<PAGE>

                                                                    Exhibit 99.1

                                                                    CONFIDENTIAL
                                                                    ------------


                               COMMITMENT LETTER

                        American Commercial Capital LLC
                         5963 La Place Court, Suite 300
                               Carlsbad, CA 92008


                                                                    May 10, 2001

Rockbay Properties Ltd. II
3825 Lake Austin Blvd.
Suite 401
Austin, Texas  78703
Attention: Stephen Oyster

                Re:  Rockbay Properties Ltd. II
                     ACC Loan # 01 01138 01

Sir/ Madam:

     American Commercial Capital LLC ("ACC") is pleased to inform you that ACC
has approved your loan application ("Application") for a loan or loans
(collectively, the "Loan"), and agrees to lend to the captioned borrowers
(hereinafter referred to individually or collectively, as the "Borrower", whose
liability, with respect to any Loan, if more than one person or entity, shall be
joint and several) the respective principal amounts and subject to the terms and
conditions set forth in this letter and the exhibit hereto.

     The principal terms and conditions on and subject to which Secured Party is
willing to make the Loan are set forth herein in this letter (the "Commitment
Letter"), and the Summary of Terms (the "Term Sheet") attached hereto as Exhibit
A.

     Unless otherwise defined herein, capitalized terms used herein shall have
the meanings accorded to such terms in the Term Sheet.  Unless otherwise defined
therein, capitalized terms used in the Term Sheet shall have the meaning given
to such terms in this Commitment Letter.

     Although ACC is committing to provide the entire amount of the Loan on the
terms set forth in the Term Sheet, the Loan may be funded by an affiliate or
assignee of ACC (ACC or such affiliate or assignee and their respective
successors and assigns, "Secured Party").

     Each Borrower and the undersigned principal(s) of Borrower (collectively
and jointly and severally, "Principal") represents and warrants and covenants
that:

     (1) all information which has been or is hereafter made available to
Secured Party or any business valuation consultant or any of their respective
representatives by Principal, Borrower or any of its officers, directors,
employees, agents or representatives ("Representatives") in connection with the
transactions contemplated hereby is and will be complete and correct in all
material respects and does not and will not contain any untrue statements or
omit to state a material fact necessary in order to

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make the statements contained therein not misleading in light of the
circumstances under which such statements are made; and

     (2) all financial projections that have been or are hereafter prepared by
or on behalf of Principal, Borrower or any of its Representatives and made
available to Secured Party or any business valuation consultant or any of their
respective representatives, or their respective counsel have been or will be
prepared in good faith and based upon reasonable assumptions.

     The Borrower agrees to provide Secured Party with additional information as
Secured Party reasonably requests and to afford Secured Party and its
Representatives with access, from time to time, to Borrower, Principals and
their respective businesses and assets. In addition, each Borrower and Principal
agrees to supplement in writing the information and projections referred to in
the preceding paragraph from time to time, so that the representations and
warranties in the preceding paragraph remain correct.  Secured Party may, in its
sole discretion, use and rely on such information and projections in connection
with the Loans, without independent verification thereof and notwithstanding
diligence or investigation made by or on behalf of Secured Party.

     Secured Party's commitment hereunder is subject to, but shall not be
limited to, the conditions set forth herein and in the Term Sheet, the execution
and delivery of this Commitment Letter, delivery of the Commitment Fee, and the
negotiation, execution and delivery of various loan documents with respect to
each Loan substantially in the form of Secured Party's standard loan
documentation, including, but not limited to, a Secured Promissory Note, a
Security Agreement and applicable Guarantees, Mortgages/Deeds of Trust, and
other legal documents that may be required by Secured Party (collectively, the
"Loan Documents").  Secured Party's commitment also is subject to the completion
of the review and due diligence efforts that Secured Party shall deem necessary
regarding the organization and capital structure of Borrower and the Secured
Party's satisfaction with the results of such efforts, in its sole discretion,
and to the satisfaction of the conditions to closing including all items
identified in Exhibit A, and the closing of the Loans no later than 30 days
after the Anticipated Closing Date for the Loans identified on the Term Sheet.

     If at any time prior to closing, Secured Party learns of facts and
circumstances, either pursuant to Secured Party's due diligence review or
otherwise, that in the opinion of Secured Party could materially and adversely
affect the Borrower, or the related collateral or business, or the program of
loans of which the Loans are a part is terminated by Secured Party, Secured
Party in its sole discretion may suggest alternative financing amounts or
structures, or may decline to provide the proposed Loan.  Any matters which are
not addressed herein or in the Term Sheet shall be subject to the approval of
Secured Party in its sole discretion.

     All costs and expenses (including, without limitation, the fees and
expenses of counsel and other professionals retained by Secured Party, and other
out-of-pocket expenses) arising out of or in any way related to the preparation,
negotiation, execution and delivery of this Commitment Letter, the Loan
Documents and any transactions contemplated therein shall solely be for the
account of Borrower and Principal, and each Borrower and Principal agrees to pay
such costs and expenses directly, or through the prompt reimbursement of Secured
Party, whether or not the Loans close, or by a deduction from Loan proceeds on
the closing date.  Each Borrower and Principal further agrees to indemnify and
hold harmless Secured Party and its Representatives (each, an "Indemnified
Person") against, and to reimburse each Indemnified Person, upon its demand,
for, any losses, claims, damages, liabilities or other expenses ("Losses") to
which such Indemnified Person may become subject, to the extent that such Losses
arise out of or in any way relate to or result from this Commitment Letter, the
Loan Documents or the transactions contemplated therein, including, without
limitation, any costs or expenses incurred in connection with investigating,
defending or otherwise participating in any legal proceeding relating to any of
the foregoing (whether or not such Indemnified Person is a party thereto);

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<PAGE>

provided however, that the foregoing will not apply to any Losses to the extent
that they are adjudged by a final decree or order of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Person.  Each Borrower's and Principal's obligations under this
paragraph shall remain effective whether or not definitive financing
documentation is executed and notwithstanding any termination of this Commitment
Letter and the terms hereof shall survive the closing of the Loan.  Neither
Secured Party nor any other Indemnified Person shall be responsible or liable to
any other person for consequential damages which may be alleged arising out of
or in any way related to this Commitment Letter, the Loan Documents or the
transactions contemplated therein.

     By executing this Commitment Letter, Borrower acknowledges that this
Commitment Letter and the Loan Documents contemplated herein are the only
agreements between the parties hereto with respect to the Loan and set forth the
entire understanding of the parties with respect thereto.  This Commitment
Letter and the terms set forth in the Term Sheet may not be amended except
pursuant to a writing signed by each of the parties hereto.  The parties agree
that this Commitment Letter and the Loan Documents shall be governed by and
construed in accordance with the internal laws of the State of New York.

     For a period ending on the third anniversary of the date hereof, neither
Borrower, nor Principals, nor any of their respective affiliates shall, directly
or indirectly, (a) employ, hire, engage (whether as a consultant, independent
contractor or otherwise), or compensate in any manner any Restricted Person, (b)
solicit or engage in any discussions concerning any employment, engagement or
compensation of a Restricted Person with any Restricted Person, or (c) recommend
or suggest to any other person, firm or entity that it or any of its affiliates,
clients or customers solicit, employ or engage any Restricted Person, or provide
any information concerning any Restricted Person to third party.   For purposes
hereof, a person shall be deemed to be a "Restricted Person" so long as such
person is employed by ACC or any of its affiliates, and for a period of one year
following such employment.  In the event of a breach of  this provision,
Borrower and Principals shall pay to ACC, on demand, as liquidated damages and
not as a penalty, an amount equal to the greater of (x) $100,000 and (y) the sum
of the annualized base salary and other regular compensation being paid to such
Restricted Person by ACC and its affiliates as of the date of the breach.  It is
understood and agreed that the amount of damages which would be suffered as a
result of any breach of this provision would be difficult to measure and that
such payment amount constitutes reasonable liquidated damages for such breach.

     This letter is delivered to you on the understanding and by your receipt
hereof you agree that whether or not this commitment is accepted by you, prior
to the closing and funding of the Loan contemplated hereby, neither this letter
nor any of its terms or substance hereof (including those set forth on the
Exhibits and Schedules hereto) shall be disclosed by you, directly or
indirectly, in whole or in part to any other person except to your
Representatives to whom disclosure is necessary in connection with your
consideration of the terms hereof and who have been advised of and agree to
abide to these confidentiality provisions or as may be compelled in a judicial
or administrative proceeding or as otherwise required by law and Borrower and
Principal agree to give Secured Party prior notice of any such disclosure.

                            [SIGNATURE PAGE FOLLOWS]

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<PAGE>

     If you are in agreement with the foregoing, please sign and return to
Secured Party the enclosed copies of this letter no later than 5:00 P.M., New
York time, on Monday May 14, 2001.  This offer shall terminate at such time
unless prior thereto we shall have received a signed copy of this Letter and the
Commitment Fee.


     We look forward to working with you on this transaction.

                              AMERICAN COMMERCIAL CAPITAL LLC


                              By:  /s/ Brian J. Roach
                                   -------------------------------
                                         Brian J. Roach
                                         Managing Director


                              By:  /s/ James Kendrick Noble III
                                   -------------------------------
                                         James Kendrick Noble III
                                         Managing Director


ACCEPTED AND AGREED TO:

BORROWER:                          PRINCIPAL:
ROCKBAY PROPERTIES LTD II:         STEPHEN OYSTER


By: /s/ Stephen Oyster             /s/ Stephen Oyster
    ------------------             ------------------
    Name:  Stephen Oyster           Name:  Stephen Oyster
    Title: President of
           Bayshore Properties, Inc.
           the General Partner


                                    Page 4
<PAGE>

                                              Loan Reference Number:____________

                                   EXHIBIT A

                         CONFIDENTIAL SUMMARY OF TERMS

                                 ACC TERM LOAN

<TABLE>
--------------------------------------------------------------------------------------------------------
<S>                                                 <C>
Secured Party:                                      American Commercial Capital LLC, its affiliates
                                                    and/or successors and assigns
--------------------------------------------------------------------------------------------------------
Borrower:                                           Rockbay Properties Ltd. II
--------------------------------------------------------------------------------------------------------
Brand:                                              Pancho's Mexican Buffet
--------------------------------------------------------------------------------------------------------
Loan Type:                                          Fee
--------------------------------------------------------------------------------------------------------
Unit Address:                                       See Schedule 5
--------------------------------------------------------------------------------------------------------
Initial Principal Amount:                           Up to $5,000,000 in aggregate (see Paragraph #1)
--------------------------------------------------------------------------------------------------------
Minimum Borrower FCCR, (as defined in the Loan      1.10x
 Documents)
--------------------------------------------------------------------------------------------------------
Tenant Target FCCR and CU Tenant Target FCCR:       1.40x

Tenant Default FCCR and CU Tenant Default FCCR:     1.20x
--------------------------------------------------------------------------------------------------------
Interest Rate:                                      Benchmark Treasury Rate on the Rate Lock Date plus
                                                    445 basis points.  (See Paragraph #3)
--------------------------------------------------------------------------------------------------------
Benchmark Treasury Rate:                            For each Loan, U.S. Treasury Note selected by
                                                    Secured Party that has a maturity approximately
                                                    equal to that of the subject Loan.
--------------------------------------------------------------------------------------------------------
Default Rate:                                       Interest Rate plus 300 basis points (see Paragraph
                                                    # 6)
--------------------------------------------------------------------------------------------------------
Monthly Payment:                                    TBD
--------------------------------------------------------------------------------------------------------
Call Protection:                                    Defeasance  (See Paragraph #8)
--------------------------------------------------------------------------------------------------------
Scheduled Period of Amortization (Months):          See SCHEDULE 5 (See Paragraph #4)
--------------------------------------------------------------------------------------------------------
Scheduled Maturity (Months):                        See SCHEDULE 5
--------------------------------------------------------------------------------------------------------
Commitment Fee                                      $50,000
--------------------------------------------------------------------------------------------------------
Anticipated Closing Date                            June 15, 2001
--------------------------------------------------------------------------------------------------------
</TABLE>

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     1.   Principal Amount: The Loans will be evidenced by one or more secured
          ----------------
promissory notes (each a "Note"), each in an amount consisting of the Initial
Principal Amount referred to below. The anticipated Initial Principal Amounts
allocated to the units are set forth on SCHEDULE 5 hereto. These amounts are
subject to adjustment in accordance with the Secured Party's underwriting
guidelines based upon Secured Party's verification of the information submitted
to the Secured Party and based upon the appraised value of the collateral
locations. The Principal Amount will not exceed ninety-five percent (95%) of the
appraised land, building and equipment value of the Units. The Borrower
acknowledges that the Units will be grouped together in a manner determined in
the Secured Party's sole discretion and a Loan will be made hereunder in respect
of each group of Units in an amount equal to the Initial Principal Amount
allocated to such Units. For certain purposes, including calculation of CU
Tenant Target FCCR and CU Tenant Default FCCR, a group of Units covered by a
single security agreement (a "pod") will be considered as a single Unit. Under
the terms of the Loan Documents, all the Loans will be cross defaulted and
cross-collateralized with each other. The Loan Documents will provide for the
uncrossing, from time to time, of certain of the Loans and/or Units relating to
the Loans in Secured Party's sole discretion and any resulting pods of Loans
shall be cross defaulted and cross-collateralized to the extent and in form and
substance satisfactory to Secured Party in its sole discretion.

     2.   Payments of Principal and Interest: An initial payment will be due
          ----------------------------------
with respect to each Loan on the date such Loan closes (the "Funding Date
Payment"), and will be paid from the loan proceeds to be disbursed at closing.
The Funding Date Payment for each Loan will be in an amount equal to the
interest accruing on such Loan during the period from (and including) the date
such loan closes to (but excluding) the first day of the calendar month next
succeeding the month in which the Loan is funded (unless funding occurs on the
first day of the month) and the interest and principal due on the first Payment
Date. The required monthly payment amount will consist of (i) amortization of
the Principal Amount over the Amortization Period (described below), and (ii)
interest on the outstanding Principal Amount.

     3.   Payment Date ACH: All payments after the Borrower's Funding Date
          ----------------
Payment through the maturity date will be made on the first day of each calendar
month (or if such date is not a business day, the first business day of the
month) (each a "Payment Date") commencing with the first day of the second
calendar month following the funding of each Loan (or the first calendar month
following the funding of each Loan if such Loan is funded on the first day of a
month). All scheduled payments will be required to be made by bank account debit
in United States dollars and in immediately available funds, at such place or
places as the Secured Party requests.

     4.   Amortization: Borrower will be required to amortize the Initial
          ------------
Principal Amount of each Loan over the Scheduled Period of Amortization.
Notwithstanding that interest accrues on Actual/360 Basis (as defined in
Paragraph #6 below), equal monthly payments of principal and interest shall be
determined using 360-day year consisting of 12 months of 30 days each ("30/360
Basis"). Borrower acknowledges that interest calculated on Actual/360 Basis
exceeds interest calculated on 30/360 Basis and, therefore, (a) a greater
portion of each monthly installment of principal and interest will be applied to
interest using Actual/360 Basis than would be the case using 30/360 Basis and
(b) the unpaid principal balance due at maturity using Actual/360 Basis will
exceed that which would result using 30/360 Basis.

     5.   Term: All outstanding principal and accrued and unpaid interest and
          ----
other amounts will be due and payable on the Scheduled Maturity Date.

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     6.   Interest Rate; Default Rate: Borrower agrees to pay interest on the
          ---------------------------
outstanding principal amount until each Loan has been paid in full in accordance
with its terms. The interest rate for each Loan prior to an Event of Default
will be a fixed per annum rate of interest, as defined in Exhibit A (the
"Interest Rate") and determined by Secured Party on the business day prior to
the closing of the Loan or the day of closing of the Loan, as determined by
Secured Party in its sole discretion ("Rate Lock Date"). Interest will be
calculated on the basis of a 360-day year and charged on the basis of actual
days elapsed ("Actual/360 Basis"). Borrower agrees that upon the occurrence of
an Event of Default, Secured Party shall be entitled to receive and Borrower
shall pay interest on the entire unpaid principal sum at a per annum rate equal
to the lesser of (a) three percent (3%) plus the Interest Rate and (b) the
maximum interest rate which Borrower may by law pay (the "Default Rate").

     7.   Late Charge: In the event that Secured Party has not received a
          -----------
required monthly payment amount on any Payment Date, or any other amount when
due, Borrower shall promptly pay, upon demand, a late charge in an amount equal
to the product of (a) the amount due on any such date less the amount actually
received on such date multiplied by (b) 0.05.

     8.   Prepayment/Call Protection: Prior to the closing of the Loan, Secured
          --------------------------
Party will notify Borrower of Secured Party's decision to utilize either the
prepayment/call protection provision described on Schedule 1A or Schedule 1B in
its sole and absolute discretion.

     9.   Use of Proceeds: Borrower will use the proceeds of the Loan solely for
          ---------------
lawful business or commercial purposes identified in the Borrower's application
as further described on SCHEDULE 4 attached hereto, and not otherwise prohibited
by the terms hereof or the Loan Documents.

     10.  Collateral; Disposition Restrictions: The Borrower and Tenant will
          ------------------------------------
grant Secured Party a first mortgage lien, deed of trust or deed to secure debt
on the real property on which the Borrower and Tenant operates its business at
the Units and a first priority perfected security interest in and right of set
off with respect to the Collateral (as defined in the Loan Documents) including
the following property and assets, whether now owned and existing or hereafter
acquired or arising: all goods (including equipment and inventory), general
intangibles (including the principal agreements but with respect to the
franchise agreements, fuel agreements and licenses, if any, only as provided
below), accounts, certificates of title, fixtures, money, instruments,
securities, investment property, documents, chattel paper, and all other
personal property; all additions and accessions thereto, substitutions therefor
and replacements and improvements of or to any or all of the foregoing, all
interest, income, dividends, distributions and earnings thereon or other monies
or revenues derived therefrom, including any such property received in
connection with any disposition of any principal agreement and all monies which
may become payable under any policy insuring the Collateral or otherwise
required to be maintained under the Loan Documents (including return of unearned
premium) and all products and proceeds of the foregoing. In the event and to the
extent that Borrower or Tenant now or hereafter may grant a security interest in
or other lien on its rights under any principal agreement (e.g. franchise
agreement, fuel supply agreements and license) without Borrower breaching or
being in default thereunder, either because the terms of the principal agreement
do not restrict such grant or each of the parties thereto has consented to such
grant or applicable law permits such grant, or for any other reason, each of
Borrower and Tenant will grant a security interest in the principal agreements,
whether now owned or hereafter acquired, and all proceeds thereof to the extent
allowed by law. In connection therewith, the Borrower and Tenant will execute
one or more Security Agreements. In addition, the Borrower and Tenant will agree
not to sell, assign, transfer, grant a security interest in, or otherwise
encumber or dispose of any of the Collateral or any principal agreement except
as expressly permitted in the Loan Documents. Such liens and security interests
will be subject to only those liens and encumbrances, if any, expressly
permitted by Secured Party ("Permitted Encumbrances").

     11.  Assignment: Borrower may not, in whole or in part, directly or
indirectly, assign its rights

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<PAGE>

and obligations hereunder or under the Loan Documents with respect to any Loan
without specific prior written consent of Secured Party. Any such assignment
will require, among other things, assignee satisfying, to Secured Party's
discretion, Secured Party's then applicable underwriting guidelines, and the
payment to Secured Party of an amount equal to 1% of the outstanding principal
amount of the Loan to be assigned and all reasonable costs and expenses incurred
by Secured Party in connection with said assignment.

     12.  Event of Default: An Event of Default is defined to include (i)
          ----------------
Borrower's failure to make any payment when due under the Loan Documents or
Borrower's disclaimer of liability under or enforceability of any Loan Document;
(ii) the non-renewal or termination of any principal agreement; or (iii)
Borrower's default under, failure to perform or observe any covenant or
condition of or agreement in, or breach of, or making of a material inaccuracy
in or omission from, any representation or warranty under or in any of the Loan
Documents, any principal agreement, any financial or other statement delivered
to Secured Party or any agreement, instrument or obligation in connection with
any Permitted Encumbrance, and such other events of default typical for these
types of facilities and in the context of this transaction, which default,
failure, breach, inaccuracy or omission, continues beyond any applicable grace
period provided. Cross-defaults will be limited to those of "Scheduled
Affiliates" (which will be those affiliates of Borrower who have executed and
delivered any Loan Documents).

     13.  Remedies: In the Event of Default under any of the Loan Documents, the
          --------
term of the Loan may be accelerated (requiring Borrower to pay the full amount
due in the event of a prepayment including the Prepayment Premium Amount as
defined in SCHEDULE 1) and Secured Party will, among other things, be accorded
all rights and remedies under the Loan Documents, and by law (including the
Uniform Commercial Code), including, without limitation, the right to take
possession of and operate the Collateral and to dispose of such Collateral.

     14.  Closing Documents:
          -----------------

     A.   On or before the business day prior to the closing of the Loans,
Borrower must execute and deliver in escrow to the Secured Party or its counsel
pending closing the Loan Documents in form and substance satisfactory to Secured
Party and Secured Party's counsel, including the following for each Unit:

               i.   Secured Promissory Note(s) evidencing the Borrower's
obligation to repay the Loans;

               ii.  Three copies of the Security Agreement(s) granting to
Secured Party security interests in the Collateral referred to above;

               iii. Three copies of each Guarantee, if any, and three copies of
each Agreement of Principals (if any);

               iv.  Three copies of the Mortgages, Deeds of Trust, Deeds to
Secure Debt, and/or collateral assignments of lease, if any ("Mortgages"),
encumbering the Collateral referred to above and three copies of the Assignment
of Leases and Rents related thereto;

               v.   Three copies of the Environmental Liabilities Agreement;

               vi.  Three copies of the Assignment of Licenses, Permits and
Contracts; and

               vii. Three copies of any and all other documents required by
Secured Party or Secured Party's counsel in connection with the Loans.

     B.   On or before the business day prior to the closing, Secured Party
shall have received

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each of the following documents (and three copies of items i, ii and iv), in
form and substance satisfactory to Secured Party and Secured Party's counsel:

          i.   Opinions of Borrower's legal counsel in all applicable
jurisdictions and conforming with Secured Party's standard form opinion;

          ii.    Organizational documents for each entity Borrower and
Guarantor, certified by the respective Secretaries of State of the states where
organized and/or appropriate officers;

          iii.   Certificates of good standing for each entity Borrower and
Guarantor issued by the respective Secretaries of State of the states where
appropriate, together with evidence of payment of all corporation and/or
franchise taxes in each such state;

          iv.    Certified transactional resolutions and incumbency of officers
and signatories, as appropriate;

          v.     Insurance policies satisfying Secured Party's requirements from
providers satisfying Secured Party's requirements (generally rated A/X or better
by A.M. Best Company Inc.) and, among other things, covering the full
replacement value of all improvements, and providing for business interruption
insurance, and flood, earthquake, other hazard insurance policies for each
location as appropriate; and naming Secured Party, its successors and assigns,
as loss payee (see SCHEDULE 2 "Insurance Requirements");

          vi.    Business and all other required licenses, permits, and
certificates required to lawfully operate each business of each unit location;

          vii.   Complete copies of all leases (including superior leases in the
case of any sub lease) with respect to each Unit location;

          viii.  With respect to each Loan, a valid permanent certificate of
occupancy for each Unit location, covering all improvements or satisfactory
letter from appropriate authority;

          ix.    With respect to each Loan secured by fee or ground lease
mortgage or, at Secured Party's discretion, leasehold mortgage (a) an ALTA
policy of mortgage title insurance in the amount of the Loan containing no
exceptions other than those approved by Secured Party and its counsel, and (b) a
currently dated title survey satisfying Secured Party's requirements;

          x.     With respect to each leased Unit location, an estoppel letter
in Secured Party's standard form, similar estoppels may be required of lessor's
lender for each superior loan, if any;

          xi.    With respect to each leased Unit location a non-disturbance
agreement in Secured Party's standard form may be required from each mortgagee
or lessor;

          xii.   With respect to each Franchisor, an Agreement of Franchisor and
Franchisee satisfactory to Secured Party; and

          xiii.  Any and all other documents required by Secured Party in
connection with each Loan.

          Secured Party's forms of Loan Documents and required closing
documents, including legal opinions and resolutions will be provided to you and
your counsel following your acceptance of this Commitment Letter.

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<PAGE>

          15.  Commitment Fee: From and after the date of this Commitment
               --------------
Letter, the full amount of the application fee and other fees, if any,
previously paid by Borrower are deemed fully earned and non-refundable. In
consideration of the delivery of this Commitment Letter, Secured Party has
earned and Borrower will pay to Secured Party a non-refundable Commitment Fee
concurrently with the execution and delivery hereof.

          16.  Additional Conditions to Closing: The following are additional
               --------------------------------
conditions to Secured Party's obligation to close, which must be satisfied ten
(10) days prior to the Anticipated Closing Date and to Secured Party's sole
discretion.

          A.   Disposition satisfactory to Secured Party of all outstanding
liens, claims, encumbrances or rights of others affecting the Collateral.

          B.   Secured Party shall determine in its sole discretion that the
Borrower FCCR is not less than 1.10x and that the Tenant FCCR and Tenant CU
FCCR, as defined in Paragraph #22, are not less than 1.50x. The Loan Documents
to be executed by Borrower shall contain financial covenants of the type set
forth therein, including, but not limited to, requiring a Minimum Borrower FCCR,
which Borrower will be required to meet and maintain both at the time of closing
and during the term of the Loans. An Event of Default will occur if any of the
Minimum Borrower FCCR levels are not met.

          C.   At the closing Borrower must pay all closing costs, including
Secured Party's attorneys' fees and disbursements.

          D.   The date, time and place of closing will be set by Secured Party.

          E.   Borrower must be in full compliance with the Borrower's principal
agreements for each location, and the terms thereof (including, without
limitation, the duration thereof) must be satisfactory to Secured Party in all
respects. Secured Party's counsel must be satisfied with the documentation,
proceedings and legal opinions incident to this transaction.

          F.   There shall have been no material adverse change in any Borrower
or Guarantor's financial condition or prospects or with respect to any
collateral since the date of this Commitment Letter. Secured Party shall have
received trade and bank references satisfactory to it in its sole and absolute
discretion.

          G.   The Secured Party's environmental requirements for each Unit
location must be satisfied to Secured Party's discretion (see SCHEDULE 3
"Environmental Requirements").

          H.   The Secured Party shall have received, in form and substance
satisfactory to Secured Party, updated unit level and corporate YTD P&L's (and
corresponding 2000 P&L's) and a corporate balance sheet through such period that
the financial data is not less than 90 days old from the anticipated closing
date.

          I.   The Secured Party shall have completed, in form and substance
satisfactory to Secured Party, full lien, tax, LEXIS-NEXIS, public records,
credit, judgment and background search on the Principal and Borrower and Secured
Party shall have received satisfactory resolution of any identified items as
determined by Secured Party.

          J.   The Secured Party shall have received appraisal(s) of the Unit(s)
prepared by an independent appraiser holding an M.A.I. or S.R.E.A. designation
who shall be designated and engaged by Secured Party and licensed in the state
where the Unit(s) are located. Such appraisal shall be addressed to Secured
Party and (I) shall be prepared in accordance with current federal regulatory
requirements, (ii) shall note any readily visible environmental conditions; and
(iii) shall be satisfactory to


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<PAGE>

Secured Party in all other respects. The appraisal shall also indicate the basis
of and the assumptions used in calculating the appraised value. The fees and
expenses for said appraisal(s) shall be paid by Borrower.

     K.  The Secured Party shall have received, in form and substance
satisfactory to the Secured Party, a capital expenditure schedule for the
collateral units for the past three fiscal years and a budget for next three
fiscal years.

     L.  The organization and structure of the Borrower shall be a special
purpose entity satisfying Secured Party's special purpose entity requirements or
another entity satisfactory to Secured Party in its discretion.

     17. Brokerage Commissions:  It is understood and agreed that Secured Party
         ---------------------
shall be under no obligation for payment of any brokerage commission or fee of
any kind with respect to this commitment and that by Borrower's acceptance of
this commitment, Borrower agrees to indemnify and hold Secured Party harmless
from any liabilities, cost and expenses, and claims from any other person or
entity for any fees or commissions with respect to this commitment and any of
the transactions contemplated hereby.

     18. Costs and Expenses:  By acceptance of this commitment, Borrower agrees
         ------------------
to pay all costs and expenses in connection with the Loans and the transactions
contemplated herein, and the preparation, negotiation, execution and delivery of
the Loan Documents, including without limitation, appraisals, environmental and
accountant reports, title insurance, preparation of surveys, recording and
filing fees, mortgage taxes, and Secured Party's attorneys' fees. Borrower has
previously given the Secured Party an initial expense deposit of $25,000 (the
"Initial Expense Deposit"). Upon depletion of the Initial Expense Deposit, the
Borrower will be required to post an additional deposit sufficient to cover
estimated closing and processing costs.

     19. Rate Lock: The Borrower acknowledges that in order for Secured Party
         ---------
to establish a fixed rate of interest for the Loans prior to the closing date of
the Loan, Secured Party is required to enter into certain financial arrangements
with third parties on the date such fixed rate is established, provided, that,
if the Borrower shall elect to rate lock prior to the Secured Party electing to
do so, and the Secured Party consents to such early rate lock in its sole
discretion, the Borrower agrees to enter into a separate rate lock agreement in
form and substance satisfactory to the Secured Party and including the payment
of a deposit or other rate lock fee as required by the Secured Party. In the
event that the Loans do not close for any reason (other than Secured Party's
willful failure to close notwithstanding Borrower's compliance with all of the
terms and conditions of this Commitment Letter) Borrower shall pay to Secured
Party an amount equal to any and all loss, cost or expense incurred by Secured
Party as a result of the failure to close, including, without limitation,
losses, costs and expenses incurred as a result of the liquidation or
redeployment of funds acquired or reserved to fund the Loans. A certificate
prepared by Secured Party setting forth in reasonable detail the amount of such
loss, cost or expense and the basis therefor shall be conclusive evidence,
absent manifest error, of the amount to be paid by Borrower.

     20. Cooperation:  In the event that any one or more of the Loans are
         -----------
securitized or sold as a whole loan, the Borrower shall agree (a) to meet with
representatives of the national credit rating agencies and prospective
purchasers and investors of such Loan(s) to discuss the business and operations
of the Units, (b) to cooperate with the reasonable requests of such
representatives, purchasers, investors and the Secured Party, including agreeing
to non-material modifications (provided that the Borrower's consent would be
required to change any economic terms of the Loan, such consent not to be
unreasonably withheld) of the Loan Documents, providing "comfort" letters
concerning Borrower's financial statements and legal opinions, delivering
updated information
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regarding Borrower, the Principals and the Collateral, and reviewing the Secured
Party's offering materials to the extent relating to the Borrower, the Units or
the Loan, and (c) to take such other actions to facilitate the securitization or
whole loan sale as the Secured Party shall request.

     21. Agreement of Principals: Borrower's Principals agree that they will
         ------------------------
refrain from the actions listed below ("Trigger Events"). In the event of the
occurrence of any of the Trigger Events, the Principals will be personally
liable for Borrower's obligations under the Loan and for any other losses
incurred by the Secured Party in the event of the occurrence of any of the
following Trigger Events:

     A.  Fraud (including an intentional violation of any covenant under the
Loan Documents), misappropriation of funds or intentional misrepresentation made
by the Principal, the Borrower, or any Guarantor (each a "Debtor") or any of
their respective Affiliates or principals and/or equity owners or their
employees, officers, directors, agents or representatives in connection with any
of the Loan Documents (including without limitation any claim of fraudulent
conveyance is made in connection with the transactions contemplated hereby);

     B.  Dividends, distributions or payments being made to the equity owners or
Affiliates of the Borrower with respect to the Collateral or Property in
contravention of the provisions of the Loan Documents;

     C.  Any damage or material diminution in the value of the Collateral or
Property is caused by the willful, wanton or tortuous act or omission of the
Principal, or any other Debtor;

     D.  Any felonies or crimes involving moral turpitude of Principal or any
other Debtor, their Affiliates or principals and/or equity owners or any willful
violations of laws including and willful violation of any Environmental Laws;

     E.  Any misuse, misapplications or misappropriation of the proceeds of any
Loan;

     F.  Any intentional act by the Principal or any other Debtor which
prevents, delays or hinders Secured Party's perfection of its interest in the
Collateral or Property;

     G.  Any voluntary disposition or encumbrance of any Collateral (including
any Principal Agreement)or Property of any part thereof or interest therein by a
lien or encumbrance not expressly permitted by the Loan Documents;

     H.  The Principal or any other Debtor files, initiates or consents to the
filing of a voluntary petition under any chapter of the Bankruptcy Code, or in
any manner seek relief under the insolvency laws of any state or jurisdiction or
the appointment of a trustee, receiver, conservator or liquidator for all or any
part of any Debtor's properties and assets;

     I.  The Principal or any other Debtor, or any of their respective equity
owners or Affiliates voluntarily seek, cause or take any action to effect a
dissolution or liquidation of the Principal or any other Debtor;

     J.  The Principal or any other Debtor, or any of their respective equity
owners or Affiliates file, initiate or consent to the filing of an involuntary
petition under any chapter of the Bankruptcy Code against the Principal or any
other Debtor;

     K.  The Principal or any other Debtor, or any of their respective equity
owners or Affiliates consent to, initiate or institute or make any claim or
proceedings that seeks or is intended to result in consolidating or otherwise
causing the Principal, or any other Debtor or any of their respective properties
or assets to become subject to any other Person's case, action or proceeding
under the insolvency laws of any state or jurisdiction, or the Collateral
(including any Principal Agreement) or

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<PAGE>

Property, or any portion thereof or interest therein, to be included in any
other Person's bankrupt estate or otherwise subject to the claims of creditors
of any other Person, the property of any bankruptcy estate or subject to any
proceeding under any insolvency laws of any state or other jurisdiction;

The Principal or any other Debtor, or any of their respective equity owners or
Affiliates consent to, initiate or institute or cause the Principal, or any
other Debtor or any Affiliate to disclaim any representation, warranty or
certificate made by the Principal or any other Debtor, or any of their
respective equity owners or any Affiliate in any Loan Documents or otherwise in
a writing delivered to the Secured Party in connection with the Loan; and The
Principal or the any other Debtor or any of their respective Affiliates engage
in unauthorized relocation of Business, Unit or Collateral.

     22.  Borrower and Tenant Lease: The lease agreement between the Borrower
          -------------------------
and the Tenant, Pancho's Mexican Buffet, Inc. (the "Lease"), shall be
satisfactory in form and substance to the Secured Party in its sole discretion.
The Lease shall contain Tenant financial covenants that the Secured Party shall
determine in its sole discretion. The Tenant financial covenants shall include,
but are not limited to, (x) a Tenant Target FCCR and a CU Tenant Target FCCR (as
will be defined in the loan documents and the Lease) of 1.40x which Tenant will
be required to use its commercially reasonable efforts to maintain and (y) a
Tenant Default FCCR and a CU Tenant Default FCCR of 1.20x, which the Tenant will
be required to meet and maintain both at the time of closing and during the term
of the Loan. Certain limitations (including restrictions on payments to
affiliates and incurrence of additional indebtedness, see paragraph #26) will
apply during any period in which the Tenant Target FCCR and/or CU Tenant Target
FCCR levels are not met. An Event of Default will occur if the Tenant Default
FCCR and/or CU Tenant Default FCCR levels are not met. In addition the Lease
shall contain Tenant reporting requirements that the Secured Party shall
determine in its sole discretion. For this purpose, all of the Tenant's Units
leased from Borrower to Tenant and covered by a security agreement for benefit
of Secured Party will be grouped together for purposes of calculating CU Tenant
Target FCCR and CU Tenant Default FCCR. The Tenant financial covenants shall
include, but are not limited to, providing certified financial statements (which
may be unaudited) of Tenant within 20 days following the end of each fiscal
quarter and providing monthly sales reports within 10 days of month's end. In
addition, the Lease will include a covenant by the Tenant to expend each year an
amount equal to 1.0% of sales of the Tenant for such year on capital
expenditures relating to Units operated by the Tenant.

     23.  Guarantee: The Principal will provide a guarantee of Borrower's
          ----------
obligations to Secured Party in form and substance satisfactory to Secured
Party. The guarantee will provide that it shall be released (if no Event of
Default or event which with the passage of time or the giving of notice, or both
would constitute an Event of Default has occurred and is continuing) on the date
that Borrower submits evidence to Secured Party in form and substance
satisfactory to Secured Party that Borrower (x) has made and implemented the G&A
adjustments set forth on Schedule 9 hereto and (y) has completed two hundred
fifty thousand ($250,000) in Capital Expenditure upgrades on Units identified on
Schedule 5 or such other capital expenditures deemed acceptable to Secured Party
in its discretion.

     24.  Sale of Assets:  The Borrower and Tenant shall covenant that all funds
          ---------------
generated from the sale of assets of the Tenant, will be used for general
business purposes and not distributed by the Tenant.

     25.  Negative Pledge Collateral: The Secured Party shall receive a negative
          ---------------------------
pledge agreement on the assets identified on SCHEDULE 6 and on SCHEDULE 7. The
Tenant will execute a Negative Pledge in form and substance to Secured Party in
its sole discretion.

     26.  Additional Indebtedness Restriction: The Borrower will covenant that
          ------------------------------------
it will not incur additional indebtedness. The Tenant will covenant that it will
not incur additional indebtedness if at such
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<PAGE>

time of the contemplated borrowing, the Tenant FCCR and Tenant CU FCCR is less
than the Tenant Target FCCR or CU Tenant Target FCCR or such additional
borrowing would cause the Tenant FCCR and Tenant CU FCCR to fall below the
Tenant Target FCCR CU Tenant Target FCCR. In addition to the foregoing, Tenant
will covenant that it will not incur additional indebtedness except indebtedness
in an amount up to $1,000,000, incurred for the purpose of and actually used for
the capital expenditures. Any amount greater than $1,000,000 will be subject to
Secured Party's approval in its sole and absolute discretion.

                     *   *   *   *   *   *   *   *   *   *

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