Document:

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                                                Amended effective April 28, 2000

              ABBOTT LABORATORIES NON-EMPLOYEE DIRECTORS' FEE PLAN

                                    SECTION 1
                                     PURPOSE

     ABBOTT LABORATORIES NON-EMPLOYEE DIRECTORS' FEE PLAN - referred to below as
the "Plan" - has been established by ABBOTT LABORATORIES - referred to below as
the "Company" - to attract and retain as members of its Board of Directors
persons who are not full-time employees of the Company or any of its
subsidiaries but whose business experience and judgment are a valuable asset to
the Company and its subsidiaries.

                                    SECTION 2
                                DIRECTORS COVERED

     As used in the Plan, the term "Director" means any person who is elected to
the Board of Directors of the Company in April, 1962 or at any time thereafter,
and is not a full-time employee of the Company or any of its subsidiaries.

                                    SECTION 3
                            FEES PAYABLE TO DIRECTORS

     3.1  Each Director shall be entitled to a deferred monthly fee of Five
Thousand Dollars ($5,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected a Director) that he holds such
office with the Company.

     3.2  A Director who serves as Chairman of the Executive Committee of the
Board of Directors shall be entitled to a deferred monthly fee of One Thousand
Six Hundred Dollars ($1,600.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

     3.3  A Director who serves as Chairman of the Audit Committee of the Board
of Directors shall be entitled to a deferred monthly fee of Six Hundred
Sixty-Seven Dollars ($667.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

     3.4  A Director who serves as Chairman of the Compensation Committee of the
Board of Directors shall be entitled to a deferred monthly fee of Six Hundred
Sixty-Seven Dollars ($667.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

     3.5  A Director who serves as Chairman of the Nominations Committee of the
Board of Directors shall be entitled to a deferred monthly fee of Six Hundred
Sixty-Seven Dollars ($667.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

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                                      -2-

     3.6  A Director who serves as Chairman of any other Committee created by
this Board of Directors shall be entitled to a deferred monthly fee of Six
Hundred Sixty-Seven Dollars ($667.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

     3.7  A Director's Deferred Fee Account shall be credited with interest
annually. During the calendar years 1968 and prior, the rate of interest
credited to deferred fees shall be four (4) percent per annum. During the
calendar years 1969 through 1992, the rate of interest credited to deferred fees
shall be the average of the prime rates being charged by two largest commercial
banks in the City of Chicago as of the end of the month coincident with or last
preceding the date upon which said interest is so credited. During the calendar
years 1993 and subsequent, the rate of interest credited to deferred fees shall
be equal to: (a) the average of the prime rates being charged by the two largest
commercial banks in the City of Chicago as of the end of the month coincident
with or last preceding the date upon which said interest is so credited; plus
(b) two hundred twenty-five (225) basis points. For purposes of the provisions
of the Plan, the term "deferred fees" shall include "deferred monthly fees," and
"deferred meeting fees," and shall also include any such interest credited
thereon.

                                    SECTION 4
                           PAYMENT OF DIRECTORS' FEES

     4.1  A Director's deferred fees earned pursuant to the Plan shall commence
to be paid on the first day of the calendar month next following the earlier of
his death or his attainment of age sixty-five (65) if he is not then serving as
a Director, or the termination of his service as a Director if he serves as a
Director after the attainment of age sixty-five (65); provided that any Director
may, by written notice filed with the Secretary of the Company, elect to receive
current payment of all or any portion of the monthly and meeting fees earned by
him in calendar years subsequent to the calendar year in which he files such
notice (or all or any portion of such fees earned by him in the calendar year he
first becomes a Director, if such notice is filed within 30 days of becoming a
Director), in which case such fees or the portion thereof so designated earned
in such calendar years shall not be deferred but shall be paid quarterly as
earned and no interest shall be credited thereon. Such election may be revoked
or modified by any Director by written notice to the Secretary of the Company as
to fees to be earned by him in calendar years subsequent to the calendar year in
which he files such notice.

     4.2  After a Director's deferred fees shall have commenced to be payable
pursuant to Paragraph 4.1 they shall be payable in annual installments in the
order in which they shall have been deferred (i.e. the deferred fees for the
earliest year of service as a Director will be paid on the date provided for in
Section 4.1, the deferred fees for the next earliest year of service as a
Director will be paid on the anniversary of the payment of the first
installment, etc.).

     4.3  A Director's deferred fees shall continue to be paid until all
deferred fees which he is entitled to receive under the Plan shall have been
paid to him (or, in case of his death, to his beneficiary).

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                                      -3-

     4.4  Notwithstanding any other provisions of the Plan, if a Director's
service as a Director should terminate for any reason within five (5) years
after the date of a Change in Control, the aggregate unpaid balance of such
Director's deferred fees plus all unpaid interest credited thereon, shall be
paid to such Director in a lump sum within thirty (30) days following the date
of such termination.

     4.5  A "Change in Control" shall be deemed to have occurred on the earliest
of the following dates:

     (i)   The date any entity or person (including a "group" as defined in
           Section 13(d)(3) of the Securities Exchange Act of 1934 (the
           "Exchange Act")) shall have become the beneficial owner of, or
           shall have obtained voting control over thirty percent (30%) or
           more of the outstanding common shares of the Company;

     (ii)  The date the shareholders of the Company approve a definitive
           agreement (A) to merge or consolidate the Company with or into
           another corporation, in which the Company is not the continuing or
           surviving corporation or pursuant to which any common shares of the
           company would be converted into cash, securities or other property
           of another corporation, other than a merger of the Company in which
           holders of common shares immediately prior to the merger have the
           same proportionate ownership of common stock of the surviving
           corporation immediately after the merger as immediately before, or
           (B) to sell or otherwise dispose of substantially all the assets of
           the Company; or

     (iii) The date there shall have been a change in a majority of the Board of
           Directors of the Company within a twelve (12) month period unless the
           nomination for election by the Company's shareholders of each new
           director was approved by the vote of two-thirds of the directors then
           still in office who were in office at the beginning of the twelve
           (12) month period.

     4.6  The provisions of Paragraphs 4.4 and 4.5 and this Paragraph 4.6 may
not be amended or deleted, nor superseded by any other provision of the Plan,
during the period beginning on the date of a Change in Control and ending on the
date five (5) years following such Change in Control.

                                    SECTION 5
                          DIRECTORS' RETIREMENT BENEFIT

     5.1  Effective April 30, 1998, each of the persons serving as a Director on
December 12, 1997 shall be credited with a retirement benefit of $4,167 a month
for 120 months of continuous service and no additional retirement benefits shall
accrue under the Plan. Each of the persons serving as a Director on December 12,
1997 may elect: (a) to have his or her retirement benefit under the Plan treated
as provided in Section 5.2 of the Plan; or (b) to have the present value of that
retirement benefit credited to an unfunded phantom stock account and converted
into phantom stock units based on the closing price of the Company's common
stock on April 30, 1998, with those phantom stock units then being credited with
the same cash and stock dividends, stock splits and other distributions and
adjustments as are paid on the Company's

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                                      -4-

common stock. The phantom stock units shall be payable to the Director in annual
payments commencing on the first day of the calendar month next following the
earlier of the Director's death or termination of service as a Director, in an
amount determined by the closing price of the Company's common stock on the
first business day preceding the payment date. Unless the retirement benefit is
terminated, the annual benefit shall continue to be paid on the anniversary of
the day on which the first such retirement benefit payment was made, until the
benefit has been paid for ten years, or until the death of the Director or
surviving spouse, if earlier. If a Director should die with such benefit still
in effect, prior to receipt of all payments due hereunder, the annual benefit
shall continue to be paid to the surviving spouse of such Director until all
payments due hereunder have been made or until the death of the surviving
spouse, if earlier.

     5.2  Any person serving as a Director on December 12, 1997 who elects to
have his or her retirement benefit paid pursuant to this Section 5.2 shall
receive a monthly benefit equal to $4,167. Payment of the monthly benefit shall
commence on the first day of the calendar month next following the earlier of
the Director's death or termination of service as a Director. Unless the
retirement benefit is terminated, the monthly benefit shall continue to be paid
on the first day of each calendar month thereafter, until the benefit has been
paid for one hundred and twenty (120) months, or until the death of the Director
or surviving spouse, if earlier. If a Director should die with such benefit
still in effect, prior to receipt of all payments due hereunder, the monthly
benefit shall continue to the surviving spouse of such Director until all
payments due hereunder have been made or until the death of the surviving
spouse, if earlier.

     5.3  Directors who retired on or before December 12, 1997 will receive the
form and amount of retirement benefit payable under the terms of the Plan in
effect at the time of their retirement.

     5.4  Each Director who is granted a retirement benefit hereunder shall make
him or herself available for such consultation with the Board of Directors or
any committee or member thereof, as may be reasonably requested from time to
time by the Chairman of the Board of Directors, following such Director's
termination of service as a Director. The Company shall reimburse each such
Director for all reasonable travel, lodging and subsistence expenses incurred by
the Director at the request of the Company in rendering such consultation. The
Company may terminate the retirement benefit if the Director should fail to
render such consultation, unless prevented by disability or other reason beyond
the Director's control.

     5.5  It is recognized that during a Director's period of service as a
Director and as a consultant hereunder, a Director will acquire knowledge of the
affairs of the Company and its subsidiaries, the disclosure of which would be
contrary to the best interests of the Company. Accordingly, the Company may
terminate the retirement benefit if, without the express consent of the Company,
the Director accepts election to the Board of Directors of, acquires a
partnership or proprietary interest in, or renders services as an employee or
consultant to, any business entity which is engaged in substantial competition
with the Company or any of its subsidiaries.

     5.6  An individual will be considered a Director's "surviving spouse" for
purposes of this Section 5 only if the Director and such individual were married
in a religious or civil ceremony recognized under the laws of the state where
the marriage was contracted and the marriage remained legally effective at the
date of the Director's death.

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                                      -5-

                                    SECTION 6
                        CONVERSION TO COMMON STOCK UNITS

     6.1  Any Director who is then serving as a director may, by written notice
filed with the Secretary of the Company, elect to have all or any portion of
deferred fees previously earned but not yet paid, transferred from the
Director's Deferred Fee Account to a Stock Account maintained on his or her
behalf pursuant to paragraph 9.3. Any election as to a portion of such fees
shall be expressed as a percentage and the same percentage shall be applied to
all such fees regardless of the calendar year in which earned or to all deferred
fees earned in designated calendar years, as specified by the Director. A
Director may make no more than one election under this paragraph 6.l in any
calendar year. All such elections may apply only to deferred fees for which an
election has not previously been made and shall be irrevocable.

     6.2  Any Director may, by written notice filed with the Secretary of the
Company, elect to have all or any portion of deferred fees earned subsequent to
the date such notice is filed credited to a Stock Account established under this
Section 6. Fees covered by such election shall be credited to such account at
the end of each calendar quarter in, or for which, such fees are earned. Such
election may be revoked or modified by such Director, by written notice filed
with the Secretary of the Company, as to deferred fees to be earned in calendar
years subsequent to the calendar year such notice is filed, but shall be
irrevocable as to deferred fees earned prior to such year.

     6.3  Deferred fees credited to a Stock Account under paragraph 6.1 shall be
converted to Common Stock Units by dividing the deferred fees so credited by the
closing price of common shares of the Company on the date notice of election
under paragraph 6.1 is received by the Company (or the next business day, if
there are no sales on such date) as reported on the New York Stock Exchange
Composite Reporting System. Deferred fees credited to a Stock Account under
paragraph 6.2 shall be converted to Common Stock Units by dividing the deferred
fees so credited by the closing price of common shares of the Company as of the
last business day of the calendar quarter for which the credit is made, as
reported on the New York Stock Exchange Composite Reporting System.

     6.4  Each Common Stock Unit shall be credited with the same cash and stock
dividends, stock splits and other distributions and adjustments as are received
by one common share of the Company. All cash dividends and other cash
distributions credited to Common Stock Units shall be converted to additional
Common Stock Units by dividing each such dividend or distribution by the closing
price of common shares of the Company on the payment date for such dividend or
distribution, as reported by the New York Stock Exchange Composite Reporting
System.

     6.5  The value of the Common Stock Units credited each Director shall be
paid the Director in cash on the dates specified in paragraph 4.2 (or, if
applicable, paragraph 4.4). The amount of each payment shall be determined by
multiplying the Common Stock Units payable on each date specified in paragraph
4.2 (or, if applicable, paragraph 4.4) by the closing price of common shares of
the Company on the day prior to that date (or the next preceding business day if
there are no sales on such date), as reported by the New York Stock Exchange
Composite Reporting System.

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                                    SECTION 7
                                  MISCELLANEOUS

     7.1  Each Director or former Director entitled to payment of deferred fees
hereunder, from time to time may name any person or persons (who may be named
contingently or successively) to whom any deferred Director's fees earned by him
and payable to him are to be paid in case of his death before he receives any or
all of such deferred Director's fees. Each designation will revoke all prior
designations by the same Director or former Director, shall be in form
prescribed by the Company, and will be effective only when filed by the Director
or former Director in writing with the Secretary of the Company during his
lifetime. If a deceased Director or former Director shall have failed to name a
beneficiary in the manner provided above, or if the beneficiary named by a
deceased Director or former Director dies before him or before payment of all
the Director's or former Director's deferred Directors' fees, the Company, in
its discretion, may direct payment in a single sum of any remaining deferred
Directors' fees to either:

     (a)  any one or more or all of the next of kin (including the surviving
          spouse) of the Director or former Director, and in such proportions as
          the Company determines; or

     (b)  the legal representative or representatives of the estate of the last
          to die of the Director or former Director and his last surviving
          beneficiary.

The person or persons to whom any deceased Director's or former Director's
deferred Directors' fees are payable under this paragraph will be referred to as
his "beneficiary."

     7.2  Establishment of the Plan and coverage thereunder of any person shall
not be construed to confer any right on the part of such person to be nominated
for reelection to the Board of Directors of the Company, or to be reelected to
the Board of Directors.

     7.3  Payment of deferred Directors' fees will be made only to the person
entitled thereto in accordance with the terms of the Plan, and deferred
Directors' fees are not in any way subject to the debts or other obligations of
persons entitled thereto, and may not be voluntarily or involuntarily sold,
transferred or assigned. When a person entitled to a payment under the Plan is
under legal disability or, in the Company's opinion, is in any way incapacitated
so as to be unable to manage his financial affairs, the Company may direct that
payment be made to such person's legal representative, or to a relative or
friend of such person for his benefit. Any payment made in accordance with the
preceding sentence shall be in complete discharge of the Company's obligation to
make such payment under the Plan.

     7.4  Any action required or permitted to be taken by the Company under the
terms of the Plan shall be by affirmative vote of a majority of the members of
the Board of Directors then in office.

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                                      -7-

                                    SECTION 8
                          AMENDMENT AND DISCONTINUANCE

     While the Company expects to continue the Plan, it must necessarily
reserve, and does hereby reserve, the right to amend or discontinue the Plan at
any time; provided, however, that any amendment or discontinuance of the Plan
shall be prospective in operation only, and shall not affect the payment of any
deferred Directors' fees theretofore earned by any Director, or the conditions
under which any such fees are to be paid or forfeited under the Plan, unless the
Director affected shall expressly consent thereto.

                                    SECTION 9
                       ALTERNATE PAYMENT OF DEFERRED FEES

     9.1  By written notice filed with the Secretary of the Company prior to
calendar years beginning after December 31, 1988 (or, for the calendar year he
first becomes a Director within 30 days of becoming a Director), a Director may
elect to receive all or any portion of his deferred fees earned in such calendar
years in a lump sum in accordance with the provisions of this Section 9. An
election under this subsection 9.1 may be revoked or modified by the Director by
written notice to the Secretary of the Company as to deferred fees earned under
Section 3 in calendar years beginning after the calendar year in which he files
such notice. Any amounts that were deferred for calendar years beginning before
January 1, 1989 shall automatically be paid as provided in this Section 9.

     9.2  If payment of a Director's deferred fees is made pursuant to paragraph
9.1, a portion of such fees shall be paid in cash for the Director directly to a
"Grantor Trust" established by the Director, provided such trust is in a form
which the Company determines to be substantially similar to the trust attached
to this plan as Exhibit A; and the balance of the deferred fees shall be paid in
cash directly to the Director, provided that the payment made directly to the
Director shall approximate the aggregate federal, state and local individual
income taxes attributable to the deferred fees paid pursuant to this paragraph
9.2.

     9.3  The Company will establish and maintain four separate accounts in the
name of each Director, "a Deferred Fee Account", a "Deferred Fee Trust Account",
a "Stock Account" and a "Stock Trust Account". The Deferred Fee Account shall
reflect the deferred fees and interest to be credited to a Director pursuant to
Section 3. The Deferred Fee Trust Account shall reflect any deferred fees paid
in cash to a Director (including amounts paid to a Director's Grantor Trust and
allocated to the deferred account maintained thereunder) pursuant to paragraph
9.2 and any adjustments made pursuant to paragraph 9.4. The Stock Account shall
reflect the deferred fees converted to Common Stock Units pursuant to Section 6
and any adjustments made pursuant to that Section. The Stock Trust Account shall
reflect deferred fees that have been converted to Common Stock Units under
Section 6 and paid in cash to a Director (including amounts paid to a Director's
Grantor Trust and allocated to the stock account maintained thereunder) pursuant
to paragraph 9.2 and any adjustments made pursuant to paragraph 9.5. The
Accounts established pursuant to this paragraph 9.3 are for the convenience of
the administration of the plan and no trust relationship with respect to such
Accounts is intended or should be implied.

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                                      -8-

     9.4  As of the end of each calendar year, the Company shall adjust each
Director's Deferred Fee Trust Account as follows:

     (a)  FIRST, charge an amount equal to the product of: (i) any payments made
          to the Director during that year from the deferred account maintained
          under his or her Grantor Trust (other than distributions of trust
          earnings in excess of the Net Interest Accrual authorized by the
          administrator of the trust to provide for the Tax Gross Up under
          paragraph 9.9 below); multiplied by (ii) a fraction, the numerator of
          which is the balance in the Director's Deferred Fee Trust Account as
          of the end of the prior calendar year and the denominator of which is
          the balance in the deferred account maintained under the Director's
          Grantor Trust (as determined by the administrator of the trust) as of
          that same date;

     (b)  NEXT, credit an amount equal to the deferred fees that have not been
          converted to Common Stock Units that are paid that year to the
          Director (including the amount paid to the Director's Grantor Trust
          and allocated to the deferred account maintained thereunder) pursuant
          to paragraph 9.2; and

     (c)  FINALLY, credit an amount equal to the Interest Accrual earned for
          that year pursuant to paragraph 9.6.

     9.5  As of the end of each calendar year, the Company shall adjust each
Director's Stock Trust Account as follows:

     (a)  FIRST, charge an amount equal to the product of: (i) any payments made
          to the Director during that year from the stock account maintained
          under his or her Grantor Trust (other than distributions of trust
          earnings authorized by the administrator of the trust to provide for
          the Tax Gross Up under paragraph 9.9 below); multiplied by (ii) a
          fraction, the numerator of which is the balance in the Director's
          Stock Trust Account as of the end of the prior calendar year and the
          denominator of which is the balance in the stock account maintained
          under the Director's Grantor Trust (as determined by the administrator
          of the trust) as of that same date;

     (b)  NEXT, credit an amount equal to the deferred fees that have been
          converted to Common Stock Units that are paid that year to the
          Director (including the amount paid to the Director's Grantor Trust
          and allocated to the stock account maintained thereunder) pursuant to
          paragraph 9.2; and

     (c)  FINALLY, credit an amount equal to the Book Value Adjustments to be
          made for that year pursuant to paragraph 9.6.

     9.6  As of the end of each calendar year, a Director's Deferred Fee Trust
Account shall be credited with interest at the rate described in paragraph 3.7.
Any amount so credited shall be referred to as a Director's "Interest Accrual".
As of that same date, a Director's Stock Trust Account shall be adjusted as
provided in paragraph 6.4, and shall also be adjusted to reflect the

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                                      -9-

increase or decrease in the fair market value of the Company's common stock
determined in accordance with paragraph 6.5. Such adjustments shall be referred
to as "Book Value Adjustments."

     9.7  In addition to any fees earned by a Director under Section 3 of this
plan or paid under paragraphs 4.1 or 9.1 the Company shall also make a payment
to a Director's Grantor Trust (a "Guaranteed Rate Payment"), to be credited to
the deferred account maintained thereunder, for any year in which the net income
credited to the deferred account maintained under such trust does not equal or
exceed the Director's Net Interest Accrual for that year. A Director's "Net
Interest Accrual" for a year is an amount equal to: (a) the Interest Accrual
credited to the Director's Deferred Fee Trust Account for that year; less (b)
the product of (i) the amount of such Interest Accrual, multiplied by (ii) the
aggregate of the federal, state and local individual income tax rates
(determined in accordance with paragraph 9.10). The Guaranteed Rate Payment
shall equal the difference between the Director's Net Interest Accrual and the
net income credited to the deferred account maintained under the Director's
Grantor Trust for the year, and shall be paid within 90 days of the end of that
year.

     9.8  The Company shall also make a payment to a Director's Grantor Trust
(a "Guaranteed Principal Payment"), to be credited to the stock account
maintained thereunder, to the extent that the balance in the stock account as
of the end of any calendar year is less than 75 percent of the balance of the
Director's Stock Trust Account (net of federal, state and local income taxes)
as of that same date. For the calendar year in which the last installment
distribution is made from the Director's Grantor Trust, the payment made
under this paragraph 9.8 shall equal the amount, if any, needed to increase
the fair market value of the stock account maintained under the Director's
Grantor Trust; such that if a distribution of the stock account were then
made to the Director, the Director would receive the same amount he or she
would have received (net of federal, state and local income taxes) if his or
her Stock Trust Account were to be distributed on that same date with the
deferred fees that had been allocated to that Account taxed at the federal,
state and local income tax rates in effect on the date the fees were credited
to the Account and the balance of the Account taxed at the federal, state and
local income tax rates in effect on the date of the distribution. Payments
required under this paragraph 9.8 shall be made within 90 days of the end of
the calendar year, except the last payment which shall be made not later than
the due date of the last installment distribution from the Director's Grantor
Trust.

     9.9  In addition to the fees provided under Section 3, each Director (or,
if the Director is deceased, the beneficiary designated under the Director's
Grantor Trust) shall be entitled to a Tax Gross Up payment for each year there
is a balance in his or her Deferred Fee Trust Account or Stock Trust Account.
The "Tax Gross Up" shall approximate: (a) the amount necessary to compensate the
Director (or beneficiary) for the net increase in his or her federal, state and
local income taxes as a result of the inclusion in the Director's (or
beneficiary's) taxable income of the income of his or her Grantor Trust and any
Guaranteed Rate and Guaranteed Principal Payments for that year; less (b) any
distribution to the Director (or beneficiary) of his or her Grantor Trust's net
earnings for that year; plus (c) an amount necessary to compensate the Director
(or beneficiary) for the net increase in the taxes described in (a) above as a
result of the inclusion in his or her taxable income of any payment made
pursuant to this paragraph 9.9.

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                                      -10-

     9.10 For purposes of this Section, a Director's federal income tax rate
shall be deemed to be the highest marginal rate of federal individual income tax
in effect in the calendar year in which a calculation under this Section is to
be made and state and local tax rates shall be deemed to be the highest marginal
rates of individual income tax in effect in the state and locality of the
Director's residence on the date such a calculation is made, net of any federal
tax benefits. Notwithstanding the preceding sentence, if a Director is not a
citizen or resident of the United States, his or her income tax rates shall be
deemed to be the highest marginal income tax rates actually imposed on the
Director's benefits under this Plan or earnings under his or her Grantor Trust.

     9.11 If a Director's deferred fees have been paid to a Grantor Trust(s)
pursuant to paragraph 9.2, then at any time (and from time to time) prior to the
Director's retirement the Director may elect to have those deferred fees paid to
him or her from the Grantor Trust(s) either:

     (i)  in the order in which they were earned (i.e., the fees for the
          earliest year of service as a Director will be the first fees
          distributed from the Grantor Trust(s), the fees for the next earliest
          year of service as a Director will be paid on the anniversary of the
          payment of the first installment, etc.), or

     (ii) in reverse chronological order from the order in which they were
          earned (i.e., the fees for the Director's last year of service as a
          Director will be the first fees distributed from the Grantor Trust(s),
          the fees for the penultimate year of service as a Director will be
          paid on the anniversary of the payment of the first installment,
          etc.).

If a Director fails to elect a manner of payment for his or her deferred fees,
then those deferred fees will be paid to the Director in the order in which they
were earned. The date on which payments commence and the other terms governing
distributions from the Grantor Trust(s) shall be determined in accordance with
the terms of the Grantor Trust(s). A Director's deferred fees shall continue to
be paid until all deferred fees to which the Director is entitled to receive
under the Plan shall have been paid in accordance with the terms of the Grantor
Trust(s).

<PAGE>

Exhibit A

                       IRREVOCABLE GRANTOR TRUST AGREEMENT

     THIS AGREEMENT, made this ____ day of ______________, 198_, by and between
________________________ of ________, __________ (the "grantor"), and The
Northern Trust Company, located at Chicago, Illinois, as trustee (the
"trustee"),

                                WITNESSETH THAT:

     WHEREAS, the grantor desires to establish and maintain a trust to hold
certain benefits received by the grantor under the Abbott Laboratories
Non-Employee Directors' Fee Plan, as it may be amended from time to time;

     NOW, THEREFORE, IT IS AGREED as follows:

                                    ARTICLE I
                                  INTRODUCTION

     I-1. NAME. This agreement and the trust hereby evidenced (the "trust") may
be referred to as the "_______________ 1988 Grantor Trust".

     I-2. THE TRUST FUND. The "trust fund" as at any date means all property
then held by the trustee under this agreement.

     I-3. STATUS OF THE TRUST. The trust shall be irrevocable. The trust is
intended to constitute a grantor trust under Sections 671-678 of the Internal
Revenue Code, as amended, and shall be construed accordingly.

     I-4. THE ADMINISTRATOR. Abbott Laboratories ("Abbott") shall act as the
"administrator" of the trust, and as such shall have certain powers, rights and
duties under this agreement as described below. Abbott will certify to the
trustee from time to time the person or persons authorized to act on behalf of
Abbott as the administrator. The trustee may rely on the latest certificate
received without further inquiry or verification.

     I-5. ACCEPTANCE. The trustee accepts the duties and obligations of the
"trustee" hereunder, agrees to accept funds delivered to it by the grantor or
the administrator, and agrees to hold such funds (and any proceeds from the
investment of such funds) in trust in accordance with this agreement.

                                   ARTICLE II
                         DISTRIBUTION OF THE TRUST FUND

     II-1. SEPARATE ACCOUNTS. The administrator shall maintain two separate
accounts under the trust, a "deferred account" and a "stock account." Funds
delivered to the trustee shall be allocated between the accounts by the trustee
as directed by the administrator. As of the end of each calendar year, the
administrator shall charge each account with all distributions made from such

<PAGE>
                                      -2-

account during that year; and credit each account with its share of income and
realized gains and charge each account with its share of expenses and realized
losses for the year. The trustee shall be required to make separate investments
of the trust fund for the accounts, and may not administer and invest all funds
delivered to it under the trust as one trust fund.

     II-2. DISTRIBUTIONS PRIOR TO THE GRANTOR'S DEATH. Principal and accumulated
income shall not be distributed from the trust prior to the grantor's
termination of service as a Director of Abbott (the grantor's "settlement
date"); provided that, each year the administrator may direct the trustee to
distribute to the grantor a portion of the income of the trust fund for that
year, with the balance of such income to be accumulated in the trust. The
administrator shall inform the trustee of the grantor's settlement date.
Thereafter, the trustee shall distribute the trust fund to the grantor, if then
living, in a series of annual installments, commencing on the first day of the
month next following the later of the grantor's settlement date or the date the
grantor attains age 65 years. The administrator shall inform the trustee of the
number of installment distributions and the amount of each installment
distribution under this paragraph II-2, and the trustee shall be fully protected
in relying on such information received from the administrator.

     II-3. DISTRIBUTIONS AFTER THE GRANTOR'S DEATH. The grantor, from time to
time may name any person or persons (who may be named contingently or
successively and who may be natural persons or fiduciaries) to whom the
principal of the trust fund and all accrued or undistributed income thereof
shall be distributed in a lump sum or, if the beneficiary is the grantor's
spouse, in installments, as directed by the grantor, upon the grantor's death.
If the grantor directs an installment method of distribution, any amounts
remaining at the death of the spouse beneficiary shall be distributed in a lump
sum. Each designation shall revoke all prior designations, shall be in writing
and shall be effective only when filed by the grantor with the administrator
during the grantor's lifetime. If the grantor fails to direct a method of
distribution, the distribution shall be made in a lump sum. If the grantor fails
to designate a beneficiary as provided above, then on the grantor's death, the
trustee shall distribute the balance of the trust fund in a lump sum to the
executor or administrator of the grantor's estate.

     II-4. FACILITY OF PAYMENT. When a person entitled to a distribution
hereunder is under legal disability, or, in the trustee's opinion, is in any way
incapacitated so as to be unable to manage his or her financial affairs, the
trustee may make such distribution to such person's legal representative, or to
a relative or friend of such person for such person's benefit. Any distribution
made in accordance with the preceding sentence shall be a full and complete
discharge of any liability for such distribution hereunder.

     II-5. PERPETUITIES. Notwithstanding any other provisions of this agreement,
on the day next preceding the end of 21 years after the death of the last to die
of the grantor and the grantor's descendants living on the date of this
instrument, the trustee shall immediately distribute any remaining balance in
the trust to the beneficiaries then entitled to distributions hereunder.

<PAGE>
                                      -3-

                                   ARTICLE III
                          MANAGEMENT OF THE TRUST FUND

     III-1. GENERAL POWERS. The trustee shall, with respect to the trust fund,
have the following powers, rights and duties in addition to those provided
elsewhere in this agreement or by law:

     (a)  Subject to the limitations of subparagraph (b) next below, to sell,
          contract to sell, purchase, grant or exercise options to purchase, and
          otherwise deal with all assets of the trust fund, in such way, for
          such considerations, and on such terms and conditions as the trustee
          decides.

     (b)  To retain in cash such amounts as the trustee considers advisable; and
          to invest and reinvest the balance of the trust fund, without
          distinction between principal and income, in common stock of Abbott
          Laboratories, or in obligations of the United States Government and
          its agencies or which are backed by the full faith and credit of the
          United States Government or in any mutual fund, common trust fund or
          collective investment fund which invests solely in such obligations;
          and any such investment made or retained by the trustee in good faith
          shall be proper despite any resulting risk or lack of diversification
          or marketability.

     (c)  To deposit cash in any depositary (including the banking department of
          the bank acting as trustee) without liability for interest, and to
          invest cash in savings accounts or time certificates of deposit
          bearing a reasonable rate of interest in any such depositary.

     (d)  To invest, subject to the limitations of subparagraph (b) above, in
          any common or commingled trust fund or funds maintained or
          administered by the trustee solely for the investment of trust funds.

     (e)  To borrow from anyone, with the administrator's approval, such sum or
          sums from time to time as the trustee considers desirable to carry out
          this trust, and to mortgage or pledge all or part of the trust fund as
          security.

     (f)  To retain any funds or property subject to any dispute without
          liability for interest and to decline to make payment or delivery
          thereof until final adjudication by a court of competent jurisdiction
          or until an appropriate release is obtained.

     (g)  To begin, maintain or defend any litigation necessary in connection
          with the administration of this trust, except that the trustee shall
          not be obliged or required to do so unless indemnified to the
          trustee's satisfaction.

     (h)  To compromise, contest, settle or abandon claims or demands.

     (i)  To give proxies to vote stocks and other voting securities, to join in
          or oppose (alone or jointly with others) voting trusts, mergers,
          consolidations, foreclosures, reorganizations, liquidations, or other
          changes in the financial structure of any corporation, and to exercise
          or sell stock subscription or conversion rights.

<PAGE>
                                      -4-

     (j)  To hold securities or other property in the name of a nominee, in a
          depositary, or in any other way, with or without disclosing the trust
          relationship.

     (k)  To divide or distribute the trust fund in undivided interests or
          wholly or partly in kind.

     (l)  To pay any tax imposed on or with respect to the trust; to defer
          making payment of any such tax if it is indemnified to its
          satisfaction in the premises; and to require before making any payment
          such release or other document from any lawful taxing authority and
          such indemnity from the intended payee as the trustee considers
          necessary for its Protection.

     (m)  To deal without restriction with the legal representative of the
          grantor's estate or the trustee or other legal representative of any
          trust created by the grantor or a trust or estate in which a
          beneficiary has an interest, even though the trustee, individually,
          shall be acting in such other capacity, without liability for any loss
          that may result.

     (n)  To appoint or remove by written instrument any bank or corporation
          qualified to act as successor trustee, wherever located, as special
          trustee as to part or all of the trust fund, including property as to
          which the trustee does not act, and such special trustee, except as
          specifically limited or provided by this or the appointing instrument,
          shall have all of the rights, titles, powers, duties, discretions and
          immunities of the trustee, without liability for any action taken or
          omitted to be taken under this or the appointing instrument.

     (o)  To appoint or remove by written instrument any bank, wherever located,
          as custodian of part or all of the trust fund, and each such custodian
          shall have such rights, powers, duties and discretions as are
          delegated to it by the trustee.

     (p)  To employ agents, attorneys, accountants or other persons, and to
          delegate to them such powers as the trustee considers desirable, and
          the trustee shall be protected in acting or refraining from acting on
          the advice of Persons so employed without court action.

     (q)  To perform any and all other acts which in the trustee's judgment are
          appropriate for the proper management, investment and distribution of
          the trust fund.

     III-2. PRINCIPAL AND INCOME. Any income earned on the trust fund which is
not distributed as provided in Article II shall be accumulated and from time to
time added to the principal of the trust. The grantor's interest in the trust
shall include all assets or other property held by the trustee hereunder,
including principal and accumulated income.

<PAGE>
                                      -5-

     III-3. STATEMENTS. The trustee shall prepare and deliver monthly to the
administrator and annually to the grantor, if then living, otherwise to each
beneficiary then entitled to distributions under this agreement, a statement (or
series of statements) setting forth (or which taken together set forth) all
investments, receipts, disbursements and other transactions effected by the
trustee during the reporting period; and showing the trust fund and the value
thereof at the end of such period.

     III-4. COMPENSATION AND EXPENSES. All reasonable costs, charges and
expenses incurred in the administration of this trust, including compensation to
the trustee, any compensation to agents, attorneys, accountants and other
persons employed by the trustee, and expenses incurred in connection with the
sale, investment and reinvestment of the trust fund shall be paid from the trust
fund.

                                   ARTICLE IV
                               GENERAL PROVISIONS

     IV-1. INTERESTS NOT TRANSFERABLE. The interests of the grantor or other
persons entitled to distributions hereunder are not subject to their debts or
other obligations and may not be voluntarily or involuntarily sold, transferred,
alienated, assigned or encumbered.

     IV-2. DISAGREEMENT AS TO ACTS. If there is a disagreement between the
trustee and anyone as to any act or transaction reported in any accounting, the
trustee shall have the right to a settlement of its account by any proper court.

     IV-3. TRUSTEE'S OBLIGATIONS. No power, duty or responsibility is imposed on
the trustee except as set forth in this agreement. The trustee is not obliged to
determine whether funds delivered to or distributions from the trust are proper
under the trust, or whether any tax is due or payable as a result of any such
delivery or distribution. The trustee shall be protected in making any
distribution from the trust as directed pursuant to Article II without inquiring
as to whether the distributee is entitled thereto; and the trustee shall not be
liable for any distribution made in good faith without written notice or
knowledge that the distribution is not proper under the terms of this agreement.

     IV-4. GOOD FAITH ACTIONS. The trustee's exercise or non-exercise of its
powers and discretions in good faith shall be conclusive on all persons. No one
shall be obliged to see to the application of any money paid or property
delivered to the trustee. The certificate of the trustee that it is acting
according to this agreement will fully protect all persons dealing with the
trustee.

     IV-5. WAIVER OF NOTICE. Any notice required under this agreement may be
waived by the Person entitled to such notice.

     IV-6. CONTROLLING LAW. The laws of the State of Illinois shall govern the
interpretation and validity of the provisions of this agreement and all
questions relating to the management, administration, investment and
distribution of the trust hereby created.

<PAGE>
                                      -6-

     IV-7. SUCCESSORS. This agreement shall be binding on all persons entitled
to distributions hereunder and their respective heirs and legal representatives,
and on the trustee and its successors.

                                    ARTICLE V
                               CHANGES IN TRUSTEE

     V-1. RESIGNATION OR REMOVAL OF TRUSTEE. The trustee may resign at any time
by giving thirty days' advance written notice to the administrator and the
grantor. The administrator may remove a trustee by written notice to the trustee
and the grantor.

     V-2. APPOINTMENT OF SUCCESSOR TRUSTEE. The administrator shall fill any
vacancy in the office of trustee as soon as practicable by written notice to the
successor trustee; and shall give prompt written notice thereof to the grantor,
if then living, otherwise to each beneficiary then entitled to payments or
distributions under this agreement. A successor trustee shall be a bank (as
defined in Section 581 of the Internal Revenue Code, as amended).

     V-3. DUTIES OF RESIGNING OR REMOVED TRUSTEE AND OF SUCCESSOR TRUSTEE. A
trustee that resigns or is removed shall furnish promptly to the administrator
and the successor trustee an account of its administration of the trust from the
date of its last account. Each successor trustee shall succeed to the title to
the trust fund vested in its predecessor without the signing or filing of any
instrument, but each predecessor trustee shall execute all documents and do all
acts necessary to vest such title of record in the successor trustee. Each
successor trustee shall have all the powers conferred by this agreement as if
originally named trustee. No successor trustee shall be personally liable for
any act or failure to act of a predecessor trustee. With the approval of the
administrator, a successor trustee may accept the account furnished and the
property delivered by a predecessor trustee without incurring any liability for
so doing, and such acceptance will be complete discharge to the predecessor
trustee.

                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

     VI-1. AMENDMENT. With the consent of the administrator, this trust may be
amended from time to time by the grantor, if then living, otherwise by a
majority of the beneficiaries then entitled to payments or distributions
hereunder, except as follows:

     (a)  The duties and liabilities of the trustee cannot be changed
          substantially without its consent.

     (b)  This trust may not be amended so as to make the trust revocable.

     VI-2. TERMINATION. This trust shall not terminate, and all rights, titles,
powers, duties, discretions and immunities imposed on or reserved to the
trustee, the administrator, the grantor and the beneficiaries shall continue in
effect, until all assets of the trust have been distributed by the trustee as
provided in Article II.

<PAGE>
                                      -7-

     IN WITNESS WHEREOF, the grantor and the trustee have executed this
agreement as of the day and year first above written.

                         -------------------------------------------------
                         Grantor

                         The Northern Trust Company, as Trustee

                         By
                              --------------------------------------------

                         Its
                              --------------------------------------------<PAGE>
                                                                  EXHIBIT 10.19

                       CHECKERS DRIVE-IN RESTAURANTS, INC.

                                       and

                           CERTAIN OF ITS SUBSIDIARIES

                         (collectively, the "BORROWERS")

                                       and

                          TEXTRON FINANCIAL CORPORATION

                                   ("LENDER")

                         ------------------------------
                                 LOAN AGREEMENT
                            SENIOR CREDIT FACILITY A
                         ------------------------------

                              Dated: June 15, 2000

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE I                  DEFINITIONS AND ACCOUNTING TERMS.......................................................1
         1.1      Certain Defined Terms...........................................................................1
         1.2      Accounting Terms................................................................................9

ARTICLE II                 LOAN COMMITMENT........................................................................9
         2.1      Commitment......................................................................................9
         2.2      Repayment.......................................................................................9
         2.3      Obligations Joint and Several...................................................................9
         2.4      Waiver of Subrogation...........................................................................9

ARTICLE III                CONDITIONS PRECEDENT..................................................................10
         3.1      Documents......................................................................................10
         3.2      Termination of Liens...........................................................................11
         3.3      Proposal Fee...................................................................................12
         3.4      Origination Fee................................................................................12
         3.5      Lender Costs and Expenses......................................................................12
         3.6      Other Documents................................................................................12
         3.7      No Default.....................................................................................12
         3.8      Accuracy of Representations and Warranties.....................................................12
         3.9      No Material Adverse Occurrence.................................................................12
         3.10     Payoff of Existing Notes.......................................................................12

ARTICLE IV                 IDENTIFICATION AND SUBSTITUTION OF PLEDGED UNITS......................................13
         4.1      Delivery of Documents..........................................................................13
         4.2      Identification of Pledged Units................................................................15
         4.3      Deadline for Identification of Pledged Units...................................................15
         4.4      Amendment of Security Documents................................................................15
         4.5      Costs and Expenses.............................................................................16
         4.6      Substitution of Pledged Units..................................................................16
         4.7      Sale of Units Under Contract...................................................................17

ARTICLE V                  REPRESENTATIONS AND WARRANTIES........................................................18
         5.1      Organization, Qualification and Authorization..................................................18
         5.2      Subsidiaries; Affiliates.......................................................................18
         5.3      Power and Authority............................................................................18
         5.4      Validity of Obligations........................................................................19
         5.5      Financial Statements...........................................................................19
         5.6      Litigation.....................................................................................19
         5.7      Accuracy of Information........................................................................19
         5.8      Taxes..........................................................................................20
         5.9      ERISA..........................................................................................20

</TABLE>

                                       i
<PAGE>

<TABLE>

<S>                                                                                                            <C>
         5.10     Titles and Liens...............................................................................20
         5.11     Environmental Compliance.......................................................................20
         5.12     Permits and Franchises.........................................................................21
         5.13     Franchise Agreements...........................................................................21
         5.14     Leases.........................................................................................21
         5.15     Location of Collateral.........................................................................21
         5.16     Patents, Trademarks, Etc.......................................................................22
         5.17     Labor Matters..................................................................................22
         5.18     Securities Acts................................................................................22
         5.19     Financial Solvency.............................................................................22

ARTICLE V                  AFFIRMATIVE COVENANTS.................................................................22
         6.1      Reporting Requirements ........................................................................23
         6.2      Maintain Assets ...............................................................................23
         6.3      Taxes, Assessments and Charges.................................................................23
         6.4      Notification of Changes........................................................................23
         6.5      Preservation of Existence......................................................................24
         6.6      Compliance with Law............................................................................24
         6.7      Conduct of Business............................................................................24
         6.8      Books and Records..............................................................................25
         6.9      Reimbursement of Expenses......................................................................25
         6.10     ERISA  ........................................................................................25
         6.11     Leases.........................................................................................26
         6.12     Insurance .....................................................................................26
         6.13     Further Acts, etc. ............................................................................26
         6.14     Estoppel Certificates .........................................................................27
         6.15     Fixed Charge Coverage..........................................................................27
         6.16     Delivery of Documents Relating to the Initial Real Estate Collateral...........................27
         6.17     Delivery of Nondisturbance Agreements..........................................................28

ARTICLE VII                NEGATIVE COVENANTS....................................................................28
         7.1      Liens and Encumbrances.........................................................................28
         7.2      Consolidation, Merger, etc.....................................................................29
         7.3      Arm's Length Transactions......................................................................29
         7.4      Hazardous Materials............................................................................29
         7.5      ERISA..........................................................................................29
         7.6      Fiscal Year....................................................................................30
         7.7      Subsidiaries...................................................................................30
         7.8      Debt...........................................................................................30
         7.9      Restricted Payments............................................................................30
         7.10     Advances, Investments and Loans................................................................30
         7.11     Average Senior Funded Debt to EBITDA...........................................................31
         7.12     EBITDA.........................................................................................31

</TABLE>

                                       ii
<PAGE>

<TABLE>

<S>                                                                                                            <C>
ARTICLE VIII               EVENTS OF DEFAULT; REMEDIES...........................................................32
         8.1      Events of Default..............................................................................32
         8.2      Remedies.......................................................................................33

ARTICLE IX                 MISCELLANEOUS.........................................................................34
         9.1      Binding Effect; Assignment.....................................................................34
         9.2      Governing Law; Venue...........................................................................34
         9.3      Waiver of Jury Trial...........................................................................35
         9.4      [Intentionally Omitted]........................................................................35
         9.5      Notices........................................................................................35
         9.6      Amendment and Waiver...........................................................................35
         9.7      Headings.......................................................................................36
         9.8      Judicial Interpretation........................................................................36
         9.9      Severability...................................................................................36
         9.10     Agreement Supersedes...........................................................................36
         9.11     Acceptance.....................................................................................36

</TABLE>

                                       iii
<PAGE>

<TABLE>

<S>                                                                                                            <C>
         9.12     Opinion of Counsel.............................................................................36
         9.13     Secondary Market...............................................................................36
         9.14     No Reliance; No Lender Obligations.............................................................37
         9.15     Conflict Between Loan Documents................................................................38

</TABLE>

LIST OF EXHIBITS

<TABLE>

<S>                                         <C>
         EXHIBIT A                          Eligible Unit Requirements
         EXHIBIT B                          Title Policy Requirements
         EXHIBIT C                          Form of Unit Schedule
         EXHIBIT D-1                        Form of Landlord's Consent
         EXHIBIT D-2                        Form of Nondisturbance Agreement
         EXHIBIT E                          Form  of Supplemental Opinion of Counsel
         EXHIBIT F                          Form  of  Amendment to Security
         EXHIBIT G                          Initial Real Estate Collateral
         EXHIBIT H                          Unit Schedule Deletion Certificate

</TABLE>

                                       iv
<PAGE>

LIST OF SCHEDULES

<TABLE>
<CAPTION>

         UNIT SCHEDULES
<S>                                   <C>
         SCHEDULE 5.1                 Prior Names; Chief Executive Office
         SCHEDULE 5.2                 Subsidiaries
         SCHEDULE 5.6                 Litigation
         SCHEDULE 5.8                 Taxes and Assessments
         SCHEDULE 5.10                Units Subject to Purchase Agreements
         SCHEDULE 5.11                Exceptions to Environmental Representations
         SCHEDULE 5.13                Franchise Agreements
         SCHEDULE 5.15                Units
         SCHEDULE 5.17                Labor Matters
         SCHEDULE 5.19                Financial Solvency Matters
         SCHEDULE 7.8                 Permitted Debt
         SCHEDULE 7.10                Permitted Investments

</TABLE>

                                       v
<PAGE>

                  THIS LOAN AGREEMENT (this "LOAN AGREEMENT") is made and
entered into as of this 15th day of June, 2000 by and among CHECKERS DRIVE-IN
RESTAURANTS, INC., a Delaware corporation ("CHECKERS"), CHECKERS OF PUERTO RICO,
INC., a Puerto Rico corporation ("CHECKERS PUERTO RICO"), RALLY'S OF OHIO, INC.,
an Ohio corporation ("RALLY'S OHIO"), and RALLY'S MANAGEMENT, INC., a Kentucky
corporation ("RALLY'S MANAGEMENT"; Checkers, Checkers Puerto Rico, Rally's Ohio
and Rally's Management are sometimes referred to herein individually as a
"BORROWER" and collectively as the "BORROWERS") and TEXTRON FINANCIAL
CORPORATION, a Delaware corporation (the "LENDER").

                                   WITNESSETH:

                  WHEREAS, the Borrowers have requested that Lender extend to
them a term loan in the original principal amount of up to $12,000,000, as more
particularly described herein; and

                  WHEREAS, Lender has agreed to extend such loan upon the terms
and subject to the conditions contained herein;

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Borrowers and the Lender hereby agree as
follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  Section 1.1. CERTAIN  DEFINED TERMS.  When used in this
Agreement the following terms have the following meanings:

                  "AFFILIATE" means, at any time and with respect to any Person,
(a) any other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 25% or more of any class of voting or equity interests
of any Borrower or any of their respective Subsidiaries, or any Person of which
the Borrowers and their respective Subsidiaries own or hold, in the aggregate,
directly or indirectly, 25% or more of any class of voting interests. As used in
this definition, "CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Without limiting the foregoing, the term "AFFILIATE" when used with
reference to any Borrower shall include the Persons identified on SCHEDULE 5.2
hereof as affiliates.

                  "AGREEMENT" means this Loan Agreement,  as it may be amended,
modified or supplemented from time to time.

                                       1
<PAGE>

                  "BUSINESS DAY" means any day other than a Saturday, Sunday,
legal holiday or other day on which Lender ordinarily does not conduct business.

                  "BUSINESS VALUE" shall mean, with respect to any Unit, the
value assigned to such Unit by the Lender in its reasonable discretion based
upon, among other things, the results of the business valuation prepared for the
Lender by Deloitte and Touche with respect to such Unit and, with respect to any
real property that is not related to a Unit, the value assigned to such real
property by Lender in its reasonable discretion based upon, among other things,
the capitalized value of any lease of such real property.

                  "CAPITAL STOCK" means (a) in the case of a corporation,
capital stock, (b) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (c) in the case of a partnership, partnership
interests (whether general or limited), (d) in the case of a limited liability
company, membership interests, and (e) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

                  "CHANGE IN CONTROL" means the acquisition by any Person and
its Affiliates, or group of Persons and their respective Affiliates acting in
concert, of more than 35% percent of the issued and Capital Stock of Checkers as
a fully-diluted basis.

                  "CLOSING DATE" means the date of this Agreement.

                  "CODE" means the Internal Revenue Code of 1986, as amended, or
any successor statute, together with the regulations thereunder.

                  "COLLATERAL" means, collectively, the personal property
described in the Mortgage and in the Security Agreement.

                  "COLLATERAL CONVERSION DATE" shall have the meaning assigned
to that term in SECTION 4.4 hereof.

                  "CONSOLIDATED", when used in connection with any calculation,
means a calculation to be determined on a consolidated basis for a Person and
its Subsidiaries in accordance with GAAP.

                  "CONTROL EVENT" means (a) the execution by any Borrower of any
agreement or letter of intent with respect to any proposed transaction or event
or series of transactions or events which, individually or in the aggregate,
will likely be expected to result in a Change in Control, (b) the execution of
any written agreement which, when fully performed by the parties thereto, would
result in a Change in Control, or (c) the making of any written offer by any
person (as such term is used in section 13(d) and section 14(d)(2) of the
Securities Exchange Act of 1934 as in effect on the Closing Date) or related
persons constituting a group (as such term is used in Rule 13d-5 under the

                                       2
<PAGE>

Securities Exchange Act of 1934 as in effect on the Closing Date) to the holders
of the Capital Stock of any Borrower or any of their respective Subsidiaries,
which offer, if accepted by the requisite number of holders, would result in a
Change in Control.

                  "CURRENT PORTION OF LONG TERM DEBT" shall have the meaning
assigned to that term under GAAP.

                  "DEBT" of any Person means all obligations of such Person
under capitalized leases, all debt created, issued, guaranteed, incurred or
assumed by such Person for money borrowed, all liability for the deferred
purchase price of property or services, all contingent liabilities including the
obligation to reimburse any financial institution for any drafts drawn on
letters of credit, and obligations secured by any lien on property owned by such
Person.

                  "DEFAULT" means any Event of Default and any event which would
be an Event of Default with the giving of notice or lapse of any applicable
grace period, or both.

                  "EBITDA" means, with regard to any Person for any applicable
computation period, such Person's consolidated net income PLUS (a) Interest
Expense, (b) income and franchise taxes paid or accrued during such period, (c)
depreciation, (d) amortization, and (e) other non-cash charges, MINUS (a)
extraordinary gains of such Person and its Subsidiaries, and (e) dividends,
disbursements and draws to owners/stockholders.

                  "EBITDAR" means, with regard to any Person for any applicable
computation period, such Person's consolidated net income PLUS (a) Interest
Expense, (b) income and franchise taxes paid or accrued during such period, (c)
depreciation, (d) amortization, (e) Rent Expense, and (f) other non-cash
charges, MINUS (a) extraordinary gains of such Person and its Subsidiaries, and
(b) dividends, disbursements and draws to owners/stockholders; and (c) until
such time as Related Liabilities are paid in full and the obligation of the
Lender to make any advance under the Related Loan Agreement is terminated,
amounts paid by such Person and its Subsidiaries to repurchase common stock of
such Person or its Subsidiaries.

                  "ELIGIBLE UNIT" means a Unit that satisfies the requirements
set forth on EXHIBIT A attached hereto.

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

                  "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is a member of a group of which any Borrower is a member and
which is treated as a single employer under Section 414 of the Code.

                  "EVENT OF DEFAULT" has the meaning given in ARTICLE VII
hereof.

                                       3
<PAGE>

                  "EXISTING NOTES" means those certain $85,000,000 9 7/8%
Senior Notes due June 15, 2000 issued by Rally's Hamburgers, Inc. on March 9,
1993.

                  "FINANCING STATEMENT" means each UCC financing statement
executed by any Borrower in favor of the Lender covering all or any part of the
Collateral.

                  "FIXED CHARGE COVERAGE RATIO" means, for any applicable
computation period, the ratio of: (a) EBITDAR; to (b) Interest Expense, Rent
Expense and Current Portion of Long Term Debt.

                  "FRANCHISE AGREEMENT" means each franchise, license or similar
agreement between a Borrower and any other Person by which such Person obtains
the right to use or conduct business under any trademark or tradename of such
Borrower, including without limitation the "Checkers" or "Rally's" trademarks or
tradenames, as the same may be amended from time to time.

                  "GAAP" means generally accepted accounting principles
consistently applied and maintained throughout the period indicated, except for
changes mandated by the Financial Accounting Standards Board or any similar
accounting authority of comparable standing.

                  "HAZARDOUS MATERIALS" means any material designated pursuant
to the Clean Water Act, Title 33 U.S.C. Section 1321, any element, compound,
mixture, solution or substance designated pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, Title 42 U.S.C. Section
9602, any hazardous waste having the characteristics identified under or listed
pursuant to the Solid Waste Disposal Act, Title 42, U.S.C. Section 6921, any
toxic pollutant listed under Section 307(a) of the Clean Water Act, Title 33
U.S.C. Section 1317(a), any hazardous air pollutant listed under Section 112 of
the Clean Air Act, Title 42 U.S.C. Section 7412, any imminently hazardous
chemical substance or mixture with respect to which the Administrator of the
Environmental Protection Agency has taken action pursuant to Section 7 of the
Toxic Substances Control Act, Title 15 U.S.C. Section 2606 and any "Hazardous
Waste," "Hazardous Material," "Pollutant or Contaminant" or similar term as
defined under laws of any state in which any Unit or Mortgaged Property is
located. The term also includes, but is not limited to, polychlorinated
biphenyls, asbestos, urea formaldehyde and related hazardous substances.

                  "INDEMNITY AGREEMENT" means each Environmental and ADA
Indemnity Agreement or similar agreement from any Borrower in favor of the
Lender relating to all or any portion of the Mortgaged Properties, as the same
may be amended, modified or supplemented from time to time.

                  "INITIAL REAL ESTATE COLLATERAL" means the real property
described on EXHIBIT G attached hereto and made a part hereof.

                  "INTEREST EXPENSE" means, for any applicable computation
period, all interest paid or accrued during such period by any Person and its
Subsidiaries, determined on a consolidated basis and in accordance with GAAP.

                                       4

<PAGE>

                  "INVESTMENT" means the acquisition, purchase, making or
holding of any stock or other security, any loan, advance, contribution to
capital, extension of credit (except for trade and customer accounts receivable
for inventory sold or services rendered in the ordinary course of business and
payable in accordance with customary trade terms), any acquisitions of real and
personal property (other than real and personal property acquired in the
ordinary course of business) and any purchase or commitment or option to
purchase stock or other debt or equity securities of, or any interest in,
another Person or any integral part of any business or the assets comprising
such business or part thereof.

                  "LANDLORD'S CONSENT" means a Landlord's Consent or similar
agreement entered into by and among Lender, a Borrower and the fee owner of the
real property described in a Lease, as the same may be amended, modified or
supplemented from time to time.

                  "LEASE" means any real property lease relating to a Pledged
Unit including, without limitation, any leases described in the Unit Schedules,
as the same may be amended, modified or supplemented from time to time.

                  "LEASED PROPERTY" means real property relating to a Pledged
Unit if a Person other than a Borrower holds fee title to the land, or to both
the land and improvements, constituting such real property.

                  "LIABILITIES" means each and every Debt, liability and other
obligation of every type and description arising under or in connection with any
of the Loan Documents which a Borrower may now or at any time hereafter owe to
Lender including, without limitation, all indebtedness, liabilities and
obligations of the Borrowers arising under this Agreement or evidenced by the
Notes.

                  "LOAN DOCUMENTS" means this Agreement, the Notes, the
Financing Statements, the Mortgage, the Security Agreement, the Indemnity
Agreement and the Subordination Agreements, individually or collectively as the
case may be, as the same may hereafter be amended, modified, restated or renewed
from time to time. The term "LOAN DOCUMENTS" shall also include each
Subordination Agreement delivered to Lender under SECTION 6.16 hereof or
otherwise and each Financing Statement, Landlord's Consent and Nondisturbance
Agreement delivered to Lender under SECTION 4.1 hereof or otherwise.

                  "MATERIAL ADVERSE OCCURRENCE" means an occurrence of any kind,
whether or not insured against, which does or will materially adversely affect
the financial condition or operations of any Borrower, or materially impair the
ability of any Borrower, to perform its respective obligations under any Loan
Document.

                  "MINIMUM LOAN A BUSINESS VALUE" means, as of any date of
determination, an amount equal to (a) 200% of the principal balance of the
Note outstanding on such date; MINUS (b) the Business Value of that portion
of the Initial Real Estate Collateral that is not used in connection

                                       5

<PAGE>

with the operation of any Pledged Unit and with respect to which the items
described in SECTION 6.16 have been received and approved by the Lender.

                  "MINIMUM LOAN B BUSINESS VALUE" means, as of any date of
determination, an amount equal to 200% of the "Revolving Credit Amount", as that
term is defined in the Related Loan Agreement, as of such date.

                  "MORTGAGE" means that certain Mortgage, Deed to Secure Debt,
Deed of Trust, Leasehold Mortgage, Leasehold Deed to Secure Debt, Leasehold Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Financing Statement (Senior Credit Facility A) of even date herewith from the
Borrowers, as grantors, in favor of Lender, as mortgagee/grantee with First
Title Corporation or Fidelity National Title Insurance Corporation, as trustee,
as the same may be amended, modified or supplemented from time to time.

                  "NONDISTURBANCE AGREEMENT" means a nondisturbance or similar
agreement executed by a Borrower and any Person with an interest in the fee
title to Leased Property by which such Person agrees not to disturb the tenancy
of the Borrower with respect such Leased Property if such Borrower performs its
obligations under the related Lease, as such nondisturbance or similar agreement
may be amended, modified or supplemented from time to time.

                  "NOTE" shall have the meaning assigned to such term in SECTION
2.2 hereof.

                  "ORGANIZATIONAL DOCUMENTS" means (a) in the case of a
corporation, Articles of Incorporation, Bylaws and similar agreements, (b) in
the case of a partnership, Partnership Agreement and, if a limited partnership,
Certificate of Limited Partnership, and (c) in the case of a limited liability
company, Articles of Organization, Operating Agreement and Member Control and
similar agreements.

                  "ORIGINATION FEE" shall have the meaning set forth in
SECTION 3.4 hereof.

                  "PBGC" means the Pension Benefit Guaranty Corporation,
established pursuant to Subtitle A of Title IV of ERISA, or any successor
thereto or to the functions thereof.

                  "PERMITTED EXCEPTIONS" shall have the meaning given such term
in SECTION 5.1 of the Mortgage.

                  "PERMITTED LIENS" means liens and encumbrances permitted by
SECTION 7.1 of this Agreement.

                  "PERSON" means any natural person, corporation, limited
liability company, partnership, limited partnership, limited liability
partnership, joint venture, organization or governmental entity.

                                       6

<PAGE>

                  "PLAN" means each employee pension or benefit plan (as those
terms are defined in Section 3 of ERISA) maintained for the benefit of
employees, officers or directors of any Borrower or of any Subsidiary of any
Borrower or of any ERISA Affiliate.

                  "PLEDGED UNIT" means each Unit identified in a Unit Schedule
that has been signed by the Borrowers and the Lender.

                  "PROHIBITED TRANSACTION" shall have the respective meanings
assigned to such term in Section 4975 of the Code and Section 406 of ERISA.

                  "REAL PROPERTY" means, with respect to any Unit, the real
property owned or Leased by a Borrower in connection with the operation of such
Unit.

                  "RELATED LIABILITIES" means each and every Debt, liability and
other obligation of every type and description arising under or in connection
with any of the Related Loan Documents which a Borrower may now or at any time
hereafter owe to Lender including, without limitation, all indebtedness,
liabilities and obligations of the Borrower arising under the Related Loan
Agreement or evidenced by the Related Notes.

                  "RELATED LOAN AGREEMENT" means that certain Loan Agreement
(Subordinate Credit Facilities B and C) of even date herewith by and among the
Borrowers and the Lender, as the same may hereafter be amended, modified,
restated or renewed from time to time.

                  "RELATED LOAN DOCUMENTS" means, collectively, the Related Loan
Agreement and the other "Loan Documents", as that term is defined in the Related
Loan Agreement, as the same may be amended, modified, restated or renewed from
time to time.

                  "RELATED LOAN PLEDGED UNITS" means, collectively, the "Pledged
Units," as that term is defined in the Related Loan Agreement.

                  "RELATED NOTES" shall mean, collectively, that certain
Revolving Credit Note of even date herewith made jointly and severally payable
by the Borrowers to the order of the Lender in the original principal amount of
up to $8,000,000 and that certain Bridge Note of even date herewith made jointly
and severally payable by the Borrowers to the order of the Lender in the
original principal amount of up to $20,000,000, as the same may hereafter be
amended, modified, restated or renewed from time to time.

                  "RENT EXPENSE" means, for any applicable computation period,
amounts paid by a Person and its Subsidiaries in respect of rent under any real
property leases, determined on a consolidated basis and in accordance with GAAP.

                  "REPORTABLE EVENT" means a reportable event, as defined in
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such

                                       7

<PAGE>

events as to which the PBGC by regulation has waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence
of such event; PROVIDED, that for purposes of this Agreement, a failure to
meet the minimum funding standard of Section 412 of the Code and Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any waiver
in accordance with Section 412(d) of the Code.

                  "RESTRICTED PAYMENT" shall mean (a) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Borrower or any of its Subsidiaries, now or hereafter
outstanding, (b) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of any Borrower or any of its Subsidiaries, now or
hereafter outstanding, (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of any Borrower or any of its Subsidiaries,
now or hereafter outstanding, or (d) any payment or prepayment of principal of,
premium, if any, or interest on, redemption, purchase, retirement, defeasance,
sinking fund or similar payment with respect to, any Debt that is subordinated
in right of payment to the prior payment of all or any portion of Debt to the
Lender.

                  "SECURITY AGREEMENT" means that certain Security Agreement
(Senior Credit Facility A) of even date herewith from Borrowers in favor of the
Lender covering, prior to the Collateral Conversion Date, all personal property
and fixtures located at or used in connection with the Units, as the same may be
amended, modified, supplemented or renewed from time to time.

                  "SUBORDINATION AGREEMENT" means a Subordination and Attornment
Agreement or similar agreement executed by a Borrower and any other Person in
favor of Lender subordinating all right, title and interest of such Person in
real property leased by a Borrower to such Person to all right, title and
interest of the Lender in such property, as the same may be amended, modified or
supplemented from time to time.

                  "SUBSIDIARY" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries, or any Person and one or more of its Subsidiaries, owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or joint
venture if more than a 50% interest in the profits or capital thereof is owned
by such Person or one or more of its Subsidiaries, or such person and one or
more of its Subsidiaries. Unless the context otherwise clearly requires, any
reference to "Subsidiary" is a reference to a Subsidiary of Checkers.

                  "TERM LOAN" shall have the meaning assigned to such term in
SECTION 2.1 hereof.

                  "TITLE" means Fidelity National Title Insurance Company.

                                       8

<PAGE>

                  "UNIT" means each restaurant facility owned and operated by a
Borrower under Checkers' comprehensive system for developing and operating a
"Checkers" or "Rally's" restaurant, which system includes trademarks, building
designs and layouts, equipment, ingredients, recipes and specifications for
authorized food products, methods of inventory control and operational and
business standards and policies.

                  "UNIT SCHEDULE" means, collectively, each unit schedule
attached to this Agreement and each unit schedule made a part of this Agreement
after the Closing Date pursuant to SECTION 4.2(B) hereof, each of which is
incorporated herein by reference.

                  Section 1.2  ACCOUNTING  TERMS. All accounting terms not
otherwise  specifically  defined in this Agreement shall be construed in
accordance with GAAP.

                                   ARTICLE II

                              TERM LOAN COMMITMENT

                  Section 2.1  COMMITMENT. The Lender agrees, upon the terms
and subject to the conditions set forth in this Agreement and the other Loan
Documents, to extend to the Borrowers on the Closing Date a term loan (the
"TERM LOAN") in the original principal amount of Twelve Million Dollars
($12,000,000). The entire Term Loan will be advanced in accordance with the
payment instructions referred to in SECTION 3.1 and will be used by the
Borrowers solely to refinance existing Debt of the Borrowers, and to finance
certain closing and related costs. The Lender shall have no obligation to
make any advance of the Term Loan after the Closing Date.

                  Section 2.2  REPAYMENT. The Term Loan shall be evidenced by
and payable in accordance with the terms of a promissory note of even date
herewith made payable jointly and severally by the Borrowers to the order of
the Lender in the original principal amount of $12,000,000 (as the same may
be amended, modified, supplemented, extended, restated or replaced from time
to time, the "NOTE"). Any principal of the Term Loan which is repaid may not
be reborrowed, and any prepayment of all or any part of the Term Loan shall
be made in strict accordance with the provisions of the Note.

                  Section 2.3  OBLIGATIONS JOINT AND SEVERAL. All obligations
of the Borrowers hereunder and under the other Loan Documents shall be joint
and several. Each Borrower hereby agrees to make payment upon the maturity of
the Liabilities, whether by acceleration or otherwise, and such obligation
and liability on the part of each Borrower shall in no way be affected by any
act or omission of the Lender including, without limitation any extension,
renewal or forbearance granted by the Lender to any Borrower, any failure of
the Lender to pursue or preserve its rights against any Borrower or the
release by the Lender of any collateral now or hereafter given as security
for all or any part of such obligations.

                                       9

<PAGE>

                  Section 2.4  WAIVER OF SUBROGATION. Each Borrower expressly
waives any and all rights of subrogation, reimbursement, indemnity,
exoneration, contribution or any other claim which such Borrower may now or
hereafter have against the other Borrowers or any other person directly or
contingently liable for the Liabilities, or against or with respect to the
other Borrowers' property (including, without limitation, any property which
is collateral for the Liabilities), arising from the existence or performance
of this Agreement, until repayment in full of the Liabilities.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

                  In addition to the other conditions to the extension of
credit contained in this Agreement, the obligation of the Lender to make the
Term Loan is subject to the satisfaction of the following conditions:

                  Section 3.1  DOCUMENTS.  The  Borrowers  shall have
delivered or caused the delivery of the following  documents and  instruments
to the Lender or such third parties as Lender may instruct,  each in form and
substance acceptable to Lender:

                  (a) This Loan Agreement, the Note and the Security Agreement,
         each duly executed by the parties thereto.

                  (b) UCC Financing Statements from each Borrower in form and
         substance acceptable to lender for filing in such jurisdictions as
         Lender may require.

                  (c) With respect to the Initial Real Estate Collateral, the
         following:

                           (i)  the Mortgage;

                           (ii) a copy of each lease agreement covering all or
                  any portion of the Initial Real Estate Collateral, including
                  all amendments and supplements thereto;

                           (iii) a title policy or marked-up title commitment
                  covering the Initial Real Estate Collateral which satisfies
                  the requirements set forth on EXHIBIT B and is otherwise in
                  form and substance reasonably acceptable to Lender, together
                  with copies of all documents, instruments, agreements and
                  other items shown as exceptions on said title policy or
                  commitment; and

                           (iv) Current evidence of hazard and extended coverage
                  insurance acceptable to Lender covering the improvements
                  located on the Initial Real Estate Collateral, such insurance
                  to name the Borrowers as insured, as their respective
                  interests appear, and Lender as mortgagee and loss payee with
                  long form Lender's

                                      10

<PAGE>

                  endorsement to be in an amount not less than the full
                  replacement value of the improvements, to provide for thirty
                  (30) days' prior written notice to the Lender of cancellation
                  or nonrenewal and to otherwise comply with the requirements
                  of the Mortgage.

                           (v) Supplemental Opinions of counsel in substantially
                  the form of EXHIBIT E from counsel to the Borrowers in each
                  jurisdiction where Initial Real Estate Collateral is located
                  in form and substance acceptable to Lender.

                  (d) Copies of the Organizational Documents of each Borrower,
         together with all amendments and restatements to date, certified by an
         appropriate officer of such Borrower.

                  (e) Certified copies of the resolutions of the Board of
         Directors of each Borrower authorizing its execution and delivery of
         the relevant Loan Documents and identifying the officers authorized to
         execute the Loan Documents and request an advance of the proceeds of
         the Term Loan, together with an incumbency certificate listing the
         names and titles of the officers of such Borrower.

                  (f) Certificates of good standing, existence or its equivalent
         with respect to each Borrower certified as of a recent date by the
         appropriate governmental authorities of the state of incorporation and
         each other state in which the failure to so qualify and be in good
         standing could reasonably be expected to constitute a Material Adverse
         Occurrence.

                  (g) Opinion(s) of legal counsel to the Borrowers in form and
         substance acceptable to Lender and its counsel.

                  (h) Evidence of: (i) hazard and extended coverage insurance
         acceptable to Lender covering the Collateral; such insurance to name
         the Borrowers as insured, as their respective interests appear, and
         Lender as loss payee with long form lender's endorsement to be in an
         amount not less than the full replacement value of the Collateral, to
         provide for thirty (30) days' prior written notice to the Lender of
         cancellation or nonrenewal and to otherwise comply with the
         requirements of the Mortgage and the Security Agreement; and (ii)
         liability insurance acceptable to Lender naming each Borrower as
         insured and Lender as additional insured and to provide for thirty (30)
         days' prior written notice to the Lender of cancellation or renewal.

                  (i) UCC, state/federal tax lien and bankruptcy searches on
         such parties and in such locations as the Lender may require.

                  (j) Payment instructions regarding the advance of funds
         against the Note.

                  Section 3.2  TERMINATION OF LIENS. Borrowers shall have
provided evidence satisfactory to Lender of the termination and satisfaction
of all liens and encumbrances (other than

                                      11
<PAGE>

Permitted Liens and Permitted Exceptions) against the Initial Real Estate
Collateral and the Collateral.

                  Section 3.3  PROPOSAL FEE. Borrowers shall have paid to
Lender, in connection with the transactions contemplated hereunder and under
the Related Loan Agreement, a proposal fee of $100,000 (the "PROPOSAL FEE"),
which fee lender acknowledges was received prior to the Closing Date and
agrees will be applied to customary closing costs and expenses such as
reasonable attorneys' fees, business valuations and title insurance charges.

                  Section 3.4  ORIGINATION FEE. Borrowers shall have paid to
Lender a fully earned, nonrefundable origination fee of $120,000 (the
"ORIGINATION FEE"). Borrowers acknowledge that the Origination Fee is
separate and distinct from any origination fee due under the Related Loan
Agreement and that $100,000 of the Origination Fee is due from the Lender to
Citicorp North America, Inc.

                  Section 3.5  LENDER COSTS AND EXPENSES. Borrowers shall
have paid all costs and expenses incurred by the Lender in connection with
the documentation and closing of the Term Loan including, without limitation,
reasonable attorney's fees, and shall have deposited with Lender such amounts
as Lender may reasonably require to pay the costs and expenses, including
reasonable attorney's fees, the Lender estimates it will incur after the
Closing Date in connection with its review and approval of Pledged Units
under ARTICLE IV hereof.

                  Section 3.6  OTHER DOCUMENTS. Borrowers shall have
delivered to Lender such other documents as the Lender may reasonably require.

                  Section 3.7  NO DEFAULT. No Default exists or will result
from the making of the initial advance.

                  Section 3.8  ACCURACY OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties contained in ARTICLE V shall be true and
correct as of the date of the Closing Date

                  Section 3.9  NO MATERIAL ADVERSE OCCURRENCE. No Material
Adverse Occurrence shall have occurred.

                  Section 3.10 PAYOFF OF EXISTING NOTES. Evidence reasonably
satisfactory to Lender that (a) the proceeds of the advances to be made
against the Note and the Related Notes on the Closing Date, together with
such additional cash payments to be made by the Borrowers on the Closing
Date, are sufficient to pay the Existing Notes in full and then finally
satisfy all obligations of the Borrowers with respect thereto, and (b) such
advances and cash payments will be paid on the Closing Date to the holders of
the Existing Notes or their trustee or designee in full and final payment of
the Existing Notes.

                                      12

<PAGE>

                                  ARTICLE IV

                IDENTIFICATION AND SUBSTITUTION OF PLEDGED UNITS

                  Section 4.1  DELIVERY OF DOCUMENTS. Borrowers may from time
to time request that the Lender approve an Eligible Unit as a Pledged Unit in
accordance with the provisions of SECTION 4.2 below by delivering or causing
to be delivered to Lender the following documents, instruments and agreements:

                  (a)  the address of the Unit, including street address, city,
         state and zip code;

                  (b)  a legal description of the Real Property relating to the
         Unit;

                  (c)  if the Real Property relating to the Unit is Leased
         Property (a) a copy of the applicable Lease, including all amendments
         and supplements thereto, and (b) a copy of a memorandum of lease
         describing the applicable Lease in detail reasonably acceptable to
         Lender and evidence acceptable to Lender that such memorandum has been
         recorded in all appropriate recording offices;

                  (d) a title policy or marked-up title commitment covering the
         Real Property relating to the Unit which satisfies the requirements set
         forth on EXHIBIT B and is otherwise in form and substance reasonably
         acceptable to Lender, together with copies of all documents,
         instruments, agreements and other items shown as exceptions on said
         title policy or commitment;

                  (e) if a Borrower is the fee owner of the land and/or
         improvements constituting the Real Property relating to the Unit, a
         policy of flood insurance naming the Lender as an additional insured
         covering the improvements located on the Real Property relating to the
         Unit in an amount equal to the maximum limit of coverage available for
         such property under the National Flood Insurance Act of 1968, the Flood
         Disaster Protection Act of 1973 and the National Flood Insurance Act of
         1994, as each may be amended (the "FLOOD INSURANCE ACTS"), or proof
         reasonably satisfactory to Lender that no portion of the improvements
         located on the Real Property relating to the Unit is located in an area
         identified by the Federal Emergency Management Agency or any successor
         thereto as having special flood hazards pursuant to the Flood Insurance
         Acts;

                  (f) a properly completed and acknowledged environmental
         questionnaire in the form required by Lender relating to the Unit, such
         environmental searches and assessments as Lender may require and, if
         required by Lender, environmental insurance in such form and amount as
         Lender may reasonably require;

                  (g) a Mortgage Supplement covering the Real Property relating
         to the Unit in the form attached to the Mortgage and otherwise in form
         and substance reasonably acceptable

                                      13

<PAGE>

         to Lender, properly executed and acknowledged by all
         appropriate parties and filed of record in the appropriate recording
         offices;

                  (h) a UCC financing statement and a UCC fixture financing
         statement in such form as Lender may reasonably require covering all
         now existing or hereafter acquired furniture, fixtures and equipment of
         the Borrower relating to the Unit, properly executed and acknowledged
         by all appropriate parties and filed of record in the appropriate
         recording offices;

                  (i) a UCC fixture financing statement in such form as Lender
         may reasonably require covering all now existing or hereafter acquired
         fixtures of the Borrower relating to the Unit, properly executed and
         acknowledged by all appropriate parties and filed of record in the
         appropriate recording offices;

                  (j) if the Real Property relating to the Unit is Leased
         Property, (i) a Landlord's Consent in substantially the form attached
         hereto as EXHIBIT D-1 properly executed by such parties as the Lender
         may reasonably require and (ii) evidence reasonably satisfactory to
         Lender that Borrowers have used their best efforts to obtain a
         Nondisturbance Agreement in substantially the form attached hereto as
         EXHIBIT D-2 properly executed by such parties as the Lender may
         reasonably require;

                  (k) Current evidence of: (i) hazard and extended coverage
         insurance acceptable to Lender covering the improvements located on the
         Real Property relating to the Unit, such insurance to name the
         Borrowers as insured, as their respective interests appear, and Lender
         as mortgagee and loss payee with long form Lender's endorsement to be
         in an amount not less than the full replacement value of the
         improvements, to provide for thirty (30) days' prior written notice to
         the Lender of cancellation or nonrenewal and to otherwise comply with
         the requirements of the Mortgage; and (ii) hazard and extended coverage
         insurance acceptable to Lender covering the Collateral relating to the
         Unit; such insurance to name the Borrowers as insured, as their
         respective interests appear, and Lender as loss payee with long form
         lender's endorsement to be in an amount not less than the full
         replacement value of the Collateral, to provide for thirty (30) days'
         prior written notice to the Lender of cancellation or nonrenewal and to
         otherwise comply with the requirements of the Mortgage and the Security
         Agreement;

                  (l) a supplemental opinion of counsel relating to the Unit and
         the Mortgage Supplement relating thereto in substantially the form
         attached hereto as EXHIBIT E and otherwise in form and substance
         reasonably acceptable to Lender;

                  (m) two (2) original counterparts a completed Unit Schedule
         with respect to the Unit in the form attached hereto as EXHIBIT C,
         properly executed by the Borrowers;

                                      14

<PAGE>

                  (n) a business Valuation with respect to the Unit prepared by
         Deloitte & Touche or other accounting firm acceptable to Lender; and

                  (o) such other documents, instruments and agreements relating
         to the Unit and the Borrowers as the Lender may reasonably require.

                  Section 4.2 IDENTIFICATION OF PLEDGED UNITS. Upon
delivery of the items described in SECTION 4.1 above with respect to any
Eligible Unit, Lender shall review the same and use its reasonable efforts to
promptly advise the Borrowers of any deficiencies with respect thereto.
Lender reserves the right to reject any deliverable that does not conform to
the Lender's underwriting or due diligence standards. In the event that the
Lender in its reasonable discretion determines that an Eligible Unit does not
meet the Lender's underwriting standards or is unacceptable for any other
reason, whether based on information obtained from the Borrowers pursuant to
SECTION 4.1 above or otherwise, such Unit shall no longer constitute an
Eligible Unit, and Lender shall use its reasonable efforts to promptly advise
the Borrowers of the same. Upon receipt and review by the Lender of all of
the items required to be delivered pursuant to SECTION 4.1 above with respect
to any Eligible Unit and Lender's satisfaction in its reasonable discretion
with the form, substance and content of the same, Lender shall execute the
Unit Schedule relating to such Eligible Unit and promptly deliver an original
counterpart of the same to the Borrowers. Each Unit Schedule shall, upon
execution by the Borrowers and the Lender, constitute an addendum to this
Agreement and each Unit described therein be identified as and constitute a
Pledged Unit.

                  Section 4.3 DEADLINE FOR IDENTIFICATION OF PLEDGED UNITS.
The Borrowers agree to promptly:

                  (a) identify Pledged Units which have a Business Value equal
         to or in excess of the Minimum Loan A Business Value; and

                  (b) identify Related Loan Pledged Units which have a Business
         Value equal to or in excess of the Minimum Loan B Business Value.

In the event that, on or before the date which is sixty (60) days following
the date hereof, the borrowers have failed to identify Pledged Units that
satisfy the requirements of SECTION 4.3(a) above, or have failed to identify
Related Loan Pledged Units that satisfy the requirements of SECTION 4.3(b)
above, then the Borrowers shall immediately, and without notice or demand,
pay to Lender a wholly earned, non-refundable fee of $200,000. If such
failure is continuing on the date which is ninety (90) days following the
date hereof, or on the last day of each thirty (30) day period thereafter,
the Borrowers shall pay to Lender an additional wholly earned, nonrefundable
fee in the amount of $100,000 on each such date.

                  Section 4.4 AMENDMENT OF SECURITY DOCUMENTS. Provided no
Default has occurred and is continuing, the Borrowers and the Lender shall
execute an amendment to the Security Agreement in substantially the form of
EXHIBIT F attached hereto to cover only the Pledged Units and the Units
identified on SCHEDULE 5.10 as subject to a commitment or agreement for sale

                                       15
<PAGE>

which have not been released by the Lender pursuant to SECTION 4.7 or
otherwise, promptly following the initial identification of Pledged Units as
evidenced by Unit Schedules executed by the Borrowers and the Lender, which
satisfy the requirements of SECTIONS 4.3(a) and 4.3(b). The date on which
such amendments are executed by the Borrowers and the Lender shall be
referred to as the "COLLATERAL CONVERSION DATE".

                  Section 4.5 COSTS AND EXPENSES. Without limiting any other
provision hereof, the Borrowers agree to reimburse the Lender, upon written
demand of Lender (which demand shall be accompanied by reasonable supporting
documentation; it being agreed that such documentation need not in any event
include attorney/client privileged materials), for (a) any out-of-pocket
expenses incurred by the Lender, including reasonable attorneys' fees, in
connection with the matters contemplated by this ARTICLE IV; and (b) any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification
of, this Agreement or the other Loan Documents; together with interest on any
amount not paid within thirty (30) DAYS OF DEMAND AT THE RATE OF INTEREST
THEN ACCRUING ON THE NOTE.

                  Section 4.6 SUBSTITUTION OF PLEDGED UNITS. From and after the
Collateral Conversion Date, and provided no Default has occurred and is
continuing, the Lender will consent to the substitution of an Eligible Unit, or
more than one Eligible Unit, for an existing Pledged Unit, or more than one
existing Pledged Unit, upon the following terms and subject to satisfaction of
the following conditions:

                  (a) The Borrowers shall have identified to the Lender the
         Eligible Unit(s) and Pledged Unit(s) to be included as part of the
         substitution and provided to the Lender, with respect to each such
         Eligible Unit, the documents, instruments and agreements described in
         SECTION 4.1.

                  (b) The Lender shall have completed its review of the
         documents, instruments and agreements delivered pursuant to SECTION
         4.6(a) and determined, in its reasonable discretion, that the Eligible
         Unit(s) to be substituted conforms to the Lender's then-existing
         underwriting and due diligence standards.

                  (c) The Borrowers shall have provided the Lender with such
         other documentation regarding the substitution of collateral as the
         Lender may reasonably request including, without limitation, such
         Uniform Commercial Code, judgment, bankruptcy and tax lien searches
         covering such persons and entities and in such jurisdictions as the
         Lender may require, and the Lender shall be satisfied in its sole
         discretion with the matters disclosed therein.

                                       16
<PAGE>

                  (d) The Business Value of the Eligible Unit(s) to be
         substituted shall, in the sole opinion of the Lender, equal or exceed
         the Business Value attributed by the Lender at such time to the Pledged
         Unit(s) such Eligible Unit is/are to replace.

                  (e) The Borrowers shall pay the Lender a wholly-earned
         collateral substitution fee of $500 per Eligible Unit to be
         substituted.

                  (f) The Borrowers shall have executed and delivered to the
         Lender, or caused the execution and delivery to the Lender of, all
         documents and instruments which the Lender deems reasonably necessary
         or desirable in accordance with prudent lending practices to consummate
         the substitution of collateral including, without limitation, such
         amendments to the Mortgage, Security Agreement and Financing Statements
         as may be necessary or desirable to acquire, perfect and maintain the
         interest of the Lender in and to such substitute collateral, subject
         only to such liens and encumbrances as may be permitted hereunder.

                  (g) The Lender shall have received a supplemental opinion or
         opinions of counsel for the Borrowers in such form and content as
         Lender may reasonably require.

                  (h) The Borrowers shall have paid all costs and expenses of
         the Lender, including attorneys' fees incurred by the Lender in
         reviewing and processing such substitution of collateral.

                  (i) If the Real Property relating to the Pledged Unit to be
         substituted for constitutes Initial Real Estate Collateral, or if both
         the land and improvements constituting the Real Property relating to
         the Unit are otherwise owned by the Borrower, the Lender shall have
         consented in writing to such substitution.

Upon satisfaction of all of the foregoing conditions, the Borrowers and Lender
shall (a) execute two counterparts of the Unit Schedule relating to the Eligible
Unit or Eligible Units to be added as Pledged Units, which schedule shall
thereafter constitute an addendum to this Agreement and each Unit described
therein shall be identified as and constitute a Pledged Unit; and (b) execute
two counterparts of a Unit Schedule Deletion Certificate in the form of EXHIBIT
H attached hereto with respect to each Unit Schedule relating to the Pledged
Unit or Pledged Units to be released, which report shall operate to delete the
Unit Schedules identified therein from this Agreement and thereafter the Unit or
Units described in such deleted schedules shall no longer be identified as or
constitute a Pledged Unit or Pledged Units.

                  Section 4.7 SALE OF UNITS UNDER CONTRACT. In the event that
any of the Units identified on SCHEDULE 5.10 as being subject to an agreement,
commitment or option providing for the sale thereof are sold, the Borrowers
shall cause the net sale proceeds with respect to each such Unit to be delivered
directly to the Lender for application to the obligations of the Borrowers
hereunder and under the Related Loan Agreement. Lender agrees to release the
lien of the Security Agreement against such Units provided that no Default shall
have occurred and be continuing and

                                       17
<PAGE>

the Borrowers shall have delivered to the Lender net sale proceeds with
respect to such Units in an amount not less than the following amounts:

                  (a) With respect to the Units identified on SCHEDULE 5.10
         as the "St. Louis, Little Rock and Virginia Beach Units", $10,750,000;

                  (b) With respect to the Units identified on SCHEDULE 5.10 as
         the "Indianapolis and Toledo Units", $5,000,000;

                  (c) With respect to the Units identified on SCHEDULE 5.10 as
         the "Cincinnati Units", $700,000; and

                  (d) With respect to the Units identified on SCHEDULE 5.10 as
         the "Louisville and Lexington Units", $7,250,000.

                                     ARTICLE V

                         REPRESENTATIONS AND WARRANTIES

                  To induce the Lender to enter into this Agreement, each
Borrower hereby represents and warrants to the Lender that:

                  Section 5.1 ORGANIZATION, QUALIFICATION AND AUTHORIZATION.
Borrower and each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its state of organization;
has the power and authority to own its property and to carry on its business
as now being conducted; and is duly qualified and licensed to do business,
and is in good standing, in every jurisdiction where the failure to qualify
would, or would reasonably be expected, to constitute a Material Adverse
Occurrence. Borrower and each Subsidiary has all requisite power and
authority to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under, the Loan Documents.
Within the last twelve (12) months, Borrower and each Subsidiary has done
business solely under the names set forth in SCHEDULE 5.1 hereto. The chief
executive office and principal place of business of Borrower is located at
the address set forth in SCHEDULE 5.1 hereto, and all records relating to the
business of such Borrower are kept at that location and at 360 South Hope
Avenue, Suite C300, Santa Barbara, California 93105. The taxpayer
identification number of Borrower is set forth on SCHEDULE 5.1 hereto.

                  Section 5.2 SUBSIDIARIES; AFFILIATES. All Subsidiaries and
Affiliates of Borrower are set forth and described on SCHEDULE 5.2 attached
hereto. Except as set forth and described on SCHEDULE 5.2 attached hereto,
neither Borrower nor any Subsidiary is a general partner in any general or
limited partnership, or a joint venturer in any joint venture or a member of
any limited liability company.

                                       18

<PAGE>

                  Section 5.3 POWER AND AUTHORITY. The execution, delivery
and performance by Borrower and each Subsidiary of the Loan Documents to
which it is a party, and the advances from time to time obtained hereunder,
have been duly authorized by all necessary corporate, company or partnership
action, as the case may be, and do not and will not (a) require any consent
or approval which has not been obtained prior to the date hereof, (b) require
any authorization, consent or approval by, or registration, declaration or
filing (other than filings contemplated hereunder to perfect liens in favor
of Lender) with, or notice to, any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any third
party, except such authorization, consent, approval, registration,
declaration, filing or notice as has been obtained, accomplished or given
prior to the date hereof; (c) to Borrower's knowledge, violate any provision
of law, rule or regulation, or of any order, writ, injunction or decree
presently in effect having applicability to Borrower or any Subsidiary, or
the articles of incorporation, bylaws or other organizational documents of
Borrower or any Subsidiary; (d) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which Borrower or any Subsidiary may be
bound or affected, and such breach or default constitutes a Material Adverse
Occurrence; (e) result in, or require, the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature upon or with respect to any of the properties now
owned or hereafter acquired by Borrower or any Subsidiary (other than as
required hereunder in favor of the Lender).

                  Section 5.4 VALIDITY OF OBLIGATIONS. Each of the Loan
Documents to which Borrower or any Subsidiary is a party constitutes the
legal, valid and binding obligations of Borrower or such Subsidiary, as
applicable, enforceable in accordance with its terms except to the extent
that enforcement thereof may be limited by applicable bankruptcy, insolvency
or similar laws now or hereafter in effect affecting creditors' rights
generally, and by general principles of equity.

                  Section 5.5 FINANCIAL STATEMENTS. Checkers has furnished
the Lender with its audited balance sheet, statement of income and retained
earnings, and statement of cash flow the year ended January 3, 2000 and its
interim financial statement dated March 27, 2000. Such financial statements
(including any related schedules and/or notes) and show all liabilities,
direct and contingent, of Checkers and its Subsidiaries have been prepared in
accordance with GAAP on a consolidated basis. The balance sheets fairly
present the financial condition of Checkers and its Subsidiaries as of the
dates thereof, and the statements of income and retained earnings fairly
present the results of the operations of Checkers and its Subsidiaries for
the periods indicated. Since the date of the financial statements described
above, there has been no Material Adverse Occurrence. Checkers and its
Subsidiaries have good and marketable title to all of the property and assets
reflected in the interim balance sheet and any purported to have been
acquired after said date, subject to exceptions and encumbrances as therein
detailed.

                  Section 5.6 LITIGATION. Except as disclosed to the Lender
on SCHEDULE 5.6 hereto, there is no proceeding at law or in equity, or before
or by any federal, state, local or other governmental entity, domestic or
foreign, pending, or to their knowledge threatened, against

                                       19
<PAGE>

Borrower or its Subsidiaries which, if determined adversely to such party,
would constitute a Material Adverse Occurrence.

                  Section 5.7 ACCURACY OF INFORMATION. All factual
information furnished or to be furnished to the Lender by or on behalf of
Borrower or its Subsidiaries in connection with this Agreement is, to the
Borrower's knowledge, and will be, to the Borrower's knowledge, true and
accurate in every material respect on the date as of which such information
is dated or certified and not incomplete by omitting to state any material
fact necessary to make such information not misleading on such date.

                  Section 5.8 TAXES. Except as set forth and described on
SCHEDULE 5.8 hereto, Borrower and its Subsidiaries have paid or caused to be
paid to the proper authorities when due all federal, state and local taxes
required to be withheld by them. Borrower and its Subsidiaries have filed all
federal, state and local tax returns which, to the knowledge of the officers
of Borrower are required to be filed, and have paid or caused to be paid to
the respective taxing authorities all taxes as shown on said returns or on
any assessment received by it to the extent such taxes have become due,
except (a) for any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested by Borrower or its Subsidiary,
as applicable, in good faith and by proper proceedings and for which Borrower
or such Subsidiary shall have set aside adequate reserves, and (b) as set
forth and described on SCHEDULE 5.8 hereto.

                  Section 5.9 ERISA. Each Plan is in substantial compliance
with all applicable requirements of ERISA and the Code and with all material
applicable rulings and regulations issued under the provisions of ERISA and
the Code setting forth those requirements. No Reportable Event has occurred
and is continuing with respect to any Plan. All of the minimum funding
standards applicable to such Plans have been satisfied and there exists no
event or condition which would reasonably be expected to result in the
institution of proceedings to terminate any Plan under Section 4042 of ERISA.
With respect to each Plan subject to Title IV of ERISA, as of the most recent
valuation date for such Plan, the present value (determined on the basis of
reasonable assumptions employed by the independent actuary for such Plan and
previously furnished in writing to the Lender) of such Plan's projected
benefit obligations did not exceed the fair market value of such Plan's
assets. Except as required under Section 4890B of the Code, Section 601 of
ERISA or applicable state law, no Borrower or Subsidiary is obligated to
provide post-retirement medical or insurance benefits with respect to
employees or former employees.

                  Section 5.10 TITLES AND LIENS. Checkers and its
Subsidiaries have good and marketable title to its real property and good and
sufficient title to its other property, including without limitation all
properties and assets reflected in the latest consolidated balance sheet
referred to in SECTION 5.5 hereof, free and clear of all mortgages, security
interests, liens and encumbrances, except for (a) mortgages, security
interests, liens and encumbrances permitted by SECTION 7.1 hereof, and (b)
covenants, restrictions, easements and minor irregularities which do not (i)
materially interfere with the business or operations of Checkers Subsidiaries
as presently conducted, or (ii) materially impair the value of the property
to which they attach. In addition, no financing statement naming Borrower or
its Subsidiaries as debtor is on file in any office except to perfect only
security

                                       20
<PAGE>

interests permitted by SECTION 7.1 hereof. Except as set forth in SCHEDULE
5.10 hereof, no Unit is subject to any commitment or agreement providing for
the sale of such Unit to any Person or giving any Person the right or option
to purchase such Unit.

                  Section 5.11 ENVIRONMENTAL COMPLIANCE. Borrower and its
Subsidiaries have obtained, to the Borrower's knowledge after due inquiry,
all permits, licenses and other authorizations which are required under
federal, state and local laws (the "ENVIRONMENTAL LAWS") and regulations
relating to emissions, discharges, releases of Hazardous Materials into
ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials at the facilities of Borrower or
its Subsidiaries, or in connection with the operation of such facilities
except where its failure to obtain such permits, licenses and other
authorizations would not constitute a Material Adverse Occurrence. Except as
disclosed in SCHEDULE 5.11 hereof, Borrower and its Subsidiaries, and all
activities of Borrower and its Subsidiaries at its facilities, comply, to the
Borrower's knowledge after due inquiry, with all Environmental Laws and with
the terms and conditions of any required permits, licenses and authorizations
applicable to Borrower or such Subsidiary, except where its noncompliance
would not constitute a Material Adverse Occurrence. Except as disclosed in
SCHEDULE 5.11 hereof, Borrower and its Subsidiaries are in material
compliance, to the Borrower's knowledge after due inquiry with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in Environmental Laws or
contained in any plan, order, decree, judgment or notice of which Borrower or
any Subsidiary is aware and with respect to which noncompliance would
constitute a Material Adverse Occurrence. Except as disclosed in SCHEDULE
5.11 hereto, Borrower is not aware of, nor has Borrower received notice of,
any events, conditions, circumstances, activities, practices, incidents,
actions or plans which may interfere with or prevent continued compliance
with, or which may give rise to liability under, any Environmental Laws.

                  Section 5.12 PERMITS AND FRANCHISES. To Borrower's
knowledge, all certificates, permits, licenses and other authorizations from
government bodies or authorities which are necessary to permit the operation
of the business of the Borrower and its Subsidiaries have been obtained and
are in full force and effect except where the failure to obtain or maintain
such permits, licenses and authorizations would not constitute a Material
Adverse Occurrence.

                  Section 5.13 FRANCHISE AGREEMENTS. Set forth on SCHEDULE
5.13 is a complete and accurate description of each Franchise Agreement to
which any Borrower is a party. Checkers is the sole party with an interest in
the rights of the franchisor under the Franchise Agreements. Except as
disclosed in SCHEDULE 5.13 and to the knowledge of the Borrower, no material
default exists under the terms of any Franchise Agreement as currently in
effect, and neither Checkers nor any other Borrower has received any notice
of a material default under any Franchise Agreement within the preceding six
months.

                  Section 5.14 LEASES. Set forth on the Unit Schedules is a
complete and accurate list of each real property lease covering all or any
portion of the Real Property relating to each Pledged

                                       21
<PAGE>

Unit. The Borrowers have delivered to the Lender true, correct and complete
copies of the Leases as currently in effect. No default currently exists
under any term of any Lease. Borrowers are the sole parties with an interest
in each Lease and are reflected as such in the records of the lessor.

                  Section 5.15 LOCATION OF COLLATERAL. Set forth on SCHEDULE
5.15 is a complete list of each Unit operated by Borrower and each other
location where any tangible real or personal property of the Borrower is
located, and set forth on each Unit Schedule is a complete and accurate
description of the location(s) where Collateral relating to the Unit
described on such schedule is located.

                  Section 5.16 PATENTS, TRADEMARKS, ETC. Borrower and each
Subsidiary possesses or has the right to use all of the patents, trademarks,
trade names, service marks and copyrights, and applications therefor, and all
technology, know-how, processes, methods and designs used in or necessary for
the conduct of its business, without known conflict with the rights of
others. All such licenses, patents, trademarks, trade names, service marks
and copyrights, and applications therefor existing on the date hereof are
listed on SCHEDULE 5.16.

                  Section 5.17 LABOR MATTERS. To the knowledge of the
Borrower, no Borrower nor any Subsidiary is a party to any contract or
agreement, or subject to any charge, corporate restriction, judgment, decree
or order, the performance of which would constitute a Material Adverse
Occurrence; no labor contract to which Borrower or Subsidiary is subject is
scheduled to expire during the original term of this Agreement; and, except
as set forth on SCHEDULE 5.17, on the date of this Agreement neither Borrower
nor any Subsidiary is a party to any labor dispute and there are no strikes
or walkouts relating to any labor contracts to which Borrower or any
Subsidiary is subject.

                  Section 5.18 SECURITIES ACT. Borrower has not issued any
unregistered securities in violation of the registration requirements of
Section 5 of the Securities Act of 1933, as amended, or any other law, and is
not violating any rule, regulation or requirement under the Securities Act of
1933, as amended, or the Securities Act of 1934, as amended, in any material
respect.

                  Section 5.19 FINANCIAL SOLVENCY. Except as set forth on
SCHEDULE 5.19, both before and after giving effect to all of the transactions
contemplated in the Loan Documents, Borrower and each of its Subsidiaries (a)
was not and will not be insolvent, as that term is used and defined in
Section 101(32) of the United States Bankruptcy Code and Section 2 of the
Uniform Fraudulent Transfer Act, (b) does not have unreasonably small capital
and is not engaged or about to engage in a business or transaction for which
any remaining assets of Borrower or such Subsidiary are unreasonably small,
(c) does not, by executing, delivering or performing its obligations under
the Loan Documents or by taking any action with respect thereto, intend to,
nor believe that it will, incur debts beyond its ability to pay them as they
mature, (d) does not, by executing, delivering or performing its obligations
under the Loan Documents or by taking any action with respect thereto, intend
to hinder, delay or defraud either its present or future creditors; and (e)
does not contemplate filing a petition in bankruptcy or for an arrangement or
reorganization or similar proceeding under any law of any jurisdiction or
country and, to the best knowledge of Borrower, is not the subject of

                                       22
<PAGE>

any bankruptcy or insolvency proceeding or similar proceeding under any law
of any jurisdiction or country threatened or pending against Borrower or any
of its Subsidiaries.

                                     ARTICLE VI

                              AFFIRMATIVE COVENANTS

                  Each Borrower hereby covenants and agrees with the Lender that
on the Closing Date, and thereafter for so long as the Liabilities or any
portion thereof remain unpaid or the Lender has any obligation to make advances
against the Note, such Borrower shall, and shall cause each of its Subsidiaries,
to comply with the following requirements:

                  Section 6.1 REPORTING REQUIREMENTS.  Furnish to the Lender:

                  (a) As soon as available and in any event within 120 days
         after the close of each fiscal year of Checkers, the annual
         consolidated balance sheet of Checkers and its Subsidiaries as at the
         end of such year and a statement of its income and retained earnings
         and statement of cash flow for such year audited by independent
         certified public accountants of recognized standing selected by
         Checkers and acceptable to the Lender. Such statements shall be
         prepared on a consolidated basis in accordance with GAAP in a manner
         consistent with the financial statements referred to in SECTION 5.5 and
         shall be accompanied by the report of such accountants in form and
         substance reasonably satisfactory to the Lender;

                  (b) As soon as available and in any event within 45 days after
         the close of each fiscal quarter of Checkers, a company-prepared
         quarterly balance sheet of Checkers and its Subsidiaries as at the end
         of such quarter and a statement of its income and retained earnings and
         statement of cash flow for such quarter certified to Lender by the
         chief financial officer of Checkers. Such statements shall be prepared
         on a consolidated basis in accordance with GAAP in a manner consistent
         with the financial statements referred to in SECTION 5.5.

                  (c) Within ten (10) days after Lender's written request,
         copies of each tax return (together with supporting schedules) of
         Checkers and its Subsidiaries requested by Lender.

                  (d) From time to time such other information pertaining to
         each Borrower and their respective Subsidiaries and their financial
         conditions, as the Lender may reasonably request in writing.

                  Section 6.2 MAINTAIN ASSETS. Keep and maintain in good
repair, working order and condition all of its assets and properties which
are necessary or useful in its business (ordinary wear and tear excepted).

                  Section 6.3 TAXES, ASSESSMENTS AND CHARGES. Promptly pay or
discharge when due (a) all taxes, assessments and other governmental charges
levied or imposed upon it or upon its income or profits or upon any
properties belonging to it, prior to the date on which penalties attach

                                       23

<PAGE>

thereto, (b) all federal, state and local taxes required to be withheld by it,
and (c) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien or charge upon any of its properties; PROVIDED,
however, that each Borrower and its Subsidiaries shall not be required to pay
any such tax, assessment, charge or claim the amount, applicability or validity
of which is being contested in good faith by appropriate proceedings and for
which such Borrower or Subsidiary has established adequate reserves in
accordance with GAAP.

                  Section 6.4 NOTIFICATION OF CHANGES. Promptly provide the
Lender with written notice of any of the following:

                  (a) any litigation which might materially and adversely
         affect it;

                  (b) the occurrence of any Default under this Agreement;

                  (c) any Material Adverse Occurrence;

                  (d) its receipt of (and promptly furnish the Lender with a
         copy of) any citation relating to Hazardous Materials;

                  (e) its receipt of any notice of default from, or its
         provision of any notice of default to, any Person under any Franchise
         Agreement;

                  (f) the occurrence of a Reportable Event or Prohibited
         Transaction with respect to any Plan, together with a notice specifying
         the nature thereof and what action the Borrowers propose to take with
         respect thereto, and, when received, copies of any notice from PBGC of
         intention to terminate or have a trustee appointed for any Plan;

                  (g) any change in location of any of the Collateral to
         locations other than those identified in this Agreement or in SCHEDULE
         5.15, together with a list of such new location(s), the legal
         description of the location and the name and address of any landlord
         and/or mortgagee;

                  (h) any change in the name of any Borrower or any of their
         Subsidiaries; or

                  (i) any addition to the list of patents, trademarks,
         copyrights and other information set forth on SCHEDULE 5.16.

                  Section 6.5 PRESERVATION OF EXISTENCE. Maintain and
preserve, and cause each Subsidiary to maintain and preserve (a) its
existence and good standing as a corporation or other form of business
organization, as the case may be, in the jurisdiction of its formation, (b)
its qualification to do business in every other jurisdiction in which the
nature of its business makes such qualification necessary, and (c) all
rights, privileges, licenses, patents, patent rights, copyrights,

                                       24
<PAGE>

trademarks, trade names, franchises and other authority to the extent
material and necessary for the conduct of its respective business in the
ordinary course as conducted from time to time.

                  Section 6.6 COMPLIANCE WITH LAW. Comply in all material
respects with all applicable statutes, laws, rules and regulations, and use
and keep its assets, and will require that others use and keep its assets,
only for lawful purposes, without violation of any federal, state or local
law, statute or ordinance.

                  Section 6.7 CONDUCT OF BUSINESS. Continue to engage in a
reasonably efficient and economical manner in the business of, and solely in the
business of owning, operating, leasing and franchising the Units and other
Checkers and Rally's restaurants. The Units shall be operated as Checkers or
Rally's restaurants unless the Lender consents in writing to a change in
concept, which consent the Lender may grant or withhold in its sole discretion.

                  Section 6.8 BOOKS AND RECORDS. Keep true and accurate
records and books of account in accordance with sound accounting principles;
and permit any agent or representative of the Lender at any reasonable time
upon reasonable prior notice to visit, inspect and make copies of any of
their books and financial records and discuss their business with its
officers, directors, managers, legal counsel or accountants. Lender agrees to
use its reasonable efforts to maintain in confidence all information provided
by any Borrower to Lender which is specifically designated in writing as
privileged or confidential ("CONFIDENTIAL INFORMATION"), and not to disclose
any such information to anyone except (a) to employees, agents, auditors and
counsel of the Lender, its parent, its subsidiaries and its affiliates
(collectively, the "LENDER RELATED Parties"), (b) to regulatory agencies in
connection with examinations of the records of any Lender Related Party, (c)
pursuant to a subpoena, court order or otherwise as may be required by law,
(d) in connection with any court or arbitration proceeding to which any
Lender Related Party is a party, to the extent such information is relevant
to matters at issue in such proceeding, and (e) any Investor (as defined in
SECTION 9.13), Rating Agency (as defined in SECTION 9.13), prospective
Investor or organization maintaining databases on the underwriting and
performance of commercial loans. Confidential Information shall not include
any information that is rightfully received from a third party without
accompanying use or disclosure restrictions, is independently developed by
employees of the Lender or its affiliates who have not had access to such
confidential information, is or becomes publicly available through no
wrongful act of the Lender or its affiliates, or is already known to the
Lender, or is approved for release by a Borrower.

                  Section 6.9 REIMBURSEMENT OF EXPENSES. Reimburse the Lender
on written demand (which demand shall be accompanied by reasonable supporting
documentation, it being agreed that such documentation need not in any event
include attorney/client privileged materials) for (a) any out-of-pocket
expenses incurred by the Lender, including reasonable attorneys' fees, in the
preparation, performance or amendment of any of the Loan Documents; and (b)
any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any

                                       25
<PAGE>

of the transactions contemplated by, or any amendment, supplement or
modification of, this Agreement or the other Loan Documents; together with
interest on any amount not paid within thirty (30) days of demand at the rate
of interest then accruing on the Note. The Borrowers agree that Lender's
out-of-pocket expenses for customary closing costs and fees, and for the
preparation of the Loan Documents, will be reimbursed to the Lender from the
Proposal Fee; all out-of-pocket expenses in excess of the Proposal Fee shall
be reimbursed to the Lender or paid by the Borrowers at closing or upon
demand by the Lender.

                  Section 6.10 ERISA. Maintain, and cause each ERISA
Affiliate to maintain, each Plan in compliance with all material applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and not
permit any of the ERISA Affiliates to (a) engage in any transaction in
connection with which any Borrower or ERISA Affiliate would be subject to
either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code, in either case in an amount exceeding
$50,000, (b) fail to make full payment when due of all amounts which, under
the provisions of any Plan, any Borrower or ERISA Affiliate is required to
pay as contributions thereto, or permit to exist any accumulated funding
deficiency (as such term is defined in Section 302 of ERISA and Section 412
of the Code), whether or not waived, with respect to any Plan in an aggregate
amount exceeding $50,000, or (c) fail to make any payments in an aggregate
amount exceeding $50,000, to any Multiemployer Plan that any Borrower or
ERISA Affiliate may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.

                  Section 6.11 LEASES. Comply in all material respects with
the terms of the Leases and take all such actions as may be reasonably
required to maintain the Leases for the respective terms thereof.

                  Section 6.12 INSURANCE. Obtain and at all times maintain
insurance with financially sound and reputable insurers in such amounts and
against such risks as is usually carried by companies engaged in similar
business and owning similar properties in the same general area in which it
operates. Without limiting the foregoing, at all times each Borrower shall,
and shall cause its Subsidiaries to, keep all tangible Collateral insured
against such risks and in such amounts as required by the Mortgage and the
Security Agreement and keep the Mortgaged Properties insured against such
risks and in such amounts as required by the Mortgage and, if the Mortgaged
Property is a Leased Property, the applicable Lease. In the case of any
material loss, damage to or destruction of the Collateral or the Mortgaged
Properties, or any part thereof, the Borrowers shall promptly give written
notice thereof to the Lender generally describing the nature and extent of
such loss, damage or destruction.

                  Section 6.13 FURTHER ACTS, ETC. At Borrowers' sole cost and
expense, do, perform, execute, acknowledge and deliver such further acts,
deeds, conveyances, mortgages, assignments, notices of assignments, transfers
and assurances as Lender may, from time to time, reasonably require for (a)
the better, conveying, assigning, transferring, and confirming unto Lender
the

                                       26
<PAGE>

Properties, the Leases, the Collateral and the other rights granted or to be
granted to the Lender hereunder or under any of the other Loan Documents, (b)
carrying out the intention of, or facilitating the performance of, the terms
of this Loan Agreement and the other Loan Documents, (c) filing, registering
or recording any Loan Document, or (d) for complying with all applicable
state or federal law. Borrower will, on written demand, execute and deliver
to Lender, and hereby authorizes Lender, following 10 days' written notice to
Borrowers, to execute in the name of any Borrower or without the signature of
any Borrower to the extent Lender may lawfully do so, one or more financing
statements, chattel mortgages or other instruments, to evidence or perfect
more effectively the security interest of Lender in the Mortgaged Properties,
the Leases and the Collateral. Each Borrower grants to Lender an irrevocable
power of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lender pursuant to
this SECTION 6.13.

                                       27

<PAGE>

                   Section 6.14  ESTOPPEL CERTIFICATES.

                  (a) Furnish to Lender or any proposed assignee, within ten
         (10) days after receipt of a request therefor, with a statement, duly
         acknowledged and certified by Borrower setting forth to Borrower's
         knowledge (i) the original principal amount of each Note, (ii) the
         unpaid principal amount of each Note, (iii) the rate of interest of
         each Note, (iv) the terms of payment and maturity date of each Note,
         (v) the date installments of interest and/or principal were last paid,
         (vi) that, except as provided in such statement, there are no defaults
         or events which with the passage of time or the giving of notice or
         both, would constitute an event of default under this Loan Agreement,
         (vii) this Loan Agreement, each Note and each of the other Loan
         Documents are valid, legal and binding obligations and have not been
         modified or if modified, giving particulars of such modification,
         (viii) whether any offsets or defenses exist against the obligations
         secured hereby and, if any are alleged to exist, a detailed description
         thereof, (ix) that all Leases are in full force and effect have not
         been modified (or if modified, setting forth all modifications), (x)
         the date to which the rents under each Lease have been paid, (xi)
         whether or not, to the best knowledge of such Borrower, any default
         exists under any Lease and setting forth the specific nature of any
         such default, (xii) the amount of security deposits held or paid by
         such Borrower under each Lease and that such amounts are consistent
         with the amounts required under each Lease, and (xiii) as to any other
         matters reasonably requested by Lender and reasonably related to this
         Loan Agreement, the obligations secured hereby, the Properties, the
         Leases or the Collateral.

                  (b) Upon any transfer or proposed transfer contemplated by
         SECTION 9.13, at Lender's request, Borrower shall provide, an estoppel
         certificate to the Investor (defined in SECTION 9.13) or any
         prospective Investor in such form, substance and detail as Lender, such
         Investor or prospective Investor may require.

                  Section 6.15 FIXED CHARGE COVERAGE. At all times from and
after December 31, 2001, cause Checkers to maintain on a consolidated basis,
a Fixed Charge Coverage Ratio for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to such time, of not less
than 1.25 to 1.0.

                  Section 6.16 DELIVERY OF DOCUMENTS RELATING TO THE INITIAL
REAL ESTATE COLLATERAL. As soon as available but in any event not more than
sixty (60) days following the Closing Date, deliver or cause the delivery to
Lender of the following with respect to the Initial Real Estate Collateral:

                  (a) a policy of flood insurance naming Lender as an additional
         inured covering the improvements located on each parcel of land
         constituting the Initial Real Estate Collateral in an amount equal to
         the maximum level of coverage available for such parcel under the Flood
         Insurance Acts, or proof reasonably satisfactory to Lender that no
         protection of the improvements located on such parcel are located in an
         area identified by the Federal

                                      28

<PAGE>

         Emergency Management Agency or any successor thereto as having special
         flood hazards pursuant to the Flood Insurance Acts;

                  (b) properly completed and acknowledged environmental
         questionnaires in the form required by Lender relating to the Initial
         Real Estate Collateral such environmental assessments and searches as
         Lender may require and, if required by Lenders, environmental insurance
         in such form and amount as Lender may reasonably require; and

                  (c) a Subordination Agreement covering the interest of any
         Person other than the Borrowers in the Initial Real Estate Collateral
         property executed by such parties as Lender may reasonably require.

                  Section 6.17 DELIVERY OF NONDISTURBANCE AGREEMENTS. In the
event that the Borrowers are unable to obtain any Nondisturbance Agreement
required under SECTION 4.1(J) with respect to any Pledged Unit, and the Lender
reasonably determines that the interest of any Borrower or the Lender in and to
the Real Property relating to such Pledged Unit could be extinguished or
impaired if such Nondisturbance Agreement is not obtained, the Lender may
provide the Borrowers with written notice requiring delivery of such
Nondisturbance Agreements, in substantially the form attached hereto as EXHIBIT
D-2 and otherwise in form and substance reasonably acceptable to Lender,
properly executed by such parties as the Lender may require. The Borrowers shall
have sixty (60) days from the date of such written notice to either deliver such
Nondisturbance Agreements to the Lender or to substitute an alternative Eligible
Unit for such Pledged Unit in accordance with the procedures set forth in
SECTION 4.6 hereof.

                                  ARTICLE VII

                               NEGATIVE COVENANTS

                  Each Borrower hereby covenants and agrees with the Lender that
on the Closing Date, and thereafter for so long as the Liabilities or any
portion thereof remain unpaid or the Lender has any obligation to make advances
against the Notes, it will comply with the following requirements:

                  Section 7.1 LIENS AND ENCUMBRANCES. Borrower will not, and
will not permit any Subsidiary to, create, assume, incur or suffer to exist
any lien or encumbrance of any kind, upon all or any portion of the Mortgaged
Property, any Lease, the Collateral or any Franchise Agreement, whether now
owned or hereafter acquired, or of or upon the income or profits therefrom,
except for:

                  (a) Liens for taxes, assessments and other governmental
         charges which are not delinquent or which are being contested in good
         faith by appropriate proceedings diligently conducted, against which
         reserves have been set up;

                  (b) Liens incurred or deposits made in the ordinary course of
         business in connection with worker's compensation, unemployment
         insurance or other similar laws or

                                      29
<PAGE>

         to secure the performance of statutory obligations of a like nature
         (exclusive of obligations for the payment of money borrowed);

                  (c) Liens imposed by law in connection with transactions in
         the ordinary course of business, such as liens of carriers,
         warehousemen, mechanics and materialmen for sums not yet due or being
         contested in good faith and by appropriate proceedings diligently
         conducted, against which adequate reserves have been set up;

                  (d) Liens in favor of the Lender;

                  (e) The Permitted Exceptions (as defined in SECTION 5.1 of
         the Mortgage);

                  (f) Purchase money liens securing Debt incurred to finance all
         or part of the purchase price of personal property, provided that the
         liens attach only to such property;

                  (g) easements, rights of way, restrictions and other similar
         charges or encumbrances on Mortgaged Property, in each case incidental
         to, and not interfering with, the ordinary conduct of the business of
         the Borrower and its Subsidiaries, PROVIDED, that such easements,
         rights of way, restrictions and other similar charges or encumbrances
         do not, in the aggregate, materially detract from the value of such
         property; and

                  (h) licenses of copyrights, patents and trademarks to
         franchisees in the ordinary course of business.

                  Section 7.2  CONSOLIDATION, MERGER, ETC. Borrower will not,
and will not permit any Subsidiary to, (a) lease, assign or sell all or
substantially all of its property or business to any other Person, (b) merge
or consolidate with or into any other Person, (c) purchase or lease or
otherwise acquire all or substantially all of the assets of any other Person,
(d) sell, transfer, pledge or otherwise dispose of Capital Stock in any of
its Subsidiaries, (e) liquidate, suspend or dissolve its business operations,
(f) change its name, identity (including its trade name(s)) or corporate,
partnership or other structure, or (g) change the principal place of business
or chief executive office set forth in SECTION 5.1 hereof, in each case
without the prior written consent of Lender.

                  Section 7.3  ARM'S LENGTH TRANSACTIONS. Borrower will not,
and will not permit any Subsidiary to, enter into any transaction with an
affiliate or other Person except on terms consistent with those available in
an arm's length transaction.

                  Section 7.4  HAZARDOUS MATERIALS. Borrower will not, and
will not permit any Subsidiary to, use or cause to be used Hazardous
Materials, except in substantial compliance with all applicable federal,
state and local laws and regulations and except to the extent legally
adequate remedial action has been taken.

                                      30

<PAGE>

                  Section 7.5  ERISA. Permit any event to occur or condition
to exist which would permit any Plan to terminate under any circumstances
which would cause the Lien provided for in Section 4068 of ERISA to attach to
any assets of the Borrower; and the Borrower will not permit, as of the most
recent valuation date for any Plan subject to Title IV of ERISA, the present
value (determined on the basis of reasonable assumptions employed by the
independent actuary for such Plan and previously furnished in writing to the
Lender) of such Plan's projected benefit obligations to exceed the fair
market value of such Plan's assets.

                  Section 7.6  FISCAL  YEAR.  Change  the end of any  fiscal
year to any date  other than the date which is 364 or 371 calendar days, as
appropriate, following the last day of its prior fiscal year.

                  Section 7.7  SUBSIDIARIES. Borrower will not, and will not
permit any Subsidiary to, form or acquire any corporation or other entity
which would thereby become a Subsidiary, or form or enter into any
partnership as a general or limited partner or into any joint venture or any
limited liability company or similar entity, in each case without the prior
written consent of the Lender and execution of such amendments and
supplements to the Loan Documents as the Lender may reasonably require by the
entity forming the subsidiary and such other Persons as Lender may require.

                  Section 7.8  DEBT. At any time prior to the "Revolving
Credit Conversion Date", as that term is defined in the Related Loan
Agreement, Borrower will not, and will not permit any Subsidiary to, directly
or indirectly, incur, create, issue, assume or suffer to exist any Debt,
except: (a) Debt under the terms of this Agreement and the Related Loan
Agreement; (b) trade payables arising from the purchase by Borrower or its
Subsidiaries of goods and services in the ordinary course of business, (c)
Debt in the aggregate amount incurred during the term hereof with respect to
the acquisition of point of sale equipment by the Borrower not to exceed
$4,000,000, (d) Debt outstanding on the date hereof and listed on SCHEDULE
7.8; (e) other Debt approved in writing by the Lender, and (f) Debt not
otherwise excepted above in the aggregate amount at any time outstanding of
not more than $1,000,000.

                  Section 7.9  RESTRICTED PAYMENTS. At any time prior to full
and final payment of the Related Liabilities, and termination of any
obligation or commitment of the Lender under the Related Loan Agreement,
Borrower will not, and will not permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment without the prior written consent of the Lender, except
(a) to make dividends payable solely in the same class of Capital Stock of
such Person, (b) to make dividends or other distributions payable to any
other Borrower, and (c) to make regularly scheduled payments of principal and
interest under the Related Loan Agreement and on the Related Notes to the
extent permitted thereby and subject to the subordination provisions
applicable thereto. Salary and bonuses paid in the ordinary course of
business to employees of the Borrower who are also shareholders of such
Borrower shall not constitute Restricted Payments.

                                      31

<PAGE>

                  Section 7.10  ADVANCES, INVESTMENTS AND LOANS. At any time
prior to full and final payment of the Related Liabilities, and termination
of any obligation or commitment of the Lender under the Related Loan
Agreement, Borrower will not, nor will it permit any Subsidiary to, acquire
for value, make, have or hold any Investments, except: (a) advances to
employees of the Borrower or any Subsidiary for (i) travel or other ordinary
business expenses, provided that the aggregate amount outstanding at any one
time shall not exceed $100,000 in the aggregate for all employees and (ii)
other purposes, including without limitation loans to employees, provided
that the aggregate amount outstanding at any one time shall not exceed
$200,000; (b) advances to subcontractors and suppliers in maximum aggregate
amount not to exceed $250,000 at any one time outstanding; (c) extensions of
credit in the nature of accounts receivable or notes receivable arising from
the sale of goods and services in the ordinary course of business; (d) shares
of stock, obligations or other securities received in settlement of claims
arising in the ordinary course of business; (e) Investments (other than
Investments in the nature of loans or advances) outstanding on the date
hereof in Subsidiaries by the Borrower and other Subsidiaries; (f) other
Investments outstanding on the date hereof with a fair market value in excess
of $500,000 each and listed on SCHEDULE 7.10; (g) seller financing provided
to the Purchasers of the Units identified on SCHEDULE 5.10 as being subject
to an agreement, commitment or option providing for the sale thereof,
PROVIDED that in connection with such sale net proceeds in the amount
required under SECTION 4.7 have been delivered to Lender; and (h) other
Investments consented to by the Lender in writing.

                  Section 7.11  AVERAGE SENIOR FUNDED DEBT TO EBITDA.
Borrower will not at any time permit the ratio of (a) Average Senior Funded
Debt for the period of four fiscal quarters ending on, or most recently ended
prior to such time, to (b) EBITDA for the period of four fiscal quarters
ending on, or most recently ended prior to such time; to exceed 4.0 to 1. For
purposes of this SECTION 7.11, the term "AVERAGE SENIOR FUNDED DEBT" shall
mean the average outstanding principal balance of the Term Loan during the
period of four fiscal quarters ending on, or most recently ended prior to,
such date.

                  Section 7.12   EBITDA.  Borrower  shall not  permit  the
aggregate  EBITDA of the  Borrowers, calculated on a consolidated basis, to
be less than the following amounts for the following periods:

<TABLE>
<CAPTION>

                                  PERIOD                                          AMOUNT
                           <S>                                                  <C>
                           June 19, 2000 through                                $3,300,000
                             September 10, 2000

                           June 19, 2000 through                                $8,200,000
                             January 1, 2001

                           June 19, 2000 through                                $10,200,000
                             March 16, 2001

</TABLE>

                                                  32
<PAGE>

<TABLE>
                           <S>                                                  <C>
                           June 19, 2000 through                                $13,400,000
                             June 18, 2001
</TABLE>

From and after June 18, 2001, Borrower shall not at any time permit consolidated
EBITDA of the Borrowers for the period of four fiscal quarters ending on, or
most recently ended prior to such time to be less than $13,400,000.

                                   ARTICLE VII

                           EVENTS OF DEFAULT; REMEDIES

                  Section8.1  EVENTS OF DEFAULT.  The  occurrence of any one
or more of the following  events shall constitute an Event of Default:

                  (a)  default in the payment of any  installment  of
         principal or interest on the Note when it becomes due and payable; or

                  (b) default in the payment of any fees, costs or expenses
         required to be paid by the Borrowers, or any one or more of them, under
         this Agreement or any other Loan Document and the continuance of such
         default for a period of five (5) calendar days following written notice
         from Lender; or

                  (c) default in the performance, or breach, of any covenant on
         the part of the Borrowers, or any one or more of them, contained in
         ARTICLE VII; and, if such default or breach is susceptible to cure,
         continuance of such default for a period of ten (10) calendar days
         following written notice from Lender; or

                  (d) default in the performance, or breach, of any covenant or
         agreement of the Borrowers, or any one or more of them, in this
         Agreement (other than a covenant or agreement the performance or breach
         of which is elsewhere in this SECTION 8.1 specifically dealt with) and
         the continuance of such default or breach for a period of thirty (30)
         calendar days after notice thereof to the Borrowers from Lender; or if
         such default or breach is cureable but cannot be cured within the
         above-mentioned thirty (30) days, the Borrowers will upon proving
         diligence to cure, have an additional fifteen (15) days to cure such
         failure or occurrence but only if it does not diminish the security
         given under the Loan Documents and no other default exists hereunder.

                  (e) default in the performance, or breach, of any covenant or
         agreement of the Borrowers (or any one or more of them), any of their
         respective Subsidiaries under any Loan Document other than this
         Agreement (other than a covenant or agreement the performance or breach
         of which is elsewhere in this SECTION 8.1 specifically dealt with) and
         the continuance of such default beyond the applicable period of grace,
         if any, specified in such Loan Document; or

                                      33

<PAGE>

                  (f) any Borrower or any Subsidiary or Affiliate of any
         Borrower shall fail to pay when due, or any event shall occur resulting
         in the acceleration of, (i) any Debt to Lender or any of its
         subsidiaries or affiliates (other than the Liabilities); or (ii) any
         Debt to any person or entity other than the Lender or any of its
         subsidiaries or affiliates aggregating at least $250,000; or

                  (g) any Borrower or any Subsidiary or Affiliate of any
         Borrower shall liquidate, dissolve, terminate or suspend its business
         operations or otherwise fail to operate its business in the ordinary
         course, or shall sell all or substantially all of its assets; or any
         Borrower shall terminate or suspend its business operations or
         otherwise fail to operate its business operations with respect to any
         Pledged Unit and shall not have substituted an Eligible Unit therefor
         within sixty (60) calendar days after such termination, suspension or
         failure;

                  (h) any representation or warranty contained in or delivered
         pursuant to any of the Loan Documents shall prove false in any material
         respect as of the time made; or

                  (i) any event shall occur which entitles any Franchisee,
         immediately or following the giving of notice or lapse of any
         applicable grace period, to terminate any Franchise Agreement and such
         termination would, or would reasonably be expected to, constitute a
         Material Adverse Occurrence; or

                  (j) any Borrower shall sell, encumber, or otherwise transfer
         all or any material part of its interest in the Mortgaged Properties,
         any Lease, the Collateral or any Franchise Agreement, in each case
         without the prior written consent of the Lender; or

                  (k) any Borrower or any Subsidiary or Affiliate of any
         Borrower shall (i) become insolvent or unable to pay its debts
         generally as they mature, (ii) suspend its ordinary course of business,
         (iii) make a general assignment for the benefit of creditors; (iv)
         admit in writing its inability to pay its debts generally as they
         mature, (v) file or have filed against it a petition in bankruptcy or a
         petition or answer seeking a reorganization, arrangement with creditors
         or other similar relief under the Federal bankruptcy laws or under any
         other applicable law of the United States of America or any state
         thereof, and such petition or answer shall remain undismissed for a
         period of more than sixty (60) days (vi) consent to the appointment of
         a trustee or receiver for it, or for a substantial part of its
         property, or (vii) take any corporate or other action for the purpose
         of effecting or consenting to any of the foregoing; or

                  (l) Judgments against the Borrowers and their respective
         Subsidiaries and Affiliates, or any one or more of them, for the
         payment of money totaling in excess of $250,000 shall be outstanding
         for a period of sixty (60) days without a stay of execution; or

                  (m) a Change in Control or Control Event shall occur; or

                                       34
<PAGE>

                  (n) an Event of Default shall occur under the Related Loan
         Agreement.

                  Section 8.2 REMEDIES. Upon the occurrence of an Event of
Default the Lender may, at its option, (a) terminate its obligation to make
any further advances against the Note, if any such obligation exists; (b)
declare the Liabilities to be immediately due and payable, whereupon the same
shall become immediately due and payable together with accrued interest
thereon; (c) until payment in full of the liabilities or final sale or
disposition of all Collateral, take possession of all premises owned, leased
or held by the Borrower upon which any Collateral is or may be located (the
"PREMISES") for the purpose of holding, processing, manufacturing, selling or
otherwise disposing of goods which are inventory, or providing services under
contracts for receivables, or using, operating, storing, liquidating or
realizing upon any Collateral and for other purposes which the Lender may in
good faith deem to be related or incidental purposes, and without liability
to the Borrower for the payment of rent or performance of any other of their
obligations under any lease of the Premises; and (d) exercise any other of
its rights and remedies under the Loan Documents or otherwise available at
law or in equity. Upon the occurrence of an Event of Default described in
SECTION 8.1(K), the obligation, if any, of the Lender to make any advance
against the Notes shall automatically terminate, and the Liabilities shall
immediately become due and payable, without any election or action on the
part of the Lender. In addition, the Lender may, at any time whether before
or after the occurrence of a Default and whether before or after expiration
of any applicable cure period, (but if no Default has occurred and is
continuing, following five (5) days prior written notice to Borrowers)
advance funds and take other action necessary to cure any default under any
Franchise Agreement or Lease, or to enforce or preserve the rights of the
Lender under this Agreement or any other Loan Document, or to enforce or
preserve the rights and interest of the Lender in all or any part of the
Mortgaged Properties, the Leases or the Collateral, which amounts the
Borrower agrees to repay upon demand together with interest at the highest
rate provided for in the Notes.

                                     ARTICLE IX

                                  MISCELLANEOUS

                  Section 9.1 BINDING EFFECT; ASSIGNMENT. The parties hereto
agree that this Agreement shall be binding upon and inure to the benefit of
their respective successors in interest and assigns including any holder of
any Note; provided however, that no Borrower may assign or transfer its
interest hereunder without the prior written consent of the Lender. The
Lender may, without notice, assign, or sell participations in, the Note and
the other Loan Documents and may provide such participants and purchasers
with any financial and other information concerning the Borrowers which has
been provided to the Lender by the Borrower or which the Lender has otherwise
obtained.

                  Section 9.2. GOVERNING LAW; VENUE. The Loan Documents shall
be interpreted and construed in accordance with and governed by the laws of
the State of Arizona, without regard to its law governing choice of law or
conflict of law, except as otherwise provided and except to the

                                       35
<PAGE>

extent the laws of other jurisdictions apply to the creation, perfection and
foreclosure of real estate and personal property liens. THE BORROWER HEREBY
CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED
IN THE STATE OF ARIZONA IN CONNECTION WITH ANY CONTROVERSY INVOLVING OR
RELATED TO ANY OF THE LOAN DOCUMENTS, WAIVES ANY ARGUMENT THAT VENUE IN SUCH
FORUMS IS NOT CONVENIENT, AND AGREES THAT ANY LITIGATION INITIATED BY IT OR
ON ITS BEHALF AGAINST THE LENDER IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS
SHALL BE VENUED IN EITHER THE SUPERIOR COURT OF MARICOPA COUNTY, ARIZONA, OR
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA.

                  Section 9.3 WAIVER OF JURY TRIAL. EACH BORROWER AND THE
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

                  Section 9.4 [Intentionally Omitted]

                  Section 9.5 NOTICES.

                  (a) Except as otherwise expressly provided herein, all
         notices, requests and demands and other communications provided for
         under the Loan Documents shall be in writing and mailed or delivered to
         the applicable parties at their respective addresses set forth on the
         execution pages hereto or, as to each party, at such other address as
         shall be designated by such party in a written notice to the other
         party complying with the terms of this SECTION 9.5. All such notices,
         requests, demands and other communications shall be deemed to have been
         duly given or made (a) when delivered by hand, (b) when transmitted via
         telecopy (or other facsimile device) to the number set out on the
         execution page hereto of such party, (c) the day following the day on
         which the same is delivered prepaid to a reputable national overnight
         air courier service, or (d) the third business day following the day on
         which the same is placed in the United States mails, certified or
         registered, postage prepaid, addressed to such party at the address set
         out on the execution page hereto of such party.

                  (b) Copies of all notices, requests, demands and other
         communications sent to any Borrower shall also be sent to Brett Cohen,
         Esq. at Christensen, Miller, 2121 Avenue of the Stars, 18th Floor, Los
         Angeles, CA 90067, Telecopy (310) 556-2920, or to such other individual
         or at such other address and telecopy number as shall be designated by
         the Borrowers in a written notice to the Lender complying with the
         terms of this SECTION 9.5.

                                       36
<PAGE>

                  (c) Copies of all notices, requests, demands and other
         communications sent to the Lender shall also be sent to Textron
         Financial Corporation, Legal Department, 40 Westminster Street, P.O.
         Box 6687, Providence, RI 02940-6687, Attn: Division Counsel - Franchise
         Finance Division, Telecopy (401) 621-5040, or to such other individual
         or at such other address and telecopy number as shall be designated by
         the Lender in a written notice to the Borrowers complying with the
         terms of this SECTION 9.5.

                  Section 9.6 AMENDMENT AND WAIVER. No failure or delay on
the part of the Lender in exercising any right, power or privilege hereunder
and no course of dealing between any Borrower and the Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. Neither this
Agreement nor any provision hereof may be modified, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination is
sought.

                  Section 9.7 HEADINGS. The headings of various sections of
this Agreement have been inserted for reference only and shall not be deemed
to be a part of this Agreement.

                  Section 9.8 JUDICIAL INTERPRETATION. Should any provision
of this Agreement or any of the other Loan Documents require interpretation,
it is agreed that the interpreting Person shall not apply a presumption that
the terms hereof shall be more strictly construed against any Person, whether
by reason of the rule of construction that a documents is to be construed
more strictly against the Person who prepared the same or otherwise, it being
agreed that all parties hereto have participated in the preparation of this
Agreement and the other Loan Documents.

                  Section 9.9 SEVERABILITY. All provisions of this Agreement
and any other of the Loan Documents are severable and if any provision shall
be held invalid or unenforceable, the validity and enforceability of the
remaining provisions shall in no way be affected.

                  Section 9.10 AGREEMENT SUPERSEDES. This Agreement
supersedes and has merged into it all prior oral and written agreements
(including the commitment letter dated June 5, 2000) on the same subjects
with the effect that this Agreement shall control the subject matter covered
by it.

                  Section 9.11 ACCEPTANCE. The Loan Documents shall not be
effective until accepted by the Lender in Tempe, Arizona.  Notice of
acceptance need not be given to any Borrower.

                  Section 9.12 OPINION OF COUNSEL. Borrowers acknowledge and
agree that (a) the Lender has offered to retain special legal counsel to the
Lender to render an opinion, at the Borrowers' costs and expense, in relation
to the validity, binding effect and enforceability of the loan documents and
the availability of remedies thereunder, (b) the Lender has not required,
directly or indirectly as a condition of any loan or advance, any attorney
representing the Borrowers to give such an opinion, and (c) to the extent the
opinion delivered pursuant to SECTION 2.12 hereof includes opinions in
relation to the validity, binding effect and enforceability of the loan
documents and the

                                       37
<PAGE>

availability of remedies thereunder, such opinions were provided by the
Borrowers to the Lender voluntarily in lieu of retention by the Lender of
special legal counsel to render such opinions.

                  Section 9.13 SECONDARY MARKET.

                  (a) Lender may, at any time, sell, transfer or assign all or
         any portion of its right, title and interest in and to this Loan
         Agreement, the Note and the other Loan Documents, and any or all
         servicing rights with respect thereto, or grant participations therein
         (the "PARTICIPATIONS") or issue mortgage pass-through certificates or
         other securities evidencing a beneficial interest in a rated or unrated
         public offering or private placement (the "SECURITIES"). Lender may
         forward to any purchaser, transferee, assignee or servicer of, or
         participant or investor in, such Participations or Securities
         (collectively, the "INVESTOR"), any agency rating such Securities
         (collectively, the "RATING AGENCY"), any prospective Investor and any
         organization maintaining databases on the underwriting and performance
         of commercial loans, all documents and information which Lender, or its
         Subsidiaries or Affiliates, now has or may hereafter acquire relating
         to the Liabilities, any Borrower, any Subsidiary or Affiliate of any
         Borrower, any surety, indemnitor or other Person obligated with respect
         to all or any portion of the Liabilities, the Mortgaged Properties, the
         Collateral or the Leases, whether furnished by the Borrowers, any
         Subsidiary or Affiliate of the Borrowers, any such guarantor,
         indemnitor or other obligated Person, or otherwise, as Lender
         determines necessary or desirable. Each Borrower irrevocably waives any
         and all rights it may have under applicable state or federal law to
         prohibit such disclosure, including but not limited to any right of
         privacy.

                  (b) Each Borrower agrees to cooperate in all reasonable
         respects with Lender in connection with any transfer made, or any
         Securities created, pursuant to this SECTION 9.13, including, without
         limitation, the delivery of such estoppel certificates, amendments and
         other documents as may be reasonably requested by Lender. Each Borrower
         shall also furnish, and cause each of its Subsidiaries and Affiliates
         to furnish, and each Borrower, its Subsidiaries and Affiliates, and any
         guarantor, indemnitor or other Person obligated with respect to the
         Liabilities consent to Secured Party furnishing to such Investors or
         such prospective Investors or such Rating Agency, any and all
         information concerning the Mortgaged Properties, the Leases and the
         Collateral, the financial condition of the Borrowers and their
         respective Subsidiaries and Affiliates, and any guarantor, indemnitor
         or other person obligated with respect to the Liabilities as may be
         requested by Lender, any Investor, any prospective Investor or any
         Rating Agency in connection with any sale, transfer or Participations
         or Securities.

                  Section 9.14 NO RELIANCE; NO LENDER OBLIGATIONS. The
relationship between Borrower and Lender is solely that of debtor and
creditor, and Lender has no fiduciary or other special relationship with
Borrower, and no term or condition of this Loan Agreement or any other Loan
Document shall be construed so as to deem the relationship between Borrower
and Lender to be other than that of debtor and creditor. By accepting or
approving anything required to be

                                       38
<PAGE>

observed, performed or fulfilled or to be given to Lender pursuant to this
Loan Agreement or any other Loan Document (including without limitation, any
officer's certificate, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal, or insurance policy), Lender shall
not be deemed to have warranted, consented to, or affirmed the sufficiency,
the legality or effectiveness of same, and such acceptance or approval
thereof shall not constitute any warranty or affirmation with respect thereto
by Lender. Borrowers recognize and acknowledge that, in accepting this Loan
Agreement and the other Loan Documents, Lender is expressly and primarily
relying on the truth and accuracy of the warranties and representations set
forth herein and in the other Loan Documents, without any obligation on the
part of the Lender to investigate the Mortgaged Properties, the Leases or the
Collateral.

                  Section 9.15 CONFLICT BETWEEN LOAN DOCUMENTS. In the event
of a conflict between the terms of this Agreement and the terms of any other
Loan Document, the terms of this Agreement shall control.

                [Remainder of this page intentionally left blank;
                             signature pages follow]

                                       39
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be executed and delivered the date and year first above written.

Address:                               CHECKERS DRIVE-IN RESTAURANTS, INC.,
14255 - 49th Street North              a Delaware corporation
Building 1
Clearwater, FL  33762
Telecopy: (727) 519-2265
                                       By
                                         -------------------------------------
                                        Its
                                           -----------------------------------

Address:                               CHECKERS PUERTO RICO, INC.,
14255 - 49th Street North              a Puerto Rico corporation
Building 1
Clearwater, FL  33762
Telecopy: (727) 519-2265
                                       By
                                         -------------------------------------
                                        Its
                                           -----------------------------------

Address:                               RALLY'S OF OHIO, INC.,
14255 - 49th Street North              an Ohio corporation
Building 1
Clearwater, FL  33762
Telecopy: (727) 519-2265
                                       By
                                         -------------------------------------
                                        Its
                                           -----------------------------------

Address:                               RALLY'S MANAGEMENT, INC.
14255 - 49th Street North              a Kentucky corporation
Building 1
Clearwater, FL  33762
Telecopy: (727) 519-2265
                                       By
                                         -------------------------------------
                                        Its
                                           -----------------------------------

                                       40
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be executed and delivered the date and year first above written.

Address:                                TEXTRON FINANCIAL CORPORATION, a
c/o Franchise Finance Division          Delaware corporation
4545 S. Wendler Drive, Suite 109
Tempe, AZ 85282
Telecopy: (888) 249-8733
                                       By
                                         -------------------------------------
                                        Its
                                           -----------------------------------

                                       41

<PAGE>

                                    EXHIBIT A

                           ELIGIBLE UNIT REQUIREMENTS

                  1. The Unit is owned by a Borrower and no other Person, and is
         not subject to or part of any joint venture or similar arrangement.

                  2. The Borrower's interest in the Unit, the furniture,
         fixtures, equipment and other personal property used in connection
         therewith, the real property owned or leased by the Borrower in
         connection therewith and the income and profits therefrom are not
         subject to any lien or encumbrance of any kind, other than liens and
         encumbrances permitted under SECTION 7.1(a), (b), (c), (d), (f) and
         (g).

                  3. The Unit is not subject to any commitment or agreement
         providing for the sale of such Unit to any Person other than a
         Borrower.

                  4. If the Property relating to the Unit is Leased Property,
         (a) the lessor under any Lease relating thereto is not a Borrower or an
         Affiliate of any Borrower; and (b) each Lease relating thereto has an
         expiration date (including all renewal options) not earlier than
         fifteen (15) years from the date hereof or, if shorter, the average
         term of such Lease and all other Leases relating to Pledged Units, is
         not less than fifteen (15) years from the date hereof.

                  5. The Unit otherwise satisfies the Lender's then-existing
         underwriting standards applicable thereto for franchise finance loans
         to operators of similar franchised restaurant facilities.

                  6. The Unit is not a "Pledged Unit", as that term is defined
         in the Related Loan Agreement.

                                       42
<PAGE>

                                    EXHIBIT B

                            TITLE POLICY REQUIREMENTS

                  ALTA Loan Policy of Title Insurance (10-17-92) or its
equivalent issued by Title naming "Textron Financial Corporation, its successors
and assigns" as insured in such amount as Lender may reasonably require and
otherwise in form and substance acceptable to Lender. Said policy must
specifically insure that the Mortgage is a first lien upon the fee interest of
the Borrower in the Real Property subject only to such exceptions as may be
reasonably acceptable to Lender. Without limiting the foregoing, said policy
shall waive the all standard exceptions and insure over, among other things, (a)
rights and claims of parties in possession, (b) mechanic's, contractor's or
materialmen's liens and lien claims, (c) easements, or claims of easements, not
shown by the public records, and (d) taxes or special assessments which are not
shown as existing liens by the public records. Said policy shall also include
the following endorsements or their equivalent:

                  (a)      ALTA Form 9 Comprehensive Endorsement

                  (b)      If a Borrower is the owner of the fee interest in the
                           land and improvements constituting the Real Property,
                           an ALTA Form 3.1 Broad Form Zoning Endorsement;
                           otherwise a zoning letter in form and substance
                           reasonably acceptable to Lender from the applicable
                           governmental authority

                  (c)      ALTA Form 116 Location Endorsement

                  (e)      ALTA Form 100 Access Endorsement

                  (f)      Tax Parcel Endorsement

                  (g)      Creditor's Rights Endorsement

                  (h)      Tie-in Endorsement (referring to each other policy of
                           title insurance covering all or any portion of the
                           real property described in the Mortgage)

                                       43
<PAGE>

                                    EXHIBIT C

                              FORM OF UNIT SCHEDULE

                                  UNIT SCHEDULE

UNIT DESCRIPTION:        [_____________________]

STREET ADDRESS:          [_______________]
                         [_______________]

CONCEPT:                 [Rally's/Checkers]

DESCRIPTION OF REAL
PROPERTY:                Real property located in [____________] County,
                         [____________], more particularly described as follows:

                                [Insert legal description]

LEASES:                  Lease  dated as of  [____________],  between
                         [_________], as landlord, and [_______________], as
                         tenant, covering the above-described property.

LOCATION OF COLLATERAL:  All Collateral used in connection with the operation
                         of the Unit described on this Unit Schedule is located
                         on the above-described property at the
                         street address set forth above.

                  [Remainder of page intentionally left blank]

                                       44
<PAGE>

THIS UNIT SCHEDULE is hereby incorporated into and made a part of that certain
Loan Agreement (Senior Credit Facility A) dated June 15, 2000 by and among
Checkers Drive-In Restaurants, Inc., certain of its subsidiaries (collectively,
the "BORROWERS") and Textron Financial Corporation (the "LOAN AGREEMENT").
Borrowers hereby reaffirm, as of the date hereof, the representations and
warranties set forth in ARTICLE V of the Loan Agreement to the extent they
pertain to the Unit described above.

         Dated this   day of         , 2000.
                   ---       ---------

CHECKERS DRIVE-IN RESTAURANT, INC.

By
  -------------------------------------
  Its
     ----------------------------------

CHECKERS PUERTO RICO, INC.

By
  -------------------------------------
  Its
     ----------------------------------

RALLY'S OF OHIO, INC.

By
  -------------------------------------
  Its
     ----------------------------------

RALLY'S MANAGEMENT, INC.

By
  -------------------------------------
  Its
     ----------------------------------

                                       Accepted this    day of        , 200 .
                                                    ---       --------

                                       TEXTRON FINANCIAL CORPORATION

                                       By
                                         -------------------------------------
                                         Its
                                            ----------------------------------

                                       45
<PAGE>

                                  EXHIBIT D-1

                           FORM OF LANDLORD'S CONSENT

                                       46
<PAGE>

                                  EXHIBIT D-2

                        FORM OF NONDISTURBANCE AGREEMENT

                                       47
<PAGE>

                                   EXHIBIT E

                     FORM OF SUPPLEMENTAL OPINION OF COUNSEL

                                       48
<PAGE>

                                  EXHIBIT F

                     FORM OF AMENDMENT TO SECURITY AGREEMENT

                                       49
<PAGE>

                                   EXHIBIT G

                         INITIAL REAL ESTATE COLLATERAL

                                       50

<PAGE>

                                   EXHIBIT H

                       UNIT SCHEDULE DELETION CERTIFICATE

                  THIS UNIT SCHEDULE DELETION CERTIFICATE is hereby incorporated
into and made a part of that certain Loan Agreement (Senior Credit Facility A)
dated June 15, 2000 by and among Checkers Drive-In Restaurants, Inc., certain of
its subsidiaries (collectively, the "BORROWERS") and Textron Financial
Corporation (the "LOAN AGREEMENT"). Capitalized terms not otherwise defined in
this certificate shall have the meanings assigned to such terms in the Loan
Agreement.

                  The Borrowers and the Lender hereby delete the Unit Schedule
attached to the Loan Agreement pertaining to the following described Unit:

UNIT DESCRIPTION:                   [_____________________]

STREET ADDRESS:                     [_______________]
                                    [_______________]
                                    [_______________]

CONCEPT:                            [Rally's/Checkers]

                  The Borrowers hereby certify that as of the date of the
execution of this certificate, no Default has occurred and is continuing.

                        [Remainder of page intentionally
                                   left blank]

                                       51

<PAGE>

                  Dated this ____ day of ____________, 2000.

CHECKERS DRIVE-IN RESTAURANT, INC.

By___________________________________
 Its __________________________________

CHECKERS PUERTO RICO, INC.

By___________________________________
 Its __________________________________

RALLY'S OF OHIO, INC.

By___________________________________
 Its __________________________________

RALLY'S MANAGEMENT, INC.

By___________________________________
 Its __________________________________

                                    Accepted this ___ day of _________, 20___.

                                    TEXTRON FINANCIAL CORPORATION

                                    By___________________________________
                                    Its__________________________________

                                       52

<PAGE>

                                    SCHEDULE 5.1

         NAMES UNDER WHICH BORROWERS AND SUBSIDIARIES HAVE CONDUCTED BUSINESS

                       Checkers Drive-In Restaurants, Inc.
                            Rally's Hamburgers, Inc.
                              Rally's of Ohio, Inc.
                            Rally's Management, Inc.
                          Checkers of Puerto Rico, Inc.
                               Hampton Road Foods
                                 ZDT Corporation
                     Rally's National Advertising Fund, Inc.
                     Checkers National Production Fund, Inc.
                            Merger Acquisition Corp.

                       LOCATION OF CHIEF EXECUTIVE OFFICE

                             14255 49th Street North
                                   Building 1
                              Clearwater, FL 33762

                                       53

<PAGE>

                        SCHEDULE 5.2

                        SUBSIDIARIES

     NAME OF BORROWER                  NAMES OF SUBSIDIARIES

     Checkers                          Checkers of Puerto Rico, Inc.
                                       Checkers of Chicago, Inc.
                                       Rally's of Ohio, Inc.
                                       Rally's Management, Inc.
                                       Rally's National Advertising Fund, Inc.
                                       Checkers National Production Fund, Inc.

     Checkers of Puerto Rico, Inc.     None.

     Rally's of Ohio, Inc.             None.

     Rally's Management, Inc.          None.

                                   AFFILIATES

                                      None.

                   GENERAL OR LIMITED PARTNERSHIP INTERESTS;
                                JOINT VENTURES;
                       LIMITED LIABILITY COMPANY INTERESTS

                                  CHA Partners
                        Skipper Road Checkers Partnership

                                       54

<PAGE>

                                  SCHEDULE 5.6

                                   LITIGATION

                                  See attached.

                                       55

<PAGE>

                                  SCHEDULE 5.8

                          UNPAID TAXES AND ASSESSMENTS

                                  See attached.

                                       56

<PAGE>

                                  SCHEDULE 5.10

                       UNITS SUBJECT TO PURCHASE AGREEMENT

                                       57

<PAGE>

                                  SCHEDULE 5.11

                   EXCEPTIONS TO ENVIRONMENTAL REPRESENTATIONS

                                  See attached.

                                       58

<PAGE>

                                 SCHEDULE 5.13

                              FRANCHISE AGREEMENTS

                       DEFAULTS UNDER FRANCHISE AGREEMENTS

                                       59

<PAGE>

                                  SCHEDULE 5.15

                                      UNITS

                                       60

<PAGE>

                                  SCHEDULE 5.17

                                  LABOR MATTERS

                                       61

<PAGE>

                                 SCHEDULE 5.19

                           FINANCIAL SOLVENCY MATTERS

     On January 7, 2000, Checkers of Chicago, Inc., a wholly owned subsidiary
of Checkers Drive-In Restaurants, Inc. filed for relief under Chapter 7 of
the United States Bankruptcy Code. Checkers of Chicago, Inc. had operated
eight restaurants as a general partner of certain limited partnerships and
three Company-owned restaurants, all of which are now closed.

                                       62

<PAGE>

                                   SCHEDULE 7.8

                                  PERMITTED DEBT

                                       63

<PAGE>

                                SCHEDULE 7.10

                            PERMITTED INVESTMENTS

                                       64

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