LOAN AGREEMENT

         This LOAN AGREEMENT, dated as of April 21, 2000, is between CHAMPPS
OPERATING CORPORATION, a Minnesota corporation ("Borrower"), and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("FINOVA").

                             PRELIMINARY STATEMENT:

         Borrower desires to borrow up to $14,080,000 from FINOVA, which amount
shall be used (i) to reimburse Borrower for the Financeable Costs incurred in
developing the Owned Store and (ii) to consummate the Acquisitions. FINOVA has
agreed to make the Loans upon the terms and subject to the conditions set forth
herein.
         NOW, THEREFORE, it is agreed as follows:

                                    ARTICLE I

                         DEFINITIONS AND DETERMINATIONS

         1.1 Definitions. As used in this Loan Agreement and in the other Loan
Instruments, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of the terms defined):

         Acceleration Date: as defined in subsection 2.6.4.

         Accountants: Arthur Andersen, LLP or any other independent certified
         public accounting firm selected by Borrower and reasonably satisfactory
         to FINOVA.

         Accounting Changes:  as defined in Section 1.3.

         Acquisitions: collectively, the Eden Prairie Acquisition and the
         Minnetonka Acquisition.

         Acquisition Instruments: collectively, the Eden Prairie Acquisition
         Instruments and the Minnetonka Acquisition Instruments.

         ADA:  the Americans with Disabilities Act of 1990, as amended, any
         successor statute thereto, and the rules and regulations issued
         thereunder, as in effect from time to time.

         Additional Sums:  as defined in subsection 2.2.4.

         Affiliate: any Person that directly or indirectly, through one or more
         intermediaries, controls or is controlled by or is under common control
         with another Person. The term "control" means possession, direct or
         indirect, of the power to direct or cause the direction of the
         management and policies of a Person, whether through the ownership of
         voting securities or equity interests, by contract or otherwise. For
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         the purposes hereof any Person which owns or controls, directly or
         indirectly, 10% or more of the securities or equity interests, as
         applicable, whether voting or non-voting, of any other Person shall be
         deemed to "control" such Person.

         Bankruptcy Code:  the United States Bankruptcy Code, any successor
         statute thereto, and the rules, regulations and legally binding
         policies promulgated thereunder, as amended and in effect from time to
         time.

         Basic Financial Statements:  as defined in subsection 6.3.2.

         Borrower:  as defined in the Preamble to this Loan Agreement.

         Borrower Capital Stock:  as defined in subsection 5.3.1.

         Borrower Fixed Charge Coverage Ratio: for any period, the ratio of (i)
         the Cash Flow of Borrower for such period less, to the extent
         capitalized, all Non-Financed Capital Expenditures of Borrower and its
         Subsidiaries for such period to (ii) Borrower Fixed Charges for such
         period.

         Borrower Fixed Charges: during any period as applicable, the sum of (i)
         all payments of principal, interest, premiums, loan fees and other
         charges with respect to Indebtedness for Borrowed Money made or
         required to be made by Borrower and its Subsidiaries during such period
         plus (ii) rent expense paid or accrued under all Operating Leases of
         Borrower and its Subsidiaries during such period, including all Leases
         and all equipment leases of Borrower and its Subsidiaries which are not
         Capitalized Leases.

         Borrower's Obligations: (i) any and all Indebtedness due or to become
         due, now existing or hereafter arising, of Borrower to FINOVA pursuant
         to the terms of this Loan Agreement or any other Loan Instrument,
         including, without limitation, the Loan Fees, and (ii) the performance
         of the covenants of Borrower contained in the Loan Instruments.

         Business Day:  any day other than a Saturday, Sunday or other day on
         which banks in Phoenix, Arizona or New York, New York are required to
         close.

         Capital Expenditures: payments that are made or liabilities that are
         incurred by a Person for the lease, purchase, improvement, construction
         or use of any Property, the value or cost of which under GAAP is
         required to be capitalized and appears on such Person's balance sheet
         in the category of property, plant, equipment or leasehold
         improvements, without regard to the manner in which such payments or
         the instruments pursuant to which they are made are characterized, and
         shall include, without limitation, payments for or liabilities incurred
         with respect to the installment purchase of Property and payments under
         Capitalized Leases.

         Capitalized Lease:  any lease of Property, the obligations for the
         rental of which are required to be capitalized in accordance with GAAP.

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         Cash Flow:  for any period, the consolidated net income of Borrower or
         Guarantor, as applicable, for such period:

                  (i)      plus the sum of the following (without duplication),
                  to the extent deducted in determining such net income for such
                  period:

                                    (A) losses from sales, exchanges and other
                           dispositions of Property, and other extraordinary and
                           non-recurring losses, in each case not in the
                           ordinary course of business;

                                    (B) interest, fees and other charges paid or
                           accrued on Indebtedness, including, without
                           limitation, interest on Capitalized Leases that is
                           imputed in accordance with GAAP;

                                    (C)     income taxes which are accrued, but
                           not paid;

                                    (D)     depreciation,  amortization  and all
                           other non-cash items deducted in determining  such
                           net income; and

                                    (E) rent expense paid or accrued under all
                           Operating Leases during such period, including all
                           Leases and all equipment leases which are not
                           Capitalized Leases; and

                  (ii)     minus the sum of the following (without duplication),
                  to the extent included in determining such net income for
                  such period:

                                    (A) gains from sales, exchanges and other
                           dispositions of Property, and other extraordinary and
                           non-recurring gains, in each case not in the ordinary
                           course of business;

                                    (B)     proceeds of any insurance other than
                           business interruption insurance; and

                                    (C) any other non-cash item included in
                           determining such net income.

         Closing Date: with respect to (i) Term Loan A, the Term Loan A Closing
         Date, (ii) Term Loan B, the Term Loan B Closing Date and (iii) Term
         Loan C, the Term Loan C Closing Date.

         Code:  the Internal Revenue Code of 1986, any successor statute
         thereto, and the rules, regulations and legally binding policies
         promulgated thereunder, as amended and in effect from time to time.

         Collateral: (i) all existing and after-acquired Property of Borrower
         related to the Collateral Stores, including, without limitation, all
         furniture, fixtures, equipment and inventory located at the Collateral
         Stores, and (ii) all proceeds of the foregoing.

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         Collateral Stores: as of the (i) Term Loan A Closing Date, the Owned
         Store, (ii) Term Loan B Closing Date, the Owned Store and the Eden
         Prairie Leased Store and, if the Term Loan C Closing Date has occurred,
         the Minnetonka Leased Store, (iii) Term Loan C Closing Date, the Owned
         Store and the Minnetonka Leased Store and, if the Term Loan B Closing
         Date has occurred, the Eden Prairie Leased Store and (ii) at any time
         after the later to occur of the Term Loan B Closing Date and the Term
         Loan C Closing Date, any Initial Store which has not been replaced by a
         Substitute Store and each Substitute Store which has not been replaced
         by a Substitute Store.

         Compliance Certificate:  a compliance certificate executed by Borrower
         in the form of Exhibit 1.1(A) attached hereto.

         Default Rate: with respect to any portion of the Principal Balance, the
         applicable per annum rate of interest payable on such portion pursuant
         to subsection 2.2.1 plus 5.0%.

         Default Rate Period:  a period of time commencing on the date an Event
         of Default has occurred and ending on the date that such Event of
         Default is cured or waived.

         Eden Prairie Acquisition: the acquisition by Borrower of the assets of
         the Eden Prairie Leased Store and the assumption by Borrower of the
         Eden Prairie Lease pursuant to the terms and conditions of the Eden
         Prairie Acquisition Instruments.

         Eden Prairie Acquisition Agreement: Asset Purchase Agreement dated as
         of April 6, 2000, as amended April 20, 2000 between the Eden Prairie
         Seller (as seller) and Borrower (as buyer) relating to the Eden Prairie
         Leased Store.

         Eden Prairie Acquisition Instruments: the Eden Prairie Acquisition
         Agreement and all documents, instruments and
         agreements executed by or delivered to the Eden Prairie Seller in
         connection therewith.

         Eden Prairie Lease:   the Lease of the Eden Prairie Leased Store
         assumed by Borrower pursuant to the terms and conditions of the Eden
         Prairie Acquisition Instruments.

         Eden Prairie Leased Store:   the Leased Store located at 8010 Glen
         Lane, Eden Prairie, Minnesota.

         Eden Prairie Seller: Prairie Restaurant Group, Inc., a Minnesota
         corporation.

         Employee Benefit Plan: any employee benefit plan within the meaning of
         Section 3(3) of ERISA which (i) is maintained for employees of Borrower
         or any of its ERISA Affiliates or (ii) has at any time within the
         preceding six years been maintained for the employees of Borrower or
         any of its current or former ERISA Affiliates.

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         Environmental Certificate:  Environmental Certificate and Indemnity
         Agreement executed by Borrower in favor of FINOVA.

         Environmental Laws:  any and all federal, state and local laws that
         relate to or impose liability or standards of conduct concerning public
         or occupational health and safety or protection of the environment,
         as now or hereafter in effect and as have been or hereafter may be
         amended or reauthorized, including, without limitation, the
         Comprehensive Environmental Response, Compensation and Liability Act
         (42 U.S.C.ss.9601 et seq.), the Hazardous

          Materials  Transportation Act (42 U.S.C.ss.1802 et seq.), the Resource
          Conservation and Recovery Act (42  U.S.C.ss.6901 et seq.), the Federal
          Water  Pollution  Control Act (33  U.S.C.ss.1251  et seq.),  the Toxic
          Substances  Control Act (15  U.S.C.ss.2601 et seq.), the Clean Air Act
          (42 U.S.C.ss.7901 et seq.), the National  Environmental Policy Act (42
          U.S.C.  ss.4231, et seq.), the Refuse Act (33 U.S.C.ss.407,  et seq.),
          the  Safe  Drinking  Water  Act  (42  U.S.C.ss.300(f)  et  seq.),  the
          Occupational  Safety and Health Act (29 U.S.C.ss.651 et seq.), and all
          rules,   regulations,   codes,   ordinances  and  guidance   documents
          promulgated  or  published  thereunder,  and  the  provisions  of  any
          licenses,  permits,  orders and decrees issued  pursuant to any of the
          foregoing.

          ERISA:  the Employee  Retirement  Income Security Act of 1974, and any
          successor  statute  thereto,  and the rules,  regulations  and legally
          binding policies promulgated thereunder, as amended and in effect from
          time to time.

          ERISA Affiliate: any Person who is a member of a group which is under
          common control with Borrower, who together with Borrower is treated as
          a single employer within the meaning of Section 414(b), (c) and (m) of
          the Code.

          Event of  Default:  any of the Events of Default  set forth in Section
          8.1.

          Excess Interest:  as defined in subsection 2.2.4.

          Existing Indebtedness: all Indebtedness for Borrowed Money of Borrower
          secured by a Lien on any of the Collateral.

          Financeable Costs:  as defined in Exhibit 2.1.1.

          FINOVA:  as defined in the Preamble to this Loan Agreement.

          GAAP: generally accepted accounting  principles as in effect from time
          to time,  which shall include but shall not be limited to the official
          interpretations thereof by the Financial Accounting Standards Board or
          any successor thereto.

          Good Funds: United States Dollars available in Federal funds to FINOVA
          at or before 2:00 p.m., Scottsdale time, on a Business Day.

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          Governmental  Body: any foreign,  federal,  state,  municipal or other
          government,  or any department,  commission,  board,  bureau,  agency,
          public   authority  or   instrumentality   thereof  or  any  court  or
          arbitrator.

          Guaranty:  a guaranty of Borrower's  Obligations executed by Guarantor
          in favor of FINOVA.

          Guarantor: Champps Entertainment, Inc., a Delaware corporation.

          Guarantor Fixed Charge Coverage  Ratio:  for any period,  the ratio of
          (i) the Cash Flow of  Guarantor  for such period  less,  to the extent
          capitalized,  all Non-Financed  Capital  Expenditures of Guarantor and
          its  Subsidiaries  for such period to (ii) Guarantor Fixed Charges for
          such period.

          Guarantor Fixed Charges:  during any period as applicable,  the sum of
          (i) all payments of principal, interest, premiums, loan fees and other
          charges  with  respect  to  Indebtedness  for  Borrowed  Money made or
          required  to be made by  Guarantor  and its  Subsidiaries  during such
          period  plus (ii) rent  expense  paid or accrued  under all  Operating
          Leases of Guarantor and its Subsidiaries during such period, including
          all Leases and all equipment  leases of Guarantor and its Subsidiaries
          which are not Capitalized Leases.

          Hazardous Materials:  any hazardous,  toxic, dangerous or other waste,
          substance or material defined as such in, regulated by or for purposes
          of any Environmental Law.

          Incipient  Default:  any event or condition which,  with the giving of
          notice  or the  lapse  of  time,  or both,  would  become  an Event of
          Default.

          Indebtedness: all liabilities, obligations and reserves, contingent or
          otherwise,  which,  in accordance  with GAAP,  would be reflected as a
          liability on a balance sheet or would be required to be disclosed in a
          financial  statement  or the  footnotes  thereto,  including,  without
          duplication:  (i)  Indebtedness  for Borrowed Money,  (ii) obligations
          secured by any Lien upon Property, (iii) guaranties, letters of credit
          and other  contingent  obligations and (iv)  liabilities in respect of
          unfunded  vested  benefits  under any  Pension  Plan or in  respect of
          withdrawal liabilities incurred under ERISA by Borrower, or Guarantor,
          as  applicable,  or any of its ERISA  Affiliates to any  Multiemployer
          Plan.

          Indebtedness for Borrowed Money: without duplication, all Indebtedness
          (i) in respect of money borrowed,  (ii) evidenced by a note, debenture
          or other like  written  obligation  to pay money  (including,  without
          limitation,  in the case of Borrower, all of Borrower's  Obligations),
          (iii) in respect of rent or hire of Property under Capitalized  Leases
          or for the deferred  purchase  price of  Property,  (iv) in respect of
          obligations   under   conditional   sales  or  other  title  retention
          agreements and (v) all guaranties of any or all of the foregoing.

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          Initial Stores: the Owned Store, the Eden Prairie Leased Store and the
          Minnetonka Leased Store.

          Landlord: a lessor under a Lease.

          Landlord's   Waiver:  a  landlord's   waiver  in  form  and  substance
          satisfactory to FINOVA.

          Lease:  any lease of real estate under which Borrower is the lessee or
          sublessee.

          Leased Store: any Collateral Store which is the subject of a Lease.

          Leased Store Lease: a Lease of a Leased Store.

          Lease Expiration: as defined in subsection 2.6.4(a).

          Leasehold Property: any real estate which is the subject of a Lease.

          Licenses:  all licenses (including liquor licenses,  if any), permits,
          consents,  approvals and authority issued by any Governmental  Body in
          connection with the operation of the Collateral Stores.

          Lien: any mortgage, pledge,  assignment,  lien, charge, encumbrance or
          security  interest of any kind,  or the interest of a vendor or lessor
          under any conditional sale agreement, Capitalized Lease or other title
          retention agreement.

          Loans:  collectively,  Term  Loan A, Term Loan B and Term Loan C. Loan
          Agreement:  this Loan  Agreement  and any  amendments  or  supplements
          hereto.

          Loan Fees: the fees payable to FINOVA pursuant to Section 2.5.

          Loan Instruments:

                  (i)      Loan Agreement;

                  (ii)     Notes;

                  (iii)    Guaranty;

                  (iv)     Security Agreement;

                  (v)      Mortgage;

                  (vi)     Solvency Certificates;

                  (vii)    Environmental Certificate;

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                  (viii)   Notices of Borrowing/Disbursement Requests;

                  (ix)     such Uniform  Commercial  Code  financing  statements
                           as FINOVA may require in order to perfect the
                           Security Interests; and

                  (x)      such other instruments and documents as FINOVA
                           reasonably may require in connection with the
                           transactions contemplated by this Loan Agreement.

          Make-Whole Premium: as defined in subsection 2.6.6.

          Mandatory Prepayment Amount: as defined in subsection 2.6.4(a).

          Mandatory Prepayment Date: as defined in subsection 2.6.4(a).

          Mandatory Prepayment Event: as defined in subsection 2.6.4(a).

          Material  Adverse  Effect:  (i) a  material  adverse  effect  upon the
          business,  operations,  Property,  profits or condition  (financial or
          otherwise) of Borrower or Guarantor,  as the case may be, or of any of
          the  Collateral  Stores,  (ii) a  material  adverse  effect  upon  the
          validity,  enforceability  or priority of the  Security  Interests  or
          (iii) a material  impairment  of the ability of any Obligor to perform
          its obligations under any Loan Instrument to which it is a party or of
          FINOVA to enforce or collect any of Borrower's Obligations.

          Maturity  Date:  the  earlier to occur of (i) May 1, 2010 and (ii) the
          date Borrower's Obligations are accelerated pursuant to Section 8.2.

          Maximum Rate: as defined in subsection 2.2.4.

          Minnetonka  Acquisition:  the acquisition by Borrower of the assets of
          the  Minnetonka  Leased  Store and the  assumption  by Borrower of the
          Minnetonka   Lease  pursuant  to  the  terms  and  conditions  of  the
          Minnetonka Acquisition Instruments.

          Minnetonka Acquisition Agreement: Asset Purchase Agreement dated as of
          April 6, 2000, as amended April 20, 2000 between the Minnetonka Seller
          (as seller) and Borrower (as buyer) relating to the Minnetonka  Leased
          Store.

          Minnetonka   Acquisition   Instruments:   the  Minnetonka  Acquisition
          Agreement and all documents, instruments and agreements executed by or
          delivered to the Minnetonka Seller in connection therewith.

          Minnetonka  Lease: the Lease of the Minnetonka Leased Store assumed by
          Borrower  pursuant  to the  terms  and  conditions  of the  Minnetonka
          Acquisition Instruments.

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          Minnetonka  Leased  Store:  the Leased Store  located at 1641 Plymouth
          Road, Minnetonka, Minnesota.

          Minnetonka Seller: collectively, Dean P. Vlahos and Breagan Investment
          Group, Inc., a Minnesota corporation.

          Mortgage: a mortgage or deed of trust executed by Borrower in favor of
          FINOVA  encumbering  Borrower's  right,  title and interest in, to and
          under the Real Estate upon which the Owned Store is located.

          Multiemployer  Plan:  any  multiemployer  plan as defined  pursuant to
          Section  3(37)  of  ERISA  to  which  Borrower  or any  of  its  ERISA
          Affiliates makes, or accrues an obligation to make  contributions,  or
          has  made,  or  been  obligated  to  make,  contributions  within  the
          preceding six years.

          Non-Financed  Capital  Expenditures:  for any  period,  the  aggregate
          amount  of  all  Capital  Expenditures  of  Guarantor  or  any  of its
          Subsidiaries,  as  applicable,  not  financed  with  the  proceeds  of
          Indebtedness for Borrowed Money.

          Notes: collectively, Term Note A, Term Note B and Term Note C.

          Notice   of   Borrowing/Disbursement    Request:    individually   and
          collectively,  one or more notices of borrowing/disbursement  requests
          executed by Borrower in favor of FINOVA.

          Obligor: any of the Obligors.

          Obligors: collectively, Borrower and Guarantor.

          Operating   Agreements:   all   right-of-entry   agreements,    supply
          agreements,  access  agreements,   advertising  contracts,   equipment
          leases,  service  contracts  and  similar  agreements  relating to the
          operation of the Collateral Stores, excluding the Leased Store Leases.

          Operating  Lease:  any lease which,  under GAAP, is not required to be
          capitalized.

          Owned  Store:  that  Store  located  at 2301  Fountain  Square  Drive,
          Lombard, Illinois.

          Pay-Off Letters:  pay-off letters addressed to FINOVA from the holders
          of all Existing Indebtedness.

          PBGC: the Pension  Benefit  Guaranty  Corporation or any  Governmental
          Body succeeding to the functions thereof.

          Pension Plan: any Employee  Benefit Plan,  other than a  Multiemployer
          Plan,  which  is  subject  to the  provisions  of Part 3 of Title I of
          ERISA,  Title IV of ERISA, or Section 412 of the Code and which (i) is

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          maintained  for employees of Borrower or any of its ERISA  Affiliates,
          or (ii) has at any time within the preceding six years been maintained
          for the  employees  of Borrower or any of its current or former  ERISA
          Affiliates.

          Permitted Liens: any of the following Liens:

                  (i)      the Security Interests;

                  (ii)     Liens for taxes or assessments and similar charges,
                           which either are (A) not delinquent or (B) being
                           contested diligently and in good faith by appropriate
                           proceedings, and as to which Borrower has set aside
                           reserves on its books which are satisfactory to
                           FINOVA;

                  (iii)    statutory Liens, such as mechanic's, materialman's,
                           warehouseman's, carrier's or other like Liens,
                           incurred in good faith in the ordinary course of
                           business, provided that the underlying obligations
                           relating to such Liens are paid in the ordinary
                           course of business, or are being contested diligently
                           and in good faith by appropriate proceedings and as
                           to which Borrower has set aside reserves on its books
                           satisfactory to FINOVA, or the payment of which
                           obligations are otherwise secured in a manner
                           satisfactory to FINOVA;

                  (iv)     zoning ordinances, easements, licenses, reservations,
                           provisions, covenants, conditions, waivers or
                           restrictions on the use of Property and other title
                           exceptions, in each case, that are acceptable to
                           FINOVA;

                  (v)      Liens in respect of judgments or awards with  respect
                           to which no Event of Default  would exist  pursuant
                           to subsection 8.1.6; and

                  (vi)     Liens to secure payment of insurance premiums (A) to
                           be paid in accordance with applicable laws in the
                           ordinary course of business relating to payment of
                           worker's compensation, or (B) that are required for
                           the participation in any fund in connection with
                           worker's compensation, unemployment insurance,
                           old-age pensions or other social security programs.

          Permitted Prior Liens: any of the following Liens:

                  (i)      the  Permitted  Liens  described in clauses  (ii) and
                           (iii) of the  definition  of Permitted  Liens that
                           are accorded priority to the Security Interests by
                           law; and

                  (ii)     the Permitted Liens described in clauses (iv) and
                           (vi) of the definition of Permitted Liens, subject to
                           the limitations set forth therein.

          Person: any individual, firm, corporation, business enterprise, trust,
          association,  joint venture,  partnership,  Governmental Body or other
          entity, whether acting in an individual, fiduciary or other capacity.

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          Principal Balance: the aggregate unpaid principal balance of the Loans
          or any specified portion thereof outstanding from time to time.

          Property:  all types of real, personal or mixed property and all types
          of tangible or intangible property.

          Qualified  Depository:  a member  bank of the Federal  Reserve  System
          having a combined capital and surplus of at least $100,000,000.

          Real  Estate:  any fee  simple  real  estate  now  owned or  hereafter
          acquired, beneficially or otherwise, by Borrower.

          Restaurant  Business:  the  ownership  and  operation of  restaurants,
          taverns,  banquet centers,  related  commissary/catering  services and
          ancillary activities.  Securities Act: the Securities Act of 1933, the
          Securities  Exchange Act of 1934, any successor  statute thereto,  and
          the rules,  regulations and legally binding policies of the Securities
          Exchange Commission promulgated  thereunder,  as amended and in effect
          from time to time.

          Security  Agreement:   individually  and  collectively,  one  or  more
          security agreements executed by Borrower in favor of FINOVA.

          Security  Interests:  the Liens in the  Collateral  granted  to FINOVA
          pursuant  to the  Security  Agreement  and any other  document  now or
          hereafter  executed by any Obligor  which  purports to grant a Lien on
          the Property of such  Obligor in favor of FINOVA to secure  Borrower's
          Obligations.

          Solvency  Certificate:  individually  and  collectively,  one or  more
          solvency certificates executed by Borrower in favor of FINOVA.

          Stated Rate: as defined in subsection 2.2.4.

          Store: a Champps Americana restaurant owned and operated by Borrower.

          Store Cash Flow: for any period,  with respect to any designated Store
          or Stores,  the net income of Borrower  derived from the  operation of
          such Store or Stores for such period:

                  (i) plus the sum of the following (without duplication), to
                  the extent deducted in determining such net income for such
                  period and to the extent attributable to such Store or Stores
                  for such period:

                                    (A) losses from sales, exchanges and other
                           dispositions of Property, and other extraordinary and
                           non-recurring losses, in each case not in the
                           ordinary course of business;

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                                    (B) interest, fees and other charges paid or
                           accrued on Indebtedness, including, without
                           limitation, interest on Capitalized Leases that is
                           imputed in accordance with GAAP;

                                    (C)     income taxes which are accrued, but
                           not paid;

                                    (D)     depreciation,  amortization  and all
                           other non-cash items deducted in determining  such
                           net income; and

                                    (E) rent expense paid or accrued under all
                           Operating Leases related to such Store or Stores,
                           including the Lease(s) of such Store or Stores and
                           all equipment leases which are not Capitalized Leases
                           pertaining to equipment located at such Store or
                           Stores; and

                  (ii) minus the sum of the following (without duplication), to
                  the extent included in determining such net income for such
                  period and to the extent attributable to such Store or Stores
                  for such period:

                                    (A) gains from sales, exchanges and other
                           dispositions of Property, and other extraordinary and
                           non-recurring gains, in each case not in the ordinary
                           course of business;

                                    (B)     proceeds of any insurance other than
                           business interruption insurance; and

                                    (C) any other non-cash item included in
                           determining such net income.

          Store Fixed Charges:  during any period with respect to any designated
          Store  or  Stores,  as  applicable,  the  sum of (i) all  payments  of
          principal, interest, premium, loan fees and other charges with respect
          to  Indebtedness  for  Borrowed  Money made or  required to be made by
          Borrower  which are  allocable  to such Store or Stores plus (ii) rent
          expense paid or accrued under all Operating Leases of Borrower related
          to such Store or Stores  including  the  applicable  Lease(s)  of such
          Store or Stores and all  equipment  leases  which are not  Capitalized
          Leases pertaining to equipment located at such Store or Stores.

          Subsidiary: any corporation, general partnership, limited partnership,
          limited  liability  company,  limited  liability  partnership or other
          entity with respect to which another Person owns or controls, directly
          or  indirectly,  such  amount of  outstanding  shares or other  equity
          interests   of  such   corporation,   general   partnership,   limited
          partnership,  limited liability company, limited liability partnership
          or other entity as have at the time of any determination hereunder 50%
          or more of the ordinary voting power for the election of directors (or
          their equivalent under the laws of the jurisdiction of organization of
          such corporation,  general partnership,  limited partnership,  limited
          liability company, limited liability partnership or other entity).

                                       12
<PAGE>

          Substitute Store: as defined in subsection 2.6.4(a).

          Substitution Conditions: as defined in subsection 2.6.4(a).

          Substitution Documents: as defined in subsection 2.6.4(a).

          Termination  Event: (i) a "Reportable Event" described in Section 4043
          of ERISA and the regulations issued thereunder; or (ii) the withdrawal
          of Borrower or any of its ERISA  Affiliates from a Pension Plan during
          a plan year in which it was a  "substantial  employer"  as  defined in
          Section  4001(a)(2);  or (iii) the  termination of a Pension Plan, the
          filing  of a notice  of intent  to  terminate  a  Pension  Plan or the
          treatment of a Pension Plan  amendment as a termination  under Section
          4041 of ERISA; or (iv) the institution of proceedings to terminate, or
          the  appointment of a trustee with respect to, any Pension Plan by the
          PBGC;  or (v) any other  event or  condition  which  would  constitute
          grounds under Section  4042(a) of ERISA for the termination of, or the
          appointment of a trustee to administer,  any Pension Plan; or (vi) the
          partial  or  complete  withdrawal  of  Borrower  or any  of its  ERISA
          Affiliates  from a  Multiemployer  Plan; or (vii) the  imposition of a
          lien  pursuant to Section 412 of the Code or Section 302 of ERISA;  or
          (viii) any event or condition which results in the  reorganization  or
          insolvency  of a  Multiemployer  Plan under  Sections  4241 or 4245 of
          ERISA; or (ix) any event or condition which results in the termination
          of  a  Multiemployer   Plan  under  Section  4041A  of  ERISA  or  the
          institution by the PBGC of  proceedings  to terminate a  Multiemployer
          Plan under Section 4042 of ERISA.

          Term Loan A: the term loan to be made by FINOVA  pursuant  to  Section
          2.1.1.

          Term Loan A Closing: the disbursement of Term Loan A.

          Term Loan A Closing Date: the date the Term Loan A Closing occurs.

          Term Loan A Loan  Year:  a period of time from the Term Loan A Closing
          Date  or any  anniversary  of the  Term  Loan A  Closing  Date  to the
          immediately succeeding anniversary of the Term Loan A Closing Date.

          Term Loan B: the term loan to be made by FINOVA  pursuant  to  Section
          2.1.2.

          Term Loan B Closing: the disbursement of Term Loan B.

          Term Loan B Closing Date: the date the Term Loan B Closing occurs.

          Term Loan B Loan  Year:  a period of time from the Term Loan B Closing
          Date  or any  anniversary  of the  Term  Loan B  Closing  Date  to the
          immediately succeeding anniversary of the Term Loan B Closing Date.

          Term Loan C: the term loan to be made by FINOVA  pursuant  to  Section
          2.1.3.

          Term Loan C Closing: the disbursement of Term Loan C.

                                       13
<PAGE>

          Term Loan C Closing Date: the date the Term Loan C Closing occurs.

          Term Loan C Loan  Year:  a period of time from the Term Loan B Closing
          Date  or any  anniversary  of the  Term  Loan B  Closing  Date  to the
          immediately succeeding anniversary of the Term Loan B Closing Date.

          Term Note A: a promissory  note in the principal  amount of $5,000,000
          executed and delivered by Borrower to FINOVA to evidence Term Loan A.

          Term Note B: a promissory  note in the principal  amount of $4,540,000
          executed and delivered by Borrower to FINOVA to evidence Term Loan B.

          Term Note C: a promissory  note in the principal  amount of $4,540,000
          executed and delivered by Borrower to FINOVA to evidence Term Loan C.

         1.2 Time Periods. In this Loan Agreement and the other Loan
Instruments, in the computation of periods of time from a specified date to a
later specified date, (i) the word "from" means "from and including," (ii) the
words "to" and "until" each mean "to, but excluding" and (iii) the words
"through," "end of" and "expiration" each mean "through and including." Unless
otherwise specified, all references in this Loan Agreement and the other Loan
Instruments to (i) a "month" shall be deemed to refer to a calendar month, (ii)
a "quarter" shall be deemed to refer to a calendar quarter and (iii) a "year"
shall be deemed to refer to a calendar year.

         1.3 Accounting Terms and Determinations. All accounting terms not
specifically defined herein shall be construed, all accounting determinations
hereunder shall be made and all financial statements required to be delivered
pursuant hereto shall be prepared in accordance with GAAP as in effect at the
time of such interpretation, determination or preparation, as applicable. In the
event that any Accounting Changes (as hereinafter defined) occur and such
changes result in a change in the method of calculation of financial covenants,
standards or terms contained in this Loan Agreement, then Borrower and FINOVA
agree to enter into negotiations to amend such provisions of this Loan Agreement
so as to reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of Borrower shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
For purposes hereof, "Accounting Changes" shall mean (i) changes in generally
accepted accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants (or any successor
thereto) or other appropriate authoritative body and (ii) changes in accounting
principles as approved by the Accountants.

         1.4 References. All references in this Loan Agreement to "Article,"
"Section," "subsection," "subparagraph," "clause" or "Exhibit," unless otherwise
indicated, shall be deemed to refer to an Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.

         1.5 FINOVA's Discretion. Whenever the terms "satisfactory to FINOVA,"
"determined by FINOVA," "acceptable to FINOVA," "FINOVA shall elect," "FINOVA
shall request," "at the option or election of FINOVA," or similar terms are used
in the Loan Instruments, except as otherwise specifically provided therein, such

                                       14
<PAGE>

terms shall mean satisfactory to, at the election or option of, determined by,
acceptable to or requested by FINOVA, in its sole and unlimited discretion.

         1.6 Borrower's Knowledge. Any statements, representations or warranties
in the Loan Instruments that are based upon the best knowledge of Borrower or an
officer thereof shall be deemed to have been made after due inquiry by Borrower
or an officer, as applicable, with respect to the matter in question.

                                   ARTICLE II

                           LOANS AND TERMS OF PAYMENT

         2.1      Loans.

                  2.1.1    Term Loan A.

                  (a)      Amount.  Term Loan A shall consist of a term loan
                  from FINOVA to Borrower in the amount of $5,000,000.

                  (b) Disbursement. FINOVA shall disburse Term Loan A to or as
                  directed by Borrower when all of the terms and conditions set
                  forth in Sections 4.1 and 4.2 have been satisfied.

                  (c) Use of Proceeds. The proceeds of Term Loan A shall be used
                  to reimburse Borrower for the Financeable Costs incurred in
                  developing the Owned Store.

                  (d)      Term Note A.   Term Loan A shall be evidenced by
                  Term Note A.

                  (e)      Reborrowing.  Borrower shall not be entitled to
                  reborrow any portion of Term Loan A which is repaid or
                  prepaid.

                  2.1.2    Term Loan B.

                  (a)      Amount.  Term Loan B shall consist of a term loan
                  from FINOVA to Borrower in the amount of $4,540,000.

                  (b) Disbursement. FINOVA shall disburse Term Loan B to or as
                  directed by Borrower at any time on or prior to August 1, 2000
                  provided all of the terms and conditions set forth in Sections
                  4.1 and 4.3 have been satisfied.

                  (c)      Use of Proceeds.  The proceeds of Term Loan B shall
                  be used to consummate the Eden Prairie Acquisition.

                  (d)      Term Note B.   Term Loan B shall be evidenced by Term
                  Note B.

                  (e)      Reborrowing.  Borrower shall not be entitled to
                  reborrow any portion of Term Loan B which is repaid or
                  prepaid.

                                       15
<PAGE>

                  2.1.3    Term Loan C.

                  (a)      Amount.  Term Loan C shall consist of a term loan
                  from FINOVA to Borrower in the amount of $4,540,000.

                  (b) Disbursement. FINOVA shall disburse Term Loan C to or as
                  directed by Borrower at any time on or prior to August 1, 2000
                  provided all of the terms and conditions set forth in Sections
                  4.1 and 4.4 have been satisfied.

                  (c)      Use of Proceeds.  The proceeds of Term Loan C shall
                  be used to consummated the Minnetonka Acquisition.

                  (d)      Term Note C.   Term Loan C shall be evidenced by Term
                  Note C.

                  (e)      Reborrowing.  Borrower shall not be entitled to
                  reborrow any portion of Term Loan C which is repaid or
                  prepaid.

         2.2      Interest.

                  2.2.1 Interest Rate. Except as provided in subsection 2.2.2:

                  (a) Term Loan A. The Principal Balance of Term Loan A shall
                  bear interest at a fixed rate per annum equal to 10.23%.

                  (b) Term Loan B. The Principal Balance of Term Loan B shall
                  bear interest at a fixed rate per annum equal to the yield on
                  the 11.75% February 5, 2010 U.S. Treasury Note/Bond as
                  published in The Wall Street Journal on the Friday before the
                  Term Loan B Closing Date plus 3.75% per annum.

                  (c) Term Loan C. The Principal Balance of Term Loan C shall
                  bear interest at a fixed rate per annum equal to the yield on
                  the 11.75% February 5, 2010 U.S. Treasury Note/Bond as
                  published in The Wall Street Journal on the Friday before the
                  Term Loan C Closing Date plus 3.75% per annum.

                  2.2.2    Default Rate.  During a Default Rate Period, the
Principal Balance shall bear interest at the applicable Default Rate.

                  2.2.3 Interest Computation. Interest shall be computed on the
basis of a year consisting of 360 days and charged for the actual number of days
during the period for which interest is being charged. In computing interest,
the date of funding of a Loan shall be included and the date of payment shall be
excluded.

                  2.2.4 Maximum Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Instrument, FINOVA shall not
collect a rate of interest on any obligation or liability due and owing by

                                       16
<PAGE>

Borrower to FINOVA in excess of the maximum contract rate of interest permitted
by applicable law ("Excess Interest"). All fees, charges, goods, things in
action or any other sums or things of value (other than items (a), (b) and (c)
below) paid or payable by Borrower (collectively, the "Additional Sums"),
whether pursuant to the Notes, this Loan Agreement, the other Loan Instruments
or any other document or instrument in any way pertaining to the Loans, that,
under the laws of the State of Arizona, may be deemed to be interest with
respect to the Loans, for the purpose of any laws of the State of Arizona that
may limit the maximum amount of interest to be charged with respect to the Loans
shall be payable by Borrower and shall be deemed to be additional interest, and
for such purposes only, the agreed upon and "contracted for rate of interest"
with respect to the Loan shall be deemed to be increased by the rate of interest
resulting from the Additional Sums. FINOVA and Borrower agree that the interest
laws of the State of Arizona shall govern the relationship among them and
understand and believe that the transactions contemplated by the Loan
Instruments comply with the usury laws of the State of Arizona, but in the event
of a final adjudication to the contrary, Borrower shall be obligated to pay,
nunc pro tunc, to FINOVA only such interest as then shall be permitted by the
laws of the state found to govern the contract relationship between FINOVA and
Borrower. For the purpose of any laws of the State of Arizona that may limit the
maximum amount of interest to be charged with respect to a loan, the "contracted
for rate of interest" for the Loan shall consist of the following: (a) interest
calculated in accordance with the provisions of subsection 2.2.1 and 2.2.2; (b)
the late charges calculated in accordance with the provisions of Section 2.4;
(c) the Loan Fees; and (d) all Additional Sums, if any. Borrower agrees to pay
an effective "contracted for rate of interest" which is the sum of items (a),
(b), (c) and (d) above. If any Excess Interest is provided for or determined by
a court of competent jurisdiction to have been provided for in this Loan
Agreement or any other Loan Instrument, then in such event (i) no Obligor shall
be obligated to pay such Excess Interest, (ii) any Excess Interest collected by
FINOVA shall be, at FINOVA's option, (A) applied to the Principal Balance of any
Loan in such manner as FINOVA may elect or to accrued and unpaid interest not in
excess of the maximum rate permitted by applicable law or (B) refunded to the
payor thereof, (iii) the interest rates provided for herein (collectively,
including, without limitation, the Loan Fees, the "Stated Rate") shall be
automatically reduced to the maximum rate allowed from time to time under
applicable law (the "Maximum Rate") and this Loan Agreement and the other Loan
Instruments, as applicable, shall be deemed to have been, and shall be, modified
to reflect such reduction, and (iv) neither Borrower nor any other Obligor shall
have any action against FINOVA for any damages arising out of the payment or
collection of such Excess Interest.

         2.3      Payments.

                  2.3.1 Stub Period Interest. Interest which will accrue on the
Principal Balance of any Loan from the Closing Date of such Loan through the
last day of the month in which such Closing Date occurs shall be paid in advance
on such Closing Date.

                  2.3.2    Monthly Installments.
                                       17
<PAGE>

                  (a) Term Loan A. Commencing on the first Business Day of June,
                  2000 and on the first Business Day of each month thereafter
                  through the first Business Day of April, 2010, the Principal
                  Balance of Term Loan A and all accrued and unpaid interest
                  thereon shall be payable in 119 equal monthly installments of
                  $49,015.47.

                  (b) Term Loan B. Commencing on the first Business Day of the
                  first month following the month in which the Term Loan B
                  Closing Date occurs and on the first Business Day of each
                  month thereafter through the first Business Day of April,
                  2010, the Principal Balance of Term Loan B and all accrued and
                  unpaid interest thereon shall be payable in monthly
                  installments, each in an amount equal to the amount, based on
                  a mortgage style amortization schedule, which would fully
                  amortize the Principal Balance of Term Loan B by May 1, 2020.

                  (c) Term Loan C. Commencing on the first Business Day of the
                  first month following the month in which the Term Loan C
                  Closing Date occurs and on the first Business Day of each
                  month thereafter through the first Business Day of April,
                  2010, the Principal Balance of Term Loan C and all accrued and
                  unpaid interest thereon shall be payable in monthly
                  installments, each in an amount equal to the amount, based on
                  a mortgage style amortization schedule, which would fully
                  amortize the Principal Balance of Term Loan C by May 1, 2020.

                  2.3.3 Payment at Maturity. The remaining Principal Balance,
together with all accrued and unpaid interest thereon and all other amounts
which then are due and payable pursuant to the terms of the Loan Instruments,
shall be due and payable in full on the Maturity Date.

         2.4 Late Charges. If a payment of principal or interest to be made
pursuant to this Loan Agreement becomes past due for a period in excess of ten
days, Borrower shall pay on demand to FINOVA a late charge of 10% of the amount
of such overdue payment.

         2.5      Loan Fees.

                  2.5.1 Term Loan A. Borrower shall pay to FINOVA a loan fee of
$50,000, which shall be deemed to be fully earned and payable upon the Term Loan
A Closing Date and against which FINOVA shall credit $8,333.33 of the $25,000
deposit (net of FINOVA's expenses) previously paid by Borrower to FINOVA.

                  2.5.2 Term Loan B. Borrower shall pay to FINOVA a loan fee of
$45,400, which shall be deemed to be fully earned and payable upon the Term Loan
B Closing Date and against which FINOVA shall credit $8,333.33 of the $25,000
deposit (net of FINOVA's expenses) previously paid by Borrower to FINOVA.

                                       18
<PAGE>

                  2.5.3 Term Loan C. Borrower shall pay to FINOVA a loan fee of
$45,400, which shall be deemed to be fully earned and payable upon the Term Loan
C Closing Date and against which FINOVA shall credit $8,333.34 of the $25,000
deposit (net of FINOVA's expenses) previously paid by Borrower to FINOVA.

         2.6      Prepayments.

                  2.6.1 Voluntary Prepayment of Term Loan A. Borrower may not
prepay any portion of the Principal Balance of Term Loan A at any time during
the first two Term Loan A Loan Years. Borrower voluntarily may prepay the
Principal Balance of Term Loan A in whole, but not in part, at any time after
the second Term Loan A Loan Year subject to the following conditions:

                  (a) Prepayment Premium. Concurrently with any such voluntary
                  prepayment of the Principal Balance of Term Loan A, Borrower
                  shall pay to FINOVA a prepayment premium equal to a percentage
                  of the amount of the Principal Balance prepaid, determined in
                  accordance with the following schedule:

                                                         Percentage of Principal
                           Period of Prepayment              Balance Prepaid

                           Third Term Loan A Loan Year            5.0%
                           Fourth Term Loan A Loan Year           4.0%
                           Fifth Term Loan A Loan Year            3.0%
                           Sixth Term Loan A Loan Year            2.0%
                           Seventh Term Loan A Loan Year
                            and thereafter                        1.0%

                  (b) Notice of Prepayment. Not less than 30 days prior to the
                  date upon which Borrower desires to prepay the Principal
                  Balance of Term Loan A, Borrower shall deliver to FINOVA
                  notice of its intention to prepay, which notice shall state
                  the prepayment date and the amount of the Principal Balance of
                  Term Loan A as of the prepayment date. If Borrower delivers to
                  FINOVA a notice of prepayment and fails to make such
                  prepayment, Borrower shall reimburse FINOVA on demand in the
                  amount of any loss, cost and/or expense incurred by FINOVA as
                  a result of FINOVA's reliance on such notice, including
                  without limitation, any loss, cost or expense resulting from
                  any contractual obligations of FINOVA in connection with the
                  reinvestment of the amount indicated in such notice of
                  prepayment.

                  (c) Additional Payments. Concurrently with any prepayment of
                  the Principal Balance of Term Loan A, Borrower shall pay to
                  FINOVA accrued and unpaid interest on the Principal Balance
                  which is being prepaid to the date on which FINOVA is in

                                       19
<PAGE>

                  receipt of Good Funds, and any other sums which are due and
                  payable pursuant to the terms of any of the Loan Instruments.

                  2.6.2 Voluntary Prepayment of Term Loan B. Borrower may not
prepay any portion of the Principal Balance of Term Loan B at any time during
the first two Term Loan B Loan Years (except to the extent permitted under
subsection 2.6.4). Borrower voluntarily may prepay the Principal Balance of Term
Loan B in whole, but not in part (except to the extent permitted under
subsection 2.6.4), at any time after the second Term Loan B Loan Year subject to
the following conditions:

                  (a) Prepayment Premium. Concurrently with any such voluntary
                  prepayment of the Principal Balance of Term Loan B, Borrower
                  shall pay to FINOVA a prepayment premium equal to a percentage
                  of the amount of the Principal Balance prepaid, determined in
                  accordance with the following schedule:

                                                         Percentage of Principal
                           Period of Prepayment              Balance Prepaid

                           Third Term Loan B Loan Year             5.0%
                           Fourth Term Loan B Loan Year            4.0%
                           Fifth Term Loan B Loan Year             3.0%
                           Sixth Term Loan B Loan Year             2.0%
                           Seventh Term Loan B Loan Year
                            and thereafter                         1.0%

                  (b) Notice of Prepayment. Not less than 30 days prior to the
                  date upon which Borrower desires to prepay the Principal
                  Balance of Term Loan B, Borrower shall deliver to FINOVA
                  notice of its intention to prepay, which notice shall state
                  the prepayment date and the amount of the Principal Balance of
                  Term Loan B as of the prepayment date. If Borrower delivers to
                  FINOVA a notice of prepayment and fails to make such
                  prepayment, Borrower shall reimburse FINOVA on demand in the
                  amount of any loss, cost and/or expense incurred by FINOVA as
                  a result of FINOVA's reliance on such notice, including
                  without limitation, any loss, cost or expense resulting from
                  any contractual obligations of FINOVA in connection with the
                  reinvestment of the amount indicated in such notice of
                  prepayment.

                  (c) Additional Payments. Concurrently with any prepayment of
                  the Principal Balance of Term Loan B, Borrower shall pay to
                  FINOVA accrued and unpaid interest on the Principal Balance
                  which is being prepaid to the date on which FINOVA is in
                  receipt of Good Funds, and any other sums which are due and
                  payable pursuant to the terms of any of the Loan Instruments.

                                       20
<PAGE>

                  2.6.3 Voluntary Prepayment of Term Loan C. Borrower may not
prepay any portion of the Principal Balance of Term Loan C at any time during
the first two Term Loan C Loan Years (except to the extent permitted under
subsection 2.6.4). Borrower voluntarily may prepay the Principal Balance of Term
Loan C in whole, but not in part (except to the extent permitted under
subsection 2.6.4), at any time after the second Term Loan C Loan Year subject to
the following conditions:

                  (a) Prepayment Premium. Concurrently with any such voluntary
                  prepayment of the Principal Balance of Term Loan C, Borrower
                  shall pay to FINOVA a prepayment premium equal to a percentage
                  of the amount of the Principal Balance prepaid, determined in
                  accordance with the following schedule:

                                                         Percentage of Principal
                           Period of Prepayment               Balance Prepaid

                           Third Term Loan C Loan Year             5.0%
                           Fourth Term Loan C Loan Year            4.0%
                           Fifth Term Loan C Loan Year             3.0%
                           Sixth Term Loan C Loan Year             2.0%
                           Seventh Term Loan C Loan Year
                            and thereafter                         1.0%

                  (a) Notice of Prepayment. Not less than 30 days prior to the
                  date upon which Borrower desires to prepay the Principal
                  Balance of Term Loan C, Borrower shall deliver to FINOVA
                  notice of its intention to prepay, which notice shall state
                  the prepayment date and the amount of the Principal Balance of
                  Term Loan C as of the prepayment date. If Borrower delivers to
                  FINOVA a notice of prepayment and fails to make such
                  prepayment, Borrower shall reimburse FINOVA on demand in the
                  amount of any loss, cost and/or expense incurred by FINOVA as
                  a result of FINOVA's reliance on such notice, including
                  without limitation, any loss, cost or expense resulting from
                  any contractual obligations of FINOVA in connection with the
                  reinvestment of the amount indicated in such notice of
                  prepayment.

                  (b) Additional Payments. Concurrently with any prepayment of
                  the Principal Balance of Term Loan C, Borrower shall pay to
                  FINOVA accrued and unpaid interest on the Principal Balance
                  which is being prepaid to the date on which FINOVA is in
                  receipt of Good Funds, and any other sums which are due and
                  payable pursuant to the terms of any of the Loan Instruments.

         2.6.4    Mandatory Prepayments.

                                       21
<PAGE>

                  (a)      Mandatory Prepayment Amount.  If a Mandatory
                  Prepayment Event occurs, then, on the applicable Mandatory
                  Prepayment Date, Borrower shall prepay the Principal Balance
                  in an amount equal to the applicable Mandatory Prepayment
                  Amount.

                  As used herein, the following terms shall have the following
                  meanings:

                  "Mandatory Prepayment Event" shall mean the failure of
                  Borrower, as of the date of a closure, sale or Lease
                  Expiration of a Collateral Store, to replace such Collateral
                  Store with a Substitute Store and to satisfy the Substitution
                  Conditions.

                  "Mandatory Prepayment Date" shall mean the date the closure,
                  sale or Lease Expiration which is the subject of a Mandatory
                  Prepayment Event occurs.

                  "Mandatory Prepayment Amount" shall mean the amount,
                  determined by FINOVA as of the applicable Mandatory Prepayment
                  Date, which, after giving effect to the applicable Mandatory
                  Prepayment Event and the application of such amount to reduce
                  the Principal Balance, would cause the ratio of the Store Cash
                  Flow of the remaining Collateral Stores as of the twelve month
                  period most recently ended to the projected Store Fixed
                  Charges of the remaining Collateral Stores for the succeeding
                  twelve month period to be no less than 1.25.

                  "Lease Expiration" shall mean the termination of the Lease of
                  any Collateral Store prior to May 1, 2010 for any reason or
                  the failure of Borrower to renew or extend the term of the
                  Lease of any Collateral Store which expires prior to May 1,
                  2010 at least 60 days prior to the expiration date to a date
                  not earlier than May 1, 2010.

                  "Substitute Store" shall mean, in connection with the closure
                  or sale of a Collateral Store or a Lease Expiration with
                  respect to a Collateral Store and the replacement of such
                  Collateral Store, a Store:

                                    (1)     designated  by  Borrower to replace
                           the  Collateral  Store which is the subject of a
                           sale, closure or Lease Expiration;

                                    (2)     which is the subject of Lease which
                           does not expire prior to May 1, 2010; and

                                    (3) with respect to which the
                           representations and warranties contained in Section
                           5.5 are true and correct in all material respects,
                           after giving effect to the applicable Substitution
                           Documents.

                                       22
<PAGE>

                  "Substitution Conditions" shall mean, in connection with the
                  replacement of a Collateral Store with a Substitute Store,
                  that, as of the date such Collateral Store is closed or sold
                  or the date of the Lease Expiration of such Collateral Store,
                  as applicable:

                                    (1) Borrower shall have demonstrated to the
                           satisfaction of FINOVA that the ratio of the Store
                           Cash Flow of the remaining Collateral Stores and the
                           Substitute Store as of the twelve month period most
                           recently ended to the projected Store Fixed Charges
                           of the remaining Collateral Stores and the Substitute
                           Store for the succeeding twelve month period is not
                           less than 1.25;

                                    (2) Borrower shall have demonstrated to the
                           satisfaction of FINOVA that such Substitute Store has
                           not suffered a material adverse trend in financial
                           performance for the preceding three year period;

                                    (3) Borrower shall have delivered to FINOVA
                           the Substitution Documents with respect to the
                           Substitute Store, each duly authorized and executed
                           and in form and substance satisfactory to FINOVA;

                                    (4) all filings of Uniform Commercial Code
                           financing statements and other actions necessary to
                           perfect and maintain the Security Interests as first,
                           valid and perfected Liens in the Collateral covered
                           thereby, subject only to Permitted Liens and subject
                           in priority only to Permitted Prior Liens, shall have
                           been filed or taken and FINOVA shall have received
                           such UCC, state and federal tax Lien, pending suit
                           and other searches as it deems necessary to confirm
                           the foregoing;

                                    (5) FINOVA shall have received evidence that
                           all insurance coverage required pursuant to Section
                           6.6 with respect to such Substitute Store is in full
                           force and effect and that all premiums thereon have
                           been paid in full; and

                                    (6) no Event of Default or Incipient Default
                           shall exist and be continuing or be created by the
                           replacement of such Collateral Store with such
                           Substitute Store.

                  "Substitution Documents" shall mean, in connection with the
                  replacement of a Collateral Store with a Substitute Store (i)
                  a certified copy of the Lease of such Substitute Store, (ii) a
                  Landlord's Waiver from the Landlord under the Lease of such
                  Substitute Store and (iii) such amendments to this Loan
                  Agreement and the Security Agreement as are necessary to
                  reflect the substitution of such Substitute Store for such
                  Collateral Store, together with a UCC-1 financing statement
                  naming Borrower, as debtor, and FINOVA, as secured party,
                  covering the Collateral located at such Substitute Store

                                       23
<PAGE>

                  (a) Additional Payments; Prepayment Premium. Concurrently with
                  any mandatory prepayment pursuant to subsection 2.6.4(a),
                  Borrower shall pay to FINOVA accrued and unpaid interest on
                  the portion of the Principal Balance which is being prepaid to
                  the date on which FINOVA is in receipt of Good Funds, any
                  other sums which are due and payable pursuant to the terms of
                  any of the Loan Instruments and a prepayment premium equal to
                  a percentage of the Mandatory Prepayment Amount, determined in
                  accordance with the following schedule:

                                                         Percentage of Mandatory
                     Period of Prepayment                   Prepayment Amount

                     Third Term Loan B Loan Year
                     or Third Term Loan C Loan Year                 5.0%

                     Fourth Term Loan B Loan Year
                     or Fourth Term Loan C Loan Year                4.0%

                     Fifth Term Loan B Loan Year
                     or Fifth Term Loan C Loan Year                 3.0%

                     Sixth Term Loan B Loan Year
                     or Sixth Term Loan C Loan Year                 2.0%

                     Seventh Term Loan B Loan Year or
                     or Seventh Term Loan C Loan Year
                     and thereafter                                 1.0%

                  (c) Application of Mandatory Prepayments. Prepayments received
                  by FINOVA pursuant to this subsection 2.6.4 shall be applied
                  in the following order of priority to the payment of: (i) any
                  and all sums which are due and payable pursuant to the terms
                  of the Loan Instruments, except the Principal Balance and
                  accrued and unpaid interest thereon, (ii) the Principal
                  Balance then projected to be payable on the Maturity Date and
                  (iii) any remainder, pro rata to the remaining monthly
                  installments payable under subsection 2.3.2 in the inverse
                  order of maturity.

                  2.6.5    No Prepayment Premium.  No prepayment premium shall
be payable with respect to prepayments made from insurance proceeds.

                  2.6.6 Involuntary Prepayment. If an Event of Default occurs
and Borrower's Obligations are accelerated at any time (i) from and after the
second anniversary of the last Closing Date to occur, then, concurrently with
any payment of the Principal Balance received by FINOVA resulting from the
exercise by FINOVA of any remedy available to FINOVA, Borrower shall pay to
FINOVA a prepayment premium in an amount equal to the sum of the prepayment

                                       24
<PAGE>

premiums which would be payable if such payment was made pursuant to subsections
2.6.1, 2.6.2 and 2.6.3 and (ii) prior to the second anniversary of the last
Closing Date to occur, then, concurrently with any payment of the Principal
Balance received by FINOVA resulting from the exercise by FINOVA of any remedy
available to FINOVA, Borrower shall pay to FINOVA the Make-Whole Premium.
Borrower acknowledges and agrees that such prepayment premium is a reasonable
estimate of loss and not a penalty. Such prepayment premium is payable as
liquidated damages for loss of bargain but shall not reduce, affect or impair
any other obligation of Borrower under the Loan Instruments.

         As used herein, the following terms shall have the following meanings:

         "Acceleration Date" shall mean the date Borrower's Obligations are
accelerated.

         "Make-Whole Premium" shall mean the remainder of (i) the sum of the
         scheduled payments under Section 2.3 remaining unpaid as of the
         Acceleration Date minus (ii) the present value on the Acceleration
         Date, discounted at the highest interest rate set forth in subsection
         2.2.1, of the stream of payments described in the preceding clause (i).

         2.7 Payments after Event of Default. All payments received by FINOVA
during the existence of an Event of Default shall be applied in accordance with
Section 8.4.
                                   ARTICLE III

                              GUARANTY AND SECURITY

         Borrower's Obligations shall be (i) guaranteed by the Guarantor
pursuant to the Guaranty and (iii) secured by a Lien upon all of the Collateral,
which at all times shall be superior and prior to all other Liens, except
Permitted Prior Liens.
                                   ARTICLE IV

                              CONDITIONS OF CLOSING

         4.1      All Loans.  The obligation of FINOVA to disburse any Loan is
subject to the satisfaction of the following conditions in a manner, form and
substance satisfactory to FINOVA:

                  4.1.1 Representations and Warranties. On the applicable
Closing Date the representations and warranties of each Obligor set forth in the
Loan Instruments to which such Person is a party shall be true and correct.

                  4.1.2 Performance; No Default. Each Obligor shall have
performed and complied with all agreements and conditions contained in the Loan
Instruments to be performed by or complied with by such Person prior to or at
such disbursement and no Event of Default or Incipient Default shall then exist
or result from the disbursement of such Loan.

                                       25
<PAGE>

                  4.1.3 No Material Adverse Effect. No event or series of events
shall have occurred, and no litigation or governmental proceeding or
investigation shall be pending, which has had or could reasonably be expected to
have a Material Adverse Effect. No judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions on the
transactions to be consummated on the applicable Closing Date shall be in
effect.

                  4.1.4 Security Interests. All filings of Uniform Commercial
Code financing statements, recordings of the Mortgage and all other filings and
actions necessary to perfect and maintain the Security Interests as first, valid
and perfected Liens in the Collateral covered thereby, subject only to Permitted
Prior Liens, shall have been filed or taken and FINOVA shall have received such
UCC, state and federal tax Lien, pending suit, judgment and other Lien searches
as it deems necessary to confirm the foregoing.

                  4.1.5 Use of Assets. FINOVA shall be satisfied that Borrower
at all times shall be entitled to the use and quiet enjoyment of all Property
necessary for the continued ownership and operation of the Collateral Stores,
including, without limitation, the use of equipment, fixtures, Licenses, offices
and means of ingress and egress thereto, necessary for the operation of the
Collateral Stores.

                  4.1.6 Licenses. FINOVA shall have received evidence that (i)
Borrower is the licensee of all Licenses necessary for the operation of the
Collateral Stores and the Restaurant Business therein and (ii) such Licenses are
in full force and effect as of the respective Closing Date and no event has
occurred which could result in the termination, revocation or non-renewal of any
such License;

                  4.1.7 Business and Flood Insurance. At least three Business
Days prior to the applicable Closing Date Borrower shall have delivered to
FINOVA evidence satisfactory to FINOVA that all insurance coverage required
pursuant to Section 6.6 is in full force and effect and all premiums then due
thereon have been paid in full.

                  4.1.8 Approval of Instruments and Security Interests. FINOVA
shall have received evidence that the approval or consent shall have been
obtained from all Governmental Bodies and all other Persons whose approval or
consent is required to enable Obligors to (i) enter into and perform their
respective obligations under the Loan Instruments to which each such Person is a
party and (ii) grant the Security Interests to FINOVA.

                  4.1.9 Opinion of Counsel. FINOVA shall have received an
opinion from such local counsel to the Obligors as FINOVA reasonably may
require, addressed to FINOVA, in such form and covering such matters as FINOVA
reasonably may require.

                  4.1.10 Payment of Fees and Expenses. Borrower shall have paid
the applicable Loan Fees and all fees and expenses described in subsection
10.1.1.

                                       26
<PAGE>

         4.2      Term Loan A. The obligation of FINOVA to disburse Term Loan A
is subject to the satisfaction of the conditions set forth in Section 4.1 above,
and the following conditions in a manner, form and substance satisfactory to
FINOVA:
                  4.2.1 Store Fixed Charge Coverage. Borrower shall demonstrate
to the satisfaction of FINOVA that the ratio of the Store Cash Flow of the Owned
Store for the fiscal year ending January 2, 2000 to the projected Store Fixed
Charges of such Owned Store for the twelve month period ending May 31, 2001 is
not less than 1.25:1.00.

                  4.2.2 Delivery of Documents. The following shall have been
delivered to FINOVA, each duly authorized and executed, where applicable, and in
form and substance satisfactory to FINOVA:

                  (a)      the Loan Instruments, except those Loan Instruments
                  required to be delivered pursuant to subsections 4.3.3 and
                  4.4.3 below;

                  (b) good standing certificates for each Obligor from the State
                  in which each such Person is organized and for Borrower from
                  each State in which any Initial Store is located, each dated a
                  recent date prior to the Closing Date;

                  (c)      copies of:

                                    (1) the articles of incorporation of each
                           Obligor, certified by the Secretary of State of the
                           State in which such Obligor is organized, together
                           with all current and proposed amendments thereto,
                           certified by the corporate secretary of such Obligor;

                                    (2)     the by-laws of each  Obligor,
                           together with all current and proposed  amendments
                           thereto, certified by the corporate secretary of such
                           Obligor;

                                    (3) resolutions adopted by the board of
                           directors of each Obligor, authorizing the execution
                           and delivery by such Obligor of the Loan Instruments
                           to which such Obligor is a party and the consummation
                           of the transactions contemplated thereby, certified
                           as of the Closing Date by the corporate secretary of
                           such Obligor;

                                    (4)     signature and incumbency
                           certificates of the officers of each Obligor;

                                    (5)     the certificate of occupancy for the
                           Owned Store; and

                                    (6)     such other instruments,  documents,
                           certificates,  consents, waivers and opinions as
                           FINOVA reasonably may request; and

                           (d)      the Pay-Off Letters, if any.

                                       27
<PAGE>

                  4.2.3 Opinion of Counsel. FINOVA shall have received an
opinion dated the Closing Date from Donna Depoian, general counsel to the
Obligors, addressed to FINOVA, in such form and covering such matters as FINOVA
reasonably may require..

                  4.2.4 Financial Statements, Reports and Projections;
Inspection. FINOVA shall have received the financial statements described in
Exhibit 5.7. Borrower shall have arranged for representatives of FINOVA to visit
and inspect its offices and properties.

                  4.2.5 Title Insurance. FINOVA shall have received a
mortgagee's policy of title insurance in favor of FINOVA with respect to each
parcel of Real Estate covered by the Mortgage, issued by a title company and in
an amount satisfactory to FINOVA, showing that the Borrower has a valid fee
simple estate in each parcel of Real Estate covered by the Mortgage and insuring
that the Mortgage constitutes a valid Lien on Borrower's right, title and
interest in, to and under such parcel, subject only to Permitted Liens and
subject in priority only to Permitted Prior Liens. Each such policy shall insure
over all survey and other general exceptions contained therein and shall include
such affirmative endorsements as reasonably may be required by FINOVA and as are
available in the applicable jurisdiction, including, without limitation,
comprehensive endorsement no. 1, contiguity (if applicable), usury, doing
business, tie-in, restrictions (where applicable), encroachment (where
applicable), 3.1 zoning (including parking), last dollar, tax parcel, survey,
location and access. FINOVA shall have received copies of and found reasonably
satisfactory the provisions of each document referred to in each such policy.
FINOVA shall have received evidence that all premiums with respect to such title
insurance have been paid by Borrower.

                  4.2.6 Survey. FINOVA shall have received a recent "as-built"
survey of each parcel of Real Estate covered by the Mortgage, certified to
FINOVA and the title company containing a flood plain certification, showing no
matters or exceptions which are not Permitted Liens and otherwise in sufficient
detail as to permit the elimination of any survey exceptions to the title
policies described above and the issuance of the affirmative endorsements
required above.

                  4.2.7 Environmental Audit or Insurance. FINOVA shall have
received and found satisfactory an environmental audit or environmental
insurance with respect to each parcel of Real Estate designated by FINOVA.

         4.3      Term Loan B. The obligation of FINOVA to disburse Term Loan B
is subject to the satisfaction of the conditions set forth in Section 4.1 above,
and the following conditions in a manner, form and substance satisfactory to
FINOVA:
                  4.3.1    Term Loan A.   Term Loan A shall have been disbursed.

                  4.3.2 Eden Prairie Acquisition. The Eden Prairie Acquisition
shall have been consummated or will be consummated concurrently with the Term
Loan B Closing in accordance with the terms of the Eden Prairie Acquisition
Instruments and applicable law. No party to the Eden Prairie Acquisition

                                       28
<PAGE>

Instruments shall have failed to perform or comply with any obligation contained
in such applicable Eden Prairie Acquisition Instruments to be performed or
complied with by it prior to the consummation of the transactions contemplated
therein.

                  4.3.3 Delivery of Documents. The following shall have been
delivered to FINOVA, each duly authorized and executed, where applicable, and in
form and substance satisfactory to FINOVA:

                           (a)      certified copies or executed originals of
                           each of the following:

                                    (1)     the Eden Prairie Acquisition
                           Instruments; and

                                    (2)     the Eden Prairie Lease, as in effect
                           on the Term Loan B Closing Date; and

                                    (3)     the certificate of occupancy for the
                           Eden Prairie Leased Store;

                           (b)      a Landlord's Waiver from the Landlord under
                           the Eden Prairie Lease;.

                           (c)      a Solvency Certificate; and

                           (d)      a Notice of Borrowing/Disbursement Request.

                  4.3.4 Store Fixed Charge Coverage. Borrower shall demonstrate
to the satisfaction of FINOVA that the ratio of the Store Cash Flow of the Eden
Prairie Leased Store for the fiscal year ending January 2, 2000 to the projected
Store Fixed Charges for such Eden Prairie Leased Store for the twelve month
period ending May 31, 2001 is not less than 1.25:1.00.

         4.4      Term Loan C. The obligation of FINOVA to disburse Term Loan C
is subject to the satisfaction of the conditions set forth in Section 4.1 above,
and the following conditions in a manner, form and substance satisfactory to
FINOVA:
                  4.4.1    Term Loan A.   Term Loan A shall have been disbursed.

                  4.4.2 Minnetonka Acquisition. The Minnetonka Acquisition shall
have been consummated or will be consummated concurrently with the Term Loan C
Closing in accordance with the terms of the Minnetonka Acquisition Instruments
and applicable law. No party to the Minnetonka Acquisition Instruments shall
have failed to perform or comply with any obligation contained in such
applicable Minnetonka Acquisition Instruments to be performed or complied with
by it prior to the consummation of the transactions contemplated therein.

                                       29
<PAGE>

                  4.4.3 Delivery of Documents. The following shall have been
delivered to FINOVA, each duly authorized and executed, where applicable, and in
form and substance satisfactory to FINOVA:

                           (a)      certified copies or executed originals of
                           each of the following:

                                    (1)     the Minnetonka Acquisition
                                    Instruments; and

                                    (2)     the Minnetonka Lease, as in effect
                                    on the Term Loan C Closing Date; and

                                    (3)     the certificate of occupancy for the
                                    Minnetonka Leased Store;

                           (b)      a Landlord's Waiver from the Landlord under
                           the Minnetonka Lease;

                           (c)      a Solvency Certificate; and

                           (d)      a Notice of Borrowing/Disbursement Request.

                  4.4.4 Store Fixed Charge Coverage. Borrower shall demonstrate
to the satisfaction of FINOVA that the ratio of the Store Cash Flow of the
Minnetonka Leased Store for the fiscal year ending January 2, 2000 to the
projected Store Fixed Charges for such Minnetonka Leased Store for the twelve
month period ending May 31, 2001 is not less than 1.25:1.00.

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to FINOVA as follows:
         5.1 Existence and Power. Each Obligor is a corporation, duly formed,
validly existing and in good standing under the laws of the State of its
incorporation. Each Obligor is duly authorized to transact business in each
other State where such Obligor conducts business and has all requisite power and
authority to own its Property and to carry on its business as now conducted and
as proposed to be conducted.

         5.2 Authority. Each Obligor has full power and authority to enter into,
execute, deliver and carry out the terms of the Loan Instruments to which it is
a party and to incur the obligations provided for therein, all of which have
been duly authorized by all proper and necessary action and are not prohibited
by its articles of incorporation, by-laws or other organizational instruments of
such Person.

         5.3      Borrower Capital Stock and Related Matters.

                                       30
<PAGE>

                  5.3.1 Borrower Capital Stock. There is set forth in Exhibit
5.3.1 a complete description of the capital stock of Borrower and each of
Borrower's subsidiaries (collectively, "Borrower Capital Stock"), all of which
is validly issued, fully paid and non-assessable, and has been issued and sold
in compliance with all applicable federal and state laws, rules and regulations,
including, without limitation, all so-called "Blue-Sky" laws. All of the capital
stock of Borrower is owned beneficially and of record by Guarantor, free and
clear of all Liens. Borrower has four wholly-owned subsidiaries each of which is
engaged solely in owning and operating Champps Americana restaurants. All of
capital stock of each of Borrower's subsidiaries is owned beneficially and of
record by Borrower, free and clear of all Liens.

                  5.3.2 Restrictions. No Obligor (i) is a party to or has
knowledge of any agreements restricting the transfer of the Borrower Capital
Stock, except the Loan Instruments, (ii) has issued any rights which can be
convertible into or exchangeable or exercisable for any of the Borrower Capital
Stock, or 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,
any of the Borrower Capital Stock or any securities convertible into or
exchangeable or exercisable for any of the Borrower Capital Stock and (iii) is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of the Borrower Capital Stock or any convertible
rights or options.

         5.4 Binding Agreements. This Loan Agreement and the other Loan
Instruments, when executed and delivered, will constitute the valid and legally
binding obligations of each Obligor to the extent such Obligor is a party
thereto, enforceable against such Obligor in accordance with their respective
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting the enforcement of creditors' rights generally and
(ii) equitable principles (whether or not any action to enforce such document is
brought at law or in equity).

         5.5      Business and Property; Collateral Stores.

                  5.5.1 Business and Property. Borrower owns all Property
including, without limitation, the Owned Store and holds or, with respect to the
Leased Stores, shall hold, as of the Closing Date of the respective Loan
relating to the applicable Leased Store, all Leased Store Leases, Licenses and
Operating Agreements necessary to conduct its business as now conducted.
Borrower does not engage or propose to engage in any business or activity other
than the Restaurant Business.

                  5.5.2 Collateral Stores; Other Locations. There is set forth
in Exhibit 5.5.2 (i) a complete and accurate address of each Collateral Store,
(ii) the chief executive office of each Obligor and (iii) all other locations
where any books and records of Borrower pertaining to the Collateral Stores are
located.

                  5.5.3 Leased Store Leases. There is set forth in Exhibit 5.5.3
a description of each Leased Store Lease, including the name and address of the
landlord thereunder, the commencement and expiration dates thereof, a
description of all renewal or extension options with respect thereto and a
complete and accurate legal description of each parcel of Leasehold Property

                                       31
<PAGE>

which is the subject of such Leased Store Lease. Each such Leased Store Lease is
and on the Closing Date of the respective Loan relating to the applicable Leased
Store shall be in full force and effect, there has been, and shall have been, as
of such respective Closing Date, no material default in the performance of any
of its terms or conditions by any party thereto, and no claims of default have
been, or shall have been, as of such respective Closing Date, asserted with
respect thereto. The present and contemplated use of the Leasehold Property
which is the subject of such Leased Store Lease is in compliance in all material
respects with all applicable zoning ordinances and regulations and other laws
and regulations.

                  5.5.4 Licenses. There is set forth in Exhibit 5.5.4 a
description of all Licenses with respect to the Collateral Stores which have
been issued or assigned, or, with respect to the Leased Stores, shall have been
issued, as of the Closing Date of the respective Loan relating to the applicable
Leased Store, to Borrower. All of such Licenses are, or shall be, as of such
respective Closing Date, in full force and effect and have been duly, or, with
respect to the Leased Stores, shall have been issued, as of the Closing Date of
the respective Loan relating to the applicable Leased Store, issued in the name
of, or validly assigned to, Borrower, no default or breach exists, or shall
exist, as of such respective Closing Date, thereunder and Borrower has full
power and authority thereunder to conduct its Restaurant Business with respect
to the Collateral Stores.

                  5.5.5 Operating Agreements. There is set forth in Exhibit
5.5.5 a description of all material Operating Agreements with respect to the
Collateral Stores. All of such Operating Agreements are, or, with respect to the
Leased Stores, shall be, as of the Closing Date of the respective Loan relating
to the applicable Leased Store, in full force and effect and no event has
occurred which could result in the cancellation or termination of any such
Operating Agreement or the imposition thereunder of any liability upon Borrower
which could have a Material Adverse Effect.

                  5.5.6    Real Estate.  Except with respect to the Owned Store,
no Collateral Store is located upon any Real Estate.

                  5.5.7 Operation and Maintenance of Equipment. No equipment
owned or operated by Borrower which is necessary for the operation of any
Collateral Store has been used, operated or maintained in a manner which now or
hereafter could result in the cancellation or termination of the right of
Borrower to use or make use of the same or which could result in any material
liability of Borrower for damages in connection therewith. All of the equipment
and other tangible personal property owned by Borrower used in the operation of
the Collateral Stores is, in all material respects, in good operating condition
and repair (subject to normal wear and tear) and has been used, operated and
maintained in substantial compliance with all applicable laws, rules and
regulations.

                  5.5.8 Title to Property; Liens. Each Obligor has (i) good and
marketable title to all of its Property used or useful in connection with the
operation of the Collateral Stores, except (A) any License which cannot be
transferred without the consent of the applicable Governmental Body and (B) the
portion thereof consisting of a leasehold estate and (ii) a valid leasehold
estate in each portion of its Property which consists of a leasehold estate. All

                                       32
<PAGE>

of such Property is free and clear of all Liens, except Permitted Liens. Upon
the proper filing with the appropriate Governmental Bodies of appropriate
Uniform Commercial Code financing statements and the recording of the Mortgage,
the applicable Loan Instruments will create valid and perfected Liens in the
Property described therein, subject only to Permitted Prior Liens.

         5.6 Indebtedness for Borrowed Money. There is set forth in Exhibit 5.6
a description of all Indebtedness for Borrowed Money of Borrower existing as of
the Closing Date, including the principal amount thereof and the interest rate,
amortization schedule and maturity date applicable thereto.

         5.7 Financial Statements. Borrower has delivered to FINOVA the
financial statements described in Exhibit 5.7 pertaining to the operations of
the Obligors. Such financial statements present fairly in all material respects
the results of operations of the Obligors for the periods covered thereby and
the financial condition of the Obligors as of the dates indicated therein. All
of such financial statements have been prepared in conformity with GAAP. Since
January 2, 2000, there has been no change which has had a Material Adverse
Effect. Borrower also has delivered to FINOVA a pro-forma balance sheet as of
the Closing Date. Such pro-forma balance sheet, which assumes the consummation
of the transactions contemplated by the Loan Instruments, presents fairly in all
material respects the anticipated financial condition of Borrower as of the
Closing Date of Term Loan A.

         5.8 Litigation. There is set forth in Exhibit 5.8 a description of all
actions, suits, arbitration proceedings and claims pending or, to the best
knowledge of Borrower, threatened against any Obligor or maintained by any
Obligor at law or in equity or before any Governmental Body, or in respect of
which any Obligor may have any liability which could reasonably be expected to
be adversely determined and, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.

         5.9 Defaults in Other Agreements; Consents; Conflicting Agreements. No
Obligor is in default under any agreement to which it is a party or by which it
or any of its Property is bound, the effect of which default could have a
Material Adverse Effect. No authorization, consent, approval or other action by,
and no notice to or filing with, any Governmental Body or any other Person which
has not already been obtained, taken or filed, as applicable, is required (i)
for the due execution, delivery or performance by any Obligor of any of the Loan
Instruments to which it is a party or (ii) as a condition to the validity or
enforceability of any of the Loan Instruments to which it is a party or any of
the transactions contemplated thereby or the priority of the Security Interests,
except for certain filings to establish and perfect the Security Interests. No
provision of any mortgage, indenture, contract, agreement, statute, rule,
regulation, judgment, decree or order binding on any Obligor or affecting its
Property conflicts with, or requires any consent which has not already been
obtained under, or would in any way prevent the execution, delivery or
performance of the terms of any of the Loan Instruments or affect the validity
or priority of the Security Interests. The execution, delivery and performance
of the terms of the Loan Instruments will not constitute a default under, or
result in the creation or imposition of, or obligation to create, any Lien upon
the Property of any Obligor pursuant to the terms of any such mortgage,
indenture, contract or agreement.

                                       33
<PAGE>

         5.10 Taxes. Each Obligor has filed all tax returns required to be
filed, and has paid, or made adequate provision for the payment of, all taxes
shown to be due and payable on such returns or in any assessments made against
it, and no tax liens have been filed and, to the best knowledge of Borrower, no
claims are being asserted in respect of such taxes which are required by GAAP to
be reflected in the financial statements of such Obligor and are not so
reflected therein. The charges, accruals and reserves on the books of each
Obligor with respect to all federal, state, local and other taxes are considered
by the management of Borrower to be adequate, and Borrower does not know of any
unpaid assessment which is or might be due and payable by any Obligor or create
a Lien against such Obligor's Property, except such assessments as are being
contested in good faith and by appropriate proceedings diligently conducted, and
for which adequate reserves have been set aside in accordance with GAAP. None of
the tax returns of any Obligor are under audit or investigation by the Internal
Revenue Service.

         5.11 Compliance with Applicable Laws. No Obligor is in default in
respect of any judgment, order, writ, injunction, decree or decision of any
Governmental Body, which default could have a Material Adverse Effect. Each
Obligor is in compliance in all material respects with all applicable statutes
and regulations, including, without limitation, all Environmental Laws, ERISA,
ADA and all laws and regulations relating to unfair labor practices, equal
employment opportunity and employee safety, of all Governmental Bodies. No
material condemnation, eminent domain or expropriation has been commenced or, to
the best knowledge of Borrower, threatened against the Property which any
Obligor owns or will own upon the Closing.

         5.12 Patents, Trademarks, Franchises, Agreements. Each Obligor owns,
possesses or has the right to use all patents, trademarks, service marks, trade
names, copyrights, franchises and rights with respect thereto which are
necessary for the conduct of its business, the failure to own, possess or have
the right to use could have a Material Adverse Effect, without any known
conflict with the rights of others.

         5.13 Regulatory Matters. Each Obligor (i) has duly and timely filed all
reports and other filings which are required to be filed by Borrower under any
applicable law, rule or regulation of any Governmental Body, the non-filing of
which could have a Material Adverse Effect, and (ii) is in compliance with all
such laws, rules and regulations, the noncompliance with which could have a
Material Adverse Effect.

         5.14 Environmental Matters. Each Obligor is in compliance in all
material respects with all applicable Environmental Laws and no portion of any
Real Estate or Leasehold Property has been used as a land fill. There currently
are not any known Hazardous Materials generated, manufactured, released, stored,
buried or deposited over, beneath, in or on (or used in the construction and/or
renovation of) the Real Estate or Leasehold Property in violation of applicable
Environmental Laws.

         5.15     Application of Certain Laws and Regulations.  Borrower is not
and no Affiliate of Borrower is:

                                       34
<PAGE>

                  5.15.1   Investment Company Act.  An "investment company," or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.

                  5.15.2 Holding Company Act. A "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.

                  5.15.3 Foreign or Enemy Status. (i) An "enemy" or an "ally of
an enemy" within the meaning of Section 2 of the Trading with the Enemy Act,
(ii) a "national" of a foreign country designated in Executive Order No. 8389,
as amended, or of any "designated enemy country" as defined in Executive Order
No. 9095, as amended, of the President of the United States of America, in each
case within the meaning of such Executive Orders, as amended, or of any
regulation issued thereunder, (iii) a "national of any designated foreign
country" within the meaning of the Foreign Assets Control Regulations or the
Cuban Assets Control Regulations of the United States of America (Code of
Federal Regulations, Title 31, Chapter V, Part 515, Subpart B, as amended) or
(iv) an alien or a representative of any alien or foreign government within the
meaning of Section 310 of Title 47 of the United States Code.

                  5.15.4 Regulations as to Borrowing. Subject to any statute or
regulation which regulates the incurrence of any Indebtedness for Borrowed
Money, including, without limitation, statutes or regulations relative to common
or interstate carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.

         5.16 Margin Regulations. None of the transactions contemplated by this
Loan Agreement or any of the other Loan Instruments, including the use of the
proceeds of the Loans, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T, U and X, and no
Obligor owns or intends to carry or purchase any "margin security" within the
meaning of such Regulation U or G.

         5.17 No Misrepresentation. Neither this Loan Agreement nor any other
Loan Instrument, certificate, financial statement, information or report
furnished or to be furnished by or on behalf of any Obligor to FINOVA in
connection with any of the transactions contemplated hereby or thereby, contains
or will contain a misstatement of material fact, or omits or will omit to state
a material fact required to be stated in order to make the statements contained
herein or therein, taken as a whole, not misleading in the light of the
circumstances under which such statements were made. There is no fact, other
than information known to the public generally, known to Borrower after diligent
inquiry, that could have a Material Adverse Effect that has not expressly been
disclosed to FINOVA in writing.

         5.18     Employee Benefit Plans.

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<PAGE>

                  5.18.1 ERISA and Code Compliance and Liability. Borrower and
each ERISA Affiliate are in compliance with all applicable provisions of ERISA
and the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except where failure to comply would not result in a
material liability to Borrower and except for any required amendments for which
the remedial amendment period as defined in Section 401(b) of the Code has not
yet expired. Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such plan has been determined to
be exempt under Section 401(a) of the Code. No material liability has been
incurred by Borrower or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan.

                  5.18.2 Funding. No Pension Plan has been terminated, nor has
any accumulated funding deficiency (as defined in Section 412 of the Code) been
insured (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has Borrower or any ERISA
Affiliate failed to make any contributions or to pay any amounts due and owing
as required by Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under Section 412 of
the Code or Section 302 of ERISA, nor has there been any event requiring any
disclosure under Section 4041(c)(3)(C), 4063(a) or 4068 of ERISA with respect to
any Pension Plan.

                  5.18.3 Prohibited Transactions and Payments. Neither Borrower
nor any ERISA Affiliate has: (i) engaged in a nonexempt "prohibited transaction"
as such term is defined in Section 406 of ERISA or Section 4975 of the Code;
(ii) incurred any liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and unpaid;
(iii) failed to make a required contribution or payment to a Multiemployer Plan;
or (iv) failed to make a required installment or other required payment under
Section 412 of the Code.

                  5.18.4   No Termination Event.  No Termination Event has
occurred or is reasonably expected to occur.

                  5.18.5 ERISA Litigation. No material proceeding, claim,
lawsuit and/or investigation is existing or, to the best knowledge of Borrower,
threatened concerning or involving any (i) employee welfare benefit plan (as
defined in Section 3(1) of ERISA) currently maintained or contributed to by
Borrower or any ERISA Affiliate, (ii) Pension Plan or (iii) Multiemployer Plan.

         5.19     Employee Matters.

                  5.19.1 Collective Bargaining Agreements; Grievances. Except as
set forth in Exhibit 5.20.1, (i) none of the employees of Borrower is subject to
any collective bargaining agreement with Borrower, (ii) no petition for
certification or union election is pending with respect to the employees of
Borrower and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of Borrower and (iii)

                                       36
<PAGE>

there are no strikes, slowdowns, work stoppages, unfair labor practice
complaints, grievances, arbitration proceedings or controversies pending or, to
the best knowledge of Borrower, threatened against Borrower by any of Borrower's
employees, other than employee grievances or controversies arising in the
ordinary course of business that could not in the aggregate be expected to have
a Material Adverse Effect.

                  5.19.2 Claims Relating to Employment. Neither Borrower nor, to
Borrower's best knowledge, any employee of Borrower, is subject to any
employment agreement or non-competition agreement with any former employer or
any other Person which agreement would have a Material Adverse Effect due to (i)
any information which Borrower would be prohibited from using under the terms of
such agreement or (ii) any legal considerations relating to unfair competition,
trade secrets or proprietary information.

         5.20 Burdensome Obligations. After giving effect to the transactions
contemplated by the Loan Instruments (i) no Obligor (A) will be a party to or be
bound by any franchise, agreement, deed, lease or other instrument, or be
subject to any restriction, which is so unusual or burdensome so as to cause, in
the foreseeable future, a Material Adverse Effect and (B) intends to incur, or
believes that it will incur, debts beyond its ability to pay such debts as they
become due, and (ii) each Obligor (A) owns and will own Property, the fair
saleable value of which is (I) greater than the total amount of its liabilities
(including contingent liabilities) and (II) greater than the amount that will be
required to pay the probable liabilities of its then existing debts as they
become absolute and matured, and (B) has and will have capital that is not
unreasonably small in relation to its business as presently conducted and as
proposed to be conducted. Borrower does not presently anticipate that future
expenditures needed to meet the provisions of federal or state statutes, orders,
rules or regulations will be so burdensome so as to have a Material Adverse
Effect.

         5.21 Broker Fees.   The services of a broker or other similar agent
have not been used in connection with the Loans.

         5.22 Insurance.   No written notice of cancellation has been received
with respect to any insurance policies required pursuant to Section 6.6 and
Borrower is in material compliance with all conditions contained in such
policies.

         5.23 Acquisition Instruments.   The representations and warranties set
forth in the Acquisition Instruments are true and correct in all material
respects.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

         Until all of Borrower's Obligations are paid and performed in full
Borrower agrees that it will:

         6.1 Legal Existence; Good Standing. Maintain its existence and its good
standing in the jurisdiction of its formation and its qualification in each

                                       37
<PAGE>

jurisdiction in which the failure so to qualify could have a Material Adverse
Effect, and in any event in each jurisdiction in which any Store is operated by
it.
         6.2 Inspection. Permit representatives of FINOVA at any time to (i)
visit its offices, (ii) examine its books and records and Accountants' reports
relating thereto, (iii) make copies or extracts therefrom, (iv) discuss its
affairs with its employees, (v) examine and inspect the Collateral and (vi) meet
and discuss its affairs with the Accountants, and such Accountants, as a
condition to their retention by Borrower, are hereby irrevocably authorized by
Borrower to fully discuss and disclose all such affairs with FINOVA.

         6.3      Financial Statements and Other Information.  Maintain a
standard system of accounting in accordance with GAAP and furnish to FINOVA:

                  6.3.1    Quarterly Statements.  As soon as available and in
any event within 45 days after the close of each quarter:

               (a) a copy of the balance  sheet of each Obligor as of the end of
               such quarter, and

               (b)  statements of  operations  and Cash Flow of each Obligor for
               such  quarter and for the period from the  beginning  of the then
               current year to the end of such  quarter,  setting  forth in each
               case  in  comparative  form  the  corresponding  figures  for the
               corresponding  period in the  preceding  year,  all in reasonable
               detail,  containing  such  information  as FINOVA  reasonably may
               require, and certified by the chief financial officer of Borrower
               as complete and correct, subject to normal year-end adjustments.

                  6.3.2    Annual Statements.  As soon as available and in any
event within 90 days after the close of each year:

                  (a) the balance sheet of Guarantor as of the end of such year
                  and the statements of operations, cash flows, shareholders'
                  equity of Guarantor for such year (collectively, the "Basic
                  Financial Statements"), a statement of Cash Flow of each
                  Obligor for such year, setting forth in each case in
                  comparative form the corresponding figures for the preceding
                  year, and

                  (b) an opinion of the Accountants which shall accompany the
                  Basic Financial Statements which opinion shall be unqualified
                  as to going concern and scope of audit, stating that (i) the
                  examination by the Accountants in connection with such Basic
                  Financial Statements has been made in accordance with
                  generally accepted auditing standards, (ii) such Basic

                                       38
<PAGE>

                  Financial Statements have been prepared in conformity with
                  GAAP and in a manner consistent with prior periods, and (iii)
                  such Basic Financial Statements fairly present in all material
                  respects the financial position and results of operations of
                  each Obligor.

                  6.3.3    Compliance Certificate.  The financial statements
described in subsection 6.3.1 and in subsection 6.3.2 shall be accompanied by a
Compliance Certificate.

                  6.3.4 Audit Reports. Promptly upon receipt thereof, a copy of
each report, other than the reports referred to in subsection 6.3.2, including
any so-called "Management Letter" or similar report, submitted to any Obligor by
the Accountants in connection with any annual, interim or special audit made by
the Accountants of the books of such Obligor.

                  6.3.5 Notice of Defaults; Loss. Prompt written notice if: (i)
any Indebtedness of any Obligor is declared or shall become due and payable
prior to its declared or stated maturity, or called and not paid when due, (ii)
an event has occurred that enables the holder of any note, or other evidence of
such Indebtedness, certificate or security evidencing any such Indebtedness of
any Obligor to declare such Indebtedness due and payable prior to its stated
maturity, (iii) there shall occur and be continuing an Event of Default,
accompanied by a statement of setting forth what action Borrower proposes to
take in respect thereof, or (iv) any event shall occur which has a Material
Adverse Effect, including the amount or the estimated amount of any loss or
adverse effect.

                  6.3.6 Notice of Suits; Adverse Events. Prompt written notice
of: (i) any citation, summons, subpoena, order to show cause or other order
naming any Obligor a party to any proceeding before any Governmental Body which
could reasonably be expected to have a Material Adverse Effect, including with
such notice a copy of such citation, summons, subpoena, order to show cause or
other order, (ii) any lapse or other termination of any license, permit,
franchise, agreement or other authorization issued to any Obligor by any
Governmental Body or any other Person that is material to the operation of the
business of such Obligor, (iii) any refusal by any Governmental Body or any
other Person to renew or extend any such license, permit, franchise, agreement
or other authorization and (iv) any dispute between any Obligor and any
Governmental Body or any other Person, which lapse, termination, refusal or
dispute referred to in clauses (ii) and (iii) above or in this clause (iv) could
have a Material Adverse Effect.

                  6.3.7    Reports to Shareholders, Creditors and Governmental
Bodies.

                  (a) Promptly upon becoming available, copies of all financial
                  statements, reports, notices and other statements sent or made
                  available generally by any Obligor to its shareholders, of all
                  regular and periodic reports and all registration statements
                  and prospectuses filed by any Obligor with any securities
                  exchange or with the Securities and Exchange Commission or any
                  Governmental Body succeeding to any of its functions, and of

                                       39
<PAGE>

                  all statements generally made available by any Obligor or
                  others concerning material developments in the business of
                  such Obligor.

                  (b) Promptly upon becoming available, copies of any periodic
                  or special reports filed by any Obligor with any Governmental
                  Body or Person, if such reports indicate any material adverse
                  change in the business, operations, affairs or condition of
                  such Obligor, or if copies thereof are requested by FINOVA,
                  and copies of any material notices and other communications
                  from any Governmental Body or Person which specifically relate
                  to any Obligor.

                  6.3.8    ERISA Notices and Requests.

                  (a) With reasonable promptness, and in any event within 30
                  days after occurrence of any of the following, notice and/or
                  copies of: (i) the establishment of any new Employee Benefit
                  Plan, Pension Plan or Multiemployer Plan; (ii) the
                  commencement of contributions to any Employee Benefit Plan,
                  Pension Plan or Multiemployer Plan to which Borrower or any of
                  its ERISA Affiliates was not previously contributing or any
                  increase in the benefits of any existing Employee Benefit
                  Plan, Pension Plan or Multiemployer Plan; (iii) each funding
                  waiver request filed with respect to any Employee Benefit Plan
                  and all communications received or sent by Borrower or any
                  ERISA Affiliate with respect to such request; and (iv) the
                  failure of Borrower or any of its ERISA Affiliates to make a
                  required installment or payment under Section 302 of ERISA or
                  Section 412 of the Code by the due date.

                  (b) Promptly and in any event within 10 days of becoming aware
                  of the occurrence of or forthcoming occurrence of any (i)
                  Termination Event or (ii) "prohibited transaction," as such
                  term is defined in Section 406 of ERISA or Section 4975 of the
                  Code, in connection with any Pension Plan or any trust created
                  thereunder, a notice specifying the nature thereof, what
                  action Borrower has taken, is taking or proposes to take with
                  respect thereto and, when known, any action taken or
                  threatened by the Internal Revenue Service, the Department of
                  Labor or the PBGC with respect thereto.

                  (c) With reasonable promptness but in any event within 10 days
                  after the occurrence of any of the following, copies of: (i)
                  any favorable or unfavorable determination letter from the
                  Internal Revenue Service regarding the qualification of an
                  Employee Benefit Plan under Section 401(a) of the Code; (ii)
                  all notices received by Borrower or any ERISA Affiliate of the
                  PBGC's intent to terminate any Pension Plan or to have a
                  trustee appointed to administer any Pension Plan; (iii) each

                                       40
<PAGE>

                  Schedule B (Actuarial Information) to the annual report (Form
                  5500 Series) filed by Borrower or any ERISA Affiliate with the
                  Internal Revenue Service with respect to each Pension Plan;
                  and (iv) all notices received by Borrower or any ERISA
                  Affiliate from a Multiemployer Plan sponsor concerning the
                  imposition or amount of withdrawal liability pursuant to
                  Section 4202 of ERISA; and written notice within two Business
                  Days of Borrower's or any ERISA Affiliate's filing of or
                  intention to file a notice of intent to terminate any Pension
                  Plan under a distress termination within the meaning of
                  Section 4041(c) of ERISA.

                  6.3.9    Other Information.

                  (a) Immediate notice of any change in the location of any
                  Property of Borrower located at any of the Collateral Stores,
                  any change in the name of Borrower, any sale or purchase of
                  Property outside the regular course of business of Borrower,
                  and any change in the business or financial affairs of any
                  Obligor, which change could have a Material Adverse Effect.

                  (b) Promptly upon request therefor, such other information and
                  reports relating to the past, present or future financial
                  condition, operations, plans and projections of Borrower as
                  FINOVA reasonably may request from time to time.

         6.4 Reports to Governmental Bodies and Other Persons. Timely file all
material reports, applications, documents, instruments and information required
to be filed pursuant to all rules, regulations or requests of any Governmental
Body or other Person having jurisdiction over the operation of the business of
Borrower, including, but not limited to, such of the Loan Instruments as are
required to be filed with any such Governmental Body or other Person pursuant to
applicable rules and regulations promulgated by such Governmental Body or other
Person.

         6.5 Maintenance of Licenses. Maintain in full force and effect at all
times, and apply in a timely manner for renewal of, all Licenses, trademarks,
tradenames and agreements necessary for the operation of its Restaurant
Business, the loss of any of which could have a Material Adverse Effect.

         6.6      Insurance.

                  6.6.1 Maintenance of Insurance. (i) Maintain in full force and
effect at all times such property, casualty, business interruption and other
insurance with respect to the Collateral Stores (including, without limitation,
all Collateral therein) required by FINOVA, all of which shall be written by
insurers, contain terms and be in amounts and forms satisfactory to FINOVA and
otherwise meeting the requirements set forth on Exhibit 6.6.1 attached hereto
and (ii) deliver to FINOVA, from time to time as FINOVA reasonably may request,

                                       41
<PAGE>

evidence of compliance with this subsection, but in any event at least 15 days
prior to the expiration date of any policy required hereunder, each bearing
notations evidencing prior payment of premiums.

                  6.6.2 Claims and Proceeds. Borrower hereby directs all
insurers under all policies of casualty and property insurance pertaining to the
furniture, fixtures, equipment and other contents located at the Collateral
Stores required to be maintained by Borrower pursuant to subsection 6.6.1 to pay
all proceeds payable thereunder directly to FINOVA and Borrower hereby
authorizes FINOVA to collect such proceeds; provided that so long as no
Incipient Default or Event of Default exists and is continuing any proceeds
payable thereunder in an aggregate amount of $50,000 or less may be paid
directly to Borrower provided Borrower promptly uses such proceeds to pay for
the cost of repair or replacement of the Collateral subject to the applicable
loss, damage, destruction or other casualty to at least equal value and
substantially the same character as prior to such loss, damage, destruction or
other casualty. Borrower hereby irrevocably appoints FINOVA (and all officers,
employees or agents designated by FINOVA) as Borrower's true and lawful attorney
and agent in fact for the purpose of and with power to make, settle and adjust
claims under such policies of insurance, endorse the name of Borrower on any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance, and to make all determinations and decisions with respect
to such policies of insurance. Borrower acknowledges that such appointment of
FINOVA as its attorney and agent in fact is a power coupled with an interest and
therefore is irrevocable. FINOVA agrees that it shall use reasonable efforts to
consult with Borrower in the event that FINOVA makes, settles or adjusts any
claims under such policies of insurance; provided, however, any decision in
connection therewith made by FINOVA may be made in FINOVA's discretion, without
the consent of Borrower. Borrower shall promptly notify FINOVA of any loss,
damage, destruction or other casualty to the Collateral. Subject to the first
sentence of this subsection 6.6.2, the insurance proceeds received on account of
any loss, damage, destruction or other casualty (i) if any Incipient Default or
Event of Default exists, at the option of FINOVA shall be applied (A) as set
forth in the following clause (ii) or (B) in reduction of Borrower's Obligations
in the following order of priority: (1) first, to the payment of any and all
sums which are then due and payable pursuant to the terms of the Loan
Instruments, other than the Principal Balance and accrued and unpaid interest
thereon, (2) next, to accrued and unpaid interest on the Principal Balance and
(3) next, to the Principal Balance of the Loans in the inverse order of the
maturity of the installments thereof or (ii) if no Incipient Default or Event of
Default exists or if FINOVA so elects, shall be held by FINOVA and applied to
pay for the cost of repair or replacement of the Collateral subject to such
loss, damage, destruction or other casualty, in which event such proceeds shall
be made available in the manner and under such conditions as FINOVA reasonably
may require. In the event the proceeds are to be applied to the repair or
replacement of Collateral, the Collateral shall be so repaired or replaced as to
be of at least equal value and substantially the same character as prior to such
loss, damage, destruction or other casualty.

         6.7 Environmental Matters. At all times comply with, and be responsible
for, its obligations under all Environmental Laws applicable to the Real Estate
and Leasehold Property and any other Property owned by Borrower or used by
Borrower in the operation of its Restaurant Business. At its sole cost and

                                       42
<PAGE>

expense, Borrower shall (i) comply in all respects with (A) any notice of any
violation or administrative or judicial complaint or order having been filed
against Borrower, any portion of any Real Estate or Leasehold Property or any
other Property owned by Borrower or used by Borrower in the operation of its
business alleging violations of any law, ordinance and/or regulation requiring
Borrower to take any action in connection with the release, transportation
and/or clean-up of any Hazardous Materials, and (B) any notice from any
Governmental Body or any other Person alleging that Borrower is or may be liable
for costs associated with a response or clean-up of any Hazardous Materials or
any damages resulting from such release or transportation, or (ii) diligently
contest in good faith by appropriate proceedings any demands set forth in such
notices, provided (A) reserves in an amount satisfactory to FINOVA to pay the
costs associated with complying with any such notice are established by Borrower
and (B) no Lien would or will attach to the Property which is the subject of any
such notice as a result of any compliance by Borrower which is delayed during
any such contest. Promptly upon receipt of any notice described in the foregoing
clause (i), Borrower shall deliver to FINOVA a copy thereof.

         6.8 Compliance with Laws. Comply with all federal, state and local
laws, ordinances, requirements and regulations and all judgments, orders,
injunctions and decrees applicable to Borrower and its operations, the failure
to comply with which could have a Material Adverse Effect.
\
         6.9 Taxes and Claims. Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any Property belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien (other than
a Permitted Lien) upon the Property of Borrower, provided that Borrower shall
not be required by this Section 6.9 to pay any such amount if the same is being
contested diligently and in good faith by appropriate proceedings and as to
which Borrower has set aside reserves on its books satisfactory to FINOVA.

         6.10 Maintenance of Properties.  Maintain all of its Properties
necessary in the operation of the Collateral Stores in good working order and
condition.

         6.11 Approvals. Upon the exercise by FINOVA of any power, right or
privilege pursuant to the provisions of any of the Loan Instruments requiring
any consent, approval or authorization of any Governmental Body, Landlord or
other Person (including, without limitation, transfers of Licenses and Leases),
promptly execute and cause the execution of all applications, certificates,
instruments and other documents that FINOVA may be required to obtain for such
consent, approval or authorization.

         6.12 Payment of Indebtedness. Except as to matters being contested in
good faith and by appropriate proceedings, promptly pay when due, or in
conformance with customary trade terms, all of its Indebtedness.

                                   ARTICLE VII

                               NEGATIVE COVENANTS

         Until all of Borrower's Obligations are paid and performed in full,
Borrower shall not:

                                       43
<PAGE>

         7.1 Borrowing. Create, incur, assume or suffer to exist any liability
for Indebtedness for Borrowed Money if the Borrower Fixed Charge Coverage Ratio
for the twelve month period most recently ended would be less than 1.20 assuming
such Indebtedness for Borrowed Money was incurred on the first day of such
period.

         7.2 Liens. Create, incur, assume or suffer to exist any Lien upon any
of the Collateral or the Leased Store Leases, in each case whether now owned or
hereafter acquired, except Permitted Liens.

         7.3 Merger and Acquisition. Consolidate with or merge with or into any
Person unless (i) Borrower is the surviving corporation and (ii) immediately
upon consummation of such consolidation or merger, Borrower would be permitted
to borrow at least $1.00 of additional Indebtedness for Borrowed Money under
Section 7.1.

         7.4 Contingent Liabilities. Assume, guarantee, endorse, contingently
agree to purchase, become liable in respect of any letter of credit, or
otherwise become liable upon the obligation of any Person, where any such
liabilities, in the aggregate, exceed $250,000.00, except for liabilities
arising from the endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business.

         7.5 Dividends and Distributions. Make any dividends or distributions
with respect to the capital stock of Borrower or apply any of its Property to
the purchase, redemption or other retirement of, or set apart any sum for the
payment of, or make any other distribution by reduction of capital or otherwise
in respect of, any of the capital stock of Borrower, if the ratio of the Cash
Flow of Borrower for the twelve month period most recently ended to the sum of
Borrower Fixed Charges for such period plus the amount of such dividends,
distributions or other payments for such period would be less than 1.00.

         7.6 Equipment Leases. Enter into any (i) Operating Leases pertaining to
equipment or other Property located at any of the Collateral Stores if the
aggregate rent expense payable under all such Operating Leases at such
Collateral Store would exceed $50,000 in any year or (ii) Capitalized Leases
pertaining to equipment or other Property located at any of the Collateral
Stores.

         7.7 Investments, Loans. Except with respect to dividends or
distributions made by Borrower to Guarantor permitted under Section 7.5, at any
time purchase or otherwise acquire, hold or invest in the capital stock of, or
any other interest in, any Person (except with respect to Borrower's ownership
of the capital stock of its subsidiaries listed in Exhibit 5.3.1), or make any
loan or advance to, or enter into any arrangement for the purpose of providing
funds or credit to, or make any other investment, whether by way of capital
contribution or otherwise, in or with any Person, including, without limitation,
any Affiliate, except (i) investments in direct obligations of, or instruments
unconditionally guaranteed by, the United States of America or in certificates
of deposit issued by a Qualified Depository, (ii) investments in commercial or
finance paper which, at the time of investment, is rated "A" or better by
Moody's Investors Service, Inc., or Standard & Poor's Corporation, respectively,
or at the equivalent rate by any of their respective successors and (iii) any
interests in any money market account maintained, at the time of investment,
with a Qualified Depository, the investments of which, at the time of

                                       44
<PAGE>

investment, are restricted to the types specified in clause (i) above. All
investments permitted pursuant to this Section 7.7 shall have a maturity not
exceeding one year.

         7.8 Fundamental Business Changes.  Materially change the nature of
its business or engage in any business other than the Restaurant Business and
activities incidental thereto.

         7.9 Facility Sites. Change the locations of its chief executive office
or other Property used in the operation of the Collateral Stores unless (i)
FINOVA shall have received at least 30 days' prior written notice thereof and
(ii) Borrower shall have executed and delivered to FINOVA any documents FINOVA
may reasonably require in order to maintain the validity and priority of the
Security Interests.

         7.10     Sale or Transfer of Assets; Store Closing or Sale. Sell,
lease, assign, transfer or otherwise dispose of any of the Collateral or any of
the Leased Store Leases, or close or sell any Collateral Store, except that
Borrower may:

                  7.10.1 Inventory and Equipment. Sell or dispose of (i)
inventory in the ordinary course of business and (ii) obsolete or unusable items
of equipment which promptly are replaced with new items of equipment of like
function and comparable value to the unusable items of equipment when the same
were new or not obsolete or unusable, provided such replacement items of
equipment shall become subject to the Security Interests.

                  7.10.2   Store Closing or Sale.  Close or sell:

                  (a) the Eden Prairie Store or any Substitute Store for the
                  Eden Prairie Store (i) during the first two Term Loan B Loan
                  Years provided that such Collateral Store is replaced with a
                  Substitute Store and FINOVA determines that the Substitution
                  Conditions have been satisfied as of the date of such closure
                  or sale and (ii) after the first two Term Loan B Loan Years
                  provided that (B) such Collateral Store is replaced with a
                  Substitute Store and FINOVA determines that the Substitution
                  Conditions have been satisfied as of the date of such closure
                  or sale or (B) Borrower makes the payments required under
                  subsection 2.6.4 on the date of such closure or sale; and

                  (b) the Minnetonka Store or any Substitute for the Minnetonka
                  Store (i) during the first two Term Loan C Loan Years provided
                  that such Collateral Store is replaced with a Substitute Store
                  and FINOVA determines that the Substitution Conditions have
                  been satisfied as of the date of such closure or sale and (ii)
                  after the first two Term Loan C Loan Years provided that (A)
                  such Collateral Store is replaced with a Substitute Store and
                  FINOVA determines that the Substitution Conditions have been
                  satisfied as of the date of such closure or sale or (B)
                  Borrower makes the payments required under subsection 2.6.4 on
                  the date of such closure or sale.

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<PAGE>

         7.11 Amendment of Certain Agreements. Amend, modify or waive any term
or provision of its articles of incorporation or by-laws or the Leased Store
Leases without the prior written consent of FINOVA, which consent shall not be
unreasonably withheld.

         7.12 Transactions with Affiliates. Sell, lease, assign, transfer or
otherwise dispose of any Property to any Obligor or any Affiliate of any
Obligor, lease Property, render or receive services or purchase assets from any
Obligor or any such Affiliate, or otherwise enter into any contractual
relationship with any Obligor or any Affiliate of any Obligor except on terms
and conditions no less favorable to Borrower than could be obtained on an arm's
length basis from a third party who is not an Obligor or an Affiliate of an
Obligor.

         7.13     Compliance with ERISA.

          (i) Permit the occurrence of any Termination  Event which would result
          in a  liability  to  Borrower  or any  ERISA  Affiliate  in  excess of
          $50,000;

          (ii) Permit the present  value of all  benefit  liabilities  under all
          Pension  Plans to  exceed  the  current  value of the  assets  of such
          Pension  Plans  allocable  to such  benefit  liabilities  by more than
          $50,000;

          (iii) Permit any accumulated  funding  deficiency in excess of $50,000
          (as  defined in Section 302 of ERISA and Section 412 of the Code) with
          respect to any Pension Plan, whether or not waived;

          (iv) Fail to make any  contribution  or payment  to any  Multiemployer
          Plan which  Borrower  or any ERISA  Affiliate  may be required to make
          under any agreement  relating to such  Multiemployer  Plan, or any law
          pertaining  thereto  which  results  in or is  likely  to  result in a
          liability in excess of $50,000;

          (v) Engage,  or permit Borrower or any ERISA  Affiliate to engage,  in
          any "prohibited transaction" as such term is defined in Section 406 of
          ERISA or Section 4975 of the Code for which a civil  penalty  pursuant
          to Section  502(i) of ERISA or a tax  pursuant to Section  4975 of the
          Code in excess of $50,000 is imposed;

          (vi) Permit the  establishment  of any Employee Benefit Plan providing
          post-retirement  welfare  benefits or  establish or amend any Employee
          Benefit  Plan  which   establishment  or  amendment  could  result  in
          liability  to  Borrower  or  any  ERISA   Affiliate  or  increase  the
          obligation of Borrower or any ERISA Affiliate to a Multiemployer  Plan
          which liability or increase, individually or together with all similar
          liabilities  and  increases,  is  material  to  Borrower  or amu ERISA
          Affiliate; or

          (vii) Fail,  or permit  Borrower or any ERISA  Affiliate  to fail,  to
          establish,   maintain  and  operate  each  Employee  Benefit  Plan  in
          compliance in all material respects with ERISA, the Code and all other
          applicable laws and regulations and interpretations thereof.

                                       46
<PAGE>

                                  ARTICLE VIII

                              DEFAULT AND REMEDIES

         8.1      Events of Default.  The occurrence of any of the following
shall constitute an Event of Default under the Loan Instruments:

                  8.1.1    Default in Payment.  If Borrower shall fail to pay
all or any portion of Borrower's Obligations the same become due and payable.

                  8.1.2    Breach of Covenants.

                  (a) If Borrower shall fail to observe or perform any covenant
                  or agreement made by Borrower contained in Sections 6.1, 6.2
                  or 6.6 or in Article VII;

                  (b) If Borrower shall fail to observe or perform any covenant
                  or agreement made by Borrower contained in Sections 6.3, 6.5,
                  6.7, 6.8, 6.9, 6.10 or 6.11 and such failure shall continue
                  for a period of 15 days; or

                  (c) If Borrower or Guarantor shall fail to observe or perform
                  any covenant or agreement (other than those referred to in
                  subparagraphs (a) or (b) above or specifically addressed
                  elsewhere in this Section 8.1) made by such Person in any of
                  the Loan Instruments to which such Person is a party, and such
                  failure shall continue for a period of 30 days after the
                  earlier of (i) notice to Borrower from FINOVA of such failure,
                  or (ii) the date Borrower first becomes aware of such failure.

                  8.1.3 Breach of Warranty. If any representation or warranty
made by or on behalf of any Obligor in or pursuant to any of the Loan
Instruments or in any instrument or document furnished in compliance with the
Loan Instruments shall prove to be false or misleading in any material respect.

                  8.1.4 Default Under Other Indebtedness for Borrowed Money. If
(i) any Obligor at any time shall be in default (as principal or guarantor or
other surety) in the payment of any principal of or premium or interest on any
Indebtedness for Borrowed Money (other than Borrower's Obligations) beyond the
grace period, if any, applicable thereto and the aggregate amount of such
payments then in default beyond such grace period shall exceed $100,000 or (ii)
any default shall occur in respect of any issue of Indebtedness for Borrowed
Money of any Obligor (other than Borrower's Obligations) outstanding in a
principal amount of at least $1,000,000, or in respect of any agreement or
instrument relating to any such issue of Indebtedness for Borrowed Money, and
such default shall continue beyond the grace period, if any, applicable thereto.

                  8.1.5    Bankruptcy.

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<PAGE>

                  (a) If any Obligor shall (i) generally not be paying its debts
                  as they become due, (ii) file, or consent, by answer or
                  otherwise, to the filing against it of a petition for relief
                  or reorganization or arrangement or any other petition in
                  bankruptcy or insolvency under the laws of any jurisdiction,
                  (iii) make an assignment for the benefit of creditors, (iv)
                  consent to the appointment of a custodian, receiver, trustee
                  or other officer with similar powers for it or for any
                  substantial part of its Property, or (v) be adjudicated
                  insolvent.

                  (b) If any Governmental Body of competent jurisdiction shall
                  enter an order appointing, without consent of such Obligor, a
                  custodian, receiver, trustee or other officer with similar
                  powers with respect to it or with respect to any substantial
                  part of its Property, or if an order for relief shall be
                  entered in any case or proceeding for liquidation or
                  reorganization or otherwise to take advantage of any
                  bankruptcy or insolvency law of any jurisdiction, or ordering
                  the dissolution, winding-up or liquidation of any Obligor or
                  if any petition for any such relief shall be filed against it
                  and such petition shall not be dismissed or stayed within 60
                  days.

                  8.1.6 Judgments. If there shall be entered against Borrower
one or more judgments, awards or decrees, or orders of attachment, garnishment
or any other writ, which exceed $250,000 in the aggregate at any one time
outstanding, excluding judgments, awards, decrees, orders or writs (i) for which
there is full insurance (subject to applicable deductibles) and with respect to
which the insurer has assumed responsibility for the defense thereof, (ii) for
which there is full indemnification (upon terms and by creditworthy indemnitors
which are satisfactory to FINOVA), (iii) which have been in force for less than
the applicable period for filing an appeal so long as execution has not been
levied thereunder (or in respect of which Borrower shall at the time in good
faith be prosecuting an appeal or proceeding for review and in respect of which
a stay of execution or appropriate appeal bond shall have been obtained pending
such appeal or review) or (iv) which arise in connection with that certain case
known as Tyrone McCrae v. Howard University, et al. Civil Action No. 97-CA-7505
(D.C. Superior Court), filed September 27, 1997 ("McCrae"), provided the final
judgment, award or settlement amount incurred by Borrower in connection with
McCrae does not exceed $500,000 (and, in the event that any such final judgment,
award or settlement in McCrae exceeds $250,000, then the $250,000 limitation
described in the third line of this subsection 8.1.6 shall be reduced dollar for
dollar for each dollar that such final judgment, award or settlement exceeds
$250,000).

                  8.1.7 Impairment of Licenses; Other Agreements. If (i) any
Governmental Body shall revoke, terminate, suspend or adversely modify any
License of Borrower, the adverse modification or non-continuation of which could
have a Material Adverse Effect, or (ii) there shall exist any violation or
default in the performance of, or a material failure to comply with any
agreement, or condition or term of any License, which violation, default or
failure has a Material Adverse Effect, or (iii) any Franchise Agreement or other
agreement which is necessary to the operation of the Restaurant Business of

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<PAGE>

Borrower shall be revoked or terminated and not replaced by a substitute
acceptable to FINOVA within 30 days after the date of such revocation or
termination, and such revocation or termination and non-replacement could have a
Material Adverse Effect.

                  8.1.8 Collateral. If any material portion of the Collateral or
any Leased Store Lease shall be seized or taken by a Governmental Body or Person
(unless in any such case either (i) the Initial Store or Substitute Store
affected is replaced with a Substitute Store within 60 days after such seizure
or taking and Borrower otherwise complies with the requirements of subsection
2.6.4(a) with respect to such Substitute Store or (ii) Borrower prepays the
Principal Balance in an amount required pursuant to subsection 2.6.4(a), or
Borrower shall fail to maintain or cause to be maintained the Security Interests
and priority of the Loan Instruments as against any Person, or the title and
rights of Borrower to any material portion of the Collateral or any Leased Store
Lease shall have become the subject matter of litigation which could reasonably
be expected to result in impairment or loss of the security provided by the Loan
Instruments.

                  8.1.9 Plans. If an event or condition specified in subsection
6.3.8 hereof shall occur or exist with respect to any Pension Plan or
Multiemployer Plan and, as a result of such event or condition, together with
all other such events or conditions, Borrower or any ERISA Affiliate shall
incur, or in the opinion of FINOVA be reasonably likely to incur, a liability to
a Pension Plan or Multiemployer Plan or the PBGC (or any of them) which, in the
reasonable judgment of FINOVA, would have a Material Adverse Effect.

                  8.1.10 Change in Control. If Guarantor at any time shall cease
(i) to own 100% of the capital stock of Borrower or (ii) to maintain (A)
effective voting control over Borrower, including the right to elect a majority
of the board of directors of Borrower or (B) the ability to direct the
management and policies of Borrower, or Borrower at any time shall cease to own
100% of the capital stock of each of its subsidiaries.

                  8.1.11 Guaranty. If prior to the termination of the Guaranty
in accordance with its terms, Guarantor shall (i) deny or disaffirm its
obligations thereunder or (ii) fail to make any payment required thereunder when
due.

                  8.1.12 Guarantor Fixed Charge Coverage Ratio. If the Guarantor
Fixed Charge Coverage Ratio for the twelve month period ending on the last day
of any quarter commencing with the month ending June 30, 2000 is less than 1.20.

          8.2  Acceleration of Borrower's  Obligations.  Upon the occurrence of:

          (a) any Event of Default  described in clauses (ii),  (iii),  (iv) and
          (v)  of  subsection  8.1.5(a)  or  in  8.1.5(b),   all  of  Borrower's
          Obligations at that time  outstanding  automatically  shall mature and
          become due, and

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<PAGE>

          (b) any other Event of Default,  FINOVA,  at any time,  at its option,
          without  further  notice or  demand,  may  declare  all of  Borrower's
          Obligations  due  and  payable,   whereupon   Borrower's   Obligations
          immediately  shall  mature  and become due and  payable,  all  without
          presentment,  demand,  protest  or notice  (other  than  notice of the
          declaration  referred to in clause (b) above), all of which hereby are
          waived.

         8.3      Remedies on Default. If Borrower's Obligations have been
accelerated pursuant to Section 8.2, FINOVA, at its option, may: 8.3.1
Enforcement of Security Interests. Enforce its rights and remedies under the
Loan Instruments in accordance with their respective terms.

                  8.3.2    Other Remedies.  Enforce any of the rights or
remedies accorded to FINOVA at equity or law, by virtue of statute or otherwise.

         8.4      Application of Funds. Any funds received by FINOVA pursuant to
the exercise of any rights accorded to FINOVA pursuant to, or by the operation
of any of the terms of, any of the Loan Instruments, including, without
limitation, insurance proceeds, condemnation proceeds or proceeds from the sale
of Collateral, shall be applied to Borrower's Obligations in the following order
of priority:

                  8.4.1 Expenses. First, to the payment of (i) all fees and
expenses actually incurred, including, without limitation, court costs, fees of
appraisers, title charges, costs of maintaining and preserving the Collateral,
costs of sale, and all other costs incurred by FINOVA in exercising any rights
accorded to such Persons pursuant to the Loan Instruments or by applicable law,
including, without limitation, reasonable attorney's fees, and (ii) all Liens
superior to the Liens of FINOVA except such superior Liens subject to which any
sale of the Collateral may have been made.

                  8.4.2    Borrower's Obligations.  Next, to the payment of the
remaining portion of Borrower's Obligations in such order as FINOVA may
determine.

                  8.4.3    Surplus.  Any surplus, to the Person or Persons
entitled thereto.

         8.5 Performance of Borrower's Obligations. If Borrower fails to (i)
maintain in force and pay for any insurance policy or bond which Borrower is
required to provide pursuant to any of the Loan Instruments, (ii) keep the
Collateral free from all Liens except for Permitted Liens, (iii) pay when due
all taxes, levies and assessments on or in respect of the Collateral, except as
otherwise permitted pursuant to the terms hereof, (iv) make all payments and
perform all acts on the part of Borrower to be paid or performed in the manner
required by the terms hereof and by the terms of the other Loan Instruments with
respect to any of the Collateral, including, without limitation, all expenses of
protecting, storing, warehousing, insuring, handling and maintaining the
Collateral, (v) keep fully and perform promptly any other of the obligations of
Borrower hereunder or under any of the other Loan Instruments, and (vi) keep
fully and perform promptly the obligations of Borrower with respect to any issue

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<PAGE>

of Indebtedness for Borrowed Money secured by a Permitted Prior Lien, then
FINOVA may (but shall not be required to) procure and pay for such insurance
policy or bond, place such Collateral in good repair and operating condition,
pay, contest or settle such Liens or taxes or any judgments based thereon or
otherwise make good any other aforesaid failure of Borrower; provided, however,
FINOVA shall not, except in (a) the event that Borrower is in default pursuant
to Section 8.1.5 above, or (b) any reasonable threat of diminishment of value of
the Collateral or impairment of FINOVA's security interest therein, take any
such action unless such failure by Borrower continues for more than five (5)
days following notice from FINOVA to Borrower of such failure. Borrower shall
reimburse FINOVA immediately upon demand for all sums paid or advanced on behalf
of Borrower for any such purpose, together with costs and expenses (including
reasonable attorney's fees) paid or incurred by FINOVA in connection therewith
and interest on all sums advanced from the date of advancement until repaid to
FINOVA at the Default Rate. All such sums advanced by FINOVA, with interest
thereon, immediately upon advancement thereof, shall be deemed to be part of
Borrower's Obligations.

                                   ARTICLE IX

                                     CLOSING

         The Term Loan A Closing Date shall be such date as the parties shall
determine, and the Term Loan A Closing shall take place on such date, provided
all conditions for the Term Loan A Closing as set forth in this Loan Agreement
have been satisfied or otherwise waived by FINOVA. The Term Loan A Closing shall
take place at the offices of Altheimer & Gray, 10 S. Wacker Drive, Chicago,
Illinois 60606 or such other place as the parties hereto shall agree. Unless the
Term Loan A Closing Date occurs on or before May 1, 2000, this Loan Agreement
shall terminate and be of no further force or effect and, except for any
obligation of Borrower to FINOVA pursuant to Article X, none of the parties
hereto shall have any further obligation to any other party.

                                    ARTICLE X

                             EXPENSES AND INDEMNITY

         10.1     Attorneys' Fees and Other Fees and Expenses. Whether or not
any of the transactions contemplated by this Loan Agreement shall be
consummated, subject to the limitations set forth in subsection 10.1.1, Borrower
agrees to pay to FINOVA on demand all expenses incurred by FINOVA in connection
with the transactions contemplated hereby and in connection with any amendments,
modifications or waivers (whether or not the same become effective) under or in
respect of any of the Loan Instruments, including, without limitation:

                  10.1.1 Fees and Expenses for Preparation of Loan Instruments.
All expenses, disbursements (including, without limitation, charges for required
mortgagee's title insurance, lien searches, surveys, document recording and
filing fees, reproduction of documents, long distance telephone calls and
overnight express carriers) and reasonable attorneys' fees, actually incurred by
FINOVA in connection with the (i) preparation and negotiation of the Loan
Instruments or any amendments, modifications or waivers thereto or any documents
delivered pursuant thereto and (ii) administration of the Loan.

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<PAGE>

                  10.1.2 Fees and Expenses in Enforcement of Rights or Defense
of Loan Instruments. Any expenses or other costs, including reasonable
attorneys' fees and expert witness fees, actually incurred by FINOVA in
connection with the enforcement or collection against any Obligor of any
provision of any of the Loan Instruments, and in connection with or arising out
of any litigation, investigation or proceeding instituted by any Governmental
Body or any other Person with respect to any of the Loan Instruments, whether or
not suit is instituted, including, but not limited to, such costs or expenses
arising from the enforcement or collection against any Obligor of any provision
of any of the Loan Instruments in any workout or restructuring or in any state
or federal bankruptcy or reorganization proceeding.

         10.2     Indemnity.  Borrower agrees to indemnify and save FINOVA
harmless of and from the following:

                  10.2.1   Brokerage Fees.  The fees, if any, of brokers and
finders engaged by Borrower.

                  10.2.2 General. Any loss, cost, liability, damage or expense
(including reasonable attorneys' fees and expenses) incurred by FINOVA in
investigating, preparing for, defending against, providing evidence, producing
documents or taking other action in respect of any commenced or threatened
litigation, administrative proceeding, suit instituted by any Person or
investigation under any law, including any federal securities law, the
Bankruptcy Code, any relevant state corporate statute or any other securities
law, bankruptcy law or law affecting creditors generally of any jurisdiction, or
any regulation pertaining to any of the foregoing, or at common law or
otherwise, relating, directly or indirectly, to the transactions contemplated by
or referred to in, or any other matter related to, the Loan Instruments, except
to the extent of any gross negligence or willful misconduct of FINOVA.

                  10.2.3 Operation of Collateral; Joint Venturers. Any loss,
cost, liability, damage or expense (including reasonable attorneys' fees and
expenses) incurred in connection with the ownership, operation or maintenance of
the Collateral, the construction of FINOVA and Borrower as having the
relationship of joint venturers or partners or the determination that FINOVA has
acted as agent for Borrower.

                  10.2.4 Environmental Indemnity. Any and all claims, losses,
damages, response costs, clean-up costs and expenses suffered and/or incurred at
any time by FINOVA arising out of or in any way relating to the existence at any
time of any Hazardous Materials in, on, under, at, transported to or from, or
used in the construction and/or renovation of, any of the Real Estate or
Leasehold Property, or otherwise with respect to any Environmental Law, and/or
the failure of any Obligor to perform its obligations and covenants hereunder
witch respect to environmental matters, including, but not limited to: (i)
claims of any Persons for damages, penalties, response costs, clean-up costs,
injunctive or other relief, (ii) costs of removal and restoration, including

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<PAGE>

fees of attorneys and experts, and costs of reporting the existence of Hazardous
Materials to any Governmental Body, and (iii) any expenses or obligations,
including attorneys' fees and expert witness fees, incurred at, before and after
any trial or other proceeding before any Governmental Body or appeal therefrom
whether or not taxable as costs, including, without limitation, witness fees,
deposition costs, copying and telephone charges and other expenses, all of which
shall be paid by Borrower to FINOVA on demand.

                                   ARTICLE XI

                                  MISCELLANEOUS

         11.1 Notices. All notices and communications under this Loan Agreement
shall be in writing and shall be (i) delivered in person, (ii) sent by telecopy,
or (iii) mailed, postage prepaid, either by registered or certified mail, return
receipt requested, or by overnight express carrier, addressed in each case as
follows:

      To Borrower:                      Champps Operating Corporation
                                        5619 DTC Parkway
                                        Suite 1000
                                        Englewood, Colorado 80111
                                        Attention: William H. Baumhauer
                                                   President
                                        Telecopy No.:     (303) 804-8477

      Copy to:                          Donna Depoian
                                        614 Forest Street
                                        No. Andover, Massachusetts 01845
                                        Telecopy No.:     (978) 725-6560

      To FINOVA:                        FINOVA Capital Corporation
                                        115 West Century Road
                                        Paramus, New Jersey 07693
                                        Attention: Daniel O'Donnell
                                                   Vice President
                                        Telecopy No.:  (201) 634-3497

      Copy to:                          FINOVA Capital Corporation
                                        The FINOVA Corporate Center
                                        4800 North Scottsdale Road
                                        Scottsdale, Arizona 85251-7623
                                        Attention:  Vice President, Law
                                        Telecopy No.:  (480) 636-6444

      Copy to:                          Altheimer & Gray
                                        10 South Wacker Drive
                                        Suite 4000
                                        Chicago, Illinois 60606
                                        Attention:  Michael L. Owen, Esq.
                                        Telecopy No.:  (312) 715-4800

                                       53
<PAGE>

or to any other address or telecopy number, as to any of the parties hereto, as
such party shall designate in a written notice to the other parties hereto. All
notices sent pursuant to the terms of this Section 11.1 shall be deemed received
(i) if personally delivered, then on the Business Day of delivery, (ii) if sent
by telecopy before 2:00 p.m. Phoenix time, on the day sent if a Business Day or
if such day is not a Business Day or if sent after 2:00 p.m. Phoenix time, then
on the next Business Day, (iii) if sent by overnight, express carrier, on the
next Business Day immediately following the day sent, or (iv) if sent by
registered or certified mail, on the earlier of the fifth Business Day following
the day sent or when actually received. Any notice by telecopy shall be followed
by delivery on the next Business Day by overnight, express carrier or by hand.

         11.2 Survival of Loan Agreement; Indemnities. All covenants,
agreements, representations and warranties made in this Loan Agreement and in
the certificates delivered pursuant hereto shall survive the making by FINOVA of
the Loans and the execution and delivery to FINOVA of the Notes and of all other
Loan Instruments, and shall continue in full force and effect so long as any of
Borrower's Obligations remain outstanding, unperformed or unpaid.
Notwithstanding the repayment of all amounts due under the Loan Instruments, the
cancellation of the Note and the release and/or cancellation of any and all of
the Loan Instruments or the foreclosure of any Liens on the Collateral, the
obligations of Borrower to indemnify FINOVA with respect to the expenses,
damages, losses, costs and liabilities described in Section 10.2 shall survive
until all applicable statute of limitations periods with respect to actions
which may be brought against FINOVA have run.

         11.3 Further Assurance. From time to time, Borrower shall execute and
deliver to FINOVA such additional documents as FINOVA reasonably may require to
carry out the purposes of the Loan Instruments and to protect rights of FINOVA
thereunder, including, without limitation, using its best efforts in the event
any Collateral is to be sold to secure the approval by any Governmental Body of
any application required by such Governmental Body in connection with such sale,
and not take any action inconsistent with such sale or the purposes of the Loan
Instruments.

         11.4 Taxes and Fees. Should any tax (other than taxes based upon the
net income of any FINOVA), recording or filing fees become payable in respect of
any of the Loan Instruments, or any amendment, modification or supplement
thereof, Borrower agrees to pay the same on demand, together with any interest
or penalties thereon attributable to any delay by Borrower in meeting any FINOVA
demand, and agrees to hold FINOVA harmless with respect thereto.

         11.5 Severability. In the event that any provision of this Loan
Agreement is deemed to be invalid by reason of the operation of any law, or by
reason of the interpretation placed thereon by any court or any other
Governmental Body, as applicable, the validity, legality and enforceability of
the remaining terms and provisions of this Loan Agreement shall not in any way
be affected or impaired thereby, all of which shall remain in full force and
effect, and the affected term or provision shall be modified to the minimum
extent permitted by law so as to achieve most fully the intention of this Loan
Agreement.

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<PAGE>

         11.6 Waiver. No delay on the part of FINOVA in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, and no single or
partial exercise of any right, power or privilege hereunder shall preclude other
or further exercise thereof, or be deemed to establish a custom or course of
dealing or performance between the parties hereto, or preclude the exercise of
any other right, power or privilege.

         11.7 Modification of Loan Instruments. No modification or waiver of any
provision of any of the Loan Instruments shall be effective unless the same
shall be in writing and signed by Borrower and FINOVA, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on any Borrower not specifically required
under the Loan Instruments in any case shall entitle Borrower to any other or
further notice or demand in the same, similar or other circumstances.

         11.8 Captions.  The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

         11.9 Successors and Assigns. This Loan 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 Borrower may not assign any of its
rights or delegate any of its duties hereunder to any other Person.

         11.10 Remedies Cumulative. All rights and remedies of the parties
hereto, any other Loan Instruments or otherwise, shall be cumulative and
non-exclusive, and may be exercised singularly or concurrently. FINOVA shall not
be required to prosecute collection, enforcement or other remedies against any
Obligor before proceeding against any other Obligor or to enforce or resort to
any security, liens, collateral or other rights of FINOVA. One or more
successive actions may be brought against Borrower and/or any other Obligor,
either in the same action or in separate actions, as often as FINOVA deems
advisable, until all of Borrower's Obligations are paid and performed in full.

         11.11 Entire Agreement; Conflict. This Loan Agreement and the other
Loan Instruments executed prior or pursuant hereto constitute the entire
agreement among the parties hereto with respect to the transactions contemplated
hereby or thereby and supersede any prior agreements, whether written or oral,
relating to the subject matter hereof. In the event of a conflict between the
terms and conditions set forth herein and the terms and conditions set forth in
any other Loan Instrument, the terms and conditions set forth herein shall
govern.

         11.12 Applicable Law. The Loan Instruments shall be construed in
accordance with and governed by the laws and decisions of the State of Arizona.
For purposes of this Section 11.12, the Loan Instruments shall be deemed to be
performed and made in the State of Arizona.

         11.13 Jurisdiction and Venue. Borrower hereby agrees that all actions
or proceedings initiated by Borrower and arising directly or indirectly out of
the Loan Instruments shall be litigated in the Superior Court of Maricopa
County, or the United States District Court for the District of Arizona or, if
FINOVA initiates such action, in addition to the foregoing courts, any court in
which FINOVA shall initiate or to which FINOVA shall remove such action, to the

                                       55
<PAGE>

extent such court has jurisdiction. Borrower hereby expressly submits and
consents in advance to such jurisdiction in any action or proceeding commenced
by FINOVA in or removed by FINOVA to any of such courts, and hereby agrees that
personal service of the summons and complaint, or other process or papers issued
therein may be served in the manner provided for notices herein, and agrees that
service of such summons and complaint or other process or papers may be made by
registered or certified mail addressed to Borrower at the address to which
notices are to be sent pursuant to Section 11.1. Borrower waives any claim that
Maricopa County, Arizona or the District of Arizona is an inconvenient forum or
an improper forum based on lack of venue. To the extent provided by law, should
Borrower, after being so served, fail to appear or answer to any summons,
complaint, process or papers so served within the number of days prescribed by
law after the mailing thereof, Borrower shall be deemed in default and an order
and/or judgment may be entered by the court against Borrower as demanded or
prayed for in such summons, complaint, process or papers. The exclusive choice
of forum for Borrower set forth in this Section 11.13 shall not be deemed to
preclude the enforcement by FINOVA of any judgment obtained in any other forum
or the taking by FINOVA of any action to enforce the same in any other
appropriate jurisdiction, and Borrower hereby waives the right to collaterally
attack any such judgment or action.

         11.14 Waiver of Right to Jury Trial. FINOVA and Borrower acknowledge
and agree that any controversy which may arise under any of the Loan Instruments
or with respect to the transactions contemplated thereby would be based upon
difficult and complex issues and, therefore, the parties agree that any lawsuit
arising out of any such controversy will be tried in a court of competent
jurisdiction by a judge sitting without a jury.

         11.15 Time of Essence. Time is of the essence for the performance by
Borrower of the obligations set forth in this Loan Agreement and the other Loan
Instruments.

         11.16 Estoppel Certificate. Within 15 days after FINOVA requests
Borrower to do so, Borrower will execute and deliver to FINOVA a statement
certifying (i) that this Loan Agreement is in full force and effect and has not
been modified except as described in such statement, (ii) the date to which
interest and principal on the Notes has been paid, (iii) the Principal Balance,
(iv) whether or not to its knowledge an Incipient Default or Event of Default
has occurred and is continuing, and, if so, specifying in reasonable detail each
such Incipient Default or Event of Default of which it has knowledge, (v)
whether to its knowledge it has any defense, setoff or counterclaim to the
payment of any Note in accordance with its terms, and, if so, specifying each
defense, setoff or counterclaim of which it has knowledge in reasonable detail
(including where applicable the amount thereof), and (vi) as to any other matter
reasonably requested by FINOVA.

         11.17 Consequential Damages. Neither FINOVA nor any agent or attorney
of FINOVA shall be liable to Borrower for consequential damages arising from any
breach of contract, tort or other wrong relating to the establishment,
administration or collection of Borrower's Obligations.

                                       56
<PAGE>

         11.18 Counterparts. This Loan Agreement may be executed by the parties
hereto in several counterparts and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same agreement.

         11.19 No Fiduciary Relationship. No provision in this Loan Agreement or
in any other Loan Instrument, and no course of dealing among the parties hereto,
shall be deemed to create any fiduciary duty by FINOVA to Borrower.

         11.20 Notice of Breach by FINOVA. Borrower agrees to give FINOVA
written notice of (i) any action or inaction by FINOVA or any agent or attorney
of FINOVA in connection with the Loan Instruments that may be actionable against
FINOVA or such agent or attorney and (ii) any defense to the payment of
Borrower's Obligations for any reason, including, but not limited to, commission
of a tort or violation of any contractual duty implied by law. Borrower agrees
that unless such notice is fully given as promptly as possible (but in any event
within 30 days) after Borrower has knowledge, or with the exercise of reasonable
diligence should have had knowledge, of any such action, inaction or defense,
Borrower shall not assert, and shall be deemed to have waived, any claim or
defense arising therefrom.

         11.21 Sale of Notes; Participations. FINOVA may assign to one or more
banks or other Persons all or any part of, or may grant participations to one or
more banks or other Persons in, its right, title and interest in the Loans, this
Loan Agreement, the other Loan Instruments, or any of them, and to the extent of
any such assignment or participation (unless otherwise stated therein) the
assignee or participant of such assignment or participation shall have the same
rights, benefits and obligations hereunder and thereunder as FINOVA would have
hereunder.

         11.22 Publicity. Neither party hereto shall issue any press release or
cause any announcement to be published regarding the consummation of this
transaction or the aggregate amount thereof without the prior written consent of
the other, which consent shall not be unreasonably withheld or delayed.



                [remainder of this page intentionally left blank]


                                       57
<PAGE>



         IN WITNESS WHEREOF, this Loan Agreement has been executed and delivered
by each of the parties hereto by a duly authorized officer of each such party on
the date first set forth above.

                                       CHAMPPS OPERATING CORPORATION,
                                       a Minnesota corporation
                                   By: /s/ William H. Baumhauer
                                       William H. Baumhauer
                                       President


                                       FINOVA CAPITAL CORPORATION,
                                       a Delaware corporation
                                   By: /s/ Daniel O'Donnell
                                       Daniel O'Donnell
                                       Vice President



                                       58
<PAGE>



                                 EXHIBIT 1.1(A)

                             COMPLIANCE CERTIFICATE

                          CHAMPPS OPERATING CORPORATION



         Reference is made to that certain Loan Agreement dated as of April 21,
2000 (such Loan Agreement, as the same may be amended, modified, supplemented or
restated from time to time, the "Loan Agreement"), between Champps Operating
Corporation, a Minnesota corporation, and FINOVA Capital Corporation, a Delaware
corporation. All capitalized terms used but not elsewhere defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.

         Pursuant to the Loan Agreement the undersigned hereby certifies to
Agent and FINOVA that:

         (1)      as of April 21 2000, Fred Dreibholz is the Chief Financial
Officer of Borrower; and

         (2)      except as set forth below, Borrower is in full compliance with
 all terms and conditions of the Loan Agreement; and

         (3) with respect to the Sections of the Loan Agreement set forth below
and the covenants contained therein, Borrower is in full compliance unless
otherwise indicated.
<TABLE>
<S>     <C>                                                       <C>                             <C>

Section and Covenant                                         In Full Compliance           Not in Compliance

6.1     Legal Existence; Good Standing                              |_|                            |_|

6.2     Inspection                                                  |_|                            |_|

6.3      Financial Statements and Other Information
        6.3.1     Quarterly Statements                              |_|                            |_|

        6.3.2     Annual Statements                                 |_|                            |_|

        6.3.3     Compliance Certificate                            |_|                            |_|

        6.3.4     Audit Report                                      |_|                            |_|

        6.3.5     Notice of Defaults; Loss                          |_|                            |_|

                                       59
<PAGE>


        6.3.6     Notice of Suits; Adverse Events                   |_|                            |_|

        6.3.7     Reports to Shareholders, Creditors                |_|                            |_|
                  and Governmental Bodies

        6.3.8     ERISA Notices and Requests                        |_|                            |_|

        6.3.9     Other Information                                 |_|                            |_|

6.4     Reports to Governmental Bodies and Other Persons            |_|                            |_|

6.5     Maintenance of Licenses and Franchise Agreements            |_|                            |_|

6.6     Insurance

        6.6.1     Maintenance of Insurance                          |_|                            |_|

        6.6.2     Claims and Proceeds                               |_|                            |_|

6.7      Environmental Matters
        6.7.1     Compliance                                        |_|                            |_|

        6.7.2     Environmental Audit                               |_|                            |_|

6.8     Compliance with Laws                                        |_|                            |_|

6.9     Taxes and Claims                                            |_|                            |_|

6.10    Maintenance of Properties                                   |_|                            |_|

6.11    Governmental Approvals                                      |_|                            |_|

6.12    Payment of Indebtedness                                     |_|                            |_|

7.1     Borrowing |_|                                               |_|

7.2     Liens                                                       |_|                            |_|

                                       60
<PAGE>

7.3     Merger and Acquisition                                      |_|                            |_|

7.4     Contingent Liabilities                                      |_|                            |_|

7.5     Dividends and Distributions                                 |_|                            |_|

7.6     Equipment Leases                                            |_|                            |_|
7.7     Investments and Loans                                       |_|                            |_|

7.8     Fundamental Business Changes                                |_|                            |_|

7.9     Facility Sites                                              |_|                            |_|

7.10    Sale or Transfer of Assets                                  |_|                            |_|

7.11    Amendment of Certain Agreements                             |_|                            |_|

7.12    Transactions with Affiliates                                |_|                            |_|

7.13    Compliance with ERISA                                       |_|                            |_|

7.14     Borrower Fixed Charge Coverage Ratio                       |_|                            |_|
         (See Schedule 1 for supporting calculations)
7.15     Guarantor Fixed Charge Coverage Ratio                      |_|                            |_|
         (See Schedule 1 for supporting calculations)
</TABLE>

         With respect to any item identified above as not being in compliance,
the undersigned has attached and certifies as to the accuracy of statements
specifying the violation, condition, or events which result in such
non-compliance, the nature and status thereof, and the actions which Borrower
proposes to take with respect thereto to bring Borrower into full compliance
with the Loan Agreement.

         The foregoing certifications are made by Fred Dreibholz, in his
capacity as the acting Chief Financial Officer of Borrower, from his personal
knowledge, after due inquiry and with full knowledge that FINOVA will rely
thereon. This Certificate is given pursuant to and in compliance with subsection
6.3.3 of the Loan Agreement.

                                       61
<PAGE>

         IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate on this 21st day of April, 2000.

                                       CHAMPPS OPERATING CORPORATION,
                                       a Minnesota corporation
                                   By: /s/ William H. Baumhauer
                                       William H. Baumhauer
                                       President


                                       62
<PAGE>



                                   Schedule 1

                      Borrower Fixed Charge Coverage Ratio


    For ________________________ ended on _________________________________
       (Indicate fiscal period)          (Indicate date of financial statements)




                      Guarantor Fixed Charge Coverage Ratio


    For ________________________ ended on _________________________________
       (Indicate fiscal period)          (Indicate date of financial statements)


                                       63
<PAGE>


                                  EXHIBIT 2.2.1

                                FINANCEABLE COSTS

I.       LOMBARD PROPERTY: The following categories constitute the financeable
costs for the Lombard property.

A.       Financeable Hard Costs (associated with fee simple real estate)
include:

Land Cost
Building Costs
Site Improvements


B.       Allowable Soft Costs include (see note below for non-financeable soft
costs):

Tap Fees
Building Permits
Engineering Fees
Architectural Fees
Appraisal Fees
Soil Fees
Phase I Inspection Costs

C.       Equipment Costs include:

The invoice cost of the furniture, fixtures and equipment


Note: The following costs, as they relate to fee simple real estate, represent
non-financeable soft costs:

Insurance
Franchise Fees
Legal Costs
Liquor Licenses
Construction Loan Interest
Pre-Opening Expenses
FINOVA Loan Points/FINOVA fees
Utilities
Contingency Costs



II.      EDEN PRAIRIE, MINNESOTA

         The Financeable Costs are equal to eighty percent (80%) of the Purchase
Price, as set forth in the Section 3.1 of the Asset Purchase Agreement (Eden
Prairie).

                                       64
<PAGE>

III.     MINNETONKA, MINNESOTA

         The Financeable Costs are equal to eighty percent (80%) of the Purchase
Price, as set forth in Section 3.1 of the Asset Purchase Agreement (Minnetonka).



                                       65
<PAGE>



                                  EXHIBIT 5.3.1

                       (See Attached List of Subsidiaries)


                                       66
<PAGE>



                                  EXHIBIT 5.5.2

Location of Chief Executive Office:                Champps Operating Corporation
                                                   5619 DTC Parkway, Suite 1000
                                                   Englewood, Colorado 80111

Location of other Places of Business:              None

Location of Books and Records:                     Champps Operating Corporation
                                                   5619 DTC Parkway, Suite 1000
                                                   Englewood, Colorado 80111

                                                   8010 Glen Lane
                                                   Eden Prairie, MN 55305

                                                   1641 Plymouth Road
                                                   Minnetonka, MN 55305

                                                   2301 Fountain Square Drive
                                                   Lombard, IL 60148

Locations of All Tangible Collateral:              8010 Glen Lane
                                                   Eden Prairie, MN 55305

                                                   1641 Plymouth Road
                                                   Minnetonka, MN 55305

                                                   2301 Fountain Square Drive
                                                   Lombard, IL 60148



                                       67
<PAGE>



                                  EXHIBIT 5.5.3
                               Leased Store Leases

                                   ARTICLE 12.

Eden Prairie: That certain Lease dated June 24, 1998, as amended by First by and
between Prairie Entertainment Associates, a Minnesota general partnership, as
Lessor, and Prairie Restaurant Group, Inc., a Minnesota corporation, as Lessee.

                                   ARTICLE 13.

Minnetonka:
         a.       That certain Lease Agreement dated June 2, 1989 by and between
                  CSM Bonaventure Limited Partnership, as ultimate successor in
                  interest to Bonaventure Associates Limited Partnership, as
                  Lessor, and Breagan Investment Group, Inc., a Minnesota
                  corporation, as ultimate successor in interest to Champps of
                  Minnetonka, Inc, as Lessee.

         b.       That certain Office Lease Agreement dated February 5, 1990 by
                  and between CSM Bonaventure Limited Partnership, as ultimate
                  successor in interest to Welsh Companies, as Lessor, and
                  Breagan Investment Group, Inc., a Minnesota corporation, as
                  ultimate successor in interest to Champps of Minnetonka, Inc,
                  as Lessee.

         c.       That certain Bakery Lease Agreement dated November 24, 1992 by
                  and between CSM Bonaventure Limited Partnership, as ultimate
                  successor in interest to CSM Investors, Inc., as Lessor and
                  Breagan Investment Group, Inc., a Minnesota corporation, as
                  ultimate successor in interest to Champps of Minnetonka, Inc,
                  as Lessee.


                                       68
<PAGE>



                                  EXHIBIT 5.5.4

                                    LICENSES


                                       69
<PAGE>



                                  EXHIBIT 5.5.5

                              OPERATING AGREEMENTS


                                       70
<PAGE>



                                   EXHIBIT 5.6
                         Indebtedness for Borrowed Money



None.


                                       71
<PAGE>



                                   EXHIBIT 5.7

                              FINANCIAL STATEMENTS



                                       72
<PAGE>



                                   EXHIBIT 5.8

                                   LITIGATION

None.


                                       73
<PAGE>



                                 EXHIBIT 5.20.1

                  COLLECTIVE BARGAINING AGREEMENTS; GRIEVANCES


None.


                                       74
<PAGE>



                                  EXHIBIT 6.6.1

                      (See Attached Coverage Requirements)



                                       75
<PAGE>



                                  EXHIBIT 2.2.1

                                FINANCEABLE COSTS



I.       LOMBARD PROPERTY: The following categories constitute the financeable
costs for the Lombard property.

A.       Financeable Hard Costs (associated with fee simple real estate)
include:

Land Cost
Building Costs
Site Improvements


B.       Allowable Soft Costs include (see note below for non-financeable soft
costs):

Tap Fees
Building Permits
Engineering Fees
Architectural Fees
Appraisal Fees
Soil Fees
Phase I Inspection Costs

C.       Equipment Costs include:

The invoice cost of the furniture, fixtures and equipment

Note: The following costs, as they relate to fee simple real estate, represent
non-financeable soft costs:

Insurance
Franchise Fees
Legal Costs
Liquor Licenses
Construction Loan Interest
Pre-Opening Expenses
FINOVA Loan Points/FINOVA fees

Utilities
Contingency Costs





<PAGE>


II.      EDEN PRAIRIE, MINNESOTA

         The Financeable Costs are equal to eighty percent (80%) of the purchase
price, as set forth in the Asset Purchase Agreement for the Eden Prairie
property.

III.     MINNETONKA, MINNESOTA

         The Financeable Costs are equal to eighty percent (80%) of the purchase
price, as set forth in the Asset Purchase Agreement for the Minnetonka property.


                                       2
<PAGE>



                                  EXHIBIT 5.3.1

                       (See Attached List of Subsidiaries)


                                       3
<PAGE>



                                  EXHIBIT 5.5.2

Location of Chief Executive Office:                Champps Operating Corporation
                                                   5619 DTC Parkway, Suite 1000
                                                   Englewood, Colorado 80111

Location of other Places of Business:              None

Location of Books and Records:                     Champps Operating Corporation
                                                   5619 DTC Parkway, Suite 1000
                                                   Englewood, Colorado 80111

                                                   8010 Glen Lane
                                                   Eden Prairie, MN 55305

                                                   1641 Plymouth Road
                                                   Minnetonka, MN 55305

                                                   2301 Fountain Square Drive
                                                   Lombard, IL 60148

Locations of All Tangible Collateral:              8010 Glen Lane
                                                   Eden Prairie, MN 55305

                                                   1641 Plymouth Road
                                                   Minnetonka, MN 55305

                                                   2301 Fountain Square Drive
                                                   Lombard, IL 60148


                                       4
<PAGE>



                                  EXHIBIT 5.5.3
                               Leased Store Leases

1.       Eden Prairie: That certain Lease dated June 24, 1998, as amended by
First by and between Prairie Entertainment Associates, a Minnesota general
partnership, as Lessor, and Prairie Restaurant Group, Inc., a Minnesota
corporation, as Lessee.

2.       Minnetonka:
        a.       That certain Lease Agreement dated June 2, 1989 by and between
                  CSM Bonaventure Limited Partnership, as ulimate successor in
                  interest to Bonaventure Associates Limited Partnership, as
                  Lessor, and Bregean Investment Group, Inc., a Minnesota
                  corporation, as ultimate successor in interest to Champps of
                  Minnetonka, Inc, as Lessee.

         b.       That certain Office Lease Agreement dated February 5, 1990 by
                  and between CSM Bonaventure Limited Partnership, as ultimate
                  successor in interest to Welsh Companies, as Lessor, and
                  Bregean Investment Group, Inc., a Minnesota corporation, as
                  ultimate successor in interest to Champps of Minnetonka, Inc,
                  as Lessee.

         c.       That certain Bakery Lease Agreement dated November 24, 1992 by
                  and between CSM Bonaventure Limited Partnership, as ulimate
                  successor in interest to CSM Investors, Inc., as Lessor and
                  Bregean Investment Group, Inc., a Minnesota corporation, as
                  ultimate successor in interest to Champps of Minnetonka, Inc,
                  as Lessee.



                                       5
<PAGE>



                                   EXHIBIT 5.6
                         Indebtedness for Borrowed Money



None.


                                       6
<PAGE>



                                 EXHIBIT 5.20.1
                  Collective Bargaining Agreements: Grievances


None.


                                       7
<PAGE>



                                  EXHIBIT 6.6.1

                      (See Attached Coverage Requirements)



                                       8
<PAGE>



                                   EXHIBIT 5.8

                                   LITIGATION

None.


                                       9