Document:

MERRILL LYNCH                        WCMA(R)REDUCING REVOLVER(SM) LOAN AGREEMENT
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WCMA REDUCING REVOLVER(SM) LOAN AGREEMENT NO. 78M-07B84 ("Loan Agreement") dated
as of November 2, 1999,  between  MAIN  STREET AND MAIN  INCORPORATED  D/B/A TGI
FRIDAY'S,  a corporation  organized and existing  under the laws of the State of
Delaware  having its  principal  office at 5050 North  40th  Street,  Suite 200,
Phoenix,  AZ 85018  ("Customer"),  and MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC.,  a  corporation  organized  and  existing  under  the laws of the State of
Delaware having its principal  office at 222 North LaSalle Street,  Chicago,  IL
60601 ("MLBFS").

In accordance with that certain WORKING CAPITAL  MANAGEMENT(R) ACCOUNT AGREEMENT
NO. 78M-07B84 ("WCMA Agreement") betweeN Customer and MLBFS' affiliate,  MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED  ("MLPF&S"),  Customer has subscribed
to the WCMA Program  described in the WCMA  Agreement.  The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith, Customer
has  requested  that  MLBFS  make a WCMA  Reducing  Revolver  Loan (a  "Reducing
Revolver")  to  Customer in the amount and upon the terms  hereafter  specified,
and, subject to the terms and conditions  hereafter set forth,  MLBFS has agreed
to provide a Reducing Revolver for Customer.

A Reducing  Revolver is a term credit facility,  similar to a conventional  term
loan,  but funded out of a line of credit under the WCMA Program  ("WCMA Line of
Credit")  in the  amount of the  initial  loan.  With a Reducing  Revolver:  (i)
interest will generally be charged each month to Customer's  WCMA account,  and,
so long as the WCMA Line of Credit is in effect,  paid with an  additional  loan
under the WCMA Line of Credit (i.e.,  added to the loan balance),  (ii) after an
initial  interest  only period,  the maximum WCMA Line of Credit will be reduced
each month by the amount  that would be payable on account of  principal  if the
Reducing Revolver were a conventional term loan amortized over the same term and
in the same manner as the Reducing Revolver, and (iii) Customer will be required
to make sufficient  payments on account of the Reducing  Revolver to assure that
the outstanding balance of the Reducing Revolver does not at any time exceed the
Maximum WCMA Line of Credit, as reduced each month.

Absent a prepayment  by Customer,  this  structure  results in required  monthly
payments  for the  Reducing  Revolver  that  are  substantially  the same as the
required  monthly  payments for a conventional  term loan with the same term and
amortization. However, unlike most conventional term loans, because it is funded
out of a line of credit,  the Reducing  Revolver  permits  both a prepayment  in
whole  or in  part  at  any  time,  and,  subject  to  certain  conditions,  the
re-borrowing  on a revolving basis of any such prepaid amounts up to the Maximum
WCMA Line of Credit, as reduced each month. The structure  therefore will enable
Customer at its option to use any excess or temporary  cash balances that it may
have from time to time to prepay the Reducing  Revolver and thereby  effectively
reduce interest expense on the Reducing  Revolver without  impairing its working
capital.

Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:

                             ARTICLE I. DEFINITIONS

1.1  SPECIFIC  TERMS.  In  addition  to terms  defined  elsewhere  in this  Loan
Agreement,  when used  herein  the  following  terms  shall  have the  following
meanings:

(a) "Additional  Agreements" shall mean all agreements,  instruments,  documents
and opinions  other than this Loan  Agreement,  whether with or from Customer or
any other party, which are contemplated hereby or otherwise  reasonably required
by MLBFS in connection  herewith,  or which  evidence the creation,  guaranty or
collateralization  of any of the  Obligations  or the granting or  perfection of
liens or security interests upon any collateral for the Obligations.

(b) "Bankruptcy  Event" shall mean any of the following:  (i) a proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt or
receivership  law or statute  shall be filed or  consented to by Customer or any
Guarantor;  or (ii) any such proceeding  shall be filed against  Customer or any
Guarantor  and shall not be dismissed or withdrawn  within sixty (60) days after
filing;  or (iii) Customer or any Guarantor shall make a general  assignment for
the benefit of creditors; or (iv) Customer or any Guarantor shall generally fail
to pay or admit in writing its inability to pay its debts as they become due; or
(v) Customer or any Guarantor shall be adjudicated a bankrupt or insolvent.

(c)  "Business  Day" shall mean any day other than a Saturday,  Sunday,  federal
holiday or other day on which the New York Stock Exchange is regularly closed.

(d) "Closing  Date" shall mean the date upon which all  conditions  precedent to
MLBFS'  obligation  to make the first  advance on account of the Loan shall have
been met to the satisfaction of MLBFS.

(e)  "Commitment  Fee" shall mean a fee of $15,750.00 due to MLBFS in connection
with this Loan Agreement.

(f)  "Conversion  Date" shall mean the first to occur of the date of funding the
final  advance on  account  of the Loan  permitted  under the terms  hereof,  or
September 30, 2000.

(g) "Default"  shall mean either an "Event of Default" as defined in Section 4.4
hereof,  or an event which with the giving of notice,  passage of time, or both,
would constitute such an Event of Default.

(h) "Default  Interest Rate" shall mean a rate equal to the sum of the "Interest
Rate", as determined below, plus two percent (2%) per annum.
<PAGE>
(i) "General  Funding  Conditions"  shall mean each of the following  conditions
precedent to the  obligation  of MLBFS to make the Loan or any  Subsequent  WCMA
Loan hereunder:  (i) Customer shall have validly  subscribed to and continued to
maintain  the WCMA  Account  with  MLPF&S,  and the WCMA  Account  shall then be
reflected as an active  "Commercial" WCMA Account (i.e., one with line of credit
capabilities)  on MLPF&S'  WCMA  computer  system;  (ii) no  Default  shall have
occurred and be  continuing  or would result from the making of the Loan or such
Subsequent  WCMA Loan by MLBFS;  (iii)  there  shall  not have  occurred  and be
continuing any material adverse change in the business or financial condition of
Customer and any Guarantor collectively; (iv) all representations and warranties
of Customer or any Guarantor  herein or in any Additional  Agreements shall then
be true and correct in all material respects; (v) MLBFS shall have received this
Loan  Agreement  and all  Additional  Agreements,  duly  executed  and  filed or
recorded  where  applicable,  all  of  which  shall  be in  form  and  substance
reasonably  satisfactory to MLBFS;  (vi) the Commitment Fee shall have been paid
in full;  (vii)  MLBFS  shall have  received,  as and to the extent  applicable,
copies of invoices,  bills of sale,  loan payoff  letters  and/or other evidence
reasonably  satisfactory  to it that the  proceeds of the Loan will  satisfy the
Loan Purpose;  (viii) MLBFS shall have received evidence reasonably satisfactory
to it as to the ownership of and the perfection and priority of MLBFS' liens and
security  interests on any collateral for the Obligations  furnished pursuant to
any of the Additional  Agreements;  and (ix) any additional conditions specified
in the "WCMA  Reducing  Revolver Loan  Approval"  letter  executed by MLBFS with
respect  to the  transactions  contemplated  hereby  shall  have been met to the
reasonable satisfaction of MLBFS.

(j)  "Guarantor"  shall  mean a person or entity who has  either  guaranteed  or
provided collateral for any or all of the Obligations;  and "Business Guarantor"
shall   mean   any  such   Guarantor   that  is  a   corporation,   partnership,
proprietorship, limited liability company or other entity regularly engaged in a
business activity.

(k) "Interest Due Date" shall mean the last Business Day of each calendar  month
during the term hereof (or, if Customer makes special  arrangements with MLPF&S,
on the last Friday of each calendar month during the term hereof).

(l) "Interest Rate" shall mean a variable per annum rate equal to the sum of (i)
2.65% per annum,  and (ii) the interest rate from time to time  published in the
"Money  Rates"  section of THE WALL  STREET  JOURNAL as the  "Dealer  Commercial
Paper" rate for 30-day high-grade  unsecured notes sold through dealers by major
corporations (the "30-day Dealer Commercial Paper Rate"). The Interest Rate will
change as of the date of  publication  in THE WALL  STREET  JOURNAL  of a 30-day
Dealer  Commercial  Paper  Rate that is  different  from that  published  on the
preceding Business Day. In the event that THE WALL STREET JOURNAL shall, for any
reason,  fail or cease to publish the 30-day Dealer Commercial Paper Rate, MLBFS
will choose a reasonably  comparable index or source to use as the basis for the
Interest Rate. Upon the occurrence and during the continuance of a Default,  the
Interest  Rate with  respect  the WCMA Line of Credit  may be  increased  to the
"Default Interest Rate", as herein provided.

(m) "Loan" shall mean the specific  multiple advance Reducing  Revolver by MLBFS
to Customer  pursuant to this Agreement for the Loan Purpose and in an aggregate
amount equal to the Loan Amount.

(n) "Loan Amount" shall mean an amount equal to the lesser of: (i) the aggregate
amount which  Customer shall request be advanced by MLBFS on account of the Loan
Purpose on or prior to the Conversion Date, or (ii) $3,150,000.00.

(o) "Loan  Purpose"  shall mean the purpose  for which the  proceeds of the Loan
will be used; to wit: To finance 80% of the cost of the furniture,  fixtures and
equipment associated with the opening of seven (7) T.G.I. Friday's restaurants.

(p)  "Maximum  WCMA Line of Credit"  shall mean the  maximum  aggregate  line of
credit which MLBFS will extend to Customer  subject to the terms and  conditions
hereof,  as the same shall be increased by advances prior to the Conversion Date
and reduced each month  thereafter in accordance  with the terms hereof.  On the
Conversion Date, the Maximum WCMA Line of Credit will equal the Loan Amount.

(q) "Obligations" shall mean all liabilities, indebtedness and other obligations
of Customer  to MLBFS,  howsoever  created,  arising or  evidenced,  whether now
existing  or  hereafter  arising,  whether  direct  or  indirect,   absolute  or
contingent, due or to become due, primary or secondary or joint or several, and,
without limiting the foregoing, shall include interest accruing after the filing
of  any  petition  in  bankruptcy,  and  all  present  and  future  liabilities,
indebtedness  and  obligations  of Customer  under this Loan Agreement and under
that certain WCMA Reducing Revolver Loan Agreement No. 78M-07B82.

(r)  "Subsequent  WCMA  Loan"  shall  mean each WCMA Loan  other  than the Loan,
including, without limitation, each WCMA Loan to pay accrued interest.

(s)  "Termination  Date" shall mean the first to occur of: (i) the last Business
Day of the  eighty-fourth  (84th) full calendar  month  following the Conversion
Date,  or (ii) if earlier,  the date of  termination  of the WCMA Line of Credit
pursuant to the terms hereof.

(t) "WCMA  Account"  shall  mean and  refer to the  Working  Capital  Management
Account of Customer with MLPF&S identified as WCMA Account No. 78M-07B84 and any
successor Working Capital Management Account of Customer with MLPF&S.

(u) "WCMA Loan" shall mean each advance made by MLBFS  pursuant to the WCMA Line
of Credit, including the Loan and each Subsequent WCMA Loan.

(v) "WCMA Loan  Balance"  shall  mean an amount  equal to the  aggregate  unpaid
principal balance of all WCMA Loans.

1.2 OTHER TERMS.  Except as otherwise defined herein: (i) all terms used in this
Loan  Agreement  which are  defined in the Uniform  Commercial  Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used  herein  which  are  defined  in the  WCMA  Agreement  (including,  without
limitation,  "Money Accounts",  "Minimum Money Accounts Balance", "WCMA Directed
Reserve  Program" and "WCMA  Program")  shall have the meanings set forth in the
WCMA Agreement.
<PAGE>
                              ARTICLE II. THE LOAN

2.1 COMMITMENT.  Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer, and Customer hereby agrees to borrow the Loan from
MLBFS. The Loan will be funded in up to seven separate  advances as requested by
Customer prior to the Conversion Date;  provided,  however,  that Customer shall
not request  funding of, and MLBFS shall not be obligated to fund,  any advances
on account of the Loan in an amount less than  $450,000.00.  Except as otherwise
provided in Section 3.1 hereof, each such advance will be disbursed by MLBFS out
of the WCMA Line of Credit  either  directly  to the  applicable  third party or
parties on account of the Loan  Purpose or to  reimburse  Customer  for  amounts
directly expended by it for the Loan Purpose;  all as directed by Customer in an
Advance  Certificate  to be executed and delivered to MLBFS prior to the date of
each funding.

2.2 CONDITIONS OF MLBFS' OBLIGATION.  The Closing Date and MLBFS' obligations to
activate the WCMA Line of Credit,  as hereafter set forth, and make each advance
on  account of the Loan prior to the  Conversion  Date are  subject to the prior
fulfillment of each of the following conditions:  (a) not less than two Business
Days prior to any requested  funding date,  MLBFS shall have received an Advance
Certificate,  duly executed by Customer,  setting forth, among other things, the
amount of such  advance and the method of payment and  payee(s) of the  proceeds
thereof; (b) after giving effect to such advance, the WCMA Loan Balance will not
exceed  either  the  Maximum  WCMA Line of Credit  or the Loan  Amount;  (c) the
Conversion  Date  shall  not then  have  occurred;  and (d) each of the  General
Funding  Conditions  shall  then have been met or  satisfied  to the  reasonable
satisfaction of MLBFS.

2.3  COMMITMENT  FEE. In  consideration  of the agreement by MLBFS to extend the
Loan and any Subsequent WCMA Loans to Customer in accordance with and subject to
the terms hereof, Customer has paid or shall, on or before the Closing Date pay,
the  Commitment  Fee  to  MLBFS.  Customer  acknowledges  and  agrees  that  the
Commitment  Fee has been fully  earned by MLBFS,  and that it will not under any
circumstances be refundable.

2.4 USE OF LOAN  PROCEEDS.  Unless  otherwise  agreed by MLBFS in  writing,  the
proceeds of the Loan shall be used solely for the Loan Purpose.  The Proceeds of
each Subsequent WCMA Loan initiated by Customer shall be used by Customer solely
for working capital in the ordinary  course of its business,  or, with the prior
written  consent of MLBFS,  for other lawful  business  purposes of Customer not
prohibited hereby. Customer agrees that under no circumstances will the proceeds
of the loan or any  subsequent  WCMA loan be used:  (i) for personal,  family or
household purposes of any person whatsoever, or (ii) to purchase, carry or trade
in securities, or repay debt incurred to purchase, carry or trade in securities,
whether in or in connection  with the WCMA account,  another account of customer
with  MLPF&S  or an  account  of  customer  at any  other  broker  or  dealer in
securities, or (iii) unless otherwise consented to in writing by MLBFS, to repay
any debt to Merrill Lynch and Co., Inc. or any of its subsidiaries.

                      ARTICLE III. THE WCMA LINE OF CREDIT

3.1  ACTIVATION OF THE WCMA LINE OF CREDIT.  Subject to the terms and conditions
hereof,  on the  Closing  Date  MLBFS  will  activate  a WCMA Line of Credit for
Customer  in the amount of the advance on account of the Loan made on such date.
Concurrently  with each  subsequent  advance on account of the Loan prior to the
Conversion Date, the Maximum WCMA Line of Credit will be increased by the amount
of such advance. All such advances will be funded out of the WCMA Line of Credit
immediately  after  such  activation  or  increase  (or,  if and  to the  extent
otherwise expressly  contemplated in the definition of Loan Purpose or otherwise
directed in the Advance Certificate and hereafter expressly agreed by MLBFS, all
or part of the Loan may be made available as a WCMA Line of Credit and funded by
Customer.)

3.2 SUBSEQUENT WCMA LOANS.  Subject to the terms and conditions  hereof,  during
the period from and after the Closing Date to the Termination Date: (a) Customer
may repay the WCMA Loan Balance in whole or in part at any time without  premium
or penalty  (except,  as  hereafter  set forth,  upon a  refinancing  by another
lender),  and request a re-borrowing of amounts repaid on a revolving basis, and
(b) in  addition  to  Subsequent  WCMA Loans made  automatically  to pay accrued
interest,  as hereafter provided,  MLBFS will make such Subsequent WCMA Loans as
Customer  may from  time to time  request  or be  deemed  to have  requested  in
accordance with the terms hereof.  Customer may request Subsequent WCMA Loans by
use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other means of
access  to the WCMA Line of Credit  as may be  permitted  by MLBFS  froM time to
time;  it being  understood  that so long as the WCMA Line of Credit shall be in
effect,  any charge or debit to the WCMA Account  which but for the WCMA Line of
Credit would under the terms of the WCMA Agreement result in an overdraft, shall
be deemed a request by Customer for a Subsequent WCMA Loan.

3.3 CONDITIONS OF SUBSEQUENT WCMA LOANS.  Notwithstanding  the foregoing,  MLBFS
shall not be obligated to make any Subsequent  WCMA Loan, and may without notice
refuse to honor any such request by Customer, if at the time of receipt by MLBFS
of Customer's  request:  (a) the making of such Subsequent WCMA Loan would cause
the  Maximum  WCMA Line of Credit,  as reduced  pursuant  to the  provisions  of
Section 3.6  hereof,  to be  exceeded;  or (b) the  Termination  Date shall have
occurred; or (c) an event shall have occurred and be continuing which shall have
caused any of the General Funding  Conditions to not then be met or satisfied to
the reasonable satisfaction of MLBFS. The making by MLBFS of any Subsequent WCMA
Loan (including, without limitation, the making of a Subsequent WCMA Loan to pay
accrued interest,  as hereafter provided) at a time when any one or more of said
conditions  shall not have been met  shall  not in any event be  construed  as a
waiver of said condition or conditions or of any Default,  and shall not prevent
MLBFS at any time  thereafter  while any condition  shall not have been met from
refusing to honor any request by Customer for a Subsequent WCMA Loan.

3.4 WCMA NOTE.  Customer  hereby  promises to pay to the order of MLBFS,  at the
times  and in the  manner  set forth in this Loan  Agreement,  or in such  other
manner and at such place as MLBFS may  hereafter  designate in writing:  (a) the
WCMA Loan Balance; (b) interest at the Interest Rate (or, if applicable,  at the
Default  Interest Rate) on the outstanding  WCMA Loan Balance  (computed for the
actual  number of days elapsed on the basis of a year  consisting  of 360 days),
from and including the date on which the first advance on account of the Loan is
made until the date of payment of all WCMA Loans in full; and (c) on demand, all
other sums payable pursuant to this Loan Agreement,  including,  but not limited
to,  any  collection  fees.  Except as  otherwise  expressly  set forth  herein,
Customer hereby waives  presentment,  demand for payment,  protest and notice of
protest,  notice  of  dishonor,  notice  of  acceleration,  notice  of intent to
accelerate and all other notices and  formalities  in connection  with this WCMA
Note and this Loan Agreement.
<PAGE>
3.5 INTEREST.  (a) An amount equal to accrued  interest on the WCMA Loan Balance
shall be payable by Customer monthly on each Interest Due Date,  commencing with
the Interest Due Date  occurring in the calendar month in which the Closing Date
shall occur. Unless otherwise hereafter directed in writing by MLBFS on or after
the Termination  Date, such interest will be  automatically  charged to the WCMA
Account on the  applicable  Interest Due Date,  and, to the extent not paid with
free credit  balances or the proceeds of sales of any Money Accounts then in the
WCMA Account, as hereafter provided,  such interest will be paid by a Subsequent
WCMA Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.

(b) Upon the occurrence and during the  continuance of any Default,  but without
limiting  the rights and  remedies  otherwise  available  to MLBFS  hereunder or
waiving such Default,  the interest  payable by Customer  hereunder shall at the
option of MLBFS accrue and be payable at the Default  Interest Rate. The Default
Interest Rate,  once  implemented,  shall  continue to apply to the  Obligations
under this Loan Agreement and be payable by Customer until the date such Default
is either cured or waived in writing by MLBFS.

(c)  Notwithstanding  any provision to the contrary in this  Agreement or any of
the  Additional  Agreements,  no  provision  of  this  Agreement  or  any of the
Additional  Agreements shall require the payment or permit the collection of any
amount in excess of the maximum  amount of interest  permitted  to be charged by
law  ("Excess  Interest").  If  any  Excess  Interest  is  provided  for,  or is
adjudicated  as being  provided for, in this  Agreement or any of the Additional
Agreements,  then:  (i)  Customer  shall  not be  obligated  to pay  any  Excess
Interest; and (ii) any Excess Interest that MLBFS may have received hereunder or
under any of the Additional  Agreements shall, at the option of MLBFS, be either
applied as a credit against the then WCMA Loan Balance, or refunded to the payer
thereof.

3.6  PERIODIC  REDUCTION  OF  MAXIMUM  WCMA LINE OF  CREDIT.  Commencing  on the
Conversion  Date, and continuing on the last Business Day of each calendar month
thereafter to and including  the last  Business Day of the  eighty-third  (83rd)
such  calendar  month,  the Maximum  WCMA Line of Credit  shall be reduced by an
amount equal to one-seventy-sixth  (1/84th) of the Loan Amount per month. Unless
the WCMA Line of Credit shall have been earlier terminated pursuant to the terms
hereof,  on the last Business Day of the  eighty-fourth  (84th)  calendar  month
following the Conversion  Date, the WCMA Line of Credit shall,  without  further
action of either of the parties  hereto,  be  terminated,  Customer shall pay to
MLBFS the entire WCMA Loan Balance,  if any, and all other Obligations,  and the
WCMA Account, at the option of Customer, will either be converted to a WCMA Cash
Account  (subject to any  requirements  of MLPF&S) or terminated.  No failure or
delay on the  part of MLBFS in  entering  into  the  WCMA  computer  system  any
scheduled  reduction in the Maximum WCMA Line of Credit pursuant to this Section
shall have the effect of preventing or delaying such reduction.

3.7 MANDATORY PAYMENTS.  CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING
OR THE REQUEST OF MLBFS,  FROM TIME TO TIME MAKE SUFFICIENT  PAYMENTS ON ACCOUNT
OF THE WCMA LOAN  BALANCE TO ASSURE THAT THE WCMA LOAN  BALANCE  WILL NOT AT ANY
TIME EXCEED THE MAXIMUM WCMA LINE OF CREDIT,  AS REDUCED EACH MONTH  PURSUANT TO
SECTION 3.6 HEREOF.

3.8 METHOD OF MAKING  PAYMENTS.  All  payments  required or permitted to be made
pursuant  to this Loan  Agreement  shall be made in lawful  money of the  United
States.  Unless otherwise hereafter directed by MLBFS, such payments may be made
by the delivery of checks (other than WCMA  Checks),  or by means of FTS or wire
transfer of funds  (other than funds from the WCMA Line of Credit) to MLPF&S for
credit to the WCMA  Account.  Payments  to MLBFS from funds in the WCMA  Account
shall be deemed to be made by Customer upon the same basis and schedule as funds
are made available for  investment in the Money Accounts in accordance  with the
terms of the WCMA Agreement.  The acceptance by or on behalf of MLBFS of a check
or other payment for a lesser amount than shall be due from Customer, regardless
of any endorsement or statement thereon or transmitted  therewith,  shall not be
deemed an accord and  satisfaction  or anything other than a payment on account,
and MLBFS or anyone  acting on behalf of MLBFS may  accept  such  check or other
payment without prejudice to the rights of MLBFS to recover the balance actually
due or to pursue any other remedy under this Loan  Agreement or  applicable  law
for such  balance.  All checks  accepted by or on behalf of MLBFS in  connection
with this Loan Agreement are subject to final collection.

3.9  IRREVOCABLE  INSTRUCTIONS  TO MLPF&S.  In order to  minimize  the WCMA Loan
Balance, Customer hereby irrevocably authorizes and directs MLPF&S, effective on
the Closing Date and continuing thereafter so long as this Agreement shall be in
effect: (a) to immediately and prior to application for any other purpose pay to
MLBFS to the  extent  of any WCMA  Loan  Balance  or other  amounts  payable  by
Customer  hereunder all available free credit  balances from time to time in the
WCMA Account; and (b) if such available free credit balances are insufficient to
pay the WCMA Loan  Balance  and such  other  amounts,  and there are in the WCMA
Account  at  any  time  any  investments  in  Money  Accounts  (other  than  any
investments  constituting  any Minimum  Money  Accounts  Balance  under the WCMA
Directed Reserve Program),  to immediately liquidate such investments and pay to
MLBFS to the  extent  of any  WCMA  Loan  Balance  and such  other  amounts  the
available proceeds from the liquidation of any such Money Accounts.

3.10  PREPAYMENT.  Customer may prepay the Loan and any Subsequent  WCMA Loan at
any time in whole or in part without premium or penalty; provided, however, that
any refinancing of the WCMA Loan Balance by another financial institution shall:
(a) if such  refinancing  shall  occur  prior to the  first  anniversary  of the
Conversion  Date,  be  accompanied  by a premium in an amount equal to 3% of the
amount  prepaid  by  such  refinancing;  (b) if  such  refinancing  shall  occur
thereafter,  but prior to the second  anniversary  of the  Conversion  Date,  be
accompanied  by a premium in an amount equal to 2% of the amount prepaid by such
refinancing; and (c) if such refinancing shall occur on or at any time after the
second  anniversary  of the  Conversion  Date, be accompanied by a premium in an
amount equal to 1% of the amount prepaid by such refinancing.

3.11 OPTION OF CUSTOMER TO TERMINATE. Customer will have the option to terminate
the WCMA Line of Credit at any time upon written  notice to MLBFS.  Concurrently
with any such  termination,  Customer  shall pay to MLBFS the  entire  WCMA Loan
Balance and all other Obligations.

3.12 LIMITATION OF LIABILITY. MLBFS shall not be responsible,  and shall have no
liability to Customer or any other  party,  for any delay or failure of MLBFS to
honor any  request of  Customer  for a WCMA Loan or any other act or omission of
MLBFS,  MLPF&S or any of their  affiliates  due to or resulting  from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of MLBFS,  MLPF&S or any
of their  affiliates  unless directly arising out of the willful wrongful act or
active gross  negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential  damages arising from any
act or omission by MLBFS,  MLPF&S or any of their  affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.
<PAGE>
3.13 STATEMENTS.  MLPF&S will include in each monthly  statement it issues under
the WCMA  Program  information  with  respect  to WCMA  Loans  and the WCMA Loan
Balance.  Any questions that Customer may have with respect to such  information
or the Loan should be directed to MLBFS;  and any questions  with respect to any
other matter in such statements or about or affecting the WCMA Program should be
directed to MLPF&S.

                         ARTICLE IV. GENERAL PROVISIONS

4.1 REPRESENTATIONS AND WARRANTIES.

Customer represents and warrants to MLBFS that:

(a)  ORGANIZATION AND EXISTENCE.  Customer is a corporation,  duly organized and
validly existing in good standing under the laws of the State of Delaware and is
qualified  to do  business  and in good  standing  in each other state where the
nature of its  business  or the  property  owned by it make  such  qualification
necessary;  and, where  applicable,  each Business  Guarantor is duly organized,
validly  existing  and in good  standing  under  the  laws of the  state  of its
formation  and is qualified  to do business  and in good  standing in each other
state  where the nature of its  business or the  property  owned by it make such
qualification necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and performance
by Customer of this Loan Agreement and by Customer and each Guarantor of such of
the Additional  Agreements to which it is a party: (i) have been duly authorized
by all requisite  action,  (ii) do not and will not violate or conflict with any
law or other governmental requirement, or any of the agreements,  instruments or
documents which formed or govern  Customer or any such  Guarantor,  and (iii) do
not and will not breach or violate any of the provisions of, and will not result
in a default by  Customer  or any such  Guarantor  under,  any other  agreement,
instrument  or document to which it is a party or by which it or its  properties
are bound.

(c) NOTICES AND APPROVALS.  Except as may have been given or obtained, no notice
to or consent or approval of any  governmental  body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection  with the  execution,  delivery or  performance by Customer or any
Guarantor of such of this Loan Agreement and the Additional  Agreements to which
it is a party.

(d) ENFORCEABILITY. This Loan Agreement and such of the Additional Agreements to
which Customer or any Guarantor is a party are the respective  legal,  valid and
binding  obligations of Customer and such Guarantor,  enforceable  against it or
them, as the case may be, in accordance with their respective  terms,  except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.

(e)  FINANCIAL  STATEMENTS.  Except as expressly  set forth in Customer's or any
Business Guarantor's financial statements,  all financial statements of Customer
and each Business Guarantor  furnished to MLBFS have been prepared in conformity
with generally accepted accounting  principles,  consistently  applied, are true
and correct in all material respects, and fairly present the financial condition
of it as at such dates and the results of its  operations  for the periods  then
ended (subject, in the case of interim unaudited financial statements, to normal
year-end adjustments);  and since the most recent date covered by such financial
statements,  there has been no  material  adverse  change in any such  financial
condition  or  operation.  All  financial  statements  furnished to MLBFS of any
Guarantor  other than a Business  Guarantor are true and correct in all material
respects and fairly  represent such  Guarantor's  financial  condition as of the
date of such  financial  statements,  and  since  the most  recent  date of such
financial  statements,  there  has  been  no  material  adverse  change  in such
financial condition.

(f)  LITIGATION.  No litigation,  arbitration,  administrative  or  governmental
proceedings  are pending or, to the  knowledge of Customer,  threatened  against
Customer or any Guarantor, which would, if adversely determined,  materially and
adversely  affect the liens and security  interests of MLBFS  hereunder or under
any of the  Additional  Agreements,  the financial  condition of Customer or any
such  Guarantor  or  the  continued  operations  of  Customer  or  any  Business
Guarantor.

(g) TAX  RETURNS.  All  federal,  state  and  local  tax  returns,  reports  and
statements  required to be filed by Customer and each  Guarantor have been filed
with the  appropriate  governmental  agencies  and all taxes due and  payable by
Customer and each Guarantor have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely  affect either the
liens and security  interests of MLBFS  hereunder or under any of the Additional
Agreements,  the  financial  condition  of  Customer  or any  Guarantor,  or the
continued operations of Customer or any Business Guarantor).

(h) NO OUTSIDE  BROKER.  Except for  employees of MLBFS,  MLPF&S or one of their
affiliates,  Customer has not in connection with the  transactions  contemplated
hereby  directly or indirectly  engaged or dealt with, and was not introduced or
referred to MLBFS by, any broker or other loan arranger.

Each of the foregoing  representations and warranties:  (i) has been and will be
relied upon as an inducement to MLBFS to make the Loan and each  Subsequent WCMA
Loan,  and (ii) is  continuing  and shall be deemed  remade by  Customer  on the
Closing  Date, on the date of funding of each  additional  advance on account of
the Loan, on the Conversion Date, and concurrently with each request by Customer
for a Subsequent WCMA Loan.

4.2 FINANCIAL AND OTHER INFORMATION.

(a) Customer  shall furnish or cause to be furnished to MLBFS during the term of
this Loan Agreement all of the following:

(i) ANNUAL FINANCIAL STATEMENTS.  Within 120 days after the close of each fiscal
year of Customer, a copy of the annual audited consolidated financial statements
of Customer and each Business Guarantor,  including, in each case, in reasonable
detail,  a balance sheet and  statement of retained  earnings as at the close of
such fiscal year and statements of profit and loss and cash flow for such fiscal
year with a breakdown  of the profit and loss and cash flow of Customer and each
Business Guarantor on a store-by-store basis;
<PAGE>
(ii) INTERIM FINANCIAL STATEMENTS. Within 45 days after the close of each fiscal
quarter of Customer,  a copy of the interim financial statements of Customer and
each Business  Guarantor for such fiscal quarter (including in reasonable detail
both a balance  sheet as of the close of such fiscal  period,  and  statement of
profit and loss for the applicable  fiscal period with a breakdown of the profit
and loss of Customer and each Business Guarantor on a store-by-store basis);

(iii) SEC REPORTS.  Customer shall furnish or cause to be furnished to MLBFS not
later than 10 days after the date of filing  with the  Securities  and  Exchange
Commission  ("SEC"),  a copy of each 10-K,  10-Q and other report required to be
filed with the SEC during the term hereof by Customer; and

(iv) OTHER  INFORMATION.  Such other  information as MLBFS may from time to time
reasonably request relating to Customer or any Guarantor.

(b) GENERAL  AGREEMENTS WITH RESPECT TO FINANCIAL  INFORMATION.  Customer agrees
that except as otherwise  specified  herein or otherwise agreed to in writing by
MLBFS: (i) all annual financial  statements required to be furnished by Customer
to  MLBFS  hereunder  will  be  prepared  by  either  the  current   independent
accountants for Customer or other independent  accountants reasonably acceptable
to MLBFS, and (ii) all other financial  information  required to be furnished by
Customer to MLBFS  hereunder  will be  certified as correct by the party who has
prepared such information,  and, in the case of internally prepared  information
with  respect to Customer or any  Business  Guarantor,  certified  as correct by
their respective chief financial officer.

4.3 OTHER COVENANTS.  Customer  further  covenants and agrees during the term of
this Loan Agreement that:

(a) FINANCIAL  RECORDS;  INSPECTION.  Customer and each Business Guarantor will:
(i) maintain at its principal place of business  complete and accurate books and
records,  and maintain all of its financial  records in a manner consistent with
the  financial  statements  heretofore  furnished to MLBFS,  or prepared on such
other basis as may be approved in writing by MLBFS; and (ii) permit MLBFS or its
duly authorized representatives, upon reasonable notice and at reasonable times,
to inspect  its  properties  (both  real and  personal),  operations,  books and
records.

(b) TAXES. Customer and each Guarantor will pay when due all taxes,  assessments
and other governmental charges,  howsoever designated, and all other liabilities
and  obligations,  except to the  extent  that any such  failure to pay will not
materially and adversely affect either any liens and security interests of MLBFS
under any  Additional  Agreements,  the  financial  condition of Customer or any
Guarantor or the continued operations of Customer or any Business Guarantor.

(c) COMPLIANCE WITH LAWS AND AGREEMENTS. Neither Customer nor any Guarantor will
violate any law, regulation or other governmental  requirement,  any judgment or
order of any  court or  governmental  agency  or  authority,  or any  agreement,
instrument  or document  to which it is a party or by which it is bound,  if any
such  violation  will  materially  and  adversely  affect  either  any liens and
security  interests  of MLBFS under any  Additional  Agreements,  the  financial
condition of Customer or any Guarantor,  or the continued operations of Customer
or any Business Guarantor.

(d) NO USE OF MERRILL  LYNCH  NAME.  Except  upon the prior  written  consent of
MLBFS,  neither Customer nor any Guarantor will directly or indirectly  publish,
disclose or otherwise use in any advertising or promotional  material,  or press
release or interview,  the name, logo or any trademark of MLBFS, MLPF&S, Merrill
Lynch and Co., Incorporated or any of their affiliates.

(e)  NOTIFICATION BY CUSTOMER.  Customer shall provide MLBFS with prompt written
notification  of: (i) any Default;  (ii) any  materially  adverse  change in the
business,  financial  condition  or  operations  of  Customer  or  any  Business
Guarantor;  (iii) any information which indicates that any financial  statements
of Customer or any Guarantor fail in any material  respect to present fairly the
financial condition and results of operations  purported to be presented in such
statements;  and  (iv)  any  change  in  Customer's  outside  accountants.  Each
notification by Customer  pursuant hereto shall specify the event or information
causing such  notification,  and, to the extent  applicable,  shall  specify the
steps being taken to rectify or remedy such event or information.

(f)  NOTICE OF  CHANGE.  Customer  shall  give MLBFS not less than 30 days prior
written  notice of any change in the name  (including  any  fictitious  name) or
principal place of business or residence of Customer or any Guarantor.

(g) CONTINUITY.  Except upon the prior written  consent of MLBFS,  which consent
will  not be  unreasonably  withheld:  (i)  neither  Customer  nor any  Business
Guarantor shall be a party to any merger or  consolidation  with, or purchase or
otherwise  acquire all or  substantially  all of the assets of, or any  material
stock,  partnership,  joint  venture or other equity  interest in, any person or
entity, or sell, transfer or lease all or any substantial part of its assets, if
any such action would result in either:  (A) a material  change in the principal
business,  ownership or control of Customer or such Business Guarantor, or (B) a
material adverse change in the financial  condition or operations of Customer or
such  Business  Guarantor;  (ii)  Customer  and each  Business  Guarantor  shall
preserve their respective  existence and good standing in the jurisdiction(s) of
establishment and operation;  (iii) neither Customer nor any Business  Guarantor
shall  engage  in any  material  business  substantially  different  from  their
respective  business in effect as of the date of  application  by  Customer  for
credit from MLBFS, or cease operating any such material  business;  (iv) neither
Customer  nor any Business  Guarantor  shall cause or permit any other person or
entity to assume or succeed to any material  business or  operations of Customer
or such Business Guarantor;  and (v) neither Customer nor any Business Guarantor
shall cause or permit any material change in its controlling ownership.

(h) FIXED CHARGE  COVERAGE  RATIO.  Customer  shall at all times during the term
hereof  maintain a Fixed  Charge  Coverage  Ratio of not less than 1.3 to 1. The
term "Fixed  Charge  Coverage  Ratio" shall mean the ratio of: (a) income before
interest  (including  payments in the nature of interest under capital  leases),
state and federal income taxes,  depreciation and amortization,  less internally
financed  capital  expenditures,  to (b)  the sum the  aggregate  principal  and
interest  paid or accrued,  the aggregate  rental under  capital  leases paid or
accrued,  any dividends and other  distributions paid or payable to shareholders
and state and federal income taxes paid in cash; all as determined on a trailing
12-month basis from the regular  consolidated  financial  statements of Customer
prepared in a manner consistent with the terms hereof.

(i) FUNDED DEBT TO CASH FLOW. Customer's Funded Debt shall not exceed a multiple
of 3.5 times  Customer's  Cash Flow.  The term "Funded Debt" shall be defined as
all  indebtedness  that has a final  maturity  date more than one year after the
date of creation  thereof (or which is renewable or  extendable at the
<PAGE>
option of the debtor(s) to a date more than one year from the date of creation),
including all final and serial maturities, prepayments and sinking fund payments
required to be made in one year or less after the date of determination  thereof
(notwithstanding  the fact that any amount  thereof is at the time also included
in current  liabilities  as defined by GAAP).  The term "Cash  Flow"  shall mean
Customer's  Earnings  Before  Preopening  Expenses (as  identified by Customer's
accountant,  but not to exceed  $2,000,000.00  in any  fiscal  year),  Interest,
Taxes,  Depreciation  and  Amortization,  as set  forth  on  Customer's  regular
consolidated financial statements prepared in a manner consistent with the terms
hereof.

4.4 EVENTS OF DEFAULT.

The  occurrence  of any of the  following  events shall  constitute an "Event of
Default" under this Loan Agreement:

(a) FAILURE TO PAY. (i) Customer  shall fail to deposit into the WCMA Account an
amount  sufficient  to assure  that the WCMA Loan  Balance  does not  exceed the
Maximum  WCMA Line of  Credit,  as  reduced in  accordance  with the  provisions
hereof,  or (ii)  Customer  shall fail to pay to MLBFS or deposit  into the WCMA
Account  when due any other  amount owing or required to be paid or deposited by
Customer under this Loan Agreement, or (iii) Customer shall fail to pay when due
any other  Obligations;  and any such failure shall  continue for more than five
(5) Business Days after written notice thereof shall have been given by MLBFS to
Customer.

(b)  FAILURE  TO  PERFORM.  Customer  or  any  Guarantor  shall  default  in the
performance  or  observance  of any  covenant  or  agreement  on its  part to be
performed  or  observed  under  this  Loan  Agreement  or any of the  Additional
Agreements (not  constituting an Event of Default under any other clause of this
Section),  and such default shall continue unremedied for ten (10) Business Days
after written notice thereof shall have been given by MLBFS to Customer.

(c) BREACH OF WARRANTY.  Any  representation or warranty made by Customer or any
Guarantor  contained  in this  Loan  Agreement  or any of the  other  Additional
Agreements  shall  at any time  prove to have  been  incorrect  in any  material
respect when made.

(d) DEFAULT UNDER OTHER AGREEMENT.  A default or Event of Default by Customer or
any Guarantor shall occur under the terms of any other agreement,  instrument or
document  with or  intended  for the  benefit  of MLBFS,  MLPF&S or any of their
affiliates,  and any required notice shall have been given and required  passage
of time shall have elapsed.

(e) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.

(f)  MATERIAL  IMPAIRMENT.  Any event shall occur which shall  reasonably  cause
MLBFS to in good faith believe that the prospect of full payment or  performance
by  Customer  or any  Guarantor  of  any  of  their  respective  liabilities  or
obligations  under this Loan  Agreement or any of the  Additional  Agreements to
which Customer or such Guarantor is a party has been  materially  impaired.  The
existence  of  such a  material  impairment  shall  be  determined  in a  manner
consistent with the intent of Section 1-208 of the UCC.

(g) ACCELERATION OF DEBT TO OTHER CREDITORS. Any event shall occur which results
in the  acceleration of the maturity of any  indebtedness of $100,000.00 or more
of Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise.

4.5 REMEDIES.

(a) REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of any
Event of Default,  MLBFS may at its sole option do any one or more or all of the
following,  at such time and in such  order as MLBFS may in its sole  discretion
choose:

(i)  TERMINATION.  MLBFS may without notice terminate its obligation to make any
further advances on account of the Loan (if any portion of the Loan has not then
been funded), terminate the WCMA Line of Credit, and terminate any obligation to
make any Subsequent WCMA Loan  (including,  without  limitation,  any Subsequent
WCMA Loan to pay accrued  interest) or otherwise extend any credit to or for the
benefit  of  Customer  (it  being  understood  that upon the  occurrence  of any
Bankruptcy  Event  the  WCMA  Line of  Credit  and all  such  obligations  shall
automatically  terminate without any action on the part of MLBFS);  and upon any
such termination MLBFS shall be relieved of all such obligations.

(ii)  ACCELERATION.  MLBFS  may  declare  the WCMA  Loan  Balance  and all other
Obligations to be forthwith due and payable, whereupon all such amounts shall be
immediately due and payable,  without presentment,  demand for payment,  protest
and notice of protest,  notice of dishonor,  notice of  acceleration,  notice of
intent to accelerate or other notice or formality of any kind,  all of which are
hereby  expressly  waived;  provided,  however,  that upon the occurrence of any
Bankruptcy Event the WCMA Loan Balance and other Obligations shall automatically
become due and payable without any action on the part of MLBFS.

(b) COLLECTION  FEE. If following any  acceleration of the WCMA Loan Balance and
all other  Obligations  pursuant to Section 4.5 (a) (ii) hereof  Customer  shall
fail to pay the entire WCMA Loan Balance and all such other  Obligations in full
within ten (10) Business Days after  Customer is notified of such  acceleration,
then  Customer  shall pay to  MLBFS,  in  addition  to all  other  sums  payable
hereunder,  a  collection  fee in an amount  equal to the  lesser  of:  (i) five
percent (5%) of the sum of the then  outstanding  WCMA Loan Balance and the then
outstanding other  Obligations,  or (ii) the maximum collection fee permitted by
law.  Such  collection  fee,  which is  intended  to  compensate  MLBFS  for its
administrative  costs  incident to the  collection  of the WCMA Loan Balance and
such other Obligations following an Event of Default and acceleration,  shall be
payable on demand.

(c) SET-OFF.  MLBFS shall have the further right upon the  occurrence and during
the continuance of an Event of Default to set-off,  appropriate and apply toward
payment of any of the  Obligations,  in such order of  application  as MLBFS may
from time to time and at any time elect, any cash, credit,  deposits,  accounts,
financial  assets,  investment  property,  securities  and any other property of
Customer  which is in  transit  to or in the  possession,  custody or control of
MLBFS,  MLPF&S or any agent,  bailee, or affiliate of MLBFS or MLPF&S.  Customer
hereby  collaterally  assigns and grants to MLBFS a continuing security
<PAGE>
interest in all such property as additional  security for the Obligations.  Upon
the  occurrence and during the  continuance of an Event of Default,  MLBFS shall
have all rights in such property  available to collateral  assignees and secured
parties under all applicable laws, including, without limitation, the UCC.

(d)  REMEDIES ARE  SEVERABLE  AND  CUMULATIVE.  All rights and remedies of MLBFS
herein are  severable  and  cumulative  and in addition to all other  rights and
remedies  available in the Additional  Agreements,  at law or in equity, and any
one or more of such  rights and  remedies  may be  exercised  simultaneously  or
successively.

4.6 MISCELLANEOUS.

(a)  NON-WAIVER.  No  failure  or delay on the part of MLBFS in  exercising  any
right,  power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shall operate as a waiver thereof,  and no single or partial exercise
of any such right,  power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of this Loan Agreement or any of the Additional Agreements, nor
any consent to any departure by Customer  therefrom,  shall be effective  unless
the same shall be in writing and signed by MLBFS. Any waiver of any provision of
this Loan Agreement or any of the  Additional  Agreements and any consent to any
departure by Customer  from the terms  thereof  shall be  effective  only in the
specific  instance  and for the  specific  purpose  for which  given.  Except as
otherwise expressly provided herein, no notice to or demand on Customer shall in
any case entitle Customer to any other or further notice or demand in similar or
other circumstances.

(b) DISCLOSURE.  Customer hereby  irrevocably  authorizes  MLBFS and each of its
affiliates,  including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred)  obtain from and disclose to each other
any and all financial and other information about Customer.

(c) COMMUNICATIONS.  All notices and other communications  required or permitted
hereunder or in connection  with any of the  Additional  Agreements  shall be in
writing,  and shall be either  delivered  personally,  mailed by postage prepaid
certified  mail or sent by  express  overnight  courier  or by  facsimile.  Such
notices and  communications  shall be deemed to be given on the date of personal
delivery,  facsimile  transmission  or actual delivery of certified mail, or one
Business Day after delivery to an express  overnight  courier.  Unless otherwise
specified  in a notice sent or delivered in  accordance  with the terms  hereof,
notices and other communications in writing shall be given to the parties hereto
at their respective addresses set forth at the beginning of this Loan Agreement,
or, in the case of facsimile  transmission,  to the parties at their  respective
regular facsimile telephone number.

(d) FEES, EXPENSES AND TAXES. Customer shall pay or reimburse MLBFS for: (i) all
Uniform Commercial Code filing and search fees and expenses incurred by MLBFS in
connection  with the  verification,  perfection or preservation of MLBFS' rights
hereunder  or in any  collateral  for the  Obligations;  (ii) any and all stamp,
transfer  and other  taxes and fees  payable  or  determined  to be  payable  in
connection with the execution,  delivery and/or recording of this Loan Agreement
or  any of  the  Additional  Agreements;  and  (iii)  all  reasonable  fees  and
out-of-pocket  expenses  (including,  but not  limited to,  reasonable  fees and
expenses of outside counsel) incurred by MLBFS in connection with the collection
of any sum payable hereunder or under any of the Additional  Agreements not paid
when due,  the  enforcement  of this  Loan  Agreement  or any of the  Additional
Agreements  and  the  protection  of  MLBFS'  rights  hereunder  or  thereunder,
excluding,   however,  salaries  and  normal  overhead  attributable  to  MLBFS'
employees.  Customer hereby authorizes MLBFS, at its option, to either cause any
and all such fees,  expenses  and taxes to be paid with a WCMA Loan,  or invoice
Customer therefor (in which event Customer shall pay all such fees, expenses and
taxes within 5 Business Days after receipt of such invoice).  The obligations of
Customer  under this  paragraph  shall survive the  expiration or termination of
this Loan Agreement and the discharge of the other Obligations.

(e) RIGHT TO PERFORM OBLIGATIONS.  If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty  on the part of  Customer  contained  in this Loan  Agreement  shall be
breached,  MLBFS may,  in its sole  discretion,  after 5 Business  Days  written
notice is sent to Customer (or such lesser  notice,  including no notice,  as is
reasonable  under  the  circumstances),  do the  same or  cause it to be done or
remedy any such breach,  and may expend its funds for such purpose.  Any and all
reasonable  amounts so expended by MLBFS shall be repayable to MLBFS by Customer
upon  demand,  with  interest  at the  Interest  Rate during the period from and
including the date funds are so expended by MLBFS to the date of repayment,  and
all such amounts shall be additional Obligations.  The payment or performance by
MLBFS of any of Customer's  obligations  hereunder shall not relieve Customer of
said  obligations or of the  consequences of having failed to pay or perform the
same, and shall not waive or be deemed a cure of any Default.

(f) FURTHER  ASSURANCES.  Customer agrees to do such further acts and things and
to execute  and deliver to MLBFS such  additional  agreements,  instruments  and
documents as MLBFS may  reasonably  require or deem  advisable to effectuate the
purposes of this Loan Agreement or any of the Additional Agreements.

(g) BINDING EFFECT.  This Loan Agreement and the Additional  Agreements shall be
binding  upon,  and shall  inure to the  benefit  of MLBFS,  Customer  and their
respective  successors and assigns.  Customer shall not assign any of its rights
or  delegate  any of its  obligations  under this Loan  Agreement  or any of the
Additional  Agreements  without  the prior  written  consent  of  MLBFS.  Unless
otherwise  expressly  agreed to in a writing  signed by MLBFS,  no such  consent
shall in any event relieve  Customer of any of its  obligations  under this Loan
Agreement or any of the Additional Agreements.

(h) HEADINGS. Captions and section and paragraph headings in this Loan Agreement
are  inserted  only as a  matter  of  convenience,  and  shall  not  affect  the
interpretation hereof.

(i) GOVERNING LAW. This Loan Agreement and, unless otherwise  expressly provided
therein, each of the Additional Agreements, shall be governed in all respects by
the laws of the State of Illinois.

(j) SEVERABILITY OF PROVISIONS.  Whenever possible,  each provision of this Loan
Agreement and the Additional  Agreements  shall be interpreted in such manner as
to be  effective  and valid under  applicable  law.  Any  provision of this Loan
Agreement  or  any  of  the  Additional   Agreements   which  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability  without invalidating
the
<PAGE>
remaining provisions of this Loan Agreement and the Additional Agreements or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

(k) TERM.  This Loan  Agreement  shall become  effective on the date accepted by
MLBFS at its office in  Chicago,  Illinois,  and,  subject to the terms  hereof,
shall continue in effect so long  thereafter as: (i) MLBFS shall be obligated to
make the Loan,  (ii) the WCMA Line of Credit  shall be in  effect,  (iii)  there
shall be any moneys  outstanding under this Loan Agreement,  or (iv) there shall
be any other Obligations outstanding.

(l)  COUNTERPARTS.   This  Loan  Agreement  may  be  executed  in  one  or  more
counterparts which, when taken together, constitute one and the same agreement.

(m)  JURISDICTION;  WAIVER.  CUSTOMER  ACKNOWLEDGES  THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL  CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS  SOLE  DISCRETION,  TO  ENFORCE  THIS  LOAN  AGREEMENT  AND  THE  ADDITIONAL
AGREEMENTS  IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER  JURISDICTION  WHERE
CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER CONSENTS
TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF COOK FOR SUCH PURPOSES,  AND CUSTOMER WAIVES ANY AND ALL RIGHTS
TO CONTEST SAID  JURISDICTION  AND VENUE.  CUSTOMER FURTHER WAIVES ANY RIGHTS TO
COMMENCE ANY ACTION  AGAINST MLBFS IN ANY  JURISDICTION  EXCEPT IN THE COUNTY OF
COOK AND STATE OF ILLINOIS.  MLBFS AND CUSTOMER  HEREBY EACH EXPRESSLY WAIVE ANY
AND ALL  RIGHTS TO A TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES  AGAINST  THE OTHER  PARTY WITH  RESPECT TO ANY
MATTER  RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN,  THIS
LOAN AGREEMENT,  ANY ADDITIONAL  AGREEMENTS AND/OR ANY OF THE TRANSACTIONS WHICH
ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT.

(n) INTEGRATION.  THIS LOAN AGREEMENT,  TOGETHER WITH THE ADDITIONAL AGREEMENTS,
CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT  MATTER  HEREOF,  AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN  AGREEMENTS OR PRIOR,  CONTEMPORANEOUS
OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO  UNWRITTEN  ORAL
AGREEMENTS OF THE PARTIES. WITHOUT LIMITING THE FOREGOING, CUSTOMER ACKNOWLEDGES
THAT: (I) NO PROMISE OR COMMITMENT  HAS BEEN MADE TO IT BY MLBFS,  MLPF&S OR ANY
OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO MAKE THE LOAN OR ANY
SUBSEQUENT  WCMA LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH HEREIN,  OR
TO MAKE ANY OTHER LOAN OR  OTHERWISE  EXTEND ANY OTHER CREDIT TO CUSTOMER OR ANY
OTHER PARTY; AND (II) EXCEPT AS OTHERWISE  EXPRESSLY PROVIDED HEREIN,  THIS LOAN
AGREEMENT  SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS,  LETTERS OF INTENT AND
APPROVAL AND COMMITMENT  LETTERS FROM MLBFS TO CUSTOMER,  NONE OF WHICH SHALL BE
CONSIDERED  AN  ADDITIONAL  AGREEMENT.  NO  AMENDMENT  OR  MODIFICATION  OF THIS
AGREEMENT OR ANY OF THE ADDITIONAL AGREEMENTS TO WHICH CUSTOMER IS A PARTY SHALL
BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND CUSTOMER.

IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.

MAIN STREET AND MAIN INCORPORATED D/B/A TGI FRIDAY'S

By:
    ----------------------------------------------------------------------------
                  Signature (1)                      Signature (2)

--------------------------------------------------------------------------------
                  Printed Name                       Printed Name

--------------------------------------------------------------------------------
                  Title                              Title

Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.

By:
    -------------------------------MERRILL LYNCH                        WCMA(R)REDUCING REVOLVER(SM) LOAN AGREEMENT
================================================================================

WCMA REDUCING REVOLVER(SM) LOAN AGREEMENT NO. 78M-07B82 ("Loan Agreement") dated
as of November 22, 1999,  between  MAIN STREET AND MAIN  INCORPORATED  D/B/A TGI
FRIDAY'S,  a corporation  organized and existing  under the laws of the State of
Delaware  having its  principal  office at 5050 North  40th  Street,  Suite 200,
Phoenix,  AZ 85018  ("Customer"),  and MERRILL LYNCH BUSINESS FINANCIAL SERVICES
INC.,  a  corporation  organized  and  existing  under  the laws of the State of
Delaware having its principal  office at 222 North LaSalle Street,  Chicago,  IL
60601 ("MLBFS").

In accordance with that certain WORKING CAPITAL  MANAGEMENT(R) ACCOUNT AGREEMENT
NO. 78M-07B82 ("WCMA Agreement") between Customer and MLBFS' affiliate,  MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED  ("MLPF&S"),  Customer has subscribed
to the WCMA Program  described in the WCMA  Agreement.  The WCMA Agreement is by
this reference incorporated as a part hereof. In conjunction therewith, Customer
has  requested  that  MLBFS  make a WCMA  Reducing  Revolver  Loan (a  "Reducing
Revolver")  to  Customer in the amount and upon the terms  hereafter  specified,
and, subject to the terms and conditions  hereafter set forth,  MLBFS has agreed
to provide a Reducing Revolver for Customer.

A Reducing  Revolver is a term credit facility,  similar to a conventional  term
loan,  but funded out of a line of credit under the WCMA Program  ("WCMA Line of
Credit")  in the  amount of the  initial  loan.  With a Reducing  Revolver:  (i)
interest will generally be charged each month to Customer's  WCMA account,  and,
so long as the WCMA Line of Credit is in effect,  paid with an  additional  loan
under the WCMA Line of Credit (i.e.,  added to the loan balance),  (ii) after an
initial  interest  only period,  the maximum WCMA Line of Credit will be reduced
each month by the amount  that would be payable on account of  principal  if the
Reducing Revolver were a conventional term loan amortized over the same term and
in the same manner as the Reducing Revolver, and (iii) Customer will be required
to make sufficient  payments on account of the Reducing  Revolver to assure that
the outstanding balance of the Reducing Revolver does not at any time exceed the
Maximum WCMA Line of Credit, as reduced each month.

Absent a prepayment  by Customer,  this  structure  results in required  monthly
payments  for the  Reducing  Revolver  that  are  substantially  the same as the
required  monthly  payments for a conventional  term loan with the same term and
amortization. However, unlike most conventional term loans, because it is funded
out of a line of credit,  the Reducing  Revolver  permits  both a prepayment  in
whole  or in  part  at  any  time,  and,  subject  to  certain  conditions,  the
re-borrowing  on a revolving basis of any such prepaid amounts up to the Maximum
WCMA Line of Credit, as reduced each month. The structure  therefore will enable
Customer at its option to use any excess or temporary  cash balances that it may
have from time to time to prepay the Reducing  Revolver and thereby  effectively
reduce interest expense on the Reducing  Revolver without  impairing its working
capital.

Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:

                             ARTICLE I. DEFINITIONS

1.1  SPECIFIC  TERMS.  In  addition  to terms  defined  elsewhere  in this  Loan
Agreement,  when used  herein  the  following  terms  shall  have the  following
meanings:

(a) "Additional  Agreements" shall mean all agreements,  instruments,  documents
and opinions  other than this Loan  Agreement,  whether with or from Customer or
any other party, which are contemplated hereby or otherwise  reasonably required
by MLBFS in connection  herewith,  or which  evidence the creation,  guaranty or
collateralization  of any of the  Obligations  or the granting or  perfection of
liens or security interests upon any collateral for the Obligations.

(b) "Bankruptcy  Event" shall mean any of the following:  (i) a proceeding under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt or
receivership  law or statute  shall be filed or  consented to by Customer or any
Guarantor;  or (ii) any such proceeding  shall be filed against  Customer or any
Guarantor  and shall not be dismissed or withdrawn  within sixty (60) days after
filing;  or (iii) Customer or any Guarantor shall make a general  assignment for
the benefit of creditors; or (iv) Customer or any Guarantor shall generally fail
to pay or admit in writing its inability to pay its debts as they become due; or
(v) Customer or any Guarantor shall be adjudicated a bankrupt or insolvent.

(c)  "Business  Day" shall mean any day other than a Saturday,  Sunday,  federal
holiday or other day on which the New York Stock Exchange is regularly closed.

(d) "Closing  Date" shall mean the date upon which all  conditions  precedent to
MLBFS'  obligation  to make the first  advance on account of the Loan shall have
been met to the satisfaction of MLBFS.

(e)  "Commitment  Fee" shall mean a fee of $80,500.00 due to MLBFS in connection
with this Loan Agreement.

(f)  "Conversion  Date" shall mean the first to occur of the date of funding the
final  advance on  account  of the Loan  permitted  under the terms  hereof,  or
September 30, 2000.

(g) "Default"  shall mean either an "Event of Default" as defined in Section 4.4
hereof,  or an event which with the giving of notice,  passage of time, or both,
would constitute such an Event of Default.

(h) "Default  Interest Rate" shall mean a rate equal to the sum of the "Interest
Rate", as determined below, plus two percent (2%) per annum.
<PAGE>
(i) "General  Funding  Conditions"  shall mean each of the following  conditions
precedent to the  obligation  of MLBFS to make the Loan or any  Subsequent  WCMA
Loan hereunder:  (i) Customer shall have validly  subscribed to and continued to
maintain  the WCMA  Account  with  MLPF&S,  and the WCMA  Account  shall then be
reflected as an active  "Commercial" WCMA Account (i.e., one with line of credit
capabilities)  on MLPF&S'  WCMA  computer  system;  (ii) no  Default  shall have
occurred and be  continuing  or would result from the making of the Loan or such
Subsequent  WCMA Loan by MLBFS;  (iii)  there  shall  not have  occurred  and be
continuing any material adverse change in the business or financial condition of
Customer and Guarantors collectively; (iv) all representations and warranties of
Customer or any Guarantor  herein or in any Additional  Agreements shall then be
true and correct in all material  respects;  (v) MLBFS shall have  received this
Loan Agreement and all Additional  Agreements  (including,  without  limitation,
each of the Additional  Agreements described in the definition of "Real Property
Funding Condition"),  duly executed and filed or recorded where applicable,  all
of which shall be in form and substance  reasonably  satisfactory to MLBFS; (vi)
the  Commitment  Fee shall  have  been  paid in full;  (vii)  MLBFS  shall  have
received,  as and to the extent applicable,  copies of invoices,  bills of sale,
loan payoff letters and/or other evidence reasonably satisfactory to it that the
proceeds of the Loan will  satisfy  the Loan  Purpose;  (viii)  MLBFS shall have
received evidence  reasonably  satisfactory to it as to the ownership of and the
perfection and priority of MLBFS' liens and security interests on any collateral
for the Obligations furnished pursuant to any of the Additional Agreements;  and
(ix) any additional  conditions  specified in the "WCMA  Reducing  Revolver Loan
Approval" letter executed by MLBFS with respect to the transactions contemplated
hereby shall have been met to the reasonable satisfaction of MLBFS.

(j)  "Guarantor"  shall  mean a person or entity who has  either  guaranteed  or
provided collateral for any or all of the Obligations;  and "Business Guarantor"
shall   mean   any  such   Guarantor   that  is  a   corporation,   partnership,
proprietorship, limited liability company or other entity regularly engaged in a
business activity.

(k) "Interest Due Date" shall mean the last Business Day of each calendar  month
during the term hereof (or, if Customer makes special  arrangements with MLPF&S,
on the last Friday of each calendar month during the term hereof).

(l) "Interest Rate" shall mean a variable per annum rate equal to the sum of (i)
2.65% per annum,  and (ii) the interest rate from time to time  published in the
"Money  Rates"  section of THE WALL  STREET  JOURNAL as the  "Dealer  Commercial
Paper" rate for 30-day high-grade  unsecured notes sold through dealers by major
corporations (the "30-day Dealer Commercial Paper Rate"). The Interest Rate will
change as of the date of  publication  in THE WALL  STREET  JOURNAL  of a 30-day
Dealer  Commercial  Paper  Rate that is  different  from that  published  on the
preceding Business Day. In the event that THE WALL STREET JOURNAL shall, for any
reason,  fail or cease to publish the 30-day Dealer Commercial Paper Rate, MLBFS
will choose a reasonably  comparable index or source to use as the basis for the
Interest Rate. Upon the occurrence and during the continuance of a Default,  the
Interest  Rate with  respect  the WCMA Line of Credit  may be  increased  to the
"Default Interest Rate", as herein provided.

(m) "Loan" shall mean the specific  multiple advance Reducing  Revolver by MLBFS
to Customer  pursuant to this Agreement for the Loan Purpose and in an aggregate
amount equal to the Loan Amount.

(n) "Loan Amount" shall mean an amount equal to the lesser of: (i) the aggregate
amount which  Customer shall request be advanced by MLBFS on account of the Loan
Purpose on or prior to the Conversion Date, or (ii) $8,050,000.00.

(o) "Loan  Purpose"  shall mean the purpose  for which the  proceeds of the Loan
will be used;  to wit:  To  finance  80% of the  costs  (including  soft  costs)
associated with completed site  improvements  for seven TGI Friday's  restaurant
locations.

(p)  "Maximum  WCMA Line of Credit"  shall mean the  maximum  aggregate  line of
credit which MLBFS will extend to Customer  subject to the terms and  conditions
hereof,  as the same shall be increased by advances prior to the Conversion Date
and reduced each month  thereafter in accordance  with the terms hereof.  On the
Conversion Date, the Maximum WCMA Line of Credit will equal the Loan Amount.

(q) "Obligations" shall mean all liabilities, indebtedness and other obligations
of Customer  to MLBFS,  howsoever  created,  arising or  evidenced,  whether now
existing  or  hereafter  arising,  whether  direct  or  indirect,   absolute  or
contingent, due or to become due, primary or secondary or joint or several, and,
without limiting the foregoing, shall include interest accruing after the filing
of  any  petition  in  bankruptcy,  and  all  present  and  future  liabilities,
indebtedness  and  obligations  of Customer  under this Loan Agreement and under
that certain WCMA Reducing Revolver Loan Agreement No. 78M-07B84.

(r) "Real  Properties"  shall mean the parcels of real property and improvements
thereon commonly known as 2795 Tapo Canyon Road, Simi Valley,  CA 93063; 5055 N.
Oracle Road, N. Tucson, AZ 85704;  23040 Eastpark Drive,  Yorba Linda, CA 92887;
980 N. 54th Street, Chandler, AZ; 195 N. Moorpark Road, Thousand Oaks, CA 91360;
Long  Beach,  CA  and  N.  Scottsdale,   AZ  (or  another  location   reasonably
satisfactory to MLBFS).

(s) "Real Property Funding  Condition"  shall mean that Customer,  at Customer's
expense,  shall have  furnished  or caused to be  furnished  to MLBFS all of the
following,  in form and substance reasonably  satisfactory to MLBFS: (i) a first
leasehold mortgage or deed of trust upon each of the Real Properties in favor of
MLBFS  (including an assignment  of rents and a security  agreement  granting to
MLBFS a first security  interest upon all fixtures now or hereafter located upon
each of the Real  Properties);  (ii) a policy or commitment for a policy of ALTA
mortgagee's  title  insurance  insuring  MLBFS'  lien  upon  each  of  the  Real
Properties  for the  pro-rata  amount  of the  Loan,  issued  by  Chicago  Title
Insurance  Company,  Lawyers Title Insurance  Company or one of their agents, or
another title company selected by MLBFS,  with such special  endorsements as may
reasonably  be  required  by MLBFS and  subject  only to  exceptions  reasonably
acceptable to MLBFS;  (iii) a Phase 1 Environmental  Audit Report on each of the
Real  Properties,  prepared by an  environmental  specialist  selected by MLBFS,
disclosing no conditions  that are  reasonably  unacceptable  to MLBFS;  (iv) an
appraisal  of  each of the  Real  Properties  prepared  by an  M.A.I.  appraiser
selected by MLBFS  demonstrating  a reasonable  fair market value of each; (v) a
current  as-built ALTA survey of each of the Real Properties  certified in favor
of MLBFS and the  title  insurance  company;  and (vi)  such  other  agreements,
documents and  instruments  in connection  with the Real Property or MLBFS' lien
thereon as MLBFS or the title insurance company may reasonably require.

(t)  "Subsequent  WCMA  Loan"  shall  mean each WCMA Loan  other  than the Loan,
including, without limitation, each WCMA Loan to pay accrued interest.
<PAGE>
(u)  "Termination  Date" shall mean the first to occur of: (i) the last Business
Day of the one hundred  twentieth  (120th) full  calendar  month  following  the
Conversion Date, or (ii) if earlier, the date of termination of the WCMA Line of
Credit pursuant to the terms hereof.

(v) "WCMA  Account"  shall  mean and  refer to the  Working  Capital  Management
Account of Customer with MLPF&S identified as WCMA Account No. 78M-07B82 and any
successor Working Capital Management Account of Customer with MLPF&S.

(w) "WCMA Loan" shall mean each advance made by MLBFS  pursuant to the WCMA Line
of Credit, including the Loan and each Subsequent WCMA Loan.

(x) "WCMA Loan  Balance"  shall  mean an amount  equal to the  aggregate  unpaid
principal balance of all WCMA Loans.

1.2 OTHER TERMS.  Except as otherwise defined herein: (i) all terms used in this
Loan  Agreement  which are  defined in the Uniform  Commercial  Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used  herein  which  are  defined  in the  WCMA  Agreement  (including,  without
limitation,  "Money Accounts",  "Minimum Money Accounts Balance", "WCMA Directed
Reserve  Program" and "WCMA  Program")  shall have the meanings set forth in the
WCMA Agreement.

                              ARTICLE II. THE LOAN

2.1 COMMITMENT.  Subject to the terms and conditions hereof, MLBFS hereby agrees
to make the Loan to Customer, and Customer hereby agrees to borrow the Loan from
MLBFS. The Loan will be funded in up to seven separate  advances as requested by
Customer prior to the Conversion Date;  provided,  however,  that Customer shall
not request  funding of, and MLBFS shall not be obligated to fund,  any advances
on account of the Loan in an amount less than  $600,000.00.  Except as otherwise
provided in Section 3.1 hereof, each such advance will be disbursed by MLBFS out
of the WCMA Line of Credit  either  directly  to the  applicable  third party or
parties on account of the Loan  Purpose or to  reimburse  Customer  for  amounts
directly expended by it for the Loan Purpose;  all as directed by Customer in an
Advance  Certificate  to be executed and delivered to MLBFS prior to the date of
each funding.

2.2 CONDITIONS OF MLBFS' OBLIGATION.  The Closing Date and MLBFS' obligations to
activate the WCMA Line of Credit,  as hereafter set forth, and make each advance
on  account of the Loan prior to the  Conversion  Date are  subject to the prior
fulfillment of each of the following conditions:  (a) not less than two Business
Days prior to any requested  funding date,  MLBFS shall have received an Advance
Certificate,  duly executed by Customer,  setting forth, among other things, the
amount of such  advance and the method of payment and  payee(s) of the  proceeds
thereof; (b) after giving effect to such advance, the WCMA Loan Balance will not
exceed  either  the  Maximum  WCMA Line of Credit  or the Loan  Amount;  (c) the
Conversion  Date  shall  not then  have  occurred;  and (d) each of the  General
Funding  Conditions and the Real Property Funding Condition shall then have been
met or satisfied to the reasonable satisfaction of MLBFS.

2.3  COMMITMENT  FEE. In  consideration  of the agreement by MLBFS to extend the
Loan and any Subsequent WCMA Loans to Customer in accordance with and subject to
the terms hereof, Customer has paid or shall, on or before the Closing Date pay,
the  Commitment  Fee  to  MLBFS.  Customer  acknowledges  and  agrees  that  the
Commitment  Fee has been fully  earned by MLBFS,  and that it will not under any
circumstances be refundable.

2.4 USE OF LOAN  PROCEEDS.  Unless  otherwise  agreed by MLBFS in  writing,  the
proceeds of the Loan shall be used solely for the Loan Purpose.  The Proceeds of
each Subsequent WCMA Loan initiated by Customer shall be used by Customer solely
for working capital in the ordinary  course of its business,  or, with the prior
written  consent of MLBFS,  for other lawful  business  purposes of Customer not
prohibited hereby. CUSTOMER AGREES THAT UNDER NO CIRCUMSTANCES WILL THE PROCEEDS
OF THE LOAN OR ANY  SUBSEQUENT  WCMA LOAN BE USED:  (I) FOR PERSONAL,  FAMILY OR
HOUSEHOLD PURPOSES OF ANY PERSON WHATSOEVER, OR (II) TO PURCHASE, CARRY OR TRADE
IN SECURITIES, OR REPAY DEBT INCURRED TO PURCHASE, CARRY OR TRADE IN SECURITIES,
WHETHER IN OR IN CONNECTION  WITH THE WCMA ACCOUNT,  ANOTHER ACCOUNT OF CUSTOMER
WITH  MLPF&S  OR AN  ACCOUNT  OF  CUSTOMER  AT ANY  OTHER  BROKER  OR  DEALER IN
SECURITIES, OR (III) UNLESS OTHERWISE CONSENTED TO IN WRITING BY MLBFS, TO REPAY
ANY DEBT TO MERRILL LYNCH AND CO., INC. OR ANY OF ITS SUBSIDIARIES.
<PAGE>
                      ARTICLE III. THE WCMA LINE OF CREDIT

3.1  ACTIVATION OF THE WCMA LINE OF CREDIT.  Subject to the terms and conditions
hereof,  on the  Closing  Date  MLBFS  will  activate  a WCMA Line of Credit for
Customer  in the amount of the advance on account of the Loan made on such date.
Concurrently  with each  subsequent  advance on account of the Loan prior to the
Conversion Date, the Maximum WCMA Line of Credit will be increased by the amount
of such advance. All such advances will be funded out of the WCMA Line of Credit
immediately  after  such  activation  or  increase  (or,  if and  to the  extent
otherwise expressly  contemplated in the definition of Loan Purpose or otherwise
directed in the Advance Certificate and hereafter expressly agreed by MLBFS, all
or part of the Loan may be made available as a WCMA Line of Credit and funded by
Customer.)

3.2 SUBSEQUENT WCMA LOANS.  Subject to the terms and conditions  hereof,  during
the period from and after the Closing Date to the Termination Date: (a) Customer
may repay the WCMA Loan Balance in whole or in part at any time without  premium
or penalty  (except,  as  hereafter  set forth,  upon a  refinancing  by another
lender),  and request a re-borrowing of amounts repaid on a revolving basis, and
(b) in  addition  to  Subsequent  WCMA Loans made  automatically  to pay accrued
interest,  as hereafter provided,  MLBFS will make such Subsequent WCMA Loans as
Customer  may from  time to time  request  or be  deemed  to have  requested  in
accordance with the terms hereof.  Customer may request Subsequent WCMA Loans by
use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or sucH other means of
access  to the WCMA Line of Credit  as may be  permitted  by MLBFS  from time to
time;  it being  understood  that so long as the WCMA Line of Credit shall be in
effect,  any charge or debit to the WCMA Account  which but for the WCMA Line of
Credit would under the terms of the WCMA Agreement result in an overdraft, shall
be deemed a request by Customer for a Subsequent WCMA Loan.

3.3 CONDITIONS OF SUBSEQUENT WCMA LOANS.  Notwithstanding  the foregoing,  MLBFS
shall not be obligated to make any Subsequent  WCMA Loan, and may without notice
refuse to honor any such request by Customer, if at the time of receipt by MLBFS
of Customer's  request:  (a) the making of such Subsequent WCMA Loan would cause
the  Maximum  WCMA Line of Credit,  as reduced  pursuant  to the  provisions  of
Section 3.6  hereof,  to be  exceeded;  or (b) the  Termination  Date shall have
occurred; or (c) an event shall have occurred and be continuing which shall have
caused any of the General Funding
<PAGE>
Conditions  to not then be met or satisfied to the  reasonable  satisfaction  of
MLBFS.  The  making by MLBFS of any  Subsequent  WCMA Loan  (including,  without
limitation,  the making of a Subsequent  WCMA Loan to pay accrued  interest,  as
hereafter  provided) at a time when any one or more of said conditions shall not
have been met shall not in any event be construed as a waiver of said  condition
or  conditions  or of any  Default,  and  shall  not  prevent  MLBFS at any time
thereafter  while any  condition  shall not have been met from refusing to honor
any request by Customer for a Subsequent WCMA Loan.

3.4 WCMA NOTE.  Customer  hereby  promises to pay to the order of MLBFS,  at the
times  and in the  manner  set forth in this Loan  Agreement,  or in such  other
manner and at such place as MLBFS may  hereafter  designate in writing:  (a) the
WCMA Loan Balance; (b) interest at the Interest Rate (or, if applicable,  at the
Default  Interest Rate) on the outstanding  WCMA Loan Balance  (computed for the
actual  number of days elapsed on the basis of a year  consisting  of 360 days),
from and including the date on which the first advance on account of the Loan is
made until the date of payment of all WCMA Loans in full; and (c) on demand, all
other sums payable pursuant to this Loan Agreement,  including,  but not limited
to,  any  collection  fees.  Except as  otherwise  expressly  set forth  herein,
Customer hereby waives  presentment,  demand for payment,  protest and notice of
protest,  notice  of  dishonor,  notice  of  acceleration,  notice  of intent to
accelerate and all other notices and  formalities  in connection  with this WCMA
Note and this Loan Agreement.

3.5 INTEREST.  (a) An amount equal to accrued  interest on the WCMA Loan Balance
shall be payable by Customer monthly on each Interest Due Date,  commencing with
the Interest Due Date  occurring in the calendar month in which the Closing Date
shall occur. Unless otherwise hereafter directed in writing by MLBFS on or after
the Termination  Date, such interest will be  automatically  charged to the WCMA
Account on the  applicable  Interest Due Date,  and, to the extent not paid with
free credit  balances or the proceeds of sales of any Money Accounts then in the
WCMA Account, as hereafter provided,  such interest will be paid by a Subsequent
WCMA Loan and added to the WCMA Loan Balance. All interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 360 days.

(b) Upon the occurrence and during the  continuance of any Default,  but without
limiting  the rights and  remedies  otherwise  available  to MLBFS  hereunder or
waiving such Default,  the interest  payable by Customer  hereunder shall at the
option of MLBFS accrue and be payable at the Default  Interest Rate. The Default
Interest Rate,  once  implemented,  shall  continue to apply to the  Obligations
under this Loan Agreement and be payable by Customer until the date such Default
is either cured or waived in writing by MLBFS.

(c)  Notwithstanding  any provision to the contrary in this  Agreement or any of
the  Additional  Agreements,  no  provision  of  this  Agreement  or  any of the
Additional  Agreements shall require the payment or permit the collection of any
amount in excess of the maximum  amount of interest  permitted  to be charged by
law  ("Excess  Interest").  If  any  Excess  Interest  is  provided  for,  or is
adjudicated  as being  provided for, in this  Agreement or any of the Additional
Agreements,  then:  (i)  Customer  shall  not be  obligated  to pay  any  Excess
Interest; and (ii) any Excess Interest that MLBFS may have received hereunder or
under any of the Additional  Agreements shall, at the option of MLBFS, be either
applied as a credit against the then WCMA Loan Balance, or refunded to the payer
thereof.

3.6  PERIODIC  REDUCTION  OF  MAXIMUM  WCMA LINE OF  CREDIT.  Commencing  on the
Conversion  Date, and continuing on the last Business Day of each calendar month
thereafter to and including the last Business Day of the one hundred  nineteenth
(119th) such calendar month, the Maximum WCMA Line of Credit shall be reduced by
an amount equal to the  percentage  of the Loan Amount set forth below  opposite
the number of such month following the Conversion Date, as follows:

                                          Monthly Reduction
                  Months              (Percentage of Loan Amount)
                  ------              ---------------------------
                   1-12                          .29%
                  13-24                          .31%
                  25-36                          .34%
                  37-48                          .37%
                  49-60                          .40%
                  61-72                          .43%
                  73-84                          .48%
                  85-96                          .52%
                  97-108                         .56%
                 109-119                         .61%

In  addition  to the  foregoing,  on the  closing  date of any  sale,  exchange,
transfer  or  other  disposition  of any of the  Real  Properties  permitted  in
accordance  with the  terms of this Loan  Agreement,  the  Maximum  WCMA Line of
Credit  shall be reduced  by an amount  equal to the  following:  the amount set
forth on the Advance Certificate for such Real Property location, divided by the
Loan Amount,  and then  multiplied  by the Maximum WCMA Line of Credit as of the
date of such sale, exchange, transfer or other disposition of such Real Property
location.

Unless the WCMA Line of Credit  shall have been earlier  terminated  pursuant to
the terms hereof,  on the last Business Day of the one hundred twentieth (120th)
such calendar  month,  the WCMA Line of Credit shall,  without further action of
either of the parties  hereto,  be  terminated,  Customer shall pay to MLBFS the
entire  WCMA  Loan  Balance,  if any,  and all other  Obligations,  and the WCMA
Account,  at the option of  Customer,  will either be  converted  to a WCMA Cash
Account  (subject to any  requirements  of MLPF&S) or terminated.  No failure or
delay on the  part of MLBFS in  entering  into  the  WCMA  computer  system  any
scheduled  reduction in the Maximum WCMA Line of Credit pursuant to this Section
shall have the effect of preventing or delaying such reduction.

3.7 MANDATORY PAYMENTS.  CUSTOMER AGREES THAT IT WILL, WITHOUT DEMAND, INVOICING
OR THE REQUEST OF MLBFS,  FROM TIME TO TIME MAKE SUFFICIENT  PAYMENTS ON ACCOUNT
OF THE WCMA LOAN  BALANCE TO ASSURE THAT THE WCMA LOAN  BALANCE  WILL NOT AT ANY
TIME EXCEED THE MAXIMUM WCMA LINE OF CREDIT,  AS REDUCED EACH MONTH  PURSUANT TO
SECTION 3.6 HEREOF.
<PAGE>
3.8 METHOD OF MAKING  PAYMENTS.  All  payments  required or permitted to be made
pursuant  to this Loan  Agreement  shall be made in lawful  money of the  United
States.  Unless otherwise hereafter directed by MLBFS, such payments may be made
by the delivery of checks (other than WCMA  Checks),  or by means of FTS or wire
transfer of funds  (other than funds from the WCMA Line of Credit) to MLPF&S for
credit to the WCMA  Account.  Payments  to MLBFS from funds in the WCMA  Account
shall be deemed to be made by Customer upon the same basis and schedule as funds
are made available for  investment in the Money Accounts in accordance  with the
terms of the WCMA Agreement.  The acceptance by or on behalf of MLBFS of a check
or other payment for a lesser amount than shall be due from Customer, regardless
of any endorsement or statement thereon or transmitted  therewith,  shall not be
deemed an accord and  satisfaction  or anything other than a payment on account,
and MLBFS or anyone  acting on behalf of MLBFS may  accept  such  check or other
payment without prejudice to the rights of MLBFS to recover the balance actually
due or to pursue any other remedy under this Loan  Agreement or  applicable  law
for such  balance.  All checks  accepted by or on behalf of MLBFS in  connection
with this Loan Agreement are subject to final collection.

3.9  IRREVOCABLE  INSTRUCTIONS  TO MLPF&S.  In order to  minimize  the WCMA Loan
Balance, Customer hereby irrevocably authorizes and directs MLPF&S, effective on
the Closing Date and continuing thereafter so long as this Agreement shall be in
effect: (a) to immediately and prior to application for any other purpose pay to
MLBFS to the  extent  of any WCMA  Loan  Balance  or other  amounts  payable  by
Customer  hereunder all available free credit  balances from time to time in the
WCMA Account; and (b) if such available free credit balances are insufficient to
pay the WCMA Loan  Balance  and such  other  amounts,  and there are in the WCMA
Account  at  any  time  any  investments  in  Money  Accounts  (other  than  any
investments  constituting  any Minimum  Money  Accounts  Balance  under the WCMA
Directed Reserve Program),  to immediately liquidate such investments and pay to
MLBFS to the  extent  of any  WCMA  Loan  Balance  and such  other  amounts  the
available proceeds from the liquidation of any such Money Accounts.

3.10  PREPAYMENT.  Customer may prepay the Loan and any Subsequent  WCMA Loan at
any time in whole or in part without premium or penalty; provided, however, that
any refinancing of the WCMA Loan Balance by another financial institution shall:
(a) if such  refinancing  shall  occur  prior to the  first  anniversary  of the
Conversion  Date,  be  accompanied  by a premium in an amount equal to 3% of the
amount  prepaid  by  such  refinancing;  (b) if  such  refinancing  shall  occur
thereafter,  but prior to the second  anniversary  of the  Conversion  Date,  be
accompanied  by a premium in an amount equal to 2% of the amount prepaid by such
refinancing; and (c) if such refinancing shall occur on or at any time after the
second  anniversary  of the  Conversion  Date, be accompanied by a premium in an
amount equal to 1% of the amount prepaid by such refinancing.

3.11 OPTION OF CUSTOMER TO TERMINATE. Customer will have the option to terminate
the WCMA Line of Credit at any time upon written  notice to MLBFS.  Concurrently
with any such  termination,  Customer  shall pay to MLBFS the  entire  WCMA Loan
Balance and all other Obligations.

3.12 LIMITATION OF LIABILITY. MLBFS shall not be responsible,  and shall have no
liability to Customer or any other  party,  for any delay or failure of MLBFS to
honor any  request of  Customer  for a WCMA Loan or any other act or omission of
MLBFS,  MLPF&S or any of their  affiliates  due to or resulting  from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of MLBFS,  MLPF&S or any
of their  affiliates  unless directly arising out of the willful wrongful act or
active gross  negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential  damages arising from any
act or omission by MLBFS,  MLPF&S or any of their  affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.

3.13 STATEMENTS.  MLPF&S will include in each monthly  statement it issues under
the WCMA  Program  information  with  respect  to WCMA  Loans  and the WCMA Loan
Balance.  Any questions that Customer may have with respect to such  information
or the Loan should be directed to MLBFS;  and any questions  with respect to any
other matter in such statements or about or affecting the WCMA Program should be
directed to MLPF&S.

                         ARTICLE IV. GENERAL PROVISIONS

4.1 REPRESENTATIONS AND WARRANTIES.

Customer represents and warrants to MLBFS that:

(a)  ORGANIZATION AND EXISTENCE.  Customer is a corporation,  duly organized and
validly existing in good standing under the laws of the State of Delaware and is
qualified  to do  business  and in good  standing  in each other state where the
nature of its  business  or the  property  owned by it make  such  qualification
necessary;  and, where  applicable,  each Business  Guarantor is duly organized,
validly  existing  and in good  standing  under  the  laws of the  state  of its
formation  and is qualified  to do business  and in good  standing in each other
state  where the nature of its  business or the  property  owned by it make such
qualification necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and performance
by Customer of this Loan Agreement and by Customer and each Guarantor of such of
the Additional  Agreements to which it is a party: (i) have been duly authorized
by all requisite  action,  (ii) do not and will not violate or conflict with any
law or other governmental requirement, or any of the agreements,  instruments or
documents which formed or govern  Customer or any such  Guarantor,  and (iii) do
not and will not breach or violate any of the provisions of, and will not result
in a default by  Customer  or any such  Guarantor  under,  any other  agreement,
instrument  or document to which it is a party or by which it or its  properties
are bound.

(c) NOTICES AND APPROVALS.  Except as may have been given or obtained, no notice
to or consent or approval of any  governmental  body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection  with the  execution,  delivery or  performance by Customer or any
Guarantor of such of this Loan Agreement and the Additional  Agreements to which
it is a party.

(d) ENFORCEABILITY. This Loan Agreement and such of the Additional Agreements to
which Customer or any Guarantor is a party are the respective  legal,  valid and
binding  obligations of Customer and such Guarantor,  enforceable  against it or
them, as the case may be, in accordance with their respective  terms,  except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.
<PAGE>
(e)  FINANCIAL  STATEMENTS.  Except as expressly  set forth in Customer's or any
Business Guarantor's financial statements,  all financial statements of Customer
and each Business Guarantor  furnished to MLBFS have been prepared in conformity
with generally accepted accounting  principles,  consistently  applied, are true
and correct in all material respects, and fairly present the financial condition
of it as at such dates and the results of its  operations  for the periods  then
ended (subject, in the case of interim unaudited financial statements, to normal
year-end adjustments);  and since the most recent date covered by such financial
statements,  there has been no  material  adverse  change in any such  financial
condition  or  operation.  All  financial  statements  furnished to MLBFS of any
Guarantor  other than a Business  Guarantor are true and correct in all material
respects and fairly  represent such  Guarantor's  financial  condition as of the
date of such  financial  statements,  and  since  the most  recent  date of such
financial  statements,  there  has  been  no  material  adverse  change  in such
financial condition.

(f)  LITIGATION.  No litigation,  arbitration,  administrative  or  governmental
proceedings  are pending or, to the  knowledge of Customer,  threatened  against
Customer or any Guarantor, which would, if adversely determined,  materially and
adversely  affect the liens and security  interests of MLBFS  hereunder or under
any of the  Additional  Agreements,  the financial  condition of Customer or any
such  Guarantor  or  the  continued  operations  of  Customer  or  any  Business
Guarantor.

(g) TAX  RETURNS.  All  federal,  state  and  local  tax  returns,  reports  and
statements  required to be filed by Customer and each  Guarantor have been filed
with the  appropriate  governmental  agencies  and all taxes due and  payable by
Customer and each Guarantor have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely  affect either the
liens and security  interests of MLBFS  hereunder or under any of the Additional
Agreements,  the  financial  condition  of  Customer  or any  Guarantor,  or the
continued operations of Customer or any Business Guarantor).

(h) NO OUTSIDE  BROKER.  Except for  employees of MLBFS,  MLPF&S or one of their
affiliates,  Customer has not in connection with the  transactions  contemplated
hereby  directly or indirectly  engaged or dealt with, and was not introduced or
referred to MLBFS by, any broker or other loan arranger.

(i)  OWNER-OCCUPIED.  Not  less  than  80% of each  of the  Real  Properties  is
regularly  occupied  for use in a business  operated  by Customer or one or more
entities  which are either (i) more than 50% owned and controlled by Customer or
a Guarantor,  or (ii) if Customer is an entity,  which own and control more than
50% of Customer.

Each of the foregoing  representations and warranties:  (i) has been and will be
relied upon as an inducement to MLBFS to make the Loan and each  Subsequent WCMA
Loan,  and (ii) is  continuing  and shall be deemed  remade by  Customer  on the
Closing  Date, on the date of funding of each  additional  advance on account of
the Loan, on the Conversion Date, and concurrently with each request by Customer
for a Subsequent WCMA Loan.

4.2 FINANCIAL AND OTHER INFORMATION.

(a) Customer  shall furnish or cause to be furnished to MLBFS during the term of
this Loan Agreement all of the following:

(i) ANNUAL FINANCIAL STATEMENTS.  Within 120 days after the close of each fiscal
year of Customer, a copy of the annual audited consolidated financial statements
of Customer and each Business Guarantor,  including, in each case, in reasonable
detail,  a balance sheet and  statement of retained  earnings as at the close of
such fiscal year and statements of profit and loss and cash flow for such fiscal
year with a breakdown  of the profit and loss and cash flow of Customer and each
Business Guarantor on a store-by-store basis;

(ii) INTERIM FINANCIAL STATEMENTS. Within 45 days after the close of each fiscal
quarter of Customer,  a copy of the interim financial statements of Customer and
each Business  Guarantor for such fiscal quarter (including in reasonable detail
both a balance  sheet as of the close of such fiscal  period,  and  statement of
profit and loss for the applicable  fiscal period with a breakdown of the profit
and loss of Customer and each Business Guarantor on a store-by-store basis);

(iii) SEC REPORTS.  Customer shall furnish or cause to be furnished to MLBFS not
later than 10 days after the date of filing  with the  Securities  and  Exchange
Commission  ("SEC"),  a copy of each 10-K,  10-Q and other report required to be
filed with the SEC during the term hereof by Customer;

(iv)  PAID TAX  BILLS.  A copy of each  real  estate  tax bill on or  issued  in
connection with the Real Property, together with evidence of payment of such tax
bill; and

(v) OTHER  INFORMATION.  Such other  information  as MLBFS may from time to time
reasonably request relating to Customer or any Guarantor.

(b) GENERAL  AGREEMENTS WITH RESPECT TO FINANCIAL  INFORMATION.  Customer agrees
that except as otherwise  specified  herein or otherwise agreed to in writing by
MLBFS: (i) all annual financial  statements required to be furnished by Customer
to  MLBFS  hereunder  will  be  prepared  by  either  the  current   independent
accountants for Customer or other independent  accountants reasonably acceptable
to MLBFS, and (ii) all other financial  information  required to be furnished by
Customer to MLBFS  hereunder  will be  certified as correct by the party who has
prepared such information,  and, in the case of internally prepared  information
with  respect to Customer or any  Business  Guarantor,  certified  as correct by
their respective chief financial officer.

4.3 OTHER COVENANTS.  Customer  further  covenants and agrees during the term of
this Loan Agreement that:

(a) FINANCIAL  RECORDS;  INSPECTION.  Customer and each Business Guarantor will:
(i) maintain at its principal place of business  complete and accurate books and
records,  and maintain all of its financial  records in a manner consistent with
the  financial  statements  heretofore  furnished to MLBFS,  or prepared on such
other basis as may be approved in writing by MLBFS; and (ii) permit MLBFS or its
duly authorized representatives, upon reasonable notice and at reasonable times,
to inspect  its  properties  (both  real and  personal),  operations,  books and
records.
<PAGE>
(b) TAXES. Customer and each Guarantor will pay when due all taxes,  assessments
and other governmental charges,  howsoever designated, and all other liabilities
and  obligations,  except to the  extent  that any such  failure to pay will not
materially and adversely affect either any liens and security interests of MLBFS
under any  Additional  Agreements,  the  financial  condition of Customer or any
Guarantor or the continued operations of Customer or any Business Guarantor.

(c) COMPLIANCE WITH LAWS AND AGREEMENTS. Neither Customer nor any Guarantor will
violate any law, regulation or other governmental  requirement,  any judgment or
order of any  court or  governmental  agency  or  authority,  or any  agreement,
instrument  or document  to which it is a party or by which it is bound,  if any
such  violation  will  materially  and  adversely  affect  either  any liens and
security  interests  of MLBFS under any  Additional  Agreements,  the  financial
condition of Customer or any Guarantor,  or the continued operations of Customer
or any Business Guarantor.

(d) NO USE OF MERRILL  LYNCH  NAME.  Except  upon the prior  written  consent of
MLBFS,  neither Customer nor any Guarantor will directly or indirectly  publish,
disclose or otherwise use in any advertising or promotional  material,  or press
release or interview,  the name, logo or any trademark of MLBFS, MLPF&S, Merrill
Lynch and Co., Incorporated or any of their affiliates.

(e)  NOTIFICATION BY CUSTOMER.  Customer shall provide MLBFS with prompt written
notification  of: (i) any Default;  (ii) any  materially  adverse  change in the
business,  financial  condition  or  operations  of  Customer  or  any  Business
Guarantor;  (iii) any information which indicates that any financial  statements
of Customer or any Guarantor fail in any material  respect to present fairly the
financial condition and results of operations  purported to be presented in such
statements;  and  (iv)  any  change  in  Customer's  outside  accountants.  Each
notification by Customer  pursuant hereto shall specify the event or information
causing such  notification,  and, to the extent  applicable,  shall  specify the
steps being taken to rectify or remedy such event or information.

(f)  NOTICE OF  CHANGE.  Customer  shall  give MLBFS not less than 30 days prior
written  notice of any change in the name  (including  any  fictitious  name) or
principal place of business or residence of Customer or any Guarantor.

(g) REAL ESTATE EXPENSE  DEPOSIT.  On or before the date of execution  hereof by
Customer,  Customer  shall pay to MLBFS a "Real Estate  Expense  Deposit" in the
aggregate amount of $35,000.00.  Said deposit, which shall not bear interest and
which  need not be  segregated  from other  funds of MLBFS,  shall be applied by
MLBFS on account of the  out-of-pocket  expenses  to third  parties  incurred in
fulfilling the Real Properties Funding Condition.  On the final Closing Date, or
if this Loan  Agreement  and any  commitment of MLBFS to make the Loan shall for
any reason be  terminated  without a funding of any  portion of the Loans,  then
promptly  after the date of such  termination,  any  unused  portion of the Real
Estate Expense Deposit shall be refunded to Customer. Nothing herein shall alter
the  primary  liability  of Customer  to pay or  reimburse  MLBFS for all of the
out-of-pocket expenses to third parties incurred in fulfilling the Real Property
Funding Condition, whether or not the Loan is funded.

(h) CONTINUITY.  Except upon the prior written  consent of MLBFS,  which consent
will  not be  unreasonably  withheld:  (i)  neither  Customer  nor any  Business
Guarantor shall be a party to any merger or  consolidation  with, or purchase or
otherwise  acquire all or  substantially  all of the assets of, or any  material
stock,  partnership,  joint  venture or other equity  interest in, any person or
entity, or sell, transfer or lease all or any substantial part of its assets, if
any such action would result in either:  (A) a material  change in the principal
business,  ownership or control of Customer or such Business Guarantor, or (B) a
material adverse change in the financial  condition or operations of Customer or
such  Business  Guarantor;  (ii)  Customer  and each  Business  Guarantor  shall
preserve their respective  existence and good standing in the jurisdiction(s) of
establishment and operation;  (iii) neither Customer nor any Business  Guarantor
shall  engage  in any  material  business  substantially  different  from  their
respective  business in effect as of the date of  application  by  Customer  for
credit from MLBFS, or cease operating any such material  business;  (iv) neither
Customer  nor any Business  Guarantor  shall cause or permit any other person or
entity to assume or succeed to any material  business or  operations of Customer
or such Business Guarantor;  and (v) neither Customer nor any Business Guarantor
shall cause or permit any material change in its controlling ownership.

(i) FIXED CHARGE  COVERAGE  RATIO.  Customer  shall at all times during the term
hereof  maintain a Fixed  Charge  Coverage  Ratio of not less than 1.3 to 1. The
term Fixed Charge  Coverage  Ratio"  shall mean the ratio of: (a) income  before
interest  (including  payments in the nature of interest under capital  leases),
state and federal income taxes,  depreciation and amortization,  less internally
financed  capital  expenditures,  to (b)  the sum the  aggregate  principal  and
interest  paid or accrued,  the aggregate  rental under  capital  leases paid or
accrued,  any dividends and other  distributions paid or payable to shareholders
and state and federal income taxes paid in cash; all as determined on a trailing
12-month basis from the regular  consolidated  financial  statements of Customer
prepared in a manner consistent with the terms hereof.

(j) FUNDED DEBT TO CASH FLOW. Customer's Funded Debt shall not exceed a multiple
of 3.5 times  Customer's  Cash Flow.  The term "Funded Debt" shall be defined as
all  indebtedness  that has a final  maturity  date more than one year after the
date of creation  thereof (or which is renewable or  extendable at the option of
the debtor(s) to a date more than one year from the date of creation), including
all final and serial maturities,  prepayments and sinking fund payments required
to be  made in one  year  or  less  after  the  date  of  determination  thereof
(notwithstanding  the fact that any amount  thereof is at the time also included
in current  liabilities  as defined by GAAP).  The term "Cash  Flow"  shall mean
Customer's  Earnings  Before  Preopening  Expenses (as  identified by Customer's
accountant,  but not to exceed  $2,000,000.00  in any  fiscal  year),  Interest,
Taxes,  Depreciation  and  Amortization,  as set  forth  on  Customer's  regular
consolidated financial statements prepared in a manner consistent with the terms
hereof.

(k) RELEASE OF REAL PROPERTY LOCATIONS.  Provided no default or Event of Default
has  occurred  and  is   continuing,   and  provided  that  MLBFS  has  received
satisfactory  evidence  that the Maximum  WCMA Line of Credit will be reduced in
accordance  with  paragraph 3.6 of this Loan  Agreement,  MLBFS will release its
lien on any Real  Property  location  that is sold,  exchanged,  transferred  or
otherwise  disposed of in accordance with the terms of this Loan  Agreement.  In
connection with any release,  the monthly reduction schedule in Section 3.6 will
be amended accordingly.

4.4 EVENTS OF DEFAULT.

The  occurrence  of any of the  following  events shall  constitute an "Event of
Default" under this Loan Agreement:
<PAGE>
(a) FAILURE TO PAY. (i) Customer  shall fail to deposit into the WCMA Account an
amount  sufficient  to assure  that the WCMA Loan  Balance  does not  exceed the
Maximum  WCMA Line of  Credit,  as  reduced in  accordance  with the  provisions
hereof,  or (ii)  Customer  shall fail to pay to MLBFS or deposit  into the WCMA
Account  when due any other  amount owing or required to be paid or deposited by
Customer under this Loan Agreement, or (iii) Customer shall fail to pay when due
any other  Obligations;  and any such failure shall  continue for more than five
(5) Business Days after written notice thereof shall have been given by MLBFS to
Customer.

(b)  FAILURE  TO  PERFORM.  Customer  or  any  Guarantor  shall  default  in the
performance  or  observance  of any  covenant  or  agreement  on its  part to be
performed  or  observed  under  this  Loan  Agreement  or any of the  Additional
Agreements (not  constituting an Event of Default under any other clause of this
Section),  and such default shall continue unremedied for ten (10) Business Days
after written notice thereof shall have been given by MLBFS to Customer.

(c) BREACH OF WARRANTY.  Any  representation or warranty made by Customer or any
Guarantor  contained  in this  Loan  Agreement  or any of the  other  Additional
Agreements  shall  at any time  prove to have  been  incorrect  in any  material
respect when made.

(d) DEFAULT UNDER OTHER AGREEMENT.  A default or Event of Default by Customer or
any Guarantor shall occur under the terms of any other agreement,  instrument or
document  with or  intended  for the  benefit  of MLBFS,  MLPF&S or any of their
affiliates,  and any required notice shall have been given and required  passage
of time shall have elapsed.

(e) BANKRUPTCY EVENT. Any Bankruptcy Event shall occur.

(f)  MATERIAL  IMPAIRMENT.  Any event shall occur which shall  reasonably  cause
MLBFS to in good faith believe that the prospect of full payment or  performance
by  Customer  or any  Guarantor  of  any  of  their  respective  liabilities  or
obligations  under this Loan  Agreement or any of the  Additional  Agreements to
which Customer or such Guarantor is a party has been  materially  impaired.  The
existence  of  such a  material  impairment  shall  be  determined  in a  manner
consistent with the intent of Section 1-208 of the UCC.

(g) ACCELERATION OF DEBT TO OTHER CREDITORS. Any event shall occur which results
in the  acceleration of the maturity of any  indebtedness of $100,000.00 or more
of Customer or any Guarantor to another creditor under any indenture, agreement,
undertaking, or otherwise.

4.5 REMEDIES.

(a) REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of any
Event of Default,  MLBFS may at its sole option do any one or more or all of the
following,  at such time and in such  order as MLBFS may in its sole  discretion
choose:

(i)  TERMINATION.  MLBFS may without notice terminate its obligation to make any
further advances on account of the Loan (if any portion of the Loan has not then
been funded), terminate the WCMA Line of Credit, and terminate any obligation to
make any Subsequent WCMA Loan  (including,  without  limitation,  any Subsequent
WCMA Loan to pay accrued  interest) or otherwise extend any credit to or for the
benefit  of  Customer  (it  being  understood  that upon the  occurrence  of any
Bankruptcy  Event  the  WCMA  Line of  Credit  and all  such  obligations  shall
automatically  terminate without any action on the part of MLBFS);  and upon any
such termination MLBFS shall be relieved of all such obligations.

(ii)  ACCELERATION.  MLBFS  may  declare  the WCMA  Loan  Balance  and all other
Obligations to be forthwith due and payable, whereupon all such amounts shall be
immediately due and payable,  without presentment,  demand for payment,  protest
and notice of protest,  notice of dishonor,  notice of  acceleration,  notice of
intent to accelerate or other notice or formality of any kind,  all of which are
hereby  expressly  waived;  provided,  however,  that upon the occurrence of any
Bankruptcy Event the WCMA Loan Balance and other Obligations shall automatically
become due and payable without any action on the part of MLBFS.

(b) COLLECTION  FEE. If following any  acceleration of the WCMA Loan Balance and
all other  Obligations  pursuant to Section 4.5 (a) (ii) hereof  Customer  shall
fail to pay the entire WCMA Loan Balance and all such other  Obligations in full
within ten (10) Business Days after  Customer is notified of such  acceleration,
then  Customer  shall pay to  MLBFS,  in  addition  to all  other  sums  payable
hereunder,  a  collection  fee in an amount  equal to the  lesser  of:  (i) five
percent (5%) of the sum of the then  outstanding  WCMA Loan Balance and the then
outstanding other  Obligations,  or (ii) the maximum collection fee permitted by
law.  Such  collection  fee,  which is  intended  to  compensate  MLBFS  for its
administrative  costs  incident to the  collection  of the WCMA Loan Balance and
such other Obligations following an Event of Default and acceleration,  shall be
payable on demand.

(c) SET-OFF.  MLBFS shall have the further right upon the  occurrence and during
the continuance of an Event of Default to set-off,  appropriate and apply toward
payment of any of the  Obligations,  in such order of  application  as MLBFS may
from time to time and at any time elect, any cash, credit,  deposits,  accounts,
financial  assets,  investment  property,  securities  and any other property of
Customer  which is in  transit  to or in the  possession,  custody or control of
MLBFS,  MLPF&S or any agent,  bailee, or affiliate of MLBFS or MLPF&S.  Customer
hereby  collaterally  assigns and grants to MLBFS a continuing security interest
in all such  property  as  additional  security  for the  Obligations.  Upon the
occurrence and during the  continuance of an Event of Default,  MLBFS shall have
all rights in such  property  available  to  collateral  assignees  and  secured
parties under all applicable laws, including, without limitation, the UCC.

(d)  REMEDIES ARE  SEVERABLE  AND  CUMULATIVE.  All rights and remedies of MLBFS
herein are  severable  and  cumulative  and in addition to all other  rights and
remedies  available in the Additional  Agreements,  at law or in equity, and any
one or more of such  rights and  remedies  may be  exercised  simultaneously  or
successively.
<PAGE>
4.6 MISCELLANEOUS.

(a)  NON-WAIVER.  No  failure  or delay on the part of MLBFS in  exercising  any
right,  power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shall operate as a waiver thereof,  and no single or partial exercise
of any such right,  power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of this Loan Agreement or any of the Additional Agreements, nor
any consent to any departure by Customer  therefrom,  shall be effective  unless
the same shall be in writing and signed by MLBFS. Any waiver of any provision of
this Loan Agreement or any of the  Additional  Agreements and any consent to any
departure by Customer  from the terms  thereof  shall be  effective  only in the
specific  instance  and for the  specific  purpose  for which  given.  Except as
otherwise expressly provided herein, no notice to or demand on Customer shall in
any case entitle Customer to any other or further notice or demand in similar or
other circumstances.

(b) DISCLOSURE.  Customer hereby  irrevocably  authorizes  MLBFS and each of its
affiliates,  including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred)  obtain from and disclose to each other
any and all financial and other information about Customer.

(c) COMMUNICATIONS.  All notices and other communications  required or permitted
hereunder or in connection  with any of the  Additional  Agreements  shall be in
writing,  and shall be either  delivered  personally,  mailed by postage prepaid
certified  mail or sent by  express  overnight  courier  or by  facsimile.  Such
notices and  communications  shall be deemed to be given on the date of personal
delivery,  facsimile  transmission  or actual delivery of certified mail, or one
Business Day after delivery to an express  overnight  courier.  Unless otherwise
specified  in a notice sent or delivered in  accordance  with the terms  hereof,
notices and other communications in writing shall be given to the parties hereto
at their respective addresses set forth at the beginning of this Loan Agreement,
or, in the case of facsimile  transmission,  to the parties at their  respective
regular facsimile telephone number.

(d) FEES, EXPENSES AND TAXES. Customer shall pay or reimburse MLBFS for: (i) all
Uniform Commercial Code filing and search fees and expenses incurred by MLBFS in
connection  with the  verification,  perfection or preservation of MLBFS' rights
hereunder  or in any  collateral  for the  Obligations;  (ii) any and all stamp,
transfer  and other  taxes and fees  payable  or  determined  to be  payable  in
connection with the execution,  delivery and/or recording of this Loan Agreement
or any of the  Additional  Agreements;  (iii)  any and all  reasonable  fees and
out-of-pocket expenses to third parties incurred by MLBFS in connection with the
title insurance, environmental audit, appraisal, survey and other instruments or
documents referred to in the definition of Real Property Funding Condition;  and
(iv) all reasonable fees and out-of-pocket expenses (including,  but not limited
to,  reasonable  fees and  expenses  of outside  counsel)  incurred  by MLBFS in
connection with the collection of any sum payable  hereunder or under any of the
Additional  Agreements not paid when due, the enforcement of this Loan Agreement
or any of  the  Additional  Agreements  and  the  protection  of  MLBFS'  rights
hereunder  or  thereunder,  excluding,  however,  salaries  and normal  overhead
attributable  to MLBFS'  employees.  Customer  hereby  authorizes  MLBFS, at its
option,  to either  cause any and all such fees,  expenses  and taxes to be paid
with a WCMA Loan, or invoice  Customer  therefor (in which event  Customer shall
pay all such fees,  expenses and taxes within 5 Business  Days after  receipt of
such invoice).  The  obligations of Customer under this paragraph  shall survive
the  expiration or  termination  of this Loan Agreement and the discharge of the
other Obligations.

(e) RIGHT TO PERFORM OBLIGATIONS.  If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty  on the part of  Customer  contained  in this Loan  Agreement  shall be
breached,  MLBFS may,  in its sole  discretion,  after 5 Business  Days  written
notice is sent to Customer (or such lesser  notice,  including no notice,  as is
reasonable  under  the  circumstances),  do the  same or  cause it to be done or
remedy any such breach,  and may expend its funds for such purpose.  Any and all
reasonable  amounts so expended by MLBFS shall be repayable to MLBFS by Customer
upon  demand,  with  interest  at the  Interest  Rate during the period from and
including the date funds are so expended by MLBFS to the date of repayment,  and
all such amounts shall be additional Obligations.  The payment or performance by
MLBFS of any of Customer's  obligations  hereunder shall not relieve Customer of
said  obligations or of the  consequences of having failed to pay or perform the
same, and shall not waive or be deemed a cure of any Default.

(f) FURTHER  ASSURANCES.  Customer agrees to do such further acts and things and
to execute  and deliver to MLBFS such  additional  agreements,  instruments  and
documents as MLBFS may  reasonably  require or deem  advisable to effectuate the
purposes of this Loan Agreement or any of the Additional Agreements.

(g) BINDING EFFECT.  This Loan Agreement and the Additional  Agreements shall be
binding  upon,  and shall  inure to the  benefit  of MLBFS,  Customer  and their
respective  successors and assigns.  Customer shall not assign any of its rights
or  delegate  any of its  obligations  under this Loan  Agreement  or any of the
Additional  Agreements  without  the prior  written  consent  of  MLBFS.  Unless
otherwise  expressly  agreed to in a writing  signed by MLBFS,  no such  consent
shall in any event relieve  Customer of any of its  obligations  under this Loan
Agreement or any of the Additional Agreements.

(h) HEADINGS. Captions and section and paragraph headings in this Loan Agreement
are  inserted  only as a  matter  of  convenience,  and  shall  not  affect  the
interpretation hereof.

(i) GOVERNING LAW. This Loan Agreement and, unless otherwise  expressly provided
therein, each of the Additional Agreements, shall be governed in all respects by
the laws of the State of Illinois.

(j) SEVERABILITY OF PROVISIONS.  Whenever possible,  each provision of this Loan
Agreement and the Additional  Agreements  shall be interpreted in such manner as
to be  effective  and valid under  applicable  law.  Any  provision of this Loan
Agreement  or  any  of  the  Additional   Agreements   which  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability  without invalidating
the remaining provisions of this Loan Agreement and the Additional Agreements or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.
<PAGE>
(k) TERM.  This Loan  Agreement  shall become  effective on the date accepted by
MLBFS at its office in  Chicago,  Illinois,  and,  subject to the terms  hereof,
shall continue in effect so long  thereafter as: (i) MLBFS shall be obligated to
make the Loan,  (ii) the WCMA Line of Credit  shall be in  effect,  (iii)  there
shall be any moneys  outstanding under this Loan Agreement,  or (iv) there shall
be any other Obligations outstanding.

(l)  COUNTERPARTS.   This  Loan  Agreement  may  be  executed  in  one  or  more
counterparts which, when taken together, constitute one and the same agreement.

(m)  JURISDICTION;  WAIVER.  CUSTOMER  ACKNOWLEDGES  THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL  CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS  SOLE  DISCRETION,  TO  ENFORCE  THIS  LOAN  AGREEMENT  AND  THE  ADDITIONAL
AGREEMENTS  IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER  JURISDICTION  WHERE
CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER CONSENTS
TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF COOK FOR SUCH PURPOSES,  AND CUSTOMER WAIVES ANY AND ALL RIGHTS
TO CONTEST SAID  JURISDICTION  AND VENUE.  CUSTOMER FURTHER WAIVES ANY RIGHTS TO
COMMENCE ANY ACTION  AGAINST MLBFS IN ANY  JURISDICTION  EXCEPT IN THE COUNTY OF
COOK AND STATE OF ILLINOIS.  MLBFS AND CUSTOMER  HEREBY EACH EXPRESSLY WAIVE ANY
AND ALL  RIGHTS TO A TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES  AGAINST  THE OTHER  PARTY WITH  RESPECT TO ANY
MATTER  RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN,  THIS
LOAN AGREEMENT,  ANY ADDITIONAL  AGREEMENTS AND/OR ANY OF THE TRANSACTIONS WHICH
ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT.

(n) INTEGRATION.  THIS LOAN AGREEMENT,  TOGETHER WITH THE ADDITIONAL AGREEMENTS,
CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT  MATTER  HEREOF,  AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN  AGREEMENTS OR PRIOR,  CONTEMPORANEOUS
OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO  UNWRITTEN  ORAL
AGREEMENTS OF THE PARTIES. WITHOUT LIMITING THE FOREGOING, CUSTOMER ACKNOWLEDGES
THAT: (I) NO PROMISE OR COMMITMENT  HAS BEEN MADE TO IT BY MLBFS,  MLPF&S OR ANY
OF THEIR RESPECTIVE EMPLOYEES, AGENTS OR REPRESENTATIVES TO MAKE THE LOAN OR ANY
SUBSEQUENT  WCMA LOAN ON ANY TERMS OTHER THAN AS EXPRESSLY SET FORTH HEREIN,  OR
TO MAKE ANY OTHER LOAN OR  OTHERWISE  EXTEND ANY OTHER CREDIT TO CUSTOMER OR ANY
OTHER PARTY; AND (II) EXCEPT AS OTHERWISE  EXPRESSLY PROVIDED HEREIN,  THIS LOAN
AGREEMENT  SUPERSEDES AND REPLACES ANY AND ALL PROPOSALS,  LETTERS OF INTENT AND
APPROVAL AND COMMITMENT  LETTERS FROM MLBFS TO CUSTOMER,  NONE OF WHICH SHALL BE
CONSIDERED  AN  ADDITIONAL  AGREEMENT.  NO  AMENDMENT  OR  MODIFICATION  OF THIS
AGREEMENT OR ANY OF THE ADDITIONAL AGREEMENTS TO WHICH CUSTOMER IS A PARTY SHALL
BE EFFECTIVE UNLESS IN A WRITING SIGNED BY BOTH MLBFS AND CUSTOMER.

IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.

MAIN STREET AND MAIN INCORPORATED D/B/A TGI FRIDAY'S

By:
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                  Signature (1)                      Signature (2)

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                  Printed Name                       Printed Name

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                  Title                              Title

Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.

By:
    ---------------------------------

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