Document:

Exhibit
10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT,
by and between Ballistic Recovery Systems, Inc., a Minnesota corporation (the “Company”), and Larry E. Williams (the “Executive”) is entered into on this 4th day of January, 2007 (the “Effective Date”).

INTRODUCTION

A.    Executive and the Company entered into an Employment Agreement
effective May 6, 2005 (the “2005 Employment Agreement”).

B.    The Company and Executive desire to terminate the 2005 Employment
Agreement and the Company desires to employ Executive in accordance with the
terms and conditions stated in this employment agreement (the “Agreement”), and wishes to obtain
reasonable protection against unfair competition from Executive following a
termination of employment and to further protect against unfair use of its
confidential business and technical information; and Executive is willing to
grant the Company the benefits of a covenant not to compete for these same
purposes.

C.    Executive wishes to receive compensation from the Company for Executive’s
continued services and desires to accept continued employment pursuant to the
terms and conditions of this Agreement.

AGREEMENT

NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the Company and
Executive, each intending to be legally bound, hereby agree as follows:

1.            2005 Employment Agreement
Termination.  The 2005
Employment Agreement is hereby terminated. 
  

2.            Employment.  Subject to all of the terms and conditions of
this Agreement, the Company hereby agrees to employ Executive as the Company’s
Chief Executive Officer, President and Chief Operating Officer and Executive
hereby accepts such employment, and agrees to serve the Company with undivided
loyalty and to the best of his ability. 
Executive shall report to and take direction from the Company’s Board of
Directors.

3.            Term.  Unless terminated earlier according to the
provisions of Section 7, Executive’s employment shall commence as of the
Effective Date and shall continue for a period of two (2) years from the
Effective Date (the “Term”).

4.            Duties.  Executive will devote substantially all of
his business hours to and, during such time, make the best use of his energy,
knowledge, and training in advancing the Company’s interests.  In addition, Executive may: (i) devote a
reasonable amount of time and attention to civic, charitable, or social
organizations; (ii) engage in such other activities as are specifically
approved in writing by the Company’s Board of Directors (the “Board”); and (iii) make passive personal
investments which do not conflict with the Company’s business.  Executive’s duties and responsibilities shall
include, without limitation, assisting in the management of the Company’s
routine day-to-day business operations, business development and servicing of
client accounts, and such other duties and responsibilities as may be assigned
by the Board or set forth in the Company’s Bylaws.

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5.            Board of Director Position.  Executive will serve on the Board along with
the other elected Directors of the Company for the term so elected by Company
shareholders.   So long as Executive is
Chief Executive Officer, the Board agrees to nominate Executive each year to
serve as a Director of the Company.  In
the event that the Executive is terminated or resigns his position from the
Company for any reason, the Executive agrees to resign from his position on the
Board and any and all boards of directors of any subsidiaries of the Company.

6.            Compensation.

(a)   Base Salary.  In consideration for Executive’s services
under this Agreement, the Company hereby agrees to pay Executive an annual
salary of One Hundred Ninety-Four Thousand Dollars ($194,000) (the “Base Salary”) effective October 1, 2006.  The Base Salary shall be paid on an at least
monthly basis in accordance with the Company’s standard payroll
procedures.  Notwithstanding the
foregoing, to the extent that Actual Net Sales (as defined below) for a
particular fiscal quarter  is 50% or less
of Budgeted Net Sales (as defined below) for such period, then the Base Salary
for the next fiscal quarter shall be reduced by the percentage that Actual Net
Sales is less than Budgeted Net Sales.

(b)   Bonus.  During each year of the Term, Executive is eligible
for an annual bonus of up to 100% of the Base Salary for such fiscal year of
the Company (the “Bonus”).  The Bonus will be broken down into two
components:  a non-discretionary bonus
(the “Non-Discretionary Bonus”) and a
discretionary bonus (the “Discretionary Bonus”)
as set forth below.  The Bonus
compensation is a gross bonus subject to withholding for federal and state
income taxes and all other required deductions.

(c)   Discretionary Bonus.  Executive shall be
eligible for a Discretionary Bonus not to exceed 25% of Executive’s Base Salary
for such fiscal year.  The Discretionary
Bonus shall be paid in cash and shall be determined in the sole discretion of
the Board’s Compensation Committee based upon Executive’s performance, and
shall be paid to Executive within 90 days of fiscal year-end.

(d)   Non-Discretionary Bonus.  Executive shall be eligible for a
Non-Discretionary Bonus not to exceed 75% of the Executive’s Base Salary for
such fiscal year (“Maximum Non-Discretionary Bonus”).  The Non-Discretionary Bonus shall consist of
two components:  (a) Net Sales Component
and (b) Net Income Component.

(i)        Net Sales Component.

a.     35%
of the Maximum Non-Discretionary Bonus shall be earned if the Company’s “Actual
Net Sales” equals “Budgeted Net Sales” for a fiscal year.  For purposes of this Section, “Actual Net
Sales” shall mean revenues of the Company for a given fiscal year, as reported
for GAAP purposes, minus any returned Company products during such period.  For purposes of this Section, “Budgeted Net
Sales” means budgeted revenues of the Company for a given fiscal year minus any
budgeted returned Company products during such period, as agreed to by
Executive and the Board.

By way of example, for Fiscal 2007, Executive’s Base
Salary is $194,000.  If the Company’s
Actual Net Sales for Fiscal 2007 equals the Company’s Budgeted Net Sales for
Fiscal 2007, this portion of Executive’s Non-Discretionary Bonus shall equal
$50,925 (i.e., $194,000 x .75 x .35).

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b.     To
the extent that Actual Net Sales exceeds Budgeted Net Sales for a fiscal year,
Executive shall be entitled to receive 2% of Base Salary for each 1% that
Actual Net Sales exceeds Budgeted Net Sales for such period (the “Incremental
Net Sales Bonus”).  In no event shall the
Incremental Net Sales Bonus exceed 15% of the Maximum Non-Discretionary Bonus
potential for a given fiscal year.

c.     Performance
Under Budget.  To the extent that
Budgeted Net Sales exceeds Actual Net Sales for a fiscal year, the Net Sales
Component of the Non-Discretionary Bonus for such period shall be adjusted by
reducing the Net Sales Component that would have been earned for such fiscal
year had the Company’s Actual Net Sales equaled the Company’s Budgeted Net
Sales for such fiscal year, proportionately by the percentage that Budgeted Net
Sales exceeds Actual Net Sales for such fiscal year.  Notwithstanding the foregoing, no Net Sales
Component of the Non-Discretionary Bonus shall be paid or earned for a given
fiscal year to the extent that Actual Net Sales is less than 80% of Budgeted
Net Sales for a given fiscal year.

(ii)    Net
Income Component.

a.       35% of the Maximum Non-Discretionary Bonus
shall be earned if the Company’s “Actual Net Income” equals “Budget Net Income”
for a given fiscal year.  For purposes of
this Section, “Actual Net Income” shall mean net income of the Company for a
given fiscal year as reported for GAAP purposes.  For purposes of this Section, “Budgeted Net
Income” means projected net income of the Company for a given fiscal year, as
agreed to in advance of such fiscal year by Executive and the Board.

By way of example, for Fiscal 2007, Executives Base
Salary is $194,000.  If the Company’s
Actual Net Income for Fiscal 2007 equals the Company’s Budgeted Net Income,
this portion of Executive’s Non-Discretionary Bonus shall equal $50,925(i.e.,
$194,000 x .75 x .35).

b.    To the extent that Actual
Net Income exceeds Budgeted Net Income for a given period, Executive shall be
entitled to receive 1% of Base Salary for each 10% that Actual Net Income
exceeds Budgeted Net Income (the “Incremental Net Income Bonus”).  In no event shall the Incremental Net Income
Bonus exceed 15% of the Maximum Non-Discretionary Bonus potential for a given
fiscal year.

c.    Performance Under
Budget.  To the extent that Budgeted
Net Income exceeds Actual Net Income for a fiscal year, the Net Income
Component of the Non-Discretionary Bonus for such fiscal year shall be adjusted
by reducing the Net Income Component that would have been earned for such
fiscal year had the Company’s Actual Net Income equaled the Company’s Budgeted
Net Income for such fiscal year, proportionately by the percentage that Budget
Net Income exceeds Actual Net Income. 
Notwithstanding the foregoing, no Net Income Component of the
Non-Discretionary Bonus shall be paid or earned for a fiscal year to the extent
that Actual Net Income is less than 80% of Budgeted Net Income for a fiscal
year.

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(iii)   Non-Discretionary
Payment.

a.     
The Non-Discretionary Bonus for a fiscal year shall be paid within 10 days of
the filing of the Form 10-KSB for such fiscal year.  Upon agreement of the Executive and the
Compensation Committee of the Board, up to 50% of the Non-Discretionary Bonus
may be paid to Executive in the form of restricted  shares of Common Stock of the Company.  Executive understands that the Company has no
obligation to register such shares and, accordingly, such shares must be sold
in compliance with applicable federal and state securities laws and Company
policy, including Rule 144 of the Securities Act of 1933, as amended, in
addition; federal and state insider trading laws and the Company’s Insider
Trading Policy.  The balance shall be
paid in cash.

(e)   Benefits.  Executive shall be entitled to the employee
benefits as provided by the Company to its management team.  The Company reserves the right, in its sole
discretion, to alter the terms of such benefits at any time and from time to
time.

(f)    Reimbursement.  The Company shall reimburse Executive for all
reasonable out-of-pocket business expenses incurred by Executive on the Company’s
behalf; provided, however,
that Executive properly accounts to the Company for all such expenses in
accordance with the rules and regulations of the Internal Revenue Service under
the Internal Revenue Code of 1986, as amended, and in accordance with any
standard policies of the Company relating to reimbursement of business expenses
as such policies exist or may be implemented in the future.

7.   Termination.  Prior to the expiration of the Term, this
Agreement may be terminated under the provisions of this Section 7.

(a)   Voluntary Termination.  Executive may voluntarily terminate his
employment hereunder for any reason and at any time after giving at least 30
days’ prior written notice thereof to the Board.  Upon such a voluntary termination, Executive
shall have no further rights against the Company hereunder, except for the
right to receive: (i) any unpaid Base Salary with respect to the period prior
to the effective date of termination; (ii) any accrued Bonus earned pursuant to
Section 6(d) with respect to the period prior to the effective date of
termination; and (iii) reimbursement of expenses to which Executive is entitled
under Section 6(f).

(b)   Termination Without Cause.

(i)      Except
as provided in Section 7(b)(ii), if the Company terminates this Agreement
without Cause, Executive shall have the right to receive:  (i) any unpaid Base Salary with respect to
the period prior to the effective date of termination; (ii) reimbursement of
expenses to which Executive is entitled under Section 6(f); (iii) Executive’s
then-current Base Salary for an 18 month period after the date of such
termination (the “Severance Payment”),
payable over an 18 month period in the same manner as Base Salary is paid; and
(iv) any accrued Bonus earned pursuant to Section 6(d) with respect to the
period prior to the effective date of termination.  The right to receive (iii) and (iv) above
shall be conditioned upon the Company receiving a full release from Executive
in a form reasonably acceptable to the Company.

(ii)    In
the event (a) there is Change of Control and (b) the Company terminates this
Agreement without cause, the Executive shall have the right to receive (i),
(ii), (iii) and (iv) as indicated in Section 7(b)(i) above, provided, however,
the Severance Payment

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shall be for a
24 month period payable over a 24 month period. 
For purposes of this Agreement, a reduction in Executive’s Base Salary
by the Company during the Term, except as provided for herein,  occurring within twelve (12) months after a
Change of Control of the Company shall constitute a Termination without Cause
under this Section 7(b).  “Change of
Control” shall mean the occurrence of any of the following:  (i)  the acquisition (other than from the Company
directly) by any person, entity or group, within the meaning of § 13(d) or
14(d) of the Securities Exchange Act of 1934, of beneficial ownership of
twenty-five (25%) percent or more of the outstanding shares of the Company’s
common stock; (ii)  a merger, reorganization or consolidation whereby the
shareholders of the Company immediately prior to such merger, reorganization or
consolidation do not, immediately after consummation of such merger,
reorganization or consolidation own more than fifty (50%) of the voting stock
of the surviving entity; or (iii) the liquidation or dissolution of the Company
or the sale of all or substantially all of the assets of the Company.  The right to receive such payments above
shall be conditioned upon the Company receiving a full release from Executive
in a form reasonably acceptable to the Company.

(c)   Termination For Cause.  The Company may terminate Executive’s
employment and all of the Company’s obligations under this Agreement at any
time for “Cause” (as defined below) by giving notice to Executive stating the
basis for such termination.  Any
Termination under this Section 7(c) shall be effective immediately upon
delivery of the above-described notice or at such other time thereafter as the
Company may designate in the notice.  For
“Cause” shall mean any of the following: (i) dishonesty, fraud, or material and
deliberate injury or attempted injury, in each case related to the Company or
its business; (ii) Executive’s conviction of a felony; or (iii) Executive’s
continued failure to satisfactorily perform the duties assigned to him pursuant
to Section 4 of this Agreement for a period of 30 days after a written demand
by the Board for such satisfactory performance, which demand specifically
identifies the manner in which it is alleged that Executive has not
satisfactorily performed such duties.

If Executive’s employment is terminated for Cause,
Executive shall have no further rights against the Company hereunder, except
for the right to receive: (i) any unpaid Base Salary with respect to the period
prior to the effective date of termination and (ii) reimbursement of expenses
to which Executive is entitled under Section 6(f).

8.   Confidentiality and Noncompetition.

(a)   Confidentiality.  As used in this Section 8, “Confidential Information” means information that is not
generally known and that is proprietary to the Company or that the Company is
obligated to treat as proprietary, but shall not include any information known
by Executive prior to the Effective Date. 
Any information that Executive reasonably considers Confidential Information,
or that the Company treats as Confidential Information, will be presumed to be
Confidential Information (whether the Executive or others originated it and
regardless of how the Executive obtained it).

Except as specifically permitted by an authorized
officer of the Company or by written Company policies, Executive will not,
either during or after his employment by the Company, use Confidential
Information for any purpose other than the business of the Company or disclose
it to any person who is not also an executive of the Company unless authorized
by the Board.  When Executive’s
employment with the Company ends, Executive will promptly deliver to the
Company all records and any compositions, articles, devices, apparatuses and
other items that disclose, describe, or embody Confidential Information,
including all copies, reproductions, and

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specimens of the
Confidential Information in Executive’s possession, regardless of who prepared
them and will promptly deliver any other property of the Company in Executive’s
possession (all such foregoing items, the “Materials”), whether or not
Confidential Information.  The foregoing
sentence shall not apply to any Materials produced by Executive prior to the
Effective Date.

(b)   Competitive Activities.  Executive agrees that, during the Term and
for an eighteen-month period afterwards, Executive will not alone or in any
capacity with another entity:  directly
engage in any commercial activity that competes with the Company’s Business (as
defined below) within any state in the United States or within any country in
which the Company directly markets or services products or intends to market or
service products.

Notwithstanding anything to the contrary in this
Agreement, the provisions of this Section 8(b) shall apply in the event that
the Executive is terminated without cause for so long as Executive is receiving
installments of the Severance Payment. 
In addition, this Section 8 shall not apply to any activity of the Executive
from and after such time as the Company (i) shall have ceased all Business
activities for a period of 60 days, or (ii) shall have made a decision through
its Board not to continue, or shall have ceased for a period of 60 days, the
Company’s Business activities.

For purposes of this Section 8, “Business” shall mean
the design, manufacture, distribution, sale or marketing of emergency parachute
recovery systems for use with recreational, general and commercial aviation
aircraft and unnamed aircraft or any activity involving or relating thereto.

9.            Conflicts of Interest.  Executive agrees that he will not, directly
or indirectly, transact business with the Company personally, or as agent,
owner, partner or shareholder of any other entity; provided,
however, that any such transaction may
be entered into if approved by the Board so long as Executives ownership or
relationship is disclosed to or otherwise known by the Board.

10.         General Provisions.

(a)   Successors and Assigns.  This Agreement is binding on and inures to
the benefit of the Company’s successors and assigns, all of which are included
in the term the “Company” as it is used in this Agreement; provided,
however, that the Company may assign
this Agreement only in connection with a merger, consolidation, assignment,
sale or other disposition of substantially all of its assets or business.

(b)   Amendment.  This Agreement may be modified or amended
only by a written agreement signed by both the Company and Executive.

(c)   Governing Law and Forum.  The laws of Minnesota will govern the
validity, construction, and performance of this Agreement.  Any legal proceeding related to this
Agreement will be brought in an appropriate Minnesota court, and both the
Company and Executive hereby consent to the exclusive jurisdiction of Minnesota
courts for this purpose.

(d)   Construction.  Wherever possible, each provision of this
Agreement will be interpreted so that it is valid under the applicable
law.  If any provision of this Agreement
is to any extent invalid under the applicable law, that provision will still be
effective to the extent it remains valid. 
The remainder of this Agreement also will continue to be valid, and the
entire Agreement will continue to be valid in other jurisdictions.

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(e)   No Waiver.  No failure or delay by either the Company or
Executive in exercising or enforcing any right or remedy under this Agreement
will waive any provision of the Agreement. 
Nor will any single or partial exercise by either the Company or
Executive of any right or remedy under this Agreement preclude either of them
from otherwise or further exercising these rights or remedies, or any other
rights or remedies granted by any law or any related document.

(f)    Captions.  The headings in this Agreement are for
convenience only and shall not affect this Agreement’s interpretation.

(g)   References.  Except as otherwise required or indicated by
the context, all references to Sections in this Agreement refer to Sections of
this Agreement.

(h)   Entire Agreement.  This Agreement supersedes all previous and
contemporaneous oral negotiations, commitments, writings, and understandings
between the parties concerning the matters in this Agreement.

(i)    Notices.  All notices and other communications required
or permitted under this Agreement shall be in writing and shall be hand delivered
or sent by registered or certified first class mail, postage prepaid, and shall
be effective upon delivery if hand delivered, or three days after mailing if
mailed to the addresses stated below. 
These addresses may be changed at any time by like notice:

	
  If to the Company:

  	
  Ballistic Recovery Systems, Inc.

  
	
   

  	
  300 Airport Road

  
	
   

  	
  South St. Paul, MN 55075

  
	
   

  	
  Attention: Chairman of the Board

  
	
   

  	
   

  
	
  If to Executive:

  	
  Larry Williams

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
			

 

(j)    Counterparts.  This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement
binding on all parties.  Each party shall
become bound by this Agreement immediately upon signing any counterpart,
independently of the signature of any other party.  In making proof of this Agreement, however,
it will be necessary to produce only one copy signed by the party to be
charged.

Signature
Page Follows

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IN WITNESS WHEREOF, the undersigned Executive and the
Company have executed this Agreement effective as of the Effective Date.

	
  

  	
  Ballistic Recovery Systems, Inc.

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Boris
  Popov

  
	
   

  	
   

  	
  Boris Popov, Chairman of the Compensation

  
	
   

  	
   

  	
  Committee of the Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   /s/ Larry
  Williams

  
	
   

  	
  Larry WilliamsExhibit 10.34

AMENDMENT NUMBER TWO 

TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This AMENDMENT NUMBER TWO TO AMENDED
AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”)
is entered into as of February 16, 2007, by the lenders identified on the
signature pages hereof (the “Lenders”), WELLS FARGO FOOTHILL,
INC., a California corporation (“Agent”; and together with
the Lenders, the “Lender Group”), as the arranger and administrative
agent for the Lenders, VI ACQUISITION CORP.,
a Delaware corporation (“Parent”), and VICORP
RESTAURANTS, INC., a Colorado corporation (“Borrower”), with reference to the following:

WHEREAS, Parent, Borrower and the Lender Group are
parties to that certain Amended and Restated Loan and Security Agreement, dated
as of April 14, 2004 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Loan Agreement”);

WHEREAS, Borrower has requested that the Lender
Group consent to the amendment of the Loan Agreement as set forth herein; and

WHEREAS, subject to the terms and conditions set
forth herein, the Lender Group is willing to make the amendments requested by
Borrower.

NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:

1.     Defined Terms. 
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement, as amended hereby.

2.     Amendments to Loan Agreement.

(a)           Section 1.1 of the Loan
Agreement is hereby amended by amending and restating the following definitions
in their entirety as follows:

““Adjusted
EBITDA” means, as of any date of determination, the EBITDA of Parent and
its Subsidiaries adjusted by adding back to EBITDA the amounts corresponding to
the items set forth on Schedule A-1(a), and by subtracting from EBITDA
the amounts corresponding to the items set forth on Schedule A-1(c), any
modifications to categories on such schedules requiring the prior review of and
approval by Agent; provided  however (a) the Adjusted EBITDA for
the 13 Fiscal Month period ending March 18, 2004 shall be $41,438,000, (b) the
Adjusted EBITDA for each of the 13 Fiscal Months 

 

ending March 18, 2004 shall
be the amounts set forth on Schedule A-1(b), and (c) all settlement fees
and costs, attorneys’ and other professional fees and costs, and any other
costs in connection with litigation against the Borrower by Michelle Coleman, Barbara
Hodges, and Janice Faso, not to exceed $3,000,000, may be added back to EBITDA
to the extent deducted in the calculation of EBITDA.”

““Borrowing
Base” means, as of any date of determination, the result of:

(a) the result of

(y)
[1.8] times Parent’s Adjusted
EBITDA for the most recently completed 13 Fiscal Month period ending as of the
date of determination, minus

(z) the outstanding principal balance of the Term Loan, less

(b)
the sum of the aggregate amount of reserves, if any, established by Agent under
Section 2.1(b).”

““Fixed
Charge Coverage Ratio” means, with respect to Parent and its Subsidiaries
for any period, the ratio of (a) Adjusted EBITDA for such period minus
non-financed Maintenance Capital Expenditures incurred during such period, to (b)
Fixed Charges for such period.  For
purposes of this definition and calculation, “Fixed Charges” shall exclude cash
interest expense and cash principal payments on Deemed Financing Liabilities.

““Leverage
Ratio” means, at any date of determination, the ratio of (a) the
outstanding principal amount of Total Debt at such date, to (b) Adjusted EBITDA
for the most recently completed four-fiscal quarter period ended on or prior to
the date of determination.”

““Maximum
Revolver Amount” means $35,000,000.”

(b)                           Section
1.1 of the Loan Agreement is hereby amended by amending and restating the
pricing grids in the definitions of “Base Rate Margins,” “Letter of Credit Fee,”
and “LIBOR Rate Margin” and by substituting the following grids therefore,
respectively:

(i)            Base Rate Margin Grid:

	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Base Rate Margin

  
	
  I

  	
   

  	
  equal to or greater than 4.0:1.0

  	
   

  	
  1.00 percentage
  points

  

 

 2 
 

 

	
  II

  	
   

  	
  less than 4.0:1.0 and equal to or greater than
  3.5:1.0

  	
   

  	
  0.75 percentage
  points

  
	
  III

  	
   

  	
  less than 3.5:1.0 and equal to or greater than
  3.0:1.0

  	
   

  	
  0.50 percentage
  points

  
	
  IV

  	
   

  	
  less than 3.0:1.0

  	
   

  	
  0.25 percentage
  points

  

 

(ii)           Letter of Credit Fee Grid:

	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  Letter of Credit Fee

  
	
  I

  	
   

  	
  equal to or greater than 4.0:1.0

  	
   

  	
  3.00 percentage
  points

  
	
  II

  	
   

  	
  less than 4.0:1.0 and equal to or greater than
  3.5:1.0

  	
   

  	
  2.75 percentage
  points

  
	
  III

  	
   

  	
  less than 3.5:1.0 and equal to or greater than
  3.0:1.0

  	
   

  	
  2.50 percentage
  points

  
	
  IV

  	
   

  	
  less than 3.0:1.0

  	
   

  	
  2.25 percentage
  points

  

 

(iii)          LIBOR Rate Margin Grid:

	
  Level

  	
   

  	
  Leverage Ratio

  	
   

  	
  LIBOR Rate Margin

  
	
  I

  	
   

  	
  equal to or greater than 4.0:1.0

  	
   

  	
  3.00 percentage
  points

  
	
  II

  	
   

  	
  less than 4.0:1.0 and equal to or greater than
  3.5:1.0

  	
   

  	
  2.75 percentage
  points

  
	
  III

  	
   

  	
  less than 3.5:1.0 and equal to or greater than
  3.0:1.0

  	
   

  	
  2.50 percentage
  points

  
	
  IV

  	
   

  	
  less than 3.0:1.0

  	
   

  	
  2.25 percentage
  points

  

(c)           Section 1.1 of the Loan
Agreement is hereby amended by adding the following definitions:

““Deeming
Financing Liabilities” shall be deemed financing liabilities under GAAP
with respect to long-term real property lease obligations, which 

 3 
 

 

prior to the Restatement
would have been treated as operating lease obligations or capitalized lease
obligations.”

““Restatement” means
the restatement of Borrower’s financial statements and related disclosures for
periods spanning from Borrower’s fiscal 2000 through fiscal 2004 relating to
certain operating lease issues and their application under GAAP as disclosed in
Borrower’s form 10-K/A for its fiscal year ended October 28, 2004, as filed
with the Securities and Exchange Commission on May 18, 2005.”

(d)           Section 1.1 of the Loan
Agreement is hereby amended by amending the definition of Indebtedness to
delete the period at the end of such definition and inserting the following in
lieu thereof:

“;
provided, however, that Indebtedness shall specifically exclude Deemed
Financing Liabilities.”

(e)           Section 7.18 of the Loan
Agreement is hereby amended by amending and restating subsection (a)(i) thereof
in its entirety as follows:

“(i)          Minimum Adjusted EBITDA.  Adjusted EBITDA, measured on each fiscal
quarter-end basis, for the then most recently completed thirteen Fiscal Month
period, of at  least $28,000,000.”

(f)            Section 7.18 of the Loan
Agreement is hereby amended by amending and restating subsection (a)(ii)
thereof in its entirety as follows:

“(ii)         Fixed
Charge Coverage Ratio.  A Fixed Charge Coverage Ratio, measured on a
fiscal quarter-end basis, of at least the required amount set forth in the
following table for the applicable period set forth opposite thereto:

	
  Applicable Ratio

  	
   

  	
  Applicable Period

  
	
  1.05:1.0

  	
   

  	
  For the four
  fiscal quarters ending January 25, 2007

  
	
  1.05:1.0

  	
   

  	
  For the four
  fiscal quarters ending April 19, 2007

  
	
  1.05:1.0

  	
   

  	
  For the four
  fiscal quarters ending July 12, 2007

  
	
  1.00:1.0

  	
   

  	
  For the four
  fiscal quarters ending November 1, 2007

  

 

 4 
 

 

	
  1.05:1.0

  	
   

  	
  For each of the
  four fiscal quarters ended thereafter”

  

 

(g)           A Schedule A-1(c) is added to
the Loan Agreement as follows:

“Schedule A-1(c)

POST-CLOSING ADJUSTMENTS TO TTM EBITDA

Without
duplication and to the extent included in the calculation of EBITDA:

(i)                                     Cash rental payments associated with leases
that are currently treated as Deferred Financing Liabilities that either were
treated as operating leases prior to the Restatement or would be treated as
operating leases in the absence of the Restatement.”

(h)           Schedule C-1 of the Loan
Agreement is hereby amended by deleting the table therein and replacing it with
the following:

	
  Lender

  	
   

  	
  Revolver

  Commitment

  	
   

  	
  Term Loan

  Commitment

  	
   

  	
  Total

  Commitment

  	
   

  
	
  Wells
  Fargo Foothill, Inc.

  	
   

  	
  $

  	
  29,166,000

  	
   

  	
  $

  	
  10,000,000

  	
   

  	
  $

  	
  39,166,000

  	
   

  
	
  GE
  Capital Franchise Finance Corporation

  	
   

  	
  $

  	
  5,834,000

  	
   

  	
  $

  	
  5,000,000

  	
   

  	
  $

  	
  10,834,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All
  Lenders

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  $

  	
  15,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

(i)            All
applicable schedules are amended to reflect that Subsidiary Village Inn Pancake
House of Albuquerque, Inc., a New Mexico corporation has been merged with and
into Borrower.

3.     Conditions Precedent to Amendment.  The
satisfaction of each of the following shall constitute conditions precedent to
the effectiveness of this Amendment and each and every provision hereof:

(a)           Agent
shall have received this Amendment, duly executed by the parties hereto, and
the same shall be in full force and effect.

 5 
 

 

(b)           Agent
shall have received a reaffirmation and consent substantially in the form
attached hereto as Exhibit A, duly executed and delivered by each Guarantor.

(c)           The
representations and warranties herein and in the Loan Agreement and the other
Loan Documents shall be true and correct in all material respects on and as of
the date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date).

(d)           After
giving effect to the amendments set forth herein, no Default or Event of Default
shall have occurred and be continuing on the date hereof, nor shall result from
the consummation of the transactions contemplated herein.

(e)           No
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated
herein shall have been issued and remain in force and effect by any
Governmental Authority against Borrower, any Guarantor, Agent, or any Lender.

4.     Release.  Each of Borrower and
Guarantor hereby acknowledges and agrees that: (i) neither it nor any of its
Subsidiaries has any claim or cause of action against Agent or any Lender (or
any of the directors, officers, employees, agents, Affiliates or attorneys of
the foregoing) and (ii) Agent and the Lenders have heretofore properly
performed and satisfied in a timely manner all of their obligations to
Borrower, Guarantor, and all of their Subsidiaries and Affiliates.  Agent and the Lenders wish (and Borrower and
Guarantor agree) to eliminate any possibility that any past conditions, acts,
omissions, events or circumstances would impair or otherwise adversely affect
any of their rights, interests, security and/or remedies.  For and in consideration of the agreements
contained in this Amendment and other good and valuable consideration, Borrower
and Guarantor (the “Releasors”) unconditionally and irrevocably release,
waive and forever discharge Agent and the Lenders, together with their
respective successors, assigns, subsidiaries, Affiliates, agents and attorneys
(collectively, the “Released Parties”), from: (x) any and all
liabilities, obligations, duties, promises or indebtedness of any kind of the
Released Parties to the Releasors or any of them and (y) all claims, offsets,
causes of action, suits or defenses of any kind whatsoever (if any), which the
Releasors or any of them might otherwise have against the Released Parties or
any of them, in either case (x) or (y) on account of any condition, act,
omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind which existed, arose or
occurred at any time from the beginning of the world to the date this Amendment
becomes effective.

5.     Representations and Warranties. 
Borrower represents and warrants to the Lender Group that:

(a)           It has the
requisite power and authority to execute and deliver this Amendment and to
perform its obligations hereunder and under each Loan Document to which it is a
party.  The execution, delivery, and
performance by it of this Amendment and 

 6 
 

 

the
performance by it of each Loan Document to which it is a party (i) have been
duly approved by all necessary action and no other proceedings are necessary to
consummate such transactions; and (ii) are not in contravention of (A) any law,
rule, or regulation, or any order, judgment, decree, writ, injunction, or award
of any arbitrator, court or Governmental Authority binding on it, (B) the terms
of its Governing Documents, or (C) any provision of any material contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected;

(b)           This
Amendment has been duly executed and delivered by Borrower.  This Amendment and each Loan Document to
which it is a party is its legal, valid and binding obligation, enforceable
against it in accordance with its terms, and is in full force and effect;

(c)           No
injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein
has been issued and remains in force by any Governmental Authority against
Borrower, any Guarantor, Agent or any Lender;

(d)           After
giving effect to the amendments set forth herein, no Default or Event of
Default has occurred and is continuing on the date hereof or as of the date on
which the conditions precedent set forth in Section 3 of this Amendment
shall have been satisfied;

(e)           The
representations and warranties herein and in the Loan Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date).

6.     Choice of Law.  The
validity of this Amendment, its construction, interpretation and enforcement,
the rights of the parties hereunder, shall be determined under, governed by,
and construed in accordance with the laws of the State of New York, without
reference to the conflict of laws provisions thereof other than those that would
give effect to the choice of New York law.

7.     Counterpart Execution.  This
Amendment may be executed in any number of counterparts, all of which when
taken together shall constitute one and the same instrument, and any of the
parties hereto may execute this Amendment by signing any such counterpart.  Delivery of an executed counterpart of this
Amendment by telefacsimile or electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Amendment.  Any party delivering an executed counterpart
of this Amendment by telefacsimile or electronic mail also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability,
and binding effect of this Amendment.

8.     Effect on Loan Documents.

 7 
 

 

(a)           The Loan
Agreement, as amended hereby, and each of the other Loan Documents shall be and
remain in full force and effect in accordance with their respective terms and
hereby are ratified and confirmed in all respects.  The execution, delivery, and performance of
this Amendment shall not operate, except as expressly set forth herein, as a
modification or waiver of any right, power, or remedy of Agent or any Lender
under the Loan Agreement or any other Loan Document.  The waivers, consents, and modifications
herein are limited to the specifics hereof, shall not apply with respect to any
facts or occurrences other than those on which the same are based, shall not
excuse future non-compliance with the Loan Documents, shall not operate as a
consent to any further or other matter under the Loan Documents and shall not
be construed as an indication that any future waiver of covenants or any other
provision of the Loan Agreement will be agreed to, it being understood that the
granting or denying of any waiver which may hereafter be requested by Borrower
remains in the sole and absolute discretion of the Lender Group.

(b)           Upon and
after the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import
referring to the Loan Agreement, and each reference in the other Loan Documents
to “the Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as modified and amended hereby.

(c)           To the
extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any terms or conditions of the Loan
Agreement, after giving effect to this Amendment, such terms and conditions are
hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.

(d)           This
Amendment is a Loan Document.

9.     Entire Agreement.  This
Amendment embodies the entire understanding and agreement between the parties
hereto with respect to the subject matter hereof and supersedes any and all
prior or contemporaneous agreements or understandings with respect to the
subject matter hereof, whether express or implied, oral or written.

[signature pages follow]

 

 8 

 

IN
WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.

	
  

  	
   

  	
   

  	
  VI ACQUISITION CORP.,  

  
	
   

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Debra Koenig

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Debra Koenig

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  VICORP RESTAURANTS, INC., 

  
	
   

  	
   

  	
   

  	
  a Colorado corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Anthony Carroll

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Anthony Carroll

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Administrative Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

  
 

 

	
  

  	
   

  	
   

  	
  WELLS FARGO FOOTHILL, INC.,  

  
	
   

  	
   

  	
   

  	
  A California corporation, as Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Fong

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Kevin S. Fong

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

  
 

 

	
  

  	
   

  	
   

  	
  GE CAPITAL FRANCHISE FINANCE CORPORATION, 

  
	
   

  	
   

  	
   

  	
  a Delaware corporation, as a Lender

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Kristine Kinzle

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Authorized Signatory

  

 

  
 

 

	
   Agreed to for purposes of Section 4:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   VI
  ACQUISITION CORP., 

  	
   

  	
   

  	
   

  
	
  a Delaware corporation  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Debra Koenig

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Debra Koenig 

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VILLAGE INN PANCAKE HOUSE OF ALBUQUERQUE, INC.,

  	
   

  	
   

  	
   

  
	
  a New Mexico corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Debra Koenig

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Debra Koenig

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  	
   

  

 

  
 

 

Exhibit A

REAFFIRMATION AND CONSENT

Dated as of February 16, 2007

Reference hereby is made to
that certain Amendment Number Two to Amended and Restated Loan and Security
Agreement, dated as of the date hereof (the “Amendment”), among the
lenders signatory thereto (the “Lenders”), Wells Fargo Foothill,
Inc., a California corporation, as administrative agent for the Lenders (“Agent”),
VI Acquisition Corp., a Delaware corporation (“Parent”), and VICORP
Restaurants, Inc., a Colorado corporation (“Borrower”). 
Capitalized terms used herein shall have the meanings ascribed to them
in that certain Amended and Restated Loan and Security Agreement, dated as of
April 14, 2004 (as amended, restated, supplemented, or otherwise modified from
time to time, the “Loan Agreement”), among Parent, Borrower, Agent, and
the Lenders.  Each of the undersigned
hereby (a) represents and warrants that the execution and delivery of this
Reaffirmation and Consent are within its powers, have been duly authorized by
all necessary action, and are not in contravention of any law, rule, or
regulation applicable to him or it, or any order, judgment, decree, writ,
injunction, or award of any arbitrator, court, or Governmental Authority, or of
the terms of its Governing Documents, as applicable, or of any contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected, (b) consents to the amendment of the Loan Agreement set
forth in the Amendment and any waivers granted therein; (c) acknowledges and
reaffirms all obligations owing by it to the Lender Group under any Loan
Document to which it is a party; (d) agrees that each Loan Document to which it
is a party is and shall remain in full force and effect, and (e) ratifies and
confirms its consent to any previous amendments of the Loan Agreement and any
previous waivers granted with respect to the Loan Agreement.  Although each of the undersigned have been
informed of the matters set forth herein and have acknowledged and agreed to
same, each of the undersigned understands that the Lender Group shall have no
obligation to inform the undersigned of such matters in the future or to seek
the undersigned’s acknowledgement or agreement to future amendments, waivers,
or modifications, and nothing herein shall create such a duty.  EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT IT
HAS EITHER OBTAINED THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO OBTAIN
SUCH ADVICE IN CONNECTION WITH THE TERMS AND PROVISIONS OF THIS REAFFIRMATION
AND CONSENT.

  
 

 

IN WITNESS WHEREOF, the
undersigned have executed this Reaffirmation and Consent as of the date first
set forth above.

	
  

  	
   

  	
   

  	
  VI ACQUISITION CORP.,  

  
	
   

  	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Debra Koenig

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Debra Koenig

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  VILLAGE INN PANCAKE HOUSE OF ALBUQUERQUE, INC.,

  
	
   

  	
   

  	
   

  	
  a New Mexico corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Debra Koenig

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Debra Koenig

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

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