Document:

Unassociated Document

    PLAN SUPPORT AND
RESTRUCTURING AGREEMENT

     

    This PLAN
SUPPORT AND RESTRUCTURING AGREEMENT (together with the Term Sheet (as defined
below), the “Agreement”), dated as
of July 22, 2010, is made by and among those certain holders of the July/August
Debentures, the March Debentures, the VPP Debentures, and the November
Debentures (as defined in the Term Sheet, and collectively, the “Debentures”) issued
by Capital Growth Systems, Inc., (together with its subsidiaries and affiliates,
the “Company)
that are signatories hereto and  (collectively the “Participating
Holders”), on the one hand, and the Company, on the other
hand.

    

    WHEREAS,
the Company and the Participating Holders have engaged in negotiations with the
objective of reaching an agreement for a Restructuring (as defined below) of the
Company;

     

    WHEREAS,
the Company and the Participating Holders now desire to implement a financial
restructuring (the “Restructuring”) of
the Company that is substantially consistent with the terms and conditions set
forth in the term sheet (together with the Exhibits and Schedules attached
thereto, the “Term
Sheet”) attached hereto as Exhibit A;

     

    WHEREAS,
in order to implement the Restructuring, the Company has agreed, on the terms
and conditions set forth in this Agreement and the Term Sheet, to use its best
efforts to consummate the Restructuring through a pre-negotiated plan of
reorganization (the “Reorganization
Plan”), the requisite acceptances of which shall be solicited following
commencement of voluntary cases (“Chapter 11 Case”) by
the Company and its affiliated debtors under chapter 11 of title 11 of the
United States Code, 11 U.S.C. §§ 101-1532 (as amended, the “Bankruptcy Code”) in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”);

     

    WHEREAS,
to expedite and ensure the implementation of the Restructuring, each of the
Participating Holders is prepared to commit, on the terms and subject to the
conditions of this Agreement and applicable law, to, if and when solicited in
accordance with applicable bankruptcy law, to accept the Reorganization Plan and
support its confirmation and to, in either case, perform its other obligations
hereunder.

     

    NOW
THEREFORE, in consideration of the promises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and each
Participating Holder hereby agree as follows:

     

    1.           Acknowledgment. Each
Participating Holder signatory hereto represents that the debenture holdings
listed in their respective signature lines are true and accurate as of June 30,
2010.

     

    2.            Term Sheet. The Term Sheet is
incorporated herein and is made part of this Agreement. The general terms and
conditions of the Restructuring are set forth in the Term Sheet. In the event of
any inconsistencies between the terms of this Agreement and the Term Sheet, the
Term Sheet shall govern.  This Agreement is not a solicitation of
acceptances or rejections with respect to any restructuring plan or
reorganization.  Any such solicitation will be conducted in accordance
with the Bankruptcy Code and/or applicable securities laws.  This
Agreement is not a commitment by the Participating Holders to lend to the
Company.  Any such commitment is subject to negotiation and execution
of acceptable documentation and approval by the Bankruptcy Court.

     

    3.          
Condition Precedent. It is a condition precedent to the effectiveness of
this Agreement that (i) the Restructuring as set forth in the Term Sheet be
approved by the Company's Board of Directors, which approval shall be obtained
prior to filing of the voluntary Chapter 11 Cases; (ii) the Chapter 11 Cases are
commenced no later than 5:00 p.m. (NY Time) on July 23, 2010; and (iii) the DIP
Facility (as defined below) be approved by the Bankruptcy Court and the senior
Pivotal Global Capacity, LLC (“Pivotal”) debt be
repaid from the proceeds of the DIP Facility and all commitment of Pivotal to
make loans under Pivotal’s senior loan agreement be terminated.

     

    4.   
           Means for Effectuating the
Restructuring. The Company shall seek to effectuate the Restructuring
through the commencement of the voluntary Chapter 11 Case, consummation of the
DIP Facility and the confirmation and consummation of the Reorganization
Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.            
Preparation of Restructuring
Documents.

     

    a)           No
later than the date hereof, the Company shall instruct its counsel in
consultation with the Participating Holders to prepare all of the documents
necessary to commence the Chapter 11 Cases (collectively, the “Chapter 11
Documents”), which shall include, without limitation, the
following:

     

    i           Petitions
for relief and required schedules under chapter 11 of the Bankruptcy Code for
the Company (the “Petition”):

     

    ii           A
disclosure statement, including customary exhibits, related to the
Reorganization Plan (the “Disclosure
Statement”) that complies with section 1125 of the Bankruptcy
Code;

     

    iii           The
Reorganization Plan, which shall incorporate the terms and conditions set forth
in the Term Sheet and such other terms and conditions agreed upon by the Company
and the Participating Holders, including any exhibits and, prior to
confirmation, plan supplement documents (which shall include appropriate revised
corporate governance documents);

     

    iv           A
proposed order confirming the Reorganization Plan;

     

    v           Proposed
forms of the DIP Financing Order (as defined below) and the DIP Financing
Agreement, and a motion for approval of the DIP Facility; and

     

    vi           Any
other typical or necessary motions and applications for relief filed by the
Company on the date of the commencement of the Chapter 11 Cases (the “First Day
Pleadings”), as set forth in the Term Sheet.

     

    Each
Chapter 11 Document shall be in the form and substance reasonably acceptable to
the Participating Holders prior to its filing with the Bankruptcy Court and
shall be prepared jointly with the Participating Holders.

     

    6.             Company Undertakings. The
Company hereby agrees to use its best efforts to, as applicable, (i) take all
acts reasonably necessary to effectuate and consummate the Restructuring, (ii)
obtain approval of the DIP Facility and repayment in full of the prepetition
secured debt owing to Pivotal, and (iii) implement all reasonable steps
necessary to obtain an order of the Bankruptcy Court confirming the
Reorganization Plan, in each case, as expeditiously as possible. The Company
hereby agrees that it will not take any action inconsistent with this Agreement
or the Reorganization Plan.

     

    7.              Conduct
of Business. The Company agrees that, prior to the Effective Date (as
defined below) of the Reorganization Plan and prior to termination of this
Agreement pursuant to Sections 10 and 11 below, unless the Participating Holders
consent to such actions in writing:

     

    
      	
               
      

            	
              a)

            	
              The
      Company shall not (i) directly or indirectly engage in, agree to or
      consummate any transaction that is not on an arms' length basis or outside
      the ordinary course of its business (other than the Restructuring) or
      incur any liability outside the ordinary course of business (other than
      pursuant to the DIP Financing Agreement, defined below), or that is not on
      an arms' length basis, and, if between unaffiliated parties, also on
      market terms or (ii) enter into any transaction or perform any act which
      would constitute any breach by it of any of its representations,
      warranties, covenants or obligations
hereunder;

            

    

     

    
      	
               
      

            	
              b)

            	
              The
      Company shall maintain its corporate existence and shall maintain its
      qualification in good standing under the laws of each state or other
      jurisdiction in which it is organized or required to be qualified to do
      business and is presently so
qualified;

            

    

     

    
      
        
        

      

      
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              c)

            	
              The
      Company shall not pay any dividends to holders of common and/or preferred
      equity in the Company (the “Old Equity”) or
      make any distributions to Old
Equity;

            

    

     

    
      	
               
      

            	
              d)

            	
              The
      Company shall not make any payments on or account of existing indebtedness
      (other than secured indebtedness owing to Pivotal after Bankruptcy Court
      approval upon notice (including to the Participating Holders) and, if
      necessary, a hearing) other than in the ordinary course of business or
      authorized under a first day motion, provided such amounts are allowed
      under the Budget;

            

    

     

    
      	
               
      

            	
              e)

            	
              Except
      as expressly allowed in this Agreement or the Term Sheet, the Company
      shall not directly or indirectly, and shall cause each of its direct and
      indirect subsidiaries not to directly or indirectly do or permit to occur
      any of the following: (i) issue, sell, pledge, dispose of, or encumber any
      additional shares of, or any options, warrants, conversion privileges or
      rights of any kind to acquire any shares of, any of its equity interests;
      (ii) amend or propose to amend its respective articles of incorporation or
      comparable organizational documents; (iii) split, combine, or reclassify
      any outstanding shares of its capital stock or other equity interests, or
      declare, set aside, or pay any dividend or other distribution payable in
      cash, stock, property, or otherwise with respect to any of its equity
      interests; (iv) redeem, purchase, or acquire or offer to acquire any of
      its equity interests; (v) acquire, transfer, or sell (by merger, exchange,
      consolidation, acquisition of stock or assets, or otherwise) any
      corporation, partnership, joint venture, or other business organization or
      division, or any assets;

            

    

     

    
      	
               
      

            	
              f)

            	
              The
      Company shall promptly, and in any event within three (3) business days
      after receipt or knowledge of the same by any of them, notify (i) the
      Participating Holders, or (ii) counsel for the Participating Holders of
      any governmental or third party notices, complaints, investigations,
      hearings, orders, decrees or judgments (or communications indicating that
      any of the foregoing may be contemplated or threatened) which could
      reasonably be anticipated to (i) have a Material Adverse Effect (as
      defined below) or (ii) prevent or delay the timely consummation of the
      Restructuring. “Material Adverse Effect” shall mean any change, event,
      occurrence, effect, or state of facts that, individually, or aggregated
      with other such matters, is materially adverse to the business, assets
      (including intangible assets), properties, prospects, condition (financial
      or otherwise), or results of operations of the Company and its
      subsidiaries taken as a whole, but excluding changes, events, occurrences,
      effects or states of fact that customarily occur as a result of the
      commencement of a case under chapter 11 of the Bankruptcy
      Code.

            

    

     

    8.            Timetable. The Company shall
file petitions for relief for the Chapter 11 Cases no later than 5:00 p.m. (NY
Time) on July 23, 2010 (the “Petition Date”). The
Reorganization Plan, Disclosure Statement, and motion to approving bidding and
sale procedures (including break-up fee, qualified bidder requirements; bid,
sale hearing, auction  and closing deadlines, and bidding rules) shall
be filed as soon as practicable after commencement of the Chapter 11 Cases but
in no event later than 15 days after the Petition Date.  The Company
shall obtain approval of the sale transaction contemplated hereby by no later
than 90 days after the Petition Date..
The Bankruptcy Court shall confirm the Plan no later than 105 days after the
Petition Date.  The Effective Date of the Plan shall occur by the
later of 125 days after the Petition Date or the date all conditions precedent
to the Effective Date under the Plan are satisfied or waived.  The
dates provided in this Section 8 may be extended by agreement of the Required
Participating Holders in writing.

     

    9.           Agreement
to Support Company Restructuring.  For so long as this
Agreement remains in effect, and subject to the parties hereto fulfilling their
respective obligations as provided herein, the Participating Holders, severally
but not jointly, agree to (i) support approval of the Reorganization Plan; (ii)
not, nor encourage any other person or entity to, delay, impede, appeal or take
any other negative action, directly or indirectly, to interfere with, the
approval of the Reorganization Plan; (iii) cooperate with the Company by
providing the Company with information about Participating
Holders  that, based upon advice of counsel, the Company reasonably
believes is required to be included in the Disclosure Statement, and (iv) not
commence any proceeding or prosecute, join in or otherwise support any objection
to oppose or object to the Reorganization
Plan.          

     

    
      
        
        

      

      
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    10.
       Termination
of Agreement. This Agreement shall terminate upon the occurrence of any
“Agreement Termination
Event (as hereinafter defined), unless the occurrence of such Agreement
Termination Event is waived in writing by the Participating Holders. If any
Agreement Termination Event occurs (and has not been waived) at the time when
permission of the Bankruptcy Court shall be required for any Participating
Holder to change or withdraw (or cause to be changed or withdrawn) its votes to
accept the Reorganization Plan, the Company shall not oppose any attempt by such
Participating Holder to change or withdraw (or cause to be changed or withdrawn)
such votes at such time. Upon the occurrence of an Agreement Termination Event,
unless such Agreement Termination Event is waived in accordance with the terms
hereof, this Agreement shall terminate and no party hereto shall have any
continuing liability or obligation to any other party hereunder and (i) each of
the Participating Holders shall have all rights and remedies available to it
under the applicable law and (ii) the obligations of each of the parties
hereunder shall thereupon terminate and be of no further force and effect with
respect to each party.

     

    An “Agreement Termination
Event” shall mean any of the following events, upon which the Agreement
shall automatically terminate following the occurrence of such event, other than
with respect to items (i), (ii), (iv) and (vii), upon which the Agreement shall
terminate if such event remains uncured for five (5) days after receipt of
written notice from the Required Participating Holders following the occurrence
of such event:

     

    i           The
Company shall have breached any provision of this Agreement, including but not
limited to, ceasing to take any steps that are reasonably necessary to obtain
approval of the Disclosure Statement and/or confirmation of the Reorganization
Plan, as applicable, or any provision of any order (each, a “DIP Financing Order”)
authorizing the Company to obtain post-petition financing in its Chapter 11
cases in accordance with the Debtor in Possession Loan and Security Agreement
executed by the Parties hereto (the agreement governing such post-petition
financing is referred to herein as the “DIP Financing
Agreement” and the credit facility contemplated by the DIP Financing
Agreement, the “DIP
Facility”;

     

    ii           Any
representation or warranty made by the Company to any Participating Holder in
this Agreement shall have been untrue in any material respect when made or any
breach of any covenant or material provision hereof by the Company shall have
occurred;

     

    iii           The
Company takes formal action (including, without limitation, the filing of a
pleading in the Chapter 11 Case), or announces an intention to take or pursue
action, inconsistent with (i) the Term Sheet, (ii) any of the Chapter 11
Documents, or (iii) the Financing Order or the DIP Financing Agreement, or
selects the treatment of any claim or class from the contemplated alternatives
set forth in the Term Sheet without the consent and approval of the
Participating Holders;

     

    iv           The
Chapter 11 Documents, including, without limitation, the Reorganization Plan,
contain any term or condition (a) not set forth in the Term Sheet or (b)
inconsistent with the Term Sheet or the DIP Financing Agreement, and such term
or condition is not reasonably acceptable to the Participating
Holders;

     

    v           There
shall have been issued or remain in force any order, decree, or ruling by any
court or governmental body having jurisdiction restraining or enjoining the
consummation of or rendering illegal the transactions contemplated by this
Agreement or the Reorganization Plan;

     

    vi           The
Company shall propose, consent to, support, acquiesce or participate in the
formulation of any out-of-court restructuring, any chapter 7 or chapter 11 plan
of reorganization or liquidation or any other such similar reorganization or
liquidation (whether foreign or domestic) other than the Restructuring as set
forth on the Term Sheet and other than as agreed to by the Participating
Holders;

     

    
      
        
        

      

      
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    vii           The
occurrence of a Material Adverse Effect;

     

    viii           If
any of the final forms of the documents prepared in connection with or related
to the Restructuring (including, without limitation, any stockholders'
agreement, any certificate of incorporation, any bylaws, any document concerning
the corporate governance of the Company upon the consummation of the
Reorganization Plan or any document concerning the rights of Company
shareholders or debtholders upon the consummation of the Reorganization Plan)
necessary for the implementation of the Restructuring are not reasonably
acceptable to the Participating Holders, including being inconsistent with any
provisions of the Term Sheet;

     

    ix           The
exclusive periods (as provided for in section 1121 of the Bankruptcy Code) to
(a) file a plan of reorganization or (b) solicit acceptances thereof are
terminated or expire as to any party other than the Participating
Holders;

     

    x           [intentionally
deleted].

     

    xi           The
Reorganization Plan shall not have been confirmed by order (the “Confirmation Order”)
entered by the Bankruptcy Court on or before one hundred and five (105) days
following the Petition Date, and the Effective Date of such Plan shall not occur
by  the later of  one hundred five
(125) days
after the Petition Date or
the satisfaction of the conditions precedent to the Plan have been satisfied or
waived

     

    xii           A
trustee or examiner with enlarged powers shall have been appointed under section
1104 or 105 of the Bankruptcy Code for service in the Chapter 11
Cases;

     

    xiii           Any
of the Chapter 11 Cases shall have been converted to a case under chapter 7 of
the Bankruptcy Code;

     

    xiv           The
Confirmation Order is not in form and substance reasonably acceptable to counsel
for the Participating Holders; and

     

    xv.           Any
affiliate or subsidiary of the Company object to the terms of this Agreement,
the Term Sheet, or the proposed transactions contemplated thereby.

     

    A
Participating Holder may rescind its vote on the Reorganization Plan (which vote
shall be null and void and have no further force and effect) by giving written
notice thereof to the other Participating Holders and the Company if: (a) the
Reorganization Plan is modified to provide any term that is inconsistent with
the Term Sheet, (b) after filing the Reorganization Plan, the Company (i)
submits a second or amended plan of reorganization that changes, modifies, or
deletes any provision of the Term Sheet in any respect, or (ii) moves to
withdraw the Reorganization Plan, (c) the Company fails to satisfy any term or
condition set forth in this Agreement, or (d) the Company is in breach of any
DIP Financing Order or the DIP Financing Agreement. After giving notice pursuant
to this Section and no cure having occurred within five (5) days after the
Company's receipt of such notice, this Agreement shall be of no force and effect
with respect to and as between the terminating Participating Holder and the
Company.

     

    11.
             Fiduciary Obligations
..  The Company may terminate this Agreement upon five (5) days’
written notice to the Participating Holders (A) that the Company has been
presented with a financing proposal to fund a transaction as an alternative to
the transaction contemplated by this Agreement, provided that such proposal is
contained in a plan of reorganization that is filed with the Bankruptcy Court
that provides for the payment in full, in cash, of all outstanding obligations
under the DIP Facility and all obligations under the Company’s prepetition
debentures, and the filing of such plan, as well as the timetable for
confirmation and effectiveness of such plan complies with the timetable set
forth herein in Section 8, and provided further that such proposal is a proposal
of committed funds and not conditioned upon financing and has been proposed by a
creditworthy source; (B) if the Participating Holders have not funded the DIP
Facility, provided the Company is not in default of the DIP Facility; or (C)
subject to the terms herein, if after solicitation of votes for the Plan, the
Debenture classes of the Participating Debenture Holders vote  to
reject the Plan and the Company cannot confirm its case.

     

    
      
        
        

      

      
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    12.
             Representations and Warranties.
The Company represents and warrants that (i) to the extent applicable, it
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its formation, (ii) its execution, delivery, and performance of
this Agreement are within the power and authority of such party and have been
duly authorized by such party and that no other approval or authorization is
required, (iii) this Agreement has been duly executed and delivered by it and
constitutes its legal, valid, and binding obligation, enforceable in accordance
with the terms hereof, subject to bankruptcy, insolvency, fraudulent conveyance,
and similar laws affecting the rights or remedies of creditors generally, and
(iv) none of the execution and delivery of this Agreement or compliance with the
terms and provisions hereof will violate, conflict with, or result in a breach
of, its certificate of incorporation or bylaws or other constitutive document,
any applicable law or regulation, any order, writ, injunction, or decree of any
court or governmental authority or agency, or any agreement or instrument to
which it is a party or by which it is bound or to which it is
subject.

     

    Each
Participating Holder represents and warrants that it is either the beneficial
owner, of the principal amount of the Debentures set forth in the signature
pages hereof.

     

    13.
       Covenants.

     

    
      	
               
      

            	
              a)

            	
              Each
      Participating Holder, the Company and its affiliates and subsidiaries
      agrees to use commercially reasonable efforts to (i) support and complete
      the Restructuring and (ii) do all things reasonably necessary and
      appropriate in furtherance thereof.

            

    

     

    
      	
               
      

            	
              b)

            	
              Each
      party hereby further covenants and agrees to negotiate the definitive
      documents relating to the Restructuring in good faith. The Company shall
      keep the Participating Holders apprised of any discussions, negotiations
      or meetings with any other creditor
  constituency.

            

    

     

    14.
           Impact of Appointment to Creditors'
Committee. Notwithstanding anything herein to the contrary, if any
Participating Holder is appointed to and serves on an official committee of
creditors in the Chapter 11 Cases, the terms of this Agreement shall not be
construed so as to limit such Participating Holder's exercise (in its sole
discretion) of its fiduciary duties, if any, to any person arising from its
service on such committee, and any such exercise of such fiduciary duties shall
not be deemed to constitute a breach of the terms of this
Agreement.

     

    15.
          Approval, Acceptance, Waiver, or
Consent by Participating Holders. Where this Agreement provides that the
Participating Holders may agree, waive, accept, consent, or approve any action
or document, including, but not limited to, the Participating Holder's approval
of documents in “form and substance reasonably acceptable” to the Participating
Holders, then approval by Participating Holders owning at least 66.67% in
principal amount of the Debentures owned by all of the Participating Holders
(“Required
Participating Holders”) will constitute such agreement, waiver,
acceptance, consent, or approval, as applicable. The Participating Holders agree
that they will respond to any waiver, approval, request for acceptance, or
consent sought by the Company within three (3) business days.

     

    16.
          Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance with the
internal laws of the state of New York, without regard to any conflicts of law
provisions which would require the application of the law of any other
jurisdiction. By its execution and delivery of this agreement, each of the
parties hereby irrevocably and unconditionally agrees for itself that any legal
action, suit, or proceeding against it with respect to any matter under or
arising out of or in connection with this Agreement or for recognition or
enforcement of any judgment rendered in any such action, suit, or proceeding,
shall be brought in the United States District Court for the Southern District
of New York or in any New York state court, and, by execution and delivery of
this Agreement, each of the parties hereby irrevocably accepts and submits
itself to the exclusive jurisdiction of such court, generally and
unconditionally, with respect to any such action, suit, or proceeding and agrees
that service of process in connection therewith shall be effective if made by
first class mail and shall not contest the form of manner of such service.
Notwithstanding the foregoing consent to New York jurisdiction, upon the
commencement of the Chapter 11 Cases, the parties agree that the Bankruptcy
Court shall have exclusive jurisdiction of all matters arising out of or in
connection with the Participating Holders' obligations under this Agreement and
that the parties shall not seek to enforce this Agreement in any other
court.

     

    
      
        
        

      

      
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    17.
          Specific Performance. It is
understood and agreed by the parties to this Agreement that money damages would
not be a sufficient remedy for any breach of this Agreement by any party, and
each non-breaching party shall be entitled to seek specific performance and
injunctive or other equitable relief as a remedy of any such breach, including,
without limitation, an order of the Bankruptcy Court requiring any party to
comply promptly with any of its obligations hereunder.

     

    18.
           Reservation of Rights. This
Agreement and the Reorganization Plan are part of a proposed settlement of
disputes among the parties hereto. Except as expressly provided in this
Agreement, nothing herein is intended to, or does, in any manner waive, limit,
impair or restrict the ability of the Company and each of the Participating
Holders to protect and preserve its rights, remedies and interests, including
without limitation, with respect to each Participating Holder its claims against
the Company or its full participation in any bankruptcy case filed by the
Company. If the transactions contemplated herein or in the Reorganization Plan
are not consummated, or if this Agreement is terminated, the parties hereto
fully reserve any and all of their rights. Pursuant to Rule 408 of the Federal
Rules of Evidence and any applicable state rules of evidence, this Agreement
shall not be admitted into evidence in any proceeding other than a proceeding to
enforce its terms.

     

    19.
          Headings. The headings of the
Sections and Subsections of this Agreement are inserted for convenience only and
shall not affect the interpretation hereof.

     

    20.
          Successors and Assigns. This
Agreement is intended to bind and inure to the benefit of the parties and their
respective successors, assigns, heirs, executors, administrators and
representatives. If any Participating Holder transfers or assigns its debt , it
shall provide any such transferee a copy of this Agreement and notify the
Company of such transfer.  The agreements, representations and
obligations of the Participating Holders under this Agreement are, in all
respects, several and not joint.

     

    21.
        
Notice. Notices given under this agreement shall be to:

     

    If to the
Company:

    

    Global
Capacity Group, Inc.

    200 S.
Wacker Drive, Suite 1600

    Chicago,
IL 60606

    Attn:  Patrick
C. Shutt

    

    and

    Heller,
Draper, Hayden, Patrick & Horn, LLC

    650
Poydras Street, Suite 2500

    New
Orleans, La. 70130

    Attn:
Douglas S. Draper, Esq.

    

    -and-

    

    

     

    If to Any
Participating Holder or the Participating Holders:

     

    At the
address set forth on the signature pages hereto

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    -and-

     

    Olshan
Grundman Frome Rosenzweig & Wolosky LLP

    Park
Avenue Tower

    65 East
55th
Street

    New York,
New York 10022-1106

    Attn:  Adam
H. Friedman, Esq.

     

    

    22.
          Counterparts. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same Agreement. This
Agreement may be executed and delivered by hand, facsimile, or by electronic
mail in portable document format.

     

    23.
          Amendments and Waivers. This
Agreement may not be modified, amended, or supplemented except in writing signed
by the signatories to this Agreement.

     

    24.
          No Third Party Beneficiaries.
Unless expressly stated herein, this Agreement shall be solely for the
benefit of the parties hereto and no other person or entity.

     

    25.
.          No Solicitation. This
Agreement is not and shall not be deemed to be a solicitation for votes in favor
of the Reorganization Plan in the Chapter 11 Cases. The vote of each of the
Participating Holders' with respect to the Reorganization Plan will not be
solicited until such Participating Holder has received the Reorganization Plan
and Disclosure Statement. Each party hereto acknowledges that it has been
represented by counsel in connection with this Agreement and the transactions
contemplated hereby. The provisions of this Agreement shall be interpreted in a
reasonable manner to effectuate the intent of the parties hereto.

     

    26.
.          Several, but not Joint
Liability.  The obligations of each Participating Holder
hereunder shall be several and not joint, and for avoidance of doubt, no
Participating Holder shall be liable for obligations or liabilities of any other
Participating Holder or for any breach by any other Participating Holder under
this Agreement, the DIP Financing Agreement or any other Chapter 11
Document.

     

    27.
          Consideration. It is hereby
acknowledged by the parties hereto that no consideration shall be due or paid to
the Participating Holders for their agreement to vote to accept the
Reorganization Plan in accordance with the terms and conditions of this
Agreement other than the Company's agreement to commence the Chapter 11 Cases
and, if applicable, to use its best efforts to take all steps necessary to
obtain approval of the Disclosure Statement and to seek to confirm, consummate
and implement the Reorganization Plan in accordance with the terms and
conditions of the transaction contemplated by the Restructuring and this
Agreement.

     

     

                                 24.           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.

     

     

    (signature
pages follow)

     

     

    
      
        
        

      

      
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      Exhibit
A to Plan Support and Restructuring Agreement

       

      
        GLOBAL
CAPACITY GROUP, INC, et al.

        TERM
SHEET FOR SALE UNDER A PROPOSED SALE/PLAN OF REORGANIZATION

         

        The
following is an outline of the principal terms and conditions of a proposed Plan
of Reorganization (the “Proposed POR”) including a
sale of the Assets to a Newco formed by the holders (collectively the “Debenture Holders”) of the
July/ August Debentures, VPP Debentures, the March Debentures, and the November
Debentures (as defined below, and collectively, the “Debentures”) issued by Capital
Growth Systems, Inc. (together with its subsidiaries and affiliates, the “Company”) that participate in
the DIP Facility described below (the “Participating Debenture
Holders”).  This term sheet (this “Term Sheet”) and the proposals
contained herein are subject to, among other conditions, the completion of
legal, financial and other due diligence by the Parties and their advisors and
does not, and shall not be construed to, indicate the agreement by any parties
to support the Proposed POR contemplated hereby until mutually agreeable,
definitive documentation is executed and delivered.  This Term Sheet
does not contain all of the terms of any Proposed POR and, except for the
provisions set forth below under the heading “Exclusivity”, shall not be
construed as (i) an offer capable of acceptance, (ii) a binding agreement of any
kind, (iii) a commitment to enter into, or offer to enter into, any agreement,
or (iv) an agreement to file any plan of reorganization or disclosure statement
or consummate any transaction or to vote for or otherwise support any plan of
reorganization or any restructuring.  Nothing in this Term Sheet shall
affect in any way, nor be deemed a waiver of, any of the rights of the Company
or the Debenture Holders.

         

        This Term
Sheet is not a solicitation of acceptances or rejections with respect to any
restructuring plan or reorganization.  Any such solicitation will be
conducted in accordance with the Bankruptcy Code and/or applicable securities
laws. Any POR based hereon is subject to approval by the Bankruptcy
Court.  This Term Sheet and all related communications are for
discussion and settlement purposes only and shall be deemed to be settlement
negotiations and subject to Rule 408 of the Federal Rules of Evidence and any
other applicable state or federal law or rule.

         

        
          	
                  I.

                	
                  TREATMENT
      OF CLAIMS AND INTERESTS UNDER THE
PLAN

                

        

         

        This Term
Sheet is conditioned on the consummation of a confirmed chapter 11 plan of
reorganization of the Company satisfactory to the Company and the Participating
Debenture Holders (the “POR”) or other sale
transaction. Except as specified below, claims and interests shall be satisfied
in full by the delivery of the applicable consideration with respect to any
class as soon as practicable after the effective date of the POR (the “Effective Date”).

         

        
          	
                  Newco

                	
                  The
      Participating Debenture Holders will form a Newco, in a form acceptable to
      them, with which to purchase the Assets of the Company as part of the
      POR.1

                   

                

        

         

          
            

          

        

        
          1 The
Company, in consultation with the Participating Debenture Holders, Newco, and
the Reorganized Debtor, as the case may be, shall seek to preserve any and all
net operating losses of the Company, including, but not limited to, through the
POR and any transaction contemplated hereby.  At the option of the
Participating Debenture Holders, the Reorganized Debtor may remain a public
company.  

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                  DIP
      Facility

                	
                  There
      shall be a $10.25 million DIP Facility providing for the terms set forth
      in the Debtor in Possession Loan and Security Agreement to be executed by
      the parties thereto, including but not limited to the payoff of the senior
      secured claim of Pivotal Global Capacity, LLC in the approximate amount of
      $5.1 million and $3.2 million of Vendor Utility Deposits.  The
      DIP Facility and any advances thereunder are subject to execution of
      definitive Loan Documents.  The DIP Financing Order shall
      require that (a) the Plan and Disclosure Statement and Motion to Approve
      Bid Procedures be filed no later than 15 days after the Petition Date, (b)
      a hearing to confirm a winning bidder and to approve the sale of the
      Assets thereto be held no later than 90 days after the Petition
      Date,  (c) Confirmation of the POR occur no later than 105 days
      after the Petition Date (the “Confirmation Deadline”),
      and (d) the Effective Date be no later than the later of (i) 125 days
      after the Petition Date or (ii) the date on which all conditions precedent
      to the Effective Date have been met or waived.

                   

                
	
                  Purchase
      of Assets and Assumption of Liabilities under POR or 363 Sale
      Transaction

                	Newco
      shall be the Stalking Horse bidder on, and if it is the winning bidder
      purchase the assets of the Company in, a sale pursuant to Section 363 of
      the Bankruptcy Code (a “363 Sale”), which sale
      shall be a component of a POR subject to clause 6 below, as
    follows:
	 	 	
                  1.

                   

                   

                  2.

                   

                   

                  3.

                   

                  4.

                   

                   

                   

                  5.

                   

                   

                  6.

                	
                  Credit
      bid of all or some, in Newco’s discretion, of (i) the liens and
      pre-petition amounts due under the Debentures , including accrued OID and
      (ii) Tranche B amounts due under the DIP Facility plus accrued
      interest;

                   

                  Issuance
      to the Company of common stock of Newco representing 10% of the
      outstanding shares of New Common Stock (as defined below) on a
      Fully-Diluted Basis (the “New Common Stock
      Pool”);

                   

                  As
      more fully set forth below, assumption of all mission critical vendor
      payments;

                   

                  As
      more fully set forth below, assumption or payment of (i) the Tranche A
      Loan in full and (ii) all administrative and priority payments set forth
      in the Budget (subject to any variances from the Budget permitted by or
      pursuant to the Credit Agreement) and the Exit Capital Requirements,
      annexed hereto as Schedule 1 and
      Schedule 2, respectively, as allowed
      by the Bankruptcy Court;

                   

                  Establishment
      and payment of a wind-down fund for the Estate, consistent with the
      Budget, mutually acceptable to the Company and the Participating Debenture
      Holders.

                   

                  If,
      pursuant to an order issued by the Bankruptcy Court, Newco is the winning
      bidder, either the assets of the Company shall be sold to Newco pursuant a
      363 Sale, which sale shall be a component of a POR, for the consideration
      set forth in the winning bid or a transaction having substantially the
      same effect shall be consummated as a restructuring of the Company
      pursuant to a POR (the Company, as restructured pursuant to such a POR,
      the “Reorganized
      Debtor”); provided, however, that if the POR is not confirmed
      by the Confirmation Deadline or an Event of Default occurs under the DIP
      Facility, then, if the Participating Debenture Holders so elect, the
      assets of the Company shall be sold to Newco pursuant to a sale order as a
      363 Sale outside of a plan for the consideration set forth in the winning
      bid.

                   

                

        

         

         

        
          
            
            

          

          
            Page |
2

            
              

            

          

          
            
            

          

        

         

        
          	
                  Conditional
      Exclusivity for Stalking Horse Status

                	
                  For
      a period from the Petition Date through the date that is forty-five (45)
      days after the date of the filing of an agreed upon Plan and Disclosure
      Statement and Motion to Approve Bid Procedures (the “Exclusivity Period”),
      Newco shall have the exclusive right to provide a commitment of funds
      and/or agreements to meet in order to satisfy the Stalking Horse bid
      requirements.  In the event Newco is unable to commit to the
      necessary funds or have the necessary agreements in place by the end of
      the Exclusivity Period, (a) the Company shall have the option to extend
      Newco’s exclusivity or immediately select a different Stalking Horse
      bidder and/or proceed to conduct an orderly and open sales process with or
      without a Stalking Horse Bidder and (b) Newco shall have no obligation to
      participate in the bidding.  If this occurs, it will not be an
      event of default under the DIP or a Termination Event under the Plan
      Support Agreement.

                  Notwithstanding
      anything to the contrary set forth herein, any bid or sale procedures
      shall include a provision that (a) the Participating Debenture Holders are
      qualified bidders, (b) the Participating Debenture Holders may credit bid
      the full amount of their pre-petition and post-petition debt and (c) any
      bid of the Participating Debenture Holders is subject only to the
      Participating Debenture Holders  providing adequate assurances per
      the approval of the  Bankruptcy Court.

                   

                
	
                  Administrative
      Expense Claims

                   

                	
                  Newco
      shall assume and pay each holder of an allowed Administrative Expense set
      forth in the Budget and Exit Capital Requirements  in full and
      final satisfaction of such allowed Administrative Expense Claim, as
      follows: either (i) in cash, in full on the later of (x) the Effective
      Date and (y) the date such claim becomes allowed, or due and payable in
      the ordinary course of business or (ii) on such other terms and conditions
      as may be agreed between the holder of such claim, on the one hand, and
      the Company and the Debenture Holders, on the other hand.

                   

                
	
                  Priority
      Non-Tax Claims

                   

                	
                  Newco
      shall assume and pay each holder of an allowed Priority Non-Tax Claim set
      forth in the Budget and Exit Capital Requirements, in full and final
      satisfaction of such Priority Non-Tax Claim, be paid in full in cash on
      the Effective Date, unless the holder of such claim agrees to deferred
      cash payments of a value, as of the Effective Date of the POR, equal to
      the amount of such claim.

                   

                
	
                  Priority
      Tax Claims

                   

                	
                  Newco
      shall assume and pay each allowed Priority Tax Claim set forth in the Exit
      Capital Requirements, in full and final satisfaction of such allowed
      Priority Tax Claim, in accordance with the Bankruptcy Code.

                   

                
	
                  Tranche
      A DIP Facility Claim

                	
                  Newco
      shall assume and pay each holder of an allowed Tranche A DIP Facility
      Claim in full on the Effective Date of the POR, unless otherwise agreed to
      in writing by the holders of the Tranche A DIP Facility
      Claims.

                   

                

        

         

        
          
            
            

          

          
            Page |
3

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  Debenture
      Holders and other Tranche B Lenders

                	
                  As
      determined by Newco, the Debenture Holders and other Tranche B Lenders
      shall be entitled to preferred stock in Newco in accordance with the
      following2:

                   

                  Each
      holder of an allowed Tranche B DIP Facility Claim shall receive, in full
      and final satisfaction of such allowed Tranche B DIP Facility Claim, its
      pro-rata share (based on its interest in the Tranche B Loan) of Series C
      Preferred Stock.  “Series C Preferred
      Stock” means participating convertible preferred stock of Newco (or
      a Reorganized Debtor, as applicable) that (i) will have a liquidation
      preference, senior to all other capital stock of the issuer, equal in the
      aggregate to the total amount of the Tranche B DIP Facility Claim
      (including all outstanding principal of and accrued and unpaid interest on
      the Tranche B Loan), (ii) will be convertible, at the option of the
      respective holders thereof as to the shares thereof held by each of them,
      into shares of New Common Stock representing in the aggregate up to 63% of
      the issued and outstanding New Common Stock on a Fully-Diluted Basis,
      subject to dilution by the Exit Financing,3 and (iii) will entitle the holders
      thereof to voting rights on the basis of one vote for each share of New
      Common Stock into which the Series C Preferred Stock is
      convertible.  “New Common Stock” means
      the common stock of Newco (or the Reorganized Debtor, as
      applicable).  “Fully-Diluted Basis”
      means as if all shares of the Series C Preferred Stock, the Series B
      Preferred Stock and the Series A Preferred Stock were converted to New
      Common Stock in accordance with the respective terms of such preferred
      stock.

                   

                  Each
      holder of an allowed July or August Debenture Claim shall receive, in full
      and final satisfaction of such allowed July or August Debenture Claim, a
      number of shares of Series B Preferred Stock based upon a formula taking
      into account the outstanding amount of the July or August Debenture Claim
      held by it and the level of its participation in the Tranche B DIP
      Facility.  “Series B Preferred
      Stock” means participating convertible preferred stock of Newco (or
      a Reorganized Debtor, as applicable) that (i) will have an aggregate
      liquidation preference of $6,000,000, senior to all other capital stock of
      the issuer other than Series C Preferred Stock, (ii) will be convertible,
      at the option of the respective holders thereof as to the shares thereof
      held by each of them, into shares of New Common Stock representing in the
      aggregate up to 13.5% of the issued and outstanding New Common Stock on a
      Fully-Diluted Basis, subject to dilution by the Exit Financing, and (iii)
      will entitle the holders thereof to voting rights on the basis of one vote
      for each share of New Common Stock into which the Series B Preferred Stock
      is convertible.

                   

                  Each
      holder of an allowed VPP, March or November Debenture Claim shall receive,
      in full and final satisfaction of such allowed VPP, March or November
      Debenture Claim, a number of shares of Series A Preferred Stock based upon
      a formula taking into account the outstanding amount of the VPP, March or
      November Debenture Claim held by it and the level of its participation in
      the Tranche B DIP Facility.  “Series A Preferred
      Stock” means participating convertible preferred stock of Newco (or
      a Reorganized Debtor, as applicable) that (i) will have an aggregate
      liquidation preference of $6,000,000, senior to all other capital stock of
      the issuer other than Series C Preferred Stock and Series B Preferred
      Stock, (ii) will be convertible, at the option of the respective holders
      thereof as to the shares thereof held by each of them, into shares of New
      Common Stock representing in the aggregate up to 13.5% of the issued and
      outstanding New Common Stock on a Fully-Diluted Basis, subject to dilution
      by the Exit Financing, and (iii) will entitle the holders thereof to
      voting rights on the basis of one vote for each share of New Common Stock
      into which the Series A Preferred Stock is convertible.

                   

                

        

         

          
            

          

        

        
          
            2 Each
class of Debentures will constitute a separate class in the
Bankruptcy.

          

            
            3 The Exit
Financing may be in the form of a capital raise, rights offering or similar
transaction(s).

             

            
              
                
                

              

              
                Page |
4

                
                  

                

              

              
                
                

              

            

          

        

         

        
          	
                  Bidding
      and Sales Procedures

                	
                  The
      Participating Debenture Holders and the Company shall agree to mutually
      acceptable bidding and sales procedures for the 363 Sale.

                   

                
	
                  General
      Unsecured Claims & Equity Interests

                	
                  To
      the extent permitted by the Bankruptcy Court, each holder of an allowed
      General Unsecured Claim (including any deficiency claim) and common equity
      interests of any kind in the Company, shall participate in the New Common
      Stock Pool in such manner as the Board of the Company may determine, and,
      if so requested by the Company, the Participating Debenture Holders will
      waive any right to participate in the New Common Stock Pool or other
      distribution in respect of their deficiency claims (if any).

                   

                
	
                  Documentation

                	
                  Any
      plan of reorganization and related disclosure statement and related
      documentation shall be in form and substance reasonably satisfactory to
      the Company and the Participating Debenture Holders.

                   

                
	
                  Additional
      Capital Requirements

                	
                  It
      is anticipated that Newco will require additional capital to fund the
      acquisition or reorganization.  Newco will work with CapStone
      Investments during the Exclusivity Period to immediately establish market
      terms acceptable to Newco.  In the event CapStone brings in
      additional capital on substantially the agreed upon terms, Newco will
      accept the capital.  In the event the terms are substantially
      different, Newco can reject or accept such different terms at its own
      option.

                   

                

        

         

         

        
          
            
            

          

          
            Page |
5

            
              

            

          

          
            
            

          

        

         

        
          	
                  CRO
      Function

                	
                  During
      the Exclusivity Period (to be extended until the closing date of the Sale
      in the event Newco provides a satisfactory commitment to provide
      sufficient funds to be the Stalking Horse bidder on or before the end of
      the Exclusivity Period), George King and Mark Rubin will report directly
      to the Board of the Company and will jointly carry out the functions of a
      CRO, including but not limited to the following:

                   

                  1.
       Implementing and leading the Company’s restructuring efforts in
      Bankruptcy Court;

                  2.  Supervision
      of accounting functions and financial reporting;

                  3.  Ensuring
      compliance with agreements, Budget, DIP Financing reporting requirements
      and Court orders;

                  4.  Assisting
      the Company to comply with all US Trustee Guidelines, Bankruptcy Code
      & Rules and Local Bankruptcy Rule reporting  requirements to
      ensure compliance with such rules and regulations;

                  5.  Preparing
      the Company for sale;

                  6.
      Attendance at Court hearings and creditors meetings, including section 341
      meetings; and

                  7.  Claims
      reconciliation and similar bankruptcy functions

                   

                  Newco
      may retain an advisor to advise Newco on the Company operations and
      financing to insure the orderly operation of the Company until the POR is
      confirmed and the sale is closed. The Company will provide (a) up to
      $25,000 per month for the payment of such advisor and (b) complete
      transparency on all financial and operational issues.

                   

                
	
                  Exclusivity

                	
                  The
      Company shall not, directly or indirectly, through any director, officer,
      employee, accountant or other agent or representative (collectively,
      “Representatives”)
      of the Company or otherwise, solicit or entertain offers from, negotiate
      with or in any manner encourage, discuss, accept or consider any proposal
      of any person other than the Debenture Holders (and any other parties the
      Debenture Holders elect to include in the DIP Facility or any purchase or
      financing of the purchase of the Company’s assets) and their affiliates
      and Representatives relating to the provision of DIP financing to or the
      acquisition of all or any portion of the assets of the Company, except in
      accordance with the bid procedures approved by the Court.

                  Notwithstanding
      any other provision of this Term Sheet, the Company agrees that the
      provisions of this and the immediately preceding sentence constitute the
      binding obligations of the Company.

                   

                

        

         

         

        
          
            
            

          

          
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6

            
              

            

          

          
            
            

          

        

        
Schedule
1

         

        Budget

         

        [See
attached.]

         

         

        
          
            
            

          

          
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7

            
              

            

          

          
            
            

          

        

         

        

         

         

        
          
            
            

          

          
            Page |
8

            
              

            

          

          
            
            

          

        

         

        Schedule
2

         

        Exit
Capital Requirements

         

        [See
attached.]

         

         

        
          
            
            

          

          
            Page |
9

            
              

            

          

          
            
            

          

        

         

      

    

     

    

     

     

    
      
        
        

      

      
        Page |
10ex10-1.htm

    
      
        

      

      Exhibit 10.1

       

    

    Agreement

     

    This
Agreement, dated as of August 16, 2010 (this “Argeement”), is by
and among Coliseum Capital Partners, L.P., a Delaware limited partnership,
Coliseum Capital Management, LLC, a Delaware limited liability company, Coliseum
Capital, LLC, a Delaware limited liability company, Blackwell Partners, LLC, a
Georgia limited liability company, Adam Gray and Christopher Shackelton
(collectively, the “Coliseum Capital
Group”, and each, individually, a “member” of the
Coliseum Capital Group) and Benihana Inc. (the “Company”).

     

    RECITALS

     

    WHEREAS,
the Coliseum Capital Group beneficially owns (as defined below) shares of the
Company’s Class A Common Stock, par value, $0.10 par value per share (the “Class A Common
Stock”) and the Company’s Common Stock, par value $0.10 per share (the
“Common Stock”)
as specified in Amendment No. 8 to the Schedule 13D filed by the Coliseum
Capital Group with the Securities and Exchange Commission (the “SEC”) on August 6,
2010;

     

    WHEREAS,
Coliseum Capital Partners, L.P. delivered (i) a letter to the
Company nominating Adam L. Gray (the “Nomination Letter”)
for election to the Company’s Board of Directors (the “Board”) as a Class A
Common Stock director at the 2010 annual meeting of stockholders of the Company
(the “2010 Annual
Meeting”) and (ii) a demand,
pursuant to Section 220 of the Delaware General Corporation Law, to review
certain of the Company's books and records in connection with the 2010 Annual
Meeting (the “Section
220 Demand”);

     

    WHEREAS,
on August 5, 2010, Coliseum Capital Partners, L.P. filed a preliminary proxy
statement on Schedule 14A with the SEC related to the matters set forth in the
Nomination Letter; and

     

    WHEREAS,
the Company and the members of the Coliseum Capital Group have determined to
come to an agreement with respect to certain matters related to the 2010 Annual
Meeting and certain other matters, as provided in this Agreement;

     

    NOW,
THEREFORE, in consideration of the promises, covenants and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Party, intending to be
legally bound, hereby agrees as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
I

     

    DEFINITIONS

     

    Section
1.1    Defined
Terms.  For purposes of this Agreement:

     

      (a)  “Affiliate” has the
meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange
Act.

     

     
(b)    The terms
“beneficial
owner” and “beneficially owns”
have the meanings set forth in Rule 13d-3 promulgated by the SEC under the
Exchange Act.

     

     
(c)   “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.

     

     
(d)   “Person” means any
individual, partnership, corporation, group, syndicate, trust, government or
agency, or any other organization, entity or enterprise.

     

    Section
1.2     Interpretation.  When
reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated.  Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”  The
words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.  This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing an instrument to be
drafted.

     

    ARTICLE
II

     

    BOARD
NOMINATION

     

    Section
2.1    2010 Annual
Meeting.  As promptly as practicable after the date hereof,
(a) the Company
shall nominate Adam L. Gray for election at the 2010 Annual Meeting as a Class
III, Class A Common Stock director, in replacement of the nominee for such
directorship previously identified by the Company, (b) the Board shall
recommend that the Company’s stockholders vote in favor of the election at the
2010 Annual Meeting of Mr. Gray as a Class III, Class A Common Stock director,
(c) the Company
shall amend its preliminary proxy statement filed in connection with the 2010
Annual Meeting to reflect such nomination and recommendation, as well as the
other matters set forth herein, and (d) the Company shall
use its reasonable best efforts to solicit proxies in favor of the election at
the 2010 Annual Meeting of Mr. Gray as a Class III, Class A Common Stock
director.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Section
2.2    Additional Company
Obligations.

     

     
(a)     Upon Mr.
Gray’s election as a director of the Company, the Board shall appoint Mr. Gray
as a member of the Nominating and Governance Committee, the Compensation and
Stock Option Committee, the Audit Committee, and any other committee of the
Board that is formed or to which responsibility is delegated for the purpose of
evaluating the Company’s strategic alternatives or any material financing,
acquisition, sale, disposition or other material transaction provided that Mr.
Gray meets Nasdaq independence eligibility criteria for such
committees.

     

     
(b)    The
Company shall reimburse the Coliseum Capital Group for all of Coliseum Capital
Group’s reasonable, documented, out-of-pocket expenses (including legal fees and
expenses) incurred in connection with its Section 13D filings, the Nomination
Letter, the Section 220 Demand and the other matters governed by this Agreement
(including the negotiation and execution hereof) but in no event in excess of
$250,000.

     

     
(c)     The
Nominating and Governance Committee shall nominate for election at the 2011
Annual Meeting, as a Class I, Common Stock Director to fill the directorship
that is vacant as of the date hereof, a person who is “independent” pursuant to
Nasdaq listing standards and who otherwise has no relationships with any
Affiliate of the Company (or any Affiliate thereof).

     

      (d)    
The
Company will hold its 2010 Annual Meeting on September 14, 2010 or as soon as
reasonably possible after that date.

     

    Section
2.3     Death or
Disability.  If Mr. Gray is elected as a director and can no
longer serve on the Board because of death or disability before the expiration
of his term, the Coliseum Capital Group shall be entitled to recommend to the
Nominating and Corporate Governance Committee a replacement director who will
qualify as “independent” pursuant to Nasdaq listing standards.  The
Nominating and Corporate Governance Committee shall not unreasonably withhold
acceptance of any such replacement director.  If the Nominating and
Corporate Governance Committee does not accept a replacement director
recommended by the Coliseum Capital Group, the Coliseum Capital Group shall have
the right to recommend one or more additional replacement directors for
consideration by the Nominating and Corporate Governance Committee. Upon the
acceptance of a replacement director nominee by the Nominating and Corporate
Governance Committee, the Board will appoint such replacement director to the
Board no later than five (5) business days after the Nominating and Corporate
Governance Committee’s recommendation of such replacement director.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    ARTICLE
III

     

    PROXY
CONTEST AND OTHER MATTERS; PRESS RELEASE

     

    Section
3.1    Undertakings by the Coliseum
Capital Group.  The Coliseum Capital Group hereby (a) withdraws the
Nomination Letter, (b) agrees to cease
its proxy solicitation activities with respect to the Company in connection with
the 2010 Annual Meeting, (c) withdraws the
Section 220 Demand, and (d) agrees to vote all
shares of Common Stock beneficially owned by it in favor of the Company’s
nominees for election as directors at the 2010 Annual Meeting.  No
later than the second business day after the date hereof, the Coliseum Capital
Group shall file with the SEC an amendment to its Schedule 13D with respect to
the Company disclosing the material contents of this Agreement.

     

    Section
3.2    Press
Release.  In the event that the Company elects to make a press
release pertaining to this Agreement, such press release will be mutually
acceptable to both the Coliseum Capital Group and the Company.

     

    ARTICLE
IV

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
4.1    Representations and
Warranties.  Each Party represents and warrants to the other
Parties that:

     

     
(a)    such
Party, if not a natural Person, has all requisite limited partnership, limited
liability company or corporate authority and power to execute and deliver this
Agreement and to perform such Party’s obligations hereunder;

     

     
(b)    the
execution and delivery of this Agreement by such Party and the performance of
such Party’s obligations hereunder have been duly and validly authorized by all
required limited partnership, limited liability company, corporate or other
action on the part of such Party and no other proceedings on the part of such
Party are necessary to authorize the execution and delivery of this Agreement by
such Party or the performance of such Party’s obligations
hereunder;

     

     
(c)    this
Agreement has been duly and validly executed and delivered by such Party and
constitutes the valid and binding obligation of such Party, enforceable against
such Party in accordance with its terms; and

     

     
(d)    this
execution and delivery by such Party of Agreement and the performance of such
Party’s obligations hereunder will not result in a violation of any terms or
provisions of any (i) organizational
document of such Party, (ii) agreement to
which such Party is a party or by which such Party may otherwise be bound or
(iii) law,
rule, license, regulation, judgment, order or decree governing or affecting such
Party.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
V

     

    OTHER
PROVISIONS

     

    Section
5.1    Remedies; Governing
Law.

     

     
(a)     The
Parties agree that any breach of this Agreement would cause irreparable harm to
the other Parties, that money damages alone would not be a sufficient remedy and
that the Parties shall be entitled to equitable relief, including injunction and
specific performance, in the event of any breach or threatened breach of the
provisions of this Agreement.  The Parties shall not oppose the
granting of such relief, and shall waive any requirement for the securing or
posting of any bond in connection with such remedy.  Equitable relief
shall not be deemed to be the exclusive remedy for breach of this agreement, but
shall be in addition to all other remedies available at law or in
equity.

     

     
(b)    The
Parties agree that the Court of Chancery or federal court of the State of
Delaware shall have exclusive jurisdiction with respect to all actions and
proceedings arising out of or relating to this Agreement,  Each
Parties hereby (i) consents to submit
itself to the personal jurisdiction of the Court of Chancery or federal court of
the State of Delaware in the event any dispute between the Parties arises out or
relates of this Agreement, (ii) agrees that it
shall not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it
shall not bring any action relating to this Agreement in any other court and
irrevocably waives the right to trial by jury in the event of any such dispute
and (iv)
irrevocably consents to service of process by delivery of notice complying with
Section 5.3.

     

     
(c)     THIS
AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING WITHOUT LIMITATION
VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE CHOICE OF LAW RULES OR PRINCIPLES OF SUCH STATE
THAT WOULD PERMIT OR COMPEL THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION.

     

    Section
5.2     Entire
Agreement.  This Agreement contains the entire understanding of
the Parties with respect to the subject matter hereof and may be amended only by
an agreement in writing executed by the Parties.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    Section
5.3    Notices.  All
notices, consents, requests, instructions, approvals and other communications
provided for herein and all legal process in regard hereto shall be in writing
and shall be deemed validly given, made or served, if when actually received
during normal business hours at the address specified in this
subsection:

     

     

    if to the
Company, to:

     

    Benihana
Inc.

    8685
Northwest 53rd Terrace

    Miami,
Florida  33166.

    Attention:                      General
Counsel

     

    if to any
member of the Coliseum Capital Group, to:

     

    Coliseum
Capital Management, LLC

    767 Third
Avenue, 35th Floor

    New York,
NY  10017

    Attention:                      Christopher
Shackelton

     

    with a
copy to:

     

    Debevoise
& Plimpton LLP

    919 Third
Avenue

    New York,
NY  10022

    Attention:                      William
D. Regner

     

    or to
such other address as any party hereto may, from time to time, designate in
writing delivered pursuant to the terms of this Section 5.3.

     

    Section
5.4    Severability.  If
any provision of this Agreement shall be held by any court of competent
jurisdiction to be illegal, void or unenforceable, such provision shall be of no
force and effect, but the illegality or unenforceability of such provision shall
have no effect upon the legality or enforceability of any other provision of
this Agreement.

     

    Section
5.5    Counterparts.  This
Agreement may be executed in two or more counterparts (including by facsimile or
PDF) which together shall constitute a single agreement.

     

    Section
5.6    Successors and
Assigns.  This Agreement shall not be assignable by any Party
but shall be binding on successors of the Parties.

     

    Section
5.7    No Third Party
Beneficiaries.  This Agreement is solely for the benefit of the
Parties hereto and is not enforceable by any other Person.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

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

     

    
      	 	BENIHANA
  INC.
	 	 	 
	 	By:	/s/ Alan B. Levan
	 	 	Name:  Alan
      B. Levan
	 	 	Title:  Director
	 	 	 
	 	COLISEUM CAPITAL MANAGEMENT,
      LLC
	 	 	 
	 	By: 	/s/ Christopher Shackeklton
	 	 	Name:  Christopher
      Shackelton
	 	 	Title:    Manager
	 	 	 
	 	COLISEUM CAPITAL PARTNERS,
      L.P.
	 	 	 
	 	By: 	Coliseum Capital,
      LLC, General Partner
	 	 	 
	 	By: 	/s/ Christopher
      Shackeklton   
	 	 	Name:  Christopher
      Shackelton
	 	 	Title:    Manager
	 	 	 
	 	COLISEUM CAPITAL,
      LLC
	 	 	 
	 	By:  	/s/ Christopher
      Shackeklton   
	 	 	Name:  Christopher
      Shackelton
	 	 	Title:  Manager

       

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      
        	 	BLACKWELL PARTNERS,
      LLC
	 	 	 
	 	By: 	Coliseum Capital
      Management, LLC,
	 	 	Attorney-in-fact

      

    

    
      	 	 	 
	 	 	/s/ Adam Gray
	 	 	Name:  Adam
      Gray
	 	 	Title:  Manager
	 	 	 
	 	CHRISTOPHER
      SHACKELTON
	 	 	 
	 	 	/s/ Christopher Shackeklton
	 	 	Christopher
      Shackelton
	 	 	 
	 	ADAM GRAY
	 	 	 
	 	 	/s/ Adam Gray
	 	 	Adam
  Gray

    

     

     

    8

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