SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

   [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended March 30, 2003
                                       or,
     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                           Commission File No. 0-26396

                                  Benihana Inc.
                -------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                             65-0538630
               ----------                         ------------------
      (State or other jurisdiction of             (I.R.S. Employer
       incorporation or organization)             Identification No.)

       8685 Northwest 53rd Terrace, Miami, Florida        33166
       -------------------------------------------        -----
         (Address of principal executive offices)       (Zip Code)

      (Registrant's telephone number, including area code): (305) 593-0770
                                                            --------------
          Securities registered pursuant to Section 12(b) of the Act:
                                      None
          Securities registered pursuant to Section 12 (g) of the Act:

                     Common Stock, par value $.10 per share
                 Class A Common Stock, par value $.10 per share
                         Preferred Share Purchase Right

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
                                Yes  X      No
                                    ---        ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

                                 Yes  X      No
                                     ---        ---

As of June 18, 2003, 3,174,479 shares of Common Stock and 5,605,084 shares of
Class A Common Stock were outstanding, and the aggregate market value of the
common equity of Benihana Inc. held by non-affiliates based upon the closing
price of $13.08 and $13.20, respectively, was approximately $85,384,579. As of
October 13, 2002, the last day of our second fiscal quarter, the aggregate
market value of common equity held by non-affiliates was $81,727,841.

                   DOCUMENTS INCORPORATED BY REFERENCE
                   -----------------------------------
Portions of the Registrant's Annual Report to Stockholders for the year ended
March 30, 2003 are incorporated by reference in Parts I and II.

Portions of the Registrant's Proxy Statement for the Annual Meeting to be held
August 21, 2003 are incorporated by reference in Part III.



<PAGE>


Item 1.  General
         -------
We have operated teppanyaki-style Japanese restaurants in the United States for
over 38 years, and we believe we are the largest operator of teppanyaki-style
restaurants in the country. Our core concept, the traditional Benihana
restaurant, offers teppanyaki-style Japanese cooking in which fresh steak,
chicken and seafood is prepared by a Benihana chef on a grill which forms a part
of the table on which the food is served. Our Haru concept offers an extensive
menu of Japanese fusion dishes in a high energy, urban atmosphere. In addition
to traditional, high quality sushi and sashimi creations, Haru offers raw bar
items and Japanese cruisine, including New York strip steak with wasabi
croquette, spicy shallots and ginger sauce, garlic shrimp and crispy duck. Our
newly acquired RA Sushi concept offers sushi and a full menu of Pacific-Rim
dishes in a high energy environment featuring upbeat design elements and music.

 At June 18, 2003:

o  own and operate 54 Benihana teppanyaki-style Japanese dinnerhouse
   restaurants, including one restaurant under the name Samurai;
o  franchise others to operate 20 additional Benihana restaurants;
o  own and operate five Haru restaurants in New York City;
o  own and operate four RA Sushi restaurants in the greater Phoenix
   metropolitan area; and
o  own and operate one Doraku restaurant in Miami Beach, Florida.

We own the related United States trademarks and service marks to the names
"Benihana", "Benihana of Tokyo" and the "red flower" symbol and we have the
exclusive rights to own, develop and license Benihana and Benihana Grill
restaurants in the United States, Central and South America and the islands of
the Caribbean. We also own the United States trademarks to the names "Haru" and
"RA Sushi".

Sales by our owned restaurants were approximately $187.9 million for the fiscal
year ended March 30, 2003, as compared to approximately $170.1 million for the
prior fiscal year. Our net income for the fiscal year ended March 30, 2003 was
approximately $9.5 million, as compared to approximately $8.8 million for the
prior fiscal year.

Strategy

The critical elements of our growth strategy are as follows:

Selectively Pursue Restaurant Growth. We believe that our Benihana concept has
broad appeal and that, as a result, we have significant opportunities to expand
our business selectively. We plan to continue to capitalize on our broad
customer appeal and strong brand recognition within the casual dining segment by
opening new restaurants, selectively acquiring existing Asian-theme restaurants
in major U.S. markets and franchising new restaurant locations. In April 2003,
we opened a teppanyaki restaurant in Westbury, New York and are currently
developing or have under construction three new Benihana restaurants in
Alpharetta, Georgia, Scottsdale, Arizona and Carlsbad, California, three RA
Sushi restaurants in Tucson, Arizona and San Diego and Huntington Beach,
California and one Haru restaurant in Philadelphia, Pennsylvania. Additionally,
we are converting a Doraku restaurant in Chicago, Illinois to a RA Sushi
restaurant.

Maintain Strong Unit Economics. Our experienced management team intends to
maintain and improve where necessary attractive store margins due to sustained
sales growth and effective cost controls.

Continue To Build Brand Awareness And Customer Loyalty. We will continue to
provide marketing and promotional support to sustain and grow our reputation for
distinctive value, quality food and customer satisfaction.

Provide Strong Management Support. Led by Joel Schwartz, our Chief Executive
Officer, our senior management team has an average of over 15 years with our
company and is experienced in developing and operating distinctive, high-volume
casual dining establishments.

The Benihana Concept

The Benihana concept offers casual dining in a distinctive Japanese atmosphere
enhanced by the unique entertainment provided by our highly-skilled Benihana
chefs who prepare fresh steak, chicken and seafood in traditional Japanese style
at the customer's table. Most of our Benihana restaurants are open for both
lunch and dinner and have a limited menu offering a full course meal consisting
of an appetizer, soup, salad, tea, rice, vegetable, an entree of steak, seafood,
chicken or any combination of them and a dessert.


<PAGE>




Specific menu items may be different in the various restaurants depending upon
the local geographic market. The servings prepared at the teppanyaki grill are
portion controlled to provide consistency in quantities served to each customer.
Alcoholic beverages, including specialty mixed drinks, wines and beers and soft
drinks are available. During fiscal 2003, beverage sales in both the lounges and
dining rooms accounted for approximately 17% of total restaurant sales. The
average check size per person was $23.45 in fiscal 2003. Sushi is offered at all
of our traditional restaurants at either separate sushi bars or at the
teppanyaki grills.

Each of our teppan tables generally seats eight customers. The chef is assisted
in the service of the meal by the waitress or waiter who takes beverage and food
orders. An entire dinnertime meal takes approximately one hour and thirty
minutes.

Of the 54 Benihana restaurants we operate:

o  37 are located in freestanding, special use restaurant buildings usually on
   leased land;
o  6 are located in shopping centers; and
o  11 are located in office or hotel building complexes.

The freestanding restaurants were built to our specifications as to size, style
and interior and exterior decor. The other locations were adapted to the
Benihana interior decor. The freestanding, traditional Benihana restaurant
units, which are generally one story buildings, average approximately 8,000
square feet and are constructed on a lot of approximately 1.25 to 1.50 acres.
The shopping center, office building and hotel-based Benihana restaurants are of
similar size, but differ somewhat in appearance from location to location in
order to conform to the appearance of the buildings in which they are located. A
typical Benihana restaurant has 18 teppan tables and seats from 86 to 178
customers in the dining rooms and 8 to 120 customers in the bar, lounge and
sushi bar areas.

In addition to the Benihana restaurant recently opened in April 2003 in
Westbury, New York, we anticipate opening three new Benihana restaurants in
Alpharetta, Georgia, Scottsdale, Arizona and Carlsbad, California in fiscal
2004.

The Haru Concept

The Haru concept offers an extensive menu of distinctive Japanese fusion dishes
in a high energy, urban atmosphere. In addition to traditional, high quality
sushi and sashimi creations, Haru offers raw bar items and Japanese cruisine,
including New York strip steak with wasabi croquette, spicy shallots and ginger
sauce, garlic shrimp and crispy duck. Haru also offers delivery and take-out.
The average check size per person was $28.22 in fiscal 2003. Delivery and
take-out sales account for 35% of total sales. We own 80% of the subsidiary that
operates the Haru restaurants. The remaining 20% interest is owned by the
originator of the concept and is subject to a mutual put/call arrangement
exercisable in fiscal 2006. We are currently developing a new Haru restaurant in
Philadelphia, Pennsylvania.

The RA Sushi Concept

The RA Sushi concept offers sushi and Pacific-Rim dishes in a fun-filled, high
energy environment. The average check size per person was $19.15 for the four
months we owned the concept in fiscal 2003. During the same period of time,
beverage sales in both the lounges and dining rooms accounted for approximately
33% of total sales.

We are currently developing three new RA Sushi restaurants in Tucson, Arizona
and in San Diego and Huntington Beach, California. In addition, we are
converting a Doraku restaurant in Chicago, Illinois to a RA Sushi restaurant.

The Doraku Concept

We have one Doraku restaurant in operation and we do not currently have plans
for expansion. We closed a Doraku restaurant in Chicago, Illinois in February
2003 and are in the process of converting it to a RA Sushi restaurant. The
Doraku concept offers sushi as well as other Japanese dishes. The average check
size per person was $20.56 in fiscal 2003.

Restaurant Operations

Our Benihana and Doraku restaurants are under the direction of our Executive
Vice President-Restaurant Operations and are divided among eight geographic
regions, each managed by a regional manager. Food preparation in the teppanyaki
restaurants is supervised by nine regional chefs. Our Haru restaurants are
locally managed in New York and our RA Sushi restaurants are locally managed in
Phoenix, both under the supervision of our Chief Executive Officer.


<PAGE>



Each restaurant has a manager and one or more assistant managers responsible for
the operation of the restaurant, including personnel matters, local inventory
purchasing, maintenance of quality control standards, cleanliness and service.

Strict guidelines as documented in our restaurant operations manuals are
followed to assure consistently high quality in customer service and food
quality from location to location. Specifications are used for quality of
ingredients, preparation of food, maintenance of premises and employee conduct
and are incorporated in manuals used by the managers, assistant managers and
head chefs. Food products and portion size are regularly and systematically
tested for quality and compliance with our standards. Certain seafood items are
purchased in bulk for most of the restaurants under which a certain quantity is
purchased at a specific price. Most of the other food products are purchased in
local markets. Substantially all of our restaurant operating supplies are
purchased centrally and distributed to the restaurants from our warehouse or a
bonded warehouse.

Our chefs are trained in the teppanyaki or sushi style of cooking and customer
service in training programs lasting from eight to twelve weeks. A portion of
the training is spent working in a restaurant under the direct supervision of an
experienced head chef. The program includes lectures on our method of restaurant
operations and training in both tableside and kitchen food preparation as
applied in our restaurants. Manager training is similar except that the manager
trainee is given in-depth exposure to each position in the restaurant. Other
categories of employees are trained by the manager and assistant manager at the
restaurant. Ongoing continuing education programs and seminars are provided to
restaurant managers and chefs to improve restaurant quality and implement
changes in operating policy or menu listings.

We use various incentive compensation plans pursuant to which key restaurant
personnel share in the results of operations at both a local and company-wide
level.

Marketing

We utilize television, radio, billboard and print media to promote our
restaurants; strengthen our brand identity; and maintain high name recognition.

The advertising programs are tailored to each local market and to print media
focused on the business traveler. The advertising program is designed to
emphasize the inherently fresh aspects of a Benihana meal and the entertainment
value of the chef cooking at the customer's table. In fiscal year 2003, we
expended approximately $6.5 million on advertising and other marketing,
approximately 3.4% of our net sales. The entertainment component of the Benihana
method of food preparation and service is emphasized to distinguish Benihana
from other restaurant concepts.

Franchising

We have, from time to time, franchised restaurant operators in markets in which
we consider expansion to be of benefit to the Benihana system. We continue to
pursue selectively franchising opportunities, particularly in Central and South
America and the islands of the Caribbean where we own the rights to the Benihana
trademarks and system.

Franchisees bear all direct costs involved in the development, construction and
operation of their restaurants. We provide franchisee support for:

o  site selection;
o  prototypical architectural plans;
o  interior and exterior design and layout;
o  training, marketing and sales techniques; and
o  opening assistance.

All franchisees are required to operate their restaurants in accordance with
Benihana standards and specifications including menu offerings, food quality and
preparation.

The current standard franchise agreement provides for payment to us of a
non-refundable franchise fee of from $30,000 to $50,000 per restaurant and
royalties of from 3% to 6% of gross sales. In fiscal year 2003, revenues from
franchising were approximately $1,331,000.

To comply with the terms of the franchise agreements, we are prohibited from
opening additional restaurants within certain areas in which our existing
franchisees have the exclusive right to open additional restaurants and operate
their existing Benihana restaurants. In general, such franchise agreements
currently provide for an initial payment to us with respect to each new
restaurant opened by a franchisee and continuing royalty payments to us based
upon a percentage of a franchisee's gross sales throughout the term of the
franchise.

<PAGE>


We anticipate that two new franchised Benihana restaurants will open in fiscal
2004: one in Trinidad and one in Santiago, Chile, along with the recently opened
franchise restaurant in Edison, New Jersey.

Trade Names and Service Marks

Benihana is a Japanese word meaning "red flower". In the United States and
certain foreign countries, we own the "Benihana", "Benihana of Tokyo", "Haru"
and "RA" names and "red flower" symbol, which we believe to be of material
importance to our business and are registered in the United States Patent and
Trademark Office. We also own registered trademarks for the Doraku concept.

Benihana of Tokyo, Inc., a privately held company and our largest stockholder
and originator of the Benihana concept, continues to own the rights to the
Benihana name and trademarks outside of the United States, Central and South
America and the islands of the Caribbean. Benihana of Tokyo, Inc. is also the
operator of a Benihana restaurant in Honolulu under an exclusive, royalty-free
franchise. We have no financial interest in any restaurant operated or
franchised by Benihana of Tokyo, Inc.

Employees

At March 30, 2003, we employed 3,787 people, of which 3,719 were restaurant
employees and 68 were corporate personnel. Most employees, except restaurant
management and corporate management personnel, are paid on an hourly basis. We
also employ some restaurant personnel on a part-time basis to provide the
services necessary during the peak periods of restaurant operations. We believe
our relationship with our employees is good.

Competition

The casual dining segment of the restaurant industry is intensely competitive
with respect to price, service, location, and the type and quality of food. Each
of our restaurants competes directly or indirectly with locally owned
restaurants as well as regional and national chains, and several of our
significant competitors are larger or more diversified and have substantially
greater resources than the Company. It is also anticipated that growth in the
industry will result in continuing competition for available restaurant sites as
well as continued competition in attracting and retaining qualified
management-level operating personnel. We believe that our competitive position
is enhanced by offering quality food selections at an appropriate price with the
unique entertainment provided by our chefs in an attractive, relaxed atmosphere.

Government Regulation

Each of our restaurants is subject to licensing and regulation by the health,
sanitation, safety standards, fire department and the alcoholic beverage control
authorities in the state or municipality where it is located. Difficulties or
failure in obtaining the required licensing or requisite approvals could result
in delays or cancellations in the opening of new restaurants; termination of the
liquor license for any Benihana restaurant would adversely affect the revenues
for the restaurant. While to date we have not experienced any material
difficulties in obtaining and maintaining necessary governmental approvals, the
failure to obtain or retain, or a delay in obtaining food and liquor licenses or
any other governmental approvals could have a material adverse effect on our
operating results. Federal and state environmental regulations have not had a
material effect on our operations, but more stringent and varied requirements of
local governmental bodies with respect to zoning, land use and environmental
factors could delay construction of new restaurants.

We are also subject to federal and state regulations regarding franchise
offering and sales. Such laws impose registration and disclosure requirements on
franchisors in the offer and sale of franchises, or impose substantive standards
on the relationship between franchisee and franchisor.

The Americans with Disabilities Act (the "ADA") prohibits discrimination on the
basis of disability in public accommodations and employment. The ADA, which
mandates accessibility standards for individuals with physical disabilities,
increases the cost of construction of new restaurants and of remodeling older
restaurants.

We are also subject to the Fair Labor Standards Act, which governs such matters
as minimum wages, overtime, and other working conditions. A significant portion
of our food service personnel are paid at rates related to federal or state
minimum wage rates, and accordingly, increases in any such minimum wage will
increase our labor costs.

Management Information Systems

We provide restaurant managers with centralized financial and management control
systems through use of data processing information systems and prescribed
reporting procedures.


<PAGE>



Each restaurant transmits sales, purchasing, payroll and other operational data
to the home office on a weekly and four-week period basis. This data is used to
record sales, product, labor and other costs and to prepare periodic financial
and management reports. We believe that our centralized accounting, payroll and
human resources, cash management and information systems improve management's
ability to control and manage its operations efficiently.

Item 2.  Properties
         ----------
Of the 64 restaurants in operation at June 18, 2003, ten are located on owned
real estate and 54 are leased pursuant to land or land and building leases,
which require either a specific monthly rental, or a minimum rent and additional
rent based upon a percentage of gross sales. In addition, there are three
Benihana restaurants under development in Alpharetta, Georgia, Scottsdale,
Arizona and Carlsbad, California, three RA Sushi restaurants in Tucson, Arizona
and San Diego and Huntington Beach, California and one Haru restaurant in
Philadelphia, Pennsylvania, all of which will be pursuant to land leases.
Generally, these leases are "triple net" leases which pass increases in property
operating expenses, such as real estate taxes and utilities, through to the
Company as tenant. Expiration dates of these leases, including renewal options,
range from December 2003 to March 2027.


<PAGE>



The following table sets forth the location of our owned restaurants:
<TABLE>
<CAPTION>
<S>                     <C>                                                     <C>             <C>           <C>

Benihana, Haru,                                                                 Approx.
RA Sushi or                                                                     Square           Interior     Date
Doraku Location           Address                                               Footage          Seating      Opened
---------------           -------                                               -------          --------     ------
ARIZONA:
RA Sushi               2905 E. Skyline Drive, Suite 244, Tucson (1)             3,900            -0-          Under development

RA Sushi               4921 E. Ray Road, Suite B-1, Phoenix (2)                 6,200            255          December, 2002

RA Sushi               3815 N. Scottsdale Road, Scottsdale (2)                  5,000            156          December, 2002

RA Sushi               411 S. Mill Avenue, Tempe (1)                            3,500            204          December, 2002

RA Sushi               7012 E. Greenway Parkway, Scottsdale (2)                 4,200            155          December, 2002

Benihana               16403 N. Scottsdale Road, Scottsdale  (1)                8,600            -0-          Under development

CALIFORNIA:
Benihana               2100 E. Ball Road, Anaheim  (1)                          8,710            263          March, 1980

Benihana               1496 Old Bayshore Hwy., Burlingame  (1)                  8,740            286          February, 1978

Benihana               755 Raintree Drive, Carlsbad (1)                         9,200            -0-          Under development

Benihana               17877 Gale Avenue, City of Industry (1)                  8,000            224          November, 1988

Benihana               1989 Diamond Blvd., Concord  (1)                         8,250            246          February, 1980

Benihana               2074 Vallco Fashion Park, Cupertino  (1)                 7,937            197          July, 1980

Benihana               16226 Ventura Blvd., Encino  (2)                         7,790            216         October, 1970

Benihana               136 Olivier Street, Monterey  (2)                        4,856            154         June, 2000

Benihana               4250 Birch Street, Newport Beach  (2)                    8,275            242         March, 1978

Benihana               3760 E. Inland Empire Blvd., Ontario (1)                 7,433            172         December, 1998

Benihana               5489F Sunrise Blvd., Citrus Heights (1)                  3,798            101         October, 1995

Benihana               477 Camino Del Rio So., San Diego (1)                    7,981            235         May, 1977

RA Sushi               1014 Fifth Avenue, Suite 110, San Diego (1)              4,500            -0-         Under development

Benihana               1737 Post Street, San Francisco (1)                      7,990            185         December, 1980

Benihana               1447 4th Street, Santa Monica (1)                        7,500            197         September, 2001

Benihana               21327 Hawthorne Blvd., Torrance (1)                      7,430            219         May, 1980

RA Sushi               Huntington Beach (1)                                     4,535            -0-         Under development

COLORADO:
Benihana               3295 S. Tamarac Drive, Denver (1)                        7,572            220         February, 1977
</TABLE>

(1) Lease provides for minimum rent, plus additional rent based upon a
    percentage of gross sales.
(2) Lease provides for fixed rent.


<PAGE>


<TABLE>
<CAPTION>
<S>                     <C>                                                     <C>             <C>          <C>

Benihana, Haru,                                                                 Approx.
RA Sushi or                                                                     Square           Interior     Date
Doraku Location           Address                                               Footage          Seating      Opened
---------------           -------                                               -------          --------     ------
DISTRICT OF COLUMBIA:
Benihana               3222 M Street, NW, Washington (2)                        7,761            164         May, 1982

FLORIDA:
Doraku                 1104 Lincoln Road, Miami Beach (1)                       3,900            64          June, 2000

Samurai                8717 S.W. 136th Street, Miami (1)                        8,162            218         October, 1981

Benihana               8727 South Dixie Hwy., Miami (2)                         8,700            203         March, 1989

Benihana               276 E. Commercial Blvd., Ft. Lauderdale                  8,965            230         June, 1970

Benihana               1665 N.E. 79th Street, Miami Beach                       8,938            306         September, 1973

Benihana               1751 Hotel Plaza Blvd., Lake Buena Vista (1)             8,145            220         October, 1988

Benihana               3602 S.E. Ocean Blvd., Stuart                            8,485            286         February, 1977

GEORGIA:
Benihana               2365 Mansell Road, Alpharetta                            8,600            -0-         Under development

Benihana               2143 Peachtree Road, NE, Atlanta I (2)                   8,244            217         May, 1974

Benihana               229 Peachtree Street NE, Atlanta II (2)                  6,372            160         April, 1981

ILLINOIS:
RA Sushi               1139 N. State Street, Chicago (1)                        4,500            -0-         Under development

Benihana               166 East Superior Street, Chicago (1)                    7,288            198         April, 1968

Benihana               747 E. Butterfield Road, Lombard                         9,200            219         April, 1985

Benihana               1200 E. Higgins Road, Schaumburg                         8,388            208         July, 1992

Benihana               150 N. Milwaukee Avenue, Wheeling                        8,500            199         June, 2001

INDIANA:
Benihana               8830 Keystone Crossing Road, Indianapolis (1)            8,460            237         February, 1979

MARYLAND:
Benihana               7315 Wisconsin Avenue, Bethesda I (1)                    6,047            186         October, 1974

Benihana               7935 Wisconsin Avenue, Bethesda II (1)                   9,300            -0-         Under development

MICHIGAN:
Benihana               18601 Hubbard Drive, Dearborn (1)                        7,500            222         March, 1977

Benihana               21150 Haggerty Road, Northville                          8,000            184         May, 1989

Benihana               1985 W. Big Beaver Road, Troy (1)                        8,600            231         February, 1966
</TABLE>

(1) Lease provides for minimum rent, plus additional rent based upon a
    percentage of gross sales.
(2) Lease provides for fixed rent.


<PAGE>


<TABLE>
<CAPTION>
<S>                     <C>                                                    <C>             <C>          <C>
Benihana, Haru,                                                                Approx.
RA Sushi or                                                                    Square          Interior     Date
Doraku Location          Address                                               Footage         Seating      Opened
---------------          -------                                               -------         --------     ------
MINNESOTA:
Benihana              850 Louisiana Avenue So., Golden Valley                  10,400           237          September, 1980

NEW JERSEY:
Benihana              840 Morris Turnpike, Short Hills (2)                     11,500           256          October, 1976

Benihana              5255 Marlton Pike, Pennsauken (1)                        7,000            239          February, 1978

NEW YORK:
Benihana              120 East 56th Street, New York (2)                       3,859            110          May, 1966

Benihana              47 West 56th Street, New York (2)                        7,340            171          June, 1973

Benihana              2105 Northern Blvd., Munsey Park (1)                     8,252            307          December, 1978

Benihana              920 Merchant's Concourse, Westbury (1)                   7,400            173          April, 2003

Haru                  205 West 43rd Street, New York (2)                       4,400            119          May, 2001

Haru                  1327 Third Avenue, New York (2)                          2,200            46           September, 2001

Haru                  1329 Third Avenue, New York (2)                          4,000            78           December, 1999

Haru                  433 Amsterdam Avenue, New York (2)                       4,000            74           December, 1999

Haru                  280 Park Avenue, New York (2)                            6,350            132          August, 2001

OHIO:
Benihana              50 Tri-County Parkway, Cincinnati (1)                    7,669            235          June, 1978

Benihana              126 East 6th Street, Cincinnati (1)                      5,800            142          August, 1979

Benihana              23611 Chagrin Blvd., Beachwood (1)                       10,393           273          May, 1973

OREGON:
Benihana              9205 S.W. Cascade Avenue, Beaverton (1)                  6,077            200          August, 1986

PENNSYLVANIA
Benihana              2100 Greentree Road, Pittsburgh (1)                      8,000            234          May, 1971

Haru                  241-243 Chestnut Street, Philadelphia (1)                6,000            -0-          Under development

TENNESSEE:
Benihana              912 Ridgelake Blvd., Memphis (1)                         8,680            233          October, 1979

TEXAS:
Benihana              7775 Banner Drive, Dallas (2)                            8,007            307          January, 1976

Benihana              3848 Oak Lawn Avenue, Dallas (1)                         3.998            106          June, 1997

Benihana              1318 Louisiana Street, Houston I (2)                     6,938            200          May, 1975

Benihana              1720 Lake Woodlands Drive, The Woodlands                 8,728            203          April, 2002
</TABLE>

(1) Lease provides for minimum rent, plus additional rent based upon a
    percentage of gross sales.
(2) Lease provides for fixed rent.


<PAGE>


<TABLE>
<CAPTION>
<S>                     <C>                                                    <C>              <C>            <C>
Benihana, Haru,                                                                Approx.
RA Sushi or                                                                    Square           Interior       Date
Doraku Location          Address                                               Footage          Seating        Opened
---------------          -------                                               -------          --------       ------
Benihana               5400 Whitehall Street, Irving (2)                       8,565            172            May, 2002

Benihana               9707 Westheimer Road, Houston II (1)                    7,669            274            November, 1977

Benihana               2579 Town Center Blvd., Sugar Land (1)                  5,000            152            July, 1997

UTAH:
Benihana               165 S.W. Temple, Bldg. 1, Salt Lake City (1)            7,530            202            April, 1977
</TABLE>

(1) Lease provides for minimum rent, plus additional rent based upon a
    percentage of gross sales.
(2) Lease provides for fixed rent.


<PAGE>

The Company leases approximately 11,000 square feet of space for its general
administrative offices in Miami, Florida at an annual rental of $201,000 and
8,000 square feet for a warehouse in Miami, Florida at an annual rental of
$38,000. The leases expire May 31, 2009 and October 31, 2003, respectively.
The Company anticipates renewing the warehouse lease upon expiration.

Item 3.  Legal Proceedings
         -----------------
The Company is the defendant in a consolidated action in the United States
District Court for the Southern District of New York entitled Lixin Zhao, on
behalf of herself and all others similarly situated v. Benihana Inc. (01 Civ.
1297 (KMW)) and Jin Yip, on behalf of herself and all others similarly situated
v. Benihana Inc. (02 Civ. 0541 (KMW)). The original complaints in the "Zhao" and
the "Yip" actions were filed by an individual former server at the Benihana
restaurant at West 56th Street in Manhattan, and an individual current server at
the Benihana restaurant at Manhasset, New York, respectively, both purporting to
also be filed on behalf of other unnamed current and former employees of the
Company who are alleged to be similarly situated. Each of the original
complaints set forth a claim for alleged violations of the minimum wage
provisions of the Federal Fair Labor Standards Act, 29 U.S.C. ss.ss. 201, et
seq. (the "Act") (the "Federal Claim"). The Yip action also asserted a claim for
alleged violations of New York State Labor Law ss. 196-d concerning gratuities
(the "State Claim"). Both the Federal Claim and the State Claim arise from the
tip pooling and distribution practices of employees at the Company. The Federal
Claim purports to be asserted as part of a collective action, pursuant to which
certain similarly situated individuals may have rights to "opt-in" to the
action. The scope of the Federal Claim has been limited to date to just two
Benihana restaurants, the one located on West 56th Street in Manhattan and the
one in Manhasset, New York, and to a total of 12 Plaintiffs who have opted into
the action. The State Claim, however, purports to be asserted as a class claim,
but no motion for class certification has been made. In the consolidated action,
the Plaintiffs seek: an injunction enjoining the Company from continuing to
engage in the alleged violations; an award of damages arising from the Company's
alleged violations of the Act consisting of the difference between the hourly
wage Plaintiffs were paid and the applicable Federal minimum hourly wage; an
award of damages equal to all the gratuities allegedly furnished by the
Plaintiffs and the putative class to the Company, or other Company employees, in
alleged violation of New York State Labor Law ss. 196-d; an award of liquidated
damages; and reasonable attorneys' fees and costs. The Company has served
answers to the complaints in the consolidated action denying the material
allegations made and asserting various defenses and has vigorously defended the
action.

The parties entered into a Settlement Agreement with respect to the consolidated
action dated March 13, 2003, which provides for, among other things, settlement
payments to the plaintiffs and a payment of attorney's fees and costs. Depending
upon the number of putative class members who opt out of the class (and thus the
settlement) and the number of class members who fail to claim their settlement
payment, the total amount of settlement payments made may be less than the
aggregate amount of settlement payments provided for in the Settlement
Agreement. Plaintiffs' motion seeking preliminary approval of the Settlement
Agreement and certification of a class for purposes of the Settlement is
currently pending. While the Company believes that the complaints in the
consolidated action have no merit, should the settlement not be finalized and
the action proceed to trial, there can be no assurance that the Company will not
be required to pay a material amount in connection with the consolidated action.
If the consolidated action is settled in accordance with the terms of the
Settlement Agreement, the maximum payments from the Company would not be
material to the Company's financial condition or results of operations.

Except for the matter described above, the Company is not a party to any
litigation other than routine claims which are incidental to its business.

Item 4.  Submission of Matters to a Vote of Security Holders
         ---------------------------------------------------
There were no matters submitted to a vote of security holders during the fourth
quarter.


                                    PART II


Item 5.  Market for the Company's Common Stock and Related Stockholder Matters
         ---------------------------------------------------------------------
The information required by this Item is incorporated herein by reference to
Page 30 of the Company's 2003 Annual Report to Shareholders.

Item 6.  Selected Consolidated Financial Data
         ------------------------------------
The information required by this Item is incorporated herein by reference to
Page 1 of the Company's 2003 Annual Report to Shareholders.


<PAGE>



Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations
         ---------------------------------------------------------------
The information required by this Item is incorporated herein by reference to
Pages 4 through 11 of the Company's 2003 Annual Report to Shareholders.

Item 7.A.  Quantitative and Qualitative Disclosures About Market Risks
           -----------------------------------------------------------
The information required by this item is incorporated herein by reference to
Page 9 of the Company's 2003 Annual Report to Shareholders.

Item 8.  Financial Statements and Supplementary Data
         -------------------------------------------
The information required by this Item is incorporated herein by reference to
Pages 12 through 29 of the Company's 2003 Annual Report to Shareholders.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure
         ---------------------------------------------------------------
None.

                                    PART III


Item 10.  Directors and Executive Officers of the Company
          -----------------------------------------------
Directors. The information appearing under the caption "Election of Directors"
on Pages 7 through 10 of the Company's Proxy Statement for its Annual Meeting of
Stockholders to be held on August 21, 2003 (the "Proxy Statement") is
incorporated herein by reference.

Item 11.  Executive Compensation
          ----------------------
The information appearing under the caption "Executive Compensation" commencing
on Page 14 of the Proxy Statement is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          --------------------------------------------------------------
The information required by Sections A through C of this item is incorporated by
reference to the information appearing under the caption "Security Ownership of
Certain Beneficial Owners of Management" on Pages 3 through 7 of the Proxy
Statement.

Item 12.D.  Equity Compensation Plan Information
            ------------------------------------
<TABLE>
<CAPTION>
<S>                                <C>                                <C>                             <C>

                                                                                                      Number of securities
                                                                                                      remaining available
                                   Number of securities to            Weighted average                for future issuance
                                   be issued upon exercise            exercise price of               under equity compensation
                                   of outstanding options             outstanding options             plans (excluding securities
Plan category                      warrants and rights                warrants and rights             reflected in column (a))
-------------                      -------------------                -------------------             ------------------------
                                           (a)                                (b)                             (c)
Equity compensation
plans approved by                      1,740,571                              $9.92                       1,541,493
security holders
Equity compensation
plans not approved by                     22,138                               7.77                             -0-
security holders

Total                                  1,762,709                               9.90                       1,541,493
</TABLE>

Item 13.  Certain Relationships and Related Transactions
          ----------------------------------------------
The information appearing under the captions "Certain Relationships and Related
Transactions" commencing on Page 19 of the Proxy Statement is incorporated
herein by reference.


<PAGE>



Item 14.  Controls and Procedures
          -----------------------
The Company's Chief Executive Officer and its Chief Financial Officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)
as of a date within 90 days of the filing date of this Annual Report on Form
10-K (the "Evaluation Date"), have concluded that as of the Evaluation Date, the
Company's disclosure controls and procedures were adequate and effective to
ensure that material information relating to the Company and its consolidated
subsidiaries would be made known to them by others within those entities,
particularly during the period in which this Annual Report on Form 10-K was
being prepared.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect the Company's disclosure controls and
procedures subsequent to the Evaluation Date, nor any significant deficiencies
or material weaknesses in such disclosure controls and procedures requiring
corrective actions. As a result, no corrective actions were taken.


                                    PART IV


Item 15.  Principal Accountant Fees and Services
          --------------------------------------
The information required by this item is incorporated herein by reference to the
Company's Proxy Statement.

Item 16.  Exhibits, Financial Statement Schedules and Reports on Form 8-K
          ---------------------------------------------------------------
(a) 1. Financial Statements:

                The following consolidated financial statements of the Company
                and its subsidiaries, which are set forth on Pages 12 through 29
                of the Company's 2003 Annual Report to Shareholders included
                herein as Exhibit 13, are incorporated herein by reference as
                part of this report.

                Consolidated Balance Sheets as of March 30, 2003 and March 31,
                2002.

                Consolidated Statements of Earnings for the years ended March
                30, 2003, March 31, 2002 and April 1, 2001.

                Consolidated Statements of Stockholders' Equity for the years
                ended March 30, 2003, March 31, 2002 and April 1, 2001.

                Consolidated Statements of Cash Flows for the years ended March
                30, 2003, March 31, 2002 and April 1, 2001.

                Notes to Consolidated Financial Statements.

                Independent Auditors' Report.

     2. Financial Statement Schedules:

                None

     3. Exhibits:

                2.01           Amended and Restated Agreement and Plan of
                               Reorganization dated as of December 29, 1994 and
                               amended as of March 17, 1995 among BNC, BOT, the
                               Company and BNC Merger Corp. Incorporated by
                               reference to Exhibit 2.01 to the Company's
                               Registration Statement on Form S-4, Registration
                               No. 33-88295, made effective March 23, 1995 (the
                               "S-4").

                3.01           Certificate of Incorporation of the Company.
                               Incorporated by reference to Exhibit 3.01 to the
                               S-4 and to Exhibit 1 on Form 8-A dated February
                               12, 1997.

                3.02           By-Laws of the Company.  Incorporated by
                               reference to Exhibit 3.02 to the S-4.


<PAGE>



                4.01           Certificate of Designation of Rights, Preferences
                               and Terms for the Series A Convertible Preferred
                               Stock of the Company. Incorporated by reference
                               to Exhibit 4.01 to the Company's Current Report
                               on Form 8-K dated May 15, 1995.

                4.02           Form of Certificate representing shares of the
                               Company's Common Stock.  Incorporated by
                               reference to Exhibit 4.02 to the S-4.

                4.03           Form of Certificate representing shares of the
                               Company's Class A Common Stock.  Incorporated by
                               reference to Exhibit 4.03 to the S-4.

                4.04           Warrant Agreement dated December 1, 1997 between
                               the Company and Douglas M. Rudolph.  Incorporated
                               by reference to Exhibit 4.1 to the Company's
                               current report on Form 8-K dated December 1,
                               1997.

                4.05           Amendment dated February 15, 2001 to Warrant
                               Agreement December 1, 1997 between Douglas M.
                               Rudolph and the Company.

                10.01          License Agreement, dated as of May 15, 1995
                               between BNC and BOT.  Incorporated by reference
                               to Exhibit 10.01 to the S-4.

                10.02          BNC's 1985 Employees' Stock Option Plan.
                               Incorporated by reference to Appendix II to BNC
                               Proxy Statement for its Annual Meeting of
                               Stockholders held on December 11, 1985.
                               Incorporated by reference to Exhibit 10.06 to
                               the S-4.

                10.03          1994 Employees' Stock Option Plan Incorporated
                               by reference to Exhibit 10.07 to the S-4.

                10.04          Directors' Stock Option Plan.  Incorporated by
                               reference to Exhibit 10.08 to the S-4.

                10.05          1996 Class A Stock Option Plan.  Incorporated by
                               reference to Exhibit A to Benihana Inc. Proxy
                               Statement for its Annual Meeting of Stockholders
                               held on July 19, 1996.

                10.06          1997 Class A Stock Option Plan.  Incorporated by
                               reference to Exhibit A to Benihana Inc. Proxy
                               Statement for its Annual Meeting of Stockholders
                               held on August 27, 1998 (the "1998 Proxy
                               Statement").

                10.07          Amendments to the Directors' Stock Option Plan.
                               Incorporated by reference to Exhibit B to the
                               1998 Proxy Statement.

                10.08          2000 Employees' Class A Common Stock Option Plan.
                               Incorporated by reference to Exhibit A to
                               Benihana Inc. Proxy Statement for its Annual
                               Meeting of Stockholders held on August 3, 2000.

                10.09          Restated Credit Agreement dated December 3, 2002
                               (the "Credit Agreement") by and among Benihana
                               Inc., the Guarantors (as listed and defined
                               therein), and Wachovia Bank, National
                               Association, as Agent and Lender.

                10.10          Stockholders Agreement dated as of December 6,
                               1999 by and among Haru Holding Corp., BNC, Mei
                               Ping Matsumura and the Estate of Arthur Cutler.
                               Incorporated by reference to Exhibit 10.10 to the
                               Company's Registration Statement on Form S-2,
                               Registration Number 333-68946.

                10.11          Benihana Incentive Compensation Plan.
                               Incorporated by reference to Exhibit 10.12 to
                               the Company's Annual Report on Form 10-K for the
                               fiscal year ended March 31, 1996.
<PAGE>


                10.12          Employment Agreement dated April 1, 2001 between
                               Joel A. Schwartz and the Company. Incorporated
                               by reference to Exhibit 10.07 of the 2001 10-K.

                10.13          Employment Agreement dated April 1, 2001 between
                               Taka Yoshimoto and the Company. Incorporated by
                               reference to Exhibit 10.12 of the 2001 10-K.

                10.14          Employment Agreement dated October 19, 1998
                               between Kevin Aoki and the Company.  Incorporated
                               by reference to Exhibit 10.19 of the Company's
                               Annual Report on Form 10-K for the fiscal year
                               ended March 26, 2000 (the "2000 10-K").

                10.15          Employment Agreement dated September 1, 2000
                               between Juan C. Garcia and the Company.
                               Incorporated by reference to Exhibit 10.15 of
                               the 2001 10-K.

                10.16          Consulting Agreement dated April 1, 2001 between
                               Rocky H. Aoki and the Company.  Incorporated by
                               reference to Exhibit 10.23 of the 2001 10-K.

                10.17          Amendment No. 1 dated January 25, 2000 to
                               Employment Agreement dated October 19, 1998
                               between Kevin Aoki and the Company.  Incorporated
                               by reference to Exhibit 10.20 to the 2000 10-K.

                10.18          Amendment No. 2 dated April 1, 2001 to Employment
                               Agreement dated October 19, 1998 between Kevin
                               Aoki and the Company.  Incorporated by reference
                               to Exhibit 10.14 to the 2001 10-K.

                10.19          Amendment No. 2 dated April 1, 2001 to Employment
                               Agreement dated September 1, 2000 between Juan C.
                               Garcia and the Company.  Incorporated by
                               reference to Exhibit 10.22 to the 2001 10-K.

                13.01          Portions of Annual Report to Stockholders for
                               the year ended March 30, 2003.

                23.01          Consent of Deloitte & Touche LLP.

                23.02          Consent of Deloitte & Touche LLP.

                99.1           Chief Executive Officer's certification pursuant
                               to Section 302 of the Sarbanes-Oxley Act of 2002.

                99.2           Chief Financial Officer's certification pursuant
                               to Section 302 of the Sarbanes-Oxley Act of 2002.

                99.3           Chief Executive Officer's certification pursuant
                               to Section 906 of the Sarbanes-Oxley Act of 2002.

                99.4           Chief Financial Officer's certification pursuant
                               to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K.

    None.


<PAGE>



                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Date:    June 23, 2003          BENIHANA INC.

By:       /s/ Joel A. Schwartz
      ----------------------------------
           Joel A. Schwartz, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on the date indicated above by the following persons on behalf
of the registrant and in the capacities indicated.
<TABLE>
<CAPTION>
<S>                                                 <C>                                          <C>

Signature                                           Title                                         Date
---------                                           -----                                         ----

   /s/ Joel A. Schwartz                             President and                                 June 23, 2003
----------------------------------
    Joel A. Schwartz                                Director (Principal
                                                    Executive Officer)

   /s/ Taka Yoshimoto                               Executive Vice President -                    June 23, 2003
----------------------------------
    Taka Yoshimoto                                  Restaurant Operations
                                                       and Director

   /s/ Michael R. Burris                            Senior Vice President of                      June 23, 2003
----------------------------------
    Michael R. Burris                               Finance and Treasurer -
                                                    Chief Financial Officer
                                                    (Principal Financial and
                                                    Accounting Officer)

   /s/ Kevin Y. Aoki                                Vice President -                              June 23, 2003
----------------------------------
    Kevin Y. Aoki                                   Marketing and Director

   /s/ Juan C. Garcia                               Vice President - Controller                   June 23, 2003
-----------------------------------
    Juan C. Garcia

   /s/ Darwin C. Dornbush                           Secretary and Director                        June 23, 2003
-----------------------------------
    Darwin C. Dornbush

   /s/ John E. Abdo                                 Director                                      June 23, 2003
-----------------------------------
    John E. Abdo

   /s/ Norman Becker                                Director                                      June 23, 2003
-----------------------------------
    Norman Becker

   /s/ Max Pine                                     Director                                      June 23, 2003
------------------------------------
    Max Pine

    Robert B. Sturges                               Director                                      June 23, 2003

    Yoshihiro Sano                                  Director                                      June 23, 2003
</TABLE>





<PAGE>



                                                             Exhibit 10.09
                                CREDIT AGREEMENT


           THIS CREDIT AGREEMENT, dated as of December 3, 2002 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among BENIHANA INC., a Delaware corporation (the "Borrower"), the
Guarantors (as defined herein), the Lenders (as defined herein) and WACHOVIA
BANK, NATIONAL ASSOCIATION, as Agent for the Lenders (in such capacity, the
"Agent").

                               W I T N E S S E T H

           WHEREAS, the Borrower has requested that the Lenders provide a
$31,000,000 credit facility for the purposes hereinafter set forth; and

           WHEREAS, the Lenders have agreed to make the requested credit
facility available to the Borrower on the terms and conditions hereinafter set
forth;

           NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:


                                    SECTION 1

                                   DEFINITIONS
                                   -----------
           1.1       Definitions.
                     -----------
           As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:

                     "Acquired Companies" means a collective reference to H.K.H.
           L.L.C. 2002, an Arizona limited liability company, Ra on Mill, an
           Arizona limited liability company, Ra Ahwatukee LLC, an Arizona
           limited liability company and Kierland LLC, an Arizona limited
           liability company, each of which are wholly-owned subsidiaries of RA
           Sushi LLC, an Arizona limited liability company

                     "Acquisition" means the acquisition by the Borrower or one
           of its Subsidiaries of the Acquired Companies pursuant to the terms
           of the Purchase Agreement.

                     "Additional Credit Party" means each Person that becomes a
           Guarantor after the Closing Date by execution of a Joinder Agreement.

                     "Adjusted Base Rate" means the Base Rate plus the
           Applicable Margin.

                    "Adjusted LIBOR Rate" means the LIBOR Rate plus the
           Applicable Margin.

                     "Affiliate" means, with respect to any Person, any other
           Person (a) directly or indirectly controlling or controlled by or
           under direct or indirect common control with such Person or (b)
           directly or indirectly owning or holding five percent (5%) or more of
           the equity interest in such Person. For purposes of this definition,
           "control" when used with respect to any Person means the power to
           direct the management and policies of such Person, directly or
           indirectly, whether through the ownership of voting securities, by
           contract or otherwise; and the terms "controlling" and "controlled"
           have meanings correlative to the foregoing.
<PAGE>


                     "Agent" shall have the meaning assigned to such term in the
           heading hereof, together with any successors or assigns.

                     "Agent's Fee Letter" means that certain letter agreement,
           dated as of July 12, 2002, between the Agent and the Borrower, as
           amended, modified, restated or supplemented from time to time.

                     "Agent's Fees" shall have the meaning assigned to such term
           in Section 3.5(c).

                     "Applicable Lending Office" means, for each Lender, the
           office of such Lender (or of an Affiliate of such Lender) as such
           Lender may from time to time specify to the Agent and the Borrower by
           written notice as the office by which its Eurodollar Loans are made
           and maintained.

                     "Applicable Margin" means, for purposes of calculating the
           applicable interest rate for any day for any Revolving Loan or any
           Term Loan, the applicable rate of the Commitment Fee for any day for
           purposes of Section 3.5(a) and the applicable rate of the Standby
           Letter of Credit Fee for any day for purposes of Section 3.5(b)(i),
           the appropriate Applicable Margin corresponding to the Leverage Ratio
           in effect as of the most recent Calculation Date:
<TABLE>
<CAPTION>
<S>               <C>              <C>                  <C>                  <C>                   <C>

================ ================ ===================== =================== ==================== =====================
                                   Applicable Margin    Applicable Margin    Applicable Margin     Applicable Margin
                                    For Eurodollar        For Base Rate      For Standy Letter       For Commitment
 Pricing Level   Leverage Ratio         Loans                 Loans            of Credit Fee             Fees
---------------- ---------------- --------------------- ------------------- -------------------- ---------------------
       I          > 2.25 to 1.0          2.50%                1.00%                2.50%                 .50%
                  -
---------------- ---------------- --------------------- ------------------- -------------------- ---------------------
      II          < 2.25 to 1.0          2.25%                 .75%                2.25%                .375%
                  but > 1.75 to
                      -
                       1.0
---------------- ---------------- --------------------- ------------------- -------------------- ---------------------
      III         < 1.75 to 1.0          1.50%                 .25%                1.50%                 .25%
                  but > 1.25 to
                      -
                       1.0
---------------- ---------------- --------------------- ------------------- -------------------- ---------------------
      IV          < 1.25 to 1.0          1.00%                0.00%                1.00%                 .25%
================ ================ ===================== =================== ==================== =====================
</TABLE>

           The Applicable Margins shall be determined and adjusted quarterly on
           the date (each a "Calculation Date") five Business Days after the
           date by which the Borrower is required to provide the officer's
           certificate in accordance with the provisions of Section 7.1(c) for
           the most recently ended fiscal quarter of the Consolidated Parties
           the first of which to occur on January 5, 2003; provided, however,
           that if the Borrower fails to provide the officer's certificate
           required by Section 7.1(c) on or before the most recent Calculation
           Date, the Applicable Margin from such Calculation Date shall be based
           on Pricing Level I until such time as an appropriate officer's
           certificate is provided whereupon the Pricing Level shall be
           determined by the then current Leverage Ratio. Each Applicable Margin
           shall be effective from one Calculation Date until the next
           Calculation Date. Any adjustment in the Applicable Margins shall be
           applicable to all existing Loans as well as any new Loans made or
           issued.
<PAGE>


                     "Application Period", in respect of any Asset Disposition,
           shall have the meaning assigned to such term in Section 8.5.

                     "Asset Disposition" means the disposition of any or all of
           the assets (including without limitation the Capital Stock of a
           Subsidiary but excluding the sale of inventory in the ordinary course
           of business) of any Consolidated Party whether by sale, lease,
           transfer or otherwise. The term "Asset Disposition" shall not include
           any Equity Issuance.

                     "Bankruptcy Code" means the Bankruptcy Code in Title 11 of
           the United States Code, as amended, modified, succeeded or replaced
           from time to time.

                     "Bankruptcy Event" means, with respect to any Person, the
           occurrence of any of the following with respect to such Person: (a) a
           court or governmental agency having jurisdiction in the premises
           shall enter a decree or order for relief in respect of such Person in
           an involuntary case under any applicable bankruptcy, insolvency or
           other similar law now or hereafter in effect, or appointing a
           receiver, liquidator, assignee, custodian, trustee, sequestrator (or
           similar official) of such Person or for any substantial part of its
           Property or ordering the winding up or liquidation of its affairs; or
           (b) there shall be commenced against such Person an involuntary case
           under any applicable bankruptcy, insolvency or other similar law now
           or hereafter in effect, or any case, proceeding or other action for
           the appointment of a receiver, liquidator, assignee, custodian,
           trustee, sequestrator (or similar official) of such Person or for any
           substantial part of its Property or for the winding up or liquidation
           of its affairs, and such involuntary case or other case, proceeding
           or other action shall remain undismissed, undischarged or unbonded
           for a period of sixty (60) consecutive days; or (c) such Person shall
           commence a voluntary case under any applicable bankruptcy, insolvency
           or other similar law now or hereafter in effect, or consent to the
           entry of an order for relief in an involuntary case under any such
           law, or consent to the appointment or taking possession by a
           receiver, liquidator, assignee, custodian, trustee, sequestrator (or
           similar official) of such Person or for any substantial part of its
           Property or make any general assignment for the benefit of creditors;
           or (d) such Person shall be unable to, or shall admit in writing its
           inability to, pay its debts generally as they become due.

                     "Base Rate" means, for any day, the rate per annum equal to
           the higher of (a) the Federal Funds Rate for such day plus one-half
           of one percent (.5%) and (b) the Prime Rate for such day. 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 any Loan bearing interest at a rate
           determined by reference to the Base Rate.

                     "Borrower" means the Person identified as such in the
           heading hereof, together with any permitted successors and assigns.
<PAGE>


                     "Business Day" means a day other than a Saturday, Sunday or
           other day on which commercial banks in Charlotte, North Carolina or
           New York, New York are authorized or required by law to close, except
           that, when used in connection with a Eurodollar Loan, such day shall
           also be a day on which dealings between banks are carried on in U.S.
           dollar deposits in London, England.

                     "Calculation Date" has the meaning set forth in the
           definition of "Applicable Margin" set forth in this Section 1.1.

                     "Capital Lease" means, as applied to any Person, any lease
           of any Property (whether real, personal or mixed) by that Person as
           lessee which, in accordance with GAAP, is or should be accounted for
           as a capital lease on the balance sheet of that Person.

                     "Capital Stock" means (a) in the case of a corporation,
           capital stock, (b) in the case of an association or business entity,
           any and all shares, interests, participations, rights or other
           equivalents (however designated) of capital stock, (c) in the case of
           a partnership, partnership interests (whether general or limited),
           (d) in the case of a limited liability company, membership interests
           and (e) any other interest or participation that confers on a Person
           the right to receive a share of the profits and losses of, or
           distributions of assets of, the issuing Person.

                     "Cash Equivalents" means (a) securities issued or directly
           and fully guaranteed or insured by the United States of America or
           any agency or instrumentality thereof (provided that the full faith
           and credit of the United States of America is pledged in support
           thereof) having maturities of not more than twelve months from the
           date of acquisition, (b) U.S. dollar denominated time deposits and
           certificates of deposit of (i) any Lender, (ii) any domestic
           commercial bank of recognized standing having capital and surplus in
           excess of $500,000,000 or (iii) any bank whose short-term commercial
           paper rating from S&P is at least A-1 or the equivalent thereof or
           from Moody's is at least P-1 or the equivalent thereof (any such bank
           being an "Approved Bank"), in each case with maturities of not more
           than 270 days from the date of acquisition, (c) commercial paper and
           variable or fixed rate notes issued by any Approved Bank (or by the
           parent company thereof) or any variable rate notes issued by, or
           guaranteed by, any domestic corporation rated A-1 (or the equivalent
           thereof) or better by S&P or P-1 (or the equivalent thereof) or
           better by Moody's and maturing within six months of the date of
           acquisition, (d) repurchase agreements with a bank or trust company
           (including any of the Lenders) or recognized securities dealer having
           capital and surplus in excess of $500,000,000 for direct obligations
           issued by or fully guaranteed by the United States of America in
           which any Credit Party shall have a perfected first priority security
           interest (subject to no other Liens) and having, on the date of
           purchase thereof, a fair market value of at least 100% of the amount
           of the repurchase obligations and (e) Investments, classified in
           accordance with GAAP as current assets, in money market investment
           programs registered under the Investment Company Act of 1940, as
           amended, which are administered by reputable financial institutions
           having capital of at least $500,000,000 and the portfolios of which
           are limited to Investments of the character described in the
           foregoing subdivisions (a) through (d).
<PAGE>


                     "Change of Control" means the occurrence of any of the
           following events: (a) the failure of Benihana of Tokyo, Inc. to
           maintain beneficial ownership, directly or indirectly, of Voting
           Stock of the Borrower representing at least 35% of the combined
           voting power of all Voting Stock of the Borrower, (b) any Person or
           two or more Persons acting in concert shall have acquired beneficial
           ownership, directly or indirectly, or shall have acquired by contract
           or otherwise, or shall have entered into a contract or arrangement
           that, upon consummation, will result in its or their acquisition of
           control over, Voting Stock of the Borrower (or other securities
           convertible into such Voting Stock) representing 20% or more of the
           combined voting power of all Voting Stock of the Borrower at any time
           when Benihana of Tokyo, Inc. and officers and directors of the
           Borrower possess, collectively, directly or indirectly, less than
           sufficient voting power to elect a majority of the directors of the
           Borrower, or (c) Continuing Directors shall cease for any reason to
           constitute a majority of the members of the board of directors of the
           Borrower then in office. As used herein, "beneficial ownership" shall
           have the meaning provided in Rule 13d-3 of the Securities and
           Exchange Commission promulgated under the Securities Exchange Act of
           1934."

                     "Closing Date" means the date hereof.

                     "Code" means the Internal Revenue Code of 1986, as amended,
           and any successor statute thereto, as interpreted by the rules and
           regulations issued thereunder, in each case as in effect from time to
           time. References to sections of the Code shall be construed also to
           refer to any successor sections.

                     "Collateral" means a collective reference to the collateral
           which is identified in, and at any time will be covered by, the
           Collateral Documents.

                     "Collateral Documents" means a collective reference to the
           Security Agreement, the Pledge Agreement and such other documents
           executed and delivered in connection with the attachment and
           perfection of the Agent's security interests and liens arising
           thereunder, including without limitation, UCC financing statements
           and patent and trademark filings.

                     "Commitment" means (a) with respect to each Lender, the
           Revolving Commitment of such Lender and the Term Loan Commitment of
           such Lender and (b) with respect to the Issuing Lender, the LOC
           Commitment.

                     "Commitment Fee" shall have the meaning assigned to such
           term in Section 3.5(a).

                     "Commitment Fee Calculation Period" shall have the meaning
           assigned to such term in Section 3.5(a).
<PAGE>


                     "Consolidated Accrued Interest Expense" means, for any
           period, accrued interest expense (including the amortization of debt
           discount and premium and the interest component under Capital Leases)
           of the Consolidated Parties on a consolidated basis for such period,
           as determined in accordance with GAAP. The applicable period shall be
           for the four consecutive quarters ending as of the date of
           determination.

                     "Consolidated Capital Expenditures" means, for any period,
           all capital expenditures of the Consolidated Parties on a
           consolidated basis for such period, as determined in accordance with
           GAAP.

                     "Consolidated Cash Taxes" means, for any period, the
           aggregate of all taxes of the Consolidated Parties on a consolidated
           basis for such period, as determined in accordance with GAAP, to the
           extent the same are paid in cash during such period.

                     "Consolidated EBITDA" means, for any period, the sum of (a)
           Consolidated Net Income for such period, plus (b) an amount which, in
           the determination of Consolidated Net Income for such period, has
           been deducted for (i) Consolidated Accrued Interest Expense, (ii)
           total accrued federal, state, local and foreign income, value added
           and similar taxes and (iii) depreciation and amortization expense,
           all as determined in accordance with GAAP. The applicable period
           shall be for the four consecutive quarters ending as of the date of
           determination.

                     "Consolidated Material Adverse Effect" means a material
           adverse effect on (a) the condition (financial or otherwise),
           operations, business, assets, liabilities or prospects of the
           Consolidated Parties taken as a whole, (b) the ability the
           Consolidated Parties taken as a whole to perform any obligation under
           the Credit Documents or (c) the material rights and remedies of the
           Lenders under the Credit Documents.

                     "Consolidated Net Income" means, for any period, net income
           (excluding extraordinary items) after taxes for such period of the
           Consolidated Parties on a consolidated basis, as determined in
           accordance with GAAP.

                     "Consolidated Parties" means a collective reference to the
           Borrower and its Subsidiaries, and "Consolidated Party" means any
           one of them.

                     "Consolidated Scheduled Funded Debt Payments" means, as of
           the end of each fiscal quarter of the Consolidated Parties, for the
           Consolidated Parties on a consolidated basis, the sum of all
           scheduled payments of principal on Funded Indebtedness for the
           applicable period ending on such date (including the principal
           component of payments due on Capital Leases during the applicable
           period ending on such date); it being understood that Scheduled
           Funded Debt Payments shall not include voluntary prepayments or the
           mandatory prepayments required pursuant to Section 3.3.

                     "Consolidated Tangible Net Worth" means, as of any date
           with respect to the Consolidated Parties on a consolidated basis,
           Consolidated Total Tangible Assets minus Consolidated Total
           Liabilities, as determined in accordance with GAAP.
<PAGE>


                     "Consolidated Total Assets" means, as of any date with
           respect to the Consolidated Parties on a consolidated basis, total
           assets, as determined in accordance with GAAP.

                     "Consolidated Total Liabilities" means, as of any date with
           respect to the Consolidated Parties on a consolidated basis, total
           liabilities, as determined in accordance with GAAP.

                     "Consolidated Total Tangible Assets" means, as of any date
           with respect to the Consolidated Parties on a consolidated basis,
           Consolidated Total Assets minus (a) goodwill and (b) other items
           properly classified as "intangible assets" in each case as determined
           in accordance with GAAP.

                     "Continue", "Continuation", and "Continued" shall refer to
           the continuation pursuant to Section 3.2 hereof of a Eurodollar Loan
           from one Interest Period to the next Interest Period.

                     "Continuing Directors" means, during any period of up to 24
           consecutive months, commencing after the Closing Date, individuals
           who at the beginning of such 24 month period were directors of the
           Borrower (together with any new director whose election by the
           Borrower's board of directors or whose nomination for election by the
           Borrower's shareholders was approved by a vote of at least two-thirds
           of the directors then still in office who either were directors at
           the beginning of such period or whose election or nomination for
           election was previously so approved).

                     "Convert", "Conversion", and "Converted" shall refer to a
           conversion pursuant to Section 3.2 or Sections 3.7 through 3.12,
           inclusive, of a Base Rate Loan into a Eurodollar Loan.

                     "Credit Documents" means a collective reference to this
           Credit Agreement, the Notes, the LOC Documents, each Joinder
           Agreement, the Agent's Fee Letter, the Collateral Documents and all
           other related agreements and documents issued or delivered hereunder
           or thereunder or pursuant hereto or thereto (in each case as the same
           may be amended, modified, restated, supplemented, extended, renewed
           or replaced from time to time), and "Credit Document" means any one
           of them.

                     "Credit Parties" means a collective reference to the
           Borrower and the Guarantors, and "Credit Party" means any one of
           them.

                     "Credit Party Obligations" means, without duplication, (a)
           all of the obligations of the Credit Parties to the Lenders
           (including the Issuing Lender) and the Agent, whenever arising, under
           this Credit Agreement, the Notes, the Collateral Documents or any of
           the other Credit Documents (including, but not limited to, any
           interest accruing after the occurrence of a Bankruptcy Event with
           respect to any Credit Party, regardless of whether such interest is
           an allowed claim under the Bankruptcy Code) and (b) all liabilities
           and obligations, whenever arising, owing from the Borrower to any
           Lender, or any Affiliate of a Lender, arising under any Hedging
           Agreement.
<PAGE>


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

                     "Defaulting Lender" means, at any time, any Lender that (a)
           has failed to make a Loan or purchase a Participation Interest
           required pursuant to the term of this Credit Agreement within one
           Business Day of when due, (b) other than as set forth in (a) above,
           has failed to pay to the Agent or any Lender an amount owed by such
           Lender pursuant to the terms of this Credit Agreement within one
           Business Day of when due, or (c) has been deemed insolvent or has
           become subject to a bankruptcy or insolvency proceeding or with
           respect to which (or with respect to any of assets of which) a
           receiver, trustee or similar official has been appointed.

                     "Dollars" and "$" means dollars in lawful currency of the
           United States of America.

                     "Domestic Subsidiary" means, with respect to any Person,
           any Subsidiary of such Person which is incorporated or organized
           under the laws of any State of the United States or the District of
           Columbia.

                     "Eligible Assignee" means (a) a Lender; (b) an Affiliate of
           a Lender; and (c) 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 11.3, the Borrower
           (such approval not to be unreasonably withheld or delayed by the
           Borrower and such approval to be deemed given by the Borrower if no
           objection is received by the assigning Lender and the Agent from the
           Borrower within two Business Days after notice of such proposed
           assignment has been provided by the assigning Lender to the
           Borrower); provided, however, that neither the Borrower nor an
           Affiliate of the Borrower shall qualify as an Eligible Assignee.

                     "Environmental Laws" means any and all lawful and
           applicable Federal, state, local and foreign statutes, laws,
           regulations, ordinances, rules, judgments, orders, decrees, permits,
           concessions, grants, franchises, licenses, agreements or other
           governmental restrictions relating to the environment or to
           emissions, discharges, releases or threatened releases of pollutants,
           contaminants, chemicals, or industrial, toxic or hazardous substances
           or wastes into the environment including, without limitation, ambient
           air, surface water, ground water, or land, or otherwise relating to
           the manufacture, processing, distribution, use, treatment, storage,
           disposal, transport, or handling of pollutants, contaminants,
           chemicals, or industrial, toxic or hazardous substances or wastes.
<PAGE>


                     "Equity Issuance" means any issuance by any Consolidated
           Party to any Person which is not a Credit Party of shares of its
           Capital Stock, including, without limitation, (a) any shares of its
           Capital Stock pursuant to the exercise of options or warrants and (b)
           any shares of its Capital Stock pursuant to the conversion of any
           debt securities to equity. The term "Equity Issuance" shall not
           include (i) any Asset Disposition, (ii) the issuance of shares of the
           Borrower's common stock or Class A common stock pursuant to options
           granted pursuant to any employee stock option plan or non-employee
           directors stock option plan of the Borrower, or (iii) the issuance of
           non-plan options to non-employee directors covering an aggregate of
           16,638 shares of Class A common stock and 5,500 shares of common
           stock.

                     "ERISA" means the Employee Retirement Income Security Act
           of 1974, as amended, and any successor statute thereto, as
           interpreted by the rules and regulations thereunder, all as the same
           may be in effect from time to time. References to sections of ERISA
           shall be construed also to refer to any successor sections.

                     "ERISA Affiliate" means an entity which is under common
           control with any Credit Party within the meaning of Section
           4001(a)(14) of ERISA, or is a member of a group which includes the
           Borrower and which is treated as a single employer under Sections
           414(b) or (c) of the Code.

                     "ERISA Event" means (a) with respect to any Plan, the
           occurrence of a Reportable Event or the substantial cessation of
           operations (within the meaning of Section 4062(e) of ERISA); (b) the
           withdrawal by any Consolidated Party or any ERISA Affiliate from a
           Multiple Employer Plan during a plan year in which it was a
           substantial employer (as such term is defined in Section 4001(a)(2)
           of ERISA), or the termination of a Multiple Employer Plan; (c) the
           distribution of a notice of intent to terminate or the actual
           termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
           ERISA; (d) the institution of proceedings to terminate or the actual
           termination of a Plan by the PBGC under Section 4042 of ERISA; (e)
           any event or condition which might constitute grounds under Section
           4042 of ERISA for the termination of, or the appointment of a trustee
           to administer, any Plan; (f) the complete or partial withdrawal of
           any Consolidated Party or any ERISA Affiliate from a Multiemployer
           Plan; (g) the conditions for imposition of a lien under Section
           302(f) of ERISA exist with respect to any Plan; or (h) the adoption
           of an amendment to any Plan requiring the provision of security to
           such Plan pursuant to Section 307 of ERISA.

                     "Eurodollar Loan" means any Loan that bears interest at a
           rate based upon the Eurodollar Rate.

                     "Eurodollar Rate" means, for any Eurodollar Loan for any
           Interest Period therefor, the rate per annum (rounded upwards, if
           necessary, to the nearest 1/100 of 1%) determined by the Agent to be
           equal to the quotient obtained by dividing (a) the London Interbank
           Offered Rate for such Eurodollar Loan for such Interest Period by (b)
           1 minus the Eurodollar Reserve Requirement for such Eurodollar Loan
           for such Interest Period.
<PAGE>


                     "Eurodollar 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 Eurodollar Reserve Requirement shall
           reflect any other reserves required to be maintained by such member
           banks with respect to (a) any category of liabilities which includes
           deposits by reference to which the Adjusted Eurodollar Rate is to be
           determined, or (b) any category of extensions of credit or other
           assets which include Eurodollar Loans. The Adjusted Eurodollar Rate
           shall be adjusted automatically on and as of the effective date of
           any change in the Eurodollar Reserve Requirement.

                     "Event of Default" means such term as defined in Section
           9.1.

                     "Excluded Asset Disposition" means any Asset Disposition by
           any Consolidated Party to any Credit Party if (a) the Credit Parties
           shall cause to be executed and delivered such documents, instruments
           and certificates as the Agent may request so as to cause the Credit
           Parties to be in compliance with the terms of Section 7.13 after
           giving effect to such Asset Disposition and (b) after giving effect
           such Asset Disposition, no Default or Event of Default exists.

                     "Existing Credit Agreement" means the Credit Agreement
           dated as of December 1, 1997, as amended prior to the date hereof, by
           and among Benihana Inc. the Guarantors, Wachovia Bank, National
           Association, as a Lender and as the Agent.

                     "Fees" means all fees payable pursuant to Section 3.5.

                     "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.

                     "Fixed Charge Coverage Ratio" means, as of the end of each
           fiscal quarter of the Consolidated Parties for the twelve month
           period ending on such date, the ratio of (a) Consolidated EBITDA for
           the applicable period to (b) the sum of (i) Consolidated Accrued
           Interest Expense for the applicable period plus (ii) Consolidated
           Capital Expenditures for the applicable period plus (iii)
           Consolidated Cash Taxes for the applicable period plus (iv) dividends
           paid during such period plus (v) Consolidated Scheduled Funded Debt
           Payments for the applicable period plus (vi) any amounts paid for the
           repurchase of preferred stock for the applicable period. The
           applicable period for the foregoing components shall be for the four
           consecutive quarters ending as of the date of determination.
<PAGE>


                     "Foreign Subsidiary" means, with respect to any Person, any
           Subsidiary of such Person which is not a Domestic Subsidiary of such
           Person.

                     "Funded Indebtedness" means, with respect to any Person,
           without duplication, (a) all obligations of such Person for borrowed
           money, (b) all obligations of such Person evidenced by bonds,
           debentures, notes or similar instruments, or upon which interest
           payments are customarily made, (c) all obligations of such Person
           under conditional sale or other title retention agreements relating
           to Property purchased by such Person (other than customary
           reservations or retentions of title under agreements with suppliers
           entered into in the ordinary course of business), (d) all obligations
           of such Person issued or assumed as the deferred purchase price of
           Property or services purchased by such Person (other than trade debt
           incurred in the ordinary course of business and due within six months
           of the incurrence thereof) which would appear as liabilities on a
           balance sheet of such Person, (e) all Guaranty Obligations of such
           Person, (f) the maximum amount of all standby letters of credit
           issued or bankers' acceptances facilities created for the account of
           such Person and, without duplication, all drafts drawn thereunder (to
           the extent unreimbursed), (g) all preferred Capital Stock issued by
           such Person and required by the terms thereof to be redeemed, or for
           which mandatory sinking fund payments are due, by a fixed date, (h)
           Indebtedness in respect of any synthetic lease, end loaded lease
           financing, tax retention operating lease, off-balance sheet loan or
           similar off-balance sheet financing product to which such Person is a
           party, (i) the principal portion of all obligations of such Person
           under Capital Leases, (j) all Indebtedness of another Person of the
           type referred to in clauses (a)-(i) above secured by (or for which
           the holder of such Funded Indebtedness has an existing right,
           contingent or otherwise, to be secured by) any Lien on, or payable
           out of the proceeds of production from, Property owned or acquired by
           such Person, whether or not the obligations secured thereby have been
           assumed, (k) all Guaranty Obligations of such Person with respect to
           Indebtedness of the type referred to in clauses (a)-(i) above of
           another Person and (l) Indebtedness of the type referred to in
           clauses (a)-(i) above of any partnership or unincorporated joint
           venture in which such Person is legally obligated or has a reasonable
           expectation of being liable with respect thereto.

                     "GAAP" means generally accepted accounting principles in
           the United States applied on a consistent basis and subject to the
           terms of Section 1.3.

                     "Governmental Authority" means any Federal, state, local or
           foreign court or governmental agency, authority, instrumentality or
           regulatory body.

                     "Guarantor" means each of the Persons identified as a
           "Guarantor" on the signature pages hereto and each Additional Credit
           Party which may hereafter execute a Joinder Agreement, together with
           their successors and permitted assigns, and "Guarantor" means any one
           of them.
<PAGE>


                     "Guaranty Obligations" means, with respect to any Person,
           without duplication, any obligations of such Person (other than
           endorsements in the ordinary course of business of negotiable
           instruments for deposit or collection) guaranteeing or intended to
           guarantee any Indebtedness of any other Person in any manner, whether
           direct or indirect, and including without limitation any obligation,
           whether or not contingent, (a) to purchase any such Indebtedness or
           any Property constituting security therefor, (b) to advance or
           provide funds or other support for the payment or purchase of any
           such Indebtedness or to maintain working capital, solvency or other
           balance sheet condition of such other Person (including without
           limitation keep well agreements, maintenance agreements, comfort
           letters or similar agreements or arrangements) for the benefit of any
           holder of Indebtedness of such other Person, (c) to lease or purchase
           Property, securities or services primarily for the purpose of
           assuring the holder of such Indebtedness, or (d) to otherwise assure
           or hold harmless the holder of such Indebtedness against loss in
           respect thereof. The amount of any Guaranty Obligation hereunder
           shall (subject to any limitations set forth therein) be deemed to be
           an amount equal to the outstanding principal amount (or maximum
           principal amount, if larger) of the Indebtedness in respect of which
           such Guaranty Obligation is made.

                     "Hedging Agreements" means any interest rate protection
           agreement or foreign currency exchange agreement between any
           Consolidated Party and any Lender, or any Affiliate of a Lender.

                     "Indebtedness" of any Person means (a) all obligations of
           such Person for borrowed money, (b) all obligations of such Person
           evidenced by bonds, debentures, notes or similar instruments, or upon
           which interest payments are customarily made, (c) all obligations of
           such Person under conditional sale or other title retention
           agreements relating to Property purchased by such Person (other than
           customary reservations or retentions of title under agreements with
           suppliers entered into in the ordinary course of business), (d) all
           obligations of such Person issued or assumed as the deferred purchase
           price of Property or services purchased by such Person (other than
           trade debt incurred in the ordinary course of business and due within
           six months of the incurrence thereof) which would appear as
           liabilities on a balance sheet of such Person, (e) all obligations of
           such Person under take-or-pay or similar arrangements or under
           commodities agreements, (f) all Indebtedness of others secured by (or
           for which the holder of such Indebtedness has an existing right,
           contingent or otherwise, to be secured by) any Lien on, or payable
           out of the proceeds of production from, Property owned or acquired by
           such Person, whether or not the obligations secured thereby have been
           assumed, (g) all Guaranty Obligations of such Person, (h) the
           principal portion of all obligations of such Person under Capital
           Leases, (i) all obligations of such Person under Hedging Agreements,
           (j) obligations in respect of any synthetic lease, end loaded lease
           financing, tax retention operating lease, off-balance sheet loan or
           similar off-balance sheet financing product to which such Person is a
           party, (k) the maximum amount of all standby letters of credit issued
           or bankers' acceptances facilities created for the account of such
           Person and, without duplication, all drafts drawn thereunder (to the
           extent unreimbursed), (l) all preferred Capital Stock issued by such
           Person and required by the terms thereof to be redeemed, or for which
           mandatory sinking fund payments are due, by a fixed date and (m) the
           Indebtedness of any partnership or unincorporated joint venture in
           which such Person is a general partner or a joint venturer.
<PAGE>


                     "Interest Coverage Ratio" means, with respect to the
           Consolidated Parties on a consolidated basis for the twelve month
           period ending on the last day of any fiscal quarter of the
           Consolidated Parties, the ratio of (a) Consolidated EBITDA for such
           period to (b) Consolidated Accrued Interest Expense for such period.

                     "Interest Payment Date" means (a) as to Base Rate Loans,
           the last day of each fiscal quarter of the Borrower and the Maturity
           Date, and (b) as to Eurodollar Loans, the last day of each applicable
           Interest Period and the Maturity Date.

                     "Interest Period" means, as to Eurodollar Loans, a period
           of one, two or three months' duration, as the Borrower may elect,
           commencing, in each case, on the date of the borrowing (including
           continuations and conversions thereof); provided, however, (a) if any
           Interest Period would end on a day which is not a Business Day, such
           Interest Period shall be extended to the next succeeding Business Day
           (except that where the next succeeding Business Day falls in the next
           succeeding calendar month, then on the next preceding Business Day),
           (b) no Interest Period shall extend beyond the Maturity Date, (c)
           with regard to the Term Loans, no Interest Period shall extend beyond
           any Principal Amortization Payment Date unless the portion of Term
           Loans comprised of Base Rate Loans together with the portion of Term
           Loans comprised of Eurodollar Loans with Interest Periods expiring
           prior to the date such Principal Amortization Payment is due, is at
           least equal to the amount of such Principal Amortization Payment due
           on such date and (d) where an Interest Period begins on a day for
           which there is no numerically corresponding day in the calendar month
           in which the Interest Period is to end, such Interest Period shall
           end on the last Business Day of such calendar month.

                     "Investment" in any Person means (a) the acquisition
           (whether for cash, property, services, assumption of Indebtedness,
           securities or otherwise) of assets (excluding goods and inventory
           used or sold in the ordinary course of business), shares of Capital
           Stock, bonds, notes, debentures, partnership, joint ventures or other
           ownership interests or other securities of such other Person or (b)
           any deposit with, or advance, loan or other extension of credit to,
           such Person (other than deposits made in connection with the purchase
           of equipment or other assets in the ordinary course of business) or
           (c) any other capital contribution to or investment in such Person,
           including, without limitation, any Guaranty Obligations (including
           any support for a letter of credit issued on behalf of such Person)
           incurred for the benefit of such Person, but excluding any Restricted
           Payment to such Person.

                     "Issuing Lender" means Wachovia Bank, National Association.

                     "Issuing Lender Fees" shall have the meaning assigned to
           such term in Section 3.5(b)(iii).

                     "Joinder Agreement" means a Joinder Agreement substantially
           in the form of Exhibit 7.12 hereto, executed and delivered by an
           Additional Credit Party in accordance with the provisions of Section
           7.12.
<PAGE>


                     "Lender" means any of the Persons identified as a "Lender"
           on the signature pages hereto, and any Person which may become a
           Lender by way of assignment in accordance with the terms hereof,
           together with their successors and permitted assigns.

                     "Letter of Credit" means any letter of credit issued by the
           Issuing Lender for the account of any Credit Party in accordance with
           the terms of Section 2.2.

                     "Leverage Ratio" means, with respect to the Consolidated
           Parties on a consolidated basis for the twelve month period ending on
           the last day of any fiscal quarter, the ratio of (a) Funded
           Indebtedness of the Consolidated Parties on a consolidated basis on
           the last day of such period to (b) Consolidated EBITDA for such
           period.

                     "Lien" means any mortgage, pledge, hypothecation,
           assignment, deposit arrangement, security interest, encumbrance, lien
           (statutory or otherwise), preference, priority or charge of any kind
           (including any agreement to give any of the foregoing, any
           conditional sale or other title retention agreement, any financing or
           similar statement or notice filed under the Uniform Commercial Code
           as adopted and in effect in the relevant jurisdiction or other
           similar recording or notice statute, and any lease in the nature
           thereof).

                     "Loan" or "Loans" means the Revolving Loans and/or the Term
           Loans (or a portion of any Revolving Loan or Term Loan bearing
           interest at the Adjusted Base Rate or the Adjusted Eurodollar Rate),
           individually or collectively, as appropriate.

                     "LOC Commitment" means the commitment of the Issuing Lender
           to issue Letters of Credit in an aggregate face amount at any time
           outstanding (together with the amounts of any unreimbursed drawings
           thereon) of up to the LOC Committed Amount.

                     "LOC Committed Amount" shall have the meaning assigned to
           such term in Section 2.2.

                     "LOC Documents" means, with respect to any Letter of
           Credit, such Letter of Credit, any amendments thereto, any documents
           delivered in connection therewith, any application therefor, and any
           agreements, instruments, guarantees or other documents (whether
           general in application or applicable only to such Letter of Credit)
           governing or providing for (a) the rights and obligations of the
           parties concerned or at risk or (b) any collateral security for such
           obligations.

                     "LOC Obligations" means, at any time, the sum of (a) the
           maximum amount which is, or at any time thereafter may become,
           available to be drawn under Letters of Credit then outstanding,
           assuming compliance with all requirements for drawings referred to in
           such Letters of Credit plus (b) the aggregate amount of all drawings
           under Letters of Credit honored by the Issuing Lender but not
           theretofore reimbursed by the Borrower.
<PAGE>


                     "London Interbank Offered Rate" shall mean, with respect to
           any Eurodollar Loan for the Interest Period applicable thereto, the
           rate of interest 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; provided, however, if more than one rate is
           specified on Telerate Page 3750, the applicable rate shall be the
           arithmetic mean of all such rates. If, for any reason, such rate is
           not available, the term "London Interbank Offered Rate" shall mean,
           with respect to any Eurodollar Loan for the Interest Period
           applicable thereto, the rate of interest 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.

                     "Material Adverse Effect" means a material adverse effect
           on (a) the condition (financial or otherwise), operations, business,
           assets, liabilities or prospects of any Consolidated Party, (b) the
           ability of any Credit Party to perform any material obligation under
           the Credit Documents to which it is a party or (c) the material
           rights and remedies of the Lenders under the Credit Documents.

                     "Materials of Environmental Concern" means any gasoline or
           petroleum (including crude oil or any fraction thereof) or petroleum
           products or any hazardous or toxic substances, materials or wastes,
           defined or regulated as such in or under any Environmental Laws,
           including, without limitation, asbestos, polychlorinated biphenyls
           and urea-formaldehyde insulation.

                     "Maturity Date" means (a) as to the Revolving Loans and
           Letters of Credit (and the related LOC Obligations), December 2, 2007
           and (b) as to the Term Loan, the date of the final maturity of such
           Term Loan.

                     "Moody's" means Moody's Investors Service, Inc., or any
           successor or assignee of the business of such company in the business
           of rating securities.

                     "Multiemployer Plan" means a Plan which is a multiemployer
           plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.

                     "Multiple Employer Plan" means a Plan which any
           Consolidated Party or any ERISA Affiliate and at least one employer
           other than the Consolidated Parties or any ERISA Affiliate are
           contributing sponsors.
<PAGE>


                     "Net Cash Proceeds" means the aggregate cash proceeds
           received by the Consolidated Parties in respect of any Asset
           Disposition or Equity Issuance, net of (a) direct costs (including,
           without limitation, legal, accounting and investment banking fees,
           and sales commissions), (b) taxes paid or payable as a result
           thereof; it being understood that "Net Cash Proceeds" shall include,
           without limitation, any cash received upon the sale or other
           disposition of any non-cash consideration received by the
           Consolidated Parties in any Asset Disposition or Equity Issuance, and
           (c) in the case of an Asset Disposition only, any amounts payable in
           respect of Indebtedness which is secured by, or otherwise related to,
           any Property which is the subject thereof to the extent such
           Indebtedness and any payments in respect thereof are paid with a
           portion of the proceeds therefrom.

                     "Note" or "Notes" means the Revolving Notes and/or the Term
           Notes, individually or collectively, as appropriate.

                     "Notice of Borrowing" means a written notice of borrowing
           in substantially the form of Exhibit 2.1(b)(i), as required by
           Section 2.1(b)(i), Section 2.3(b) or Section 2.4(b).

                     "Notice of Extension/Conversion" means the written notice
           of extension or conversion in substantially the form of Exhibit 3.2,
           as required by Section 3.2.

                     "Operating Lease" means, as applied to any Person, any
           lease (including, without limitation, leases which may be terminated
           by the lessee at any time) of any Property (whether real, personal or
           mixed) which is not a Capital Lease other than any such lease in
           which that Person is the lessor.

                     "Other Taxes" means such term as is defined in Section
           3.11.

                     "Participation Interest" means a purchase by a Lender of a
           participation in Letters of Credit or LOC Obligations as provided in
           Section 2.2 or in any Loans as provided in Section 3.14.

                     "PBGC" means the Pension Benefit Guaranty Corporation
           established pursuant to Subtitle A of Title IV of ERISA and any
           successor thereof.

                     "Permitted Investments" means Investments which are either
           (a) cash and Cash Equivalents; (b) accounts receivable created,
           acquired or made by any Consolidated Party in the ordinary course of
           business and payable or dischargeable in accordance with customary
           trade terms; (c) Investments existing as of the Closing Date and set
           forth in Schedule 1.1A, (d) Guaranty Obligations permitted by Section
           8.8; (e) transactions permitted by Section 8.9, (f) advances or loans
           to employees, agents, customers or suppliers that do not exceed
           $500,000 in the aggregate at any one time outstanding for all of the
           Consolidated Parties; (g) Investments in any Credit Party; or (h)
           equity securities listed on the New York Stock Exchange, provided
           that (i) the long-term credit rating of the corporation issuing such
           securities shall be A- (or the equivalent thereof) or better from S&P
           or A3 (or the equivalent thereof) or better from Moody's and (ii) the
           purchase price paid for all such equity securities held at any time
           shall not exceed $500,000.
<PAGE>


                     "Permitted Liens" means:

                     (a) Liens in favor of the Agent to secure the Credit Party
           Obligations;

                     (b) Liens (other than Liens created or imposed under ERISA)
           for taxes, assessments or governmental charges or levies not yet due
           or Liens for taxes being contested in good faith by appropriate
           proceedings for which adequate reserves determined in accordance with
           GAAP have been established (and as to which the Property subject to
           any such Lien is not yet subject to foreclosure, sale or loss on
           account thereof);

                     (c) statutory Liens of landlords and Liens of carriers,
           warehousemen, mechanics, materialmen and suppliers and other Liens
           imposed by law or pursuant to customary reservations or retentions of
           title arising in the ordinary course of business, provided that such
           Liens secure only amounts not yet due and payable or, if due and
           payable, are unfiled and no other action has been taken to enforce
           the same or are being contested in good faith by appropriate
           proceedings for which adequate reserves determined in accordance with
           GAAP have been established (and as to which the Property subject to
           any such Lien is not yet subject to foreclosure, sale or loss on
           account thereof);

                     (d) Liens (other than Liens created or imposed under ERISA)
           incurred or deposits made by any Consolidated Party in the ordinary
           course of business in connection with workers' compensation,
           unemployment insurance and other types of social security, or to
           secure the performance of tenders, statutory obligations, bids,
           leases, government contracts, performance and return-of-money bonds
           and other similar obligations (exclusive of obligations for the
           payment of borrowed money);

                     (e) Liens in connection with attachments or judgments
           (including judgment or appeal bonds) provided that no Event of
           Default shall have occurred hereunder, and provided further, that the
           judgments secured shall, within 30 days after the entry thereof, have
           been discharged or execution thereof stayed pending appeal, or shall
           have been discharged within 30 days after the expiration of any such
           stay;

                     (f) easements, rights-of-way, restrictions (including
           zoning restrictions), minor defects or irregularities in title and
           other similar charges or encumbrances not, in any material respect,
           impairing the use of the encumbered Property for its intended
           purposes;

                     (g) Liens on Property securing purchase money Indebtedness
           (including Capital Leases) to the extent permitted under Section
           8.1(c), provided that any such Lien attaches to such Property
           concurrently with or within 30 days after the acquisition thereof;
<PAGE>


                     (h) any interest of title of a lessor under, and Liens
           arising from UCC financing statements (or equivalent filings,
           registrations or agreements in foreign jurisdictions) relating to,
           leases permitted by this Credit Agreement;

                     (i) normal and customary rights of setoff upon deposits of
           cash in favor of banks or other depository institutions provided,
           that no Event of Default shall have occurred hereunder; and

                     (j) Liens existing as of the Closing Date and set forth on
           Schedule 1.1B; provided that (i) no such Lien shall at any time be
           extended to or cover any Property other than the Property subject
           thereto on the Closing Date and (ii) the principal amount of the
           Indebtedness secured by such Liens shall not be extended, renewed,
           refunded or refinanced.

                     "Person" means any individual, partnership, joint venture,
           firm, corporation, limited liability company, association, trust or
           other enterprise (whether or not incorporated) or any Governmental
           Authority.

                     "Plan" means any employee benefit plan (as defined in
           Section 3(3) of ERISA) which is covered by ERISA and with respect to
           which any Consolidated Party or any ERISA Affiliate is (or, if such
           plan were terminated at such time, would under Section 4069 of ERISA
           be deemed to be) an "employer" within the meaning of Section 3(5) of
           ERISA.

                     "Pledge Agreement" means the pledge agreement dated as of
           the Closing Date in the form of Exhibit 1.1A to be executed in favor
           of the Agent by each of the Credit Parties, as amended, modified,
           restated or supplemented from time to time.

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

                     "Principal Amortization Payment" means a principal payment
           on the Term Loans as set forth in Section 2.3(d).

                     "Principal Amortization Payment Date" means the date a
           Principal Amortization Payment is due.

                     "Principal Office" means the principal office of Wachovia
           Bank, National Association, presently located at Charlotte, North
           Carolina.

                     "Property" means any interest in any kind of property or
           asset, whether real, personal or mixed, or tangible or intangible.
<PAGE>


                     "Purchase Agreement" means that certain Equity Purchase
           Agreement dated as of November 11, 2002 by and among RA Sushi, LLC,
           as Seller, RA Sushi Holding Corp., as Purchaser, and the individuals
           referred to therein as the Principal Members.

                     "Register" shall have the meaning given such term in
           Section 11.3(c).

                     "Regulation T, U, or X" means Regulation T, U or X,
           respectively, of the Board of Governors of the Federal Reserve System
           as from time to time in effect and any successor to all or a portion
           thereof.

                     "Release" means any spilling, leaking, pumping, pouring,
           emitting, emptying, discharging, injecting, escaping, leaching,
           dumping or disposing into the environment (including the abandonment
           or discarding of barrels, containers and other closed receptacles
           containing any Materials of Environmental Concern).

                     "Reportable Event" means any of the events set forth in
           Section 4043(c) of ERISA, other than those events as to which the
           notice requirement has been waived by regulation.

                     "Required Lenders" means, at any time, Lenders which are
           then in compliance with their obligations hereunder (as determined by
           the Agent) and holding in the aggregate at least 51% of (a) the
           Revolving Commitments (and Participation Interests therein) and the
           outstanding Term Loans (and Participation Interests therein) or (b)
           if the Commitments have been terminated, the outstanding Loans and
           Participation Interests (including the Participation Interests of the
           Issuing Lender in any Letters of Credit).

                     "Requirement of Law" means, as to any Person, the
           certificate of incorporation and by-laws or other organizational or
           governing documents of such Person, and any law, treaty, rule or
           regulation or determination of an arbitrator or a court or other
           Governmental Authority, in each case applicable to or binding upon
           such Person or any of its material property is subject.

                     "Responsible Officer" means either the president or chief
           financial officer of the Borrower.

                     "Restricted Payment" means (a) any dividend or other
           distribution, direct or indirect, on account of any shares of any
           class of Capital Stock of any Consolidated Party, now or hereafter
           outstanding, (b) any redemption, retirement, sinking fund or similar
           payment, purchase or other acquisition for value, direct or indirect,
           of any shares of any class of Capital Stock of any Consolidated
           Party, now or hereafter outstanding and (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 Capital
           Stock of any Consolidated Party, now or hereafter outstanding.
<PAGE>


                     "Revolving Commitment" means, with respect to each Lender,
           the commitment of such Lender in an aggregate principal amount at any
           time outstanding of up to such Lender's Revolving Commitment
           Percentage of the Revolving Committed Amount, (a) to make Revolving
           Loans in accordance with the provisions of Section 2.1(a) and (b) to
           purchase Participation Interests in Letters of Credit in accordance
           with the provisions of Section 2.2(c).

                     "Revolving Commitment Percentage" means, for any Lender,
           the percentage identified as its Revolving Commitment Percentage on
           Schedule 2.1(a), as such percentage may be modified in connection
           with any assignment made in accordance with the provisions of Section
           11.3.

                     "Revolving Committed Amount" shall have the meaning
           assigned to such term in Section 2.1(a).

                     "Revolving Loans" shall have the meaning assigned to such
           term in Section 2.1(a).

                     "Revolving Note" or "Revolving Notes" means the promissory
           notes of the Borrower in favor of each of the Lenders evidencing the
           Revolving Loans provided pursuant to Section 2.1(e), individually or
           collectively, as appropriate, as such promissory notes may be
           amended, modified, restated, supplemented, extended, renewed or
           replaced from time to time.

                     "S&P" means Standard & Poor's Ratings Group, a division of
           The McGraw-Hill Companies, Inc., or any successor or assignee of the
           business of such division in the business of rating securities.

                     "Sale and Leaseback Transaction" means any direct or
           indirect arrangement with any Person or to which any such Person is a
           party, providing for the leasing to any Consolidated Party of any
           Property, whether owned by such Consolidated Party as of the Closing
           Date or later acquired, which has been or is to be sold or
           transferred by such Consolidated Party to such Person or to any other
           Person from whom funds have been, or are to be, advanced by such
           Person on the security of such Property.

                     "Security Agreement" means the security agreement dated as
           of the Closing Date in the form of Exhibit 1.1B to be executed in
           favor of the Agent by each of the Credit Parties, as amended,
           modified, restated or supplemented from time to time.

                     "Single Employer Plan" means any Plan which is covered by
           Title IV of ERISA, but which is not a Multiemployer Plan or a
           Multiple Employer Plan.
<PAGE>

                     "Solvent" or "Solvency" means, with respect to any Person
           as of a particular date, that on such date (a) such Person is able to
           realize upon its assets and pay its debts and other liabilities,
           contingent obligations and other commitments as they mature in the
           normal course of business, (b) such Person does not intend to, and
           does not believe that it will, incur debts or liabilities beyond such
           Person's ability to pay as such debts and liabilities mature in their
           ordinary course, (c) such Person is not engaged in a business or a
           transaction, and is not about to engage in a business or a
           transaction, for which such Person's Property would constitute
           unreasonably small capital after giving due consideration to the
           prevailing practice in the industry in which such Person is engaged
           or is to engage, (d) the fair value of the Property of such Person is
           greater than the total amount of liabilities, including, without
           limitation, contingent liabilities, of such Person and (e) the
           present fair salable value of the assets of such Person is not less
           than the amount that will be required to pay the probable liability
           of such Person on its debts as they become absolute and matured. In
           computing the amount of contingent liabilities at any time, it is
           intended that such liabilities will be computed at the amount which,
           in light of all the facts and circumstances existing at such time,
           represents the amount that can reasonably be expected to become an
           actual or matured liability.

                     "Standby Letter of Credit Fee" shall have the meaning
           assigned to such term in Section 3.5(b)(i).

                     "Subsidiary" means, as to any Person, (a) any corporation
           more than 50% of whose Capital Stock of any class or classes having
           by the terms thereof ordinary voting power to elect a majority of the
           directors of such corporation (irrespective of whether or not at the
           time, any class or classes of such corporation shall have or might
           have voting power by reason of the happening of any contingency) is
           at the time owned by such Person directly or indirectly through
           Subsidiaries, and (b) any partnership, association, joint venture or
           other entity in which such Person directly or indirectly through
           Subsidiaries has more than 50% equity interest at any time.

                     "Taxes" means such term as is defined in Section 3.11.

                     "Trade Letter of Credit Fee" shall have the meaning
           assigned to such term in Section 3.5(b)(ii).

                     "Term Loan" shall have the meaning assigned to such term in
           Section 2.3(a).

                     "Term Loan Commitment" means, with respect to each Lender,
           the commitment of such Lender to make its portion of the Term Loan in
           a principal amount equal to such Lender's Term Loan Commitment
           Percentage of the Term Loan Committed Amount.

                     "Term Loan Commitment Percentage" means, for any Lender,
           the percentage identified as its Term Loan Commitment Percentage on
           Schedule 2.1(a), as such percentage may be modified in connection
           with any assignment made in accordance with the provisions of Section
           11.3.

                     "Term Loan Committed Amount" shall have the meaning
           assigned to such term in Section 2.3(a).
<PAGE>


                     "Term Note" or "Term Notes" means the promissory notes of
           the Borrower in favor of each of the Lenders evidencing the Term
           Loans provided pursuant to Section 2.3(f), individually or
           collectively, as appropriate, as such promissory notes may be
           amended, modified, restated, supplemented, extended, renewed or
           replaced from time to time.

                     "Voting Stock" means, with respect to any Person, Capital
           Stock issued by such 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 though the right so to vote has been suspended by the happening
           of such a contingency.

                     "Wachovia Bank, National Association" means Wachovia Bank,
            National Association and its successors.

                     "Wholly Owned Subsidiary" of any Person means any
           Subsidiary 100% of whose Voting Stock or other equity interests is at
           the time owned by such Person directly or indirectly through other
           Wholly Owned Subsidiaries.

           1.2       Computation of Time Periods.
                     ----------------------------
           For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."

           1.3       Accounting Terms.
                     -----------------
           Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements as at March 31, 2002); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Agent or the
Required Lenders shall so object in writing within 60 days after delivery of
such financial statements, then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Borrower
to the Lenders as to which no such objection shall have been made.

<PAGE>


                                    SECTION 2

                                CREDIT FACILITIES

           2.1       Revolving Loans.
                     ----------------
                     (a) Revolving Commitment. Subject to the terms and
           conditions hereof and in reliance upon the representations and
           warranties set forth herein, each Lender severally agrees to make
           available to the Borrower such Lender's Revolving Commitment
           Percentage of revolving credit loans requested by the Borrower in
           Dollars ("Revolving Loans") from time to time from the Closing Date
           until the Maturity Date, or such earlier date as the Revolving
           Commitments shall have been terminated as provided herein for the
           purposes hereinafter set forth; provided, however, that the sum of
           the aggregate principal amount of outstanding Revolving Loans shall
           not exceed FIFTEEN MILLION DOLLARS ($15,000,000) (as such aggregate
           maximum amount may be reduced from time to time as provided in
           Section 3.4, the "Revolving Committed Amount"); provided, further,
           (A) with regard to each Lender individually, such Lender's
           outstanding Revolving Loans shall not exceed such Lender's Revolving
           Commitment Percentage of the Revolving Committed Amount, and (B) the
           aggregate principal amount of outstanding Revolving Loans plus LOC
           Obligations outstanding shall not exceed the Revolving Committed
           Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar
           Loans, or a combination thereof, as the Borrower may request, and may
           be repaid and reborrowed in accordance with the provisions hereof;
           provided, however, that no more than 5 Eurodollar Loans shall be
           outstanding hereunder at any time. For purposes hereof, Eurodollar
           Loans with different Interest Periods shall be considered as separate
           Eurodollar Loans, even if they begin on the same date, although
           borrowings, extensions and conversions may, in accordance with the
           provisions hereof, be combined at the end of existing Interest
           Periods to constitute a new Eurodollar Loan with a single Interest
           Period. Revolving Loans hereunder may be repaid and reborrowed in
           accordance with the provisions hereof.

                     (b) Revolving Loan Borrowings.

                               (i) Notice of Borrowing. The Borrower shall
                     request a Revolving Loan borrowing by written notice (or
                     telephonic notice promptly confirmed in writing) to the
                     Agent not later than 11:00 A.M. (Charlotte, North Carolina
                     time) on the Business Day prior to the date of the
                     requested borrowing in the case of Base Rate Loans, and on
                     the third Business Day prior to the date of the requested
                     borrowing in the case of Eurodollar Loans. Each such
                     request for borrowing shall be irrevocable and shall
                     specify (A) that a Revolving Loan is requested, (B) the
                     date of the requested borrowing (which shall be a Business
                     Day), (C) the aggregate principal amount to be borrowed,
                     and (D) whether the borrowing shall be comprised of Base
                     Rate Loans, Eurodollar Loans or a combination thereof, and
                     if Eurodollar Loans are requested, the Interest Period(s)
                     therefor. If the Borrower shall fail to specify in any such
                     Notice of Borrowing (I) an applicable Interest Period in
                     the case of a Eurodollar Loan, then such notice shall be
                     deemed to be a request for an Interest Period of one month,
                     or (II) the type of Revolving Loan requested, then such
                     notice shall be deemed to be a request for a Base Rate Loan
                     hereunder. The Agent shall give notice to each affected
                     Lender promptly upon receipt of each Notice of Borrowing
                     pursuant to this Section 2.1(b)(i), the contents thereof
                     and each such Lender's share of any borrowing to be made
                     pursuant thereto.
<PAGE>


                               (ii) Minimum Amounts. Each Eurodollar Loan or
                     Base Rate Loan that is a Revolving Loan shall be in a
                     minimum aggregate principal amount of $100,000 and integral
                     multiples of $25,000 in excess thereof (or the remaining
                     amount of the Revolving Committed Amount, if less).

                               (iii) Advances. Each Lender will make its
                     Revolving Commitment Percentage of each Revolving Loan
                     borrowing available to the Agent for the account of the
                     Borrower as specified in Section 3.15(a), or in such other
                     manner as the Agent may specify in writing, by 1:00 P.M.
                     (Charlotte, North Carolina time) on the date specified in
                     the applicable Notice of Borrowing in Dollars and in funds
                     immediately available to the Agent. Such borrowing will
                     then be made available to the Borrower by the Agent by
                     crediting the account of the Borrower on the books of such
                     office with the aggregate of the amounts made available to
                     the Agent by the Lenders and in like funds as received by
                     the Agent.

                     (c) Repayment. The principal amount of all Revolving Loans
           shall be due and payable in full on the Maturity Date, unless
           accelerated sooner pursuant to Section 9.2.

                     (d) Interest. Subject to the provisions of Section 3.1,

                               (i) Base Rate Loans. During such periods as
                     Revolving Loans shall be comprised in whole or in part of
                     Base Rate Loans, such Base Rate Loans shall bear interest
                     at a per annum rate equal to the Adjusted Base Rate.

                               (ii) Eurodollar Loans. During such periods as
                     Revolving Loans shall be comprised in whole or in part of
                     Eurodollar Loans, such Eurodollar Loans shall bear interest
                     at a per annum rate equal to the Adjusted Eurodollar Rate.

           Interest on Revolving Loans shall be payable in arrears on each
           applicable Interest Payment Date (or at such other times as may be
           specified herein).

                     (e) Revolving Notes. The Revolving Loans made by each
           Lender shall be evidenced by a duly executed promissory note of the
           Borrower to such Lender in an original principal amount equal to such
           Lender's Revolving Commitment Percentage of the Revolving Committed
           Amount and in substantially the form of Exhibit 2.1(e).

<PAGE>


           2.2       Letter of Credit Subfacility.
                     -----------------------------
                     (a) Issuance. Subject to the terms and conditions hereof
           and of the LOC Documents, if any, and any other terms and conditions
           which the Issuing Lender may reasonably require and in reliance upon
           the representations and warranties set forth herein, the Issuing
           Lender agrees to issue, and each Lender severally agrees to
           participate in the issuance by the Issuing Lender of, standby and
           trade Letters of Credit in Dollars from time to time from the Closing
           Date until the Maturity Date as the Borrower may request, in a form
           acceptable to the Issuing Lender; provided, however, that (i) the LOC
           Obligations outstanding shall not at any time exceed ONE MILLION
           DOLLARS ($1,000,000) (the "LOC Committed Amount") and (ii) the sum of
           the aggregate principal amount of outstanding Revolving Loans plus
           LOC Obligations outstanding shall not at any time exceed the
           Revolving Committed Amount. No Letter of Credit shall (x) have an
           original expiry date more than one year from the date of issuance or
           (y) as originally issued or as extended, have an expiry date
           extending beyond the Maturity Date. Each Letter of Credit shall
           comply with the related LOC Documents. The issuance and expiry dates
           of each Letter of Credit shall be a Business Day.

                     (b) Notice and Reports. The request for the issuance of a
           Letter of Credit shall be submitted by the Borrower to the Issuing
           Lender at least three (3) Business Days prior to the requested date
           of issuance. The Issuing Lender will, at least quarterly and more
           frequently upon request, disseminate to each of the Lenders a
           detailed report specifying the Letters of Credit which are then
           issued and outstanding and any activity with respect thereto which
           may have occurred since the date of the prior report, and including
           therein, among other things, the beneficiary, the face amount and the
           expiry date, as well as any payment or expirations which may have
           occurred.

                     (c) Participation. Each Lender, upon issuance of a Letter
           of Credit, shall be deemed to have purchased without recourse a
           Participation Interest from the applicable Issuing Lender in such
           Letter of Credit and the obligations arising thereunder and any
           collateral relating thereto, in each case in an amount equal to its
           pro rata share of the obligations under such Letter of Credit (based
           on the respective Revolving Commitment Percentages of the Lenders)
           and shall absolutely, unconditionally and irrevocably assume and be
           obligated to pay to the Issuing Lender and discharge when due, its
           pro rata share of the obligations arising under such Letter of
           Credit. Without limiting the scope and nature of each Lender's
           Participation Interest in any Letter of Credit, to the extent that
           the Issuing Lender has not been reimbursed as required hereunder or
           under any such Letter of Credit, each such Lender shall pay to the
           Issuing Lender its pro rata share of such unreimbursed drawing in
           same day funds on the day of notification by the Issuing Lender of an
           unreimbursed drawing pursuant to the provisions of subsection (d)
           below. The obligation of each Lender to so reimburse the Issuing
           Lender shall be absolute and unconditional and shall not be affected
           by the occurrence of a Default, an Event of Default or any other
           occurrence or event. Any such reimbursement shall not relieve or
           otherwise impair the obligation of the Borrower to reimburse the
           Issuing Lender under any Letter of Credit, together with interest as
           hereinafter provided.
<PAGE>


                     (d) Reimbursement. In the event of any drawing under any
           Letter of Credit, the Issuing Lender will promptly notify the
           Borrower. Unless the Borrower shall immediately notify the Issuing
           Lender that the Borrower intends to otherwise reimburse the Issuing
           Lender for such drawing, the Borrower shall be deemed to have
           requested that the Lenders make a Revolving Loan in the amount of the
           drawing as provided in subsection (e) below on the related Letter of
           Credit, the proceeds of which will be used to satisfy the related
           reimbursement obligations. The Borrower promises to reimburse the
           Issuing Lender on the day of drawing under any Letter of Credit
           (either with the proceeds of a Revolving Loan obtained hereunder or
           otherwise) in same day funds. If the Borrower shall fail to reimburse
           the Issuing Lender as provided hereinabove, the unreimbursed amount
           of such drawing shall bear interest at a per annum rate equal to the
           Base Rate plus 3%. The Borrower's reimbursement obligations hereunder
           shall be absolute and unconditional under all circumstances
           irrespective of any rights of setoff, counterclaim or defense to
           payment the Borrower may claim or have against the Issuing Lender,
           the Agent, the Lenders, the beneficiary of the Letter of Credit drawn
           upon or any other Person, including without limitation any defense
           based on any failure of the Borrower or any other Credit Party to
           receive consideration or the legality, validity, regularity or
           unenforceability of the Letter of Credit. The Issuing Lender will
           promptly notify the other Lenders of the amount of any unreimbursed
           drawing and each Lender shall promptly pay to the Agent for the
           account of the Issuing Lender in Dollars and in immediately available
           funds, the amount of such Lender's pro rata share of such
           unreimbursed drawing. Such payment shall be made on the day such
           notice is received by such Lender from the Issuing Lender if such
           notice is received at or before 2:00 P.M. (Charlotte, North Carolina
           time) otherwise such payment shall be made at or before 12:00 Noon
           (Charlotte, North Carolina time) on the Business Day next succeeding
           the day such notice is received. If such Lender does not pay such
           amount to the Issuing Lender in full upon such request, such Lender
           shall, on demand, pay to the Agent for the account of the Issuing
           Lender interest on the unpaid amount during the period from the date
           of such drawing until such Lender pays such amount to the Issuing
           Lender in full at a rate per annum equal to, if paid within two (2)
           Business Days of the date that such Lender is required to make
           payments of such amount pursuant to the preceding sentence, the
           Federal Funds Rate and thereafter at a rate equal to the Base Rate.
           Each Lender's obligation to make such payment to the Issuing Lender,
           and the right of the Issuing Lender to receive the same, shall be
           absolute and unconditional, shall not be affected by any circumstance
           whatsoever and without regard to the termination of this Credit
           Agreement or the Commitments hereunder, the existence of a Default or
           Event of Default or the acceleration of the obligations of the
           Borrower hereunder and shall be made without any offset, abatement,
           withholding or reduction whatsoever. Simultaneously with the making
           of each such payment by a Lender to the Issuing Lender, such Lender
           shall, automatically and without any further action on the part of
           the Issuing Lender or such Lender, acquire a Participation Interest
           in an amount equal to such payment (excluding the portion of such
           payment constituting interest owing to the Issuing Lender) in the
           related unreimbursed drawing portion of the LOC Obligation and in the
           interest thereon and in the related LOC Documents, and shall have a
           claim against the Borrower with respect thereto.
<PAGE>


                     (e) Repayment with Revolving Loans. On any day on which the
           Borrower shall have requested, or been deemed to have requested, a
           Revolving Loan advance to reimburse a drawing under a Letter of
           Credit, the Agent shall give notice to the Lenders that a Revolving
           Loan has been requested or deemed requested by the Borrower to be
           made in connection with a drawing under a Letter of Credit, in which
           case a Revolving Loan advance comprised of Base Rate Loans (or
           Eurodollar Loans to the extent the Borrower has complied with the
           procedures of Section 2.1(b)(i) with respect thereto) shall be
           immediately made to the Borrower by all Lenders (notwithstanding any
           termination of the Commitments pursuant to Section 9.2) pro rata
           based on the respective Revolving Commitment Percentages of the
           Lenders (determined before giving effect to any termination of the
           Commitments pursuant to Section 9.2) and the proceeds thereof shall
           be paid directly to the Issuing Lender for application to the
           respective LOC Obligations. Each such Lender hereby irrevocably
           agrees to make its pro rata share of each such Revolving Loan
           immediately upon any such request or deemed request in the amount, in
           the manner and on the date specified in the preceding sentence
           notwithstanding (i) the amount of such borrowing may not comply with
           the minimum amount for advances of Revolving Loans otherwise required
           hereunder, (ii) whether any conditions specified in Section 5.2 are
           then satisfied, (iii) whether a Default or an Event of Default then
           exists, (iv) failure for any such request or deemed request for
           Revolving Loan to be made by the time otherwise required hereunder,
           (v) whether the date of such borrowing is a date on which Revolving
           Loans are otherwise permitted to be made hereunder or (vi) any
           termination of the Commitments relating thereto immediately prior to
           or contemporaneously with such borrowing. In the event that any
           Revolving Loan cannot for any reason be made on the date otherwise
           required above (including, without limitation, as a result of the
           commencement of a proceeding under the Bankruptcy Code with respect
           to the Borrower or any Credit Party), then each such Lender hereby
           agrees that it shall forthwith purchase (as of the date such
           borrowing would otherwise have occurred, but adjusted for any
           payments received from the Borrower on or after such date and prior
           to such purchase) from the Issuing Lender such Participation
           Interests in the outstanding LOC Obligations as shall be necessary to
           cause each such Lender to share in such LOC Obligations ratably
           (based upon the respective Revolving Commitment Percentages of the
           Lenders (determined before giving effect to any termination of the
           Commitments pursuant to Section 9.2)), provided that at the time any
           purchase of Participation Interests pursuant to this sentence is
           actually made, the purchasing Lender shall be required to pay to the
           Issuing Lender, to the extent not paid to the Issuer by the Borrower
           in accordance with the terms of subsection (d) above, interest on the
           principal amount of Participation Interests purchased for each day
           from and including the day upon which such borrowing would otherwise
           have occurred to but excluding the date of payment for such
           Participation Interests, at the rate equal to, if paid within two (2)
           Business Days of the date of the Revolving Loan advance, the Federal
           Funds Rate, and thereafter at a rate equal to the Base Rate.

                     (f) Designation of Consolidated Parties as Account Parties.
           Notwithstanding anything to the contrary set forth in this Credit
           Agreement, including without limitation Section 2.2(a), a Letter of
           Credit issued hereunder may contain a statement to the effect that
           such Letter of Credit is issued for the account of a Consolidated
           Party other than the Borrower, provided that notwithstanding such
           statement, the Borrower shall be the actual account party for all
           purposes of this Credit Agreement for such Letter of Credit and such
           statement shall not affect the Borrower's reimbursement obligations
           hereunder with respect to such Letter of Credit.
<PAGE>

                     (g) Renewal, Extension. The renewal or extension of any
           Letter of Credit shall, for purposes hereof, be treated in all
           respects the same as the issuance of a new Letter of Credit
           hereunder.

                     (h) Uniform Customs and Practices/International Standby
           Practices 1998. The Issuing Lender may have the Letters of Credit be
           subject to The Uniform Customs and Practice for Documentary Credits,
           (the "UCP") or the International Standby Practices 1998 (the "ISP98")
           in either case as published as of the date of issue by the
           International Chamber of Commerce, in which case the UCP or the ISP98
           may be incorporated therein and deemed in all respects to be a part
           thereof.

                     (i) Indemnification; Nature of Issuing Lender's Duties.

                               (i) In addition to its other obligations under
                     this Section 2.2, the Borrower hereby agrees to pay, and
                     protect, indemnify and save each Lender harmless from and
                     against, any and all claims, demands, liabilities, damages,
                     losses, costs, charges and expenses (including reasonable
                     attorneys' fees) (unless the same shall have resulted from
                     such Lender's gross negligence or willful misconduct) that
                     such Lender may incur or be subject to as a consequence,
                     direct or indirect, of (A) the issuance of any Letter of
                     Credit or (B) the failure of such Lender to honor a drawing
                     under a Letter of Credit as a result of any act or
                     omission, whether rightful or wrongful, of any present or
                     future de jure or de facto government or Governmental
                     Authority (all such acts or omissions, herein called
                     "Government Acts").

                               (ii) As between the Borrower and the Lenders
                     (including the Issuing Lender), the Borrower shall assume
                     all risks of the acts, omissions or misuse of any Letter of
                     Credit by the beneficiary thereof. Unless the same shall
                     have resulted from such Lenders gross negligence or willful
                     misconduct, no Lender (including the Issuing Lender) shall
                     be responsible: (A) for the form, validity, sufficiency,
                     accuracy, genuineness or legal effect of any document
                     submitted by any party in connection with the application
                     for and issuance of any Letter of Credit, even if it should
                     in fact prove to be in any or all respects invalid,
                     insufficient, inaccurate, fraudulent or forged; (B) for the
                     validity or sufficiency of any instrument transferring or
                     assigning or purporting to transfer or assign any Letter of
                     Credit or the rights or benefits thereunder or proceeds
                     thereof, in whole or in part, that may prove to be invalid
                     or ineffective for any reason; (C) for errors, omissions,
                     interruptions or delays in transmission or delivery of any
                     messages, by mail, cable, telegraph, telex or otherwise,
                     whether or not they be in cipher; (D) for any loss or delay
                     in the transmission or otherwise of any document required
                     in order to make a drawing under a Letter of Credit or of
                     the proceeds thereof; and (E) for any consequences arising
                     from causes beyond the control of such Lender, including,
                     without limitation, any Government Acts. None of the above
                     shall affect, impair, or prevent the vesting of the Issuing
                     Lender's rights or powers hereunder.
<PAGE>


                               (iii) In furtherance and extension and not in
                     limitation of the specific provisions hereinabove set
                     forth, any action taken or omitted by any Lender (including
                     the Issuing Lender), under or in connection with any Letter
                     of Credit or the related certificates, if taken or omitted
                     in good faith, shall not put such Lender under any
                     resulting liability to the Borrower or any other Credit
                     Party. It is the intention of the parties that this Credit
                     Agreement shall be construed and applied to protect and
                     indemnify each Lender (including the Issuing Lender)
                     against any and all risks involved in the issuance of the
                     Letters of Credit, all of which risks are hereby assumed by
                     the Borrower (on behalf of itself and each of the other
                     Credit Parties), including, without limitation, any and all
                     Government Acts. No Lender (including the Issuing Lender)
                     shall, in any way, be liable for any failure by such Lender
                     or anyone else to pay any drawing under any Letter of
                     Credit as a result of any Government Acts or any other
                     cause beyond the control of such Lender.

                               (iv) Nothing in this subsection (h) is intended
                     to limit the reimbursement obligations of the Borrower
                     contained in subsection (d) above. The obligations of the
                     Borrower under this subsection (h) shall survive the
                     termination of this Credit Agreement. No act or omissions
                     of any current or prior beneficiary of a Letter of Credit
                     shall in any way affect or impair the rights of the Lenders
                     (including the Issuing Lender) to enforce any right, power
                     or benefit under this Credit Agreement.

                               (v) Notwithstanding anything to the contrary
                     contained in this subsection (h), the Borrower shall have
                     no obligation to indemnify any Lender (including the
                     Issuing Lender) in respect of any liability incurred by
                     such Lender (A) arising solely out of the gross negligence
                     or willful misconduct of such Lender, as determined by a
                     court of competent jurisdiction, or (B) caused by such
                     Lender's failure to pay under any Letter of Credit after
                     presentation to it of a request strictly complying with the
                     terms and conditions of such Letter of Credit, as
                     determined by a court of competent jurisdiction, unless
                     such payment is prohibited by any law, regulation, court
                     order or decree.

                     (j) Responsibility of Issuing Lender. It is expressly
           understood and agreed that the obligations of the Issuing Lender
           hereunder to the Lenders are only those expressly set forth in this
           Credit Agreement and that the Issuing Lender shall be entitled to
           assume that the conditions precedent set forth in Section 5.2 have
           been satisfied unless it shall have acquired actual knowledge that
           any such condition precedent has not been satisfied; provided,
           however, that nothing set forth in this Section 2.2 shall be deemed
           to prejudice the right of any Lender to recover from the Issuing
           Lender any amounts made available by such Lender to the Issuing
           Lender pursuant to this Section 2.2 in the event that it is
           determined by a court of competent jurisdiction that the payment with
           respect to a Letter of Credit constituted gross negligence or willful
           misconduct on the part of the Issuing Lender.

                     (k) Conflict with LOC Documents. In the event of any
           conflict between this Credit Agreement and any LOC Document
           (including any letter of credit application), this Credit Agreement
           shall control.
<PAGE>


                     2.3       Term Loan.
                               ----------
                     (a) Term Commitment. Subject to the terms and conditions
           hereof and in reliance upon the representations and warranties set
           forth herein each Lender severally agrees to make available to the
           Borrower on the Closing Date such Lender's Term Loan Commitment
           Percentage of a term loan in Dollars (the "Term Loan") in the
           aggregate principal amount of SIXTEEN MILLION DOLLARS ($16,000,000)
           (the "Term Loan Committed Amount") for the purposes hereinafter set
           forth. The Term Loan may consist of Base Rate Loans or Eurodollar
           Loans, or a combination thereof, as the Borrower may request;
           provided, however, that no more than 5 Eurodollar Loans shall be
           outstanding hereunder at any time. For purposes hereof, Eurodollar
           Loans with different Interest Periods shall be considered as separate
           Eurodollar Loans, even if they begin on the same date, although
           borrowings, extensions and conversions may, in accordance with the
           provisions hereof, be combined at the end of existing Interest
           Periods to constitute a new Eurodollar Loan with a single Interest
           Period. Amounts repaid on the Term Loan may not be reborrowed.

                     (b) Borrowing Procedures. The Borrower shall submit an
           appropriate Notice of Borrowing to the Agent not later than 11:00
           A.M. (Charlotte, North Carolina time) on the Closing Date, with
           respect to the portion of the Term Loan initially consisting of a
           Base Rate Loan, or on the third Business Day prior to the Closing
           Date, with respect to the portion of the Term Loan initially
           consisting of one or more Eurodollar Loans, which Notice of Borrowing
           shall be irrevocable and shall specify (i) that the funding of a Term
           Loan is requested and (ii) whether the funding of the Term Loan shall
           be comprised of Base Rate Loans, Eurodollar Loans or a combination
           thereof, and if Eurodollar Loans are requested, the Interest
           Period(s) therefor. If the Borrower shall fail to deliver such Notice
           of Borrowing to the Agent by 11:00 A.M. (Charlotte, North Carolina
           time) on the third Business Day prior to the Closing Date, then the
           full amount of the Term Loan shall be disbursed on the Closing Date
           as a Base Rate Loan. Each Lender shall make its Term Loan Commitment
           Percentage of the Term Loan available to the Agent for the account of
           the Borrower at the office of the Agent specified in Schedule 2.1(a),
           or at such other office as the Agent may designate in writing, by
           1:00 P.M. (Charlotte, North Carolina time) on the Closing Date in
           Dollars and in funds immediately available to the Agent.

                     (c) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan
           that is part of the Term Loan shall be in an aggregate principal
           amount that is not less than $500,000 and integral multiples of
           $100,000 (or the then remaining principal balance of the Term Loan,
           if less).
<PAGE>


                     (d) Repayment of Term Loan. The principal amount of the
           Term Loan shall be repaid in twenty (20) consecutive quarterly
           installments as follows, unless accelerated sooner pursuant to
           Section 9.2:

====================================== ==================================
     Principal Amortization                   Term Loan Principal
        Payment Dates                         Amortization Payment
-------------------------------------- ----------------------------------
           March 31, 2003                          $750,000
-------------------------------------- ----------------------------------
            June 30, 2003                          $750,000
-------------------------------------- ----------------------------------
         September 30, 2003                        $750,000
-------------------------------------- ----------------------------------
          December 31, 2003                        $750,000
-------------------------------------- ----------------------------------
           March 31, 2004                          $750,000
-------------------------------------- ----------------------------------
            June 30, 2004                          $750,000
-------------------------------------- ----------------------------------
         September 30, 2004                        $750,000
-------------------------------------- ----------------------------------
          December 31, 2004                        $750,000
-------------------------------------- ----------------------------------
           March 31, 2005                          $833,333
-------------------------------------- ----------------------------------
            June 30, 2005                          $833,333
-------------------------------------- ----------------------------------
         September 30, 2005                        $833,333
-------------------------------------- ----------------------------------
          December 31, 2005                        $833,333
-------------------------------------- ----------------------------------
           March 31, 2006                          $833,333
-------------------------------------- ----------------------------------
            June 30, 2006                          $833,333
-------------------------------------- ----------------------------------
         September 30, 2006                        $833,333
-------------------------------------- ----------------------------------
          December 31, 2006                        $833,334
-------------------------------------- ----------------------------------
           March 31, 2007                          $833,334
-------------------------------------- ----------------------------------
            June 30, 2007                          $833,334
-------------------------------------- ----------------------------------
         September 30, 2007                        $833,334
-------------------------------------- ----------------------------------
          December 31, 2007                        $833,334
-------------------------------------- ----------------------------------

                     (e) Interest. Subject to the provisions of Section 3.1, the
Term Loan shall bear interest at a per annum rate equal to:

                               (i) Base Rate Loans. During such periods as the
                     Term Loan shall be comprised in whole or in part of Base
                     Rate Loans, such Base Rate Loans shall bear interest at a
                     per annum rate equal to the Adjusted Base Rate.

                               (ii) Eurodollar Loans. During such periods as the
                     Term Loan shall be comprised in whole or in part of
                     Eurodollar Loans, such Eurodollar Loans shall bear interest
                     at a per annum rate equal to the Adjusted Eurodollar Rate.

           Interest on the Term Loan shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).

                     (f) Term Notes. The portion of the Term Loan made by each
           Lender shall be evidenced by a duly executed promissory note of the
           Borrower to such Lender in an original principal amount equal to such
           Lender's Term Loan Commitment Percentage of the Term Loan and
           substantially in the form of Exhibit 2.3(f).
<PAGE>


                                    SECTION 3

                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

           3.1       Default Rate.
                     -------------
           Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate equal to the Base
Rate plus 3%.

           3.2       Extension and Conversion.
                     -------------------------
           Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; provided, however, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in, with respect to Revolving
Loans, Section 2.1(b)(ii), or, with respect to the Term Loan, Section 2.3(c),
(iv) no more than 5 Eurodollar Loans shall be outstanding hereunder at any time
(it being understood that, for purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar Loans, even if they
begin on the same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of existing
Interest Periods to constitute a new Eurodollar Loan with a single Interest
Period) and (v) any request for extension or conversion of a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephonic notice promptly confirmed in writing) to the office of the Agent
specified in specified in Schedule 2.1(a), or at such other office as the Agent
may designate in writing, prior to 11:00 A.M. (Charlotte, North Carolina time)
on the Business Day of, in the case of the conversion of a Eurodollar Loan into
a Base Rate Loan, and on the third Business Day prior to, in the case of the
extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed extension or conversion, specifying
the date of the proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (b), (c) and (d) of Section 5.2. In the event the Borrower fails to
request extension or conversion of any Eurodollar Loan in accordance with this
Section, or any such conversion or extension is not permitted or required by
this Section, then such Eurodollar Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The Agent
shall give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
<PAGE>

           3.3       Prepayments.
                     ------------
                     (a) Voluntary Prepayments. The Borrower shall have the
           right to prepay Loans in whole or in part from time to time, but
           otherwise without premium or penalty; provided, however, that each
           partial prepayment of Loans shall be in a minimum principal amount of
           $250,000 and integral multiples of $50,000. Subject to the foregoing
           terms, amounts prepaid under this Section 3.3(a) with respect to the
           Term Loan shall be applied ratably to the remaining Principal
           Amortization Payments thereof; provided that if the Borrower fails to
           specify a voluntary prepayment then such prepayment shall be applied
           first to Revolving Loans and then to the Term Loan (ratably to the
           remaining Principal Amortization Payments thereof), in each case
           first to Base Rate Loans and then to Eurodollar Loans in direct order
           of Interest Period maturities. All prepayments under this Section
           3.3(a) shall be subject to Section 3.12.

                     (b)       Mandatory Prepayments.

                               (i) Revolving Committed Amount. If at any time,
                     the sum of the aggregate principal amount of outstanding
                     Revolving Loans plus LOC Obligations outstanding shall
                     exceed the Revolving Committed Amount, the Borrower
                     immediately shall prepay the Revolving Loans and (after all
                     Revolving Loans have been repaid) cash collateralize the
                     LOC Obligations, in an amount sufficient to eliminate such
                     excess.

                               (ii) Asset Dispositions. Immediately upon the
                     occurrence of any Asset Disposition other than an Excluded
                     Asset Disposition, the Borrower shall prepay the Loans in
                     an aggregate amount equal to the Net Cash Proceeds of the
                     related Asset Disposition (such prepayment to be applied as
                     set forth in clause (iv) below); provided, however, that no
                     mandatory prepayments shall be required hereunder if, at
                     the time such Asset Disposition occurs, the ratio of Funded
                     Indebtedness of the Consolidated Parties to Consolidated
                     EBITDA at the end of the immediately preceding fiscal
                     quarter was less than 2.0 to 1.0.

                               (iii) Issuances of Equity. Immediately upon
                     receipt by a Consolidated Party of proceeds from any Equity
                     Issuance occurring at any time when the Leverage Ratio at
                     the end of the immediately preceding fiscal quarter was
                     greater than 2.0 to 1.0, the Borrower shall prepay the
                     Loans in an aggregate amount equal to 50% of the Net Cash
                     Proceeds of such Equity Issuance to the Lenders (such
                     prepayment to be applied as set forth in clause (iv)
                     below); provided, however, that no mandatory prepayments
                     shall be required hereunder if, at the time such Equity
                     Issuance occurs, the Leverage Ratio at the end of the
                     immediately preceding fiscal quarter was less than 2.0 to
                     1.0; provided further, that if mandatory prepayments are
                     required to be made hereunder, then such prepayments shall
                     be made only to the extent required to restore the Leverage
                     Ratio to 2.0 to 1.0.
<PAGE>


                               (iv) Application of Mandatory Prepayments. All
                     amounts required to be paid pursuant to this Section 3.3(b)
                     shall be applied as follows: (A) with respect to all
                     amounts prepaid pursuant to Section 3.3(b)(i), to Revolving
                     Loans and (after all Revolving Loans have been repaid) to a
                     cash collateral account in respect of LOC Obligations, (B)
                     with respect to all amounts prepaid pursuant to Section
                     3.3(b)(ii) and 3.3(b)(iii), (1) first to the Term Loan
                     (ratably to the remaining Principal Amortization Payments
                     thereof) and (2) second to the Revolving Loans and (after
                     all Revolving Loans have been repaid) to a cash collateral
                     account in respect of LOC Obligations (with a corresponding
                     reduction in the Revolving Committed Amount in an amount
                     equal to all amounts applied pursuant to this clause (2)).
                     Within the parameters of the applications set forth above,
                     prepayments shall be applied first to Base Rate Loans and
                     then to Eurodollar Loans in direct order of Interest Period
                     maturities. All prepayments under this Section 3.3(b) shall
                     be subject to Section 3.12.

           3.4       Termination and Reduction of Revolving Committed Amount.

                     (a) Voluntary Reductions. The Borrower may from time to
           time permanently reduce or terminate the Revolving Committed Amount
           in whole or in part (in minimum aggregate amounts of $250,000 or in
           integral multiples of $50,000 in excess thereof (or, if less, the
           full remaining amount of the then applicable Revolving Committed
           Amount)) upon five Business Days' prior written notice to the Agent;
           provided, however, no such termination or reduction shall be made
           which would cause the aggregate principal amount of outstanding
           Revolving Loans plus LOC Obligations outstanding to exceed the
           Revolving Committed Amount, unless, concurrently with such
           termination or reduction, the Revolving Loans are repaid to the
           extent necessary to eliminate such excess. The Agent shall promptly
           notify each affected Lender of receipt by the Agent of any notice
           from the Borrower pursuant to this Section 3.4(a).

                     (b) Mandatory Reductions. On any date that the Revolving
           Loans are required to be prepaid pursuant to the terms of Section
           3.3(b)(ii) or (iii), the Revolving Committed Amount automatically
           shall be permanently reduced by the amount of such required
           prepayment and/or reduction.

                     (c) Maturity Date. The Revolving Commitments of the Lenders
           and the LOC Commitment of the Issuing Lender shall automatically
           terminate on the Maturity Date.

                     (d) General. The Borrower shall pay to the Agent for the
           account of the Lenders in accordance with the terms of Section
           3.5(a), on the date of each termination or reduction of the Revolving
           Committed Amount, the Commitment Fee accrued through the date of such
           termination or reduction on the amount of the Revolving Committed
           Amount so terminated or reduced.
<PAGE>


           3.5       Fees.
                     -----
                     (a) Commitment Fee. In consideration of the Revolving
           Commitments of the Lenders hereunder, the Borrower agrees to pay to
           the Agent for the account of each Lender a fee (the "Commitment Fee")
           on the unused portion of the Revolving Committed Amount computed at a
           per annum rate for each day during the applicable Commitment Fee
           Calculation Period (hereinafter defined) at a rate equal to the
           Applicable Margin in effect from time to time. The Commitment Fee
           shall commence to accrue on the Closing Date and shall be due and
           payable in arrears on the last business day of each March, June,
           September and December (and any date that the Revolving Committed
           Amount is reduced as provided in Section 3.4(a) and the Maturity
           Date) for the immediately preceding quarter (or portion thereof)
           (each such quarter or portion thereof for which the Commitment Fee is
           payable hereunder being herein referred to as an "Commitment Fee
           Calculation Period"), beginning with the first of such dates to occur
           after the Closing Date.

                     (b) Letter of Credit Fees.

                                          (i) Standby Letter of Credit Issuance
                               Fee. In consideration of the issuance of standby
                               Letters of Credit hereunder, the Borrower
                               promises to pay to the Agent for the account of
                               each Lender a fee (the "Standby Letter of Credit
                               Fee") on such Lender's Revolving Commitment
                               Percentage of the average daily maximum amount
                               available to be drawn under each such standby
                               Letter of Credit computed at a per annum rate for
                               each day from the date of issuance to the date of
                               expiration equal to the Applicable Margin. The
                               Standby Letter of Credit Fee will be payable
                               quarterly in arrears on the last Business Day of
                               each March, June, September and December for the
                               immediately preceding quarter (or a portion
                               thereof).

                                          (ii) Trade Letter of Credit Drawing
                               Fee. In consideration of the issuance of trade
                               Letters of Credit hereunder, the Borrower
                               promises to pay to the Agent for the account of
                               each Lender a fee (the "Trade Letter of Credit
                               Fee") equal to one quarter of one percent (1/4%)
                               on such Lender's Revolving Commitment Percentage
                               of the amount of each drawing under any such
                               trade Letter of Credit. The Trade Letter of
                               Credit Fee will be payable on each date of
                               drawing under a trade Letter of Credit.

                                          (iii) Issuing Lender Fees. In addition
                               to the Standby Letter of Credit Fee payable
                               pursuant to clause (i) above and the Trade Letter
                               of Credit Fee payable pursuant to clause (ii)
                               above, the Borrower promises to pay to the
                               Issuing Lender for its own account without
                               sharing by the other Lenders the letter of credit
                               fronting and negotiation fees agreed to by the
                               Borrower and the Issuing Lender from time to time
                               and the customary charges from time to time of
                               the Issuing Lender with respect to the issuance,
                               amendment, transfer, administration, cancellation
                               and conversion of, and drawings under, such
                               Letters of Credit (collectively, the "Issuing
                               Lender Fees").
<PAGE>


                     (c) Administrative Fees. The Borrower agrees to pay to the
           Agent, for its own account, as applicable, the fees referred to in
           the Agent's Fee Letter (collectively, the "Agent's Fees").

           3.6       Capital Adequacy.
                     -----------------
           If any Lender has determined, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto.

           3.7       Limitation on Eurodollar Loans.
                     -------------------------------
           If on or prior to the first day of any Interest Period for any
Eurodollar Loan:

                     (a) the Agent 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 Loans for such Interest Period;

then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.
<PAGE>

           3.8       Illegality.
                     -----------
           Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).

           3.9       Requirements of Law.
                     --------------------
           (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 Loans, its Notes, or its obligation to make Eurodollar
           Loans, or change the basis of taxation of any amounts payable to such
           Lender (or its Applicable Lending Office) under this Credit Agreement
           or its Notes in respect of any Eurodollar 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 Eurodollar Reserve Requirement utilized in the determination
           of the Adjusted 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 Commitment of such Lender hereunder; or

                          (iii) shall impose on such Lender (or its Applicable
           Lending Office) or on the United States market for certificates of
           deposit or the London interbank market any other condition affecting
           this Credit Agreement or its Notes 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 Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar 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 3.9(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 Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); provided
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.
<PAGE>


           (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 3.9 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 Section 3.6 or under this Section 3.9 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.

           3.10      Treatment of Affected Loans.
                     ----------------------------
           If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 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 3.8 or 3.9 hereof that gave rise to such Conversion no longer exist:

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


                     (b) all Loans that would otherwise be made or Continued by
           such Lender as Eurodollar Loans shall be made or Continued instead as
           Base Rate Loans, and all Base Rate Loans of such Lender that would
           otherwise be Converted into Eurodollar Loans 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 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans 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
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.

           3.11      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
           Credit 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 Credit Agreement or any other Credit 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
           3.11) 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
           11.1, 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 Credit Agreement or any other Credit Document
           or from the execution or delivery of, or otherwise with respect to,
           this Credit Agreement or any other Credit Document (hereinafter
           referred to as "Other Taxes").
<PAGE>


                     (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 3.11) 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 Credit 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 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 W-8BEN or Form W-8CEI, 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 Credit 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 Credit Agreement or any of the other Credit 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 3.11(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 3.11(a) or
           3.11(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 3.11,
           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 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.
<PAGE>


                     (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 3.11 shall survive the
           repayment of the Loans, LOC Obligations and other obligations under
           the Credit Documents and the termination of the Commitments
           hereunder.

           3.12      Compensation.
                     -------------
           Upon the request of the Agent, on behalf of a 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 loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:

                     (a) any payment, prepayment, or Conversion of a Eurodollar
           Loan for any reason (including, without limitation, the acceleration
           of the Loans pursuant to Section 9.2) 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 Section 5 to be satisfied) to borrow, Convert, Continue, or prepay
           a Eurodollar Loan on the date for such borrowing, Conversion,
           Continuation, or prepayment specified in the relevant notice of
           borrowing, prepayment, Continuation, or Conversion under this Credit
           Agreement.

With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (b) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.

           3.13      Pro Rata Treatment.
                     -------------------
           Except to the extent otherwise provided herein:

                     (a) Loans. Each Loan, each payment or (subject to the terms
           of Section 3.3) prepayment of principal of any Loan or reimbursement
           obligations arising from drawings under Letters of Credit, each
           payment of interest on the Loans or reimbursement obligations arising
           from drawings under Letters of Credit, each payment of Commitment
           Fees, each payment of the Standby Letter of Credit Fee, each payment
           of the Trade Letter of Credit Fee, each reduction of the Revolving
           Committed Amount and each conversion or extension of any Loan, shall
           be allocated pro rata among the Lenders in accordance with the
           respective principal amounts of their outstanding Loans and
           Participation Interests.
<PAGE>


                      (b) Advances.  No Lender shall be responsible for the
           failure or delay by any other Lender in its obligation to make its
           ratable share of a borrowing hereunder; provided, however, that the
           failure of any Lender to fulfill its obligations hereunder shall not
           relieve any other Lender of its obligations hereunder.  Unless the
           Agent shall have been notified by any Lender in writing not less
           than the earlier to occur of one Business Day or 24 hours prior to
           the date of any requested borrowing that such Lender does not intend
           to make available to the Agent its ratable share of such borrowing
           to be made on such date, the Agent may assume that such Lender has
           made such amount available to the Agent on the date of such
           borrowing, and the Agent in reliance upon such assumption, may (in
           its sole discretion but without any obligation to do so) make
           available to the Borrower a corresponding amount.  If such
           corresponding amount is not in fact made available to the Agent,
           the Agent shall be able to recover such corresponding amount from
           such Lender with interest at a rate per annum equal to the Federal
           Funds Rate.  If such Lender does not pay such corresponding amount
           forthwith upon the Agent's demand therefor, the Agent will promptly
           notify the Borrower, and the Borrower shall immediately pay such
           corresponding amount to the Agent.  The Agent shall also be entitled
           to recover from the Lender or the Borrower, as the case may be,
           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 at a per annum rate equal to (i) from the Borrower at
           the applicable rate for the applicable borrowing pursuant to the
           Notice of Borrowing and (ii) from a Lender at the Federal Funds Rate.

           3.14      Sharing of Payments.
                     --------------------
           The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a Participation Interest in such Loans, LOC
Obligations and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
Participation Interest theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a Participation Interest
may, to the fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
Participation Interest as fully as if such Lender were a holder of such Loan,
LOC Obligations or other obligation in the amount of such Participation
Interest. Except as otherwise expressly provided in this Credit Agreement, if
any Lender or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 3.14 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.14 to share in the benefits of any recovery on such secured claim.
<PAGE>


           3.15      Payments, Computations, Etc.
                     ----------------------------
                     (a) Except as otherwise specifically provided herein, all
           payments hereunder shall be made to the Agent in dollars in
           immediately available funds, without offset, deduction, counterclaim
           or withholding of any kind, at the Agent's office specified in
           Schedule 2.1(a) not later than 4:00 P.M. (Charlotte, North Carolina
           time) on the date when due. Payments received after such time shall
           be deemed to have been received on the next succeeding Business Day.
           The Agent may (but shall not be obligated to) debit the amount of any
           such payment which is not made by such time to any ordinary deposit
           account of the Borrower maintained with the Agent (with notice to the
           Borrower). The Borrower shall, at the time it makes any payment under
           this Credit Agreement, specify to the Agent the Loans, LOC
           Obligations, Fees, interest or other amounts payable by the Borrower
           hereunder to which such payment is to be applied (and in the event
           that it fails so to specify, or if such application would be
           inconsistent with the terms hereof, the Agent shall distribute such
           payment to the Lenders in such manner as the Agent may determine to
           be appropriate in respect of obligations owing by the Borrower
           hereunder, subject to the terms of Section 3.13(a)). The Agent will
           distribute such payments to such Lenders, if any such payment is
           received prior to 12:00 Noon (Charlotte, North Carolina time) on a
           Business Day in like funds as received prior to the end of such
           Business Day and otherwise the Agent will distribute such payment to
           such Lenders on the next succeeding Business Day. Whenever any
           payment hereunder shall be stated to be due on a day which is not a
           Business Day, the due date thereof shall be extended to the next
           succeeding Business Day (subject to accrual of interest and Fees for
           the period of such extension), except that in the case of Eurodollar
           Loans, if the extension would cause the payment to be made in the
           next following calendar month, then such payment shall instead be
           made on the next preceding Business Day. Except as expressly provided
           otherwise herein, all computations of interest and fees shall be made
           on the basis of actual number of days elapsed over a year of 360
           days, except with respect to computation of interest on Base Rate
           Loans which (unless the Base Rate is determined by reference to the
           Federal Funds Rate) shall be calculated based on a year of 365 or 366
           days, as appropriate. Interest shall accrue from and include the date
           of borrowing, but exclude the date of payment.
<PAGE>


                     (b) Allocation of Payments After Event of Default.
           Notwithstanding any other provisions of this Credit Agreement to the
           contrary, after the occurrence and during the continuance of an Event
           of Default, all amounts collected or received by the Agent or any
           Lender on account of the Credit Party Obligations or any other
           amounts outstanding under any of the Credit Documents or in respect
           of the Collateral shall be paid over or delivered as follows:

                     FIRST, to the payment of all reasonable out-of-pocket costs
           and expenses (including without limitation reasonable attorneys'
           fees) of the Agent in connection with enforcing the rights of the
           Lenders under the Credit Documents and any protective advances made
           by the Agent with respect to the Collateral under or pursuant to the
           terms of the Collateral Documents;

                     SECOND, to payment of any fees owed to the Agent;

                     THIRD, to the payment of all reasonable out-of-pocket costs
           and expenses (including without limitation, reasonable attorneys'
           fees) of each of the Lenders in connection with enforcing its rights
           under the Credit Documents or otherwise with respect to the Credit
           Party Obligations owing to such Lender;

                     FOURTH, to the payment of all of the Credit Party
           Obligations consisting of accrued fees and interest;

                     FIFTH, to the payment of the outstanding principal amount
           of the Credit Party Obligations (including the payment or cash
           collateralization of the outstanding LOC Obligations);

                     SIXTH, to all other Credit Party Obligations and other
           obligations which shall have become due and payable under the Credit
           Documents or otherwise and not repaid pursuant to clauses "FIRST"
           through "FIFTH" above; and

                     SEVENTH, to the payment of the surplus, if any, to whoever
           may be lawfully entitled to receive such surplus.

           In carrying out the foregoing, (i) amounts received shall be applied
           in the numerical order provided until exhausted prior to application
           to the next succeeding category; (ii) each of the Lenders shall
           receive an amount equal to its pro rata share (based on the
           proportion that the then outstanding Loans and LOC Obligations held
           by such Lender bears to the aggregate then outstanding Loans and LOC
           Obligations) of amounts available to be applied pursuant to clauses
           "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent
           that any amounts available for distribution pursuant to clause
           "FIFTH" above are attributable to the issued but undrawn amount of
           outstanding Letters of Credit, such amounts shall be held by the
           Agent in a cash collateral account and applied (A) first, to
           reimburse the Issuing Lender from time to time for any drawings under
           such Letters of Credit and (B) then, following the expiration of all
           Letters of Credit, to all other obligations of the types described in
           clauses "FIFTH" and "SIXTH" above in the manner provided in this
           Section 3.15(b).
<PAGE>


           3.16      Evidence of Debt.
                     -----------------
                     (a) Each Lender shall maintain an account or accounts
           evidencing each Loan made by such Lender to the Borrower from time to
           time, including the amounts of principal and interest payable and
           paid to such Lender from time to time under this Credit Agreement.
           Each Lender will make reasonable efforts to maintain the accuracy of
           its account or accounts and to promptly update its account or
           accounts from time to time, as necessary.

                     (b) The Agent shall maintain the Register pursuant to
           Section 11.3(c), and a subaccount for each Lender, in which Register
           and subaccounts (taken together) shall be recorded (i) the amount,
           type and Interest Period of each such Loan hereunder, (ii) the amount
           of any principal or interest due and payable or to become due and
           payable to each Lender hereunder and (iii) the amount of any sum
           received by the Agent hereunder from or for the account of the
           Borrower and each Lender's share thereof. The Agent will make
           reasonable efforts to maintain the accuracy of the subaccounts
           referred to in the preceding sentence and to promptly update such
           subaccounts from time to time, as necessary.

                     (c) The entries made in the accounts, Register and
           subaccounts maintained pursuant to subsection (b) of this Section
           3.16 (and, if consistent with the entries of the Agent, subsection
           (a)) shall be prima facie evidence of the existence and amounts of
           the obligations of the Borrower therein recorded; provided, however,
           that the failure of any Lender or the Agent to maintain any such
           account, such Register or such subaccount, as applicable, or any
           error therein, shall not in any manner affect the obligation of the
           Borrower to repay the Loans made by such Lender in accordance with
           the terms hereof.

           3.17      Replacement Lenders.
                     --------------------
           If any Lender either (i) becomes a Defaulting Lender or (ii) delivers
a notice pursuant to Sections 3.6, 3.9 or 3.11, the Borrower shall have the
right, if no Default or Event of Default then exists, to replace such Lender
(the "Replaced Lender") with one or more assignees eligible under Section
11.3(b) hereof (collectively, the "Replacement Lender"), provided that (A) at
the time of any replacement pursuant to this Section, the Replacement Lender
shall enter into one or more assignment agreements substantially in the form of
Exhibit 11.3(b) pursuant to, and in accordance with the terms of, Section
11.3(b) pursuant to which the Replacement Lender shall acquire all of the rights
and obligations of the Replaced Lender hereunder and, in connection therewith,
shall pay to (1) the Replaced Lender in respect thereof of an amount equal to
the sum of (x) the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (y) all unreimbursed drawings under the Letters of
Credit that have been funded by the Replaced Lender, together with all then
unpaid interest with respect thereto at such time and (z) all accrued but
theretofore unpaid, fees and other amounts owing to the Replaced Lender pursuant
to Section 3.5 and (2) each Issuing Lender an amount equal to such Replaced
Lender's Revolving Commitment Percentage of any unreimbursed drawings under
Letters of Credit issued by such Issuing Lender to the extent such amount was
not heretofore funded by Replaced Lender, and (B) all obligations of the
Borrower owing to the Replaced Lender (including all obligations, if any, owing
pursuant to Section 3.6, 3.9 or 3.11, but excluding those obligations
specifically described in clause (A) above in respect of which the assignment
purchase price has been, or is concurrently being paid) shall be paid in full by
the Borrower to such Replaced Lender concurrently with such replacement.

<PAGE>


                                    SECTION 4

                                    GUARANTY
                                    --------

           4.1       The Guaranty.
                     -------------
           Each of the Guarantors hereby jointly and severally guarantees to
each Lender, each Affiliate of a Lender that enters into a Hedging Agreement,
and the Agent as hereinafter provided the prompt payment of the Credit Party
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Credit Party Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Credit Party Obligations, the same will be promptly paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise) in accordance with the terms of
such extension or renewal.

           Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.

           4.2       Obligations Unconditional.
                     --------------------------
           The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor of the Credit Party Obligations for amounts
paid under this Section 4 until such time as the Lenders (and any Affiliates of
Lenders entering into Hedging Agreements) have been paid in full, all
Commitments under this Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents or Hedging Agreements. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
<PAGE>


                     (a) at any time or from time to time, without notice to any
           Guarantor, the time for any performance of or compliance with any of
           the Credit Party Obligations shall be extended, or such performance
           or compliance shall be waived;

                     (b) any of the acts mentioned in any of the provisions of
           any of the Credit Documents, any Hedging Agreement or any other
           agreement or instrument referred to in the Credit Documents or
           Hedging Agreements shall be done or omitted;

                     (c) the maturity of any of the Credit Party Obligations
           shall be accelerated, or any of the Credit Party Obligations shall be
           modified, supplemented or amended in any respect, or any right under
           any of the Credit Documents, any Hedging Agreement or any other
           agreement or instrument referred to in the Credit Documents or
           Hedging Agreements shall be waived or any other guarantee of any of
           the Credit Party Obligations or any security therefor shall be
           released, impaired or exchanged in whole or in part or otherwise
           dealt with;

                     (d) any Lien granted to, or in favor of, the Agent or any
           Lender or Lenders as security for any of the Credit Party Obligations
           shall fail to attach or be perfected; or

                     (e) any of the Credit Party Obligations shall be determined
           to be void or voidable (including, without limitation, for the
           benefit of any creditor of any Guarantor) or shall be subordinated to
           the claims of any Person (including, without limitation, any creditor
           of any Guarantor).

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents,
any Hedging Agreement or any other agreement or instrument referred to in the
Credit Documents or Hedging Agreements, or against any other Person under any
other guarantee of, or security for, any of the Credit Party Obligations.

           4.3       Reinstatement.
                     --------------
           The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
<PAGE>


           4.4       Certain Additional Waivers.
                     ---------------------------
           Without limiting the generality of the provisions of this Section 4,
each Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. ss.ss.
26-7 through 26-9, inclusive, to the extent applicable. Each Guarantor further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations, except through the exercise of rights of subrogation
pursuant to Section 4.2 and through the exercise of rights of contribution
pursuant to Section 4.6.

           4.5       Remedies.
                     ---------
           The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.

           4.6       Rights of Contribution.
                     -----------------------
           The Guarantors hereby agree as among themselves that, if any
Guarantor shall make an Excess Payment (as defined below), such Guarantor shall
have a right of contribution from each other Guarantor in an amount equal to
such other Guarantor's Contribution Share (as defined below) of such Excess
Payment. The payment obligations of any Guarantor under this Section 4.6 shall
be subordinate and subject in right of payment to the prior payment in full to
the Agent and the Lenders of the Guaranteed Obligations, and none of the
Guarantors shall exercise any right or remedy under this Section 4.6 against any
other Guarantor until payment and satisfaction in full of all of such Guaranteed
Obligations. For purposes of this Section 4.6, (a) "Guaranteed Obligations"
shall mean any obligations arising under the other provisions of this Section 4;
(b) "Excess Payment" shall mean the amount paid by any Guarantor in excess of
its Pro Rata Share of any Guaranteed Obligations; (c) "Pro Rata Share" shall
mean, for any Guarantor in respect of any payment of Guaranteed Obligations, the
ratio (expressed as a percentage) as of the date of such payment of Guaranteed
Obligations of (i) the amount by which the aggregate present fair salable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (ii) the amount by which the aggregate present fair salable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors; provided, however, that, for purposes of calculating the
Pro Rata Shares of the Guarantors in respect of any payment of Guaranteed
Obligations, any Guarantor that became a Guarantor subsequent to the date of any
such payment shall be deemed to have been a Guarantor on the date of such
payment and the financial information for such Guarantor as of the date such
Guarantor became a Guarantor shall be utilized for such Guarantor in connection
with such payment; and (d) "Contribution Share" shall mean, for any Guarantor in
respect of any Excess Payment made by any other Guarantor, the ratio (expressed
as a percentage) as of the date of such Excess Payment of (i) the amount by
which the aggregate present fair salable value of all of its assets and
properties exceeds the amount of all debts and liabilities of such Guarantor
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of such Guarantor hereunder) to (ii) the amount by
which the aggregate present fair salable value of all assets and other
properties of the Borrower and all of the Guarantors other than the maker of
such Excess Payment exceeds the amount of all of the debts and liabilities
(including contingent, subordinated, unmatured, and unliquidated liabilities,
but excluding the obligations of the Borrower and the Guarantors hereunder) of
the Borrower and all of the Guarantors other than the maker of such Excess
<PAGE>


Payment; provided, however, that, for purposes of calculating the Contribution
Shares of the Guarantors in respect of any Excess Payment, any Guarantor that
became a Guarantor subsequent to the date of any such Excess Payment shall be
deemed to have been a Guarantor on the date of such Excess Payment and the
financial information for such Guarantor as of the date such Guarantor became a
Guarantor shall be utilized for such Guarantor in connection with such Excess
Payment. This Section 4.6 shall not be deemed to affect any right of
subrogation, indemnity, reimbursement or contribution that any Guarantor may
have under applicable law against the Borrower in respect of any payment of
Guaranteed Obligations. Notwithstanding the foregoing, all rights of
contribution against any Guarantor shall terminate from and after such time, if
ever, that such Guarantor shall be relieved of its obligations pursuant to
Section 8.4.

           4.7       Continuing Guarantee.
                     ---------------------
           The guarantee in this Section 4 is a continuing guarantee of payment
and not of collection, and shall apply to all Credit Party Obligations whenever
arising.


                                    SECTION 5

                                   CONDITIONS
                                   ----------

           5.1       Closing Conditions.
                     -------------------
           The obligation of the Lenders to enter into this Credit Agreement and
to make the initial Loans or the Issuing Lender to issue the initial Letter of
Credit, whichever shall occur first, shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):

                     (a) Executed Credit Documents. Receipt by the Agent of duly
           executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii)
           the Collateral Documents and (iv) all other Credit Documents, each in
           form and substance acceptable to the Lenders in their sole
           discretion.

                     (b) Corporate Documents. Receipt by the Agent of the
           following:

                               (i) Charter Documents. (A) Copies of the articles
                     or certificates of incorporation or other charter documents
                     of each Credit Party (unless such charter documents were
                     delivered in connection with the Existing Credit Agreement)
                     certified to be true and complete as of a recent date by
                     the appropriate Governmental Authority of the state or
                     other jurisdiction of its incorporation and certified by a
                     secretary or assistant secretary of such Credit Party to be
                     true and correct as of the Closing Date and (B) for those
                     Credit Parties for which charter documents were delivered
                     in connection with the Existing Credit Agreement, a
                     certificate from a secretary or assistant secretary of such
                     Credit Party certifying that such previously delivered
                     charter documents have not been amended, modified, altered,
                     rescinded, or cancelled since the date of their delivery.

                               (ii) Bylaws. (A) A copy of the bylaws of each
                     Credit Party (unless such bylaws were delivered in
                     connection with the Existing Credit Agreement) certified by
                     a secretary or assistant secretary of such Credit Party to
                     be true and correct as of the Closing Date and (B) for
                     those Credit Parties for which bylaws were delivered in
                     connection with the Existing Credit Agreement, a
                     certificate from a secretary or assistant secretary of such
                     Credit Party certifying that such previously delivered
                     bylaws have not been amended, modified, altered, rescinded,
                     or cancelled since the date of their delivery.
<PAGE>


                               (iii) Resolutions. Copies of resolutions of the
                     Board of Directors of each Credit Party approving and
                     adopting the Credit Documents to which it is a party, the
                     transactions contemplated therein and authorizing execution
                     and delivery thereof, certified by a secretary or assistant
                     secretary of such Credit Party to be true and correct and
                     in force and effect as of the Closing Date.

                               (iv) Good Standing. Copies of (A) certificates of
                     good standing, existence or its equivalent with respect to
                     each Credit Party certified as of a recent date by the
                     appropriate Governmental Authorities of the state or other
                     jurisdiction of incorporation and each other jurisdiction
                     in which the failure to so qualify and be in good standing
                     could have a Material Adverse Effect and (B) to the extent
                     available, a certificate indicating payment of all
                     corporate franchise taxes certified as of a recent date by
                     the appropriate governmental taxing authorities.

                               (v) Incumbency. An incumbency certificate of each
                     Credit Party certified by a secretary or assistant
                     secretary to be true and correct as of the Closing Date.

                     (c) Financial Statements. Receipt by the Agent and the
           Lenders of (i) the consolidated financial statements of the Borrower
           and its Subsidiaries, including balance sheets and income and cash
           flow statements for the fiscal quarter ended October 13, 2002, (ii) a
           satisfactory estimated consolidated balance sheet of the Borrower as
           of March 31, 2002 giving effect to the acquisition of the Acquired
           Companies and the transactions contemplated by the Purchase Agreement
           and reflecting estimated purchase price accounting adjustments,
           prepared by the Company, (iii) projected financial statements of the
           Consolidated Parties for the fiscal years ending 2003 through and
           including the twelve month period ending March 31, 2007, including
           consolidated balance sheets, statements of income and cash flow
           statements of the Consolidated Parties giving effect to the
           Acquisition of the Acquired Companies, together with appropriate
           supporting details and such other facts as relate to the ongoing
           business of the Consolidated Parties (collectively, the
           "Projections") which shall be accompanied by a certificate of a
           Responsible Officer to the effect that the Projections (A) are based
           on reasonable estimates and assumptions, all of which are fair in
           light of the conditions which existed at the time the Projections
           were made, (B) have been prepared on the basis of the assumptions
           stated therein, and (C) reflect, as of the time so furnished and the
           Closing Date, the reasonable estimate of the Borrower of the results
           of the operations and other information projected therein, and (iv)
           such other information relating to the Borrower and its Subsidiaries
           or the Acquired Companies as the Agent may reasonably require in
           connection with the structuring and syndication of credit facilities
           of the type described herein.

                     (d) Opinions of Counsel. The Agent shall have received
           favorable opinions dated as of the Closing Date of counsel to the
           Credit Parties addressed to the Lenders with respect to the Credit
           Parties, the Credit Documents and such other matters as the Lenders
           shall request:

                     (e) Personal Property Collateral. The Agent shall have
           received:

                            (i) searches of Uniform Commercial Code filings in
                     the jurisdiction of the chief executive office of each
                     Credit Party and each jurisdiction where any Collateral is
                     located or where a filing would need to be made in order to
                     perfect the Agent's security interest in the Collateral,
                     copies of the financing statements on file in such
                     jurisdictions and evidence that no Liens exist other than
                     Permitted Liens;
<PAGE>


                           (ii) duly executed UCC financing statements for each
                     appropriate jurisdiction as is necessary, in the Agent's
                     sole discretion, to perfect the Agent's security interest
                     in the Collateral;

                          (iii) searches of ownership of intellectual property
                     in the appropriate governmental offices and such
                     patent/trademark/copyright filings as requested by the
                     Agent in order to perfect the Agent's security interest in
                     the Collateral;

                           (iv) all stock certificates evidencing the Capital
                     Stock pledged to the Agent pursuant to the Pledge
                     Agreement, together with duly executed in blank undated
                     stock powers attached thereto (unless, with respect to the
                     pledged Capital Stock of any Foreign Subsidiary, such stock
                     powers are deemed unnecessary by the Agent in its
                     reasonable discretion under the law of the jurisdiction of
                     incorporation of such Person);

                            (v) such patent/trademark/copyright filings as
                     requested by the Agent in order to perfect the Agent's
                     security interest in the Collateral;

                           (vi) all instruments and chattel paper in the
                     possession of any of the Credit Parties, together with
                     allonges or assignments as may be necessary or appropriate
                     to perfect the Agent's security interest in the Collateral;
                     and

                          (vii) duly executed consents as are necessary, in the
                     Agent's sole discretion, to perfect the Lenders' security
                     interest in the Collateral.

                     (f) Priority of Liens. The Agent shall have received
           satisfactory evidence that (i) the Agent, on behalf of the Lenders,
           holds a perfected, first priority Lien on all Collateral and (ii)
           none of the Collateral is subject to any other Liens other than
           Permitted Liens.

                     (g) Evidence of Insurance. Receipt by the Agent of copies
           of insurance policies or certificates of insurance of the
           Consolidated Parties evidencing liability and casualty insurance
           meeting the requirements set forth in the Credit Documents,
           including, but not limited to, naming the Agent as sole loss payee on
           behalf of the Lenders.

                     (h) Corporate Structure. The corporate capital and
           ownership structure of the Consolidated Parties (after giving effect
           to the purchase of the Acquired Companies) shall be as described in
           Schedule 6.13.

                     (i) Government Consent. Receipt by the Agent of evidence
           that all governmental, shareholder and material third party consents
           (including Hart-Scott-Rodino clearance) and approvals necessary or
           desirable in connection with the acquisition of the Acquired
           Companies and the related financings and other transactions
           contemplated hereby and expiration of all applicable waiting periods
           without any action being taken by any authority that could restrain,
           prevent or impose any material adverse conditions on the acquisition
           of the Acquired Companies or such other transactions or that could
           seek or threaten any of the foregoing, and no law or regulation shall
           be applicable which in the judgment of the Agent could have such
           effect.
<PAGE>


                     (j) Material Adverse Effect. No material adverse change
           shall have occurred since March 31, 2002 in the condition (financial
           or otherwise), business, management or prospects of the Consolidated
           Parties taken as a whole.

                     (k) Litigation. There shall not exist (i) any order,
           decree, judgment, ruling or injunction which restrains the
           consummation of the acquisition of the Acquired Companies in the
           manner contemplated by the Purchase Agreement or (ii) any actions,
           suits or legal, equitable, arbitration or administrative proceedings,
           pending or, to the knowledge of any Credit Party, threatened against
           any Consolidated Party which could reasonably be expected to have a
           Consolidated Material Adverse Effect.

                     (l) Other Indebtedness. Receipt by the Agent of evidence
           that, after the acquisition of the Acquired Companies, the Credit
           Parties shall have no Funded Indebtedness other than the Indebtedness
           under the Credit Documents.

                     (m) Purchase Agreement. There shall not have been any
           material modification, amendment, supplement or waiver to the
           Purchase Agreement without the prior written consent of the Agent,
           including, but not limited to, any modification, amendment,
           supplement or waiver relating to the amount or type of consideration
           to be paid in connection with the acquisition of the Acquired
           Companies and the contents of all disclosure schedules and exhibits,
           and the acquisition of the Acquired Companies shall have been
           consummated in accordance with the terms of the Purchase Agreement
           (without waiver of any conditions precedent to the obligations of the
           buyer thereunder) and the expenses of the Borrower related to such
           acquisition shall not exceed $250,000 in the aggregate. The Agent
           shall have received a final copy of the Purchase Agreement, together
           with all exhibits and schedules thereto, certified by an officer of
           the Borrower.

                     (n) Officer's Certificates. The Agent shall have received a
           certificate or certificates executed by a Responsible Officer of the
           Borrower as of the Closing Date stating that (i) all governmental,
           shareholder and third party consents and approvals, if any, with
           respect to the Credit Documents and the transactions contemplated
           thereby have been obtained, (ii) each Consolidated Party is in
           compliance with all existing financial obligations, (iii) no action,
           suit, investigation or proceeding is pending or threatened in any
           court or before any arbitrator or governmental instrumentality that
           purports to affect any Consolidated Party or any transaction
           contemplated by the Credit Documents, if such action, suit,
           investigation or proceeding could have a Material Adverse Effect,
           (iv) the transactions contemplated by the Purchase Agreement have
           been consummated in accordance with the terms thereof and (v)
           immediately after giving effect to this Credit Agreement, the other
           Credit Documents and all the transactions contemplated therein to
           occur on such date, (A) each of the Credit Parties is Solvent, (B) no
           Default or Event of Default exists, (C) all representations and
           warranties contained herein and in the other Credit Documents are
           true and correct in all material respects, and (D) the Credit Parties
           are in compliance with each of the financial covenants set forth in
           Section 7.11.
<PAGE>


                     (o) Existing Credit Agreement. The Agent shall have
           received satisfactory evidence that the Existing Credit Agreement has
           been terminated.

                     (p) Fees and Expenses. Payment by the Credit Parties of all
           fees and expenses owed by them to the Lenders and the Agent,
           including, without limitation, payment to the Agent of the fees set
           forth in the Fee Letter.

                     (q) Other. Receipt by the Lenders of such other documents,
           instruments, agreements or information as reasonably requested by any
           Lender, including, but not limited to, information regarding
           litigation, tax, accounting, labor, insurance, pension liabilities
           (actual or contingent), real estate leases, material contracts, debt
           agreements, property ownership and contingent liabilities of the
           Consolidated Parties.

           5.2       Conditions to all Extensions of Credit.
                     ---------------------------------------
           The obligations of each Lender to make, convert or extend any Loan
and of the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:

                     (a) The Borrower shall have delivered (i) in the case of
           any Revolving Loan or any portion of the Term Loan, an appropriate
           Notice of Borrowing or Notice of Extension/Conversion or (ii) in the
           case of any Letter of Credit, the Issuing Lender shall have received
           an appropriate request for issuance in accordance with the provisions
           of Section 2.2(b);

                     (b) The representations and warranties set forth in Section
           6 shall, subject to the limitations set forth therein, be true and
           correct in all material respects as of such date (except for those
           which expressly relate to an earlier date);

                     (c) No Default or Event of Default shall exist and be
           continuing either prior to or after giving effect thereto;

                     (d) Immediately after giving effect to the making of such
           Loan (and the application of the proceeds thereof) or to the issuance
           of such Letter of Credit, as the case may be, (i) the sum of the
           aggregate principal amount of outstanding Revolving Loans plus LOC
           Obligations outstanding shall not exceed the Revolving Committed
           Amount, and (ii) the LOC Obligations shall not exceed the LOC
           Committed Amount.

The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c), and (d), above.

<PAGE>


                                    SECTION 6

                         REPRESENTATIONS AND WARRANTIES

           The Credit Parties hereby represent to the Agent and each Lender
that:

           6.1       Financial Condition.
                     --------------------
                     (a) The audited consolidated and consolidating balance
           sheet of the Consolidated Parties as of March 31, 2002 and the
           audited consolidated statements of earnings and statements of cash
           flows for the years ended March 31, 2002, April 1, 2001 and March 21,
           2000 and for the seven 4-week periods ended October 13, 2002 have
           heretofore been furnished to each Lender. Such financial statements
           (including the notes thereto) (i) have been audited by Deloitte &
           Touche LLP (except for the seven 4-week periods ending October 13,
           2002 which have not been audited), (ii) have been prepared in
           accordance with GAAP consistently applied throughout the periods
           covered thereby and (iii) present fairly (on the basis disclosed in
           the footnotes to such financial statements) the consolidated
           financial condition, results of operations and cash flows of the
           Consolidated Parties as of such date and for such periods. The
           unaudited interim balance sheets of the Consolidated Parties as at
           the end of, and the related unaudited interim statements of earnings
           and of cash flows for, each fiscal month and quarterly period ended
           after December 31, 2001 and prior to the Closing Date have heretofore
           been furnished to each Lender. Such interim financial statements for
           each such quarterly period, (i) have been prepared in accordance with
           GAAP consistently applied throughout the periods covered thereby and
           (ii) present fairly (on the basis disclosed in the footnotes to such
           financial statements) the consolidated financial condition, results
           of operations and cash flows of the Consolidated Parties as of such
           date and for such periods. During the period from December 31, 2001
           to and including the Closing Date, there has been no sale, transfer
           or other disposition by any Consolidated Party of any material part
           of the business or property of the Consolidated Parties, taken as a
           whole, and no purchase or other acquisition by any of them of any
           business or property (including any capital stock of any other
           person) material in relation to the consolidated financial condition
           of the Consolidated Parties, taken as a whole, in each case, which,
           is not reflected in the foregoing financial statements or in the
           notes thereto and has not otherwise been disclosed in writing to the
           Lenders on or prior to the Closing Date.

                     (b) The pro forma consolidated balance sheet of the
           Consolidated Parties as of March 31, 2002 giving effect to the
           Acquisition, in accordance with the terms of the Purchase Agreement
           and reflecting estimated purchase price accounting adjustments, has
           heretofore been furnished to each Lender. Such pro forma balance
           sheet is based upon reasonable assumptions made known to the Lenders
           and upon information not known as of the date hereof to be incorrect
           or misleading in any material respect.

                     (c) The financial statements delivered to the Lenders
           pursuant to Section 7.1(a) and (b), (i) have been prepared in
           accordance with GAAP (except as may otherwise be permitted under
           Section 7.1(a) and (b)) and (ii) present fairly (on the basis
           disclosed in the footnotes to such financial statements) the
           consolidated financial condition, results of operations and cash
           flows of the Consolidated Parties as of such date and for such
           periods.
<PAGE>


           6.2       No Material Change.
                     -------------------
           Since March 31, 2002, (a) there has been no development or event
relating to or affecting a Consolidated Party which has had or could have a
Material Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in a Consolidated Party nor has any of the Capital Stock
in a Consolidated Party been redeemed, retired, purchased or otherwise acquired
for value.

           6.3       Organization and Good Standing.
                     -------------------------------
           Each of the Consolidated Parties (a) is duly organized, validly
existing and is in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged and (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing could have a Consolidated Material Adverse
Effect.

           6.4       Power; Authorization; Enforceable Obligations.
                     ----------------------------------------------
           Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party. No consent or
authorization of, filing with, notice to or other similar act by or in respect
of, any Governmental Authority or any other Person is required to be obtained or
made by or on behalf of any Credit Party in connection with the borrowings or
other extensions of credit hereunder or with the execution, delivery,
performance, validity or enforceability of the Credit Documents to which such
Credit Party is a party, except for (a) consents, authorizations, notices and
filings described in Schedule 6.4, all of which have been obtained or made or
have the status described in such Schedule 6.4 and (b) filings to perfect the
Liens created by the Collateral Documents. This Credit Agreement has been, and
each other Credit Document to which any Credit Party is a party will be, duly
executed and delivered on behalf of the Credit Parties. This Credit Agreement
constitutes, and each other Credit Document to which any Credit Party is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of such Credit Party enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
<PAGE>


           6.5       No Conflicts.
                     -------------
           Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable to
it, (c) violate, contravene or conflict with contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which could have a Material Adverse
Effect, or (d) result in or require the creation of any Lien (other than those
contemplated in or created in connection with the Credit Documents) upon or with
respect to its properties.

           6.6       No Default.
                     -----------
           No Consolidated Party is in default in any respect under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound which default could have a Consolidated Material Adverse
Effect. No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.

           6.7       Ownership.
                     ----------
           Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to any
Lien other than Permitted Liens.

           6.8       Indebtedness.
                     -------------
           Except as otherwise permitted under Section 8.1, the Credit Parties
have no Indebtedness.

           6.9       Litigation.
                     -----------
           Except as set forth on Schedule 6.9 hereto, there are no material
actions, suits or legal, equitable, arbitration or administrative proceedings,
pending or, to the knowledge of any Credit Party, threatened against any
Consolidated Party. There are no actions, suits or legal, equitable, arbitration
or administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Consolidated Party which could reasonably be expected to
have a Consolidated Material Adverse Effect.

           6.10      Taxes.
                     ------
           Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
<PAGE>


           6.11      Compliance with Law.
                     --------------------
           Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Consolidated Material Adverse Effect. No
Requirement of Law could cause a Consolidated Material Adverse Effect.

           6.12      ERISA.
                     ------
                     (a) During the five-year period prior to the date on which
           this representation is made or deemed made: (i) no ERISA Event has
           occurred, and, to the best knowledge of the Credit Parties, no event
           or condition has occurred or exists as a result of which any ERISA
           Event could reasonably be expected to occur, with respect to any
           Plan; (ii) no "accumulated funding deficiency," as such term is
           defined in Section 302 of ERISA and Section 412 of the Code, whether
           or not waived, has occurred with respect to any Plan; (iii) each Plan
           has been maintained, operated, and funded in compliance with its own
           terms and in material compliance with the provisions of ERISA, the
           Code, and any other applicable federal or state laws; and (iv) no
           lien in favor of the PBGC or a Plan has arisen or is reasonably
           likely to arise on account of any Plan.

                     (b) The actuarial present value of all "benefit
           liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or
           not vested, under each Single Employer Plan, as of the last annual
           valuation date prior to the date on which this representation is made
           or deemed made (determined, in each case, utilizing the actuarial
           assumptions used in such Plan's most recent actuarial valuation
           report), did not exceed as of such valuation date the fair market
           value of the assets of such Plan.

                     (c) Neither any Consolidated Party nor any ERISA Affiliate
           has incurred, or, to the best knowledge of the Credit Parties, could
           be reasonably expected to incur, any withdrawal liability under ERISA
           to any Multiemployer Plan or Multiple Employer Plan. Neither any
           Consolidated Party nor any ERISA Affiliate would become subject to
           any withdrawal liability under ERISA if any Consolidated Party or any
           ERISA Affiliate were to withdraw completely from all Multiemployer
           Plans and Multiple Employer Plans as of the valuation date most
           closely preceding the date on which this representation is made or
           deemed made. Neither any Consolidated Party nor any ERISA Affiliate
           has received any notification that any Multiemployer Plan is in
           reorganization (within the meaning of Section 4241 of ERISA), is
           insolvent (within the meaning of Section 4245 of ERISA), or has been
           terminated (within the meaning of Title IV of ERISA), and no
           Multiemployer Plan is, to the best knowledge of the Credit Parties,
           reasonably expected to be in reorganization, insolvent, or
           terminated.
<PAGE>


                     (d) No prohibited transaction (within the meaning of
           Section 406 of ERISA or Section 4975 of the Code) or breach of
           fiduciary responsibility has occurred with respect to a Plan which
           has subjected or may subject any Consolidated Party or any ERISA
           Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
           of ERISA or Section 4975 of the Code, or under any agreement or other
           instrument pursuant to which any Consolidated Party or any ERISA
           Affiliate has agreed or is required to indemnify any person against
           any such liability.

                     (e) Neither any Consolidated Party nor any ERISA Affiliates
           has any material liability with respect to "expected post-retirement
           benefit obligations" within the meaning of the Financial Accounting
           Standards Board Statement 106.

           6.13      Subsidiaries.
                     -------------
           Set forth on Schedule 6.13 is a complete and accurate list of all
Subsidiaries of each Consolidated Party. Information on Schedule 6.13 includes
jurisdiction of incorporation, the number of shares of each class of Capital
Stock outstanding, the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Consolidated Party; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Consolidated Party, directly or
indirectly, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). Other than as set forth
in Schedule 6.13, no Consolidated Party has outstanding any securities
convertible into or exchangeable for its Capital Stock nor does any such Person
have outstanding any rights to subscribe for or to purchase or any options for
the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its Capital Stock. Schedule 6.13 may be updated from time to time by the
Borrower by giving written notice thereof to the Agent.

           6.14      Governmental Regulations, Etc.
                     ------------------------------
                     (a) No part of the Letters of Credit or proceeds of the
           Loans will be used, directly or indirectly, for the purpose of
           purchasing or carrying any "margin stock" within the meaning of
           Regulation U, or for the purpose of purchasing or carrying or trading
           in any securities. If requested by any Lender or the Agent, the
           Borrower will furnish to the Agent and each Lender a statement to the
           foregoing effect in conformity with the requirements of FR Form U-1
           referred to in Regulation U. No indebtedness being reduced or retired
           out of the proceeds of the Loans was or will be incurred for the
           purpose of purchasing or carrying any margin stock within the meaning
           of Regulation U or any "margin security" within the meaning of
           Regulation T. "Margin stock" within the meaning of Regulation U does
           not constitute more than 25% of the value of the consolidated assets
           of the Consolidated Parties. None of the transactions contemplated by
           this Credit Agreement (including, without limitation, the direct or
           indirect use of the proceeds of the Loans) will violate or result in
           a violation of the Securities Act of 1933, as amended, or the
           Securities Exchange Act of 1934, as amended, or regulations issued
           pursuant thereto, or Regulation T, U or X.
<PAGE>


                     (b) No Consolidated Party is subject to regulation under
           the Public Utility Holding Company Act of 1935, the Federal Power Act
           or the Investment Company Act of 1940, each as amended. In addition,
           no Consolidated Party is (i) an "investment company" registered or
           required to be registered under the Investment Company Act of 1940,
           as amended, and is not controlled by such a company, or (ii) a
           "holding company", or a "subsidiary company" of a "holding company",
           or an "affiliate" of a "holding company" or of a "subsidiary" of a
           "holding company", within the meaning of the Public Utility Holding
           Company Act of 1935, as amended.

                     (c) No director, executive officer or principal shareholder
           of any Consolidated Party is a director, executive officer or
           principal shareholder of any Lender. For the purposes hereof the
           terms "director", "executive officer" and "principal shareholder"
           (when used with reference to any Lender) have the respective meanings
           assigned thereto in Regulation O issued by the Board of Governors of
           the Federal Reserve System.

                     (d) Each Consolidated Party has obtained and holds in full
           force and effect, all franchises, licenses, permits, certificates,
           authorizations, qualifications, accreditations, easements, rights of
           way and other rights, consents and approvals which are necessary for
           the ownership of its respective Property and to the conduct of its
           respective businesses as presently conducted.

                     (e) No Consolidated Party is in violation of any applicable
           statute, regulation or ordinance of the United States of America, or
           of any state, city, town, municipality, county or any other
           jurisdiction, or of any agency thereof (including without limitation,
           environmental laws and regulations), which violation could have a
           Consolidated Material Adverse Effect.

                     (f) Each Consolidated Party is current with all material
           reports and documents, if any, required to be filed with any state or
           federal securities commission or similar agency and is in full
           compliance in all material respects with all applicable rules and
           regulations of such commissions.

           6.15      Purpose of Loans and Letters of Credit.
                     ---------------------------------------
           The proceeds of the Loans hereunder shall be used solely by the
Borrower to (a) finance a portion of the purchase price of the Acquisition and
to pay certain fees and expenses related thereto, (b) refinance existing
Indebtedness and (c) provide for working capital and capital expenditures. The
Letters of Credit shall be used only for or in connection with appeal bonds,
reimbursement obligations arising in connection with surety and reclamation
bonds, reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
<PAGE>


           6.16      Environmental Matters.
                     ----------------------
                     (a) Each of the facilities and properties owned, leased or
           operated by the Consolidated Parties (the "Properties") and all
           operations at the Properties are in compliance with all applicable
           Environmental Laws, and there is no violation of any Environmental
           Law with respect to the Properties or the businesses operated by the
           Consolidated Parties (the "Businesses"), and there are no conditions
           relating to the Businesses or Properties that could give rise to
           liability under any applicable Environmental Laws.

                     (b) None of the Properties contains, or has previously
           contained, any Materials of Environmental Concern at, on or under the
           Properties in amounts or concentrations that constitute or
           constituted a violation of, or could give rise to liability under,
           Environmental Laws.

                     (c) No Consolidated Party has received any written or
           verbal notice of, or inquiry from any Governmental Authority
           regarding, any violation, alleged violation, non-compliance,
           liability or potential liability regarding environmental matters or
           compliance with Environmental Laws with regard to any of the
           Properties or the Businesses, nor does any Consolidated Party have
           knowledge or reason to believe that any such notice will be received
           or is being threatened.

                     (d) Materials of Environmental Concern have not been
           transported or disposed of from the Properties, or generated,
           treated, stored or disposed of at, on or under any of the Properties
           or any other location, in each case by or on behalf of any
           Consolidated Party in violation of, or in a manner that could give
           rise to liability under, any applicable Environmental Law.

                     (e) No judicial proceeding or governmental or
           administrative action is pending or, to the best knowledge of any
           Credit Party, threatened, under any Environmental Law to which any
           Consolidated Party is or will be named as a party, nor are there any
           consent decrees or other decrees, consent orders, administrative
           orders or other orders, or other administrative or judicial
           requirements outstanding under any Environmental Law with respect to
           the Consolidated Parties, the Properties or the Businesses.

                     (f) There has been no release or, threat of release of
           Materials of Environmental Concern at or from the Properties, or
           arising from or related to the operations (including, without
           limitation, disposal) of any Consolidated Party in connection with
           the Properties or otherwise in connection with the Businesses, in
           violation of or in amounts or in a manner that could give rise to
           liability under Environmental Laws.
<PAGE>


           6.17      Intellectual Property.
                     ----------------------
           Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Consolidated Material Adverse Effect. Set forth on
Schedule 6.17 is a list of all Intellectual Property owned by each Consolidated
Party or that any Consolidated Party has the right to use. Except as provided on
Schedule 6.17, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does any Credit
Party know of any such claim, and to the Credit Parties' knowledge the use of
such Intellectual Property by any Consolidated Party does not infringe on the
rights of any Person, except for such claims and infringements that in the
aggregate, could not have a Consolidated Material Adverse Effect. Schedule 6.17
may be updated from time to time by the Borrower by giving written notice
thereof to the Agent.

           6.18      Solvency.
                     ---------
           Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement (including without limitation the
acquisition of the Acquired Companies by the Borrower), will be Solvent.

           6.19      Investments.
                     ------------
           All Investments of each Consolidated Party are Permitted Investments.

           6.20      Location of Collateral.
                     -----------------------
           Set forth on Schedule 6.20(a) is a list of all locations where any
tangible personal property of a Consolidated Party is located, including county
and state where located. Set forth on Schedule 6.20(b) is the chief executive
office and principal place of business of each Consolidated Party. Schedule
6.20(a) and 6.20(b) may be updated from time to time by the Borrower giving
written notice thereof to the Agent.

           6.21      Disclosure.
                     -----------
           Neither this Credit Agreement nor any financial statements delivered
to the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.

           6.22      No Burdensome Restrictions.
                     ---------------------------
           No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could have a Consolidated Material Adverse Effect.
<PAGE>


           6.23      Brokers' Fees.
                     --------------
           Except for investment banking and other related fees in connection
with the purchase by the Borrower of the Acquired Companies, no Consolidated
Party has any obligation to any Person in respect of any finder's, broker's,
investment banking or other similar fee in connection with any of the
transactions contemplated under the Credit Documents.

           6.24      Labor Matters.
                     --------------
           There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.

           6.25      Representations and Warranties from Purchase Agreement.
                     -------------------------------------------------------
           As of the Closing Date, each of the representations and warranties
made in the Purchase Agreement by each of the parties thereto is true and
correct in all material respects.


                                    SECTION 7

                              AFFIRMATIVE COVENANTS

           Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

           7.1       Information Covenants.
                     ----------------------
           The Borrower will furnish, or cause to be furnished, to the Agent and
each of the Lenders:

                     (a) Annual Financial Statements. As soon as available, and
           in any event within 90 days after the close of each fiscal year of
           the Consolidated Parties, a consolidated balance sheet and income
           statement of the Consolidated Parties, as of the end of such fiscal
           year, together with related consolidated statements of operations and
           retained earnings and of cash flows for such fiscal year, setting
           forth in comparative form consolidated figures for the preceding
           fiscal year, all such financial information described above to be in
           reasonable form and detail and audited by independent certified
           public accountants of recognized national standing reasonably
           acceptable to the Agent and whose opinion shall be to the effect that
           such financial statements have been prepared in accordance with GAAP
           (except for changes with which such accountants concur) and shall not
           be limited as to the scope of the audit or qualified as to the status
           of the Consolidated Parties as a going concern.
<PAGE>


                     (b) Quarterly Financial Statements. As soon as available,
           and in any event within 45 days after the close of each fiscal
           quarter of the Consolidated Parties (other than the fourth fiscal
           quarter, in which case 90 days after the end thereof) a consolidated
           balance sheet and income statement of the Consolidated Parties, as of
           the end of such fiscal quarter, together with related consolidated
           statements of operations and retained earnings and of cash flows for
           such fiscal quarter in each case setting forth in comparative form
           consolidated figures for the corresponding period of the preceding
           fiscal year, all such financial information described above to be in
           reasonable form and detail and reasonably acceptable to the Agent,
           and accompanied by a certificate of a Responsible Officer to the
           effect that such quarterly financial statements fairly present in all
           material respects the financial condition of the Consolidated Parties
           and have been prepared in accordance with GAAP, subject to changes
           resulting from audit and normal year-end audit adjustments.

                     (c) Officer's Certificate. At the time of delivery of the
           financial statements provided for in Sections 7.1(a) and 7.1(b)
           above, a certificate of a Responsible Officer substantially in the
           form of Exhibit 7.1(c), (i) demonstrating compliance with the
           financial covenants contained in Section 7.11 by calculation thereof
           as of the end of each such fiscal period and (ii) stating that no
           Default or Event of Default exists, or if any Default or Event of
           Default does exist, specifying the nature and extent thereof and what
           action the Credit Parties propose to take with respect thereto.

                     (d) Annual Business Plan and Budgets. At least 30 days
           prior to the end of each fiscal year of the Borrower, beginning with
           the fiscal year ending March 30, 2003, an annual business plan and
           budget of the Consolidated Parties containing, among other things,
           projected financial statements for the next fiscal year.

                     (e) Compliance With Certain Provisions of the Credit
           Agreement. Within 90 days after the end of each fiscal year of the
           Borrower, a certificate containing information regarding the amount
           of all Asset Dispositions and Equity Issuances that were made during
           the prior fiscal year.

                     (f) Accountant's Certificate. Within the period for
           delivery of the annual financial statements provided in Section
           7.1(a), a certificate of the accountants conducting the annual audit
           stating that they have reviewed this Credit Agreement and stating
           further whether, in the course of their audit, they have become aware
           of any Default or Event of Default and, if any such Default or Event
           of Default exists, specifying the nature and extent thereof.

                     (g) Auditor's Reports. Promptly upon receipt thereof, a
           copy of any other report or "management letter" submitted by
           independent accountants to any Consolidated Party in connection with
           any annual, interim or special audit of the books of such Person.
<PAGE>


                     (h) Reports. Promptly upon transmission or receipt thereof,
           (i) copies of any filings and registrations with, and reports to or
           from, the Securities and Exchange Commission, or any successor
           agency, and copies of all financial statements, proxy statements,
           notices and reports as any Consolidated Party shall send to its
           shareholders or to a holder of any Indebtedness owed by any
           Consolidated Party in its capacity as such a holder and (ii) upon the
           request of the Agent, all reports and written information to and from
           the United States Environmental Protection Agency, or any state or
           local agency responsible for environmental matters, the United States
           Occupational Health and Safety Administration, or any state or local
           agency responsible for health and safety matters, or any successor
           agencies or authorities concerning environmental, health or safety
           matters.

                     (i) Notices. Upon obtaining knowledge thereof, the Borrower
           will give written notice to the Agent immediately of (i) the
           occurrence of an event or condition consisting of a Default or Event
           of Default, specifying the nature and existence thereof and what
           action the Credit Parties propose to take with respect thereto, and
           (ii) the occurrence of any of the following with respect to any
           Consolidated Party (A) the pendency or commencement of any
           litigation, arbitral or governmental proceeding against such Person
           which if adversely determined is likely to have a Material Adverse
           Effect, (B) the institution of any proceedings against such Person
           with respect to, or the receipt of notice by such Person of potential
           liability or responsibility for violation, or alleged violation of
           any federal, state or local law, rule or regulation, including but
           not limited to, Environmental Laws, the violation of which could have
           a Material Adverse Effect, or (C) any notice or determination
           concerning the imposition of any withdrawal liability by a
           Multiemployer Plan against such Person or any ERISA Affiliate, the
           determination that a Multiemployer Plan is, or is expected to be, in
           reorganization within the meaning of Title IV of ERISA or the
           termination of any Plan.

                     (j) ERISA. Upon obtaining knowledge thereof, the Borrower
           will give written notice to the Agent promptly (and in any event
           within five business days) of: (i) of any event or condition,
           including, but not limited to, any Reportable Event, that
           constitutes, or might reasonably lead to, an ERISA Event; (ii) with
           respect to any Multiemployer Plan, the receipt of notice as
           prescribed in ERISA or otherwise of any withdrawal liability assessed
           against the Borrower or any of its ERISA Affiliates, or of a
           determination that any Multiemployer Plan is in reorganization or
           insolvent (both within the meaning of Title IV of ERISA); (iii) the
           failure to make full payment on or before the due date (including
           extensions) thereof of all amounts which any Consolidated Party or
           any ERISA Affiliate is required to contribute to each Plan pursuant
           to its terms and as required to meet the minimum funding standard set
           forth in ERISA and the Code with respect thereto; or (iv) any change
           in the funding status of any Plan that could have a Material Adverse
           Effect, together with a description of any such event or condition or
           a copy of any such notice and a statement by the chief financial
           officer of the Borrower briefly setting forth the details regarding
           such event, condition, or notice, and the action, if any, which has
           been or is being taken or is proposed to be taken by the Credit
           Parties with respect thereto. Promptly upon request, the Credit
           Parties shall furnish the Agent and the Lenders with such additional
           information concerning any Plan as may be reasonably requested,
           including, but not limited to, copies of each annual report/return
           (Form 5500 series), as well as all schedules and attachments thereto
           required to be filed with the Department of Labor and/or the Internal
           Revenue Service pursuant to ERISA and the Code, respectively, for
           each "plan year" (within the meaning of Section 3(39) of ERISA).
<PAGE>


                     (k) Other Information. With reasonable promptness upon any
           such request, such other information regarding the business,
           properties or financial condition of any Consolidated Party as the
           Agent or the Required Lenders may reasonably request.

           7.2       Preservation of Existence and Franchises.
                     -----------------------------------------
           Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority.

           7.3       Books and Records.
                     ------------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).

           7.4       Compliance with Law.
                     --------------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could have a Material Adverse Effect.

           7.5       Payment of Taxes and Other Indebtedness.
                     ----------------------------------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
pay and discharge (a) all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all lawful claims (including claims for
labor, materials and supplies) which, if unpaid, might give rise to a Lien upon
any of its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could have
a Material Adverse Effect.
<PAGE>


           7.6       Insurance.
                     ----------
           Each Credit Party will, and will cause each of its Subsidiaries to,
at all times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Agent shall be named as loss payee or mortgagee, as its interest may appear,
and/or additional insured with respect to any such insurance providing coverage
in respect of any Collateral, and each provider of any such insurance shall
agree, by endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Agent, that it will give the Agent thirty (30) days
prior written notice before any such policy or policies shall be altered or
canceled, and that no act or default of any Consolidated Party or any other
Person shall affect the rights of the Agent or the Lenders under such policy or
policies. The present insurance coverage of the Consolidated Parties is outlined
as to carrier, policy number, expiration date, type and amount on Schedule 7.6.

           7.7       Maintenance of Property.
                     ------------------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.

           7.8       Performance of Obligations.
                     ---------------------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound.

           7.9       Use of Proceeds.
                     ----------------
           The Borrower will use the proceeds of the Loans and will use the
Letters of Credit solely for the purposes set forth in Section 6.15.

           7.10      Audits/Inspections.
                     -------------------
           Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person. The Credit Parties agree
that the Agent, and its representatives, may conduct an annual audit of the
Collateral, at the expense of the Borrower.
<PAGE>


           7.11      Financial Covenants.
                     --------------------
                     (a) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
           Ratio, as of the last day of each fiscal quarter of the Consolidated
           Parties shall be greater than or equal to 1.25 to 1.0:

                     (b) Leverage Ratio. The Leverage Ratio, as of the last day
           of each fiscal quarter of the Consolidated Parties for each date of
           determination occurring during each of the periods listed below,
           shall be less than or equal to:

                                  Period                              Ratio
                                  ------                              -----
                                Fiscal year 2003                    2.25 to 1.0
                                Thereafter                          1.50 to 1.0

                     (c) Consolidated EBITDA. Consolidated EBITDA at the end of
           each fiscal quarter of the Borrower for the immediately preceding
           four consecutive fiscal quarters as shown on the financial statements
           of the Borrower delivered pursuant to Section 7.1(b) for each date of
           determination occurring during each of the periods listed below shall
           not be less than:

                                  Period                              Amount
                                  ------                              ------
                                Fiscal year 2003                    $21,000,000
                                Fiscal year 2004                    $25,000,000
                                Fiscal year 2005                    $31,000,000
                                Fiscal year 2006                    $36,500,000
                                Fiscal year 2007                    $44,000,000

                     (d) Capital Expenditures. Consolidated Capital Expenditures
           for each fiscal year shall not exceed the amounts set forth below for
           the periods set forth below:

                                  Period                              Amount
                                  ------                              ------
                                Fiscal year 2003                    $26,000,000
                                Fiscal year 2004                    $26,000,000
                                Fiscal year 2005                    $29,000,000
                                Fiscal year 2006                    $28,000,000
                                Fiscal year 2007                    $26,000,000

                     (e) Tangible Net Worth. Consolidated Tangible Net Worth
           shall not at any time be less than $31,000,000 increased by the sum
           of (i) on a cumulative basis as of the end of each fiscal quarter of
           the Borrower, commencing with the fiscal quarter ending January 5,
           2003, an amount equal to 50% of Consolidated Net Income (to the
           extent positive) for the fiscal quarter then ended plus (ii) an
           amount equal to 100% of the Net Cash Proceeds from any Equity
           Issuance occurring after the Closing Date.
<PAGE>


           7.12      Additional Credit Parties.
                     --------------------------
           As soon as practicable and in any event within 30 days after any
Person becomes a Subsidiary of any Credit Party, the Borrower shall provide the
Agent with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) if such Person is a
Domestic Subsidiary of a Credit Party, cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit 7.12, (b) cause 100% (if
such Person is a Domestic Subsidiary of a Credit Party) or 65% (if such Person
is a direct Foreign Subsidiary of a Credit Party) of the Capital Stock of such
Person to be delivered to the Agent (together with undated stock powers signed
in blank (unless, with respect to a Foreign Subsidiary, such stock powers are
deemed unnecessary by the Agent in its reasonable discretion under the law of
the jurisdiction of incorporation of such Person)) and pledged to the Agent
pursuant to an appropriate pledge agreement(s) in substantially the form of the
Pledge Agreement and otherwise in form acceptable to the Agent and (c) cause
such Person to provide certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other items of the types
required to be delivered pursuant to Section 5.1(e), all in form, content and
scope reasonably satisfactory to the Agent.

           7.13      Pledged Assets.
                     ---------------
           Each Credit Party will, and will cause each of its Subsidiaries to,
cause (a) all of its owned personal property located in the United States and
(b) to the extent deemed to be material by the Agent or the Required Lenders in
its or their sole reasonable discretion, all of its other owned personal
property, to be subject at all times to first priority, perfected Liens in favor
of the Agent pursuant to the terms and conditions of the Collateral Documents
or, with respect to any such property acquired subsequent to the Closing Date,
such other additional security documents as the Agent shall reasonably request.
In furtherance of the foregoing terms of this Section 7.13, the Borrower agrees
to promptly provide the Agent with written notice of the acquisition by, or the
entering into a leasing by, any Credit Party of any asset(s) having a market
value greater than $500,000, setting forth in reasonable detail the location and
a description of the asset(s) so acquired. Without limiting the generality of
the above, the Credit Parties will cause 100% of the Capital Stock or other
equity interest in each of their direct or indirect Domestic Subsidiaries and
65% of the Capital Stock or other equity interest in each of their direct
Foreign Subsidiaries to be subject at all times to a first priority, perfected
Lien in favor of the Agent pursuant to the terms and conditions of the
Collateral Documents or such other security documents as the Agent shall
reasonably request.

           If, subsequent to the Closing Date, a Credit Party shall acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents, the Borrower shall promptly (and in any event
within three (3) Business Days) after any responsible officer of a Credit Party
acquires knowledge of same notify the Agent of same.
<PAGE>


                                    SECTION 8

                               NEGATIVE COVENANTS

           Each Credit Party hereby covenants and agrees that, so long as this
Credit Agreement is in effect or any amounts payable hereunder or under any
other Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

           8.1       Indebtedness.
                     -------------
           The Credit Parties will not permit any Consolidated Party to
contract, create, incur, assume or permit to exist any Indebtedness, except:

                     (a) Indebtedness arising under this Credit Agreement and
           the other Credit Documents;

                     (b) Indebtedness of the Borrower and its Subsidiaries set
           forth in Schedule 8.1 (and renewals, refinancings and extensions
           thereof on terms and conditions no less favorable to such Person than
           such existing Indebtedness);

                     (c) purchase money Indebtedness consisting of Capital
           Leases as permitted under Section 8.13;

                     (d) obligations of the Borrower or any of its Subsidiaries
           in respect of Hedging Agreements entered into in order to manage
           existing or anticipated interest rate or exchange rate risks and not
           for speculative purposes;

(e) intercompany Indebtedness arising out of loans and advances permitted under
Section 8.6;

(f)        in addition to the Indebtedness otherwise permitted by this Section
           8.1, other Indebtedness hereafter incurred by the Borrower or any of
           its Subsidiaries in an aggregate amount not to exceed $300,000 at any
           time outstanding.

           8.2       Liens.
                     ------
           The Credit Parties will not permit any Consolidated Party to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.

           8.3       Nature of Business.
                     -------------------
           The Credit Parties will not permit any Consolidated Party to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date.
<PAGE>


           8.4       Consolidation, Merger, Dissolution, etc.
                     ----------------------------------------
           Except in connection with an Asset Disposition permitted by the terms
of Section 8.5, the Credit Parties will not permit any Consolidated Party to (a)
dissolve, liquidate or wind up their affairs or enter into any transaction of
merger or consolidation; provided, however that the Borrower may merge or
consolidate with any Subsidiary so long as the Borrower shall be the continuing
or surviving corporation or (b) acquire all or substantially all of the assets,
property and/or operations of any Person which is not a Subsidiary in an
aggregate amount in excess of $1,000,000 in any fiscal year.

           8.5       Asset Dispositions.
                     -------------------
           The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than Excluded Asset Dispositions unless (a) the consideration
paid in connection therewith is cash or Cash Equivalents, (b) if such
transaction is a Sale and Leaseback Transaction, such transaction is permitted
by the terms of Section 8.12, (c) the aggregate net book value of all of the
assets sold or otherwise disposed of by the Consolidated Parties in all such
transactions after the Closing Date shall not exceed $500,000, and (d) no later
than 30 days prior to such Asset Disposition, the Agent and the Lenders shall
have received a certificate of an officer of the Borrower specifying the
anticipated or actual date of such Asset Disposition, briefly describing the
assets to be sold or otherwise disposed of and setting forth the net book value
of such assets, the aggregate consideration and the Net Cash Proceeds to be
received for such assets in connection with such Asset Disposition, and
thereafter the Borrower shall, within the period of 30 days following the
consummation of such Asset Disposition (with respect to any such Asset
Disposition, the "Application Period"), apply (or cause to be applied) an amount
equal to the Net Cash Proceeds of such Asset Disposition to the prepayment of
the Loans in accordance with the terms of Section 3.3(b)(iii).

           Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Agent's security interest, if any, in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, if any, the return of stock certificates, if any, and the release of
such Subsidiary from all of its obligations, if any, under the Credit Documents.

           8.6       Investments.
                     ------------
           The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.

           8.7       Restricted Payments.
                     --------------------
           The Credit Parties will not permit any Consolidated Party to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person and (b) to make dividends or other
distributions payable to the Borrower (directly or indirectly through
Subsidiaries).
<PAGE>


           8.8       Transactions with Affiliates.
                     -----------------------------
           Except for the transactions referenced on Schedule 8.8, the Credit
Parties will not permit any Consolidated Party to enter into or permit to exist
any transaction or series of transactions with any officer, director,
shareholder, Subsidiary or Affiliate of such Person other than (a) advances of
working capital to any Credit Party, (b) transfers of cash and assets to any
Credit Party, (c) transactions permitted by Section 8.1, Section 8.4, Section
8.5, Section 8.6, or Section 8.7, (d) normal compensation and reimbursement of
expenses of officers and directors and (e) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with a Person other than an officer,
director, shareholder, Subsidiary or Affiliate.

           8.9       Fiscal Year; Organizational Documents.
                     --------------------------------------
           The Credit Parties will not permit any Consolidated Party to change
its fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without the prior written consent of the Required Lenders.

           8.10      Limitation on Restricted Actions.
                     ---------------------------------
           The Credit Parties will not permit any Consolidated Party to

                     (a) directly or indirectly, create or otherwise cause or
           suffer to exist or become effective any encumbrance or restriction on
           the ability of any such Person to (i) pay dividends or make any other
           distributions to any Credit Party on its Capital Stock or with
           respect to any other interest or participation in, or measured by,
           its profits, (ii) pay any Indebtedness or other obligation owed to
           any Credit Party, (iii) make loans or advances to any Credit Party,
           (iv) sell, lease or transfer any of its properties or assets to any
           Credit Party, or (v) act as a Guarantor and pledge its assets
           pursuant to the Credit Documents or any renewals, refinancings,
           exchanges, refundings or extension thereof, except (in respect of any
           of the matters referred to in clauses (i)-(v) above) for such
           encumbrances or restrictions existing under or by reason of (A) this
           Credit Agreement and the other Credit Documents, (B) applicable law
           or (C) any document or instrument governing Indebtedness incurred
           pursuant to Section 8.1(c), provided, however, that any such
           restriction contained therein relates only to the asset or assets
           constructed or acquired in connection therewith; or
<PAGE>


                     (b) enter into, assume or become subject to any agreement
           prohibiting or otherwise restricting the creation or assumption of
           any Lien upon its properties or assets, whether now owned or
           hereafter acquired, or requiring the grant of any security for such
           obligation if security is given for some other obligation, except (i)
           pursuant to this Credit Agreement and the other Credit Documents, and
           (ii) pursuant to any document or instrument governing Indebtedness
           incurred pursuant to Section 8.1(c), provided, however, that any such
           restriction contained therein relates only to the asset or assets
           constructed or acquired in connection therewith.

           8.11      Ownership of Subsidiaries.
                     --------------------------
           Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any Consolidated Party to (a)
permit any Person (other than the Borrower or any Wholly-Owned Subsidiary of the
Borrower) to own more than twenty-five percent (25%) of any Subsidiary of the
Borrower, (b) permit any Subsidiary of the Borrower to issue Capital Stock
(except to the Borrower or to a Wholly-Owned Subsidiary of the Borrower), (c)
permit, create, incur, assume or suffer to exist any Lien thereon, in each case
except (i) to qualify directors where required by applicable law or to satisfy
other requirements of applicable law with respect to the ownership of Capital
Stock of Foreign Subsidiaries, (ii) as a result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5 or (iii) for Permitted Liens and (d) notwithstanding anything to
the contrary contained in clause (b) above, permit any Subsidiary of the
Borrower to issue any shares of preferred Capital Stock.

           8.12      Sale Leasebacks.
                     ----------------
           The Credit Parties will not permit any Consolidated Party to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any Property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which such Consolidated Party has sold or transferred or
is to sell or transfer to a Person which is not a Consolidated Party or (b)
which such Consolidated Party intends to use for substantially the same purpose
as any other Property which has been sold or is to be sold or transferred by
such Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.

           8.13      Lease Obligations.
                     ------------------
           The Credit Parties will not permit any Consolidated Party to enter
into, assume or permit to exist any obligations with respect to Capital Leases
or for the payment of rent under Operating Leases which in the aggregate for all
such Persons in any fiscal year would be in excess of $1,250,000 greater than
the amount existing as of the end of the immediately preceding fiscal year.

<PAGE>


                                    SECTION 9

                                EVENTS OF DEFAULT

           9.1       Events of Default.
                     ------------------
           An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):

                     (a)       Payment.  Any Credit Party shall

                               (i) default in the payment when due of any
                     principal of any of the Loans or of any reimbursement
                     obligations arising from drawings under Letters of Credit,
                     or

                               (ii) default, and such default shall continue for
                     five (5) or more Business Days, in the payment when due of
                     any interest on the Loans or on any reimbursement
                     obligations arising from drawings under Letters of Credit,
                     or of any Fees or other amounts owing hereunder, under any
                     of the other Credit Documents or in connection herewith or
                     therewith; or

                     (b) Representations. Any representation, warranty or
           statement made or deemed to be made by any Credit Party herein, in
           any of the other Credit Documents, or in any statement or certificate
           delivered or required to be delivered pursuant hereto or thereto
           shall prove untrue in any material respect on the date as of which it
           was deemed to have been made; or

                     (c)       Covenants.  Any Credit Party shall

                               (i) default in the due performance or observance
                     of any term, covenant or agreement contained in Sections
                     7.2, 7.9, 7.11, 7.12, 7.13 or 8.1 through 8.13, inclusive;

                               (ii) default in the due performance or observance
                     of any term, covenant or agreement contained in Sections
                     7.1(a), (b), (c) or (d) and such default shall continue
                     unremedied for a period of at least 10 days after the
                     earlier of a responsible officer of a Credit Party becoming
                     aware of such default or notice thereof by the Agent; or

                               (iii) default in the due performance or
                     observance by it of any term, covenant or agreement (other
                     than those referred to in subsections (a), (b), (c)(i) or
                     (c)(ii) of this Section 9.1) contained in this Credit
                     Agreement and such default shall continue unremedied for a
                     period of at least 30 days after the earlier of a
                     responsible officer of a Credit Party becoming aware of
                     such default or notice thereof by the Agent; or
<PAGE>


                     (d) Other Credit Documents. (i) Any Credit Party shall
           default in the due performance or observance of any term, covenant or
           agreement in any of the other Credit Documents (subject to applicable
           grace or cure periods, if any), or (ii) except as a result of or in
           connection with a dissolution, merger or disposition of a Subsidiary
           permitted under Section 8.4 or Section 8.5, any Credit Document shall
           fail to be in full force and effect or to give the Agent and/or the
           Lenders the Liens, rights, powers and privileges purported to be
           created thereby, or any Credit Party shall so state in writing; or

                     (e) Guaranties. Except as the result of or in connection
           with a dissolution, merger or disposition of a Subsidiary permitted
           under Section 8.4 or Section 8.5, the guaranty given by any Guarantor
           hereunder (including any Additional Credit Party) or any provision
           thereof shall cease to be in full force and effect, or any Guarantor
           (including any Additional Credit Party) hereunder or any Person
           acting by or on behalf of such Guarantor shall deny or disaffirm such
           Guarantor's obligations under such guaranty, or any Guarantor shall
           default in the due performance or observance of any term, covenant or
           agreement on its part to be performed or observed pursuant to any
           guaranty; or

                     (f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
           respect to any Consolidated Party; or

                     (g) Defaults under Other Agreements.

                               (i) Any Consolidated Party shall default in the
                     performance or observance (beyond the applicable grace
                     period with respect thereto, if any) or any material
                     obligation or condition of any contract or lease material
                     to the Consolidated Parties; or

                               (ii) With respect to any Indebtedness (other than
                     Indebtedness outstanding under this Credit Agreement) in
                     excess of $100,000 in the aggregate for the Consolidated
                     Parties taken as a whole, (A) any Consolidated Party shall
                     (1) default in any payment (beyond the applicable grace
                     period with respect thereto, if any) with respect to any
                     such Indebtedness, or (2) the occurrence and continuance of
                     a default in the observance or performance relating to such
                     Indebtedness or contained in any instrument or agreement
                     evidencing, securing or relating thereto, or any other
                     event or condition shall occur or condition exist, the
                     effect of which default or other event or condition is to
                     cause, or permit, the holder or holders of such
                     Indebtedness (or trustee or agent on behalf of such
                     holders) to cause (determined without regard to whether any
                     notice or lapse of time is required), any such Indebtedness
                     to become due prior to its stated maturity; or (B) any such
                     Indebtedness shall be declared due and payable, or required
                     to be prepaid other than by a regularly scheduled required
                     prepayment, prior to the stated maturity thereof; or
<PAGE>


                     (h) Judgments. One or more judgments or decrees shall be
           entered against one or more of the Consolidated Parties involving a
           liability of $100,000 or more in the aggregate (to the extent not
           paid or fully covered by insurance provided by a carrier who has
           acknowledged coverage and has the ability to perform) and any such
           judgments or decrees shall not have been vacated, discharged or
           stayed or bonded pending appeal within 30 days from the entry
           thereof; or

                     (i) ERISA. Any of the following events or conditions, if
           such event or condition could have a Material Adverse Effect: (i) any
           "accumulated funding deficiency," as such term is defined in Section
           302 of ERISA and Section 412 of the Code, whether or not waived,
           shall exist with respect to any Plan, or any lien shall arise on the
           assets of any Consolidated Party or any ERISA Affiliate in favor of
           the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a
           Single Employer Plan, which is, in the reasonable opinion of the
           Agent, likely to result in the termination of such Plan for purposes
           of Title IV of ERISA; (iii) an ERISA Event shall occur with respect
           to a Multiemployer Plan or Multiple Employer Plan, which is, in the
           reasonable opinion of the Agent, likely to result in (A) the
           termination of such Plan for purposes of Title IV of ERISA, or (B)
           any Consolidated Party or any ERISA Affiliate incurring any liability
           in connection with a withdrawal from, reorganization of (within the
           meaning of Section 4241 of ERISA), or insolvency or (within the
           meaning of Section 4245 of ERISA) such Plan; or (iv) any prohibited
           transaction (within the meaning of Section 406 of ERISA or Section
           4975 of the Code) or breach of fiduciary responsibility shall occur
           which may subject any Consolidated Party or any ERISA Affiliate to
           any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
           Section 4975 of the Code, or under any agreement or other instrument
           pursuant to which any Consolidated Party or any ERISA Affiliate has
           agreed or is required to indemnify any person against any such
           liability; or

                     (j) Ownership. There shall occur a Change of Control.

                     (k) Responsible Officer. Either of the following events or
           conditions shall occur: (i) both of Joel A. Schwartz and Michael
           Burris shall cease to be Responsible Officers of the Borrower or (ii)
           both of Joel A. Schwartz and Michael Burris shall cease to be
           actively engaged in the daily management and/or operations of the
           Borrower.

           9.2       Acceleration; Remedies.
                     -----------------------
           Upon the occurrence of an Event of Default, and at any time
thereafter unless and until such Event of Default has been waived by the
requisite Lenders (pursuant to the voting requirements of Section 11.6) or cured
to the satisfaction of the requisite Lenders (pursuant to the voting procedures
in Section 11.6), the Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Credit Parties take any of the
following actions:

                     (a) Termination of Commitments. Declare the Commitments
           terminated whereupon the Commitments shall be immediately terminated.
<PAGE>


                     (b) Acceleration. Declare the unpaid principal of and any
           accrued interest in respect of all Loans, any reimbursement
           obligations arising from drawings under Letters of Credit and any and
           all other indebtedness or obligations of any and every kind owing by
           the Borrower to the Agent and/or any of the Lenders hereunder to be
           due whereupon the same shall be immediately due and payable without
           presentment, demand, protest or other notice of any kind, all of
           which are hereby waived by the Borrower.

                     (c) Cash Collateral. Direct the Borrower to pay (and the
           Borrower agrees that upon receipt of such notice, or upon the
           occurrence of an Event of Default under Section 9.1(f), it will
           immediately pay) to the Agent additional cash, to be held by the
           Agent, for the benefit of the Lenders, in a cash collateral account
           as additional security for the LOC Obligations in respect of
           subsequent drawings under all then outstanding Letters of Credit in
           an amount equal to the maximum aggregate amount which may be drawn
           under all Letters of Credits then outstanding.

                     (d) Enforcement of Rights. Enforce any and all rights and
           interests created and existing under the Credit Documents including,
           without limitation, all rights and remedies existing under the
           Collateral Documents, all rights and remedies against a Guarantor and
           all rights of set-off.

           Notwithstanding the foregoing, if an Event of Default specified in
Section 9.1(f) shall occur, then the Commitments shall automatically terminate
and all Loans, all reimbursement obligations arising from drawings under Letters
of Credit, all accrued interest in respect thereof, all accrued and unpaid Fees
and other indebtedness or obligations owing to the Agent and/or any of the
Lenders hereunder automatically shall immediately become due and payable without
the giving of any notice or other action by the Agent or the Lenders.


                                   SECTION 10

                                AGENCY PROVISIONS

           10.1      Appointment, Powers and Immunities.
                     -----------------------------------
           Each Lender hereby irrevocably appoints and authorizes the Agent to
act as its agent under this Credit Agreement and the other Credit Documents with
such powers and discretion as are specifically delegated to the Agent by the
terms of this Credit Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. The Agent (which term as
used in this sentence and in Section 10.5 and the first sentence of Section 10.6
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 Credit 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 Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit 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 Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit 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.
<PAGE>


           10.2      Reliance by Agent.
                     ------------------
           The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other printed communication (including, without
limitation, any thereof by telecopy) 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 holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. As
to any matters not expressly provided for by this Credit 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 Credit Document or applicable
law or 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.

           10.3      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 10.2 hereof) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Required
Lenders.

           10.4      Rights as a Lender.
                     -------------------
           With respect to its Commitment and the Loans made by it, Wachovia
Bank, National Association (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. Wachovia Bank, National
Association (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 Wachovia Bank,
National Association (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 Credit Agreement
or otherwise without having to account for the same to the Lenders.
<PAGE>


           10.5      Indemnification.
                     ----------------
           The Lenders agree to indemnify the Agent (to the extent not
reimbursed under Section 11.5 hereof, but without limiting the obligations of
the Borrower under such Section) ratably in accordance with their respective
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 Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document; provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or 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 11.5, to
the extent that the Agent is not promptly reimbursed for such costs and expenses
by the Borrower. The agreements in this Section 10.5 shall survive the repayment
of the Loans, LOC Obligations and other obligations under the Credit Documents
and the termination of the Commitments hereunder.

           10.6      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 Credit 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 Credit 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.

           10.7      Successor 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
$100,000,000. 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 Section 10 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.
<PAGE>


                                   SECTION 11

                                  MISCELLANEOUS

           11.1      Notices.
                     --------
           Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Borrower, Guarantors and
the Agent, set forth below, and, in the case of the Lenders, set forth on
Schedule 2.1(a), or at such other address as such party may specify by written
notice to the other parties hereto:

           if to the Borrower or the Guarantors:

                     BENIHANA INC.
                     8685 N.W. 53rd Terrace
                     Miami, Florida  33166-4591
                     Attn:  Mr. Joel A. Schwartz
                     Telephone:  (305) 593-0770
                     Telecopy:   (305) 594-9492

           if to the Agent:

                     Wachovia Bank, National Association
                     Wachovia Financial Center - FL 8004
                     200 South Biscayne Blvd., 15th Floor
                     Miami, Florida 33131
                     Attn:  Margarita Alfonso
                     Telephone:  (305) 789-5057
                     Telecopy:   (305) 789-5008
<PAGE>


           11.2      Right of Set-Off; Adjustments.
                     ------------------------------
           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 any
Credit Party against any and all of the obligations of such Person now or
hereafter existing under this Credit Agreement, under the Notes, under any other
Credit Document or otherwise, irrespective of whether such Lender shall have
made any demand under hereunder or thereunder and although such obligations may
be unmatured. Each Lender agrees promptly to notify any affected Credit Party
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 11.2 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.

           11.3      Benefit of Agreement.
                     ---------------------
                     (a) This Credit Agreement shall be binding upon and inure
           to the benefit of and be enforceable by the respective successors and
           assigns of the parties hereto; provided that none of the Credit
           Parties may assign or transfer any of its interests and obligations
           without prior written consent of the Lenders; provided further that
           the rights of each Lender to transfer, assign or grant participations
           in its rights and/or obligations hereunder shall be limited as set
           forth in this Section 11.3.

                     (b) Each Lender may assign to one or more Eligible
           Assignees all or a portion of its rights and obligations under this
           Credit Agreement (including, without limitation, all or a portion of
           its Loans, its Notes, and its 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 Credit Agreement, any such
                     partial assignment shall be in an amount at least equal to
                     $5,000,000 (or, if less, the remaining amount of the
                     Commitment being assigned by such Lender) 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 its Revolving
                     Commitment and its Term Loan Commitment and all other
                     rights and obligations under this Credit Agreement and the
                     Notes; 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 11.3(b) hereto,
                     together with any Note subject to such assignment and a
                     processing fee of $3,500.
<PAGE>


           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 Credit Agreement. Upon the consummation of
           any assignment pursuant to this Section 11.3(b), the assignor, the
           Agent and the Borrower shall make appropriate arrangements so that,
           if required, new 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 3.11.

                     (c) The Agent shall maintain at its address referred to in
           Section 11.1 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 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 Credit 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.

                     (d) 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 11.3(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.

                     (e) Each Lender may sell participations to one or more
           Persons in all or a portion of its rights and obligations under this
           Credit Agreement (including all or a portion of its Commitment and
           its Loans); provided, however, that (i) such Lender's obligations
           under this Credit 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 Sections 3.7 through 3.12, inclusive, and the right of set-off
           contained in Section 11.2, 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 Credit Agreement, and such
           Lender shall retain the sole right to enforce the obligations of the
           Borrower relating to its Loans and its Notes and to approve any
           amendment, modification, or waiver of any provision of this Credit
           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 Notes, extending any scheduled principal
           payment date or date fixed for the payment of interest on such Loans
           or Notes, or extending its Commitment).
<PAGE>


                     (f) Notwithstanding any other provision set forth in this
           Credit Agreement, any Lender may at any time assign and pledge all or
           any portion of its Loans and its Notes 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.

                     (g) 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), subject, however, to the
           provisions of Section 11.14 hereof.

           11.4      No Waiver; Remedies Cumulative.
                     -------------------------------
           No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Agent or any Lender and any of the
Credit Parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies provided herein are cumulative and not exclusive of any rights or
remedies which the Agent or any Lender would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle the Borrower or any other
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent or the Lenders
to any other or further action in any circumstances without notice or demand.

           11.5      Expenses; Indemnification.
                     --------------------------
           (a) The Borrower agrees to pay on demand all costs and expenses of
the Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
(including the cost of internal counsel) with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the Credit
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 Credit Documents and the other documents to be delivered
hereunder.
<PAGE>


           (b) 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 Credit 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 11.5 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 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 Credit Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans.

           (c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.

           11.6      Amendments, Waivers and Consents.
                     ---------------------------------
           Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:

                     (a) without the consent of each Lender affected thereby,
           neither this Credit Agreement or any other Credit Document may be
           amended, changed, waived, discharged or terminated so as to:

                            (i) extend the final maturity of any Loan or the
                     time of payment of any reimbursement obligation, or any
                     portion thereof, arising from drawings under Letters of
                     Credit, or extend or waive any Principal Amortization
                     Payment of any Loan, or any portion thereof,

                           (ii) reduce the rate or extend the time of payment of
                     interest (other than as a result of waiving the
                     applicability of any post-default increase in interest
                     rates) thereon or Fees hereunder,
<PAGE>


                          (iii) reduce or waive the principal amount of any Loan
                     or of any reimbursement obligation, or any portion thereof,
                     arising from drawings under Letters of Credit,

                           (iv) increase the Commitment of a Lender over the
                     amount thereof in effect (it being understood and agreed
                     that a waiver of any Default or Event of Default or
                     mandatory reduction in the Commitments shall not constitute
                     a change in the terms of any Commitment of any Lender),

                            (v) except as the result of or in connection with an
                     Asset Disposition permitted by Section 8.5, release all or
                     substantially all of the Collateral,

                           (vi) except as the result of or in connection with a
                     dissolution, merger or disposition of a Subsidiary
                     permitted under Section 8.4, release the Borrower or
                     substantially all of the other Credit Parties from its or
                     their obligations under the Credit Documents,

                          (vii) amend, modify or waive any provision of this
                     Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11,
                     3.12, 3.13, 3.14, 9.1(a), 11.2, 11.3, 11.5 or 11.9,

                         (viii) reduce any percentage specified in, or otherwise
                     modify, the definition of Required Lenders, or

                           (ix) consent to the assignment or transfer by the
                     Borrower or all or substantially all of the other Credit
                     Parties of any of its or their rights and obligations under
                     (or in respect of) the Credit Documents except as permitted
                     thereby;

                     (b) without the consent of the Agent, no provision of
Section 10 may be amended;

                     (c) without the consent of the Issuing Lender, no provision
of Section 2.2 may be amended.

           Notwithstanding the fact that the consent of all the Lenders is
           required in certain circumstances as set forth above, (x) each Lender
           is entitled to vote as such Lender sees fit on any bankruptcy
           reorganization plan that affects the Loans, and each Lender
           acknowledges that the provisions of Section 1126(c) of the Bankruptcy
           Code supersedes the unanimous consent provisions set forth herein and
           (y) the Required Lenders may consent to allow a Credit Party to use
           cash collateral in the context of a bankruptcy or insolvency
           proceeding.
<PAGE>


           11.7      Counterparts.
                     -------------
           This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.

           11.8      Headings.
                     ---------
           The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

           11.9      Survival.
                     ---------
           All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and
delivery of this Credit Agreement, the making of the Loans, the issuance of the
Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.

           11.10     Governing Law; Submission to Jurisdiction; Venue.
                     -------------------------------------------------
                     (a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
           AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
           THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
           ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA. Any legal
           action or proceeding with respect to this Credit Agreement or any
           other Credit Document may be brought in the courts of the State of
           North Carolina in Mecklenburg County, or of the United States for the
           Western District of North Carolina, and, by execution and delivery of
           this Credit Agreement, each of the Credit Parties hereby irrevocably
           accepts for itself and in respect of its property, generally and
           unconditionally, the nonexclusive jurisdiction of such courts. Each
           of the Credit Parties further irrevocably consents to the service of
           process out of any of the aforementioned courts in any such action or
           proceeding by the mailing of copies thereof by registered or
           certified mail, postage prepaid, to it at the address set out for
           notices pursuant to Section 11.1, such service to become effective
           three (3) days after such mailing. Nothing herein shall affect the
           right of the Agent or any Lender to serve process in any other manner
           permitted by law or to commence legal proceedings or to otherwise
           proceed against any Credit Party in any other jurisdiction.
<PAGE>


                     (b) Each of the Credit Parties hereby irrevocably waives
           any objection which it may now or hereafter have to the laying of
           venue of any of the aforesaid actions or proceedings arising out of
           or in connection with this Credit Agreement or any other Credit
           Document brought in the courts referred to in subsection (a) above
           and hereby further irrevocably waives and agrees not to plead or
           claim in any such court that any such action or proceeding brought in
           any such court has been brought in an inconvenient forum.

                     (c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
           LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY
           WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
           COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY
           OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
           HEREBY.

           11.11     Severability.
                     -------------
           If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

           11.12     Entirety.
                     ---------
           This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.

           11.13     Binding Effect; Termination.
                     ----------------------------
                     (a) This Credit Agreement shall become effective at such
           time on or after the Closing Date when it shall have been executed by
           the Borrower, the Guarantors and the Agent, and the Agent shall have
           received copies hereof (telefaxed or otherwise) which, when taken
           together, bear the signatures of each Lender, and thereafter this
           Credit Agreement shall be binding upon and inure to the benefit of
           the Borrower, the Guarantors, the Agent and each Lender and their
           respective successors and assigns.

                     (b) The term of this Credit Agreement shall be until no
           Loans, LOC Obligations or any other amounts payable hereunder or
           under any of the other Credit Documents shall remain outstanding, no
           Letters of Credit shall be outstanding, all of the Credit Party
           Obligations have been irrevocably satisfied in full and all of the
           Commitments hereunder shall have expired or been terminated.

           11.14     Source of Funds.
                     ----------------
           Each of the Lenders hereby represents and warrants to the Borrower
that at least one of the following statements is an accurate representation as
to the source of funds to be used by such Lender in connection with the
financing hereunder:
<PAGE>


                     (a) no part of such funds constitutes assets allocated to
           any separate account maintained by such Lender in which any employee
           benefit plan (or its related trust) has any interest;

                     (b) to the extent that any part of such funds constitutes
           assets allocated to any separate account maintained by such Lender,
           such Lender has disclosed to the Borrower the name of each employee
           benefit plan whose assets in such account exceed 10% of the total
           assets of such account as of the date of such purchase (and, for
           purposes of this subsection (b), all employee benefit plans
           maintained by the same employer or employee organization are deemed
           to be a single plan);

                     (c) to the extent that any part of such funds constitutes
           assets of an insurance company's general account, such insurance
           company has complied with all of the requirements of the regulations
           issued under Section 401(c)(1)(A) of ERISA; or

                     (d) such funds constitute assets of one or more specific
           benefit plans which such Lender has identified in writing to the
           Borrower.

As used in this Section 11.14, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

           11.15     Conflict.
                     ---------
           To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.

           11.16    Arbitration; Consent to Jurisdiction and Service of Process.
                    ------------------------------------------------------------
           (a) Upon demand of any party hereto, whether made before or after
institution of any judicial action, any dispute, claim or controversy arising
out of or connected herewith or with the Credit Documents ("Disputes") shall be
resolved by binding arbitration as provided herein. Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions
and claims arising herefrom or from Credit Documents executed in the future.
Arbitration shall be conducted under the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, Mecklenburg County, North Carolina, or such other place
as agreed to in writing by the parties. A judgment upon the award may be entered
in any court having jurisdiction, and all decisions shall be in writing. The
panel from which all arbitrators are selected shall be comprised of licensed
attorneys having at least ten years' experience representing parties in secured
lending transactions. Notwithstanding the foregoing, this arbitration provision
does not apply to disputes under or related to interest protection agreements.
<PAGE>


           (b) Notwithstanding the preceding binding arbitration provision, the
Agent, on behalf of the Lenders, preserves certain remedies that may be
exercised during a Dispute. The Agent, on behalf of the Lenders, shall have the
right to proceed in any court of proper jurisdiction or by self help to exercise
or prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale granted in the Credit Documents or under applicable law, (ii) all rights of
self help including peaceful occupation of real property and collection of
rents, set-off and peaceful possession of personal property, (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment and appointment of receiver, (iv) when applicable, a
judgment by confession of judgment and (v) other remedies. Preservation of these
remedies does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.

           (c) By execution and delivery of this Credit Agreement, each of the
parties hereto accepts, for itself and in connection with its properties,
generally and unconditionally, the non-exclusive jurisdiction relating to any
arbitration proceedings conducted under the Arbitration Rules in Charlotte,
Mecklenburg County, North Carolina and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Credit Agreement from
which no appeal has been taken or is available. Each of the parties hereto
irrevocably agrees that all process in any such arbitration proceedings or
otherwise may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 11.1 or at such other address of which such party
shall have been notified pursuant thereto, such service being hereby
acknowledged by each party hereto to be effective and binding service in every
respect. Each party hereto irrevocably waives any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction. Nothing herein shall affect
the right to serve process in any other manner permitted by law or shall limit
the right of any party to bring proceedings against the Borrower or any party
hereto in any court or pursuant to arbitration proceedings in any other
jurisdiction.






                           [Signature Page to Follow]



<PAGE>



           IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as of the
date first above written.

BORROWER:                              BENIHANA INC.,
---------
                                       a Delaware corporation


                                       By: /s/ Joel A. Schwartz
                                       -------------------------------------
                                       Name:   Joel A. Schwartz
                                       Title:  President

SUBSIDIARY
----------
GUARANTORS:
-----------                            1501 BROADWAY RESTAURANT CORP.
                                       a New York corporation
                                       BENIHANA BETHESDA CORP.,
                                       a New York corporation
                                       BENIHANA BRICKELL STATION CORP.,
                                       a Delaware corporation
                                       BENIHANA CARLSBAD CORP.,
                                       a Delaware corporation
                                       BENIHANA ENCINO CORP.,
                                       a California corporation
                                       BENIHANA INTERNATIONAL CORP.,
                                       a Delaware corporation
                                       BENIHANA LINCOLN ROAD CORP.,
                                       a Delaware corporation
                                       BENIHANA LOMBARD CORP.,
                                       a Illinois corporation
                                       BENIHANA MARINA CORP.,
                                       a California corporation
                                       BENIHANA MONTEREY CORPORATION,
                                       a Delaware corporation
                                       BENIHANA NATIONAL CORP.,
                                       a Delaware corporation
                                       BENIHANA NATIONAL OF FLORIDA CORP.,
                                       a Delaware corporation
                                       BENIHANA NEW YORK CORP.,
                                       a Delaware corporation
                                       BENIHANA ONTARIO CORP.,
                                       a Delaware corporation
                                       BENIHANA ORLANDO CORP.,
                                       a Delaware corporation
                                       BENIHANA OF PUENTE HILLS CORP.,
                                       a Delaware corporation
                                       BENIHANA SCHAUMBURG CORP.,
                                       a Delaware corporation


                           [signature pages continue]


<PAGE>


                                       BENIHANA STATE & ELM CORP.,
                                       a Delaware corporation
                                       BENIHANA SUNRISE CORP.,
                                       a Delaware corporation
                                       BENIHANA WESTBURY CORP.
                                       a Delaware corporation
                                       BENIHANA WHEELING CORP.
                                       a Delaware corporation
                                       BIG SPLASH KENDALL CORP.,
                                       a Delaware corporation
                                       HARU AMSTERDAM AVENUE CORP.
                                       a New York corporation
                                       HARU FOOD CORP.
                                       a New York corporation
                                       HARU HOLDING CORP.
                                       a Delaware corporation
                                       HARU PARK AVENUE CORP.,
                                       a Delaware corporation
                                       HARU THIRD AVENUE CORP.
                                       a New York corporation
                                       HARU TOO, INC.,
                                       a New York corporation
                                       MAXWELL INTERNATIONAL INC.,
                                       a Delaware corporation
                                       NOODLE TIME, INC.,
                                       a Florida corporation
                                       RA AHWATUKEE RESTAURANT CORP.,
                                       a Delaware corporation
                                       RA KIERLAND RESTAURANT CORP.,
                                       a Delaware corporation
                                       RA SCOTTDALE CORP.,
                                       a Delaware corporation
                                       RA TEMPE CORP.,
                                       a Delaware corporation
                                       RUDY'S RESTAURANT GROUP, INC.,
                                       a Nevada corporation
                                       TEPPAN RESTAURANTS LTD.,
                                       a California corporation
                                       THE SAMURAI, INC.,
                                       a New York corporation


                                      By:/s/ Joel A. Schwartz
                                      ----------------------------------------
                                      Name:   Joel A. Schwartz
                                      Title:  President of each of the foregoing
                                              Subsidiary Guarantors



                           [signature pages continue]


<PAGE>


                                       BENIHANA LAS COLINAS CORP.,
                                       a Texas corporation
                                       BENIHANA OF TEXAS, INC.,
                                       a Texas corporation
                                       BENIHANA WOODLANDS CORP.,
                                       a Texas corporation


                                       By:/s/ Joel A. Schwartz
                                       ----------------------------------------
                                       Name:   Joel A. Schwartz
                                       Title:  Authorized Agent of each of the
                                               foregoing Subsidiary Guarantors




<PAGE>


LENDERS:                               WACHOVIA BANK, NATIONAL ASSOCIATION,
-------
                                       individually in its capacity as a Lender
                                       and in its capacity as Agent


                                       By:/s/ Daniel N. Gonzalez
                                       ----------------------------------------
                                       Name:   Daniel N. Gonzalez
                                       Title:  Senior Vice President



<PAGE>



                                                                  Exhibit 13.01
                                  Annual Report

SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
<S>                                                   <C>              <C>         <C>     <C>            <C>             <C>

                                                                                   YEARS ENDED
                                                      March 30,         March 31,          April 1,        March 26,      March 28,
                                                        2003              2002               2001            2000           1999
                                                        ----              ----               ----            ----           ----
                                                                                     (53 wk yr)
                                                                   (In thousands, except per share information)
CONSOLIDATED STATEMENTS
OF EARNINGS DATA:

Total revenues                                          $189,244         $171,507          $163,243          $137,477      $119,149
Cost of food and beverage sales                           46,182           42,754            43,301            36,588        30,964
Restaurant operating expenses                            111,725           99,707            89,427            74,088        65,188
Restaurant opening costs                                     485            1,228             1,453               566            12
Marketing, general and administrative
    expenses                                              15,512           13,373            13,690            11,402        11,343
Impairment charge                                                             438
Interest expense, net                                        528              990             1,233             1,297         1,644
Minority interest                                            477              100                40                81
Income before income taxes                                14,335           12,917            14,099            13,455         9,998
Net income                                                 9,473            8,829             9,091             8,733         6,518
Basic earnings
    per common share (1)                                    1.08             1.16              1.28              1.23          0.92
Diluted earnings
    per common share (1)                                    1.01             1.11              1.20              1.14          0.88

CONSOLIDATED BALANCE SHEET
DATA:

Total assets                                            $128,481          $98,301           $85,929           $75,445       $60,868
Long-term debt including
    current maturities                                    22,000                             14,645            14,646        12,407
                                                                 6,000
Stockholders' equity                                      85,631           73,713            52,685            43,545        34,699

OTHER FINANCIAL DATA:

Capital expenditures                                     $27,418          $13,944           $14,611            $9,643        $7,212
</TABLE>

(1)   On June 7, 2002, the Board of Directors declared a 15% stock dividend in
      Class A stock on both the Class A Shares and Common Shares.  The stock
      dividend was paid on August 12, 2002 to holders of record July 15, 2002.
      As a result, basic and diluted earnings per common share are shown as if
      the stock dividend had been in existence for each fiscal year presented.


<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS
Financial Condition and Results of Operations

Overview
--------
Summary of results

Summary highlights of our fiscal 2003 year compared to the previous year:

o  the eleventh consecutive year of total sales increases and comparable
   restaurant sales increases,
o  acquired a chain of four RA Sushi restaurants,
o  opened two new Benihana teppanyaki-style restaurants in The Woodlands and Las
   Colinas, Texas,
o  earnings per share diluted of $1.01 compared to $1.11,
o  revised our credit facility, gaining flexibility to finance the Company's
   continued profitable growth,
o  restaurant operating profit (restaurant sales less cost of food and beverage
   sales and restaurant operating expenses) increased 8.8% to approximately
   $30.0 million, and
o  net income increased 7.3% to approximately $9.5 million.

Our Business

We have operated teppanyaki-style Japanese restaurants in the United States for
over 38 years, and we believe we are the largest operator of teppanyaki-style
restaurants in the country. Our core concept, the traditional Benihana
restaurant, offers teppanyaki-style Japanese cooking in which fresh steak,
chicken and seafood is prepared by a Benihana chef on a steel grill which forms
a part of the table on which the food is served. Our Haru concept offers an
extensive menu of Japanese fusion dishes in a high energy, urban atmosphere. In
addition to traditional, high quality sushi and sashimi creations, Haru offers
raw bar items and Japanese cuisine. Our RA Sushi concept, acquired in December
2002, offers sushi and a full menu of Pacific-Rim dishes in a high energy
environment featuring upbeat design elements and music.

At March 30, 2003 we:

o  owned and operated 53 Benihana teppanyaki-style Japanese dinnerhouse
   restaurants,
o  franchised others to operate 19 additional Benihana restaurants,
o  owned and operated five Haru restaurants in New York City,
o  owned and operated four RA Sushi restaurants in the greater Phoenix
   Metropolitan area, and
o  owned and operated one Doraku restaurant in Miami Beach, Florida.

Outlook
-------

We continued to grow in fiscal 2003, despite a challenging environment. We
completed the highly promising acquisition of the RA Sushi restaurants, our Haru
restaurants enjoyed steady growth and we opened two new teppanyaki restaurants.
Subsequent to year-end, we opened a teppanyaki restaurant in Westbury, New York
and have seven other new teppanyaki and sushi restaurants under development. In
addition, we have successfully addressed important cost issues that will
contribute to the Company's near and long-range profitability, including the
cost of the health care program and significantly improving productivity while
maintaining our high standards of quality service.

We believe that our revenues will increase next year due to the aforementioned
newly opened teppanyaki restaurant in Westbury, New York and the opening of six
of the seven new restaurants under development, having one full year of RA Sushi
sales and from continuing increases in customer counts at restaurants open for
longer than one year. We expect food and beverage costs along with marketing,
general and administrative expenses to remain in line and to benefit from the
aforementioned cost cutting measures put in place in fiscal 2003. However, the
current prolonged slowdown in the economy may result in flat to negative
comparable restaurant sales increases as well as less than anticipated sales
from new restaurant openings.

Operating results
-----------------

Revenues

Revenues consist of the sales of food and beverages at our restaurants and
royalties and licensing fees from franchised restaurants. Revenues are dependent
upon the number of patrons that visit our restaurants and franchisees'
restaurants and the average check amounts.


<PAGE>



The following table shows revenues and percentage increases for the past three
years:

(Dollar amounts are expressed in thousands)
<TABLE>
<CAPTION>
<S>                                 <C>              <C>        <C>               <C>        <C>             <C>

                                                              Fiscal year ended
                                -----------------------------------------------------------------------------------
                                                                       2002                        2001
                                           2003                                                 (53 wk yr)
                                -----------------------------------------------------------------------------------
                                          Percentage                  Percentage                   Percentage
                                          change                      change                       change
                                          from 2002                   from 2001                    from 2000
  -----------------------------------------------------------------------------------------------------------------
  Restaurant sales                  $187,913         10.5%      $170,051          5.1%       $161,865         18.7%
  Franchise fees
    and royalties                      1,331         (8.6%)        1,456          5.7%          1,378         26.7%
  ------------------------------------------------------------------------------------------------------------------
  Total revenues                    $189,244         10.3%      $171,507          5.1%       $163,243         18.7%
  ------------------------------------------------------------------------------------------------------------------
</TABLE>

The table below shows the amount of the changes in restaurant sales and the
nature of the changes.

(Dollar amounts are expressed in thousands)
<TABLE>
<CAPTION>
<S>                                                                         <C>     <C>      <C>            <C>
                                                                                    Fiscal year ended
                                                                     ------------------------------------------------
                                                                             2003             2002           2001
                                                                                                          (53 wk yr)
  -------------------------------------------------------------------------------------------------------------------
  Amount of increase from prior year                                         $17,862          $8,186         $25,476
  Increase in sales from restaurants opened
      or owned longer than one year                                            7,206           1,808          13,847
  Increase from new restaurants                                                8,897           9,580           2,345
  Increase from acquired restaurants                                           3,226                           6,082
  Increase from sales at existing units while
    not comparable due to remodeling closures                                    330
  Effect of additional week in fiscal 2001                                                    (3,202)          3,202
  Closed units                                                                (1,797)
</TABLE>

We believe that the Benihana style of presentation makes us a unique choice for
customers. We believe that customers who are seeking greater value for their
dining budget appreciate the entertainment value provided by the chef cooking
directly at their table. We continued our multi-year program to build capacity
in our existing restaurants through adding additional tables and sushi bars.
Sales over the past two years have also increased as a result of an increasing
trend for sushi as a menu item. We believe that we are the largest restaurant
chain offering sushi to consumers nationwide. Sushi bars have been added to most
of the Benihana restaurants over the past several years.


2003 compared to 2002

Revenues increased 10.3% in fiscal 2003 when compared to fiscal 2002. Restaurant
sales increased $17,862,000 in fiscal 2003 when compared to the prior fiscal
year. The increase is mainly attributable to increases in comparable restaurant
sales of $7,206,000 and from increases in sales from new restaurants of
$8,897,000. Comparable restaurant sales growth for restaurants opened longer
than one year was 4.4% in fiscal 2003. Guest counts increased 9.4% to 7.6
million. The average per guest check amount was $23.45 at the teppanyaki
restaurants, $28.22 at the Haru restaurants, $20.56 at the Doraku restaurants
and $19.15 at the RA Sushi restaurants. The average per guest check amount
decreased in the Benihana teppanyaki restaurant due to customers trading down
the menu and a decrease in alcoholic beverage sales in response to the economic
slump.

Sales revenues were positively affected by the increase in guest counts in
fiscal 2003 when compared to the 9/11 affected fiscal 2002. The increase in
customer counts was tempered by a slowing economy, the Iraqi war as well as the
inclement weather in the fourth quarter.

We closed two restaurants in fiscal 2003. The Louisville teppanyaki restaurant
closed the last week of the fiscal year after its lease expired. The Chicago
Doraku restaurant closed in February 2003 and it is in the process of being
converted to a RA Sushi restaurant.



<PAGE>



2002 compared to 2001

Revenues increased 5.1% in fiscal 2002 when compared to fiscal 2001. Restaurant
sales increased $8,186,000 in fiscal 2002 when compared to fiscal 2001 (which
included an additional week which produced $3,202,000 of sales). The increase is
mainly attributable to the five new restaurants opened in fiscal 2002 which
accounted for $9,580,000 of sales. Comparable restaurant sales growth for
restaurants opened longer than one year was 1.1% in fiscal 2002. Guest counts
increased 2.4% to 7.0 million. The average per guest check amount was $23.61 at
the teppanyaki restaurants, $26.50 at the Haru restaurants and $15.53 at the
Doraku restaurants.

Sales revenues were profoundly impacted following the tragic events of September
11, which occurred during the second quarter of fiscal 2002, particularly in
urban areas and in other areas more dependent upon tourism and business travel.
We experienced a decline in sales, particularly in New York City where we
operate two Benihana and five Haru restaurants, and other urban markets in which
we have restaurants.

We closed two restaurants in fiscal 2002. The Marina del Rey teppanyaki
restaurant closed in August 2001 after its lease expired. A Doraku restaurant
closed in March 2002 principally due to poor traffic at the mall in which it was
located.

Operating costs and expenses

Operating costs and expenses are largely dependent on the number of customers
that visit our restaurants and the costs of the commodities, the number of
employees that are necessary to provide a high quality of service to our
customers, rents we pay for our restaurant properties, utilities and other
necessary costs.

The following table shows the amount of change in our restaurant operating
costs, costs as a percentage of restaurant sales, and the percentages of change
from the preceding years.
<TABLE>
<CAPTION>
<S>                                                                      <C>       <C>    <C>             <C>
                                                                                   Year ended
                                                                 ------------------------------------------------
                                                                          2003             2002            2001
                                                                 ------------------------------------------------
  Cost as a percentage of restaurant sales:
  Cost of food and beverage sales                                          24.6%           25.1%           26.8%
  Restaurant operating expenses                                            59.5%           58.6%           55.2%
  Restaurant opening costs                                                   .3%             .7%             .9%
  Marketing, general and administrative expenses                            8.3%            7.9%            8.5%

  Amount of change from prior year:
  Cost of food and beverage sales                                         $3,428         $ (547)          $6,713
  Restaurant operating expenses                                           12,018         10,280           15,339
  Restaurant opening costs                                                 (743)           (225)             889
  Marketing, general and administrative expenses                           2,139           (317)           2,288
  Interest expense, net                                                    (462)           (243)            (64)

  Percentage increase or (decrease) from prior year:
  Cost of food and beverage sales                                           8.0%          (1.3%)           18.3%
  Restaurant operating expenses                                            12.1%          11.5%            20.7%
  Restaurant opening costs                                               (60.5%)         (15.5%)          157.4%
  Marketing, general and administrative expenses                           16.0%          (2.3%)           20.1%
  Interest expense, net                                                  (46.7%)         (19.7%)          (4.9%)
</TABLE>

2003 compared to 2002

Cost of food and beverage sales increased in absolute amount, but decreased when
expressed as a percentage of sales in fiscal 2003 when compared to fiscal 2002.
The increase in absolute amount is attributable to an increase in sales. The
decrease when expressed as a percentage of sales is attributable to lower
commodity prices, principally shrimp, in the current fiscal year.


<PAGE>



Restaurant operating expenses increased in absolute amount and when expressed as
a percentage of sales in fiscal 2003 when compared to fiscal 2002. The increase
was attributable to increased labor and related costs, an increase in property
and liability insurance expense and increased depreciation and amortization
expenses. The increase in labor and related costs relates principally to the
increase in health care benefits costs and declining productivity coupled with
increasing overtime wages during the first two quarters of fiscal 2003 compared
to the equivalent periods of fiscal 2002. Property and liability insurance
expense increased from an increase in premiums. Lastly, depreciation and
amortization increased due to new restaurant properties placed into service and
other capital expenditures made to the existing restaurant portfolio in the
current year compared to the previous fiscal year.

Restaurant opening costs decreased in fiscal 2003 when compared to fiscal year
2002 as a result of the relatively large expenses associated with the three Haru
openings in the preceding fiscal year. In fiscal year 2003, restaurant opening
costs related to the new Benihana restaurants in The Woodlands and Las Colinas,
Texas and to the new Benihana in Westbury, New York which opened during the
second week of fiscal 2004.

Marketing, general and administrative costs increased in absolute amount and
when expressed as a percentage of sales in fiscal 2003 when compared to fiscal
2002. The increase was attributable to increased salaries and benefits from
additional management personnel who were hired by the Company in connection with
the acquisition of the RA Sushi concept. Additionally, advertising expenses
increased in the current year as a result of increased planned advertising
expenditures.

Interest expense, net, decreased in 2003 fiscal year when compared to fiscal
2002. The decrease was a result of lower average borrowings outstanding coupled
with lower interest rates in the current fiscal year compared to the previous
fiscal year.

Our effective income tax rate increased in fiscal 2003 to 33.9% from 31.6% in
fiscal 2002. The increase was due to an increase in net pre-tax income coupled
with a relatively fixed amount of Federal tax credit for FICA taxes paid on
reported tip income.

2002 compared to 2001

Cost of food and beverage sales decreased in absolute amount and as a percentage
of sales in fiscal 2002 when compared to fiscal 2001. The decrease was
attributable to lower commodities costs, principally shrimp costs, in fiscal
year 2002 compared to fiscal 2001.

Restaurant operating expenses increased in absolute amount and when expressed as
a percentage of sales in fiscal 2002 from fiscal 2001. The increase was
attributable to higher labor costs, occupancy costs and depreciation and
amortization expenses. The increased labor costs were due to maintaining full
restaurant staffs following the tragic events of September 11, which had a
negative effect on restaurant operating expenses as a percentage of sales. Also,
labor costs increased due to higher labor costs during the start-up period of
the three new Haru restaurants and two new Benihana restaurants that opened
during fiscal 2002. Additionally, higher occupancy costs and depreciation and
amortization expenses relating to the five new restaurants negatively affected
restaurant operating expenses in absolute amount and when expressed as a
percentage of sales.

Restaurant opening costs decreased in fiscal 2002 when compared to fiscal 2001.
The decrease was attributable to pre-opening expenses in fiscal 2001 that
related to the new Haru restaurants.

Marketing, general and administrative costs decreased in total dollar amount in
fiscal 2002 when compared to fiscal 2001. We incurred higher legal costs in
fiscal 2002 to defend the wage and hour disputes discussed in Note 11 of the
notes to our consolidated financial statements. The increase in legal fees was
offset in part by a decrease in amortization expense resulting from the
cessation of the amortization of goodwill as a result of implementation of SFAS
142.

Interest expense decreased in fiscal 2002 when compared to fiscal 2001. The
decrease was attributable to a significant decrease in the interest rates on our
borrowings under our credit facility as well as a decrease in the borrowings in
fiscal 2002 compared to the previous comparable fiscal year. The Company
capitalized $12,000 and $345,000 of construction period interest during fiscal
2002 and 2001, respectively.

During fiscal 2002, we recorded an impairment charge of $438,000 for the
write-down to fair value of property and equipment at a Doraku restaurant in Ft.
Lauderdale, Florida because its future projected cash flows were not sufficient
to support the previous carrying value of these assets. We closed the restaurant
in March 2002.


<PAGE>



Our effective income tax rate decreased in fiscal 2002 to 31.6% from 35.5% in
fiscal 2001. The decrease was due to a decrease in net pre-tax income coupled
with a relatively fixed amount of Federal tax credit for FICA taxes paid on
reported tip income.

Our financial resources


We have borrowings from Wachovia Bank, National Association ("Wachovia") under a
term loan and a revolving line of credit facility, both of which were
renegotiated on December 3, 2002. The renegotiated credit agreement increased
the term loan facility to $16,000,000. The line of credit facility allows us to
borrow up to $15,000,000 through December 31, 2007. At March 30, 2003, we had
$9,000,000 available for borrowing under the revolving line of credit. The full
amount of the term loan, $16,000,000, was outstanding at March 30, 2003 and is
payable in quarterly installments of $750,000 through December 2004 and $833,333
thereafter until the term loan matures in December 2007. The interest rate at
March 30, 2003 of both the line of credit and the term loan was approximately
2.38%. We have the option to pay interest at Wachovia's prime rate plus 1% or at
libor plus 1%. The interest rate may vary depending upon the ratio that the sum
of earnings before interest, taxes, depreciation and amortization has to our
total indebtedness. The loan agreements limit our capital expenditures, require
that we maintain certain financial ratios and profitability amounts and prohibit
the payment of cash dividends.

In fiscal 2001, we entered into a master lease agreement with Wachovia and two
other banks that provided financing for up to $25,000,000 for new restaurant
acquisition and construction. Management determined that more favorable rates
were available under our line of credit and accordingly we terminated this
arrangement on June 12, 2002 by borrowing $5,000,000 from the line of credit and
using $8,000,000 in cash to pay off the outstanding facility balance and we
acquired the three restaurant properties that were financed under the facility.

Since restaurant businesses generally do not need relatively large amounts of
inventory and accounts receivable, there is no need to finance them. As a
result, many restaurant businesses have deficiencies in working capital.

The following table summarizes the sources and uses of cash (in thousands).

                                                          Fiscal year ended
                                                      --------------------------
                                                        2003              2002
                                                      --------------------------
    Cash provided by operations                       $18,279           $15,231
    Cash (used in) investing activities               (38,782)          (13,959)
    Cash provided by financing activities              17,740             2,855
                                                      --------------------------
    (Decrease) increase in cash                       ($2,763)          $ 4,127
                                                      --------------------------

Operating activities
--------------------
Cash provided by operations increased during the year from fiscal 2002 primarily
as a result of increased earnings and noncash items such as depreciation and
amortization as well as changes in operating assets and liabilities.


Investing activities
--------------------
Expenditures for property and equipment were $27,418,000, an increase of
$13,474,000 from the prior fiscal year. Approximately $13 million of the total
expenditures related to teppanyaki restaurants that we originally financed under
the master lease agreement which was terminated June 12, 2002. We expended an
additional $8.2 million for the construction of new restaurants.

We expect to expend approximately $14 million for the development of new
restaurants during the 2004 fiscal year. We also intend to remodel several
restaurants during our 2004 fiscal year. The total cost of these renovations are
expected to be approximately $12 million. We do not expect that sufficient cash
will be provided from operations and the availability under our revolving line
of credit will be adequate to pay for expansion and renovation programs. To
complete these programs, we will need to increase our revolving line of credit
with Wachovia or pursue other financing alternatives. There is no assurance that
we will be successful in obtaining such financing which will force us to curtail
our plans.

We purchased RA Sushi, a privately owned Arizona chain that operates four
restaurants for a cash price of approximately $11.4 million, approximately $1.2
million of debt assumption and other costs of approximately $0.5 million. The
acquisition was financed from our renegotiated credit agreement.


<PAGE>



Financing activities
--------------------
Our total indebtedness increased by $16,000,000 from the end of fiscal 2002 as a
result of increased bank borrowings to acquire RA Sushi. We had net borrowings
of $10,000,000 under the renegotiated term loan portion of the credit agreement
and $6,000,000 under the revolving line of credit. We repaid $702,000 of leases
that are considered to be capital in nature. We also realized $1,929,000 from
the exercise of stock options as compared to $1,235,000 in the previous fiscal
year.

The impact of inflation
-----------------------
The Company does not believe that inflation has had a material effect on sales
or expenses during the last three years other than labor costs. The Company's
restaurant operations are subject to federal and state minimum wage laws
governing such matters as working conditions, overtime and tip credits.
Significant numbers of the Company's food service and preparation personnel are
paid at rates related to the federal minimum wage and, accordingly, increases in
the minimum wage have increased the Company's labor costs in the last two years.
To the extent permitted by competition, the Company has mitigated increased
costs by increasing menu prices and may continue to do so if deemed necessary in
future years.


Market risks
------------
We are exposed to certain risks of increasing interest rates and commodity
prices. The interest on our indebtedness is largely variable and is benchmarked
to the prime rate in the United States or to the London interbank offering rate.
We may protect ourselves from interest rate increases from time-to-time by
entering into derivative agreements that fix the interest rate at predetermined
levels. We have a policy not to use derivative agreements for trading purposes.

We purchase commodities such as chicken, beef, lobster, fish and shrimp for our
restaurants. The prices of these commodities may be volatile depending upon
market conditions. We do not purchase forward commodity contracts because the
changes in prices for them have historically been short-term in nature and, in
our view, the cost of the contracts is in excess of the benefits.

Seasonality of our business
---------------------------
Our business is not highly seasonal although we do have more diners coming to
our restaurants for special holidays such as Mother's Day, Valentine's Day and
New Year's. Mother's Day falls in our first fiscal quarter, New Year's in the
third quarter and Valentine's Day in the fourth quarter of each year.

Critical accounting policies and estimates
------------------------------------------
The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities during the reported period. (See Note 1 of
notes to consolidated financial statements included in this Annual Report).

Critical accounting policies are those that we believe are most important to
portraying our financial condition and results of operations and also require
the greatest amount of subjective or complex judgments by management. Judgments
or uncertainties regarding the application of these policies may result in
materially different amounts being reported under different conditions or using
different assumptions. We consider the following policies to be the most
critical in understanding the judgments that are involved in preparing our
consolidated financial statements.

We record all property and equipment at cost less accumulated depreciation.
Improvements are capitalized while repairs and maintenance costs are expensed as
incurred. Depreciation is calculated using the straight-line method over the
estimated useful life of the assets or the lease terms of the respective leases.
The useful life of property and equipment and the determination as to what
constitutes a capitalized cost versus a repair and maintenance expense involves
judgments by management. These judgments may produce materially different
amounts of depreciation expense if different assumptions were used.



<PAGE>



We periodically assess the potential impairment of long-lived assets whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. Recoverability of assets is measured by comparing the carrying
value of the assets to the future cash flows to be generated by the asset. If
the total future cash flows are less than the carrying amount of the asset, the
carrying amount is written down to the estimated fair value, and an impairment
charge is taken against results of operations.

We periodically review the recoverability of goodwill based primarily upon an
analysis of cash flows of the related investment assets compared to the carrying
value or whenever events or changes in circumstances indicate that the carrying
amounts may not be recoverable. The analysis involves judgments by management
which may produce materially different results if different assumptions are used
in the analysis.

We are self-insured for a significant portion of our employee health and
workers' compensation programs. The Company maintains stop-loss coverage with
third party insurers to limit its total exposure. The accrued liability
associated with these programs is based on our estimate of the ultimate costs to
be incurred to settle known claims and an estimate of claims incurred but not
reported to the Company as of the balance sheet date. Our estimated liability is
not discounted and is based on a number of assumptions and factors, including
historical trends, actuarial assumptions and economic conditions. If actual
trends, including the severity or frequency of claims, differ from our
estimates, our financial results could be impacted.

We estimate certain components of our provision for income taxes. These
estimates include, but are not limited to, effective state and local income tax
amounts, allowable tax credits for items such as FICA taxes paid on reported tip
income and estimates related to depreciation expense allowable for tax purposes.
Our estimates are made based on the best available information at the time that
we prepare the provision. We usually file our income tax returns many months
after our fiscal year-end. All tax returns are subject to audit by federal and
state governments, usually years after the returns are filed, and could be
subject to differing interpretations of the tax laws or the Company's
application of such laws to its business. (See Note 10 to our consolidated
financial statements).

New accounting pronouncements that may affect our financial reporting
---------------------------------------------------------------------
In June 2002, the Financial Accounting Standards Board (the "FASB") issued
Statements of Financial Accounting Standards ("SFAS") SFAS No. 146, "Accounting
for Costs Associated with Exit and Disposal Activities". SFAS No. 146 addresses
significant issues regarding the recognition, measurement and reporting of costs
that are associated with exit and disposal activities, including restructuring
activities that are currently accounted for pursuant to the guidance that the
Emerging Issues Task Force (EITF) has set forth in EITF Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)". The
scope of SFAS No. 146 also includes: (1) costs related to terminating a contract
that is not a capital lease and (2) termination benefits that employees who are
involuntarily terminated receive under the terms of a one-time benefit
arrangement that is not an ongoing benefit arrangement or an individual
deferred-compensation contract. SFAS No. 146 is effective January 1, 2003. The
adoption of SFAS No. 146 did not have a material impact on our consolidated
financial statements.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45), "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others". FIN 45 requires that upon the issuance of
a guarantee, the guarantor must recognize a liability for the fair value of the
obligation it assumes under the guarantee. FIN 45 provides that initial
recognition and measurement should be applied on a prospective basis to
guarantees issued or modified after December 31, 2002, irrespective of the
guarantor's fiscal year end. The disclosure requirements are effective for
financial statements of both interim and annual periods that end after December
15, 2002. The implementation of FIN 45 did not have a material impact on our
consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure, an Amendment of SFAS No. 123". SFAS No.
148 provides alternative methods for an entity that voluntarily charges for the
fair value based method of accounting for stock-based employee compensation as
required by SFAS No. 123. This Statement also requires prominent disclosure
related to stock-based employee compensation in both annual and interim
financial reporting. This Statement is effective for fiscal years ending after
December 15, 2002. Other than the new disclosure provisions, this Statement did
not have any impact on our consolidated financial statements.



<PAGE>



In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest
Entities, an interpretation of ARB No. 51". FIN 46 provides guidance on
identifying variable interest entities and assessing whether or not a variable
interest entity should be consolidated. The provisions of FIN 46 are to be
applied immediately to variable interest entities created after January 31,
2003. For variable interest entities created on or before January 31, 2003, the
provisions of FIN 46 are to be applied no later than the beginning of the first
interim period beginning after June 15, 2003. We do not expect the
implementation of FIN 46 to have a material impact on our consolidated financial
statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". This Statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives) and for hedging activities under SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities". This
Statement is effective for contracts entered into or modified after June 30,
2003. We do not expect the implementation of SFAS No. 149 to have a material
impact on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity". This Statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). This Statement is effective
for financial instruments entered into or modified after May 30, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003. We do not expect the implementation of SFAS No. 150 to have
a material impact on our consolidated financial statements.

Forward looking statements
--------------------------
This Annual Report contains various "forward-looking statements" which represent
our expectations or beliefs concerning future events, including unit growth,
future capital expenditures, and other operating information. A number of
factors could, either individually or in combination, cause actual results to
differ materially from those included in the forward-looking statements,
including changes in consumer dining preferences, fluctuations in commodity
prices, availability of qualified employees, changes in the general economy,
industry cyclicality, and in consumer disposable income, competition within the
restaurant industry, availability of suitable restaurant locations, or
acquisition opportunities, harsh weather conditions in areas in which the
Company and its franchisees operate restaurants or plan to build new
restaurants, acceptance of the Company's concepts in new locations, changes in
governmental laws and regulations affecting labor rates, employee benefits, and
franchising, ability to complete new restaurant construction and obtain
governmental permits on a reasonably timely basis, unstable economy and
conditions in foreign countries where we franchise restaurants and other factors
that we cannot presently foresee.



<PAGE>



BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share information)
<TABLE>
<CAPTION>
<S>                                                                                 <C>                 <C>              <C>
Year ended                                                                          March 30,           March 31,        April 1,
                                                                                      2003                2002             2001
------------------------------------------------------------------------------------------------------------------------------------

Revenues

Restaurant sales                                                                      $187,913          $170,051         $161,865
Franchise fees and royalties                                                             1,331             1,456            1,378
------------------------------------------------------------------------------------------------------------------------------------
Total revenues                                                                         189,244           171,507          163,243
------------------------------------------------------------------------------------------------------------------------------------

Costs and Expenses

Cost of food and beverage sales                                                         46,182            42,754             43,301
Restaurant operating expenses                                                          111,725            99,707             89,427
Restaurant opening costs                                                                   485             1,228              1,453
Marketing, general and administrative expenses                                          15,512            13,373             13,690
Impairment charge                                                                                            438
------------------------------------------------------------------------------------------------------------------------------------
Total operating expenses                                                               173,904           157,500            147,871
------------------------------------------------------------------------------------------------------------------------------------

Income from operations                                                                  15,340            14,007             15,372
Interest expense, net                                                                      528               990              1,233
Minority interest                                                                          477               100                 40

------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes                                                              14,335            12,917             14,099
Income tax provision                                                                     4,862             4,088              5,008
------------------------------------------------------------------------------------------------------------------------------------

Net Income                                                                              $9,473            $8,829             $9,091
------------------------------------------------------------------------------------------------------------------------------------

Earnings Per Share

Basic earnings per common share (1)                                                      $1.08             $1.16              $1.28
Diluted earnings per common share (1)                                                    $1.01             $1.11              $1.20
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   On June 7, 2002, the Board of Directors declared a 15% stock dividend in
      Class A stock on both the Class A Shares and Common Shares.  The stock
      dividend was paid on August 12, 2002 to holders of record July 15, 2002.
      As a result, basic and diluted earnings per common share are shown as if
      the stock dividend had been in existence for each fiscal year presented.

See notes to consolidated financial statements


<PAGE>



BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>   <C>                                                                                      <C>                        <C>
(In thousands, except share and per share information)
                                                                                               March 30,                  March 31,
                                                                                                  2003                      2002
-----------------------------------------------------------------------------------------------------------------------------------
Assets
Current Assets:
     Cash and cash equivalents                                                                      $2,299                 $ 5,062
     Receivables                                                                                       626                     990
     Inventories                                                                                     5,328                   4,097
     Prepaid expenses                                                                                2,236                   2,530
-----------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                                10,489                  12,679

Property and equipment, net                                                                         84,482                  61,971
Deferred income taxes, net                                                                           1,172                   1,963
Goodwill, net                                                                                       27,131                  16,478
Other assets                                                                                         5,207                   5,210
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  $128,481                 $98,301
-----------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
Current Liabilities:
     Accounts payable and accrued expenses                                                        $ 19,407                 $16,921
     Current maturity of bank debt                                                                   3,000                   3,000
     Current maturities of obligations
          under capital leases                                                                         373                     668
-----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                           22,780                  20,589

Long-term debt - bank                                                                               19,000                   3,000
Obligations under capital leases                                                                       299                     705

Minority Interest                                                                                      771                     294
Commitments and Contingencies
Stockholders' Equity:
     Common stock - $.10 par value; convertible into Class A Common stock;
         authorized - 12,000,000 shares; issued and outstanding - 3,184,479
         and 3,276,179 shares in 2003 and 2002, respectively                                           318                     328
     Class A Common stock - $.10 par value; authorized -
         20,000,000 shares; issued and outstanding -
         5,595,084 and 4,151,319 shares in 2003 and 2002, respectively                                 560                     415
     Additional paid-in capital                                                                     48,444                  26,926
     Retained earnings                                                                              36,452                  46,160
     Treasury stock - 10,828 and 9,177 shares of Common
         stock at cost, respectively                                                                 (143)                    (116)
-----------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                                          85,631                  73,713
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                  $128,481                 $98,301
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements



<PAGE>




BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share information)
<TABLE>
<CAPTION>
<S>  <C>                                              <C>         <C>      <C>       <C>         <C>        <C>          <C>
                                                                           Class A   Additional                          Total
                                                      Preferred   Common   Common     Paid-in    Retained   Treasury   Stockholders'
                                                        Stock      Stock    Stock     Capital    Earnings     Stock      Equity
------------------------------------------------------------------------------------------------------------------------------------

Balance, March 26, 2000                                  $ 1       $358      $258    $ 14,756     $28,288    $ (116)      $43,575
     Net income                                                                                     9,091                   9,091
     Dividend on preferred stock                                                                      (43)                    (43)
     Issuance of 2,500 shares of common stock
         under exercise of options                                                         14                                  14
     Issuance of 9,511 shares of Class A
         common stock under exercise of options                                 1          77                                  78

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

Balance, April 1, 2001                                      1       358       259      14,847       37,336     (116)       52,685
     Net income                                                                                      8,829                  8,829
     Tax benefit from stock options                                                       352                                 352
      Dividend on preferred stock                                                                       (5)                    (5)
      Conversion of 700 shares of preferred stock
           into 105,267 shares of Class A common stock     (1)                 11         (10)
     Conversion of 316,937 shares of common
         stock into Class A common stock                             (31)      31
      Issuance of 1,000,000 shares of Class A common
          stock, net of offering costs                                        100      10,517                              10,617
     Issuance of 14,000 shares of common stock
         under exercise of options                                     1                   39                                  40
     Issuance of 139,406 shares of Class A
         common stock under exercise of options                                14       1,181                               1,195

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

Balance, March 31, 2002                                              328      415      26,926       46,160      (116)      73,713
     Net income                                                                                      9,473                  9,473
     Tax benefit from stock options                                                       517                                 517
     Issuance of 1,141,050 shares of Class A
          common stock for stock dividend                                     115      19,089      (19,181)      (23)
     Conversion of 100,700 shares of common
         stock into Class A common stock                             (10)      10
     Purchase of treasury stock                                                                                   (4)          (4)
     Issuance of 9,000 shares of common stock
         under exercise of options                                                         43                                  43
     Issuance of 178,865 shares of Class A
         common stock under exercise of options                                18       1,708                               1,726
     Issuance of 150 shares of Class A common
         stock for incentive compensation                                                   3                                   3
     Issuance of 23,000 shares of Class A common
          stock under exercise of warrant                                       2         158                                 160

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

Balance, March 30, 2003                                            $ 318    $ 560      $48,444      $36,452    $ (143)    $85,631
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See notes to consolidated financial statements.





<PAGE>



BENIHANA INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, except share information)
<TABLE>
<CAPTION>
<S>     <C>                                                                                 <C>            <C>            <C>
                                                                                            March 30,       March 31,      April 1,
Year ended                                                                                    2003            2002           2001
------------------------------------------------------------------------------------------------------------------------------------
Operating Activities:
     Net income                                                                              $ 9,473          $8,829        $9,091
     Adjustments to reconcile net income to net cash
     provided by operating activities:
        Depreciation and amortization                                                          7,375           5,898         5,178
        Minority interest                                                                        477             100            40
        Deferred income taxes                                                                    791           1,010           317
        Issuance of common stock for incentive compensation                                        3
        Loss on disposal of assets                                                               120             207            63
        Write-down of impaired assets                                                                            438
        Change in operating assets and liabilities that provided
        (used) cash:
          Receivables                                                                            364            (256)         (253)
          Inventories                                                                         (1,085)             52          (536)
          Prepaid expenses                                                                       351          (1,408)         (357)
          Other assets                                                                          (431)           (228)         (497)
          Accounts payable and accrued expenses                                                  841             589         1,935
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities                                                     18,279          15,231        14,981
------------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
     Business acquisition, net of cash acquired                                              (11,353)
     Expenditures for property and equipment                                                 (27,418)       (13,944)      (14,611)
     Other                                                                                       (11)           (15)          (19)
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                        (38,782)       (13,959)      (14,630)
------------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
     Dividends paid on preferred stock                                                                           (5)          (43)
     Proceeds from issuance of long-term debt                                                 34,800         15,000         6,500
     Repayment of long-term debt and obligations under capital leases                        (19,502)       (24,344)       (7,130)
     Proceeds from issuance of Class A Common stock                                                          10,617
     Proceeds from issuance of common stock and
         Class A Common stock under exercise of options                                        1,929          1,235            92
     Tax benefit from stock option exercise                                                      517            352
     Purchase of treasury stock                                                                   (4)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                                           17,740          2,855          (581)
------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents                                          (2,763)         4,127          (230)
Cash and cash equivalents, beginning of year                                                   5,062            935         1,165
------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                                                        $2,299         $5,062         $ 935
------------------------------------------------------------------------------------------------------------------------------------
Supplemental Cash Flow Information
Cash paid during the fiscal year for:
     Interest                                                                                 $  423         $1,030        $1,376
     Income taxes                                                                             $3,055         $3,831        $6,254
Business acquisitions, net of cash acquired:
     Fair value of assets acquired, other than cash                                           $2,346
     Liabilities assumed                                                                      (1,646)
     Purchase price in excess of the net assets acquired                                      10,653
------------------------------------------------------------------------------------------------------------------------------------
                                                                                             $11,353
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

During fiscal 2003, 100,700 shares of common stock were converted into 100,700
  shares of Class A common stock.
During fiscal 2003, a stock dividend of 1,141,050 shares of Class A common
  stock was paid.
During fiscal 2002, 316,937 shares of common stock were converted into 316,937
  shares of Class A common stock.
During fiscal 2002, 700 shares of preferred stock were converted into 105,267
  shares of Class A common stock.

See notes to consolidated financial statements.


<PAGE>


BENIHANA INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED MARCH 30, 2003, MARCH 31, 2002 AND APRIL 1, 2001
------------------------------------------------------------

1.         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

           Operations - Benihana Inc., including its majority owned subsidiaries
           (the "Company"), owned and operated 53 teppanyaki style and 10 sushi
           restaurants and franchised 19 others as of March 30, 2003. The
           Company has the rights to open, license and develop Benihana
           restaurants in the United States, Central and South America and the
           Caribbean islands.

           Basis of Presentation - The consolidated financial statements include
           the assets, liabilities and results of operations of the Company's
           majority-owned subsidiaries. The ownership of other interest holders
           including attributable income is reflected as minority interest. All
           intercompany accounts and transactions have been eliminated in
           consolidation. The Company operates within only one reportable
           operating segment.

           The Company has a 52/53-week fiscal year. The fiscal years ended
           March 30, 2003 and March 31, 2002 consisted of 52 weeks and the year
           ended April 1, 2001 consisted of 53 weeks.

           The preparation of financial statements in conformity with accounting
           principles generally accepted in the United States of America
           ("generally accepted accounting principles") requires that management
           make estimates and assumptions that affect the reported amounts of
           assets and liabilities at the date of the financial statements and
           the reported amounts of revenue and expenses during the reporting
           period. Actual amounts could differ from those estimates.

           Certain prior year amounts in the accompanying consolidated financial
           statements have been reclassified to conform with fiscal 2003
           classifications.

           Franchise and Royalties Revenue Recognition - The Company recognizes
           initial franchise fees as income when substantially all of its
           obligations are satisfied, which generally coincides with the opening
           of the franchised restaurants. The Company also receives continuing
           royalties based upon a percentage of each franchised restaurant's
           gross revenues. Royalties are recognized as income when earned.

           Cash and Cash Equivalents - The Company considers all highly liquid
           investment instruments purchased with an initial maturity of three
           months or less to be cash equivalents.

           Inventories - Inventories, which consist principally of restaurant
           operating supplies and food and beverage, are stated at the lower of
           cost (first-in, first-out method) or market.

           Depreciation and Amortization - Depreciation and amortization are
           computed by the straight-line method over the estimated useful life
           (buildings - 30 years; restaurant furniture, fixtures and equipment -
           8 years; office equipment - 8 years; personal computers, software and
           related equipment - 3 years; and leaseholds - lesser of the lease
           terms, including renewal options, or useful life).

           The Company capitalizes all direct costs incurred to construct
           restaurants. Upon opening, these costs are depreciated and charged to
           expense based upon their useful life classification. The amount of
           interest capitalized in connection with restaurant construction was
           approximately $12,000 in fiscal 2002 and was $345,000 in fiscal year
           2001.

           Accounting for Long-Lived Assets - The Company periodically evaluates
           its net investment in restaurant properties for impairment for events
           or changes in circumstances that indicate the carrying amounts of an
           asset may not be recoverable. During fiscal 2002, the Company
           recorded an impairment charge of $438,000 for the write-down to fair
           value of property and equipment at a Doraku restaurant. No
           impairments occurred in fiscal years 2003 and 2001.

           Accounting for Goodwill - The Company periodically reviews goodwill
           for impairment and writes-down the carrying amount of goodwill to
           results of operations when the recorded value of goodwill is
           determined to be more than their fair value.


<PAGE>

           The Company adopted the provisions of SFAS No. 142 effective the
           beginning of the first quarter of fiscal 2002. These standards only
           permit prospective application of the new accounting; accordingly,
           adoption of these standards did not affect previously reported
           financial information. The principal effect of implementing SFAS No.
           142 was the cessation of the amortization of goodwill; however,
           impairment reviews may result in future write-downs. Goodwill
           amortization amounted to $898,000 or $.13 per diluted share in fiscal
           2001. The Company reviewed goodwill for possible impairment during
           fiscal 2003 and 2002 and determined that there was no impairment.

           Had the Company been accounting for its goodwill under SFAS No. 142
           for all periods presented, the Company's net income and net income
           per share would have been as follows:

           (In thousands except for earnings per share amounts)
<TABLE>
<CAPTION>
<S>      <C>                                                             <C>                   <C>                  <C>
                                                                         March 30,             March 31,            April 1,
                                                                           2003                   2002               2001
                                                                     ----------------      ----------------      --------------

         Reported net income                                                  $9,473                $8,829              $9,091
         Add back: Goodwill amortization, net of tax                                                                       898
                                                                     ----------------      ----------------      --------------
         Adjusted net income                                                  $9,473                $8,829              $9,989
                                                                     ================      ================      ==============
         Basic earnings per share:
         Reported net income                                                   $1.08                 $1.16               $1.28
         Goodwill amortization, net of tax                                                                                 .13
                                                                     ----------------      ----------------      --------------
         Adjusted net income                                                   $1.08                 $1.16               $1.41
                                                                     ================      ================      ==============
         Diluted earnings per share:
         Reported net income                                                   $1.01                 $1.11               $1.20
         Goodwill amortization, net of tax                                                                                 .13
                                                                     ----------------      ----------------      --------------
         Adjusted net income                                                   $1.01                 $1.11               $1.33
                                                                     ================      ================      ==============
</TABLE>

           Accounting for the Costs of Computer Software Developed or Obtained
           for Internal Use - The Company capitalizes and records in other
           assets the cost of computer software obtained for internal use and
           amortizes such costs over a three-year period.

           Derivative Instruments - The Company does not currently utilize
           interest rate swap agreements to hedge exposure to fluctuations in
           variable interest rates. The Company had entered into an interest
           swap agreement which expired on May 1, 2002.

           Stock-Based Compensation - The Company accounts for stock-based
           compensation under the intrinsic value method of accounting for
           stock-based compensation. Therefore, the Company generally recognizes
           no compensation expense with respect to such awards because options
           are generally granted at the fair market value of the underlying
           shares on the date of the grant. The Company has disclosed pro forma
           net income and earnings per share amounts using the fair value
           method.

           Had the Company accounted for its stock-based awards under the fair
           value method, the table below shows the pro forma effect on net
           income and earnings per share for the three most recent fiscal years.
<TABLE>
<CAPTION>
<S>     <C>    <C>                                                       <C>                   <C>                  <C>
                                                                         March 30,             March 31,            April 1,
                                                                           2003                   2002               2001
                                                                     ----------------      ----------------      --------------

         Net Income
               As reported                                                    $9,473                $8,829              $9,091
         Total stock based employee
               compensation expense
               determined under fair value
               based method for all awards                                       754                   606                 928
                                                                     ----------------      ----------------      --------------
               Pro forma                                                      $8,719                $8,223              $8,163
                                                                     ================      ================      ==============
          Basic earnings per share
               As reported                                                     $1.08                 $1.16               $1.28
                                                                     ----------------      ----------------      --------------
               Pro forma                                                       $1.00                 $1.08               $1.15
                                                                     ================      ================      ==============
          Diluted earnings per share
               As reported                                                     $1.01                 $1.11               $1.20
                                                                     ----------------      ----------------      --------------
               Pro forma                                                        $.93                 $1.03               $1.07
                                                                     ================      ================      ==============
</TABLE>



<PAGE>

           As a result of the inclusion of only the grants made subsequent to
           fiscal 1995, the effects may not be representative of the pro forma
           impact in future years. The following weighted average assumptions
           were used in the Black-Scholes option-pricing model used in
           developing the above pro forma information: a risk-free interest rate
           of 1.8% for fiscal year 2003, 3.8% for fiscal year 2002 and 4.7% for
           2001, respectively, an expected life of three years, no expected
           dividend yield and a volatility factor of 50%, 50% and 53% for fiscal
           years 2003, 2002 and 2001, respectively.

           Segment Reporting - Reportable operating segments are components of
           an enterprise about which separate financial information is available
           that is evaluated by the chief operating decision maker in deciding
           how to allocate resources and in evaluating performance. The Company
           believes its restaurants meet the criteria supporting aggregation of
           all restaurants into one operating segment.

           Earnings Per Share - Basic earnings per common share is computed by
           dividing net income available to common shareholders by the weighted
           average number of common shares outstanding during each period. The
           diluted earnings per common share computation includes dilutive
           common share equivalents issued under the Company's various stock
           option plans and dilutive convertible preferred stock.

           The computation of basic earnings per common share and diluted
           earnings per common share for each year is shown below (in
           thousands):
<TABLE>
<CAPTION>
<S>     <C>    <C>                                                       <C>                   <C>                 <C>
                                                                         March 30,             March 31,            April 1,
                                                                           2003                   2002                2001
                                                                     ----------------      ----------------      --------------

         Net income                                                           $9,473                $8,829              $9,091
         Less preferred dividends                                                                      (5)                (43)
                                                                     ----------------      ----------------      --------------
         Income for computation of basic
              earnings per common share                                        9,473                 8,824               9,048
         Convertible preferred dividends (See Note 12)                                                   5                  43
                                                                     ----------------      ----------------      --------------
         Income for computation of diluted
              earnings per common share                                       $9,473                $8,829              $9,091
                                                                     ================      ================      ==============

         Weighted average number of common
              shares in basic earnings per share                               8,739                 7,596               7,090
         Effect of dilutive securities:
              stock options and warrants                                         670                   336                 392
              convertible preferred shares                                                              14                 121
                                                                     ----------------      ----------------      --------------
         Weighted average number of common
              shares and dilutive potential common
              shares used in diluted earnings per share                        9,409                 7,946               7,603
                                                                     ================      ================      ==============
</TABLE>

           Recent Accounting Pronouncements Affecting the Company - In June
           2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
           with Exit and Disposal Activities". SFAS No. 146 addresses
           significant issues regarding the recognition, measurement and
           reporting of costs that are associated with exit and disposal
           activities, including restructuring activities that are currently
           accounted for pursuant to the guidance that the Emerging Issues Task
           Force (EITF) has set forth in EITF Issue No. 94-3, "Liability
           Recognition for Certain Employee Termination Benefits and Other Costs
           to Exit an Activity (including Certain Costs Incurred in a
           Restructuring)". The scope of SFAS No. 146 also includes: (1) costs
           related to terminating a contract that is not a capital lease and (2)
           termination benefits that employees who are involuntarily terminated
           receive under the terms of a one-time benefit arrangement that is not
           an ongoing benefit arrangement or an individual deferred-compensation
           contract. SFAS No. 146 is effective January 1, 2003. The adoption of
           SFAS No. 146 did not have a material impact on the Company's
           consolidated financial statements.

           In November 2002, the FASB issued Interpretation No. 45 (FIN 45),
           "Guarantor's Accounting and Disclosure Requirements for Guarantees,
           Including Indirect Guarantees of Indebtedness of Others". FIN 45
           requires that upon the issuance of a guarantee, the guarantor must
           recognize a liability for the fair value of the obligation it assumes
           under the guarantee. FIN 45 provides that initial recognition and
           measurement should be applied on a prospective basis to guarantees
           issued or modified after December 31, 2002, irrespective of the
           guarantor's fiscal year end. The disclosure requirements are
           effective for financial statements of both interim and annual periods
           that end after December 15, 2002. The implementation of FIN 45 did
           not have a material impact on the Company's consolidated financial
           statements.


<PAGE>


           In December 2002, the FASB issued SFAS No. 148, "Accounting for
           Stock-Based Compensation Transition and Disclosure, an Amendment of
           SFAS No. 123". SFAS No. 148 provides alternative methods for an
           entity that voluntarily charges for the fair value based method of
           accounting for stock-based employee compensation as required by SFAS
           No. 123. This Statement also requires prominent disclosure related to
           stock-based employee compensation in both annual and interim
           financial reporting. This Statement is effective for fiscal years
           ending after December 15, 2002. Other than the new disclosure
           provisions, this Statement did not have any impact on the Company's
           consolidated financial statements.

           In January 2003, the FASB issued FIN 46, "Consolidation of Variable
           Interest Entities, an interpretation of ARB No. 51". FIN 46 provides
           guidance on identifying variable interest entities and assessing
           whether or not a variable interest entity should be consolidated. The
           provisions of FIN 46 are to be applied immediately to variable
           interest entities created after January 31, 2003. For variable
           interest entities created on or before January 31, 2003, the
           provisions of FIN 46 are to be applied no later than the beginning of
           the first interim period beginning after June 15, 2003. The Company
           does not expect the implementation of FIN 46 to have a material
           impact on the Company's consolidated financial statements.

           In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
           133 on Derivative Instruments and Hedging Activities". This Statement
           amends and clarifies financial accounting and reporting for
           derivative instruments, including certain derivative instruments
           embedded in other contracts (collectively referred to as derivatives)
           and for hedging activities under SFAS No. 133, "Accounting for
           Derivative Instruments and Hedging Activities". This Statement is
           effective for contracts entered into or modified after June 30, 2003.
           The Company does not expect the implementation of SFAS No. 149 to
           have a material impact on its consolidated financial statements.

           In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
           Financial Instruments with Characteristics of Both Liabilities and
           Equity". This Statement establishes standards for how an issuer
           classifies and measures certain financial instruments with
           characteristics of both liabilities and equity. It requires that an
           issuer classify a financial instrument that is within its scope as a
           liability (or an asset in some circumstances). This Statement is
           effective for financial instruments entered into or modified after
           May 30, 2003, and otherwise is effective at the beginning of the
           first interim period beginning after June 15, 2003. The Company does
           not expect the implementation of SFAS No. 150 to have a material
           impact on its consolidated financial statements.

2.         ACQUISITION

           The Company's financial statements and the discussion and the data
           presented below reflect the acquisition by the Company of RA Sushi, a
           privately owned Arizona chain currently operating four restaurants,
           on December 3, 2002. The purchase price paid in cash at closing was
           approximately $11.4 million, along with the assumption of
           approximately $1.2 million of debt and other costs of approximately
           $0.5 million. The purchase agreement also included a contingent
           purchase price provision which requires the Company to pay the seller
           contingent payments based on certain operating results of the
           acquired business for fiscal years ending 2004, 2005 and 2006. The
           acquisition has been accounted for using the purchase method of
           accounting and the operating results of RA Sushi have been included
           in the Company's current fiscal year consolidated statements of
           earnings since the date of acquisition. The excess of the purchase
           price over the acquired tangible and intangible net assets of
           approximately $10.7 million has been allocated to goodwill. The
           Company anticipates that all goodwill recorded in connection with the
           RA Sushi acquisition will be deductible for tax purposes.

           The following unaudited pro forma financial information gives effect
           to the acquisition as if the acquisition had occurred as of the
           beginning of the fiscal years presented. This pro forma financial
           information reflects certain adjustments such as interest expense on
           additional bank borrowings and related income tax effects for the
           periods presented.
<PAGE>

                (In thousands except per share information):
<TABLE>
<CAPTION>
<S>              <C>                                                                    <C>                        <C>
                                                                                        March 30,                   March 31,
                                                                                           2003                       2002
                                                                                    ----------------            ---------------
                                                                                       (Unaudited)                 (Unaudited)

                Restaurant sales                                                           $193,499                   $175,584
                Net income                                                                   $9,786                     $9,237
                Basic earnings per common share                                               $1.12                      $1.22
                Diluted earnings per common share                                             $1.04                      $1.16
</TABLE>

           These pro forma results are not necessarily indicative of what
           actually would have occurred if the acquisition had taken place as of
           the beginning of the fiscal years presented.

3.         FAIR VALUE OF FINANCIAL INSTRUMENTS

           The carrying amounts of cash, accounts receivable and payable, and
           accrued liabilities approximate fair value because of the short-term
           nature of the items. The carrying amounts of the Company's debt and
           other payables approximate fair value either due to their short-term
           nature or the variable rates associated with these debt instruments.

4.         INVENTORIES

                Inventories consist of (in thousands):
<TABLE>
<CAPTION>
<S>             <C>                                                                     <C>                         <C>
                                                                                        March 30,                   March 31,
                                                                                           2003                       2002
                                                                                  ------------------            ---------------

                Food and beverage                                                            $1,612                     $1,568
                Supplies                                                                      3,716                      2,529
                                                                                  ------------------            ---------------

                                                                                             $5,328                     $4,097
                                                                                  ==================            ===============

5.         PROPERTY AND EQUIPMENT

                Property and equipment consist of (in thousands):

                                                                                      March 30,                    March 31,
                                                                                         2003                        2002
                                                                                  -------------------           ----------------

                Land                                                                        $11,159                     $ 5,925
                Buildings                                                                    21,717                      13,686
                Leasehold improvements                                                       66,102                      58,947
                Restaurant furniture, fixtures, and equipment                                25,161                      21,941
                Restaurant facilities and equipment under
                     capital leases                                                           7,040                       7,638
                                                                                  -------------------           ----------------
                                                                                            131,179                     108,137

                Less accumulated depreciation and amortization (including
                     accumulated amortization of restaurant facilities and
                     equipment under capital leases of $6,792 and $7,116 in 2003
                     and 2002, respectively)                                                53,027                       47,729
                                                                                                                ----------------
                                                                                  -------------------
                                                                                            78,152                       60,408
                Construction in progress                                                     6,330                        1,563
                                                                                  -------------------           ----------------

                                                                                           $84,482                       $61,971
                                                                                  ===================           ================
</TABLE>



<PAGE>



6.         OTHER ASSETS

                Other assets consist of (in thousands):
<TABLE>
<CAPTION>
<S>             <C>                                                                   <C>                          <C>
                                                                                      March 30,                    March 31,
                                                                                        2003                         2002
                                                                                  ------------------            ---------------

                Lease acquisition costs, net                                                 $2,137                     $2,378
                Security deposits                                                             1,031                        992
                Premium on liquor licenses                                                      981                        995
                Computer software costs, net                                                    243                        265
                Deferred financing charges, net                                                 365                        129
                Cash surrender value of
                     life insurance policy                                                      391                        380
                Long-term receivables                                                            59                         71
                                                                                  ------------------            ---------------
                                                                                             $5,207                     $5,210
                                                                                  ==================            ===============

7.         ACCOUNTS PAYABLE AND ACCRUED EXPENSES

                Accounts payable and accrued expenses consist of (in thousands):

                                                                                      March 30,                    March 31,
                                                                                        2003                         2002
                                                                                  ------------------          -----------------

                Accounts payable                                                             $6,129                    $5,586
                Accrued payroll, incentive
                     compensation and related taxes                                           3,867                     3,701
                Accrued health insurance costs                                                  840                       500
                Sales taxes payable                                                           1,178                     1,107
                Unredeemed gift certificates                                                  1,161                       857
                Accrued percentage rent                                                       1,078                     1,052
                Accrued property taxes                                                          623                       706
                Straight line rent accrual                                                    1,531                     1,161
                Other accrued operating expenses                                              3,000                     2,251
                                                                                  -------------------          -----------------

                                                                                            $19,407                   $16,921
                                                                                  ===================          =================
</TABLE>

8.         LEASE OBLIGATIONS

                The Company generally operates its restaurants in leased
                premises. The typical restaurant premises lease is for a term of
                between 15 to 25 years with renewal options ranging from 5 to 25
                years. The leases generally provide for the obligation to pay
                property taxes, utilities, and various other use and occupancy
                costs. Rentals under certain leases are based on a percentage of
                sales in excess of a certain minimum level. Certain leases
                provide for increases based upon the changes in the consumer
                price index. The Company is also obligated under various leases
                for restaurant equipment and for office space and equipment.

                Minimum payments under lease commitments are summarized below
                for capital and operating leases. The imputed interest rates
                used in the calculations for capital leases vary from 9.75% to
                12% and are equivalent to the rates which would have been
                incurred at the time to borrow, over a similar term, the amounts
                necessary to purchase the leased assets.


<PAGE>

                The amounts of operating and capital lease obligations are as
follows (in thousands):
<TABLE>
<CAPTION>
<S>             <C>                                                        <C>               <C>                <C>
                                                                           Operating         Capital
                                                                              Leases         Leases
                                                                         ---------------    ---------------
                Fiscal year ending:
                2004                                                              7,287                458
                2005                                                              7,823                290
                2006                                                              7,979                 26
                2007                                                              7,858
                2008                                                              7,847
                Thereafter                                                       73,872
                                                                         ---------------    ---------------
                Total minimum lease payments                                   $112,666               $774
                                                                         ===============
                Less amount representing interest                                                      102
                                                                                            ---------------
                Total obligations under capital leases                                                 672
                Less current maturities                                                                373
                                                                                            ---------------
                Long-term obligations under capitalized
                    leases at March 30, 2003                                                          $299
                                                                                            ===============



                Rental expense consists of (in thousands):

                                                                           March 30,          March 31,        April 1,
                                                                              2003               2002            2001
                                                                         ----------------------------------------------------

                Minimum rental commitments                                       $8,191             $7,804            $6,497
                Rental based on percentage of sales                               2,404              2,273             2,298
                                                                         ----------------------------------------------------
                                                                                $10,595            $10,077            $8,795
                                                                         ====================================================


9.         LONG-TERM DEBT

                Long-term debt consists of (in thousands):
                                                                                     March 30,                 March 31,
                                                                                        2003                      2002
                                                                               ------------------       -------------------
                     Term loan - bank                                                    $16,000                    $6,000
                     Revolving line of credit - bank                                       6,000
                                                                               ------------------       -------------------
                                                                                          22,000                     6,000
                Less current portion                                                       3,000                     3,000
                                                                               ------------------
                                                                                                        -------------------
                                                                                         $19,000                    $3,000
                                                                               ==================       ===================
</TABLE>

           The Company has borrowings from Wachovia Bank, National Association
           ("Wachovia") under a term loan and a revolving line of credit
           facility, both of which were renegotiated on December 3, 2002. The
           renegotiated credit agreement increased the term loan facility to
           $16,000,000. The line of credit facility allows the Company to borrow
           up to $15,000,000 through December 31, 2007. At March 30, 2003, the
           Company had $9,000,000 available for borrowing under the revolving
           line of credit. The full amount of the term loan, $16,000,000, was
           outstanding at March 30, 2003 and is payable in quarterly
           installments of $750,000 through December 2004 and $833,333
           thereafter until the term loan matures in December 2007. The interest
           rate at March 30, 2003 of both the line of credit and the term loan
           was approximately 2.38%. The Company has the option to pay interest
           at Wachovia's prime rate plus 1% or libor plus 1%. The interest rate
           may vary depending upon the ratio that the sum of earnings before
           interest, taxes, depreciation and amortization has to the Company's
           total indebtedness. The loan agreements limit the Company's capital
           expenditures to certain amounts, require that the Company maintain
           certain financial ratios and profitability amounts and prohibit the
           payment of cash dividends.

           In fiscal 2001, the Company entered into a master lease agreement
           with Wachovia and two other banks that provided financing for up to
           $25,000,000 for new restaurant acquisition and construction.
           Management determined that more favorable rates were available under
           the Company's line of credit and accordingly the Company terminated
           this arrangement on June 12, 2002 by borrowing $5,000,000 from the
           line of credit and using $8,000,000 in cash to pay off the
           outstanding facility balance and the Company acquired the three
           restaurant properties that were financed under the facility.


<PAGE>



           Principal maturities of long-term debt obligations at March 30, 2003
are as follows:

                Fiscal year ending
                2004                                                $3,000
                2005                                                 3,000
                2006                                                 3,333
                2007                                                 4,167
                2008                                                 8,500
                                                                   -------
                Total                                              $22,000
                                                                   =======

10.   INCOME TAXES

           Deferred tax assets and liabilities reflect the tax effect of
           temporary differences between amounts of assets and liabilities for
           financial reporting purposes and the amounts of such assets and
           liabilities as measured by income tax law. A valuation allowance is
           recognized to reduce deferred tax assets to the amounts that are more
           likely than not to be realized.

           The net deferred tax asset balance consists of (in thousands):
<TABLE>
<CAPTION>
<S>       <C>                                            <C>         <C>              <C>         <C>         <C>

                                                                     March 30, 2003                           March 31, 2002
                                                         Assets      Liabilities      Total        Assets     Liabilities    Total
           -------------------------------------------------------------------------------------------------------------------------
           Tax loss carryforwards                         $   733                     $ 733        $1,164                    $1,164
           Excess book amortization
               for pre-opening costs
               and capital leases                            180                        180           349                       349
           Income tax credits                                790                        790           572                       572
           Gift certificates                                 464                        464           343                       343
           Accelerated depreciation
                for tax purposes                                        ($263)         (263)           34                        34
           Smallware inventory                                           (705)         (705)                     ($523)        (523)
           Goodwill                                                       (94)          (94)
           Other                                               67                        67            24                        24

                                                       -----------------------------------------------------------------------------
           Total asset (liability)                         $2,234     ($1,062)       $1,172        $2,486        ($523)      $1,963
                                                       =============================================================================
</TABLE>

           As of March 30, 2003, the Company had available net operating loss
           carryforwards as a result of a 1997 acquisition amounting to
           $1,831,000 for ordinary income tax purposes and is available to
           reduce future taxable income. The net operating loss carryforwards
           are subject to the change of control provisions of the Internal
           Revenue Code which limit the usage of the net operating loss
           carryforwards to approximately $1,100,000 per year. All net operating
           loss carryforwards expire as follows (in thousands):

           Fiscal year ending
           2005                                                      $1,361
           2006                                                         470
                                                                   ------------
                                                                     $1,831
                                                                   ============


<PAGE>


<TABLE>
<CAPTION>
<S>        <C>                                                                           <C>            <C>               <C>
           The income tax provision consists of (in thousands):
                                                                                         March 30,      March 31,         April 1,
                                                                                           2003           2002              2001
           ------------------------------------------------------------------------------------------------------------------------
           Current:
               Federal                                                                    $2,826         $2,069            $3,398
               State                                                                       1,245          1,009             1,293
           Deferred:
               Federal and State                                                             791          1,010               317
                                                                                          -----------------------------------------

           Income tax provision                                                           $4,862         $4,088            $5,008
                                                                                          =========================================

           The income tax provision differed from the amount computed at the statutory rate as follows (in thousands):

                                                                                          March 30,       March 31,       April 1,
                                                                                            2003            2002            2001
           ------------------------------------------------------------------------------------------------------------------------
           Federal income tax provision at statutory rate of 34%                           $4,917         $4,421           $4,835
           State income taxes, net of federal benefit                                         822            663              854
           Tax credits, net                                                                (1,000)          (893)            (833)
           Other                                                                              123           (103)             152
                                                                                           ----------------------------------------

           Income tax provision                                                            $4,862         $4,088           $5,008
                                                                                           ========================================

           Effective income tax rate                                                        33.9%           31.6%           35.5%
                                                                                           ========================================
</TABLE>

11.   COMMITMENTS AND CONTINGENCIES

           Litigation - The Company is a defendant in an action brought by a
           former server at a Benihana restaurant and purported to be filed on
           behalf of similarly situated current and former employees of the
           Company alleging violations of the minimum wage provisions applicable
           to certain tipped employees arising from the tip pooling and
           distribution practices at the restaurant. Plaintiffs seek damages
           consisting of the difference between the hourly wage paid and the
           applicable federal minimum wage rate, attorneys' fees and costs and
           certain liquidated damages provided by statute. The Company is also a
           defendant in a related action which asserts two claims: one for
           alleged violations of the minimum wage provisions of the Federal Fair
           Labor Standards Act, and one for alleged violations of New York State
           Labor Law concerning gratuities. As in the action described above,
           certain similarly situated employees may have rights to "opt in" to
           the federal claim, while the state claim purports to be brought as a
           class action.

           The parties entered into a Settlement Agreement with respect to the
           consolidated action dated March 13, 2003, which provides for, among
           other things, settlement payments to the plaintiffs and a payment of
           attorney's fees and costs. Depending upon the number of putative
           class members who opt out of the class (and thus the settlement) and
           the number of class members who fail to claim their settlement
           payment, the total amount of settlement payments made may be less
           than the aggregate amount of settlement payments provided for in the
           Settlement Agreement. Plaintiffs' motion seeking, among other things,
           preliminary approval of the Settlement Agreement and certification of
           a class for purposes of the settlement is currently pending. While
           the Company believes that the complaints in the consolidated action
           have no merit, should the settlement not be finalized and the action
           proceed to trial, there can be no assurance that the Company will not
           be required to pay a material amount in connection with defending or
           settling the consolidated action. If the consolidated action is
           settled in accordance with the terms of the Settlement Agreement, the
           maximum payments from the Company would not be material to the
           Company's financial condition or results of operations.

           Except for the matters described above, the Company is not a party to
           any litigation other than routine claims which are incidental to its
           business.

           Audit - The Company is under examination by the Internal Revenue
           Service of its fiscal 2000 Federal income tax return. The examination
           is in its preliminary stages and while the Company believes that
           there are no significant issues of concern, there can be no assurance
           that the Internal Revenue Service will agree with all items as filed
           on the Federal income tax return.


<PAGE>

           Acquisitions - In December 1999, the Company completed the
           acquisition of 80% of the equity of Haru Holding Corp. ("Haru"). The
           acquisition was accounted for using the purchase method of
           accounting. Pursuant to the purchase agreement, at any time during
           the period of July 1, 2005 through September 30, 2005, the holders of
           the balance of Haru's equity the ("Minority Stockholders") shall have
           a one-time option to sell their shares to the Company. Provided that
           the Minority Stockholders do not exercise their right to sell their
           shares, then the Company has a one-time option to purchase the shares
           of the Minority Stockholders between the period of October 1, 2005
           and December 31, 2005. The price for both the put and call options
           will be determined based on a defined cash flow measure for the
           acquired business.

           In December 2002, the Company completed the acquisition of RA Sushi
           restaurants. The acquisition was accounted for using the purchase
           method of accounting. Pursuant to the purchase agreement, the Company
           is required to pay the seller contingent payments based on certain
           operating results of the acquired business for fiscal years ending
           2004, 2005 and 2006.

12.   STOCKHOLDERS' EQUITY

           Preferred Stock - The preferred stock had a liquidation preference of
           $1,000 per share, carried a cumulative dividend of 6% and entitled
           the holder a right to convert into shares of the Company's Class A
           Common Stock. In fiscal 2002, the holder converted all of the
           preferred stock to 105,267 shares of Class A Common Stock.

           Common and Class A Common Stock - The Company's Common Stock is
           convertible into Class A Common Stock on a one-for-one basis. The
           Class A Common Stock is identical to the Common Stock except that it
           gives the holder one-tenth (1/10) vote per share, voting together
           with the Company's Common Stock as a single class on all matters
           except the election of directors. For election of directors, the
           Class A Common Stockholders vote as a class to elect 25% of the
           members of the Board of Directors.

           Stock Dividend - On June 7, 2002, the Board of Directors declared a
           15% stock dividend on Class A stock in both the Class A shares and
           common shares. The stock dividend was paid on August 12, 2002 to
           holders of record July 15, 2002.

           Stock Options - The Company has various stock option plans: a 1994
           Employee Stock Option Plan (1994 Plan), a 1996 Class A Stock Option
           Plan (1996 Plan), a 1997 Class A Stock Option Plan (1997 Plan), a
           2000 Class A Stock Option Plan (2000 Plan), a Directors' Stock Option
           Plan (Directors' Plan) and a Directors' Class A Stock Option Plan
           (Directors' Class A Plan), under all of which a maximum of 3,285,000
           shares of the Company's Common Stock and Class A Common Stock were
           authorized for grant and for all of which options for 1,541,493
           shares remain available for grant.

           Options granted under the 1996, 1997 and 2000 Plans have a term of
           ten years from date of issuance, and are exercisable ratably over a
           three-year period commencing with the date of the grant. Options
           granted under these plans require that the exercise price be at
           market value on the date of the grant, or for optionees that own more
           than 10% of the combined voting rights of the Company, at 110% of
           market value for incentive stock options.

           Options granted under the 1994 Plan have a term of ten years from
           date of issuance and are exercisable on the date of grant. Under the
           Directors' Plan, options to purchase 10,000 shares are automatically
           granted to each of the Company's non-employee directors on the date
           of the Company's annual meeting. Options granted under the Directors
           Plan are exercisable ratably over two years commencing with the first
           anniversary of the date of the grant.

           The following table summarizes information about fixed-price stock
           options outstanding at March 30, 2003:
<TABLE>
<CAPTION>
<S>        <C>      <C>    <C>                     <C>        <C>                   <C>                     <C>           <C>
                                                               Options Outstanding                           Options Exercisable
                                                    -----------------------------------------            --------------------------
                                                              Weighted-
                                                               Average              Weighted                               Weighted
           Ranges of                                          Remaining              Average                                Average
           Exercise                                           Contractual           Exercise                               Exercise
           Prices                                   Number       Life                 Price                  Number          Price
           ------------------------------------------------------------------------------------------------------------------------
           $ 2.50     -     $ 2.83                  11,500        1.2                 $2.75                   11,500         $2.75
              5.87    -       7.44                 429,105        6.6                  6.92                  429,105          6.92
              7.83    -       8.31                  77,877        4.0                  7.98                   77,877          7.98
              8.91    -      10.65                 472,171        5.1                 10.32                  472,171         10.32
            11.03     -      16.78                 772,056        8.1                 13.48                  560,223         12.75
                                                -----------                                               -----------
           $ 2.50     -     $16.78               1,762,709                                                 1,550,876
                                                ===========                                               ===========
</TABLE>


<PAGE>



           Transactions under the above plans for the years ended are as
           follows:

                                           March 30,      March 31,    April 1,
                                             2003           2002         2001
           ---------------------------------------------------------------------
           Balance, beginning of year      1,435,046     1,426,938    1,177,784
           Issued from stock dividend        216,028
           Granted                           300,000       220,000      276,500
           Canceled                                        (28,813)     (15,335)
           Expired                              (500)      (29,673)
           Exercised                        (187,865)     (153,406)     (12,011)
                                          --------------------------------------

           Balance, end of year            1,762,709     1,435,046    1,426,938
                                          ======================================

           Weighted average fair value of
              options granted during year      $5.47         $2.48        $5.07

           Stock Rights - The Company has a Shareholder Rights Plan under which
           a Preferred Share Purchase Right (Right) is represented by each
           outstanding share of the Company's Common and Class A Common Stock.
           The Rights operate to create substantial dilution to a potential
           acquirer who seeks to make an acquisition, the terms of which the
           Company's Board of Directors believes is inadequate or structured in
           a coercive manner.

           The Rights become exercisable on the tenth day (or such later date as
           the Board of Directors may determine) after public announcement that
           a person or a group (subject to certain exceptions) has acquired 20%
           or more of the outstanding Common Stock or an announcement of a
           tender offer that would result in beneficial ownership by a person or
           a group of 20% or more of the Common Stock.

13.  INCENTIVE AND DEFERRED COMPENSATION PLANS

           The Company has an incentive compensation plan whereby bonus awards
           are made if the Company attains a certain targeted return on its
           opening equity or at the discretion of the Compensation Committee.
           The purpose of the plan is to improve the long-term sustainable
           results of operations of the Company by more fully aligning the
           interests of management and key employees with the shareholders of
           the Company. One-third of the amounts awarded are immediately made
           available to the employee and the remaining two-thirds become
           available ratably over the succeeding two years. Amounts allocated
           under the Plan may be taken in cash or deferred in a non-qualified
           deferred compensation plan. The target rate, which was 15.0% for
           2003, 15.5% for 2002 and 15.0% for 2001, is approved annually based
           upon a review of the rates of return on equity of other publicly
           traded restaurant businesses by the Compensation Committee of the
           Board of Directors. The amount of the awards is capped at 50% of the
           eligible salary of the employee. The Company accrued $350,000,
           $300,000 and $564,000 of incentive compensation for fiscal years
           2003, 2002 and 2001, respectively.

           The Company has an executive retirement plan whereby certain key
           employees may elect to defer up to 20% of their salary and 100% of
           their bonus until retirement or age 55, whichever is later, or due to
           disability or death. Employees may select from various investment
           options for their available account balances. Investment earnings are
           credited to their accounts.

14.  QUARTERLY FINANCIAL DATA (UNAUDITED)

           Quarter ended (in thousands except for per share information)
<TABLE>
<CAPTION>
<S>       <C>                     <C>           <C>          <C>          <C>           <C>          <C>         <C>        <C>
                                                  March 30, 2003                                      March 31, 2002
           -------------------------------------------------------------------------------------------------------------------------
                                    4th          3rd          2nd          1st             4th        3rd          2nd         1st

           Revenues               $46,305      $43,822      $41,958      $57,159       $42,904      $40,182      $37,486    $50,935
           Gross profit            34,693       32,952       31,353       42,733        32,154       30,254       27,649     37,240
           Net income               3,063        2,168        1,452        2,790         3,661        2,339          382      2,447
           Basic earnings
              per share           $   .35      $   .25      $   .17      $   .32       $   .43      $   .31      $   .05    $   .34
           Diluted earnings
              per share           $   .33      $   .24      $   .16      $   .30       $   .40      $   .30      $   .05    $   .33
</TABLE>


<PAGE>





INDEPENDENT AUDITORS' REPORT






To the Board of Directors and Stockholders of Benihana Inc.:

We have audited the accompanying consolidated balance sheets of Benihana Inc.
and subsidiaries ("Benihana") as of March 30, 2003 and March 31, 2002, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for each of the three years in the period ended March 30, 2003. These
consolidated financial statements are the responsibility of Benihana's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Benihana as of March 30, 2003 and
March 31, 2002, and the results of its operations and its cash flows for each of
the three years in the period ended March 30, 2003 in conformity with accounting
principles generally accepted in the United States of America.








Deloitte & Touche LLP
Certified Public Accountants

Miami, Florida
May 15, 2003




<PAGE>






COMMON STOCK INFORMATION

The Company's Common Stock and Class A Common Stock are traded on the Nasdaq
National Market System. There were 225 holders of record of the Company's Common
Stock and 511 holders of record of the Class A Common Stock at March 30, 2003.

The table below sets forth high and low bid prices for the Company's Common
Stock and Class A Common Stock, which do not include commissions and mark-ups or
mark-downs for the periods indicated. Such bid prices reflect inter-dealer
prices without retail mark-ups, markdowns or commissions and may not necessarily
represent actual transactions.

<TABLE>
<CAPTION>
<S>             <C>                              <C>                  <C>               <C>                <C>
                                                                        Fiscal Year Ended
                                                                        -----------------
                                                        March 30, 2003                       March 31, 2002
                                                  ----------------------------------------------------------------------------
                COMMON STOCK (1)                  High                 Low               High              Low
                --------------------------------------------------------------------------------------------------------------

                1st Quarter                       20.32                13.91             12.17               8.54
                2nd Quarter                       16.42                10.26             12.22               9.22
                3rd Quarter                       15.04                11.31             13.65               8.70
                4th Quarter                       13.31                 9.36             17.60              12.49




                                                                        Fiscal Year Ended
                                                                        -----------------
                CLASS A                                 March 30, 2003                       March 31, 2002
                                                  ----------------------------------------------------------------------------
                COMMON STOCK (1)                  High                 Low               High              Low
                --------------------------------------------------------------------------------------------------------------

                1st Quarter                       19.77                13.76             12.26               7.14
                2nd Quarter                       16.25                10.30             12.39               8.70
                3rd Quarter                       14.98                11.59             13.57               8.05
                4th Quarter                       13.49                 9.34             17.80              13.00
</TABLE>


The Class A Common Stock is identical to the Common Stock except that it gives
the holder one-tenth (1/10) vote per share, voting together with the Company's
Common Stock as a single class on all matters except the election of directors.
For election of directors, the Class A Common stockholders vote as a class to
elect 25% of the members of the Board of Directors.

The Company has not declared or paid a cash dividend on common equity since its
organization and has no present intention of paying any such dividend in the
foreseeable future. The Company intends to retain all available cash for the
operation and expansion of its business. In addition, the Company's present loan
agreement restricts the payment of cash dividends.

On June 7, 2002, the Board of Directors declared a 15% stock dividend in Class A
stock on both the Class A shares and common shares. The stock dividend was paid
on August 12, 2002 to holders of record July 15, 2002.


(1)     The high and low prices have been adjusted to reflect the aforementioned
        stock dividend for all periods presented prior to the second quarter of
        fiscal 2003.


<PAGE>



                                                                  Exhibit 23.01


INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No.'s
333-33880, 333-63783 and 333-13973 of Benihana Inc. on Forms S-8 of our report
dated May 15, 2003, incorporated by reference in the Annual Report on Form 10-K
of Benihana Inc. for the year ended March 30, 2003.


Deloitte & Touche LLP

Miami, Florida
June 23, 2003



<PAGE>




                                                                  Exhibit 23.02


INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statement No.'s
333-83585 and 333-13977 of Benihana Inc. on Form S-3 of our report dated May 15,
2003, incorporated by reference in the Annual Report on Form 10-K of Benihana
Inc. for the year ended March 30, 2003 and to the reference to us under the
heading "Experts" in such Registration Statements.


Deloitte & Touche LLP

Miami, Florida
June 23, 2003



<PAGE>




                                                                   Exhibit 99.1
                                  CERTIFICATION


     I, Joel A. Schwartz, certify that:

     1. I have reviewed this Annual Report on Form 10-K of Benihana Inc.;

     2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respect the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                 (a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the "Evaluation Date"); and

                  (c) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.

    5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the Audit Committee
of registrant's Board of Directors (or persons performing the equivalent
function):

               (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                (b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls.

     6. The registrant's other certifying officers and I have indicated in this
Annual Report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


/s/ Joel A. Schwartz
-------------------------------
Joel A. Schwartz
President and
Chief Executive Officer

June 23, 2003


<PAGE>



                                                                   Exhibit 99.2

                                  CERTIFICATION


     I, Michael R. Burris, certify that:

     1. I have reviewed this Annual Report on Form 10-K of Benihana Inc.;

     2. Based on my knowledge, this Annual Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Annual
Report;

     3. Based on my knowledge, the financial statements, and other financial
information included in this Annual Report, fairly present in all material
respect the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this Annual Report;

     4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                (a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this Annual Report is being prepared;

                  (b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this Annual Report (the "Evaluation Date"); and

                  (c) presented in this Annual Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.

    5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the Audit Committee
of registrant's Board of Directors (or persons performing the equivalent
function):

             (a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

             (b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls.

     6. The registrant's other certifying officers and I have indicated in this
Annual Report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


/s/ Michael R. Burris
-------------------------------
Michael R. Burris
Chief Financial Officer

June 23, 2003


<PAGE>



                                                                   Exhibit 99.3


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report of Benihana Inc. (the "Company") on
Form 10-K for the period ended March 30, 2003 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Joel A. Schwartz,
President and Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:

     1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


/s/ Joel A. Schwartz
------------------------------
Joel A. Schwartz
President and
Chief Executive Officer

June 23, 2003


<PAGE>



                                                                   Exhibit 99.4


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report of Benihana Inc. (the "Company") on
Form 10-K for the period ended March 30, 2003 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Michael R. Burris,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350,
as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

     1. The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     2. The information contained in the report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


/s/ Michael R. Burris
------------------------------
Michael R. Burris
Chief Financial Officer

June 23, 2003