Document:

CONVERSION SERVICES INTERNATIONAL, INC.

                               2003 INCENTIVE PLAN

SECTION 1. ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

      1.1  ESTABLISHMENT.  The  Conversion  Services  International,  Inc.  2003
Incentive  Plan (the "PLAN") is hereby  established  effective as of December 1,
2003, by adoption of the Board, provided it is approved within 12 months of this
date  by  stockholders  of  the  Company.  Awards  may  be  granted  subject  to
stockholder approval, but may not be exercised or otherwise settled in the event
stockholder approval is not obtained.

      1.2  PURPOSE.  The purpose of the Plan is to advance the  interests of the
Participating Company Group and its stockholders by encouraging and facilitating
the  ownership  of  LCS  Group,  Inc.'s  ("COMPANY")  common  stock  by  persons
performing services for the Participating  Company Group in order to enhance the
ability of the Company to attract,  retain and reward such  persons and motivate
them to contribute to the growth and profitability of the Participating  Company
Group.

      1.3 TERM OF PLAN.  The Plan shall be effective from the date that the Plan
is adopted by the Board of Directors of the Company and shall continue in effect
thereafter  until the earlier of (a) its  termination  by the Board,  or (b) the
date on which all of the shares of Stock  available for issuance  under the Plan
have been issued and all restrictions on such shares under the terms of the Plan
and the agreements evidencing Options granted under the Plan have lapsed, or (c)
ten (10) years from its effective date. All Options shall be granted, if at all,
within ten (10)  years  from the  earlier of the date the Plan is adopted by the
Board or the date the Plan is duly approved by the stockholders of the Company.

SECTION 2. DEFINITIONS AND CONSTRUCTION.

      2.1  DEFINITIONS.  Whenever used herein,  the  following  terms shall have
their respective meanings set forth below:

      (a) "AWARD" means any award or grant of Restricted Shares or Options under
the Plan.

      (b) "BENEFICIARY" means the person,  persons, trust, or trusts entitled by
will or by the laws of  descent,  to  exercise a  Participant's  Option or other
rights under the Plan after the Participant's death.

      (c) "BOARD"  means the Board of Directors  of the Company.  If one or more
Committees  have been  appointed by the Board to administer  the Plan,  the term
"BOARD" also means such Committee(s).

      (d) A "CHANGE IN CONTROL" shall mean an Ownership Change Event or a series
of related Ownership Change Events (collectively,  a "TRANSACTION")  wherein the
stockholders of the Company,  immediately before the Transaction,  do not retain
immediately  after the  Transaction,  in  substantially  the same proportions as
their ownership of shares of the Company's voting stock  immediately  before the
Transaction,  direct or indirect beneficial ownership of more than fifty percent
(50%) of the total combined voting power of the outstanding voting securities of
the

<PAGE>

Company  or,  in the case of a  Transaction  involving  the  sale,  exchange  or
transfer of all or substantially all of the Company's assets, the corporation or
other business entity to which the assets of the Company were  transferred  (the
"TRANSFEREE"),  as the case may be.  For  purposes  of the  preceding  sentence,
indirect beneficial  ownership shall include,  without  limitation,  an interest
resulting from ownership of the voting securities of one or more corporations or
other business entities which own the Company or the Transferee, as the case may
be,  either  directly or through one or more  subsidiary  corporations  or other
business entities.  The Board shall have the right to determine whether multiple
sales or exchanges of the voting securities of the Company or multiple Ownership
Change Events are related,  and its  determination  shall be final,  binding and
conclusive.

      (e) "CODE" means the Internal  Revenue Code of 1986,  as amended,  and any
applicable regulations promulgated thereunder.

      (f) "COMMITTEE" means the Compensation Committee or other committee of the
Board duly  appointed to administer  the Plan and having such powers as shall be
specified  by  the  Board.   Unless  the  powers  of  the  Committee  have  been
specifically  limited,  the Committee  shall have all of the powers of the Board
granted herein, including,  without limitation,  the power to amend or terminate
the Plan at any  time,  subject  to the  terms  of the  Plan and any  applicable
limitations imposed by law.

      (g)  "COMPANY"  means LCS  Group,  Inc.,  a Delaware  corporation,  or any
successor corporation thereto.

      (h) "CONSULTANT"  means a person engaged to provide consulting or advisory
services (other than as an employee or a director) to a Participating Company.

      (i) "DIRECTOR" means a member of the Board or of the board of directors of
any other Participating Company.

      (j)  "DISABILITY"  means the inability of the  Participant  to perform the
major duties of the Participant's  position with the Participating Company Group
because of the  sickness  or injury of the  Participant.  The  Determination  of
whether or not a Participant is disabled for purposes of this Plan shall be made
by, and at the sole discretion of, the Committee.

      (k)  "EMPLOYEE"  means any person  treated as an  employee  (including  an
officer or a director  who is also  treated as an  employee) in the records of a
Participating Company and, with respect to any Incentive Stock Option granted to
such  person,  who is an  employee  for  purposes  of  Section  422 of the Code;
provided,  however,  that  neither  service  as  a  director  nor  payment  of a
director's  fee shall alone be sufficient to constitute  employment for purposes
of the Plan. The Company shall  determine in good faith and in the sole exercise
of its  discretion,  whether an individual  has become,  or has ceased to be, an
Employee and the effective date of such  individual's  employment or termination
of employment,  as the case may be. For purposes of an individual's  rights,  if
any,  under  the Plan as of the time of the  Company's  determination,  all such
determinations   by  the  Company  shall  be  final,   binding  and  conclusive,
notwithstanding  that the  Company  or any court of law or  governmental  agency
subsequently makes a contrary determination.

      (l) "FAIR MARKET  VALUE"  means,  as of any date,  the value of a share of
Stock or other property as determined by the Board, in its  discretion,  in good
faith without regard to any restriction  other than a restriction  which, by its
terms, will never lapse. If the Stock is not trading over a public exchange, the
"fair market value" shall take into account the latest  private  transaction  in
which the Company  sold stock to an  informed  and  willing  buyer,  if any such
transaction  exists.  If the Stock is listed for trading  over a public  market,
"fair  market  value" of the Stock on a given day shall be the mean  between the
highest  and lowest  quoted  selling  prices,  regular  way, of the Stock on the
NASDAQ or the exchange on which the Stock is listed, and if no trading occurs on
such date, the mean between the highest and lowest prices on the nearest trading
day before such date.

<PAGE>

      (m) "INCENTIVE  STOCK OPTION" means an Option intended to be (as set forth
in the Option  Agreement),  and which  qualifies  as, an incentive  stock option
within the meaning of Section 422(b) of the Code.

      (n) "NONQUALIFIED STOCK OPTION" means an Option not intended to be (as set
forth in the Option  Agreement) or which does not qualify as an Incentive  Stock
Option.

      (o)  "OFFICER"  means any person  designated by the Board as an officer of
the Company.

      (p)  "OPTION"  means a right to purchase  Stock  pursuant to the terms and
conditions of the Plan.  An Option may be either an Incentive  Stock Option or a
Nonqualified  Stock  Option and may also,  in the  discretion  of the Board,  be
structured and granted as a Stock Appreciation Right. For purposes of this Plan,
a "STOCK  APPRECIATION  RIGHT" is the right of a holder thereof,  on exercise of
the Stock  Appreciation  Right,  to receive from the Company in cash or Stock an
amount equal to the excess of: (x) the Fair Market Value of the Stock covered by
the exercised  portion of the Stock  Appreciation  Right, as of the date of such
exercise,  over (y) the Fair Market Value of the Stock  covered by the exercised
portion  of the  Stock  Appreciation  Right as of the date on  which  the  Stock
Appreciation Right was granted.

      (q) "OPTION  AGREEMENT" means a written  agreement between the Company and
an Optionee setting forth the terms,  conditions and restrictions  pertaining to
the Option  granted to the Optionee and to any shares of Stock acquired upon the
exercise thereof.

      (r)  "OPTIONEE"  means a  Participant  who has  been  awarded  one or more
Options.

      (s) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred if any of
the  following  occurs with respect to the  Company:  (i) the direct or indirect
sale  or  exchange  in a  single  or  series  of  related  transactions  by  the
stockholders of the Company of more than fifty percent (50%) of the voting stock
of the Company;  (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange,  or transfer of all or substantially all of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.

      (t) "PARENT  CORPORATION" means any present or future "parent corporation"
of the Company, as defined in Section 424(e) of the Code.

      (u)  "PARTICIPANT"  means any employee,  consultant or director to whom an
Award  has been  made  under the Plan.  (v)  "PARTICIPATING  COMPANY"  means the
Company or any Parent Corporation or Subsidiary Corporation.

      (w)  "PARTICIPATING  COMPANY  GROUP"  means,  at any  point in  time,  all
corporations collectively which are then Participating Companies.

      (x)  "RESTRICTED  SHARES" means shares  awarded  pursuant to a "RESTRICTED
SHARE  AGREEMENT"  between the Company and Participant  setting forth the terms,
conditions or  restrictions  applicable to an Award of shares of Stock under the
Plan.

<PAGE>

      (y)  "SERVICE"  means a  Participant's  employment  or  service  with  the
Participating  Company Group, whether in the capacity of an employee, a director
or a consultant.  A Participant's Service shall not be deemed to have terminated
merely  because of a change in the  capacity  in which the  Participant  renders
Service  to the  Participating  Company  Group or a change in the  Participating
Company for which the Participant  renders such Service,  provided that there is
no  interruption or termination of the  Participant's  Service.  Furthermore,  a
Participant's  Service with the Participating  Company Group shall not be deemed
to have terminated if the Participant  takes any military leave,  sick leave, or
other bona fide leave of absence  approved by the  Company;  provided,  however,
that if any such leave exceeds ninety (90) days, on the ninety-first  (91st) day
of such  leave the  Participant's  Service  shall be  deemed to have  terminated
unless  the  Participant's  right to return to  Service  with the  Participating
Company  Group  is  guaranteed  by  statute  or  contract.  Notwithstanding  the
foregoing,  unless  otherwise  designated  by the  Company or required by law, a
leave of absence  shall not be treated as service for  purposes  of  determining
vesting under the  Participant's  Option or  Restricted  Shares  Agreement.  The
Participant's  Service shall be deemed to have terminated  either upon an actual
termination  of  service  or upon the  corporation  for  which  the  Participant
performs  services  ceasing  to  be a  Participating  Company.  Subject  to  the
foregoing,  the  Company,  in  its  discretion,   shall  determine  whether  the
Participant's Service has terminated and the effective date of such termination.

      (z) "STOCK"  means the common stock of the Company,  as adjusted from time
to time in accordance  with Section 4.2. Such Stock may be  unrestricted  or, at
the sole discretion of the Board,  be made subject to  restrictions  relating to
employment and transferability.

      (aa)  "SUBSIDIARY  CORPORATION"  means any  present or future  "subsidiary
corporation" of the Company, as defined in Section 424(f) of the Code.

      (bb) "TEN PERCENT  OWNER  OPTIONEE"  means an Optionee who, at the time an
Option is granted to the Optionee,  owns stock  possessing more than ten percent
(10%)  of  the  total  combined  voting  power  of all  classes  of  stock  of a
Participating Company within the meaning of Section 422(b)(6) of the Code.

      (cc) "VEST" or "VESTING",  with respect to Options, means the date, event,
or act prior to which an Award is not, in whole or in part,  exercisable  except
at the sole discretion of the Board. With respect to Restricted  Shares,  "Vest"
or "Vesting"  shall mean the date,  event, or act prior to which an Award is, in
whole or in part, forfeitable.

2.2 CONSTRUCTION.  Captions and titles contained herein are for convenience only
and shall not affect the meaning or interpretation of any provision of the Plan.
Except when otherwise  indicated by the context,  the singular shall include the
plural and the plural shall  include the  singular.  Use of the term "or" is not
intended to be exclusive, unless the context clearly requires otherwise.

SECTION 3. ADMINISTRATION.

3.1  ADMINISTRATION  BY THE BOARD.  The Plan shall be administered by the Board.
All questions of interpretation of the Plan or of any Option,  Restricted Share,
or other right awarded  hereunder  shall be  determined  by the Board,  and such
determinations shall be final and binding upon all persons having an interest in
the Plan or in such Option or right.

3.2 AUTHORITY OF OFFICERS. Any Officer shall have the authority to act on behalf
of the Company with respect to any matter, right,  obligation,  determination or
election which is the  responsibility  of, or which is allocated to, the Company
herein, provided the Officer has apparent authority with respect to such matter,
right, obligation, determination or election.

<PAGE>

3.3 POWERS OF THE BOARD.  In addition to any other  powers set forth in the Plan
and  subject to the  provisions  of the Plan,  the Board shall have the full and
final power and authority, in its discretion to:

      (a) determine  the persons to whom,  and the time or times at which Awards
shall be granted, the types of Awards to be granted, and the number of shares of
Stock to be subject to each Award;

      (b) determine the terms, conditions and restrictions applicable to Awards;
approve one or more forms of Option, or Restricted Share Agreements;

      (c)  amend,  modify,  extend,  cancel  or renew  any  Option  or waive any
restrictions or conditions  applicable to any Option or applicable to any shares
of Stock awarded or acquired upon the exercise thereof;

      d) correct any defect, supply any omission, or reconcile any inconsistency
in the and take such  other  actions  with  respect to the Plan as the Board may
deem advisable to the extent not inconsistent with the provisions of the Plan or
applicable law.

SECTION 4. SHARES SUBJECT TO PLAN.

4.1 MAXIMUM  NUMBER OF SHARES  ISSUABLE.  Subject to  adjustment  as provided in
Section 4.2, the maximum  aggregate number of shares of Stock that may be issued
under the Plan shall be one hundred million  (100,000,000)  and shall consist of
authorized but unissued or reacquired  shares of Stock,  treasury shares, or any
combination  thereof.  If an  outstanding  Option for any  reason  expires or is
terminated  or canceled or if shares of Stock are acquired  upon the exercise or
Award of an Option or Restricted Share Agreement subject to a Company repurchase
option and are repurchased by the Company,  the shares of Stock allocable to the
unexercised  portion of such  Option or such  repurchased  shares of Stock shall
again be available for issuance under the Plan.

4.2  ADJUSTMENTS  FOR  CHANGES IN CAPITAL  STRUCTURE.  In the event of any stock
dividend,  stock  split,  reverse  stock split,  recapitalization,  combination,
reclassification  or similar  change in the capital  structure  of the  Company,
appropriate  adjustments shall be made in the number and class of shares subject
to the Plan and to any  outstanding  Options,  in the Share  Issuance  Limit set
forth in  Section  4.1,  in the  exercise  price  per  share of any  outstanding
Options.

5. ELIGIBILITY AND LIMITATIONS.

5.1 PERSONS ELIGIBLE. Awards may be granted only to Employees,  Consultants, and
Directors. For purposes of the foregoing sentence,  "Employees,"  "Consultants",
and "Directors" shall include prospective  Employees,  prospective  Consultants,
and prospective  Directors to whom Options and Restricted  Shares may be awarded
in connection with written offers of an employment or other service relationship
with the Participating Company Group.

5.2  OPTION  AWARD  RESTRICTIONS.  Any  person  who is not  an  Employee  on the
effective  date of the Award of an Option to such  person may be awarded  only a
Nonqualified  Stock Option.  An Incentive  Stock Option awarded to a prospective
Employee upon the condition  that such person become an Employee shall be deemed
granted effective on the date such person commences Service with a Participating
Company.

<PAGE>

5.3 FAIR MARKET  VALUE  LIMITATION.  To the extent that  Options  designated  as
Incentive   Stock  Options   (granted  under  all  stock  option  plans  of  the
Participating  Company  Group,  including  the Plan)  become  exercisable  by an
Optionee  for the first time during any  calendar  year for Stock  having a Fair
Market Value greater than One Hundred Thousand Dollars ($100,000),  the portions
of such Options which exceed such amount shall be treated as Nonqualified  Stock
Options. For purposes of this Section 5.3, Options designated as Incentive Stock
Options shall be taken into account in the order in which they were awarded, and
the Fair  Market  Value of Stock shall be  determined  as of the time the Option
with respect to such Stock was awarded.  If the Code is amended to provide for a
different  limitation  from that set forth in this Section 5.3,  such  different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such  amendment to the Code.
If an  Option  is  treated  as an  Incentive  Stock  Option  in  part  and  as a
Nonqualified  Stock Option in part by reason of the limitation set forth in this
Section  5.3,  the  Optionee  may  designate  which  portion of such  Option the
Optionee is exercising.  In the absence of such designation,  the Optionee shall
be deemed to have  exercised  the Incentive  Stock Option  portion of the Option
first. Separate certificates representing each such portion shall be issued upon
the exercise of the Option.

SECTION 6. TERMS AND CONDITIONS OF OPTIONS AND RESTRICTED SHARES.

6.1 AWARD AGREEMENTS. Options shall be evidenced by Option Agreements specifying
the nature and number of shares of Stock  covered  thereby,  and shall  exist in
such form as the Board shall from time to time establish. An Award of Restricted
Shares shall be evidenced by a Restricted Share Agreement  specifying the number
of shares issued and the restrictions  thereon,  and shall exist in such form as
the Board shall, from time to time, approve. Such Agreements may incorporate all
or any of the  terms of the  Plan by  reference  and  shall  comply  with and be
subject to the terms and conditions herein.

6.2 OPTION VESTING AND EXERCISE  PRICE.  Each Option  Agreement  shall include a
vesting schedule  describing the date,  event, or act upon which an Option shall
vest,  in whole or in part,  with  respect to all or a specified  portion of the
shares  covered by such  Option.  Each  Option  Agreement  shall also convey the
exercise  price  for each  Option  or the  means by which  such  price  shall be
established,   with  such  exercise  price  or  method  of  establishment  being
established in the  discretion of the Board;  provided,  however,  that: (a) the
exercise  price per share for an  Incentive  Stock Option shall be not less than
the Fair Market Value of a share of Stock on the effective  date of grant of the
Option,  and (b) no Option granted to a Ten Percent Owner Optionee shall have an
exercise  price per share less than one hundred  ten percent  (110%) of the Fair
Market Value of a share of Stock on the effective date of grant of the Option.

6.3 EXERCISABILITY AND TERM OF OPTIONS. Options shall be exercisable as shall be
determined by the Board and set forth in the Option  Agreement  evidencing  such
Option;  provided,  however,  that:  (a) no  Incentive  Stock  Option  shall  be
exercisable  after the  expiration of ten (10) years after the effective date of
grant of such  Option,  (b) no Incentive  Stock Option  awarded to a Ten Percent
Owner Optionee shall be exercisable after the expiration of five (5) years after
the  effective  date of grant of such  Option,  or (c) no  Option  awarded  to a
prospective Employee,  prospective Consultant or prospective Director may become
exercisable  prior to the date on which such  person  commences  Service  with a
Participating Company.

6.4 PAYMENT OF OPTION EXERCISE PRICE

      (a) FORMS OF CONSIDERATION  AUTHORIZED.  Payment of the exercise price for
the number of shares of Stock being  purchased  pursuant to any Option  shall be
made in cash, by check or cash equivalent by such other  consideration as may be
approved by the Board from time to time to the extent  permitted  by  applicable
law.

      (b) LIMITATIONS ON FORMS OF CONSIDERATION.

            (i) CASHLESS EXERCISE.  The Company reserves,  at any and all times,
the right, in the Company's sole and absolute discretion, to establish,  decline
to approve or terminate any program or procedures for the exercise of Options by
means of a cashless exercise.

            (ii)  PAYMENT  BY  PROMISSORY  NOTE.  No  promissory  note  shall be
permitted  if the  exercise  of an Option  using a  promissory  note  would be a
violation of any law. Any  permitted  promissory  note shall be on such terms as
the Board  shall  determine.  The Board  shall have the  authority  to permit or
require the  Optionee to secure any  promissory  note used to exercise an Option
with the shares of Stock  acquired upon the exercise of the Option or with other
collateral acceptable to the Company.

6.5 TAX  WITHHOLDING.  Upon the  exercise  of an Option or upon the  vesting  of
Restricted Shares, the Company shall have the right, but not the obligation,  to
deduct from the shares of Stock issuable,  or to accept from the Participant the
tender of, a number of whole  shares of Stock  having a Fair  Market  Value,  as
determined by the Company, equal to all or any part of the federal, state, local
and foreign taxes, if any,  required by law to be withheld by the  Participating
Company  Group  with  respect to such  Restricted  Stock,  Option,  or the Stock
acquired  upon  the  exercise  thereof.  Alternatively  or in  addition,  in its
discretion, the Company shall have the right to require the Participant, through
payroll withholding, cash payment or otherwise, including by means of a Cashless
Exercise, to make adequate provision for any such tax withholding obligations of
the Participating Company Group arising in connection with the Restricted Stock,
Option, or the shares acquired upon the exercise thereof.  The Fair Market Value
of any shares of Stock withheld or tendered to satisfy any such tax  withholding
obligations  shall not exceed the amount  determined by the  applicable  minimum
statutory  withholding  rates.  The Company  shall have no obligation to deliver
shares  of Stock  or to  release  shares  of Stock  from an  escrow  established
pursuant to any Agreement  entered  hereunder  until the  Participating  Company
Group's tax withholding obligations have been satisfied by the Participant.

6.6 STOCK RESTRICTIONS. Shares issued under the Plan shall be subject to a right
of first refusal,  one or more repurchase options, and such other conditions and
restrictions  as determined by the Board in its discretion at the time an Option
or Restricted Share Award is made.

      (a) REPURCHASE  RIGHTS.  The Company shall have the right to assign at any
time  any  repurchase  right it may  have,  whether  or not  such  right is then
exercisable,  to one or more  persons as may be  selected by the  Company.  Upon
request by the Company,  each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder and
shall  promptly  present to the  Company any and all  certificates  representing
shares of Stock  acquired  hereunder for the placement on such  certificates  of
appropriate legends evidencing any such transfer restrictions.

      (b) SERVICE VESTING AND TRANSFERABILITY. The Company shall have the right,
at the time of the Award, to place  restrictions on Awards including upon shares
issued upon the exercise of an Option.

<PAGE>

      (c) RESTRICTED SHARE AWARDS. Subject to and consistent with the provisions
of this Plan,  each Restricted  Share shall be evidenced by a written  Agreement
setting forth the terms and conditions  pertaining to such Award,  including the
number of shares  awarded.  Unless  otherwise  required by  statute,  Restricted
Shares  may  be  awarded  with  or  without  payment  of  consideration  by  the
Participant.  Each Restricted  Share Agreement shall include a vesting  schedule
describing the date,  event, or act upon which Restricted  Shares shall vest, in
whole or in part,  with  respect  to all or a  specified  portion  of the Shares
covered by the  Award.  No  Restricted  Share not yet  vested is  assignable  or
transferable  and any attempt at transfer or assignment  of such Share,  and any
attempt by a creditor to attach such  Share,  shall be null and void.  Until the
date a Stock certificate is issued to a Participant,  a Participant will have no
rights  as a  stockholder  of the  Company.  No  adjustments  shall  be made for
dividends  of any kind or nature,  distributions,  or other rights for which the
record date is prior to the date such stock  certificate  is issued.  Consistent
with the  provisions  of this  Plan,  the  Board may in its  discretion  modify,
extend, or renew any Restricted Share Agreement,  or accept cancellation of same
in exchange for the granting of a new Award. The preceding not withstanding,  no
modification of a Restricted  Share Agreement which is not vested shall,  absent
the consent of the  Participant,  alter or impair any rights or obligations with
respect to such Agreement.

6.7 EFFECT OF TERMINATION OF SERVICE.

      (a)  RESTRICTED  SHARES.  If a  Participant's  Service  terminates for any
reason  other  than as a  result  of a Change  in  Control,  such  Participant's
Restricted Shares which are not vested at the time of Service  termination shall
be  forfeited.  If a  Participant's  service  terminates  because of a Change of
Control and if an amount to be received  by a  Participant  from this Plan would
otherwise  constitute a "parachute  payment" as defined in section 280G(b)(2) of
the Code, then any accelerated  vesting due to a Change of Control or subsequent
termination  of the  Participant's  Service  shall be  limited  to the amount of
vesting that permits the Participant to receive, after application of the excise
tax imposed by section 4999 of the Code,  the greater of: (1) A total  parachute
payment  that equals 2.99 times the  Participant's  base amount,  as  determined
under section 280G of the Code;  or (2) full vesting of all unvested  Restricted
Shares as of the date of the Participant's termination of employment.

      (b)  OPTIONS.  Subject to earlier  termination  of the Option as otherwise
provided herein,  and unless otherwise provided by the Board in an Award and set
forth in the Agreement  related thereto,  an Option shall be exercisable after a
Participant's  termination  of Service  only during the  applicable  time period
determined in accordance  with the following  provisions of this Section 6.10(b)
and thereafter shall terminate:

            (i) DISABILITY.  If the Participant's  Service terminates because of
the Disability of the  Participant,  an Option,  to the extent  unexercised  and
exercisable on the date on which the Participant's  Service  terminated,  may be
exercised  by  the   Participant  (or  the   Participant's   guardian  or  legal
representative)  at any time prior to the expiration of twelve (12) months after
the date on which  the  Participant's  Service  terminated,  but in any event no
later  than the date of  expiration  of the  Option's  term as set  forth in the
Agreement evidencing such Option (the "EXPIRATION DATE").

            (ii) DEATH. If the Participant's  Service  terminates because of the
death of the Participant,  an Option, to the extent  unexercised and exercisable
on the date on which the Participant's  Service terminated,  may be exercised by
the Participant's legal representative or other person who acquired the right to
exercise  the Option or Right by reason of the  Participant's  death at any time
prior to the  expiration  of  twelve  (12)  months  after  the date on which the
Participant's Service terminated,  but in any event no later than the Expiration
Date. The Participant's Service shall be deemed to have terminated on account of
death if the Participant  dies within three (3) months (or such longer period of
time as  determined by the Board,  in its  discretion)  after the  Participant's
termination of Service.

<PAGE>

            (iii) OTHER  TERMINATION OF SERVICE.  If the  Participant's  Service
terminates for any reason,  except Disability or death, an Option, to the extent
unexercised  and  exercisable  by the  Participant  on the  date  on  which  the
Participant's  Service  terminated,  may be exercised by the  Participant at any
time prior to the  expiration of three (3) months (or such longer period of time
as  determined  by the  Board,  in its  discretion)  after the date on which the
Participant's Service terminated,  but in no event any later than the Expiration
Date.

      (c) RESERVATION OF RIGHTS.  The grant of Awards under the Plan shall in no
way  affect  the right of the  Company  to  adjust,  reclassify,  reorganize  or
otherwise  change its capital or business  structure  or to merge,  consolidate,
dissolve,  liquidate  or sell or  transfer  all or any part of its  business  or
assets.

6.8  TRANSFERABILITY  OF OPTIONS.  During the  lifetime of the  Participant,  an
Option shall be  exercisable  only by the  Participant  or by the  Participant's
guardian or legal representative.  No Option shall be assignable or transferable
by the Participant,  except by will or by the laws of descent and  distribution.
Notwithstanding the foregoing, to the extent permitted by the Board, in its sole
discretion,  and as set forth in the Option Agreement  evidencing such Option, a
Nonqualified Stock Option shall be assignable or transferable.

SECTION 7. CHANGE IN CONTROL.

7.1 EFFECT OF CHANGE IN CONTROL ON OPTIONS. In the event of a Change in Control,
the  surviving,  continuing,  successor,  or  purchasing  corporation  or  other
business  entity  or  parent  thereof,  as  the  case  may  be  (the  "ACQUIRING
CORPORATION"),  may, without the consent of any  Participant,  either assume the
Company's  rights and obligations  under  outstanding  Options or substitute for
such outstanding Options  substantially  equivalent options or rights for, or in
relation to, the Acquiring Corporation's stock.

7.2 EFFECT OF CHANGE OF CONTROL ON RESTRICTED SHARE RIGHTS.

      (a) Restricted  Shares  outstanding under the Plan at the time of a Change
in Control shall  automatically  Vest in full immediately prior to the effective
date of such Change in Control and will no longer be subject to forfeiture  risk
or to any  repurchase  right.  However,  Restricted  Shares shall not vest on an
accelerated basis as a result of a Change in Control if and to the extent:

            (i)  such  Restricted  Share  Award,  having  been  assumed  by  the
successor  corporation  (or parent  thereof),  is  replaced  with  shares of the
capital stock of the successor  corporation subject to substantially  equivalent
restrictions or is otherwise  continued in full force and effect pursuant to the
terms of the Change in Control  transaction,  and any  repurchase  rights of the
Company with respect to any unvested Restricted Shares are concurrently assigned
to such  successor  corporation  (or parent  thereof) or otherwise  continued in
effect; or

            (ii) such Restricted Shares are to be replaced with a cash incentive
program of the Company or any successor  corporation  which  preserves the value
existing on the unvested  Restricted Shares at the time of the Change in Control
and provides for subsequent  payout in accordance with the same Vesting schedule
applicable to those unvested Restricted Shares; or

<PAGE>

            (iii) the  acceleration of such Restricted Share is subject to other
limitations  imposed  by the Plan  Administrator  at the time of the  Restricted
Share grant.

      (b) Should,  in the course of a Change in Control,  the actual  holders of
the Company's  outstanding Stock receive cash consideration in exchange for such
Stock, the successor  corporation may, in connection with the replacement of the
outstanding  Restricted Shares under this Plan, substitute one or more shares of
its  own  common  stock  with  a  fair  market  value  equivalent  to  the  cash
consideration  paid per share of Stock in such  Change in Control and subject to
substantially  equivalent  restrictions  as were in  effect  for the  Restricted
Shares immediately before the Change in Control.

      (c) The foregoing  notwithstanding,  the Board shall have the  discretion,
exercisable  either at the time the Restricted Shares are granted or at any time
while the Restricted Shares remain unvested, to structure one or more Restricted
Shares so that those Restricted Shares shall  automatically  accelerate and Vest
in full upon the  occurrence  of a Change in Control.  The Board shall also have
full power and authority,  exercisable  either at the time The Restricted Shares
are  granted or at any time while the  Restricted  Shares  remain  unvested,  to
structure such Restricted Share so that the shares will automatically Vest on an
accelerated  basis should the  Participant's  employment or service terminate by
reason of an Involuntary  Termination  within a designated period (not to exceed
eighteen (18) months)  following the effective  date of any Change in Control in
which the  Restricted  Shares  do not  otherwise  Vest.  In  addition,  the Plan
Administrator  may  provide  that  one  or  more  of the  Company's  outstanding
repurchase  rights with respect to Restricted  Shares held by the Participant at
the time of such  Involuntary  Termination  shall  immediately  terminate  on an
accelerated  basis, and the Restricted Shares subject to those terminated rights
shall accordingly Vest at that time.

            (i)  For  purposes  of  this   Section   8.2(c),   an   "INVOLUNTARY
TERMINATION"  shall mean the  termination  of the  Participant's  service  which
occurs by reason of: (1) such individual's involuntary dismissal or discharge by
the  Company  for  reasons  other  than  Misconduct,  or (2)  such  individual's
voluntary  resignation  following  (A) a change in his or her position  with the
Company which materially reduces his or her duties and  responsibilities  or the
level of  management  to which he or she reports,  (B) a reduction in his or her
level of compensation  (including base salary,  fringe benefits and target bonus
under any corporate-performance  based bonus or incentive programs) by more than
fifteen  percent  (15%)  or (3) a  relocation  of  such  individual's  place  of
employment  by more than fifty (50)  miles,  provided  and only if such  change,
reduction or relocation is effected without the individual's consent.

            (ii)  "MISCONDUCT"  shall mean the  commission  of any act of fraud,
embezzlement  or  dishonesty  by  the  Participant,   any  unauthorized  use  or
disclosure by such person of  confidential  information  or trade secrets of the
Company or any other intentional  misconduct by such person adversely  affecting
the  business  or affairs of the  Company in a material  manner.  The  foregoing
definition  shall  not be deemed to be  inclusive  of all the acts or  omissions
which the Company may consider as grounds for the  dismissal or discharge of any
Participant or other person in the Company's service.

SECTION 8. PROVISION OF INFORMATION.

      At least  annually,  copies of the  Company's  balance  sheet  and  income
statement  for the just  completed  fiscal year shall be made  available to each
Participant.

SECTION 9. TERMINATION OR AMENDMENT OF PLAN.

<PAGE>

      The Plan shall terminate ten (10) years from its effective date. The Board
may terminate or amend the Plan at any time. No  termination or amendment of the
Plan shall affect any then outstanding  Award unless  expressly  provided by the
Board.

SECTION 10. REPURCHASE AND FIRST REFUSAL RIGHTS.

10.1  REPURCHASE  RIGHTS.  Should the  Participant  cease to be  employed  by or
provide services to the Company while holding one or more shares of Stock issued
pursuant to the exercise of an Option  granted  under this Plan or pursuant to a
Stock  Award under the Plan,  then those  shares,  to the extent any  Restricted
Shares are no longer  subject to  forfeiture,  shall be subject to repurchase by
the Company, at the Company's sole discretion,  at the Fair Market Value of such
shares on the date of such repurchase and the Participant  shall have no further
stockholder  rights with respect to those shares.  The terms and conditions upon
which such  repurchase  right  shall be  exercisable  (including  the period and
procedure for exercise) shall be established by the Board.

10.2 FIRST REFUSAL RIGHTS.  If imposed in the agreement,  the Company shall have
the  right  of  first  refusal  with  respect  to any  proposed  sale  or  other
disposition  by the holder of any shares of Stock  issued  pursuant  to an Award
granted  under the Plan.  Such right of first refusal  shall be  exercisable  in
accordance with terms and conditions established by the Board.

SECTION 11. MISCELLANEOUS PROVISIONS.

11.1 NO  RIGHTS  OF  STOCKHOLDER.  Prior  to the  date on  which  an  Option  is
exercised,  neither the Participant, nor a Beneficiary or any other successor in
interest  will  be,  or  will  have  any of the  rights  and  privileges  of,  a
stockholder with respect to any Stock issuable upon the exercise of such Option.

11.2 NO RIGHT TO CONTINUED EMPLOYMENT.  Nothing contained herein shall be deemed
to give any person any right to employment by the Company or by a  Participating
Company,  or to  interfere  with the  right of the  Company  or a  Participating
Company to discharge  any person at any time  without  regard to the effect that
such discharge will have upon such person's rights or potential  rights, if any,
under  the  Plan.  The  provisions  of the Plan are in  addition  to,  and not a
limitation  on, any  rights a  Participant  may have  against  the  Company or a
Participating  Company by reason of any  employment or other  agreement with the
Company or a Participating Company.

11.3  SEVERABILITY.  If any  provision  of this  Plan is held to be  illegal  or
invalid for any reason, the remaining provisions are to remain in full force and
effect and are to be construed and enforced in  accordance  with the purposes of
the Plan as if the illegal or invalid provision or provisions did not exist.

      IN WITNESS WHEREOF, the undersigned  President and Chief Executive Officer
of the Company  certifies that the foregoing sets forth the LCS Group, Inc. 2003
Incentive Plan as duly adopted by the Board on November 21, 2003.

                         /s/ Michael Mitchell
                         -------------------------------------------------------
                         Michael Mitchell, President and Chief Executive OfficerExhibit 10.42

                                               ---------------------------------
                                                     Execution Version
                                               ---------------------------------

================================================================================

                                        Published CUSIP Number: ________________

                                CREDIT AGREEMENT

                          dated as of October 31, 2005

                                      among

                       MAIN STREET RESTAURANT GROUP, INC.,
                                as the Borrower,

                             BANK OF AMERICA, N.A.,
                           as Administrative Agent and
                                   L/C Issuer,

                                       and

                         The Other Lenders Party Hereto

                         BANC OF AMERICA SECURITIES LLC,
                                       as
                    Sole Lead Arranger and Sole Book Manager

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

         Section                                                                                               Page

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS
<S>      <C>                                                                                                   <C>

1.01     Defined Terms...........................................................................................1
1.02     Other Interpretive Provisions..........................................................................27
1.03     Accounting Terms.......................................................................................27
1.04     Rounding...............................................................................................28
1.05     Times of Day...........................................................................................28
1.06     Letter of Credit Amounts...............................................................................28

                                   ARTICLE II.
                      THE COMMITMENTS AND CREDIT EXTENSIONS

2.01     Term Loan..............................................................................................28
2.02     Revolving Loans........................................................................................29
2.03     Revolving Borrowings, Conversions and Continuations of Revolving Loans and Term Loan Segments..........29
2.04     Letters of Credit......................................................................................31
2.05     Prepayments............................................................................................39
2.06     Termination or Reduction of Commitments................................................................42
2.07     Repayment of Loans.....................................................................................42
2.08     Interest...............................................................................................42
2.09     Fees...................................................................................................43
2.10     Computation of Interest and Fees.......................................................................44
2.11     Evidence of Debt.......................................................................................44
2.12     Payments Generally; Administrative Agent's Clawback....................................................45
2.13     Sharing of Payments by Lenders.........................................................................47

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

3.01     Taxes..................................................................................................47
3.02     Illegality.............................................................................................49
3.03     Inability to Determine Rates...........................................................................50
3.04     Increased Costs; Reserves on Eurodollar Rate Loans.....................................................50
3.05     Compensation for Losses................................................................................52
3.06     Mitigation Obligations; Replacement of Lenders.........................................................52
3.07     Survival...............................................................................................53

                                   ARTICLE IV.
                    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01     Conditions of Initial Credit Extension.................................................................53
4.02     Conditions to all Credit Extensions....................................................................56

</TABLE>

                                       i

<PAGE>

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES
<TABLE>
<CAPTION>

<S>      <C>                                                                                                   <C>
5.01     Existence, Qualification and Power; Compliance with Laws...............................................57
5.02     Authorization; No Contravention........................................................................57
5.03     Governmental Authorization; Other Consents.............................................................57
5.04     Binding Effect.........................................................................................57
5.05     Financial Statements; No Material Adverse Effect; No Internal Control Event............................58
5.06     Litigation.............................................................................................58
5.07     No Default.............................................................................................58
5.08     Ownership of Property; Liens...........................................................................59
5.09     Environmental Compliance...............................................................................59
5.10     Insurance..............................................................................................59
5.11     Taxes..................................................................................................59
5.12     ERISA Compliance.......................................................................................59
5.13     Subsidiaries; Equity Interests.........................................................................60
5.14     Margin Regulations; Investment Company Act; Public Utility Holding Company Act.........................60
5.15     Disclosure.............................................................................................60
5.16     Compliance with Laws...................................................................................61
5.17     Intellectual Property; Licenses, Etc...................................................................61
5.18     Collateral.............................................................................................61
5.19     Locations of Loan Parties..............................................................................61
5.20     Franchise Agreements...................................................................................62
5.21     Leases.................................................................................................62
5.22     Material Management Agreements.........................................................................62
5.23     Solvency...............................................................................................62

                                   ARTICLE VI.
                              AFFIRMATIVE COVENANTS

6.01     Financial Statements...................................................................................62
6.02     Certificates; Other Information........................................................................64
6.03     Notices................................................................................................65
6.04     Payment of Obligations.................................................................................66
6.05     Preservation of Existence, Etc.........................................................................66
6.06     Maintenance of Properties..............................................................................66
6.07     Maintenance of Insurance...............................................................................67
6.08     Compliance with Laws...................................................................................67
6.09     Books and Records......................................................................................67
6.10     Inspection Rights......................................................................................67
6.11     Use of Proceeds........................................................................................67
6.12     New Subsidiaries.......................................................................................67
6.13     New Unit Location and Other Real Property..............................................................69
6.14     Franchise Agreements, Leases and Other Material Contracts..............................................70
6.15     Interest Rate Protection...............................................................................70
6.16     Material Management Agreements.........................................................................70

</TABLE>

                                       ii

<PAGE>

<TABLE>
<CAPTION>

<S>      <C>                                                                                                   <C>
6.17     Internal Control Events................................................................................70
6.18     Leases and Franchise Agreements for Excluded Restaurants...............................................70
6.19     Additional Subsidiary Securities.......................................................................71
6.20     Excluded West Sahara Restaurant........................................................................71
                                  ARTICLE VII.
                               NEGATIVE COVENANTS

7.01     Liens..................................................................................................72
7.02     Investments............................................................................................73
7.03     Indebtedness...........................................................................................73
7.04     Fundamental Changes....................................................................................74
7.05     Dispositions...........................................................................................75
7.06     Restricted Payments....................................................................................75
7.07     Change in Nature of Business...........................................................................76
7.08     Transactions with Affiliates...........................................................................76
7.09     Burdensome Agreements..................................................................................76
7.10     Use of Proceeds........................................................................................76
7.11     Financial Covenants....................................................................................77
7.12     Capital Expenditures...................................................................................77
7.13     Management Agreements..................................................................................77
7.14     General Partner........................................................................................78
7.15     Acquisitions; New Subsidiaries.........................................................................78
7.16     Management of the Borrower.............................................................................78
7.17     New Unit Locations.....................................................................................78
7.18     Prepayments, etc. of Indebtedness......................................................................78

                                  ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

8.01     Events of Default......................................................................................78
8.02     Remedies Upon Event of Default.........................................................................80
8.03     Application of Funds...................................................................................81

                                   ARTICLE IX.
                              ADMINISTRATIVE AGENT

9.01     Appointment and Authority..............................................................................82
9.02     Rights as a Lender.....................................................................................82
9.03     Exculpatory Provisions.................................................................................82
9.04     Reliance by Administrative Agent.......................................................................83
9.05     Delegation of Duties...................................................................................84
9.06     Resignation of Administrative Agent....................................................................84
9.07     Non-Reliance on Administrative Agent and Other Lenders.................................................85
9.08     No Other Duties, Etc...................................................................................85
9.09     Administrative Agent May File Proofs of Claim..........................................................85
9.10     Collateral and Guaranty Matters........................................................................86

</TABLE>

                                      iii

<PAGE>

                                   ARTICLE X.
                                  MISCELLANEOUS
<TABLE>
<CAPTION>

<S>      <C>                                                                                                   <C>
10.01    Amendments, Etc........................................................................................86
10.02    Notices; Effectiveness; Electronic Communication.......................................................88
10.03    No Waiver; Cumulative Remedies.........................................................................90
10.04    Expenses; Indemnity; Damage Waiver.....................................................................90
10.05    Payments Set Aside.....................................................................................92
10.06    Successors and Assigns.................................................................................92
10.07    Treatment of Certain Information; Confidentiality......................................................95
10.08    Right of Setoff........................................................................................96
10.09    Interest Rate Limitation...............................................................................97
10.10    Counterparts; Integration; Effectiveness...............................................................97
10.11    Survival of Representations and Warranties.............................................................97
10.12    Severability...........................................................................................97
10.13    Replacement of Lenders.................................................................................98
10.14    Governing Law; Jurisdiction; Etc.......................................................................98
10.15    Waiver of Jury Trial...................................................................................99
10.16    USA PATRIOT Act Notice.................................................................................99

SIGNATURES.....................................................................................................S-1

</TABLE>

                                       iv

<PAGE>

                                CREDIT AGREEMENT

     This CREDIT AGREEMENT ("Agreement") is entered into as of October 31, 2005,
among  MAIN  STREET  RESTAURANT  GROUP,   INC.,  a  Delaware   corporation  (the
"Borrower"),  each  lender  from time to time party  hereto  (collectively,  the
"Lenders"  and  individually,  a  "Lender"),  and  BANK  OF  AMERICA,  N.A.,  as
Administrative Agent and L/C Issuer.

     The  Borrower has  requested  that the Lenders  provide a revolving  credit
facility  and term loan  facility,  and the  Lenders are willing to do so on the
terms and conditions set forth herein.

     In consideration of the mutual covenants and agreements  herein  contained,
the parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

     1.01 Defined Terms.  As used in this  Agreement,  the following terms shall
have the meanings set forth below:

     "Acquisition" means the acquisition of (i) a controlling equity interest in
another Person  (including the purchase of an option,  warrant or convertible or
similar  type  security to acquire  such a  controlling  interest at the time it
becomes  exercisable by the holder thereof),  whether by purchase of such equity
interest  or upon  exercise  of an option  or  warrant  for,  or  conversion  of
securities  into, such equity  interest,  or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by such Person.

     "Administrative   Agent"   means  Bank  of  America  in  its   capacity  as
administrative  agent  under  any  of  the  Loan  Documents,  or  any  successor
administrative agent.

     "Administrative  Agent's Office" means the  Administrative  Agent's address
and,  as  appropriate,  account as set forth on  Schedule  10.02,  or such other
address or account as the  Administrative  Agent may from time to time notify to
the Borrower and the Lenders.

     "Administrative  Questionnaire" means an Administrative  Questionnaire in a
form supplied by the Administrative Agent.

     "Affiliate"  means,  with  respect  to  any  Person,  another  Person  that
directly,  or  indirectly  through  one or more  intermediaries,  Controls or is
Controlled by or is under common Control with the Person specified.

     "Aggregate Commitments" means, as of the date of determination thereof, the
sum of (a) the Aggregate  Revolving Credit Commitments at such date plus (b) the
Outstanding Amount with respect to the Term Loan at such date.

     "Aggregate   Revolving  Credit  Commitments"  means,  as  at  the  date  of
determination  thereof,  the  sum of all  Revolving  Credit  Commitments  of all
Revolving Lenders at such date.

<PAGE>

     "Agreement" means this Credit Agreement.

     "Applicable  Interest  Notice Date" means,  with respect to any  Compliance
Certificate  that is not delivered when due in accordance with Section 6.02, the
date that the  Administrative  Agent  delivers  notice to the Borrower that such
Compliance  Certificate  was not delivered when due and that the Applicable Rate
shall thereafter be computed at Pricing Level III (pursuant to the definition of
"Applicable Rate").

     "Applicable  Percentage" means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) equal to:

          (a)  the sum of (i) such Lender's  Revolving Credit Commitment at such
     time (or, if a Commitment  Termination  Event (defined  below) has occurred
     the  Revolving  Credit  Commitment  of such Lender most recently in effect,
     giving effect to any subsequent assignments),  plus (ii) the portion of the
     outstanding  principal  amount  of the Term  Loan  funded by such Term Loan
     Lender, after giving effect to any subsequent assignments,

          divided by
          ----------

          (b)  the sum of (i) the Aggregate Revolving Credit Commitments (or, if
     a Commitment Termination Event has occurred, the Aggregate Revolving Credit
     Commitments most recently in effect),  plus (ii) the outstanding  principal
     amount of the Term Loan:

     Where,

     "Commitment   Termination  Event"  means  the  occurrence  of  any  of  the
     following:  (y) the  termination,  pursuant to Section 2.06 or 8.02, of the
     commitment  of each  Revolving  Lender to make  Revolving  Loans or the L/C
     Issuer  to  make  L/C  Credit  Extensions,  or (z)  the  expiration  of the
     Aggregate Revolving Credit Commitments.

     "Applicable Rate" means the following percentages per annum, based upon the
Consolidated  Leverage  Ratio  as  set  forth  in  the  most  recent  Compliance
Certificate received by the Administrative Agent pursuant to Section 6.02(b):

                                 Applicable Rate

<TABLE>
<CAPTION>

   ---------------- --------------------------------- --------------- ---------------- ------------- ----------------
       Pricing           Consolidated Leverage          Base Rate     Eurodollar Rate   Letter of    Commitment Fee
        Level                    Ratio                                                  Credit Fee
   ---------------- --------------------------------- --------------- ---------------- ------------- ----------------
<S>      <C>                          <C>                 <C>              <C>            <C>             <C>
          I         Less than 2.00 to 1.00                0.75%            2.00%          2.00%           0.25%
   ---------------- --------------------------------- --------------- ---------------- ------------- ----------------
                    Less than 2.50 to 1.00 but
         II         greater than or equal to 2.00
                    to 1.00                               1.00%            2.25%          2.25%          0.375%
   ---------------- --------------------------------- --------------- ---------------- ------------- ----------------
                    Greater than or equal to 2.50
         III        to 1.00                               1.25%            2.50%          2.50%           0.50%
   ---------------- --------------------------------- --------------- ---------------- ------------- ----------------

</TABLE>

                                       2

<PAGE>

     Any increase or decrease in the Applicable  Rate resulting from a change in
the Consolidated  Leverage Ratio shall become effective as of the first Business
Day  immediately  following  the  date  a  Compliance  Certificate  relating  to
financial  statements  described  in Section  6.01(a) is  delivered  pursuant to
Section  6.02(b);  provided,  however,  that if a Compliance  Certificate is not
delivered when due in accordance with such Section, then Pricing Level III shall
apply as of the first  Business Day after the  Applicable  Interest  Notice Date
until the first  Business  Day after  the date such  Compliance  Certificate  is
actually  delivered,  then the Pricing  Level  consistent  with such  Compliance
Certificate shall apply. Subject to the preceding sentence,  the Applicable Rate
in effect from the  Closing  Date  through the date of delivery of a  Compliance
Certificate  for the fiscal period ending  December 26, 2005 shall be determined
based upon Pricing Level III.

     "Approved  Fund"  means any Fund that is  administered  or managed by (a) a
Lender,  (b) an  Affiliate  of a Lender or (c) an entity or an  Affiliate  of an
entity that administers or manages a Lender.

     "Arranger"  means Banc of America  Securities  LLC, in its capacity as sole
lead arranger and sole book manager.

     "Assignee  Group" means two or more Eligible  Assignees that are Affiliates
of one  another or two or more  Approved  Funds  managed by the same  investment
advisor.

     "Assignment and Assumption" means an assignment and assumption entered into
by a Lender  and an  Eligible  Assignee  (with the  consent  of any party  whose
consent is  required by Section  10.06(b),  and  accepted by the  Administrative
Agent, in substantially  the form of Exhibit D or any other form approved by the
Administrative Agent.

     "Assignment of Lease" means,  collectively,  the  Collateral  Assignment of
Rights in Leases  now or  hereafter  encumbering  any of the  Borrower's  or any
Guarantor's Space Leased Restaurants.

     "Attributable  Indebtedness"  means,  on any date,  (a) in  respect  of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation,  the capitalized amount of
the remaining  lease  payments  under the relevant  lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

     "Audited Financial Statements" means the audited consolidated balance sheet
of the  Borrower  and its  Subsidiaries  for the fiscal year ended  December 27,
2004,  and  the  related  consolidated   statements  of  income  or  operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

     "Availability  Period" means the period from and including the Closing Date
to the earliest of (a) the Maturity  Date,  (b) the date of  termination  of the
Aggregate  Commitments pursuant to Section 2.06, and (c) the date of termination
of the  commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.02.

                                       3

<PAGE>

     "Bamboo Club" means The Bamboo Club Asian Bistro.
      -----------

     "Bank of America" means Bank of America, N.A. and its successors.
     ---------------

     "Base  Rate"  means for any day a  fluctuating  rate per annum equal to the
higher of (a) the Federal  Funds Rate plus 1/2 of 1% or (b) the rate of interest
in  effect  for  such day as  publicly  announced  from  time to time by Bank of
America as its "prime  rate." The "prime  rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors,  and is used as a reference point
for pricing some loans,  which may be priced at, above,  or below such announced
rate.  Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public  announcement of such
change.

     "Base Rate Loan" means a Loan  (including  a Segment)  that bears  interest
based on the Base Rate.

     "Base Rate Revolving Loan" means a Revolving Loan that is a Base Rate Loan.

     "Base Rate Segment"  means a Segment that bears  interest based on the Base
Rate.

     "Borrower" has the meaning specified in the introductory paragraph hereto.

     "Borrower Materials" has the meaning specified in Section 6.02.

     "Borrowing" means (a) a Term Loan Borrowing,  or (b) a Revolving Borrowing,
as the context may require.

     "Business"  means the  operation by the Borrower  and its  Subsidiaries  of
Restaurants at the Unit Locations.

     "Business Day" means any day other than a Saturday,  Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative  Agent's Office is located and, if
such day  relates  to any  Eurodollar  Rate  Loan,  means  any such day on which
dealings in Dollar  deposits are  conducted  by and between  banks in the London
interbank eurodollar market.

     "Cash Collateralize" has the meaning specified in Section 2.03(g).

     "Change in Law" means the occurrence,  after the date of this Agreement, of
any of the  following:  (a) the  adoption  or taking  effect  of any law,  rule,
regulation or treaty,  (b) any change in any law, rule,  regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any  request,  guideline or directive
(whether or not having the force of law) by any Governmental Authority.

     "Change of Control" means an event or series of events by which:

          (a)  any "person" or "group" (as such terms are used in Sections 13(d)
     and  14(d) of the  Securities  Exchange  Act of  1934,  but  excluding  any
     employee benefit plan of such person or its subsidiaries, and any person or

                                       4

<PAGE>

     entity  acting in its  capacity as  trustee,  agent or other  fiduciary  or
     administrator of any such plan) becomes the "beneficial  owner" (as defined
     in Rules 13d-3 and 13d-5 under the Securities  Exchange Act of 1934, except
     that a person or group shall be deemed to have  "beneficial  ownership"  of
     all  securities  that such  person or group has the right to acquire  (such
     right, an "option right"), whether such right is exercisable immediately or
     only after the passage of time), directly or indirectly,  of 20% or more of
     the equity  securities of the Borrower  entitled to vote for members of the
     board of  directors  or  equivalent  governing  body of the  Borrower  on a
     fully-diluted  basis (and taking into account all such securities that such
     person or group has the right to acquire pursuant to any option right);

          (b)  during any period of 12  consecutive  months,  a majority  of the
     members of the board of directors or other equivalent governing body of the
     Borrower cease to be composed of  individuals  (i) who were members of that
     board or equivalent  governing  body on the first day of such period,  (ii)
     whose election or nomination to that board or equivalent governing body was
     approved by individuals referred to in clause (i) above constituting at the
     time of such  election or  nomination  at least a majority of that board or
     equivalent  governing  body or (iii) whose  election or  nomination to that
     board or  other  equivalent  governing  body was  approved  by  individuals
     referred to in clauses (i) and (ii) above  constituting at the time of such
     election  or  nomination  at least a majority  of that board or  equivalent
     governing  body  (excluding,  in the case of both  clause  (ii) and  clause
     (iii), any individual whose initial nomination for, or assumption of office
     as, a member of that board or equivalent  governing body occurs as a result
     of an actual or  threatened  solicitation  of proxies or  consents  for the
     election or removal of one or more  directors  by any person or group other
     than a  solicitation  for the  election of one or more  directors  by or on
     behalf of the board of directors);

          (c)  any Person or two or more  Persons  acting in concert  shall have
     acquired by contract or otherwise, or shall have entered into a contract or
     arrangement  that, upon consummation  thereof,  will result in its or their
     acquisition of the power to exercise, directly or indirectly, a controlling
     influence over the management or policies of the Borrower,  or control over
     the equity  securities of the Borrower  entitled to vote for members of the
     board of  directors  or  equivalent  governing  body of the  Borrower  on a
     fully-diluted  basis (and taking into account all such securities that such
     Person or group has the right to  acquire  pursuant  to any  option  right)
     representing  20% or more of the combined voting power of such  securities;
     or

          (d)  John  Antioco  ceases to be a member of the board of directors of
     the Borrower.

     "Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.

     "CNL Facility" means the agreements identified on Schedule 1.01A.

     "CNL Sale/Leaseback" the agreements identified on Schedule 1.01B

                                       5

<PAGE>

     "Code" means the Internal Revenue Code of 1986.

     "Collateral"  means any and all assets and  rights  and  interest  in or to
property  of the  Borrower  or any of the other Loan  Parties,  whether  real or
personal,  tangible or intangible, in which a Lien is granted or purported to be
granted pursuant to the Security Instruments.

     "Commitment"  means,  as to each Lender,  its  obligation  to (a) make Term
Loans to the Borrower  pursuant to Section 2.01, (b) make Revolving Loans to the
Borrower  pursuant  to Section  2.02,  and (c)  purchase  participations  in L/C
Obligations, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth  opposite  such Lender's name on Schedule 2.01 or in
the  Assignment  and  Assumption  pursuant to which such Lender  becomes a party
hereto,  as  applicable,  as such  amount may be  adjusted  from time to time in
accordance with this Agreement.

     "Compliance  Certificate" means a certificate  substantially in the form of
Exhibit C.

     "Consolidated  Debt  Service"  means,  with respect to any period,  the sum
(without  duplication)  of (a) the aggregate  amount of all scheduled  principal
payments of  Indebtedness  during such period  (other than optional or mandatory
prepayments  of  Obligations  due under  Section  2.04  hereof),  whether or not
payment was made during the measurement period, (b) Deemed Amortization for such
period, (c) Consolidated  Interest Charges during such period, (d) the aggregate
amount of all actual  payments  due,  whether or not payment was made during the
measurement period,  under capital leases  obligations,  and (e) Operating Lease
and Rental Expense for such  measurement  period,  each of (a) (except as to the
inclusion of synthetic leases),  (c), (d) and (e) above determined in accordance
with GAAP on a consolidated basis.

     "Consolidated  EBITDA"  means,  for any period,  for the  Borrower  and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the  following  to the extent  deducted in  calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for Federal, state, local and foreign income taxes payable by
the  Borrower  and its  Subsidiaries  for such period,  (iii)  depreciation  and
amortization  expense and (iv) other non-recurring  expenses of the Borrower and
its Subsidiaries  reducing such Consolidated Net Income which do not represent a
cash item in such period or any future period and minus (b) the following to the
extent included in calculating such Consolidated Net Income: (i) Federal, state,
local and foreign  income tax credits of the Borrower and its  Subsidiaries  for
such period and (ii) all non-cash items  increasing  Consolidated Net Income for
such period.

     "Consolidated  Fixed  Charge  Coverage  Ratio"  means,  as of any  date  of
determination,  the ratio of (a) Consolidated  EBITDA less  Maintenance  Capital
Expenditures  less income taxes paid during such period plus Operating Lease and
Rental  Expense,  in each case for the period of the four prior fiscal  quarters
ending on such date to (b) Consolidated Debt Service for such period.

     "Consolidated  Funded Indebtedness" means, as of any date of determination,
for the Borrower and its  Subsidiaries on a consolidated  basis,  the sum of (a)
the  outstanding  principal  amount  of  all  obligations,  whether  current  or
long-term,   for  borrowed  money  (including  Obligations  hereunder)  and  all
obligations  evidenced by bonds,  debentures,  notes,  loan  agreements or other

                                       6

<PAGE>

similar  instruments,  (b) all  purchase  money  Indebtedness,  (c)  all  direct
obligations  arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments, (d)
all  obligations  in respect  of the  deferred  purchase  price of  property  or
services (other than trade accounts payable in the ordinary course of business),
(e)  Attributable  Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness  of the types specified in clauses (a) through (e) above of Persons
other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any partnership or joint venture
(other than a joint  venture that is itself a corporation  or limited  liability
company) in which the  Borrower or a  Subsidiary  is a general  partner or joint
venturer,  unless  such  Indebtedness  is  expressly  made  non-recourse  to the
Borrower or such Subsidiary.

     "Consolidated Interest Charges" means, for any period, for the Borrower and
its Subsidiaries on a consolidated  basis, the sum of (a) all interest,  premium
payments, debt discount,  fees, charges and related expenses of the Borrower and
its  Subsidiaries  in connection  with  borrowed  money  (including  capitalized
interest) or in connection with the deferred  purchase price of assets,  in each
case to the extent  treated as interest  in  accordance  with GAAP,  and (b) the
portion of rent  expense of the Borrower  and its  Subsidiaries  with respect to
such period under capital leases that is treated as interest in accordance  with
GAAP.

     "Consolidated  Leverage Ratio" means, as of any date of determination,  the
ratio  of  (a)  Consolidated   Funded  Indebtedness  as  of  such  date  to  (b)
Consolidated  EBITDA for the period of the four fiscal  quarters  most  recently
ended.

     "Consolidated  Net Income" means, for any period,  for the Borrower and its
Subsidiaries  on a  consolidated  basis,  the net income of the Borrower and its
Subsidiaries (excluding  extraordinary gains but including extraordinary losses)
for that period.

     "Contractual  Obligation"  means,  as to any Person,  any  provision of any
security  issued  by  such  Person  or of any  agreement,  instrument  or  other
undertaking  to  which  such  Person  is a party  or by  which  it or any of its
property is bound.

     "Control"  means the  possession,  directly or indirectly,  of the power to
direct or cause the direction of the management or policies of a Person, whether
through  the  ability to  exercise  voting  power,  by  contract  or  otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

     "Credit Extension" means each of the following:  (a) a Borrowing and (b) an
L/C Credit Extension.

     "Debt Issuance"  means the incurrence,  issuance or sale by the Borrower or
any of its Subsidiaries of any debt  (including,  without  limitation,  any debt
securities,  whether in a public  offering of such  securities or otherwise) but
excluding  issuance of any Indebtedness  permitted under Section 7.03(a) through
(g).

     "Debtor  Relief Laws" means the Bankruptcy  Code of the United States,  and
all other liquidation,  conservatorship,  bankruptcy, assignment for the benefit

                                       7

<PAGE>

of   creditors,    moratorium,    rearrangement,    receivership,    insolvency,
reorganization,  or similar  debtor  relief  Laws of the United  States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

     "Deemed  Amortization"  means,  with  respect  to  any  four-fiscal-quarter
period, the aggregate  Outstanding Amount of Revolving Loans and L/C Obligations
(including,  without  limitation,  the undrawn amounts of outstanding Letters of
Credit) as of the last day of such four-fiscal-quarter period divided by 10.

     "Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice,  the passage of time, or both,  would be
an Event of Default.

     "Default Rate" means (a) when used with respect to  Obligations  other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any,  applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate  (including  any Applicable
Rate)  otherwise  applicable  to such Loan plus 2% per annum,  and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable  Rate plus
2% per annum.

     "Defaulting  Lender"  means  any  Lender  that (a) has  failed  to fund any
portion of the Revolving Loans or participations in L/C Obligations  required to
be funded by it hereunder  within one  Business  Day of the date  required to be
funded  by  it  hereunder,   (b)  has  otherwise  failed  to  pay  over  to  the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due, unless the subject of
a good faith dispute,  or (c) has been deemed insolvent or become the subject of
a bankruptcy or insolvency proceeding.

     "Direct Foreign Subsidiary" means a Foreign Subsidiary, a majority of whose
Voting Securities is owned directly by the Borrower or a Domestic Subsidiary.

     "Disposition"  or "Dispose"  means the sale,  transfer,  license,  lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment,  transfer or other disposal, with
or  without  recourse,  of any notes or  accounts  receivable  or any rights and
claims associated therewith.

     "Dollar" and "$" mean lawful money of the United States.

     "Domestic Subsidiary" means any Subsidiary that is organized under the laws
of any political subdivision of the United States.

     "Eligible  Assignee" means (a) a Lender;  (b) an Affiliate of a Lender; (c)
an  Approved  Fund;  and (d) any other  Person  (other  than a  natural  person)
approved by (i) the Administrative  Agent and the L/C Issuer, and (ii) unless an
Event of  Default  has  occurred  and is  continuing,  the  Borrower  (each such
approval  not  to  be   unreasonably   withheld  or  delayed);   provided   that
notwithstanding  the  foregoing,  "Eligible  Assignee"  shall  not  include  the
Borrower or any of the Borrower's Affiliates or Subsidiaries.

                                       8

<PAGE>

     "Environmental  Laws" means any and all Federal,  state, local, and foreign
statutes,  laws, regulations,  ordinances,  rules,  judgments,  orders, decrees,
permits, concessions,  grants, franchises,  licenses, agreements or governmental
restrictions  relating to pollution and the protection of the environment or the
release  of any  materials  into the  environment,  including  those  related to
hazardous  substances or wastes, air emissions and discharges to waste or public
systems.

     "Environmental  Liability"  means any  liability,  contingent  or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective  Subsidiaries directly or indirectly resulting from or based upon (a)
violation  of  any  Environmental  Law,  (b)  the  generation,   use,  handling,
transportation,  storage,  treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous  Materials,  (d) the release or threatened  release of
any Hazardous  Materials into the environment or (e) any contract,  agreement or
other consensual  arrangement  pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

     "Equity  Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants,  options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person,  all of the securities  convertible into or exchangeable for shares
of capital stock of (or other  ownership or profit  interests in) such Person or
warrants,  rights or options for the purchase or acquisition from such Person of
such shares (or such other interests),  and all of the other ownership or profit
interests  in such  Person  (including  partnership,  member or trust  interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

     "Equity  Issuance"  means the issuance,  sale or other  disposition  by the
Borrower or any of its Subsidiaries of any of its Equity  Interests  (including,
without limitation,  pursuant to an initial Public Equity Offering), any rights,
warrants or options to purchase or acquire any shares of its Equity Interests or
any other security or instrument representing,  convertible into or exchangeable
for any Equity Interests in the Borrower or any of its Subsidiaries.

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

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
under common  control with the Borrower  within the meaning of Section 414(b) or
(c) of the  Code  (and  Sections  414(m)  and (o) of the Code  for  purposes  of
provisions relating to Section 412 of the Code).

     "ERISA Event" means (a) a Reportable  Event with respect to a Pension Plan;
(b) a  withdrawal  by the  Borrower or any ERISA  Affiliate  from a Pension Plan
subject  to  Section  4063  of  ERISA  during  a plan  year  in  which  it was a
substantial  employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of  operations  that is treated as such a withdrawal  under  Section  4062(e) of
ERISA;  (c) a  complete  or  partial  withdrawal  by the  Borrower  or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in  reorganization;  (d) the  filing of a notice of  intent  to  terminate,  the
treatment of a Plan  amendment as a termination  under Sections 4041 or 4041A of

                                       9

<PAGE>

ERISA,  or the  commencement  of  proceedings by the PBGC to terminate a Pension
Plan or Multiemployer  Plan; (e) an event or condition which constitutes grounds
under  Section 4042 of ERISA for the  termination  of, or the  appointment  of a
trustee to  administer,  any  Pension  Plan or  Multiemployer  Plan;  or (f) the
imposition  of any  liability  under  Title  IV of  ERISA,  other  than for PBGC
premiums due but not delinquent  under Section 4007 of ERISA,  upon the Borrower
or any ERISA Affiliate.

     "Eurodollar  Rate"  means,  for  any  Interest  Period  with  respect  to a
Eurodollar  Rate  Loan,  the  rate  per  annum  equal  to  the  British  Bankers
Association  LIBOR  Rate  ("BBA  LIBOR"),  as  published  by  Reuters  (or other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative  Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest  Period,  for
Dollar  deposits (for delivery on the first day of such Interest  Period) with a
term equivalent to such Interest  Period.  If such rate is not available at such
time for any reason,  then the "Eurodollar  Rate" for such Interest Period shall
be the rate per annum determined by the  Administrative  Agent to be the rate at
which deposits in Dollars for delivery on the first day of such Interest  Period
in same day funds in the  approximate  amount of the Eurodollar  Rate Loan being
made,  continued or converted by Bank of America and with a term  equivalent  to
such  Interest  Period  would be offered by Bank of America's  London  Branch to
major  banks in the  London  interbank  eurodollar  market at their  request  at
approximately   11:00  a.m.  (London  time)  two  Business  Days  prior  to  the
commencement of such Interest Period.

     "Eurodollar  Rate  Loan"  means a Loan  (including  a  Segment)  that bears
interest at a rate based on the Eurodollar Rate.

     "Eurodollar  Rate  Segment"  means a Segment that bears  interest at a rate
based on the Eurodollar Rate.

     "Event of Default" has the meaning specified in Section 8.01.

     "Excluded  CNL  Restaurant"  means  any of the  fourteen  (14)  Restaurants
identified on Schedule  1.01C, in each case so long as CNL or its assignee has a
Lien on such Restaurant.

     "Excluded GMAC  Restaurant"  means either of (i) the Restaurant  located at
72620 El Paseo, Palm Desert, California and (ii) the Restaurant located at 28141
Crown Valley Parkway, Laguna Niguel, California, in each case so long as GMAC or
its assignee has a Lien on such Restaurant,  as each Restaurant is identified on
Schedule 1.01C.

     "Excluded West Sahara Restaurant" means the Restaurant located at 4570 West
Sahara Avenue, Las Vegas, Nevada, as identified on Schedule 1.01C.

     "Excluded Receipts" means,  collectively,  tax refunds,  indemnity payments
and  insurance  proceeds  received by the  Borrower or any of its  Subsidiaries,
provided  that (a) the  amount of any such  Excluded  Receipt  shall not  exceed
$500,000,  and (b) the aggregate amount of all Excluded Receipts of the Borrower
and its Subsidiaries shall not exceed $1,000,000.

     "Excluded Restaurants" means,  collectively,  the Excluded CNL Restaurants,
Excluded  GMAC  Restaurants,  the Excluded  Sale/Leaseback  Restaurants  and the
Excluded West Sahara Restaurant.

                                       10

<PAGE>

     "Excluded Sale/Leaseback  Restaurant" means any of the nine (9) Restaurants
identified on Schedule 1.01D, in each case so long as CNL or its assignee is the
owner of such Restaurant and the Lease of such Restaurant to the Borrower or any
Subsidiary  prohibits  the Borrower or such  Subsidiary  from granting a Lien on
such Restaurant to the Administrative Agent.

     "Excluded  Taxes"  means,  with respect to the  Administrative  Agent,  any
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any  obligation  of the Borrower  hereunder,  (a) taxes imposed on or
measured by its overall net income  (however  denominated),  and franchise taxes
imposed  on it (in  lieu  of net  income  taxes),  by the  jurisdiction  (or any
political  subdivision  thereof)  under  the laws of  which  such  recipient  is
organized  or in which its  principal  office is located  or, in the case of any
Lender,  in which its  applicable  Lending  Office is  located,  (b) any  branch
profits  taxes  imposed by the United  States or any  similar tax imposed by any
other  jurisdiction  in which the  Borrower  is located and (c) in the case of a
Foreign  Lender  (other than an assignee  pursuant to a request by the  Borrower
under Section 10.13),  any withholding tax that is imposed on amounts payable to
such Foreign  Lender at the time such Foreign  Lender becomes a party hereto (or
designates a new Lending  Office) or is  attributable  to such Foreign  Lender's
failure or inability  (other than as a result of a Change in Law) to comply with
Section 3.01(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled,  at the time of  designation  of a new Lending  Office (or
assignment),  to receive  additional  amounts from the Borrower  with respect to
such withholding tax pursuant to Section 3.01(a).

     "Existing   Indebtedness"   means  the  Borrower's  and  its  Subsidiaries'
Indebtedness  existing in connection with the agreements  identified on Schedule
1.01E.

     "Existing  Letters of Credit"  means  those  letters of credit set forth on
Schedule 1.01K.

     "Extraordinary  Receipts"  means cash payments  received by the Borrower or
its  Subsidiaries  not  constituting  Excluded  Receipts or proceeds of any Debt
Issuance,  Equity  Issuance or Property  Sale, and includes  without  limitation
pension  reversions  and any  tax  refunds,  indemnity  payments  and  insurance
proceeds other than Excluded  Receipts;  provided,  however,  that cash payments
received in the ordinary  course of business shall not constitute  Extraordinary
Receipts.

     "Facility Termination Date" means the date as of which all of the following
shall have occurred:  (a) the Borrowers  shall have  permanently  terminated the
credit  facilities  under the Loan  Documents  by final  payment  in full of all
Outstanding  Amounts,  together  with all accrued and unpaid  interest  and fees
thereon;  (b) all Commitments shall have terminated or expired;  (c) all Letters
of Credit shall have terminated or expired;  (d) the obligations and liabilities
of the Borrower and each other Loan Party under all Related Credit  Arrangements
shall have been fully,  finally and  irrevocably  paid and satisfied in full and

                                       11

<PAGE>

the Related Credit Arrangements shall have expired or been terminated,  or other
arrangements  satisfactory  to the  counterparties  shall  have  been  made with
respect  thereto;  and (e) the  Borrower  and each other  Loan Party  shall have
fully,  finally  and  irrevocably  paid  and  satisfied  in  full  all of  their
respective  obligations  and  liabilities  arising  under  the  Loan  Documents,
including  with respect to the Borrower and the  Obligations  other than Related
Credit  Arrangements  as to which  clause  (d) shall  apply  (except  for future
obligations   consisting  of  continuing   indemnities   and  other   contingent
Obligations  of the  Borrower  or any  Loan  Party  that  may  be  owing  to the
Administrative  Agent, any Lender, or any Related Parties of the  Administrative
Agent  or any  Lender  pursuant  to the Loan  Documents  and  expressly  survive
termination of the Credit Agreement or any other Loan Document).

     "Federal  Funds Rate"  means,  for any day, the rate per annum equal to the
weighted  average of the rates on  overnight  Federal  funds  transactions  with
members of the Federal  Reserve System arranged by Federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding  such day;  provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such  transactions  on
the next preceding Business Day as so published on the next succeeding  Business
Day, and (b) if no such rate is so published  on such next  succeeding  Business
Day,  the  Federal  Funds Rate for such day shall be the average  rate  (rounded
upward,  if  necessary,  to a whole  multiple of 1/100 of 1%) charged to Bank of
America on such day on such  transactions  as determined  by the  Administrative
Agent.

     "Fee Letter"  means the letter  agreement,  dated July 27, 2005,  among the
Borrower, the Administrative Agent and the Arranger.

     "Foreign  Lender"  means any Lender that is  organized  under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition,  the United States,  each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     "Foreign   Subsidiary"   means  any  Subsidiary  that  is  not  a  Domestic
Subsidiary.

     "Franchise  Agreements"  means,  collectively,  all  franchise  agreements,
development agreements,  license agreements or related agreements by and between
the Franchisor and the Borrower or any Subsidiary,  which  agreements  relate to
any of the Restaurants,  including but not limited to those Franchise Agreements
described on Schedule 1.01F attached hereto.

     "Franchisor"  means,  collectively,   Carlson  Restaurants  Worldwide,  its
successors and assigns.

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

     "Fund" means any Person (other than a natural  person) that is (or will be)
engaged in making,  purchasing,  holding or otherwise  investing  in  commercial
loans and similar extensions of credit in the ordinary course of its business.

     "GAAP" means generally accepted accounting  principles in the United States
set forth in the opinions and pronouncements of the Accounting  Principles Board
and the American  Institute of Certified  Public  Accountants and statements and
pronouncements  of the  Financial  Accounting  Standards  Board  or  such  other
principles  as  may be  approved  by a  significant  segment  of the  accounting
profession in the United States,  that are applicable to the circumstances as of
the date of determination, consistently applied.

                                       12

<PAGE>

     "Governmental  Authority"  means the government of the United States or any
other nation, or of any political  subdivision thereof,  whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative,  judicial, taxing, regulatory
or administrative  powers or functions of or pertaining to government (including
any  supra-national  bodies such as the European  Union or the European  Central
Bank).

     "Ground Leased Real Estate Support  Documents"  means,  with respect to any
Restaurant or other real  property  which is leased or subleased to the Borrower
or a Guarantor,  pursuant to a ground lease, such landlord and mortgagee waivers
and nondisturbance agreements,  third party consents,  mortgagee title insurance
policies  (in amounts and with  endorsements  acceptable  to the  Administrative
Agent), surveys, environmental reports, flood hazard certifications, evidence of
flood  insurance,  if  required,  and other  mortgage-related  documents  as the
Administrative Agent may reasonably request.

     "Guarantee" means, as to any Person, any (a) any obligation,  contingent or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing  any  Indebtedness  or other  obligation  payable or performable by
another  Person  (the  "primary  obligor")  in any manner,  whether  directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply  funds for the  purchase or payment of)
such  Indebtedness  or other  obligation,  (ii) to purchase  or lease  property,
securities  or services  for the  purpose of assuring  the obligee in respect of
such  Indebtedness  or other  obligation of the payment or  performance  of such
Indebtedness or other  obligation,  (iii) to maintain  working  capital,  equity
capital or any other  financial  statement  condition  or  liquidity or level of
income or cash flow of the primary  obligor so as to enable the primary  obligor
to pay such  Indebtedness  or other  obligation,  or (iv)  entered  into for the
purpose  of  assuring  in any  other  manner  the  obligee  in  respect  of such
Indebtedness  or other  obligation of the payment or  performance  thereof or to
protect such obligee  against loss in respect  thereof (in whole or in part), or
(b) any Lien on any assets of such Person  securing  any  Indebtedness  or other
obligation  of any  other  Person,  whether  or not such  Indebtedness  or other
obligation is assumed by such Person (or any right,  contingent or otherwise, of
any  holder of such  Indebtedness  to obtain any such  Lien).  The amount of any
Guarantee  shall be deemed to be an amount  equal to the stated or  determinable
amount of the related  primary  obligation,  or portion  thereof,  in respect of
which such  Guarantee  is made or, if not stated or  determinable,  the  maximum
reasonably  anticipated  liability  in  respect  thereof  as  determined  by the
guaranteeing  Person  in  good  faith.  The  term  "Guarantee"  as a verb  has a
corresponding meaning.

     "Guarantors" means, collectively, each Subsidiary of the Borrower.

     "Guaranty" means that certain Guaranty Agreement executed by the Guarantors
in favor of the Administrative Agent and the Lenders,  substantially in the form
of Exhibit E, as  supplemented  from time to time by  execution  and delivery of
Guaranty Joinder Agreements pursuant to Section 6.12 or otherwise.

     "Guaranty  Joinder   Agreement"  means  each  Guaranty  Joinder  Agreement,
substantially  in the  form  thereof  attached  to the  Guaranty,  executed  and
delivered by a Subsidiary to the Administrative Agent pursuant to Section 6.12.

                                       13

<PAGE>

     "Hazardous  Materials"  means all  explosive or  radioactive  substances or
wastes  and all  hazardous  or toxic  substances,  wastes  or other  pollutants,
including petroleum or petroleum  distillates,  asbestos or  asbestos-containing
materials,  polychlorinated  biphenyls,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

     "Indebtedness"  means,  as to any  Person  at a  particular  time,  without
duplication,  all of the following,  whether or not included as  indebtedness or
liabilities in accordance with GAAP:

          (a)  all  obligations  of  such  Person  for  borrowed  money  and all
     obligations  of such Person  evidenced by bonds,  debentures,  notes,  loan
     agreements or other similar instruments;

          (b)  all direct or contingent obligations of such Person arising under
     letters of credit (including standby and commercial), bankers' acceptances,
     bank guaranties, surety bonds and similar instruments;

          (c)  net obligations of such Person under any Swap Contract;

          (d)  all obligations of such Person to pay the deferred purchase price
     of property or services (other than trade accounts  payable in the ordinary
     course of business;

          (e)  indebtedness  (excluding  prepaid interest  thereon) secured by a
     Lien on  property  owned  or  being  purchased  by such  Person  (including
     indebtedness  arising  under  conditional  sales or other  title  retention
     agreements),  whether or not such  indebtedness  shall have been assumed by
     such Person or is limited in recourse;

          (f)  capital leases and Synthetic Lease Obligations;

          (g)  all  obligations  of such  Person to  purchase,  redeem,  retire,
     defease or otherwise make any payment in respect of any Equity  Interest in
     such  Person  or any  other  Person,  valued,  in the case of a  redeemable
     preferred  interest,  at  the  greater  of  its  voluntary  or  involuntary
     liquidation preference plus accrued and unpaid dividends; and

          (h)  all Guarantees of such Person in respect of any of the foregoing.

     For all purposes  hereof,  the Indebtedness of any Person shall include the
Indebtedness  of any  partnership  or joint venture  (other than a joint venture
that is itself a corporation or limited liability  company) in which such Person
is a general partner or a joint venturer,  unless such Indebtedness is expressly
made  non-recourse  to such Person.  The amount of any net obligation  under any
Swap  Contract  on any date  shall be  deemed to be the Swap  Termination  Value
thereof as of such date.  The amount of any  capital  lease or  Synthetic  Lease
Obligation  as of any date  shall be  deemed to be the  amount  of  Attributable
Indebtedness in respect thereof as of such date.

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Indemnitees" has the meaning specified in Section 10.04(b).

                                       14

<PAGE>

     "Information" has the meaning specified in Section 10.07.

     "Interest  Payment  Date" means,  (a) as to any Loan other than a Base Rate
Loan,  the last day of each  Interest  Period  applicable  to such  Loan and the
Maturity  Date;  and (b) as to any Base Rate Loan,  the first Business Day after
the end of each March, June, September and December and the Maturity Date.

     "Interest  Period"  means,  as to each  Eurodollar  Rate  Loan,  the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued  as a  Eurodollar  Rate Loan and ending on the date one,  two or three
months  thereafter,  as selected by the  Borrower in its Loan  Notice;  provided
that:

          (i)  any Interest Period that would otherwise end on a day that is not
     a Business Day shall be extended to the next succeeding Business Day unless
     such  Business  Day falls in  another  calendar  month,  in which case such
     Interest Period shall end on the next preceding Business Day;

          (ii) any  Interest  Period that begins on the last  Business  Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the calendar month at the end of such Interest  Period) shall end on
     the last  Business  Day of the calendar  month at the end of such  Interest
     Period; and

          (iii) no Interest Period shall extend beyond the Maturity Date.

Notwithstanding the foregoing,  at the option of the Administrative  Agent, on a
one-time basis, an Interest Period may be slightly shorter or slightly longer in
order to  allow  the last  days of  Interest  Periods  to match  with the  dates
amortization amounts are due under the Term Loan as set forth in Section 2.07 of
this Agreement.

     "Internal  Control  Event"  means,  with  respect  to the  Borrower  or any
Subsidiary, a determination by management or the Audit Committee of the Board of
Directors of the Borrower or by the  Borrower's  Public  Accountants  that (i) a
material weakness, as described in the Securities Laws, exists in the Borrower's
or any Subsidiary's internal controls over financial reporting, or (ii) a member
of the senior  management of the Borrower or any Subsidiary has committed an act
of fraud.

     "Investment" means, as to any Person, any direct or indirect acquisition or
investment  by such  Person,  whether  by  means  of (a) the  purchase  or other
acquisition of capital stock or other securities of another Person,  (b) a loan,
advance or capital  contribution  to,  Guarantee  or  assumption  of debt of, or
purchase  or other  acquisition  of any other  debt or equity  participation  or
interest in, another Person, including any partnership or joint venture interest
in such  other  Person  and any  arrangement  pursuant  to  which  the  investor
Guarantees  Indebtedness  of such other  Person,  or (c) the  purchase  or other
acquisition  (in one  transaction  or a series  of  transactions)  of  assets of
another  Person  that  constitute  a business  unit.  For  purposes  of covenant
compliance,  the amount of any Investment shall be the amount actually invested,
without  adjustment for  subsequent  increases or decreases in the value of such
Investment.

     "IP Rights" has the meaning specified in Section 5.17.

                                       15

<PAGE>

     "IRS" means the United States Internal Revenue Service.

     "ISP"  means,  with  respect to any Letter of  Credit,  the  "International
Standby Practices 1998" published by the Institute of International  Banking Law
&  Practice  (or such later  version  thereof as may be in effect at the time of
issuance).

     "Issuer  Documents" means with respect to any Letter of Credit,  the Letter
of Credit Application,  and any other document, agreement and instrument entered
into by the L/C Issuer and the Borrower (or any  Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.

     "Key  Management  Team" means William G. Schrader,  Michael  Garnreiter and
Stuart Gee.

     "Laws" means, collectively, all international,  foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations,  ordinances, codes and
administrative   or  judicial   precedents   or   authorities,   including   the
interpretation or administration  thereof by any Governmental  Authority charged
with  the  enforcement,   interpretation  or  administration  thereof,  and  all
applicable   administrative  orders,   directed  duties,   requests,   licenses,
authorizations and permits of, and agreements with, any Governmental  Authority,
in each case whether or not having the force of law.

     "L/C Advance" means, with respect to each Lender,  such Lender's funding of
its  participation  in any L/C  Borrowing  in  accordance  with  its  Applicable
Percentage.

     "L/C Borrowing" means an extension of credit resulting from a drawing under
any  Letter of Credit  which  has not been  reimbursed  on the date when made or
refinanced as a Revolving Borrowing.

         "L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.

     "L/C Issuer"  means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

     "L/C  Obligations"  means, as at any date of  determination,  the aggregate
amount  available to be drawn under all  outstanding  Letters of Credit plus the
aggregate  of all  Unreimbursed  Amounts,  including  all  L/C  Borrowings.  For
purposes  of  computing  the amount  available  to be drawn  under any Letter of
Credit,  the amount of such Letter of Credit shall be  determined  in accordance
with  Section  1.06.  For all  purposes  of this  Agreement,  if on any  date of
determination  a Letter of Credit  has  expired  by its terms but any amount may
still be drawn  thereunder  by reason of the  operation of Rule 3.14 of the ISP,
such  Letter of Credit  shall be deemed  to be  "outstanding"  in the  amount so
remaining available to be drawn.

     "Lease" means each operating or capital lease of real or personal property,
or  both,  related  to a  Restaurant  or to  the  operations  of  the  Business,
including, but not limited to, those leases set forth in Schedule 1.01G attached
hereto.

                                       16

<PAGE>

     "Lender" has the meaning specified in the introductory paragraph hereto.

     "Lending  Office"  means,  as to any Lender,  the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire,  or such
other  office or offices as a Lender may from time to time  notify the  Borrower
and the Administrative Agent.

     "Letter of Credit" means any standby letter of credit issued  hereunder and
shall include the Existing Letters of Credit.

     "Letter of Credit  Application"  means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

     "Letter of Credit  Expiration  Date" means the day that is seven days prior
to the Maturity  Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

     "Letter of Credit Fee" has the meaning specified in Section 2.04(i).

     "Letter of Credit Sublimit" means an amount equal to $4,000,000. The Letter
of  Credit  Sublimit  is  part  of,  and  not  in  addition  to,  the  Aggregate
Commitments.

     "Lien"  means any  mortgage,  pledge,  hypothecation,  assignment,  deposit
arrangement,  encumbrance,  lien  (statutory or other),  charge,  or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever  (including any conditional
sale or other title  retention  agreement,  any easement,  right of way or other
encumbrance  on  title  to  real  property,   and  any  financing  lease  having
substantially the same economic effect as any of the foregoing).

     "Loan"  means an  extension  of credit by a Lender  to the  Borrower  under
Article  II in the  form of a  Revolving  Loan  or a Term  Loan,  including  any
Segment.

     "Loan Documents" means this Agreement, each Note, each Issuer Document, the
Fee Letter,  the Guaranty  (including each Guaranty Joinder  Agreement) and each
Security Instrument.

     "Loan Notice" means (i) with respect to a Revolving  Loan, a written notice
delivered by the  Responsible  Officer of the Borrower in connection  with (a) a
Revolving  Borrowing,  (b) a conversion of Revolving  Loans from one Type to the
other,  or (c) a  continuation  of  Eurodollar  Rate Loans,  pursuant to Section
2.03(a),  or (ii) with respect to the Term Loan, a written notice delivered by a
Responsible Officer of the Borrower in connection with (a) the conversion of any
Eurodollar Segment to a Base Rate Segment or (b) the conversion of any Base Rate
Segment to a Eurodollar Rate Segment,  in each case in substantially the form of
Exhibit A.

     "Loan Parties" means, collectively,  the Borrower, each Guarantor, and each
Person (other than the Administrative  Agent or any Lender) executing a Security
Instrument.

     "Maintenance Capital  Expenditures" means, as of any date of determination,
the greater of (A) actual maintenance capital expenses during the period of four
fiscal  quarters ending on such date and (B) $35,000 per Restaurant in operation
as of the end of the  fiscal  quarter  immediately  preceding  such four  fiscal
quarters.

                                       17

<PAGE>

     "Material  Adverse  Effect"  means (a) a material  adverse  change in, or a
material adverse effect upon, the operations, business, properties,  liabilities
(actual or contingent),  condition  (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations  under any Loan Document to
which it is a party; (c) a material adverse effect upon the legality,  validity,
binding effect or enforceability  against any Loan Party of any Loan Document to
which it is a party;  or (d) a  material  adverse  effect  upon the  rights  and
remedies of the Administrative Agent or any Lender under the Loan Documents.

     "Material Management Agreements" means (i) the employment agreement between
William G.  Schrader and the Borrower,  dated as of November 19, 2004,  and (ii)
the employment  agreement between Michael Garnreiter and the Borrower,  dated as
of November 19, 2004.

     "Maturity Date" means October 31, 2010.

     "Mortgages"  means,  collectively,  the  mortgages or deeds of trust now or
hereafter  encumbering any of the Borrower's or any Guarantor's fee or leasehold
estates in the Restaurants  and other property as described  therein in favor of
the Administrative Agent.

     "Multiemployer  Plan" means any employee benefit plan of the type described
in Section  4001(a)(3)  of ERISA,  to which the Borrower or any ERISA  Affiliate
makes or is obligated to make  contributions,  or during the preceding five plan
years, has made or been obligated to make contributions.

     "Net Cash  Proceeds"  means the  aggregate  cash  proceeds  received by the
Borrower  or any of its  Subsidiaries  in respect of any Debt  Issuance,  Equity
Issuance or Property Sale (including, without limitation, any cash received upon
the sale or other disposition of any noncash consideration  received in any Debt
Issuance, Equity Issuance or Property Sale), net of the direct costs relating to
such Debt  Issuance,  Equity  Issuance  or  Property  Sale  (including,  without
limitation   legal,   accounting   and   investment   banking  fees,  and  sales
commissions),  taxes paid or payable as a result  thereof,  and any  reserve for
adjustment in respect of the sale price of such asset or assets  established  in
accordance with GAAP.

     "Note"  means a  promissory  note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

     "Obligations" means all advances to, and debts,  liabilities,  obligations,
covenants  and  duties of, any Loan Party  arising  under any Loan  Document  or
otherwise  with  respect  to any  Loan,  Letter  of  Credit  or  Related  Credit
Arrangement,   whether   direct  or  indirect   (including   those  acquired  by
assumption),  absolute  or  contingent,  due or to become due,  now  existing or
hereafter  arising  and  including  interest  and fees  that  accrue  after  the
commencement  by or  against  any Loan  Party or any  Affiliate  thereof  of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding,  regardless of whether such interest and fees are allowed  claims in
such proceeding.

     "Operating Lease and Rental Expense" means,  for any period,  all operating
lease and  rental  expense  paid in cash by the  Borrower  and its  Subsidiaries
during such period.

                                       18

<PAGE>

     "Organization  Documents"  means, (a) with respect to any corporation,  the
certificate  or  articles  of  incorporation  and the bylaws (or  equivalent  or
comparable  constitutive  documents with respect to any non-U.S.  jurisdiction);
(b) with respect to any limited liability  company,  the certificate or articles
of formation or organization  and operating  agreement;  and (c) with respect to
any  partnership,  joint venture,  trust or other form of business  entity,  the
partnership,  joint  venture  or other  applicable  agreement  of  formation  or
organization  and any  agreement,  instrument,  filing  or notice  with  respect
thereto  filed  in  connection  with  its  formation  or  organization  with the
applicable  Governmental  Authority  in the  jurisdiction  of its  formation  or
organization  and, if  applicable,  any  certificate or articles of formation or
organization of such entity.

     "Other Taxes" means all present or future stamp or documentary taxes or any
other  excise or property  taxes,  charges or similar  levies  arising  from any
payment made  hereunder or under any other Loan Document or from the  execution,
delivery or enforcement  of, or otherwise with respect to, this Agreement or any
other Loan Document.

     "Outstanding  Amount"  means (i) with respect to the Term Loan on any date,
the aggregate  outstanding  principal  amount thereof after giving effect to any
borrowings  and any  prepayments or repayments of the Term Loan (or any Segment,
as the case may be) occurring on such date, (ii) with respect to Revolving Loans
on any date,  the aggregate  outstanding  principal  amount thereof after giving
effect to any  borrowings  and  prepayments  or  repayments  of Revolving  Loans
occurring  on such date,  and (iii) with respect to any L/C  Obligations  on any
date, the amount of such L/C Obligations on such date after giving effect to any
L/C  Credit  Extension  occurring  on such  date and any  other  changes  in the
aggregate  amount of the L/C Obligations as of such date,  including as a result
of any reimbursements by the Borrower of Unreimbursed Amounts.

     "Owned Real Estate Support Documents" means, with respect to any Restaurant
or other real  property  which is owned by the  Borrower or a  Guarantor  in fee
simple,  such third party  consents,  mortgagee  title  insurance  policies  (in
amounts and with endorsements  acceptable to the Administrative Agent), surveys,
environmental reports, flood hazard certifications, evidence of flood insurance,
if required,  and other  mortgage-related  documents as the Administrative Agent
may reasonably request.

     "Participant" has the meaning specified in Section 10.06(d).

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Pension Plan" means any "employee  pension  benefit plan" (as such term is
defined in Section  3(2) of ERISA),  other than a  Multiemployer  Plan,  that is
subject to Title IV of ERISA and is sponsored or  maintained  by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate  contributes
or has an obligation  to  contribute,  or in the case of a multiple  employer or
other plan described in Section 4064(a) of ERISA, has made  contributions at any
time during the immediately preceding five plan years.

     "Permitted Equity Issuances" means,  collectively,  (a) the sale of capital
stock of the Borrower to the holders of Permitted  Warrants or Options  pursuant
to the  exercise  of such  warrants  or  options  by such  holders,  and (b) the

                                       19

<PAGE>

issuance of Permitted Warrants or Options or restricted stock of the Borrower to
employees  of  the  Borrower  or  any  Subsidiary  as  part  of  the  employment
compensation or benefits of such employees,  in each case in the ordinary course
of business consistent with past practices of the Borrower and its Subsidiaries.

     "Permitted  Liens" means (i) those Liens  created by the Loan  Documents or
permitted under Section 7.01 hereof, and (ii) (a) those Liens,  encumbrances and
other matters  affecting  title to any Unit Location listed on Schedule B to the
loan title  insurance  policy  delivered to and  accepted by the  Administrative
Agent in respect  thereof,  (b) as to any particular  real property at any time,
such  easements,  encroachments,   covenants,  rights  of  way,  minor  defects,
irregularities or encumbrances on title which do not, in the reasonable  opinion
of the  Administrative  Agent,  materially  impair the value or use of such real
property for the purpose for which it is held by any Loan Party,  (c)  municipal
and zoning  ordinances  which are not  violated in any  material  respect by the
existing  improvements and the present use made by any Loan Party, (d) Liens for
general real estate taxes and assessments not yet delinquent, and (e) such other
items as to which the Administrative Agent may consent.

     "Permitted Stock Rights" means, collectively,  those certain rights held on
the date hereof by certain owners of capital stock of the Borrower, which rights
(a) are listed on Schedule 1.01H and (b) entitle the holders thereof to purchase
additional shares of the capital stock of the Borrower under certain conditions,
provided  that under the terms of the stock rights plan  governing  such rights,
the  Borrower  may  repurchase  such rights from the holders  thereof in lieu of
selling such additional shares of capital stock.

     "Permitted  Warrants or Options"  means,  collectively,  (a) those  certain
warrants and options to purchase  capital stock of the Borrower,  which warrants
and options are held by employees of the Borrower or any  Subsidiary on the date
hereof and are listed on Schedule 1.01I, and (b) and any additional  warrants or
options  to  purchase  capital  stock of the  Borrower  that are  issued  by the
Borrower  to  employees  of  the  Borrower  or any  Subsidiary  as  part  of the
employment  compensation  or  benefits  of such  employees,  in each case in the
ordinary  course of business  consistent with past practices of the Borrower and
its Subsidiaries.

     "Person" means any natural person, corporation,  limited liability company,
trust, joint venture, association, company, partnership,  Governmental Authority
or other entity.

     "Plan"  means any  "employee  benefit  plan" (as such  term is  defined  in
Section 3(3) of ERISA)  established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA,  any ERISA
Affiliate.

     "Platform" has the meaning specified in Section 6.02.

     "Pro Rata Revolving Share" means,  with respect to each Revolving Lender at
any time,  a  fraction  (expressed  as a  percentage,  carried  out to the ninth
decimal  place),  the numerator of which is the amount of the  Revolving  Credit
Commitment of such Revolving Lender at such time and the denominator of which is
the amount of the Aggregate  Revolving  Credit  Commitments at such time. If the
commitment of each Revolving  Lender to make Revolving  Loans and the obligation
of the L/C Issuer to make L/C Extensions have been terminated at such time or if

                                       20

<PAGE>

the Aggregate  Revolving  Credit  Commitments  have  expired,  then the Pro Rata
Revolving  Share of each Revolving  Lender shall be determined  based on the Pro
Rata  Revolving  Share of such Revolving  Lender most recently in effect,  after
giving effect to any subsequent  assignments  made pursuant to the terms hereof.
The  initial  Pro Rata  Revolving  Share of each  Revolving  Lender is set forth
opposite the name of such Revolving Lender on Schedule 2.01 or in the Assignment
and Assumption  pursuant to which such Revolving  Lender becomes a party hereto,
as applicable.

     "Pro Rata Term Share"  means,  with respect to each Term Loan  Lender,  the
percentage  (carried out to the ninth decimal place) of the principal  amount of
the Term  Loan  funded  by such Term Loan  Lender,  after  giving  effect to any
subsequent  assignments made pursuant to the terms hereof.  The initial Pro Rata
Term Share of each Term Loan Lender is set forth  opposite the name of such Term
Loan Lender on Schedule 2.01 or in the  Assignment  and  Assumption  pursuant to
which such Term Loan Lender becomes a party hereto, as applicable.

     "Property  Sale" means any sale,  conveyance  or other  disposition  of any
assets or property of the  Borrower or any of its  Subsidiaries,  other than the
sale of inventory or  equipment  in the ordinary  course of business  consistent
with past practices and other than  Dispositions  permitted by Sections 7.04(a),
7.04(b) and 7.05(d).

     "Public Accountant" has the meaning specified in Section 6.01(a).

     "Public Equity Offering" means  underwritten  public offering of the common
stock of the  Borrower or a  Subsidiary  pursuant to an  effective  registration
statement  filed with the SEC in accordance  with Securities Laws (whether alone
or in conjunction with a secondary public offering).

     "Register" has the meaning specified in Section 10.06(c).

     "Registered  Public  Accounting  Firm"  has the  meaning  specified  in the
Securities  Laws and shall be  independent  of the Borrower as prescribed in the
Securities Laws.

     "Related Credit Arrangements" means,  collectively,  Related Swap Contracts
and Related Treasury Management Arrangements.

     "Related  Parties"  means,  with  respect  to  any  Person,  such  Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.

     "Related  Swap  Contract"  means a Swap  Contract  which is entered into or
maintained  by any Loan Party with a Lender or an Affiliate of a Lender that has
executed and delivered a letter of undertaking in the form of Exhibit H.

     "Related  Treasury  Management  Arrangement"  means an arrangement  for the
delivery of treasury management services to or for the benefit of any Loan Party
which is entered into or  maintained  with a Lender or Affiliate of a Lender and
which is not prohibited by the express terms of the Loan Documents.

                                       21

<PAGE>

     "Reportable  Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30-day notice period has been waived.

     "Request  for Credit  Extension"  means (a) with  respect  to a  Borrowing,
conversion  or  continuation  of Revolving  Loans,  a Loan Notice,  and (b) with
respect to an L/C Credit Extension, a Letter of Credit Application.

     "Required  Lenders" means, as of any date of determination,  Lenders having
at least 75% of the Aggregate  Commitments  or, if the commitment of each Lender
to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated  pursuant to Section 8.02, Lenders holding in the aggregate
at least  75% of the  Total  Outstandings  (with  the  aggregate  amount of each
Lender's risk  participation  and funded  participation in L/C Obligations being
deemed "held" by such Lender for purposes of this definition); provided that the
portion  of  the  Aggregate   Commitment  of,  and  the  portion  of  the  Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

     "Required  Revolving  Lenders"  means,  as of any  date  of  determination,
Revolving  Lenders  having  at  least  75% of  the  Aggregate  Revolving  Credit
Commitments  or, if the  commitment of each  Revolving  Lender to make Revolving
Loans and the  obligation of the L/C Issuer to make L/C Credit  Extensions  have
been  terminated  pursuant to Section  8.02,  Revolving  Lenders  holding in the
aggregate at least 75% of the  Outstanding  Amount of Revolving  Loans (with the
aggregate  amount of each  Revolving  Lender's  risk  participation  and  funded
participation in L/C Obligations being deemed "held" by such Lender for purposes
of this definition); provided that the portion of the Aggregate Revolving Credit
Commitment of, and the portion of the Outstanding Amount of Revolving Loans held
or deemed  held by, any  Defaulting  Lender  shall be excluded  for  purposes of
making a determination of Required Revolving Lenders.

     "Required Term Loan Lenders" means, as of any date of  determination,  Term
Loan  Lenders  having at least 75% of the  Outstanding  Amount of the Term Loan;
provided that the portion of the Outstanding  Amount of Term Loan held or deemed
held by, any  Defaulting  Lender  shall be  excluded  for  purposes  of making a
determination of Required Term Loan Lenders.

     "Responsible Officer" means the chief executive officer,  president,  chief
financial officer, vice president/controller,  vice president/general counsel or
treasurer of a Loan Party. Any document delivered  hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively  presumed to have been
authorized by all necessary  corporate,  partnership  and/or other action on the
part of such  Loan  Party and such  Responsible  Officer  shall be  conclusively
presumed to have acted on behalf of such Loan Party.

     "Restaurant" means any T.G.I. Friday's, Alice Cooper'stown,  Bamboo Club or
Redfish  restaurant  owned  or  leased  and  operated  by  the  Borrower  or any
Subsidiary.

     "Restricted  Payment" means any dividend or other distribution  (whether in
cash,  securities or other  property) with respect to any capital stock or other

                                       22

<PAGE>

Equity  Interest of the Borrower or any Subsidiary,  or any payment  (whether in
cash,  securities  or other  property),  including  any sinking  fund or similar
deposit,  on  account  of the  purchase,  redemption,  retirement,  acquisition,
cancellation or termination of any such capital stock or other Equity  Interest,
or on account of any return of capital to the Borrower's stockholders,  partners
or members (or the equivalent Person thereof).

     "Revolving   Borrowing"  means  a  borrowing   consisting  of  simultaneous
Revolving  Loans of the same Type and,  in the case of  Eurodollar  Rate  Loans,
having the same Interest Period made by each of the Revolving  Lenders  pursuant
to Section 2.02.

     "Revolving Credit  Commitment"  means, as to each Lender, its obligation to
(a)  make  Revolving  Loans  to the  Borrower  pursuant  to  Section  2.02 in an
aggregate  principal amount at any one time outstanding not to exceed the amount
set forth  opposite  such  Revolving  Lender's  name on Schedule  2.01 or in the
Assignment and Assumption  pursuant to which such Lender becomes a party hereto,
as  applicable,  as such amount may be adjusted  from time to time in accordance
with this Agreement.

     "Revolving  Credit  Facility" means the facility  described in Section 2.02
providing  for Revolving  Loans to the Borrower by the Revolving  Lenders in the
maximum  aggregate  principal amount at any time outstanding of $20,000,000,  as
reduced from time to time pursuant to the terms of this Agreement.

     "Revolving Lender" means each Lender that has a Revolving Credit Commitment
or,  following  termination of the Revolving Credit  Commitments,  has Revolving
Loans outstanding.

     "Revolving Loan" has the meaning specified in Section 2.02.

     "Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002.

     "SEC" means the Securities  and Exchange  Commission,  or any  Governmental
Authority succeeding to any of its principal functions.

     "Secured Parties" means, collectively, with respect to each of the Security
Instruments,  the Administrative  Agent, the Lenders,  and each Affiliate of any
Lender, which Affiliate is party to a Related Credit Arrangement.

     "Securities Laws" means the Securities Act of 1933, the Securities Exchange
Act  of  1934,   Sarbanes-Oxley  and  the  applicable  accounting  and  auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the SEC or the Public  Company  Accounting  Oversight  Board,  as each of the
foregoing may be amended and in effect on any applicable date hereunder.

     "Security  Agreement" means that certain Security Agreement dated as of the
Closing  Date  made  by  the  Borrower  and  each  Guarantor  in  favor  of  the
Administrative  Agent for the benefit of the Secured  Parties,  substantially in
the form of  Exhibit F  attached  hereto,  as  supplemented  from time to by the
execution and delivery of Security Joinder  Agreements  pursuant to Section 6.12
or otherwise.

                                       23

<PAGE>

     "Security  Joinder   Agreement"  means  each  Security  Joinder  Agreement,
substantially in the form thereof attached to the Security  Agreement,  executed
and  delivered  by  the  Borrower  or  a  Guarantor,   as  applicable,   to  the
Administrative Agent pursuant to Section 6.12 or otherwise.

     "Security  Instruments" means,  collectively or individually as the context
may indicate,  the Security Agreement (and any Security Joinder Agreement),  the
Mortgages, the Assignments of Lease, and all other agreements (including control
agreements),  instruments and other documents, whether now existing or hereafter
in effect,  pursuant to which the  Borrower,  any  Guarantor or any other Person
shall grant or convey to the  Administrative  Agent or the Lenders a Lien in, or
any other Person shall  acknowledge  any such Lien in,  property as security for
all or any  portion  of the  Obligations,  any other  obligation  under any Loan
Document  and any  obligation  or  liability  arising  under any Related  Credit
Arrangement.

     "Segment"  means a portion of the Term Loan (or all of the Term  Loan),  in
each case with respect to which a particular interest rate is (or is proposed to
be) applicable.

     "September  2006 Quarter  End" means the last day of the fiscal  quarter of
the Borrower ending closest to September 30, 2006.

     "September  2007 Quarter  End" means the last day of the fiscal  quarter of
the Borrower ending closest to September 30, 2007.

     "Solvent" means, when used with respect to any Person,  that at the time of
determination:

          (a)  the fair  value of its  assets  (both  at fair  valuation  and at
     present fair saleable  value on an orderly basis) is in excess of the total
     amount of its liabilities, including contingent obligations; and

          (b)  it is then able and  expects  to be able to pay its debts as they
     mature; and

          (c)  it has capital  sufficient  to carry on its business as conducted
     and as proposed to be conducted.

     "Space Lease" (and the correlative  phrase  "Space-Leased")  refer to (a) a
lease  of the  improvements  (or  the  land  and  improvements)  constituting  a
Restaurant  or other office or business  location or (b) a lease of a Restaurant
(or  other  office  or  business  location)or  the  land  thereunder  which  the
Administrative  Agent,  in its sole  discretion,  determines  to be the legal or
practical  equivalent of a space lease of such  Restaurant or other  location as
described in clause (a).

     "Space Leased Real Estate  Support  Documents"  means,  with respect to any
Restaurant or other real  property  which is leased or subleased to the Borrower
or a Guarantor,  pursuant to a Space Lease,  such landlord and mortgagee waivers
and  nondisturbance  agreements,  third party consents,  surveys,  environmental
reports, flood hazard certifications,  evidence of flood insurance, if required,
and other documents as the Administrative Agent may reasonably request.

     "Subsidiary" of a Person means a corporation,  partnership,  joint venture,
limited  liability  company or other business  entity of which a majority of the
shares of securities or other  interests  having  ordinary  voting power for the

                                       24

<PAGE>

election  of  directors  or other  governing  body  (other  than  securities  or
interests  having such power only by reason of the  happening of a  contingency)
are at the time  beneficially  owned,  or the  management  of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by  such  Person.  Unless  otherwise  specified,  all  references  herein  to  a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.

     "Subsidiary  Securities"  means the  shares of  capital  stock or the other
equity interests issued by or equity  participations in any Subsidiary,  whether
or not constituting a "security" under Article 8 of the Uniform  Commercial Code
as in effect in any jurisdiction.

     "Swap Contract" means (a) any and all rate swap transactions,  basis swaps,
credit  derivative  transactions,  forward rate  transactions,  commodity swaps,
commodity options, forward commodity contracts,  equity or equity index swaps or
options,  bond or bond price or bond index  swaps or options or forward  bond or
forward bond price or forward bond index  transactions,  interest  rate options,
forward foreign exchange  transactions,  cap transactions,  floor  transactions,
collar  transactions,  currency  swap  transactions,  cross-currency  rate  swap
transactions,   currency   options,   spot  contracts,   or  any  other  similar
transactions or any  combination of any of the foregoing  (including any options
to enter  into any of the  foregoing),  whether or not any such  transaction  is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related  confirmations,  which are subject to the terms and
conditions  of, or governed  by, any form of master  agreement  published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange  Master  Agreement,  or any other  master  agreement  (any such  master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

     "Swap  Termination  Value"  means,  in  respect  of any  one or  more  Swap
Contracts,  after  taking into  account  the effect of any  legally  enforceable
netting agreement relating to such Swap Contracts,  (a) for any date on or after
the date such Swap  Contracts  have been  closed  out and  termination  value(s)
determined in accordance therewith,  such termination value(s),  and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts  (which may include a Lender or any Affiliate of a
Lender).

     "Synthetic  Lease  Obligation"  means the monetary  obligation  of a Person
under (a) a so-called  synthetic,  off-balance  sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

     "Taxes"  means  all  present  or future  taxes,  levies,  imposts,  duties,
deductions,  withholdings,  assessments,  fees or other  charges  imposed by any
Governmental  Authority,  including any interest,  additions to tax or penalties
applicable thereto.

                                       25

<PAGE>

     "Term Loan"  means,  individually  or in the  aggregate  as the context may
indicate,  the loans made pursuant to the Term Loan Facility in accordance  with
Section 2.01.

     "Term Loan Borrowing"  means a borrowing  consisting of  simultaneous  Term
Loans of the same  Type  and,  as to  Eurodollar  Rate  Loans,  having  the same
Interest Period made by each of the Term Loan Lenders pursuant to Section 2.01.

     "Term Loan Commitment"  means, as to each Term Loan Lender,  its obligation
to fund Borrowings  under the Term Loan pursuant to Section 2.01 in an aggregate
principal  amount at any one time outstanding not to exceed the amount set forth
opposite such Term Loan  Lender's  name on Schedule  2.01, as such amount may be
reduced or adjusted from time to time in accordance with this Agreement.

     "Term Loan Facility" means the facility described in Section 2.01 providing
for a Term Loan to the Borrower by the Term Loan Lenders in the principal amount
of $25,000,000.

     "Term Loan Lender"  means each Lender that has a Term Loan  Commitment or a
Term Loan outstanding under the Term Loan Facility.

     "Threshold Amount" means $2,000,000.

     "Total  Outstandings"  means, as at any date of determination  thereof, the
aggregate  of the  Outstanding  Amount of (a) the Term Loan,  (b) the  Revolving
Loans and (c) all L/C Obligations.

     "Total Revolving Credit  Outstandings"  means, at any date of determination
thereof, the aggregate of the Outstanding Amount of Revolving Loans.

     "Type" means,  with respect to a Revolving Loan, Term Loan or Segment,  its
character as a Base Rate Loan or a Eurodollar Rate Loan.

     "Unfunded  Pension  Liability" means the excess of a Pension Plan's benefit
liabilities  under Section  4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets,  determined in accordance with the  assumptions  used for
funding the Pension Plan pursuant to Section 412 of the Code for the  applicable
plan year.

     "Unit  Locations"  means,   collectively,   the  property   comprising  the
Restaurant locations described on Schedule 1.01J and the property comprising any
other Restaurant locations.

     "United States" and "U.S." mean the United States of America.

     "Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).

     "Voting  Securities" means shares of capital stock issued by a corporation,
or  equivalent  interests  in  any  other  Person,  the  holders  of  which  are
ordinarily,  in the absence of contingencies,  entitled to vote for the election
of directors (or persons performing  similar functions) of such Person,  even if
the right so to vote has been suspended by the happening of such a contingency.

                                       26

<PAGE>

     1.02 Other  Interpretive  Provisions.  With reference to this Agreement and
each other Loan Document,  unless  otherwise  specified  herein or in such other
Loan Document:

     (a)  The  definitions  of terms herein shall apply  equally to the singular
and plural forms of the terms  defined.  Whenever  the context may require,  any
pronoun shall include the  corresponding  masculine,  feminine and neuter forms.
The words "include,"  "includes" and "including"  shall be deemed to be followed
by the phrase "without  limitation."  The word "will" shall be construed to have
the same  meaning and effect as the word  "shall."  Unless the context  requires
otherwise,  (i) any definition of or reference to any  agreement,  instrument or
other  document  (including  any  Organization  Document)  shall be construed as
referring to such  agreement,  instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments,  supplements or modifications  set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person's  successors and assigns,  (iii) the words  "herein,"  "hereof" and
"hereunder,"  and words of similar import when used in any Loan Document,  shall
be  construed  to refer to such Loan  Document  in its  entirety  and not to any
particular  provision  thereof,  (iv)  all  references  in a  Loan  Document  to
Articles,  Sections,  Exhibits  and  Schedules  shall be  construed  to refer to
Articles and Sections of, and Exhibits and  Schedules  to, the Loan  Document in
which such  references  appear,  (v) any  reference to any law shall include all
statutory  and  regulatory  provisions  consolidating,  amending,  replacing  or
interpreting such law and any reference to any law or regulation  shall,  unless
otherwise  specified,  refer to such law or regulation  as amended,  modified or
supplemented  from time to time, and (vi) the words "asset" and "property" shall
be  construed  to have the same  meaning  and effect and to refer to any and all
tangible and  intangible  assets and  properties,  including  cash,  securities,
accounts and contract rights.

     (b)  In the computation of periods of time from a specified date to a later
specified  date, the word "from" means "from and  including;" the words "to" and
"until"  each  mean "to but  excluding;"  and the word  "through"  means "to and
including."

     (c)  Section  headings  herein and in the other Loan Documents are included
for  convenience  of reference only and shall not affect the  interpretation  of
this Agreement or any other Loan Document.

     1.03 Accounting Terms. (a) Generally. All accounting terms not specifically
or  completely  defined  herein shall be construed in conformity  with,  and all
financial data (including  financial  ratios and other  financial  calculations)
required  to be  submitted  pursuant  to this  Agreement  shall be  prepared  in
conformity  with, GAAP applied on a consistent  basis, as in effect from time to
time,  applied in a manner  consistent  with that used in preparing  the Audited
Financial Statements, except as otherwise specifically prescribed herein.

     (b)  Changes in GAAP.  If at any time any  change in GAAP would  affect the
computation  of any  financial  ratio  or  requirement  set  forth  in any  Loan
Document,  and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or  requirement  to preserve the original  intent thereof in
light of such change in GAAP (subject to the approval of the Required  Lenders);
provided that, until so amended, (i) such ratio or requirement shall continue to

                                       27

<PAGE>

be computed in  accordance  with GAAP prior to such change  therein and (ii) the
Borrower  shall provide to the  Administrative  Agent and the Lenders  financial
statements  and other  documents  required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation  between calculations of such
ratio or requirement made before and after giving effect to such change in GAAP.

     (c)  Consolidation of Variable Interest Entities.  All references herein to
consolidated financial statements of the Borrower and its Subsidiaries or to the
determination  of  any  amount  for  the  Borrower  and  its  Subsidiaries  on a
consolidated  basis or any similar  reference  shall, in each case, be deemed to
include  each  variable  interest  entity  that  the  Borrower  is  required  to
consolidate  pursuant to FASB  Interpretation No. 46 - Consolidation of Variable
Interest  Entities:  an  interpretation  of ARB No. 51 (January 2003) as if such
variable interest entity were a Subsidiary as defined herein.

     1.04 Rounding.  Any  financial  ratios  required  to be  maintained  by the
Borrower  pursuant  to this  Agreement  shall  be  calculated  by  dividing  the
appropriate  component by the other component,  carrying the result to one place
more than the  number of places by which  such  ratio is  expressed  herein  and
rounding  the result up or down to the nearest  number  (with a  rounding-up  if
there is no nearest number).

     1.05 Times of Day. Unless  otherwise  specified,  all references  herein to
times of day shall be  references  to Central time  (daylight  or  standard,  as
applicable).

     1.06 Letter of Credit  Amounts.  Unless  otherwise  specified  herein,  the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time;  provided,  however,  that with
respect  to any Letter of Credit  that,  by its terms or the terms of any Issuer
Document  related thereto,  provides for one or more automatic  increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum  stated  amount of such Letter of Credit after giving  effect to all
such  increases,  whether or not such maximum stated amount is in effect at such
time.

                                  ARTICLE II.
                      THE COMMITMENTS AND CREDIT EXTENSIONS

     2.01 Term Loan. (a) Subject to the terms and conditions of this  Agreement,
each Term Loan Lender  severally  agrees to make an advance of its Pro Rata Term
Share of the Term Loan to the Borrower on the Closing Date. The principal amount
of each Segment of the Term Loan  outstanding  hereunder from time to time shall
bear interest and the Term Loan shall be repayable as herein provided. No amount
of the Term Loan repaid or prepaid by the Borrower may be reborrowed  hereunder,
and no  subsequent  advances  of Term Loan  amounts  shall be made by any Lender
after the initial such advance.

     (b)  Not later than 1:00 P.M.  on the Closing  Date,  each Term Loan Lender
shall,  pursuant to the terms and subject to the  conditions of this  Agreement,
make the  amount of its Pro Rata Term Share of the Term Loan  available  by wire
transfer to the  Administrative  Agent.  Such wire transfer shall be directed to
the Administrative  Agent at the  Administrative  Agent's Office and shall be in
the form of immediately  available,  freely transferable  Dollars. The amount so

                                       28

<PAGE>

received by the Administrative  Agent shall, subject to the terms and conditions
of this Agreement, be made available to the Borrower by delivery of the proceeds
thereof as shall be directed by a Responsible Officer and reasonably  acceptable
to the Agent. The initial Borrowing of the Term Loan shall be a single Base Rate
Segment,  subject to conversion after the Closing Date in accordance with a Loan
Notice delivered on the Closing Date pursuant to Section 4.01(a) (or, if no Loan
Notice is so  delivered  on the  Closing  Date with  respect  to the Term  Loan,
thereafter in accordance with Section 2.03).

     2.02 Revolving Loans. Subject to the terms and conditions set forth herein,
each  Revolving  Lender  severally  agrees to make  loans  (each  such  loan,  a
"Revolving  Loan") to the Borrower from time to time, on any Business Day during
the  Availability  Period,  in an  aggregate  amount  not to  exceed at any time
outstanding the amount of such Revolving  Lender's  Revolving Credit Commitment;
provided,  however, that after giving effect to any Revolving Borrowing, (i) the
Total Revolving  Credit  Outstandings  shall not exceed the Aggregate  Revolving
Credit Commitments, (ii) the aggregate Outstanding Amount of the Revolving Loans
of any Lender,  plus such Lender's Pro Rata Revolving  Share of the  Outstanding
Amount of all L/C Obligations  shall not exceed such Lender's  Revolving  Credit
Commitment.  Within  the  limits of each  Revolving  Lender's  Revolving  Credit
Commitment,  and subject to the other terms and conditions  hereof, the Borrower
may borrow under this Section  2.02,  prepay under  Section  2.05,  and reborrow
under this Section  2.02.  Revolving  Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.

     2.03 Revolving Borrowings, Conversions and Continuations of Revolving Loans
and Term Loan Segments.

     (a)  Each  Revolving  Borrowing,  each  conversion  of  Revolving  Loans or
Segments  of Term  Loans from one Type to the other,  and each  continuation  of
Eurodollar  Rate Loans shall be made upon the Borrower's  irrevocable  notice to
the   Administrative   Agent.   Each  such   notice  must  be  received  by  the
Administrative  Agent not later than 11:00 a.m. (i) three Business Days prior to
the  requested  date of any  Borrowing  of,  conversion  to or  continuation  of
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans.  Each
notice by the Borrower  pursuant to this Section 2.03(a) must be accomplished by
delivery to the  Administrative  Agent of a written Loan  Notice,  appropriately
completed and signed by a Responsible  Officer of the Borrower.  Each  Borrowing
of,  conversion  to or  continuation  of  Eurodollar  Rate  Loans  shall be in a
principal  amount of  $5,000,000  or a whole  multiple of  $1,000,000  in excess
thereof.  Except as provided in Section 2.04(c), each Borrowing of or conversion
to Base  Rate  Loans  shall be in a  principal  amount  of  $500,000  or a whole
multiple of  $100,000 in excess  thereof.  Each Loan  Notice  shall  specify (i)
whether the  Borrower is  requesting  a Revolving  Borrowing,  a  conversion  of
Revolving  Loans or Segments  of the Term Loan from one Type to the other,  or a
continuation of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation,  as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued, (iv)
the Type of Loans to be borrowed or to which existing Loans are to be converted,
and (v) if applicable, the duration of the Interest Period with respect thereto.
If the Borrower  fails to specify a Type of Revolving Loan in a Loan Notice with
respect to Revolving Loans or Type of Segment in a Loan Notice with respect to a
Segment  of the Term  Loan,  or if the  Borrower  fails to give a timely  notice

                                       29

<PAGE>

requesting a conversion or continuation, then the applicable Revolving Loans and
applicable  Segments  of the Term Loan shall be made as, or  converted  to, Base
Rate Loans. Any such automatic  conversion to Base Rate Loans shall be effective
as of the last day of the  Interest  Period then in effect  with  respect to the
applicable  Eurodollar  Rate Loans.  If the  Borrower  requests a Borrowing  of,
conversion to, or continuation of Eurodollar Rate Loans in any such Loan Notice,
but fails to specify an Interest Period,  it will be deemed to have specified an
Interest Period of one month.

     (b)  Following  receipt of a Loan Notice with respect to a Revolving  Loan,
the  Administrative  Agent shall promptly  notify each  Revolving  Lender of the
amount of its Pro Rata Revolving Share of the applicable Revolving Loans, and if
no timely  notice of a conversion or  continuation  is provided by the Borrower,
the  Administrative  Agent shall notify each applicable Lender of the details of
any  automatic  conversion  to  Base  Rate  Loans  described  in  the  preceding
subsection.  In the case of a Revolving  Borrowing,  each Revolving Lender shall
make the amount of its Revolving Loan available to the  Administrative  Agent in
immediately available funds at the Administrative  Agent's Office not later than
1:00 p.m. on the Business  Day  specified in the  applicable  Loan Notice.  Upon
satisfaction  of the  applicable  conditions  set forth in Section 4.02 (and, if
such  Borrowing  is  the  initial   Credit   Extension,   Section   4.01),   the
Administrative  Agent shall make all funds so received available to the Borrower
in like funds as received by the  Administrative  Agent either by (i)  crediting
the account of the  Borrower on the books of Bank of America  with the amount of
such funds or (ii) wire transfer of such funds,  in each case in accordance with
instructions provided to (and reasonably acceptable to) the Administrative Agent
by the Borrower;  provided,  however,  that if, on the date the Loan Notice with
respect to such  Borrowing is given by the  Borrower,  there are L/C  Borrowings
outstanding, then the proceeds of such Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings,  and second, shall be made available
to the Borrower as provided above.

     (c)  Following  receipt of a Loan Notice  with  respect to a Segment of the
Term Loan, the Administrative  Agent shall promptly notify each Term Loan Lender
of the amount of its Pro Rata Term Share of the applicable  Term Loan, and if no
timely notice of a conversion or continuation  is provided by the Borrower,  the
Administrative  Agent shall notify each applicable  Lender of the details of any
automatic conversion to Base Rate Loans described in subsection (a).

     (d)  Except as otherwise  provided  herein,  a Eurodollar  Rate Loan may be
continued  or  converted  only on the last day of an  Interest  Period  for such
Eurodollar  Rate  Loan.  During  the  existence  of a  Default,  no Loans may be
requested  as,  converted to or continued as  Eurodollar  Rate Loans without the
consent of the Required Lenders.

     (e)  The  Administrative  Agent shall promptly  notify the Borrower and the
Lenders of the interest rate  applicable to any Interest  Period for  Eurodollar
Rate Loans upon  determination of such interest rate. At any time that Base Rate
Loans are outstanding,  the  Administrative  Agent shall notify the Borrower and
the Lenders of any change in Bank of  America's  prime rate used in  determining
the Base Rate promptly following the public announcement of such change.

     (f)  After giving effect to all Revolving  Borrowings,  all  conversions of
Revolving  Loans and  Segments of the Term Loan from one Type to the other,  and

                                       30

<PAGE>

all  continuations  of Revolving Loans as the same Type, there shall not be more
than ten Interest  Periods in the  aggregate in effect with respect to Revolving
Loans and Segments of the Term Loan.

     2.04 Letters of Credit.

     (a)  The Letter of Credit Commitment.

          (i)  Subject to the terms and conditions set forth herein, (A) the L/C
     Issuer agrees, in reliance upon the agreements of the Revolving Lenders set
     forth in this  Section  2.04,  (1) from  time to time on any  Business  Day
     during  the  period  from the  Closing  Date  until  the  Letter  of Credit
     Expiration Date, to issue Letters of Credit for the account of the Borrower
     or its  Subsidiaries,  and to amend or extend Letters of Credit  previously
     issued by it, in accordance  with  subsection  (b) below,  and (2) to honor
     drawings  under  the  Letters  of  Credit;  and (B) the  Revolving  Lenders
     severally  agree to participate in Letters of Credit issued for the account
     of the Borrower or its Subsidiaries and any drawings  thereunder;  provided
     that after giving  effect to any L/C Credit  Extension  with respect to any
     Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate
     Commitments,  (x) the aggregate  Outstanding  Amount of all Revolving Loans
     and L/C  Obligations  shall  not  exceed  the  Aggregate  Revolving  Credit
     Commitments,  and (z) the  aggregate  Outstanding  Amount of the  Revolving
     Loans of any  Revolving  Lender,  plus  such  Revolving  Lender's  Pro Rata
     Revolving Share of the Outstanding  Amount of all L/C Obligations shall not
     exceed such Revolving  Lender's  Revolving Credit  Commitment,  and (z) the
     Outstanding  Amount of the L/C  Obligations  shall not exceed the Letter of
     Credit Sublimit. Each request by the Borrower for the issuance or amendment
     of a  Letter  of  Credit  shall be  deemed  to be a  representation  by the
     Borrower  that the L/C Credit  Extension  so  requested  complies  with the
     conditions set forth in the proviso to the preceding  sentence.  Within the
     foregoing  limits,  and  subject to the terms and  conditions  hereof,  the
     Borrower's  ability to obtain  Letters of Credit shall be fully  revolving,
     and  accordingly  the Borrower  may,  during the foregoing  period,  obtain
     Letters of Credit to replace  Letters of Credit  that have  expired or that
     have been drawn upon and reimbursed.  All Existing  Letters of Credit shall
     be deemed  to have  been  issued  pursuant  hereto,  and from and after the
     Closing Date shall be subject to and  governed by the terms and  conditions
     hereof.

          (ii) The L/C Issuer shall not issue any Letter of Credit, if:

               (A)  subject to  Section  2.04(b)(iii),  the expiry  date of such
          requested  Letter of Credit would occur more than twelve  months after
          the date of issuance or last extension,  unless the Required Revolving
          Lenders have approved such expiry date; or

               (B)  the expiry  date of such  requested  Letter of Credit  would
          occur  after the  Letter of Credit  Expiration  Date,  unless  all the
          Revolving Lenders have approved such expiry date.

                                       31

<PAGE>

          (iii) The L/C Issuer  shall not be under any  obligation  to issue any
     Letter of Credit if:

               (A)  any order, judgment or decree of any Governmental  Authority
          or arbitrator shall by its terms purport to enjoin or restrain the L/C
          Issuer from issuing such Letter of Credit,  or any Law  applicable  to
          the L/C Issuer or any request or directive  (whether or not having the
          force of law) from any Governmental  Authority with  jurisdiction over
          the L/C Issuer shall prohibit,  or request that the L/C Issuer refrain
          from,  the  issuance of letters of credit  generally or such Letter of
          Credit in  particular or shall impose upon the L/C Issuer with respect
          to  such  Letter  of  Credit  any  restriction,   reserve  or  capital
          requirement  (for  which the L/C Issuer is not  otherwise  compensated
          hereunder) not in effect on the Closing Date, or shall impose upon the
          L/C  Issuer  any  unreimbursed  loss,  cost or  expense  which was not
          applicable  on the Closing Date and which the L/C Issuer in good faith
          deems material to it;

               (B)  the issuance of such Letter of Credit  would  violate one or
          more policies of the L/C Issuer;

               (C)  except as otherwise agreed by the  Administrative  Agent and
          the L/C Issuer,  such Letter of Credit is in an initial  stated amount
          less than $500,000;

               (D)  such  Letter of Credit is to be  denominated  in a  currency
          other than Dollars; or

               (E)  a default  of any  Revolving  Lender's  obligations  to fund
          under Section 2.04(c) exists or any Revolving Lender is at such time a
          Defaulting  Lender  hereunder,  unless the L/C Issuer has entered into
          satisfactory  arrangements  with the Borrower or such Revolving Lender
          to  eliminate  the L/C Issuer's  risk with  respect to such  Revolving
          Lender.

          (iv) The L/C  Issuer  shall not amend any  Letter of Credit if the L/C
     Issuer  would not be  permitted at such time to issue such Letter of Credit
     in its amended form under the terms hereof.

          (v)  The L/C Issuer shall be under no  obligation  to amend any Letter
     of Credit if (A) the L/C Issuer  would have no  obligation  at such time to
     issue such Letter of Credit in its amended form under the terms hereof,  or
     (B) the  beneficiary  of such Letter of Credit does not accept the proposed
     amendment to such Letter of Credit.

          (vi) The L/C Issuer shall act on behalf of the Revolving  Lenders with
     respect to any Letters of Credit issued by it and the documents  associated
     therewith, and the L/C Issuer shall have all of the benefits and immunities
     (A) provided to the Administrative  Agent in Article IX with respect to any
     acts  taken or  omissions  suffered  by the L/C Issuer in  connection  with
     Letters of Credit  issued by it or  proposed  to be issued by it and Issuer
     Documents  pertaining  to such  Letters  of  Credit as fully as if the term
     "Administrative  Agent" as used in Article IX included  the L/C Issuer with
     respect to such acts or omissions,  and (B) as additionally provided herein
     with respect to the L/C Issuer.

                                       32

<PAGE>

     (b)  Procedures   for  Issuance   and   Amendment  of  Letters  of  Credit;
Auto-Extension Letters of Credit.

          (i)  Each Letter of Credit shall be issued or amended, as the case may
     be, upon the request of the  Borrower  delivered  to the L/C Issuer (with a
     copy to the  Administrative  Agent)  in the  form  of a  Letter  of  Credit
     Application, appropriately completed and signed by a Responsible Officer of
     the Borrower. Such Letter of Credit Application must be received by the L/C
     Issuer and the Administrative  Agent not later than 11:00 a.m. at least two
     Business Days (or such later date and time as the Administrative  Agent and
     the L/C Issuer may agree in a particular instance in their sole discretion)
     prior to the proposed  issuance date or date of amendment,  as the case may
     be. In the case of a request for an initial issuance of a Letter of Credit,
     such  Letter  of  Credit  Application  shall  specify  in form  and  detail
     satisfactory  to the L/C  Issuer:  (A) the  proposed  issuance  date of the
     requested  Letter of Credit (which shall be a Business Day); (B) the amount
     thereof;  (C) the  expiry  date  thereof;  (D) the name and  address of the
     beneficiary  thereof; (E) the documents to be presented by such beneficiary
     in case of any drawing thereunder;  (F) the full text of any certificate to
     be presented by such beneficiary in case of any drawing thereunder; and (G)
     such other matters as the L/C Issuer may require.  In the case of a request
     for an amendment of any outstanding Letter of Credit, such Letter of Credit
     Application shall specify in form and detail satisfactory to the L/C Issuer
     (A) the Letter of Credit to be amended;  (B) the proposed date of amendment
     thereof  (which  shall be a Business  Day);  (C) the nature of the proposed
     amendment;  and (D) such  other  matters  as the L/C  Issuer  may  require.
     Additionally,  the  Borrower  shall  furnish  to the  L/C  Issuer  and  the
     Administrative  Agent such other  documents and  information  pertaining to
     such requested Letter of Credit issuance or amendment, including any Issuer
     Documents, as the L/C Issuer or the Administrative Agent may require.

          (ii) Promptly after receipt of any Letter of Credit  Application,  the
     L/C Issuer will confirm with the  Administrative  Agent (by telephone or in
     writing) that the  Administrative  Agent has received a copy of such Letter
     of Credit  Application  from the Borrower  and, if not, the L/C Issuer will
     provide the Administrative Agent with a copy thereof. Unless the L/C Issuer
     has received written notice from any Revolving Lender,  the  Administrative
     Agent or any Loan Party,  at least one Business Day prior to the  requested
     date of issuance or amendment of the applicable Letter of Credit,  that one
     or more  applicable  conditions  contained  in Article IV shall not then be
     satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
     shall, on the requested  date,  issue a Letter of Credit for the account of
     the Borrower (or the  applicable  Subsidiary)  or enter into the applicable
     amendment,  as the case may be,  in each  case in  accordance  with the L/C
     Issuer's  usual and  customary  business  practices.  Immediately  upon the
     issuance of each Letter of Credit,  each  Revolving  Lender shall be deemed
     to, and hereby irrevocably and unconditionally agrees to, purchase from the
     L/C Issuer a risk participation in such Letter of Credit in an amount equal
     to the product of such Revolving  Lender's Pro Rata  Revolving  Share times
     the amount of such Letter of Credit.

          (iii) If the Borrower so requests in any  applicable  Letter of Credit
     Application, the L/C Issuer may, in its sole and absolute discretion, agree
     to issue a Letter of Credit that has automatic extension  provisions (each,
     an   "Auto-Extension   Letter   of   Credit");   provided   that  any  such

                                       33

<PAGE>

     Auto-Extension  Letter of Credit  must permit the L/C Issuer to prevent any
     such extension at least once in each twelve-month  period  (commencing with
     the date of issuance of such  Letter of Credit) by giving  prior  notice to
     the  beneficiary  thereof not later than a day (the  "Non-Extension  Notice
     Date") in each such twelve-month  period to be agreed upon at the time such
     Letter of Credit is issued.  Unless  otherwise  directed by the L/C Issuer,
     the  Borrower  shall not be required to make a specific  request to the L/C
     Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
     been issued,  the Lenders shall be deemed to have  authorized  (but may not
     require) the L/C Issuer to permit the extension of such Letter of Credit at
     any time to an expiry  date not later than the Letter of Credit  Expiration
     Date;  provided,  however,  that the L/C  Issuer  shall not permit any such
     extension  if (A) the L/C  Issuer  has  determined  that  it  would  not be
     permitted,  or would have no obligation,  at such time to issue such Letter
     of Credit in its  revised  form (as  extended)  under the terms  hereof (by
     reason of the  provisions  of clause  (ii) or (iii) of  Section  2.04(a) or
     otherwise),  or (B) it has received notice (which may be by telephone or in
     writing)  on or  before  the day  that is five  Business  Days  before  the
     Non-Extension  Notice  Date  (1)  from the  Administrative  Agent  that the
     Required Revolving Lenders have elected not to permit such extension or (2)
     from the  Administrative  Agent,  any Revolving Lender or the Borrower that
     one or more of the applicable  conditions  specified in Section 4.02 is not
     then  satisfied,  and in each such case  directing  the L/C  Issuer  not to
     permit such extension.

          (iv) Promptly  after  its  delivery  of any  Letter  of  Credit or any
     amendment to a Letter of Credit to an advising bank with respect thereto or
     to the  beneficiary  thereof,  the L/C  Issuer  will  also  deliver  to the
     Borrower  and the  Administrative  Agent a true and  complete  copy of such
     Letter of Credit or amendment.

     (c)  Drawings and Reimbursements; Funding of Participations.
          -------------------------------------------------------

          (i)  Upon receipt from the  beneficiary of any Letter of Credit of any
     notice of a drawing  under  such  Letter of Credit,  the L/C  Issuer  shall
     notify the Borrower and the  Administrative  Agent thereof.  Not later than
     11:00 a.m. on the date of any  payment by the L/C Issuer  under a Letter of
     Credit (each such date, an "Honor Date"),  the Borrower shall reimburse the
     L/C  Issuer  through  the  Administrative  Agent in an amount  equal to the
     amount of such  drawing.  If the  Borrower  fails to so  reimburse  the L/C
     Issuer by such time, the  Administrative  Agent shall promptly  notify each
     Revolving Lender of the Honor Date, the amount of the unreimbursed  drawing
     (the  "Unreimbursed  Amount"),  and the  amount of such  Lender's  Pro Rata
     Revolving  Share  thereof.  In such event,  the Borrower shall be deemed to
     have requested a Revolving  Borrowing of Base Rate Loans to be disbursed on
     the  Honor  Date in an amount  equal to the  Unreimbursed  Amount,  without
     regard to the  minimum  and  multiples  specified  in Section  2.03 for the
     principal  amount of Base Rate  Loans,  but  subject  to the  amount of the
     unutilized  portion of the Aggregate  Revolving Credit  Commitments and the
     conditions  set forth in Section  4.02 (other  than the  delivery of a Loan
     Notice).  Any notice  given by the L/C Issuer or the  Administrative  Agent
     pursuant  to  this  Section   2.04(c)(i)  may  be  given  by  telephone  if
     immediately  confirmed  in  writing;  provided  that  the  lack  of such an
     immediate  confirmation  shall not  affect  the  conclusiveness  or binding
     effect of such notice.

                                       34

<PAGE>

          (ii) Each Revolving  Lender shall upon any notice  pursuant to Section
     2.04(c)(i) make funds available to the Administrative Agent for the account
     of the L/C Issuer at the  Administrative  Agent's Office in an amount equal
     to its Pro Rata Revolving Share of the  Unreimbursed  Amount not later than
     1:00  p.m.  on  the   Business   Day   specified  in  such  notice  by  the
     Administrative  Agent,  whereupon,  subject  to the  provisions  of Section
     2.04(c)(iii),  each Revolving Lender that so makes funds available shall be
     deemed to have  made a Base Rate  Revolving  Loan to the  Borrower  in such
     amount. The  Administrative  Agent shall remit the funds so received to the
     L/C Issuer.

          (iii) With  respect  to any  Unreimbursed  Amount  that  is not  fully
     refinanced  by a  Revolving  Borrowing  of  Base  Rate  Loans  because  the
     conditions  set forth in Section  4.02 cannot be satisfied or for any other
     reason,  the Borrower  shall be deemed to have incurred from the L/C Issuer
     an L/C  Borrowing in the amount of the  Unreimbursed  Amount that is not so
     refinanced,  which  L/C  Borrowing  shall  be due  and  payable  on  demand
     (together  with  interest)  and shall bear interest at the Default Rate. In
     such event, each Revolving Lender's payment to the Administrative Agent for
     the  account of the L/C Issuer  pursuant  to Section  2.04(c)(ii)  shall be
     deemed  payment in respect of its  participation  in such L/C Borrowing and
     shall  constitute an L/C Advance from such Revolving Lender in satisfaction
     of its participation obligation under this Section 2.04.

          (iv) Until  each  Revolving  Lender  funds its  Revolving  Loan or L/C
     Advance  pursuant to this Section  2.04(c) to reimburse  the L/C Issuer for
     any amount  drawn  under any Letter of Credit,  interest in respect of such
     Revolving  Lender's Pro Rata Revolving Share of such amount shall be solely
     for the account of the L/C Issuer.

          (v)  Each Revolving Lender's obligation to make Revolving Loans or L/C
     Advances to  reimburse  the L/C Issuer for amounts  drawn under  Letters of
     Credit,  as  contemplated  by this Section  2.04(c),  shall be absolute and
     unconditional and shall not be affected by any circumstance,  including (A)
     any  setoff,  counterclaim,  recoupment,  defense or other right which such
     Revolving Lender may have against the L/C Issuer, the Borrower or any other
     Person for any reason  whatsoever;  (B) the  occurrence or continuance of a
     Default,  or (C) any other occurrence,  event or condition,  whether or not
     similar to any of the  foregoing;  provided,  however,  that each Revolving
     Lender's  obligation  to make  Revolving  Loans  pursuant  to this  Section
     2.04(c) is subject to the  conditions set forth in Section 4.02 (other than
     delivery  by the  Borrower  of a Loan  Notice).  No such  making  of an L/C
     Advance shall relieve or otherwise impair the obligation of the Borrower to
     reimburse  the L/C  Issuer for the  amount of any  payment  made by the L/C
     Issuer  under any Letter of Credit,  together  with  interest  as  provided
     herein.

          (vi) If  any  Revolving   Lender  fails  to  make   available  to  the
     Administrative  Agent for the account of the L/C Issuer any amount required
     to be paid by such Revolving Lender pursuant to the foregoing provisions of
     this Section 2.04(c) by the time specified in Section 2.04(c)(ii),  the L/C
     Issuer  shall be entitled to recover  from such  Revolving  Lender  (acting
     through the  Administrative  Agent),  on demand,  such amount with interest
     thereon for the period  from the date such  payment is required to the date
     on which such payment is immediately  available to the L/C Issuer at a rate

                                       35

<PAGE>

     per  annum  equal  to the  greater  of the  Federal  Funds  Rate and a rate
     determined by the L/C Issuer in accordance  with banking  industry rules on
     interbank  compensation.  A certificate of the L/C Issuer  submitted to any
     Revolving  Lender  (through the  Administrative  Agent) with respect to any
     amounts  owing under this clause (vi) shall be conclusive  absent  manifest
     error.

     (d)  Repayment of Participations.

          (i)  At any time  after the L/C  Issuer  has made a payment  under any
     Letter of Credit and has received from any  Revolving  Lender such Lender's
     L/C Advance in respect of such payment in accordance with Section  2.04(c),
     if the Administrative  Agent receives for the account of the L/C Issuer any
     payment in respect of the related  Unreimbursed  Amount or interest thereon
     (whether  directly  from the Borrower or otherwise,  including  proceeds of
     Cash  Collateral  applied  thereto  by  the   Administrative   Agent),  the
     Administrative  Agent will distribute to such Revolving Lender its Pro Rata
     Revolving Share thereof  (appropriately  adjusted,  in the case of interest
     payments,  to  reflect  the  period of time  during  which  such  Revolving
     Lender's L/C Advance was  outstanding)  in the same funds as those received
     by the Administrative Agent.

          (ii) If any  payment  received  by the  Administrative  Agent  for the
     account of the L/C Issuer pursuant to Section  2.04(c)(i) is required to be
     returned  under  any  of  the  circumstances  described  in  Section  10.05
     (including pursuant to any settlement entered into by the L/C Issuer in its
     discretion),  each Revolving Lender shall pay to the  Administrative  Agent
     for the account of the L/C Issuer its Pro Rata  Revolving  Share thereof on
     demand of the Administrative  Agent, plus interest thereon from the date of
     such demand to the date such amount is returned by such  Lender,  at a rate
     per annum equal to the Federal Funds Rate from time to time in effect.  The
     obligations  of the  Revolving  Lenders under this clause shall survive the
     payment in full of the Obligations and the termination of this Agreement.

     (e)  Obligations Absolute.  The obligation of the Borrower to reimburse the
L/C Issuer for each  drawing  under each  Letter of Credit and to repay each L/C
Borrowing shall be absolute,  unconditional  and irrevocable,  and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:

          (i)  any lack of validity or  enforceability of such Letter of Credit,
     this Agreement, or any other Loan Document;

          (ii) the  existence  of any claim,  counterclaim,  setoff,  defense or
     other  right  that  the  Borrower  or any  Subsidiary  may have at any time
     against any  beneficiary or any transferee of such Letter of Credit (or any
     Person for whom any such beneficiary or any such transferee may be acting),
     the L/C  Issuer  or any  other  Person,  whether  in  connection  with this
     Agreement, the transactions contemplated hereby or by such Letter of Credit
     or  any  agreement  or  instrument   relating  thereto,  or  any  unrelated
     transaction;

          (iii) any draft, demand, certificate or other document presented under
     such  Letter  of  Credit  proving  to be  forged,  fraudulent,  invalid  or
     insufficient  in any  respect  or any  statement  therein  being  untrue or

                                       36

<PAGE>

     inaccurate  in any  respect;  or any loss or delay in the  transmission  or
     otherwise  of any document  required in order to make a drawing  under such
     Letter of Credit;

          (iv) any payment by the L/C Issuer under such Letter of Credit against
     presentation  of a draft or certificate  that does not strictly comply with
     the terms of such Letter of Credit;  or any payment  made by the L/C Issuer
     under  such  Letter of Credit to any Person  purporting  to be a trustee in
     bankruptcy,  debtor-in-possession,  assignee for the benefit of  creditors,
     liquidator,  receiver  or  other  representative  of or  successor  to  any
     beneficiary  or any  transferee  of such  Letter of Credit,  including  any
     arising in connection with any proceeding under any Debtor Relief Law; or

          (v)  any other  circumstance or happening  whatsoever,  whether or not
     similar to any of the  foregoing,  including  any other  circumstance  that
     might otherwise  constitute a defense  available to, or a discharge of, the
     Borrower or any Subsidiary.

     The  Borrower  shall  promptly  examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance  with  the  Borrower's  instructions  or other  irregularity,  the
Borrower  will  notify  the L/C  Issuer  within  five (5)  Business  Days of the
Borrower's receipt of such Letter of Credit or amendment.  The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.

     (f)  Role of L/C Issuer. Each Lender and the Borrower agree that, in paying
any  drawing  under a  Letter  of  Credit,  the L/C  Issuer  shall  not have any
responsibility to obtain any document (other than any sight draft,  certificates
and  documents  expressly  required by the Letter of Credit) or to  ascertain or
inquire as to the validity or accuracy of any such  document or the authority of
the Person  executing or delivering any such  document.  None of the L/C Issuer,
the  Administrative  Agent,  any of their  respective  Related  Parties  nor any
correspondent,  participant or assignee of the L/C Issuer shall be liable to any
Revolving  Lender for (i) any action taken or omitted in connection  herewith at
the request or with the  approval of the Lenders,  the  Required  Lenders or the
Required Revolving Lenders,  as applicable;  (ii) any action taken or omitted in
the  absence  of gross  negligence  or  willful  misconduct;  or  (iii)  the due
execution,  effectiveness,   validity  or  enforceability  of  any  document  or
instrument  related to any  Letter of Credit or Issuer  Document.  The  Borrower
hereby  assumes  all  risks  of the  acts or  omissions  of any  beneficiary  or
transferee with respect to its use of any Letter of Credit;  provided,  however,
that this assumption is not intended to, and shall not,  preclude the Borrower's
pursuing  such rights and  remedies as it may have  against the  beneficiary  or
transferee  at law or under any other  agreement.  None of the L/C  Issuer,  the
Administrative   Agent,  any  of  their  respective   Related  Parties  nor  any
correspondent,  participant  or  assignee  of the L/C Issuer  shall be liable or
responsible  for any of the  matters  described  in clauses  (i)  through (v) of
Section  2.04(e);  provided,  however,  that  anything  in such  clauses  to the
contrary notwithstanding,  the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent,  of any  direct,  as  opposed to  consequential  or  exemplary,  damages
suffered  by the  Borrower  which the  Borrower  proves  were  caused by the L/C
Issuer's  willful  misconduct or gross  negligence  or the L/C Issuer's  willful
failure to pay under any Letter of Credit  after the  presentation  to it by the
beneficiary  of a sight draft and  certificate(s)  strictly  complying  with the

                                       37

<PAGE>

terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing,  the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation,  regardless of
any notice or  information  to the  contrary,  and the L/C  Issuer  shall not be
responsible  for the validity or sufficiency of any instrument  transferring  or
assigning or  purporting  to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

     (g)  Cash Collateral.  Upon the request of the Administrative Agent, (i) if
the L/C Issuer has honored any full or partial  drawing request under any Letter
of Credit and such drawing has resulted in an L/C  Borrowing,  or (ii) if, as of
the Letter of Credit  Expiration Date, any L/C Obligation for any reason remains
outstanding,  the Borrower shall, in each case,  immediately Cash  Collateralize
the then Outstanding  Amount of all L/C  Obligations.  Sections 2.05 and 8.02(c)
set forth certain additional  requirements to deliver Cash Collateral hereunder.
For  purposes of this Section  2.04,  Section  2.05 and Section  8.02(c),  "Cash
Collateralize" means to pledge and deposit with or deliver to the Administrative
Agent,  for  the  benefit  of the  L/C  Issuer  and the  Revolving  Lenders,  as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the L/C  Issuer  (which  documents  are  hereby  consented  to by the  Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuer and the Revolving
Lenders, a security interest in all such cash, deposit accounts and all balances
therein and all proceeds of the foregoing.  Cash Collateral  shall be maintained
in blocked, non-interest bearing deposit accounts at Bank of America.

     (h)  Applicability  of ISP. Unless  otherwise  expressly  agreed by the L/C
Issuer and the Borrower  when a Letter of Credit is issued  (including  any such
agreement  applicable  to an Existing  Letter of  Credit),  the rules of the ISP
shall apply to each Letter of Credit.

     (i)  Letter of Credit Fees.  The Borrower  shall pay to the  Administrative
Agent for the account of each Revolving  Lender in accordance  with its Pro Rata
Revolving  Share a Letter of Credit fee (the  "Letter  of Credit  Fee") for each
Letter of Credit equal to the Applicable  Rate times the daily amount  available
to be drawn under such Letter of Credit.  For  purposes of  computing  the daily
amount  available  to be drawn  under any Letter of  Credit,  the amount of such
Letter of Credit shall be determined in accordance with Section 1.06.  Letter of
Credit Fees shall be (i)  computed on a quarterly  basis in arrears and (ii) due
and  payable  on the  first  Business  Day after  the end of each  March,  June,
September and December,  commencing  with the first such date to occur after the
issuance of such Letter of Credit,  on the Letter of Credit  Expiration Date and
thereafter on demand.  If there is any change in the Applicable  Rate during any
quarter,  the daily  amount  available  to be drawn  under each Letter of Credit
shall be computed and  multiplied by the  Applicable  Rate  separately  for each
period   during  such  quarter  that  such   Applicable   Rate  was  in  effect.
Notwithstanding  anything to the contrary contained herein,  upon the request of
the Required Revolving Lenders, while any Event of Default exists, all Letter of
Credit Fees shall accrue at the Default Rate.

     (j)  Fronting Fee and  Documentary  and Processing  Charges  Payable to L/C
Issuer.  The Borrower shall pay directly to the L/C Issuer for its own account a
fronting  fee with  respect  to each  Letter  of  Credit,  at the rate per annum

                                       38

<PAGE>

specified in the Fee Letter,  computed on the daily amount available to be drawn
under such Letter of Credit and on a quarterly  basis in arrears.  Such fronting
fee shall be due and  payable  on the tenth  Business  Day after the end of each
March,  June,  September  and  December  in respect  of the most  recently-ended
quarterly  period  (or  portion  thereof,  in the  case of the  first  payment),
commencing  with the first such date to occur after the  issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For
purposes of computing the daily amount available to be drawn under any Letter of
Credit,  the amount of such Letter of Credit shall be  determined  in accordance
with  Section  1.06.  In addition,  the  Borrower  shall pay directly to the L/C
Issuer for its own account the customary issuance,  presentation,  amendment and
other processing  fees, and other standard costs and charges,  of the L/C Issuer
relating  to letters of credit as from time to time in  effect.  Such  customary
fees and  standard  costs and  charges  are due and  payable  on demand  and are
nonrefundable.

     (k)  Conflict with Issuer  Documents.  In the event of any conflict between
the terms  hereof and the terms of any Issuer  Document,  the terms hereof shall
control.

     (l)  Letters of Credit  Issued  for  Subsidiaries.  Notwithstanding  that a
Letter  of  Credit  issued  or  outstanding  hereunder  is  in  support  of  any
obligations  of, or is for the account of, a Subsidiary,  the Borrower  shall be
obligated to reimburse the L/C Issuer  hereunder for any and all drawings  under
such Letter of Credit.  The Borrower  hereby  acknowledges  that the issuance of
Letters of Credit for the account of  Subsidiaries  inures to the benefit of the
Borrower, and that the Borrower's business derives substantial benefits from the
businesses of such Subsidiaries.

     2.05 Prepayments.

     (a)  In addition to the required payments of principal of the Term Loan set
forth in Section  2.07(b) and any  mandatory  prepayments  of  principal  of the
Revolving  Loans and the Term Loan effected  under  subsection (b) or (c) below,
the Borrower may, upon notice by the Borrower to the  Administrative  Agent,  at
any time or from time to time  voluntarily  prepay  Revolving  Loans or the Term
Loan in whole or in part  without  premium or  penalty;  provided  that (i) such
notice must be received  by the  Administrative  Agent not later than 11:00 a.m.
(A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (B) on the date of  prepayment  of Base Rate Loans;  (ii) any  prepayment of
Eurodollar  Rate Loans shall be in a principal  amount of  $1,000,000 or a whole
multiple of $100,000 in excess  thereof;  and (iii) any  prepayment of Base Rate
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then  outstanding.  Each such notice  shall  specify the date and amount of such
prepayment,  whether such prepayment is applicable to the Revolving Loans or the
Term Loan and the Type(s) of Loans to be prepaid.  The Administrative Agent will
promptly notify each applicable  Lender of its receipt of each such notice,  and
of the amount of such Lender's Pro Rata Revolving  Share or Pro Rata Term Share,
as applicable of such prepayment.  If such notice is given by the Borrower,  the
Borrower shall make such  prepayment  and the payment  amount  specified in such
notice shall be due and payable on the date specified therein. Any prepayment of
a  Eurodollar  Rate Loan shall be  accompanied  by all  accrued  interest on the
amount  prepaid,  together  with any  additional  amounts  required  pursuant to
Section 3.05.  Each such  prepayment  shall be applied to the Revolving Loans of
the Lenders in accordance with their respective Pro Rata Revolving Shares.  Each
such  prepayment of principal of the Term Loan under this Section  2.05(a) shall
be applied to remaining  installments  of  principal of the Term Loan,  on a pro
rata basis.

                                       39

<PAGE>

     (b)  If for any reason the Total Revolving Credit Outstandings plus all L/C
Obligations at any time exceed the Aggregate  Revolving Credit  Commitments then
in effect,  then the Borrower shall  immediately  prepay  Revolving Loans and/or
Cash  Collateralize  the L/C  Obligations  in an aggregate  amount equal to such
excess;  provided,  however,  that the  Borrower  shall not be  required to Cash
Collateralize the L/C Obligations  pursuant to this Section 2.05(c) unless after
the  prepayment  in full of the  Revolving  Loans  the  Total  Revolving  Credit
Outstandings  plus all L/C  Obligations  exceed the Aggregate  Revolving  Credit
Commitments then in effect.

     (c)  In addition to the required payments of principal of the Term Loan set
forth in Section 2.07 and any optional or mandatory payments of principal of the
Term Loan and the Revolving Loans effected under  subsections (a) and (b) above,
the Borrower shall make the following required  prepayments of the Term Loan and
the Revolving Loans,  each such payment to be made to the  Administrative  Agent
for the  benefit of the  applicable  Lenders  within the time  period  specified
below.

          (i)  The Borrower shall make, or cause each  applicable  Subsidiary to
     make, a prepayment in an amount equal to one hundred  percent (100%) of the
     Net Cash Proceeds of each Property Sale by the Borrower or any  Subsidiary,
     each such  prepayment  to be made within thirty (30) days of receipt of the
     Net Cash  Proceeds  thereof and upon not less than five (5) Business  Days'
     prior  written  notice to the  Administrative  Agent,  which  notice  shall
     include a  certificate  of a  Responsible  Officer of the Borrower  setting
     forth in reasonable  detail the calculations  utilized in computing the Net
     Cash  Proceeds  of such sale and the amount of such  prepayment;  provided,
     however,   that  the  Borrower  and  its  Subsidiaries  may  sell  Exempted
     Restaurants  (defined below) without making a prepayment  arising from such
     sales  so long as (A)  within  360  days  after  the  sale of any  Exempted
     Restaurant,  all of the Net  Cash  Proceeds  of such  sale  are used by the
     Borrower  or the  applicable  Subsidiary  to  purchase  or develop  another
     Restaurant (a  "Replacement  Restaurant")  owned in fee simple or leased by
     the Borrower or such  Subsidiary,  and (B) the purchase of such Replacement
     Restaurant  complies  in all  respects  with  Section  6.13,  and  (without
     limitation  of the  foregoing)  the  Administrative  Agent has  received  a
     Mortgage or (in the case of a  Spaced-Leased  Restaurant)  an Assignment of
     Lease with respect to such  Replacement  Restaurant and all other documents
     required by Section 6.13;  provided  further that in the case of a Property
     Sale by the Borrower or any  Subsidiary of any Excluded  Restaurant  (other
     than the Excluded West Sahara  Restaurant),  (i) the Borrower  shall not be
     required  to  make  such  prepayment  to  the  extent  such  prepayment  is
     prohibited by the transaction  documents relating to the Indebtedness owing
     with  respect  to such  Excluded  Restaurant,  and (ii) in the  event  such
     prepayment  is not  prohibited  by clause  (i)  above,  the  amount of such
     prepayment shall be reduced by the amount, if any, then due and owing (as a
     result of such  Property  Sale) by the Borrower or and  Subsidiary,  as the
     case may be, to the holder of the  Indebtedness  owing with respect to such
     Excluded  Restaurant in accordance with the transaction  documents relating
     to  such  Indebtedness.   For  the  purposes  of  the  Section,   "Exempted
     Restaurants"  means up to five (5)  restaurants  in the aggregate  (none of

                                       40

<PAGE>

     which  may be a T.G.I.  Friday's  Restaurant  except  for  T.G.I.  Friday's
     Restaurants located in Kansas City, Kansas, Kansas City, Missouri or Omaha,
     Nebraska) sold by the Borrower and its Subsidiaries after the Closing Date.

          (ii) the Borrower shall make, or cause each  applicable  Subsidiary to
     make, a prepayment in an amount equal to one hundred  percent (100%) of the
     Net Cash Proceeds of each Debt  Issuance,  each such  prepayment to be made
     within ten (10) Business Days of receipt of such proceeds and upon not less
     than five (5) Business  Days' prior  written  notice to the  Administrative
     Agent, which notice shall include a certificate of a Responsible Officer of
     the Borrower setting forth in reasonable  detail the calculations  utilized
     in computing  the Net Cash Proceeds of such issuance and the amount of such
     prepayment;

          (iii) the Borrower shall make, or cause each applicable  Subsidiary to
     make, a prepayment  in an amount  equal to fifty  percent  (50%) of the Net
     Cash  Proceeds  of  each  Equity  Issuance  (other  than  Permitted  Equity
     Issuances),  each such  prepayment to be made within ten (10) Business Days
     of receipt of such proceeds and upon not less than five (5) Business  Days'
     prior  written  notice to the  Administrative  Agent,  which  notice  shall
     include a  certificate  of a  Responsible  Officer of the Borrower  setting
     forth in reasonable  detail the calculations  utilized in computing the Net
     Cash Proceeds of such issuance and the amount of such prepayment; and

          (iv) the Borrower shall make, or cause each  applicable  Subsidiary to
     make, a prepayment equal to one hundred percent (100%) of all Extraordinary
     Receipts,  each  such  prepayment  to be made  within  thirty  (30) days of
     receipt of such  proceeds  and upon not less than five (5)  Business  Days'
     prior  written  notice to the  Administrative  Agent,  which  notice  shall
     include a  certificate  of a  Responsible  Officer of the Borrower  setting
     forth in reasonable detail the amount of such prepayment.

Each prepayment received pursuant to this Section 2.05(c) shall be applied:

     First, to the then outstanding principal installments of the Term Loan on a
     pro rata basis until the Term Loan is paid in full; and

     Second,  to  the  outstanding  Revolving  Loans  and  Unreimbursed  Amounts
     (including L/C Borrowings),  and shall  automatically  reduce the Aggregate
     Revolving  Credit  Commitments by an amount equal to the amount so applied,
     which reduction  shall be allocated to the Revolving  Lenders on a pro rata
     basis,  until the  outstanding  Revolving  Loans and  Unreimbursed  Amounts
     (including L/C Borrowings) are repaid in full; and

Third, to pay all accrued interest on a pro rata basis.

     (d)  In the event  there is a Change of Control  within  twelve (12) months
after the Closing Date, the Borrower  shall, on the earlier of the date that all
outstanding  Loans are paid and the date that all outstanding Loans are required
to be paid (whether by  acceleration  or otherwise),  pay to the  Administrative
Agent for the benefit of each Lender a prepayment fee in an amount equal to 0.5%
times the  Commitment  of such  Lender as of the date of such Change of Control;
provided, however, that this subsection (d) shall not waive any Default or Event

                                       41

<PAGE>

of Default or limit any rights or  remedies  of the  Administrative  Agent,  any
Lender or the L/C Issuer arising from the Change in Control (including the right
to require acceleration of outstanding Obligations pursuant to Section 8.02).

     2.06 Termination or Reduction of Commitments. The Borrower may, upon notice
to  the  Administrative   Agent,   terminate  the  Aggregate   Revolving  Credit
Commitments,  or from time to time  permanently  reduce the Aggregate  Revolving
Credit  Commitments;  provided that (i) any such notice shall be received by the
Administrative  Agent not later than 11:00 a.m.  five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate  amount of  $5,000,000  or any whole  multiple of $1,000,000 in excess
thereof,  (iii)  the  Borrower  shall not  terminate  or  reduce  the  Aggregate
Revolving  Credit  Commitments  if,  after  giving  effect  thereto  and  to any
concurrent prepayments  hereunder,  the Total Revolving Credit Outstandings plus
all L/C Obligations would exceed the Aggregate Revolving Credit Commitments, and
(iv) if, after giving effect to any reduction of the Aggregate  Revolving Credit
Commitments,  the Letter of Credit Sublimit  exceeds the amount of the Aggregate
Revolving Credit  Commitments,  such Sublimit shall be automatically  reduced by
the amount of such excess.  The  Administrative  Agent will promptly  notify the
Revolving  Lenders  of any  such  notice  of  termination  or  reduction  of the
Aggregate Revolving Credit Commitments. Any reduction of the Aggregate Revolving
Credit  Commitments  shall be applied to the Revolving Credit Commitment of each
Revolving  Lender  according to its Pro Rata Revolving  Share.  All fees accrued
until the effective date of any  termination of the Aggregate  Revolving  Credit
Commitments shall be paid on the effective date of such termination.

     2.07 Repayment of Loans.

     (a)  The Borrower shall repay to the Revolving Lenders on the Maturity Date
the aggregate principal amount of Revolving Loans outstanding on such date.

     (b)  The  Borrower  shall  repay  the  principal  amount  of the Term  Loan
(together with any additional  amounts required pursuant to Section 3.05 and all
interest accrued as of such payment date on the principal  portion so repaid) on
the dates (or, in the event that the date set forth below is not a Business Day,
on the immediately  following Business Day) and, in each case, in the respective
amount  set  forth  on  Schedule  2.07(b)  and  the  Borrower  shall  repay  the
Outstanding Amount of the Term Loan on Maturity Date.

     2.08 Interest.

     (a)  Subject to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the  outstanding  principal  amount thereof for
each Interest  Period at a rate per annum equal to the Eurodollar  Rate for such
Interest  Period plus the  Applicable  Rate;  and (ii) each Base Rate Loan shall
bear interest on the  outstanding  principal  amount thereof from the applicable
borrowing  date at a rate per annum  equal to the Base Rate plus the  Applicable
Rate.

     (b)  (i) If any  amount  of  principal  of any  Loan is not  paid  when due
     (without  regard  to any  applicable  grace  periods),  whether  at  stated
     maturity,  by acceleration or otherwise,  such amount shall thereafter bear
     interest at a fluctuating interest rate per annum at all times equal to the
     Default Rate to the fullest extent permitted by applicable Laws.

                                       42

<PAGE>

          (ii) If any amount  (other than  principal of any Loan) payable by the
     Borrower  under any Loan  Document is not paid when due (without  regard to
     any applicable grace periods),  whether at stated maturity, by acceleration
     or otherwise,  then upon the request of the Required  Lenders,  such amount
     shall thereafter bear interest at a fluctuating  interest rate per annum at
     all times equal to the  Default  Rate to the fullest  extent  permitted  by
     applicable Laws.

          (iii) Upon the  request of the  Required  Lenders,  while any Event of
     Default exists,  the Borrower shall pay interest on the principal amount of
     all outstanding  Obligations  hereunder at a fluctuating  interest rate per
     annum  at all  times  equal  to the  Default  Rate  to the  fullest  extent
     permitted by applicable Laws.

          (iv) Accrued  and  unpaid  interest  on past  due  amounts  (including
     interest on past due interest) shall be due and payable upon demand.

     (c)  Interest  on each Loan  shall be due and  payable  in  arrears on each
Interest  Payment  Date  applicable  thereto  and at such other  times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the  terms  hereof  before  and  after  judgment,   and  before  and  after  the
commencement of any proceeding under any Debtor Relief Law.

     (d)  Without  limiting  the  generality  of the  foregoing,  at the time of
payment of each installment of principal under the Term Loan, the Borrower shall
pay interest accrued on the amount repaid.

     2.09 Fees. In addition to certain fees described in subsections (i) and (j)
of Section 2.03:

     (a)  Commitment Fee. The Borrower shall pay to the Administrative Agent for
the account of each Revolving  Lender in accordance  with its Pro Rata Revolving
Share,  a  commitment  fee equal to the  Applicable  Rate times the actual daily
amount by which the Aggregate Revolving Credit Commitments exceed the sum of (i)
the Outstanding Amount of Revolving Loans and (ii) the Outstanding Amount of L/C
Obligations.   The   commitment  fee  shall  accrue  at  all  times  during  the
Availability  Period,  including  at any time  during  which  one or more of the
conditions  in Article IV is not met, and shall be due and payable  quarterly in
arrears on the first Business Day after the end of each March,  June,  September
and  December,  commencing  with the first such date to occur  after the Closing
Date, and on the Maturity Date. The commitment fee shall be calculated quarterly
in  arrears,  and if there is any  change  in the  Applicable  Rate  during  any
quarter,  the actual  daily  amount  shall be  computed  and  multiplied  by the
Applicable  Rate  separately  for each  period  during  such  quarter  that such
Applicable Rate was in effect.

     (b)  Other  Fees.  (i)  The  Borrower  shall  pay to the  Arranger  and the
     Administrative  Agent for their own respective accounts fees in the amounts
     and at the times  specified  in the Fee  Letter.  Such fees  shall be fully
     earned when paid and shall not be refundable for any reason whatsoever.

                                       43

<PAGE>

          (ii) The  Borrower  shall pay to the  Lenders  such fees as shall have
     been  separately  agreed upon in writing in the amounts and at the times so
     specified.  Such  fees  shall be fully  earned  when  paid and shall not be
     refundable for any reason whatsoever.

     2.10 Computation  of Interest and Fees.  All  computations  of interest for
Base Rate Loans when the Base Rate is  determined  by Bank of  America's  "prime
rate"  shall be made on the basis of a year of 365 or 366 days,  as the case may
be, and actual days elapsed.  All other  computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest,  as applicable,  being paid than if computed on the basis
of a 365-day year).  Interest shall accrue on each Loan for the day on which the
Loan is made,  and shall not accrue on a Loan, or any portion  thereof,  for the
day on which the Loan or such  portion is paid,  provided  that any Loan that is
repaid on the same day on which it is made  shall,  subject to Section  2.12(a),
bear interest for one day. Each determination by the Administrative  Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

     2.11 Evidence of Debt.

     (a)  The Credit Extensions made by each Lender shall be evidenced by one or
more  accounts or records  maintained  by such Lender and by the  Administrative
Agent in the ordinary course of business.  The accounts or records maintained by
the  Administrative  Agent and each Lender shall be conclusive  absent  manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon.  Any failure to so record or any error in
doing so shall not,  however,  limit or otherwise  affect the  obligation of the
Borrower  hereunder to pay any amount owing with respect to the Obligations.  In
the event of any conflict  between the accounts  and records  maintained  by any
Lender and the  accounts and records of the  Administrative  Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest  error.  Upon the request of any Lender made  through
the Administrative  Agent, the Borrower shall execute and deliver to such Lender
(through the  Administrative  Agent) a Note,  which shall evidence such Lender's
Loans in addition to such accounts or records.  Each Lender may attach schedules
to its Note and  endorse  thereon  the date,  Type (if  applicable),  amount and
maturity of its Loans and payments with respect thereto.

     (b)  In addition to the accounts and records referred to in subsection (a),
each Lender and the  Administrative  Agent shall maintain in accordance with its
usual  practice  accounts or records  evidencing the purchases and sales by such
Lender of  participations  in Letters of  Credit.  In the event of any  conflict
between the accounts and records maintained by the Administrative  Agent and the
accounts and records of any Lender in respect of such matters,  the accounts and
records of the  Administrative  Agent  shall  control in the absence of manifest
error.

                                       44

<PAGE>

     2.12 Payments Generally; Administrative Agent's Clawback.

     (a)  General. All payments to be made by the Borrower shall be made without
condition or deduction  for any  counterclaim,  defense,  recoupment  or setoff.
Except as  otherwise  expressly  provided  herein,  all payments by the Borrower
hereunder  shall be made to the  Administrative  Agent,  for the  account of the
respective Lenders to which such payment is owed, at the Administrative  Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative  Agent will promptly distribute to
each Lender its Pro Rata Revolving  Share or Pro Rata Term Share,  as applicable
(or other  applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender's Lending Office. All payments received
by the Administrative Agent after 2:00 p.m. shall be deemed received on the next
succeeding  Business Day and any  applicable  interest or fee shall  continue to
accrue.  If any payment to be made by the Borrower shall come due on a day other
than a Business Day,  payment shall be made on the next following  Business Day,
and such extension of time shall be reflected in computing  interest or fees, as
the case may be.

     (b)  (i) Funding by Lenders;  Presumption by Administrative  Agent.  Unless
     the Administrative  Agent shall have received notice from a Lender prior to
     the proposed  date of any  Borrowing of  Eurodollar  Rate Loans (or, in the
     case of any  Borrowing of Base Rate Loans,  prior to 12:00 noon on the date
     of such  Borrowing)  that  such  Lender  will  not  make  available  to the
     Administrative   Agent  such  Lender's   share  of  such   Borrowing,   the
     Administrative  Agent may  assume  that  such  Lender  has made such  share
     available  on such  date in  accordance  with  Section  2.01  or  2.02,  as
     applicable,  (or, in the case of a Borrowing of Base Rate Loans,  that such
     Lender has made such share  available  in  accordance  with and at the time
     required by Section 2.02) and may, in reliance upon such  assumption,  make
     available  to the  Borrower a  corresponding  amount.  In such event,  if a
     Lender has not in fact made its share of the applicable Borrowing available
     to the  Administrative  Agent,  then the applicable Lender and the Borrower
     severally agree to pay to the Administrative Agent forthwith on demand such
     corresponding amount in immediately  available funds with interest thereon,
     for each day from and including  the date such amount is made  available to
     the  Borrower to but  excluding  the date of payment to the  Administrative
     Agent,  at (A) in the  case of a  payment  to be made by such  Lender,  the
     greater  of  the  Federal   Funds  Rate  and  a  rate   determined  by  the
     Administrative Agent in accordance with banking industry rules on interbank
     compensation  and (B) in the case of a payment to be made by the  Borrower,
     the interest rate  applicable to Base Rate Loans.  If the Borrower and such
     Lender shall pay such interest to the Administrative  Agent for the same or
     an overlapping period, the Administrative Agent shall promptly remit to the
     Borrower the amount of such  interest paid by the Borrower for such period.
     If  such  Lender  pays  its  share  of  the  applicable  Borrowing  to  the
     Administrative  Agent,  then  the  amount  so paid  shall  constitute  such
     Lender's Loan included in such Borrowing. Any payment by the Borrower shall
     be without  prejudice  to any claim the  Borrower may have against a Lender
     that shall have failed to make such payment to the Administrative Agent.

          (ii) Payments  by  Borrower;  Presumptions  by  Administrative  Agent.
     Unless  the  Administrative  Agent  shall  have  received  notice  from the
     Borrower   prior  to  the  date  on  which  any   payment  is  due  to  the
     Administrative  Agent for the  account  of the  Lenders  or the L/C  Issuer

                                       45

<PAGE>

     hereunder that the Borrower will not make such payment,  the Administrative
     Agent may assume that the  Borrower  has made such  payment on such date in
     accordance  herewith and may, in reliance upon such assumption,  distribute
     to the applicable Lenders or the L/C Issuer, as the case may be, the amount
     due. In such event, if the Borrower has not in fact made such payment, then
     each of the Lenders or the L/C Issuer, as the case may be, severally agrees
     to repay to the  Administrative  Agent  forthwith  on demand  the amount so
     distributed  to such Lender or the L/C  Issuer,  in  immediately  available
     funds with interest thereon,  for each day from and including the date such
     amount is  distributed  to it to but  excluding  the date of payment to the
     Administrative  Agent,  at the greater of the Federal Funds Rate and a rate
     determined by the Administrative  Agent in accordance with banking industry
     rules on interbank compensation.

     A notice of the  Administrative  Agent to any Lender or the  Borrower  with
respect  to any amount  owing  under this  subsection  (b) shall be  conclusive,
absent manifest error.

     (c)  Failure to Satisfy Conditions Precedent. If any Lender makes available
to the  Administrative  Agent  funds  for any Loan to be made by such  Lender as
provided in the foregoing  provisions of this Article II, and such funds are not
made  available  to  the  Borrower  by  the  Administrative  Agent  because  the
conditions to the  applicable  Credit  Extension set forth in Article IV are not
satisfied or waived in  accordance  with the terms  hereof,  the  Administrative
Agent shall  return such funds (in like funds as received  from such  Lender) to
such Lender, without interest.

     (d)  Obligations  of Revolving  Lenders  Several.  The  obligations  of the
Revolving Lenders  hereunder to make Revolving Loans, to fund  participations in
Letters of Credit and to make payments  pursuant to Section 10.04(c) are several
and not joint.  The failure of any Revolving  Lender to make any Revolving Loan,
to fund any such  participation or to make any payment under Section 10.04(c) on
any date required  hereunder shall not relieve any other Revolving Lender of its
corresponding obligation to do so on such date, and no Revolving Lender shall be
responsible  for the  failure  of any  other  Revolving  Lender  to so make  its
Revolving  Loan,  to purchase  its  participation  or to make its payment  under
Section 10.04(c).

     (e)  Obligations of Term Loan Lenders Several.  The obligations of the Term
Loan Lenders to fund each of their  respective  Pro Rata Term Shares of the Term
Loan and to make  payments  pursuant  to Section  10.04(c)  are  several and not
joint.  The  failure of any Term Loan  Lender to fund its Pro Rata Term Share of
the Term Loan or to make any payment under Section 10.04(c) on any date required
hereunder  shall not  relieve  any other Term Loan  Lender of its  corresponding
obligation to do so on such date,  and no Term Loan Lender shall be  responsible
for the failure of any other Term Loan Lender so to fund its Pro Rata Term Share
of the Term Loan or to make its payment under Section 10.04(c).

     (f)  Funding Source.  Nothing herein shall be deemed to obligate any Lender
to  obtain  the  funds  for any Loan in any  particular  place or  manner  or to
constitute  a  representation  by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.

                                       46

<PAGE>

     2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim  or otherwise,  obtain payment in respect of any
principal of or interest on any of the Revolving  Loans or Term Loan made by it,
or the  participations  in L/C Obligations held by it resulting in such Lender's
receiving payment of a proportion of the aggregate  Outstanding  Amount of Loans
and L/C Obligations,  or participations  and accrued interest  thereon,  greater
than its pro rata share thereof as provided  herein,  then the Lender  receiving
such greater proportion shall (a) notify the Administrative  Agent of such fact,
and  (b)  purchase  for  cash  at  face  value  from  the  other   Lenders  such
participations  in the Revolving  Loans of the other Lenders,  or portion of the
Term Loan made by them, or subparticipations in the L/C Obligations, as the case
may be,  or make  such  other  adjustments  as shall be  equitable,  so that the
benefit of all such payments  shall be shared by the Revolving  Lenders and Term
Loan Lenders ratably in accordance with the aggregate amount of principal of and
accrued  interest  on their  respective  Loans and  other  amounts  owing  them,
provided that:

          (i)  if any such participations or subparticipations are purchased and
     all or any portion of the payment  giving rise thereto is  recovered,  such
     participations  or  subparticipations  shall be rescinded  and the purchase
     price restored to the extent of such recovery, without interest; and

          (ii) the provisions of this Section shall not be construed to apply to
     (x) any payment made by the Borrower pursuant to and in accordance with the
     express terms of this Agreement or (y) any payment  obtained by a Lender as
     consideration  for the assignment of or sale of a  participation  in any of
     its  Loans or  subparticipations  in L/C  Obligations  to any  assignee  or
     participant,  other than to the Borrower or any  Subsidiary  thereof (as to
     which the provisions of this Section shall apply).

     Each Loan Party consents to the foregoing and agrees,  to the extent it may
effectively  do  so  under   applicable   law,  that  any  Lender   acquiring  a
participation  pursuant to the foregoing  arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such  participation
as fully as if such  Lender  were a direct  creditor  of such Loan  Party in the
amount of such participation.

     For the purposes of this Section 2.13,  any  calculation of pro rata shares
of Loans will be determined on the basis of the Outstanding  Amount of all Loans
and all L/C  Obligations  (and  each  Lender's  participation  therein)  without
distinction between Revolving Loans and Term Loans.

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

     3.01 Taxes.

     (a)  Payments  Free of Taxes.  Any and all payments by or on account of any
obligation of the Borrower  hereunder or under any other Loan Document  shall be
made free and clear of and without  reduction or withholding for any Indemnified
Taxes or Other  Taxes,  provided  that if the  Borrower  shall  be  required  by
applicable law to deduct any Indemnified  Taxes (including any Other Taxes) from
such payments,  then (i) the sum payable shall be increased as necessary so that

                                       47

<PAGE>

after  making  all  required  deductions  (including  deductions  applicable  to
additional sums payable under this Section) the Administrative  Agent, Lender or
L/C Issuer,  as the case may be,  receives  an amount  equal to the sum it would
have received had no such  deductions  been made,  (ii) the Borrower  shall make
such deductions and (iii) the Borrower shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.

     (b)  Payment  of  Other  Taxes  by  the  Borrower.   Without  limiting  the
provisions  of  subsection  (a) above,  the Borrower  shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.

     (c)  Indemnification  by the  Borrower.  The Borrower  shall  indemnify the
Administrative  Agent,  each  Lender  and the L/C  Issuer,  within 10 days after
demand  therefor,  for the full amount of any  Indemnified  Taxes or Other Taxes
(including   Indemnified  Taxes  or  Other  Taxes  imposed  or  asserted  on  or
attributable to amounts  payable under this Section) paid by the  Administrative
Agent,  such  Lender or the L/C Issuer,  as the case may be, and any  penalties,
interest and  reasonable  expenses  arising  therefrom or with respect  thereto,
whether or not such  Indemnified  Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental  Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the  L/C  Issuer  (with  a  copy  to  the  Administrative   Agent),  or  by  the
Administrative  Agent on its own  behalf  or on  behalf  of a Lender  or the L/C
Issuer, shall be conclusive absent manifest error.

     (d)  Evidence  of  Payments.  As soon as  practicable  after any payment of
Indemnified  Taxes or Other Taxes by the Borrower to a  Governmental  Authority,
the  Borrower  shall  deliver  to the  Administrative  Agent the  original  or a
certified copy of a receipt  issued by such  Governmental  Authority  evidencing
such payment,  a copy of the return  reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

     (e)  Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the  jurisdiction in which
the  Borrower  is  resident  for tax  purposes,  or any  treaty  to  which  such
jurisdiction is a party,  with respect to payments  hereunder or under any other
Loan Document shall deliver to the Borrower  (with a copy to the  Administrative
Agent),  at the  time  or  times  prescribed  by  applicable  law or  reasonably
requested by the Borrower or the  Administrative  Agent, such properly completed
and executed  documentation  prescribed  by  applicable  law as will permit such
payments to be made without withholding or at a reduced rate of withholding.  In
addition,  any Lender, if requested by the Borrower or the Administrative Agent,
shall  deliver  such  other  documentation   prescribed  by  applicable  law  or
reasonably  requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.

     Without  limiting the  generality of the  foregoing,  in the event that the
Borrower is resident for tax purposes in the United  States,  any Foreign Lender
shall  deliver to the Borrower and the  Administrative  Agent (in such number of
copies as shall be requested by the  recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time

                                       48

<PAGE>

thereafter  upon the request of the Borrower or the  Administrative  Agent,  but
only if such  Foreign  Lender is legally  entitled to do so),  whichever  of the
following is applicable:

          (i)  duly  completed  copies of Internal  Revenue  Service Form W-8BEN
     claiming  eligibility  for  benefits  of an income  tax treaty to which the
     United States is a party,

          (ii) duly completed copies of Internal Revenue Service Form W-8ECI,

          (iii) in the case of a Foreign  Lender  claiming  the  benefits of the
     exemption for portfolio  interest  under section  881(c) of the Code, (x) a
     certificate  to the  effect  that such  Foreign  Lender is not (A) a "bank"
     within the meaning of section  881(c)(3)(A)  of the Code, (B) a "10 percent
     shareholder" of the Borrower within the meaning of section  881(c)(3)(B) of
     the Code, or (C) a "controlled  foreign  corporation"  described in section
     881(c)(3)(C) of the Code and (y) duly completed  copies of Internal Revenue
     Service Form W-8BEN, or

          (iv) any  other  form  prescribed  by  applicable  law as a basis  for
     claiming exemption from or a reduction in United States Federal withholding
     tax duly completed together with such supplementary documentation as may be
     prescribed  by  applicable  law to permit the  Borrower  to  determine  the
     withholding or deduction required to be made.

     (f)  Treatment of Certain Refunds. If the Administrative  Agent, any Lender
or the L/C Issuer  determines,  in its sole  discretion,  that it has received a
refund of any Taxes or Other  Taxes as to which it has been  indemnified  by the
Borrower  or with  respect to which the  Borrower  has paid  additional  amounts
pursuant to this  Section,  it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid,  by the  Borrower  under this  Section  with respect to the Taxes or Other
Taxes  giving rise to such  refund),  net of all  out-of-pocket  expenses of the
Administrative  Agent,  such Lender or the L/C  Issuer,  as the case may be, and
without  interest  (other than any interest  paid by the  relevant  Governmental
Authority  with respect to such refund),  provided  that the Borrower,  upon the
request of the  Administrative  Agent, such Lender or the L/C Issuer,  agrees to
repay the amount  paid over to the  Borrower  (plus any  penalties,  interest or
other  charges   imposed  by  the  relevant   Governmental   Authority)  to  the
Administrative   Agent,  such  Lender  or  the  L/C  Issuer  in  the  event  the
Administrative  Agent,  such  Lender or the L/C Issuer is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to
require the Administrative Agent, any Lender or the L/C Issuer to make available
its tax  returns (or any other  information  relating to its taxes that it deems
confidential) to the Borrower or any other Person.

     3.02 Illegality.  If any  Lender  determines  that  any  Law  has  made  it
unlawful,  or that any Governmental  Authority has asserted that it is unlawful,
for any  Lender  or its  applicable  Lending  Office to make,  maintain  or fund
Eurodollar  Rate Loans,  or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material restrictions
on the  authority  of such Lender to purchase or sell,  or to take  deposits of,
Dollars in the London interbank  market,  then, on notice thereof by such Lender
to the Borrower through the Administrative  Agent, any obligation of such Lender

                                       49

<PAGE>

to make or  continue  Eurodollar  Rate  Loans or to  convert  Base Rate Loans to
Eurodollar  Rate  Loans  shall be  suspended  until  such  Lender  notifies  the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice,  the Borrower shall,
upon demand from such Lender (with a copy to the Administrative  Agent),  prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans,  either on the last day of the Interest Period  therefor,  if such Lender
may lawfully  continue to maintain  such  Eurodollar  Rate Loans to such day, or
immediately,  if  such  Lender  may  not  lawfully  continue  to  maintain  such
Eurodollar  Rate Loans.  Upon any such  prepayment or  conversion,  the Borrower
shall also pay accrued interest on the amount so prepaid or converted.

     3.03 Inability to Determine Rates. If the Required  Lenders  determine that
for any reason in  connection  with any request for a Eurodollar  Rate Loan or a
conversion  to or  continuation  thereof that (a) Dollar  deposits are not being
offered to banks in the London  interbank  eurodollar  market for the applicable
amount and  Interest  Period of such  Eurodollar  Rate Loan,  (b)  adequate  and
reasonable  means do not  exist  for  determining  the  Eurodollar  Rate for any
requested  Interest Period with respect to a proposed  Eurodollar Rate Loan , or
(c) the  Eurodollar  Rate for any  requested  Interest  Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan,  the  Administrative  Agent will  promptly so
notify the Borrower and each Lender.  Thereafter,  the obligation of the Lenders
to make  or  maintain  Eurodollar  Rate  Loans  shall  be  suspended  until  the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of,  conversion to or  continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

     3.04 Increased Costs; Reserves on Eurodollar Rate Loans.

     (a)  Increased Costs Generally. If any Change in Law shall:

          (i)  impose,  modify or deem applicable any reserve,  special deposit,
     compulsory loan, insurance charge or similar requirement against assets of,
     deposits with or for the account of, or credit  extended or participated in
     by, any Lender  (except any  reserve  requirement  contemplated  by Section
     3.04(e)) or the L/C Issuer;

          (ii) subject  any  Lender  or the L/C  Issuer  to any tax of any  kind
     whatsoever  with  respect to this  Agreement,  any  Letter of  Credit,  any
     participation in a Letter of Credit or any Eurodollar Rate Loan made by it,
     or change  the basis of  taxation  of  payments  to such  Lender or the L/C
     Issuer in respect  thereof  (except  for  Indemnified  Taxes or Other Taxes
     covered by Section  3.01 and the  imposition  of, or any change in the rate
     of, any Excluded Tax payable by such Lender or the L/C Issuer); or

          (iii) impose on any Lender or the L/C  Issuer or the London  interbank
     market any other  condition,  cost or expense  affecting  this Agreement or
     Eurodollar  Rate  Loans  made by such  Lender  or any  Letter  of Credit or
     participation therein;

                                       50

<PAGE>

and the result of any of the  foregoing  shall be to  increase  the cost to such
Lender of making or maintaining  any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender or the
L/C Issuer of participating  in, issuing or maintaining any Letter of Credit (or
of  maintaining  its  obligation  to  participate  in or to issue any  Letter of
Credit),  or to reduce  the amount of any sum  received  or  receivable  by such
Lender or the L/C Issuer hereunder (whether of principal,  interest or any other
amount) then,  upon request of such Lender or the L/C Issuer,  the Borrower will
pay to such Lender or the L/C Issuer, as the case may be, such additional amount
or amounts as will compensate such Lender or the L/C Issuer, as the case may be,
for such additional costs incurred or reduction suffered.

     (b)  Capital Requirements.  If any Lender or the L/C Issuer determines that
any Change in Law affecting  such Lender or the L/C Issuer or any Lending Office
of such Lender or such  Lender's or the L/C Issuer's  holding  company,  if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the L/C Issuer's capital or on the capital of such
Lender's or the L/C Issuer's holding  company,  if any, as a consequence of this
Agreement,   the   Commitments   of  such  Lender  or  the  Loans  made  by,  or
participations  in Letters of Credit  held by,  such  Lender,  or the Letters of
Credit issued by the L/C Issuer,  to a level below that which such Lender or the
L/C Issuer or such  Lender's  or the L/C  Issuer's  holding  company  could have
achieved but for such Change in Law (taking into  consideration such Lender's or
the L/C Issuer's  policies and the policies of such Lender's or the L/C Issuer's
holding  company with respect to capital  adequacy),  then from time to time the
Borrower  will pay to such  Lender or the L/C  Issuer,  as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer or
such  Lender's  or the L/C  Issuer's  holding  company  for any  such  reduction
suffered.

     (c)  Certificates for  Reimbursement.  A certificate of a Lender or the L/C
Issuer setting forth the amount or amounts  necessary to compensate  such Lender
or the L/C Issuer or its holding  company,  as the case may be, as  specified in
subsection  (a) or (b) of this Section and  delivered  to the Borrower  shall be
conclusive  absent manifest error. The Borrower shall pay such Lender or the L/C
Issuer,  as the case may be,  the  amount  shown as due on any such  certificate
within 10 days after receipt thereof.

     (d)  Delay in  Requests.  Failure or delay on the part of any Lender or the
L/C Issuer to demand compensation  pursuant to the foregoing  provisions of this
Section shall not constitute a waiver of such Lender's or the L/C Issuer's right
to demand such compensation, provided that the Borrower shall not be required to
compensate a Lender or the L/C Issuer  pursuant to the  foregoing  provisions of
this Section for any increased  costs incurred or reductions  suffered more than
nine months  prior to the date that such  Lender or the L/C Issuer,  as the case
may be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or the L/C Issuer's  intention to claim
compensation  therefor  (except  that,  if the Change in Law giving rise to such
increased  costs  or  reductions  is  retroactive,  then the  nine-month  period
referred to above shall be extended to include the period of retroactive  effect
thereof).

     (e)  Reserves on  Eurodollar  Rate Loans.  The  Borrower  shall pay to each
Lender,  as long as such Lender  shall be required  to  maintain  reserves  with
respect to liabilities or assets consisting of or including  Eurocurrency  funds
or deposits (currently known as "Eurocurrency liabilities"), additional interest
on the unpaid  principal amount of each Eurodollar Rate Loan equal to the actual

                                       51

<PAGE>

costs of such reserves  allocated to such Loan by such Lender (as  determined by
such Lender in good faith, which determination shall be conclusive), which shall
be due and  payable  on each date on which  interest  is  payable  on such Loan,
provided the Borrower shall have received at least 10 days' prior notice (with a
copy to the Administrative  Agent) of such additional interest from such Lender.
If a Lender fails to give notice 10 days prior to the relevant  Interest Payment
Date, such additional  interest shall be due and payable 10 days from receipt of
such notice.

     3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative  Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such  Lender  harmless  from any loss,  cost or expense
incurred by it as a result of:

     (a)  any continuation,  conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other  than the last day of the  Interest  Period
for  such  Loan  (whether  voluntary,   mandatory,   automatic,   by  reason  of
acceleration, or otherwise);

     (b)  any failure by the  Borrower  (for a reason  other than the failure of
such  Lender to make a Loan) to prepay,  borrow,  continue  or convert  any Loan
other  than a Base  Rate  Loan on the  date  or in the  amount  notified  by the
Borrower; or

     (c)  any assignment of a Eurodollar  Rate Loan on a day other than the last
day of the  Interest  Period  therefor as a result of a request by the  Borrower
pursuant to Section 10.13;

including any loss of anticipated  profits and any loss or expense  arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower  shall also pay any customary  administrative  fees charged by such
Lender in connection with the foregoing.

     For purposes of calculating  amounts payable by the Borrower to the Lenders
under  this  Section  3.05,  each  Lender  shall be deemed to have  funded  each
Eurodollar  Rate  Loan  made by it at the  Eurodollar  Rate for  such  Loan by a
matching  deposit or other borrowing in the London interbank  eurodollar  market
for a  comparable  amount  and for a  comparable  period,  whether  or not  such
Eurodollar Rate Loan was in fact so funded.

     3.06 Mitigation Obligations; Replacement of Lenders.

     (a)  Designation  of a Different  Lending  Office.  If any Lender  requests
compensation  under  Section  3.04,  or the  Borrower  is  required  to pay  any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section  3.02,  then such Lender  shall use  reasonable  efforts to  designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and  obligations  hereunder  to another of its  offices,  branches or
affiliates,  if, in the judgment of such Lender,  such designation or assignment
(i) would eliminate or reduce amounts payable  pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as  applicable,  and (ii) in each case,  would not subject such
Lender  to  any  unreimbursed  cost  or  expense  and  would  not  otherwise  be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs  and  expenses  incurred  by  any  Lender  in  connection  with  any  such
designation or assignment.

                                       52

<PAGE>

     (b)  Replacement  of Lenders.  If any Lender  requests  compensation  under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any  Governmental  Authority for the account of any Lender pursuant to
Section 3.01,  the Borrower may replace such Lender in  accordance  with Section
10.13.

     3.07 Survival.  All of the  Borrower's  obligations  under this Article III
shall  survive  termination  of the Aggregate  Commitments  and repayment of all
other Obligations hereunder.

                                  ARTICLE IV.
                    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     4.01 Conditions  of Initial  Credit  Extension.  The  obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:

     (a)  The  Administrative  Agent's  receipt of the following,  each of which
shall be  originals  or  telecopies  (followed  promptly  by  originals)  unless
otherwise  specified,  each properly  executed by a  Responsible  Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of certificates
of  governmental  officials,  a recent date before the Closing Date) and each in
form and  substance  satisfactory  to the  Administrative  Agent and each of the
Lenders:

          (i)  executed  counterparts of this  Agreement,  the Guaranty and each
     Security   Instrument   sufficient  in  number  for   distribution  to  the
     Administrative Agent, each Lender and the Borrower;

          (ii) a  Note  executed  by  the  Borrower  in  favor  of  each  Lender
     requesting a Note;

          (iii) such  certificates  of resolutions  or other action,  incumbency
     certificates and/or other certificates of Responsible Officers of each Loan
     Party as the  Administrative  Agent may require  evidencing  the  identity,
     authority and capacity of each  Responsible  Officer thereof  authorized to
     act as a  Responsible  Officer in  connection  with this  Agreement and the
     other Loan Documents to which such Loan Party is a party;

          (iv) certified  Organization  Documents  of each Loan Party,  and such
     other  documents  and  certifications  as  the  Administrative   Agent  may
     reasonably  require to evidence  that each Loan Party is duly  organized or
     formed,  and that each of the Borrower and each other Loan Party is validly
     existing,  in good  standing  and  qualified  to engage in business in each
     jurisdiction  where its ownership,  lease or operation of properties or the
     conduct of its business requires such  qualification,  except to the extent
     that failure to do so could not  reasonably  be expected to have a Material
     Adverse Effect;

          (v)  a favorable opinion of Michael J. Herron,  general counsel to the
     Loan Parties,  addressed to the Administrative Agent and each Lender, as to
     the matters set forth in Exhibit G and such other  matters  concerning  the
     Loan Parties and the Loan Documents as the Required  Lenders may reasonably
     request;

                                       53

<PAGE>

          (vi) favorable  opinions of local  counsel to the Loan Parties in each
     of Arizona,  California,  and Nevada, addressed to the Administrative Agent
     and each  Lender,  as to  certain  matters  set forth in Exhibit G and such
     other  matters  concerning  the Loan Parties and the Loan  Documents as the
     Required Lenders may reasonably request;

          (vii) a certificate of a Responsible Officer of each Loan Party either
     (A) attaching  copies of all consents,  licenses and approvals  required in
     connection with the execution,  delivery and performance by such Loan Party
     and the validity  against such Loan Party of the Loan Documents to which it
     is a party,  and such  consents,  licenses and  approvals  shall be in full
     force  and  effect,  or (B)  stating  that no such  consents,  licenses  or
     approvals are so required;

          (viii) a certificate  signed by a Responsible  Officer of the Borrower
     certifying  (A) that the conditions  specified in Sections  4.02(a) and (b)
     have been satisfied, (B) that there has been no event or circumstance since
     the  date of the  Audited  Financial  Statements  that  has had or could be
     reasonably  expected to have,  either  individually or in the aggregate,  a
     Material Adverse Effect; (C) that there has been no material adverse change
     in the facts and  information  regarding the Borrower and its  Subsidiaries
     since the date of the Audited Financial  Statements,  and (D) a calculation
     of the Consolidated Leverage Ratio as of the last day of the fiscal quarter
     of the Borrower most recently ended prior to the Closing Date;

          (ix) a certificate  signed by the chief financial officer of each Loan
     Party  certifying  that each Loan Party is Solvent,  after giving effect to
     this Agreement,  the transactions  contemplated hereby and any Indebtedness
     incurred in connection herewith;

          (x)  a copy of each Lease in effect on the Closing  Date with  respect
     to any Restaurant (other than Excluded  Restaurants),  each of which Leases
     shall be certified by a Responsible Officer of the Borrower;

          (xi) a copy certified by a Responsible Officer of the Borrower of each
     Franchise  Agreement  with respect to any  Restaurant  (other than Excluded
     Restaurants);

          (xii) a copy  certified  by a  Responsible  Officer of the Borrower of
     each Material Management Agreement;

          (xiii) evidence of the consent and approval by the  Franchisor  of the
     transactions  contemplated  by this  Agreement and the other Loan Documents
     and the Liens in favor of the  Administrative  Agent  pursuant  to the Loan
     Documents or evidence that such consents and approvals are not required;

          (xiv) with respect to each Restaurant that is owned by any Loan Party:
     (A) the  Mortgage  and  evidence  of the  proper  recordation  of each such
     Mortgage  (or the  delivery of any such  Mortgage to the  applicable  title
     insurance  company for  recordation,  on or  immediately  after the Closing
     Date) in the  appropriate  filing  office,  and (B) the Owned  Real  Estate
     Support Documents with respect to such Restaurant;

                                       54

<PAGE>

          (xv) with  respect  to  each  Restaurant   (other  than  any  Excluded
     Restaurant) that is ground leased by any Loan Party: (A) the Mortgage and a
     memorandum  of lease  for  such  Restaurant,  and  evidence  of the  proper
     recordation  of each such Mortgage and memorandum of lease (or the delivery
     of any  such  Mortgage  or  memorandum  of lease  to the  applicable  title
     insurance company for recordation on or immediately after the Closing Date)
     in the  appropriate  filing  office,  and (B) the Ground Leased Real Estate
     Support Documents with respect to such Restaurant;

          (xvi) with  respect  to  each  Restaurant  (other  than  any  Excluded
     Restaurant)  that is Space Leased by any Loan Party:  (A) the Assignment of
     Leases and a memorandum of lease for such  Restaurant,  and evidence of the
     proper  recordation  of each such  Assignment  of Leases and  memorandum of
     lease (or the delivery of any such  Assignment  of Leases or  memorandum of
     lease to the  applicable  title  insurance  company for  recordation  on or
     immediately after the Closing Date) in the appropriate  filing office,  and
     (B) the Space  Leased Real Estate  Support  Documents  with respect to such
     Restaurant;

          (xvii) such  warehouseman  and bailee  letters  as the  Administrative
     Agent may request;

          (xviii) such executed  intercreditor  agreements as the Administrative
     Agent may request;

          (xix) Uniform  Commercial Code search results showing only those Liens
     as are acceptable to the Administrative Agent;

          (xx) delivery of Uniform Commercial Code financing statements suitable
     in form and substance for filing in all places  required by applicable  Law
     to  perfect  the  Liens of the  Administrative  Agent  under  the  Security
     Instruments  as a first  priority Lien as to items of Collateral in which a
     security  interest may be perfected by the filing of financing  statements,
     and  such  other  documents  and/or  evidence  of other  actions  as may be
     necessary under  applicable Law to perfect the Liens of the  Administrative
     Agent under the Security  Instruments  as a first  priority  Lien in and to
     such other Collateral as the Administrative Agent may require;

          (xxi) evidence that all insurance  required to be maintained  pursuant
     to the Loan Documents has been obtained and is in effect;  and endorsements
     naming the  Administrative  Agent (on behalf of the  Lenders  and the other
     Secured  Parties) as an additional  insured or loss payee,  as the case may
     be, on all such insurance policies maintained with respect to properties of
     any Loan Party constituting part of the Collateral;

          (xxii) a duly completed  Compliance  Certificate as of the last day of
     the fiscal  quarter of the  Borrower  ended on June 27,  2005,  signed by a
     Responsible Officer of the Borrower;

          (xxiii)  evidence   that  the  Existing   Indebtedness   has  been  or
     concurrently  with the  Closing  Date is being  paid in  full,  all  credit
     facilities  listed on  Schedule  1.01E have been or  concurrently  with the
     Closing Date are being terminated and all Liens securing  obligations under

                                       55

<PAGE>

     the Existing  Indebtedness  have been or concurrently with the Closing Date
     are being released;

          (xxiv)  evidence  satisfactory  to the  Administrative  Agent that all
     taxes,  filing fees and recording fees and other related  transaction costs
     have been paid; and

          (xxv) such other  assurances,  certificates,  documents,  consents  or
     opinions  as the  Administrative  Agent,  the L/C  Issuer  or the  Required
     Lenders reasonably may require.

     (b)  Any fees  required to be paid on or before the Closing Date shall have
been paid.

     (c)  Unless waived by the  Administrative  Agent,  the Borrower  shall have
paid all fees, charges and disbursements of counsel to the Administrative  Agent
to the extent  invoiced  prior to or on the Closing Date,  plus such  additional
amounts  of such  fees,  charges  and  disbursements  as  shall  constitute  its
reasonable  estimate of such fees,  charges and disbursements  incurred or to be
incurred by it through  the closing  proceedings  (provided  that such  estimate
shall not thereafter  preclude a final settling of accounts between the Borrower
and the Administrative Agent).

     (d)  The Closing Date shall have occurred on or before October 31, 2005.

     Without  limiting the  generality of the  provisions  of Section 9.04,  for
purposes of determining compliance with the conditions specified in this Section
4.01,  each  Lender  that has  signed  this  Agreement  shall be  deemed to have
consented  to,  approved or accepted or to be satisfied  with,  each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative  Agent shall have received
notice  from such Lender  prior to the  proposed  Closing  Date  specifying  its
objection thereto.

     4.02 Conditions to all Credit Extensions.  The obligation of each Lender to
honor any Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type, or a  continuation  of Eurodollar  Rate
Loans) is subject to the following conditions precedent:

     (a)  The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document,  or which are contained
in any  document  furnished  at any time  under  or in  connection  herewith  or
therewith,  shall  be true  and  correct  on and as of the  date of such  Credit
Extension,  except  to the  extent  that  such  representations  and  warranties
specifically  refer to an  earlier  date,  in which  case they shall be true and
correct as of such  earlier  date,  and except that for purposes of this Section
4.02, the representations and warranties contained in subsections (a) and (b) of
Section  5.05 shall be deemed to refer to the most recent  statements  furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.

     (b)  No Default  shall  exist,  or would result from such  proposed  Credit
Extension or from the application of the proceeds thereof.

     (c)  The Administrative Agent and, if applicable, the L/C Issuer shall have
received a Request for Credit  Extension  in  accordance  with the  requirements
hereof.

                                       56

<PAGE>

     Each Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type or a  continuation  of  Eurodollar  Rate
Loans)  submitted by the  Borrower  shall be deemed to be a  representation  and
warranty  that the  conditions  specified in Sections  4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

     The Borrower  represents and warrants to the  Administrative  Agent and the
Lenders that:

     5.01 Existence,  Qualification  and Power;  Compliance with Laws. Each Loan
Party and each  Subsidiary  thereof  (a) is duly  organized  or formed,  validly
existing  and in  good  standing  under  the  Laws  of the  jurisdiction  of its
incorporation or organization, (b) has all requisite power and authority and all
requisite governmental licenses,  authorizations,  consents and approvals to (i)
own or lease its assets and carry on its business and (ii) execute,  deliver and
perform its obligations  under the Loan Documents to which it is a party, (c) is
duly  qualified  and is  licensed  and in good  standing  under the Laws of each
jurisdiction  where its  ownership,  lease or  operation  of  properties  or the
conduct of its business  requires such  qualification or license,  and (d) is in
compliance with all Laws; except in each case referred to in clause (b)(i),  (c)
or (d), to the extent that failure to do so could not  reasonably be expected to
have a Material Adverse Effect.

     5.02 Authorization;   No   Contravention.   The  execution,   delivery  and
performance  by each Loan Party of each Loan  Document  to which such  Person is
party,   have  been  duly  authorized  by  all  necessary   corporate  or  other
organizational  action,  and do not and will not (a) contravene the terms of any
of such  Person's  Organization  Documents;  (b) conflict  with or result in any
breach or  contravention  of, or the creation of any Lien under,  or require any
payment to be made under (i) any Contractual Obligation (including any Franchise
Agreement)  to which  such  Person is a party or  affecting  such  Person or the
properties  of  such  Person  or any of its  Subsidiaries  or  (ii)  any  order,
injunction,  writ or decree of any Governmental  Authority or any arbitral award
to which such Person or its  property is subject;  or (c) violate any Law.  Each
Loan Party is in  compliance  with all  Contractual  Obligations  referred to in
clause  (b)(i),  except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect.

     5.03 Governmental  Authorization;  Other  Consents.  No approval,  consent,
exemption,  authorization, or other action by, or notice to, or filing with, any
Governmental  Authority  or  any  other  Person  is  necessary  or  required  in
connection  with the  execution,  delivery  or  performance  by, or  enforcement
against, any Loan Party of this Agreement or any other Loan Document.

     5.04 Binding Effect. This Agreement has been, and each other Loan Document,
when delivered  hereunder,  will have been,  duly executed and delivered by each
Loan Party that is party  thereto.  This Agreement  constitutes,  and each other
Loan  Document when so delivered  will  constitute,  a legal,  valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.

                                       57

<PAGE>

     5.05 Financial Statements;  No Material Adverse Effect; No Internal Control
Event.

     (a)  The Audited Financial  Statements (i) were prepared in accordance with
GAAP  consistently  applied  throughout  the period covered  thereby,  except as
otherwise  expressly noted therein;  (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance  with GAAP  consistently
applied  throughout the period covered  thereby,  except as otherwise  expressly
noted therein;  and (iii) show all material  indebtedness and other liabilities,
direct  or  contingent,  of the  Borrower  and its  Subsidiaries  as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

     (b)  The  unaudited  consolidated  balance  sheet of the  Borrower  and its
Subsidiaries  dated June 27, 2005,  and the related  consolidated  statements of
income or operations, shareholders' equity and cash flows for the fiscal quarter
ended on that  date (i) were  prepared  in  accordance  with  GAAP  consistently
applied  throughout the period covered  thereby,  except as otherwise  expressly
noted therein,  and (ii) fairly present the financial  condition of the Borrower
and its  Subsidiaries as of the date thereof and their results of operations for
the period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal  year-end  audit  adjustments.  Schedule 5.05
sets  forth  all  material   indebtedness  and  other  liabilities,   direct  or
contingent,  of the Borrower and its consolidated Subsidiaries as of the date of
such financial statements, including liabilities for taxes, material commitments
and Indebtedness.

     (c)  Except as set forth on Schedule 5.05(c), since the date of the Audited
Financial  Statements,   there  has  been  no  event  or  circumstance,   either
individually or in the aggregate,  that has had or could  reasonably be expected
to have a Material Adverse Effect.

     (d)  Since  the  date of the  Audited  Financial  Statements,  no  Internal
Control Event has occurred.

     (e)  The consolidated forecasted balance sheet and statements of income and
cash flows of the Borrower and its  Subsidiaries  delivered  pursuant to Section
6.01(c)  were  prepared  in good  faith on the basis of the  assumptions  stated
therein,  which assumptions were fair in light of the conditions existing at the
time of delivery of such forecasts,  and  represented,  at the time of delivery,
the Borrower's best estimate of its future financial performance.

     5.06 Litigation.  Except  as set  forth  on  Schedule  5.06,  there  are no
actions, suits, proceedings,  claims or disputes pending or, to the knowledge of
the Borrower after due and diligent  investigation,  threatened or contemplated,
at law, in equity,  in arbitration or before any Governmental  Authority,  by or
against  the  Borrower  or any of  its  Subsidiaries  or  against  any of  their
properties or revenues  that (a) purport to affect or pertain to this  Agreement
or any other Loan Document,  or any of the transactions  contemplated hereby, or
(b) either  individually  or in the aggregate,  if determined  adversely,  could
reasonably be expected to have a Material Adverse Effect.

     5.07 No Default.  Neither the  Borrower  nor any  Subsidiary  is in default
under  or  with  respect  to  any  Contractual  Obligation  that  could,  either
individually  or in the  aggregate,  reasonably  be  expected to have a Material

                                       58

<PAGE>

Adverse  Effect.  No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

     5.08 Ownership of Property; Liens. Each of the Borrower and each Subsidiary
has good  record  and  marketable  title in fee  simple  to, or valid  leasehold
interests in, all real property necessary or used in the ordinary conduct of its
business,  except for such defects in title as could not, individually or in the
aggregate,  reasonably  be  expected  to have a  Material  Adverse  Effect.  The
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Liens permitted by Section 7.01.

     5.09 Environmental Compliance.  There are no Environmental Laws that could,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse   Effect.   There  are  no  claims  alleging   potential   liability  or
responsibility  for  violation  of  any  Environmental  Law  on  the  respective
businesses,  operations or properties of the Borrower or any  Subsidiary,  which
claims could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     5.10 Insurance.  The  properties of the Borrower and its  Subsidiaries  are
insured with financially sound and reputable  insurance companies not Affiliates
of the Borrower,  in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.

     5.11 Taxes.  Except as set forth on Schedule  5.11,  the  Borrower  and its
Subsidiaries  have filed all Federal,  state and other  material tax returns and
reports  required  to be  filed,  and have  paid all  Federal,  state  and other
material  taxes,  assessments,  fees and other  governmental  charges  levied or
imposed  upon  them or their  properties,  income or  assets  otherwise  due and
payable,  except those which are being  contested  in good faith by  appropriate
proceedings  diligently  conducted  and for which  adequate  reserves  have been
provided in accordance  with GAAP.  There is no proposed tax assessment  against
the Borrower or any  Subsidiary  that would,  if made,  have a Material  Adverse
Effect.  Neither any Loan Party nor any  Subsidiary  thereof is party to any tax
sharing agreement.

     5.12 ERISA Compliance.

     (a)  Each  Plan  is  in  compliance  in  all  material  respects  with  the
applicable  provisions of ERISA,  the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable  determination letter from the IRS or an application for such a letter
is currently  being  processed by the IRS with respect  thereto and, to the best
knowledge of the Borrower,  nothing has occurred which would  prevent,  or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required  contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any  amortization  period
pursuant to Section 412 of the Code has been made with respect to any Plan.

                                       59

<PAGE>

     (b)  There  are no  pending  or,  to the best  knowledge  of the  Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with  respect to any Plan that could  reasonably  be expected to have a Material
Adverse  Effect.  There has been no prohibited  transaction  or violation of the
fiduciary  responsibility  rules with  respect to any Plan that has  resulted or
could reasonably be expected to result in a Material Adverse Effect.

     (c)  (i) No ERISA Event has  occurred or is  reasonably  expected to occur;
(ii) no Pension  Plan has any  Unfunded  Pension  Liability;  (iii)  neither the
Borrower nor any ERISA Affiliate has incurred,  or reasonably  expects to incur,
any  liability  under Title IV of ERISA with  respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA);  (iv) neither
the Borrower nor any ERISA  Affiliate  has incurred,  or  reasonably  expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with  respect to a  Multiemployer  Plan;  and (v)  neither  the
Borrower  nor any ERISA  Affiliate  has engaged in a  transaction  that could be
subject to Sections 4069 or 4212(c) of ERISA.

     5.13 Subsidiaries; Equity Interests. The Borrower has no Subsidiaries other
than those  specifically  disclosed in Part (a) of Schedule 5.13, and all of the
outstanding  Equity Interests in such Subsidiaries have been validly issued, are
fully  paid  and  nonassessable  and are  owned by a Loan  Party in the  amounts
specified on Part (a) of Schedule 5.13 free and clear of all Liens. The Borrower
has no equity  investments  in any other  corporation or entity other than those
specifically  disclosed  in Part(b) of  Schedule  5.13.  All of the  outstanding
Equity Interests in each Subsidiary have been validly issued, are fully paid and
nonassessable  and  are  owned  by the  Persons  and in the  respective  amounts
specified on Part (c) of Schedule 5.13 free and clear of all Liens.

     5.14 Margin  Regulations;  Investment  Company Act;  Public Utility Holding
Company Act.

     (a)  The Borrower is not engaged and will not engage, principally or as one
of its important  activities,  in the business of purchasing or carrying  margin
stock  (within  the meaning of  Regulation  U issued by the FRB),  or  extending
credit for the purpose of purchasing or carrying margin stock.

     (b)  None of the Borrower,  any Person  Controlling  the  Borrower,  or any
Subsidiary (i) is a "holding  company," or a "subsidiary  company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of  1935,  or (ii) is or is  required  to be  registered  as an  "investment
company" under the Investment Company Act of 1940.

     5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and
the Lenders all agreements,  instruments and corporate or other  restrictions to
which it or any of its  Subsidiaries is subject,  and all other matters known to
it, that,  individually  or in the  aggregate,  could  reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Administrative  Agent or any Lender in connection with the
transactions  contemplated  hereby  and the  negotiation  of this  Agreement  or

                                       60

<PAGE>

delivered  hereunder or under any other Loan Document (in each case, as modified
or  supplemented  by other  information  so  furnished)  contains  any  material
misstatement  of fact or omits to state any material fact  necessary to make the
statements  therein,  in the light of the  circumstances  under  which they were
made,  not  misleading;  provided  that,  with  respect to  projected  financial
information,  the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

     5.16 Compliance  with Laws.  Each of the Borrower and each Subsidiary is in
compliance in all material  respects with the  requirements  of all Laws and all
orders,  writs,  injunctions and decrees  applicable to it or to its properties,
except in such instances in which (a) such  requirement  of Law or order,  writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

     5.17 Intellectual   Property;   Licenses,   Etc.   The   Borrower  and  its
Subsidiaries  own, or possess the right to use, all of the  trademarks,  service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other  intellectual  property  rights  (collectively,   "IP  Rights")  that  are
reasonably necessary for the operation of their respective  businesses,  without
conflict  with the  rights of any other  Person.  To the best  knowledge  of the
Borrower,  no slogan or other  advertising  device,  product,  process,  method,
substance,  part or other  material  now  employed,  or now  contemplated  to be
employed,  by the Borrower or any  Subsidiary  infringes upon any rights held by
any other  Person.  No claim or  litigation  regarding  any of the  foregoing is
pending or, to the best  knowledge of the Borrower,  threatened,  which,  either
individually  or in the  aggregate,  could  reasonably  be  expected  to  have a
Material Adverse Effect.

     5.18 Collateral.

     (a)  All of the Collateral is owned by the grantor of the security interest
therein in favor of the  Administrative  Agent free of any title  defects or any
Liens or interests of others, except for the liens and security interests of the
Administrative  Agent and other Permitted Liens. All of the furniture,  fixtures
and  equipment  used in  connection  with the  Business  are located at the Unit
Locations, except for individual items requiring repair away from the applicable
Unit Location.

     (b)  The Liens and security interests granted to the  Administrative  Agent
(for the benefit of the  Administrative  Agent,  Lenders  hereunder  and certain
Affiliates of the Lenders) are valid first priority Liens and security interests
in the Collateral (subject only to Permitted Liens), and each has been perfected
in  accordance  with the  requirements  of all  states  in which any item of the
Collateral  is  located or any Loan Party is  organized  to the extent  that the
filing  of UCC  financing  statements  or the  recording  of  the  Mortgages  is
sufficient to perfect such lien or security interest.  The Administrative  Agent
has a  perfected  security  interest  in, or Lien on,  substantially  all of the
Collateral.

     5.19 Locations of Loan Parties.  Each Loan Party's correct legal name, type
of organization,  jurisdiction of organization,  state  organization  number and
federal  employers  identification  number are set forth on Schedule 5.19.  Each

                                       61

<PAGE>

Loan  Party's  chief  executive  office is located at the  address  set forth in
Schedule 5.19. Borrower shall immediately report to the Administrative Agent any
change  in any of (a) any Loan  Party's  name,  type of  organization,  state of
organization or organization  number, (b) the location of any Loan Party's chief
executive office, or (c) the location of any material Collateral.

     5.20 Franchise Agreements. There is a Franchise Agreement in force for each
Unit  Location,  each  Franchise  Agreement is in full force and effect  without
amendment or modification  from the form or copy delivered to Lenders except for
amendments  permitted  hereunder;  no  default  by any  party  exists  under any
Franchise   Agreement  that  could  result  in  termination  of  such  Franchise
Agreement,  nor has any event  occurred  which,  with the passage of time or the
giving of notice, or both, would constitute such a default.  Schedule 1.01F is a
complete and correct listing of all Franchise  Agreements as of the Closing Date
and which will remain outstanding after the Closing Date.

     5.21 Leases.  There is a Lease in force  for each  Unit  Location  which is
ground leased or Space Leased by any Loan Party, each Lease is in full force and
effect  without  amendment or  modification  from the form or copy  delivered to
Lenders  except  for  amendments  permitted  hereunder;  no default by any party
exists under any such Lease that could result in termination of such Lease,  nor
has any event occurred which,  with the passage of time or the giving of notice,
or both,  would  constitute  such a default.  Schedule  1.01G is a complete  and
correct  listing of all  Leases as of the  Closing  Date and which  will  remain
outstanding after the Closing Date.

     5.22 Material  Management  Agreements.  Each  of  the  Material  Management
Agreements is full force and effect without  amendment or modification  from the
copy  delivered  to the  Lenders;  no default by any party exists under any such
Material  Management  Agreement  that could  result in the  termination  of such
agreement,  nor has any event  occurred  which,  with the passage of time or the
giving of notice, or both, would constitute such a default.

     5.23 Solvency.  Both before and after giving effect to the Loans hereunder,
each Loan Party is Solvent.

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

     So long as any Lender  shall  have any  Commitment  hereunder,  any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied,  or any Letter of
Credit shall remain  outstanding,  the Borrower shall,  and shall (except in the
case of the covenants  set forth in Sections  6.01,  6.02,  and 6.03) cause each
Subsidiary to:

     6.01 Financial  Statements.  Deliver to the  Administrative  Agent and each
Lender,  in form and detail  satisfactory  to the  Administrative  Agent and the
Required Lenders:

     (a)  as  soon  as  available,  but  in  any  event  by the  date  on  which
consolidated  financial  statements for such period are required to be delivered
to the SEC under the Securities  Laws (without  regard to any extensions of such
date  permitted  by the  Securities  Laws for which any special  application  is
required),  a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal  year,  and the  related  consolidated  statements  of

                                       62

<PAGE>

income or operations,  shareholders' equity and cash flows for such fiscal year,
setting  forth in each case in  comparative  form the figures  for the  previous
fiscal year,  all in  reasonable  detail and prepared in  accordance  with GAAP,
audited  and  accompanied  by (i) a report and  opinion of a  Registered  Public
Accounting Firm of nationally  recognized standing reasonably  acceptable to the
Required  Lenders  (the  "Public  Accountants")  as to  whether  such  financial
statements are free of material misstatement,  which report and opinion shall be
prepared in accordance  with audit  standards of the Public  Company  Accounting
Oversight  Board and applicable  Securities Laws and shall not be subject to any
"going  concern" or like  qualification  or  exception or any  qualification  or
exception  as to the  scope of such  audit or with  respect  to the  absence  of
material  misstatement and (ii) an attestation  report of such Registered Public
Accounting Firm as to the Borrower's  internal  controls pursuant to Section 404
of  Sarbanes-Oxley  expressing a conclusion of which the Required Lenders do not
object;

     (b)  as  soon  as  available,  but  in  any  event  by the  date  on  which
consolidated  financial  statements for such period are required to be delivered
to the SEC under the Securities  Laws (without  regard to any extensions of such
date  permitted  by the  Securities  Laws for which any special  application  is
required),  a consolidated balance sheet of the Borrower and its Subsidiaries as
at the end of such fiscal quarter,  and the related  consolidated  statements of
income or  operations,  shareholders'  equity  and cash  flows  for such  fiscal
quarter and for the portion of the  Borrower's  fiscal year then ended,  setting
forth in each case in comparative form the figures for the corresponding  fiscal
quarter  of the  previous  fiscal  year  and the  corresponding  portion  of the
previous  fiscal year,  all in  reasonable  detail,  certified by a  Responsible
Officer of the Borrower as fairly presenting the financial condition, results of
operations,  shareholders'  equity  and  cash  flows  of the  Borrower  and  its
Subsidiaries  in accordance  with GAAP,  subject only to normal  year-end  audit
adjustments and the absence of footnotes;

     (c)  as soon as available,  but in any event by January 31 of each calendar
year,  the internal  budget  prepared by  management  of the  Borrower,  in form
satisfactory  to  the  Administrative   Agent  and  the  Required  Lenders,   of
consolidated  balance  sheets and  statements of income or  operations  and cash
flows of the Borrower and its  Subsidiaries on a quarterly basis for the current
fiscal year (including the fiscal year in which the Maturity Date occurs); and

     (d)  as soon as  available,  but in any  event  by the  date on  which  the
Borrower  delivers  financials  pursuant to Sections  6.01(a) and 6.01(b) above,
store  level  statements  of  income  with  respect  to  each  Restaurant,  such
statements  of income to be certified by a  Responsible  Officer of the Borrower
and fairly presenting the profits and/or losses of each Restaurant.

     The   requirements  of  Sections   6.01(a)  and  6.01(b)  (other  than  the
requirements  of Section  6.01(a)(i) or (ii)) shall be satisfied if the Borrower
delivers to the  Administrative  Agent (no later than the respective  dates such
financial  statements  are required to be delivered to the SEC under  applicable
Securities Laws) any financial  statements  required to be delivered to the SEC,
including  each annual report on Form 10-K,  and each  quarterly  report on Form
10-Q; provided, however, that (x) any such annual report shall be accompanied by
a report and opinion of the Public  Accountants  satisfying the  requirements of
clause (i) of Section 6.01, (y) any such  quarterly  report shall be accompanied
by a  certificate  of a  Responsible  Officer  of the  Borrower  satisfying  the
requirements  of  Section  6.01(b),  and (z) upon  review of any such  report or

                                       63

<PAGE>

financial  statement,  the  Administrative  Agent  or  any  Lender  may  request
additional  information  and detail from the Borrower  regarding such reports or
financial statements.

     6.02 Certificates;  Other Information.  Deliver to the Administrative Agent
and each Lender, in form and detail satisfactory to the Administrative Agent and
the Required Lenders:

     (a)  concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;

     (b)  promptly after any request by the Administrative  Agent or any Lender,
copies of any detailed  audit  reports,  management  letters or  recommendations
submitted  to the board of  directors  (or the audit  committee  of the board of
directors) of the Borrower by  independent  accountants  in connection  with the
accounts  or books of the  Borrower  or any  Subsidiary,  or any audit of any of
them;

     (c)  promptly after the same are  available,  copies of each annual report,
proxy or  financial  statement  or other  report  or  communication  sent to the
stockholders of the Borrower,  and copies of all annual,  regular,  periodic and
special reports and  registration  statements  which the Borrower may file or be
required  to file  with the SEC  under  Section  13 or  15(d) of the  Securities
Exchange  Act of  1934,  and  not  otherwise  required  to be  delivered  to the
Administrative Agent pursuant hereto;

     (d)  promptly  after the  furnishing  thereof,  copies of any  statement or
report  furnished  to any  holder of debt  securities  of any Loan  Party or any
Subsidiary  thereof  pursuant to the terms of any  indenture,  loan or credit or
similar  agreement  and not  otherwise  required to be  furnished to the Lenders
pursuant to Section 6.01 or any other clause of this Section 6.02;

     (e)  promptly,  and in any event within five  Business  Days after  receipt
thereof by any Loan Party or any  Subsidiary  thereof,  copies of each notice or
other  correspondence  received  from  the  SEC  (or  comparable  agency  in any
applicable  non-U.S.  jurisdiction)  concerning  any  investigation  or possible
investigation  or other  inquiry by such  agency  regarding  financial  or other
operational results of any Loan Party or any Subsidiary thereof;

     (f)  promptly,   such  additional   information   regarding  the  business,
financial or corporate affairs of the Borrower or any Subsidiary,  or compliance
with the terms of the Loan Documents,  as the Administrative Agent or any Lender
may from time to time reasonably request;

     (g)  promptly,  any  notice  of any  environmental  action,  proceeding  or
liability, ERISA Event or tax action, proceeding or liability; and

     (h)  promptly,  any notice of any other  material  litigation  or  material
judicial or governmental  proceeding,  or any material investigation,  action or
liability whether direct or contingent.

     Documents  required to be delivered  pursuant to Section  6.01(a) or (b) or
Section  6.02(d) (to the extent any such  documents  are  included in  materials
otherwise  filed  with  the  SEC)  may  be  delivered  electronically  and if so

                                       64

<PAGE>

delivered,  shall be deemed to have been  delivered on the date (i) on which the
Borrower  posts such  documents,  or provides a link  thereto on the  Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such  documents are posted on the  Borrower's  behalf on an Internet or
intranet website, if any, to which each Lender and the Administrative Agent have
access (whether a commercial,  third-party  website or whether  sponsored by the
Administrative  Agent);  provided  that:  (i) the Borrower  shall  deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the  Borrower  to deliver  such paper  copies  until a written  request to cease
delivering paper copies is given by the Administrative  Agent or such Lender and
(ii) the  Borrower  shall  notify the  Administrative  Agent and each Lender (by
telecopier or electronic  mail) of the posting of any such documents and provide
to the Administrative  Agent by electronic mail electronic  versions (i.e., soft
copies) of such documents.  Notwithstanding  anything contained herein, in every
instance  the  Borrower  shall  be  required  to  provide  paper  copies  of the
Compliance Certificates required by Section 6.02(b) to the Administrative Agent.
Except for such Compliance Certificates,  the Administrative Agent shall have no
obligation  to request  the  delivery  or to  maintain  copies of the  documents
referred  to above,  and in any event  shall have no  responsibility  to monitor
compliance by the Borrower  with any such request for delivery,  and each Lender
shall be solely  responsible  for requesting  delivery to it or maintaining  its
copies of such documents.

     The Borrower hereby  acknowledges that (a) the Administrative  Agent and/or
the Arranger  will make  available  to the Lenders and the L/C Issuer  materials
and/or  information   provided  by  or  on  behalf  of  the  Borrower  hereunder
(collectively,  "Borrower  Materials")  by posting  the  Borrower  Materials  on
IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders may be "public-side"  Lenders (i.e.,  Lenders that do not wish to
receive  material  non-public  information  with  respect to the Borrower or its
securities)  (each, a "Public Lender").  The Borrower hereby agrees that (w) all
Borrower  Materials  that are to be made  available to Public  Lenders  shall be
clearly and conspicuously  marked "PUBLIC" which, at a minimum,  shall mean that
the word "PUBLIC"  shall appear  prominently  on the first page thereof;  (x) by
marking  Borrower  Materials  "PUBLIC",  the  Borrower  shall be  deemed to have
authorized  the  Administrative  Agent,  the  Arranger,  the L/C  Issuer and the
Lenders  to  treat  such  Borrower  Materials  as not  containing  any  material
non-public  information  with  respect to the  Borrower  or its  securities  for
purposes of United States Federal and state securities laws (provided,  however,
that to the extent such Borrower Materials constitute Information, they shall be
treated  as set forth in  Section  10.07);  (y) all  Borrower  Materials  marked
"PUBLIC" are  permitted to be made  available  through a portion of the Platform
designated "Public Investor";  and (z) the Administrative Agent and the Arranger
shall be entitled to treat any Borrower  Materials that are not marked  "PUBLIC"
as being  suitable only for posting on a portion of the Platform not  designated
"Public Investor".

     6.03 Notices. Promptly notify the Administrative Agent and each Lender:

     (a)  of the occurrence of any Default;

     (b)  of any matter  that has  resulted or could  reasonably  be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or  any  default  under,  a  Contractual  Obligation  of  the  Borrower  or  any
Subsidiary;  (ii)  any  dispute,   litigation,   investigation,   proceeding  or

                                       65

<PAGE>

suspension   between  the  Borrower  or  any  Subsidiary  and  any  Governmental
Authority;  or (iii) the  commencement  of, or any material  development in, any
litigation or proceeding  affecting  the Borrower or any  Subsidiary,  including
pursuant to any applicable Environmental Laws;

     (c)  of the occurrence of any ERISA Event;

     (d)  of the  Public  Accountants'  determination  (in  connection  with its
preparation of its report under Section 6.01(a)) or the Borrower's determination
of the occurrence or existence of any Internal Control Event;

     (e)  of any material change in accounting  policies or financial  reporting
practices by the Borrower or any Subsidiary; and

     (f)  any default under any Franchise Agreement,  any Lease, or any Material
Management Agreement.

     Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible  Officer of the Borrower  setting forth details of the  occurrence
referred to therein and stating  what action the Borrower has taken and proposes
to take with respect  thereto.  Each notice  pursuant to Section  6.03(a)  shall
describe with  particularity  any and all  provisions of this  Agreement and any
other Loan Document that have been breached.

     6.04 Payment of Obligations. Pay and discharge as the same shall become due
and  payable,  all  its  obligations  and  liabilities,  including  (a)  all tax
liabilities,  assessments  and  governmental  charges  or levies  upon it or its
properties  or  assets,  unless  the same are being  contested  in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being  maintained  by the  Borrower  or such  Subsidiary;  (b) all
lawful  claims which,  if unpaid,  would by law become a Lien upon its property;
and (c) all  Indebtedness,  as and  when due and  payable,  but  subject  to any
subordination  provisions  contained in any  instrument or agreement  evidencing
such Indebtedness.

     6.05 Preservation of Existence,  Etc. Preserve,  renew and maintain in full
force and effect its legal  existence  and good  standing  under the Laws of the
jurisdiction of its  organization  except in a transaction  permitted by Section
7.04 or 7.05;  (b) take all  reasonable  action  to  maintain  all  charter  and
statutory rights and all privileges, permits, licenses, approvals and franchises
necessary  or  desirable in the normal  conduct of its  business,  except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse  Effect;  and (c)  preserve  or  renew  all of its  registered  patents,
trademarks,  trade names and service marks, the  non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

     6.06 Maintenance of Properties.  Maintain,  preserve and protect all of its
material  properties and equipment necessary in the operation of its business in
good working order and condition,  ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not  reasonably  be expected  to have a Material  Adverse
Effect;  and  (c) use  the  standard  of care  typical  in the  industry  in the
operation and maintenance of its facilities.

                                       66

<PAGE>

     6.07 Maintenance  of  Insurance.   Maintain  with  financially   sound  and
reputable  insurance  companies not  Affiliates of the Borrower,  insurance with
respect  to its  properties  and  business  against  loss or  damage  (including
business  interruption  insurance) of the kinds  customarily  insured against by
Persons  engaged  in the same or  similar  business,  of such  types and in such
amounts as are  customarily  carried under similar  circumstances  by such other
Persons  and  providing  for  not  less  than  30  days'  prior  notice  to  the
Administrative Agent of termination, lapse or cancellation of such insurance.

     6.08 Compliance  with  Laws.  Comply  in all  material  respects  with  the
requirements  of all  Laws  and  all  orders,  writs,  injunctions  and  decrees
applicable  to it or to its  business or property,  except in such  instances in
which (a) such requirement of Law or order, writ,  injunction or decree is being
contested in good faith by appropriate  proceedings diligently conducted; or (b)
the  failure to comply  therewith  could not  reasonably  be  expected to have a
Material Adverse Effect.

     6.09 Books and Records. (a) Maintain proper books of record and account, in
which  full,  true and  correct  entries in  conformity  with GAAP  consistently
applied shall be made of all financial  transactions  and matters  involving the
assets and business of the Borrower or such Subsidiary,  as the case may be; and
(b) maintain  such books of record and account in material  conformity  with all
applicable   requirements  of  any  Governmental   Authority  having  regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.

     6.10 Inspection Rights. Permit representatives and independent  contractors
of the  Administrative  Agent and each  Lender to visit and  inspect  any of its
properties, to examine its corporate, financial and operating records located at
the  Borrower's   executive  offices,  and  make  copies  thereof  or  abstracts
therefrom, and to discuss its affairs, finances and accounts with its directors,
officers, and independent public accountants, all at the expense of the Borrower
and at such reasonable times during normal business hours and as often as may be
reasonably  desired,  upon reasonable advance notice to the Borrower;  provided,
however,  that when an Event of Default exists, the Administrative  Agent or any
Lender  may visit any  Restaurant  and  inspect  the  corporate,  financial  and
operating records located at such Restaurant; and provided further, that when an
Event of Default exists the Administrative  Agent or any Lender (or any of their
respective  representatives  or  independent  contractors)  may  take any of the
actions  described  in this  Section  6.10 at the expense of the Borrower at any
time during normal business hours and without advance notice.

     6.11 Use of  Proceeds.  Use the  proceeds of the Credit  Extensions  (i) to
refinance  certain existing  indebtedness of the Borrower and its  subsidiaries,
(ii) to fund the development of new T.G.I.  Friday's Restaurant  locations;  and
(iii) to expend for working  capital,  capital  expenditures,  and other general
corporate purposes not in contravention of any Law or of any Loan Document.

     6.12 New Subsidiaries.  If the Required Lenders agree,  pursuant to Section
7.15 and  Section  10.01 to permit the  Borrower or a  Subsidiary  to acquire or
create a new Subsidiary,  then, within 30 days of the acquisition or creation of
such Subsidiary,  the Borrower shall (and shall cause its Subsidiaries to) cause
to be delivered to the Administrative  Agent for the benefit of the Lenders each
of the  following  (in form and  substance  satisfactory  to the  Administrative
Agent):

                                       67

<PAGE>

     (a)  with respect to such Subsidiary:

          (i)  a Guaranty Joinder Agreement and Security Joinder Agreement;

          (ii) with respect to each  Restaurant or other real property  owned by
     such Subsidiary: (A) the Mortgage and evidence of the proper recordation of
     each such Mortgage (or the delivery of any such Mortgage to the  applicable
     title insurance  company for recordation,  on or immediately after the date
     of such delivery to such company) in the appropriate filing office, and (B)
     the Owned Real Estate Support  Documents with respect to such Restaurant or
     other real property;

          (iii) with respect to each  Restaurant  or other real property that is
     ground  leased by such  Subsidiary:  (A) the Mortgage  and a memorandum  of
     lease for such  Restaurant  or other real  property,  and  evidence  of the
     proper  recordation  of each such Mortgage and  memorandum of lease (or the
     delivery of any such  Mortgage  or  memorandum  of lease to the  applicable
     title insurance  company for recordation,  on or immediately after the date
     of delivery thereof) in the appropriate  filing office,  and (B) the Ground
     Leased Real Estate  Support  Documents  with respect to such  Restaurant or
     other real property;

          (iv) with respect to each  Restaurant  or other real  property that is
     Space  Leased  by such  Subsidiary:  (A) the  Assignment  of  Leases  and a
     memorandum  of  lease  for such  Restaurant  or other  real  property,  and
     evidence of the proper  recordation  of each such  Assignment of Leases and
     memorandum  of lease (or the delivery of any such  Assignment  of Leases or
     memorandum  of  lease  to  the  applicable  title  insurance   company  for
     recordation,  on or  immediately  after the date of such  Borrowing) in the
     appropriate  filing  office with respect to such  Restaurant  or other real
     property,  and (B) the Space  Leased Real  Estate  Support  Documents  with
     respect to such Restaurant or other real property;

          (v)  a copy of each Lease with respect to each Unit Location leased by
     the Subsidiary;

          (vi) a copy of each  Franchise  Agreement  with  respect  to each Unit
     Location owned or leased by the Subsidiary;

     (b)  such Uniform  Commercial Code financing  statements or other documents
as are required to perfect the security  interest of the Secured  Parties in the
Collateral;

     (c)  (subject  to  Section   2.03(a)(iii))   opinions  of  counsel  to  the
Subsidiary dated as of the date of delivery of the Guaranty Joinder Agreement or
Security Joinder Agreement,  as applicable,  and addressed to the Administrative
Agent  and the  Lenders,  in form and  substance  reasonably  acceptable  to the
Administrative Agent;

     (d)  documents of the types  identified  in Section  4.01(iii)  and (iv) as
appropriate to such Subsidiary; and

     (e)  evidence  satisfactory  to the  Administrative  Agent  that all taxes,
filing fees and  recording  fees and other related  transaction  costs have been
paid/.

                                       68

<PAGE>

     6.13 New Unit  Location and Other Real  Property.  Give the  Administrative
Agent  prompt  notice of the  acquisition  or lease of any new Unit  Location or
other real property by any Loan Party and within 30 days of the  acquisition  or
lease of any such Unit Location or other real property, cause to be delivered to
the  Administrative  Agent for the benefit of the Lenders each of the  following
(in  form and  substance  satisfactory  to the  Administrative  Agent)  (without
limiting any requirements of Section 4.02(d) or (e)):

          (i)  such  environmental  due diligence with respect to the applicable
     Restaurant or other real  property as shall be reasonably  requested by the
     Administrative Agent;

          (ii) if such  Restaurant  or other real  property is owned by any Loan
     Party: (A) the Mortgage and evidence of the proper recordation of each such
     Mortgage  (or the  delivery of any such  Mortgage to the  applicable  title
     insurance  company for  recordation,  on or  immediately  after the Closing
     Date) in the  appropriate  filing  office,  and (B) the Owned  Real  Estate
     Support Documents with respect to such Restaurant or other real property;

          (iii) if such  Restaurant is ground leased by any Loan Party:  (A) the
     Mortgage  and a  memorandum  of lease  for such  Restaurant  or other  real
     property,  and evidence of the proper recordation of each such Mortgage and
     memorandum  of lease (or the delivery of any such Mortgage or memorandum of
     lease to the applicable  title  insurance  company for  recordation,  on or
     immediately  after the date of such  Borrowing) in the  appropriate  filing
     office,  and (B) the Ground  Leased  Real  Estate  Support  Documents  with
     respect to such Restaurant or other real property;

          (iv) if such  Restaurant or other real property is Space Leased by any
     Loan Party: (A) the Assignment of Leases and a memorandum of lease for such
     Restaurant or other real property,  and evidence of the proper  recordation
     of each such  Assignment of Leases and memorandum of lease (or the delivery
     of any such  Assignment of Leases or memorandum of lease to the  applicable
     title insurance  company for recordation,  on or immediately after the date
     of such  Borrowing) in the  appropriate  filing office with respect to such
     Restaurant  or other real  property,  and (B) the Space  Leased Real Estate
     Support Documents with respect to such Restaurant or other real property;

          (v)  such  Uniform  Commercial  Code  financing  statements  or  other
     documents as are  required to perfect the security  interest of the Secured
     Parties in such Restaurant or other real property;

          (vi) opinions of counsel to the applicable  Loan Party dated as of the
     date of delivery of such Mortgage or Assignment of Lease,  and addressed to
     the Administrative  Agent and the Lenders, in form and substance reasonably
     acceptable to the Administrative Agent;

          (vii) a copy of each Lease with  respect to such  Restaurant  or other
     real property;

          (viii) a copy  of  each  Franchise  Agreement  with  respect  to  such
     Restaurant or other real property; and

                                       69

<PAGE>

          (ix) evidence satisfactory to the Administrative Agent that all taxes,
     filing fees and  recording  fees and other related  transaction  costs have
     been paid.

     6.14 Franchise Agreements,  Leases and Other Material Contracts. (a) At all
times,  comply in all material  respects  with the terms and  provisions  of the
Franchise  Agreements  and Leases of the Unit  Locations and any other  material
contracts  of any  Borrower  or any  Loan  Party,  and to  cause  the  Franchise
Agreements  and Leases of the Unit Locations to be kept in full force and effect
without  termination,  amendment  or  modification,  except for (i)  renewals or
extensions on substantially the same terms as the existing  Franchise  Agreement
or  Lease  of  the  Unit  Location,   or  (ii)  as  otherwise  approved  by  the
Administrative  Agent in  writing,  which  approval  shall  not be  unreasonably
withheld.

     (b)  No Loan Party shall cause or permit any Franchise  Agreement to expire
in accordance  with its terms,  unless (i) such Loan Party obtains a replacement
Franchise  Agreement on substantially  the same terms as the expiring  Franchise
Agreement or (ii) the Administrative  Agent otherwise consents in writing,  such
consent not to be unreasonably withheld.

     (c)  If any Loan Party  acquires fee title to any Unit  Location  which was
theretofore  subject to a Lease on the  Closing  Date or  thereafter,  such Loan
Party  will grant (as soon as  practicable  and,  in any event,  within ten (10)
days) the  Administrative  Agent a first priority mortgage or deed of trust lien
thereon,  and deliver to the Administrative  Agent the Owned Real Estate Support
Documents.

     6.15 Interest Rate  Protection.  At all times after the Closing  Date,  the
Borrower  shall  maintain Swap  Contracts  providing  interest  rate  protection
containing terms and conditions  satisfactory to the Administrative  Agent which
limit the risk of interest rate  fluctuations,  which Swap Contracts shall be in
an  aggregate  notional  amount  of not less  than  fifty  percent  (50%) of the
Outstanding Amount of the Term Loan.

     6.16 Material  Management  Agreements.  The Borrower  shall,  at all times,
comply in all material  respects with the terms and  provisions of each Material
Management Agreement, and to cause each Material Management Agreement to be kept
in full force and effect without termination,  amendment or modification, except
for the termination of any Material Management  Agreement in accordance with its
terms or as otherwise approved by the Administrative Agent in writing.

     6.17 Internal Control Events.  Upon  notification  from the  Administrative
Agent to the  Borrower  that the Required  Lenders  require  remediation  of any
Internal  Control Event of which they have received  notice  pursuant to Section
6.03(e) or as reported  in any report  delivered  pursuant  to Section  6.01(a),
remediate or cause to be remediated such Internal Control Event, and to test and
confirm such  remediation,  not later than the end of the time period reasonably
agreed  by  the  Required  Lenders  with  the  Company  as  necessary  for  such
remediation (the  "Remediation  Period").  It is understood that the Remediation
Period will require a sufficient  period of time to permit  testing  required by
the relevant Securities Laws.

     6.18 Leases and  Franchise  Agreements  for  Excluded  Restaurants.  Within
forty-five (45) days following the Closing Date,  deliver to the  Administrative
Agent (a) a copy of each  Lease in effect  as of such date with  respect  to any

                                       70

<PAGE>

Excluded  Restaurant,  each of which Leases shall be certified by a  Responsible
Officer of the Borrower, and (b) a copy of each Franchise Agreement in effect as
of such date with respect to any Excluded  Restaurant,  each of which  Franchise
Agreements shall be certified by a Responsible Officer of the Borrower.

     6.19 Additional  Subsidiary  Securities.  Within  thirty  (30)  days of the
termination  of the CNL  Facility,  cause to be delivered to the  Administrative
Agent  each  of  the  following  (in  form  and  substance  satisfactory  to the
Administrative Agent):

     (a)  such stock certificates and related powers in blank or other documents
as are required to perfect the security interest of the Administrative Agent (on
behalf of the  Lenders) in the  Subsidiary  Securities  of Main St.  California,
Inc., Main St. Midwest, Inc and Cornerstone Productions, Inc.;

     (b)  opinions of counsel to the  Borrower  dated as of the date of delivery
of such Subsidiary Securities, and addressed to the Administrative Agent;

     (c)  such Uniform  Commercial Code financing  statements or other documents
as are  required  to  perfect  the  security  interest  of the  Lenders  in such
Subsidiary Securities.

     6.20 Excluded West Sahara Restaurant. Within forty-five (45) days following
the Closing  Date,  cause to be  delivered to the  Administrative  Agent for the
benefit of the Lenders each of the following (in form and substance satisfactory
to the  Administrative  Agent)  (without  limiting any  requirements  of Section
4.02(d) or (e)):

          (i)  such  environmental  due  diligence  with respect to the Excluded
     West  Sahara   Restaurant   as  shall  be   reasonably   requested  by  the
     Administrative Agent;

          (ii) if the  Excluded  West  Sahara  Restaurant  is  owned by any Loan
     Party:  (A) the  Mortgage and  evidence of the proper  recordation  of such
     Mortgage  (or  the  delivery  of  such  Mortgage  to the  applicable  title
     insurance  company for immediate  recordation)  in the  appropriate  filing
     office, and (B) the Owned Real Estate Support Documents with respect to the
     Excluded West Sahara Restaurant;

          (iii) if the Excluded  West Sahara  Restaurant is ground leased by any
     Loan Party:  (A) the Mortgage  and a  memorandum  of lease for the Excluded
     West Sahara  Restaurant,  and  evidence of the proper  recordation  of such
     Mortgage  and  memorandum  of lease (or the  delivery  of such  Mortgage or
     memorandum of lease to the applicable title insurance company for immediate
     recordation)  in the appropriate  filing office,  and (B) the Ground Leased
     Real Estate  Support  Documents  with respect to the  Excluded  West Sahara
     Restaurant;

          (iv) if the  Excluded  West Sahara  Restaurant  is Space Leased by any
     Loan Party:  (A) the Assignment of Leases and a memorandum of lease for the
     Excluded West Sahara Restaurant,  and evidence of the proper recordation of
     such  Assignment of Leases and memorandum of lease (or the delivery of such
     Assignment  of  Leases  or  memorandum  of  lease to the  applicable  title
     insurance  company for immediate  recordation)  in the  appropriate  filing

                                       71

<PAGE>

     office with respect to the  Excluded  West Sahara  Restaurant,  and (B) the
     Space  Leased Real Estate  Support  Documents  with respect to the Excluded
     West Sahara Restaurant;

          (v)  such  Uniform  Commercial  Code  financing  statements  or  other
     documents as are  required to perfect the security  interest of the Secured
     Parties in the Excluded West Sahara Restaurant;

          (vi) opinions of counsel to the applicable  Loan Party dated as of the
     date of delivery of such Mortgage or Assignment of Lease,  and addressed to
     the Administrative  Agent and the Lenders, in form and substance reasonably
     acceptable to the Administrative Agent;

          (vii) a copy of each Lease with  respect to the  Excluded  West Sahara
     Restaurant;

          (viii) a copy of each Franchise Agreement with respect to the Excluded
     West Sahara Restaurant; and

     (b)  evidence  satisfactory  to the  Administrative  Agent  that all taxes,
filing fees and  recording  fees and other related  transaction  costs have been
paid.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

     So long as any Lender  shall  have any  Commitment  hereunder,  any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied,  or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:

     7.01 Liens.  Create,  incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

     (a)  Liens pursuant to any Loan Document;

     (b)  Liens  existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions  thereof,  provided that (i) the property covered thereby
is not changed,  (ii) the amount secured or benefited  thereby is not increased,
(iii) the direct or any contingent  obligor with respect thereto is not changed,
and (iv) any  renewal or  extension  of the  obligations  secured  or  benefited
thereby is permitted by Section 7.03(b);

     (c)  Liens for taxes not yet due or which are being contested in good faith
and by appropriate  proceedings diligently conducted,  if adequate reserves with
respect  thereto  are  maintained  on the  books  of the  applicable  Person  in
accordance with GAAP;

     (d)  carriers', warehousemen's,  mechanics', materialmen's,  repairmen's or
other  like Liens  arising  in the  ordinary  course of  business  which are not
overdue for a period of more than 30 days or which are being  contested  in good
faith and by appropriate  proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person;

                                       72

<PAGE>

     (e)  pledges or deposits in the ordinary  course of business in  connection
with workers'  compensation,  unemployment  insurance and other social  security
legislation, other than any Lien imposed by ERISA;

     (f)  deposits to secure the performance of bids, trade contracts and leases
(other  than  Indebtedness),  statutory  obligations,  surety and appeal  bonds,
performance  bonds  and  other  obligations  of a like  nature  incurred  in the
ordinary course of business;

     (g)  easements, rights-of-way,  restrictions and other similar encumbrances
affecting real property which, in the aggregate,  are not substantial in amount,
and which do not in any case  materially  detract from the value of the property
subject  thereto  or  materially  interfere  with the  ordinary  conduct  of the
business of the applicable Person;

     (h)  Liens securing  judgments for the payment of money not constituting an
Event of Default under Section 8.01(h); and

     (i)  Liens securing Indebtedness permitted under Section 7.03(e);  provided
that (i) such  Liens do not at any time  encumber  any  property  other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not  exceed  the cost or fair  market  value,  whichever  is lower,  of the
property being acquired on the date of acquisition.

     7.02 Investments. Make any Investments, except:

     (a)  Investments  held by the  Borrower or such  Subsidiary  in the form of
cash equivalents or short-term  marketable debt securities or obligations of the
United States;

     (b)  advances to  officers,  directors  and  employees  of the Borrower and
Subsidiaries  in  an  aggregate  amount  not  to  exceed  $50,000  at  any  time
outstanding,  for  travel,  entertainment,  relocation  and  analogous  ordinary
business purposes;

     (c)  Investments  of the Borrower in any Guarantor and  Investments  of any
Guarantor in the Borrower or in another Guarantor;

     (d)  Investments  consisting  of  extensions  of  credit  in the  nature of
accounts  receivable or notes receivable  arising from the grant of trade credit
in the ordinary course of business,  and Investments received in satisfaction or
partial  satisfaction  thereof from financially  troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss; and

     (e)  Guarantees permitted by Section 7.03.

     7.03 Indebtedness.   Create,   incur,   assume   or  suffer  to  exist  any
Indebtedness, except:

     (a)  Indebtedness under the Loan Documents;

     (b)  Indebtedness  outstanding  on the date  hereof and listed on  Schedule
7.03 and any refinancings,  refundings, renewals or extensions thereof; provided
that (i) the amount of such  Indebtedness  is not  increased at the time of such
refinancing,  refunding,  renewal or  extension  except by an amount  equal to a
reasonable  premium  or other  reasonable  amount  paid,  and fees and  expenses

                                       73

<PAGE>

reasonably incurred,  in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization,  maturity, collateral (if any) and subordination
(if any), and other material  terms taken as a whole,  of any such  refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection  therewith,  are no less favorable in
any  material  respect to the Loan  Parties or the Lenders than the terms of any
agreement or instrument  governing the Indebtedness being refinanced,  refunded,
renewed or extended and the interest rate  applicable  to any such  refinancing,
refunding,   renewing  or  extending  Indebtedness  does  not  exceed  the  then
applicable market interest rate;

     (c)  Guarantees of the Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of the Borrower or any other Guarantor;

     (d)  obligations   (contingent   or  otherwise)  of  the  Borrower  or  any
Subsidiary  existing or arising under any Swap Contract,  provided that (i) such
obligations  are (or were) entered into by such Person in the ordinary course of
business  for  the  purpose  of  directly   mitigating   risks  associated  with
liabilities,  commitments,  investments,  assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person,  and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its  obligation to make payments on outstanding  transactions  to the
defaulting party;

     (e)  Indebtedness in respect of capital leases, Synthetic Lease Obligations
and  purchase  money   obligations  for  fixed  or  capital  assets  within  the
limitations set forth in Section 7.01(i); provided,  however, that the aggregate
amount of all such  Indebtedness  at any one time  outstanding  shall not exceed
$1,000,000;

     (f)  Indebtedness under the CNL Facility; and

     (g)  Indebtedness under Swap Contracts set forth on Schedule 7.03.

     7.04 Fundamental Changes. Merge, dissolve,  liquidate,  consolidate with or
into another Person, or Dispose of (whether in one transaction or in a series of
transactions)  all or  substantially  all of its  assets  (whether  now owned or
hereafter  acquired) to or in favor of any Person,  except  that,  so long as no
Default exists or would result therefrom:

     (a)  any  Subsidiary  may merge with (i) the  Borrower,  provided  that the
Borrower  shall be the continuing or surviving  Person,  or (ii) any one or more
other  Subsidiaries,  provided  that when any  Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person; and

     (b)  any Subsidiary may Dispose of all or  substantially  all of its assets
(upon  voluntary  liquidation  or  otherwise)  to  the  Borrower  or to  another
Subsidiary;  provided  that  if  the  transferor  in  such  a  transaction  is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.

                                       74

<PAGE>

     7.05 Dispositions. Make any Disposition or enter into any agreement to make
any Disposition, except:

     (a)  Dispositions  of obsolete or worn out  property,  whether now owned or
hereafter acquired, in the ordinary course of business;

     (b)  Dispositions of inventory in the ordinary course of business;

     (c)  Dispositions of equipment or real property to the extent that (i) such
property  is  exchanged  for  credit  against  the  purchase  price  of  similar
replacement property or (ii) the proceeds of such Disposition (A) are applied in
accordance  with Section  2.05(c)(i)  or (B) to the extent  permitted by Section
2.05(c)(i),  are  reasonably  promptly  applied  to the  purchase  price of such
replacement property;

     (d)  Dispositions  of property by any  Subsidiary  to the  Borrower or to a
wholly-owned  Subsidiary;  provided that if the transferor of such property is a
Guarantor,  the  transferee  thereof must either be the Borrower or a Guarantor;
and

     (e)  Dispositions permitted by Section 7.04;

provided,  however,  that any  Disposition  pursuant  to clauses (a) through (e)
shall be for fair market value.

     The foregoing notwithstanding,  the Borrower shall not, nor shall it permit
any  Subsidiary  to,  directly  or  indirectly,  dispose of any T.G.I.  Friday's
Restaurant  (other than six (6)  restaurants in the aggregate,  of which no more
than four (4) may be located in Kansas City, Kansas or Kansas City, Missouri and
no more than two (2) may be located outside Kansas City, Kansas and Kansas City,
Missouri) after the Closing Date.

     7.06 Restricted  Payments.  Declare or make,  directly or  indirectly,  any
Restricted Payment, or incur any obligation  (contingent or otherwise) to do so,
or issue or sell any Equity Interests,  except that, so long as no Default shall
have  occurred and be continuing  at the time of any action  described  below or
would result therefrom:

     (a)  each  Subsidiary  may make  Restricted  Payments to the Borrower,  the
Guarantors and any other Person that owns an Equity Interest in such Subsidiary,
ratably according to their respective holdings of the type of Equity Interest in
respect of which such Restricted Payment is being made;

     (b)  the  Borrower  and each  Subsidiary  may  declare  and  make  dividend
payments  or other  distributions  payable  solely in the common  stock or other
common Equity Interests of such Person;

     (c)  (subject to Section 2.05(c)(iii)) the Borrower and each Subsidiary may
purchase,  redeem or otherwise  acquire Equity  Interests  issued by it with the
proceeds received from the  substantially  concurrent issue of new shares of its
common stock or other common Equity Interests;

                                       75

<PAGE>

     (d)  the Borrower may issue and sell shares of its common stock, so long as
the Net Cash  Proceeds  thereof  are  applied  to the  prepayment  of the  Loans
pursuant to Section 2.05(c)(iii);

     (e)  Permitted Equity Issuances; and

     (f)  the  Borrower may issue  additional  shares of its common stock to the
holders of  Permitted  Stock  Rights  pursuant to the exercise of such rights by
such holders,  or, in lieu of issuing such additional  shares,  the Borrower may
repurchase  such Permitted Stock Rights from such holders in accordance with the
terms of such rights.

     7.07 Change in Nature  of  Business.  (a)  Engage in any  material  line of
business  substantially  different from those lines of business conducted by the
Borrower and its  Subsidiaries on the date hereof or any business  substantially
related or incidental thereto; or (b) own, lease or operate any Restaurant other
than (i) the Restaurants existing on the Closing Date and identified on Schedule
1.01J,  or (ii) any  T.G.I.  Friday's  Restaurant  constructed  or  acquired  in
accordance with Section 6.12 or 6.13.

     7.08 Transactions  with Affiliates.  Enter into any transaction of any kind
with any  Affiliate of the  Borrower,  whether or not in the ordinary  course of
business,  other than on fair and reasonable terms substantially as favorable to
the Borrower or such  Subsidiary  as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable  arm's length  transaction  with a Person
other than an Affiliate, provided that the foregoing restriction shall not apply
to  transactions  between or among the Borrower and any Guarantor or between and
among any Guarantors.

     7.09 Burdensome  Agreements.  Enter into any Contractual  Obligation (other
than this  Agreement or any other Loan Document) that (a) limits the ability (i)
of any Subsidiary to make  Restricted  Payments to the Borrower or any Guarantor
or to otherwise transfer property to the Borrower or any Guarantor,  (ii) of any
Subsidiary  to  Guarantee  the  Indebtedness  of the  Borrower  or  (iii) of the
Borrower or any Subsidiary to create,  incur, assume or suffer to exist Liens on
property of such  Person;  provided,  however,  that this clause (iii) shall not
prohibit any negative  pledge incurred or provided in favor of any holder of (A)
Indebtedness  permitted by Section 7.03(b) that financed any Excluded Restaurant
or (B) Indebtedness  permitted by Section 7.03(e) or (f), in each case of clause
(A) or (B),  solely  to the  extent  any such  negative  pledge  relates  to the
property  financed by or the subject of such  Indebtedness;  or (b) requires the
grant of a Lien to secure an  obligation  of such Person if a Lien is granted to
secure another obligation of such Person.

     7.10 Use of  Proceeds.  Use the proceeds of any Credit  Extension,  whether
directly or indirectly, and whether immediately,  incidentally or ultimately, to
purchase or carry margin stock  (within the meaning of  Regulation U of the FRB)
or to extend credit to others for the purpose of  purchasing or carrying  margin
stock or to refund indebtedness originally incurred for such purpose.

                                       76

<PAGE>

     7.11 Financial Covenants.

     (a)  Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at
any time to be greater than 3.00 to 1.00.

     (b)  Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as
of the last day of any period of four fiscal  quarters of the Borrower set forth
below to be less than the ratio set forth below opposite such period:

<TABLE>
<CAPTION>

                                                                                      Minimum
                                                                                   Fixed Charge
                       Four Fiscal Quarters Ending                                Coverage Ratio
     ----------------------------------------------------------------- -------------------------------------
<S>                                                                                <C>     <C>
     Closing Date through September 2006 Quarter End                               1.15 to 1.00
     Day after September 2006 Quarter End through September 2007
     Quarter End                                                                   1.20 to 1.00
     Day after September 2007 Quarter End and at all times thereafter
                                                                                   1.25 to 1.00

</TABLE>

     7.12 Capital Expenditures. (a) Make or become legally obligated to make any
expenditure  in respect of the  purchase  or other  acquisition  of any fixed or
capital  asset  to be used  for the  development  of new  T.G.I.  Friday's  Unit
Locations  or   remodeling  of  existing  Unit   Locations   (excluding   normal
replacements and maintenance which are properly charged to current  operations),
except for capital expenditures in the ordinary course of business not exceeding
$15,000,000  in the aggregate for the Borrower and its  Subsidiaries  during any
twelve-month  period (of which  amount not more than  $3,000,000  may be used to
acquire or develop  new Bamboo  Club  Restaurants  in  accordance  with  Section
7.17(b));  provided,  however,  that  expenditures  for the  purchase  or  other
acquisition of any fixed or capital asset to be used for the  development of new
T.G.I.  Friday's Unit Locations  permitted by this Section 7.12 shall be made by
the Borrower or any Subsidiary of the Borrower (other than Main St.  California,
Inc., Main St. Midwest, Inc. and Cornerstone  Productions,  Inc.); provided that
in the event such Subsidiary is not otherwise a Loan Party, the Required Lenders
must agree  pursuant to Section 7.15 and Section 10.01 to permit the Borrower or
Subsidiary to acquire or create such new Subsidiary,  and such Subsidiary  shall
have  met  the  requirements  set  forth  in  Section  6.12  prior  to any  such
expenditure.

     (b)  Make or become legally obligated to make any expenditure in respect of
the purchase or other  acquisition  of any fixed or capital  asset to be used in
the  development  of any new Unit  Locations  (other than T.G.I.  Friday's  Unit
Locations).

     7.13 Management  Agreements.  No Loan Party shall enter into, amend, modify
or  terminate  any  management  agreement  (other than the  Material  Management
Agreements),  or incur any management fees, without the  Administrative  Agent's
consent. After the occurrence and during the continuance of an Event of Default,
the Loan Parties will enter into any and all management  agreements (on the form
approved by the Administrative  Agent) with the Franchisor as the Administrative
Agent shall request in its sole discretion.

                                       77

<PAGE>

     7.14 General Partner. No Loan Party shall become a general partner,  either
directly or indirectly, in any partnership.

     7.15 Acquisitions;   New  Subsidiaries.   (a)  Enter  into  any  agreement,
contract, binding commitment or other arrangement providing for any Acquisition,
or take any action to solicit  the  tender of  securities  or proxies in respect
thereof in order to effect any Acquisition.

     (b)  Form, create or acquire any new Subsidiary.

     7.16 Management of the Borrower.  Permit,  at any time,  the Borrower to be
managed  by any Person or Persons  other than the Key  Management  Team and such
other management personnel as are approved the Administrative Agent.

     7.17 New Unit  Locations.  Acquire or develop any new Unit  Location  other
than (a) T.G.I.  Friday's  Unit  Locations  or (b) Bamboo  Club Unit  Locations,
provided that (1) no purchase  commitment or lease  commitment  for a new Bamboo
Club Unit  Location  may be entered  into prior to January 1, 2007,  (2) no more
than two Bamboo  Club Unit  Locations  may be acquired  or  developed  after the
Closing Date, and (3) no more than one Bamboo Club Unit Location may be acquired
or developed in any fiscal year of the Borrower.

     7.18 Prepayments, etc. of Indebtedness.

     (a)  Except as permitted  under  Section  4.01(a)(xxiii),  prepay,  redeem,
purchase,  defease or otherwise satisfy prior to the scheduled  maturity thereof
in any manner, or make any payment in violation of any  subordination  terms of,
any  Indebtedness  (including  the CNL  Facility)  other  than  the  Obligations
hereunder; or

     (b)  Amend,  modify or change in any  manner any term or  condition  of any
Indebtedness described in Section 7.03 (including the CNL Facility) or any lease
so that the terms and conditions thereof are less favorable to the Agent and the
Lenders than the terms of such Indebtedness or leases as of the Closing Date.

                                 ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

     8.01 Events of Default.  Any of the following shall  constitute an Event of
Default:

     (a)  Non-Payment.  The  Borrower  or any other Loan Party  fails to pay (i)
when and as required to be paid  herein,  any amount of principal of any Loan or
any L/C  Obligation,  or (ii) within  three days after the same becomes due, any
interest  on any Loan or on any L/C  Obligation,  or any fee due  hereunder,  or
(iii) within five days after the same  becomes  due,  any other  amount  payable
hereunder or under any other Loan Document; or

     (b)  Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement  contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.11, or Article VII, or with any  requirement  to provide  notice  contained in
Section  6.12 or 6.13 or any  Guarantor  fails to perform  or observe  any term,
covenant or agreement contained in the Guaranty; or

                                       78

<PAGE>

     (c)  Other  Defaults.  Any Loan Party fails to perform or observe any other
covenant or agreement (not  specified in subsection (a) or (b) above)  contained
in any Loan  Document on its part to be  performed  or observed and such failure
continues for 30 days; or

     (d)  Representations   and  Warranties.   Any   representation,   warranty,
certification  or  statement  of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein,  in any other Loan Document,  or in any
document  delivered in  connection  herewith or therewith  shall be incorrect or
misleading when made or deemed made; or

     (e)  Cross-Default.  (i) The Borrower or any  Subsidiary  (A) fails to make
any  payment  when due  (whether by  scheduled  maturity,  required  prepayment,
acceleration,  demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate  principal amount (including undrawn committed or available amounts
and including  amounts  owing to all creditors  under any combined or syndicated
credit  arrangement) of more than the Threshold  Amount, or (B) fails to observe
or perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any  instrument or agreement  evidencing,  securing or
relating  thereto,  or any other event  occurs,  the effect of which  default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or  beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required,  such Indebtedness to be demanded or to become
due or to be  repurchased,  prepaid,  defeased  or  redeemed  (automatically  or
otherwise),  or  an  offer  to  repurchase,   prepay,  defease  or  redeem  such
Indebtedness  to be made,  prior to its stated  maturity,  or such  Guarantee to
become  payable or cash  collateral in respect  thereof to be demanded;  or (ii)
there occurs under any Swap  Contract an Early  Termination  Date (as defined in
such Swap  Contract)  resulting  from (A) any event of  default  under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting  Party (as
defined in such Swap  Contract)  or (B) any  Termination  Event (as so  defined)
under  such Swap  Contract  as to which the  Borrower  or any  Subsidiary  is an
Affected Party (as so defined) and, in either event, the Swap Termination  Value
owed by the Borrower or such  Subsidiary as a result thereof is greater than the
Threshold  Amount;  or (iii) the  Borrower  or any  Subsidiary  defaults  in the
performance of any other  Contractual  Obligations  which defaults  described in
this clause (iii) have, or could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect; or

     (f)  Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the  institution  of any  proceeding  under any Debtor
Relief Law, or makes an assignment for the benefit of creditors;  or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator,  rehabilitator  or similar officer for it or for all or any material
part  of  its  property;  or  any  receiver,  trustee,  custodian,  conservator,
liquidator,   rehabilitator   or  similar  officer  is  appointed   without  the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding  under any Debtor Relief Law
relating to any such Person or to all or any  material  part of its  property is
instituted  without  the  consent of such Person and  continues  undismissed  or
unstayed  for 60  calendar  days,  or an order for relief is entered in any such
proceeding; or

     (g)  Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails  generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution

                                       79

<PAGE>

or similar  process is issued or levied  against all or any material part of the
property of any such Person and is not released,  vacated or fully bonded within
30 days after its issue or levy; or

     (h)  Judgments. There is entered against the Borrower or any Subsidiary (i)
a final  judgment  or order  for the  payment  of money in an  aggregate  amount
exceeding  the  Threshold  Amount  (to the extent  not  covered  by  independent
third-party  insurance  as to which the insurer does not dispute  coverage),  or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A)  enforcement  proceedings are commenced by any creditor
upon such  judgment or order,  or (B) there is a period of 10  consecutive  days
during  which a stay of  enforcement  of such  judgment,  by reason of a pending
appeal or otherwise, is not in effect; or

     (i)  ERISA.  (i) An ERISA Event  occurs with  respect to a Pension  Plan or
Multiemployer  Plan which has resulted or could reasonably be expected to result
in  liability  of the  Borrower  under  Title IV of ERISA to the  Pension  Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the  expiration of any applicable  grace period,  any  installment  payment with
respect  to its  withdrawal  liability  under  Section  4201  of  ERISA  under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

     (j)  Invalidity of Loan Documents.  Any provision of any Loan Document,  at
any time after its  execution  and  delivery  and for any  reason  other than as
expressly  permitted  hereunder or thereunder or satisfaction in full of all the
Obligations,  ceases to be in full  force and  effect;  or any Loan Party or any
other  Person  contests  in any manner the  validity  or  enforceability  of any
provision  of any Loan  Document;  or any Loan Party  denies  that it has any or
further liability or obligation under any Loan Document,  or purports to revoke,
terminate or rescind any provision of any Loan Document; or

     (k)  Change of Control. There occurs any Change of Control; or

     (l)  Collateral.  The Administrative  Agent (for the benefit of the Secured
Parties)  fails to have an  enforceable  first  priority,  perfected  Lien on or
security interest in any of the Collateral (subject only to Permitted Liens); or
any Loan Party  claims  that the  Administrative  Agent (for the  benefit of the
Secured Parties) does not have an enforceable first priority,  perfected Lien on
or security  interest in any such Collateral  (subject only to Permitted Liens);
or

     (m)  Franchise Agreements;  Leases. There shall occur any default under any
Franchise  Agreement  or any  Lease of any Unit  Location  and (i) such  default
continues  for 30 days or (ii) could  reasonably  be  expected  to result in the
termination of such Franchise Agreement or Lease.

     8.02 Remedies Upon Event of Default.  If any Event of Default occurs and is
continuing,  the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

     (a)  declare the commitment of each Lender to make Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

                                       80

<PAGE>

     (b)  declare the unpaid  principal  amount of all  outstanding  Loans,  all
interest  accrued and unpaid  thereon,  and all other  amounts  owing or payable
hereunder or under any other Loan  Document to be  immediately  due and payable,
without presentment,  demand,  protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;

     (c)  require that the Borrower Cash  Collateralize  the L/C Obligations (in
an amount equal to the then Outstanding Amount thereof); and

     (d)  exercise on behalf of itself and the  Lenders all rights and  remedies
available to it and the Lenders under the Loan Documents;

provided,  however,  that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the  Bankruptcy  Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically  terminate, the
unpaid  principal  amount of all  outstanding  Loans and all  interest and other
amounts  as  aforesaid  shall  automatically  become  due and  payable,  and the
obligation  of the  Borrower  to  Cash  Collateralize  the  L/C  Obligations  as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

     8.03 Application of Funds.  After the exercise of remedies  provided for in
Section 8.02 (or after the Loans have  automatically  become immediately due and
payable and the L/C  Obligations  have  automatically  been  required to be Cash
Collateralized  as set  forth in the  proviso  to  Section  8.02),  any  amounts
received on account of the  Obligations  shall be applied by the  Administrative
Agent in the following order:

     First,  to payment of that portion of the  Obligations  constituting  fees,
indemnities,   expenses  and  other  amounts   (including   fees,   charges  and
disbursements of counsel to the  Administrative  Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

     Second,  to payment of that portion of the Obligations  constituting  fees,
indemnities  and other  amounts  (other than  principal,  interest and Letter of
Credit Fees) payable to the Lenders and the L/C Issuer (including fees,  charges
and  disbursements  of  counsel  to the  respective  Lenders  and the L/C Issuer
(including  fees and time  charges for  attorneys  who may be  employees  of any
Lender or the L/C Issuer) and amounts payable under Article III),  ratably among
them in proportion  to the  respective  amounts  described in this clause Second
payable to them;

     Third, to payment of that portion of the Obligations  constituting  accrued
and unpaid Letter of Credit Fees and interest on the Loans,  L/C  Borrowings and
other Obligations, ratably among the Lenders and the L/C Issuer in proportion to
the respective amounts described in this clause Third payable to them;

     Fourth, to payment of that portion of the Obligations  constituting  unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the L/C
Issuer in proportion to the respective  amounts  described in this clause Fourth
held by them;

                                       81

<PAGE>

     Fifth, to the  Administrative  Agent for the account of the L/C Issuer,  to
Cash  Collateralize  that portion of L/C Obligations  comprised of the aggregate
undrawn amount of Letters of Credit; and

     Sixth,  to payment  of  Obligations  consisting  of  liabilities  under any
Related Credit Arrangement with any Lender or any Affiliate of a Lender party to
a  Related  Credit  Arrangement  and as to which  the  Administrative  Agent has
received notice of the amounts owed thereunder from the applicable Lender or any
Affiliate of a Lender party to a Related Credit Arrangement, such payments under
this clause Sixth to be allocated on a pro rata basis  according to such amounts
owed as to which the Administrative Agent has received such notice; and

     Last,  the  balance,  if  any,  after  all of  the  Obligations  have  been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Section  2.04(c),  amounts used to Cash  Collateralize  the aggregate
undrawn  amount of Letters of Credit  pursuant  to clause  Fifth  above shall be
applied to satisfy  drawings under such Letters of Credit as they occur.  If any
amount  remains on deposit as Cash  Collateral  after all Letters of Credit have
either been fully drawn or expired,  such  remaining  amount shall be applied to
the other Obligations, if any, in the order set forth above.

                                  ARTICLE IX.
                              ADMINISTRATIVE AGENT

     9.01 Appointment  and  Authority.  Each of the  Lenders  and the L/C Issuer
hereby  irrevocably  appoints  Bank  of  America  to act on  its  behalf  as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are  delegated  to the  Administrative  Agent by the  terms  hereof or
thereof,  together  with such  actions and powers as are  reasonably  incidental
thereto.  The  provisions  of this  Article  are solely  for the  benefit of the
Administrative  Agent, the Lenders and the L/C Issuer,  and neither the Borrower
nor any other Loan Party shall have rights as a third party  beneficiary  of any
of such provisions.

     9.02 Rights as a Lender.  The Person  serving as the  Administrative  Agent
hereunder  shall have the same rights and powers in its  capacity as a Lender as
any  other  Lender  and  may  exercise  the  same  as  though  it  were  not the
Administrative  Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual  capacity.  Such
Person and its  Affiliates may accept  deposits from,  lend money to, act as the
financial  advisor or in any other advisory capacity for and generally engage in
any kind of business  with the  Borrower or any  Subsidiary  or other  Affiliate
thereof  as if such  Person  were not the  Administrative  Agent  hereunder  and
without any duty to account therefor to the Lenders.

     9.03 Exculpatory  Provisions.  The Administrative  Agent shall not have any
duties or obligations  except those  expressly set forth herein and in the other
Loan  Documents.   Without  limiting  the  generality  of  the  foregoing,   the
Administrative Agent:

                                       82

<PAGE>

     (a)  shall  not be  subject  to any  fiduciary  or  other  implied  duties,
regardless of whether a Default has occurred and is continuing;

     (b)  shall not have any duty to take any  discretionary  action or exercise
any  discretionary  powers,  except  discretionary  rights and powers  expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required  Lenders (or such
other number or  percentage  of the Lenders as shall be  expressly  provided for
herein or in the other Loan Documents),  provided that the Administrative  Agent
shall not be required to take any action that,  in its opinion or the opinion of
its  counsel,  may  expose  the  Administrative  Agent to  liability  or that is
contrary to any Loan Document or applicable law; and

     (c)  shall not,  except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

     The  Administrative  Agent shall not be liable for any action  taken or not
taken by it (i) with the consent or at the request of the  Required  Lenders (or
such other number or percentage of the Lenders as shall be necessary,  or as the
Administrative  Agent shall believe in good faith shall be necessary,  under the
circumstances  as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct.  The Administrative  Agent shall
be  deemed  not to  have  knowledge  of any  Default  unless  and  until  notice
describing such Default is given to the Administrative  Agent by the Borrower, a
Lender or the L/C Issuer.

     The  Administrative  Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement,  warranty or representation made in
or in  connection  with this  Agreement  or any other  Loan  Document,  (ii) the
contents of any  certificate,  report or other document  delivered  hereunder or
thereunder or in  connection  herewith or therewith,  (iii) the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth herein or therein or the  occurrence  of any Default,  (iv) the  validity,
enforceability,  effectiveness or genuineness of this Agreement,  any other Loan
Document or any other agreement,  instrument or document or (v) the satisfaction
of any  condition  set forth in Article IV or  elsewhere  herein,  other than to
confirm   receipt  of  items   expressly   required  to  be   delivered  to  the
Administrative Agent.

     9.04 Reliance by Administrative  Agent. The  Administrative  Agent shall be
entitled to rely upon,  and shall not incur any liability for relying upon,  any
notice, request, certificate,  consent, statement, instrument, document or other
writing (including any electronic message,  Internet or intranet website posting
or other  distribution)  believed by it to be genuine  and to have been  signed,
sent or otherwise  authenticated by the proper Person. The Administrative  Agent
also may rely upon any statement  made to it orally or by telephone and believed
by it to have been made by the proper Person,  and shall not incur any liability
for relying thereon.  In determining  compliance with any condition hereunder to
the making of a Loan,  or the issuance of a Letter of Credit,  that by its terms
must be  fulfilled  to the  satisfaction  of a  Lender  or the L/C  Issuer,  the
Administrative  Agent may presume that such  condition is  satisfactory  to such
Lender or the L/C Issuer  unless the  Administrative  Agent shall have  received

                                       83

<PAGE>

notice to the contrary from such Lender or the L/C Issuer prior to the making of
such Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal  counsel (who may be counsel for the  Borrower),  independent
accountants  and other  experts  selected by it, and shall not be liable for any
action  taken or not  taken by it in  accordance  with  the  advice  of any such
counsel, accountants or experts.

     9.05 Delegation of Duties. The Administrative Agent may perform any and all
of its duties and  exercise  its rights and powers  hereunder or under any other
Loan  Document  by or  through  any  one  or  more  subagents  appointed  by the
Administrative Agent. The Administrative Agent and any such subagent may perform
any and all of its duties and exercise its rights and powers by or through their
respective  Related  Parties.  The exculpatory  provisions of this Article shall
apply to any such  subagent  and to the  Related  Parties of the  Administrative
Agent and any such subagent,  and shall apply to their respective  activities in
connection with the syndication of the credit facilities  provided for herein as
well as activities as Administrative Agent.

     9.06 Resignation of Administrative  Agent. The Administrative  Agent may at
any time give notice of its  resignation to the Lenders,  the L/C Issuer and the
Borrower.  Upon receipt of any such notice of resignation,  the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor,
which shall be a bank with an office in the United  States,  or an  Affiliate of
any such bank with an office in the United States.  If no such  successor  shall
have been so  appointed  by the Required  Lenders and shall have  accepted  such
appointment  within  thirty (30) days after the  retiring  Administrative  Agent
gives notice of its resignation,  then the retiring  Administrative Agent may on
behalf of the  Lenders and the L/C  Issuer,  appoint a successor  Administrative
Agent  meeting  the  qualifications  set  forth  above;  provided  that  if  the
Administrative  Agent  shall  notify  the  Borrower  and  the  Lenders  that  no
qualifying  Person has accepted such  appointment,  then such resignation  shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder  and under the other Loan  Documents  (except  that in the case of any
collateral  security held by the  Administrative  Agent on behalf of any Secured
Party under any of the Loan Documents,  the retiring  Administrative Agent shall
continue  to hold  such  collateral  security  until  such  time as a  successor
Administrative  Agent is  appointed)  and (2) all payments,  communications  and
determinations  provided to be made by, to or through the  Administrative  Agent
shall  instead be made by or to each Lender and the L/C Issuer  directly,  until
such time as the Required  Lenders appoint a successor  Administrative  Agent as
provided  for  above in this  Section.  Upon  the  acceptance  of a  successor's
appointment as Administrative  Agent hereunder,  such successor shall succeed to
and become vested with all of the rights,  powers,  privileges and duties of the
retiring  (or retired)  Administrative  Agent,  and the retiring  Administrative
Agent shall be discharged  from all of its duties and  obligations  hereunder or
under the other Loan Documents (if not already discharged  therefrom as provided
above  in this  Section).  The  fees  payable  by the  Borrower  to a  successor
Administrative  Agent  shall  be the same as those  payable  to its  predecessor
unless  otherwise  agreed  between the  Borrower and such  successor.  After the
retiring  Administrative  Agent's resignation hereunder and under the other Loan
Documents,  the  provisions of this Article and Section 10.04 shall  continue in
effect for the benefit of such retiring  Administrative Agent, its subagents and
their  respective  Related Parties in respect of any actions taken or omitted to
be taken by any of them while the  retiring  Administrative  Agent was acting as
Administrative Agent.

                                       84

<PAGE>

     Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer. Upon the acceptance
of a  successor's  appointment  as  Administrative  Agent  hereunder,  (a)  such
successor  shall  succeed to and become  vested with all of the rights,  powers,
privileges  and duties of the retiring  L/C Issuer,  (b) the retiring L/C Issuer
shall be discharged  from all of its duties and  obligations  hereunder or under
the other Loan  Documents,  and (c) the successor L/C Issuer shall issue letters
of credit in substitution for the Letters of Credit, if any,  outstanding at the
time of such succession or make other arrangements  satisfactory to the retiring
L/C Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit.

     9.07 Non-Reliance on  Administrative  Agent and Other Lenders.  Each Lender
and the L/C Issuer acknowledges that it has,  independently and without reliance
upon  the  Administrative  Agent or any  other  Lender  or any of their  Related
Parties  and  based  on  such  documents  and   information  as  it  has  deemed
appropriate,  made its own  credit  analysis  and  decision  to enter  into this
Agreement.  Each  Lender  and the L/C  Issuer  also  acknowledges  that it will,
independently  and without reliance upon the  Administrative  Agent or any other
Lender  or any of  their  Related  Parties  and  based  on  such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan  Document  or any related  agreement  or any  document  furnished
hereunder or thereunder.

     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding,
none of the Book  Managers or  Arrangers  listed on the cover page hereof  shall
have any powers,  duties or responsibilities  under this Agreement or any of the
other  Loan  Documents,   except  in  its  capacity,   as  applicable,   as  the
Administrative Agent, a Lender or the L/C Issuer hereunder.

     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency
of  any  receivership,   insolvency,  liquidation,  bankruptcy,  reorganization,
arrangement,  adjustment,  composition or other judicial  proceeding relative to
any Loan Party, the Administrative  Agent (irrespective of whether the principal
of any Loan or L/C Obligation  shall then be due and payable as herein expressed
or by declaration or otherwise and  irrespective  of whether the  Administrative
Agent  shall  have  made any  demand  on the  Borrower)  shall be  entitled  and
empowered, by intervention in such proceeding or otherwise.

     (a)  to file and prove a claim for the whole  amount of the  principal  and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary  or  advisable  in order to have the  claims of the  Lenders,  the L/C
Issuer and the  Administrative  Agent  (including  any claim for the  reasonable
compensation,  expenses,  disbursements  and  advances of the  Lenders,  the L/C
Issuer and the Administrative  Agent and their respective agents and counsel and
all other amounts due the Lenders,  the L/C Issuer and the Administrative  Agent
under  Sections  2.03(i)  and (j),  2.09 and  10.04)  allowed  in such  judicial
proceeding; and

     (b)  to  collect  and  receive  any  monies or other  property  payable  or
deliverable on any such claims and to distribute the same;

                                       85

<PAGE>

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.

     Nothing  contained  herein shall be deemed to authorize the  Administrative
Agent to  authorize  or consent to or accept or adopt on behalf of any Lender or
the  L/C  Issuer  any  plan  of  reorganization,   arrangement,   adjustment  or
composition  affecting  the  Obligations  or  the  rights  of any  Lender  or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.

     9.10 Collateral  and  Guaranty  Matters.  The  Lenders  and the L/C  Issuer
irrevocably  authorize  the  Administrative  Agent,  at  its  option  and in its
discretion,

     (a)  to  release  any  Lien  on any  property  granted  to or  held  by the
Administrative  Agent  under  any  Loan  Document  (i) upon  termination  of the
Aggregate  Commitments  and  payment  in full  of all  Obligations  (other  than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit,  (ii) that is sold or to be sold as part of or in  connection
with any sale  permitted  hereunder or under any other Loan  Document,  or (iii)
subject to Section 10.01, if approved,  authorized or ratified in writing by the
Required Lenders;

     (b)  to  subordinate  any Lien on any  property  granted  to or held by the
Administrative  Agent under any Loan  Document to the holder of any Lien on such
property that is permitted by Section 7.01(i); and

     (c)  to release any Guarantor  from its  obligations  under the Guaranty if
such Person  ceases to be a Subsidiary  as a result of a  transaction  permitted
hereunder.

     Upon request by the Administrative  Agent at any time, the Required Lenders
will  confirm in writing  the  Administrative  Agent's  authority  to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations  under the Guaranty  pursuant to this Section
9.10.

                                   ARTICLE X.
                                  MISCELLANEOUS

     10.01 Amendments,  Etc. No  amendment  or waiver of any  provision  of this
Agreement  or any other Loan  Document,  and no consent to any  departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower or the applicable Loan Party, as
the case may be, and  acknowledged by the  Administrative  Agent,  and each such
waiver or consent shall be effective  only in the specific  instance and for the
specific  purpose for which given;  provided,  however,  that no such amendment,
waiver or consent shall:

                                       86

<PAGE>

     (a)  waive any condition set forth in Section  4.01(a)  without the written
consent of each Lender;

     (b)  extend  or  increase  the  Revolving  Credit  Commitment  or Term Loan
Commitment of any Lender (or reinstate any Revolving  Credit  Commitment or Term
Loan Commitment terminated pursuant to Section 8.02) without the written consent
of such Lender;

     (c)  postpone any date fixed by this  Agreement or any other Loan  Document
for any payment or mandatory  prepayment of principal,  interest,  fees or other
amounts  due to the  Revolving  Lenders  (or any of  them) or any  scheduled  or
mandatory reduction of the Aggregate  Revolving Credit Commitments  hereunder or
under any other Loan  Document  without  the written  consent of each  Revolving
Lender directly affected thereby;

     (d)  postpone any date fixed by this  Agreement or any other Loan  Document
for any payment or mandatory  prepayment of principal,  interest,  fees or other
amounts  due to the Term Loan  Lenders (or any of them)  hereunder  or under any
other  Loan  Document  without  the  written  consent  of each Term Loan  Lender
directly affected thereby;

     (e)  reduce the principal of, or the rate of interest  specified herein on,
any Loan or L/C Borrowing,  or (subject to clause (iii) of the second proviso to
this Section  10.01) any fees or other  amounts  payable  hereunder or under any
other Loan Document,  or change the manner of computation of any financial ratio
(including  any change in any applicable  defined term) used in determining  the
Applicable  Rate that would result in a reduction  of any  interest  rate on any
Loan or any fee payable  hereunder  without  the written  consent of each Lender
directly  affected  thereby;  provided,  however,  that only the  consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest or Letter of Credit Fees
at the Default Rate;

     (f)  change  Section  2.13 or Section 8.03 in a manner that would alter the
pro rata sharing of payments  required  thereby  without the written  consent of
each Lender;

     (g)  change any  provision of this Section or the  definition  of "Required
Lenders",  "Required Revolving Lenders" or "Required Term Loan Lenders",  or any
other provision  hereof  specifying the number or percentage of Lenders required
to  amend,   waive  or  otherwise  modify  any  rights  hereunder  or  make  any
determination  or grant any consent  hereunder,  without the written  consent of
each Lender; or

     (h)  release (i) any Guarantor from the Guaranty or (ii) any Collateral, in
each case without the written consent of each Lender;  provided,  however,  that
the  Administrative  Agent may release any Lien on any real or personal property
that is sold or  transferred  in accordance  with Section 7.05 to a Person other
than the Borrower or any Subsidiary;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders  required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document  relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment,  waiver  or  consent  shall,  unless  in  writing  and  signed by the
Administrative  Agent in  addition  to the Lenders  required  above,  affect the
rights or duties of the  Administrative  Agent under this Agreement or any other

                                       87

<PAGE>

Loan  Document;  (iii) the Fee Letter may be  amended,  or rights or  privileges
thereunder   waived,  in  a  writing  executed  only  by  the  parties  thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment,  waiver or consent  hereunder,
except  that the  Commitment  of such  Lender may not be  increased  or extended
without the consent of such Lender.

     10.02 Notices; Effectiveness; Electronic Communication.

     (a)  Notices   Generally.   Except  in  the  case  of  notices   and  other
communications  expressly  permitted  to be given by  telephone  (and  except as
provided in subsection (b) below), all notices and other communications provided
for  herein  shall be in writing  and shall be  delivered  by hand or  overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications  expressly permitted hereunder
to be given by telephone shall be made to the applicable  telephone  number,  as
follows:

          (i)  if to the Borrower,  the Administrative  Agent or the L/C Issuer,
     to the address,  telecopier  number,  electronic  mail address or telephone
     number specified for such Person on Schedule 10.02; and

          (ii) if to any  other  Lender,  to  the  address,  telecopier  number,
     electronic mail address or telephone number specified in its Administrative
     Questionnaire.

     Notices sent by hand or overnight  courier service,  or mailed by certified
or registered  mail,  shall be deemed to have been given when received;  notices
sent by telecopier shall be deemed to have been given when sent (except that, if
not given during normal  business  hours for the  recipient,  shall be deemed to
have been given at the  opening of  business  on the next  business  day for the
recipient).  Notices delivered through  electronic  communications to the extent
provided  in  subsection  (b) below,  shall be  effective  as  provided  in such
subsection (b).

     (b)  Electronic  Communications.  Notices and other  communications  to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication  (including e-mail and Internet or intranet  websites) pursuant to
procedures  approved by the  Administrative  Agent,  provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer  pursuant  to Article
II  if  such  Lender  or  the  L/C  Issuer,  as  applicable,  has  notified  the
Administrative  Agent  that it is  incapable  of  receiving  notices  under such
Article by electronic  communication.  The Administrative  Agent or the Borrower
may, in its discretion,  agree to accept notices and other  communications to it
hereunder by electronic  communications  pursuant to procedures  approved by it,
provided that approval of such  procedures may be limited to particular  notices
or communications.

     Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications  sent to an  e-mail  address  shall be deemed  received  upon the
sender's receipt of an  acknowledgement  from the intended recipient (such as by
the "return receipt requested"  function,  as available,  return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent  during the normal  business  hours of the  recipient,  such  notice or
communication  shall be deemed to have been sent at the  opening of  business on
the next  business day for the  recipient,  and (ii)  notices or  communications

                                       88

<PAGE>

posted to an Internet  or intranet  website  shall be deemed  received  upon the
deemed  receipt by the intended  recipient at its e-mail address as described in
the foregoing  clause (i) of notification  that such notice or  communication is
available and identifying the website address therefor.

     (c)  The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR  COMPLETENESS OF
THE BORROWER  MATERIALS OR THE ADEQUACY OF THE PLATFORM,  AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY  KIND,   EXPRESS,   IMPLIED  OR   STATUTORY,   INCLUDING   ANY  WARRANTY  OF
MERCHANTABILITY,  FITNESS FOR A PARTICULAR  PURPOSE,  NON-INFRINGEMENT  OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION  WITH THE BORROWER  MATERIALS OR THE  PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively,  the
"Agent Parties") have any liability to the Borrower,  any Lender, the L/C Issuer
or any other Person for losses, claims, damages,  liabilities or expenses of any
kind (whether in tort,  contract or otherwise)  arising out of the Borrower's or
the  Administrative  Agent's  transmission  of  Borrower  Materials  through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses  are  determined  by a court of competent  jurisdiction  by a final and
nonappealable  judgment to have  resulted  from the gross  negligence or willful
misconduct of such Agent Party;  provided,  however,  that in no event shall any
Agent Party have any  liability to the borrower,  any Lender,  the L/C Issuer or
any other Person for indirect,  special,  incidental,  consequential or punitive
damages (as opposed to direct or actual damages).

     (d)  Change of Address, Etc. Each of the Borrower, the Administrative Agent
and the L/C Issuer may change its address,  telecopier  or telephone  number for
notices  and other  communications  hereunder  by  notice  to the other  parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other  communications  hereunder by notice to the Borrower,  the
Administrative  Agent and the L/C Issuer.  In  addition,  each Lender  agrees to
notify  the  Administrative   Agent  from  time  to  time  to  ensure  that  the
Administrative  Agent has on record  (i) an  effective  address,  contact  name,
telephone number, telecopier number and electronic mail address to which notices
and other  communications  may be sent and (ii) accurate wire  instructions  for
such Lender.

     (e)  Reliance  by  Administrative   Agent,  L/C  Issuer  and  Lenders.  The
Administrative  Agent,  the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including  telephonic Loan Notices)  purportedly given
by or on  behalf of the  Borrower  even if (i) such  notices  were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof,  as understood
by the  recipient,  varied from any  confirmation  thereof.  The Borrower  shall
indemnify the Administrative  Agent, the L/C Issuer, each Lender and the Related
Parties  of each of them  from  all  losses,  costs,  expenses  and  liabilities
resulting from the reliance by such Person on each notice  purportedly  given by
or on behalf of the Borrower.  All  telephonic  notices to and other  telephonic
communications   with  the   Administrative   Agent  may  be   recorded  by  the
Administrative  Agent,  and each of the parties  hereto hereby  consents to such
recording.

                                       89

<PAGE>

     10.03 No Waiver;  Cumulative  Remedies.  No failure by any Lender,  the L/C
Issuer or the Administrative Agent to exercise,  and no delay by any such Person
in exercising,  any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege  hereunder  preclude any other or further exercise thereof or
the  exercise  of any other  right,  remedy,  power or  privilege.  The  rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

     10.04 Expenses; Indemnity; Damage Waiver.

     (a)  Costs  and  Expenses.  The  Borrower  shall  pay  (i)  all  reasonable
out-of-pocket  expenses incurred by the Administrative  Agent and its Affiliates
(including the reasonable  fees,  charges and  disbursements  of counsel for the
Administrative  Agent),  in  connection  with  the  syndication  of  the  credit
facilities  provided  for  herein,  the  preparation,   negotiation,  execution,
delivery and  administration  of this  Agreement and the other Loan Documents or
any  amendments,  modifications  or waivers of the provisions  hereof or thereof
(whether  or not the  transactions  contemplated  hereby  or  thereby  shall  be
consummated),  (ii) all reasonable  out-of-pocket  expenses  incurred by the L/C
Issuer in connection with the issuance,  amendment,  renewal or extension of any
Letter  of  Credit  or  any  demand  for  payment   thereunder   and  (iii)  all
out-of-pocket  expenses incurred by the Administrative  Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for the
Administrative  Agent, any Lender or the L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or the L/C Issuer,  in connection  with the  enforcement or protection of
its rights (A) in connection  with this Agreement and the other Loan  Documents,
including  its rights under this Section,  or (B) in  connection  with the Loans
made or Letters of Credit issued  hereunder,  including  all such  out-of-pocket
expenses  incurred during any workout,  restructuring or negotiations in respect
of such Loans or Letters of Credit;  provided  that (in the case of clauses  (i)
and (ii) above) certain fees of Helms Mulliss & Wicker,  PLLC, as counsel to the
Administrative Agent and Banc of America Securities LLC ("BAS"), will be subject
to a cap in accordance with (and subject to the  assumptions and  qualifications
set forth in) the Memorandum attached as Exhibit A to the letter agreement dated
July 27, 2005 among Bank of America, BAS and the Borrower.

     (b)  Indemnification  by the  Borrower.  The Borrower  shall  indemnify the
Administrative Agent (and any subagent thereof), each Lender and the L/C Issuer,
and each Related Party of any of the  foregoing  Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses,  claims,  damages,  liabilities and related expenses  (including the
fees,  charges and  disbursements of any counsel for any Indemnitee),  and shall
indemnify and hold harmless each  Indemnitee  from all fees and time charges and
disbursements for attorneys who may be employees of any Indemnitee,  incurred by
any  Indemnitee or asserted  against any Indemnitee by any third party or by the
Borrower or any other Loan Party  arising out of, in  connection  with,  or as a
result of (i) the  execution  or  delivery  of this  Agreement,  any other  Loan
Document or any  agreement or  instrument  contemplated  hereby or thereby,  the
performance by the parties hereto of their respective  obligations  hereunder or
thereunder,  the consummation of the transactions contemplated hereby or thereby
or, in the case of the  Administrative  Agent (and any subagent thereof) and its
Related  Parties only, the  administration  of this Agreement and the other Loan
Documents,  (ii) any Loan or Letter of Credit or the use or proposed  use of the

                                       90

<PAGE>

proceeds  therefrom  (including  any refusal by the L/C Issuer to honor a demand
for payment  under a Letter of Credit if the  documents  presented in connection
with  such  demand  do not  strictly  comply  with the  terms of such  Letter of
Credit),  (iii) any actual or alleged presence or release of Hazardous Materials
on or  from  any  property  owned  or  operated  by the  Borrower  or any of its
Subsidiaries,  or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding  relating to any of the foregoing,  whether based on
contract,  tort or any other theory,  whether brought by a third party or by the
Borrower or any other Loan Party,  and regardless of whether any Indemnitee is a
party thereto;  provided that such indemnity shall not, as to any Indemnitee, be
available  to the extent  that such  losses,  claims,  damages,  liabilities  or
related  expenses (x) are  determined  by a court of competent  jurisdiction  by
final and  nonappealable  judgment to have resulted from the gross negligence or
willful  misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower or any other Loan Party against an  Indemnitee  for breach in bad faith
of such Indemnitee's  obligations hereunder or under any other Loan Document, if
the Borrower or such Loan Party has obtained a final and nonappealable  judgment
in its favor on such claim as determined by a court of competent jurisdiction.

     (c)  Reimbursement  by  Lenders.  To the extent that the  Borrower  for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this  Section to be paid by it to the  Administrative  Agent (or any subagent
thereof),  the L/C Issuer or any  Related  Party of any of the  foregoing,  each
Lender  severally  agrees  to pay to  the  Administrative  Agent  (or  any  such
subagent),  the L/C  Issuer  or such  Related  Party,  as the case may be,  such
Lender's  Applicable  Percentage  (determined as of the time that the applicable
unreimbursed  expense or  indemnity  payment is sought) of such  unpaid  amount,
provided that the  unreimbursed  expense or  indemnified  loss,  claim,  damage,
liability  or related  expense,  as the case may be, was incurred by or asserted
against the Administrative Agent (or any such subagent) or the L/C Issuer in its
capacity as such, or against any Related  Party of any of the  foregoing  acting
for the Administrative  Agent (or any such subagent) or L/C Issuer in connection
with such capacity. The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).

     (d)  Waiver of Consequential  Damages, Etc. To the fullest extent permitted
by applicable law, the Borrower shall not assert,  and hereby waives,  any claim
against any  Indemnitee,  on any theory of  liability,  for  special,  indirect,
consequential  or  punitive  damages  (as  opposed to direct or actual  damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan  Document  or  any  agreement  or  instrument   contemplated   hereby,  the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof.  No Indemnitee  referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other  information  transmission  systems in connection  with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

     (e)  Payments.  All  amounts  due under this  Section  shall be payable not
later than ten Business Days after demand therefor.

                                       91

<PAGE>

     (f)  Survival. The agreements in this Section shall survive the resignation
of the  Administrative  Agent and the L/C Issuer, the replacement of any Lender,
the termination of the Aggregate Commitments and the repayment,  satisfaction or
discharge of all the other Obligations.

     10.05 Payments Set Aside. To the extent that any payment by or on behalf of
the Borrower is made to the Administrative  Agent, the L/C Issuer or any Lender,
or the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff,  and such  payment or the proceeds of such setoff or any part thereof is
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
or  required   (including  pursuant  to  any  settlement  entered  into  by  the
Administrative  Agent,  the L/C Issuer or such Lender in its  discretion)  to be
repaid  to a  trustee,  receiver  or any other  party,  in  connection  with any
proceeding  under any Debtor Relief Law or otherwise,  then (a) to the extent of
such  recovery,  the  obligation  or  part  thereof  originally  intended  to be
satisfied  shall be revived  and  continued  in full force and effect as if such
payment had not been made or such setoff had not  occurred,  and (b) each Lender
and the L/C  Issuer  severally  agrees to pay to the  Administrative  Agent upon
demand its  applicable  share (without  duplication)  of any amount so recovered
from or repaid by the Administrative  Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect.  The  obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding  sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

     10.06 Successors and Assigns.

     (a)  Successors  and Assigns  Generally.  The  provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective  successors  and assigns  permitted  hereby,  except that neither the
Borrower  nor any other Loan Party may assign or  otherwise  transfer any of its
rights or  obligations  hereunder  without  the  prior  written  consent  of the
Administrative  Agent and each  Lender  and no Lender  may  assign or  otherwise
transfer any of its rights or  obligations  hereunder  except (i) to an Eligible
Assignee in accordance  with the  provisions of subsection  (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section,  or (iii) by way of pledge or assignment of a security interest
subject to the  restrictions  of  subsection  (f) of this Section (and any other
attempted  assignment  or transfer by any party  hereto shall be null and void).
Nothing in this  Agreement,  expressed or implied,  shall be construed to confer
upon any Person (other than the parties hereto, their respective  successors and
assigns permitted hereby,  Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly  contemplated  hereby,  the Related
Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

     (b)  Assignments  by  Lenders.  Any Lender may at any time assign to one or
more  Eligible  Assignees all or a portion of its rights and  obligations  under
this Agreement  (including all or a portion of its Revolving  Credit  Commitment
and the Revolving Loans at the time owing to it, or all or a portion of its Term
Loan  Commitment  and its Pro Rata Term Share of the Term Loan at the time owing
to it) (such Lender's portion of Loans, Commitments and risk participations with

                                       92

<PAGE>

respect to each of the  Revolving  Credit  Facility  and the Term Loan  Facility
(each, an "Applicable  Facility") being referred to in this Section 10.07 as its
"Applicable Share"); provided, that

          (i)  except  in the  case of an  assignment  of the  entire  remaining
     amount  of the  assigning  Lender's  Applicable  Share  of  the  Applicable
     Facility  at the  time  owing to it or in the  case of an  assignment  to a
     Lender or an  Affiliate  of a Lender or an Approved  Fund with respect to a
     Lender,  the  aggregate  amount of the  Applicable  Share  (which  for this
     purpose  includes  Loans  outstanding   thereunder)  with  respect  to  the
     Applicable  Facility,   determined  as  of  the  date  the  Assignment  and
     Assumption   with   respect  to  such   assignment   is  delivered  to  the
     Administrative  Agent or, if "Trade Date"  specified in the  Assignment and
     Assumption,  as of the Trade  Date,  shall not be less than (A)  $5,000,000
     with  respect to the  Revolving  Credit  Facility and (B)  $1,000,000  with
     respect  to the Term  Loan  Facility,  unless  in  either  case each of the
     Administrative  Agent and, so long as no Event of Default has  occurred and
     is continuing, the Borrower otherwise consents (each such consent not to be
     unreasonably  withheld or  delayed);  provided,  however,  that  concurrent
     assignments  to  members  of an  Assignee  Group  or to a  single  Eligible
     Assignee (or to an Eligible  Assignee  and members of its  Assignee  Group)
     will be treated as a single assignment for purposes of determining  whether
     such minimum amount has been met;

          (ii) each  partial  assignment  shall  be made as an  assignment  of a
     proportionate  part of all the assigning  Lender's  rights and  obligations
     under this Agreement with respect to the Loans or the Commitment assigned;

          (iii) any assignment of a Revolving Credit Commitment must be approved
     by the  Administrative  Agent and the L/C Issuer  unless the Person that is
     the  proposed  assignee  is itself a Lender  (whether  or not the  proposed
     assignee would otherwise qualify as an Eligible Assignee); and

          (iv) the parties to each  assignment  shall execute and deliver to the
     Administrative  Agent  an  Assignment  and  Assumption,   together  with  a
     processing and recordation fee in the amount, if any, required as set forth
     in Schedule 10.06, and the Eligible Assignee,  if it shall not be a Lender,
     shall deliver to the Administrative Agent an Administrative Questionnaire.

     Subject to acceptance  and recording  thereof by the  Administrative  Agent
pursuant to subsection  (c) of this Section,  from and after the effective  date
specified in each Assignment and Assumption,  the Eligible  Assignee  thereunder
shall be a party to this Agreement  and, to the extent of the interest  assigned
by such Assignment and  Assumption,  have the rights and obligations of a Lender
under this Agreement,  and the assigning Lender  thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Assumption  covering all of the assigning  Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the  benefits of Sections  3.01,  3.04,  3.05,  and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Upon  request,  the  Borrower (at its  expense)  shall  execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of

                                       93

<PAGE>

rights or  obligations  under  this  Agreement  that does not  comply  with this
subsection  shall be treated for  purposes of this  Agreement  as a sale by such
Lender of a  participation  in such rights and  obligations  in accordance  with
subsection (d) of this Section.

     (c)  Register.  The Administrative Agent, acting solely for this purpose as
an agent of the Borrower,  shall maintain at the Administrative Agent's Office a
copy of each  Assignment and  Assumption  delivered to it and a register for the
recordation of the names and addresses of the Lenders,  and the Revolving Credit
Commitment or Pro Rata Term Share of, and principal amounts of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the  "Register").  The entries in the  Register  shall be  conclusive,  and the
Borrower,  the Administrative  Agent and the Lenders may treat each Person whose
name is  recorded  in the  Register  pursuant  to the  terms  hereof as a Lender
hereunder  for all  purposes of this  Agreement,  notwithstanding  notice to the
contrary. The Register shall be available for inspection by each of the Borrower
and the L/C Issuer at any reasonable  time and from time to time upon reasonable
prior  notice.  In  addition,  at any time  that a request  for a consent  for a
material or substantive change to the Loan Documents is pending,  any Lender may
request and receive from the Administrative Agent a copy of the Register.

     (d)  Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative  Agent, sell participations to any
Person  (other than a natural  person or the  Borrower or any of the  Borrower's
Affiliates or Subsidiaries)  (each, a "Participant") in all or a portion of such
Lender's  rights and/or  obligations  under this  Agreement  (including all or a
portion of its Revolving  Credit  Commitment  and/or the Loans  (including  such
Lender's participations in L/C Obligations) owing to it); provided that (i) such
Lender's  obligations  under this Agreement  shall remain  unchanged,  (ii) such
Lender shall  remain  solely  responsible  to the other  parties  hereto for the
performance  of such  obligations  and (iii) the  Borrower,  the  Administrative
Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly
with such Lender in connection with such Lender's  rights and obligations  under
this Agreement.

     Any  agreement  or  instrument  pursuant  to  which a Lender  sells  such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Agreement and to approve any amendment,  modification  or waiver of
any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such  Participant.  Subject to subsection (e) of this
Section,  the  Borrower  agrees that each  Participant  shall be entitled to the
benefits  of  Sections  3.01,  3.04 and 3.05 to the same  extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent  permitted by law, each  Participant  also shall be
entitled to the benefits of Section  10.08 as though it were a Lender,  provided
such  Participant  agrees  to be  subject  to  Section  2.13 as though it were a
Lender.

     (e)  Limitations  upon  Participant  Rights.  A  Participant  shall  not be
entitled to receive  any greater  payment  under  Section  3.01 or 3.04 than the
applicable  Lender  would  have been  entitled  to receive  with  respect to the
participation sold to such Participant,  unless the sale of the participation to
such  Participant  is  made  with  the  Borrower's  prior  written  consent.   A
Participant  that  would be a Foreign  Lender  if it were a Lender  shall not be
entitled to the  benefits of Section 3.01 unless the Borrower is notified of the

                                       94

<PAGE>

participation  sold to such  Participant and such  Participant  agrees,  for the
benefit of the  Borrower,  to comply  with  Section  3.01(e) as though it were a
Lender.

     (f)  Certain  Pledges.  Any  Lender  may at any  time  pledge  or  assign a
security  interest  in all or any  portion  of its rights  under this  Agreement
(including  under  its  Note,  if any) to  secure  obligations  of such  Lender,
including any pledge or assignment to secure  obligations  to a Federal  Reserve
Bank;  provided that no such pledge or assignment shall release such Lender from
any of its obligations  hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

     (g)  Electronic Execution of Assignments.  The words "execution," "signed,"
"signature,"  and words of like import in any Assignment and Assumption shall be
deemed to include electronic  signatures or the keeping of records in electronic
form,   each  of  which  shall  be  of  the  same  legal  effect,   validity  or
enforceability  as a manually  executed  signature  or the use of a  paper-based
recordkeeping  system,  as the case may be, to the extent and as provided for in
any applicable law,  including the Federal  Electronic  Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other  similar  state laws based on the Uniform  Electronic  Transactions
Act.

     (h)  Resignation as L/C Issuer after Assignment.  Notwithstanding  anything
to the contrary  contained herein, if at any time Bank of America assigns all of
its Commitment and Loans pursuant to subsection (b) above,  Bank of America may,
upon 30 days' notice to the Borrower and the Lenders,  resign as L/C Issuer.  In
the event of any such resignation as L/C Issuer,  the Borrower shall be entitled
to appoint from among the Lenders a successor  L/C Issuer  hereunder;  provided,
however,  that no failure by the  Borrower to appoint any such  successor  shall
affect the resignation of Bank of America as L/C Issuer,  as the case may be. If
Bank of America resigns as L/C Issuer,  it shall retain all the rights,  powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as L/C Issuer and
all L/C  Obligations  with respect  thereto  (including the right to require the
Lenders  to make  Base  Rate  Revolving  Loans or fund  risk  participations  in
Unreimbursed  Amounts  pursuant to Section  2.03(c)).  Upon the appointment of a
successor L/C Issuer, (a) such successor shall succeed to and become vested with
all of the rights, powers, privileges and duties of the retiring L/C Issuer, and
(b) the successor L/C Issuer shall issue letters of credit in  substitution  for
the Letters of Credit, if any, outstanding at the time of such successor or make
other  arrangements  satisfactory  to Bank of America to effectively  assume the
obligations of Bank of America with respect to such Letters of Credit.

     10.07 Treatment  of  Certain  Information;  Confidentiality.  Each  of  the
Administrative  Agent,  the  Lenders and the L/C Issuer  agrees to maintain  the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners,  directors,  officers, employees, agents, advisors and representatives
(it being  understood  that the Persons to whom such  disclosure is made will be
informed of the  confidential  nature of such Information and instructed to keep
such  Information  confidential),  (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners),  (c) to
the extent  required by  applicable  laws or  regulations  or by any subpoena or

                                       95

<PAGE>

similar legal process, (d) to any other party hereto, (e) in connection with the
exercise  of any  remedies  hereunder  or under any other Loan  Document  or any
action or  proceeding  relating to this  Agreement or any other Loan Document or
the enforcement of rights  hereunder or thereunder,  (f) subject to an agreement
containing  provisions  substantially the same as those of this Section,  to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations  under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating  to the  Borrower  and its  obligations,  (g) with the  consent  of the
Borrower or (h) to the extent such  Information (x) becomes  publicly  available
other than as a result of a breach of this  Section or (y) becomes  available to
the Administrative  Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.

     For purposes of this Section,  "Information" means all information received
from the Borrower or any  Subsidiary  relating to the Borrower or any Subsidiary
or any of their respective  businesses,  other than any such information that is
available  to the  Administrative  Agent,  any  Lender  or the L/C  Issuer  on a
nonconfidential  basis prior to  disclosure  by the Borrower or any  Subsidiary,
provided  that,  in the case of  information  received  from the Borrower or any
Subsidiary after the date hereof,  such information is clearly identified at the
time  of  delivery  as  confidential.   Any  Person  required  to  maintain  the
confidentiality  of  Information as provided in this Section shall be considered
to have complied  with its  obligation to do so if such Person has exercised the
same degree of care to maintain the  confidentiality of such Information as such
Person would accord to its own confidential information.

     Each  of  the  Administrative   Agent,  the  Lenders  and  the  L/C  Issuer
acknowledges   that  (a)  the  Information  may  include   material   non-public
information concerning the Borrower or a Subsidiary,  as the case may be, (b) it
has developed  compliance  procedures  regarding the use of material  non-public
information  and (c) it will  handle such  material  non-public  information  in
accordance with applicable Law, including Federal and state securities Laws.

     10.08 Right of Setoff.  If an Event of Default  shall have  occurred and be
continuing,  each Lender, the L/C Issuer and each of their respective Affiliates
is hereby  authorized  at any time and from time to time,  after  obtaining  the
prior  written  consent  of the  Administrative  Agent,  to the  fullest  extent
permitted by applicable law, to set off and apply any and all deposits  (general
or special,  time or demand,  provisional or final, in whatever currency) at any
time held and other obligations (in whatever currency) at any time owing by such
Lender, the L/C Issuer or any such Affiliate to or for the credit or the account
of the Borrower or any other Loan Party  against any and all of the  obligations
of the  Borrower  or such  Loan  Party  now or  hereafter  existing  under  this
Agreement  or any  other  Loan  Document  to  such  Lender  or the  L/C  Issuer,
irrespective of whether or not such Lender or the L/C Issuer shall have made any
demand  under  this  Agreement  or any other Loan  Document  and  although  such
obligations of the Borrower or such Loan Party may be contingent or unmatured or
are owed to a branch or office of such Lender or the L/C Issuer  different  from
the branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender, the L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies  (including other rights of
setoff)  that such Lender,  the L/C Issuer or their  respective  Affiliates  may
have.  Each  Lender and the L/C Issuer  agrees to notify  the  Borrower  and the
Administrative  Agent promptly after any such setoff and  application,  provided
that the  failure to give such  notice  shall not affect  the  validity  of such
setoff and application.

                                       96

<PAGE>

     10.09 Interest Rate  Limitation.  Notwithstanding  anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan  Documents  shall not  exceed the  maximum  rate of  non-usurious  interest
permitted by applicable Law (the "Maximum Rate"). If the Administrative Agent or
any Lender shall  receive  interest in an amount that exceeds the Maximum  Rate,
the excess  interest  shall be applied to the  principal  of the Loans or, if it
exceeds such unpaid principal,  refunded to the Borrower. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate,  such Person may, to the extent  permitted by
applicable  Law,  (a)  characterize  any  payment  that is not  principal  as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects  thereof,  and (c) amortize,  prorate,  allocate,  and spread in
equal or unequal parts the total amount of interest  throughout the contemplated
term of the Obligations hereunder.

     10.10 Counterparts;  Integration;  Effectiveness.  This  Agreement  may  be
executed  in  counterparts   (and  by  different  parties  hereto  in  different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract.  This Agreement and the other
Loan Documents  constitute the entire contract among the parties relating to the
subject  matter  hereof  and  supersede  any and  all  previous  agreements  and
understandings,  oral or written,  relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received  counterparts  hereof that,  when taken  together,  bear the
signatures  of  each  of the  other  parties  hereto.  Delivery  of an  executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

     10.11 Survival of Representations  and Warranties.  All representations and
warranties  made  hereunder  and in any other Loan  Document  or other  document
delivered  pursuant  hereto or thereto or in  connection  herewith or  therewith
shall   survive  the   execution   and  delivery   hereof  and   thereof.   Such
representations  and  warranties  have  been  or  will  be  relied  upon  by the
Administrative  Agent and each Lender,  regardless of any investigation  made by
the  Administrative  Agent or any Lender or on their behalf and  notwithstanding
that the Administrative  Agent or any Lender may have had notice or knowledge of
any  Default at the time of any Credit  Extension,  and shall  continue  in full
force and  effect as long as any Loan or any other  Obligation  hereunder  shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

     10.12 Severability.  If any  provision of this  Agreement or the other Loan
Documents is held to be illegal,  invalid or  unenforceable,  (a) the  legality,
validity and  enforceability  of the remaining  provisions of this Agreement and
the other Loan Documents  shall not be affected or impaired  thereby and (b) the
parties  shall  endeavor  in good faith  negotiations  to replace  the  illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which  comes  as  close  as  possible  to  that  of  the  illegal,   invalid  or
unenforceable  provisions.  The  invalidity  of  a  provision  in  a  particular
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

                                       97

<PAGE>

     10.13 Replacement of Lenders.  If any Lender  requests  compensation  under
Section 3.04, or if the Borrower is required to pay any additional amount to any
Lender or any  Governmental  Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort,  upon notice to such Lender and the  Administrative
Agent,  require  such  Lender to  assign  and  delegate,  without  recourse  (in
accordance  with and  subject to the  restrictions  contained  in, and  consents
required by, Section 10.06), all of its interests,  rights and obligations under
this  Agreement and the related Loan  Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

     (a)  unless such fee is waived by the  Administrative  Agent,  the Borrower
shall have paid to the  Administrative  Agent the  assignment  fee  specified in
Section 10.06(b);

     (b)  such  Lender  shall have  received  payment of an amount  equal to the
outstanding  principal of its Loans and L/C Advances,  accrued interest thereon,
accrued fees and all other  amounts  payable to it hereunder and under the other
Loan Documents  (including any amounts under Section 3.05) from the assignee (to
the extent of such  outstanding  principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

     (c)  in the  case  of any  such  assignment  resulting  from  a  claim  for
compensation  under  Section  3.04 or payments  required to be made  pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and

     (d)  such assignment does not conflict with applicable Laws.

     A Lender shall not be required to make any such  assignment  or  delegation
if,  prior  thereto,  as a result of a waiver by such Lender or  otherwise,  the
circumstances  entitling the Borrower to require such  assignment and delegation
cease to apply.

     10.14 Governing Law; Jurisdiction; Etc.

     (a)  GOVERNING LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

     (b)  SUBMISSION  TO  JURISDICTION.  THE  BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND  UNCONDITIONALLY  SUBMITS,  FOR ITSELF AND ITS PROPERTY,  TO THE
NONEXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN  DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF,  IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,  OR FOR
RECOGNITION  OR  ENFORCEMENT  OF ANY  JUDGMENT,  AND EACH OF THE PARTIES  HERETO
IRREVOCABLY  AND  UNCONDITIONALLY  AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR  PROCEEDING  MAY BE HEARD AND  DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST  EXTENT  PERMITTED BY APPLICABLE  LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES  HERETO  AGREES THAT A FINAL  JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING  SHALL BE CONCLUSIVE  AND MAY BE ENFORCED IN OTHER  JURISDICTIONS  BY

                                       98

<PAGE>

SUIT ON THE  JUDGMENT OR IN ANY OTHER  MANNER  PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT  OR IN ANY  OTHER  LOAN  DOCUMENT  SHALL  AFFECT  ANY  RIGHT  THAT THE
ADMINISTRATIVE  AGENT,  ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING  RELATING TO THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS  PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

     (c)  WAIVER OF VENUE.  THE BORROWER  AND EACH OTHER LOAN PARTY  IRREVOCABLY
AND  UNCONDITIONALLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY  OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT  FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.

     (d)  SERVICE OF PROCESS.  EACH PARTY HERETO  AGREES THAT SERVICE OF PROCESS
MAY BE MADE BY PERSONAL  SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER
LEGAL PROCESS IN ANY SUCH ACTION OR PROCEEDING OR BY ANY OTHER METHOD OF SERVICE
PROVIDED FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.

     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY  IN ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF OR
RELATING  TO THIS  AGREEMENT  OR ANY OTHER  LOAN  DOCUMENT  OR THE  TRANSACTIONS
CONTEMPLATED  HEREBY OR THEREBY  (WHETHER  BASED ON CONTRACT,  TORT OR ANY OTHER
THEORY).  EACH  PARTY  HERETO (A)  CERTIFIES  THAT NO  REPRESENTATIVE,  AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER  PERSON  WOULD  NOT,  IN THE  EVENT OF  LITIGATION,  SEEK TO  ENFORCE  THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES  THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     10.16 USA PATRIOT  Act  Notice.  Each Lender that is subject to the Act (as
hereinafter  defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA PATRIOT Act (Title III of Pub.  L. 107-56  (signed  into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower,  which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.

                                       99

<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed as of the date first above written.

                                MAIN STREET RESTAURANT GROUP, INC.

                                By:    /s/ William G. Shrader
                                     -------------------------------------------
                                Name:  William G. Shrader
                                Title: President and Chief Executive Officer

                                By:    /s/ Michael Garnreiter
                                     -------------------------------------------
                                Name:  Michael Garnreiter
                                Title: Executive Vice President and Assistant
                                       Secretary

                       Main Street Restaurant Group, Inc.
                         Credit Agreement Signature Page

<PAGE>

                                BANK OF AMERICA, N.A., as
                                Administrative Agent

                                By:     /s/ Anne M. Zeschke
                                     -------------------------------------------
                                Name:   Anne M. Zeschke
                                       -----------------------------------------
                                Title:  Assitant Vice President
                                        ----------------------------------------

                       Main Street Restaurant Group, Inc.
                         Credit Agreement Signature Page

<PAGE>

                               BANK OF AMERICA, N.A., as a Lender and L/C Issuer

                               By:    /s/ Bobby R. Oliver, Jr.
                                    --------------------------------------------
                               Name:   Bobby R. Oliver, Jr.
                                     -------------------------------------------
                               Title:     Managing Director
                                     -------------------------------------------

                       Main Street Restaurant Group, Inc.
                         Credit Agreement Signature Page

<PAGE>

                         GE CAPITAL FRANCHISE FINANCE CORPORATION, as a Lender

                         By:   /s/ Kelly A. Hallford
                              --------------------------------------------------
                         Name:  Kelly A. Hallford
                                ------------------------------------------------
                         Title:  Vice President
                                 -----------------------------------------------

                       Main Street Restaurant Group, Inc.
                         Credit Agreement Signature Page

<PAGE>

                         WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender

                         By:   /s/ Brian J. Roach
                              --------------------------------------------------
                         Name:  Brian J. Roach
                                ------------------------------------------------
                         Title:  Managing Director
                                 -----------------------------------------------

                       Main Street Restaurant Group, Inc.
                         Credit Agreement Signature Page

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]