Document:

Exhibit 10.1

Exhibit 10.1

FORBEARANCE AGREEMENT

This FORBEARANCE AGREEMENT (“Agreement”), dated as of October 8, 2009, is entered into by and
among GREAT AMERICAN GROUP ENERGY EQUIPMENT, LLC, a California limited liability company
(“Borrower”), the Lenders party hereto and GARRISON LOAN AGENCY SERVICES LLC (“GLAS”), as
Administrative Agent for the Lenders (“Administrative Agent”). Unless otherwise defined above or
elsewhere in this Agreement, capitalized terms used herein shall have the meanings ascribed to them
in the Credit Agreement (as hereinafter defined).

RECITALS:

WHEREAS, the Borrower, the Guarantor party thereto, the Lenders party thereto and the
Administrative Agent have entered into that certain Credit Agreement, dated as of May 29, 2008 (as
has been amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”);

WHEREAS, on September 26, 2009 the Maturity Date occurred and Borrower and Guarantor failed to
repay the principal amount of all outstanding Loans, due and unpaid interest and all other
Obligations under the Credit Agreement and the other Loan Documents, notwithstanding that such
Obligations have become due and payable in full, and such Obligations remain due and payable and
unpaid (the “Payment Defaults”);

WHEREAS, the Non-Payment Defaults (as hereinafter defined) have occurred and are continuing
under the Credit Agreement and Security Agreement none of which has been cured or waived;

WHEREAS, as a result of the Specified Defaults (as hereinafter defined), the Collateral Agent
has the rights specified under Section 4.01 of the Security Agreement to, among other rights, take
possession of the Article 9 Collateral and to exercise any or all other rights of a secured party
under the Uniform Commercial Code;

WHEREAS, in an effort to repay the Obligations and to maximize the value of the assets,
Borrower and Guarantor have determined to effectuate a sale of Borrower’s assets pursuant to an
auction;

WHEREAS, the Borrower has requested that Administrative Agent and the Lenders forbear from the
exercise of remedies available to them as a result of the Specified Defaults; and

WHEREAS, in reliance on Borrower’s determination to dispose of its assets, the Administrative
Agent and the Lenders are willing to forbear from exercising their rights and remedies under the
Loan Documents subject to the terms and conditions hereinafter set forth, provided that Borrower
and the Guarantor comply with the terms of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements contained in the Credit Agreement
and the other Loan Documents and herein, and for other good and valuable

 

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consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

			
	SECTION 1.	 	Definitions. 

(a) The “Effective Date” of this Agreement shall be 12:01 a.m. New York City time on
September 27, 2009.

(b) “Forbearance Period” shall mean the period beginning on the Effective Date of this
Agreement and ending at 12:01 a.m. New York City time on the earlier to occur of (i) the
occurrence of any Forbearance Default and (ii) November 17, 2009.

(c) “Forbearance Default” shall mean any of the following: (i) the occurrence of any Event
of Default other than the Specified Defaults; (ii) the failure of Borrower or Guarantor timely to
comply with any term, condition, or covenant set forth in this Agreement; (iii) the failure of
any representation or warranty made by Borrower or Guarantor under or in connection with this
Agreement to be true and complete in all material respects as of the date when made or deemed
made; (iv) the filing of any petition (voluntary or involuntary) under the insolvency or
bankruptcy laws of the United States or any state thereof, or of any foreign jurisdiction, with
respect to Borrower, Guarantor, any of their Affiliates, or any of their Subsidiaries; or (v) any
postponement of the Auction Date (as hereinafter defined) or modification of any term or
provision of the Auction Services Agreement (as hereinafter defined) including, without
limitation, any change to the Acceptable Reserve Pricing (as hereinafter defined).

(d) “Non Payment Defaults” shall mean, collectively, (i) the Defaults and Events of Defaults
asserted by the Administrative Agent and expressly referred to in that certain letter dated as of
December 10, 2008 from the Administrative Agent to Borrower and (ii) the Event of Default arising
directly as a result of the existence of the Tax Lien.

(e) “Specified Defaults” means the Payment Defaults and the Non Payment Defaults.

(f) “Tax Lien” shall mean the Lien or purported Lien asserted by (i) the treasurers of each
of Blaine, Logan and Kingfisher Counties, Oklahoma, in the aggregate amount of $220,000, for
unpaid and overdue property taxes for the 2007 and 2008 tax years and (ii) the Klein Independent
School District, Texas, in the aggregate amount of $29,000 for the 2007 tax year.

			
	SECTION 2.	 	Confirmation by Borrower of Obligations and Specified Defaults Under the Credit
Agreement.

Each of the Borrower and Guarantor represents, warrants, acknowledges and agrees that:

(a) As of the Maturity Date, the aggregate principal balance of the outstanding Obligations
under the Credit Agreement is not less than $10,485,500.62;

 

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(b) The amount specified in clause (a) does not include interest (the amount of that is due
and payable as of the Maturity Date is not less than $1,966,097.99), fees, expenses and other
amounts which are chargeable or otherwise reimbursable under the Credit Agreement and the other
Loan Documents;

(c) As of the date hereof, the applicable interest rate under the Credit Agreement is 20%;

(d) Each of the Specified Defaults constitutes an Event of Default that has occurred and is
continuing as of the date of this Agreement;

(e) None of the Specified Defaults has been cured as of the Effective Date;

(f) Except for the Specified Defaults, no other Defaults or Events of Default have occurred
and are continuing as of the date hereof, or are expected to occur during the Forbearance Period,
as the case may be;

(g) Prior to, and from and after the Effective Date, the Specified Defaults: (i) except to
the extent expressly provided in Section 7 of this Agreement, relieves the Lenders from any
obligation to extend any Loan or provide other financial accommodations under the Credit
Agreement or other Loan Documents (including consenting to Borrower’s or Guarantor’s use of cash
collateral); and (ii) permits the Administrative Agent, Collateral Agent, Lenders and other
Secured Parties, as the case may be, to, among other things, (A) make other extensions of credit
under any or all of the Credit Agreement and the other Loan Documents, (B) accelerate all or any
portion of the Obligations, (C) commence any legal or other action to collect any or all of the
Obligations from Borrower and/or any Collateral, (D) foreclose or otherwise realize on any or all
of the Collateral, and/or appropriate, set-off and apply to the payment of any or all of the
Obligations, any or all of the Collateral, and/or (E) take any other enforcement action or
otherwise exercise any or all rights and remedies provided for by any or all of the Credit
Agreement, the other Loan Documents or applicable law. For the avoidance of doubt, each of
Borrower and Guarantor represents, warrants, acknowledges and agrees that as a result of the
Specified Defaults, the Obligations have become, and remain, immediately due and payable in their
entirety.

			
	SECTION 3.	 	No Waiver.

Except as expressly set forth in this Agreement, no Lender or other Secured Party has waived
or is by this Agreement waiving, and no Lender or other Secured Party has any intention of waiving,
any other provisions of the Loan Documents, any Default or Event of
Default which may be continuing on the date hereof or any Event of Default which may occur
after the date hereof (whether the same or similar to the Specified Defaults or otherwise).

			
	SECTION 4.	 	Forbearance; Forbearance Default Rights and Remedies.

(a) As of the Effective Date, each of the Lenders and the Administrative Agent agrees that
until the expiration or termination of the Forbearance Period, it will forbear from exercising
its default-related rights and remedies against Borrower or Guarantor arising solely with respect
to the Specified Defaults; provided, however, (i) the Obligations shall continue to bear interest
as specified herein, (ii) the Lenders shall have no obligation to make any further

 

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Loans or make
other extensions of credit to Borrower or Guarantor, (iii) Borrower and Guarantor shall comply
with all limitations, restrictions or prohibitions that would otherwise be effective or
applicable under the Credit Agreement or any of the other Loan Documents during the continuance
of any Event of Default, (iv) except as otherwise expressly set forth herein, nothing herein
shall restrict, impair or otherwise affect any Lender’s or other Secured Party’s other rights and
remedies under any agreements, including, without limitation, any agreement containing
subordination provisions in favor of any or all of the Lenders or amend or modify any provision
thereof, (v) nothing herein shall restrict, impair or otherwise affect Administrative Agent’s
right to file, record, publish or deliver a notice of default or document of similar effect under
any state foreclosure law and (vi) nothing herein shall restrict, impair or otherwise affect
Administrative Agent’s and Lenders’ rights referred to herein.

(b) Any Forbearance Default shall constitute an immediate Event of Default under the Credit
Agreement. No Forbearance Default shall be a Specified Default.

(c) Upon the occurrence of a Forbearance Default, the agreement of the Lenders hereunder to
forbear from exercising their respective default-related rights and remedies shall immediately
terminate without the requirement of any demand, presentment, protest, or notice of any kind, all
of which Borrower and Guarantor each waives; provided, however, the Lenders agree
to provide notice of any such Forbearance Default to the Borrower, but the failure to provide
such notice shall not affect the occurrence or existence of any such Forbearance Default or delay
or modify any of the Administrative Agent’s and Lenders’ rights. Borrower agrees that any or all
of the Lenders and other Secured Parties may at any time thereafter proceed to exercise any and
all of their respective rights and remedies under any or all of the Credit Agreement and any
other Loan Document and/or applicable law, including, without limitation, their respective rights
and remedies with respect to the Specified Defaults. Without limiting the generality of the
foregoing, upon the occurrence of a Forbearance Default, the Lenders may, in their sole
discretion and without the requirement of any demand, presentment, protest, or notice of any
kind, (i) suspend or terminate any commitment to provide Loans or other extensions of credit
under any or all of the Credit Agreement and other Loan Documents, (ii) continue to charge
interest on any or all of the Obligations in accordance with the Credit Agreement, (iii) commence
any legal or other action to collect any or all of the Obligations from Borrower, Guarantor
and/or any Collateral, (iv) foreclose or otherwise realize on any or all of the Collateral,
and/or appropriate, setoff or
apply to the payment of any or all of the Obligations and any or all of the Collateral, and
(v) take any other enforcement action or otherwise exercise any or all rights and remedies
provided for by any or all of the Loan Documents and/or applicable law, all of which rights and
remedies are fully reserved by the Lenders.

(d) Any agreement by the Lenders to extend the Forbearance Period, if any, must be set forth
in writing and signed by a duly authorized signatory of each of the Administrative Agent,
Borrower, Guarantor and the Lenders under the Credit Agreement.

(e) Borrower and Guarantor each acknowledges that, although the Administrative Agent has not
denied Borrower’s request to discuss an extension of the Forbearance Period after the auction
referred to herein is conducted, neither the Administrative Agent nor any of the Lenders have
made any assurances concerning any

 

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possibility of an extension of the Forbearance Period or the
terms and conditions of any such possible extension.

(f) The parties hereto agree that the running of all statutes of limitation or doctrine of
laches applicable to all claims or causes of action that any Lender or other Secured Party may be
entitled to take or bring in order to enforce its rights and remedies against Borrower or
Guarantor is, to the fullest extent permitted by law, tolled and suspended during the Forbearance
Period.

(g) Borrower and Guarantor each acknowledges and agrees that any Loan or other financial
accommodation which any Lender makes (or may be deemed to make) on or after the Effective Date
has been made by such party in reliance upon, and is consideration for, among other things, the
general releases and indemnities contained in this Agreement and the other covenants, agreements,
representations and warranties of Borrower and Guarantor hereunder.

			
	SECTION 5.	 	Supplemental Terms, Conditions and Covenants During the Forbearance Period.

Borrower and Guarantor, in an effort to repay the Obligations, have determined that it is in
the best interests of them and their creditors to effectuate a sale of the Borrower’s assets by way
of an auction to be managed by an Auction Services Company, and that each such determination is, in
the opinion of each of Borrower and Guarantor, commercially reasonable. Accordingly, each of
Borrower and Guarantor hereby covenants and agrees to comply with the following terms, conditions
and covenants during the Forbearance Period, in each case notwithstanding any provision to the
contrary set forth in this Agreement, the Credit Agreement or any other Loan Document:

(a) Retention of Auction Services Company. As of the Effective Date, and thereafter
at all times during the Forbearance Period, Borrower shall have engaged and retained, at its cost
and expense, an auction services company reasonably acceptable to the
Administrative Agent (it being agreed that Great American Group, LLC is acceptable to the
Administrative Agent) (an “Auction Services Company”), in connection with the sale of Borrower’s
assets, to, among other things, (a) organize, implement, manage and conduct an auction of the
Borrower’s assets, (b) oversee and control the liquidation, disposal and removal of all assets
sold at the auction, (c) implement appropriate advertising to effectively sell the assets at the
auction, (d) tag and catalogue the assets for the auction and (e) provide such other related
services deemed necessary or prudent by the Borrower to effectively conduct the auction and
maximize the value of the assets subject to such sale. The Auction Services Company shall
undertake all services in a manner that is consistent in every material respect with any auction
for which such company is engaged by a Person other than its Affiliate.

(b) Auction Process. Deliver to the Administrative Agent on or before: (A) (i)
October 8, 2009, marketing materials relating to Borrower’s proposed auction, and such materials
shall have been approved by and acceptable to the Auction Services Company and the

 

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Administrative
Agent prior to distribution to potential purchasers, and such materials shall specify the Auction
Date as the date of the auction (it being agreed by the Administrative Agent that such materials
have been delivered and approved by and acceptable to the Administrative Agent, and Borrower and
Guarantor hereby certify that such materials also have been delivered to and approved by the
Auction Services Company and further certify that such materials are commercially reasonable) and
(ii) October 12, 2009, evidence acceptable to the Administrative Agent that the materials
referred to in clause (i) have been distributed to potential purchasers; and (B) October 12,
2009, the reserve prices established under the Auction Services Agreement with respect to the
Borrower’s assets to be subject to auction (with such prices to be satisfactory to the
Administrative Agent) (the “Acceptable Reserve Pricing”) and cause such Acceptable Reserve
Pricing to have been incorporated into the Auction Services Agreement. Together with each
deliverable referred to in this clause (b), Borrower also shall deliver a writing signed by
Borrower and Guarantor certifying that, in their opinions, the materials, scope of distribution
and reserve prices are commercially reasonable.

(c) Auction. On or before November 3, 2009 (the “Auction Date”), the Borrower shall
cause the Auction Services Company to conduct an auction (it being agreed by the Borrower and
Guarantor that such date is a commercially reasonable date) substantially in accordance with the
terms and provisions of the Auction Services Agreement, and Borrower shall permit a
representative of the Administrative Agent to be present at such auction. In compliance with the
Credit Agreement and for the avoidance of doubt, any request to release a Lien on any asset shall
be subject to approval or disapproval by the Administrative Agent. All proceeds received as a
result of the auction shall be utilized by the Borrower to repay the Obligations (except to the
extent set forth in Section 7 of this Agreement) and, accordingly, shall be paid by the buyer(s)
directly to the Collection Account (or such other account as designated in writing by the
Administrative Agent).

(d) Other. Promptly following any such request, Borrower shall provide all other
available financial and operational information of Borrower that is reasonably requested by the
Administrative Agent.

(e) General Cooperation from Borrower. Borrower shall, and shall cause its
officers, other members of senior management and advisors (including, without limitation, the
Auction Services Company) to, cooperate fully with Administrative Agent, Collateral Agent and/or
the Lenders and any of its or their respective advisors in furnishing information as and when
reasonably requested by any of them regarding the matters described in this Agreement, the
Collateral or Borrower’s financial affairs, finances, financial condition, business and
operations. Borrower authorizes Administrative Agent, Collateral Agent and/or the Lenders and
any of its or their respective advisors to meet and/or have discussions with any of their
officers, other members of senior management and advisors (including, without limitation, the
Auction Services Company) from time to time as reasonably requested by Administrative Agent,
Collateral Agent and/or the Lenders or any of its or their respective advisors to discuss any
matters regarding the matters described in this Agreement, the Collateral or Borrower’s financial
affairs, finances, financial condition, business and operations, and shall direct and authorize
all such persons and entities to fully disclose to Administrative Agent, Collateral Agent, any of
the Lenders and any of its or their respective advisors all information reasonably requested by
any of them regarding the foregoing.

(f) Prohibition Against Voluntary Repayment of Other Indebtedness. Borrower agrees
that it shall not voluntarily prepay, redeem or repurchase any principal of, or

 

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interest or other amounts owing with respect to, any Indebtedness other than the Obligations during the Forbearance
Period.

			
	SECTION 6.	 	General Release; Indemnity.

(a) In consideration of, among other things, Administrative Agent’s and Lenders’ execution
and delivery of this Agreement, each of Borrower and Guarantor, on behalf of itself and its
agents, representatives, officers, directors, advisors, employees, subsidiaries, affiliates,
successors and assigns (collectively, “Releasors”), hereby forever agrees and covenants not to
sue or prosecute against any Releasee (as hereinafter defined) and hereby forever waives,
releases and discharges, to the fullest extent permitted by law, each Releasee from any and all
claims (including, without limitation, crossclaims, counterclaims, rights of set-off and
recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises,
warranties, damages and consequential damages, demands, agreements, bonds, bills, specialties,
covenants, controversies, variances, trespasses, judgments, executions, costs, expenses or claims
whatsoever (collectively, the “Claims”), that such Releasor now has or hereafter may have, of
whatsoever nature and kind, whether known or unknown, whether now existing or hereafter arising,
whether arising at law or in equity, against the Collateral Agent, Administrative Agent and any
or all of the Lenders and/or any other Secured Party in any capacity and their respective
affiliates, subsidiaries, shareholders and “controlling persons” (within the meaning of the
federal securities laws), and their
respective successors and assigns and each and all of the officers, directors, employees,
agents, attorneys and other representatives of each of the foregoing (collectively, the
“Releasees”), based in whole or in part on facts, whether or not now known, existing on or before
the date hereof, that relate to, arise out of or otherwise are in connection with: (i) any or all
of the Loan Documents and this Agreement, or transactions contemplated thereby or hereby, or any
actions or omissions in connection therewith or herewith, or (ii) any aspect of the dealings or
relationships between or among Borrower and Guarantor, on the one hand, and any or all of the
Lenders and/or any other Secured Party, on the other hand, relating to any or all of the
documents, transactions, actions or omissions referenced in clause (i) hereof. In entering into
this Agreement, Borrower and Guarantor consulted with, and has been represented by, legal counsel
and expressly disclaims any reliance on any representations, acts or omissions by any of the
Releasees and hereby agrees and acknowledges that the validity and effectiveness of the releases
set forth above do not depend in any way on any such representations, acts and/or omissions or
the accuracy, completeness or validity hereof. The provisions of this Section shall survive the
termination of this Agreement, the Credit Agreement, other Loan Documents and payment in full of
the Obligations.

(b) Borrower hereby agrees that it shall be obligated to indemnify and hold the Releasees
harmless with respect to any and all liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by
the Releasees, or any of them, whether direct, indirect or consequential, as a result of or
arising from or relating to any proceeding by, or on behalf of any person, including, without
limitation, the respective officers, directors, agents, trustees, creditors, partners or
shareholders of Borrower, or any of their respective subsidiaries, whether threatened or
initiated, in respect of any claim for legal or equitable remedy under any statute, regulation or
common law principle arising from or in connection with the negotiation, preparation, execution,
delivery, performance, administration and enforcement of the Credit Agreement,

 

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the other Loan
Documents, this Agreement or any other document executed and/or delivered in connection herewith;
provided, that Borrower shall have no obligation to indemnify or hold harmless any Releasee
hereunder with respect to liabilities to the extent they result from the gross negligence or
willful misconduct of that Releasee as finally determined by a court of competent jurisdiction.
To the extent that the undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 6 may be unenforceable in whole or in part because they are violative of any law or
public policy, Borrower agrees to contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all indemnified liabilities
hereunder incurred by any of them. The foregoing indemnity shall survive the termination of this
Agreement, the Credit Agreement, the other Loan Documents and the payment in full of the
Obligations.

(c) Each of Borrower and Guarantor, on behalf of itself and its successors, assigns, and
other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and
agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any
regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and
discharged by Borrower or any Guarantor pursuant to Section 6 hereof. If
Borrower, Guarantor or any of its successors, assigns or other legal representatives
violates the foregoing covenant, Borrower and Guarantor, each for itself and its successors,
assigns and legal representatives, agrees to pay, in addition to such other damages as any
Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any
Releasee as a result of such violation.

			
	SECTION 7.	 	Auction Services Company Expenses; Satisfaction of Tax Lien.

Notwithstanding the occurrence and continuation of the Specified Defaults, the Administrative
Agent and the Lenders agree that Borrower may, upon request, (a) reimburse the Auction Services
Company up to $250,000 of “Auction Expenses” (as such term is defined in the Auction Services
Agreement) from the proceeds initially paid to the Collection Account and received as a result of
the auction and (b) pay up to the Tax Lien amounts only to the extent due and payable on the asset
that has been sold as a result of the auction, and only to the extent actually necessary to convey
to the buyer title to the applicable asset free of such Tax Lien, with any such payment solely to
be from proceeds scheduled to be received (provided, that such payment shall be permitted
only to the extent that the sale of such asset is subject to a closing pursuant to which all of the
proceeds otherwise will be remitted to the Collection Account in accordance with the terms hereof
and such payment shall be made directly from buyer to the applicable taxing authority or to the
collection account for further application to the applicable taxing authority, or as may be
otherwise agreed by the Administrative Agent). For the avoidance of doubt, any amount paid to
satisfy the applicable Tax Lien shall not reduce the amount of the Obligations otherwise owed to
the Administrative Agent and the Lenders.

			
	SECTION 8.	 	Representations and Warranties of Borrower and Guarantor.

To induce Administrative Agent, Collateral Agent and Lenders to execute and deliver this
Agreement, each of Borrower and Guarantor represents and warrants that:

(a) The execution, delivery and performance by each of Borrower and Guarantor of this
Agreement and all documents and instruments delivered in connection

 

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herewith and the Loan
Agreement and all other Loan Documents have been duly authorized by Borrower’s and Guarantor’s
respective board of directors (or similar governing body), and this Agreement and all documents
and instruments delivered in connection herewith and the Credit Agreement and all other Loan
Documents are legal, valid and binding obligations of Borrower and Guarantor enforceable against
such parties in accordance with their respective terms, except as may be limited by (i) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law);

(b) Except as a result of the Specified Defaults, each of the representations and warranties
contained in the Credit Agreement and the other Loan Documents is true and correct in all
material respects on and as of the date hereof to the same extent as though made
on the date hereof, except to the extent that such representations and warranties
specifically relate to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects on and as of such earlier date, and each of
the agreements and covenants in the Credit Agreement and the other Loan Documents is hereby
reaffirmed with the same force and effect as if each were separately stated herein and made as of
the date hereof;

(c) Neither the execution, delivery and performance of this Agreement and all documents and
instruments delivered in connection herewith nor the consummation of the transactions
contemplated hereby or thereby does or shall contravene, result in a breach of, or violate (i)
any provision of Borrower’s or Guarantor’s corporate charter, bylaws, operating agreement, or
other governing documents, (ii) any law or regulation, or any order or decree of any court or
government instrumentality, or (iii) any indenture, mortgage, deed of trust, lease, agreement or
other instrument to which Borrower or Guarantor is a party or by which Borrower or Guarantor or
any of their respective property is bound;

(d) As of the date hereof, except for the Specified Defaults, no Event of Default has
occurred or is continuing under this Agreement, the Credit Agreement or any other Loan Document;
and

(e) The Lenders’ and the other Secured Parties’ security interests in the Collateral
continue to be valid, binding and enforceable first-priority perfected security interests which
secure the Obligations subject only to the Permitted Liens and, potentially, the Tax Lien.

			
	SECTION 9.	 	Ratification of Liability.

Borrower, as debtor, grantor, pledgor, assignor, or in other similar capacities in which such
parties grant liens or security interests in their properties or otherwise act as accommodation
parties, as the case may be, under the Loan Documents, hereby ratifies and reaffirms all of its
payment and performance obligations and obligations to indemnify, contingent or otherwise, under
each of such Loan Documents to which such party is a party, and such party hereby ratifies and
reaffirms its grant of liens on or security interests in its properties pursuant to such Loan
Documents to which it is a party as security for the Obligations under or with respect to the
Credit Agreement and confirms and agrees that such liens and security

 

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interests hereafter secure
all of the Obligations, including, without limitation, all additional Obligations hereafter arising
or incurred pursuant to or in connection with this Agreement, the Credit Agreement or any other
Loan Document. Borrower further agrees and reaffirms that the Loan Documents to which it is a
party now apply to all Obligations as defined in the Credit Agreement, as modified hereby
(including, without limitation, all additional Obligations hereafter arising or incurred pursuant
to or in connection with this Agreement, the Credit Agreement or any other Loan Document). Such
party (i) further acknowledges receipt of a copy of this Agreement and all other agreements,
documents, and instruments executed and/or delivered in connection herewith, (ii) consents to the
terms and conditions of same, and (iii)
agrees and acknowledges that each of the Loan Documents, as modified hereby, remains in full
force and effect and is hereby ratified and confirmed. Except as expressly provided herein, the
execution of this Agreement shall not operate as a waiver of any right, power or remedy of any
Lender, nor constitute a waiver of any provision of any of the Loan Documents nor constitute a
novation of any of the Obligations under the Credit Agreement or other Loan Documents.

			
	SECTION 10.	 	Reference to and Effect Upon the Credit Agreement.

(a) Except as specifically amended hereby, all terms, conditions, covenants, representations
and warranties contained in the Credit Agreement and other Loan Documents, and all rights of the
Lenders and all of the Obligations, shall remain in full force and effect. Each of Borrower and
Guarantor hereby confirms that the Credit Agreement and the other Loan Documents are in full
force and effect and that each of Borrower and Guarantor has no right of setoff, recoupment or
other offset or any defense, claim or counterclaim with respect to any of the Obligations, the
Credit Agreement or any other Loan Document.

(b) Except as expressly set forth herein, the execution, delivery and effectiveness of this
Agreement shall not directly or indirectly (i) continue to defer any enforcement action after the
occurrence of any other Default or Event of Default (including, without limitation, any
Forbearance Default), (ii) constitute a consent or waiver of any past, present or future
violations of any provisions of the Credit Agreement or any other Loan Documents, (iii) amend,
modify or operate as a waiver of any provision of the Credit Agreement or any other Loan
Documents or any right, power or remedy of any Lender, (iv) constitute a consent to any merger or
other transaction or to any sale, restructuring or refinancing transaction, or (v) constitute a
course of dealing or other basis for altering any Obligations or any other contract or
instrument. Except as expressly set forth herein, each Lender and each of the other Secured
Parties reserves all of its rights, powers, and remedies under the Credit Agreement, the other
Loan Documents and applicable law. All of the provisions of the Credit Agreement and the other
Loan Documents, including, without limitation, the time of the essence provisions, are hereby
reiterated.

(c) No Lender or other Secured Party has waived or is by this Agreement waiving, and no
Lender or other Secured Party has any intention of waiving (regardless of any delay in exercising
such rights and remedies), any Default or Event of Default which may be continuing on the date
hereof or any Event of Default which may occur after the date hereof (whether the same or similar
to the Specified Defaults or otherwise), and no Lender or any other Secured Party has agreed to
forbear with respect to any of its rights or remedies concerning any Events of Default (other
than, during the Forbearance Period, the Specified

 

10

 

Defaults solely to the extent expressly set
forth herein), which may have occurred or are continuing as of the date hereof, or which may
occur after the date hereof.

(d) Borrower agrees and acknowledges that the Lenders’ agreement to forbear from exercising
certain of their default-related rights and remedies with respect to the Specified Defaults
during the Forbearance Period does not in any manner whatsoever limit
any Lender’s or other Secured Party’s right to insist upon strict compliance by Borrower and
Guarantor with the Credit Agreement, this Agreement or any other Loan Document during the
Forbearance Period, except as related to the Specified Defaults to the extent provided herein and
otherwise as expressly set forth herein.

(e) This Agreement shall not be deemed or construed to be a satisfaction, reinstatement,
novation or release of the Credit Agreement or any other Loan Document.

			
	SECTION 11.	 	Costs And Expenses.

In addition to (to the extent not otherwise provided in the Credit Agreement), and not in lieu
of, the terms of the Credit Agreement and other Loan Documents relating to the reimbursement of
fees and expenses, Borrower shall reimburse Administrative Agent and the other Lenders, as the case
may be, promptly following demand therefor, for all fees, costs, charges and expenses, including
the fees, costs and expenses of counsel and other expenses, incurred in connection with this
Agreement and the other agreements and documents executed and/or delivered in connection herewith.
The Borrower agrees upon submission of any invoice by counsel to the Administrative Agent, to wire
the invoiced amount to such counsel (in accordance with the wire instructions set forth in such
invoice), less the amount (if any) held by such counsel from the retainer paid in accordance with
Section 21(e) of this Agreement.

			
	SECTION 12.	 	Governing Law; Consent to Jurisdiction and Venue.

THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER
AND/OR GUARANTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER LOAN DOCUMENT, OR ANY OF THE
OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE,
COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF BORROWER AND
GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO BORROWER OR
GUARANTOR AT ITS ADDRESS PROVIDED IN THE CREDIT AGREEMENT; (D) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER AND/OR GUARANTOR IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES

 

11

 

EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT; AND (E) AGREES THAT AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST BORROWER OR GUARANTOR IN THE COURTS OF
ANY OTHER JURISDICTION.

			
	SECTION 13.	 	Construction.

This Agreement and all other agreements and documents executed and/or delivered in connection
herewith have been prepared through the joint efforts of all of the parties hereto. Neither the
provisions of this Agreement or any such other agreements and documents nor any alleged ambiguity
therein shall be interpreted or resolved against any party on the ground that such party or its
counsel drafted this Agreement or such other agreements and documents, or based on any other rule
of strict construction. Each of the parties hereto represents and declares that such party has
carefully read this Agreement and all other agreements and documents executed in connection
therewith, and that such party knows the contents thereof and signs the same freely and
voluntarily. The parties hereto acknowledge that they have been represented by legal counsel of
their own choosing in negotiations for and preparation of this Agreement and all other agreements
and documents executed in connection herewith and that each of them has read the same and had their
contents fully explained by such counsel and is fully aware of their contents and legal effect. If
any matter is left to the decision, right, requirement, request, determination, judgment, opinion,
approval, consent, waiver, satisfaction, acceptance, agreement, option or discretion of one or more
Lenders, the other Secured Parties or their respective employees, counsel, or agents in the Credit
Agreement or any other Loan Documents, such action shall be deemed to be exercisable by such
Lenders, such other Secured Parties or such other Person in its sole and absolute discretion and
according to standards established in its sole and absolute discretion. Without limiting the
generality of the foregoing, “option” and “discretion” shall be implied by the use of the words
“if” and “may.”

			
	SECTION 14.	 	Counterparts.

This Agreement may be executed in any number of counterparts, each of which when so executed
shall be deemed an original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart. Any party hereto may
execute and deliver a counterpart of this Agreement by delivering by facsimile or other electronic
transmission a signature page of this Agreement signed by such party, and any such facsimile or
other electronic signature shall be treated in all respects as having the same effect as an
original signature. Any party delivering by facsimile or other electronic transmission a
counterpart executed by it shall promptly thereafter also deliver a manually signed counterpart of
this Agreement.

			
	SECTION 15.	 	Severability.

The invalidity, illegality, or unenforceability of any provision in or obligation under this
Agreement in any jurisdiction shall not affect or impair the validity, legality, or enforceability
of the remaining provisions or obligations under this Agreement or of such provision or obligation
in any other jurisdiction. If feasible, any such offending provision shall
be deemed modified to be within the limits of enforceability or validity; however, if the

 

12

 

offending provision cannot be so modified, it shall be stricken and all other provisions of this
Agreement in all other respects shall remain valid and enforceable.

			
	SECTION 16.	 	Time of Essence.

Time is of the essence in the performance of each of the obligations of Borrower and Guarantor
hereunder and with respect to all conditions to be satisfied by such parties.

			
	SECTION 17.	 	No Other Creditor Action.

The Lenders’ and the other Secured Parties’ obligations to forbear are expressly conditioned
upon all other creditors of Borrower (including, without limitation, trade creditors) refraining or
otherwise forbearing from exercising remedies or otherwise taking any enforcement action against
Borrower or the Collateral (including, without limitation, acceleration of indebtedness) during the
Forbearance Period. In the event that any such creditor takes any such action, all of the Lenders’
and the other Secured Parties’ obligations hereunder shall automatically and immediately terminate
without further notice or demand.

			
	SECTION 18.	 	Further Assurances.

Borrower agrees to take all further actions and execute all further documents as
Administrative Agent may from time to time reasonably request to carry out the transactions
contemplated by this Agreement, the Credit Agreement, other Loan Documents and all other agreements
executed and delivered in connection herewith.

			
	SECTION 19.	 	Section Headings.

Section headings in this Agreement are included herein for convenience of reference only and
shall not constitute part of this Agreement for any other purpose.

			
	SECTION 20.	 	Notices.

All notices, requests, and demands to or upon the respective parties hereto shall be given in
accordance with the Credit Agreement.

			
	SECTION 21.	 	Effectiveness.

This Agreement shall become effective as of the Effective Date, provided that all of the
following conditions precedent have been met (or waived) as determined by Administrative Agent in
its sole discretion:

(a) GAG Guaranty. Administrative Agent shall have received $1,200,000 in
immediately available funds pursuant to the GAG Guaranty in full satisfaction of the Guarantor’s
obligations to the Lenders under the GAG Guaranty, but subject to each provision
of the GAG Guaranty, including, without limitation, Section 7 thereof, that, by its terms,
survives the payment of the Guarantor’s obligations.

(b) Required Deliveries. Administrative Agent shall have received a duly executed
and effective auction services agreement (an “Auction Services Agreement”) by

 

13

 

and between the
Borrower and an Auction Services Company, such agreement to be in form and substance reasonably
satisfactory to the Administrative Agent (it being understood that such agreement shall not
obligate the Borrower to pay the Auction Services Company more than $250,000, in the aggregate,
for its services, shall not permit the setting of reserve prices except the Acceptable Reserve
Pricing and, consistent with the requirements of the Credit Agreement, including Section
6.01(d)(ii) thereof, shall require the consent of the Administrative Agent and the requisite
Lenders prior to the final acceptance of any bid lower than the Acceptable Reserve Pricing) and
accompanied by a written certification by the Borrower that the terms, conditions and provisions
of such agreement (including, without limitation, the procedures to effectuate the sale of
assets) all are commercially reasonable.

(c) Agreement. Administrative Agent shall have received duly executed signature
pages for this Agreement signed by Administrative Agent, Lenders, Borrower and Guarantor.

(d) Representations and Warranties. The representations and warranties contained
herein shall be true and correct, and no Forbearance Default, Default or Event of Default, other
than the Specific Defaults, shall exist on the date hereof.

(e) Expenses. Borrower shall have remitted to the Administrative Agent’s counsel,
Kirkland & Ellis LLP, a retainer in the amount of $15,000 in immediately available funds, which
amount shall be used towards the legal fees and expenses incurred by the Administrative Agent
through the date hereof and, to the extent of any remaining amount, any legal fees and expenses
incurred from and after the Effective Date.

			
	SECTION 22.	 	Waiver of Jury Trial Right and Other Matters.

BORROWER AND GUARANTOR EACH HEREBY WAIVES (i) THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CREDIT
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT,
DEMAND AND PROTEST, AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT, MATURITY, RELEASE WITH
RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS OR ANY COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ANY LENDER ON WHICH
BORROWER OR GUARANTOR MAY IN ANY WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER SUCH
LENDER MAY DO IN THIS REGARD; (iii) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL
OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ANY LENDER TO
EXERCISE ANY OF THEIR RESPECTIVE RIGHTS AND REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISAL
AND EXEMPTION LAWS AND ALL RIGHTS WAIVABLE UNDER ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE; (v) ANY
RIGHT BORROWER OR GUARANTOR MAY HAVE UPON PAYMENT IN FULL OF THE OBLIGATIONS TO REQUIRE ANY LENDER
OR OTHER SECURED PARTY TO TERMINATE ITS SECURITY INTEREST IN THE COLLATERAL OR IN ANY OTHER
PROPERTY OF BORROWER OR GUARANTOR UNTIL TERMINATION OF THE CREDIT AGREEMENT IN ACCORDANCE WITH ITS

 

14

 

TERMS AND THE EXECUTION BY BORROWER, AND BY ANY PERSON WHO PROVIDES FUNDS TO BORROWER WHICH ARE
USED IN WHOLE OR IN PART TO SATISFY THE OBLIGATIONS, OF AN AGREEMENT INDEMNIFYING ANY OR ALL OF THE
LENDERS AND THE OTHER SECURED PARTIES FROM ANY LOSS OR DAMAGE ANY SUCH PARTY MAY INCUR AS THE
RESULT OF DISHONORED CHECKS OR OTHER ITEMS OF PAYMENT RECEIVED BY SUCH LENDER OR OTHER SECURED
PARTY FROM BORROWER, OR ANY ACCOUNT DEBTOR AND APPLIED TO THE OBLIGATIONS AND RELEASING AND
INDEMNIFYING, IN THE SAME MANNER AS DESCRIBED IN SECTION 6 OF THIS AGREEMENT, THE RELEASEES FROM
ALL CLAIMS ARISING ON OR BEFORE THE DATE OF SUCH TERMINATION STATEMENT; AND (vi) NOTICE OF
ACCEPTANCE HEREOF, AND BORROWER AND GUARANTOR EACH ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A
MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT’S AND SIGNING LENDER’S ENTERING INTO THIS AGREEMENT AND
THAT SUCH PARTIES ARE RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH BORROWER AND
GUARANTOR. BORROWER AND GUARANTOR EACH WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

			
	SECTION 23.	 	Assignments; No Third Party Beneficiaries.

This Agreement shall be binding upon and inure to the benefit of Borrower, Guarantor, the
Lenders and the other Secured Parties and their respective successors and assigns; provided, that
neither Borrower nor Guarantor shall be entitled to delegate any of its duties hereunder and shall
not assign any of its rights or remedies set forth in this Agreement without the prior written
consent of Administrative Agent in its sole discretion. No Person other than the parties hereto,
and in the case of Section 6 hereof, the Releasees, shall have any rights hereunder or be entitled
to rely on this Agreement and all third-party beneficiary rights (other than the rights of the
Releasees under Section 6 hereof) are hereby expressly disclaimed.

			
	SECTION 24.	 	Final Agreement.

This Agreement, the Credit Agreement, the other Loan Documents, and the other written
agreements, instruments, and documents entered into in connection therewith (collectively, the
“Borrower/Lender Documents”) set forth in full the terms of agreement between the parties hereto
and thereto and are intended as the full, complete, and exclusive contracts governing the
relationship between such parties, superseding all other discussions, promises, representations,
warranties, agreements, and understandings between the parties with respect thereto. No term of
the Borrower/Lender Documents may be modified or amended, nor may any rights thereunder be waived,
except in a writing signed by the party against whom enforcement of the modification, amendment, or
waiver is sought. Any waiver of any condition in, or breach of, any of the foregoing in a
particular instance shall not operate as a waiver of other or subsequent conditions or breaches of
the same or a different kind. Administrative Agent’s, any Lender’s or any other Secured Party’s
exercise or failure to exercise any rights or remedies under any of the foregoing in a particular
instance shall not operate as a waiver of its

 

15

 

right to exercise the same or different rights and
remedies in any other instances. There are no oral agreements among the parties hereto.

			
	SECTION 25.	 	Administrative Agent.

The Lenders hereby authorize the Administrative Agent to execute this Agreement.

Signature pages to follow

 

16

 

IN WITNESS WHEREOF, as of the Effective Date, the duly authorized representatives of the
parties have caused this Agreement to be executed and acknowledge that they have read and
understood this Agreement.

	 	 	 	 	 
	 	GREAT AMERICAN GROUP

ENERGY EQUIPMENT, LLC

as Borrower

 	 
	 	By:  	/s/ Harvey M. Yellen
 	 
	 	 	Name:  	Harvey M. Yellen 	 
	 	 	Title:  	 	 
	 
	 	GREAT AMERICAN GROUP, LLC

as Guarantor

 	 
	 	By:  	/s/ Mark P. Naughton
 	 
	 	 	Name:  	Mark P. Naughton 	 
	 	 	Title:  	Senior VP/General Counsel 	 
	 
	 	GARRISON LOAN AGENCY SERVICES, LLC

as Administrative Agent

 	 
	 	By:  	/s/ Brian S. Chase
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 
	 	GARRISON SPECIAL OPPORTUNITIES FUND LP

as Lender

 	 
	 	By:  	/s/ Brian S. Chase
 	 
	 	 	Name:  	Brian S. Chase 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	GAGE INVESTMENT GROUP, LLC

 	 
	 	By:  	/s/ J. Tim Pruban
 	 
	 	 	Name:  	J. Tim Pruban 	 
	 	 	Title:  	Managing Memberexv10w1

Exhibit 10.1

Confidential

October 13, 2009

Meruelo Enterprises, Inc.

c/o Joseph (Jay) C. Sherwood III

McGladrey Capital Markets LLC

575 Anton Boulevard, 11th Floor

Costa Mesa, CA 92626

	Re:   Investment Proposal regarding Rubio’s Restaurants, Inc. (the “Company”)

Dear Jay,

     Levine Leichtman Capital Partners, Inc. or an affiliate thereof (“LLCP”) is pleased to
indicate its willingness, subject to the terms and conditions set forth herein and the Annexes
attached hereto, to partner with Alex Meruelo, Meruelo Enterprises, Inc., the Alex Meruelo Living
Trust and Luis Armona (including any newly formed acquisition vehicle created to consummate the
transactions contemplated hereby, collectively, the “Meruelo Parties”) to acquire 100% of
the outstanding common stock of the Company (excluding the shares to be contributed by the Meruelo
Parties) for a purchase price of $8.00 per share (the “Transaction”).

     The following table sets forth the anticipated sources and uses for the Transaction:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Sources	 	 	 	 	 	Uses	 	 	 	 	 
	 
	Senior Loans (LLCP)
	 	$	20.0 mm	 	 	Purchase Equity1	 	$	70.9 mm	 
	Senior Subordinated Note (LLCP)
	 	 	32.5 mm	 	 	Fees and Expenses	 	 	3.9 mm	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Holdco Common Stock (LLCP)
	 	 	3.9 mm	 	 	 	 	 	 	 	 	 
	Holdco Common Stock (Meruelo)
	 	 	13.3 mm	 	 	 	 	 	 	 	 	 
	Cash on Hand
	 	 	5.1 mm	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Total Sources
	 	$	74.8 mm	 	 	Total Uses
	 	$	74.8 mm	 

     LLCP’s investment is based on the assumption that (i) the Company will have 10,035,077 shares of
Common Stock outstanding immediately prior to the closing of the

 

			
	1	 	Excludes 1,166,212 shares of common stock to be
contributed to Holdco (as defined below) by the Meruelo Parties.

 

 

			
	Rubio’s Investment Proposal
	 	Confidential

	October 13, 2009	 	 

Transaction, (ii) the Meruelo Parties will own at least 1,166,212 shares of Common Stock of
the Company immediately prior to the closing of the Transaction, (iii) the Company will have
adequate working capital as of the closing of the Transaction to operate its business in the
ordinary course, and (iv) the Company will have cash or cash equivalents of at least $5.0 million
prior to the closing of the Transaction.

     For purposes of this letter, the Senior Loans, the Senior Subordinated Note and the Common
Stock (each as defined in this letter agreement) to be purchased by LLCP are collectively
referred to as the “Securities”.

Following are certain key points with respect to this capital structure and the mechanics of the
Transaction:

	 	•	 	LLCP together with the Meruelo Parties will provide all of the capital needed to
close the transaction. No further approvals are required internally for LLCP or
the Meruelo Parties to fund their respective portions of either the debt or equity
components of the Transaction (including with respect to the Meruelo Parties, the
contribution of the Meruelo Rollover Equity (as defined below)).
	 
	 	•	 	The Meruelo Parties will be required to contribute at least 1,166,212 of their
existing shares of common stock of the Company (collectively, the “Meruelo
Rollover Equity”) into a new corporate holding entity (“Holdco”) that
will be formed in connection with the Transaction. In addition, the Meruelo
Parties and LLCP will each purchase the Meruelo Common Stock and the LLCP Common
Stock respectively from Holdco. Following the consummation of the Transaction, the
Meruelo Parties and LLCP will own 77.0% and 23.0%, respectively, of the
fully-diluted equity of Holdco.
	 
	 	•	 	Holdco will form a wholly owned subsidiary (“Acquisition Co.”) which
will issue the Senior Loans and the Senior Subordinated Note to LLCP. Acquisition
Co. will merge into the Company, with the Company as the surviving entity. Subject
to discussions among the parties hereto, the Transaction can be consummated on an
accelerated time frame if a tender offer is made for the Company’s common stock.
Holdco will own 100% of the common stock of the surviving company.

     The structure and mechanics of the Transaction are subject to LLCP’s confirmatory business and
legal due diligence investigation. Other material terms related to the transaction are set forth
below:

     1. Principal Terms. The principal terms of the Securities are described in Annexes A,
B and C attached hereto. The principal terms and conditions of the Securities Purchase Agreement
(the “Purchase Agreement”) pursuant to which the Securities would be issued and sold are
described in Annex D.

     2. Due Diligence. Immediately following the execution of a confidentiality agreement
with the Company, LLCP will work with the Meruelo Parties to conduct a confirmatory business and
legal due diligence investigation of the Company and all of its

2

 

			
	Rubio’s Investment Proposal
	 	Confidential

	October 13, 2009	 	 

respective subsidiaries and affiliates (collectively, the “Companies”). The due diligence
investigation will include, but not be limited to, a review of the Companies’ business operations,
prospects and properties (including all of their assets), financial condition and interviews with
senior management.

     3. Conditions to Closing; Definitive Agreements. In addition to the closing
conditions described in the attached Annexes, the consummation of the transactions contemplated by
this letter agreement, including the purchase and sale of the Securities, is subject to (i) the
negotiation and execution of definitive documentation, including (x) a definitive merger agreement
with the Company, Holdco and Acquisition Co., a preliminary draft of which is attached hereto as
Annex E, and (y) the Securities Purchase Agreement, the Senior Loans, the Senior Subordinated Note
and other definitive documentation containing terms and conditions mutually acceptable to the
Meruelo Parties and LLCP, (ii) the completion of LLCP’s confirmatory business and legal due
diligence investigation of the Companies to the sole satisfaction of LLCP and its legal counsel,
and (iv) the absence of any material adverse change in the condition (financial or otherwise),
business, operations, properties or prospects of the Company since June 28, 2009.

     4. No Third Party Beneficiaries; Indemnification. This letter agreement is solely for
the benefit of the Meruelo Parties and LLCP, and no third parties (including, but not limited to,
any other shareholders, affiliates, subsidiaries or creditors of the Meruelo Parties, any Meruelo
Agent (as defined below), the Company, its shareholders, affiliates, subsidiaries or creditors, or
any other persons) shall be entitled to rely upon anything contained herein as a third party
beneficiary or otherwise. LLCP shall not be responsible or liable to any person for any special,
indirect, consequential, punitive or exemplary damages which may be alleged as a result of this
letter or the transactions contemplated hereby or for any damages which may be alleged as a result
of LLCP’s failure or refusal, in accordance with the terms of this letter, to consummate the
transactions contemplated herein. In addition, the Meruelo Parties hereby agree to indemnify,
defend and hold harmless LLCP and each of its partners (general or limited), equity holders,
officers, directors, members, managers, employees, agents, representatives and affiliates from and
against any claims, suits, actions, losses, judgments, fees, costs and expenses, including, but not
limited to, attorneys’ fees and expenses (collectively, the “LLCP Damages”) arising out of
or related to this letter or the transactions contemplated hereby, or any claim, suit, action,
investigation or proceeding related thereto, and to reimburse each such indemnified person from
time to time upon demand for any of the same incurred in connection therewith, whether or not the
transactions contemplated herein shall have been consummated, except to the extent there has been a
final non-appealable determination by a court of competent jurisdiction that such LLCP Damages were
caused by LLCP’s gross negligence or willful misconduct. LLCP hereby agrees to indemnify, defend
and hold harmless the Meruelo Parties and each of their partners (general or limited), equity
holders, officers, directors, members, managers, employees, agents, representatives and affiliates
from and against any claims, suits, actions, losses, judgments, fees, costs and expenses,
including, but not limited to, attorneys’ fees and expenses (collectively, the “Meruelo
Damages”) arising out of LLCP’s conduct, and to reimburse each such indemnified person from
time to time upon demand for any of the same incurred in connection therewith, whether or not the
transactions contemplated herein shall have been consummated, only to the extent that such Meruelo
Damages were caused by LLCP’s gross negligence, willful misconduct as determined in the final
non-appealable judgment of a court of competent jurisdiction.

3

 

			
	Rubio’s Investment Proposal
	 	Confidential

	October 13, 2009	 	 

     5. Exclusivity. To the extent Section 7 is not applicable or as otherwise agreed by
the parties hereto, (a) in consideration of the capital and other resources committed and to be
committed to our due diligence investigation of the Companies and the consummation of the
transactions contemplated by this letter, during the Effective Period (as defined in Section 12),
each of the Meruelo Parties will not, nor will any of them permit their respective affiliates,
subsidiaries, shareholders, members, partners, managers, directors, officers, employees, attorneys,
accountants, advisors, investment bankers (including McGladrey Capital Markets LLC),
representatives or agents (collectively, “Meruelo Agents”) to, directly or indirectly,
initiate contact with, make, solicit or encourage any inquiries or proposals from, or engage or
participate in any discussions or negotiations with, any person, entity or “group” (as such term is
defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) with
respect to any proposal, agreement or arrangement (x) relating to an Acquisition Proposal, (y)
related to any financing with respect to an Acquisition Proposal other than a financing by LLCP or
an alternative senior debt financing by Bank of the West or Wells Fargo Foothill to be entered into
in connection with this Transaction (or upon the written consent of LLCP another senior lender), or
(z) pursuant to which the Meruelo Parties would sell or otherwise transfer any securities of the
Company (or any interest therein), by way of sale, repurchase, hypothecation, cancellation or
otherwise, or enter into any transaction or arrangement, or otherwise approve any transaction,
pursuant to which any third party would acquire beneficial ownership (as defined in Rule 13d-3
under the Exchange Act, as amended) of any outstanding capital stock or other equity interests of
the Company. For the purposes of this letter agreement, an Acquisition Proposal means (other than
the transactions contemplated by this letter agreement) any inquiry, proposal or offer from any
person relating to (i) any direct or indirect acquisition or purchase of assets of the Company,
(ii) any issuance, sale or other disposition of (including by way of merger, consolidation,
business combination, share exchange, joint venture or any other similar transaction) securities
(or options, rights or warrants to purchase, or securities convertible into or exchangeable for,
such securities) representing voting power of the Company, (iii) any tender offer, exchange offer
or other transaction in which, if consummated, any person shall acquire beneficial ownership (as
defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership, or any
“group” (as defined under the Exchange Act) shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of outstanding voting capital stock of the Company, or
(iv) any merger, consolidation, share exchange, business combination, recapitalization, liquidation
or dissolution involving the Company. Concurrent with the execution of this letter agreement, the
Meruelo Parties and their advisors shall terminate any and all discussions with all other parties
concerning any Acquisition Proposal or any matter described in clause (x), (y) or (z) above,
provided, that the Meruelo Parties may continue their discussion with Bank of the West or Wells
Fargo Foothill regarding a potential senior financing in connection with this Transaction. The
Meruelo Parties will promptly communicate to LLCP in writing the fact that any Meruelo Party has
received, directly or indirectly, any proposal or inquiry regarding any Acquisition Proposal or any
matter described in clause (x), (y) or (z) above. During the Effective Period, none of the Meruelo
Parties will sell, transfer, pledge, hypothecate or dispose of any shares of common stock of the
Company, or any interest therein or beneficial ownership thereof (as defined
in Rule 13d-3 under the Exchange Act) or enter into any agreement, understanding or
arrangement, or derivative contract or arrangement, with respect to common stock of the Company,
except as contemplated by this letter agreement or if consented to in writing by LLCP. Neither
LLCP nor the

4

 

			
	Rubio’s Investment Proposal 

October 13, 2009
	 	Confidential

Meruelo Parties shall purchase any shares of common stock of the Company without the consent of the
other

     (b) If (i) this letter agreement is terminated for any reason (other than as provided in this
Section 5(b)) and, within ninety (90) days after such termination, any of the Meruelo Parties or
any of the Meruelo Agents enters into discussions or an understanding or agreement with any third
party relating to an Acquisition Proposal or any matter described in clauses (x), (y) or (z) of
Section 5(a) above, or (ii) prior to the termination of this letter agreement, any Meruelo Party or
any Meruelo Agent breaches, Section 5(a) above or Section 6 below, then the Meruelo Parties shall,
jointly and severally, be obligated to pay to LLCP, as liquidated damages and not as a penalty, the
amount of $2,000,000 (the “Alternative Transaction Fee”) plus the LLCP Expenses (as
defined below) without regard to any cap, which Alternative Transaction Fee and LLCP Expenses shall
be due and payable to LLCP immediately upon the entering into of any such discussion, understanding
or agreement or any such breach, as the case may be; provided, however, that the
Meruelo Parties will not be obligated to pay LLCP the Alternative Transaction Fee if LLCP
terminates this letter agreement as a result of its decision not to proceed with this investment
based solely as a result of one or more of the reasons set forth in subsections (i) — (iii) of the
second paragraph of Section 12 below.

     6. Agreement Regarding Voting. Each of the Meruelo Parties hereby agrees that, during
the Effective Period, at any meeting of the stockholders of the Company, however called, or any
adjournment or postponement thereof, or pursuant to any written consent of the stockholders of the
Company, all shares of common stock of the Company owned, directly or indirectly, beneficially or
of record, by any Meruelo Party (or any affiliate thereof) or Holdco shall be voted (a) in favor of
(i) adoption of the definitive merger agreement or other definitive agreement governing the
transactions contemplated by this letter agreement, (ii) approval of the transactions contemplated
thereby, and (iii) approval of any other matter that is required by applicable law or a
governmental authority to be approved by the stockholders of the Company to facilitate the
transactions contemplated by such definitive agreement or this letter agreement; and (b) against
(i) any Acquisition Proposal other than the one contemplated by this letter agreement, (ii) any
liquidation or winding up of the Company, (iii) any extraordinary dividend by the Company, (iv) any
material change in the capital structure of the Company (other than any change in capital structure
resulting from the transactions contemplated by this letter agreement) and (v) any other action
that could reasonably be expected to (x) impede, interfere with, delay, postpone or attempt to
discourage or have the effect of discouraging the consummation of the transactions contemplated by
this letter agreement or (y) impair or adversely affect the respective ability of the Company,
Holdco or Acquisition Co. to consummate the transactions contemplated by this letter agreement.
Without limiting the foregoing, during the Effective Period the Meruelo Parties will not solicit
proxies from, or otherwise seek to influence the vote of, any other stockholder of the Company,
other than for the approval of the transactions contemplated by this letter agreement, or otherwise
attempt to cause any such stockholder to approve an Acquisition Proposal or any matter described in
clause (x), (y) or (z) of Section 5(a).

     7. No Fault Break Fee. In consideration of the capital and other resources committed
and to be committed to our due diligence investigation of the Companies and the consummation of the
transactions contemplated by this letter agreement, if (A) the Company consummates an
Acquisition Proposal without financing provided by LLCP, in which the Meruelo Parties participate
by rolling over or retaining securities, or receiving cash or other consideration for securities of
the Company, or (B) the

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Meruelo Parties sell, transfer or dispose of any common stock of the Company (in one or more
transactions) or any interest therein, regardless of the form of transaction or time of payment,
each within one year from the later of (a) the Outside Termination Date (as defined below) or (b)
the date of the primary definitive document that governs the transaction described in clause (A)
above, then the Meruelo Parties shall, jointly and severally, be obligated to pay to LLCP, as
liquidated damages and not as a penalty, fifty percent (50%) of all Applicable Proceeds (as defined
below) (the “No Fault Break Fee”) plus the LLCP Expenses, which No Fault Break Fee
and LLCP Expenses shall be due and payable to LLCP immediately upon the consummation of such
transaction. “Applicable Proceeds” means the aggregate gross proceeds received (whether
received in cash, securities or other assets), plus the aggregate value of any shares of
common stock of the Company retained by the Meruelo Parties in connection with any transaction set
forth in clause (A) or (B) of this Section 7, minus the product obtained by multiplying the
number of shares of the Company held by the Meruelo Parties immediately prior to such transaction
by $8.00. For purposes of this Section 7, clause (i) of the definition of Acquisition Proposal
shall refer to 20% or more of the assets of the Company and clauses (ii), (iii) and (iv) shall
refer to a transaction in which a third party, any of the Meruelo Parties or a “group” (as defined
in the Exchange Act) acquires 50% or more of the voting power of the Company). The payment of any
No Fault Break Fee pursuant to this Section 7 shall be in addition to any fee payable pursuant to
Section 8 below.

     8. Allocation of Definitive Agreement Fees. In the event any Meruelo Party, Holdco,
Acquisition Co. or LLCP or any affiliate thereof enters into a definitive agreement with the
Company regarding the Transaction contemplated hereby and such agreement contains any “break-up
fee”, “alternative transaction fee” or similar arrangement then LLCP, on the one hand, and the
Meruelo Parties, on the other hand, shall split any such fee (after deducting the portion of such
fee payable to McGladrey Capital Markets LLC, which shall be 25% of the aggregate of such fees
payable under the definitive agreement) that becomes due and payable by the Company (or any
affiliate of the Company) 50/50 regardless of the party entitled to receive such fee set forth in
the definitive merger agreement.

     9. Confidentiality. Following the execution of this letter agreement, the parties
hereto shall not, and the Meruelo Parties shall use reasonable efforts to cause the Meruelo Agents
not to, disclose to any person, except as required by applicable law or to effectuate the
transaction contemplated herein (i) the fact that discussions or negotiations are taking place
concerning a possible transaction, or (ii) any of the terms or conditions contained in this letter
agreement (including the Annexes attached hereto).

     10. Costs and Expenses. Whether or not the transactions contemplated herein are
completed, the Meruelo Parties, jointly and severally, shall be obligated to reimburse LLCP
promptly, for 50% of all out of pocket fees, costs and expenses incurred by LLCP relating to the
transactions described herein, including, without limitation, all fees, costs and expenses relating
to lien searches, filing fees, due diligence, accounting services, legal services, and the
negotiation, preparation, execution and delivery of definitive documentation (collectively, the
“LLCP Expenses”) provided, however, unless mutually agreed among the
parties, in no event shall the Meruelo Parties be obligated to reimburse LLCP for any amount in
excess of $250,000 in the aggregate. The Meruelo Parties agree to pay to LLCP the LLCP Expenses
within two business days of receipt of a written demand therefore. Notwithstanding the
foregoing, the Meruelo Parties and LLCP will negotiate with the Company for the inclusion in
the merger agreement of a covenant by the Company to pay all of the LLCP Expenses whether or not
the transaction contemplated therein are consummated, provided that if such a covenant is not
included in

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the merger agreement after such negotiations, the Meruelo Parties shall not be relieved of their
obligations under this Section 10. If, following the execution of a definitive merger agreement
with the Company, the transactions contemplated therein do not close due to a failure of the
Meruelo Parties to satisfy one or more closing conditions, the Meruelo Parties, jointly and
severally, shall be obligated to reimburse LLCP promptly for all LLCP Expenses without regard to
any cap.

     11. Binding Effect; Entire Agreement. It is understood that this letter agreement
constitutes a non-binding statement of our good faith mutual intentions with respect to the
transactions described herein, except that, upon the execution of this letter agreement by the
parties hereto, the provisions of Sections 3 through 15 shall constitute legally valid and binding
agreements of the Meruelo Parties. This letter agreement, together with that certain
Confidentiality Agreement dated July 6, 2009 contains the entire understanding and agreement of the
parties hereto with respect to the transactions described herein and supersedes all prior oral or
written, and any contemporaneous or future oral, understandings, undertakings, commitments or
agreements with respect to the transactions described herein.

     12. Term and Termination. This letter agreement shall become effective on the date
LLCP shall have received a copy of this letter agreement executed by all of the Meruelo Parties and
shall terminate on the earlier to occur of (i) the closing date of the transactions as contemplated
hereby and (ii) the date that this letter agreement is terminated pursuant to this Section 12 (the
“Effective Period”). Either Alex Meruelo, on behalf of the Meruelo Parties, or LLCP may
terminate this letter agreement (but, with respect to the Meruelo Parties, not their obligations
under Sections 4 through 15, each of which shall survive any termination of this letter agreement)
by giving written notice of termination (which termination shall be effective as of the date of
receipt of such written notice) to the other at any time after December 30, 2009 (the “Outside
Termination Date”), provided, however, if a merger agreement is entered into
with the Company with respect to the transactions contemplated by this letter agreement, the
Outside Termination Date shall mean the earlier of the date that such merger is consummated or the
date on which such merger agreement is terminated by mutual agreement of the parties thereto or in
accordance with its terms. Any notice provided by LLCP hereunder shall be deemed to be delivered
to all Meruelo Parties if LLCP delivers such notice to Alex Meruelo c/o McGladrey Capital Markets
LLC. Notwithstanding the foregoing, the Meruelo Parties shall have the right, exercisable in their
sole discretion, to terminate this letter agreement (but not their obligations under Sections 4
through 15, each of which shall survive any termination of this letter agreement), at any time,
upon written notice to LLCP, in the event (i) of any outbreak or escalation of hostilities in which
the United States is involved, any declaration of war by Congress, or any other substantial
domestic or international event, calamity or terrorist attack which, in the reasonable and good
faith judgment of the Meruelo Parties, is material and adverse to the Meruelo Parties or the
Company and makes it impractical or inadvisable, in the Meruelo Parties’ sole discretion, to
proceed with the transaction contemplated herein, or (ii) of the existence or occurrence of any
material adverse change in the condition (financial or otherwise), business, operations, properties
or prospects of the Company since June 28, 2009.

     In addition, LLCP shall have the right, exercisable in its sole discretion, to terminate this
letter agreement, at any time, upon written notice to Alex Meruelo, on behalf of the Meruelo
Parties, in the
event (i) LLCP decides, in its sole discretion, not to proceed with the transaction
contemplated herein based upon its confirmatory business and legal due diligence investigation,
(ii) of any outbreak or escalation of hostilities in which the United States is involved, any
declaration of war by Congress, or

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any other substantial domestic or international event, calamity or terrorist attack which, in
the reasonable and good faith judgment of LLCP, is material and adverse to LLCP or the Company and
makes it impractical or inadvisable, in LLCP’s sole discretion, to proceed with the transaction
contemplated herein, or (iii) of the existence or occurrence of any material adverse change in the
condition (financial or otherwise), business, operations, properties or prospects of the Company
since June 28, 2009.

     13. Governing Law; Counterparts. This letter agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New York, without
regard to its conflicts of law or choice of law principles. This letter agreement may be executed
in any number of counterparts and by facsimile transmission, all of which when taken together shall
be one and the same instrument.

     14. Representations, Warranties and Covenants. The Meruelo Parties jointly and
severally represent, warrant and covenant that:

     (a) this agreement has been duly authorized, executed and delivered by each of them and no
consent or approval of any third party is required for any of them to execute or deliver this
letter agreement or perform their obligations hereunder;

     (b) as of the date hereof and until the earlier of the termination of this letter agreement
and the consummation of the Transactions contemplated hereby, the Meruelo Parties will, at all
times, have at least $13.5 million in immediately available cash or cash equivalents; and

     (c) the Schedule 13D (Amendment No. 2) dated February 18, 2009, accurately sets forth the
holdings of common stock of the Company of each of the Meruelo Parties and any of their affiliates.

     15. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ALL RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS LETTER AGREEMENT, THE PREPARATION, NEGOTIATION OR
PERFORMANCE OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY
INITIATES THE ACTION, SUIT, PROCEEDING OR COUNTERCLAIM.

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     If the terms set forth in this letter accurately reflect our mutual understanding of the
transactions contemplated herein, please acknowledge your agreement and acceptance of such terms by
countersigning this letter in the space indicated below and returning to us an executed copy of
this letter no later than 12:00 p.m. (Pacific Daylight Time) on October 14, 2009. If we do not
receive an executed copy of this letter by such time on such date, the offer contained herein will
automatically terminate and will be of no further force and effect.

	 	 	 	 	 
	 	Sincerely,

Levine Leichtman Capital Partners, Inc.

 	 
	 	By:  	/s/
Lauren B. Leichtman
 	 
	 	 	Lauren B. Leichtman, Chief Executive Officer 	 
	 	 	 	 
	 

Agreed and accepted

as of October 13 2009:

	 	 	 	 	 
	Alex Meruelo

 	 	 

	 	/s/ Alex Meruelo	 	 
	 
	Meruelo Enterprises, Inc.

 	 	 
	By:  	/s/ Alex Meruelo	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 

	 	 	 	 	 
	Alex Meruelo Living Trust
 	 	 
	By:  	/s/ Alex Meruelo	 	 
	 	Name:  	 	 	 	 
	 	Title:  	 	 	 
	 
	 	 	 	 	 
	Luis Armona

 	 	 

	  	/s/ Luis Armona	 	 

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ANNEX A

Senior Loans

	 	 	 
	Issuer:

	 	Acquisition Co. immediately prior to the merger and the Company immediately after the merger.
	 
	 	 
	Anticipated 

Closing Date:

	 	As soon as practical upon consummation of the merger.
	 
	 	 
	Principal 

Amounts:

	 	$8.0 million pursuant to
the Secured Senior Bridge
Note (the “Senior Bridge Note”)
	 
	 	 
	 

	 	$12.0 million pursuant to the Secured Senior Note (the “Senior
Note”)
	 
	 	 
	 

	 	The Senior Bridge Note and the Senior Note are referred to
collectively as the “Senior Loans.”
	 
	 	 
	Maturity Date

(Senior Bridge Note):

	 	360 days from date of issuance (the “Bridge Note Maturity Date”)
	 
	 	 
	Maturity Date

(Senior Note):

	 	5 years from date of issuance (the “Senior Note Maturity Date”)
	 
	 	 
	Cash 

Interest Rate:
	 	
The Senior Loans shall bear interest at a rate equal to 11.0% per annum, except upon the occurrence and during
the continuance of an Event of Default.
	 
	 	 
	 

	 	Interest shall be payable in cash monthly beginning the last day of the month following the closing date.
	 
	 	 
	Redemption

(Senior Bridge Note):

	 	
Mandatory: At the Bridge Note Maturity Date. There will be no
scheduled amortization payments on the Senior Bridge Note.
	 
	 	 
	 

	 	Optional: The Senior Bridge Note is redeemable, in full
or in part, at any time without premium or penalty (other than

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	 	in connection with a Change of Control).
	 
	 	 
	 

	 	Asset Sales: Mandatory prepayments shall be required with
the proceeds of any asset sales in excess of $25,000 in the
aggregate in any fiscal year, without premium or penalty.
	 
	 	 
	Redemption

(Senior Note):

	 	
Mandatory: $750,000 per fiscal quarter until maturity (or until the Senior
Note is repaid in full) beginning with the fifth fiscal quarter following the closing.
	 
	 	 
	 

	 	Optional: The Senior Note is redeemable, in full or in
part, at any time without premium or penalty (other than in
connection with a Change of Control).
	 
	 	 
	 

	 	Asset Sales: To the extent not paid on the Senior Bridge
Note, mandatory prepayments shall be required with the proceeds of
any asset sales in excess of $25,000 in the aggregate in any
fiscal year, without premium or penalty.
	 
	 	 
	Guarantees:

	 	All of the Company’s obligations to LLCP shall be
guaranteed by Holdco and all of the Company’s
subsidiaries (collectively, the “Subsidiaries”).
	 
	 	 
	Security:

	 	To secure (i) the Company’s obligations to LLCP
(including without limitation its obligations under or
relating to the Senior Loans, the Purchase Agreement and
the other investment documents and under or relating to
its guaranty to LLCP), and (ii) the obligations of
Holdco and the Subsidiaries under or relating to their
respective guarantees to LLCP, Holdco, the Company and
the Subsidiaries shall grant to LLCP a perfected first
priority security interest and lien upon, and security
interest in, all of their respective assets, including
all subsidiary stock.
	 
	 	 
	Ranking:

	 	The indebtedness represented by the Senior Loans shall
rank senior to all existing and future indebtedness of
the Company and no other indebtedness shall rank pari
passu with the Senior Loans.
	 
	 	 
	Remedies
Upon

Event of Default:

	 	A. Additional cash interest rate of 3.0% per annum.

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	 	B. Immediate repayment of all outstanding principal and
interest due and owing on the Senior Loans upon acceleration of any
portion of the Senior Loan or the Senior Subordinated Note.
	 
	 	 
	Change in Control:

	 	In the event of a change of control (to be defined in
definitive documentation), the Senior Loans or any
portion thereof may be put to the Company at 102% of
par, plus accrued interest through the date of
repurchase.
	 
	 	 
	Closing Fee:

	 	$600,000, payable concurrently with the closing of the
transactions.

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ANNEX B

Secured Senior Subordinated Note (the “Senior Subordinated Note”)

	 	 	 
	Issuer:

	 	Acquisition Co. immediately prior to the merger and the Company immediately after the merger.
	 
	 	 
	Anticipated 

Closing Date:

	 	As soon as practical upon consummation of the merger.
	 
	 	 
	Principal 

Amount:

	 	$32.5 million
	 
	 	 
	Maturity Date:

	 	5 years from date of issuance (the “Maturity Date”)
	 
	 	 
	Cash 

Interest Rate:

	 	
The Senior Subordinated Note shall bear interest at a rate equal to 14.0% per annum, except upon the
occurrence and during the continuance of an Event of Default. 
	 
	 	 
	 
	 	
Interest shall be payable in cash monthly beginning the last day of the month following the closing date.
	 
	 	 
	Redemption:

	 	Mandatory: At the Maturity Date. There will be no scheduled amortization payments.
	 
	 	 
	 

	 	Optional: Except as provided above, the Senior Subordinated Note is non-redeemable prior to the month ending
two years following the closing date. Thereafter, the Senior Subordinated Note is redeemable, in full or in
part, upon 30 days prior written notice by the Company at the following percentages of par, plus accrued
interest through the date of redemption:

	 	 	 	 	 
	 	 	Redemption
	Redemption on or before	 	Percentage Premium
	 
	 	 	 	 
	Third anniversary
	 	 	103.0	%
	Fourth anniversary
	 	 	101.0	%
	Fifth anniversary
	 	 	100.0	%

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	Guaranties:

	 	All of the Company’s obligations to LLCP shall be guaranteed by Holdco and all of the Company’s subsidiaries
(collectively, the “Subsidiaries”).
	 
	 	 
	Security:

	 	To secure (i) the Company’s obligations to LLCP (including without limitation its obligations under or
relating to the Senior Subordinated Note, the Purchase Agreement and the other investment documents and under
or relating to its guaranty to LLCP), and (ii) the obligations of Holdco and the Subsidiaries under or
relating to their respective guarantees to LLCP, Holdco, the Company and the Subsidiaries shall grant to LLCP
a perfected first priority security interest and lien upon, and security interest in, all of their respective
assets, including all subsidiary stock. The security interest granted in respect of the Senior Loans and the
Senior Subordinated Note shall be pari passu.
	 
	 	 
	Ranking:

	 	Except for the indebtedness represented by the Senior Loans (or any refinancing of the Senior Loans), the
indebtedness represented by the Senior Subordinated Note shall rank senior to all existing and future
indebtedness of the Company and no other indebtedness shall rank pari passu with the Senior Subordinated
Note.
	 
	 	 
	Remedies
Upon

Event of Default:

	 	A. Additional cash interest rate of 3.0% per annum.
	 
	 	 
	 

	 	B. Immediate repayment of all outstanding principal and interest
due and owing on the Senior Subordinated Note upon acceleration of
any portion of the Senior Loans or the Senior Subordinated Note.
	 
	 	 
	Change in Control:

	 	In the event of a change of control (to be defined in
definitive documentation), the Senior Subordinated Note
or any portion thereof may be put to the Company at the
greater of (i) the then-applicable Redemption
Percentage Premium referred to above, and (ii) 102% of
par, plus accrued interest through the date of
repurchase.
	 
	 	 
	Closing Fee:

	 	$1,100,000, payable concurrently with the closing of
the transactions.

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ANNEX C

Common Stock 

	 	 	 
	Issuer:

	 	Holdco
	 
	 	 
	Common Stock:

	 	LLCP will invest $3.86 million to purchase 13.15%
of the fully diluted common stock of Holdco at
closing.
	 
	 	 
	Common Stock
Attributable to
to Senior Subordinated
Note:

	 	In connection with the purchase of the Senior
Subordinated Note, LLCP will receive Common Stock
representing 9.85% of the fully diluted common
stock of Holdco at closing.
	 
	 	 
	Tag Along 

Rights:

	 	
LLCP shall have the right to sell its Common Stock
of Holdco on a pro rata basis in connection with
any sale of Common Stock of Holdco by any other
equity holder.
	 
	 	 
	Put Option:

	 	Upon the earlier of (i) the maturity of the Senior
Subordinated Note (by acceleration or otherwise),
(ii) the repayment in full of the Senior
Subordinated Note, or (iii) a Change in Control,
LLCP shall have the right to put the Common Stock
to Holdco and/or the Company for cash consideration
determined by a valuation obtained from a mutually
agreed upon investment banking firm of national
reputation. The costs of such valuation shall be
borne jointly by Holdco and the Company.
	 
	 	 
	Registration 

Rights:

	 	Following an initial public offering of common
stock of the Holdco (or an affiliate), LLCP shall
have two demand registration rights with respect to
public offerings, on customary terms, covering
shares of Common Stock of Holdco. LLCP shall have
piggyback registration rights on customary terms,
entitling LLCP to participate in any and all public
offerings of Common Stock of Holdco (including any
initial public offering). In addition, if Holdco
is eligible to use form S-3 or a similar form, at
LLCP’s request, Holdco shall register LLCP’s Common
Stock pursuant to a “Shelf” registration on form
S-3 or such similar form. All expenses and fees
relating to the registered sale of LLCP’s Common
Stock, (including the fees and expenses of LLCP’s
counsel in all registrations), shall be paid
jointly by Holdco and the
Company, except for LLCP’s pro-rata share of underwriting fees, selling
discounts and commissions.

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	Preemptive Rights:

	 	LLCP shall have the right to purchase, on the same
basis as all other purchasers, its pro rata share
of any and all issuances of Common Stock (or
similar equity securities) or options, warrants,
other rights or securities exercisable, convertible
or exchangeable for Common Stock (or similar equity
securities), other than common stock issued in
connection with any public offering.
	 
	 	 
	Transfer Restrictions:

	 	Other than in connection with estate planning
purposes the non-LLCP stockholders of Holdco will
be restricted from selling or transferring their
equity interests in Holdco.

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Annex D

Securities Purchase Agreement (the “Purchase Agreement”)

          The parties shall enter into a Purchase Agreement with respect to the purchase of the
Securities containing customary terms and conditions, including, among others, the following:

	 	 	 
	Representations
and Warranties
of Holdco and
the Companies:

	 	

Customary representations and warranties, including,
without limitation, evidence of corporate existence,
authority and good standing, validity, enforceability and
binding nature of all agreements, no conflict with other
agreements, ownership of collateral, solvency, compliance
with laws, regulations and environmental matters,
marketable title to property and assets, no encumbrances
on assets, patents, trademarks, intellectual property,
licenses, ERISA, financial condition and performance and
accuracy of data, absence of labor disputes and litigation
and other proceedings, which shall survive the Closing
Date, and shall be true upon execution of the Purchase
Agreement and at the Closing Date.
	 
	 	 
	Holdco
and 

Companies
Covenants:

	 	
As long as the Senior Loans or the Senior Subordinated
Notes are outstanding or LLCP holds 10% of the Common
Stock of Holdco, Holdco and the Company shall be subject
to customary covenants with certain of these covenants
based upon financial projections provided to LLCP by the
Meruelo Parties. Such covenants shall include, without
limitation:
	 
	 	 
	 

	 	A.     Financial Covenants (based upon projections
from the Meruelo Parties):
	 
	 	 
	 

	 	B.     Limitations on Capital Expenditures
	 
	 	 
	 

	 	C.     Restrictions on Dividends and Redemption of
Capital Stock
	 
	 	 
	 

	 	D.     Limitations on Asset Sales
	 
	 	 
	 

	 	E.     Limitations on Incurrence of Indebtedness
and Liens
	 
	 	 
	 

	 	F.     Restrictions on Fundamental Changes
	 
	 	 
	 

	 	G.     Restrictions on Transactions with Affiliates and Related Parties

	 
	 	 
	 

	 	H.     Informational Reporting
	 
	 	 
	Board

of Directors:

	 	Customary visitation rights and 2 out of five board seats.

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	Closing
Conditions 

of LLCP:

	 	Customary, including, without limitation:
	 
	 	 
	 

	 	A.     LLCP shall have completed its confirmatory
business and legal due diligence investigation of the Companies to
its and its counsel’s sole satisfaction.

	 
	 	 
	 

	 	B.     LLCP shall have received all reasonable and
customary certificates, evidences of authority and opinions and such
other items as it shall request.

	 
	 	 
	 

	 	C.     LLCP shall have approved the sources and
uses of funds in connection with the transactions contemplated
hereunder.

	 
	 	 
	 

	 	D.     Concurrent with the closing, the Companies
shall have a legal, tax and capital structure, in form, substance and
scope satisfactory to LLCP.

	 
	 	 
	 

	 	E.     Concurrent with the closing, LLCP shall
have received, by wire transfer in immediately available funds, an
aggregate non-refundable closing fee of $1,700,000 and reimbursement
of all LLCP Expenses incurred by LLCP relating to the transactions
described herein as provided in Section 10.

	 
	 	 
	 

	 	F.     There shall have been no material adverse
change in or to the condition (financial or otherwise), business,
operations, properties, affairs or prospects of the Companies since
June 28, 2009.

	 
	 	 
	 

	 	G.     The transactions contemplated in this
letter agreement have been consummated on terms and conditions
acceptable to LLCP

	 
	 	 
	 

	 	H.     The Company shall have a minimum of $5.0
million of cash or cash equivalents immediately prior to the closing
of the Transaction.

	 
	 	 
	 

	 	I.       Concurrent with the closing, the Companies
shall have, insurance coverage for property damage and general

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	 	liability acceptable to LLCP and shall obtain key man
life and disability insurance on the key management (to be
determined in due diligence but shall include, at a minimum, Alex
Meruelo and Joe Marchica collectively referred to as “Key
Management”), in an amount not less than $10.0 million in the
aggregate which insurance policy and proceeds thereof shall be
assigned as collateral to LLCP.

	 
	 	 
	 

	 	J.      Certain members of Key Management shall
have entered into customary agreements containing terms and
conditions acceptable to LLCP including among other things,
non-competition, compensation, non-solicitation and confidentiality
provisions. In addition, the Company, the Meruelo Parties and LLCP
shall have entered into a mutually acceptable shareholder agreement.

	 
	 	 
	 

	 	K.     The Companies shall have received all necessary and appropriate
consents (including but not limited to any regulatory, governmental,
customers, board of directors, shareholders, and other third party
consents) with respect to the transactions contemplated herein. Without
limiting the generality of the foregoing, the waiting period under the HSR
Act shall have expired or been terminated.

D-3

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