LOAN AGREEMENT

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EXHIBIT 10.6(a)

LOAN AGREEMENT

THIS LOAN AGREEMENT (this "Agreement") is made as of May 19, 2003 (the

"Closing Date"), by and between GE CAPITAL FRANCHISE FINANCE CORPORATION, a

Delaware corporation ("Lender"), and KONA GRILL KANSAS CITY, INC., a Delaware

corporation ("Borrower").

AGREEMENT:

In consideration of the mutual covenants and provisions of this Agreement,

the parties agree as follows:

1. DEFINITIONS. The following terms shall have the following meanings for

all purposes of this Agreement:

"ADA" means the Americans with Disabilities Act of 1990, as such act may

be amended from time to time.

"Affiliate" means any Person which directly or indirectly controls, is

under common control with, or is controlled by any other Person. For purposes of

this definition, "controls", "under common control with" and "controlled by"

means the possession, directly or indirectly, of the power to direct or cause

the direction of the management and policies of such Person, whether through

ownership of voting securities or otherwise.

"Anti-Money Laundering Laws" means all applicable laws, regulations and

government guidance on the prevention and detection of money laundering,

including 18 U.S.C. Sections 1956 and 1957, and the BSA.

"Applicable Regulations" means all applicable statutes, regulations,

rules, ordinances, codes, licenses, permits, orders and approvals of each

Governmental Authority having jurisdiction over the Premises, including, without

limitation, all health, building, fire, safety and other codes, ordinances and

requirements, all applicable standards of the National Board of Fire

Underwriters and the ADA and all policies or rules of common law, in each case,

as amended, and any judicial or administrative interpretation thereof, including

any judicial order, consent, decree or judgment applicable to any of the

Borrower Parties.

"Borrower Parties" means, collectively, Borrower and any guarantors of the

Loan (including, in each case, any predecessors-in-interest).

"BSA" means the Bank Secrecy Act (31 U.S.C. Sections 5311 et. seq.), and

its implementing regulations, Title 31 Part 103 of the U.S. Code of Federal

Regulations.

"Business Day" means any day on which Lender is open for business other

than a Saturday, Sunday or a legal holiday, ending at 5:00 P.M. Phoenix, Arizona

time.

"Change of Control" means a change in control of any of the Borrower

Parties, including, without limitation, a change in control resulting from

direct or indirect transfers of voting stock or partnership, membership or other

ownership interests, whether in one or a series of transactions. For purposes of

this definition, "control" means the possession, directly or indirectly, of the

power to direct or cause the direction of the management and policies of any of

the Borrower Parties, as applicable, and a Change of Control will occur if any

of the following occur: (i) any merger or consolidation by any of the Borrower

Parties, as applicable, with or into any other entity; or (ii) if any "Person"

as defined in Section 3(a)(9) of the Securities and Exchange Act of 1934, as

amended (the "Exchange Act"), and as used in Section 13(d) and 14(d) thereof,

including a "group" as defined in Section 13(d) of the Exchange Act, who,

subsequent to the Closing, becomes the "beneficial owner" (as defined in Rule

13d-3 under the Exchange Act), of securities of any of the Borrower Parties, as

applicable, representing 50% or more of the combined voting power of Borrower's

then outstanding securities (other than indirectly as a result of the redemption

by any of the Borrower Parties, as applicable, of its securities).

"Closing" means the disbursement of the Loan Amount by Title Company as

contemplated by this Agreement.

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"Code" means Title 11 of the United States Code, 11 U.S.C. Sec. 101 et

seq., as amended.

"Default Rate" has the meaning set forth in the Note.

"Entity" means any entity that is not a natural person.

"Environmental Condition" means any condition with respect to soil,

surface waters, groundwaters, land, stream sediments, surface or subsurface

strata, ambient air and any environmental medium comprising or surrounding the

Premises, whether or not yet discovered, which would reasonably be expected to

or does result in any damage, loss, cost, expense, claim, demand, order or

liability to or against any of the Borrower Parties or Lender by any third party

(including, without limitation, any Governmental Authority), including, without

limitation, any condition resulting from the operation of business at the

Premises and/or the operation of the business of any other property owner or

operator in the vicinity of the Premises and/or any activity or operation

formerly conducted by any person or entity on or off the Premises.

"Environmental Indemnity Agreement" means the environmental indemnity

agreement dated as of the date of this Agreement executed by Borrower for the

benefit of the Indemnified Parties and such other parties as are identified in

such agreement with respect to the Premises, as the same may be amended from

time to time.

"Environmental Insurer" means American International Specialty Lines

Insurance Company, or such other environmental insurance company as Lender may

select, and its successors and assigns.

"Environmental Laws" means any present and future federal, state and local

laws, statutes, ordinances, rules, regulations, orders, injunctions and decrees

of Governmental Authorities and common law, relating to Hazardous Materials

and/or the protection of human health or the environment by reason of a Release

or a Threatened Release of Hazardous Materials or relating to liability for or

costs of Remediation or prevention of Releases. "Environmental Laws" includes,

but is not limited to, the following statutes, as amended, any successor

thereto, and any regulations, rulings, orders or decrees promulgated pursuant

thereto, and any state or local statutes, ordinances, rules, regulations,

orders, injunctions and decrees of Governmental Authorities: the Comprehensive

Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601

et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C.

Sections 11001 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.

Sections 5101 et seq.; the Resource Conservation and Recovery Act (including but

not limited to Subtitle I relating to underground storage tank systems), 42

U.S.C. Sections 6901 et seq.; the Clean Water Act, 33 U.S.C. Sections 1251 et

seq.; the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; the Toxic Substances

Control Act, 15 U.S.C. Sections 2601 et seq.; the Safe Drinking Water Act, 42

U.S.C. Sections 7401 et seq.; the Occupational Safety and Health Act, 29 U.S.C.

Section 651 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7

U.S.C. Sections 136 et seq.; the Endangered Species Act, 16 U.S.C. Sections 1531

et seq. and the National Environmental Policy Act, 42 U.S.C. Sections 4321 et

seq. "Environmental Laws" also includes, but is not limited to, any present and

future federal, state and local laws, statutes, ordinances, rules, regulations,

orders, injunctions and decrees of Governmental Authorities and common law:

conditioning transfer of property upon a negative declaration or other approval

of a Governmental Authority of the environmental condition of the property;

requiring notification or disclosure of Releases or other environmental

condition of the Premises to any Governmental Authority or other person or

entity, whether or not in connection with transfer of title to or interest in

property; imposing conditions or requirements relating to Hazardous Materials in

connection with permits or other authorizations required by Governmental

Authorities; relating to the handling and disposal of Hazardous Materials;

relating to nuisance, trespass or other causes of action related to Hazardous

Materials; and relating to wrongful death, personal injury, or property or other

damage in connection with the physical condition or use of the Premises by

reason of the presence of Hazardous Materials in, on, under or above the

Premises.

"Environmental Liens" has the meaning set forth in Section 5.K(9).

"Environmental Policy" means the environmental insurance policy issued by

Environmental Insurer to Lender with respect to the Premises, which

Environmental Policy shall be in form and substance satisfactory to Lender in

its sole discretion.

"Event of Default" has the meaning set forth in Section 9.

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"FCCR Amount" has the meaning set forth in Section 9.A(7).

"Fee" means an underwriting, site assessment, valuation, processing and

commitment fee equal to 1% of the Loan Amount.

"Fixed Charge Coverage Ratio" has the meaning set forth in Section 6.J.

"GAAP" means generally accepted accounting principles consistently

applied.

"Governmental Authority" means any governmental authority, agency,

department, commission, bureau, board, instrumentality, court or

quasi-governmental authority having jurisdiction or supervisory or regulatory

authority over the Premises or any of the Borrower Parties.

"Guaranty" means the unconditional guaranty of payment and performance

dated as of the date of this Agreement executed by Michael McDermott for the

benefit of Lender with respect to the Loan.

"Hazardous Materials" means (a) any toxic substance or hazardous waste,

substance, solid waste or related material, or any pollutant or contaminant; (b)

radon gas, asbestos in any form which is or could become friable, urea

formaldehyde foam insulation, transformers or other equipment containing

dielectric fluid having levels of polychlorinated biphenyls in excess of

applicable standards established by any Governmental Authority, any petroleum

product or additive, any petroleum-based substances or any similar terms

described or defined in any Environmental Laws applicable to or regulating below

or above ground tanks and associated piping systems used in connection with the

storage, dispensing and general use of petroleum and petroleum-based substances,

or any Toxic Mold; (c) any substance, gas, material or chemical which is now or

hereafter defined as or included in the definition of "hazardous substances,"

"toxic substances," "hazardous materials," "hazardous wastes," "regulated

substances" or words of similar import under any Environmental Laws; and (d) any

other chemical, material, gas or substance the exposure to or release of which

is prohibited, limited or regulated by any Governmental Authority that asserts

or may assert jurisdiction over the Premises or the operations or activity at

the Premises, or any chemical, material, gas or substance that does or is

reasonably likely to pose a hazard to the health and/or safety of the occupants

of the Premises or the owners and/or occupants of property adjacent to or

surrounding the Premises.

"Indemnified Parties" means Lender, Environmental Insurer, the trustees

under the Mortgage, if applicable, and any person or entity who is or will have

been involved in the origination of the Loan, any person or entity who is or

will have been involved in the servicing of the Loan, any person or entity in

whose name the encumbrance created by the Mortgage is or will have been

recorded, persons and entities who may hold or acquire or will have held a full

or partial interest in the Loan (including, but not limited to, investors or

prospective investors in any Securitization, Participation or Transfer, as well

as custodians, trustees and other fiduciaries who hold or have held a full or

partial interest in the Loan for the benefits of third parties), as well as the

respective directors, officers, shareholders, partners, members, employees,

lenders, agents, servants, representatives, contractors, subcontractors,

affiliates, subsidiaries, participants, successors and assigns of any and all of

the foregoing (including, but not limited to, any other person or entity who

holds or acquires or will have held a participation or other full or partial

interest in the Loan or the Premises, whether during the term of the Loan or as

a part of or following a foreclosure of the Loan and including, but not limited

to, any successors by merger, consolidation or acquisition of all or a

substantial portion of Lender's assets and business).

"Indemnity Agreements" means all indemnity agreements executed for the

benefit of any of the Borrower Parties, any current lessee or occupant or any

prior owner, lessee or occupant of the Premises in connection with Hazardous

Materials, including, without limitation, the right to receive payments under

such indemnity agreements.

"Lease Estoppel Certificate and Consent" has the meaning set forth in

Section 4.H.

"Lender Entities" means, collectively, Lender (including any

predecessor-in-interest to Lender) and any Affiliate of Lender (including any

Affiliate of any predecessor-in-interest to Lender).

"Loan" means the loan for the Premises, described in Section 2.

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"Loan Amount" means $993,544.00 or 50% of acceptable documented costs,

whichever is less.

"Loan Documents" means, collectively, this Agreement, the Note, the

Mortgage, the Environmental Indemnity Agreement, the Subordination Agreement,

the UCC-1 Financing Statements, the Guaranty and all other documents,

instruments and agreements executed in connection therewith or contemplated

thereby, as the same may be amended from time to time.

"Loan Pool" means:

(i) in the context of a Securitization, any pool or group of loans

that are a part of such Securitization;

(ii) in the context of a Transfer, all loans which are sold,

transferred or assigned to the same transferee; and

(iii) in the context of a Participation, all loans as to which

participating interests are granted to the same participant.

"Material Adverse Effect" means a material adverse effect on (i) the

Premises, including, without limitation, the operation of the Premises as a

Permitted Concept, or (ii) Borrower's ability to perform its obligations under

the Loan Documents.

"Mortgage" means the deed of trust or mortgage dated as of the date of

this Agreement executed by Borrower for the benefit of Lender with respect to

the Premises.

"Note" means the promissory note dated as of the date of this Agreement in

the Loan Amount evidencing the Loan, as the same may be amended, restated and/or

substituted from time to time, including, without limitation, as a result of the

payment of the FCCR Amount pursuant to Section 9.

"Obligations" has the meaning set forth in the Mortgage.

"OFAC Laws and Regulations" means Executive Order 13224 issued by the

President of the United States of America, the Terrorism Sanctions Regulations

(Title 31 Part 595 of the U.S. Code of Federal Regulations), the Terrorism List

Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal

Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title

31 Part 597 of the U.S. Code of Federal Regulations), and the Cuban Assets

Control Regulations (Title 31 Part 515 of the U.S. Code of Federal Regulations),

and all other present and future federal, state and local laws, ordinances,

regulations, policies, lists (including, without limitation, the Specially

Designated Nationals and Blocked Persons List) and any other requirements of any

Governmental Authority (including, without limitation, the United States

Department of the Treasury Office of Foreign Assets Control) addressing,

relating to, or attempting to eliminate, terrorist acts and acts of war, each as

hereafter supplemented, amended or modified from time to time, and the present

and future rules, regulations and guidance documents promulgated under any of

the foregoing, or under similar laws, ordinances, regulations, policies or

requirements of other states or localities.

"Other Agreements" means, collectively, all agreements and instruments

between, among or by (1) any of the Borrower Parties and/or any Affiliate of any

of the Borrower Parties (including any Affiliate of any predecessor-in-interest

to any of the Borrower Parties), and, or for the benefit of, (2) any of the

Lender Entities, including, without limitation, promissory notes and guaranties;

provided, however, the term "Other Agreements" shall not include the agreements

and instruments defined as the Loan Documents.

"Participation" means one or more grants by Lender or any of the other

Lender Entities to a third party of a participating interest in notes evidencing

obligations to repay secured or unsecured loans owned by Lender or any of the

other Lender Entities or any or all servicing rights with respect thereto.

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"Permitted Amounts" means, with respect to any given level of Hazardous

Materials, that level or quantity of Hazardous Materials in any form or

combination of forms the presence, use, storage, release or handling of which

does not constitute a violation of any Environmental Laws and is customarily

employed in the ordinary course of, or associated with, similar businesses

located in the state in which the Premises is located.

"Permitted Concept" means a Kona Grill restaurant or such other nationally

or regionally recognized restaurant concept as Lender may approve, which

approval shall not be unreasonably withheld.

"Permitted Exceptions" means those recorded easements, restrictions, liens

and encumbrances set forth as exceptions in the title insurance policy issued by

Title Company to Lender and approved by Lender in its sole discretion in

connection with the closing of the Loan.

"Permitted Lease" means, the lease relating to the Premises and all

modifications, amendments and supplements thereto disclosed in the Lease

Estoppel Certificate and Consent delivered with respect thereto, and all

modifications, amendments and supplements consented to by Lender pursuant to the

terms of the Mortgage.

"Person" means any individual, corporation, partnership, limited liability

company, trust, unincorporated organization, Governmental Authority or any other

form of entity.

"Personal Property" has the meaning set forth in the Mortgage.

"Premises" means the parcel or parcels of real estate described on Exhibit

A attached hereto, together with all rights, privileges and appurtenances

associated therewith and all buildings, fixtures and other improvements now or

hereafter located thereon (whether or not affixed to such real estate) and the

Personal Property.

"Questionnaire" means the environmental questionnaire completed on behalf

of the Borrower Parties with respect to the Premises and submitted to

Environmental Insurer in connection with the issuance of the Environmental

Policy.

"Related Premises" means those properties (other than the Premises) which

are the subject of mortgage loans from any of the Lender Entities to any of the

Borrower Parties.

"Release" means any presence, release, deposit, discharge, emission,

leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,

escaping, dumping, disposing or other movement of Hazardous Materials.

"Remediation" means any response, remedial, removal, or corrective action,

any activity to clean up, detoxify, decontaminate, contain or otherwise

remediate any Hazardous Materials required by any Environmental Law or any

Governmental Authority, any actions to prevent, cure or mitigate any Release,

any action to comply with any Environmental Laws or with any permits issued

pursuant thereto, any inspection, investigation, study, monitoring, assessment,

audit, sampling and testing, laboratory or other analysis, or any evaluation

relating to any Hazardous Materials, including, without limitation, all acts

necessary to clean and disinfect any portions of the Premises affected by Toxic

Mold and to eliminate the sources of Toxic Mold in or on the Premises,

including, without limitation, providing any necessary moisture and control

systems at the Premises.

"Restoration" has the meaning set forth in the Mortgage.

"Securitization" means one or more sales, dispositions, transfers or

assignments by Lender or any of the other Lender Entities to a special purpose

corporation, trust or other entity identified by Lender or any of the other

Lender Entities of notes evidencing obligations to repay secured or unsecured

loans owned by Lender or any of the other Lender Entities (and, to the extent

applicable, the subsequent sale, transfer or assignment of such notes to another

special purpose corporation, trust or other entity identified by Lender or any

of the other Lender Entities), and the issuance of bonds, certificates, notes or

other instruments evidencing interests in pools of such loans, whether in

connection with a permanent asset securitization or a sale of loans in

anticipation of a permanent asset securitization. Each Securitization shall be

undertaken in accordance with all requirements which may be imposed

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by the investors or the rating agencies involved in each such sale, disposition,

transfer or assignment or which may be imposed by applicable securities, tax or

other laws or regulations.

"Subordination Agreements" means the subordination agreements dated as of

the date of this Agreement executed by Borrower and certain shareholders of

Borrower with respect to the Subordinate Debt.

"Subordinate Debt" means the debt of Borrower to certain shareholders of

Borrower described in the Subordination Agreements.

"Threatened Release" means a substantial likelihood of a Release which

requires action to prevent or mitigate damage to the soil, surface waters,

groundwaters, land, stream sediments, surface or subsurface strata, ambient air

or any other environmental medium comprising or surrounding the Premises which

may result from such Release.

"Title Company" means Lawyers Title Insurance Corporation.

"Toxic Mold" means any toxic mold or fungus of a type which would pose a

risk to human health or the environment or would negatively impact the value of

the Premises.

"Transfer" means one or more sales, transfers or assignments by Lender or

any of the other Lender Entities to a third party of notes evidencing

obligations to repay secured or unsecured loans owned by Lender or any of the

other Lender Entities or any or all servicing rights with respect thereto.

"UCC-1 Financing Statements" means such UCC-1 Financing Statements as

Lender shall file with respect to the transactions contemplated by this

Agreement.

"U.S. Publicly-Traded Entity" is an Entity whose securities are listed on

a national securities exchange or quoted on an automated quotation system in the

U.S. or a wholly-owned subsidiary of such an Entity.

2. TRANSACTION. On the terms and subject to the conditions set forth in

the Loan Documents, Lender shall make the Loan. The Loan will be evidenced by

the Note and secured by the Mortgage. Borrower shall repay the outstanding

principal amount of the Loan together with interest thereon in the manner and in

accordance with the terms and conditions of the Note and the other Loan

Documents. The Loan shall be advanced at the Closing in cash or otherwise

immediately available funds subject to any prorations and adjustments required

by this Agreement.

3. ESCROW AGENT. Borrower and Lender hereby employ Title Company to act as

escrow agent in connection with the transaction described in this Agreement.

Borrower and Lender will deliver to Title Company all documents, pay to Title

Company all sums and do or cause to be done all other things necessary or

required by this Agreement, in the reasonable judgment of Title Company, to

enable Title Company to comply herewith and to enable any title insurance policy

provided for herein to be issued. Title Company shall not cause the transaction

to close unless and until it has received written instructions from Lender and

Borrower to do so. Title Company is authorized to pay, from any funds held by it

for Lender's or Borrower's respective credit all amounts necessary to procure

the delivery of such documents and to pay, on behalf of Lender and Borrower, all

charges and obligations payable by them, respectively. Borrower will pay all

charges payable by it to Title Company. Title Company is authorized, in the

event any conflicting demand is made upon it concerning these instructions or

the escrow, at its election, to hold any documents and/or funds deposited

hereunder until an action shall be brought in a court of competent jurisdiction

to determine the rights of Borrower and Lender or to interplead such documents

and/or funds in an action brought in any such court. Deposit by Title Company of

such documents and funds, after deducting therefrom its charges and its expenses

and attorneys' fees incurred in connection with any such court action, shall

relieve Title Company of all further liability and responsibility for such

documents and funds. Title Company's receipt of this Agreement and opening of an

escrow pursuant to this Agreement shall be deemed to constitute conclusive

evidence of Title Company's agreement to be bound by the terms and conditions of

this Agreement pertaining to Title Company. Disbursement of any funds shall be

made by check, certified check or wire transfer, as directed by Borrower and

Lender. Title Company shall be under no obligation to disburse any funds

represented by check or draft, and no check or draft shall be payment to Title

Company in compliance with any of the requirements

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hereof, until it is advised by the bank in which such check or draft is

deposited that such check or draft has been honored. Title Company is authorized

to act upon any statement furnished by the holder or payee, or a collection

agent for the holder or payee, of any lien on or charge or assessment in

connection with the Premises, concerning the amount of such charge or assessment

or the amount secured by such lien, without liability or responsibility for the

accuracy of such statement. The employment of Title Company as escrow agent

shall not affect any rights of subrogation under the terms of any title

insurance policy issued pursuant to the provisions thereof.

4. CLOSING CONDITIONS. The obligation of Lender to consummate the

transaction contemplated by this Agreement is subject to the fulfillment or

waiver of each of the following conditions:

A. Title Insurance Commitments. Lender shall have received for the

Premises a preliminary title report and irrevocable commitment to insure title

in the amount of the Loan, by means of a mortgagee's ALTA extended coverage

policy of title insurance (or its equivalent, in the event such form is not

issued in the jurisdiction where the Premises is located) issued by Title

Company showing Borrower vested with good and marketable fee or leasehold title,

as the case may be, in the real property comprising the Premises, committing to

insure Lender's first priority lien upon and security interest in such real

property subject only to Permitted Exceptions, and containing such endorsements

as Lender may require.

B. Survey. Lender shall have received a current ALTA survey of the

Premises or its equivalent, the form and substance of which shall be

satisfactory to Lender in its reasonable discretion. Lender shall have obtained

a flood certificate indicating that the location of the Premises is not within

the 100-year flood plain or identified as a special flood hazard area as defined

by the Federal Emergency Management Agency, or if the Premises is in such a

flood plain or special flood hazard area, Borrower shall have provided Lender

with evidence of flood insurance maintained on the Premises in an amount and on

terms and conditions reasonably satisfactory to Lender.

C. Environmental. Lender shall have completed such environmental due

diligence of the Premises as it deems necessary or advisable in its sole

discretion, including, without limitation, receiving an Environmental Policy

with respect to the Premises, and Lender shall have approved the environmental

condition of the Premises in its sole discretion.

D. Compliance With Representations, Warranties and Covenants. All of the

representations and warranties set forth in Section 5 shall be true, correct and

complete as of the Closing Date, and Borrower shall be in compliance with each

of the covenants set forth in Section 6 as of the Closing Date. No event shall

have occurred or condition shall exist or information shall have been disclosed

by Borrower or discovered by Lender which has had or would be reasonably likely

to have a material adverse effect on the Premises, any of the Borrower Parties

or Lender's willingness to consummate the transaction contemplated by this

Agreement, as determined by Lender in its sole and absolute discretion.

E. Proof of Insurance. Borrower shall have delivered to Lender

certificates of insurance and copies of insurance policies showing that all

insurance required by the Loan Documents and providing coverage and limits

satisfactory to Lender are in full force and effect.

F. Legal Opinions. Borrower shall have delivered to Lender such legal

opinions as Lender may reasonably require all in form and substance reasonably

satisfactory to Lender and its counsel.

G. Fee and Closing Costs. Borrower shall have paid the Fee to Lender and

shall have paid all costs of the transactions described in this Agreement,

including, without limitation, the cost of title insurance premiums and all

endorsements required by Lender, survey charges, UCC and litigation search

charges, the attorneys' fees of Borrower, reasonable attorneys' fees and

expenses of Lender, the cost of the environmental due diligence undertaken

pursuant to Section 4.C, including, without limitation, the cost of the

Environmental Policy, Lender's site inspection costs and fees, stamp taxes,

mortgage taxes, transfer fees, escrow, filing and recording fees and UCC filing

and recording fees (including preparation, filing and recording fees for UCC

continuation statements). Borrower shall have also paid all real and personal

property and other applicable taxes and assessments and other charges relating

to the Premises which are due and payable on or prior to the Closing Date as

well as taxes and

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assessments due and payable subsequent to the Closing Date but which Title

Company requires to be paid at Closing as a condition to the issuance of the

title insurance policy described in Section 4.A.

H. Permitted Lease. The Permitted Lease shall be in full force and effect

and Borrower shall be entitled to occupy the Premises. Lender shall have

approved the Permitted Lease in its sole discretion and Borrower shall have

delivered to Lender an estoppel certificate and consent from the Permitted

Lessor, the form and substance of which shall be satisfactory to Lender in its

sole discretion (the "Permitted Lease Estoppel Certificate and Consent").

Borrower shall have provided Lender with a recorded copy (or executed original

in recordable form) of a memorandum of lease for the Premises. If any mortgages

or deeds of trust (or other similar security agreements) encumber fee simple

title to the Premises, the holders of such instruments shall have delivered

nondisturbance agreements to Borrower and Lender with respect to the Permitted

Lease in form and substance acceptable to Lender in its reasonable discretion.

I. Closing Documents. At or prior to the Closing Date, Lender and/or the

Borrower Parties, as may be appropriate, shall have executed and delivered or

shall have caused to be executed and delivered to Lender, or as Lender may

otherwise direct, the Loan Documents and such other documents, payments,

instruments and certificates, as Lender may require in form acceptable to

Lender.

J. Subordination Agreements. Borrower shall have delivered to Lender the

Subordination Agreements which shall be in form and substance acceptable to

lender and which shall subordinate the Subordinate Debt to the Loan.

Upon fulfillment or waiver of all of the above conditions, Lender shall

deposit funds necessary to close this transaction with the Title Company and

this transaction shall close in accordance with the terms and conditions of this

Agreement.

5. REPRESENTATIONS AND WARRANTIES OF BORROWER. The representations and

warranties of Borrower contained in this Section are being made by Borrower as

of the Closing Date to induce Lender to enter into this Agreement and consummate

the transactions contemplated herein and shall survive the Closing. Borrower

represents and warrants to Lender (and Environmental Insurer solely with respect

to Section 5.K) as follows:

A. Financial Information. Borrower has delivered to Lender certain

financial statements and other information concerning the Borrower Parties in

connection with the transaction described in this Agreement (collectively, the

"Financial Information"). The Financial Information is true, correct and

complete in all material respects; there have been no amendments to the

Financial Information since the date such Financial Information was prepared or

delivered to Lender. Borrower understands that Lender is relying upon the

Financial Information and Borrower represents that such reliance is reasonable.

All financial statements included in the Financial Information were prepared in

accordance with GAAP and fairly present as of the date of such financial

statements the financial condition of each individual or entity to which they

pertain. No change has occurred with respect to the financial condition of any

of the Borrower Parties and/or the Premises as reflected in the Financial

Information which has not been disclosed in writing to Lender or has had, or

could reasonably be expected to result in, a Material Adverse Effect.

B. Organization and Authority. Each of the Borrower Parties (other than

individuals), as applicable, is duly organized or formed, validly existing and

in good standing under the laws of its state of incorporation or formation.

Borrower is qualified as a foreign corporation, partnership or limited liability

company, as applicable, to do business in the state where the Premises is

located and each of the Borrower Parties is qualified as a foreign corporation,

partnership or limited liability company, as applicable, to do business in any

other jurisdiction where the failure to be qualified would reasonably be

expected to result in a Material Adverse Effect. All necessary action has been

taken to authorize the execution, delivery and performance by the Borrower

Parties of this Agreement and the other Loan Documents. The person(s) who have

executed this Agreement on behalf of Borrower are duly authorized so to do.

Borrower is not a "foreign corporation", "foreign partnership", "foreign trust",

"foreign estate" or "foreign person" (as those terms are defined by the Internal

Revenue Code of 1986, as amended). Borrower's U.S. Federal Tax Identification

number, Organization Identification number and principal place of business are

correctly set forth on the signature page of this Agreement. None of the

Borrower Parties, and no individual or

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entity owning directly or indirectly any interest in any of the Borrower

Parties, is an individual or entity whose property or interests are subject to

being blocked under any of the OFAC Laws and Regulations or is otherwise in

violation of any of the OFAC Laws and Regulations; provided, however, the

representation contained in this sentence shall not apply to any Person to the

extent such Person's interest is in or through a U.S. Publicly-Traded Entity.

C. Enforceability of Documents. Upon execution by the Borrower Parties,

this Agreement and the other Loan Documents shall constitute the legal, valid

and binding obligations of the Borrower Parties, enforceable against the

Borrower Parties in accordance with their respective terms, except as such

enforceability may be limited by applicable bankruptcy, insolvency, liquidation,

reorganization and other laws affecting the rights of creditors generally and

general principles of equity.

D. Litigation. There are no suits, actions, proceedings or investigations

pending, or to the best of its knowledge, threatened against or involving the

Borrower Parties or the Premises before any arbitrator or Governmental

Authority, except for such suits, actions, proceedings or investigations which,

individually or in the aggregate, have not had, and would not reasonably be

expected to result in, a Material Adverse Effect.

E. Absence of Breaches or Defaults. The Borrower Parties are not, and the

authorization, execution, delivery and performance of this Agreement and the

other Loan Documents will not result, in any breach or default under any other

document, instrument or agreement to which any of the Borrower Parties is a

party or by which any of the Borrower Parties, the Premises or any of the

property of any of the Borrower Parties is subject or bound, except for such

breaches or defaults which, individually or in the aggregate, have not had, and

would not reasonably be expected to result in, a Material Adverse Effect. The

authorization, execution, delivery and performance of this Agreement and the

other Loan Documents will not violate any applicable law, statute, regulation,

rule, ordinance, code, rule or order. The Premises is not subject to any right

of first refusal, right of first offer or option to purchase or lease granted to

a third party.

F. Utilities. Adequate public utilities are available at the Premises to

permit utilization of the Premises as a Permitted Concept and all utility

connection fees and use charges will have been paid in full prior to

delinquency.

G. Zoning; Compliance With Laws. The Premises is in compliance with all

applicable zoning requirements, and the use of the Premises as a Permitted

Concept does not constitute a nonconforming use under applicable zoning

requirements. The Borrower Parties and the Premises are in compliance with all

Applicable Regulations except for such noncompliance, which has not had, and

would not reasonably be expected to result in, a Material Adverse Effect.

H. Area Development; Wetlands. No condemnation or eminent domain

proceedings affecting the Premises have been commenced or, to the best of

Borrower's knowledge, are contemplated. Neither the Premises nor, to the best of

Borrower's knowledge, the real property bordering the Premises are designated by

any Governmental Authority as a wetlands.

I. Licenses and Permits; Access. All required licenses and permits, both

governmental and private, to use and operate the Premises as a Permitted Concept

are in full force and effect, except for such licenses and permits the failure

of which to obtain has not had, and would not reasonably be expected to result

in, a Material Adverse Effect. Adequate rights of access to public roads and

ways are available to the Premises for unrestricted ingress and egress and

otherwise to permit utilization of the Premises for their intended purposes, and

all such public roads and ways have been completed and dedicated to public use.

J. Condition of Premises. The Premises, including the Personal Property,

is in good condition and repair and well-maintained, ordinary wear and tear

excepted, fully equipped and operational, free from structural defects, safe and

properly lighted.

K. Environmental. Except as disclosed in the Questionnaire:

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(1) Neither the Premises nor any of the Borrower Parties are in

violation of, or subject to, any pending or, to Borrower's actual

knowledge, threatened investigation or inquiry by any Governmental

Authority or to any remedial obligations under any Environmental Laws, and

this representation and warranty would continue to be true and correct

following disclosure to the applicable Governmental Authorities of all

relevant facts, conditions and circumstances, if any, pertaining to the

Premises;

(2) All permits, licenses or similar authorizations required to

construct, occupy, operate or use any buildings, improvements, fixtures

and equipment forming a part of the Premises by reason of any

Environmental Laws have been obtained;

(3) No Hazardous Materials have been used, handled, manufactured,

generated, produced, stored, treated, processed, transferred, disposed of

or otherwise Released in, on, under, from or about the Premises, except in

Permitted Amounts;

(4) The Premises does not contain Hazardous Materials, except in

Permitted Amounts;

(5) There is no threat of any Release migrating to the Premises in

excess of Permitted Amounts;

(6) There is no past or present non-compliance with Environmental

Laws, or with permits issued pursuant thereto, in connection with the

Premises;

(7) None of the Borrower Parties has received any written or oral

notice or other communication from any person or entity (including but not

limited to a Governmental Authority) relating to Hazardous Materials or

Remediation thereof in excess of Permitted Amounts, of possible liability

of any person or entity pursuant to any Environmental Law, other

environmental conditions in connection with the Premises, or any actual or

potential administrative or judicial proceedings in connection with any of

the foregoing;

(8) All information known to any of the Borrower Parties or

contained in the files of any of the Borrower Parties relating to any

Env