Document:

<PAGE>   1
                                                                   EXHIBIT 10.40

                                 AMENDMENT NO. 3
                                       TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT
                                       AND
                                 LIMITED WAIVER

         This AMENDMENT NO. 3 TO THIRD AMENDED AND RE-STATED CREDIT AGREEMENT
AND LIMITED WAIVER (this "Amendment") is entered into as of January 29, 2001,
among CKE Restaurants, Inc., the Lenders and BNP Paribas, a bank organized under
the laws of France acting through its Chicago branch (as successor in interest
to Paribas), as Agent.

                                    RECITALS

         CKE Restaurants, Inc., a Delaware corporation (the "Borrower"), certain
financial institutions (the "Lenders") and Paribas, as agent for the Lenders (in
such capacity, the "Agent") are parties to that certain Third Amended and
Restated Credit Agreement, dated as of November 24, 1999, as amended by that
certain Amendment No.1 to Third Amended and Restated Credit Agreement, dated as
of April 26, 2000 and that certain Amendment No. 2 to Third Amended and Restated
Credit Agreement and Limited Waiver, dated as of September 28, 2000 (as
hereto-fore amended or otherwise modified, the "Credit Agreement").

         The Borrower has requested that the Agent and the Lenders amend and
grant waivers with respect to certain provisions of the Credit Agreement, all as
more fully described herein.

         The Agent and the Lenders have agreed to grant such amendments and
waivers upon the terms and conditions set forth herein.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT
<PAGE>   2
Section 1. Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings assigned thereto in the Credit
Agreement, as amended hereby.

Section 2. Amendments to the Credit Agreement. Subject to the terms and
conditions set forth herein, the Credit Agreement is hereby amended as follows:

         (a) Section 1.1 of the Credit Agreement is hereby amended by amending
and restating, in its entirety, subsection (c) of the definition of "Applicable
Margin" to read as follows:

                (c) Notwithstanding the foregoing, (i) if the Borrower and its
         Subsidiaries have not received an aggregate amount of Net Sale Proceeds
         of at least $10 million during the period from January 22, 2001 to
         February 28, 2001 and used such Net Sale Proceeds to prepay outstanding
         Loans and concurrently reduce the Revolving Loan Commitments pro rata
         by a corresponding amount, then effective as of 5:00 p.m. (Chicago
         time) on February 28, 2001, the Applicable Margin with respect to each
         Eurodollar Loan or Base Rate Loan shall be increased by 0.25% until the
         earlier of (x) March 31, 2001 or (y) such time as the aggregate amount
         of Net Sale Proceeds received after January 22, 2001 shall be at least
         $10 million and such Net Sale Proceeds shall have been applied to
         prepay outstanding Loans and concurrently reduce the Revolving Loan
         Commitments pro rata by a corresponding amount and (ii) if the Borrower
         and its Subsidiaries have not received an aggregate amount of Net Sale
         Proceeds of at least $25 million during the period from January 22,
         2001 to March 31, 2001 and used such Net Sale Proceeds to prepay
         outstanding Loans and concurrently reduce the Revolving Loan
         Commitments pro rata by a corresponding amount, then effective as of
         5:00 p.m. (Chicago time) on March 31, 2001, the Applicable Margin with
         respect to each Eurodollar Loan or Base Rate Loan shall be increased by
         0.50% until such time as the aggregate amount of Net Sale Proceeds
         received after January 22, 2001 shall be at least $25 million and such
         Net Sale Proceeds shall have been applied to prepay outstanding Loans
         and concurrently reduce the Revolving Loan Commitments pro rata by a
         corresponding amount; provided, however, that the maximum aggre-

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       2
<PAGE>   3
         gate increase in the Applicable Margin under clauses (i) and (ii) of
         this subsection (c) shall be 0.50%.

         (b) Section 1.1 of the Credit Agreement is hereby further amended by
inserting the following new definitions in proper alphabetical order:

         "Sale-Leaseback Proceeds" has the meaning set forth in Section 2.12(b).

         "Taco Bueno" means CBI Restaurants, Inc., a Delaware corporation and
         its subsidiaries.

         (c) Section 2.3(a) of the Credit Agreement is hereby amended by
amending and restating, in its entirety, the last parenthetical appearing
therein to read as follows:

         (provided, that (i) no Eurodollar Loan may be requested or made when
         any Default or Event of Default has occurred and is continuing and (ii)
         for the period from January 29, 2001 through 5:00 p.m. (Chicago time)
         April 30, 2001, no Eurodollar Loan with an Interest Period that would
         expire beyond April 30, 2001 may be requested or made)

         (d) Section 2.12(b) of the Credit Agreement is hereby amended by
inserting the following sentence immediately at the end of such subsection:

         Notwithstanding anything to the contrary in this Section 2.12(b), in
         the event that the Borrower or any of its Subsidiaries receives any
         Sale-Leaseback Proceeds that would not otherwise be required to be
         applied as a prepayment of the Loans under the terms hereof and that
         arise from the sale of any Taco Bueno Restaurant or the assets or
         business of one or more Restaurants being operated under the Taco Bueno
         concept, if the Agent or the Required Lenders shall have notified the

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       3
<PAGE>   4
         Borrower in writing (a "Prepayment Notice") that the Borrower has
         failed to make satisfactory progress (as determined by the Agent or the
         Required Lenders in their sole discretion) to grant, and to cause each
         of its Subsidiaries to grant, pursuant to Section 6.13, a valid and
         perfected, first priority Lien to the Agent for the benefit of the
         Lenders on such portion of the assets and property of the Borrower and
         its Subsidiaries as has been determined by the Agent or the Required
         Lenders in their sole discretion (which notice shall be given within 5
         Business Days, or such later date as agreed to by the Borrower and
         notified to the Agent, after the Borrower has delivered notice of its
         receipt of such Sale-Leaseback Proceeds as required by Section 6.1(m)),
         then the Borrower shall, within one Business Day of receipt of the
         Prepayment Notice, prepay the outstanding Loans in an amount equal to
         100% of the amount of such Sale-Leaseback Proceeds (or, if a portion of
         such Sale-Leaseback Proceeds shall have been used to prepay the Loans
         prior to the Borrower's receipt of a Prepayment Notice, 100% of the
         balance of such Sale-Leaseback Proceeds) in accordance with the
         provisions of Section 2.13 and concurrently reduce the Revolving Loan
         Commitments pro rata by a corresponding amount; provided, that,
         notwithstanding the second sentence of Section 2.13(a) to the contrary,
         such reduction of the Revolving Loan Commitments shall be temporary and
         not permanent until such time as the Person or Persons that delivered
         the Prepayment Notice shall, in their sole discretion, notify the
         Borrower that such progress is satisfactory, at which time any
         Revolving Loans prepaid pursuant to this sentence may be reborrowed,
         subject to the other terms of this Agreement.

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       4
<PAGE>   5
         (e) Section 6.1 of the Credit Agreement is hereby amended by (1)
renumbering subsection (m) thereof to be subsection (n) and (2) inserting a new
subsection (m) to read as follows:

         (m) Taco Bueno Sales. Within 5 Business Days of the Borrower or any of
         its Subsidiaries receiving any Sale-Leaseback Proceeds from the sale of
         any Taco Bueno Restaurant or the assets or business of one or more
         Restaurants being operated under the Taco Bueno concept, written notice
         thereof specifying the aggregate amount received (it being understood
         that upon receipt of such notice the Agent shall promptly notify the
         Lenders).

         (f) Section 7.1(d) of the Credit Agreement is hereby amended by
amending and restating, in its entirety, such subsection to read as follows:

         (d) Minimum Consolidated EBITDA. The Borrower shall not permit
         Adjusted Consolidated EBITDA of the Borrower for the period of four
         consecutive fiscal quarters (or, commencing on November 7, 2000, the
         period of thirteen consecutive Retail Periods) of the Borrower (taken
         as one accounting period) as determined on the last day of each fiscal
         quarter (or, commencing on November 7, 2000, the last day of each
         Retail Period) of the Borrower ending during each period set forth
         below, minus the amount of any EBITDA Adjustments as of the date of
         determination, to be less than the amount set forth opposite such
         period:

<TABLE>
<CAPTION>
        Period                                                  Amount
        <S>                                                     <C>
        Second A&R Closing Date through November 1, 1999        $200,000,000
        November 2, 1999 through January 31, 2000               $175,000,000
</TABLE>

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       5
<PAGE>   6
<TABLE>
<CAPTION>
        Period                                                  Amount
        <S>                                                     <C>
        February 1, 2000 through May 22, 2000                   $155,000,000
        May 23, 2000 through August 14, 2000                    $160,000,000
        August 15, 2000 through November 6, 2000                $133,000,000
        November 7, 2000 through January 29, 2001               $110,000,000
        January 30, 2001 through February 26, 2001              $105,000,000
        February 27, 2001 through March 26, 2001                $105,000,000
        March 27, 2001 through April 23, 2001                   $100,000,000
        April 24, 2001 through May 21, 2001 and
        each Retail Period thereafter                           $ 95,000,000
</TABLE>

         provided, however, that the amount set forth opposite such period shall
         be reduced by the EBITDA Adjustments as of the date of determination
         attributable to those Restaurants sold (excluding those sold during the
         period from November 2, 1999 through January 31, 2000) pursuant to
         which the Net Sale Proceeds from such sales have been applied to
         permanently reduce the Commitments of the Lenders on or before the 45
         th calendar day following the end of the fiscal quarter in which such
         Restaurants were sold.

         (g) Section 7.1(f) of the Credit Agreement is hereby amended by (1)
inserting "(a)" immediately before the phrase "if at any time the Unused Portion
of the Revolving Loans" appearing in the last sentence of such subsection, (2)
inserting the word "and" immediately after the parenthetical appearing in the
last sentence of such subsection and (3) inserting the following new clause (b)
immediately before the period at the end of the last sentence of such
subsection:

         (b) during the first fiscal quarter of the Borrower's fiscal year 2002,
         the Borrower shall not make or incur and shall not permit any of its
         Subsidiaries to make or incur any Capital Expenditures in an aggregate
         amount in excess of $20,000,000

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       6
<PAGE>   7
Section 3. Limited Waiver. Subject to the terms and conditions set forth herein,
(i) the Agent and the Lenders hereby waive any Default or Event of Default
arising solely as a result of the failure of the Borrower to comply with the
terms of Section 7.1(d) of the Credit Agreement for the period commencing on May
23, 2000 and ending on August 14, 2000 and (ii) for the period commencing on
August 14, 2000 and ending on April 30, 2001, the Agent and the Lenders hereby
waive compliance by the Borrower with the requirements of subsections (a), (b),
(c), (e) and (g) of Section 7.1 of the Credit Agreement; provided, however, that
each of the foregoing waivers shall cease to be effective as of 5:00 p.m.
(Chicago time) on April 30, 2001.

Section 4. Acknowledgment and Agreements. (a) By its execution hereof, the
Borrower acknowledges that it did not receive Net Sale Proceeds in the amounts
and for the periods specified in Section 6.13 of the Credit Agreement and that
as a result, pursuant to Section 6.13 of the Credit Agreement, the Borrower is
required to use its best efforts to, and to cause each of its Subsidiaries to
use its best efforts to, promptly execute and deliver to the Agent such security
agreements, pledge agreements, mortgages, leasehold mortgages and other
agreements, instruments, documents and opinions as the Agent shall request, each
in form and substance satisfactory to the Agent, granting to the Agent, for the
benefit of the Lenders, a valid and perfected, first priority security interest
in such assets and property of the Borrower and such Subsidiaries. The Borrower
hereby agrees to perform its obligations under Section 6.13 of the Credit
Agreement as soon as reasonably practicable.

         (b) By its execution hereof, the Borrower further agrees to use
reasonable efforts to effect a complete refinancing of the Loans outstanding
hereunder as soon as reasonably practicable with one or more financial
institutions, pursuant to which the Borrower shall prepay the aggregate
outstanding principal of all Loans, together with accrued and unpaid interest
thereon and all other amounts owing hereunder.

Section 5. Representations and Warranties. The Borrower represents and warrants
to the Agent and the Lenders, as of the date hereof, that after giving effect to
this Amendment:

         (a) no Default or Event of Default has occurred and is continuing; and

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       7
<PAGE>   8
         (b) all of the representations and warranties of the Borrower and each
other Loan Party contained in the Transaction Documents are true and correct.

Section 6. Conditions to Effectiveness of this Amendment. Upon satisfaction of
the following conditions precedent, this Amendment shall immediately become
effective as of the date hereof:

         (a) The Agent shall have received a counterpart to this Amendment, duly
executed and delivered by the Borrower and each of the Required Lenders;

         (b) The Agent shall have received a certificate of a duly authorized
officer of the Borrower certifying as to matters set forth in Section 5 of this
Amendment; and

         (c) The Agent shall have received a side letter from the Borrower, duly
executed and delivered by the Borrower and relating to the payment of an
amendment fee.

Section 7. Miscellaneous.

         (a) Effect; Ratification. The amendments and waivers set forth herein
are effective solely for the purposes set forth herein and shall be limited
precisely as written, and shall not be deemed to (1) be a consent to any
amendment, waiver or modification of any other term or condition of any
Transaction Document or of any other instrument or agreement referred to
therein, except as set forth herein, or (2) prejudice any right or remedy that
the Agent or any Lender may now have or may have in the future under or in
connection with the Credit Agreement, as amended hereby, or any other instrument
or agreement referred to therein. Each reference in the Credit Agreement to
"this Agreement," "herein," "hereof" and words of like import and each reference
in the other Transaction Documents to the "Credit Agreement" shall mean the
Credit Agreement as amended hereby. For the avoidance of doubt, each reference
in the Credit Agreement, as amended hereby to "the date hereof" shall mean and
be a reference to November 24, 1999. This Amendment shall be construed in
connection with and as part of the Credit Agreement and all terms, conditions,
representations, warranties, covenants and agreements set forth in the Credit
Agreement and each other instrument or agreement referred to therein, except

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       8
<PAGE>   9
as herein amended, are hereby ratified and confirmed and shall remain in full
force and effect.

         (b) Expenses and Fees. Notwithstanding anything contained in the Credit
Agreement, as amended hereby, or any other Transaction Document and in addition
to any fees and expenses required to be paid by the Borrower thereunder, the
Borrower agrees to pay all costs, fees and expenses incurred by the Agent in
connection with the preparation, execution and delivery of this Amendment
(including the reasonable fees and expenses of counsel to the Agent).

         (c) Counterparts. This Amendment may be executed in any number of
counterparts, each such counterpart constituting an original and all of which
when taken together shall constitute one and the same instrument.

         (d) Severability. Any provision contained in this Amendment that is
held to be inoperative, unenforceable or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable or invalid without affecting
the operation, enforceability or validity of the remaining provisions of this
Amendment in that jurisdiction or the operation, enforceability or validity of
such provision in any other jurisdiction.

         (e) GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS.

                            [SIGNATURE PAGES FOLLOW]

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       9
<PAGE>   10
         IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.

CKE RESTAURANTS, INC.

By: _____________________________________
Print Name:
Title:

BNP PARIBAS (as successor in interest to
PARIBAS), as Agent and as a Lender

By: ____________________________________
Print Name: Clark C. King III
Title: Managing Director

By: ____________________________________
Print Name: Michael C. Colias
Title: Vice President

BANK LEUMI USA

By: _____________________________________
Print Name:
Title:

BANK LEUMI USA

By: ____________________________________
Print Name:
Title:

ARAB BANKING CORPORATION

By: ____________________________________
Print Name:
Title:

By: ____________________________________
Print Name:
Title:

BANK UNITED

By: ____________________________________
Print Name:
Title:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       S-1
<PAGE>   11
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.

By: ____________________________________
Print Name:
Title:

By: ____________________________________
Print Name:
Title:

CALIFORNIA BANK & TRUST
f/k/a SUMITOMO BANK OF CALIFORNIA)

By: ____________________________________
Print Name:
Title:

NATIONAL BANK OF KUWAIT

By: ____________________________________
Print Name:
Title:

By: ____________________________________
Print Name:
Title:

CENTURA BANK

By: ____________________________________
Print Name:
Title:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       S-2
<PAGE>   12
CHANG HWA COMMERCIAL BANK, LTD.,
NEW YORK BRANCH

By: ____________________________________
Print Name:
Title:

AMSOUTH BANK (successor in interest by
merger to FIRST AMERICAN NATIONAL BANK)

By: ____________________________________
Print Name:
Title:

FIRST BANK & TRUST

By: ____________________________________
Print Name:
Title:

CREDIT INDUSTRIEL ET COMMERCIAL
(f/k/a COMPAGNIE FINANCIERE DE CIC
ET DE L'UNION EUROPEENNE)

By: ____________________________________
Print Name:
Title:

FIRST UNION NATIONAL BANK

By: ____________________________________
Print Name:
Title:

FLEET NATIONAL BANK
(f/k/a BANKBOSTON, N.A.)

By: ___________________________________
Print Name:
Title:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       S-3
<PAGE>   13
MANUFACTURERS BANK

By: ___________________________________
Print Name:
Title:

SUNTRUST BANK (f/k/a/ SUNTRUST
BANK, NASHVILLE, N.A.)

By: ___________________________________
Print Name:
Title:

U.S. BANK NATIONAL ASSOCIATION

By: ___________________________________
Print Name:
Title:

THE SANWA BANK, LIMITED

By: ____________________________________
Print Name:
Title:

UMB BANK, N.A.

By: ____________________________________
Print Name:
Title:

WELLS FARGO BANK

By: ____________________________________
Print Name:
Title:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT

                                       S-4
<PAGE>   14
                             OFFICER'S CERTIFICATE

         I,__________________, am the _________________ of CKE Restaurants, Inc.
I execute and deliver this Officer's Certificate dated as of January ___, 2001,
on behalf of the Borrower pursuant to Section 6 of the Amendment No. 3 and
Limited Waiver to Third Amended and Restated Credit Agreement (the "Amendment")
by and among CKE Restaurants, Inc. (the "Borrower"), the Lenders party thereto
and Paribas, acting in its capacity as agent for the Lenders (the "Agent").
Capitalized terms used but not defined herein shall the respective meanings
specified in the Amendment.

         I hereby certify, on behalf of the Borrower, after giving effect to the
Amendment, that (a) no Default or Event of Default has occurred and is
continuing and (b) all of the representations and warranties of the Borrower and
each other Loan Party contained in the Transaction Documents are true and
correct as of the date hereof.

                                        CKE RESTAURANTS, INC.

                                        By: __________________________________
                                        Name:
                                        Title:

                                           AMENDMENT NO. 3 AND LIMITED WAIVER TO
                                     THIRD AMENDED AND RESTATED CREDIT AGREEMENT<PAGE>   1
                                                                   EXHIBIT 10.41

                            STOCK PURCHASE AGREEMENT

                                     BETWEEN

                              CKE RESTAURANTS, INC.

                                    TB CORP.

                                       AND

                             JP ACQUISITION FUND III

                                 MARCH 13, 2001

<PAGE>   2

                               Table of Contents

<TABLE>
<CAPTION>
                                                                                Page
                                                                                ----
<S>           <C>                                                               <C>
Section 1.      Definitions....................................................   1

Section 2.      Purchase and Sale of Company Shares............................   7

     (a)      Basic Transaction................................................   7
     (b)      Purchase Price...................................................   7
     (c)      The Closing......................................................   7
     (d)      Deliveries at the Closing........................................   7
     (e)      Purchase Price Adjustment........................................   8

Section 3.      Representations and Warranties Concerning the Transaction......  10

     (a)      Representations and Warranties of Seller.........................  10
     (b)      Representations and Warranties of Buyer..........................  10

Section 4.      Representations and Warranties Concerning the Company and its
                Subsidiaries...................................................  11

     (a)      Organization, Qualification, and Corporate Power.................  11
     (b)      Capitalization...................................................  11
     (c)      Noncontravention.................................................  11
     (d)      Brokers' Fees....................................................  12
     (e)      Title to Assets..................................................  12
     (f)      Subsidiaries.....................................................  12
     (g)      Financial Statements.............................................  13
     (h)      Events Subsequent to the Date of the Latest Balance Sheet........  13
     (i)      Legal Compliance.................................................  15
     (j)      Tax Matters......................................................  15
     (k)      Real Property....................................................  19
     (l)      Intellectual Property............................................  20
     (m)      Contracts........................................................  20
     (n)      Litigation.......................................................  21
     (o)      Employee Benefits................................................  21
     (p)      Bonds............................................................  22
     (q)      Environmental Matters............................................  22
     (r)      Certain Business Relationships With the Company and its
               Subsidiaries....................................................  22
     (s)      Insurance........................................................  23
     (t)      Labor and Employment Matters.....................................  23
     (u)      No Representation or Warranty Concerning ADA.....................  23

Section 5.      Pre-Closing Covenants..........................................  24

     (a)      General..........................................................  24
     (b)      Notices and Consents.............................................  24
     (c)      Operation of Business............................................  24
</TABLE>

                                       i

<PAGE>   3

                               Table of Contents
                                  (continued)
<TABLE>
<CAPTION>
                                                                                Page
                                                                                ----
<S>           <C>                                                               <C>
     (d)      Financing Commitment; Exclusivity................................  25
     (e)      Access; Cooperation..............................................  25
     (f)      Delivery and Acceptance of Disclosure Schedule...................  26
     (g)      Software License Agreement.......................................  26
     (h)      POS Equipment Sublease...........................................  26
     (i)      Notice of Developments...........................................  26

Section 6.      Additional Covenants and Agreements............................  27

     (a)      General..........................................................  27
     (b)      Litigation Support...............................................  27
     (c)      Employees and Employee Benefit Plans.............................  27
     (d)      Confidentiality; Non-Solicitation................................  29
     (e)      Transition Services..............................................  29
     (f)      Insurance Matters................................................  30
     (g)      Prepayment of State Taxes........................................  30
     (h)      Banque Paribas...................................................  30

Section 7.      Conditions to Obligation to Close..............................  30

     (a)      Conditions to Obligation of Buyer................................  30
     (b)      Conditions to Obligation of Seller...............................  31

Section 8.      Remedies for Breaches of This Agreement........................  32

     (a)      Survival of Representations and Warranties.......................  32
     (b)      Indemnification Provisions for Benefit of Buyer..................  32
     (c)      Indemnification Provisions for Benefit of Seller.................  33
     (d)      Tax Indemnification..............................................  33
     (e)      Matters Involving Third Parties..................................  33
     (f)      Determination of Adverse Consequences............................  34
     (g)      Other Contractual Remedies.......................................  34

Section 9.      Termination....................................................  34

     (a)      Termination of Agreement.........................................  34
     (b)      Effect of Termination............................................  35

Section 10.     Tax Matters....................................................  35

     (a)      Indemnification..................................................  35
     (b)      Tax Returns; Miscellaneous.......................................  37
     (c)      Section 338 Elections and Related Matters........................  40
</TABLE>

                                       ii

<PAGE>   4

                               Table of Contents
                                  (continued)
<TABLE>
<CAPTION>
                                                                                    Page
                                                                                    ----
<S>           <C>                                                                  <C>
Section 11.     Guarantee..........................................................  41

     (a)      Guarantee of Buyer's Obligations.....................................  41
     (b)      Subrogation..........................................................  42
     (c)      Representations and Warranties.......................................  42
     (d)      Maintenance of Corporate Existence; Mergers, Consolidations, etc. ...  43

Section 12.     Miscellaneous......................................................  43

     (a)      Certain Understandings of Buyer......................................  43
     (b)      Press Releases and Public Announcements..............................  43
     (c)      No Third Party Beneficiaries.........................................  43
     (d)      Entire Agreement.....................................................  44
     (e)      Succession and Assignment............................................  44
     (f)      Counterparts.........................................................  44
     (g)      Headings.............................................................  44
     (h)      Notices..............................................................  44
     (i)      Governing Law........................................................  45
     (j)      Amendments and Waivers...............................................  45
     (k)      Severability.........................................................  45
     (l)      Expenses.............................................................  45
     (m)      Construction.........................................................  45
     (n)      Incorporation of Schedules...........................................  46
     (o)      Specific Performance.................................................  46
     (p)      Submission to Jurisdiction...........................................  46
</TABLE>

Exhibit A   -   Example of Working Capital Computation
Exhibit B   -   Form of Financing Commitment

                                      iii

<PAGE>   5

                            STOCK PURCHASE AGREEMENT

        THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
March 13, 2001, by and among CKE Restaurants, Inc., a Delaware corporation
("Seller"), TB Corp., a Delaware corporation ("Buyer") and JP Acquisition Fund
III, a Delaware limited partnership ("Guarantor"). Buyer and Seller are referred
to herein as the "Parties." Certain other capitalized terms used herein are
defined in Section 1.

                                    RECITALS

        A. Seller owns all of the outstanding capital stock of CBI Restaurants
Incorporated, a Delaware corporation (the "Company").

        B. Subject to the terms and conditions set forth in this Agreement,
Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all
of the outstanding capital stock of the Company.

        C. Guarantor, the holder of a majority of the equity or ownership
interests in Buyer, desires that Buyer purchase from Seller all of the
outstanding capital stock of the Company and desires to guarantee to Seller the
obligations of Buyer as set forth in this Agreement.

        NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.

                                    AGREEMENT

        Section 1. Definitions.

        "Accountants' Determination" has the meaning set forth in Section 2(e)
below.

        "Adverse Consequences" means all actions, suits, proceedings,
investigations, charges, complaints, claims, injunctions, judgments, orders,
decrees, rulings, damages, dues, penalties, fines, costs, reasonable amounts
paid in settlement, liabilities, obligations, taxes, liens, losses, expenses,
and fees (including court costs and reasonable attorneys' fees and expenses,
whether or not involving a third party claim).

        "Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned Person
within the meaning of the Securities Exchange Act.

        "Affiliated Group" means an affiliated group within the meaning of Code
Section 1504(a).

        "Allocation" has the meaning set forth in Section 10(c)(iii) below.

        "Applicable Rate" means eight percent (8%) simple interest.

        "Arbitrating Accountants" has the meaning set forth in Section 2(e)
below.

                                       1
<PAGE>   6

        "Buyer" has the meaning set forth in the preface above.

        "Buyer Plan" has the meaning set forth in Section 6(c)(iii) below.

        "Closing" has the meaning set forth in Section 2(c) below.

        "Closing Date" has the meaning set forth in Section 2(c) below.

        "Code" means the Internal Revenue Code of 1986, as amended.

        "Company" has the meaning set forth in the recitals above.

        "Company Group" means each of the Company and the Company Subsidiaries,
individually and collectively.

        "Company Shares" means the shares of common stock, par value $.01 per
share, of the Company.

        "Contracts" has the meaning set forth in Section 4(m) below.

        "Current Employee" has the meaning set forth in Section 6(c)(ii) below.

        "Disclosure Schedule" has the meaning set forth in Section 5(f) below.

        "Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan, (d) Employee Welfare
Benefit Plan, or (e) other fund, policies, arrangements, practices or programs
which cover any employees or former employees of the Company and/or any of its
Subsidiaries (and/or any of their beneficiaries or dependents) which were or are
established, contributed to or maintained by the Company or any ERISA Affiliate.

        "Employee Pension Benefit Plan" has the meaning set forth in Section
3(2) of ERISA.

        "Employee Welfare Benefit Plan" has the meaning set forth in Section
3(1) of ERISA.

        "Environmental Complaint" means any written complaint, order, directive,
claim, citation or notice by any Governmental Authority with respect to (i) air
emissions, (ii) spills, releases or discharges to soils or any improvements
located thereon, surface water, ground water or the sewer, septic system or
waste treatment, storage or disposal systems servicing the assets of Seller,
(iii) noise emissions, (iv) solid or liquid waste disposal, (v) the use,
generation, storage, transportation or disposal of toxic or hazardous substances
or wastes or (vi) other environmental, health or safety matters affecting the
Company and/or any of its Subsidiaries, any of its assets, any real property on
which any of such assets are located, any improvements located thereon or the
business therein conducted.

        "Environmental Laws" mean all federal, state, local and foreign
environmental, health and safety laws, codes and ordinances and all rules and
regulations promulgated thereunder, including, without limitation laws relating
to emissions, discharges, releases or threatened releases of pollutants,

                                       2
<PAGE>   7

contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment (including, without limitation, air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals, or industrial,
solid, toxic or hazardous substances or wastes.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

        "ERISA Affiliate" means the Company and includes any corporation which
is or has been a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which includes the Company, any trade or business
(whether or not incorporated) which is or has been under common control (as
defined in Section 414(c) of the Code) with the Company, any organization
(whether or not incorporated) which is or has been a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes the
Company and other entity required to be aggregated with the Company pursuant to
regulations issued under Section 414(o) of the Code.

        "Estimated Working Capital" means a negative $5,081,605, computed by
Seller as of January 29, 2001, in the manner set forth in Exhibit A attached
hereto.

        "Final Determination Date" has the meaning set forth in Section 2(e)(iv)
below.

        "Final Working Capital" has the meaning set forth in Section 2(e)(iii)
below.

        "Financial Statements" has the meaning set forth in Section 4(g) below.

        "Financing Commitment" has the meaning set forth in Section 5(d) below.

        "Financing Transaction" has the meaning set forth in Section 5(d) below.

        "Forms" has the meaning set forth in Section 10(c)(ii) below.

        "GAAP" means United States generally accepted accounting principles as
in effect from time to time.

        "Guaranteed Obligations" has the meaning set forth in Section 11(a)(i)
below.

        "Guarantor" has the meaning set forth in the preface above.

        "Hazardous substances or wastes" includes, without limitation, (i) all
substances which are designated pursuant to Section 311(b)(2)(A) of the Federal
Water Pollution Control Act ("FWPCA"), 33 U.S.C Section 1251 et seq.; (ii) any
element, compound, mixture, solution, or substance which is designated pursuant
to Section 102 of the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq.; (iii) any hazardous
waste having the characteristics which are identified under or listed pursuant
to Section 3001 of the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901 et seq.; (iv) any toxic pollutant listed under Section
307(a) of the FWPCA; (v) any hazardous air pollutant which is listed under
Section 112 of the Clean Air Act, 42 U.S.C. Section 7401 et seq.; (vi) any
imminently hazardous chemical substance or mixture with respect to which action
has been taken pursuant to Section 7 of the Toxic

                                       3
<PAGE>   8

Substances Control Act, 15 U.S.C. Section 2601 et seq.; and (vii) petroleum,
petroleum products, petroleum by-products, petroleum decomposition by-products,
and waste oil.

        "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.

        "Indemnified Party" has the meaning set forth in Section 8(e) below.

        "Indemnifying Party" has the meaning set forth in Section 8(e) below.

        "Intellectual Property" has the meaning set forth in Section 4(1) below.

        "Knowledge" means (a) actual knowledge or (b) the knowledge that a
prudent individual could be expected to become aware of in the ordinary course
of events. As used herein, unless expressly stated otherwise, the phrase
"Seller's Knowledge" or phrases of similar import shall be deemed to refer
collectively to the Knowledge of the following executive officers of Seller and
the Company: Andrew F. Puzder, Michael Murphy, Kathy Polson, Victoria Straschil,
Barbara Landis, Robert Wilson, Colleen Ford, Frank Moralis, David Sanders, Kathy
Wan, Casey Hill, Don Shows and Jeff Platt.

        "Latest Balance Sheet" has the meaning set forth in Section 4(g)(ii)
below.

        "Leased Real Property" has the meaning set forth in Section 4(c)(ii)
below.

        "Material Adverse Effect" means either (i) any effect on the Company or
any of its Subsidiaries that is, or could reasonably be expected to be, either
individually or in the aggregate, materially adverse to the business,
operations, properties, financial condition or result of operations of the
Company and its Subsidiaries, taken as a whole, or (ii) any financial cost or
other liability in excess of $25,000 on the business, operations, properties,
financial condition or results of operations of any restaurant of the Company or
any restaurant of any of its Subsidiaries.

        "Notice of Adjustment" has the meaning set forth in Section 2(e) below.

        "Objection Notice" has the meaning set forth in Section 2(e) below.

        "Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.

        "Owned Real Property" has the meaning set forth in Section 4(k)(i)
below.

        "Party" has the meaning set forth in the preface above.

        "Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced (or, if commenced, which are being contested in good faith): (a)
Security Interests imposed by operation of law, such as materialmen's,
mechanic's, and similar liens, (b) Security Interests for Taxes not yet due and
payable, (c) easements, rights of way and other encumbrances on title to real
property that do not materially affect the title to such real property or
materially adversely affect the use of such property for its intended purposes,
or (d) other Security Interests which are immaterial.

                                       4
<PAGE>   9

        "Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).

        "POS Equipment Sublease" has the meaning set forth in Section 5(h)
below.

        "Pre-Closing Liability" means any liability or obligation of any nature
(whether absolute or contingent, monetary or non-monetary, direct or indirect,
known or unknown or matured or unmatured) that is attributable to or results or
arises from (a) any bonuses, termination pay or severance pay owing to any
employee or former employee of the Company or any of its Subsidiaries as a
result or in connection with the transactions contemplated hereby, other than
those liabilities and obligations for severance pay provided for in Section
6(c)(vii) below; (b) any amounts owing to any employee or former employee of the
Company or any of its Subsidiaries pursuant to any Employee Benefit Plan
maintained or contributed to by Seller, the Company or any of its Subsidiaries
prior to the Closing Date or under which any such employee or former employee
participates prior to the Closing Date, and any liability arising out of or in
connection with the operation or administration of any such Employee Benefit
Plan; (c) any amounts owing to any employee or former employee of the Company or
any of its Subsidiaries pursuant to any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, or other similar benefit
plan sponsored or maintained prior to the Closing Date by Seller, the Company,
any of its Subsidiaries or any other Affiliate of Seller; (d) any
post-retirement medical or other non-pension benefits under any plan or
arrangement sponsored by Seller, the Company, any of its Subsidiaries or any of
Seller's Affiliates prior to the Closing Date; (e) any claims and/or litigation
with respect to discrimination and/or harassment involving personnel or former
personnel of the Company and its Subsidiaries based on transactions, events or
occurrences prior to the Closing Date; (f) any workers' compensation claims
involving personnel or former personnel of the Company and its Subsidiaries
based on events or occurrences prior to the Closing Date; and (g) any of the
following events with respect to an Employee Pension Benefit Plan of which
Seller or the Company (or any trade or business which is or has been under
common control with Seller or the Company as determined pursuant to either
Section 4001(b)(1) of ERISA or Section 4971(e)(2)(B) of the Code) is or was the
contributory sponsor or a contributing employer (including any joint and several
liability): (A) the termination of any such plan which is a defined benefit
pension plan subject to the provisions of Title IV of ERISA; (B) a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any such plan which is a multiemployer plan (within the meaning of Section 3(37)
of ERISA); (C) a failure to satisfy the minimum funding requirements, if any,
applicable to such plan under Section 412 of the Code and Section 302 of ERISA,
including for this purpose quarterly contributions required by section 412(m) of
the Code and Section 302(e) of ERISA; and (D) any amendment to any such plan
which requires the provision of security pursuant to Section 401(a)(29) of the
Code. Notwithstanding the foregoing, a "Pre-Closing Liability" shall not include
any liability with respect to "personal absence time."

        "Pre-Closing Tax Period" means all taxable periods ending on or before
the Closing Date and that portion to and including the Closing Date of any
taxable period that includes (but does not necessarily end on) the Closing Date.

        "Purchase Price" has the meaning set forth in Section 2(b) below.

        "Real Property" has the meaning set forth in Section 4(k)(iii) below.

        "Securities Act" means the Securities Act of 1933, as amended.

                                       5
<PAGE>   10

        "SEC" means the Securities and Exchange Commission.

        "Section 338(h)(10) Election" has the meaning set forth in Section 10(c)
below.

        "Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.

        "Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest.

        "Seller" has the meaning set forth in the preface above.

        "Seller Plan" has the meaning set forth in Section 6(c)(ii) below.

        "Settlement Agreement" has the meaning set forth in Section 2(e) below.

        "Software License Agreement" has the meaning set forth in Section 5(g)
below.

        "Statement" has the meaning set forth in Section 10(b)(ii) below.

        "Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the partnership
or other applicable ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of
that Person or a combination thereof.

        "Tax" means (i) any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including, but not limited to, guarantee fund
assessments and withholding on amounts paid to or by any Person), together with
any interest, penalty, addition to tax or additional amount imposed by the
United States, or any state, county, local, territorial or foreign government or
subdivision or agency thereof responsible for the imposition of any such tax
(domestic or foreign); (ii) all transferee, successor, joint and several or
contractual liability (including, without limitation, liability pursuant to
Treasury Regulations Section 1.1502-6 (or any similar state, local or foreign
provision) in respect to any item described in clause (i) above; and (iii) any
liability with respect to the payment of any amount described in clause (i) or
(ii) above as a result of any express or implied agreement or arrangement
(including, but not limited, to any indemnification agreement or arrangement or
a tax sharing agreement).

        "Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to any Tax, or other information
required to be supplied to any taxing authority in connection with any Tax,
including any schedule or attachment thereto, and including any amendment
thereof.

        "Third Party Claim" has the meaning set forth in Section 8(e) below.

        "Transferred Employee" has the meaning set forth in Section 6(c)(i)
below.

                                       6
<PAGE>   11

        "Treasury Regulations" means the Income Tax Regulations (final,
temporary and, as applicable, proposed) promulgated under the Code, as they may
be in effect from time to time. References to specific sections of the Treasury
Regulations shall be to such sections as amended, supplemented or superseded by
Treasury Regulations currently in effect.

        "Working Capital" means the working capital of the Company and its
Subsidiaries determined as of the Closing Date in accordance with GAAP on a
basis consistent with segment reporting and consistent with past practices
(including all reserves, provisions, accruals and adjustments made in year-end
financial statements prepared in accordance with GAAP), but with the adjustments
and exceptions thereto determined on a basis consistent with those provided in
the description and computation of Working Capital provided in Exhibit A
attached hereto. Notwithstanding the foregoing, in the computation of the
Working Capital as of the Closing Date, (w) no indebtedness to Banque Paribas
shall be reflected in the Working Capital; (x) the proceeds of the Financing
Transaction shall be excluded from total assets; (y) any liabilities incurred in
connection with the Financing Transaction shall be excluded from total
liabilities; and (z) the amounts, if any, paid by the Company prior to the
Closing for costs associated with the Financing Transaction shall be added to
total assets.

        Section 2. Purchase and Sale of Company Shares.

        (a) Basic Transaction. On and subject to the terms and conditions of
this Agreement, Buyer agrees to purchase from Seller, and Seller agrees to sell
to Buyer, free and clear of all Security Interests, all of the outstanding
Company Shares for the consideration specified in Section 2(b) below.

        (b) Purchase Price. The aggregate purchase price (the "Purchase Price")
for the Company Shares shall be $66,918,395 ($72,500,000, less the Estimated
Working Capital), subject to adjustment pursuant to Section 2(e) below.

        (c) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Stradling Yocca
Carlson & Rauth in Newport Beach, California, commencing at 9:00 a.m. local time
on May 15, 2001 (or, if later, the second business day following the
satisfaction or waiver of all conditions to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at and subsequent to the
Closing itself)) (the "Closing Date").

        (d) Deliveries at the Closing. At the Closing,

               (i) Seller will deliver to Buyer (A) stock certificates
        representing all of the outstanding Company Shares, endorsed in blank or
        accompanied by duly executed assignment documents, (B) a certificate,
        dated as of the Closing Date, signed by the Secretary of Seller and
        certifying as to (x) the certificate of incorporation and bylaws of the
        Company and each of its Subsidiaries and the incumbency of officers
        executing this Agreement and each of the documents delivered in
        connection herewith to which Seller is a party and (y) the resolutions
        of the board of directors of Seller authorizing the execution, delivery
        and performance by Seller of this Agreement and such other documents,
        and (C) letters of resignation of those officers and directors of the
        Company and its Subsidiaries as Buyer shall have requested;

                                       7
<PAGE>   12

               (ii) Buyer will deliver or cause to be delivered (but any funds
        from the Company shall be deemed to have first been distributed to Buyer
        as the sole stockholder of the Company immediately after the Closing,
        and then in turn to Seller) to Seller (A) the Purchase Price, by wire
        transfer of immediately available funds, and (B) a certificate, dated as
        of the Closing Date, signed by the Secretary of Buyer and certifying as
        to (x) the certificate of incorporation and bylaws of Buyer and the
        incumbency of officers executing this Agreement and each of the
        documents delivered in connection herewith to which Buyer is a party and
        (y) the resolutions of the board of directors of Buyer authorizing the
        execution, delivery and performance by Buyer of this Agreement and such
        other documents; and

               (iii) Guarantor will deliver to Seller a certificate, dated as of
        the Closing Date, signed by an officer of the general partner of
        Guarantor and certifying as to (x) the certificate of limited
        partnership of Guarantor and the incumbency of officers of the general
        partner of Guarantor executing this Agreement and each of the documents
        delivered in connection herewith to which Guarantor is a party and (y)
        the resolutions of the board of directors of Guarantor authorizing the
        execution, delivery and performance by Guarantor of this Agreement and
        such other documents.

        (e) Purchase Price Adjustment.

               (i) As promptly as practicable following the Closing Date (but in
        no event later than 90 days after the Closing Date), Buyer shall prepare
        and deliver to Seller a statement (the "Notice of Adjustment") setting
        forth (i) Buyer's computation of the Working Capital, and (ii) Buyer's
        proposed adjustment, if any, of the Purchase Price as contemplated by
        Section 2(e)(v) below.

               (ii) Buyer shall, in its preparation of the Notice of Adjustment
        and its computation of the Working Capital, among other things, provide
        Seller and its representatives (i) the right to be present during the
        taking of inventory and the calculation of all cash accounts immediately
        following the Closing, (ii) any updated information with respect to
        accounts receivables and payroll (the provision of which shall be
        exclusively the obligation of Buyer), and (iii) full and timely access
        to all records of the Company and its Subsidiaries from the Closing Date
        until the Final Determination Date.

               (iii) Following receipt of the Notice of Adjustment, Seller and
        its representatives will be afforded a period of 20 business days to
        review the Notice of Adjustment. At or before the end of such 20-day
        period, Seller will either (x) accept Buyer's computation of the Working
        Capital in its entirety, in which case the "Final Working Capital" (for
        purposes of making an adjustment to the Purchase Price as contemplated
        by Section 2(e)(v) below) shall be Buyer's computation of the Working
        Capital or (y) deliver to Buyer a written notice (the "Objection
        Notice") containing a sufficiently detailed written explanation of those
        items in Buyer's computation of the Working Capital which Seller
        disputes, in which case the items identified by Seller shall be deemed
        to be in dispute. The failure by Seller to deliver the Objection Notice
        within such 20-day period shall constitute Seller's acceptance of
        Buyer's computation of the Working Capital as set forth in clause (x)
        above. If Seller delivers the Objection Notice in a timely manner, then,
        within a period of 10 business days the Parties and (if desired) their
        accountants will attempt to resolve in good faith any disputed items and
        reach a written agreement (the "Settlement Agreement") with respect
        thereto, in which case the Final Working Capital shall be Buyer's
        computation of the Working Capital, as adjusted

                                       8
<PAGE>   13

        to reflect the resolution of such disputed items pursuant to the
        Settlement Agreement. Failing such resolution, the unresolved disputed
        items will be referred for final binding resolution to Deloitte & Touche
        LLP, or, if such firm is unable to accept such engagement, to another
        independent nationally-recognized firm of certified public accountants
        mutually acceptable to Buyer and Seller (the "Arbitrating Accountants"),
        the fees and expenses of which shall be borne equally by Buyer and
        Seller. The Arbitrating Accountants shall afford each of Buyer and its
        representatives and Seller and its representatives up to 30 days in the
        aggregate to present their positions as to the disputed items. Within 15
        days following the end of the submission period, the Arbitrating
        Accountants shall resolve all disputed items in a written determination
        (the "Accountants' Determination) and, in such case, the Final Working
        Capital shall be Buyer's computation of the Working Capital, as adjusted
        to reflect the resolution of such disputed items by the Arbitrating
        Accountants; provided, however, that in no event shall the Accountants'
        Determination require an adjustment to Buyer's computation of the
        Working Capital which is beyond the scope of the disputed items or which
        results in a determination of the Final Working Capital which is less
        than or exceeds, as the case may be, the amount thereof as determined by
        Buyer or as contemplated by Seller in its Objection Notice. The
        Accountants Determination shall be (A) in writing, (B) furnished to
        Buyer and Seller as soon as practicable after the items in dispute have
        been referred to the Arbitrating Accountants, (C) made in accordance
        with the same accounting principals used by the Company in determining
        the amounts set forth in the example provided in Exhibit A and (D)
        nonappealable and incontestable by Buyer, Seller or any of their
        respective Affiliates and not subject to collateral attack for any
        reason other than for its failure to fall within the parameters set
        forth in the foregoing sentence.

               (iv) For purposes of this Section 2(e), the "Final Determination
        Date" shall mean the earliest to occur of (A) the 21st business day
        following the receipt by Seller of the Notice of Adjustment if Seller
        shall have failed to deliver the Objection Notice to Buyer within 20
        business days after receipt thereof, (B) the date on which either Seller
        gives Buyer a written notice to the effect that Seller has no objection
        to Buyer's computation of the Working Capital, (C) the date on which
        Buyer and Seller execute and deliver a Settlement Agreement or (D) the
        date as of which Buyer and Seller shall have received the Accountants'
        Determination.

               (v) Within five (5) business days after the Final Determination
        Date, the following amounts will be payable in accordance with the
        following terms:

                   (A) if the Final Working Capital exceeds the Estimated
            Working Capital, Buyer shall pay to Seller the amount of such excess
            by wire transfer of immediately available funds; and

                   (B) if the Estimated Working Capital exceeds the Final
            Working Capital, Seller shall pay to Buyer the amount of such excess
            by wire transfer of immediately available funds;

               and, in either case, such amount shall be accompanied by interest
        accrued thereon from and including the Closing Date to but excluding the
        date of payment computed at the Applicable Rate (calculated on the basis
        of actual days elapsed over a 360-day year).

                                       9
<PAGE>   14

        Section 3. Representations and Warranties Concerning the Transaction.

        (a) Representations and Warranties of Seller. Seller represents and
warrants to Buyer that the statements contained in this Section 3(a) are true
and correct as of the date of this Agreement, except as set forth in the
Disclosure Schedule.

               (i) Organization. Seller is a corporation, duly organized and
        validly existing and in good standing under the laws of the State of
        Delaware.

               (ii) Authorization of Transaction. Seller has full corporate
        power and authority to execute and deliver this Agreement and to perform
        its obligations hereunder. This Agreement has been duly executed and
        delivered by Seller, has been authorized by all necessary corporate
        action on behalf of Seller and constitutes the valid and legally binding
        obligation of Seller, enforceable in accordance with its terms and
        conditions. Seller does not need to give any notice to, make any filing
        with, or obtain any authorization, consent, or approval of any
        government or governmental agency in order to consummate the
        transactions contemplated by this Agreement, except (i) pursuant to
        state or local laws governing liquor licenses and health code permits,
        (ii) under the HSR Act and (iii) authorizations, consents or approvals
        which individually or in the aggregate are immaterial.

               (iii) Brokers' Fees. Other than as disclosed in Section 3(a)(iii)
        of the Disclosure Schedule, Seller does not have any liability or
        obligation to pay any fees or commissions to any broker, finder, or
        agent with respect to the transactions contemplated by this Agreement
        for which Buyer, the Company or its Subsidiaries could become liable or
        obligated.

               (iv) Company Shares. Seller has good and valid title to, and
        holds of record and owns beneficially, all of the issued and outstanding
        Company Shares free and clear of any restrictions on transfer (other
        than restrictions under the Securities Act and state securities laws),
        taxes, Security Interests, options, warrants, purchase rights,
        contracts, commitments, equities, claims, and demands. Seller is not
        party to any option, warrant, purchase right, or other contract or
        commitment that could require it to sell, transfer, or otherwise dispose
        of any capital stock of the Company. Seller is not party to any voting
        trust, proxy, or other instrument with respect to the voting of any
        capital stock of the Company.

        (b) Representations and Warranties of Buyer. Buyer represents and
warrants to Seller that the statements contained in this Section 3(b) are true
and correct as of the date of this Agreement.

               (i) Organization; Ownership. Buyer is a corporation duly
        organized, validly existing and in good standing under the laws of
        Delaware. Guarantor holds, beneficially and of record, more than fifty
        percent (50%) of the issued and outstanding membership and other equity
        or ownership interests of Buyer.

               (ii) Authorization of Transaction. Buyer has full corporate power
        and authority to execute and deliver this Agreement and to perform its
        obligations hereunder. This Agreement constitutes the valid and legally
        binding obligation of Buyer, enforceable in accordance with its terms
        and conditions. Buyer does not need to give any notice to, make any
        filing with, or obtain any authorization, consent, or approval of any
        government agency

                                       10
<PAGE>   15

        in order to consummate the transactions contemplated by this Agreement,
        except as required pursuant to the HSR Act.

               (iii) Brokers' Fees. Other than any fee due to Red Tail Ventures
        and any other fees disclosed in Section 3(b)(iii) of the Disclosure
        Schedule (for which Buyer shall be liable), Buyer has no liability or
        obligation to pay any fees or commissions to any broker, finder, or
        agent with respect to the transactions contemplated by this Agreement
        for which Seller or any of its Affiliates could become liable or
        obligated.

               (iv) Investment. Buyer is not acquiring the Company Shares with a
        view to or for their sale in connection with any distribution thereof
        within the meaning of the Securities Act.

        Section 4. Representations and Warranties Concerning the Company and its
Subsidiaries. Subject to the limitations set forth in Section 8, Seller
represents and warrants to Buyer that the statements contained in this Section 4
are true and correct as of the date of this Agreement except as to be set forth
in the Disclosure Schedule.

        (a) Organization, Qualification, and Corporate Power. Each of the
Company and its Subsidiaries is a corporation or partnership duly organized,
validly existing, and in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where its ownership or lease of real property requires such qualification,
except where the lack of such qualification would not have a Material Adverse
Effect. Each of the Company and its Subsidiaries has full power and authority
under its corporate or partnership documents to carry on the businesses in which
it is engaged and to own and use the properties owned and used by it.

        (b) Capitalization. The entire authorized capital stock of the Company
consists of 100,000 shares of common stock, par value $.01 per share, of which
10,000 shares are issued and outstanding. All of the issued and outstanding
Company Shares have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held beneficially and of record by Seller. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require the Company to issue, sell, or otherwise cause to become
outstanding any of its capital stock or any securities or other instruments
convertible into or exchangeable or exercisable for shares of capital stock or
any other equity interest of or in the Company. There are no outstanding voting
or similar agreements or arrangements with respect to the Company Shares. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Company.

        (c) Noncontravention. Neither the execution and the delivery of this
Agreement by Seller, nor the consummation of the transactions contemplated
hereby, will (i) to the Knowledge of Seller, violate any statute, regulation or
rule of any government or governmental agency to which any of Seller, the
Company or its Subsidiaries is subject, (ii) to the Knowledge of Seller, violate
any injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which any of Seller, the
Company or its Subsidiaries is subject, (iii) violate any provision of the
charter or bylaws of any of Seller, the Company or its Subsidiaries or (iv)
except as set forth in Schedule 4(c) of the Disclosure Schedule, result in a
breach of, constitute a default under, result in the acceleration or termination
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any real estate lease, credit or financing

                                       11
<PAGE>   16

agreement or other material agreement, contract, lease, license, instrument, or
other arrangement to which any of Seller, the Company or its Subsidiaries is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Security Interest upon any of its assets). None
of Seller, the Company or its Subsidiaries is required to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except (i) pursuant to state or
local laws governing liquor licenses or health code permits, (ii) under the HSR
Act, and (iii) authorizations, consents or approvals which are immaterial.

        (d) Brokers' Fees. Other than as disclosed in Section 4(d) of the
Disclosure Schedule, none of the Company or its Subsidiaries has any liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement.

        (e) Title to Assets. The Company and its Subsidiaries have good and
marketable title to and own, or have a valid leasehold interest in or other
valid right to use, the assets they use, or otherwise purport to own or have the
right to use, in the conduct of their businesses, free and clear of all Security
Interests other than Permitted Liens. Except as provided in Section 4(r) below
(or disclosed in Section 4(r) of the Disclosure Schedule), the assets owned by
or leased for use by the Company and its Subsidiaries include all of the assets
necessary to permit the Company and its Subsidiaries to conduct its business in
all material respects in the same manner as it is conducted or, or has been
conducted immediately prior to, the date of this Agreement.

        (f) Subsidiaries. Section 4(f) of the Disclosure Schedule sets forth for
each Subsidiary of the Company (i) if such Subsidiary is a corporation (A) its
name and jurisdiction of incorporation, (B) the number of shares of authorized
capital stock of each class of its capital stock, (C) the number of issued and
outstanding shares of each class of its capital stock, (D) the names of the
holders of shares of each class of its capital stock, and (E) the number of
shares held by each such holder; and (ii) if such Subsidiary is a partnership
(A) its name and jurisdiction of organization, (B) the names of the holders of
its general and limited partner interests and (C) the percentage general or
limited partner interest held by each such holder. All of the issued and
outstanding shares of capital stock of each corporate Subsidiary of the Company
have been duly authorized and are validly issued, fully paid and nonassessable.
All of the outstanding general and limited partner interests of each partnership
Subsidiary of the Company have been duly authorized and are validly issued and
fully paid. The Company and/or its Subsidiaries hold of record and own
beneficially all of the outstanding shares of each corporate Subsidiary of the
Company, the Company and/or its Subsidiaries own each outstanding partner
interest of each partnership Subsidiary of the Company and the Company and/or
its Subsidiaries own each outstanding membership interest of each limited
liability company Subsidiary of the Company, in each case free and clear of all
Security Interests. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require any Subsidiary to issue, sell,
or otherwise cause to become outstanding any of its capital stock or any
securities or other instruments convertible into or exchangeable or exercisable
for shares of capital stock or any other equity interest of or in such
Subsidiary, nor are there any voting or similar agreements or arrangements with
respect to such capital stock or other equity interests. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to such Subsidiary. Neither the
Company nor any Subsidiary is party to any option, warrant, purchase right, or
other contract or commitment that could require it to sell, transfer, or
otherwise dispose of any capital

                                       12
<PAGE>   17

stock of any other Subsidiary. Neither the Company nor any Subsidiary is party
to any voting trust, proxy, or other instrument with respect to the voting of
any capital stock of any other Subsidiary.

        (g) Financial Statements. The following financial statements are
included in the Disclosure Schedule (collectively the "Financial Statements"):

               (i) the consolidated balance sheets of the Company and its
        Subsidiaries for the fiscal years ended January 31, 1998, 1999 and 2000,
        and the related statements of income and cash flow for such fiscal
        years; and

               (ii) the interim consolidated balance sheet of the Company and
        its Subsidiaries as of November 8, 2000 (the "Latest Balance Sheet"),
        and the related statement of income for such 10-month financial periods.

The Financial Statements in clauses (i) and (ii) above have been prepared in
accordance with GAAP, and present fairly the consolidated financial condition
and result of operations of the Company and its Subsidiaries as of the dates and
for such periods; provided, however, that such Financial Statements do not
include footnotes and have not been audited. The statements of income included
in the Financial Statements reflect, in a manner consistent with its segment
reporting for GAAP purposes, the allocated or directly charged costs of any
significant services provided to the Company and/or any Subsidiary by Seller or
any of its Affiliates; however, such allocated costs may not be reflective of
any costs which the Buyer or the Company and/or any Subsidiary may have to pay
for such services after the Closing. Subject to the qualifications referenced
above, no material elements of revenue allocated to the Company and its
Subsidiaries on the Financial Statements should be properly allocated to Seller,
and no material elements of expense allocated to the Seller on its financial
statements should be properly allocated to the Company and its Subsidiaries.
Except for (i) liabilities which are not required to be disclosed in the Latest
Balance Sheet under GAAP and (ii) liabilities incurred in the Ordinary Course of
Business by the Company or its Subsidiaries since the date of the Latest Balance
Sheet, none of the Company or its Subsidiaries has any liability not disclosed,
reserved for or otherwise reflected in the Latest Balance Sheet.

        (h) Events Subsequent to the Date of the Latest Balance Sheet.

               (i) Since the date of the Latest Balance Sheet, there has not
        been any material adverse change in the business, operations,
        properties, financial condition or results of operations of the Company
        and its Subsidiaries taken as a whole. As of the date hereof, the
        Company and its Subsidiaries have not incurred any costs or expenses
        related to the Financing Transaction.

               (ii) Since the date of the Latest Balance Sheet, none of the
        Company or its Subsidiaries has engaged in any material practice, taken
        any material action or entered into any material transaction outside the
        Ordinary Course of Business (other than the transactions contemplated by
        this Agreement). Without limiting the generality of the foregoing, since
        that date:

                   (A) there has been no change made or authorized in the
            charter or bylaws of the Company or any of its Subsidiaries;

                                       13
<PAGE>   18

                   (B) none of the Company or its Subsidiaries has issued, sold
            or otherwise disposed of any of its capital stock or other equity
            interests, or granted any options, warrants or other rights to
            purchase or obtain (including upon conversion, exchange or exercise)
            any of its capital stock or other equity interests;

                   (C) none of the Company or its Subsidiaries has declared, set
            aside or paid any dividend or made any distribution with respect to
            its capital stock or other equity interests (whether in cash or in
            kind), or redeemed, purchased or otherwise acquired any of its
            capital stock;

                   (D) the Company and its Subsidiaries have not created,
            incurred, assumed or guaranteed more than $150,000 in aggregate
            indebtedness for borrowed money and capitalized lease obligations;

                   (E) none of the Company and its Subsidiaries has granted or
            extended any power or attorney or acted as guarantor, surety,
            co-signer, endorser, co-maker or indemnitor in respect of the
            obligations of any Person other than through endorsements of
            negotiable instruments in the Ordinary Course of Business;

                   (F) none of the Company or its Subsidiaries has sold,
            assigned, transferred, conveyed, leased, pledged, mortgaged,
            encumbered or otherwise disposed of, or agreed to sell, assign,
            transfer, convey, lease or otherwise dispose of, any material
            portion of its assets or properties or any material right thereto,
            other than in the Ordinary Course of Business or as disclosed in
            Section 4(h)(ii)(F) of the Disclosure Schedule;

                   (G) none of the Company or its Subsidiaries has sold, leased,
            transferred or assigned any tangible or intangible assets having a
            fair market value in excess of $50,000, individually, or $150,000,
            in the aggregate, other than in the Ordinary Course of Business or
            as disclosed in Section 4(h)(ii)(G) of the Disclosure Schedule;

                   (H) none of the Company or its Subsidiaries has experienced
            any damage, destruction or loss (whether or not covered by
            insurance) to any property or asset in an aggregate amount (based on
            the cost of repair or replacement) exceeding $100,000;

                   (I) none of the Company or its Subsidiaries has materially
            changed any accounting methods, principles or practices, except as
            required by law or by changes in GAAP;

                   (J) none of the Company or its Subsidiaries has, other than
            in the Ordinary Course of Business, entered into any material
            contract, transaction or commitment, including any loan, lease,
            purchase or sale of assets, borrowing or capital expenditure, or any
            commitment therefor, and no material agreement, contract or
            commitment to which the Company or any of its Subsidiaries was a
            party on the date of the Latest Balance Sheet has been amended or
            modified in any material way, or terminated, in each case, other
            than in the Ordinary Course of Business;

                                       14
<PAGE>   19

                   (K) none of the Company or its Subsidiaries has granted any
            increase in the compensation or employee benefits payable to or to
            become payable to any officer, director or employee of the Company
            or its Subsidiaries, other than increases required by law or in the
            Ordinary Course of Business or as disclosed in Section 4(h)(ii)(K)
            of the Disclosure Schedule;

                   (L) none of the Company or its Subsidiaries has adopted,
            changed, amended or increased the payment to or benefits under any
            Employee Benefit Plan;

                   (M) none of the Company or its Subsidiaries has settled any
            action, suit or other proceeding against the Company, any Subsidiary
            or its business or assets for an amount in excess of $75,000,
            individually, or $150,000, in the aggregate;

                   (N) none of the Company or its Subsidiaries has, to Seller's
            Knowledge, failed to pay any obligation, except in the Ordinary
            Course of Business, where contested in good faith or, which, in the
            aggregate, are not material;

                   (O) none of the Company or its Subsidiaries has canceled or
            compromised any debt or claim, or waived or released any right,
            except for adjustments made in the Ordinary Course of Business or,
            which, in the aggregate, are not material;

                   (P) none of the Company or its Subsidiaries has made any
            material reevaluation of the Company or any Subsidiary's assets,
            including, without limitation, writing off or writing down the value
            of any asset having a material value prior to such valuations; and

                   (Q) none of the Company or its Subsidiaries has committed to
            any of the foregoing.

        (i) Legal Compliance. Except as otherwise provided elsewhere in this
Section 4, or disclosed in any section or subsection of the Disclosure Schedule,
including without limitation Section 4(i) of the Disclosure Schedule, to
Seller's Knowledge, each of the Company and its Subsidiaries has complied and is
in compliance with all applicable laws of federal, state and local governments,
except where the failure to comply would not have a Material Adverse Effect. The
Company and its Subsidiaries hold all permits, certificates, licenses, approvals
and other authorizations (or, where legally permissible, has waivers thereof or
is entitled to exemptions therefrom) of governmental authorities necessary for
or material to the operation of their businesses as presently conducted.

        (j) Tax Matters. Except as disclosed in Section 4(j) of the Disclosure
Schedule,

               (i) The provisions for Taxes, including interest and penalties,
        with respect to the Company and each of its Subsidiaries, shown on the
        consolidated balance sheet of the Company and its Subsidiaries for the
        fiscal year ended January 31, 2000 and the Latest Balance Sheet, are
        sufficient for the payment of all such Taxes, interest and penalties not

                                       15
<PAGE>   20

        theretofore paid, whether or not disputed, for the periods ended January
        31, 2000 and November 8, 2000, respectively, and for all periods prior
        thereto.

               (ii) Section 4(j) of the Disclosure Schedule lists all income Tax
        Returns filed with respect to any of the Company and its Subsidiaries
        for taxable periods ended on or after the fiscal year ended January 31,
        1998, indicates those income Tax Returns that have been audited, and
        indicates those income Tax Returns that currently are subject to audit.

               (iii) As of the time of filing, all Tax Returns required to be
        filed under federal, state, county, local or any foreign laws by or on
        behalf of the Company and its Subsidiaries were in all respects (and, as
        to Tax Returns not filed as of the date hereof, will be) true, complete
        and correct in all material respects and filed on a timely basis.

               (iv) The Company Group and, to the extent it could have a
        Material Adverse Effect on the Company Group after the Closing, each
        member of any affiliated, combined or unitary group of which it is or
        was a member, have each, within the time and in the manner prescribed by
        law, paid (and until the Closing Date will, within the time and in the
        manner prescribed by law, pay) all Taxes, including estimated taxes,
        that are due and payable.

               (v) The Company and each of its Subsidiaries has established (and
        through the Closing Date will establish) on its books and records
        reserves that are adequate for the payment of all Taxes not yet due and
        payable for which it may be liable (including Taxes for which it may be
        liable as a transferee or on a joint and several basis under the
        consolidated return rules or any comparable rules for state and local
        taxes).

               (vi) The Company Group and, to the extent it could have a
        Material Adverse Effect on the Company Group after the Closing, each
        member of any affiliated, combined or unitary group of which it is or
        was a member, have each complied (and until the Closing Date will
        comply) in all material respects with all applicable laws, rules and
        regulations relating to the payment and withholding of Taxes or similar
        provisions under any federal, state, county, local or foreign laws and
        have, within the time and in the manner prescribed by law, withheld from
        employee wages and paid over to the proper governmental authorities all
        amounts required to be so withheld and paid over under all applicable
        laws.

               (vii) Neither the Company Group nor, to the extent it could have
        a Material Adverse Effect on the Company Group after the Closing, any
        member of any affiliated, combined or unitary group of which it is or
        was a member, is a party to any agreement providing for the allocation
        or sharing of Taxes. No member of the Company Group has any liability
        for the federal income Taxes for any Person other than the Company and
        its Subsidiaries under Treasury Reg. Section 1.1502-6 (or any similar
        provision of state, local or foreign law).

               (viii) Neither the Company Group nor, to the extent it could have
        a Material Adverse Effect on the Company Group after the Closing, any
        member of any affiliated, combined or unitary group of which it is or
        was a member, has requested any extension of time within which to file
        any Tax Return, which Tax Return has not since been filed.

               (ix) Schedule 4(j)(ix) sets forth those Tax Returns of or
        relating to the Company and its Subsidiaries that have been or are
        currently being examined by the appropriate taxing

                                       16
<PAGE>   21

        authorities for taxable periods ended on or after the fiscal year ended
        January 31, 1998. No deficiency for any Taxes has been proposed,
        asserted or assessed against the Company Group, or, to the extent it
        could have a Material Adverse Effect on the Company Group after the
        Closing, any member of any affiliated, combined or unitary group of
        which it is or was a member (for such periods during which it is or was
        a member), which deficiency has not been resolved and/or paid in full.

               (x) There are no outstanding waivers or comparable consents
        regarding the application of the statute of limitations with respect to
        any Taxes or Tax Returns that have been given by or requested from the
        Company Group or, to the extent it could have a Material Adverse Effect
        on the Company Group after the Closing, any affiliated, combined or
        unitary group of which it is or was a member.

               (xi) Seller has made available to Buyer copies of all revenue
        agent's reports and other written assertions of deficiencies or other
        liabilities for Taxes of or attributable to the Company or any of its
        Subsidiaries for taxable periods ended on or after the fiscal year ended
        January 31, 1998.

               (xii) There are no rulings, requests for rulings or closing
        agreements specifically relating to either the Company or any of its
        Subsidiaries, or any member of any affiliated, combined or unitary group
        of which it is or was a member, which could affect the Company or its
        Subsidiaries' Taxes for any period after the Closing.

               (xiii) For taxable years ended on or after the fiscal year ended
        January 31, 1998, Seller has not received written notice, and, to
        Seller's Knowledge, it has not received any other notice, of any issue
        arising in any examination of Taxes of the Company or any of its
        Subsidiaries, or any member of any affiliated, combined or unitary group
        of which it is or was a member, by any taxing authority that if raised
        with respect to any other taxable year (for taxable periods ended on or
        after the fiscal year ended January 31, 1998) not so examined would
        result in a material Tax deficiency for any other period (for taxable
        periods ended on or after the fiscal year ended January 31, 1998) not so
        examined, if upheld.

               (xiv) No federal, state, county, local or foreign audits or other
        administrative proceedings or court proceedings are presently pending
        or, to the best of Seller's Knowledge, threatened with regard to any
        Taxes or Tax Returns of or attributable to the Company or any of its
        Subsidiaries.

               (xv) No power of attorney that is currently in effect has been
        granted by the Company Group or any affiliated, combined or unitary
        group of which it is or was a member, with respect to any matter
        relating to the Company or any of its Subsidiaries.

               (xvi) Neither the Company nor any of its Subsidiaries has
        participated (nor will it participate prior to the Closing) in or
        cooperated with an international boycott within the meaning of Section
        999 of the Code.

               (xvii) Neither the Company Group nor, to the extent it could have
        a Material Adverse Effect on the Company Group after the Closing, any
        member of any affiliated, combined or unitary group of which it is or
        was a member, has filed (nor will it file prior to the Closing) a
        consent pursuant to Section 341(f) of the Code or has agreed to have
        Section

                                       17
<PAGE>   22

        341(f)(2) of the Code apply to any disposition of a subsection (f) asset
        (as such term is defined in Section 341(f)(4) of the Code) owned by the
        Company Group.

               (xviii) Neither the Company nor any of its Subsidiaries is
        required to include in income any adjustment pursuant to Section 446(e)
        or Section 481(a) of the Code by reason of a voluntary change in
        accounting method initiated by the Company Group, or any member of any
        affiliated, combined or unitary group of which it is or was a member,
        and the IRS has not required, and Seller has no Knowledge that the IRS
        has proposed, any such adjustment or change in accounting method.

               (xix) The acquisition of the Company Shares will not be a factor
        causing any payments to be made by the Company after the Closing not to
        be deductible (in whole or in part) pursuant to Sections 280G, 404 or
        162(m) of the Code.

               (xx) All transactions involving the Company or its Subsidiaries
        which could give rise to an understatement of federal income tax (within
        the meaning of Section 6662 of the Code) were adequately disclosed (or,
        with respect to Tax Returns filed after the date hereof but before the
        Closing, will be adequately disclosed) on the Tax Returns in accordance
        with Section 6662(b)(2)(B) of the Code and the Treasury Regulations
        thereunder.

               (xxi) Neither the Company nor any of its Subsidiaries has made,
        or is subject to, an election as provided in Section 108(b)(5) of the
        Code (or any predecessor provision) for any taxable year.

               (xxii) None of the assets of the Company or any of its
        Subsidiaries are treated as "tax-exempt use property" within the meaning
        of Section 168(h) of the Code.

               (xxiii) Neither the Company nor any of its Subsidiaries has
        disposed of property in a transaction being accounted for under the
        installment method under Section 453 of the Code.

               (xxiv) There are no liens for Taxes upon any property or assets
        of the Company or any of its Subsidiaries except for liens for Taxes not
        yet due.

               (xxv) Neither the Company nor any of its Subsidiaries is now or,
        since October 1, 1996, was ever a member of any affiliated, combined or
        unitary group other than an affiliated, combined or unitary group of
        which the Seller was the common parent.

               (xxvi) Seller is not a "foreign person" (as that term is defined
        in Section 1445 of the Code) and shall furnish to Buyer on or before the
        Closing Date a certification of Seller's non-foreign status, as set
        forth in Treasury Regulations Section 1.1445-2(b). Neither the Company
        nor any of its Subsidiaries is a United States real property holding
        corporation as defined in Section 897(c)(2) of the Code.

               (xxvii) Section 4(j) of the Disclosure Schedule contains a list
        of all jurisdictions (whether foreign or domestic) in which, to Seller's
        Knowledge, any Tax is properly payable by the Company or any of its
        Subsidiaries.

               (xxviii) The Company Shares meet the requirements of Section
        1504(a)(2) of the Code and the Company is a member of a "seller
        consolidated group" within the meaning of Section 338(h)(10)(B) of the
        Code.

                                       18
<PAGE>   23

        (k) Real Property.

               (i) Section 4(k)(i) of the Disclosure Schedule lists all real
        property that any of the Company and its Subsidiaries owns. With respect
        to each such parcel of owned real property (collectively, the "Owned
        Real Property"), except for matters which would not have a Material
        Adverse Effect:

                   (A) the owner has good and marketable title to the parcel of
            Owned Real Property, free and clear of any Security Interest,
            easement, covenant, or other restriction, except for installments of
            special assessments not yet delinquent, recorded easements,
            covenants, and other restrictions, and utility easements, building
            restrictions, zoning restrictions, and other easements and
            restrictions existing generally with respect to properties of a
            similar character;

                   (B) except as set forth in Section 4(k)(i)(B) of the
            Disclosure Schedule, there are no leases, subleases, licenses,
            concessions, or other agreements granting to any Person the right of
            use or occupancy of any portion of the parcel of Owned Real
            Property;

                   (C) Seller has made available to Buyer copies of each of (i)
            the title insurance policies obtained by Seller, (ii) abstracts of
            title, (iii) title reports, and (iv) surveys set forth in Section
            4(k)(i)(C) of the Disclosure Schedule; and

                   (D) there are no outstanding options or rights of first
            refusal to purchase the parcel of Owned Real Property.

               (ii) Seller has made available to Buyer copies of the leases and
        subleases (including ground leases, if any) relating to all real
        property leased or subleased to any of the Company and its Subsidiaries
        (collectively, the "Leased Real Property"), together with all addenda,
        modifications and amendments thereto. Each lease and sublease relating
        to the Leased Real Property is valid, binding, enforceable, and in full
        force and effect, except where the invalidity, nonbinding nature,
        unenforceability, or ineffectiveness would not have a Material Adverse
        Effect. To Seller's Knowledge, the Company is not in default, in any
        material respect, under any such lease or sublease and there exists no
        event of default or event, occurrence, condition or act which, with the
        giving of notice or the lapse of time, would become a default under any
        such lease or sublease.

               (iii) True and complete copies of the most recent certificate of
        occupancy for each building included in the Owned Real Property or the
        Leased Real Property (collectively, the "Real Property"), where, if and
        to the extent in the possession of Seller, have been made available to
        Buyer. To Seller's Knowledge, all of the public utilities required for
        the operation of the Real Property in the manner currently operated are
        installed and operating. To Seller's Knowledge, the plumbing,
        electrical, heating, air conditioning, ventilating and all other
        structural or material mechanical systems in the buildings upon the Real
        Property are in working condition, so as to be adequate for the
        operation of the business of the Company and its Subsidiaries as
        heretofore conducted. Seller has not received notice of any assessments,
        and to Seller's Knowledge, there are no pending assessments affecting
        any of the Real Property. Notwithstanding anything in this Agreement to
        the contrary, the phrase "Seller's

                                       19
<PAGE>   24

        Knowledge" as used in this Section 4(k)(iii) shall refer only to the
        actual knowledge of the individuals identified in the definition of
        "Knowledge" in Section 1.

        (l) Intellectual Property.

               (i) Section 4(l) of the Disclosure Schedule identifies the
        following owned or used by any of the Company or its Subsidiaries: (A)
        patents and pending patent applications; (B) trademark, service mark and
        trade name registrations and applications therefor; (C) copyright
        registrations and applications therefor; and (D) licenses and similar
        agreements for the use of any intellectual property (including, without
        limitation, patents, unpatented inventions and technology, trademarks,
        service marks and trade names, copyrights and copyrightable works,
        know-how and trade secrets, hereinafter collectively referred to as
        "Intellectual Property") to which any of the Company or its Subsidiaries
        is a party, either as licensee or licensor (other than licenses for the
        use of commercially available computer software and related
        documentation).

               (ii) The Company and its Subsidiaries own and possess all right,
        title and interest in and to, or have a valid and enforceable license to
        use, the Intellectual Property necessary for the operation of their
        respective businesses and, to the Knowledge of Seller, no claim by any
        third party contesting the validity, enforceability, use or ownership of
        any of the Intellectual Property has been made in the last three years
        or is currently outstanding.

        (m) Contracts. Section 4(m) of the Disclosure Schedule lists the
following written contracts to which any of the Company and its Subsidiaries is
a party on the date hereof:

               (i) any agreement the performance of which is expected to involve
        consideration in excess of $25,000, other than agreements which can be
        cancelled prior to the payment or receipt of such amount without notice
        or penalty;

               (ii) any agreement which relates to the granting of a license to
        a third party by the Company or any of its Subsidiaries, or by a third
        party to the Company or any of its Subsidiaries;

               (iii) any agreement which restricts or contains limitations on
        the ability of any of the Company or its Subsidiaries to freely conduct
        business anywhere in the world;

               (iv) any collective bargaining agreement;

               (v) any agreement with Seller or its Affiliates (other than the
        Company and its Subsidiaries);

               (vi) any written (or, to the Knowledge of Seller, oral) agreement
        (other than "at-will" employment agreements) for the employment of any
        individual on a full-time, part-time, consulting or other basis;

               (vii) a lease or similar agreement under which:

                   (A) the Company or any Subsidiary is lessee of, or holds or
            uses, any machinery, equipment, vehicle or other tangible personal
            property owned by any third party, or

                                       20
<PAGE>   25

                   (B) the Company or any Subsidiary is a lessor or sublessor
            of, or makes available for use by any third party, any tangible
            personal property owned or leased by the Company or such Subsidiary,
            in any such case that has an aggregate future liability or
            receivable, as the case may be, in excess of $100,000;

               (viii) all joint venture, partnership, and other contracts
        (however named) involving a sharing of profits, losses, costs, or
        liabilities by the Company or any Subsidiary with any other Person;

               (ix) any group health or life insurance, pension, profit sharing,
        retirement, severance, medical, bonus, incentive, stock option or
        purchase plan or other similar benefit plan in effect with respect to
        current or former directors, officers or employees or others;

               (x) any agreement which relates to the borrowing of money or the
        guarantee thereof; and

               (xi) any agreement or instrument under which the Company or any
        of its Subsidiaries has directly or indirectly guaranteed indebtedness,
        liabilities or obligations of any other Person (other than endorsements
        for the purpose of collection in the Ordinary Course of Business) that,
        individually, is in excess of $100,000.

Seller has made available to Buyer a correct and complete copy of each contract
or other agreement listed in Section 4(m) of the Disclosure Schedule (the
"Contracts"), together with any and all amendments or modifications thereto.
Each of the Contracts is valid, binding, enforceable, and in full force and
effect, in all material respects, the Company is not in any material breach of
or default under any such Contract and no event has occurred which, with notice
or lapse of time or both, would constitute such a breach or default, or permit
termination, modification, or acceleration, under such Contract. Except as
disclosed in Section 4(m) of the Disclosure Schedule, neither the Company nor
any Subsidiary has received any written notice of the intention of any party to
terminate any Contract. Except as set forth in Section 4(m) of the Disclosure
Schedule, to Seller's Knowledge, neither the Company nor any of its Subsidiaries
is a party to any oral contract on the date hereof meeting any of the
descriptions set forth in clauses (i) through (xi) above. Seller has also made
available to Buyer forms of franchise agreements and/or franchise disclosure
statements prepared by or on behalf of the Company or any of its Subsidiaries.

        (n) Litigation. Section 4(n) of the Disclosure Schedule sets forth (i)
each instance in which any of the Company and its Subsidiaries is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge and (ii) each
action, suit, proceeding, arbitration, hearing, or investigation pending or, to
Seller's Knowledge, for which a threat has been received in writing, which would
involve the Company, any Subsidiary or any of their assets or business, whether
in, before or by any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction.

        (o) Employee Benefits. Except as set forth in Section 4(o) of the
Disclosure Schedule, there are no Employee Benefit Plans that cover any
employees or former employees of the Company or any of its Subsidiaries (and/or
any of their beneficiaries or dependents).

                                       21
<PAGE>   26

        (p) Bonds. Section 4(p) of the Disclosure Schedule identifies all bonds,
guarantees, comfort letters and similar instruments in excess of $50,000 in the
aggregate currently maintained by or on behalf of the Company and its
Subsidiaries.

        (q) Environmental Matters. Except as set forth in Section 4(q) of the
Disclosure Schedule and except for such exceptions that, individually or in the
aggregate, would not have a Material Adverse Effect,

               (i) The Company and its Subsidiaries have, and through the
        Closing Date will have, complied in all material respects with all
        Environmental Laws. The Company and its Subsidiaries have obtained and
        will maintain through the Closing Date all material permits, licenses,
        certificates and other authorizations which are required with respect to
        its operation under any Environmental Laws and all such permits,
        licenses, certificates and other authorizations are listed in Section
        4(q) of the Disclosure Schedule;

               (ii) The Company and its Subsidiaries are in compliance in all
        material respects with all permits, licenses and authorizations listed
        in Section 4(q) of the Disclosure Schedule, and, to Seller's Knowledge,
        are also in material compliance with all other limitations,
        restrictions, conditions, standards, prohibitions, requirements,
        obligations, schedules and timetables contained in any Environmental
        Laws or contained in any material regulation, code, plan, order, decree,
        judgment, injunction, notice or demand letter issued, entered,
        promulgated or approved thereunder. Seller has made available to Buyer
        the Phase I environmental reports listed on Section 4(q) of the
        Disclosure Schedule (as to which environmental reports, Seller makes no
        representation or warranty whatsoever);

               (iii) There is no pending or, to Seller's Knowledge, threatened
        civil, criminal or administrative Action, demand, claim, hearing, notice
        of violation, investigation, proceeding, notice or demand letter that
        affects or applies to the Company and its Subsidiaries, their business
        or assets, the good they have produced or the services they have
        provided relating in any way to any Environmental Laws or any
        regulation, code, plan, order, decree, judgment, injunction, notice or
        demand letter issued, entered, promulgated or approved thereunder;

               (iv) Except in accordance with a valid governmental permit,
        license, certificate or approval listed in Section 4(q) of the
        Disclosure Schedule, Seller has not received written notice nor has
        Knowledge of any emission, spill, release or discharge by the Company or
        any of its Subsidiaries, from any of their assets, from any site at
        which any of such assets are or were located, into or upon (i) the air,
        (ii) soils or improvements, (iii) surface water or ground water, or (iv)
        the sewer, septic system or waste treatment, storage or disposal system
        servicing such assets of any toxic or hazardous substances or wastes
        used, stored, generated, treated or disposed at or from any of such
        assets; and

               (v) To Seller's Knowledge, there has been no Environmental
        Complaint.

        (r) Certain Business Relationships With the Company and its
Subsidiaries. Section 4(r) of the Disclosure Schedule lists all material assets
(tangible and intangible) and material services used in the business of any of
the Company or its Subsidiaries, which assets and services are owned or provided
by Seller or its Subsidiaries or other Affiliates (excluding for this purpose
the Company and its Subsidiaries), none of which assets or services are being
purchased or assumed by, or

                                       22
<PAGE>   27

transferred to, Buyer hereunder, but which shall be made available to Buyer in
the manner and as set forth in Section 6(e) below.

        (s) Insurance. Section 4(s) of the Disclosure Schedule lists all
policies of insurance maintained by or on behalf of the Company and its
Subsidiaries for the prior three fiscal years, including all such policies which
are in effect as of the date of this Agreement. All current policies are in full
force and effect and all prior year insurance policies disclosed in Section 4(r)
of the Disclosure Schedule were in full force and effect during the periods
indicated.

        (t) Labor and Employment Matters.

               (i) None of the Company or its Subsidiaries is party to any
        collective bargaining agreement and there is no labor strike or stoppage
        actually pending, or to the Knowledge of Seller, threatened against or
        involving the Company or its Subsidiaries. Section 4(t) of the
        Disclosure Schedule lists each director and officer of the Company and
        each of its Subsidiaries, and all employees of the Company or its
        Subsidiaries, whose annual base compensation exceeds $50,000. The
        Company has made available to Buyer a true and correct copy of its
        employee policies and procedures manual and descriptions of all material
        employment or personnel policies of the Company not set forth therein.

               (ii) Section 4(t) of the Disclosure Schedule sets forth the
        method for accruing vacation pay used by the Company and its
        Subsidiaries on their books and records. Except as set forth in Section
        4(t) of the Disclosure Schedule, at the date of the Latest Balance Sheet
        there were, at the date hereof there are and on the Closing Date there
        will be, no bonuses, profit sharing, incentives, commissions or other
        compensation of any kind with respect to work done prior to the date of
        the Latest Balance Sheet, the date hereof or the Closing Date,
        respectively, owing to present or former employees of the Company or its
        Subsidiaries not fully paid prior to such applicable date (other than
        accrued payroll charges in the Ordinary Course of Business for the pay
        period during which this Agreement is executed or the Closing occurs,
        all of which will be accrued on the Latest Balance Sheet) or, with
        respect to compensation for work done prior to the date of the Latest
        Balance Sheet, not fully accrued on the Latest Balance Sheet.

               (iii) To Seller's Knowledge, the Company and it Subsidiaries have
        complied in all material respects with recordkeeping and documentation
        requirements under Federal, state and local law and regulations relating
        to the status of all former, current and potential employees of the
        Company or any such Subsidiary, including without limitation all rules
        and regulations of the U.S. Immigration and Naturalization Service.

        (u) No Representation or Warranty Concerning ADA. Notwithstanding
anything herein to the contrary, Seller makes no representations or warranties
regarding compliance with or liability under, or associated with, the Americans
with Disabilities Act, including the rules and regulations thereunder, or any
similar state or local law (all of which risks and liabilities are being assumed
by Buyer hereunder).

                                       23
<PAGE>   28

        Section 5. Pre-Closing Covenants. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.

        (a) General. Each of the Parties will use its reasonable efforts to take
all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 7 below).

        (b) Notices and Consents. Each of the Parties will (and Seller will
cause each of the Company and its Subsidiaries to) give any notices to third
parties, and each of the Parties will (and Seller will cause each of the Company
and its Subsidiaries to) use its reasonable efforts to obtain any third party
consents that the other Party reasonably may request in connection with the
matters referred to in Section 3(b)(ii) and Section 4(c) above. Each of the
Parties will (and Seller will cause each of the Company and its Subsidiaries to)
give any notices to, make any filings with, and use its reasonable efforts to
obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters referred to in Section
3(a)(ii), Section 3(b)(ii), and Section 4(c) above. In addition, each of the
Parties will file within five (5) business days of the date of this Agreement
any Notification and Report Forms and related material that it may be required
to file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the HSR Act, will supply promptly any
additional information and documentary material that may be requested in
connection therewith, will use its reasonable efforts to obtain a waiver from
the applicable waiting period, and will make any further filings pursuant
thereto that may be necessary, proper, or advisable in connection therewith.

        (c) Operation of Business. Seller agrees that it will not cause or
permit any of the Company and its Subsidiaries to engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, Seller agrees that
it will cause the Company and its Subsidiaries to:

               (i) maintain their corporate existence;

               (ii) maintain and service the tangible assets used in their
        business in the same manner as they have prior to the date hereof;

               (iii) use their reasonable efforts to keep available the services
        of the present employees and agents of the Company and such Subsidiaries
        and to maintain favorable relations with and the goodwill of suppliers,
        customers, distributors and any others having business relationships
        with the Company or any Subsidiary;

               (iv) maintain their current insurance coverage in full force and
        effect;

               (v) maintain all permits, licenses and authorizations necessary
        for the business of the Company and its Subsidiaries in full force and
        effect;

               (vi) not take any action that would result in the representation
        and warranty set forth in Section 4(h)(ii) above being untrue as of the
        Closing Date;

               (vii) incur any costs or expenses relating to the Financing
        Transaction without Buyer's prior written consent; and

                                       24
<PAGE>   29

               (viii) not enter into any agreement, contract or instrument that
        would have to be included in Section 4(m) of the Disclosure Schedule in
        order for the representation and warranty set forth in Section 4(m)
        above to be true as of the Closing Date.

Notwithstanding the foregoing, the parcel of real property located in Allan,
Texas, as more fully described in Section 4(h)(ii)(F) of the Disclosure
Schedule, and the proceeds of any such sale thereof, shall be distributed to the
Seller as a dividend prior to the Closing Date. Such property shall not be
included within the definition of Owned Real Property for the purposes of this
Agreement and neither such property, nor the proceeds of any such sale thereof,
shall be included in the assets of the Company or its Subsidiaries, including in
the Working Capital.

        (d) Financing Commitment; Exclusivity. From and after the latter of (i)
Seller's receipt of a written commitment (the "Financing Commitment") from a
financial entity with respect to sale/leaseback transactions and/or other
financing transactions (collectively, the "Financing Transaction") with the
Company and its Subsidiaries, which Financing Commitment shall be on terms and
conditions reasonably acceptable to Buyer, shall be substantially in the form
attached as Exhibit B hereto and shall set forth basic terms with respect to the
Financing Transaction including, without limitation, for the net proceeds of the
Financing Transaction to equal or exceed $55,000,000, for the lender to release
all claims and rights which it otherwise may have regarding the use of any such
proceeds as partial payment of the Purchase Price, and for Buyer to pay all
customary fees to the financial entity, and not including any obligation for the
Company or any of its Subsidiaries to make any lease extensions, and (ii)
Buyer's actual payment of the up-front expense deposit or commitment fees
associated with the Financing Transaction to the financial entity, neither
Seller nor its Affiliates will, directly or indirectly, solicit, initiate or
encourage the submission of any proposal or offer from, discuss or negotiate
with, or provide any information to, any Person relating to the acquisition of
all or substantially all of the capital stock or assets of any of the Company
and its Subsidiaries (including any acquisition structured as a merger,
consolidation or share exchange).

        (e) Access; Cooperation. From the date hereof until the Closing Date,
Seller shall permit and cause the Company and its Subsidiaries to permit Buyer
and its authorized representatives (including counsel, other consultants,
accountants and auditors) reasonable access during normal business hours to
officers, directors, employees, accountants and other advisors, properties,
books and records of the Company and its Subsidiaries for purposes of verifying
the representations and warranties made under this Agreement and, during such
period, Seller shall cause Company and its Subsidiaries to promptly furnish to
such representatives all financing, operating and other data and information
concerning the Company and its Subsidiaries and its properties, businesses and
personnel as may reasonably be requested (unless previously provided prior to
the date hereof). In addition, Seller shall cause the Company and its personnel
to provide such cooperation and assistance as Buyer may, from time to time,
reasonably request in connection with Buyer's efforts to consummate the
Financing Transaction. Notwithstanding the foregoing, all such access and
cooperation shall be coordinated through Ms. Kathy Polson and shall only be done
in the manner and to the extent authorized by Mr. Andrew F. Puzder.

                                       25
<PAGE>   30

        (f) Delivery and Acceptance of Disclosure Schedule. Within five (5)
business days after the date hereof, Seller shall deliver to Buyer the
Disclosure Schedule. Upon its receipt of the Disclosure Schedule, Buyer shall
have seven (7) business days to review the Disclosure Schedule and to either (i)
accept the Disclosure Schedule, or (ii) deliver to Seller a written notice
containing a sufficiently detailed written explanation of those items in the
Disclosure Schedule which Buyer does not find acceptable, whereupon the Parties
will work in good faith to resolve such disputes and to jointly develop a form
of Disclosure Schedule which is acceptable to both Parties. The failure by Buyer
to respond to the Disclosure Schedule within such 7-day period shall constitute
its acceptance of the Disclosure Schedule as set forth in clause (i) above. If
the Parties are unable to resolve any such disputes in writing within ten (10)
days following the delivery of such written notice from Buyer to Seller, then
Buyer and Seller shall thereafter have the right to terminate this Agreement
pursuant to Section 9(a)(vii) below. For purposes of this Agreement, "Disclosure
Schedule" shall refer to the form of Disclosure Schedule which has been accepted
by Buyer pursuant to this Section 5(f).

        (g) Software License Agreement. On or prior to the Closing Date, the
Seller will enter into a Software License Agreement with the Company and its
Subsidiaries (the "Software License Agreement"), providing the Company and its
Subsidiaries a perpetual, fully paid-up, non-exclusive and non-assignable
license to continue using current versions of certain of the Seller's software
after the Closing, as described in such Software License Agreement, subject to
the required consent of any third party licensors to such software. The Parties
shall work in good faith toward finalizing the form of the Software License
Agreement not later than the date the Disclosure Schedule is finalized pursuant
to Section 5(f) above.

        (h) POS Equipment Sublease. On or prior to the Closing Date, the Seller
will enter into the POS Equipment Sublease with the Company and its Subsidiaries
(the "POS Equipment Sublease"), providing the Company and its Subsidiaries a
sublease, at Seller's cost, to the equipment leased by the Seller under the
Lease Agreement dated January 11, 1996 with Winthrop Resources Corp., subject to
the required consent of Winthrop Resources Corp., as the lessor under such Lease
Agreement. The Parties shall work in good faith toward finalizing the form of
the POS Equipment Sublease not later than the date the Disclosure Schedule is
finalized pursuant to Section 5(f) above.

        (i) Notice of Developments.

               (i) Seller may elect at any time to notify Buyer in writing of
        any development which would cause a breach of (or would be required to
        be disclosed in response to) any of its representations and warranties
        in Section 4 above. In the event that the Closing occurs, then
        immediately prior thereto, the written notice pursuant to this Section
        5(i)(i) will be deemed to have amended the Disclosure Schedule, to have
        qualified the representations and warranties contained in Section 4
        above, and to have cured any misrepresentation or breach of warranty
        that otherwise might have existed hereunder by reason of the
        development, in each case to the extent of the disclosure contained in
        such written notice.

               (ii) Each Party will give prompt written notice to the other of
        any development causing a breach of any of its own representations and
        warranties in Section 3 above. No disclosure by any Party pursuant to
        this Section 5(i)(ii), however, shall be deemed to amend or supplement
        the Disclosure Schedule or to prevent or cure any misrepresentation or
        breach of warranty.

                                       26
<PAGE>   31

        Section 6. Additional Covenants and Agreements.

        (a) General. In case at any time after the Closing any further
reasonable action is necessary to carry out the purposes of this Agreement, each
of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party may
reasonably request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 8 below).

        (b) Litigation Support. After the Closing, in the event and for so long
as any Party actively is contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Company and its Subsidiaries, each of
the other Parties shall cooperate with such Party or its counsel in the defense
or contest, make available their personnel, and provide such testimony and
access to their books and records as shall be necessary in connection with the
defense or contest, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor under Section 8 below).

        (c) Employees and Employee Benefit Plans.

               (i) Effective as of the Closing Date, those employees of Seller
        which Buyer and Seller mutually identify and agree prior to the Closing
        shall cease to be employed by Seller and its Affiliates, and Buyer shall
        offer employment effective as of the Closing Date to each such employee
        on terms and conditions to be agreed to between Buyer and such employee,
        subject to the provisions of Section 6(c)(iii) below. Each such employee
        who becomes an employee of Buyer or its Affiliates on or immediately
        following the Closing Date shall be hereinafter referred to as a
        "Transferred Employee."

               (ii) Effective as of the Closing Date, each Transferred Employee
        and each employee and former employee of the Company and its
        Subsidiaries shall cease participation in all Employee Benefit Plans of
        the Company, Seller or any Affiliate of Seller (the "Seller Plans")
        subject to the terms of each such Seller Plan. As used herein, "Current
        Employees" means those individuals who are active employees of the
        Company or any of its Subsidiaries on the Closing Date or who are on
        inactive status (such as short-term disability or leave of absence) and
        have a legally enforceable right to return to active status with the
        Company or such Subsidiary.

               (iii) Effective as of the Closing Date, Buyer shall cover each
        Current Employee and each Transferred Employee who is covered under
        Seller Plans immediately prior to the Closing Date, under new or
        existing Employee Benefit Plans of Buyer (the "Buyer Plans") that
        provide such benefits as Buyer shall deem appropriate, including 401(k),
        health, disability, and life insurance plans. With respect to each Buyer
        Plan, employment with the Company, Seller and each Affiliate of Seller
        prior to the Closing Date shall be considered as employment with Buyer
        for purposes of eligibility to participate, eligibility to receive
        benefits, waiting and elimination periods, and preexisting condition
        limitation periods, but not for purposes of benefit accruals. Each Buyer
        Plan that is an Employee Welfare Benefit Plan shall credit Current
        Employees and Transferred Employees with their deductibles and
        co-payments paid as of the Closing Date for the current calendar year
        under Seller Plans that

                                       27
<PAGE>   32

        are Employee Welfare Benefit Plans. Buyer shall bear and discharge all
        liabilities, with respect to claims under Buyer Plans that provide
        health and medical benefits, for covered expenses that are incurred on
        and after the Closing Date by each Current Employee and Transferred
        Employee and his covered dependents. Seller shall retain, bear and
        discharge all liabilities, with respect to claims under Seller Plans
        that provide health and medical benefits, for covered expenses that are
        incurred prior to the Closing Date by each Current Employee and
        Transferred Employee and his covered dependents, whether such claim is
        submitted prior to, on or after the Closing Date. Seller shall retain,
        bear and discharge all liabilities with respect to continued health and
        medical coverage as required under Section 4980B of the Code and Part 6
        of Title I of ERISA, or any other similar applicable law, for all
        employees of the Company or its Subsidiaries (and their eligible
        dependents) who are not Current Employees, and for any dependents of
        Current Employees as to whom a qualifying event occurred prior to the
        Closing Date. Buyer shall bear and discharge all liabilities with
        respect to disability benefits coverage for each Current Employee or
        Transferred Employee who becomes disabled on or after the Closing Date,
        and Seller shall retain, assume, bear and discharge all liabilities with
        respect to disability benefits coverage for each Current Employee or
        Transferred Employee who becomes disabled prior to the Closing Date.

               (iv) Effective as of the Closing Date, Buyer shall cover or cause
        the Company and its Subsidiaries to cover each Current Employee and each
        Transferred Employee under new or existing workers' compensation
        programs and/or policies of Buyer. Buyer shall bear and discharge all
        liabilities for, and administration of, workers' compensation benefits
        in connection with all claims of, or attributable to, Current Employees
        and Transferred Employees, which arise after the Closing Date.

               (v) Seller shall, as of the Closing Date, use its reasonable best
        efforts (i) to cause the trustee of Seller's 401(k) Plan to permit
        Employees to receive a distribution, within ninety (90) days of the
        Closing Date, of their individual account balances in Seller's 401(k)
        Plan and (ii) to allow such Employees to elect to rollover or transfer
        their individual account balances directly to a Buyer Plan that is a
        401(k) plan, subject to any conditions on such transfer as may be
        applicable under Buyer's 401(k) Plan. Buyer shall cause the trustee of
        Buyer's 401(k) Plan to accept on behalf of Buyer's 401(k) Plan a
        rollover contribution from any Employee or a direct transfer from the
        trustee of Seller's 401(k) Plan representing such Employee's interest
        under such Plan, all subject to and in accordance with the provisions of
        Buyer's 401(k) Plan and applicable laws.

               (vi) Buyer shall give all Transferred Employees and Current
        Employees credit for all "personal assistance time" accrued by such
        Employees as of the Closing Date. The Working Capital shall not include
        a reserve for "personal assistance time" but shall include a reserve for
        all unused vacation time accrued by the Transferred Employees and the
        Current Employees as of the Closing Date, and Buyer shall give the
        Transferred Employees and Current Employees credit for unused vacation
        time up to the amount of such reserve.

               (vii) To the extent that the Company incurs any severance
        obligations during the 6-month period following the Closing to any
        Employees pursuant to the Company's existing severance programs, which
        are described in Section 6(c)(vii) of the Disclosure Schedule, Seller
        shall pay the first $100,000 of such obligations, the Buyer shall pay
        the next $100,000 of such obligations, and Seller and Buyer shall each
        pay one-half of all such obligations thereafter. Seller shall promptly
        pay its portion of such obligations, if any, upon presentation

                                       28
<PAGE>   33

        of evidence supporting the payment thereof to the employees and an
        accounting of all payments theretofore made of such obligations.

               (viii) Buyer hereby agrees to comply with any applicable notice
        requirements under WARN or other similar law of any jurisdiction
        relating to any plant closing or mass layoffs or as otherwise required
        by any such law.

        (d) Confidentiality; Non-Solicitation.

               (i) Seller agrees that, after the Closing, it shall not, directly
        or indirectly, without the prior written consent of Buyer, use or
        disclose to any Person, or permit any of its Affiliates to use or
        disclose to any Person, any information, trade secrets, confidential
        customer information, technical data or know-how relating to the
        products, processes, methods, equipment or business practices of the
        Company and its Subsidiaries.

               (ii) Neither Seller nor any Affiliate of Seller, for a period of
        eighteen (18) months from and after the Closing Date, shall, directly or
        indirectly, hire, offer to hire, entice away, retain, employ or solicit
        or attempt to solicit (either for itself or as agent for another) for
        employment or induce, persuade or encourage any general manager or
        senior member of management to leave the Company's or any of its
        Subsidiaries' employ who, prior to the Closing Date was, or during such
        18-month period will be, employed or retained by the Company or such
        Subsidiary as a consultant, agent, employee or otherwise; provided,
        however, that this restriction shall not apply to (a) employees no
        longer employed by the Company or any of its Subsidiaries, or (b)
        employees who respond to general solicitations of employment not
        specifically directed toward employees of the Company or any of its
        Subsidiaries.

               (iii) Seller acknowledges and agrees that any breach of this
        Section 6(d) is likely to result in irreparable injury to Buyer, the
        Company and its Subsidiaries, that monetary damages will be an
        inadequate remedy of such breach and that, accordingly, in addition to
        any other remedy that Buyer, the Company or such Subsidiary may have,
        Buyer, the Company and such Subsidiaries shall be entitled to enforce
        the specific performance of this Section 6(d) and to seek both permanent
        and temporary relief in the event of any breach hereof.

               (iv) The Parties acknowledge that the time, scope and other
        provisions of this Section 6(d) have been specifically negotiated by
        sophisticated commercial parties and agree that all such provisions are
        reasonable under the circumstances of the transactions contemplated by
        this Agreement. If any portion of this Section 6(d) shall be determined
        to be invalid and unenforceable as written, each such portion shall be
        enforced to the extent reasonable under the circumstances and such
        determination shall not affect the validity or enforceability of the
        balance hereof, and such balance shall remain in full force and effect.
        It is understood that Seller is entering into this non-solicitation
        agreement in order to induce Buyer to enter into this Agreement.

        (e) Transition Services. The Seller agrees to provide Buyer and/or the
Company and its Subsidiaries services substantially similar to those disclosed
in Section 4(r) of the Disclosure Schedule, for a period of three (3) months
from and after the Closing Date; provided that, the Parties mutually agree on
the pricing and terms for the provision of such services; and, provided further
that,

                                       29
<PAGE>   34

Seller is able to provide such services under the terms of any agreement or
other relationship pursuant to which Seller has heretofore procured and provided
such services to the Company and its Subsidiaries.

        (f) Insurance Matters. Seller shall not take any action, either before
or after the Closing, to remove the Company as a "named insured" from any
insurance policy which presently includes the Company as a "named insured".

        (g) Prepayment of State Taxes. Seller shall, on or before the Closing
Date, pay, or prepay, an estimate, the amount of which shall be reasonably
satisfactory to Buyer, of all income, franchise or similar Taxes scheduled to
become due and payable to the State of Texas (including any resulting from or
attributable to the Section 338(h)(10) Election or the transfer of assets by the
Company pursuant to the Financing Transaction) after the Closing Date for which
the Company and/or its Subsidiaries are the primary obligors, to the extent that
such income, franchise or similar Taxes are attributable to or based on the
income or operations of the Company Group for the Pre-Closing Tax Period or the
income of the Company Group resulting from or attributable to the Section
338(h)(10) Election.

        (h) Banque Paribas. Seller shall assume and discharge (i) all
obligations of the Company to Banque Paribas, and (ii) all intercompany
liabilities to Seller, which obligations shall be discharged out of the Purchase
Price.

        Section 7. Conditions to Obligation to Close.

        (a) Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

               (i) the representations and warranties of Seller set forth in
        Section 3(a) and Section 4 above shall be true and correct in all
        material respects at and as of the date of this Agreement and as of the
        Closing Date with the same force and effect as though such
        representations and warranties had been made on and as of the Closing
        Date and Seller shall have delivered to Buyer a certificate to such
        effect;

               (ii) Seller shall have performed and complied with all of its
        pre-Closing covenants hereunder in all material respects through the
        Closing, and Seller shall have delivered to Buyer a certificate to such
        effect;

               (iii) there shall not be any injunction, judgment, order, decree,
        ruling, or charge in effect preventing, or any action, suit or
        proceeding pending which seeks to restrain or prohibit, consummation of
        any of the transactions contemplated by this Agreement; and

               (iv) all applicable waiting periods (and any extensions thereof)
        under the HSR Act shall have expired or otherwise been terminated
        without the imposition of any condition, requirement or restriction
        which is or could reasonably be expected to be materially burdensome to
        Buyer or the Company and its Subsidiaries.

               (v) since the date of the Latest Balance Sheet, there shall not
        have been any material adverse change in the condition (financial or
        otherwise), assets, liabilities, business,

                                       30
<PAGE>   35

        prospects, operations, customer, employee or vendor relations of the
        Company and its Subsidiaries;

               (vi) Buyer shall have received each of the items referred to in
        Section 2(d)(i) above;

               (vii) The Company and its Subsidiaries shall have consummated the
        Financing Transaction;

               (viii) Buyer shall have received an opinion letter from Seller's
        counsel in form and substance satisfactory to Buyer addressing matters
        customarily addressed in transactions of this nature; and

               (ix) The Company or a Subsidiary shall hold good and market
        title, in fee simple, to the parcel of real property located in Mustang,
        Oklahoma, as more fully described, and subject to the disclosures, in
        Section 4(k)(i) of the Disclosure Schedule and Buyer shall have been
        provided with documents satisfactory to it confirming the foregoing.

Buyer may waive any condition specified in this Section 7(a).

        (b) Conditions to Obligation of Seller. The obligation of Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

               (i) the representations and warranties set forth in Section 3(b)
        above shall be true and correct in all material respects at and as of
        the date of this Agreement and as of the Closing Date, and Buyer shall
        have delivered to Seller a certificate to such effect;

               (ii) Buyer shall have performed and complied with all of its
        pre-Closing covenants hereunder in all material respects through the
        Closing, and Buyer shall have delivered to Seller a certificate to such
        effect;

               (iii) there shall not be any injunction, judgment, order, decree,
        ruling, or charge in effect preventing, or any action, suit or
        proceeding pending which seeks to restrain or prohibit, consummation of
        any of the transactions contemplated by this Agreement;

               (iv) all applicable waiting periods (and any extensions thereof)
        under the HSR Act shall have expired or otherwise been terminated;

               (v) Seller shall have received each of the items referred to in
        Section 2(d)(ii) and Section 2(d)(iii) above;

               (vi) The Company and its Subsidiaries shall have consummated the
        Financing Transaction in accordance with the Financing Commitment, and
        shall have received the proceeds of such Financing Transaction; and

               (vii) Seller shall have received an opinion letter from Buyer's
        and Guarantor's counsel in form and substance satisfactory to Seller
        addressing matters customarily addressed in transactions of this nature.

                                       31
<PAGE>   36

Seller may waive any condition specified in this Section 7(b).

        Section 8. Remedies for Breaches of This Agreement.

        (a) Survival of Representations and Warranties.

               (i) All of the representations and warranties of Seller contained
        in this Agreement above shall survive the Closing Date and continue in
        full force and effect for a period of eighteen (18) months thereafter,
        except as otherwise provided in clauses (ii) through (iv) below.

               (ii) The representations and warranties of Seller contained in
        Sections 4(j) and 4(o) shall survive the Closing Date and shall continue
        in full force and effect thereafter until the expiration of the
        applicable statute of limitations.

               (iii) The representations and warranties of Seller contained in
        Section 4(q) shall survive the Closing Date and shall continue in full
        force and effect for a period of two years thereafter.

               (iv) All of the representations and warranties of the Parties
        contained in Section 3 above shall survive the Closing Date and continue
        in full force and effect forever thereafter (subject to any applicable
        statutes of limitations).

               (v) Neither party may make or assert any claim under any
        representation or warranty of the other Party contained herein after the
        expiration of the survival period applicable to such representation or
        warranty. Any claim made or asserted within the applicable survival
        period prescribed above shall survive such expiration until such claim
        is finally resolved and all obligations with respect thereto are fully
        satisfied.

        (b) Indemnification Provisions for Benefit of Buyer.

               (i) Seller agrees to indemnify, defend and hold harmless Buyer,
        the Company and their Affiliates from and against any Adverse
        Consequences incurred or sustained by Buyer, the Company or any of their
        Affiliates as a result or arising from (A) any breach or inaccuracy of
        any of Seller's representations or warranties given or made herein
        (other than the representations and warranties in Sections 3(a), 4(d),
        4(j) or 4(o), in the certificates delivered pursuant to Sections 7(a)(i)
        and (ii), or (B) any beach of or non-compliance with any of Seller's
        covenants, agreements or obligations made herein or in such
        certificates; provided, however, that Seller shall not have any
        obligation to indemnify Buyer from and against any Adverse Consequences
        caused by the breach of any representation or warranty of Seller
        contained in Section 4 above (other than Sections 4(d), 4(j) and 4(o)):
        (x) unless and until Buyer has suffered Adverse Consequences by reason
        of all such breaches in excess of a $1,125,000 aggregate deductible
        (after which point Seller will be obligated only to indemnify Buyer from
        and against further such Adverse Consequences) or thereafter (y) to the
        extent the Adverse Consequences Buyer has suffered by reason of all such
        breaches exceeds a $10,000,000 aggregate ceiling (after which point
        Seller will have no obligation to indemnify Seller from and against
        further such Adverse Consequences).

                                       32
<PAGE>   37

               (ii) Seller agrees to indemnify, defend and hold harmless Buyer,
        the Company and their Affiliates from and against any Adverse
        Consequences incurred or sustained by Buyer, the Company or any of their
        Affiliates as a result or arising from (A) any breach or inaccuracy of
        any of Seller's representations or warranties given or made in Sections
        3(a) or 4(d) above, or (B) any Pre-Closing Liabilities.

               (iii) Notwithstanding anything in this Agreement to the contrary,
        to the extent that any liability is reflected or reserved for in the
        computation of the Working Capital, Seller shall have no indemnification
        obligations therefor pursuant to this Section 8(b) to Buyer, the Company
        or any of their Affiliates, except and to the extent that such liability
        exceeds the amount specifically reflected or reserved for with respect
        to such liability in the computation of the Working Capital.

        (c) Indemnification Provisions for Benefit of Seller.

               (i) Buyer agrees to indemnify, defend and hold harmless Seller
        and its Affiliates from and against any Adverse Consequences incurred or
        sustained by Seller or any of its Affiliates as a result or arising from
        (A) any breach or inaccuracy of any of Buyer's representations or
        warranties given or made herein, or in the certificates delivered
        pursuant to Sections 7(b)(i) and (ii), or (B) any beach of or
        non-compliance with any of Buyer's covenants, agreements or obligations
        made herein or in such certificates.

               (ii) Buyer agrees to indemnify, defend and hold harmless Seller
        and its Affiliates from and against any Adverse Consequences as a result
        of or arising from the Financing Transaction and Seller receiving, or
        allegedly receiving, directly or indirectly, any of the net proceeds
        therefrom in the form of a portion of the Purchase Price, including, but
        not limited to, any Adverse Consequences based on or related to a claim
        or assertion that (x) the payment of the Purchase Price is an avoidable
        transfer, or (y) the Financing Transaction is avoidable under applicable
        insolvency laws or other applicable creditors' rights laws.

        (d) Tax Indemnification. All indemnification obligations of the Parties
with respect to the representation and warranty in Section 4(j) above and with
respect to the other covenants and agreements of the Parties in Section 10 below
relating to tax matters are provided for in Section 10(a) below and are not
covered by the indemnification provisions in Sections 8(b) and (c) above.

        (e) Matters Involving Third Parties.

               (i) If any third party shall notify any Party (the "Indemnified
        Party") with respect to any matter (a "Third Party Claim") which may
        give rise to a claim for indemnification against any other Party (the
        "Indemnifying Party") under this Section 8, then the Indemnified Party
        shall promptly (and in any event within 5 business days after receiving
        notice of the Third Party Claim) notify each Indemnifying Party thereof
        in writing; provided, however, that failure to provide such notice on a
        timely basis shall not release the Indemnifying Party from any of its
        obligations under this Section 8 except to the extent the Indemnifying
        Party is materially prejudiced by such failure.

               (ii) The Indemnifying Party will have the right at any time to
        assume and thereafter conduct the defense of the Third Party Claim with
        counsel of its choice; provided, however, that the Indemnifying Party
        will not consent to the entry of any judgment or enter

                                       33
<PAGE>   38

        into any settlement with respect to the Third Party Claim without the
        prior written consent of the Indemnified Party (not to be unreasonably
        withheld or delayed) unless the judgment or proposed settlement involves
        only the payment of money damages and does not impose an injunction or
        other equitable relief upon the Indemnified Party.

               (iii) Unless and until the Indemnifying Party assumes the defense
        of the Third Party Claim as provided in Section 8(d)(ii) above, the
        Indemnified Party may defend against the Third Party Claim in any manner
        it reasonably may deem appropriate.

               (iv) In no event will the Indemnified Party consent to the entry
        of any judgment or enter into any settlement with respect to the Third
        Party Claim without the prior written consent of the Indemnifying Party
        (not to be unreasonably withheld or delayed).

               (v) In the event that any Party suffers damage or loss in respect
        of which it has or makes a valid claim against another Party for
        indemnification, it must take reasonable steps to mitigate its loss or
        damage.

        (f) Determination of Adverse Consequences. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage, and take into
account the time cost of money (using the Applicable Rate as the discount rate),
in determining Adverse Consequences for purposes of this Section 8. All
indemnification payments under this Section 8 shall be deemed adjustments to the
Purchase Price.

        (g) Other Contractual Remedies. Nothing in this Agreement or in this
Section 8 shall be deemed to limit the remedies available under the Software
License Agreement and the POS Equipment Sublease to the parties thereto.

        Section 9. Termination.

        (a) Termination of Agreement. This Agreement may be terminated as
        provided below:

               (i) Buyer and Seller may terminate this Agreement by mutual
        written consent at any time prior to the Closing;

               (ii) Seller may terminate this Agreement by giving written notice
        to Buyer if Seller has not received the Financing Commitment by the 21st
        day following the date hereof;

               (iii) Buyer or Seller may terminate this Agreement by giving
        written notice to the other if the Closing shall not have occurred by
        the 75th day following the date hereof; provided that, no termination
        right under this Section 9(a)(ii) shall be available to any Party whose
        failure to fulfill any obligation under this Agreement has been the
        cause of or resulted in the failure of the Closing to occur on or before
        such date.

               (iv) Buyer or Seller may terminate this Agreement by giving
        written notice to the other if any court of competent jurisdiction in
        the United States or federal, state or local government or regulatory
        body in the United States shall have issued an order, decree or ruling
        or taken such action that permanently restrains, enjoins or otherwise
        prohibits the transactions contemplated hereby and such order, decree,
        ruling or other action shall have become final and non-appealable;

                                       34
<PAGE>   39

               (v) Seller may terminate this Agreement by written notice to
        Buyer if there has been a material breach of any representation,
        warranty, covenant or agreement on the part of Buyer such that the
        conditions set forth in Section 7(b) would not be satisfied, provided
        that termination pursuant to this Section 9(a)(v) shall not be effective
        unless Seller shall have given Buyer at least 30 days prior notice of
        its claim of breach so as to afford Buyer the opportunity to cure the
        same;

               (vi) Buyer may terminate this Agreement by written notice to
        Seller if there has been a material breach of any representation,
        warranty, covenant or agreement on the part of Seller such that the
        conditions set forth in Section 7(a) would not be satisfied, provided
        that termination pursuant to this Section 9(a)(vi) shall not be
        effective unless Buyer shall have given Buyer at least 30 days prior
        notice of its claim of breach so as to afford Seller the opportunity to
        cure the same; and

               (vii) Buyer or Seller may terminate this Agreement by giving
        written notice to the other if a dispute has arisen under Section 5(f)
        of this Agreement and has not been resolved within the 10-day period
        contemplated therein; provided, that, this Section 9(a)(vii) may not be
        invoked following any subsequent written resolution of such dispute by
        the Parties.

        (b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party,
except (i) for Sections 3(a)(iii), 3(b)(iii), 12(i), 12(l) and 12(p), which
shall survive such termination, and (ii) that if this Agreement is terminated
because of the breach of any representation, warranty, covenant or agreement on
the part of Party contained herein or because one or more of the conditions
hereunder are not satisfied as a result of such breach by a Party (such Party,
the "non-performing Party"), then such non-performing Party shall be liable for
all damages, costs and expenses (including, without limitation, reasonable
attorneys' fees) sustained or incurred by the other Party.

        Section 10. Tax Matters.

        (a) Indemnification.

               (i) From and after the Closing Date, Seller shall pay, or cause
        to be paid, and shall indemnify and hold harmless Buyer and the Company
        Group and any director, officer, employee, advisor, parent, subsidiary
        or Affiliate of Buyer or the Company Group, and any successor thereof,
        from any Adverse Consequences from or arising out of (A) any Taxes of
        Seller and any current or former member of Seller's group of
        corporations filing on a combined, consolidated or unitary basis, other
        than the Company Group, in respect of any taxable period, (B) any Taxes
        attributable or determined by reference to the income, business,
        property or operations of the Company Group or for which the Company
        Group may be liable on any basis (including, but not limited to,
        liability as a transferee or on a joint and several basis) (x) in
        respect of the Pre-Closing Tax Period (including Taxes payable to the
        State of Texas of the type referred to in Section 6(g) above), to the
        extent such Taxes are not reflected as an accrued liability on the
        Closing Balance Sheet, or (y) resulting from the Company Group's ceasing
        to be affiliated with the Affiliated Group of which Seller is a member,
        (C) any Taxes arising or resulting from or attributable to the Section
        338(h)(10) Election or the transfer of assets by the Company pursuant to
        the Financing Transaction, other than those specified in Section
        10(a)(iv) below, (D) any increase in Taxes for any

                                       35
<PAGE>   40

        taxable period resulting from adjustments to or changes in Tax items
        relating to the Company Group for any Pre-Closing Tax Period, (E) any
        breach of or inaccuracy in any representation or warranty in Section
        4(j) above or (F) any beach of or non-compliance with any of Seller's
        covenants, agreements or obligations made in this Section 10.

               (ii) From and after the Closing Date, Buyer shall pay, or cause
        to be paid, and shall indemnify and hold Seller and any director,
        officer, employee, advisor, parent, subsidiary or Affiliate of Seller,
        and any successor thereto, harmless from any Adverse Consequences from
        or arising out of (A) any Taxes of the Company Group in respect of
        taxable periods of the Company Group ending after the Closing Date
        (except to the extent attributable to the Pre-Closing Tax Period), (B)
        those Taxes resulting from or attributable to the Section 338(h)(10)
        Election as set forth in Section 10(a)(iv) below, (C) any increase in
        Taxes for any taxable period resulting from adjustments to or changes in
        Tax items relating to the Company or any of its Subsidiaries for any
        period other than a Pre-Closing Tax Period or (D) any beach of or
        non-compliance with any of Buyer's covenants, agreements or obligations
        made in this Section 10.

               (iii) In the case of any taxable period that includes but does
        not end on the Closing Date:

                   (A) the periodic Taxes of the Company and its Subsidiaries
            that are not based on income or receipts (e.g., property taxes)
            attributable to the Pre-Closing Tax Period shall be equal to the
            amount of such Taxes attributable to the entire taxable period
            multiplied by a fraction, the numerator of which is the number of
            days during that period that are in a Pre-Closing Tax Period and the
            denominator of which is the number of days in such taxable period;
            provided, however, that if the amount of periodic Taxes imposed for
            such taxable period reflects different rates of tax imposed for
            different periods within such taxable period, the formula described
            in the preceding clause shall be applied separately with respect to
            each such period within the taxable period; and

                   (B) the Taxes of the Company and its Subsidiaries (other than
            Taxes described in clause (A) of this Section 10(a)(iii))
            attributable to the Pre-Closing Tax Period shall be computed as if
            such taxable period ended as of the close of business on the Closing
            Date.

               (iv) Buyer shall bear, and shall file any and all Tax Returns
        with respect to, any and all sales, use, and transfer Taxes, including
        but not limited to any value added, gross receipts and real, personal or
        intangible property transfer Taxes, due by reason of the consummation of
        the transactions contemplated by this Agreement.

               (v) Any payment required to be made under the terms of this
        Section 10(a) shall be made not later than ten days after receipt of
        written notice from the party to be indemnified stating the nature and
        amount of the loss and the amount of the indemnity payment required.

                                       36
<PAGE>   41

        (b) Tax Returns; Miscellaneous.

               (i) Seller shall prepare, or cause to be prepared, in a manner
        consistent with prior returns, and shall file, or cause to be filed, any
        Tax Returns of the Company Group (including amendments thereto) for all
        taxable periods that end, with respect to the Company Group, on or
        before the Closing Date. Seller shall prepare or cause to be prepared,
        in a manner consistent, with respect to the Company Group, with prior
        Tax Returns and file or cause to be filed, any consolidated, combined or
        unitary Tax Return of Seller and its Affiliates, which includes the
        Company Group, for any taxable period ending, with respect to the
        Company Group, on or before the Closing Date. Seller shall prepare and
        deliver to Buyer as soon as reasonably practicable, a pro forma
        statement providing the Tax Return information relating to the Company
        Group used in any of Seller's Tax Returns that are filed after the
        Closing Date. Except as otherwise provided in this subparagraph, Buyer
        shall be responsible for filing all Tax Returns required to be filed
        after the Closing Date by or on behalf of the Company Group. All Tax
        Returns for taxable periods of the Company Group which include the
        Closing Date shall be filed on a basis consistent with the manner in
        which Seller or the Company Group filed Tax Returns of the Company Group
        in the past unless a contrary treatment is required by law. Neither
        Buyer nor Seller shall file any amended Tax Return for any Tax period
        which may give rise to a claim for indemnification under Section 10(a)
        above without the prior written consent of the other party, which
        consent shall not be unreasonably withheld.

               (ii) With respect to any Tax Return required to be filed by Buyer
        for a taxable period of the Company and its Subsidiaries ending after
        the Closing Date (which includes the Closing Date), Buyer shall provide
        Seller and its authorized representatives with copies of such completed
        Tax Return and a statement certifying the amount of Tax shown on such
        Tax Return that is payable by Seller pursuant hereunder (the
        "Statement") at least twenty (20) business days prior to the due date
        (or extended due date, if an extension has been obtained) for the filing
        of such Tax Return, and Seller and its authorized representatives shall
        have the right to review such Tax Return and Statement prior to the
        filing of such Tax Return. Buyer and Seller agree to consult and resolve
        in good faith any issues arising as a result of the review of such Tax
        Return and Statement by Seller or its authorized representatives and to
        mutually consent to the filing of such Tax Return. The amount owed by
        Seller with respect to a Tax Return shall be paid by Seller at least
        three (3) business days prior to the due date for the filing of such Tax
        Return.

               (iii) Seller agrees to cooperate with Buyer prior to the Closing
        and thereafter, and to provide, to the extent in its possession, or if
        not in its possession, make reasonable efforts to obtain and provide,
        prior to the Closing Date, access to complete copies of all federal,
        state, county, local and foreign Tax Returns, reports and estimates for
        all periods prior to the Closing Date for the Company and its
        Subsidiaries as well as any other Tax Returns (including compete copies
        of combined or consolidated returns) on which Taxes were reportable for
        which the Company and its Subsidiaries might be liable on any basis,
        including, but not limited to, liability as a transferee or liability on
        a joint and several basis under the consolidated return rules or
        comparable state and local rules. Seller also agrees to furnish to
        Buyer, to the extent in its possession, or if not in its possession,
        make reasonable efforts to obtain and provide, prior to the Closing
        Date, any communication of any type, to which Seller has Knowledge, to
        or from any governmental agency (including, but not limited to, audit
        reports), whether or not Seller was a party to such communication, which
        pertains to

                                       37
<PAGE>   42

        any of the Tax Returns as to which Seller is required to furnish copies,
        or make reasonable efforts to furnish copies, by this Section
        10(b)(iii).

               (iv) In addition to the obligations of the Parties pursuant to
        Section 10(b)(iii) above, after the Closing Date, Buyer and Seller shall
        each make available to the other and to any taxing authority, as
        reasonably requested, all information, records or documents relating to
        federal, state, county, local or foreign tax matters of the Company and
        its Subsidiaries for all taxable periods prior to or including the
        Closing Date and shall preserve all such information, records and
        documents until the expiration of any applicable Tax statute of
        limitations or extensions thereof. If any such records or documents are,
        at the date hereof, not within the possession of Seller or the Company
        Group, Seller agrees to use its reasonable efforts to obtain such
        records and documents and, if obtained, to furnish them to Buyer prior
        to the Closing Date; provided that, Seller has Knowledge of the
        existence of such records and documents. Buyer and Seller will keep
        confidential the contents of the information, records and documents made
        available under this Section 10(b)(iv) and not use or disclose them or
        any information contained therein, except that: (a) Seller may disclose
        those portions of such information, records or documents which disclose
        information pertaining to Seller; (b) Buyer may disclose those portions
        of such information, records or documents which disclose information
        pertaining to Buyer; and (c) both Seller and Buyer may disclose any of
        such information, records or documents where such disclosure is made (l)
        to a taxing authority, (2) in the course of any judicial proceeding for
        the determination of liability for Taxes, (3) otherwise as required by
        law, or (4) of any such information, records or documents which has or
        have become generally available to the public through no fault of the
        party hereunder seeking to make disclosure.

               (v) Buyer shall promptly notify Seller in writing upon receipt by
        Buyer of notice of (i) any pending or threatened Tax audits or
        assessments of the Company or any of its Subsidiaries, or (ii) any
        pending or threatened Tax audits or assessments of any Affiliate of
        Seller which may affect the liability of the Company or any of its
        Subsidiaries for Taxes, in each case for taxable periods ending on or
        prior to the Closing Date. Seller shall have the sole right to represent
        the Company and its Subsidiaries' interests in any Tax audit or
        administrative or court proceeding related to taxable periods ending on
        or before the Closing Date, and to employ counsel of its choice at its
        expense. Buyer agrees that it will cooperate, and cause the Company and
        its Subsidiaries to cooperate fully with Seller and its counsel in the
        defense against any claim in any said proceeding. Buyer shall have the
        sole right to represent the Company and its Subsidiaries' interests in
        any Tax audit or administrative or court proceeding related to taxable
        periods ending after the Closing Date, and to employ counsel of its
        choice at its expense. Seller agrees that it will cooperate fully with
        Buyer and its counsel in the defense against any claim in any said
        proceeding. Notwithstanding the foregoing, neither Seller nor the
        Company or any of its Subsidiaries shall enter into any closing
        agreement (as defined in Section 7121 of the Code, or any comparable
        provision of state, county, local or foreign law) which is binding on
        Buyer or the Company or any of its Subsidiaries for any taxable period
        ending after the Closing Date, without the prior written consent of
        Buyer, nor shall Buyer or the Company or any of its Subsidiaries enter
        into any closing agreement (as so defined) which is binding on Seller or
        the Company or any of its Subsidiaries for any taxable period ending on
        or before the Closing Date, without the prior written consent of Seller.
        Further, notwithstanding the foregoing, neither Seller nor the Company
        or any of its Subsidiaries shall agree to any settlement concerning
        Taxes for any taxable period ending on or before the Closing Date, which
        settlement may result in an

                                       38
<PAGE>   43

        increase in Taxes of the Company or its Subsidiaries for any taxable
        period ending after the Closing Date, without the prior written consent
        of Buyer, nor shall Buyer or the Company or any of its Subsidiaries
        agree to any settlement concerning Taxes for any taxable period ending
        after the Closing Date which may result in an increase in Taxes of
        Seller or the Company or any of its Subsidiaries for any taxable period
        ending prior to or including the Closing Date, without the prior written
        consent of Seller.

               (vi) After the date hereof, Seller and Buyer shall consult in
        good faith during the course of any audits or administrative or judicial
        proceedings pertaining to Taxes of the Company or any of its
        Subsidiaries, or any other entities for the Taxes of which the Company
        or any of its Subsidiaries may be liable on any basis, including
        liability as a transferee or on a joint and several basis under
        consolidated return rules or comparable state and local rules, for
        periods ending prior to or including the Closing Date. Such
        consultations shall include, but not be limited to, consultations
        concerning (l) preparation of a response to a 30-day letter for a United
        States federal income tax audit together with any appellate conferences
        related thereto, (2) any ongoing or future audits related to any period
        ending prior to or including the Closing Date and (3) court proceedings
        with respect to any of the above. Buyer or Seller, as the case may be,
        shall be made aware of any meetings and conferences related thereto and
        have the right (to the extent permissible by law) to have a
        representative present at those conferences.

               (vii) In the event that the Company Group, or any successor
        thereto, should generate any tax loss or tax credit in a period ending
        after the Closing Date that may be carried back to a period ending on,
        prior to or including the Closing Date, Seller agrees to cooperate in
        filing such claims for refund and other returns as may be appropriate,
        but shall not be required to pay to the Company Group the proceeds of
        any such claims or refunds that Seller or any of its Affiliates receive
        (including interest thereon) resulting from the utilization of such
        attributes, whether utilized by Seller or any other member of an
        Affiliated Group of which they were a member and any predecessors
        thereto.

               (viii) The parties hereto acknowledge and agree that any tax loss
        or tax credit of the Company Group, or of any predecessor thereto, the
        economic benefit of which is realized in a period ending after the
        Closing Date, and that is generated by the activity of the Company
        Group, shall be for the account of Buyer, and Buyer shall not be
        obligated to pay any additional consideration to Seller therefor.
        Without limiting the generality of the foregoing, this Section
        10(b)(viii) applies to any tax loss or credit generated in any period
        ending on, prior to or including the Closing Date, which may be carried
        forward and utilized on returns for any period ending after the Closing
        Date of Buyer or the Company Group or any successors thereto.

               (ix) Buyer agrees to assign and promptly remit (and to cause the
        Company and its Subsidiaries to assign and promptly remit) to Seller all
        refunds (including interest thereon) received by Buyer or the Company or
        any of its Subsidiaries or any Affiliate of Buyer or the Company and its
        Subsidiaries (less (a) any amounts recorded as an asset on the Financial
        Statements in respect of such refund and interest and (b) Taxes
        (modified to include applicable foreign income taxes at the maximum
        applicable foreign rate in effect for such taxable year) in respect of
        such refund and interest to the extent such refund and interest are
        includable for applicable income tax purposes and not subject to an
        offsetting deduction by virtue of their payment to Seller) of any Taxes
        paid for the Pre-Closing Tax Period, except to

                                       39
<PAGE>   44

        the extent attributable to the carryback of tax losses or credits
        generated in a period which is not a Pre-Closing Tax Period. Seller may
        request Buyer to file, or the Company or any of its Subsidiaries to
        file, at the reasonable expense of Seller, a claim for refund of any Tax
        paid for the Pre-Closing Tax Period.

               (x) Seller will include the income of the Company and its
        Subsidiaries (including any deferred income triggered into income by
        Reg. Section 1.1502-13 and any excess loss accounts taken into income
        under Reg. Section 1.1502-19) on Seller's consolidated federal income
        tax returns for all periods through the Closing Date and pay any federal
        income taxes attributable to such income. The Company and its
        Subsidiaries will make its books and records available to Seller and
        will furnish tax information to Seller for inclusion in Seller's federal
        consolidated income tax return for the period which includes the Closing
        Date in accordance with the Company's past custom and practice. The
        income of the Company and its Subsidiaries will be apportioned to Seller
        for the period up to and including the Closing Date and to Buyer for the
        period after the Closing Date by closing the books of the Company and
        its Subsidiaries as of the end of the Closing Date.

        (c) Section 338 Elections and Related Matters.

               (i) The Parties agree that in connection with the sale
        contemplated hereby, the Parties shall cause an express election
        pursuant to Section 338(h)(10) of the Internal Revenue Code (or such
        comparable state and local tax provisions) to be made, for federal and
        where applicable, all state and local tax purposes (the "Section
        338(h)(10) Election"), and shall comply with the rules and regulations
        applicable to the Section 338(h)(10) Election. Except as provided in the
        next sentence, Seller shall be responsible for and shall pay and
        discharge all Taxes owed as a result of the deemed sale of assets
        arising from the Section 338(h)(10) Election or the transfer of assets
        by the Company pursuant to the Financing Transaction. Buyer shall be
        responsible for and shall pay and discharge all Taxes specified in
        Section 10(a)(iv) above that result from or are attributable to the
        Section 338(h)(10) Election or the transfer of assets by the Company
        pursuant to the Financing Transaction.

               (ii) For purposes of executing the Section 338(h)(10) Election,
        on or prior to the Closing Date, Buyer and Seller (and/or other entities
        as necessary) jointly shall prepare and execute four copies (three for
        Buyer and one for Seller) of IRS Form 8023 and all such Forms, schedules
        and attachments as are necessary or required to be filed therewith
        pursuant to applicable Treasury Regulations and shall perform such other
        acts as are necessary to make or perfect this Section 338(h)(10)
        Election (other than filing as discussed below). The Forms relating to
        the Section 338(h)(10) Election for federal, state and local Tax
        purposes hereinafter shall be referred to as the "Forms". Buyer and
        Seller agree that that the Forms shall be filed with the appropriate tax
        authorities not earlier than sixty (60) days before the latest date for
        the filing thereof. At least one hundred twenty (120) days prior to the
        latest date for the filing of each Form, Buyer shall prepare and submit
        to Seller any necessary corrections, amendments or supplements to such
        Form and the attachments thereto, as executed by Buyer and Seller
        (and/or other entities as necessary) on or before the Closing Date.
        Buyer and Seller agree to consult and resolve in goods faith any
        disputes regarding the contents of the Forms prior to their filing.

               (iii) For purposes of making the Section 338(h)(10) Election,
        Buyer and Seller shall mutually agree on an allocation of Buyer's
        "adjusted grossed-up basis" in the shares of

                                       40
<PAGE>   45

        the Company (within the meaning of the Treasury Regulations under
        Section 338(h)(10) of the Internal Revenue Code) to the tangible and
        intangible assets of the Company existing as of the Closing Date (the
        "Allocation"). The Allocation shall be consistent with acceptable
        business valuation principles and shall be binding upon Buyer and Seller
        for purposes of allocating the "modified aggregate deemed sale price"
        (within the meaning of the Treasury Regulations) among the assets of the
        Company. Neither party shall file any Tax return, or take a position
        with a Tax authority, that is inconsistent with the Allocation without
        the written consent of the other party. Buyer and Seller agree to
        cooperate in good faith in an effort to resolve any dispute concerning
        the appropriate Allocation.

        Section 11. Guarantee.

        (a) Guarantee of Buyer's Obligations.

               (i) Guarantor hereby unconditionally guarantees to Seller the due
        and punctual payment of (i) the due and prompt payment and performance
        of all obligations of Buyer under this Agreement that are to be paid or
        performed by Buyer on or as of the Closing Date, (ii) the due and prompt
        payment of any amount due by Buyer to Seller pursuant to Section 2(e) of
        this Agreement, and (iii) the due and prompt payment of any amount due
        by Buyer to Seller pursuant to the indemnification provisions set forth
        in Sections 8(c)(i) and 10(a)(ii) of this Agreement (collectively, the
        "Guaranteed Obligations"); provided that, notwithstanding any other
        provision of this Agreement, including anything to the contrary
        contained or implied by Sections 11(a)(ii) or 11(a)(iv) below, the
        Guaranteed Obligations shall not include any amount due by Buyer
        pursuant to the indemnification provisions set forth in Section 8(c)(ii)
        or any amount due as a result of any claim hereafter arising that is
        based on any portion of the Purchase Price having been directly or
        indirectly funded by any of the proceeds of the Financing Transaction,
        including, but not limited to, a claim that is based on or related to an
        assertion that (x) the payment of the Purchase Price is an avoidable
        transfer, or (y) the Financing Transaction is avoidable under applicable
        insolvency laws or other applicable creditors' rights laws. In case of
        the failure of Buyer to timely pay or perform any Guaranteed Obligation,
        Guarantor hereby agrees to cause any such payment to be made punctually
        when and as the same shall become due and payable, and to cause the
        timely performance of any such Guaranteed Obligations, all in accordance
        with the terms of this Agreement.

               (ii) Guarantor hereby agrees that its Guaranteed Obligations
        hereunder shall be continuing, absolute and unconditional, and shall
        remain in full force and effect until all of the Guaranteed Obligations
        under this Agreement have been completely discharged, irrespective of
        (1) the extension by Seller of the time for payment or performance by
        Buyer or Guarantor of any of their obligations arising under this
        Agreement; (2) the modification or amendment of any duty, covenant,
        agreement or obligation of Buyer or Guarantor contained in this
        Agreement; (3) any failure, omission, delay or lack on the part of
        Seller to enforce, assert or exercise any right, power or remedy
        conferred on Seller under this Section 11; (4) lack of presentment,
        notice of default or protest; (5) lack of corporate power or due
        authorization, execution or delivery by Buyer; and (6) any other
        circumstances which might otherwise constitute a legal or equitable
        discharge or defense of a guarantor; provided, that in no event shall
        this paragraph extend the scope of the Guaranteed Obligations set forth
        in Section 11(a)(i) above. Guarantor hereby waives diligence,
        presentment, demand of payment, filing of claims with a court in the
        event of merger or bankruptcy of Buyer, any

                                       41
<PAGE>   46

        right to require a legal proceeding first against Buyer, and all demands
        whatsoever, and covenants that the Guaranteed Obligations contained in
        this Section 11 will not be discharged except by complete performance of
        the obligations of Buyer contained in this Agreement or the Guaranteed
        Obligations contained in this Section 11.

               (iii) Guarantor further agrees that if at any time all or any
        part of any payment theretofore applied by Seller to any Guaranteed
        Obligation, is or must be rescinded or returned to Buyer or the Company
        for any reason whatsoever, including, without limitation, the
        insolvency, bankruptcy or reorganization of Buyer, such Guaranteed
        Obligation shall for the purposes of this Section 11, to the extent that
        such payment is or must be rescinded or returned, be deemed to have
        continued in existence notwithstanding such application, and this
        Section 11 shall continue to be effective or to be reinstated, as the
        case may be, as to such Guaranteed Obligation as though such application
        had not been made.

               (iv) Notwithstanding any other provisions hereof, Guarantor shall
        be entitled to the benefit of and may assert as a defense against any
        claim under this guarantee, any defense, set off or counterclaim which
        Buyer could have asserted other than defenses based upon or relating to
        Buyer's insolvency, bankruptcy or similar laws or lack of corporate
        power or due authorization or delivery by Buyer.

        (b) Subrogation. Guarantor shall be subrogated to all rights of Seller
against Buyer in respect of any amount paid by Guarantor pursuant to the
provisions of this Section 11 provided that any such rights of Guarantor shall
be subordinate to any rights of Seller against Buyer.

        (c) Representations and Warranties. Guarantor represents and warrants to
Seller as follows:

               (i) Guarantor holds, beneficially and of record, more than fifty
        percent (50%) of the issued and outstanding membership and other equity
        or ownership interests of Buyer.

               (ii) Guarantor is duly authorized, under all applicable
        provisions of law, to execute and deliver this Agreement and to perform
        its obligations hereunder, that all corporate action necessary therefor
        has been duly and effectively taken, that the execution and delivery of
        this Agreement and performance in accordance with its terms will not
        result in a breach of any of the terms of provisions of, or constitute a
        default under, any indenture, deed of trust, note, note agreement,
        consent or other agreement or instrument to which Guarantor is a party,
        or its certificate of limited partnership or any partnership agreement,
        and that this Agreement is a valid and legally binding instrument for
        the purposes herein expressed, enforceable in accordance with its terms
        (except as enforceability may be limited by bankruptcy, insolvency,
        moratorium, or other similar laws affecting creditors' rights
        generally).

               (iii) All consents, licenses, approvals, orders and
        authorizations of, and declarations, filings and registrations with, any
        governmental or regulatory authority, bureau or agency required to be
        obtained by Guarantor in connection with the execution, delivery,
        performance, validity or enforceability of this Agreement have been duly
        obtained or made and are in full force and effect.

               (iv) Guarantor has the following:

                                       42
<PAGE>   47

                   (A) liquid assets having a fair market value on the date
            hereof of approximately $2,000,000;

                   (B) liabilities on the date hereof of less than $100,000; and

                   (C) the legal right to pursue, with recourse, the investors
            in the Guarantor for their respective capital commitments, which, in
            the aggregate, approximate $50,000,000 on the date hereof, which
            right includes for the purpose of satisfying any claims which Seller
            may have for any breach of this Agreement by Buyer.

        (d) Maintenance of Corporate Existence; Mergers, Consolidations, etc.

               (i) Guarantor covenants that it will maintain its corporate
        existence, will not dissolve or otherwise dispose of all or
        substantially all its assets and will not consolidate with or merge into
        another corporation or entity or permit one or more other corporations
        or entities (other than a subsidiary) to consolidate with or merge into
        it; provided, however, that Guarantor may consolidate with or merge into
        another corporation or entity, or permit one or more other corporations
        or entities to consolidate with or merge into it or sell or otherwise
        transfer to another corporation or entity all or substantially all of
        its assets and thereafter dissolve if the surviving or successor
        corporation or entity assumes in writing the obligations of Guarantor
        herein.

               (ii) If a consolidation, merger or sale or other transfer is made
        as permitted by this Section 11(d), the provisions of this Section 10(d)
        shall continue in full force and effect and no further consolidation,
        merger or sale or other transfer shall be made except in compliance with
        the provisions of this Section 11(d).

        Section 12. Miscellaneous.

        (a) Certain Understandings of Buyer. Buyer acknowledges and agrees that,
EXCEPT TO THE EXTENT OF THE EXPRESS REPRESENTATIONS, WARRANTIES, AGREEMENTS AND
COVENANTS CONTAINED IN THIS AGREEMENT, AND SUBJECT TO THE DISCLOSURE SCHEDULE,
BUYER IS ACQUIRING THE COMPANY SHARES (AND INDIRECTLY THE ASSETS AND LIABILITIES
OF THE COMPANY) IN RELIANCE UPON ITS OWN INVESTIGATION AND WITHOUT ANY
REPRESENTATION OR WARRANTY OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE OR ANY OTHER IMPLIED WARRANTIES WHATSOEVER.

        (b) Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law, the regulations of the New
York Stock Exchange or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable efforts to consult the other Party prior to making the disclosure).

        (c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

                                       43
<PAGE>   48

        (d) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement among the Parties and supersedes any
prior understandings, agreements, or representations by or among the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.

        (e) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, that any Party may (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases the assigning Party nonetheless shall remain
responsible for the performance of all of its obligations hereunder).

        (f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

        (g) Headings. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

        (h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then five
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

         If to Seller:                      Copy to:

         CKE Restaurants, Inc.              Stradling Yocca Carlson & Rauth
         1200 North Harbor Boulevard        660 Newport Center Drive, Suite 1600
         Anaheim, California 92801          Newport Beach, California 92660
         Attn:  Robert Wilson               Attn:  C. Craig Carlson
         Facsimile:  (714) 520-4485         Facsimile:  (949) 725-4100

         If to Buyer:                       Copy to:

         TB Corp.                           Stroock & Stroock & Lavan LLP
         c/o Jacobson Partners              180 Maiden Lane
         595 Madison Avenue                 New York, New York 10038
         New York, New York 10022           Attn:  David H. Kaufman
         Attn:  Murry N. Gunty              Facsimile:  (212) 806-6006
         Facsimile:  (212) 758-4567

                                       44
<PAGE>   49

                                            Copy to:

         If to Guarantor:                   Stroock & Stroock & Lavan LLP
                                            180 Maiden Lane
         JP Acquisition Fund III            New York, New York 10038
         c/o Jacobson Partners              Attn:  David H. Kaufman
         595 Madison Avenue                 Facsimile:  (212) 806-6006
         New York, New York 10022
         Attn:  Murry N. Gunty
         Facsimile:  (212) 758-4567

Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.

        (i) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.

        (j) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by duly
authorized representatives of Buyer and Seller. No waiver by any Party of any
default, misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.

        (k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

        (l) Expenses. Each of Buyer and Seller will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby, except that, whether or not
the Closing occurs hereunder, Buyer shall be responsible for and shall pay, as
the same shall be incurred and become due and payable, all costs associated with
the Financing Transaction.

        (m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.

                                       45
<PAGE>   50

        (n) Incorporation of Schedules. The Schedules identified in this
Agreement are incorporated herein by reference and made a part hereof.

        (o) Specific Performance. Each of the Parties recognize and affirm that
in the event of breach by any of them of any of the provisions of this
Agreement, money damages would be inadequate and no adequate remedy at law would
exist. Accordingly, each of the Parties agrees that any party shall have the
right, in addition to any other rights and remedies existing in its favor, to
enforce its rights and the obligations of any other Party under this Agreement
not only by an action or actions for damages, but also by an action or action
for specific performance, injunctive and/or other equitable relief in order to
enforce or prevent any violations of the provision of this Agreement.

        (p) Submission to Jurisdiction. Each of the Parties consents to the
exclusive jurisdiction of the federal courts in the State of Delaware for any
legal action, suit, or proceeding arising out of or in connection with this
Agreement, and agree that any such action, suit, or proceeding may be brought
only in such courts. Each of the Parties further waives any objection to the
laying of venue for any such suit, action, or proceeding in such courts. Each
Party agrees to accept and acknowledge service of any and all process that may
be served in any suit, action, or proceeding. Each Party agrees that any service
of process upon it mailed by registered or certified mail, return receipt
requested to such Party at the address provided in Section 12(h) above shall be
deemed in every respect effective service of process upon such Party in any such
suit, action, or proceeding. Each Party agrees to waive any right it might have
to a trial by jury in any such suit, action or proceeding.

                                    * * * * *

                                       46
<PAGE>   51

        IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

                                  CKE RESTAURANTS, INC.

                                  By:  /S/ MICHAEL MURPHY
                                       -----------------------------------------
                                           Title:  EXECUTIVE V. P.

                                  TB CORP.

                                  By:  /S/ MURRY GUNTY
                                       -----------------------------------------
                                           Title:

                                  JP ACQUISITION FUND III

                                  By:  /S/ MURRY GUNTY
                                       -----------------------------------------
                                           Title:

                                       47

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