Document:

Exhibit 10.14

                       AMENDED AND RESTATED LOAN AGREEMENT

                             Dated as of May 5, 2004

      GRISTEDE'S FOODS, INC., a Delaware corporation having its principal place
of business at 823 Eleventh Avenue, New York, New York 10019 (the "Borrower"),
each of the Subsidiaries of the Borrower listed on Schedule 1 annexed hereto
(each individually, a "Guarantor" and collectively, the "Guarantors") (the
Borrower and the Guarantors, collectively, the "Credit Parties"), CITIBANK,
N.A., a national banking association, having an office at 666 Fifth Avenue, New
York, New York 10103 ("Citibank" or a "Bank") ("Citibank" or a "Bank") ISRAEL
DISCOUNT BANK OF NEW YORK, a New York banking organization, having an office at
511 Fifth Avenue, New York, New York 10017 ("Israel Discount" or a "Bank") and
BANK LEUMI USA, a New York trust company, having an office at 562 Fifth Avenue,
New York, New York 10036 ("Leumi" or a "Bank") ("Leumi" or a "Bank") and
CITIBANK, N.A., as agent for the Banks (the "Agent") hereby agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

      SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

      "Affiliate" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
ten (10%) percent or more of any class of voting stock of, or ten (10%) percent
or more of the equity interest in, such Person; or (iii) a Person ten (10%)
percent or more of the voting stock of which, or ten (10%) or more of the equity
interest of which, is directly or indirectly beneficially owned or held by such
Person. The term 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.

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      "Agent" means Citibank, N.A., or any bank which succeeds to the position
of Agent, as provided in this Agreement.

      "Agreement" means this Amended and Restated Loan Agreement, as amended,
supplemented or modified from time to time.

      "Asset Sale Recapture Event" means any sale of assets by the Borrower or
any Guarantor other than in the ordinary course of business.

      "Asset Sale Recapture Payment" means one hundred (100%) percent of the
"net proceeds" of an Asset Sale Recapture Event. In the case of an Asset Sale
Recapture Event in which assets are sold solely for cash, the "net proceeds"
shall be the sales price for the assets less reasonable and customary
out-of-pocket expenses associated with such sale. In the case of an Asset Sale
Recapture Event in which assets are sold for cash and debt, the "net proceeds"
shall be the cash portion of the sale price for the assets less reasonable and
customary out-of-pocket expenses associated with such sale plus an assignment of
the promissory notes representing the non-cash portion of the sale.

      "Bank" or "Banks" means one or more, as the context requires, of Citibank,
Israel Discount, Leumi and each other lender which becomes a party to this
Agreement.

      "Benefit Arrangement" means an employee benefit plan, within the meaning
of Section 3(3) of ERISA, which is neither a Plan nor Multiemployer Plan, and
which is maintained, sponsored or otherwise contributed to by the Borrower or
any ERISA Affiliate.

      "Board of Governors" means the Board of Governors of the Federal Reserve
System of the United States of America.

      "Borrowing Base" means 85% of the Credit Parties' Eligible Accounts
Receivable plus 65% of the Credit Parties' Eligible Warehouse Inventory (as
reasonably determined by the Agent) plus 50% of the Credit Parties' Eligible
Retail Inventory (as reasonably determined by the Agent).

      "Business Day" means (i) a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close and (ii) if the relevant day relates to a Eurodollar Loan, an Interest
Period, or notice with respect to a Eurodollar Loan, a day on which dealings in
Dollar deposits are carried on in the London interbank market.

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      "Capital Lease" means a lease which has been or should be, in accordance
with GAAP, capitalized on the books of the lessee.

      "Collateral" means all property which is subject to, or is to be subject
to, the Liens granted by the Security Agreements.

      "Commitment" means, with respect to each Bank, the aggregate obligations
of such Bank to (i) make its proportionate share of Revolving Credit Loans to
the Borrower, and (ii) make its proportionate share of the Term Loan to the
Borrower, in each case pursuant to the terms and conditions of this Agreement,
and in each case in the aggregate Dollar amount set forth in Schedule 1.01-A
annexed hereto.

      "Consolidated Capital Expenditures" means, as to any Person, the aggregate
amount of any expenditures (including such expenditures financed by purchase
money Debt or secured by purchase money Liens) by such Person and its
Consolidated Subsidiaries for assets (including fixed assets acquired under
Capital Leases) which it is contemplated will be used or usable in fiscal years
subsequent to the year of acquisition, all computed and consolidated in
accordance with GAAP.

      "Consolidated Cash Capital Expenditures" means, as to any Person, the
aggregate amount of Consolidated Capital Expenditures less expenditures financed
by Capital Leases (including such expenditures financed by purchase money Debt
or secured by purchase money Liens).

      "Consolidated Current Liabilities" means, as to any Person, the aggregate
amount of all liabilities of such Person and its Consolidated Subsidiaries
(including tax and other proper accruals) which would be properly classified as
current liabilities, all computed and consolidated in accordance with GAAP.

      "Consolidated Funded Debt" means, as to the Borrower and its Consolidated
Subsidiaries, the aggregate of the Funded Debt of the Borrower and its
Consolidated Subsidiaries, computed and consolidated in accordance with GAAP.

      "Consolidated Subordinated Debt" means, as to any Person, all of the
Subordinated Debt of such Person and its Consolidated Subsidiaries, computed and
consolidated in accordance with GAAP.

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      "Consolidated Subsidiaries" means, as to any Person, those Subsidiaries of
such Person which are consolidated with such Person in the financial statements
delivered pursuant to Section 5.01(b).

      "Consolidated Tangible Net Worth" means, as to any Person, the excess of
(i) (a) such Person's Consolidated Total Assets, less all intangible assets
properly classified as such in accordance with GAAP, including, but without
limitation, patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, permits and goodwill, plus (b) such Person's Consolidated
Subordinated Debt, over (ii) such Person's Consolidated Total Liabilities.

      "Consolidated Total Assets" means, as to any Person, the aggregate net
book value of the assets of such Person and its Consolidated Subsidiaries after
all appropriate adjustments in accordance with GAAP (including without
limitation, reserves for doubtful receivables, obsolescence, depreciation and
amortization and excluding the amount of any write-up or revaluation of any
asset, other than that arising from (i) the consummation of the Acquisition (as
defined in the Prior Agreement), and (ii) the accounting by the Borrower for any
future acquisition of store #53 or store #514 (formerly known as store #414).

      "Consolidated Total Liabilities" means, as to any Person, all of the
liabilities of such Person and its Consolidated Subsidiaries, including all
items which, in accordance with GAAP, would be included on the liability side of
the balance sheet (other than capital stock, capital surplus and retained
earnings) computed and consolidated in accordance with GAAP.

      "Consolidated Total Unsubordinated Liabilities" means, as to any Person,
the excess of (i) such Person's Consolidated Total Liabilities over (ii) the sum
of (a) such Person's Consolidated Subordinated Debt, and (b) unsecured advances
from Affiliates not subordinated to the Banks.

      "Debt" means, as to any Person, (i) all indebtedness or liability of such
Person for borrowed money; (ii) indebtedness of such Person for the deferred
purchase price of property or services (excluding trade obligations); (iii)
obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) obligations of such Person under letters of credit issued for the
account of such Person; (vi) obligations of such Person arising under acceptance
facilities; (vii) obligations secured by any Lien on property owned by such
Person whether or not the obligations have been assumed; and (viii) all other
liabilities for borrowed

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money and which are recorded as such, or which should be recorded as such, on
such Person's financial statements in accordance with GAAP.

      "Default" means any of the events specified in Section 6.01 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.

      "Dollars" and the sign "$" mean lawful money of the United States of
America.

      "EBITDA" means, as to the Borrower and its Subsidiaries for any period,
the sum of (i) net income (excluding extraordinary gains and losses), plus (ii)
interest expense, plus (iii) depreciation expense, plus (iv) amortization of
intangible assets, plus (v) federal, state and local income taxes deducted in
calculating net income, plus (vi) non-cash rent leveling expenses, plus (vii)
non-cash items permitted by GAAP, plus (viii) for each fiscal quarter, such
additional Subordinated Debt which is effective as of such quarter end, in each
case measured for the Borrower and its Subsidiaries on a consolidated basis for
such period, computed and consolidated in accordance with GAAP.

      "EBITDAR" means, as to the Borrower and its Subsidiaries for any period,
the sum of (i) EBITDA, plus (ii) rent expense, in each case measured for the
Borrower and its Subsidiaries on a consolidated basis for such period, computed
and consolidated in accordance with GAAP.

      "Eligible Accounts Receivable" means those accounts receivable of the
Credit Parties which (i) arise in the ordinary course of business, (ii) are
subject to a first, perfected security interest of the Agent, and (iii) are
evidenced by an invoice or other documentary evidence reasonably satisfactory to
the Agent provided, however no account receivable shall be an Eligible Account
Receivable if:

            (a) it arises out of a sale made by a Credit Party to an Affiliate
            of a Credit Party or to a person controlled by such an Affiliate;

            (b) it is due or unpaid more than ninety (90) days after its invoice
            (thirty (30) days in the case of credit card receivable);

            (c) the account receivable is from an account debtor of which fifty
            (50%) percent or more of such account

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            debtor's accounts receivable are otherwise ineligible hereunder;

            (d) any covenant, representation or warranty contained in any Loan
            Document with respect to such account receivable has been breached;

            (e) the account debtor has commenced a voluntary case under the
            federal bankruptcy laws, as now constituted or hereafter amended, or
            made an assignment for the benefit of creditors, or a decree or
            order for relief has been entered by a court having jurisdiction in
            the premises in respect of the account debtor in an involuntary case
            under any state or federal bankruptcy laws, as now constituted or
            hereafter amended, or if any other petition or other application for
            relief under any state or federal bankruptcy law has been filed
            against the account debtor, or if the account debtor has failed,
            suspended business, ceased to be solvent, called a meeting of its
            creditors, or consented to or suffered a receiver, trustee,
            liquidator or custodian to be appointed for it or for all or a
            significant portion of its assets of affairs;

            (f) the sale to the account debtor is on a guaranteed sale,
            sale-and-return, sale on approval, consignment or any other
            repurchase or return basis or is evidenced by chattel paper;

            (g) the account debtor is the United States of America, any state or
            any department, agency or instrumentality of the United States of
            America or any state;

            (h) the account debtor is not domiciled in the United States;

            (i) the goods giving rise to such account receivable have not been
            shipped and delivered to or have been rejected by the account debtor
            or the services giving rise to such receivable have not been
            performed by the Credit Parties or have been rejected by the account
            debtor or the account receivable otherwise does not represent a
            final sale;

            (j) the account debtor is also a creditor or supplier of the Credit
            Parties or has disputed liability, or has made any claim with
            respect to any other account receivable

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            due to the Credit Parties, or the account receivable otherwise is or
            may become subject to any right of set-off;

            (k) any of the Credit Parties have made any agreement with the
            account debtor for any deduction therefrom, (except for discounts or
            allowances made in the ordinary course of business for prompt
            payment, all of which discounts or allowances are reflected in the
            calculation of the face value of each respective invoice related
            thereto) provided, that only the amount of any such deduction shall
            be ineligible pursuant to this clause (k);

            (l) any return, rejection or repossession of the merchandise has
            occurred;

            (m) such account receivable is not payable to a Credit Party;

            (n) the Agent, in good faith and in the exercise of its discretion
            in a reasonable manner, believes that collection of such account
            receivable is insecure or that such account receivable may not be
            paid by reason of the account debtor's inability to pay, or the
            accounts receivable of the account debtor exceed a credit limit
            determined by the Agent, in good faith and in the exercise of its
            discretion in a reasonable manner, provided that only the amount of
            such excess shall be ineligible; or

            (o) the Agent determines in its reasonable discretion, that such
            account receivable, or such category of accounts receivable, is
            ineligible.

      "Eligible Retail Inventory" means all finished goods inventory of the
Credit Parties located in the Credit Parties' retail stores valued at the lower
of cost (determined using the retail method of accounting) or market value,
determined on a first-in-first-out basis, other than (i) inventory which is, in
the Agent's reasonable opinion, obsolete or unmerchantable, (ii) inventory
located at a business premises not located in the United States, (iii) inventory
not subject to a perfected security interest in favor of the Agent,(iv) goods or
materials which would not be classified as inventory on a balance sheet of the
Credit Parties, (v) produce, (vi) floral products, (vii) seafood, (viii) meat
and poultry, (ix) bakery products, (x) 25% of pharmacy goods, (xi) dairy
products,

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(xii) goods in transit, (xiii) damaged or defective goods, or (xiv) supplies.

      "Eligible Warehouse Inventory" means all finished goods inventory of the
Credit Parties located in the Credit Parties' warehouse facilities valued at the
lower of cost (determined using the retail method of accounting) or market
value, determined on a first-in-first-out basis, other than (i) inventory which
is, in the Agent's reasonable opinion, obsolete or unmerchantable, (ii)
inventory located at a business premises not located in the United States, (iii)
inventory not subject to a perfected security interest in favor of the Agent,
(iv) goods or materials which would not be classified as inventory on a balance
sheet of the Credit Parties prepared in accordance with GAAP, (v) produce, (vi)
floral products, (vii) seafood, (viii) meat and poultry, (ix) bakery products,
(x) 25% of pharmacy goods, (xi) dairy products, (xii) goods in transit,(xiii)
damaged or defective goods, or (xiv) supplies.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.

      "ERISA Affiliate" means any trade or business (whether or not
incorporated) which together with any other Person would be treated, with such
Person, as a single employer under Section 4001 of ERISA.

      "Eurocurrency Reserve Requirement" means, with respect to the Reserve
Adjusted LIBOR Rate for an Interest Period, the aggregate (without duplication)
daily average of the rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation, basic,
marginal, supplemental or emergency reserves) under any regulation (including,
but without limitation, Regulation D) promulgated by the Board of Governors (or
any successor thereto or other governmental authority having jurisdiction over
the Agent) by the Agent against "Eurocurrency liabilities" (as such term is used
in Regulation D), but without benefit or credit for proration, exemptions or
offsets that might otherwise be available to the Agent from time to time under
Regulation D. Without limiting the effect of the foregoing, the Eurocurrency
Reserve Requirement shall reflect any other reserves required to be maintained
by the Agent against (1) any category of liabilities that includes deposits by
reference to which the Reserve Adjusted LIBOR Rate is to be determined; or (2)
any category of extension of credit or other assets that include loans

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bearing a Reserve Adjusted LIBOR Rate. As of the date of this Agreement there
are no Eurocurrency Reserve Requirements in effect.

      "Eurodollar Loan" means a Loan bearing interest at an interest rate
determined with reference to the Reserve Adjusted LIBOR Rate in accordance with
the provisions of Article II hereof.

      "Event of Default" means any of the events specified in Section 6.01 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.

      "Existing Facility" means the loan facilities described in the Prior
Agreement.

      "Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three (3) federal funds brokers
of recognized standing selected by it.

      "Fee Letter" means the letter dated as of May 5, 2004 from Citibank to the
Borrower in which the Borrower agreed to pay certain fees in connection with the
credit facility as described therein, as amended.

      "Field Audit" means an examination of the books and records of the
Borrower and the Guarantors (exclusive of the Individual Guarantor), to be
performed by employees or other representatives of the Agent.

      "Fiscal Month" means, for each fiscal quarter consisting of 13 weeks,
periods equal to the first four (4) weeks, next four (4) weeks and last five (5)
weeks respectively; and for a fiscal quarter consisting of 14 weeks, periods
equal to the first four (4) weeks, next four (4) weeks and last six (6) weeks
respectively.

      "Fixed Charge Coverage Ratio" means, as to the Borrower and its
Consolidated Subsidiaries for any period, the ratio of (i) EBITDAR for such
period to (ii) the sum of (x) interest expense for such period plus,(y) rent
expense (including rent for real estate occupancy and for all other operating
leases) for such period, plus (z) the principal amount of long term Debt
(excluding Revolving

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Credit Loans and the $5,000,000.00 principal payment on the Term Loan due
October 1, 2004) scheduled to be paid during such period. The Fixed Charge
Coverage Ratio shall be measured and tested at the end of each fiscal quarter
and for a period covering the four (4) fiscal quarters then ended.

      "Funded Debt" means, as to any Person, such Debt of such Person which is
(i) all indebtedness or liability for borrowed money (other than (x)
Subordinated Debt payable to United Acquisition Corp. and/or its Affiliates, as
such amount may be changed from time to time, and (y) other unsecured Debt owing
to either United Acquisition Corp, or any Affiliate of John Catsimatidis); (ii)
all indebtedness or liability for the deferred purchase price of property
(excluding trade obligations); (iii) all obligations for principal as a lessee
under Capital Leases, as determined in accordance with GAAP; (iv) all
obligations to reimburse an issuing bank for the amount of all undrawn letters
of credit, unmatured drafts accepted or other deferred payment obligations
incurred under letters of credit, and (v) all liabilities of such Person under
any preferred stock which, at the option of the holder or upon the occurrence of
one or more certain events, is redeemable by such holder, or which, at the
option of such holder is convertible into Debt.

      "GAAP" means Generally Accepted Accounting Principles.

      "Generally Accepted Accounting Principles" means those generally accepted
accounting principles and practices which are recognized as such by the American
Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between the Borrower and the Agent relating to the
determination of Generally Accepted Accounting Principles shall, in the absence
of manifest error, be conclusively resolved for all purposes hereof by the
written opinion with respect thereto, delivered to the Agent, of the independent
accountants selected by the Borrower and approved by the Agent for the purpose
of auditing the periodic financial statements of the Borrower.

      "Guarantor" or Guarantors" means one or more of the Guarantors listed on
Schedule 1 of this Agreement and any other Person (other

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than the Individual Guarantor) required to guarantee the obligations of the
Borrower in accordance with Section 5.01(k) of this Agreement.

      "Guaranty" or "Guaranties" means the guaranty or guaranties executed and
delivered by the Guarantors pursuant to Section 3.01(j) or Section 5.01(k) of
this Agreement.

      "Hazardous Materials" includes, without limit, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 9601 et. seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule or regulation.

      "Individual Guarantor" means John Catsimatidis.

      "Interest Determination Date" means the date on which a Prime Rate Loan is
converted to a Eurodollar Loan and, in the case of a Eurodollar Loan, the last
day of the applicable Interest Period.

      "Interest Payment Date" means (i) as to each Eurodollar Loan, in the case
of Interest Periods of three (3) months or less, the last day of each Interest
Period and in the case of six (6) month Interest Periods, the ninetieth (90th)
day and the last day of such Interest Period and (ii) as to each Prime Rate
Loan, the last Business Day of each month.

      "Interest Period" means as to any Eurodollar Loan, the period commencing
on the date of such Eurodollar Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months thereafter, as
the Borrower may elect (or, if there is no numerically corresponding day, on the
last Business Day of such month); provided, however, (i) that no Interest Period
for a Revolving Credit Loan or the Term Loan shall end later than the Revolving
Credit Maturity Date or the Term Loan Maturity Date, respectively (ii) if any
Interest Period would end on a day which shall not be a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day,
(iii) no Interest Period representing a portion of the principal

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required to be paid in accordance with Section 2.10 may be selected unless the
outstanding Prime Rate Loans and Eurodollar Loans for which the relevant
Interest Periods end on or prior to the date of such payment are in an aggregate
amount which will be sufficient to make such payment, (iv) interest shall accrue
from and including the first day of such Interest Period to but excluding the
date of payment of such interest, and (v) no Interest Period of particular
duration may be selected by the Borrower if the Agent determines, in its sole,
good faith discretion, that Eurodollar Loans with such maturities are not
generally available.

      "Investment" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business) and any purchase of
(i) any security of another Person or (ii) any business or undertaking of any
Person or any commitment or option to make any such purchase, or any other
investment.

      "Leverage Ratio" means, as to the Borrower and its Consolidated
Subsidiaries, the ratio of (i) Consolidated Total Unsubordinated Liabilities to
(ii) Consolidated Tangible Net Worth.

      "LIBOR Applicable Margin" shall have the meaning set forth in Sections
2.17 of this Agreement.

      "LIBOR Rate" means the rate per annum identified as the LIBOR Rate for a
requested Interest Period as published on page 3750 of the Dow Jones Telerate
service.

      "Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.

      "Loan" or Loans" means Revolving Credit Loans, the Term Loan, or any or
all as the context requires, and may refer to Prime Rate Loans and/or Eurodollar
Loans, as the context requires.

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      "Loan Documents" means this Agreement, the Notes, the Security Agreements,
the Pledge Agreements, the Guaranties, the Fee Letter and any other document
executed or delivered pursuant to this Agreement.

      "Material Adverse Change" means, as to any Person, (i) a material adverse
change in the financial condition, business, operations, properties or results
of operations of such Person or (ii) any event or occurrence which is reasonably
likely to have a material adverse effect on the ability of such Person to
perform its obligations under the Loan Documents.

      "Maturity Dates" means, collectively, the Revolving Credit Maturity Date
and the Term Loan Maturity Date.

      "Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA
which covers employees of the Borrower or any ERISA Affiliate.

      "Note" or "Notes" means one or more of the Revolving Credit Notes or the
Term Loan Notes as the context requires.

      "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

      "Permitted Investments" means, (i) direct obligations of the United States
of America or any governmental agency thereof, or obligations guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; (ii) time certificates of deposit having a
maturity of one year or less issued by (x) any of the Banks or (y) any other
commercial bank organized and existing under the laws of the United States or
any state thereof and having aggregate capital and surplus in excess of
$1,000,000,000.00; (iii) money market mutual funds having assets in excess of
$1,000,000,000; (iv) commercial paper rated not less than P-1 or A-1 or their
equivalent by Moody's Investor Services, Inc. ("Moody") or Standard & Poor's
Corporation ("S&P"), respectively; (v) tax exempt securities rated Prime 2 or
better by Moody's or A-1 or better by S&P; (vi) investments, loans or advances
by the Borrower in or to any Guarantor (other than the Individual Guarantor);
(vii) any other Investments, (including, without limitation, loans or advances
to employees) in a maximum amount outstanding at any time of $500,000; or (viii)
notes or other evidence of indebtedness from purchasers of assets from the
Borrower or a Guarantor.

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      "Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or a federal, state or
local government, or a political subdivision thereof or any agency of such
government or subdivision.

      "Plan" means any employee benefit plan (excluding a Multiemployer Plan)
which is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code of 1986, as amended,
and which is maintained, sponsored or otherwise contributed to by the Borrower
or any ERISA Affiliate.

      "Pledge Agreement" or "Pledge Agreements" means the pledge agreement or
pledge agreements executed and delivered by the Borrower and/or one or more
Guarantors pursuant to Section 3.01(n) or 5.01(k) of this Agreement.

      "Prime Applicable Margin" shall have the meaning set forth in Section 2.17
of this Agreement.

      "Prime Rate" means the rate of interest stated by Citibank to be its prime
rate as in effect from time to time; each change in said rate shall be effective
as of the date of such change.

      "Prime Rate Loan" means a Loan bearing interest at an interest rate
determined with reference to the Prime Rate.

      "Prior Agreement" means that certain loan agreement dated as of the 31st
day of October, 2001, which Loan Agreement has heretofore been amended pursuant
to that certain First Amendment dated as of November 30, 2002, that certain
Second Amendment dated as of March 1, 2003, that certain Third Amendment dated
as of August 30, 2003, that certain Fourth Amendment dated as of January 26,
2004 and that certain Fifth Amendment dated as of November 29, 2003.

      "Pro Rata Share of the Commitment" means, as to each Bank, the ratio,
expressed as a percentage, of its Commitment to the Total Commitment.

      "Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.

                                     - 14 -
<PAGE>

      "Regulation D" means Regulation D of the Board of Governors, as the same
may be amended and in effect from time to time.

      "Regulation G" means Regulation G of the Board of Governors, as the same
may be amended and in effect from time to time.

      "Regulation T" means Regulation T of the Board of Governors, as the same
may be amended and in effect from time to time.

      "Regulation U" means Regulation U of the Board of Governors, as the same
may be amended and in effect from time to time.

      "Regulation X" means Regulation X of the Board of Governors, as the same
may be amended and in effect from time to time.

      "Reportable Event" means any of the events set forth in Section 4043 of
ERISA.

      "Required Banks" means those Banks having, in the aggregate, sixty six and
two thirds (66 2/3%) percent of the Total Commitment.

      "Reserve Adjusted LIBOR Rate" means, with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum determined by the Agent to
be equal to the quotient of (a) the LIBOR Rate divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Requirement as determined by the Agent on
the date the Reserve Adjusted LIBOR Rate is determined.

      "Revolving Credit Loan" or "Revolving Credit Loans" means one or more, as
the context requires, of the revolving credit loans made by the Banks to the
Borrower pursuant to the terms and conditions of this Agreement.

      "Revolving Credit Maturity Date" means March 31, 2007.

      "Revolving Credit Note" or "Revolving Credit Notes" means one or more, as
the context requires, of the promissory notes of the Borrower payable to the
order of each of the Banks, in substantially the form of Exhibit A annexed
hereto, evidencing the indebtedness of the Borrower to each such Bank resulting
from Revolving Credit Loans made by such Bank to the Borrower pursuant to this
Agreement.

      "Security Agreement" or "Security Agreements" means the security agreement
or security agreements executed and delivered by

                                     - 15 -
<PAGE>

the Borrower and the Guarantors pursuant to Section 3.01(l) or Section 5.01(k)
of this Agreement.

      "Subordinated Debt" means Debt of any Person, the repayment of which the
obligee has agreed in writing, or the terms of which provide, such terms to have
been approved by the Agent in advance in writing, shall be subordinate and
junior to the rights of the Banks with respect to Debt owing from such Person to
the Banks.

      "Subsidiary" means, as to any Person, any corporation, partnership,
limited liability company, joint venture or other Person whether now existing or
hereafter organized or acquired: (i) in the case of a corporation, of which a
majority of the securities having ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) are at the time owned by such Person and/or one or
more Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company, joint venture or similar entity, of which a majority of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more of its Subsidiaries.

      "Term Loan" or "Term Loans" means one or more, as the context requires, of
the term loans made by the Banks to the Borrower pursuant to the terms and
conditions of this Agreement.

      "Term Loan Maturity Date" means March 1, 2007.

      "Term Loan Note" or "Term Loan Notes" means one or more, as the context
requires, of the promissory notes of the Borrower payable to the order of each
of the Banks, in substantially the form of Exhibit B annexed hereto, evidencing
the indebtedness of the Borrower to each such Bank resulting from the Term Loan
made by such Bank to the Borrower pursuant to this Agreement.

      "Total Commitment" means the aggregate of the Commitments of each of the
Banks, which, on the date of this Agreement, is Twenty Seven Million Five
Hundred Thousand ($27,500,000.00) Dollars.

      "Unused Facility Fee" means the fee payable pursuant to Section 2.15 of
this Agreement.

      SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"

                                     - 16 -
<PAGE>

and the words "to" and "until" each means "to but excluding". All times shall be
references to New York City time.

      SECTION 1.03. Accounting Terms. Except as otherwise herein specifically
provided, each accounting term used herein shall have the meaning given to it
under GAAP.

                                     - 17 -
<PAGE>

                                   ARTICLE II

                          AMOUNT AND TERMS OF THE LOANS

      SECTION 2.01. The Revolving Credit Loans. (a) The Banks agree, severally
but not jointly, on the terms and subject to the conditions of this Agreement,
and in reliance upon the representations and warranties of the Credit Parties
set forth in this Agreement that the Banks will, until the Revolving Credit
Maturity Date, lend to the Borrower such Revolving Credit Loans as the Borrower
may request from time to time, which Loans may be borrowed, repaid and
reborrowed, provided, however, that (y) the aggregate outstanding Revolving
Credit Loans at any one time shall not exceed Nineteen Million Five Hundred
Thousand ($19,500,000.00) Dollars (the "Revolving Credit Commitment") as the
Revolving Credit Commitment may be reduced pursuant to Section 2.16 hereof, and
(z) each Bank's pro rata share of Revolving Credit Loans shall not exceed its
Pro Rata Share of the Revolving Credit Commitment.

      (b) Each Revolving Credit Loan shall be a Prime Rate Loan or a Eurodollar
Loan (or a combination thereof) as the Borrower may request subject to and in
accordance with Section 2.02. Any Bank may at its option make any Eurodollar
Loan by causing a foreign branch or affiliate to make such Loan, provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of such Bank's Revolving Credit
Note. Subject to the other provisions of this Agreement, Revolving Credit Loans
of more than one type may be outstanding at the same time provided, however,
that not more than nine (9) Eurodollar Loans may be outstanding at any time.

      SECTION 2.02. Notice of Revolving Credit Loans. (a) The Borrower shall
give the Agent irrevocable written, telex, telephonic (immediately confirmed in
writing) or facsimile notice (i) at least two (2) Business Days prior to each
Revolving Credit Loan comprised in whole or in part of one or more Eurodollar
Loans (subject to Section 2.23 hereof) and (ii) prior to 11:00 a.m. on the day
of each Revolving Credit Loan consisting solely of a Prime Rate Loan. Upon
receipt of such notice, the Agent shall promptly notify each Bank of the
contents thereof and of the amount, type and other relevant information
regarding the Loan requested. Thereupon, each Bank shall, not later than 2:00
p.m., transfer immediately available funds equal to such Bank's share of the
requested borrowing to the Agent, which, provided the conditions of Section 3.01
and 3.02 of this Agreement have been met, shall thereupon transfer immediately
available funds equal to the requested borrowing to the Borrower's account with
the Agent. If a

                                     - 18 -
<PAGE>

notice of borrowing is received by the Agent after 11:00 a.m. on a Business Day,
such notice shall be deemed to have been given on the next succeeding Business
Day. Any Bank's failure to make any requested Loan shall not relieve any other
Bank of its obligation to make such Loan, but neither the Agent nor such other
Bank shall be liable for such failure of the first Bank.

      (b) Each notice given pursuant to this Section 2.02 shall specify the date
of such borrowing, the amount thereof and whether such Loan is to be (or what
portion or portions thereof are to be) a Prime Rate Loan or a Eurodollar Loan
and, if such Loan or any portion thereof is to consist of one or more Eurodollar
Loans, the principal amounts thereof and Interest Period or Interest Periods
with respect thereto. If no election as to a type of Loan is specified in such
notice, such Loan (or portion thereof as to which no election is specified)
shall be a Prime Rate Loan. If no election as to the Interest Period is
specified in such notice with respect to any Eurodollar Loan, the Borrower shall
be deemed to have selected an Interest Period of one month's duration and if a
Eurodollar Loan is requested when such Loans are not available, the Borrower
shall be deemed to have requested a Prime Rate Loan.

      (c) The Borrower shall have the right, on such notice to the Agent as is
required pursuant to (a) above, (x) to continue any Eurodollar Loan or a portion
thereof into a subsequent Interest Period (subject to availability) and (y) to
convert a Prime Rate Loan into a Eurodollar Loan (subject to availability)
subject to the following:

            (i) if a Default or an Event of Default shall have occurred and be
continuing at the time of any proposed conversion or continuation only Interest
Periods of one month's duration shall be available;

            (ii) in the case of a continuation or conversion of fewer than all
Loans, the aggregate principal amount of each Eurodollar Loan continued or into
which a Loan is converted shall be in the minimum principal amount of
$1,000,000.00 and in increased integral multiples of $100,000.00;

            (iii) each continuation or conversion shall be effected by each Bank
applying the proceeds of the new Loan to the Loan (or portion thereof) being
continued or converted;

            (iv) if the new Loan made as a result of a continuation or
conversion shall be a Eurodollar Loan, the first Interest Period

                                     - 19 -
<PAGE>

with respect thereto shall commence on the date of continuation or conversion;

            (v) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period shall be deemed to be a request for an Interest
Period of one month's duration and each request for a Eurodollar Loan made when
such Loans are not available shall be deemed to be a request for a Prime Rate
Loan;

            (vi) in the event that the Borrower shall not give notice to
continue a Eurodollar Loan as provided above, such Loan shall automatically be
converted into a Prime Rate Loan at the expiration of the then current Interest
Period.

      (d) Unless the Agent shall have received notice from a Bank prior to 2:00
p.m. on the requested date, that such Bank will not make available to the Agent
the Loan requested to be made on such date, the Agent may assume that such Bank
has made such Loan available to the Agent on such date in accordance with
Section 2.01(a) and the Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount
on behalf of such Bank. If and to the extent such Bank shall not have so made
available to the Agent the Loan requested to be made on such date and the Agent
shall have so made available to the Borrower a corresponding amount on behalf of
such Bank, such Bank shall, on demand, pay to the Agent such corresponding
amount together with interest thereon, at the Federal Funds Effective Rate, for
each day from the date such amount shall have been so made available by the
Agent to the Borrower until the date such amount shall have been repaid to the
Agent. If such Bank does not pay such corresponding amount promptly upon the
Agent's demand therefor, the Agent shall promptly notify the Borrower and the
Borrower shall, not later than one (1) Business Day following such notice, repay
such corresponding amount to the Agent together with accrued interest thereon at
the applicable rate or rates provided in Section 2.04.

      SECTION 2.03. Revolving Credit Notes. (a) Each Revolving Credit Loan shall
be (i) in the case of each Prime Rate Loan in the minimum principal amount of
$250,000.00, and in increased integral multiples of $50,000.00 and (ii) in the
case of each Eurodollar Loan in the minimum principal amount of $1,000,000.00
and in increased integral multiples of $100,000.00 (except that, if any such
Prime Rate Loan so requested shall exhaust the remaining available Revolving
Credit Commitment, such Prime Rate Loan may be in an amount equal to the amount
of the remaining available Revolving Credit Commitment). Each Revolving Credit
Loan shall be

                                     - 20 -
<PAGE>

evidenced by the Revolving Credit Notes. Each Revolving Credit Note shall be
dated the date hereof and be in the principal amount set forth next to the
applicable Bank's name on the signature pages hereto, and shall mature on the
Revolving Credit Maturity Date, at which time the entire outstanding principal
balance and all interest thereon shall be due and payable. Each Revolving Credit
Note shall be entitled to the benefits and subject to the provisions of this
Agreement.

      (b) At the time of the making of each Revolving Credit Loan and at the
time of each payment of principal thereon, each Bank is hereby authorized by the
Borrower to make a notation on the schedule annexed to its Revolving Credit Note
of the date and amount, and the type and Interest Period, if applicable, of the
Revolving Credit Loan or payment, as the case may be. Failure to make a notation
with respect to any Revolving Credit Loan shall not limit or otherwise affect
the obligation of the Borrower hereunder or under the applicable Revolving
Credit Note with respect to such Revolving Credit Loan, and any payment of
principal by the Borrower shall not be affected by the failure to make a
notation thereof on said schedule.

      SECTION 2.04. Payment of Interest on the Revolving Credit Notes. (a) In
the case of a Prime Rate Loan, interest shall be payable at a rate per annum
equal to the Prime Rate plus the Prime Applicable Margin. Such interest shall be
payable on each Interest Payment Date, commencing with the first Interest
Payment Date after the date of such Prime Rate Loan and on the Revolving Credit
Maturity Date. Any change in the rate of interest on the Revolving Credit Notes
due to a change in the Prime Rate or a change in the Prime Applicable Margin
shall take effect as of the date of such change in the Prime Rate or Prime
Applicable Margin, as applicable.

      (b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum equal to the Reserve Adjusted LIBOR Rate plus the LIBOR Applicable
Margin. Such interest shall be payable on each Interest Payment Date, commencing
with the first Interest Payment Date after the date of such Eurodollar Loan and
on the Revolving Credit Maturity Date. In the event Eurodollar Loans are
available, the Agent shall determine the rate of interest applicable to each
requested Eurodollar Loan for each Interest Period at 11:00 a.m., New York City
time, or as soon as practicable thereafter, two (2) Business Days prior to the
commencement of such Interest Period and shall use its best efforts to notify
the Borrower and the Banks of the rate of interest so determined. Such
determination shall be conclusive absent manifest error.

                                     - 21 -
<PAGE>

      (c) All interest shall be paid to the Agent for the pro rata distribution
to the Banks.

      SECTION 2.05. Use of Proceeds. The proceeds of the Revolving Credit Loans
shall be used by the Borrower exclusively (a) to refinance existing revolving
credit indebtedness to the Banks made pursuant to the Prior Agreement, (b) to
finance accounts receivable and inventory of the Credit Parties, (c) to
refinance in part the existing Term Loans owing to the Banks under the Existing
Facility, and (d) for working capital. No part of the proceeds of any Revolving
Credit Loan may be used for any purpose that directly or indirectly violates or
is inconsistent with, the provisions of Regulation G, T, U or X.

      SECTION 2.06. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Revolving Credit Loan which is a Prime
Rate Loan, in whole or in part, without premium or penalty on irrevocable
written notice to the Agent (to be received by the Agent prior to 12:00 p.m. on
the date such prepayment is to be made) provided, however, that each such
prepayment shall be on a Business Day and shall be in an aggregate principal
amount which is in the minimum amount of $100,000.00 and in increased integral
multiples of $50,000.00, or such lesser amount as shall be necessary to prepay
all of the Revolving Credit Loans.

      (b) The Borrower shall have the right at any time and from time to time,
subject to the provisions of this Agreement, including but without limitation
Section 2.21, to prepay any Revolving Credit Loan which is a Eurodollar Loan, in
whole or in part, on three (3) Business Days' prior irrevocable written notice
to the Agent, provided, however, that each such prepayment shall be on a
Business Day and shall be in an aggregate principal amount which is in the
minimum amount of $1,000,000.00 and in increased integral multiples of
$100,000.00.

      (c) The notice of prepayment under this Section 2.06 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit the Borrower to prepay such Loan by the amount and
on the date stated therein. All prepayments shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment. Each
prepayment under this Section 2.06 shall be applied first towards unpaid
interest on the amount being prepaid and then towards the principal in whole or
partial prepayment of Loans as specified by the Borrower. In the absence of such
specification, amounts being prepaid shall be applied first to any Prime Rate
Loan

                                     - 22 -
<PAGE>

then outstanding and then to Eurodollar Loans in the order of the nearest
expiration of their Interest Periods.

      (d) At any time that the principal amount of outstanding Revolving Credit
Loans exceeds the Borrowing Base, the Borrower shall prepay so much of the
Revolving Credit Loans as shall exceed the Borrowing Base within thirty (30)
days of the date of the Borrowing Base certificate disclosing such excess. Any
such prepayment shall be applied as set forth in (c) above and if such
prepayments of Revolving Credit Loans shall result in a prepayment of a
Eurodollar Loan other than on the last day of its Interest Period, such
prepayment shall be subject to the reimbursement required by Section 2.22.

      (e) At any time that the principal amount of outstanding Revolving Credit
Loans exceed the Revolving Credit Commitment, the Borrower shall prepay so much
of the Revolving Credit Loans as shall exceed the Revolving Credit Commitment.
Any such prepayments shall be applied as set forth in (c) above and if such
prepayments of Revolving Credit Loans shall result in a prepayment of a
Eurodollar Loan other than on the last day of its Interest Period, such
prepayment shall be subject to the reimbursement required by Section 2.22.

      (f) Mandatory Prepayment of the Revolving Credit Loan. The Borrower shall
make a mandatory prepayment of the Revolving Credit Notes in am amount equal to
fifty (50%) percent of the amount of final insurance proceeds received by the
Borrower prior to October 1, 2004 (excluding temporary advances), in connection
with losses suffered as a result of the Summer, 2003 blackout. The Borrower may
re-borrow any such prepaid amount as a Revolving Credit Loan pursuant to the
terms of this Agreement.

      SECTION 2.07. The Term Loan. The Banks hereby agree, severally but not
jointly, on the date of this Agreement, and on the terms and conditions and in
reliance upon the representations and warranties of the Credit Parties
hereinafter set forth in this Agreement, to make a Term Loan to the Borrower in
the principal amount of Eight Million ($8,000,000.00) Dollars and the Borrower
agrees to borrow such amount by executing and delivering to the Agent, for
delivery to the Banks, the Term Loan Notes. The Term Loans, or portions thereof,
shall be Prime Rate Loans or Eurodollar Loans (or a combination thereof) as the
Borrower may request subject to and in accordance with Section 2.08 hereof. Any
Bank may at its option make any Eurodollar Loan by causing a foreign branch or
affiliate to make such Loan, provided that any exercise of such option shall not
affect the obligation of the Borrower to

                                     - 23 -
<PAGE>

repay such Loan in accordance with the terms of the Notes. Subject to the other
provisions of this Agreement, Term Loans of more than one type may be
outstanding at the same time provided, however, that not more than five (5)
Eurodollar Loans may be outstanding at any time.

      SECTION 2.08. Notice of Term Loan Designations. (a) The Borrower may elect
to designate the Term Loan (or a portion thereof) as a Prime Rate Loan or a
Eurodollar Loan by so specifying in the irrevocable notice given pursuant to
this Section 2.08; provided, however, that each Eurodollar Loan requested of the
Agent for any specific Interest Period shall be in the minimum principal amount
of $1,000,000.00 and in increased integral multiples of $100,000.00 thereafter.

      (b) The Borrower shall give the Agent irrevocable written, telex,
telephonic (immediately confirmed in writing) or facsimile notice (i) at least
two (2) Business Days' prior to each election to designate each Term Loan (or a
portion thereof) as a Eurodollar Loan, and (ii) prior to 11:00 a.m. on the day
of each election to designate each Term Loan (or a portion thereof) as a Prime
Rate Loan, in each case specifying the date (which shall be a Business Day)
thereof and the aggregate principal amount and, if any portion thereof is to
consist of one or more Eurodollar Loans, the respective principal amounts and
Interest Periods for each such Eurodollar Loan; provided that:

            (i) if the Borrower shall fail to specify the duration of an
Interest Period with regard to any Eurodollar Loan in its notice, the Interest
Period shall be for a period of one month; and

            (ii) if the Borrower shall fail to specify the type of Loan
requested, the request shall be deemed to be a request for a Prime Rate Loan.

      (c) Upon receipt of such notice, the Agent shall promptly notify each Bank
of the contents thereof and of the amount, type and other relevant information
regarding the Loan requested.

      SECTION 2.09. Term Loan Notes. The Term Loans shall be evidenced by the
Term Loan Notes. The Term Loan Notes shall each be dated the date hereof and
each of the Term Loan Notes shall mature on the Term Loan Maturity Date at which
time the entire outstanding principal balance and all interest thereon shall be
due and payable. The Term Loan Notes shall be entitled to the benefits and
subject to the provisions of this Agreement.

                                     - 24 -
<PAGE>

      SECTION 2.10 Repayment of Term Loan Notes. (a) The principal balance of
each of the Term Loan Notes shall be payable in thirty five (35) monthly
installments, each due on the first Business Day of each month, beginning on
June 1, 2004 and continuing on each such day thereafter, as follows:

Period                                   Monthly Aggregate
------                                   Principal Payment of all
                                         Term Loan Notes
                                         ---------------

June 1, 2004 - September 1, 2004         $   97,500.00
October 1, 2004                          $5,000,000.00
November 1, 2004 - February 1, 2007      $   90,000.00

The final monthly principal installment shall be in an amount equal to the then
aggregate outstanding principal balance of the Term Loan Notes.

In the case of the payment due October 1, 2004, in the event that Borrower
receives final insurance proceeds (excluding temporary advances) relating to
losses suffered in connection with the blackout of Summer, 2003 prior to October
1, 2004, fifty (50%) percent of such insurance proceeds shall be paid to the
Agent on behalf of the Banks to be applied towards the October 1, 2004 principal
payment. In the event that final insurance proceeds are paid to the Borrower
after it makes the October 1, 2004 principal payment, the mandatory prepayment
contemplated by this paragraph will not need to be made.

      (b) All payments of installments on the Term Loan Notes shall be made to
the Agent for the pro rata distributions to the Banks.

      SECTION 2.11 Payment of Interest on the Term Loan Notes. (a) In the case
of a Prime Rate Loan, interest shall be payable at a rate per annum equal to the
Prime Rate plus the Prime Applicable Margin. Such interest shall be payable to
the Agent, for the pro rata distribution to the Banks, on each Interest Payment
Date, commencing with the first Interest Payment Date after the date of such
Prime Rate Loan, on each Interest Determination Date and on the Term Loan
Maturity Date. Any change in the rate of interest on the Term Loan Notes due to
a change in the Prime Rate or a change in the Prime Applicable Margin shall take
effect as of the date of such change in the Prime Rate or the Prime Applicable
Margin.

      (b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the

                                     - 25 -
<PAGE>

Reserve Adjusted LIBOR Rate plus the LIBOR Applicable Margin. Such interest
shall be payable to the Agent, for the pro rata distribution to the Banks on
each Interest Payment Date, commencing with the first Interest Payment Date
after the date of such Eurodollar Loan, on each Interest Determination Date and
on the Term Loan Maturity Date. The Agent shall determine the rate of interest
applicable to each requested Eurodollar Loan for each Interest Period at 11:00
a.m., New York City time, or as soon as practicable thereafter, two (2) Business
Days prior to the commencement of such Interest Period and shall notify the
Borrower of the rate of interest so determined. Such determination shall be
conclusive absent manifest error.

      SECTION 2.12 Conversion and Continuation of Term Loans. The Borrower shall
have the right, at any time, on such notice to the Agent as set forth in Section
2.08(b) of this Agreement, (i) to continue any part of the Term Loan which is a
Eurodollar Loan or portion thereof into a subsequent Interest Period (subject to
availability) or (ii) to convert part of the Term Loan which is a Prime Rate
Loan into a Eurodollar Loan (subject to availability), subject to the following:

      (a) if a Default or Event of Default shall have occurred and be continuing
at the time of any proposed conversion or continuation only Interest Periods of
one month's duration shall be available;

      (b) in the case of a continuation or conversion of fewer than all Loans,
the aggregate principal amount of each Eurodollar Loan continued or converted
shall be in the minimum amount of $1,000,000.00 and in increased integral
multiples of $100,000.00;

      (c) each continuation or conversion shall be effected by each Bank
applying the proceeds of the new Loan to the Loan (or portion thereof) being
continued or converted;

      (d) if the new Loan made as a result of a continuation or conversion shall
be a Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of continuation or conversion;

      (e) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period shall be deemed to be a request for an Interest
Period of one month;

      (f) unless sufficient Prime Rate Loans are outstanding or other Eurodollar
Loans are outstanding with Interest Periods

                                     - 26 -
<PAGE>

expiring prior to the next scheduled installment payment of the Term Loan Notes,
and are sufficient to enable the Borrower to make such installment payments, any
Eurodollar Loan, a portion of which is required to be repaid on any such
installment payment date shall be automatically converted at the end of such
Interest Period into a Prime Rate Loan; and

      (g) in the event that the Borrower shall not give notice to continue a
Eurodollar Loan as provided above, such Loan shall automatically be converted
into a Prime Rate Loan at the expiration of the then current Interest Period.

      SECTION 2.13. Use of Proceeds. The proceeds of the Term Loans shall be
used by the Borrower to refinance in part the existing Term Loans owing to the
Banks under the Existing Facility. No part of the proceeds of any Loan may be
used for any purpose that directly or indirectly violates or is inconsistent
with, the provisions of Regulations G, T, U or X.

      SECTION 2.14. Prepayment. (a) Subject to the provisions of this Agreement,
the Borrower shall have the right at any time and from time to time to prepay
any part of the Term Loan which is a Prime Rate Loan, in whole or in part,
without premium or penalty on prior irrevocable written notice to the Agent (to
be received by the Agent prior to 12:00 p.m. on the date such prepayment is to
be made) provided, however, that each such prepayment shall be on a Business Day
and shall be in an aggregate minimum principal amount of $100,000.00 and in
increased integral multiples of $50,000.00.

      (b) The Borrower shall have the right at any time and from time to time,
subject to the provisions hereof and of Section 2.22, to prepay any part of the
Term Loan which is a Eurodollar Loan, in whole or in part, on three (3) Business
Days prior irrevocable written notice to the Agent, provided, however, that such
prepayment shall be in an aggregate minimum principal amount of $1,000,000.00
and in increased integral multiples of $100,000.00.

      (c) Upon the occurrence of any Asset Sale Recapture Event, the Borrower
shall, without demand or notice from the Agent, make an Asset Sale Recapture
Payment. Such payment shall be applied to the Term Loan as set forth in (e)
below.

      (d) Intentionally omitted.

      (e) The notice of prepayment under this Section 2.14 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit the

                                     - 27 -
<PAGE>

Borrower to prepay such Loan by the amount and on the date stated therein. All
prepayments shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Each prepayment under this Section 2.14
shall be applied first towards unpaid interest on the principal amount being
prepaid and then towards the principal in whole or partial prepayment of Term
Loans by the Borrower. All prepayments shall be applied first to any Prime Rate
Loans then outstanding and then to Eurodollar Loans outstanding in the order of
the nearest expiration of their Interest Periods. All partial prepayments of the
Term Loan shall be applied to installments of principal of the Term Loan in the
inverse order of maturity. All principal payments or prepayments shall be made
to the Agent for the pro rata distribution to the Banks.

      SECTION 2.15. Fees. (a) The Borrower agrees to pay to the Agent, for the
pro rata distribution to the Banks, from the date each of the conditions of
Section 3.01 of this Agreement has been satisfied and for so long as the
Revolving Credit Commitment remains in effect, on the last Business Day of each
fiscal quarter of the Borrower, and on any day that the Revolving Credit
Commitment is reduced or terminated, an Unused Facility Fee computed at a rate
per annum equal to one quarter of one (0.25%) percent (computed on the basis of
the actual number of days elapsed over 360 days) on the average daily unused
amount of the Revolving Credit Commitment, such Unused Facility Fee being
payable for the fiscal quarter of the Borrower, or part thereof, preceding the
payment date.

      (b) The Borrower agrees to pay to the Agent not later than the third
Business Day after the date of this Agreement, for its services as Agent
hereunder, those fees, charges and expenses as set forth in the Fee Letter and
as the Borrower and the Agent may otherwise mutually agree in a separate
writing.

      SECTION 2.16. Reduction of Revolving Credit Commitment. Upon at least
three (3) Business Days' prior written notice to the Agent, the Borrower may
irrevocably elect to have the unused Revolving Credit Commitment terminated in
whole or reduced in part provided, however, that any such partial reduction
shall be in a minimum amount of $250,000.00, or whole multiples thereof. The
Revolving Credit Commitment, once terminated or reduced, shall not be reinstated
without the express written approval of the Agent and the Banks. Any reduction
to the Revolving Credit Commitment shall be applied pro rata to the respective
Revolving Credit Commitments of each Bank.

                                     - 28 -
<PAGE>

      SECTION 2.17. Applicable Margin. The Prime Applicable Margin and the LIBOR
Applicable Margin shall each be determined on the basis of the Borrower's
Leverage Ratio, as calculated based on the Borrower's consolidated financial
statements for its most recent fiscal year or quarter. The Prime Applicable
Margin and the LIBOR Applicable Margin shall be determined as follows:

            (i) The initial Prime Applicable Margin shall be 1.50% and the
      initial LIBOR Applicable Margin shall be 3.25%, and each shall be
      applicable until delivery of the Borrower's consolidated financial
      statements for its fiscal quarter ending May 30, 2004 pursuant to Section
      5.01(b) hereof.

            (ii) Beginning with delivery of the Borrower's financial statements
      for the fiscal quarter ending May 30, 2004, and for each fiscal quarter
      thereafter the Applicable Margins shall be as follows:

              --------------------------------------------------
              Leverage Ratio     Prime Margin       LIBOR Margin
              --------------------------------------------------
                   > 3.5             1.50%              3.25%
              --------------------------------------------------
                < /= 3.5             1.25%              3.00%
              --------------------------------------------------
                < /= 3.0             1.00%              2.75%
              --------------------------------------------------
                < /= 2.5             0.75%              2.50%
              --------------------------------------------------
                < /= 2.0             0.50%              2.25%
              --------------------------------------------------

      The Agent shall determine the Applicable Margins within five (5) Business
Days of its receipt of all required financial statements and certificates.

      Upon the occurrence and during the continuance of a Default or an Event of
Default the Prime Applicable Margin and the LIBOR Applicable Margin may, as a
result of changes in the Borrower's Leverage Ratio, increase but will not
decrease.

      SECTION 2.18. Eurocurrency Reserve Requirement. It is understood that the
cost to the Banks of making or maintaining Eurodollar Loans may fluctuate as a
result of the applicability of, or change in, the Eurocurrency Reserve
Requirement. The Borrower agrees to pay to the Agent on behalf of the Banks from
time to time, as provided in Section 2.19, such amounts as shall be necessary to
compensate each Bank for the portion of the cost of making or maintaining any
Eurodollar Loans made by it resulting from any change in the Eurocurrency
Reserve Requirement, it being understood that the rates of interest applicable
to Eurodollar Loans hereunder have been determined on the basis of the
Eurocurrency Reserve Requirement in effect at the time of determination of the
Reserve Adjusted LIBOR Rate and that such

                                     - 29 -
<PAGE>

rates do not reflect costs imposed on each Bank in connection with any change to
the Eurocurrency Reserve Requirement. It is agreed that for purposes of this
paragraph the Eurodollar Loans made hereunder shall be deemed to constitute
Eurocurrency Liabilities as defined in Regulation D and to be subject to the
reserve requirements of Regulation D without benefit or credit of proration,
exemptions or offsets which might otherwise be available to each Bank from time
to time under Regulation D. There are currently no Eurocurrency Reserve
Requirements.

      SECTION 2.19. Increased Costs. If, after the date of this Agreement, the
adoption of, or any change in, any applicable law, regulation, rule or
directive, or any interpretation thereof by any authority charged with the
administration or interpretation thereof:

            (i) subjects any Bank to any tax with respect to the Notes, the
Total Commitment or on any amount paid or to be paid under or pursuant to this
Agreement or the Notes (other than any tax measured by or based upon the overall
net income of such Bank);

            (ii) changes the basis of taxation of payments to any Bank of any
amounts payable hereunder (other than any tax measured by or based upon the
overall net income of such Bank);

            (iii) imposes, modifies or deems applicable any reserve, capital
adequacy or deposit requirements against any assets held by, deposits with or
for the account of, or loans made by, any Bank; or

            (iv) imposes on the Agent or any Bank, any other condition affecting
the Notes or this Agreement; and the result of any of the foregoing is to
increase the cost to the Agent or any Bank of maintaining this Agreement or
making the Loans, or to reduce the amount of any payment (whether of principal,
interest or otherwise) receivable by the Agent or any Bank or to require the
Agent or any Bank to make any payment on or calculated by reference to the gross
amount of any sum received by them, in each case by an amount which the Agent in
its sole, reasonable judgment deems material, then and in any such case:

            (a) the Agent shall promptly advise the Borrower of such event,
      together with the date thereof, the amount of such increased cost or
      reduction or payment and the way in which such amount has been calculated;
      and

                                     - 30 -
<PAGE>

            (b) the Borrower shall pay to the Agent on behalf of itself or such
      Bank, within ten (10) days after the advice referred to in subsection (a)
      above, such an amount or amounts as will compensate the Agent or such Bank
      for such additional cost, reduction or payment for so long as the same
      shall remain in effect.

            The determination of the Agent as to additional amounts payable
pursuant to this Section 2.19 shall be conclusive evidence of such amounts
absent manifest error and if made in good faith.

      SECTION 2.20. Capital Adequacy. If the Agent or any Bank shall have
reasonably determined that, subsequent to the date hereof, any change in the
applicability of any law, rule, regulation or guideline, or the adoption after
the date hereof of any other law, rule, regulation or guideline regarding
capital adequacy, or any change in any of the foregoing or in the interpretation
or administration of any of the foregoing by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Agent or such Bank (or any lending office of such
Bank) or the Agent's or such Bank's holding company with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the Agent's or such Bank's capital or
on the capital of the Agent's or such Bank's holding company, if any, as a
consequence of its obligations hereunder to a level below that which the Agent
or such Bank or the Agent's or such Bank's holding company could have achieved
but for such adoption, change or compliance (taking into consideration the
Agent's or such Bank's policies and the policies of the Agent's or such Bank's
holding company with respect to capital adequacy) by an amount deemed by the
Agent or such Bank to be material, then from time to time the Borrower shall pay
to the Agent on behalf of the Agent or such Bank such additional amount or
amounts as will reasonably compensate the Agent or such Bank or its or their
holding company or companies for any such reduction suffered.

      SECTION 2.21. Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in law, rule, regulation, guideline or order, or in the interpretation
thereof by any governmental authority charged with the administration thereof,
shall make it unlawful for any of the Banks to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
a Eurodollar Loan, then, by

                                     - 31 -
<PAGE>

written notice to the Borrower, the Agent, on behalf of such Bank may:

            (i) declare that Eurodollar Loans will not thereafter be made by
      such Bank hereunder, whereupon the Borrower shall be prohibited from
      requesting such Eurodollar Loans from such Bank hereunder unless such
      declaration is subsequently withdrawn; and

            (ii) require that, subject to the provisions of Section 2.22, all
      outstanding Eurodollar Loans made by it be converted to a Prime Rate Loan,
      whereupon all of such Eurodollar Loans shall be automatically converted to
      a Prime Rate Loan as of the effective date of such notice as provided in
      paragraph (b) below.

      (b) For purposes of this Section 2.21, a notice to the Borrower by the
Agent pursuant to paragraph (a) above shall be effective, for the purposes of
paragraph (a) above, if lawful, and if any Eurodollar Loans shall then be
outstanding, on the last day of the then current Interest Period; otherwise,
such notice shall be effective on the date of receipt by the Borrower.

      SECTION 2.22. Funding Losses. The Borrower agrees to compensate each Bank
for any loss or expense which such Bank may sustain or incur as a consequence of
(a) default by the Borrower in payment when due of the principal amount of or
interest on any Eurodollar Loan, (b) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto, including, without limitation, in each case, any such loss or expense
arising from the reemployment of funds obtained by it or from amounts payable by
such Bank to lenders of funds obtained by it in order to make or maintain such
Loans. Such compensation shall include an amount equal to the excess, if any, of
(i) the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein,

                                     - 32 -
<PAGE>

excluding, the LIBOR Applicable Margin included therein, if any, over (ii) the
amount of interest (as reasonably determined by such Bank) which would have
accrued to such Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder for a period of ninety (90) days
from the date of termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder. When claiming under this Section 2.22, the
claiming Bank shall provide to the Borrower a statement, signed by an officer of
such Bank, explaining the amount of any such loss or expense (including the
calculation of such amount), which statement shall, in the absence of manifest
error, and provided it is made in good faith be conclusive evidence of such
amounts with respect to the parties hereto.

      SECTION 2.23. Change in LIBOR; Availability of Rates. In the event, and on
each occasion, that, on the day the interest rate for any Eurodollar Loan is to
be determined, the Agent shall have determined in good faith (which
determination, absent manifest error, shall be conclusive and binding upon the
Borrower) that dollar deposits in the amount of the principal amount of the
requested Eurodollar Loan are not generally available in the London interbank
market, or that the rate at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to the Banks of making or maintaining
the principal amount of such Eurodollar Loan during such Interest Period, such
Eurodollar Loan shall be unavailable. The Agent shall, as soon as practicable
thereafter, given written, telex or telephonic notice of such determination of
unavailability to the Borrower. Any request by the Borrower for an unavailable
Eurodollar Loan shall be deemed to have been a request for a Prime Rate Loan.
After such notice shall have been given and until the Agent shall have notified
the Borrower that the circumstances giving rise to such unavailability no longer
exist, each subsequent request for an unavailable Eurodollar Loan shall be
deemed to be a request for a Prime Rate Loan.

      SECTION 2.24. Authorization to Debit Borrower's Account. The Agent is
hereby authorized to debit the Borrower's account maintained with the Agent for
(i) all scheduled payments of principal and/or interest or fees under the Notes,
(ii) the Agent's fees, and (iii) all other amounts due hereunder; all such
debits to be made on the days such payments are due in accordance with the terms
hereof.

                                     - 33 -
<PAGE>

      SECTION 2.25. Late Charges, Default Interest. (a) If the Borrower shall
default in the payment of any principal installment of or interest on any Loan,
or any other amount becoming due hereunder, upon the consent and determination
of the Required Banks, the Borrower shall pay to the Agent for the pro rata
distribution to the Banks interest, to the extent permitted by law, on such
defaulted amount up to the date of actual payment (after as well as before
judgment) at an increased rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) of up to a rate equal to three
(3%) percent in excess of the interest rate otherwise in effect with respect to
the type of Loan in connection with which the required payments have not been
made.

      (b) Upon the occurrence and during the continuation of an Event of
Default, upon the consent and determination of the Required Banks, the Borrower
shall pay to the Agent, for the pro rata distribution to the Banks, interest, to
the extent permitted by law, on the Loans outstanding (after as well as before
judgment) at an increased rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) of up to a rate equal to three
(3%) percent in excess of the interest rate otherwise in effect hereunder.

      SECTION 2.26. Payments. All payments by the Borrower hereunder or under
the Notes shall be made in U.S. dollars in immediately available funds at the
office of the Agent by 2:00 p.m. on the date on which such payment shall be due.

      SECTION 2.27. Interest Adjustments. (a) If the provisions of this
Agreement or the Notes would at any time otherwise require payment by the
Borrower to any Bank of any amount of interest in excess of the maximum amount
then permitted by applicable law the interest payments shall be reduced to the
extent necessary so that such Bank shall not receive interest in excess of such
maximum amount. To the extent that, pursuant to the foregoing sentence, the
Agent shall receive interest payments on behalf of the Banks hereunder or under
the Notes in an amount less than the amount otherwise provided, such deficit
(hereinafter called the "Interest Deficit") will cumulate and will be carried
forward (without interest) until the termination of this Agreement. Interest
otherwise payable to any Bank hereunder or under the Notes for any subsequent
period shall be increased by such maximum amount of the Interest Deficit that
may be so added without causing such Bank to receive interest in excess of the
maximum amount then permitted by applicable law.

                                     - 34 -
<PAGE>

      (b) The amount of the Interest Deficit at the time of any complete payment
of the Loans at that time outstanding (other than an optional prepayment
thereof) shall be cancelled and not paid.

                                   ARTICLE III

                              CONDITIONS OF LENDING

      SECTION 3.01. Conditions Precedent to the Making of the Initial Revolving
Credit Loan and the Term Loan. The obligation of the Banks to make the initial
Revolving Credit Loans and the Term Loan contemplated by this Agreement are each
subject to the condition precedent that the Agent and the Banks shall have
received from the Borrower and the Guarantors on or before the date of this
Agreement the following, each dated such day, in form and substance satisfactory
to the Agent and its counsel:

      (a) A Revolving Credit Note, duly executed by the Borrower and payable to
the order of each of the Banks.

      (b) A Term Loan Note, duly executed by the Borrower and payable to the
order of each of the Banks.

      (c) From the Borrower, an up-front fee of $68,750.00 payable to the Agent
for pro rata distribution to the Banks.

      (d) From each of the Guarantors, an executed Guaranty.

      (e) From the Individual Guarantor, an executed guaranty in form and
substance reasonably satisfactory to the Agent and the Banks.

      (f) From the Borrower and each of the Guarantors, an executed Security
Agreement giving to the Agent, on behalf of the Banks, a first priority security
interest in all assets of the Borrower and the Guarantors including, but not
limited to, all personal property, equipment, fixtures, inventory, accounts,
chattel paper and general intangibles all whether now owned or hereafter
acquired (the "Collateral"). Such Collateral shall not include the Borrower's or
any Guarantor's interest as a tenant under any leases of real estate.

      (g) From the Borrower and each of the Guarantors, UCC-1 filings perfecting
the Agent's security interests in the Collateral.

                                     - 35 -
<PAGE>

      (h) A property damage insurance policy for the Collateral in the amount of
the replacement value of the Collateral naming the Agent as loss payee with
insurance companies acceptable to the Agent. The policies shall provide for
thirty (30) days notice to the Agent of cancellation or change.

      (i) Intentionally omitted.

      (j) From the Borrower, the fees and expenses to be paid pursuant to this
Agreement and the Fee Letter.

      (k) The Agent and the Banks shall, prior to the date of this Agreement,
have completed their due diligence reviews of the Borrower, the results of which
shall be satisfactory to the Agent and the Banks in their sole discretion.

      (l) From United Acquisition Corp. and/or the Individual Guarantor a
subordination agreement in form and substance satisfactory to the Agent
subordinating to the prior payment of the Credit Facility $23,500,000.00 in
loans to the Credit Parties.

      (m) The following statements shall be true:

            (i) The representations and warranties contained in Article IV of
this Agreement and in the other Loan Documents are true and correct on and as of
such date; and

            (ii) No Default or Event of Default has occurred and is continuing,
or would result from the making of the initial Revolving Credit Loans or the
Term Loan.

      (n) All legal matters incident to this Agreement and the Loan transactions
contemplated hereby shall be reasonably satisfactory to Cullen and Dykman
Bleakley Platt LLP, counsel to the Agent.

      (o) Receipt by the Agent of such other approvals, opinions or documents as
the Agent or its counsel may reasonably request.

      SECTION 3.02. Conditions Precedent to All Revolving Credit Loans. The
obligation of the Banks to make each Revolving Credit Loan shall be subject to
the further condition precedent that on the date of such Revolving Credit Loan:

      (a) The following statements shall be true and each request for a
Revolving Credit Loan shall be deemed a certification by the Borrower that:

                                     - 36 -
<PAGE>

            (i) The representations and warranties contained in Article IV of
this Agreement and in the other Loan Documents are true and correct in all
material respects on and as of such date as though made on and as such date
(provided that the representation made in Section 4.01(f) shall be deemed made
as to the then most recent fiscal year and interim period financial statements
delivered to the Agent and the Banks and any other representation that refers to
a specific date shall be restated as of such date); and

            (ii) No Default or Event of Default has occurred and is continuing,
or would result from such Revolving Credit Loan.

      (b) The Agent shall have received such other approvals, opinions or
documents as the Agent or its counsel may reasonably request.

                                     - 37 -
<PAGE>

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

      SECTION 4.01. Representations and Warranties. On the date of this
Agreement and on each date that the Borrower requests a Revolving Credit Loan,
the Borrower and each of the Guarantors represent and warrant as follows:

      (a) Subsidiaries. On the date hereof, the only Subsidiaries of the
Borrower or a Guarantor are those set forth on Schedule 4.01(a) annexed hereto,
which Schedule accurately sets forth with respect to each such Subsidiary, its
name and address, any other addresses at which it conducts business, its state
of incorporation and each other jurisdiction in which it is qualified to do
business and the identity and share holdings of its stockholders. Except as set
forth on Schedule 4.01(a), all of the issued and outstanding shares of each
Subsidiary which are owned by the Borrower or a Guarantor are owned by the
Borrower or such Guarantor free and clear of any mortgage, pledge, lien or
encumbrance. Except as set forth on Schedule 4.01(a) or in filings made with the
Securities and Exchange Commission (the "SEC Documents"), there are not
outstanding any warrants, options, contracts or commitments of any kind
entitling any Person to purchase or otherwise acquire any shares of common or
capital stock or other equity interest of the Borrower or any Guarantor or any
Subsidiary of the Borrower or a Guarantor, nor are there outstanding any
securities which are convertible into or exchangeable for any shares of the
common or capital stock of the Borrower or any Guarantor or any Subsidiary of
the Borrower or a Guarantor.

      (b) Good Standing. The Borrower and the Guarantors are each corporations
duly incorporated, validly existing and in good standing under the laws of the
States of their respective incorporation and each has the corporate power to own
their assets and to transact the business in which they are presently engaged
and are duly qualified and are in good standing in such other jurisdictions
where failure to qualify or otherwise maintain such standing could result in a
Material Adverse Change in the Borrower or in the Borrower and the Guarantors,
taken as a whole.

      (c) Due Execution, Etc. The execution, delivery and performance by the
Borrower and each Guarantor of the Loan Documents to which they are a party are
within the Borrower's and the Guarantors' corporate power and have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the stockholders of the Borrower or

                                     - 38 -
<PAGE>

Guarantors other than those already obtained; (ii) do not contravene the
Borrower's or any of the Guarantors' certificates of incorporation, charters or
by-laws; (iii) violate any provision of any law, rule, regulation, contractual
restriction, order, writ, judgment, injunction, or decree, determination or
award binding on or affecting the Borrower or any Guarantor; (iv) result in a
breach of or constitute a default under any indenture or loan or credit
agreement, or any other agreement, lease or instrument to which the Borrower or
any Guarantor is a party or by which it or its properties may be bound or
affected; or (v) result in, or require, the creation or imposition of any Lien
(other than the Lien of the Loan Documents) upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower or any Guarantor.

      (d) No Consents Required. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the Borrower or
any Guarantor of any Loan Document to which it is a party, except
authorizations, approvals, actions, notices or filings which have been obtained,
taken or made, as the case may be.

      (e) Validity and Enforceability. The Loan Documents when delivered
hereunder will have been duly executed and delivered on behalf of the Borrower
and each Guarantor, as the case may be, and will be legal, valid and binding
obligations of the Borrower and each Guarantor, as the case may be, enforceable
against the Borrower or such Guarantor in accordance with their respective terms
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws or equitable principles
affecting the enforcement of creditors rights.

      (f) Financial Statements. The consolidated financial statements of the
Borrower and its Consolidated Subsidiaries for the fiscal year ended November
30, 2003, and for the most recent interim fiscal period, and the consolidating
financial statements of the Borrower and its Consolidated Subsidiaries for the
fiscal year ended November 30, 2003, and for the most recent interim fiscal
period, copies of which have been furnished to the Agent and the Banks, fairly
present the financial condition of the Borrower and its Consolidated
Subsidiaries as at such dates and the results of operations of the Borrower and
its Consolidated Subsidiaries for the periods ended on such dates, all in
accordance with GAAP, and since such dates there has been (i) other than as set
forth in Schedule 4.01(f) hereto, and, in the ordinary course of business no
material increase in the liabilities of the Borrower and its Consolidated
Subsidiaries, and (ii) no Material Adverse Change in

                                     - 39 -
<PAGE>

the Borrower or in the Borrower and any of its Consolidated Subsidiaries, taken
as a whole.

      (g) No Litigation. As of the date hereof, except as disclosed in Schedule
4.01(g) or in the SEC Documents, there is no pending or, to the Borrower's
knowledge, threatened in writing, action, proceeding or investigation affecting
the Borrower, any Guarantor or any Subsidiary of the Borrower or a Guarantor,
before any court, governmental agency or arbitrator, which either in one case or
in the aggregate, is reasonably likely to result in a Material Adverse Change in
the Borrower or in the Borrower and the Guarantors, taken as a whole.

      (h) Taxes. The Borrower and each Guarantor have filed all federal, state
and local tax returns required to be filed and have paid all taxes, assessments
and governmental charges and levies thereon to be due, including interest and
penalties (other than taxes being contested in good faith and by appropriate
proceedings by the Borrower and for which appropriate reserves are maintained).
Other than as set forth in Schedule 4.01(h) hereto, the federal income tax
liability of the Borrower and each Guarantor has been finally determined and
satisfied for all taxable years up to and including the taxable year ending
November 30, 1997.

      (i) Licenses, Etc. The Borrower, each Guarantor and each Subsidiary of the
Borrower or each Guarantor possess all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and, to their knowledge, neither the Borrower, any Guarantor
nor any such Subsidiary are in violation of any similar rights of others.

      (j) Burdensome Agreements. Neither the Borrower nor any of the Guarantors
are a party to any indenture, loan or credit agreement or any other agreement,
lease or instrument or subject to any charter, corporate or partnership
restriction which could result in a Material Adverse Change in the Borrower or
in the Borrower and the Guarantors, taken as a whole. Neither the Borrower nor
any Guarantor is in default in any respect in the performance, observance, or
fulfillment of any of the obligations or covenants contained in any agreement or
instrument material to its business.

      (k) Margin Stock. The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation G, T, U or X), and

                                     - 40 -
<PAGE>

no proceeds of any Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock or in any other way which will cause the Borrower to violate the
provisions of Regulations G, T, U or X.

      (l) Compliance With Laws. The Borrower, each Guarantor and each Subsidiary
of the Borrower or a Guarantor are in compliance with all federal and state laws
and regulations in all jurisdictions where the failure to comply with such laws
or regulations could result in a Material Adverse Change in the Borrower or in
the Borrower and the Guarantors, taken as a whole.

      (m) ERISA. The Borrower, each Guarantor, each Subsidiary of the Borrower
or a Guarantor and each ERISA Affiliate are in compliance with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Benefit Arrangement or Plan (and
to the best of their knowledge, to any Multiemployer Plan); no notice of intent
to terminate a Plan has been filed nor has any Plan been terminated; no
circumstances exist which constitute grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administrate a Plan, nor has the PBGC instituted any such proceedings;
neither the Borrower, any Guarantor, any Subsidiary of the Borrower or a
Guarantor, nor any ERISA Affiliate has completely or partially withdrawn under
Sections 4201 or 4204 of ERISA from a Multiemployer Plan. The Borrower, each
Guarantor, each Subsidiary of the Borrower or a Guarantor and each ERISA
Affiliate:

            (i) have met their minimum funding requirements under ERISA with
respect to all of their Plans;

            (ii) have made when due any and all payments required to be made
under any agreement relating to a Multiemployer Plan and that to the best of
their knowledge, each Multiemployer Plan is able to pay benefits thereunder when
due;

            (iii) represent that for all Plans, the present fair market value of
all Plan assets exceeds the present value of all vested benefits under each
Plan, as determined on the most recent valuation date of the Plan, determined on
Financial Accounting Statements 35 and 36 basis for such Plan;

            (iv) represent that to the extent that any Benefit Arrangement is
insured, they have paid when due all premiums required to be paid; and to the
extent that any Benefit Arrangement

                                     - 41 -
<PAGE>

is funded other than with insurance, they have made when due all contributions
required to be paid;

            (v) represent that for each Benefit Arrangement, Plan, and to the
best of their knowledge each Multiemployer Plan, that neither the Borrower, any
Guarantor, any such Subsidiary nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA.

      (n) Hazardous Materials. The Borrower, each Guarantor and each Subsidiary
of the Borrower or a Guarantor are in compliance with all federal, state or
local laws, ordinances, rules, regulations or policies governing Hazardous
Materials and neither the Borrower, any Guarantor nor any such Subsidiary has
used Hazardous Materials on, from, or affecting any property now owned or
occupied or hereafter owned or occupied by the Borrower, any Guarantor or any
such Subsidiary in any manner which violates federal, state or local laws,
ordinances, rules, regulations or policies governing the use, storage,
treatment, transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials, and to the Borrower's, Guarantors' and such
Subsidiaries' knowledge, no prior owner of any such property or any tenant,
subtenant, prior tenant or prior subtenant have used Hazardous Materials on,
from or affecting such property in any manner which violates federal, state or
local laws, ordinances, rules, regulations, or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials.

      (o) Use of Proceeds. The proceeds of the Revolving Credit Loans and the
Term Loan shall be used exclusively for the purposes set forth in Section 2.05
and Section 2.13, respectively of this Agreement.

      (p) No Liens. The properties and assets of the Borrower and the Guarantors
are not subject to any Lien other than those described in Section 5.02(a)
hereof.

      (q) Casualties. Neither the business nor the properties of the Borrower,
any Guarantor or any Subsidiary of the Borrower or a Guarantor are affected by
any fire, explosion, accident, strike, hail, earthquake, embargo, act of God or
of the public enemy, or other casualty (whether or not covered by insurance),
which could result in a Material Adverse Change in the Borrower or in the
Borrower and the Guarantors, taken as a whole.

      (r) Solvency of Guarantors. The liability of the Guarantors as a result of
the execution of their respective Guaranties and the

                                     - 42 -
<PAGE>

execution of this Agreement shall not cause the liabilities (including
contingent liabilities) of the Guarantors taken as a whole to exceed the fair
saleable value of their respective assets.

      (s) Advantage to Guarantors. The Guarantors acknowledge they have derived
or expect to derive a financial or other advantage from the Loans obtained by
the Borrower from the Banks.

      (t) Credit Agreements. Schedule 4.01(t) is a complete and correct list of
all credit agreements, indentures, purchase agreements, guaranties, Capital
Leases, and other investments, agreements and arrangements presently in effect
providing for or relating to extensions of credit (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which the Borrower or any Guarantor is in any manner directly or
contingently obligated, and the maximum principal or face amounts of the credit
in question, outstanding or to be outstanding, are correctly stated, and all
Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule and neither the Borrower nor
any Guarantor is in default with respect to its obligations thereunder.

                                     - 43 -
<PAGE>

                                    ARTICLE V

                            COVENANTS OF THE BORROWER

      SECTION 5.01. Affirmative Covenants. So long as (i) the Total Commitment
shall be in effect or (ii) any amount shall remain outstanding under any of the
Notes, the Borrower and each of the Guarantors will, unless the Required Banks
shall otherwise consent in writing:

      (a) Compliance with Laws, Etc. Comply, and cause each Subsidiary of the
Borrower or a Guarantor to comply, with all applicable laws, rules, regulations
and orders, where the failure to so comply could result in a Material Adverse
Change in the Borrower or in the Borrower and the Guarantors, taken as a whole.

      (b) Reporting Requirements. Furnish to the Agent and each of the Banks:

            (i) Annual Financial Statements. As soon as available and in any
event not later than the date it is required to be filed with the Securities and
Exchange Commission, a copy of Form 10-K for each fiscal year of the Borrower,
including the audited consolidated financial statements of the Borrower and its
Consolidated Subsidiaries for such year, including a balance sheet with a
related statement of income and retained earnings and statement of cash flows,
all in reasonable detail and setting forth in comparative form the figures for
the previous fiscal year, together with an unqualified opinion, prepared by BDO
Seidman, LLP or such other independent certified public accountants selected by
the Borrower and reasonably satisfactory to the Agent, all such financial
statements to be prepared in accordance with GAAP.

            (ii) Quarterly Financial Statements. As soon as available and in any
event not later than the date it is required to be filed with the Securities and
Exchange Commission, a copy of Form 10-Q for each fiscal quarter of the
Borrower, including the consolidated financial statements of the Borrower and
its Consolidated Subsidiaries for such quarter and for year to date, including a
balance sheet with a related statement of income and retained earnings and a
statement of cash flows, all in reasonable detail and setting forth in
comparative form the figures for the comparable quarter and comparable year to
date period for the previous fiscal year, all such financial statements to be
prepared by management of the Borrower in accordance with GAAP (subject to year
end audit adjustments).

                                     - 44 -
<PAGE>

            (iii) Consolidating Financial Statements. (1) As soon as available
and in any event within ninety (90) days after the end of each fiscal year of
the Borrower and within sixty (60) days after the end of each of the first three
fiscal quarters of the Borrower, a copy of the consolidating financial
statements of the Borrower and its operating Subsidiaries for such year or
quarter, including balance sheets with related statements of income and retained
earnings and statements of cash flows, all in reasonable detail and setting
forth in comparative form the figures for the previous fiscal year or previous
fiscal quarter, all such financial statements to be prepared by management of
the Borrower in accordance with GAAP (subject to year end audit adjustments),
and (2) as soon as available and in any event within sixty (60) days after the
end of each fiscal quarter of the Borrower (90 days in the case of the fourth
fiscal quarter of each year), a copy of a financial schedule showing EBITDA
operating results by store location for such quarter, prepared by management of
the Borrower.

            (iv) In the event that the Borrower is no longer subject to SEC
filings, in lieu of (i) and (ii) above:

                  (a) Annual Financial Statements. As soon as available and in
            any event not later than ninety (90) days after the end of each
            fiscal year of the Borrower, audited consolidated financial
            statements of the Borrower and its Consolidated Subsidiaries for
            such year, including a balance sheet with a related statement of
            income and retained earnings and statement of cash flows, all in
            reasonable detail and setting forth in comparative form the figures
            for the previous fiscal year, together with an unqualified opinion,
            prepared by BDO Seidman, LLP or such other independent certified
            public accountants selected by the Borrower and reasonably
            satisfactory to the Agent, all such financial statements to be
            prepared in accordance with GAAP.

                  (b) Quarterly Financial Statements. As soon as available and
            in any event not later than forty five (45) days after the end of
            each fiscal quarter, the unaudited consolidated financial statements
            of the Borrower and its Consolidated Subsidiaries for such quarter
            and for year to date, including a balance sheet with a related
            statement of income and retained earnings and a statement of cash
            flows, all in reasonable detail and setting forth in comparative
            form the figures for the comparable quarter and comparable year to
            date period for the previous fiscal year, all such financial
            statements to be prepared on a

                                     - 45 -
<PAGE>

            review basis by BDO Seidman, LLP or such other independent certified
            public accountants selected by the Borrower and reasonably
            satisfactory to the Agent, all such financial statements to be
            prepared in accordance with GAAP (subject to year end audit
            adjustments).

            (v) Management Letters. Promptly upon receipt thereof, copies of any
reports submitted to the Borrower or any Guarantor by independent certified
public accountants in connection with examination of the financial statements of
the Borrower and each Guarantor made by such accountants.

            (vi) Certificate of No Default. Simultaneously with the delivery of
the financial statements referred to in Section 5.01(b)(i) and (ii), a
certificate of the President or the Chief Financial Officer of the Borrower (1)
certifying that no Default or Event of Default has occurred and is continuing,
or if a Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof and the action which is proposed to be taken with
respect thereto; and (2) with computations demonstrating compliance with the
covenants contained in Section 5.03.

            (vii) Notice of Litigation. Promptly after the commencement thereof,
notice of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting the Borrower, any Guarantor or any Subsidiary of the Borrower
or a Guarantor which, if determined adversely to the Borrower, any Guarantor or
any such Subsidiary could result in a Material Adverse Change in the Borrower
and the Guarantors, taken as a whole.

            (viii) Notice of Defaults and Events of Default. As soon as possible
and in any event within five (5) days after the occurrence of each Default or
Event of Default, a written notice setting forth the details of such Default or
Event of Default and the action which is proposed to be taken by the Borrower
with respect thereto.

            (ix) ERISA Reports. Promptly after the filing or receiving thereof,
copies of all reports, including annual reports, and notices which the Borrower
any Guarantor and any Subsidiary of the Borrower or a Guarantor, files with or
receives from the PBGC or the U.S. Department of Labor under ERISA; and as soon
as possible after the Borrower, any Guarantor or any such Subsidiary knows or
has reason to know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or the Borrower, any
Guarantor or any such Subsidiary has

                                     - 46 -
<PAGE>

instituted or will institute proceedings under Title IV of ERISA to terminate
any Plan, the Borrower or such Guarantor will deliver to the Agent a certificate
of the President or the Chief Financial Officer of the Borrower or such
Guarantor setting forth details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action the Borrower or such Guarantor
proposes to take with respect thereto.

            (x) Reports to Other Creditors. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other party pursuant
to the terms of any indenture, loan, or credit or similar material agreement and
not otherwise required to be furnished to the Agent pursuant to any other clause
of this Section 5.01(b).

            (xi) Proxy Statements, Etc. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports which
the Borrower or any Guarantor sends to its public stockholders, and copies of
all regular, periodic, and special reports, and all registration statements
which the Borrower or any Guarantor files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefor, or
with any national securities exchange.

            (xii) Personal Financial Statements. At least once in each calendar
year, and not later than fifteen (15) months after the last delivery of such
financial statement, a copy of the personal financial statement of the
Individual Guarantor dated as of date not more than six (6) months prior to the
date of delivery.

            (xiii) Lease Status Certificate. As soon as available and in any
event within sixty (60) days after the end of each fiscal quarter of the
Borrower (90 days in the case of the fourth fiscal quarter of each year), a
certificate from the chief financial officer of the Borrower setting forth the
Credit Parties' payment status for all leases of real property, in form and
substance reasonably satisfactory to the Agent.

            (xiv) Borrowing Base Certificate. As soon as available and in any
event within twenty (20) days after the end of each Fiscal Month, monthly
Borrowing Base certificates dated as of the end of each such month in form and
substance reasonably satisfactory to the Agent.

            (xv) Accounts Receivable Aging. As soon as available and in any
event within twenty (20) days after the end of each Fiscal Month, monthly
accounts receivable agings dated as of the end of

                                     - 47 -
<PAGE>

each such month in form and substance reasonably satisfactory to the Agent.

            (xvi) General Information. Such other information respecting the
condition or operations, financial or otherwise, of the Borrower, any Guarantor
or any Subsidiary of the Borrower or a Guarantor as the Bank may from time to
time reasonably request. (c) Taxes. Pay and discharge, and cause its
Subsidiaries to pay and discharge, all taxes, assessments and governmental
charges upon it or them, its or their income and its or their properties prior
to the dates on which penalties are attached thereto, unless and only to the
extent that (i) such taxes shall be contested in good faith and by appropriate
proceedings by the Borrower, any Guarantor or any such Subsidiary, as the case
may be, and (ii) there be adequate reserves therefor in accordance with GAAP
entered on the books of the Borrower, any Guarantor or any such Subsidiary.

      (d) Corporate Existence. Preserve and maintain, and cause its Subsidiaries
to preserve and maintain, their corporate existence and good standing in the
jurisdiction of their incorporation and the rights, privileges and franchises of
the Borrower, each Guarantor and each such Subsidiary in each case where failure
to so preserve or maintain could result in a Material Adverse Change in the
Borrower or any of the Guarantors.

      (e) Maintenance of Properties and Insurance. (i) Keep, and cause any
Subsidiaries to keep, the respective properties and assets (tangible or
intangible) that are useful and necessary in its business, in good working order
and condition, reasonable wear and tear excepted; and (ii) maintain, and cause
any Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
properties doing business in the same general areas in which the Borrower, any
Guarantors and any such Subsidiaries operate.

      (f) Books of Record and Account. Keep and cause any Subsidiaries to keep,
adequate records and proper books of record and account in which complete
entries will be made in a manner to enable the preparation of financial
statements in accordance with GAAP, reflecting all financial transactions of the
Borrower, the Guarantors, and any such Subsidiaries.

      (g) Visitation; Field Audit. (a) From time to time, permit the Agent or
any of the Banks or any agents or representatives

                                     - 48 -
<PAGE>

thereof, to examine and make copies of and abstracts from the books and records
of, and visit the properties of, the Borrower or any Guarantor and to discuss
the affairs, finances and accounts of the Borrower or any Guarantor with any of
the respective executive officers or directors of the Borrower or such Guarantor
or the Borrower's or such Guarantor's independent accountants.

            (b) From time to time, allow the Bank to conduct, and cooperate with
the Bank in connection therewith, a Field Audit. The expense of such Field Audit
shall be for the account of the Borrower, provided that as long as no Default or
Event of Default exists, Field Audits shall be limited to one per fiscal year of
the Borrower during the term of this Agreement and the cost of such Field Audits
shall not exceed $5,000.00 in any fiscal year of the Borrower.

            (c) Any Field Audits or other visitations shall be made during
normal business hours and on reasonable notice. The Agent shall use its best
efforts to preserve the confidentiality of any non-public information obtained
by it.

      (h) Performance and Compliance with Other Agreements. Perform and comply
with each of the provisions of each and every agreement the failure to perform
or comply with which would be reasonably likely to result in a Material Adverse
Change in the Borrower or in the Borrower and the Guarantors, taken as a whole.

      (i) Pension Funding. Comply with the following and cause each ERISA
Affiliate of the Borrower, any Guarantor or any Subsidiary of the Borrower or a
Guarantor to comply with the following:

            (i) engage solely in transactions which would not subject any of
      such entities to either a civil penalty assessed pursuant to Section
      502(i) of ERISA or a tax imposed by Section 4975 of the Internal Revenue
      Code in either case in an amount in excess of $25,000.00;

            (ii) make full payment when due of all amounts which, under the
      provisions of any Plan or ERISA, the Borrower, any Guarantor, any such
      Subsidiary or any ERISA Affiliate of any of same is required to pay as
      contributions thereto;

            (iii) all applicable provisions of the Internal Revenue Code and the
      regulations promulgated thereunder, including but not limited to Section
      412 thereof, and all applicable rules, regulations and interpretations of
      the Accounting Principles Board and the Financial Accounting Standards
      Board;

                                     - 49 -
<PAGE>

            (iv) not fail to make any payments in an aggregate amount greater
      than $25,000.00 to any Multiemployer Plan that the Borrower, any
      Guarantor, any such Subsidiary or any ERISA Affiliate may be required to
      make under any agreement relating to such Multiemployer Plan, or any law
      pertaining thereto; or

            (v) not take any action regarding any Plan which could result in the
      occurrence of a Prohibited Transaction.

      (j) Licenses. Maintain at all times, and cause each Subsidiary to maintain
at all times, all licenses or permits necessary to the conduct of its business
or as may be required by any governmental agency or instrumentality thereof, the
failure to maintain would be reasonably likely to result in a Material Adverse
Change in the Borrower or in the Borrower and the Guarantors, taken as a whole.

      (k) New Subsidiaries. Cause any Subsidiary of the Borrower or any
Guarantor formed after the date of this Agreement, to (x) become a guarantor of
all obligations of the Borrower under this Agreement and the other Loan
Documents, (y) to secure its obligations with a security interest in all of its
personal property (other than rights as lessees under leases for real property)
and (z) become a party to this Agreement. The parent company of any such
Subsidiary shall pledge its shares in such Subsidiary to the Agent for the
benefit of the Banks.

      (l) Agent's Fees. Pay to the Agent (i) an annual administrative fee, and
(ii) those fees (other than the annual administrative fee), in each case as set
forth in the Fee Letter.

      (m) Trademarks. The Borrower shall deliver or cause to be delivered to the
Bank certified copies of all trademarks owned by the Borrower and the Guarantors
within thirty (30) days of the date of this Agreement. The Borrower and the
Guarantors, as the case may be, shall enter into a Trademark Security Agreement
for each of such trademarks within thirty (30) days of the date hereof.

      (n) Delivery of Certain Information. The Borrower shall deliver or cause
to be delivered to the Agent the following not later than June 25, 2004:

            (a) Certified (as of the date of this Agreement) copies of (i) the
      resolutions of the Board of Directors of the Borrower authorizing the
      Loans and authorizing and approving this Agreement and the other Loan
      Documents and the execution,

                                     - 50 -
<PAGE>

      delivery and performance thereof, and (ii) all documents evidencing other
      necessary corporate action and governmental approvals, if any, with
      respect to this Agreement and the other Loan Documents.

            (b) Certified (as of the date of this Agreement) copies of the
      resolutions of the Boards of Directors and the shareholders of each of the
      Guarantors, authorizing and approving this Agreement, their Guaranties and
      any other Loan Document applicable to the Guarantors, and the execution,
      delivery and performance thereof and certified copies of all documents
      evidencing other necessary corporate action and governmental approvals, if
      any, with respect to this Agreement, their Guaranties and the other Loan
      Documents.

            (c) A certificate of the Secretary or an Assistant Secretary
      (attested to by another officer) of the Borrower certifying: (i) the names
      and true signatures of the officer or officers of the Borrower authorized
      to sign this Agreement, the Notes and the other Loan Documents to be
      delivered hereunder on behalf of the Borrower; and (ii) a copy of the
      Borrower's by-laws as complete and correct on the date of this Agreement.

            (d) A Certificate of the Secretary or an Assistant Secretary
      (attested to by another officer) of each of the Guarantors certifying (i)
      the names and true signatures of the officer or officers of the Guarantors
      authorized to sign this Agreement, their Guaranties and any other Loan
      Documents to be delivered hereunder on behalf of the Guarantors; (ii) a
      copy of each of the Guarantors' by-laws as complete and correct on the
      date of this Agreement; and (iii) the stock ownership of each Guarantor.

            (e) Copies of the certificate of incorporation and all amendments
      thereto of the Borrower and the Guarantors certified in each case by the
      Secretary of State (or equivalent officer) of the state of incorporation
      of each of the Borrower and the Guarantors and a certificate of existence
      and good standing with respect to the Borrower and the Guarantors from the
      Secretary of State (or equivalent officer) of the state of incorporation
      of the Borrower and the Guarantors) and from the Secretary of State (or
      equivalent officer) of any state in which the Borrower or the Guarantors
      are authorized to do business.

                                     - 51 -
<PAGE>

            (f) An opinion of Anderson, Kill & Olick, P.C., counsel for the
      Borrower and the Guarantors as to certain matters referred to in Article
      IV hereof and as to such other matters as the Agent or its counsel may
      reasonably request.

            (g) From the Borrower and any Guarantor which owns all or any of the
      stock of another Guarantor or any Subsidiary of the Borrower, a Pledge
      Agreement granting to the Agent, on behalf of the Banks, a first priority
      security interest in all of the stock in such Guarantor and/or Subsidiary
      (other than Gristede's Foods NY Inc.).

            (h) From the Borrower and any Guarantor executing and delivering a
      Pledge Agreement, the stock certificate(s) for the shares pledged
      thereunder, together with a stock power executed in blank.

            (i) From the Borrower, copies of all of the Borrower's credit
      agreements, loan agreements, indentures, mortgages and other documents
      relating to the extension of credit.

            (j) From the Borrower, a certificate signed by the President or
      Chief Financial Officer of the Borrower dated as of the date of delivery
      to the Agent, stating that:

                        (i) The representations and warranties contained in
            Article IV of this Agreement and in the other Loan Documents are
            true and correct on and as of such date; and

                        (ii) No Default or Event of Default has occurred and is
            continuing as a result of the making of the initial Revolving Credit
            Loans or the Term Loan.

      SECTION 5.02. Negative Covenants. So long as (i) the Total Commitment
shall be in effect or (ii) any amount shall remain outstanding under any of the
Notes, neither the Borrower nor any of the Guarantors will, without the written
consent of the Required Banks:

      (a) Liens, Etc. Create, incur, assume or suffer to exist, any Lien, upon
or with respect to any of its properties, now owned or hereafter acquired,
except:

            (i) Liens in favor of the Banks securing Debt permitted by Section
5.02;

                                     - 52 -
<PAGE>

            (ii) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;

            (iii) Liens imposed by law, such as mechanics', materialmen's,
landlords', warehousemen's, and carriers' Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due or which are being contested in good faith by appropriate proceedings
and for which appropriate reserves have been established;

            (iv) Liens under workers' compensation, unemployment insurance,
Social Security, or similar legislation;

            (v) Liens, deposits, or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;

            (vi) Liens described in Schedule 5.02(a), provided that no such
Liens shall be renewed, extended or refinanced except for the refinance of the
then outstanding balance of Debt secured by such Lien;

            (vii) Judgment and other similar Liens arising in connection with
court proceedings (other than those described in Section 6.01(f)), provided (i)
the execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings, or (ii) any such judgment is fully covered by
insurance;

            (viii) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Borrower's or a Guarantor's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto; and

            (ix) Purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property (excluding leases for the use or occupation
of real property) existing at the time of such acquisition, or a Lien incurred
in connection with any

                                     - 53 -
<PAGE>

conditional sale or other title retention agreement or a Capital Lease, provided
that:

                  (1) Any property subject to any of the foregoing is acquired
by the Borrower or any Guarantor in the ordinary course of its respective
business and the Lien on any such property is created contemporaneously with
such acquisition;

                  (2) The obligation secured by any Lien so created, assumed, or
existing shall not exceed one hundred (100%) percent of lesser of cost or fair
market value of the property acquired as of the time of the Borrower or any
Guarantor acquiring the same;

                  (3) Each such Lien shall attach only to the property so
acquired and fixed improvements thereon;

                  (4) The Debt secured by all such Liens shall not exceed
$20,000,000.00 at any time outstanding in the aggregate (including without
limitation $5,000,000.00 in Capital Lease obligations to Commerce Bank); and

                  (5) The obligation secured by such Lien is permitted by the
provisions of Section 5.02(b) and the related expenditure is permitted by the
provisions of Section 5.03(b).

            (x) Leasehold mortgage liens against stores 413 and/or 599.

            (xi) Liens for permitted Debt to United Acquisition Corp. and other
Affiliates.

            (xii) Liens granted to Otten & Golden, as attorneys for Faty
Ansoumana, et al. and National Employment Law Project acting as agents for Faty
Ansoumana, et al. in settlement of certain litigation against the Borrower which
have been subordinated to the Lien of the Agent.

      (b) Debt. Create, incur, assume, or suffer to exist, any Debt, except:

            (i) Debt of the Borrower under this Agreement or the Notes;

            (ii) Debt described in Schedule 5.02(b), provided that no such Debt
shall be renewed, extended or refinanced except for the refinance of the then
outstanding balance of such Debt;

                                     - 54 -
<PAGE>

            (iii) Accounts payable to trade creditors for goods or services and
current operating liabilities (other than for borrowed money), in each case
incurred and paid in the ordinary course of business, unless contested in good
faith and by appropriate proceedings;

            (iv) Debt of the Borrower or any Guarantor secured by purchase money
Liens permitted by Section 5.02(a)(ix);

            (v) Unsecured intercompany Debt among the Borrower and its
Affiliates; and

            (vi) Secured intercompany Debt among the Borrower and its
Affiliates, provided a subordination agreement satisfactory to the Agent and the
Banks has been executed.

      (c) Lease Obligations. Create, incur, assume, or suffer to exist any
obligation as lessee for the rental or hire of any real or personal property,
except (i) Capital Leases permitted by Section 5.02(a); (ii) leases existing on
the date of this Agreement and any extensions or renewals thereof; (iii) leases
for the use and occupancy of real property (other than leases described in
clause (i) or (ii)) which do not, in the aggregate, require the Borrower and the
Guarantors to make payments (including taxes, insurance, maintenance, and
similar expenses which the Borrower or any Guarantor is required to pay under
the terms of any lease) in any fiscal year of the Borrower in excess of
$3,000,000.00 during each fiscal year of the Borrower, it being the intent of
this clause (iii) that the Borrower may enter into such leases which add not
more than such amounts of incremental "Average Annual Cost" in each fiscal year,
and (iv) all other operating leases (other than leases described in (i), (ii) or
(iii)), which do not, in the aggregate, require the Borrower and the Guarantors
to make annual payments under such leases in excess of $1,500,000.00 in the
aggregate over the term of this Agreement. For purposes hereof, "Average Annual
Cost" shall mean the total amount to be paid by the lessee under any lease over
the term of such lease, for any and all purposes, including rent, escalations,
taxes, operating costs, pass throughs, electric and other utility costs,
commissions, build-outs, and all other amounts payable to or for the benefit of
the lessor divided by the term of the lease, in years.

      (d) Merger. Merge into, or consolidate with or into, or have merged into
it, any Person (for the purpose of this subsection (d), the acquisition or sale
by the Borrower or any Guarantor by lease, purchase or otherwise, of all, or
substantially all, of the common stock or the assets of any Person or of it
shall be deemed a merger

                                     - 55 -
<PAGE>

of such Person with the Borrower or any Guarantor) other than a merger of a
Subsidiary into its parent corporation or a Subsidiary into a Subsidiary;
provided, however, that the Borrower may merge with an Affiliate in a "going
private transaction", in which the Borrower shall be the surviving corporation.

      (e) Sale of Assets, Etc. Sell, assign, transfer, lease or otherwise
dispose of any of its assets, (including a saleleaseback transaction) with or
without recourse, except for (i) inventory disposed of in the ordinary course of
business; (ii) the sale or other disposition of assets no longer used or useful
in the conduct of its business; and (iii) upon notice to the Agent, rights as a
tenant under leases of real estate provided that (x) not more than one (1) such
lease shall be sold during each fiscal year of the Borrower and (y) the Borrower
complies with the provisions of Section 2.14(c) of this Agreement.

      (f) Investments, Etc. Make any Investment other than Permitted
Investments.

      (g) Transactions With Affiliates. Except in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's, a
Guarantor's or a Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower, or the Guarantor or the Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an
Affiliate, enter into any transaction, including, without limitation, the
purchase, sale, or exchange of property or the rendering of any service, with
any Affiliate.

      (h) Prepayment of Outstanding Debt. Pay, in whole or in part, any
outstanding Debt (other than the Loans) of the Borrower or any Guarantor which
by its terms is not then due and payable.

      (i) Guarantees. Guaranty, or in any other way become directly or
contingently obligated for any Debt of any other Person (including any
agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Schedule 5.02(i) annexed hereto; (iii) guarantees
of Debt permitted hereunder or (iv) guarantees by a Credit Party of any
obligation of any other Credit Party provided the incurrence of such obligation
does not result in a Default or an Event of Default.

                                     - 56 -
<PAGE>

      (j) Change of Business. Materially alter the nature of its business.

      (k) Fiscal Year. Change the ending date of its fiscal year.

      (l) Losses. Incur a net loss for any fiscal year other than a net loss not
exceeding $2,000,000 for the fiscal year ending November 28, 2004.

      (m) Accounting Policies. Change any accounting policies, except as
permitted by GAAP.

      (n) Change of Tax Status. Change its tax reporting status as a C
corporation.

      (o) Change in Ownership. Fail or cease to maintain the ownership by John
Catsimatidis, directly or indirectly, of a majority of such classes of voting
stock of the Borrower and the Guarantors such as would enable the holder thereof
to elect a majority of the members of the Board of Directors of the Borrower and
each Guarantor.

      (p) Management. Fail to retain John Catsimatidis in a reasonably active
full time capacity in the management of the Borrower and Guarantors.

      (q) Hazardous Material. The Borrower, each Guarantor and each Subsidiary
of the Borrower or a Guarantor shall not cause or permit any property owned or
occupied by the Borrower, any Guarantor or any such Subsidiary to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable federal, state and local laws or regulations nor shall the Borrower,
any Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on the part of the Borrower, any
Guarantor or any such Subsidiary or any tenant or subtenant, a release of
Hazardous Materials onto any property owned or occupied by the Borrower, any
Guarantor or any such Subsidiary or onto any other property. The Borrower, each
Guarantor and each such Subsidiary shall not fail to comply with all applicable
federal, state and local laws, ordinances, rules and regulations, whenever and
by whomever triggered, and shall not fail to obtain and comply with, any and all
approvals, registrations or permits required thereunder. The Borrower and the
Guarantors shall execute any documentation reasonably required by the Agent in
connection with the representations, warranties and covenants contained in this
paragraph and Section 4.01 of this Agreement.

                                     - 57 -
<PAGE>

      (r) New Store Locations. The Borrower, Guarantors and their respective
Subsidiaries and Affiliates shall not open any new store locations during fiscal
year 2004, and shall not open more than one (1) store during any other fiscal
year.

      SECTION 5.03. Financial Requirements. So long as (i) the Total Commitment
shall be in effect or (ii) any amount shall remain outstanding under any of the
Notes:

      (a) Minimum Consolidated Tangible Net Worth. The Borrower and Guarantors
will maintain at all times a Consolidated Tangible Net Worth ("TNW") plus
Subordinated Debt of not less than the following, to be tested quarterly at the
end of each fiscal quarter:

      Date/Fiscal Year Ending ("FYE")                Minimum TNW
      -------------------------------                -----------

      The first
      three quarters of FYE 2004                     $22,000,000.00

      End FYE 2004 through the first
      three fiscal quarters of FYE 2005              $22,000,000.00

      End of FYE 2005 and through the first
      three fiscal quarters of FYE 2006              $23,000,000.00

      End of FYE 2006 and
      at all times thereafter                        $24,500,000.00

      (b) Maximum Consolidated Cash Capital Expenditures. The Borrower, the
Guarantors and their respective Subsidiaries will not make Consolidated Cash
Capital Expenditures during any fiscal year in excess of $3,500,000.00 (the
"Permitted Consolidated Cash Capital Expenditures").

      (c) Leverage Ratio. The Borrower and the Guarantors will at all times
maintain a Leverage Ratio of not greater than the following, to be tested
quarterly at the end of each fiscal quarter:

      Date/Fiscal Year Ending                        Maximum Leverage Ratio
      -----------------------                        ----------------------

      The first
      three quarters of FYE 2004                     4.75 to 1.0

      End of FYE 2004 and through the first
      three fiscal quarters of FYE 2005              4.25 to 1.0

      End of FYE 2005 and through the first
      three fiscal quarters of FYE 2006              3.75 to 1.0

      End of FYE 2006 and at
      all times thereafter                           3.50 to 1.0

                                     - 58 -
<PAGE>

      (d) Fixed Charge Coverage Ratio. The Borrower and Guarantors will maintain
at all times, on a consolidated basis, a minimum Fixed Charge Coverage Ratio of
not less than the following, such ratio to be tested quarterly on a rolling four
quarter basis at the end of each fiscal quarter:

      Date/Fiscal Year Ending                        Fixed Charge Coverage Ratio
      -----------------------                        ---------------------------

      The first
      three quarters of FYE 2004                     1.10 to 1.0

      End of FYE 2004 and through the first
      three fiscal quarters of FYE 2005              1.10 to 1.0

      End of FYE 2005 and thereafter                 1.15 to 1.0

      (e) Minimum EBITDA. The Borrower and the Guarantors shall have minimum
EBITDA of not less than the following, to be tested annually at the end of each
fiscal year:

      Fiscal Year Ending                             Minimum EBITDA
      ------------------                             --------------

      FYE 2004                                       $13,500,000
      FYE 2005                                       $14,500,000
      FYE 2006 and thereafter                        $15,000,000

                                     - 59 -
<PAGE>

                                   ARTICLE VI

                                EVENTS OF DEFAULT

      SECTION 6.01. Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:

      (a) The Borrower shall fail to pay any installment of principal of, or
interest on, any of the Notes when due, or any fees or other amounts owed in
connection with this Agreement; or

      (b) Any representation or warranty made by the Borrower or any Guarantor
herein or in the Loan Documents or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with any Loan Document shall prove to have been incorrect in
any material respect when made; or

      (c) The Borrower or any Guarantor shall fail to perform any term,
covenant, or agreement contained in this Agreement or in any other Loan Document
(other than the Notes) on its part to be performed or observed; or

      (d) The Borrower, any Guarantor, or any Subsidiary of the Borrower or a
Guarantor shall fail to pay any Debt in a minimum outstanding principal balance
of $250,000.00 (excluding Debt evidenced by the Notes) of the Borrower, any
Guarantor or any such Subsidiary (as the case may be), or any interest or
premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other default under any agreement or instrument
relating to any such Debt, or any other event shall occur and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate the maturity
of such Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or

      (e) The Borrower, any Guarantor or any Subsidiary of the Borrower or a
Guarantor shall generally not pay its Debts as such Debts become due, or shall
admit in writing its inability to pay its Debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Borrower, any Guarantor or any such Subsidiary
seeking

                                     - 60 -
<PAGE>

to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its Debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and if instituted against the Borrower,
any Guarantor or any such Subsidiary shall remain undismissed for a period of 30
days; or the Borrower, any Guarantor or any such Subsidiary shall take any
action to authorize any of the actions set forth above in this subsection (e);
or

      (f) Any judgment or order or combination of judgments or orders for the
payment of money, in excess of $500,000.00 in the aggregate, which sum shall not
be subject to full, complete and effective insurance coverage, shall be rendered
against the Borrower, any Guarantor or any Subsidiary of the Borrower or a
Guarantor and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order or (ii) there shall be any period of 90
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or

      (g) Any Guarantor shall fail to perform or observe any term or provision
of its Guaranty or any representation or warranty made by any Guarantor (or any
of its officers or partners) in connection with such Guarantor's Guaranty shall
prove to have been incorrect in any material respect when made; or

      (h) Any of the following events occur or exist with respect to the
Borrower, any Guarantor, any Subsidiary of the Borrower or a Guarantor, or any
ERISA Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any
Reportable Event with respect to any Plan; (iii) the filing under Section 4041
of ERISA of a notice of intent to terminate any Plan or the termination of any
Plan; (iv) any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the termination
of, or for the appointment of a trustee to administer, any Plan, or the
institution of the PBGC of any such proceedings; (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization insolvency, or termination of any Multiemployer Plan; and in each
case above, such event or condition, together with all other events or
conditions, if any, could in the opinion of the Agent subject the Borrower, any
Guarantor, any such Subsidiary or any ERISA Affiliate to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination

                                     - 61 -
<PAGE>

thereof) which in the aggregate exceeds or may exceed $500,000.00; or

      (i) This Agreement or any other Loan Document, at any time after its
execution and delivery and for any reason, ceases to be in full force and effect
in all material respects or shall be declared to be null and void, or the
validity or enforceability of any document or instrument delivered pursuant to
this Agreement shall be contested by the Borrower, any Guarantor or any party to
such document or instrument or the Borrower, any Guarantor or any party to such
document or instrument shall deny that it has any or further liability or
obligation under any such document or instrument; or

      (j) An event of default specified in any Loan Document other than this
Agreement shall have occurred and be continuing.

      SECTION 6.02. Remedies on Default. Upon the occurrence and continuance of
an Event of Default the Agent may, and at the request of the Required Banks
shall, by notice to the Borrower take any or all of the following actions: (i)
terminate the Commitment, (ii) declare the Notes, all interest thereon and all
other amounts payable under this Agreement to be forthwith due and payable,
whereupon the Commitment shall be terminated, the Notes, all such interest, and
all such other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (iii) proceed to enforce its rights
whether by suit in equity or by action at law, whether for specific performance
of any covenant or agreement contained in this Agreement or any Loan Document,
or in aid of the exercise of any power granted in either this Agreement or any
Loan Document or proceed to obtain judgment or any other relief whatsoever
appropriate to the enforcement of its rights, or proceed to enforce any other
legal or equitable right which the Agent or the Banks may have by reason of the
occurrence of any Event of Default hereunder or under any Loan Document,
provided, however, upon the occurrence of an Event of Default referred to in
Section 6.01(e), the Commitment shall be immediately terminated, the Notes, all
interest thereon, and all other amounts payable under this Agreement shall be
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower.
Any amounts collected pursuant to action taken under this Section 6.02 shall be
applied to the payment of, first, any costs incurred by the Agent in taking such
action, including but without limitation reasonable attorneys fees and

                                     - 62 -
<PAGE>

expenses, second, to payment of the accrued interest on the Notes and third, to
payment of the unpaid principal of the Notes.

      SECTION 6.03. Remedies Cumulative. No remedy conferred upon or reserved to
the Agent or the Banks hereunder or in any Loan Document is intended to be
exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or
any Loan Document or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Agent or the Banks to exercise any
remedy reserved in this Article VI, it shall not be necessary to give any
notice, other than such notice as may be herein expressly required in this
Agreement or in any Loan Document.

                                     - 63 -
<PAGE>

                                   ARTICLE VII

                  THE AGENT; RELATIONS AMONG BANKS AND BORROWER

      SECTION 7.01. Appointment, Powers and Immunities of Agent. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under any other Loan Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Loan
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Loan Document, and shall not by reason of
this Agreement be a trustee or fiduciary for any Bank. The Agent shall not be
responsible to the Banks for any recitals, statements, representations or
warranties made by the Borrower or the Guarantors, or any officer or official of
the Borrower or Guarantors, or any of them, or any other Person contained in
this Agreement or any other Loan Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Loan Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Loan Document or any other document or instrument
referred to or provided for herein or therein, except as explicitly provided
herein, or for the failure by the Borrower, the Guarantors, or any of them to
perform any of their or its respective obligations hereunder or thereunder. The
Agent may employ agents and attorneys-in-fact and shall not be responsible,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Except as otherwise explicitly provided herein, neither
the Agent nor any of its directors, officers, employees or agents shall be
liable or responsible to any Bank for any action taken or omitted to be taken by
it or them hereunder or under any other Loan Document or in connection herewith
or therewith, except for its or their own gross negligence or wilful misconduct.
The Borrower shall pay any fee agreed to in writing by the Borrower and the
Agent with respect to the Agent's services hereunder.

      SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent with reasonable care. The

                                     - 64 -
<PAGE>

Agent may deem and treat each Bank as the holder of the Loans made by it for all
purposes hereof unless and until a notice of the permitted transfer thereof
satisfactory to, the Agent signed by such Bank shall have been furnished to the
Agent but the Agent shall not be required to deal with any Person who has
acquired a participation in any Loan from a Bank. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Banks, and such
instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks and any other holder of
all or any portion of any Loan.

      SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loans) unless the Agent has actual knowledge of
any Default or Event of Default or has received notice from a Bank or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default." In the event that the Agent receives such a
notice of, or otherwise has actual knowledge of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Banks (and
shall give each Bank prompt notice of each such non-payment). The Agent shall
(subject to Section 7.08) take such action with respect to such Default or Event
of Default which is continuing as shall be directed by the Required Banks;
provided that, unless and until the Agent shall have received such directions,
the Agent may take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interest of the Banks; and provided further that the Agent shall not be required
to take any such action which it determines to be contrary to law.

      SECTION 7.04. Rights of Agent as a Bank. With respect to the Loans made by
it, the Agent in its capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not acting as the Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include the Agent in its capacity as a Bank. The
Agent or any Bank and their respective Affiliates may (without having to account
therefor to any other Bank except as otherwise expressly provided in this
Agreement) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrower, the Guarantors or any of them (and any of their Affiliates);

                                     - 65 -
<PAGE>

provided that no payment or lien priority shall be given to the Agent or to any
Bank for any other transaction without the express written approval of all of
the other Banks. In the case of Citibank, it may do so as if it were not acting
as the Agent, and the Agent may accept fees and other consideration from the
Borrower, the Guarantors or any of them for services in connection with this
Agreement or otherwise without having to account for the same to the Banks.
Although the Agent or a Bank or any of their respective Affiliates may in the
course of such relationships and relationships with other Persons acquire
information about the Borrower, the Guarantors, their Affiliates and such other
Persons, neither the Agent nor such Bank shall have any duty to the other Banks
or the Agent to disclose such information to the other Banks or the Agent except
as otherwise provided herein with respect to the occurrence of an Event of
Default.

      SECTION 7.05. Indemnification of Agent. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 8.04 or under the applicable
provisions of any other Loan Document, but without limiting the obligations of
the Borrower and Guarantors under Section 8.04 or such provisions), ratably in
accordance with their respective percentages of the Total Commitment (without
giving effect to any participation in all or any portion of the Total Commitment
sold by them to any other Person), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement, any other Loan Document or any other documents contemplated
by or referred to herein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the Borrower and
Guarantors are obligated to pay under Section 8.04 or under the applicable
provisions of any other Loan Document but excluding, unless a Default or Event
of Default has occurred, normal administrative costs and expenses incidental to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents or instruments; provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or wilful misconduct of the party to be indemnified.

      SECTION 7.06. Documents. It is the responsibility of the Borrower to
forward to each Bank, on or before the due dates set forth herein, a copy of
each report, notice or other document required by this Agreement or any other
Loan Document to be

                                     - 66 -
<PAGE>

delivered to the Agent. The Agent is not responsible for forwarding such
information to the Banks.

      SECTION 7.07. Non-Reliance on Agent and Other Banks. Each Bank agrees that
it has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower, the Guarantors and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any other Loan Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower or Guarantors of
this Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Borrower, the Guarantors or any Subsidiary. Except for notices, reports and
other documents and information expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or responsibility to
any other Bank to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower, the
Guarantors or any Subsidiary (or any of their Affiliates) which may come into
the possession of the Agent or of its Affiliates. The Agent shall not be
required to file this Agreement, any other Loan Document or any document or
instrument referred to herein or therein, or record or give notice of this
Agreement, any other Loan Document or any document or instrument referred to
herein or therein, to any Person.

      SECTION 7.08. Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 7.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.

      SECTION 7.09. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Required Banks shall have the right to appoint a successor
Agent which shall have an office in New York State and shall be subject

                                     - 67 -
<PAGE>

to the reasonable approval of the Borrower. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a bank which has an office in New York, New York. The Required Banks or
the retiring Agent, as the case may be, shall upon the appointment of a
Successor Agent promptly so notify the Borrower, the Guarantors and the other
Banks. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation as Agent, the provisions of this Article
7 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.

      SECTION 7.10. Amendments Concerning Agency Function. The Agent shall not
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Loan Document which affects its duties hereunder or thereunder
unless it shall have given its prior written consent thereto.

      SECTION 7.11. Liability of Agent. The Agent shall not have any liabilities
or responsibilities to the Borrower, the Guarantors or any of them on account of
the failure of any Bank to perform its obligations hereunder or to any Bank on
account of the failure of the Borrower, the Guarantors or any of them to perform
their or its obligations hereunder or under any other Loan Document.

      SECTION 7.12. Transfer of Agency Function. Without the consent of the
Borrower, the Guarantors or any Bank, the Agent may at any time or from time to
time transfer its functions as Agent hereunder to any of its offices wherever
located, provided that the Agent shall promptly notify the Borrower, the
Guarantors and the Banks thereof.

      SECTION 7.13. Withholding Taxes. Each Bank represents that it is entitled
to receive any payments to be made to it hereunder without the withholding of
any tax and will furnish to the Agent such forms, certifications, statements and
other documents as the Agent may request from time to time to evidence such
Bank's exemption from the withholding of any tax imposed by any jurisdiction or
to enable the Agent to comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States of America or any state
thereof, in the

                                     - 68 -
<PAGE>

event that the payment of interest by the Borrower is treated for U.S. income
tax purposes as derived in whole or in part from sources from within the U.S.,
such Bank will furnish to the Agent Form 4224 or Form 1001 of the Internal
Revenue Service, or such other forms, certifications, statements or documents,
duly executed and completed by such Bank as evidence of such Bank's exemption
from the withholding of U.S. tax with respect thereto. The Agent shall not be
obligated to make any payments hereunder to such Bank in respect of any Loan
until such Bank shall have furnished to the Agent the requested form,
certification, statement or document.

      SECTION 7.14. Several Obligations and Rights of Banks. The failure of any
Bank to make any Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but no
Bank shall be responsible for the failure of any other Bank to make a Loan to be
made by such other Bank.

      SECTION 7.15. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided, each prepayment and payment of principal of or interest on
Loans of a particular type and a particular Interest Period shall be made to the
Agent for the account of the Banks holding Loans of such type and Interest
Period pro rata in accordance with the respective unpaid principal amounts of
such Loans of such Interest Period held by such Banks.

      SECTION 7.16. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means, it shall share such payment with the other Banks and the amount of such
payment shall be applied to reduce the Loans of all the Banks pro rata in
accordance with the unpaid principal on the Loans held by each of them, and make
such other adjustments from time to time as shall be equitable to the end that
all the Banks shall share the benefit of such payment (net of any expenses which
may be incurred by such Bank in obtaining or preserving such benefit) pro rata
in accordance with the unpaid principal and interest on the Loans held by each
of them. To such end the Banks shall make appropriate adjustments among
themselves if such payment is rescinded or must otherwise be restored. Nothing
contained herein shall require any Bank to exercise any such right or shall
affect the right of any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness of the Borrower.
Notwithstanding the foregoing or any other provision of this Agreement, no right
or remedy of any Bank relating to any assets of the Borrower (including real
property, improvements or fixtures)

                                     - 69 -
<PAGE>

not covered by this Agreement or the Loan Documents shall in any way be affected
by this Agreement or otherwise with respect to any other indebtedness of the
Borrower to any of the Banks.

      SECTION 7.17. Nonreceipt of Funds by Agent. Unless the Agent shall have
received notice from a Bank prior to the date on which such Bank is to provide
funds to the Agent for a Loan to be made by such Bank that such Bank will not
make available to the Agent such funds, the Agent may assume that such Bank has
made such funds available to the Agent on the date of such Loan, and the Agent
in its sole discretion may, but shall not be obligated to, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such funds available
to the Agent, such Bank agrees to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at the customary rate set by the Agent for the correction
of errors among banks for three Business Days and thereafter at the Prime Rate.
If such Bank shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan for purposes of this Agreement. If such
Bank does not pay such corresponding amount forthwith upon Agent's demand
therefor, the Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Agent with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at the rate of interest applicable
at the time to such proposed Loan.

      Unless the Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the Borrower will
not make such payment in full, the Agent may assume that the Borrower has made
such payment in full to the Agent on such date and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the customary rate
set by the Agent for the correction of errors among banks for three Business
Days and thereafter at the Prime Rate.

                                     - 70 -
<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

      SECTION 8.01. Amendments. Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be amended or modified only
by an instrument in writing signed by the Borrower, the Guarantors, the Agent
and the Required Banks, and any provision of this Agreement may be waived by the
Borrower (if such provision requires performance by the Agent or the Banks) or
by the Agent acting with the consent of the Required Banks (if such provision
requires performance by the Borrower); provided that no amendment, modification
or waiver shall, unless by an instrument signed by all of the Banks or by the
Agent acting with the consent of all of the Banks: (a) increase or extend the
term of the Revolving Credit Commitment or the Total Commitment or the Loans,
(b) extend the date fixed for the payment of principal of or interest on any
Loan, (c) reduce the amount of any payment of principal thereof or the rate at
which interest is payable thereon or any fee payable hereunder, (d) alter the
terms of this Section 8.01, (e) amend the definition of the term "Required
Banks", (f) change the fees payable to any Bank except as otherwise provided
herein, (g) permit the Borrower to transfer or assign any of its obligations
hereunder or under the Loan Documents, (h) amend the provisions of Article 7
hereof, (i) release the Individual Guarantor from his Guaranty or amend any of
the provisions thereof, (j) release any Guarantor from its Guaranty or amend any
of the provisions thereof, (k) give any payment priority to any Person
(including any of the Banks) over amounts due in connection with the Loans, or
(l) release any Collateral (other than as permitted by the Security Agreement).
No failure on the part of the Agent or any Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof or preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

      SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic communication) and
mailed via certified mail, telegraphed, sent by overnight mail delivery service,
sent by facsimile or delivered, if to the Borrower or any Guarantor, at the
address of the Borrower or Guarantor, as the case may be, set forth at the
beginning of this Agreement with a copy to Martin Bring, Esq. of Anderson, Kill
$ Olick, P.C., 1251 Avenue of the Americas, New York, New York 10020 and if to
the Agent or any Bank, at the address of the Agent or such Bank set forth at the
beginning of

                                     - 71 -
<PAGE>

this Agreement to the attention of Gristede's Foods, Inc. Account Officer, or,
as to each party, at such other address as shall be designated by such party in
a written notice complying as to delivery with the terms of this Section 8.02 to
the other parties. All such notices and communications shall be effective when
mailed, telegraphed or delivered, except that notices to the Bank shall not be
effective until received by the Bank.

      SECTION 8.03. No Waiver, Remedies. No failure on the part of the Agent or
any Bank to exercise, and no delay in exercising, any right, power or remedy
under any Loan Document, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.

      SECTION 8.04. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all reasonable out of pocket costs and expenses of the Agent in
connection with the preparation, execution, delivery and administration of this
Agreement, the Notes and any other Loan Documents, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Banks as to their respective
rights and responsibilities under this Agreement, and all costs and expenses, if
any (including reasonable counsel fees and expenses), in connection with the
enforcement of this Agreement, the Notes and any other Loan Documents. The
Borrower shall at all times protect, indemnify, defend and save harmless the
Agent and the Banks from and against any and all claims, actions, suits and
other legal proceedings, and liabilities, obligations, losses, damages,
penalties, judgments, costs, expenses or disbursements which the Agent or the
Banks may, at any time, sustain or incur by reason of or in consequence of or
arising out of the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby. The Borrower acknowledges that it is
the intention of the parties hereto that this Agreement shall be construed and
applied to protect and indemnify the Agent and the Banks against any and all
risks involved in the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, all of which risks are
hereby assumed by the Borrower, including, without limitation, any and all risks
of the acts or omissions, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority, provided that the
Borrower shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,

                                     - 72 -
<PAGE>

costs, expenses or disbursements resulting from the Agent or any Bank's gross
negligence or willful misconduct. The provisions of this Section 8.04 shall
survive the payment of the Notes and the termination of this Agreement.

      SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the declaration of the making of
the Notes due and payable pursuant to the provisions of Section 6.02, the Banks
each are hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Banks to or for the credit or the account
of the Borrower or any Guarantor against any and all of the obligations of the
Borrower or any Guarantor now or hereafter existing under this Agreement and the
Notes, irrespective of whether or not the Agent or the Banks shall have made any
demand under this Agreement or the Term Loan Notes and although such obligations
may be unmatured. The rights of the Banks under this Section are in addition to
all other rights and remedies (including, without limitation, other rights of
set-off) which the Agent and the Banks may have.

      SECTION 8.06. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, the Guarantors, the Agent and the
Banks.

      SECTION 8.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.

      (b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Pro Rata
Share of the Commitment or any or all of its Loans. In the event of any such
grant by a Bank of a participating interest to a Participant, whether or not
upon notice to the Borrower and the Agent, such Bank shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Any agreement pursuant
to which any Bank may grant such a participating interest shall provide that
such Bank shall retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without limitation, the right
to

                                     - 73 -
<PAGE>

approve any amendment, modification or waiver of any provision of this
Agreement. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (b).

      (c) (i) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $4,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit D hereto executed by such Assignee and such
transferor Bank, with, so long as no Default or Event of Default has occurred
and is continuing, (and subject to) the subscribed consent of the Borrower,
which shall not be unreasonably withheld, and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank, no such consent shall be
required. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.

            (ii) Upon the consummation of any assignment pursuant to this
subsection (c), the transferor Bank, the Agent and the Borrower shall make
appropriate arrangements so that, if required, a new Note or Notes is issued to
the Assignee. In connection with any such assignment, the transferor Bank shall
pay to the Agent an administrative fee for processing such assignment in the
amount of $3,500.00. If the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall deliver to the Borrower
and the Agent certification as to exemption from deduction or withholding of any
Unites States federal income taxes in accordance with Section 7.13.

      (d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Notes to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.

      SECTION 8.08. Further Assurances. The Borrower and each Guarantor agree at
any time and from time to time at its expense,

                                     - 74 -
<PAGE>

upon request of the Agent, the Banks or their respective counsel, to promptly
execute, deliver, or obtain or cause to be executed, delivered or obtained any
and all further instruments and documents and to take or cause to be taken all
such other action the Agent or any Bank may reasonably deem desirable in
obtaining the full benefits of this Agreement.

      SECTION 8.09. Section Headings, Severability, Entire Agreement. Section
and subsection headings have been inserted herein for convenience only and shall
not be construed as part of this Agreement. Every provision of this Agreement
and each Loan Document is intended to be severable; if any term or provision of
this Agreement, any Loan Document, or any other document delivered in connection
herewith shall be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions hereof or
thereof shall not in any way be affected or impaired thereby. All exhibits and
schedules to this Agreement shall be annexed hereto and shall be deemed to be
part of this Agreement. This Agreement and the exhibits and schedules attached
hereto embody the entire Agreement and understanding between the Borrower, the
Guarantors, the Agent and the Banks and supersede all prior agreements and
understandings relating to the subject matter hereof provided, however, that to
the extent that the provisions of the Fee Letter are not inconsistent with the
provisions of this Agreement and the other Loan Documents but are cumulative
with respect thereto, such provisions of the Fee Letter shall survive the
execution and delivery of this Agreement.

      SECTION 8.10. Governing Law. This Agreement, the Notes and all other Loan
Documents shall be governed by, and construed in accordance with, the laws of
the State of New York.

      SECTION 8.11. Waiver of Jury Trial. The Borrower, each Guarantor, the
Agent and the Banks waive all rights to trial by jury on any cause of action
directly or indirectly involving the terms, covenants or conditions of this
Agreement or any Loan Document.

      SECTION 8.12. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                     - 75 -
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

CITIBANK, N.A., as Agent

By:
   -------------------------------
   Anthony V. Pantina
   Vice President

CITIBANK, N.A.

By:
   -------------------------------
   Anthony V. Pantina
   Vice President

ISRAEL DISCOUNT BANK OF NEW YORK

By:
   -------------------------------
   Name:
   Title:

By:
   -------------------------------
   Name:
   Title:

BANK LEUMI USA

By:
   -------------------------------
   Name:
   Title:

By:
   -------------------------------
   Name:
   Title:

GRISTEDE'S FOODS, INC.

By:
   -------------------------------
   John Catsimatidis
   Chief Executive Officer

CITY PRODUCE OPERATING CORP.

By:
   -------------------------------
   John Catsimatidis
   President

                                     - 76 -
<PAGE>

NAMDOR INC.

By:
   -------------------------------
   John Catsimatidis
   President

GRISTEDE'S FOODS NY, INC.

By:
   -------------------------------
   John Catsimatidis
   President

GRISTEDE'S DELIVERY SERVICE INC.

By:
   -------------------------------
   John Catsimatidis
   President

                                     - 77 -Form of Stockholders Agreement dated as of May 31, 2002

 Exhibit 4.3 
  
 EXECUTION COPY 
  

  
 FORM OF STOCKHOLDERS AGREEMENT

  
 Dated as of May 31, 2002 
  
 among 
  
 INTERNATIONAL SECURITIES EXCHANGE, INC. 
  
 and 
  
 THE OTHER PARTIES NAMED 
  
 ON THE SIGNATURE PAGES HERETO 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	Page

	 ARTICLE I   CERTAIN DEFINITIONS
	  	3
		
	 ARTICLE II  REPRESENTATIONS AND WARRANTIES
	  	5
			
	 Section 2.1.
	 	 Company Representations and Warranties.
	  	5
	 Section 2.2.
	 	 Stockholder Representations and Warranties.
	  	6
		
	 ARTICLE III  TRANSFERS OF CLASS A COMMON STOCK
	  	6
			
	 Section 3.1.
	 	 Restrictions on Transfers; Permitted Transferees.
	  	6
	 Section 3.2.
	 	 Legend on Certificates.
	  	8
			
	 Section 3.3.
	 	 Involuntary Transfers.
	  	8
		
	 ARTICLE IV  REGISTRATION RIGHTS
	  	9
			
	 Section 4.1.
	 	 Right to Include Registrable Securities
	  	9
	 Section 4.2.
	 	 Registration Procedures.
	  	10
	 Section 4.3.
	 	 Underwritten Offerings.
	  	13
	 Section 4.4.
	 	 Holdback Agreements.
	  	14
	 Section 4.5.
	 	 Form S-3 Registration
	  	14
	 Section 4.6.
	 	 Indemnification.
	  	15
	 Section 4.7.
	 	 Covenants Relating to Rule 144.
	  	18
		
	 ARTICLE V  MISCELLANEOUS
	  	18
			
	 Section 5.1.
	 	 Amendment; Termination.
	  	18
	 Section 5.2.
	 	 Notices.
	  	19
	 Section 5.3.
	 	 Binding Effect.
	  	19
	 Section 5.4.
	 	 Complete Agreement.
	  	19
	 Section 5.5.
	 	 Counterparts.
	  	19
	 Section 5.6.
	 	 Governing Law.
	  	19
	 Section 5.7.
	 	 Injunctive Relief.
	  	20
	 Section 5.9.
	 	 Recapitalization, etc.
	  	20

 STOCKHOLDERS AGREEMENT 
  
 This Stockholders Agreement (this “Agreement”), dated as of May 31, 2002, among International Securities
Exchange, Inc., a Delaware corporation (the “Company”), and the other parties named on the signature pages hereto (the “Stockholders”). 
  
 W I T N E S S E T H : 
  
 WHEREAS, the Stockholders hold shares of Class A Common Stock, par value $.01 per share, of the Company (all such shares now held or hereafter acquired by
the stockholders during the term of this Agreement, whether by purchase, dividend, distribution or other means of acquisition, the “Shares”); and 
  
 WHEREAS, the Stockholders and the Company desire to establish in this Stockholders Agreement certain terms and conditions
concerning the acquisition and disposition of securities of the Company; 
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows: 
  
 ARTICLE I 
  
 CERTAIN DEFINITIONS 
  
 The following terms shall have the definitions set forth below: 

 
 “Affiliate” has the meaning set forth in Rule 12b-2
promulgated under the Exchange Act. 
  
 “Business
Day” means any day (other than a day which is a Saturday, Sunday or legal holiday in the State of New York) on which banks are open for business in New York. 
  
 “Commission” means the United States Securities and Exchange Commission, or any successor governmental
agency or authority. 
  
 “Covered Registration”
has the meaning set forth in Section 4.6. 
  
 “Cutback Registration” means any Piggyback Registration to be effected as an underwritten Public Offering in which the Managing Underwriter with respect thereto advises the Company and the Requesting Stockholders in writing
that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering without a reduction in the
selling price anticipated to be received for the securities to be sold in such Public Offering. 

 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder. 
  
 “Form
S-3” has the meaning set forth in Section 4.5. 
  
 “Form S-3 Registration” has the meaning set forth in Section 4.5. 
  
 “Indemnified Party” means a party entitled to indemnity in accordance with Section 4.6. 
  
 “Indemnifying Party” means a party obligated to provide
indemnification in accordance with Section 4.6. 
  
 “Losses” has the meaning set forth in Section 4.6. 
  
 “Managing Underwriter” means, with respect to any Public Offering, the lead managing underwriter for such Public Offering. 
  
 “Notice of Piggyback Registration” has the meaning set forth in Section 4.1. 
  
 “Permitted Transferees” has the meaning set forth in
Section 3.1(d). 
  
 “Person” means any
natural person, corporation, general partnership, limited partnership, limited liability company, proprietorship, other business organization, trust, union or association. 
  
 “Piggyback Registration” means any registration of equity securities of the Company under the Securities
Act (other than a registration in respect of a dividend reinvestment or similar plan or on Form S-4 or Form S-8 promulgated by the Commission, or any successor or similar forms thereto), whether for sale for the account of the Company or for the
account of any holder of securities of the Company. 
  
 “Public Offering” means any offering of Shares to the public, either on behalf of the Company or any of its securityholders, pursuant to an effective registration statement under the Securities Act. 
  
 “Registrable Securities” means the Shares and any shares of
common stock of the Company issued in exchange or replacement for the Shares, provided that Shares shall cease to be Registrable Securities when (x) a registration statement with respect to the sale of such Shares shall have become effective
under the Securities Act and such Shares shall have been disposed of in accordance with such registration statement or (y) such Shares shall have been distributed to the public pursuant to Rule 144. 
  
 “Registration Expenses” means all fees and expenses
incidental to the Company’s performance of or compliance with its obligations under this Agreement to effect the registration of Registrable Securities in a Piggyback Registration, including, without limitation, all registration, filing and
securities exchange listing fees, filing, qualification and other fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and 

 printing expenses, messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance, the reasonable fees and disbursements of a single counsel retained by the
Stockholders, premiums and other costs of policies of insurance against liabilities arising out of the Public Offering of Registrable Securities purchased at the option of the Company and any fees and disbursements of underwriters customarily paid
by issuers or sellers of securities, but excluding underwriting discounts and commissions and transfer taxes, if any, in respect of Registrable Securities, which shall be payable by the Stockholders. 
  
 “Request for Registration” means a written request by a
Stockholder to the Company for registration of Registrable Securities in response to a Notice of Piggyback Registration, which request shall specify the Registrable Securities intended to be disposed of and the intended method of disposition
thereof. 
  
 “Requesting Stockholders” mean, with
respect to any registration, the Stockholders requesting to have Registrable Securities included in a registration. 
  
 “Rule 144” means Rule 144 promulgated under the Securities Act, and any successor provision thereto. 
  
 “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder. 
  
 “Shares” has the meaning set forth in the first preamble of this Agreement. 
  
 “Stockholders” means each of the individuals named in the signature pages hereto and their respective Permitted Transferees that hold
Shares at the time of application of a provision of this Agreement to Stockholders. 
  
 “Transferee” has the meaning set forth in Section 3.1(b). 
  
 ARTICLE II 
  
 REPRESENTATIONS AND WARRANTIES 
  
 Section 2.1.
Company Representations and Warranties. The Company hereby represents and warrants to the Stockholders as follows: 
  
 (a) Organization. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to carry on its business as now conducted. 
  
 (b) Due Authorization. The Company has full corporate power and authority to execute this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate proceedings on the part 

 of the Company. This Agreement is a valid and legally binding agreement of the Company, enforceable against the Company
in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally and, as to enforceability, general equitable principles. 
  
 Section 2.2. Stockholder Representations and Warranties. Each
Stockholder hereby severally (and not jointly) represents and warrants to the Company and the other Stockholders with respect to itself as follows: 
  
 (a) Organization. If such Stockholder is a corporation or other entity, it is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization. 
  
 (b) Due
Authorization. Each Stockholder (i) that is an individual has full power, authority and capacity and (ii) that is a corporation or other entity has full corporate or other power and authority, to execute this Agreement and to consummate the
transactions contemplated hereby. In the case of each Stockholder that is (x) an individual, this Agreement is duly and validly executed and delivered by such individual, and in the case of each Stockholder that is (y) a corporation or other entity,
the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all requisite corporate or other proceedings on its part. This Agreement is a valid and legally binding agreement
of such Stockholder, enforceable against such Stockholder in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights generally and, as to enforceability,
general equitable principles. 
  
 ARTICLE III 
  
 TRANSFERS OF CLASS A COMMON STOCK 
  
 Section 3.1. Restrictions on Transfers; Permitted Transferees. (a)
Each Stockholder hereby agrees that such Stockholder will not, directly or indirectly, offer, sell, assign, pledge, encumber or otherwise transfer any Shares or solicit any offers to purchase or otherwise acquire or make a pledge of any Shares
unless such offer, sale, assignment, pledge, encumbrance or other transfer (i) is approved by the Board of Directors of the Company, which approval shall not be unreasonably withheld (it being understood, however, that without limiting the
generality of the foregoing, such approval shall be withheld if the transfer in question could affect the applicability of Section 351(a) of the Internal Revenue Code, as amended) to the transactions resulting in the initial issuance of Shares by
the Company, (ii) either is not subject to or complies with the requirements of this Agreement or (iii) either is made pursuant to an effective registration statement under the Securities Act and has been registered under all applicable state
securities or “blue sky” laws or is not required to be so registered because of the availability of an exemption from registration under the Securities Act and all applicable state securities or “blue sky” laws; provided,
that the availability of such an exemption shall, if reasonably requested by the Company, be confirmed by an opinion of counsel, which opinion of counsel shall be reasonably satisfactory to the Company. 

 (b) Except in the case of a sale of Shares pursuant to an effective registration statement under the
Securities Act or a sale of Shares pursuant to a transaction complying with Rule 144, no Stockholder shall sell, assign, pledge, encumber or otherwise transfer any Shares to any Person (regardless of the manner in which such Stockholder initially
acquired such Shares) nor shall the Company register the transfer of any Shares to any Person (all Persons acquiring Shares from a Stockholder, regardless of the method of transfer, shall be referred to as “Transferees”) unless (i)
the certificates representing such Shares bear legends as provided in Section 3.2 hereof and (ii) such Transferee shall have executed and delivered to the Company, as a condition precedent to any acquisition of Shares, an instrument in form
and substance satisfactory to the Company confirming that such Transferee takes such Shares subject to all the terms and conditions of this Agreement applicable to the transferor of such Shares, and agrees to be bound by the terms of this Agreement.
The Company shall not register the transfer of any Shares to any Person except in accordance with this Agreement. 
  
 (c) Except as specifically contemplated hereby, no Stockholder shall grant any proxy or enter into or agree to be bound by any voting trust with respect
to any Shares nor shall any Stockholder enter into any stockholder agreements or arrangements of any kind with any Person with respect to any Shares inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements
are with other Stockholders or holders of Shares who are not parties to this Agreement), including but not limited to, agreements or arrangements with respect to the acquisition, disposition or voting of Shares in any manner which is inconsistent
with the provisions of this Agreement, nor shall any Stockholder act, for any reason, as a member of a group or in concert with any other Persons (other than Permitted Transferees) in connection with the acquisition, disposition or voting of Shares
in any manner which is inconsistent with the provisions of this Agreement. 
  
 (d) Beginning with the date that is six (6) months from the date of this Agreement (unless the approval of the Board of Directors of the Company is obtained prior to such date), none of the restrictions contained in
this Agreement with respect to transfers of Shares shall apply: (i) to any transfer by any Stockholder to any spouse, child, parent, sibling or grandchild of such Stockholder, or by any of such relatives to such Stockholder or to any one or more of
such relatives, or by any Stockholder or any such relatives to a trust, corporation, partnership, limited liability company or limited liability partnership, all of the beneficial interests in which shall be held by such Stockholder or one or more
of such relatives; (ii) to any transfer to a legal representative of any Stockholder in the event such Stockholder becomes mentally incompetent; (iii) to any transfer by will or the laws of descent; or (iv) to any transfer by any Stockholder to an
Affiliate of such Stockholder; provided that, in the case of each transfer qualifying under one of clauses (i) through (iv) above, each Transferee (including executors and administrators of a Stockholder, a “Permitted
Transferee”) agrees to take the Shares transferred to it subject to and to comply with the provisions of this Agreement. For the purposes hereof, the Permitted Transferees of a Stockholder shall include the Permitted Transferees of such
Stockholder’s Permitted Transferees. 

 Section 3.2. Legend on Certificates. Each outstanding certificate representing Shares that are
subject to this Agreement (if certificates are issued for Shares) shall bear a legend reading substantially as follows: 
  
 THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE
“ACT”), AND IN RELIANCE UPON THE HOLDER’S REPRESENTATION THAT SUCH SHARES WERE BEING ACQUIRED FOR INVESTMENT AND NOT FOR RESALE. NO TRANSFER OF SUCH SHARES MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS SUCH TRANSFER MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE ACT (AS CONFIRMED, IF REASONABLY REQUESTED BY THE COMPANY, BY AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY) OR SUCH SHARES HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT AT
THE TIME OF SUCH TRANSFER. 
  
 THE SALE, ASSIGNMENT, PLEDGE,
ENCUMBRANCE OR OTHER TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE PROVISIONS OF AN AGREEMENT, DATED AS OF MAY 31, 2002, AMONG THE COMPANY AND THE OTHER PARTIES NAMED IN THE SIGNATURE PAGES THERETO, A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE COMPANY. 
  
 The
restrictions referred to in the first paragraph of the foregoing legend shall cease and terminate as to any particular Share when such Share shall have been effectively registered under the Securities Act and applicable state securities laws and
sold by the holder thereof in accordance with such registration or sold under and pursuant to Rule 144 or is eligible to be sold under and pursuant to paragraph (k) of Rule 144. The restrictions referred to in second paragraph of the foregoing
legend shall cease and terminate as to any particular Share when the provisions of this Agreement are no longer applicable to such Share or this Agreement shall have terminated in accordance with its terms. Whenever such restrictions shall cease and
terminate as to any Shares, the holder thereof shall be entitled to receive from the Company, without expense (other than applicable transfer taxes, if any), new certificates representing such Shares of like tenor not bearing the legend set forth in
the applicable paragraph set forth above; provided that, with respect to the first paragraph of the foregoing legend, the Company may reasonably request an opinion of counsel reasonably satisfactory to it to the effect that no such legend is
required under the Securities Act and applicable state securities or “blue sky” laws. 
  
 Section 3.3. Involuntary Transfers. If a Stockholder involuntarily transfers (other than by operation of law) directly or indirectly any or all of
its Shares for any reason in violation of this Agreement and such transfer is not to a Permitted Transferee, such transfer will be null and void ab initio and of no force and effect. Notwithstanding anything to the contrary herein, if
a transferee receives Shares by operation of law and such transferee is not reasonably satisfactory to the board of directors of the Company, the transferor shall arrange for a transfer of such Shares to a transferee reasonably satisfactory to the
Company. 

 ARTICLE IV 
  
 REGISTRATION RIGHTS 
  
 Section 4.1. Right to Include Registrable Securities. (a) If at any time following an initial Public Offering of the Company’s securities, the
Company proposes to effect a Piggyback Registration, it will give prompt written notice (a “Notice of Piggyback Registration”) to the Stockholders of its intention to do so and of such Stockholders’ rights under this Article IV
to participate in such Piggyback Registration, which Notice of Piggyback Registration shall include a description of the intended method of disposition of such securities. If any such Stockholder delivers a Request for Registration to the Company
within 15 days after such Stockholder receives a Notice of Piggyback Registration, the Company will use its best efforts to include in the registration statement relating to such Piggyback Registration all Registrable Securities which the Company
has been so requested to register. Notwithstanding the foregoing, if, at any time after giving a Notice of Piggyback Registration and prior to the effective date of the registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such securities, the Company may, at its election, give written notice of such determination to each Stockholder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from its obligation to pay the Registration Expenses in connection therewith) and (ii) in the case of a determination
to delay registration, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. 
  

(b) Registration Expenses. The Company will pay all Registration Expenses incurred in connection with each Piggyback Registration. 

 
 (c) Priority in Cutback Registrations. (i) If a Piggyback
Registration becomes a Cutback Registration and such registration as initially proposed by the Company was solely a primary registration of its securities, the Company will include in such registration to the extent of the amount of the securities
which the Managing Underwriter advises the Company can be sold in such offering without a reduction in the selling price anticipated to be received for the securities to be sold in such Public Offering: (A) first, any securities proposed by
the Company to be sold for its own account, (B) second, the Registrable Securities included in the Requests for Registration of Requesting Stockholders, pro rata in proportion to the respective numbers of securities included in
such requests and (C) third, any other shares of common stock of the Company. Any securities excluded shall be withdrawn from and shall not be included in such Piggyback Registration. 
  
 (ii) If a Piggyback Registration becomes a Cutback Registration and such
registration as initially proposed by the Company was in whole or in part requested by holders of securities of the Company, pursuant to demand registration rights, the Company will include in such registration to the extent of the amount of the
securities which the Managing Underwriter advises the Company can be sold in such offering without a reduction in the selling price 

 anticipated to be received for the securities to be sold in such Public Offering, (A) first, such securities held
by the holders initiating such registration and, if applicable, any securities proposed by the Company to be sold for its own account, allocated in accordance with the priorities then existing among the Company and such holders, and (B)
second, any Registrable Securities requested to be included in the Requests for Registration of Requesting Stockholders, pro rata in proportion to the respective numbers of securities included in such requests and (C)
third, any other shares of common stock of the Company. Any securities excluded shall be withdrawn from and shall not be included in such Piggyback Registration. 
  
 Section 4.2. Registration Procedures. If and whenever the Company is required to use its best efforts to effect the
registration of any Registrable Securities under the Securities Act pursuant to Section 4.1 hereof, the Company will use its best efforts to effect the registration and sale of such Registrable Securities in accordance with the intended methods of
disposition thereof specified by the Stockholders participating therein. Without limiting the foregoing (and subject to its rights under Section 4.1 hereof not to register or to delay registration of Registrable Securities), the Company in each such
case will, as expeditiously as possible: 
  
 (a)
prepare and file with the Commission the requisite registration statement to effect such registration (including such audited financial statements as may be required by the Securities Act or the rules and regulations promulgated thereunder) and use
its best efforts to cause such registration statement to become effective within 120 days of the initial filing thereof; provided, that as far in advance as practicable before filing such registration statement or any amendment thereto, the
Company will furnish to counsel for the Requesting Stockholders copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits), and any such Stockholder shall have the opportunity to object to any information
pertaining solely to such Stockholder that is contained therein, and the Company will make the corrections reasonably requested by such Stockholder with respect to such information prior to filing any such registration statement or amendment;

  
 (b) prepare and file with the Commission such
amendments and supplements to such registration statement and any prospectus used in connection therewith as may be necessary to maintain the effectiveness of such registration statement and to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities included in such registration statement, in accordance with the intended methods of disposition thereof, until the earlier of (i) such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement and (ii) 180 days after such registration statement becomes effective; 
  
 (c) promptly notify each Requesting Stockholder and the
underwriter or underwriters, if any: 
  
 (i) when
such registration statement or any prospectus used in connection therewith, or any amendment or supplement thereto, has been filed and, with respect to such registration statement or any post-effective amendment thereto, when the same has become
effective; 

 (ii) of any written request by the Commission for amendments or supplements to such
registration statement or prospectus; 
  
 (iii)
of the notification to the Company by the Commission of its initiation of any proceeding with respect to the issuance by the Commission of, or of the issuance by the Commission of, any stop order suspending the effectiveness of such registration
statement; and 
  
 (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction; 
  
 (d) furnish to each holder of Registrable Securities
included in such registration statement such number of conformed copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits and documents incorporated by reference), such number of copies
of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 promulgated under the Securities Act relating to such holder’s
Registrable Securities, and such other documents, as such holder may reasonably request to facilitate the disposition of its Registrable Securities; 
  
 (e) use its best efforts to register or qualify all Registrable Securities included in such registration statement under such other
securities or blue sky laws of such jurisdictions as each holder thereof shall reasonably request and to keep such registration or qualification in effect for so long as such registration statement remains in effect, and take any other action which
may be reasonably necessary or advisable to enable such holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such holder, except that the Company shall not for any such purpose be required (i) to qualify
generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this paragraph (e) be obligated to be so qualified, (ii) to subject itself to taxation in any such jurisdiction or (iii) to
consent to general service of process in any jurisdiction; 
  
 (f) use its best efforts to cause all Registrable Securities included in such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable
each holder thereof to consummate the disposition of such Registrable Securities; 
  
 (g) to the extent any of the following are obtained by or furnished to the Company or the underwriters, furnish to each Requesting
Stockholder a signed counterpart, addressed to such Requesting Stockholder (and the underwriters, if any), of 
  
 (i) an opinion of counsel for the Company, dated the effective date of such registration statement (or, if such registration includes an
underwritten Public Offering, dated the date of any closing under the underwriting agreement), reasonably satisfactory in form and substance to such Stockholder and its counsel, and 

 (ii) a “comfort” letter, dated the effective date of such registration
statement (and, if such registration includes an underwritten Public Offering, dated the date of any closing under the underwriting agreement), signed by the independent public accountants who have certified the Company’s financial statements
included in such registration statement, 
  
 in each case
covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of the accountants’ letter, with respect to events subsequent to the date of such financial statements,
as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in underwritten Public Offerings of securities and, in the case of the accountants’ letter, such other financial
matters as such Stockholder (or the underwriters, if any) may reasonably request; 
  
 (h) notify each Stockholder whose Registrable Securities are included in such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which any prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and at the request of any such Stockholder promptly prepare and furnish to such
Stockholder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; 
  
 (i) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission,
and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than 18 months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder; 
  
 (j) make available for inspection by any Requesting Stockholder, any underwriter participating in any
distribution pursuant to such registration statement, and any attorney, accountant or other agent retained by such Stockholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company reasonably
necessary to enable such Persons to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement; 

 (k) provide a transfer agent and registrar for all Registrable Securities included in
such registration statement not later than the effective date of such registration statement; and 
  
 (l) use its best efforts to cause all Registrable Securities included in such registration statement to be listed, upon official notice of
issuance, on any securities exchange on which any of the securities of the same class as the Registrable Securities are then listed. 
  
 The Company may require each Stockholder whose Registrable Securities are being registered to, and each such Stockholder, as a condition to including
Registrable Securities in such registration, shall, furnish the Company and the underwriters with such information and affidavits regarding such Stockholder and the distribution of such securities as the Company and the underwriters may from time to
time reasonably request in writing in connection with such registration. 
  
 Upon receipt of any notice from the Company of the happening of any event of the kind described in paragraph (h) of this Section 4.2, each Stockholder will forthwith discontinue such Stockholder’s disposition of
Registrable Securities pursuant to the registration statement relating to such Registrable Securities until such Stockholder receives the copies of the supplemented or amended prospectus contemplated by paragraph (h) of this Section 4.2 and, if so
directed by the Company, shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Stockholder’s possession of the prospectus relating to such Registrable Securities current at the
time of receipt of such notice. In the event the Company shall give any such notice, the period referred to in paragraph (b)(ii) of this Section 4.2 shall be extended by a number of days equal to the number of days during the period from and
including the giving of notice pursuant to paragraph (h) of this Section 4.2 and to and including the date when each Stockholder whose Registrable Securities are included in such registration statement receives the copies of the supplemented or
amended prospectus contemplated by paragraph (h) of this Section 4.2. 
  
 Section 4.3. Underwritten Offerings. If the Company at any time proposes to register any of its securities in a Piggyback Registration and such securities are to be distributed by or through one or more underwriters, the Company
will, subject to the provisions of Section 4.1(c), use its best efforts, if requested by any Stockholder whose Registrable Securities are included in such registration, to arrange for such underwriters to include the Registrable Securities to be
offered and sold by such Stockholder among the securities to be distributed by such underwriters, and such Stockholders shall be obligated to sell their Registrable Securities in such Piggyback Registration through such underwriters on the same
terms and conditions as apply to the other Company securities to be sold by such underwriters in connection with such Piggyback Registration. The Stockholders whose Registrable Securities are to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriter or underwriters if requested by the Managing Underwriter. No Requesting Stockholder may participate in such underwritten offering unless such Stockholder agrees, if requested by
the Managing Underwriter, to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms
of such underwriting 

 agreement. If any Requesting Stockholder disapproves of the terms of an underwriting, such Stockholder may elect to
withdraw therefrom and from such registration by notice to the Company and the Managing Underwriter, and each of the remaining Requesting Stockholders shall be entitled to increase the number of Registrable Securities being registered to the extent
of the Registrable Securities so withdrawn (i) in the case of a Cutback Registration, in accordance with the priorities set forth in Section 4.1(c) and (ii) in all other cases in the proportion which the number of Registrable Securities being
registered by such remaining Requesting Stockholder bears to the total number of Registrable Securities being registered by all such remaining Requesting Stockholders. 
  
 Section 4.4. Holdback Agreements. Unless the Managing Underwriter (or, in the case of a non-underwritten Public
Offering, the Company) otherwise agrees, no Stockholder shall effect any public sale or distribution (including a sale under Rule 144) of any Registrable Securities, or any securities convertible into or exchangeable or exercisable for Registrable
Securities, during the period beginning on the third business day prior to and ending on the 180th day after the
effective date of any registration statement filed by the Company in connection with an initial Public Offering (or for such shorter period of time as is sufficient and appropriate, in the opinion of the Managing Underwriter (or, in the case of a
non-underwritten initial Public Offering, the Company), in order to complete the sale and distribution of the securities included in such registration), except as part of such registration statement, whether or not such Stockholder participates in
such registration. 
  
 Section 4.5. Form S-3 Registration.
In case the Company shall receive from any Stockholder or Stockholders a written request or requests that the Company effect a registration (a “Form S-3 Registration”) on Form S-3 or any successor or similar form promulgated under
the Securities Act (“Form S-3”) and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Stockholder or Stockholders, the Company shall: 
  
 (a) promptly give written notice of the proposed Form S-3
Registration and any related qualification or compliance to all other Stockholders; and 
  
 (b) as soon as practicable effect such Form S-3 Registration and all such qualifications and compliances as may be so requested and as
would permit or facilitate the sale and distribution of all or such portion of such Stockholder’s or Stockholders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of
any other Stockholder or Stockholders joining in such request as are specified in a written request given within twenty (20) days after receipt of such written notice from the Company; provided, however, that, the Company shall not be
obligated to effect any such Form S-3 Registration, qualification or compliance, (i) if Form S-3 is not then available for such offering by Stockholders; (ii) if the Stockholders, together with the holders of any other securities of the Company
entitled to inclusion in such Form S-3 Registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or commissions) of less than $20 million;
(iii) if the Company shall furnish to the Stockholders a certificate signed by the president of the Company stating that in the good faith judgment of the Board of Directors of the Company it would be seriously 

 detrimental to the Company and its shareholders for such Form S-3 Registration, qualification and
compliance to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after receipt of the request of the Stockholder or
Stockholders under this Section 4.5; provided, however, that the Company shall not utilize the foregoing right more than once in any twelve (12) month period; or (iv) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of process in effecting such Form S-3 Registration, qualification or compliance. 
  

The Company shall bear all expenses incurred in connection with any Form S-3 Registration with respect to up to two (2) such registrations per
calendar year, including (without limitation) all registration, filing, qualification, printer’s and accounting fees and the reasonable fees and disbursements of counsel for the selling Stockholder or Stockholders. With respect to any
additional Form S-3 Registrations requested pursuant to this Section 4.5, all expenses incurred in connection therewith, including (without limitation) all registration, filing, qualification, printers and accounting fees and the reasonable fees and
disbursements of counsel for the selling Stockholder or Stockholders shall be borne by the holders of such securities pro rata on the basis of the number of shares so registered. 
  
 Section 4.6. Indemnification. 
  
 (a) Indemnification by the Company. The Company shall, to the full extent permitted by law, indemnify and hold
harmless each seller of Registrable Securities included in any registration statement filed in connection with a Piggyback Registration or a Form S-3 Registration (each a “Covered Registration”), its directors, officers, and
partners, and each other Person, if any, who controls any such seller within the meaning of the Securities Act, against any losses, claims, damages, expenses or liabilities, joint or several (together, “Losses”), to which such
seller or any such director, officer, partner or controlling Person may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact contained in any such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not
misleading, and the Company will reimburse such seller and each such director, officer, partner and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Loss (or
action or proceeding in respect thereof); provided, that the Company shall not be liable in any such case to the extent that any such Loss (or action or proceeding in respect thereof) arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in any such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information
furnished to the Company by such seller specifically stating that it is for use in the preparation thereof, or (ii) such seller’s failure to send or give a copy of the final prospectus to the Persons asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written confirmation of the 

 sale of Registrable Securities to such Person if such statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such director, officer, partner or controlling Person, and shall survive the transfer of such securities by such seller. The
Company shall also indemnify each other Person who participates (including as an underwriter) in the offering or sale of Registrable Securities, their officers and directors, and partners, and each other Person, if any, who controls any such
participating Person within the meaning of the Securities Act to the same extent as provided above with respect to sellers of Registrable Securities. 
  
 (b) Indemnification by the Stockholders. Each Stockholder whose Registrable Securities are included in any registration statement filed in
connection with a Covered Registration, as a condition to including Registrable Securities in such registration statement, shall, to the full extent permitted by law, severally and not jointly, indemnify and hold harmless the Company, its directors
and officers, and each other Person, if any, who controls the Company within the meaning of the Securities Act, against any Losses to which the Company or any such director or officer or controlling Person may become subject under the Securities Act
or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement of any material fact contained in any such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in
the case of a prospectus, in the light of the circumstances under which they were made) not misleading, if such untrue statement or omission was made in reliance upon and in conformity with written information furnished to the Company by such
Stockholder specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided that the obligation of such Stockholder to
provide indemnification pursuant to this Section 4.6 shall be limited in amount to the net proceeds received by such Stockholder from the sale of Registrable Securities pursuant to such Covered Registration. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such Stockholder. 
  
 (c) Notices of Claims, etc. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action or proceeding involving a claim referred to in the preceding paragraph (a) or (b) of this Section 4.6, such Indemnified Party shall, if a claim in respect thereof is to be made against an
Indemnifying Party pursuant to such paragraphs, give written notice to the latter of the commencement of such action; provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying
Party of its obligations under the preceding paragraphs of this Section 4.6, except to the extent that the Indemnifying Party is actually prejudiced by such failure to give notice. In case any such action is brought against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in and, unless, in the reasonable judgment of any Indemnified Party, a conflict of interest between such Indemnified Party and any Indemnifying Party exists with respect to such claim, to assume
the defense thereof, jointly with any other Indemnifying Party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such Indemnified Party, and after notice 

 from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation; provided that the Indemnified Party
may participate in such defense at the Indemnified Party’s expense; and provided further, that the Indemnified Party or Indemnified Parties shall have the right to employ one counsel to represent it or them if, in the reasonable
judgment of the Indemnified Party or Indemnified Parties, it is advisable for it or them to be represented by separate counsel by reason of having legal defenses which are different from or in addition to those available to the Indemnifying Party,
and in that event the reasonable fees and expenses of such one counsel shall be paid by the Indemnifying Party. If the Indemnifying Party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees
and expenses of more than one counsel for the Indemnified Parties with respect to such claim, unless in the reasonable judgment of any Indemnified Party a conflict of interest may exist between such Indemnified Party and any other Indemnified
Parties with respect to such claim, in which event the Indemnifying Party shall be obligated to pay the fees and expenses of such additional counsel for the Indemnified Parties or counsels. No Indemnifying Party shall consent to entry of any
judgment or enter into any settlement without the consent of the Indemnified Party which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. No Indemnifying Party shall be subject to any liability for any settlement made without its consent, which consent shall not be unreasonably withheld. 
  
 (d) Contribution. If the indemnity and reimbursement obligation provided for in any paragraph of this Section 4.6 is
unavailable or insufficient to hold harmless an Indemnified Party in respect of any Losses (or actions or proceedings in respect thereof) referred to therein, then the Indemnifying Party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and the Indemnified Party on the other hand in
connection with statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided, that the aggregate contribution of a Stockholder whose Registrable Securities are included in a Covered
Registration shall be limited to the net proceeds received by such Stockholder from the sale of such Registrable Securities. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or the Indemnified Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this paragraph. The amount paid by an Indemnified Party as a result of the Losses referred to in the first sentence of this
paragraph shall be deemed to include any legal and other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any Loss which is the subject of this paragraph. 

 No Indemnified Party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from the Indemnifying Party if the Indemnifying Party was not guilty of such fraudulent misrepresentation. 
  
 (e) Other Indemnification. Indemnification similar to that specified in the preceding paragraphs of this Section 4.6 (with appropriate
modifications) shall be given by the Company and each seller of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation of any governmental authority other
than the Securities Act. The provisions of this Section 4.6 shall be in addition to any other rights to indemnification or contribution which an Indemnified Party may have pursuant to law, equity, contract or otherwise. 
  
 (f) Indemnification Payments. The indemnification required by this
Section 4.6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Losses are incurred. 
  
 Section 4.7. Covenants Relating to Rule 144. If at any time after an initial Public Offering the Company is required
to file reports in compliance with either Section 13 or Section 15(d) of the Exchange Act, the Company will (a) file reports in compliance with the Exchange Act, (b) comply with all rules and regulations of the Commission applicable in connection
with the use of Rule 144 under the Securities Act and take such other actions and furnish each Stockholder with such other information as such Stockholder may request in order to avail itself of such rule or any other rule or regulation of the
Commission allowing such Stockholder to sell any Registrable Securities without registration, and (c) at the Company’s expense, forthwith upon the request of any Stockholder, deliver to such Stockholder a certificate, signed by the
Company’s principal financial officer, stating (i) the Company’s name, address and telephone number (including area code), (ii) the Company’s Internal Revenue Service identification number, (iii) the Company’s Commission file
number, (iv) the number of shares of each class of stock outstanding as shown by the most recent report or statement published by the Company, and (v) whether the Company has complied with the conditions specified in Rule 144(c)(1) under the
Securities Act. If at any time the Company is not required to file reports in compliance with either Section 13 or Section 15(d) of the Exchange Act, the Company at its expense will, forthwith upon the written request of the Stockholder of any
Registrable Securities, make available adequate current public information with respect to the Company within the meaning of paragraph (c)(2) of Rule 144. 
  
 ARTICLE V 
  
 MISCELLANEOUS 
  
 Section 5.1. Amendment; Termination. This Agreement shall not be modified or amended except by a writing duly executed by or on behalf of the Company and the Stockholders holding two-thirds of the Shares then held by all
Stockholders. This Agreement shall terminate upon (i) the mutual written agreement of the Company and the Stockholders holding two-thirds of the Shares then held by Stockholders, (ii) as to a particular Stockholder the date on which such Stockholder
and its Affiliates do not beneficially own any Class A Common Stock, (iii) the date of consummation of any consolidation of the Company with or merger of the 

 Company into any other corporation or merger of any other corporation into the Company if, immediately thereafter, the
Stockholders and their Affiliates hold, in the aggregate, capital stock representing less than a majority of the voting power of such corporation or (iv) the date that is two (2) years following an initial Public Offering, if not earlier terminated
hereunder. 
  
 Section 5.2. Notices. All notices to be
given by any party hereunder shall be in writing and shall be deemed to have been duly given if mailed, by first class or registered mail, five (5) Business Days after mailing by first class mail or if telecopied or delivered by hand or reputable
overnight courier, when confirmation is received, in each case as follows: (i) in the case of any Stockholder, to such Stockholder at its address set forth in the stock ledger of the Company and (ii) in the case of the Company, to: 
  
 International Securities Exchange, Inc. 
 60 Broad Street 
 New York, New York 
 Attn: Michael Simon, Esq. 
  
 The parties may change their respective addresses for purposes of notice hereunder by giving notice of such change to all other parties in
the manner provided in this Section 5.2. 
  
 Section 5.3.
Binding Effect. This Agreement supersedes all prior negotiations, statements and agreements of the parties hereto with respect to the subject matter of this Agreement, and shall be binding upon and inure to the benefit of the respective
successors and assigns of the parties hereto. If any Transferee of any Stockholder shall acquire any Shares in any manner, whether by operation of law or otherwise, such Shares shall be held subject to all of the terms of this Agreement, and by
taking and holding such Shares such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, provided, that Shares which have been distributed in a registered Public
Offering or sold under Rule 144 to Persons other than Stockholders shall no longer be subject to this Agreement. 
  
 Section 5.4. Complete Agreement. This Agreement represents the entire agreement among the Stockholders and the Company with respect to the matters
set forth herein, and the parties hereto acknowledge that there have been no representations, warranties, covenants or agreements made by any party hereto other than those contained in this Agreement. It is recognized that certain Stockholders have
entered into a Subscription Agreement with the Company, which remains in full force and effect. 
  
 Section 5.5. Counterparts. This Agreement may be executed in counterparts, each of which shall be executed by or on behalf of the Company and one
or more Stockholders and all of which shall be deemed to be one and the same agreement. 
  
 Section 5.6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. By execution and delivery of this Agreement, each of the Stockholders accepts,
generally and unconditionally, the nonexclusive jurisdiction of the state or federal courts in New York. 

 Section 5.7. Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to
measure in money the damages that would be suffered if the parties to this Agreement fail to comply with any of the obligations imposed on them by this Agreement and that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the
provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 
  
 Section 5.8. Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations
of the parties hereunder shall be enforceable to the fullest extent permitted by law. 
  
 Section 5.9. Recapitalization, etc. In the event that any capital stock or other securities are issued in respect of, in exchange for, or in substitution of, any Shares by reason of any reorganization,
recapitalization, reclassification, merger, consolidation, spin-off, partial or complete liquidation, stock dividend, split-up, sale of assets, distribution to Stockholders or combination of the Shares or any other change in the Company’s
capital structure, appropriate adjustments shall be made to the provisions of this Agreement so as to fairly and equitably preserve, as far as practicable, the original rights and obligations of the parties hereto under this Agreement. 

 IN WITNESS WHEREOF, the undersigned, thereunto duly authorized, have hereunto set their respective hands
as of the day and year first above written. 
  

			
	 THE COMPANY:

	
	 INTERNATIONAL SECURITIES EXCHANGE, INC.

		
	 By:
	 	 /s/ MICHAEL SIMON

	 	 	       Secretary

	
	 [NAME OF STOCKHOLDER]

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

 Schedule of Signatories to Stockholders Agreement, dated May 31, 2002 
  

			
	 Stockholder, as on
Ledger
  
	 	 Executing Signatory
  

	 Krell, David
  
	 	 David
Krell
  

	 Bear, Stearns & Co. Inc.
  
	 	 Richard R. Lindsey
  

	 Bear Wagner Specialists LLC
  
	 	 Michael L. Winchell
  

	 The Goldman Sachs Group, Inc.
  
	 	 Scott
Prince
  

	 Strategic Investments I. Inc.
  
	 	 R.
Sheldon Johnson
  

	 Deutsche Bank Securities Inc.
  
	 	 Alan
Capilupi
  

	 DB US Financial Markets Holding Corporation
  
	 	 Thomas A. Curtis, Stuart Clarke
  

	 J.P. Morgan Securities Inc.
  
	 	 J. C.
Pinilla
  

	 Katz, Gary
  
	 	 Gary
Katz
  

	 Knight Financial Products LLC
  
	 	 Matthew D. Wayne
  

	 Scottrade, Inc.
  
	 	 Rodger Riney
  

	 SLK-Hull Derivatives LLC
  
	 	 Scott
Prince
  

	 Wolverine Trading, L.P.
  
	 	 James
V. Harkness
  

	 771 Venture
  
	 	 Maureen Browne
  

	 Colin Family Trust
  
	 	 Roberta Colin
  

	 Continental Capital Corporation
  
	 	 Stephen Herrick
  

	 Dahl, Kristin M.
  
	 	 Kristin Dahl
  

	 E*Trade Group, Inc.
  
	 	 Leonard C. Purkis
  

	 Idle Day Associates, L.P.
  
	 	 Linda
Azzara
  

	 Laris, Tom
  
	 	 Tom
Laris
  

	 Robert D. & Nancy D. Murie Inter Vivos
Trust dated August 16,
1993
  
	 	 Robert
D. Murie, Nancy D. Murie
  

			
	 Paugh,
Robert L. & Kaye P.
  
	 	 Kaye Paugh
  

	 Petty, Richard K. & Christine
S.
  
	 	 Christine Petty
  

	 Petty, Scott R. &
Stephenie
  
	 	 Scott Petty
  

	 Porter, Kelly R. &
Christina
  
	 	 Kelly Porter, Christina Porter
  

	 Porter, Scott R.
  
	 	 Scott R. Porter
  

	 Porter 1997 Grandchildren’s
Trust
  
	 	 Susan Porter
  

	 Randall, Lewis E. & Martha E.
Randall Living Trust
  
	 	 Lewis E. Randall, Martha E. Randall
  

	 Geoffrey T. & Sarita A. Skidmore as
Trustees of the Skidmore Family Trust date 12/15/98
  
	 	 Geoffrey T. Skidmore, Sarita A. Skidmore
  

	 Skidmore, Edward A.
  
	 	 Edward A. Skidmore
  

	 Skidmore, Geoffrey T. Jr.
  
	 	 Geoffrey T. Skidmore
  

	 Yaley Revocable Trust dated
12/10/87
  
	 	 Thomas J. Yaley, Patricia J. Yaley
  

	 Ackerman, Kenneth J.
  
	 	 Kenneth J. Ackerman
  

	 Ameritrade Holding
Corporation
  
	 	 Kurt D. Halvorson
  

	 DAP & Co.
  
	 	 Andrew DaPonte
  

	 Happ, William & Roxann Revocable
Living Trust
  
	 	 William D. Happ, Roxanne Happ
  

	 Herzog, Heine & Geduld,
Inc.
  
	 	 Kenneth Bradley
  

	 Hull, M. Blair
  
	 	 M. Blair Hull
  

	 Lehman Brothers Inc.
  
	 	 Chris B. Kapsaroff
  

	 Leighton, John P.
  
	 	 John P. Leighton
  

	 Mercorella, Anthony J. & Maria
Mercorella
  
	 	 Anthony Mercorella, Maria Mercorella
  

	 Rainier Investments Inc.
  
	 	 Dag Enerskog, Joakim Roslund
  

			
	 Pasternack, Kenneth
	  	 Kenneth
Pasternack
  

	 Scottsdale Securities
Inc.
	  	 Rodger Riney
  

	 Semel,
Sandra
	  	 Sandra Semel
  

	 Trimark Investment
Inc.
	  	 Robert Lazarowitz
  

	 Zipper,
Bradley
	  	 Bradley Zipper
  

	 White, Thomas F.,
1991 Trust
	  	 Thomas F. White
  

	 Angle Family 2002
Trust
	  	 Robert T. Angle
  

	 Barber, Richard
W.
	  	 Richard W. Barber
  

	 Bolgatz,
Michael
	  	 Michael Bolgatz
  

	 Bear Stearns ATP
LLC
	  	 Marshall J. Levinson
  

	 Heckert, G.P. Family
Trust
	  	 Gerald P. Heckert, Claudette E. Heckert
  

	 Howe Barnes
Investments, Inc.
	  	 Ted Perkowski
  

	 Lewke,
William
	  	 William Lewke
  

	 PCG Inc. Profit
Sharing Plan
	  	 Philip Gevas
  

	 Adirondack Trading
Partners LLC
	  	 Bruce Ungar
  

	 Banc of America
Securities LLC
	  	 William C. Caccamise
  

	 Golden,
Andrew
	  	 Andrew Golden
  

	 Goodman,
Keith
	  	 Keith Goodman
  

	 Hayter,
George
	  	 George Hayter
  

	 Martel,
Christopher
	  	 Christopher Martel
  

	 Mercorella,
Robert
	  	 Robert Mercorella
  

	 Seltzer, Jeffrey
L.
	  	 Jeffrey L. Seltzer
  

	 Ungar, Bruce
B.
	  	 Bruce Ungar
  

	 Krell, David &
Barbara
	  	 Krell, David
  

			
	 Randall, Lewis E. & Martha E. Randall
  
	 	 Lewis E. Randall, Martha E. Randall
  

	 Haeckl Family Trust date 8/28/91
  
	 	 Fred
Haekl
  

	 Pensco Trust Co. Custodian
f/b/o James L.
D’Amico Roth IRA Account DI-062
  
	 	 James L. D’Amico

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