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<SEC-DOCUMENT>0000950117-03-002064.txt : 20030513
<SEC-HEADER>0000950117-03-002064.hdr.sgml : 20030513
<ACCEPTANCE-DATETIME>20030513162006
ACCESSION NUMBER:		0000950117-03-002064
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20030329
FILED AS OF DATE:		20030513

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ARK RESTAURANTS CORP
		CENTRAL INDEX KEY:			0000779544
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				133156768
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-09453
		FILM NUMBER:		03695830

	BUSINESS ADDRESS:	
		STREET 1:		85 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10003-3019
		BUSINESS PHONE:		2122068800

	MAIL ADDRESS:	
		STREET 1:		85 FIFTH AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10003-3019
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a35294.txt
<DESCRIPTION>ARK RESTAURANTS CORP.
<TEXT>

<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 29, 2003

                         Commission file number 0-14030

                              ARK RESTAURANTS CORP.
             (Exact name of registrant as specified in its charter)

               New York                                        13-3156768
    (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                         Identification No.)

  85 Fifth Avenue, New York, New York                             10003
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code: (212) 206-8800

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes[_]  No [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

           Class                             Outstanding shares at  May 12, 2003
           -----                             -----------------------------------
(Common stock, $.01 par value)                            3,181,299




<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1. Financial Statements

ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                      March 29,     September 28,
                                                                         2003           2002
                                                                      ---------     -------------
                                                                      (unaudited)
<S>                                                                     <C>            <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                            $   591        $   819
   Accounts receivable                                                    2,066          2,000
   Employee receivable (net of reserves of $0 and $45 respectively)         954          1,045
   Inventories                                                            1,952          1,925
   Current portion of long-term receivables                                 137            164
   Prepaid expenses and other current assets                              1,259            779
   Refundable and prepaid income taxes                                    1,264            957
   Deferred income taxes                                                    278            293
                                                                        -------        -------
         Total current assets                                             8,501          7,982

LONG-TERM RECEIVABLES                                                     1,444            904

FIXED ASSETS - At Cost:
   Leasehold improvements                                                33,656         33,542
   Furniture, fixtures and equipment                                     28,518         28,320
   Leasehold improvements in progress                                       292             --
                                                                        -------        -------
                                                                         62,466         61,862
   Less accumulated depreciation and
      amortization                                                       34,572         31,602
                                                                        -------        -------
                                                                         27,894         30,260
INTANGIBLE ASSETS - Less accumulated
   amortization of $3,837 in 2002                                         3,810          3,782
DEFERRED INCOME TAXES                                                     4,270          4,255

OTHER ASSETS                                                                784            777
                                                                        -------        -------

TOTAL ASSETS                                                            $46,703        $47,960
                                                                        =======        =======

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable - trade                                             $ 2,809        $ 3,332
   Accrued expenses and other current
      liabilities                                                         4,747          6,356
   Current maturities of long-term debt                                   8,062          6,284
                                                                        -------        -------
         Total current liabilities                                       15,618         15,972

LONG-TERM DEBT - net of current maturities                                8,711          9,547

OPERATING LEASE DEFERRED CREDIT                                           1,003            995

COMMITMENTS AND CONTINGENCIES                                                --             --

SHAREHOLDERS' EQUITY:
</TABLE>


                                       2




<PAGE>

<TABLE>
<S>                                                                     <C>            <C>
   Common stock, par value $.01 per share -
      authorized, 10,000 shares;
      issued, 5,249 shares                                                   52             52
   Additional paid-in capital                                            14,743         14,743
   Treasury stock, 2,068 shares                                          (8,351)        (8,351)
   Receivables from Employees in respect of
      stock option exercises                                               (706)          (716)
   Retained earnings                                                     15,633         15,718
                                                                        -------        -------

         Total shareholders' equity                                      21,371         21,446
                                                                        -------        -------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $46,703        $47,960
                                                                        =======        =======
</TABLE>

See notes to consolidated condensed financial statements.


                                       3




<PAGE>

ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS(Unaudited)
(In Thousands, Except per share amounts)

<TABLE>
<CAPTION>
                                               13 Weeks Ended          26 Weeks Ended
                                            ---------------------   ---------------------
                                            March 29,   March 30,   March 29,   March 30,
                                               2003        2002        2003        2002
                                            ---------   ---------   ---------   ---------
<S>                                          <C>         <C>         <C>         <C>
TOTAL REVENUES                               $26,555     $26,287     $52,821     $52,213

COST & EXPENSES:

Food & beverage cost of sales                  6,479       6,775      13,077      13,085
Payroll expenses                               9,198       9,147      18,338      17,629
Occupancy expenses                             4,279       4,254       8,700       8,178
Other operating costs and expenses             3,368       3,311       6,979       5,932
General and administrative expenses            1,343       1,535       2,934       2,931
Depreciation and amortization expenses         1,058       1,352       2,205       2,691
Asset impairment                                 667          --         667          --
                                             -------     -------     -------     -------
   Total costs and expenses                   26,392      26,374      52,900      50,446

OPERATING (LOSS) INCOME                          163         (87)        (79)      1,767
                                             -------     -------     -------     -------

OTHER (INCOME) EXPENSE:

Interest expense, net                            122         293         337         615
Other income                                      (8)        (68)       (278)       (159)
                                             -------     -------     -------     -------
   Total other (income) expense                  114         225          59         456
                                             -------     -------     -------     -------

Income before provision
   for income taxes                               49        (312)       (138)      1,311

Provision (benefit) for income taxes              19        (123)        (53)        526
                                             -------     -------     -------     -------

NET INCOME (LOSS)                                 30        (189)        (85)        785

RETAINED EARNINGS, Beginning
   of period                                  15,603      12,463      15,718      11,489
                                             -------     -------     -------     -------

RETAINED EARNINGS, End of period             $15,633     $12,274     $15,633     $12,274
                                             =======     =======     =======     =======

PER SHARE INFORMATION - BASIC & DILUTED:

NET INCOME (LOSS) BASIC                      $   .01       ($.06)      ($.03)    $   .25
                                             =======     =======     =======     =======

NET INCOME (LOSS) DILUTED                    $   .01       ($.06)      ($.03)    $   .25
                                             =======     =======     =======     =======

WEIGHTED AVERAGE NUMBER OF SHARES-BASIC        3,181       3,181       3,181       3,181
                                             =======     =======     =======     =======

WEIGHTED AVERAGE NUMBER OF SHARES-DILUTED      3,188       3,181       3,181       3,199
                                             =======     =======     =======     =======
</TABLE>

See notes to consolidated condensed financial statements.


                                       4




<PAGE>

ARK RESTAURANTS CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                               26 Weeks Ended
                                                            ---------------------
                                                            March 29,   March 30,
                                                               2003       2002
                                                            ---------   ---------
<S>                                                          <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income (loss)                                         $   (85)    $   785
   Adjustments to reconcile net income (loss) to net
      cash (used in) provided by operating activities:

      Depreciation and amortization of fixed assets            2,205       2,478
      Amortization of intangibles                                 --         213
      Asset impairment                                           667          --
      Operating lease deferred credit                              9          --
      Deferred income taxes                                       --         199
      Reduction in allowance on long-term receivables           (585)        (46)

   Changes in assets and liabilities:
      Accounts receivable                                         35        (286)
      Inventories                                                (27)        127
      Prepaid expenses and other current assets                 (480)       (137)
      Refundable and prepaid income taxes                       (307)        141
      Other assets                                               (36)         (2)
      Accounts payable - trade                                  (523)     (1,187)
      Accrued expenses and other current liabilities          (1,609)     (1,404)
                                                             -------     -------

      Net cash (used in) provided by operating activities       (736)        881
                                                             -------     -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to fixed assets                                    (506)       (120)
   Payments received on long-term receivables                     72         150
                                                             -------     -------

      Net cash used in  by investing activities                 (434)         30
                                                             -------     -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of long-term debt                                  1,778       1,500
   Principal payment on long-term debt                          (836)     (2,375)
   Exercise of stock options                                      --          16
                                                             -------     -------

      Net cash (used in) financing activities                    942        (859)
                                                             -------     -------

NET (DECREASE) INCREASE  IN CASH AND CASH EQUIVALENTS           (228)         52

CASH AND CASH EQUIVALENTS, beginning of period                   819          --
                                                             -------     -------

CASH AND CASH EQUIVALENTS, end of period                     $   591     $    52
                                                             =======     =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the period for:
   Interest                                                  $   428     $   681
                                                             =======     =======

   Income taxes                                              $   125     $   187
                                                             =======     =======
</TABLE>

See notes to consolidated condensed financial statements.


                                       5




<PAGE>

ARK RESTAURANTS CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
March 29, 2003
(Unaudited)

1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

          The consolidated condensed financial statements have been prepared by
Ark Restaurants Corp. (the "Company"), without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position at March 29, 2003 and results
of operations and cash flows for the 13 and 26 week periods ended March 29, 2003
and March 30, 2002 have been made.

          Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These condensed financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's annual report on Form 10-K for the year
ended September 28, 2002. The results of operations for the periods ended March
29, 2003 are not necessarily indicative of the operating results for the full
year.

          Certain reclassifications have been made to the 2002 financial
statements to conform to the 2003 presentation.

2. IMPACT OF NEW ACCOUNTING STANDARDS

          "Goodwill and other Intangible Assets" ("SFAS 142"). As of September
29, 2002, the Company adopted the provisions for SFAS No. 142. SFAS No. 142
requires that goodwill and intangible assets with indefinite lives no longer be
amortized, but instead tested for impairment at least annually and written down
with a charge to operations when the carrying amount exceeds the estimated fair
value. Prior to the adoption of SFAS No. 142, the Company amortized the
goodwill. The amount of such amortized goodwill was $3,448,000 as of September
28, 2002. In accordance with SFAS No. 142 the Company discontinued the
amortization of goodwill effective September 29, 2002. Had the provisions of
SFAS No. 142 been in effect during the three months ended March 30, 2002, a
reduction of amortization expense in pretax income of $123,000 or an increase of
$0.04 per share for the second quarter of fiscal year 2002 would have been
recorded. Had the provisions been in effect during the six months ended March
30, 2002, a reduction of amortization expense in pretax income of $213,000 or an
increase of $0.07 per share would have been recorded. The Company has completed
its impairment analysis as of the transition date to SFAS No. 142 and has
determined that there is no impairment.

          SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, supersedes existing accounting literature dealing with impairment and
disposal of long-lived assets, including discontinued operations. It addresses
financial accounting and reporting for the impairment of long-lived assets and
for long-lived assets to be disposed of and expands current reporting for
discontinued operations to include disposals of a "component" of an entity that
has been disposed of or is classified as held for sale. The Company adopted this
standard in the first quarter of fiscal year 2003. The adoption of this standard
did not have a material impact on the Company's financial position or results of
operations; however, the Company will be required to separately disclose the
results of closed restaurants as discontinued operations in the future.

          SFAS No. 146, Accounting for Costs Associated with Exit or Disposal
Activities, was issued in July 2002. SFAS No. 146 replaces current accounting
literature and requires the recognition of costs associated with exit or
disposal activities when they are incurred rather than at the date of commitment
to an exit or disposal plan. The provisions of the Statement are effective for
exit or disposal activities that are initiated after December 31, 2002. The
adoption of this statement did not have a material effect on the Company's
financial statements.

          FIN No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, was issued
in November 2002. This interpretation elaborates on the disclosures to be made
by a guarantor in its interim and annual financial statements about its
obligations under certain guarantees that it has issued. It also clarifies that
a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and initial measurement provisions of FIN 45
are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, while disclosure requirements are effective for interim or
annual periods ending after December 15, 2002. The Company adopted this standard
in the first quarter of fiscal year 2003. The adoption of this standard did not
have a material impact on the Company's financial position or results of
operations.

          SFAS 148, Accounting for Stock-Based Compensation - Transition and
Disclosure was issued in December 2002. This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," providing alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. SFAS No. 148 also amends the


                                       6




<PAGE>

disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The Company has adopted the disclosure-only provisions of SFAS No. 123.
Therefore, SFAS No. 148 will not affect the Company's results of operations or
financial position. The Company has applied the disclosure provisions of SFAS
No. 148 as of March 29, 2003, as required. (see Note 9)

          FIN No. 46, Consolidation of Variable Interest Entities, was issued on
January 17, 2003. Such Interpretation addresses consolidation of entities that
are not controllable through voting interests or in which the equity investors
do not bear the residual economic risks and rewards. These entities have been
commonly referred to as special purpose entities. The Interpretation provides
guidance related to identifying variable interest entities and determining
wheter such entities should be consolidated. It also provides guidance related
to the initial and subsequent measurement of assets, liabilities and
noncontrolling interests in newly consolidated variable interest entities and
requires disclosure for both the primary beneficiary of a variable interest
entity and other beneficiaries of the entity. The Company believes the adoption
of this standard will not have a material effect on its financial statements.

3. EFFECTS OF THE SEPTEMBER 11th TERRORIST ATTACKS, GENERAL DECLINE IN TOURISM

          The terrorist attacks on the World Trade Center in New York and the
Pentagon in Washington D.C. on September 11, 2001 have had a material adverse
effect on the Company's revenue. As a result of the attacks, one Company
restaurant, the Grill Room, suffered some damage, and was closed from September
11th, 2001 until December 2002, when the restaurant was reopened. The restaurant
is located in 2 World Financial Center, an office building adjacent to the World
Trade Center site. The Company recorded $163,000 and $325,000 as a reduction of
other operating costs and expenses for partial insurance recoveries of certain
out-of-pocket costs and business interruption losses incurred for the 13-week
periods ended March 29, 2003 and March 30, 2002, respectively.

          The Company believes that its restaurant and food court operations at
Desert Passage which adjoins the Aladdin Casino Resort in Las Vegas, Nevada (the
"Aladdin") were significantly impaired by the events of September 11th. The
restaurant and food court operations experienced severe sales declines in the
aftermath of September 11th and the Aladdin declared bankruptcy on September 28,
2001. The Company determined that an impairment analysis under SFAS No. 121
needed to be performed.

          Based upon the sum of the future undiscounted cash flows related to
the Company's long-lived assets at the Aladdin, the Company determined that
impairment had occurred. To estimate the fair value of such long-lived assets,
for determining the impairment amount, the Company used the expected present
value of the future cash flows. The Company projected continuing negative
operating cash flow for the foreseeable future with no value for subletting or
assigning the lease for the premises. The Company believed that the lease will
be abandoned or terminated. Therefore, the Company determined that there was no
value to such long-lived assets. The Company had an investment of $8,445,000 in
leasehold improvements, and furniture, fixtures and equipment. The Company
believes that these assets would have nominal, if any, value upon disposal. In
addition, the estimated future payments under the lease for kitchen equipment at
the location totaled $1,600,000. The Company recorded in the fiscal year ended
September 29, 2001 an impairment charge of $8,445,000 for the net book value of
the assets and recorded an additional $1,600,000 of expense and liability for
the future lease payments of which $1,064,000 remains in accrued expenses and
other current liabilities at March 29, 2003. In September 2002, the Company
abandoned its restaurant and food court operations at the Aladdin.

          In October 2002, the Company sold certain furniture, fixtures and
equipment related to the Aladdin operations for $240,000. The Company recognized
a gain of $240,000 in fiscal 2003 with respect to the transaction (included in
other income), because all of the fixed assets for the Aladdin operations had
been written off during the year ended September 28, 2002.

          The Company believes that its restaurant, Lutece, located in New York
City has been impaired by the events of September 11th and the continued
weakeness in the economy. Based upon the sum of the future undiscounted cash
flows related to the Company's long-lived fixed assets at Lutece, the Company
determined that impairment had occurred. To estimate the fair value of such
long-lived fixed assets, for determing the impairment amount, the Company used
the expected present value of the future cash flows. The Company projected
continuing negative operating cash flow for the foreseeable future with no value
for subletting or assigning the lease for the premises. As a result, the Company
determined that there was no value to the long-lived fixed assets. The Company
had an investment of $667,000 in leasehold improvements, and furniture fixtures
and equipment. The Company believes that these assets would have nominal value
upon disposal. The Company recorded an impairment charge of $667,000 during the
fiscal quarter ended March 29, 2003. The Company continues to operate this
restaurant and has no immediate intention to discontinue the restaurant's
operation.

4. NOTE RECEIVABLE

          The Company had previously established a reserve of $585,000 to
account for the probable loss resulting from its inability to collect a note
receivable in connection with the sale of a restaurant in October 1997. A review
of the performance of this note and the security underlying it has indicated
that the loss in no longer probable and , accordingly, the note no longer
requires a reserve.


                                       7




<PAGE>

Consequently, the Company eliminated this reserve and included the amount in
revenue, in the other income, for the quarter ended March 29, 2003.

5. LONG-TERM DEBT

          As of March 29, 2003 the Company's Revolving Credit and Term Loan
Facility (the "Facility") with its main bank (Bank Leumi USA), as amended in
November 2001, December 2001, April 2002 and February 2003 included a
$17,000,000 credit line to finance the development and construction of new
restaurants and for working capital purposes at the Company's existing
restaurants. The credit line is reduced to $11,500,000 on June 29, 2003 and then
$8,500,000 on September 29, 2003 until the maturity date of February 12, 2005.
The Company had borrowings of $16,008,000 outstanding on this facility at March
29, 2003. The loan bears interest at 1/2% above the bank's prime rate and at
March 29, 2003 the interest rate on outstanding loans was 4.75%. The Facility
also includes a $500,000 letter of credit facility for use in lieu of lease
security deposits. The Company had delivered $495,000 in irrevocable letters of
credit on this Facility. The Company generally is required to pay commissions of
1 1/2% per annum on outstanding letters of credit.

          The Company's subsidiaries each guaranteed the obligations of the
Company under the foregoing Facility and granted security interests in their
respective assets as collateral for such guarantees. In addition, the Company
pledged stock of such subsidiaries as security for obligations of the Company
under such Facility.

          The Facility includes restrictions relating to, among other things,
indebtedness for borrowed money, capital expenditures, mergers, sale of assets,
dividends and liens on the property of the Company. The Facility also requires
the Company to comply with certain financial covenants at the end of each
quarter such as minimum cash flow in relation to the Company's debt service
requirements, ratio of debt to equity, and the maintenance of minimum
shareholders' equity. In December 2001 and April 2002, certain covenants in the
Facility were modified for fiscal 2002 and beyond. The Company violated a
covenant related to a limitation on cash flow during the quarter ended March 29,
2003. The Company received a waiver through March 29, 2003 from Bank Leumi USA
for the covenant with which it was not in compliance. The Company believes it
will be in compliance with this covenant during future quarters. If the Company
is not in compliance with any covenant in future quarters, the Company believes
that a waiver will be granted for such violation.

          In September 2001, a subsidiary of the Company entered into a lease
agreement with World Entertainment Centers LLC regarding the leasing of premises
at the Neonopolis Center at Freemont Street for the restaurant Saloon. The
Company provided a lease guaranty ("Guaranty") to induce the landlord to enter
into the lease agreement. The Guaranty is for a term of two years from the date
of the opening of the Saloon, May 2002, and during the first year of the
Guaranty is in the amount of $350,000. Upon the first anniversary of the opening
of the Saloon, May 2003, the Guaranty is reduced to $175,000 and will expire in
May 2004. As of March 29, 2003 the maximum potential amount of future payments
the Company could be required to make as a result of the Guaranty was $350,000.

6. RECEIVABLES FROM EMPLOYEES IN RESPECT OF STOCK OPTION EXERCISES

          Receivables from employees in respect of stock option exercises
includes amounts due from officers and directors totaling $706,000 at March 29,
2003 and $716,000 at September 28, 2002. Such amounts, which are due from the
exercise of stock options in accordance with the Company's Stock Option Plan are
payable on demand with interest at 1/2% above prime (4.75% at March 29, 2003).

7. INCOME PER SHARE OF COMMON STOCK

          Net income per share is computed in accordance with Statement of
Financial Accounting Standards No. 128, Earnings Per Share, and is calculated on
the basis of the weighted average number of common shares outstanding during
each period plus, for diluted earnings per share, the additional dilutive effect
of common stock equivalents. Common stock equivalents using the treasury stock
method consist of dilutive stock options and warrants.

          For the 13-week period ended March 29, 2003, options to purchase
215,000 shares of common stock at a price of $6.30 were included in diluted
earnings per share. Options to purchase 178,000 shares of common stock at a
price range of $7.50 to $10.00 were not included in diluted earnings per share
as their effect was antidilutive. For the 13-week period ended March 30, 2002,
options to purchase 438,000 shares of common stock at a price range of $6.30 to
$12.00 were not included in diluted earnings per share as the Company had a loss
for the quarter. For the 26-week period ended March 29, 2003, options to
purchase 393,000 shares of common stock at a price range of $6.30 to $10.00 were
not included in diluted earnings per share as the Company had a loss. For the
26-week period ended March 30, 2002, options to purchase 240,000 shares of
common stock at a price of $6.30 were included in diluted earnings per share.
Options to purchase 198,000 shares of common stock at a price of $7.50 to $10.00
were not included in diluted earnings per share as their effect was
antidilutive.


                                       8




<PAGE>

8. STOCK OPTIONS

          SFAS No. 123, Accounting for Stock-Based Compensation, requires the
Company to disclose pro forma net income and pro forma earning per share
information for employee stock option grants to employees as if the fair-value
method defined in SFAS No. 123 had been applied. The Company utilized the
Black-Scholes option-pricing model to quantify the pro forma effects on net
income and earning per share of the options granted for the quarter and six
month periods ended March 29, 2003 and March 30, 2002.

The weighted-average assumptions used for the quarters and six month periods
ended March 29, 2003 and March 30, 2002 include risk free interest rates of
4.25% and volatility of 35%. An expected life of four years for all options was
used. The weighted average grant date fair value of options granted and
outstanding during all the above mentioned periods was $2.05.

The pro forma impact is as follows:

<TABLE>
<CAPTION>
                                                                      (in Thousands, Except per Share Amounts)
                                                          -----------------------------------------------------------------
                                                          13 Weeks ended   26 Weeks ended   13 Weeks ended   26 Weeks ended
                                                          March 29, 2003   March 29, 2003   March 30, 2002   March 30, 2002
                                                          --------------   --------------   --------------   --------------
<S>                                                           <C>              <C>              <C>              <C>
Net income (loss) as reported                                 $  30            $  (85)          $ (189)          $ 785

Deduct stock based employee compensation expense
computed under the fair value method                          $ (29)           $  (60)          $  (35)          $ (70)

Net income (loss) - pro forma                                 $   1            $ (145)          $ (224)          $ 715

Earnings (loss) per share as reported - basic & diluted       $0.01            $(0.03)          $(0.06)          $0.25

Earnings (loss) per share pro forma - basic & diluted          0.00             (0.05)           (0.07)           0.22
</TABLE>

9. RELATED PARTY TRANSACTIONS

          Mr. Donald D. Shack, a former director of the Company, is a member of
the firm Shack Siegel Katz & Flaherty P.C., general counsel to the Company. Mr.
Shack did not stand for re-election at the 2003 Annual Shareholder Meeting held
on March 13, 2003 . The Company incurred $106,000 in legal fees to such firm for
the 13 weeks ended March 29, 2003.

          Receivables due from officers and employees, excluding stock option
receivables, totaled $954,000 at March 29, 2003 and $1,045,000 at September 28,
2002. Such loans bear interest at the minimum statutory rate (1.57% at March 29,
2003).

Item 2. Management's Discussion And Analysis Of Financial Condition and Results
        Of Operations

          This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements. Certain of these risks and
uncertainties are discussed under the heading "forward looking statements" in
the Company's annual report on form 10-K for the fiscal year ended September 28,
2002.

Revenues

          Total revenues increased 1% in the 13-week period ended March 29, 2003
from the comparable period ended March 30, 2002. The release of an allowance for
an uncollectibale note receivable which totaled $585,000 impacted revenues
during the 13-week period ended March 29, 2003.

Revenues in New York decreased $374,000 during the 13-week period ended March
29, 2003 when compared to the previous comparable quarter revenues. This result
was affected by an increase in revenues of $457,000 resulting from the reopening
of the Grill Room a restaurant located in 2 World Financial Center, an office
building adjacent to the World Trade Center site. This restaurant was damaged in
the September 11th attacks and reopened on December 2, 2002. Revenues in Las
Vegas increased $401,000 in the quarter ended March 29, 2003 over the
corresponding 13-week period ended March 30, 2002. This increase was achieved
despite a


                                       9




<PAGE>

negative impact to revenue of $654,000 resulting from the abandonment,
at the end of fiscal 2002, of the Company's restaurant and food court operations
at the Desert Passage, the retail complex at the Aladdin Resort and Casino.
Revenues decreased by $408,000 in Washington D.C. in the period ended March 29,
2003 from the comparable period ended March 30, 2002.

Company-wide same store sales for the 13-week period ended March 29, 2003
decreased 1.5% from the 13-week period ended March 30, 2002. Same store sales
increased 4.3% in Las Vegas in the second quarter of fiscal 2003 over the second
quarter of fiscal 2002. In the second quarter of fiscal 2003 same store sales
decreased 8.6% in New York and 14.5% in Washington D.C. from the corresponding
13-week period ended March 30, 2002. Both of these markets were affected by
severe and lengthy winter weather and continued economic weakness.

Total revenues for the 26-week period ended March 29, 2003 were $52,821,000
compared to total revenues of $52,212,000 for the corresponding period ended
March 30, 2002. On a Company-wide basis, same store sales increased .6% in the
26-week period ended March 29, 2003 compared to the 26 week-period ended March
30, 2003. Same store sales increased 6% in Las Vegas during the first six months
of fiscal 2003 compared to the six-month period ended March 30, 2002. The
decreases in same store sales in the comparable 26-week periods ended March 29,
2003 and March 30, 2002 were 4.3% in New York and 9.4% in Washington D.C.

Costs and Expenses

Food and beverage costs for the 13-week period ended March 29, 2003 as a
percentage of total revenues stood at 24.4% compared to last year's 25.8%, while
food and beverage costs as a percentage of total revenues for the 26-week period
ended March 29, 2003 were 24.8% compared to 25.1% last year.

Payroll expenses as a percentage of total revenues decreased to 34.6% for the
13-week period ended March 29, 2003 as compared to 34.8% last year. Payroll
expenses as a percentage of total revenues increased to 34.7% for the 26-week
period ended March 29, 2003 versus 33.8% during last years 26-week period ended
March 30, 2002. During the 13-weeks ended December 29, 2001 the Company had
aggressively adapted its cost structure in response to lower sales expectations
following September 11th. Payroll and head count were significantly reduced,
overtime and vacation pay were eliminated, and salaries were temporarily
reduced. The reduced payroll costs incurred in the first quarter of fiscal 2002
are included in the 26-week period ended March 30, 2002. During the 26-week
period ended March 29, 2003, although payroll head count continues to be lower
than the payroll head count prior to September 11th; salary reductions and the
elimination of overtime and vacation pay were discontinued during the second
quarter of fiscal 2002.

Occupancy and other expenses as a percentage of total revenues decreased during
the quarter ended March 29, 2003 to16.1% compared to 16.2% during the quarter
ended March 30, 2002. Occupancy and other expenses incurred during the 26-week
period ended March 29, 2003 increased to 16.5% of total revenue compared to
15.7% last year. The difference is attributable to rent concessions granted the
Company by landlords in the wake of the September 11th tragedy which were not
available in the six months ended March 29, 2003.

Other operating costs and expenses, as a percentage of total revenues, increased
to 12.7% for the 13-week period ended March 29, 2003 from 12.6% for the 13-week
period ended March 30, 2003. Other operating costs and expenses for the 26-week
period ended March 29, 2003 increased to 13.2% of total revenues compared to
11.4% last year. After the September 11th attacks, the Company severely
restricted discretionary spending and received discounts from suppliers. Though
the Company continues to keep tight control over spending, maintenance of
restaurants is performed when required and the discounts received last year are
no longer available.


                                       10




<PAGE>

General and administrative expenses as a percentage of total revenues decreased
to 5.1% for the 13-week period ended March 29, 2003 compared to 5.8% for the
13-week period ended March 30, 2002. General and administrative expenses as a
percentage of total revenues stood at 5.6% for both 26-week periods ended March
29, 2003 and March 30, 2002.

The Company recorded an impairment charge of $667,000 in the quarter ended March
29, 2003, related to a write down of long lived fixed assets at its Lutece
restaurant in New York City,

Interest expense was $206,000 for the 13-week period ended March 29, 2003
compared to $326,000 for the 13-week period ended March 30, 2002. For the
26-week period ended March 29, 2003 interest expense was $428,000 compared to
$681,000 during last year's comparable 26-week period. The decrease is due to
lower outstanding borrowings on the Company's credit facility.

The Company had net income of $30,000 for the 13-week period ended March 29,
2003 as compared to a net loss of $189,000 last year and had a net loss of
$85,000 for the 26-week period ended March 29, 2003 as compared to net income of
$785,000 last year.

Income Taxes

     The provision for income taxes reflects Federal income taxes calculated on
a consolidated basis and state and local income taxes calculated by each New
York subsidiary on a non-consolidated basis. Most of the restaurants owned or
managed by the Company are owned or managed by separate subsidiaries.

     For state and local income tax purposes, the losses incurred by a
subsidiary may only be used to offset that subsidiary's income, with the
exception of the restaurants operating in the District of Columbia. Accordingly,
the Company's overall effective tax rate has varied depending on the level of
losses incurred at individual subsidiaries.

     The Company's overall effective tax rate in the future will be affected by
factors such as the level of losses incurred at the Company's New York
facilities, which cannot be consolidated for state and local tax purposes,
pre-tax income earned outside of New York City and the utilization of state and
local net operating loss carry forwards. Nevada has no state income tax and
other states in which the Company operates have income tax rates substantially
lower in comparison to New York. In order to utilize more effectively tax loss
carry forwards at restaurants that were unprofitable, the Company has merged
certain profitable subsidiaries with certain loss subsidiaries.

     The Revenue Reconciliation Act of 1993 provides tax credits to the Company
for FICA taxes paid by the Company on tip income of restaurant service
personnel. The Company estimates that this credit will be in excess of $500,000
for the current year.

Liquidity and Sources of Capital

     The Company's primary source of capital has been cash provided by
operations and funds available from its main bank, Bank Leumi USA. The Company
from time to time also utilizes equipment financing in connection with the
construction of a restaurant and seller financing in connection with the
acquisition of a restaurant. The Company utilizes capital primarily to fund the
cost of developing and opening new restaurants, acquiring existing restaurants
owned by others and remodeling existing restaurants owned by the Company.


                                       11




<PAGE>

          The Company had a working capital deficit of $7,116,000 at March 29,
2003 as compared to a working capital deficit of $7,990,000 at September 28,
2002. The restaurant business does not require the maintenance of significant
inventories or receivables; thus the Company is able to operate with negative
working capital.

          As of March 29, 2003 the Company's Revolving Credit and Term Loan
Facility (the "Facility") with its main bank (Bank Leumi USA), as amended in
November 2001, December 2001, April 2002 and February 2003 included a
$17,000,000 credit line to finance the development and construction of new
restaurants and for working capital purposes at the Company's existing
restaurants. The credit line is reduced to $11,500,000 on June 29, 2003 and then
$8,500,000 on September 29, 2003 until the maturity date of February 12, 2005.
The Company had borrowings of $16,008,000 outstanding on this Facility at March
29, 2003. The loan bears interest at 1/2% above the bank's prime rate and at
March 29, 2003 and September 28, 2002 the interest rate on outstanding loans was
4.75% and 5.25%, respectively. The Facility also includes a $500,000 letter of
credit facility for use in lieu of lease security deposits. The Company had
delivered $495,00 in irrevocable letters of credit on this Facility. The Company
generally is required to pay commissions of 1 1/2% per annum on outstanding
letters of credit.

          The Company's subsidiaries each guaranteed the obligations of the
Company under the foregoing Facility and granted security interests in their
respective assets as collateral for such guarantees. In addition, the Company
pledged stock of such subsidiaries as security for obligations of the Company
under such Facility.

          The Facility includes restrictions relating to, among other things,
indebtedness for borrowed money, capital expenditures, mergers, sale of assets,
dividends and liens on the property of the Company. The Facility also requires
the Company to comply with certain financial covenants at the end of each
quarter such as minimum cash flow in relation to the Company's debt service
requirements, ratio of debt to equity, and the maintenance of minimum
shareholders' equity. In December 2001 and April 2002, certain covenants in the
Facility were modified for fiscal 2002 and beyond. The Company violated a
covenant related to cash flow during the quarter ended March 29, 2003. The
Company received a waiver through March 29, 2003 from Bank Leumi USA for the
covenant with which it was not in compliance. The Company believes it will be in
compliance with this covenant during future quarters. If the Company is not in
compliance with any covenant in future quarters, the Company believes that a
waiver will be granted for such violation.

          In April 2000, the Company borrowed $1,570,000 from its main bank at
an interest rate of 8.8% to refinance the purchase of various restaurant
equipment at the Venetian. The note which is payable in 60 equal monthly
installments through May 2005, is secured by such restaurant equipment. At March
29, 2003 the Company had $765,000 outstanding on this note.

          The Company entered into a sale and leaseback agreement with GE
Capital for $1,652,000 in November 2000 to refinance the purchase of various
restaurant equipment at its food and beverage facilities at the Aladdin hotel in
Las Vegas, Nevada. The lease bears interest at 8.65% per annum and is payable in
48 equal monthly installments of $31,785 until maturity in November 2004 at
which time the Company has an option to purchase the equipment for $519,440.
Alternatively, the Company can extend the lease for an additional 12 months at
the same monthly payment until maturity in November 2005 and repurchase the
equipment at such time for $165,242. The Company originally accounted for this
agreement as an operating lease and did not record the assets or the lease
liability in the financial statements. During the year ended September 29, 2001,
the Company recorded the entire amount payable under the lease as a liability of
$1,600,000 based on the anticipated abandonment of the Aladdin operations. In
2002, the operations at the Aladdin were abandoned and at March 29, 2003
$1,064,000 remains in accrued expenses and other current liabilities
representing future operating lease payments.


                                       12




<PAGE>

Restaurant Expansion

          The Company is currently not committed to any projects.

Events of September 11, 2001 and General Decline in Tourism

          The terrorist attacks on the World Trade Center in New York and the
Pentagon in Washington D.C. on September 11th have had a material adverse effect
on the Company's revenue. As a result of the attacks, one Company restaurant,
the Grill Room, suffered some damage, and was closed from September 11th until
December 2002, when the restaurant was reopened. The restaurant is located in 2
World Financial Center, an office building adjacent to the World Trade Center
site. The Company recorded $200,000 and $125,000 as a reduction of other
operating costs and expenses for partial insurance recoveries of certain
out-of-pocket costs and business interruption losses incurred for the 13-week
period ended December 28, 2002 and December 29, 2001.

          The Company believed that its restaurant and food court operations at
Desert Passage which adjoins the Aladdin Casino Resort in Las Vegas, Nevada (the
"Aladdin") were significantly impaired by the events of September 11th. The
restaurant and food court operations experienced severe sales declines in the
aftermath of September 11th and the Aladdin declared bankruptcy on September 28,
2001. The Company determined that an impairment analysis under SFAS No. 121
needed to be performed.

          Based upon the sum of the future undiscounted cash flows related to
the Company's long-lived assets at the Aladdin, the Company determined that
impairment had occurred. To estimate the fair value of such long-lived assets,
for determining the impairment amount, the Company used the expected present
value of the future cash flows. The Company projected continuing negative
operating cash flow for the foreseeable future with no value for subletting or
assigning the lease for the premises. The Company believed that the lease will
be abandoned or terminated. Therefore, the Company determined that there was no
value to such long-lived assets. The Company had an investment of $8,445,000 in
leasehold improvements, and furniture, fixtures and equipment. The Company
believed that these assets would have nominal, if any, value upon disposal. In
addition, the estimated future payments under the lease for kitchen equipment at
the location totaled $1,600,000. The Company recorded in the fiscal year ended
September 29, 2001 an impairment charge of $8,445,000 for the net book value of
the assets and recorded an additional $1,600,000 of expense and liability for
the future lease payments of which $1,064,000 remains in accrued and other
current liabilities at March 29, 2003. In September 2002, the Company abandoned
its restaurant and food court operations at the Aladdin.

          In October 2002, the Company sold certain furniture, fixtures and
equipment related to the Aladdin operations for $240,000. The Company recognized
a gain of $240,000 in fiscal 2003 with respect to the transaction, since all of
the fixed assets for the Aladdin operations had been written off during the year
ended September 28, 2002.

          The Company believes that its restaurant, Lutece, located in New York
City has been impaired by the events of September 11th and the continued
weakeness in the economy. Based upon the sum of the future undiscounted cash
flows related to the Company's long-lived fixed assets at Lutece, the Company
determined that impairment had occurred. To estimate the fair value of such
long-lived fixed assets, for determing the impairment amount, the Company used
the expected present value of the future cash flows. The Company projected
continuing negative operating cash flow for the foreseeable future with no value
for subletting or assigning the lease for the premises. As a result, the Company
determined that there was no value to the long-lived fixed assets. The Company
had an investment of $667,000 in leasehold improvements, and furniture fixtures
and equipment. The Company believes that these assets would have nominal value
upon disposal. The


                                       13




<PAGE>

Company recorded an impairment charge of $667,000 during the fiscal quarter
ended March 29, 2003. The Company continues to operate this restaurant and has
no immediate intention to discontinue its operation.

Critical Accounting Policies

          The preparation of financial statements requires the application of
certain accounting policies, which may require the Company to make estimates and
assumptions of future events. In the process of preparing its consolidated
financial statements, the Company estimates the appropriate carrying value of
certain assets and liabilities, which are not readily apparent from other
sources. The primary estimates underlying the Company's financial statements
include allowances for potential bad debts on accounts and notes receivable, the
useful lives and recoverability of its assets, such as property and intangibles,
fair values of financial instruments, the realizable value of its tax assets and
other matters. Management bases its estimates on certain assumptions, which they
believe are reasonable in the circumstances, and actual results could differ
from those estimates. Although management does not believe that any change in
those assumptions in the near term would have a material effect on the Company's
consolidated financial position or the results of operation, differences in
actual results could be material to the financial statements.

          The Company's critical accounting policies are described in the
Companies Form 10-K for the year ended September 28, 2002. There have been no
significant changes to such policies during fiscal 2003.

Recent Accounting Developments

          The Financial Accounting Standards Board has recently issued the
following accounting pronouncements:

          SFAS 148, Accounting for Stock-Based Compensation - Transition and
Disclosure was issued in December 2002. This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," providing alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. SFAS No. 148 also amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
Company has applied the disclosure provisions of SFAS No. 148 as of March 29,
2003, as required.

          FIN No. 46, Consolidation of Variable Interest Entities, was issued on
January 17, 2003. Such Interpretation addresses consolidation of entities that
are not controllable through voting interests or in which the equity investors
do not bear the residual economic risks and rewards. These entities have been
commonly referred to as special purpose entities. The Interpretation provides
guidance related to identifying variable interest entities and determining
wheter such entities should be consolidated. It also provides guidance related
to the initial and subsequent measurement of assets, liabilities and
noncontrolling interests in newly consolidated variable interest entities and
requires disclosure for both the primary beneficiary of a variable interest
entity and other beneficiaries of the entity. The Company believes the adoption
of this standard will not have a material effect on its financial statements.

Item 3. Quantitative And Qualitative Disclosures About Market Risk

          The Company is exposed to market risk from changes in interest rates
with respect to its outstanding credit agreement with its main bank, Bank Leumi
USA. Outstanding loans under the agreement bear interest at prime plus one-half
percent. Based upon a $16,008,000 (the outstanding balance at March 29, 2003)
term loan and a 100 basis point change in interest rates, annual interest
expense would change by $160,000.


                                       14




<PAGE>

Item 4. Controls and Procedures

          As of a date within 90 days prior to the date of this report, the
Company's Chief Executive Officer and Chief Financial Officer carried out an
evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures, as required by Exchange Act Rule 13a-14.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in ensuring that material information about the Company and its
subsidiaries, including the material information required to be disclosed in the
Company's filings under the Securities Exchange Act of 1934, is recorded,
processed, summarized and communicated to the Chief Executive Officer and the
Chief Financial Officer as appropriate to allow timely decisions regarding
required disclosure.

          There were no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of the most recent evaluation performed by the Company's Chief
Executive Officer and Chief Financial Officer, including any corrective actions
with regard to significant deficiencies and material weaknesses.


                                       15




<PAGE>

                                     PART II
                                OTHER INFORMATION

Item 6. Exhibits And Reports On Form 8-K

(a)  Exhibits

     *10.14 Letter dated as of January 22, 2002 regarding Fourth Amended and
            Restated Credit Agreement

     *10.15 Fifth Amended and Restated Credit Agreement dated as of February 12,
            2003 between the Company and Bank Leumi USA.

     *99.1  Certifications pursuant to 18 U.S.C. Section 1350, as adopted
            pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith.

(b)  Reports on Form 8-K.

     None.


                                       16




<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


Date: May 13, 2003

    ARK RESTAURANTS CORP.


By: /s/ Michael Weinstein
    -----------------------------------
    Michael Weinstein
    President & Chief Executive Officer


By: /s/ Robert J. Stewart
    -----------------------------------
    Robert Stewart
    Chief Financial Officer


                                       17




<PAGE>

                                 CERTIFICATIONS

I, Michael Weinstein, Chief Executive Officer of Ark Restaurants Corp., certify
that:

1. I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; and

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

          b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

          c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

          a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

          b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

May 13, 2003


/s/ Michael Weinstein
- ------------------------
Michael Weinstein
Chief Executive Officer


                                       18




<PAGE>

I, Robert J. Stewart, Chief Financial Officer of Ark Restaurants Corp., certify
that:

1. I have reviewed this quarterly report on Form 10-Q of Ark Restaurants Corp.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report; and

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report.

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

          b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

          c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

          a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

          b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

May 13, 2003


                                          /s/ Robert J. Stewart
                                          --------------------------------------
                                          Robert J. Stewart
                                          Chief Financial Officer


                                       19


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-14.txt
<DESCRIPTION>EXHIBIT 10.14
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.14

                             As of January 22, 2002

Ark Restaurants Corp.
85 Fifth Avenue
New York, New York 10003

Gentlemen:

     Reference is made to that certain Fourth Amended and Restated Credit
Agreement, dated as of December 27, 1999 by and between Bank Leumi USA (the
"Bank") and Ark Restaurants Corp. (the "Company"), as amended by letter
agreements, dated August 21, 2000, as of November 21, 2000, November 1, 2001 and
December 20, 2001 (as so amended, the "Restated Agreement"). Capitalized terms
used in this letter agreement (the "Amendment"), and not otherwise defined
herein, shall have the meanings defined in the Restated Agreement.

     The Bank and the Company have agreed to further amend the Restated
Agreement, among other things, to change the Company's covenant with respect to
Loans, Advances and Investments. Accordingly, the Company and the Bank agree
that Section 7.6 of the Restated Agreement is hereby amended and restated as
follows:

7.6 Loans, Advances, Investments. Except (i) loans made to fund the purchase of
the Company's shares pursuant to its stock option plans, (ii) loans to the
Company's employees, other than as provided for in (i), which loans shall not
exceed (a) $850,000 in the aggregate, except during the period January 22, 2002
to and including February 6, 2002, and (b) $930,000 during the period January
22, 2002 to and including February 6, 2002, and (iii) other loans with the prior
written consent of the Bank, which consent shall not be unreasonably withheld or
delayed:

     This Amendment is intended by the parties as the final expression of their
agreement, and therefore incorporates all negotiations of the parties hereto,
and together with the Restated Agreement and other Loan Documents set forth in
the entire agreement of the parties hereto.

     This Amendment may be executed in one or more counterparts, each of which
shall constitute an original, but all of which taken together shall constitute
one and the same instrument.


                                       1




<PAGE>

     If the foregoing correctly sets forth our understanding and agreement,
kindly indicate your acceptance thereof by signing below.

                                        Very truly yours,

                                        BANK LEUMI USA


                                        By: /s/ Iris Schechter
                                            ------------------------------------
                                            Iris Schechter


AGREED TO:

ARK RESTAURANTS CORP.


By: /s/ Andrew Kuruc
    ---------------------------------------
    Andrew Kuruc
    Senior Vice President


APPROVED:

ATLANTIC BANK OF NEW YORK


By: /s/ Atlantic Bank of New York
    ---------------------------------------


ISRAEL DISCOUNT BANK OF NEW YORK


By: /s/ Israel Discount Bank of New York
    ---------------------------------------


                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-15.txt
<DESCRIPTION>EXHIBIT 10.15
<TEXT>

<PAGE>

                                                                   EXHIBIT 10.15

          FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 12th day
of February, 2003, by and between ARK RESTAURANTS CORP., a New York corporation
(the "Company") and BANK LEUMI USA, a New York banking corporation (the "Bank").

          A. Pursuant to a Revolving Credit Loan Agreement between the Bank and
the Company dated as of March 3, 1989, as amended by Agreement dated August 3,
1989, the Bank made available to the Company a revolving credit facility, a
standby letter of credit facility, and other financial accommodations
(collectively, the "Initial Facility").

          B. On or about December 30, 1992, the Bank and the Company entered
into an Amended and Restated Credit Agreement, dated as of said date (the
"Restated Agreement"), wherein and whereby the Bank and the Company, among other
things, renewed and increased the Initial Facility. The Restated Agreement was
amended by an Agreement dated August 10, 1994.

          C. On or about March 5, 1996, the Bank and the Company entered into a
Second Amended and Restated Credit Agreement, dated as of said date (the "Second
Restated Agreement") wherein and whereby the Bank and the Company, among other
things (i) renewed, increased and made amendments to the Initial Facility, and
(ii) the Bank provided the Company with a second loan facility and a second
letter of credit facility. The Second Restated Agreement was amended by
Agreements dated as of March 31, 1996, and as of December 24, 1996.

          D. On or about May 28, 1998, the Bank and the Company entered into a
Third Amended and Restated Credit Agreement, dated said date (the "Third
Restated Agreement") wherein and whereby the Bank and the Company, among other
things, renewed and extended and made amendments to the loan facilities. The
Third Restated Agreement was amended by Agreements, dated as of April 27, 1999,
November 10, 1999 and December 13, 1999.

          E. On or about December 27, 1999, the Bank and the Company entered
into a Fourth Amended and Restated Credit Agreement, dated said date, wherein
and whereby the Bank and the Company renewed, extended and made amendments to
the loan facilities and, among other things, provided that on the Conversion
Date (as therein defined) the revolving loans then outstanding would convert
into a Term Loan. The Fourth Amended and Restated Credit Agreement was amended
by Agreements, dated as of August 21, 2000, as of November 21, 2000, November 1,
2001, December 20, 2001, April 23, 2002, and as of January 22, 2002 (as so
amended, the "Fourth Restated Agreement").

          F. The Bank and the Company have agreed (i) that the outstanding
principal amount of the extant Term Loan will be converted into a Revolving Loan
and that a revolving loan facility will be made available to the Borrower, (ii)
that the Letter of Credit facilities made available to the Company will be
renewed, and (iii) to certain other modifications of the existing arrangements.
The Bank and the Company have agreed to reflect these changes in this Fifth
Amended and Restated Credit Agreement.

          NOW, THEREFORE, IT IS AGREED:

          1. DEFINITIONS

          Unless the context otherwise requires, for all purposes of this
Agreement and of the other Loan Documents (as hereinafter defined), all
capitalized terms used in this Agreement and in the other Loan Documents without
definition shall have the respective meanings provided therefor or referred to
below:

               1.1 The term "Affiliate" means with reference to any Person, any
director, officer or employee of such Person, any Person in which such Person
has a direct or indirect controlling interest or by which


                                       1




<PAGE>

such person is directly or indirectly controlled or which is under direct or
indirect common control with such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with") when used with respect to any specified Person
shall mean the power to direct or cause the direction of the actions, management
or policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise, and whether or not
such power is actually exercised.

               1.2 The term "Agreement" means this Fifth Amended and Restated
Credit Agreement, including all of the Schedules and Exhibits hereto, as the
same may be amended or otherwise modified from time to time, and the terms
"herein", "hereof", "hereunder" and like terms shall be taken as referring to
this Agreement in its entirety and shall not be limited to any particular
section or provision hereof.

               1.3 The term "Bank Debt" means and includes all (i) Consolidated
Indebtedness for money borrowed, unless it meets the definition of Purchase
Money Indebtedness (ii) the amount of any letters of credit outstanding for the
account of the Company or any Subsidiary and (iii) the aggregate amount of all
equipment leases entered into by the Company or any Subsidiary where the rental
payments would be required to be capitalized under generally accepted accounting
principles, unless such lease meets the definition of Purchase Money
Indebtedness.

               1.4 The term "Capital Expenditures" means assets purchased for
use in a Restaurant Related Business (other than assets purchased on a
non-recourse Purchase Money Indebtedness basis), including Indebtedness to the
Company of any newly organized Subsidiary (or any such Indebtedness guaranteed
by the Company) in connection with the development or acquisition of a
Restaurant Related Business.

               1.5 The term "Capitalized Leases" means all capitalized leases
made by the Borrower or any Subsidiary as lessee.

               1.6 The term "Commitment" means (i) $17,0000,000 through June 29,
2003, (ii) $11,500,000 during the period June 30, 2003 through September 29,
2003, and (iii) $8,500,000 from September 30, 2003 until the Maturity Date.

               1.7 The term "Company's Collateral" means all of the issued and
outstanding shares of capital stock of each of the Subsidiaries, other than
shares of stock issued by one Subsidiary to another Subsidiary, and the
"security", as such term is defined in paragraph 3 of the Company's Security
Agreement, and each of the notes pledged to the Bank pursuant to Section 2.4.3.

               1.8 The term "Consolidated Debt Service" means interest expense
and required amortization cost for the applicable period on all of the Company's
Consolidated Indebtedness.

               1.9 The term "Consolidated Indebtedness" means the aggregate
consolidated Indebtedness of the Company and its consolidated Subsidiaries. It
is understood that in the calculation of Consolidated Indebtedness, if one or
more Letters of Credit, Guarantees or similar obligations relate to the same
underlying liability, only the amount of the underlying liability will be
included in Consolidated Indebtedness.

               1.10 The term "Consolidated Operating Cash Flow" means
consolidated after-tax earnings of the Company computed in accordance with
generally accepted accounting principles for the period of calculation, plus
depreciation and interest expense for such period on all Consolidated
Indebtedness.

               1.11 The term "Consolidated Net Worth" shall mean the excess of
total assets over total liabilities of the Company and its consolidated
Subsidiaries total assets and total liabilities each to be determined as to both
classification of items and amounts in accordance with generally accepted
accounting principles, and consistent with the standards applied in the
financial statements referred to in Section 4.9; provided there shall be
excluded from total assets (i) cash set apart and held in a sinking or other
analogous fund established for the purposes of redemption or other retirement of
capital stock, (ii) any revaluation or other write-up in book value of


                                       2




<PAGE>

assets subsequent to the date hereof, and (iii) amounts owed to the Company or
any Subsidiary from any of the officers, directors or employees thereof or any
of their Affiliates in excess of $300,000 at any one time outstanding.

               1.12 The term "Consolidated Trade Indebtedness" means Current
Liabilities of the Company and its consolidated Subsidiaries for trade or other
obligations, not outstanding more than sixty (60) days, incurred in the ordinary
course of their respective businesses and not as a result of money borrowed.

               1.13 The term "Current Assets", with respect to any entity, means
as of the date of determination thereof, (i) cash and cash items on hand or in
transit to or on deposit in any bank or trust company which has not suspended
business and which is located in the United States of America; (ii) stocks,
bonds and other securities or obligations which are readily marketable in the
United States of America, all taken on the basis of cost or market value
whichever note is lower; (iii) good and collectible accounts and receivables
(including drafts, acceptances and letters of credit), in good standing and
payable in currency of the United States of America and incurred or created less
than one hundred twenty (120) days prior to such date of determination; (iv)
inventories of merchandise and supplies located in the United States of America,
all taken on the basis of cost or market value, whichever is lower, and (v)
subject to the limitations and qualifications set forth in clauses (i) through
(iv) of this paragraph, such other assets located in the United States of
America which in accordance with generally accepted accounting principles would
be included on a balance sheet as current assets; all after write-offs and
write-downs and after deducting adequate reserves, in each case where a
write-off, write-down or reserve is proper in accordance with generally accepted
accounting principles.

               1.14 The term "Current Liabilities", with respect to any entity,
includes, as of the date of determination thereof, all Indebtedness maturing on
demand or within one year from the date as of which such determination is made,
serial maturities, fixed sinking fund payments or other prepayments required to
be made with respect to any Indebtedness within one year after such date, and
all other items (including taxes accrued as estimated) which in accordance with
generally accepted accounting principles would be included on a balance sheet as
current liabilities.

               1.15 The term "Disclosure Schedule" means the Disclosure
Schedule, dated as of even date herewith, executed by an officer of the Company
and delivered to the Bank setting forth certain information with respect to the
Company and the Subsidiaries, as same may be amended or modified from time to
time.

               1.16 The phrase "Earnings Before Taxes" means for any period the
sum of (i) net income (or loss) of the Restaurant Related Business for such
period, as determined in accordance with GAAP, plus (ii) all charges against
income of such Restaurant Related Business for such period for federal, sate and
local taxes actually paid.

               1.17 The term "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the regulations and
published interpretations thereof.

               1.18 The term "ERISA Affiliate" means any trade or business
(whether or not incorporated) which together with the Company would be treated
as a single employer under Section 4001 (b)(1) of ERISA.

               1.19 The term "Events(s) of Default" shall have the meaning
provided therefor in Section 8.1.

               1.20 The term "Indebtedness", as applied to a Person (an
"obligor") at any time, shall mean the following amounts and liabilities:

                    1.20.1. all amounts which, in accordance with generally
accepted accounting principles, are or should be treated as liabilities or other
obligations on the liabilities side of a balance sheet of such obligor prepared
in accordance with generally accepted accounting principles; provided, however,
that amounts accrued by such obligor in respect of operating lease deferred
credits shall not be deemed indebtedness; and


                                       3




<PAGE>

                    1.20.2. also, to the extent not so treated,

                    (i) letters of credit (whether revocable or irrevocable)
issued for the account of such obligor, but only to the extent drawn upon and
not repaid to the issuer;

                    (ii) liabilities of any other Person guaranteed directly or
indirectly, in any manner by such obligor;

                    (iii) liabilities of or to any Person in effect guaranteed,
directly or indirectly, by such obligor through any agreement, endorsement or
understanding, contingent or otherwise (except liabilities arising from
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business) of such obligor entered into for the purpose, or which is
used for the purpose, in whole or in part, of enabling the debtor to pay,
indemnify against or otherwise satisfy a liability or obligation or to assure
the obligee of the liability against loss, including without limitation (x)
agreements, commitments or understandings to repay amounts drawn down by
beneficiaries of letters of credit (whether revocable or irrevocable) whether or
not issued, directly or indirectly, for the account of such obligor (y)
statements or representations to the effect that such obligor will not permit
any other person to default in respect of any liability or will maintain minimum
net worth of another person, or (z) agreements, commitments or understandings
(A) to purchase securities or Indebtedness, or (B) to purchase or sell services,
products, raw materials or other property of any description, outside of the
ordinary course of its business, or (C) to supply funds to or in any other
manner make an investment in the debtor;

                    (iv) all liabilities secured (directly or indirectly) by a
lien or encumbrance upon any property or asset of such obligor regardless of
whether such obligor has assumed or become liable for the payment of such
liabilities; and

                    (v) amounts equal to any reserves or commitments which are,
or, under generally accepted accounting principles, should be, reflected on the
liabilities side of a balance sheet of such obligor in respect of contingent or
disputed claims, debts or other similar monetary obligations, either direct or
guaranteed, to the extent that the same are not included pursuant to (i), (ii)
or (iii) above; provided, however, that items includable as stockholders' equity
(or parts thereof), minority interests and reserves for deferred income taxes,
each as determined or set aside in accordance with generally accepted accounting
principles, shall not be deemed to be "Indebtedness". Obligations in respect of
leases shall be included as "Indebtedness" only to the extent that the same are
treated as liabilities or obligations by such obligor on its balance sheets
prepared in accordance with generally accepted accounting principles, except
that operating lease deferred credits shall not be included as "Indebtedness".

               1.21 The term "Letter of Credit" shall have the meaning provided
therefor in Section 2.1.5 hereof.

               1.22 "Letter of Credit Availability" means $500,000.

               1.23 The term "Lien" means any charge, lien, mortgage, pledge,
security interest or other encumbrance of any nature whatsoever upon, of or in
property or other assets of a Person, whether absolute or conditional, voluntary
or involuntary, whether created pursuant to agreement, arising by force of
statute, by judicial proceedings or otherwise.

               1.24 The term "Loan Documents" shall mean and include this
Agreement, the Revolving Note, the Guarantees, the Security Agreements and all
other documents executed by the Company or any Subsidiary pursuant hereto or
thereto, as same may be amended, modified, renewed or restated from time to
time.

               1.25 The term "Maturity Date" shall mean such date as is the
second anniversary of the date of this Agreement.


                                       4




<PAGE>

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

               1.27 The term "PBGC" means the Pension Benefit Guaranty
Corporation, or any successor thereto.

               1.28 The term "Outstanding Loan Balance" shall have the meaning
defined in Section 2.1.1.

               1.29 The term "Person" shall include an individual, a
partnership, a joint venture, a corporation (including, without limitation, the
Company or any Subsidiary), a limited liability company, a trust, an estate, an
unincorporated organization or association, a governmental agency and any other
business or legal entity.

               1.30 The term "Plan" means any employee benefit plan as defined
in Section 3(2) of ERISA.

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

               1.32 The term "Purchase Money Indebtedness" means purchase money
Indebtedness incurred by a Subsidiary at the time of the acquisition of
Restaurant-Related Business assets, which Indebtedness is secured only by the
assets of the business being acquired and not guaranteed by the Company or any
Subsidiary of the Company and for which the instrument or instruments relating
to the Indebtedness does not provide recourse against the Company or any
Subsidiary of the Company other than the Subsidiary issuing the Indebtedness.

               1.33 The term "Reference Rate" means the rate designated by the
Bank, and in effect from time to time, as its reference rate, adjusted when such
reference rate changes.

               1.34 The term "Reduction Amount" shall have the meanings defined
in Section 7.3 and 7.13.

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

               1.36 The term "Restaurant-Related Business" means a restaurant,
catering, hospitality, food preparation or food service business.

               1.37 The term "Revolving Note" shall have the meaning defined in
Section 2.1.4.

               1.38 The terms "Revolving Loan" and "Revolving Loans" shall have
the meanings defined in Section 2.1.1.

               1.39 The term "Security Agreement" and "Security Agreements" mean
each security agreement made by the Company or a Subsidiary, as debtor, in favor
of the Bank, as secured party, and all of the foregoing.

               1.40 The term "Shareholders' Equity" means the excess of the
total assets of the Company and its consolidated Subsidiaries over their total
liabilities, in each case as such items would be classified on the consolidated
balance sheet of the Company and its consolidated Subsidiaries determined in
accordance with generally accepted accounting principles.

               1.41 The term "Subsidiary" and "Subsidiaries" mean, respectively,
each of the


                                       5




<PAGE>

corporations listed on the Disclosure Schedule, and any other corporation or
Person, not less than a majority of the outstanding shares of the class or
classes of stock or other equity interest of which, having by the terms thereof
ordinary voting power to elect a majority of the directors or manage such
corporation or Person, are at any time owned by the Company or by a Subsidiary
of the Company, or by the Company and one or more Subsidiaries of the Company.

               1.42 The terms "Subsidiary's Collateral" and "Subsidiaries
Collateral", respectively, shall mean all of the assets of a Subsidiary and all
of the assets of all of the Subsidiaries, except as is otherwise provided in the
Disclosure Schedule, including shares of stock in any other Subsidiary.

               1.43 The term "Term Loan" means the term loan in the current
principal amount of $14,908,333.33, made by the Bank to the Borrower pursuant to
the Fourth Restated Agreement.

               1.44 The term "Subordinated Indebtedness" shall have the meaning
defined in Section 7.3.

               1.45 The term "United States of America", when used in a
geographical sense, means all of the States of the United States of America and
the District of Columbia and, so long as they continue as possessions or
territories of the United States, Puerto Rico and the Virgin Islands.

               1.46 The term "Working Capital", with respect to any corporation,
means the excess, if any, of the Current Assets over the Current Liabilities of
such corporation.

               2. THE LOAN

               2.1 Amount and Terms of Credit.

                    2.1.1. Commitment of the Bank. Subject to and upon the terms
and conditions herein set forth, the Bank shall make available to the Company
loans (each a "Revolving Loan" and collectively the "Revolving Loans"). The
Revolving Loans made available to the Company pursuant to this facility are to
provide working capital for the Company's operations. The aggregate principal
amount of the Revolving Loans, at any time outstanding (the "Outstanding Loan
Balance"), shall not exceed the Commitment minus the Letter of Credit
Availability. Subject to the foregoing, the Company may borrow, repay and
reborrow the Revolving Loans to the limit of the Commitment minus the Letter of
Credit Availability.

                    2.1.2 Term Loan. Concurrently with the execution and
delivery of this Agreement, the Term Loan is being converted into a Revolving
Loan, and the note evidencing the Term Loan is being returned to the Borrower.

                    2.1.3. Notice of Borrowing. If and whenever the Company
desires to borrow under the Commitment it shall give the Bank prior written
notice, specifying the date of the proposed borrowing, and the amount to be
borrowed (which shall be not less than $250,000). Subject to all the terms and
conditions of this Agreement, the Bank shall make available to the Company in
immediately available funds at the Bank's office specified in Section 9.6, not
later than 11 a.m. current local time on the date specified in such notice, the
amount to be advanced hereunder. Thirty (30) days prior to the Maturity Date,
the Company shall no longer have the right to request borrowings under the
Commitment. The principal sum of the Revolving Loans outstanding on the Maturity
Date, shall be repaid by the Company to the Bank on the Maturity Date.

                    2.1.4 Revolving Note. The Revolving Loans shall be evidenced
by a promissory note substantially in the form of Exhibit A annexed, with the
blanks completed in conformity herewith (the "Revolving Note") duly executed by
the Company and payable to the order of the Bank and (i) be dated as of the date
of this Agreement; (ii) be in the principal amount of $17,000,000; (iii) bear
interest at a fluctuating rate per annum equal to one half of one (1/2%) percent
above the Reference Rate, in effect from time to time, until maturity


                                       6




<PAGE>

(whether by acceleration or otherwise) and thereafter at a fluctuating rate per
annum equal to three (3%) percent above the Reference Rate, in effect from time
to time; and (iv) be payable as to interest at such rate in arrears on the first
day of each month commencing with the first day of the month following the date
of this Agreement and thereafter on the first day of each month until (a) the
Maturity Date, or (b) maturity by acceleration, and both before and after
judgment, until the principal amount is paid in full. The Revolving Note shall
amend, restate and supersede the note evidencing the Term Loan.

                    2.1.5 Letters of Credit. Subject to and upon the terms and
conditions contained in this Agreement (including compliance with the conditions
precedent to the obligations of the Bank to make the initial Revolving Loan to
the Company and the Application (as hereinafter defined) and provided the
Company is not then in default of any of its obligations under this Agreement,
the Bank agrees on or before ninety (90) days before the Maturity Date to issue,
from time to time, one or more letters of credit (each a "Letter of Credit"),
and to renew currently outstanding letters of credit at the request and for the
account of the Company; provided, however, that after the issuance of such
Letter of Credit, the aggregate face amount of all Letters of Credit then
outstanding does not exceed the Letter of Credit Availability. The Letters of
Credit to be made available by the Bank to the Company shall be for the
Company's current operations (including but not limited to security pursuant to
real property leases). The maximum contingent liability of the Bank (including
therein any payments made by the Bank to the beneficiaries of such Letters of
Credit which have not been repaid to the Bank) under all Letters of Credit
issued for the account of the Company shall not exceed the Letter of Credit
Availability at any time. If and whenever the Company desires to obtain a Letter
of Credit from the Bank for its account, it shall apply to the Bank for such
Letter of Credit in accordance with the Bank's normal practices as in effect at
that time, and shall execute and deliver to the Bank such application and
agreement as the Bank normally requires in connection with such transactions (an
"Application") and such other documents as may be required thereunder. The Bank
shall maintain a record of the Letters of Credit and all transactions
thereunder, which records shall be conclusive evidence of the matters set forth
therein, absent manifest error. In the event of any inconsistency between any
provision of this Agreement and any provision of the Application, this Agreement
shall govern and prevail. As consideration to the Bank for the issuance of the
Letters of Credit, the Company shall pay a commission to the Bank in an amount
equal to 1 and 1/2% per annum of the maximum amount which may be drawn under
each Letter of Credit; provided, however, that the commission payable to the
Bank on the renewal of any Letter of Credit outstanding on the date of this
Agreement shall be at a rate equal to the rate then payable with respect to such
Letter of Credit. All commissions shall be paid by the Company upon issuance of
the Letter of Credit. The obligation of the Bank to issue or extend any Letter
of Credit for the account of the Company hereunder shall exist at any time only
if at that time all conditions under Section 5.2 of this Agreement to the Bank's
obligation to make a Revolving Loan to the Company would have been satisfied in
full if the Company had requested a Revolving Loan in such amount. Each Letter
of Credit issued or renewed under this Section 2.1.5 shall have an expiration
date no later than one year from the date it is issued or renewed, but not
beyond the Maturity Date, and shall be renewable only in the sole discretion of
the Bank.

               2.2  Prepayments.

                    2.2.1 Voluntary Prepayments. The Company may prepay the
Revolving Loans, or any of them, in part or in full at any time, and from time
to time, without premium or penalty, upon prior written notice to the Bank,
provided that each such prepayment shall be in the amount of $100,000 or any
integral multiple thereof. In the absence of any such designation, the Bank may
apply such prepayment at its discretion.

                    2.2.2 Mandatory Repayments. If at any time the Outstanding
Loan Balance plus the face amount of all Letters of Credit then outstanding
shall exceed the Commitment, the Borrower shall repay the Revolving Loans in
such amount as shall be necessary to reduce the amount of the Outstanding Loan
Balance plus the Outstanding Letters of Credit to a sum which is not more than
the Commitment.

                    2.2.3 Repayments Generally. Any repayments, whether
mandatory or voluntary, shall be accompanied by the payment of any accrued
interest on the principal amount so prepaid.


                                       7




<PAGE>

                    2.2.4 Application of Life Insurance Proceeds. The Bank will
apply any proceeds received by the Bank upon the policy or policies of insurance
assigned to the Bank upon the life of Michael Weinstein, in its discretion, to
the payment or prepayment of the Revolving Loans, or other obligations, as the
case may be, of the Company or the Subsidiaries to the Bank.

               2.3 General Provisions Concerning the Revolving Loans. Interest,
including additional interest, shall be computed for the actual number of days
elapsed on the basis of a 360-day year. All mandatory and voluntary payments of
principal and all payments of interest under the Revolving Note shall be made by
the Company directly to the Bank in immediately available funds. To effect the
payment of any amount due hereunder, the Bank may, but shall not be obligated
to, charge any deposit account maintained by the Company with the Bank. If any
payment of principal of or interest on the Revolving Note, the commitment fee,
agency fee or any other payment required to be made by the Company hereunder or
pursuant to any of the Loan Documents, becomes due and payable on a day on which
the Bank is closed (as required or permitted by law or otherwise), the due date
thereof shall be extended to the next succeeding business day on which the Bank
is open and, in the case of principal, interest thereon shall be payable at the
applicable rate during such extension. All notations and entries made by the
Bank, or the holder of the Revolving Note, on the grid attached thereto shall be
presumptive evidence of the correctness of such notations and entries, absent
manifest error. The failure of the Bank to make any notation or entry on any
such grid shall not, however, limit or otherwise affect the obligations of the
Company under this Agreement or under the Revolving Note.

               2.4 Security.

                    2.4.1 Concurrently with the execution and delivery of the
Restated Agreement, the Company granted a valid and perfected first priority
security interest to the Bank in the Company's Collateral, pursuant to a
security agreement, dated as of even date therewith, which security agreement
was amended and restated concurrently with the execution and delivery of the
Second Restated Agreement and the Fourth Restated Agreement and is concurrently
being further amended and restated in the form annexed as Exhibit B (the
"Company's Security Agreement").

                    2.4.2 Each of the Subsidiaries identified on the Disclosure
Schedule heretofore granted a valid and perfected security interest to the Bank
in such of the Subsidiary's Collateral as was owned by it pursuant to a security
agreement, which security agreement, except with respect to the security
agreements executed by the Subsidiaries identified on Schedule C-2, concurrently
with the execution and delivery of this Agreement, is being amended and
confirmed, as provided in Exhibit C annexed. Each existing security agreement,
as concurrently amended and confirmed, and each security agreement hereinafter
executed by a Subsidiary is a "Subsidiary's Security Agreement" and collectively
they are "Subsidiary' Security Agreements". Each security interest granted by a
Subsidiary's Security Agreement is a first priority security interest, subject
only to the security interests heretofore granted by each such Subsidiary, as
set forth on Schedule 4.13 and Purchase Money Indebtedness.

                    2.4.3 The Subsidiaries identified as "payees" on Schedule
2.4.3 annexed have pledged and delivered to the Bank each of the notes listed
thereon as part of the Subsidiary's Collateral, each with an allonge sufficient
to permit negotiation thereof, has been delivered and assigned to the Bank. Any
notes hereinafter received by the Company or any Subsidiary by reason of a sale
of a Restaurant-Related Business, as provided in Section 7.13, shall be pledged
to the Bank as Company Collateral or Subsidiary Collateral, as herein provided,
within five (5) business days of its receipt by the Company. Notwithstanding
anything otherwise in this Agreement or any Security Agreement to the contrary,
the Bank only shall have recourse to the collateral pledged pursuant to this
Section 2.4.3, and exercise its rights as secured party with respect thereto,
only upon the occurrence Event of Default pursuant to Section 8.1.1 or 8.1.10 of
this Agreement; provided, however, that with respect to Section 8.1.10, the
Company is the subject of the proceeding.

               2.5 Guarantees. The Subsidiaries identified on the Disclosure
Schedule heretofore guaranteed all of the obligations of the Company to the Bank
pursuant to an unlimited guarantee executed by each such active Subsidiary.
Concurrently with the execution and delivery of this Agreement, each such
Subsidiary


                                       8




<PAGE>

identified in Exhibit C-1 is reaffirming its Guaranty, by its execution of a
Confirmation of Guarantee, annexed as Exhibit C-1. Each existing Guarantee as
concurrently confirmed, or hereinafter executed by a Subsidiary, is individually
a "Guaranty" and collectively are the "Guarantees". Exhibit C-2 sets forth each
Subsidiary which heretofore executed a Guarantee, is no longer actively engaged
in business and has no assets.

          3. USE OF PROCEEDS.

               The Company represents, warrants and covenants that the proceeds
of the Loans will be used for working capital, and no other purposes.

          4. REPRESENTATIONS AND WARRANTIES.

               In order to induce the Bank to enter into this Agreement and to
make the Loans, the Company represents and warrants to the Bank that:

               4.1 Corporate Existence and Power.

                    4.1.1. The Company and each Subsidiary is a corporation duly
incorporated, validly existing and, except for those Subsidiaries listed on
Exhibit C-2, is in good standing under the law of its state of incorporation,
and is duly qualified as a foreign corporation in each jurisdiction wherein the
character of the property owned or the nature of the business being transacted
by it makes such qualification necessary; and the Company has the corporate
power to execute and deliver this Agreement, the Revolving Note and all other
documents to be executed and delivered by the Company in connection herewith,
and each Subsidiary which is a party thereto has the corporate power to execute
and deliver, as is applicable (i) the Confirmation of Guarantees and Amendment
and Confirmation of Security Agreements and (ii) all other documents executed
and delivered by such Subsidiary in connection herewith and to incur and perform
their respective obligations hereunder and thereunder.

                    4.1.2 Except as is otherwise set forth on the Disclosure
Schedule, all of the issued and outstanding shares of capital stock of each of
the Subsidiaries are owned of record and beneficially by the Company. The
Disclosure Schedule accurately sets forth the class and number of shares issued
by each Subsidiary, all of which shares have been duly issued, fully paid and
non-assessable. There are no outstanding warrants, options or other rights to
acquire any shares in any of the Subsidiaries.

               4.2 Authorization. The Company and each of the Subsidiaries has
all requisite legal right, power and authority to execute, deliver and perform
the terms and provisions of this Agreement, the Loan Documents executed by it,
and all other instruments and documents delivered by it pursuant hereto and
thereto. The Company and each of the Subsidiaries has taken or caused to be
taken all necessary action to authorize the execution, delivery and performance
of this Agreement, the Loan Documents executed by it, the Revolving Note, and
any other related agreements, instruments or documents delivered or to be
delivered by the Company or the Subsidiaries pursuant hereto and thereto. This
Agreement, the Loan Documents and all related agreements, instruments and
documents delivered or to be delivered pursuant hereto or thereto constitute and
will constitute legal, valid and binding obligations of the Company (and, to the
extent executed by them, the Subsidiaries) enforceable in accordance with their
respective terms.

               4.3 No Conflicts. Neither the execution and delivery of this
Agreement, the Loan Documents or any of the instruments and documents delivered
or to be delivered pursuant hereto or thereto, nor the consummation of the
transactions herein or therein contemplated, nor compliance with the provisions
hereof or thereof, will violate any law or regulation, or any order, writ or
decree of any court or governmental instrumentality, or will conflict with, or
result in the breach of, or constitute a default in any respect under, any
indenture, mortgage, deed of trust, agreement or other instrument to which the
Company or any of the Subsidiaries is a party, or by which any of them or any of
their respective properties may be bound or affected, or will result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property of any of them (except as contemplated hereunder or under the Loan
Documents) or will violate any provision of the certificate or articles of
incorporation


                                       9




<PAGE>

(as amended to date) or by-laws (as  currently  in effect) of the Company or any
of the Subsidiaries.

               4.4 Compliance and Other Agreements.

                    4.4.1 Neither the Company nor any of the Subsidiaries is in
default under any indenture, mortgage, deed of trust, agreement or other
instrument to which it is a party, or by which it or any of its properties may
be bound or affected, except for such defaults which, individually or in the
aggregate, will not have a material and adverse effect on the business,
operations, property or assets or in the condition, financial or otherwise, of
the Company or any of the Subsidiaries.

                    4.4.2 Neither the Company nor any of the Subsidiaries is in
default with respect to any order, writ, injunction or decree of any court or of
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or authority, domestic or foreign, or in violation of any
law, statute or regulation, domestic or foreign, to which it is, or any of its
properties are subject, except for such defaults or violations which, in the
aggregate, will not have a material or adverse effect on the business,
operations, property or assets or on the condition, financial or otherwise, of
the Company or any of the Subsidiaries.

                    4.4.3 Neither the Company nor any of the Subsidiaries is a
party to or bound by, nor are any of their respective properties bound or
affected by, any agreement, deed, lease or other instrument, or subject to any
charter or other corporate restriction or any judgment, order, writ, injunction,
decree or award, or any law, statute, rule or regulation, any of which
materially and adversely affects or in the future may (so far as the Company or
any Subsidiary should reasonably foresee) materially and adversely affect the
business, operations, prospects, properties or assets, or the condition,
financial or otherwise, of the Company or any of the Subsidiaries.

               4.5 ERISA. Each of the Company and the Subsidiaries is in
compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has occurred and is
continuing with respect to any Plan; no notice of intent to terminate a Plan has
been filed nor has any Plan been terminated; no circumstances exist which
constitute grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administrate, a Plan, nor has
the PBGC instituted any such proceedings; neither the Company, any Subsidiary,
nor any ERISA Affiliate has completely or partially withdrawn under Sections
4201 or 4204 of ERISA from a Multiemployer Plan; the Company, the Subsidiaries
and each of their respective ERISA Affiliates have met their minimum funding
requirements under ERISA with respect to all of their Plans and the present fair
market value of all Plan assets exceeds the present value of all vested benefits
under each Plan, as determined on the most recent valuation date of the Plan and
in accordance with the provisions of ERISA and the regulations thereunder for
calculating the potential liability of the Company, the Subsidiaries or any of
their respective ERISA Affiliates to PBGC or the Plan under Title IV of ERISA;
and neither the Company nor any of the Subsidiaries or their respective ERISA
Affiliates has incurred any liability to the PBGC under ERISA.

               4.6 Investment Company. Neither the Company nor any of the
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940.

               4.7 Approvals and Consents. All authorizations, consents,
registrations, exemptions, approvals and licenses (governmental or otherwise) or
the taking of any other action (including, without limitation, by the
shareholders of the Company or any of the Subsidiaries) which are required as a
condition to the validity or enforceability of this Agreement, the Loan
Documents, or any of the instruments or documents delivered or to be delivered
pursuant hereto or thereto have been effected or obtained and are in full force
and effect.

               4.8 Regulation U, etc. Neither the Company nor any of the
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of Regulation U or G
of the Board of Governors of the Federal Reserve System). None of the proceeds
of the Loans will be used, directly or indirectly, in violation of Regulation U
for the purpose of purchasing or carrying any margin stock or for any other
purpose which might constitute the loan contemplated hereby a "purpose credit"
within the meaning of such Regulation U which would be in violation of
Regulation U.


                                       10




<PAGE>

               4.9 Financial Condition.

                    4.9.1. The consolidated balance sheets of the Company and
its Subsidiaries as at April 30, 2002 and September 28, 2002 (prepared on a
review basis as at April 30, 2002 and audited for September 28, 2002) and the
consolidated statements of operations, shareholders' equity and cash flows of
the Company and its Subsidiaries for the fiscal periods then ended (prepared on
a review basis as at April 30, 2002, and audited for September 28, 2002), copies
of which have been furnished to the Bank, are complete and correct and fairly
present the consolidated financial condition and results of operations of the
Company and its Subsidiaries as at the dates and for the periods indicated. All
of such financial statements have been prepared in conformity with generally
accepted accounting principles and practices applied on a basis consistently
maintained throughout the periods involved.

                    4.9.2. There are no material liabilities, direct or
indirect, fixed or contingent, of the Company or the Subsidiaries as of the
dates of such financial statements which were not reflected therein or in the
notes thereto. Since the date of the most recent financial statements, there has
been no material adverse change in the condition, financial or otherwise, or the
business, operations, prospects, properties or assets of the Company and its
Subsidiaries on a consolidated basis or of the Company individually.

               4.10 Taxes. The Company and each Subsidiary has filed or caused
to be filed, all tax returns required to be filed, and has paid all taxes
(including interest and penalties) shown to be due and payable on said returns
or any assessments made against it, and no tax liens have been filed and no
claims are being asserted with respect to such taxes which are not reflected in
the financial statements referred to in Section 4.9.1 hereof. The Company has no
knowledge of any proposed material tax assessment against or affecting it or any
of the Subsidiaries and is not otherwise obligated by any agreement, instrument
or otherwise to contribute to the payment of taxes owed by any other Person. All
material tax liabilities are adequately provided for or reserved against on the
books of the Company and/or the Subsidiaries, as is applicable, in accordance
with generally accepted accounting principles.

               4.11 Litigation. Except as set forth on Schedule 4.11 annexed,
there are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary or the
property of any of them before any court, arbitrator or governmental department,
commission, board, bureau, agency or instrumentality which, (i) if not covered
by insurance seeks recovery of more than $200,000 or if covered by insurance
seeks recovery of an amount in excess of the applicable insurance limits, (ii)
either in any case or in the aggregate, if adversely determined, would have a
material adverse effect on the financial condition, business or operations of
the Company or any Subsidiary, or (iii) question the validity or enforceability
of this Agreement, the Fourth Restated Agreement, the Loan Documents, or any
action to be taken in connection with the transactions contemplated hereby or
thereby.

               4.12 Chief Executive Office; Collateral Locations. The address of
the chief executive office of the Company is set forth in the Company's Security
Agreement. The only locations of any of the Company's Collateral, other than
such of the Company's Collateral as the Bank shall take possession of to perfect
its lien and security interest therein, and the chief executive office of the
Company, are those listed in the Company's Security Agreement. The Chief
Executive Office, principal place of business, and state of incorporation of
each of the Subsidiaries is set forth on the Disclosure Schedule and in such
Subsidiaries Security Agreement. The only other locations of any of the
Subsidiaries Collateral, other than their Chief Executive Office or principal
places of business, are listed in the Subsidiaries Security Agreements.

               4.13 Title to Properties/Priority of Liens.

                    4.13.1. The Company and its Subsidiaries have good and
marketable title to, or valid leasehold interests in, all of the properties and
assets reflected on the most recent of the financial statements delivered to the
Bank pursuant to Section 4.9.1 or acquired by it after the date of such
financial statements and prior to the date hereof, except for those properties
and assets which have been disposed of since such date in the ordinary


                                       11




<PAGE>

course of business. All such properties and assets are owned or leased by the
Company or a Subsidiary free and clear of all mortgages, pledges, liens,
security interests, encumbrances or charges of any kind, except (i) such as are
disclosed on Schedule 4.13 hereto, (ii) such as are in favor of the Bank, and
(iii) such as are permitted under the provisions of Section 7.5 hereof.

                    4.13.2 The liens and security interest granted by the
Company to the Bank under the Company's Security Agreement constitute valid and
perfected first priority liens and security interest in the Company's
Collateral. Except as disclosed on Schedule 4.13 hereto, the liens and security
interests granted by each of the Subsidiaries to the Bank under the Subsidiaries
Security Agreements constitute valid and perfected first priority liens and
security interests in each Subsidiary's Collateral.

               4.14 Insurance. All physical properties and assets of the Company
and each of the Subsidiaries are insured in accordance with the requirements of
Section 6.5 hereof.

               4.15 Subsidiaries. Except for shares of stock in the
Subsidiaries, neither the Company nor any Subsidiaries owns shares of stock in,
or has any option, warrant or other right to purchase or subscribe to shares of
stock in or otherwise acquire an equity interest in any Person which upon
effecting such purchase would be a Subsidiary.

               4.16 Disclosure. No certificate, statement, report or other
document furnished to the Bank by or on behalf of the Company or any of the
Subsidiaries in connection herewith or in connection with any transaction
contemplated hereby, or this Agreement, or any Loan Document, contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained therein not misleading.

               4.17 No Event of Default. After giving effect to the transactions
contemplated by this Agreement, the Loan Documents and the other instruments or
documents delivered in connection herewith and therewith, there does not exist
at the date hereof any condition, event or act which constitutes an Event of
Default hereunder or which, after notice or lapse of time, or both, would
constitute an Event of Default hereunder.

          5. CONDITIONS.

               5.1 Initial Revolving Loan. The obligation of the Bank to make
the initial Revolving Loan to the Company hereunder on or after the date hereof
is subject to the satisfaction, on or before the date of the making of such
Revolving Loan, of each of the following conditions precedent:

                    5.1.1 Revolving Note. The Revolving Note shall have been
duly completed, executed and delivered to the Bank.

                    5.1.2 Loan Documents. The Company and each of the
Subsidiaries shall have executed and delivered to the Bank the Loan Documents to
be executed by each of them, and all other agreements, instruments and documents
required or contemplated by this Agreement and the Loan Documents. The liens and
security interests created by the Company's Security Agreement shall have been
perfected and be first and prior to any other lien with respect to the Company's
Collateral, and the liens and security interests created by each of the
Subsidiaries Security Agreements shall have been perfected and be first and be
prior to any other lien with respect to such of the Subsidiaries Collateral as
is owned by the Subsidiaries executing and delivering such Subsidiaries Security
Agreement, except as set forth on Schedule 4.13 hereof.

                    5.1.3 Opinion of the Company's Counsel. The Bank shall have
received a written opinion of Shack Siegel Katz & Flaherty, P.C., counsel to the
Company and each of the Subsidiaries, dated as of even date herewith, and
covering such other matters incident to the transactions herein contemplated as
the Bank may reasonably request.


                                       12




<PAGE>

                    5.1.4 Supporting Documents - Initial Revolving Loan. The
Bank shall have received the following: (a) a certificate of the Secretary or an
Assistant Secretary of the Company and of each Subsidiary, dated as of even date
herewith, certifying as to (i) the By-laws of the Company and each such
Subsidiary as then in effect, or in the case of any Subsidiary a certification
by an officer thereof that its by-laws have not been amended or repealed since
the date of the last copy thereof provided by such Subsidiary to the Bank; (ii)
resolutions of the Board of Directors of the Company and each such Subsidiary
authorizing the execution, delivery and performance of this Agreement, the
Revolving Note, the amendment to and confirmation of the Company's Security
Agreement, the Subsidiaries Security Agreements, on any applicable amendments
thereto and confirmation thereof, the Guarantees, or as applicable confirmations
thereof, and the other Loan Documents and the borrowing(s) hereunder, to the
extent being executed by each such corporation; (iii) the full force and effect
of such resolutions on the date hereof; and (iv) the incumbency and signature of
each of the officers of the Company and each Subsidiary signing such Loan
Documents and all other closing papers hereunder; (b) a certified copy of the
Certificate or Articles of Incorporation of the Company and each Subsidiary, as
amended through the date hereof, or in the case of any Subsidiary a
certification by an officer that its Certificate of Articles of Incorporation
have not been amended since the date of the last certified copy thereof provided
by the Subsidiary to the Bank; (c) a long-form certificate of subsistence from
the Secretary of State of the State of New York in respect of the Company and
certificates of subsistence or good standing from the appropriate official in
the jurisdiction of incorporation of each Subsidiary; (d) the tax status reports
in respect of the Company and each Subsidiary from state tax authorities unless
the authorities in such state do not issue tax status reports; and (e) such
additional supporting documents as the Bank may reasonably request.

                    5.1.5 Insurance. The Bank shall have received one or more
certificates, in form and substance satisfactory to the Bank, evidencing the
existence of the insurance required by the provisions of Section 6.5 hereof.

                    5.1.6 Assignment of Life Insurance Policy. The Bank shall
have received confirmation satisfactory to it that the assignment of life
insurance in the aggregate amount of $3,000,000 on the life of Michael
Weinstein, made as condition to the effectiveness of the Second Restated
Agreement, remains in full force and effect.

                    5.1.7 Commitment Fee. The Borrower shall have paid to the
Bank a commitment fee in the sum of $67,500, and the first annual installment of
the agency fee provided for in Section 5.2.5.

               5.2 Subsequent Revolving Loans. In addition to the conditions set
forth above with respect to the initial Revolving Loan, each of the following
conditions precedent shall be applicable thereto and to any subsequent Revolving
Loans hereunder.

                    5.2.1 No Default. After giving effect to each Revolving Loan
there shall exist no Event of Default and no condition, event or act which, with
notice or lapse of time, or both, would constitute such an Event of Default.

                    5.2.2 Representations. All representations and warranties
contained herein, or otherwise made in writing in connection herewith by the
Company or any Subsidiary, shall be true and correct, with the same force and
effect as if made on and as of the date of such Revolving Loan, and the
representations and warranties set forth in Section 4.9.1 shall also be true and
correct (and shall be deemed repeated as of the date of such Revolving Loan) in
respect of all of the Company's financial statements and all other information
furnished to the Bank as at any such date, or with respect to any period,
subsequent to September 28, 2002.


                                       13




<PAGE>

                    5.2.3 Officers' Certificate. At the time of the making of
the initial Revolving Loan and at the time of the making of such subsequent
Revolving Loan, the Company shall deliver to the Bank a certificate signed by
the chief executive and the chief financial officers of the Company, dated such
date, certifying and confirming that (i) no default exists as set forth in
Section 5.2.2, (ii) the representations and warranties referred to in Section
5.2.3 are true and correct and (iii) all conditions to the Bank's obligation to
make the Loan have been fully satisfied.

                    5.2.4 Form U-1. If required by the Bank at any time, the
Company shall have furnished to the Bank its duly executed Federal Reserve Form
U-1, in form and substance reasonably satisfactory to the Bank.

                    5.2.5 Agency Fee. Concurrently with the execution and
delivery of this Agreement, and on each annual anniversary thereof, until the
Maturity Date, the Borrower shall pay the Bank an agency fee of $25,000.

                    5.2.6 Proceedings. All corporate and legal proceedings and
all instruments and agreements in connection with the transactions contemplated
by this Agreement shall be satisfactory in form, scope and substance to the Bank
and its counsel, and the Bank and such counsel shall have received all
information and copies of all documents, including reports of corporate
proceedings, which the Bank or its counsel may reasonably have requested in
connection therewith, such documents where appropriate to be certified by proper
corporate and governmental authorities.

                    5.2.7 No Adverse Change. There shall have been no material
adverse change in the operations, business, property or assets or in the
condition (financial or otherwise) of the Company or any of the Subsidiaries.

               Each borrowing hereunder shall constitute a representation and
warranty by the Company to the Bank that all of the conditions specified in this
Section 5 have been satisfied as of that time.

          6. AFFIRMATIVE COVENANTS.

          The Company covenants and agrees that from and after the date hereof
and so long as any Revolving Loan (including interest or any other obligation
incurred hereunder) is outstanding or the Commitment is in effect, unless the
Bank shall otherwise consent in a writing delivered to the Company, the Company
and each Subsidiary will:

               6.1 Financial Statements. Furnish to the Bank:

                    6.1.1. as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the first three (3) fiscal
quarters in each fiscal year of the Company, consolidated and consolidating
balance sheets of the Company and its Subsidiaries as at such date and
consolidated and consolidating statements of operations, shareholders' equity
and cash flows of the Company and its Subsidiaries for the period commencing at
the beginning of such fiscal year and ending on the last day of such quarter,
together with the comparative financial statements for the corresponding period
of the preceding fiscal year, in each case duly certified by an authorized
officer of the Company as being complete and correct and as having been prepared
in accordance with generally accepted accounting principles consistently
applied;

                    6.1.2. as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal year, consolidated balance
sheets of the Company and its Subsidiaries as at such date and consolidated
statements of operations, shareholders' equity and cash flows of the Company and
its Subsidiaries for such fiscal year, together with the comparative financial
statements for the preceding fiscal year, in each case certified by independent
certified public accountants of recognized standing acceptable to the Bank;


                                       14




<PAGE>

                    6.1.3. together with the financial statements referred to in
Sections 6.1.1 and 6.1.2, a certificate of an authorized officer of the Company
(a) stating that no event has occurred and is continuing which constitutes an
Event of Default or which with notice and/or lapse of time would constitute an
Event of Default, or if an Event of Default or such event has occurred and is
continuing, stating the nature thereof and the action which the Company proposes
to take in connection therewith; and (b) setting forth the information
(including detailed calculations) required in order to establish whether the
Company was in compliance with the covenants set forth in Section 7 hereof
during and as of the end of the period covered by the financial statements then
being furnished;

                    6.1.4. together with the financial statements referred to in
Section 6.1.2, the related consolidating financial statements of the Company and
its Subsidiaries, which need not be certified; and

                    6.1.5. as soon as practicable, but in any event not later
than forty-five (45) days prior to the end of each fiscal year, a projection for
the next following fiscal year, in form and substance acceptable to the Bank.

                    6.1.6 As soon as practical, but in any event not later than
thirty (30) days after the end of each month, a statement signed by an executive
officer of the Company separately setting forth the Earnings Before Taxes for
each Subsidiary engaged in a Restaurant-Related Business.

                    6.1.7 As soon as practical, but in any event not later than
forty-five (45) days after the end of each fiscal quarter of the Company, a
certificate signed by an executive officer of the Company, certifying that the
Company is in compliance with each of its covenants in this Agreement, or if the
Company is not in compliance, specifying its breaches, and the particulars
thereof.

               6.2 SEC Filings. So long as the Company is registered with the
Securities and Exchange Commission ("SEC") pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, the Company will furnish to the
Bank, promptly following the filing thereof with the SEC or any securities
exchange, copies of all regular and periodic reports, notices, registration
statements, proxy statements and other documents filed by the Company with the
SEC or any securities exchange.

               6.3 Notice of Default; Litigation. Furnish to the Bank (i) as
soon as practicable and in any event within five (5) days after the occurrence
of each Event of Default or each event which, with notice and/or lapse of time,
would constitute an Event of Default, the statement of an authorized officer of
the Company setting forth details of such Event of Default or event, and the
action which the Company proposes to take in connection therewith; and (ii)
promptly after the occurrence thereof, notice of the commencement of any action
or proceeding of the type described in Section 4.11 hereof and notice of any
material development in any such action or proceeding.

               6.4 Payment of Taxes. Pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or its income or profits, or
upon any of its properties, or the income, profits or property of any
Subsidiary, prior to the date on which penalties attach thereto, except those
which are being contested in good faith and by proper proceedings; provided,
however, that the Company or Subsidiary, as the case may be, shall have
established appropriate and proper reserves which are reflected on its books, to
the extent required by generally accepted accounting principles.

               6.5 Maintenance of Insurance. Maintain insurance with responsible
and reputable insurers reasonably acceptable to the Bank in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general locations in which
the Company and each Subsidiary operates. All such insurance on the Company's
Collateral and the Subsidiaries Collateral (unless prohibited by the terms of
any lease to which the Company or such Subsidiary is a party) shall name the
Bank as loss payee in an amount not less than the maximum obligation of the
Company to the Bank hereunder, and shall contain such other provisions as the
Bank may reasonably require to fully protect its interest in the Company's
Collateral and the Subsidiaries Collateral, provided, however, that the Company
or a Subsidiary may


                                       15




<PAGE>

be named as initial loss payee of such insurance in an aggregate amount not
exceeding $50,000 for each occurrence; provided, however, the aggregate amount
for which the Company and all Subsidiaries shall be named as the initial loss
payee(s) shall not exceed $100,000 in any fiscal year of the Company. In the
event that the Bank shall receive any such insurance proceeds, it shall remit
such proceeds to the Company or the Subsidiary which suffered the insured loss,
which proceeds shall be used either (i) to restore or replace the fixtures,
furniture, furnishings or equipment as were the subject of the insured loss or
(ii) for working capital purposes. Notwithstanding the foregoing, the Bank shall
have the right to apply any such amount received by it to the payment of the
Revolving Note, or other obligation of the Company or the Subsidiaries to the
Bank should an Event of Default occur, and to retain such amount on deposit if
an event, condition or act which with notice or the lapse of time, or both,
would constitute an Event of Default, has occurred and is continuing.

               6.6 Access to Premises, Books and Records. At any reasonable time
during normal business hours and from time to time, upon reasonable prior
notice, permit the Bank or any of its agents or representatives to examine and
make copies of and abstracts from its records and books of account, visit its
properties and discuss its affairs, finances and accounts with any of its
officers, directors or independent accountants.

               6.7 Books of Account. Keep proper records and books of account,
in which complete entries will be made in accordance with generally accepted
accounting principles consistently applied, reflecting all of its financial
transactions.

               6.8 Preservation of Corporate Existence. Preserve and maintain
its corporate existence, rights, franchises and privileges, and those of each of
the Subsidiaries, in the jurisdiction of its incorporation and qualify and
remain qualified as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and operations
or the ownership of its properties; provided, however, that the Company shall
not be required to maintain the existence, rights, franchises and privileges of
any Subsidiary which shall no longer conduct any operations or own any property;
and provided, further, that any Subsidiary may be merged with and into the
Company or another Subsidiary.

               6.9 Maintenance of Properties. Maintain, preserve and keep all of
its properties and assets in reasonably good working order and condition,
ordinary wear and tear excepted, and make all necessary and proper renewals,
replacements, additions and improvements thereto.

               6.10 ERISA. Maintain compliance in all material respects with the
applicable provisions of ERISA. The Company will deliver to the Bank, promptly
after the filing or receiving thereof, copies of all reports, including annual
reports and notices, which the Company or any Subsidiary files with or receives
from the PBGC or the U.S. Department of Labor under ERISA; and as soon as
possible and in any event within thirty (30) days after the Company knows or has
reason to know that any Reportable Event or Prohibited Transaction has occurred
with respect to any Plan or that the PBGC, the Company or any Subsidiary has
instituted or will institute proceedings under Title IV of ERISA to terminate
any Plan, the Company will deliver to the Bank a certificate of the chief
executive officer or chief financial officer of the Company setting forth the
details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action the Borrower and/or each affected Subsidiary proposes
to take with respect thereto.

               6.11 Change in Business. The Company and each Subsidiary will not
make any material change in the character of its business (a "Restaurant Related
Business") as carried on at the date hereof.

               6.12 Compliance. The Company and each Subsidiary will comply with
the requirements of all applicable laws, rules, regulations, orders of any
governmental authority, and all agreements to which it is a party, a
noncompliance with which laws, rules, regulations, orders and agreements would
materially adversely affect the business, operations, prospects or assets, or
the condition, financial or otherwise, of the Company.


                                       16




<PAGE>

               6.13 Additional Notification to Bank. The Company shall promptly
notify the Bank of (i) each and every default by the Company or any Subsidiary
under any obligation for borrowed money which would permit the holder of such
obligation to accelerate its maturity, including the names and addresses of the
holders of such obligation and the amount thereof, in each case describing the
nature thereof and the action the Company, or the applicable Subsidiary, as the
case may be, proposes to take with respect thereto, and (ii) any change in the
chief executive office of the Company or location of any of the Company's
Collateral or any Subsidiaries Collateral from that listed in the Company's
Security Agreement or any of the Subsidiaries Security Agreements.

               6.14 Additional Subsidiaries. In the event that the Company or
any Subsidiary shall cause a new Subsidiary to be formed, or acquire such shares
of any corporation, or such equity interest in any other Person, that it shall
become a Subsidiary, the Company shall give the Bank not less than fifteen (15)
days notice following the formation or acquisition of a new Subsidiary or of
such Subsidiary, which notice shall (i) specify the name and state of
incorporation or formation of such new Subsidiary, identify each of the
shareholders, or other equity owners therein, and state the number of shares or
other equity interest owned by each of them, (ii) state whether it is to be a
party to a lease or management agreement and identify the other party thereto,
(iii) give the address of any Restaurant-Related Business or other facility to
be operated or managed by such Subsidiary, and (iv) state the amount to be
invested by the Company in such Subsidiary or to be paid by it to acquire same.
Concurrently with the Company's creating or acquiring a new Subsidiary, such
Subsidiary shall execute and deliver a Guaranty to the Bank, and a Subsidiary's
Security Agreement pursuant to which such Subsidiary, as debtor, shall grant to
the Bank a first priority perfected security interest in its Subsidiary's
Collateral subject only to the lien of Purchase Money Indebtedness in respect
thereof. All of the shares in any such Subsidiary which have been issued to the
Company or to any Subsidiary, together with stock powers executed in blank by
the record owner of such shares, or if applicable a collateral assignment of any
other form of equity interest in a Subsidiary, sufficient to transfer such
shares or other interest upon delivery, shall be delivered by the Company to the
Bank promptly after the Company, or such other Subsidiary's receipt thereof,
which shares and stock powers or collateral assignment will thereupon become
part of the Company's Collateral or the other Subsidiary's Collateral.

               6.15 Notification of Write-offs of Investments and Sales of
Assets. Within ten (10) days of (a) the write-off or write-down of the Company's
or any Subsidiary's investments in or advances to any Restaurant-Related
Businesses in excess of an aggregate of $1,000,000 in any fiscal year, or (b)
the sale of any assets of the Company or any Subsidiary in excess of $250,000
other than in the ordinary course of business, the Company shall deliver a
written notice to the Bank describing such event in reasonable detail.

               6.16 Description of New Restaurant Arrangements. Upon entering
into a letter of intent or similar document setting forth the terms of the
arrangements for the development or acquisition of a new Restaurant-Related
Business, the Company will deliver to the Bank a copy thereof, will advise the
Bank of the material terms (including, without limitation, the amount of the
proposed investment, any indebtedness proposed to be incurred, and whether such
indebtedness is to be non-recourse or with recourse) and will thereafter keep
the Bank informed of any material developments in respect thereof. Within ten
(10) days after execution thereof, the Company will deliver to the Bank a copy
of any acquisition agreement or lease relating thereto.

               6.17 Further Assurances. The Company and each Subsidiary will
duly execute and deliver, or will cause to be duly executed and delivered, such
further instruments and documents, including, without limitation, additional
security agreements, Uniform Commercial Code financing statements or amendments
or continuations thereof, and will do or use its best efforts to cause to be
done such further acts as may be necessary or proper in the Bank's reasonable
opinion to effectuate the provisions or purposes of this Agreement or the Loan
Documents.

          7. NEGATIVE COVENANTS.


                                       17




<PAGE>

          The Company covenants and agrees that from and after the date hereof
and so long as any Loan (including interest or any other obligations incurred
hereunder) is outstanding or any Commitment is in effect, unless the Bank shall
otherwise consent in writing delivered to the Company, the Company will not, and
will not permit or suffer any Subsidiary to:

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

                    7.1.1. Indebtedness listed in the financial statements
described in Section 4.9.1, but no renewals, extensions or refinancings thereof;

                    7.1.2. Purchase Money Indebtedness;

                    7.1.3. Indebtedness of any Subsidiary (other than Purchase
Money Indebtedness) for assets purchased for use in the Restaurant-Related
Business of such Subsidiary, which shall be deemed a capital expenditure and
shall be subject to the limitation of Section 7.8;

                    7.1.4. Indebtedness of the Company for assets purchased for
use in the Restaurant-Related Business conducted by the Company or any
Subsidiary, which, if such Indebtedness provides for non-recourse liability
limited to the asset purchased, shall constitute, for the purposes of the second
sentence of Section 7.1.9, Purchase Money Indebtedness, or which, if such
Indebtedness does not so provide, shall be deemed a capital expenditure and
shall be subject to the limitation of Section 7.8, and which Indebtedness may be
secured by the asset Purchased;

                    7.1.5. Indebtedness of any Subsidiary to the Company, which
Indebtedness is created for working capital purposes and not in connection with
the development or acquisition of a Restaurant-Related Business in an amount not
exceeding $250,000, and any such Indebtedness of such Subsidiary exceeding such
amount, which excess shall be deemed a capital expenditure subject to the
limitation set forth in Section 7.8. Indebtedness of the Company to a
Subsidiary, or of a Subsidiary to a Subsidiary, is permitted without limitation.

                    7.1.6. Indebtedness to the Company of any newly-organized
Subsidiary (or any such Indebtedness guaranteed by the Company) in connection
with the development or acquisition of a Restaurant-Related Business, which
shall be deemed a capital expenditure subject to the limitation set forth in
Section 7.8.

                    7.1.7. Consolidated Trade Indebtedness;

                    7.1.8. Indebtedness of the Company and the Subsidiaries in
respect of endorsements made in connection with the deposit of items for credit
or collection in the normal and ordinary course of business; and

                    7.1.9. Consolidated Indebtedness, which in the aggregate
does not exceed (i) $20,500,000 through June 29, 2003, (ii) $13,000,000 from
June 30, 2003 through September 29, 2003, and (iii) $12,000,000 thereafter and
until the Maturity Date. Consolidated Indebtedness as calculated for the
purposes of this Section 7.1.9 shall not include (i) Consolidated Trade
Indebtedness, (ii) Purchase Money Indebtedness, and (iii) outstanding Letters of
Credit against which there has not been a draw. This Section 7.1.9 is a
maintenance test as well as an incurrence test in that calculations will be made
on a quarterly basis to determine compliance. Nothing in this Section 7.1.9, or
elsewhere in this Agreement, shall permit the Company or any Subsidiary to
incur, assume or suffer to exist any Indebtedness except for Indebtedness which
is required in the normal course of the business of operating and acquiring
Restaurant-Related Businesses.


                                       18




<PAGE>

                    7.1.10 Subordinated Indebtedness up to $5,000,000 at any one
time outstanding.

               7.2 Cash Flow. Maintain Consolidated Operating Cash Flow,
calculated as at the end of each fiscal quarter on the basis of the twelve (12)
full calendar months preceding such calculation, of less than the product of (i)
(a) 1.5 to 1 (except as provided in subparagraph (ii)) and (b) the Consolidated
Debt Service for such twelve (12) month period, and (ii) for the fiscal quarter
of the Company ending March 31, 2003 (a) 1.25 to 1 and (b) the Consolidated Debt
Service for such twelve (12) month period.

               7.3 Consolidated Net Worth. Maintain Consolidated Net Worth which
as at the end of each fiscal quarter is (i) not less than $19,000,000 at any
time until September 30, 2003 and (ii) not less than $23,000,000 from September
30, 2003 until the Maturity Date. For the purposes of this covenant and the
covenant set forth in Section 7.4, liabilities of the Company used in the
calculation of Consolidated Net Worth shall not include principal and interest
on all indebtedness which has been subordinated to the Indebtedness of the
Company to the Bank on the terms set forth in the next sentence and pursuant to
documentation reasonably acceptable to the Bank ("Subordinated Indebtedness");
provided, however, that the first $500,000 of Subordinated Indebtedness shall be
paid to the Bank in reduction of the outstanding Loan Balance (a "Reduction
Amount"). The Company may pay interest on and repay the Subordinated
Indebtedness, in whole or in part; provided, however, that after giving effect
to such payment (i) the Company shall be in full compliance with each covenant
in the Restated Agreement, based upon a determination made immediately after
giving effect to such payment, and (ii) no Event of Default shall have occurred
and be continuing.

               7.4 Ratio of Consolidated Indebtedness to Shareholders' Equity.
Maintain a ratio of total Consolidated Indebtedness to Shareholders' Equity of
more than (i) 1.5 to 1 as at the end of each fiscal quarter of the Company
through September 30, 2003 and (ii) 1.25 to 1 as at the end of each fiscal
quarter of the Company until the Maturity Date.

               7.5 Liens. Directly or indirectly, create, incur, assume or
permit or suffer to exist any mortgage, lien, security interest, charge or
encumbrance on, or pledge or deposit of or conditional sale, lease or other
title retention agreement with respect to, any of its properties or assets,
whether now owned or hereafter acquired or created, or be bound by or subject to
any agreement or option to do so, provided that the foregoing restrictions shall
not apply to:

                    7.5.1. liens for taxes, assessments or governmental charges
or levies the payment of which is not yet due or is being contested in good
faith by appropriate proceedings;

                    7.5.2. liens incurred by the Company or the Subsidiaries or
deposits made by the Company or the Subsidiaries in the ordinary course of
business in connection with worker's compensation or unemployment insurance or
to secure the performance of tenders, statutory obligations, surety and appeal
bonds, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);

                    7.5.3. good faith deposits (in amounts not greater than the
amounts normally required under leases of that type) under leases of real
property to which the Company or any of the Subsidiaries is a party;

                    7.5.4. zoning restrictions, easements, rights-of-way,
restrictions, exceptions, reservations, covenants and other similar title
exceptions or encumbrances affecting real property, provided the same are not
incurred in connection with the borrowing of money and do not in the aggregate
materially detract from the value of said properties or materially interfere
with their use in the ordinary course of business;

                    7.5.5. statutory or common law possessory liens for charges
incurred by the Company or the Subsidiaries in the ordinary course of business,
the payment of which is not yet due or is being contested in good faith by
appropriate steps promptly initiated and diligently conducted, if adequate
reserves or other appropriate provision, if any, as shall be required by
generally accepted accounting principles shall have been made therefor;


                                       19




<PAGE>

                    7.5.6. the mortgages, liens and encumbrances disclosed on
Schedule 4.13 hereto;

                    7.5.7. purchase money liens securing Indebtedness permitted
to be incurred under Section 7.1 hereof, including conditional sale or related
lease arrangements, created or executed concurrently with or immediately
following the time of acquisition of such property;

                    7.5.8. purchase money liens created by any Subsidiary
securing Purchase Money Indebtedness or the assumption by any Subsidiary of
existing purchase money liens in connection with the acquisition by such
Subsidiary of any additional Restaurant-Related Business acquired by any
Subsidiary, provided, however, that such liens extend only to the assets of the
Restaurant-Related Business acquired;

                    7.5.9. a lien arising from a judgment which does not at the
time constitute the basis for a default under the provisions of Section 8.1.8
hereof; and

                    7.5.10. liens created in connection with the issuance of (or
to further secure) Bank Debt.

               7.6 Loans, Advances, Investments. Except (i) loans made to fund
the purchase of the Company's shares pursuant to its stock option plans, (ii)
loans to the Company's employees other than as provided for in (i), which loans
shall not exceed $1,000,000 in the aggregate, and (iii) other loans, with the
prior written consent of the Bank, which consent shall not be unreasonably
withheld or delayed:

                    7.6.1 make any loan, advance or capital contribution or
extend any credit to any Person (except to employees or to a Subsidiary in the
ordinary course of business, to the extent permitted in this Agreement), or make
any commitment to purchase or otherwise acquire any stock, bond, debenture, note
or other security or obligation of any Person if such loan, advance, capital
contribution, extension of credit or purchase or acquisition (an "Investment")
is to or in a Person engaged in other than a Restaurant-Related Business and
such Investment, together with all other outstanding Investments and the cost of
any mergers, consolidations or acquisitions of corporations engaged in other
than Restaurant-Related Businesses pursuant to Section 7.9 hereof, exceeds the
sum of $500,000; and

                    7.6.2 make any Investment in any Restaurant-Related
Businesses managed (but not owned by) the Company or a Subsidiary if such
Investment, together with all other such Investments made in any twelve (12)
month period, exceeds the sum of $1,000,000. For the purposes of this subsection
7.6.2, a Restaurant-Related Business which is "owned" by the Company shall
include a Restaurant-Related Business in which an Investment is permitted
pursuant to Section 7.6.3.

                    7.6.3 without the prior written consent of the Bank, make
any Investment in any Restaurant-Related Business, unless the Company, directly
or indirectly, shall own not less than 51% of both the equity and voting
interests in the Person owning and operating such Restaurant-Related Business.

               7.7 Guarantees. Assume, guarantee, endorse or otherwise be or
become directly or contingently responsible or liable for the obligations of any
Person (including, but not limited to, an agreement to purchase any obligation,
stock, assets, goods or services or to supply or advance any funds, assets,
goods, or services other than in the ordinary course of business, or otherwise
to assure the creditors of any Person against loss) other than (i) guarantees by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (ii) guarantees by the Company
of the obligations of any Subsidiary, or by any Subsidiary of the obligations of
the Company or any other Subsidiary, (iii) guarantees in favor of the Bank, or
(iv) other guarantees by the Company or a Subsidiary not otherwise permitted
hereunder, provided that the amount thereof shall be deemed a capital
expenditure, subject to the limitation set forth in Section 7.8.

               7.8 Capital Expenditures. Without the prior written consent of
the Bank, make, in the


                                       20




<PAGE>

aggregate (by the Company and any Subsidiary) in any fiscal year, any
expenditures for fixed or capital assets whether by purchase or capitalized
lease (including such loans, advances, investments, recourse purchase money
indebtedness and guarantees as are deemed capital expenditures under Sections
7.1.3, 7.1.4, 7.1.5 and 7.1.6 of this Agreement), in excess of $2,000,000.

               7.9 Mergers, Consolidations, Acquisitions. Except with the prior
written consent of the Bank, which consent shall not be unreasonably withheld or
delayed, merge into or consolidate with or into any corporation (and, for
purposes of this Section 7.9, the acquisition by the Company or any Subsidiary,
by lease, purchase or otherwise, of all or substantially all of the assets of
any corporation shall be deemed a merger of such corporation with the Company or
such Subsidiary), if such corporation is not engaged in Restaurant-Related
Businesses, except that the Company or any Subsidiary may merge into,
consolidate with or into or acquire any corporation or corporations engaged in
other than Restaurant-Related Businesses without the prior consent of the Bank
if the aggregate cost thereof or purchase price therefor, together with the
amount of any Investments in other than Restaurant-Related Businesses, does not
exceed $500,000.

               7.10 Sales of Assets. Sell, lease, assign, transfer or otherwise
dispose of all or substantially all of its assets; except any Subsidiary may
sell, lease, assign or otherwise dispose of substantially all of its assets.

               7.11 Dividends, Redemptions. Declare or pay any dividend,
purchase, redeem or otherwise acquire for value any of its capital stock now or
hereafter outstanding or return any capital or make any distribution of assets
to stockholders, except that Subsidiaries may declare and pay dividends, return
capital and make distributions of assets to the Company and the Company may
declare and pay stock dividends. Notwithstanding the foregoing, the Company may
use up to $5,000,000 of the proceeds from life insurance policies which it owns
on the life of Michael Weinstein to redeem its shares in the event of his death;
provided, however, that the Company is in compliance with all of its covenants
in this Agreement, and the insurance policies and proceeds utilized for such
purpose have not been pledged or assigned to the Bank.

               7.12 Transactions with Affiliates. Except as is otherwise
specifically permitted pursuant to this Agreement, enter into any transaction,
including, without limitation, the lease, purchase, sale or exchange of property
or the making of any loans or the entering into agreements for any payments with
respect to, or the making of any payment of, any fees, charges or other expenses
resulting from any allocation of general overhead, management fees or other
similar services, with any Affiliate of the Company or any of the Subsidiaries
except in the ordinary course of and pursuant to the reasonable requirements of
the business of the Company or such Subsidiary and upon fair and reasonable
terms no less favorable to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person other than an Affiliate.

               7.13 Sale of Subsidiary's Shares or Assets. Sell any of the
capital stock of any Subsidiary, or all, or substantially all, of the assets of
any Subsidiary, unless the Bank shall be paid seventy (70%) percent of the cash
proceeds of such sale in reduction of the Revolving Loans. In the event that any
such sale is financed by notes of the purchaser, such notes shall be pledged to
the Bank as Company Collateral as provided in Section 2.4.3, and the cash
proceeds thereof shall be applied pursuant to this Section upon payment of such
notes. Upon receipt by the Bank of a payment from the Borrower pursuant to this
Section, the Commitment shall be reduced by an amount equal to fifty (50%)
percent of such payment (a "Reduction Amount").

          8. DEFAULTS AND REMEDIES.

               8.1 Events of Default. In the case of the occurrence of any of
the following events for any reason whatsoever, and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or pursuant to or in compliance with any judgment, decree or order of any
court or any order, rule or regulation of any governmental body or otherwise
(each herein sometimes called an "Event of Default"):

                    8.1.1. the Company shall fail to make any payment of
principal of or interest on the Revolving Note, or any commitment fee, facility
fee or deficiency fee within three (3) days after notice of a default in such
payment;


                                       21




<PAGE>

                    8.1.2. the Company or any Subsidiary shall default in the
performance or observance of any covenant or agreement contained in Section 7
hereof;

                    8.1.3. the Company or any Subsidiary shall default in the
performance of any other covenant or agreement contained in this Agreement which
shall remain unremedied for a period of ten (10) days after notice of the
occurrence thereof;

                    8.1.4. an event of default or default shall occur and be
continuing under any other Loan Document;

                    8.1.5. any representation or warranty made by or on behalf
of the Company or any Subsidiary in this Agreement, the Revolving Note, in any
other Loan Document or in any other certificate, agreement, instrument or
statement delivered to the Bank by or on behalf of the Company shall at any time
prove to have been incorrect when made in any material respect;

                    8.1.6. the Company or any Subsidiary shall default in the
payment of principal of or interest on any Indebtedness for borrowed money or
the deferred purchase price of property (including any such Indebtedness in the
nature of a lease) or shall default in the performance or observance of the
terms of any instrument pursuant to which such Indebtedness was created or is
secured, the effect of which default is to cause or permit any holder of any
such Indebtedness to cause the same to become due prior to its stated maturity
(and whether or not such default is waived by the holder thereof);

                    8.1.7. Michael Weinstein shall not at all times be active in
the management of the Company, other than by reason of his death or disability;

                    8.1.8. any judgment against the Company or any Subsidiary or
any attachment, levy or execution against any of its properties for an amount in
excess of $100,000 shall remain unpaid, or shall not be released, discharged,
dismissed, stayed or fully bonded for a period of thirty (30) days or more after
its entry, issue or levy, as the case may be;

                    8.1.9. the Company or any Subsidiary shall become insolvent
(however evidenced) or be unable, or admit in writing its inability, to pay its
debts as they mature; or

                    8.1.10. the Company or any Subsidiary shall make an
assignment for the benefit of creditors, or a trustee, receiver or liquidator
shall be appointed for the Company or any Subsidiary, or for any of its
property, or any proceedings by or against the Company or any Subsidiary under
any bankruptcy, reorganization, arrangement of debt, insolvency, readjustment of
debt, receivership, liquidation or dissolution law or statute shall be commenced
and which, if not consented to by the Company or such Subsidiary, shall continue
undischarged for a period of thirty (30) days;

                    8.1.11 If the Company shall suspend or have suspended
(voluntarily or involuntarily and for whatever reason) the operation of a
material portion of the business conducted by the Company and the Subsidiaries;
or

                    8.1.12 If (i) a reportable event (within the meaning of
Section 4043(b) of ERISA) (whether or not waived) shall have occurred with
respect to a Plan which could, in the opinion of the Bank, have a material
adverse effect on the financial condition of the Company or of any Subsidiary,
(ii) the filing by the Company, any Subsidiary or an administrator of any Plan
of a notice of intent to terminate such Plan in a "distress termination" under
the provisions of Section 4041 of ERISA, (iii) the receipt of notice by the
Company, any Subsidiary or an administrator of a Plan that the PBGC has
instituted proceedings to terminate (or appoint a trustee to administer) such a
Plan, (iv) any other event or condition exists which might, in the opinion of
the Bank, constitute grounds under the provisions of Section 4042 of ERISA for
the termination of (or the appointment of a trustee to administer) any Plan by
the PBGC, (v) a Plan shall fail to maintain the minimum funding standard
required by Section 412 of the Internal Revenue Code for any plan year or a
waiver of such standard is sought or granted under the provisions of Section
412(d) of the Internal Revenue Code which could, in the opinion of the Bank,
have material adverse effect on the financial condition of the Company or of any
Subsidiary, (vi) the Company or any Subsidiary has incurred, or is likely to
incur, a liability under the provisions of Sections 4062, 4063, 4064 or 4201 of
ERISA which could, in the opinion of the


                                       22




<PAGE>

Bank, have a material adverse effect on the financial condition of the Company
or any Subsidiary; and in each case in clauses (i) through (vi) of this Section
8.1.12, such event or condition, together with all other such events or
conditions, if any, could subject the Company or any Subsidiary to any tax,
penalty or other liabilities in the aggregate material in relation to the
business, operations, property or financial or other condition of the Company or
any Subsidiary.

Then, if any event described in Section 8.1.10 above shall have occurred the
then extant Note shall immediately become due and payable, and if any event
described in any other subsection of this Section 8.1 shall have occurred, and
at any time thereafter, if any such event shall then be continuing, the Bank may
take either or both of the following actions by notice to the Company: (i)
declare the principal of and accrued interest on the Revolving Note, and any
other notes or evidences of Indebtedness of the Company or any Subsidiary then
held by the Bank, to be due and payable, both as to principal and interest,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in either of the Notes
or in such other note or evidence of Indebtedness to the contrary
notwithstanding; and (ii) declare the Commitment terminated immediately. Upon
termination of the Commitment under this Section 8.1, any accrued fees shall be
and become forthwith due and payable to the Bank without further notice.

               8.2 Suits for Enforcement. In case any one or more of such Events
of Default shall occur and be continuing, the Bank, or any other holder of the
Revolving Note may proceed, to the extent permitted by law, to protect and
enforce such holder's rights either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, condition or
agreement contained in this Agreement or the Revolving Note or in aid of the
exercise of any power granted in this Agreement or the Revolving Note or proceed
to enforce the payment of the Revolving Note, or to enforce any other legal or
equitable right of the holder of the Revolving Note.


                                       23




<PAGE>

               8.3 Remedies Cumulative. No right or remedy herein or in any
other agreement or instrument conferred upon the Bank or the holder of the
Revolving Note is intended to be exclusive of any other right or remedy, and
each and every such right or remedy shall be cumulative and shall be in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise. Without limiting the generality of
the foregoing, if the Revolving Note or any of the other obligations of the
Company to the Bank shall not be paid when due, whether at the stated maturity
thereof, by acceleration or otherwise, the Bank shall not be required to resort
to any particular security, right or remedy or to proceed in any particular
order of priority and the Bank shall have the right at any time and from time to
time, in any manner and in any order, to enforce its security interests, liens,
rights and remedies, or any of them, as it deems appropriate in the
circumstances including, without limitation, all of the rights and remedies of a
secured party under the Uniform Commercial Code of the State of New York and
under the Uniform Commercial Code of any other jurisdiction in which any of the
Company's Collateral or any Subsidiary's Collateral may be situated and apply
the proceeds of such collateral to such obligations of the Company and the
Subsidiaries as it determines in its sole discretion.

          9. MISCELLANEOUS.

               9.1 No Waiver. No failure on the part of the Bank to exercise,
and no delay in exercising, any right hereunder or under any of the Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise by the Bank of any right hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Bank hereunder and under the Loan Documents and under any other
present and future agreements between the Bank and the Company or any Subsidiary
are cumulative and not exclusive of any rights or remedies provided by law, or
under any of said Loan Documents or agreements, and all such rights and remedies
may be exercised successively or concurrently.

               9.2 Costs and Expenses. The Company shall reimburse the Bank for
all costs and expenses incurred by it, and shall pay the reasonable fees and
disbursements of counsel to the Bank, in connection with the preparation of this
Agreement, the Revolving Note and all other Loan Documents. The Company shall
also pay the costs and expenses incurred by the Bank, including reasonable
attorneys' fees, in connection with the enforcement of the Bank's rights
hereunder and under the Revolving Note and the other Loan Documents. The Company
shall also pay any and all taxes (other than taxes on or measured by net income
of the holder of the Revolving Note) incurred or payable in connection with the
execution and delivery of the Revolving Note.

               9.3 Amendments. No amendment, modification or waiver of any
provision of this Agreement, the Revolving Note nor consent to any departure by
the Company therefrom shall be effective unless the same shall be in writing and
signed by the Bank and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.


                                       24




<PAGE>

               9.4 Survival of Representations. All representations and
warranties made herein or in any other writing furnished to the Bank shall
survive the delivery of the Revolving Note.

               9.5 Construction. This Agreement and the Revolving Note shall be
deemed to be contracts made under the laws of the State of New York and shall be
construed in accordance with the laws of said State applicable to contracts made
and to be performed entirely within such State.

               9.6 Notices. All notices, approvals, consents, requests, demands
or other communications (collectively, "Communications") to or upon the
respective parties hereto shall be made in writing in one of the following ways
and shall be deemed to have been given, received and dated: If by hand,
immediately upon delivery; if by facsimile transmission, telex or telegram,
immediately upon receipt of answerback or confirmation; if by express mail or
any other overnight delivery service, one (1) day after dispatch; and if by
certified mail, return receipt requested, four (4) days after mailing. All
Communications are to be given to the following addresses (or to such other
address as any party may designate by Communication in accordance with this
Section):

If to the Bank:     Bank Leumi USA
                    562 Fifth Avenue
                    New York, New York 10036
                    Attn: Ms. Iris Schechter
                          Vice President

with a copy to:     Warshaw Burstein Cohen
                    Schlesinger & Kuh LLP
                    555 Fifth Avenue
                    New York, New York 10017
                    Attn: Allen N. Ross, Esq.

If to the Company
or a Subsidiary:    Ark Restaurants Corp.
                    85 Fifth Avenue
                    New York, New York 10003
                    Attn: Michael Weinstein, President

with a copy to:     Shack Siegel Katz & Flaherty, P.C.
                    530 Fifth Avenue
                    New York, New York 10036
                    Attn: Donald Shack, Esq.

               9.7 Successors and Assigns. This Agreement shall be binding upon
the Company and its successors and assigns and the terms hereof shall inure to
the benefit of the Bank and its successor and assigns, including a subsequent
holder of either of the Notes.

               9.8 Further Assurances. The Company agrees to execute and deliver
such further documents and to do such other acts and things as the Bank may
reasonably request in order further to effect the purposes of this Agreement and
the due performance by the Company of its obligations hereunder.

               9.9 Severability. The provisions of this Agreement are severable,
and if any provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall not in any
manner affect such provision in any other jurisdiction or any other provision of
this Agreement in any jurisdiction.

               9.10 JURISDICTION; WAIVER OF JURY TRIAL. THE COMPANY HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT


                                       25




<PAGE>

LOCATED IN NEW YORK CITY OVER ANY ACTION OR PROCEEDING ARISING OUT OF ANY
DISPUTE BETWEEN THE COMPANY AND THE BANK WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF A COPY OF SUCH PROCESS TO THE
COMPANY AT THE ADDRESS SET FORTH ABOVE. IN THE EVENT OF LITIGATION BETWEEN THE
COMPANY AND THE BANK OVER ANY MATTER CONNECTED WITH THIS AGREEMENT OR RESULTING
FROM TRANSACTIONS HEREUNDER, THE RIGHT TO A TRIAL BY JURY IS HEREBY WAIVED BY
THE COMPANY AND THE BANK.

               9.11 Bank's Right of Set-Off. Upon the occurrence of an Event of
Default or of any condition, event or act which, with notice or lapse of time,
or both, would constitute such an Event of Default, the Bank is hereby
authorized at any time or from time to time, without notice to the Company, any
Subsidiary or any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (generally or
special) and any other Indebtedness or property at any time held or owing by the
Bank to or for the credit or the account of the Company or any Subsidiary,
whether or not related to this Agreement or any transaction or occurrence
hereunder, against and on account of any and all obligations and liabilities of
the Company or any Subsidiary to the Bank, including (without limitation) all
claims of any nature or description arising out of or connected with this
Agreement and/or the Revolving Note, irrespective of whether or not the Bank
shall have made any demand hereunder and although such obligations, liabilities
or claims, or any of them, shall be contingent or unmatured. In addition, as
security for any and all Indebtedness and other liabilities of the Company or
any Subsidiary to the Bank, whether direct or contingent, now existing or
hereafter arising, the Bank is hereby granted a lien and security interest in
all property of the Company or any Subsidiary held by the Bank, including,
without limitation, all property of every description, now or hereafter in the
possession or custody of or in transit to the Bank for any purpose, including
safekeeping, collection or pledge, for the account of the Company or any
Subsidiary, or as to which the Company or any Subsidiary may have any right or
power. The rights and/or remedies granted to the Bank under this Section 9.11
shall be in addition to, and not in substitution for, any rights of set-off and
banker's lien, to which the Bank may otherwise be entitled.

               9.12 Use of Accounting Terms. Except as otherwise provided
herein, accounting terms used herein shall be construed, calculations hereunder
shall be made and financial data required hereunder shall be prepared, both as
to classification of items and as to amounts, in accordance with generally
accepted accounting principles.

               9.13 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original, and all of which
taken together shall constitute one and the same agreement.

               9.14 Headings. Section headings are for convenience only and
shall not affect the interpretation or construction of this Agreement or either
of the Notes.

                    [Continued on page 35]


                                       26




<PAGE>

          IN WITNESS WHEREOF, the Company and the Bank have duly executed this
Agreement as of the date first above written.

                                            ARK RESTAURANTS CORP.


                                            By: /s/ Robert Towers
                                               --------------------------
                                               Robert Towers,
                                               Executive Vice President


                                            BANK LEUMI USA


                                            By: /s/ Iris Schechter
                                               --------------------------
                                               Iris Schechter,
                                               Vice President


                                            By: /s/ Eric A. Halpern
                                               --------------------------
                                               Eric A. Halpern
                                               First Vice President


                                       27




<PAGE>

                                    EXHIBIT A

                                      NOTE

$17,000,000    As of February12, 2003

               ARK RESTAURANTS CORP., a New York corporation (the "Company"),
hereby promises to pay to the order of BANK LEUMI USA (the "Bank"), at the
office of the Bank at 562 Fifth Avenue, New York, New York 10036, in lawful
money of the United States and in immediately available funds, the principal sum
of Seventeen Million ($17,000,000) Dollars or, if less, the aggregate principal
amount of all outstanding Revolving Loans as defined in and made by the Bank to
the Company pursuant the Loan Agreement (as hereinafter defined).

               Each Loan made by the Bank under the Loan Agreement and each
payment thereof made by the Company, shall be endorsed by the Bank on the
schedule attached to this Note, provided, however, that the failure by the Bank
to endorse the schedule shall not affect the obligation of the Company to repay
the Loans.

               The outstanding unpaid principal balance of this Note shall bear
interest at the rate per annum provided for in the Loan Agreement. Interest on
this Note shall be payable as set forth in the Loan Agreement and shall be
calculated on the basis of a year of 360 days, for the actual number of days
elapsed.

               This note is the Revolving Note referred to in that certain Fifth
Amended and Restated Credit Agreement between the Company and the Bank, dated as
of even date herewith, as such agreement may be amended from time to time (the
"Loan Agreement"), and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in the Loan Agreement. Capitalized terms
used herein, and not defined in this Note, shall be defined as in the Loan
Agreement.

               If any payment on this Note becomes due and payable on a day on
which the Bank's offices are closed (as required or permitted by applicable law
or otherwise), such payment shall be extended to the next succeeding day on
which those offices are open, and if the date for any payment of principal is so
extended, interest thereon shall be payable for the extended time.

               Presentment for payment, demand, notice of dishonor, protest and
notice of protest are hereby waived.

                                            ARK RESTAURANTS CORP.


                                            By:
                                               ----------------------------
                                               Robert Towers, Executive
                                               Vice President and Treasurer
                                               ARK RESTAURANTS CORP.

                         Schedule of Loans and Payments

<TABLE>
<CAPTION>
                                 Aggregate
                                  Unpaid
       Amount of    Amount of    Principal
Date     Loan      Loan Repaid    Balance
- ----   ---------   -----------   ---------
<S>     <C>        <C>           <C>

</TABLE>


                                       28




<PAGE>

                                   EXHIBIT C-1

                  CONFIRMATION OF GUARANTEES AND AMENDMENT AND
                       CONFIRMATION OF SECURITY AGREEMENTS

     Each of the undersigned hereby confirms that:

     1. It heretofore executed and delivered an Unlimited Guarantee
("Guarantee") in favor of Bank Leumi USA F/K/A Bank Leumi Trust Company of New
York (the "Bank"), wherein and whereby, among other things, it unconditionally
guaranteed to the Bank payment when due, whether by acceleration or otherwise of
any and all liabilities of Ark Restaurants Corp. (the "Company") to the Bank,
together with all interest thereon and all attorneys' fees, costs and expenses,
collection incurred by the Bank in enforcing any of such liabilities as therein
defined.

     2. To secure its Guarantee, it executed and delivered a Security Agreement
as debtor, dated even date therewith, in favor of the Bank, as secured party.
Each reference in its Security Agreement to a Credit Agreement is hereby deemed
amended to refer to the Fifth Amended and Restated Credit Agreement, dated as of
even date herewith, by and between the Company and the Bank (the "Credit
Agreement") as same may be amended from time to time. All capitalized terms used
herein, and not otherwise defined herein, shall have the meanings defined in the
Credit Agreement.

     3. Liabilities, as used in its Guarantee and Security Agreement, means and
includes, but is not limited to, the liabilities of the Company to the Bank for
(i) the Revolving Loans, (ii) Letters of Credit, and (iii) the Company's other
obligations to the Bank pursuant to the Credit Agreement and the Loan Documents.

     3. The Bank has agreed to make the loans identified above, and otherwise
provide credit facilities to the Company in reliance, among other things, upon
the execution and delivery of this Confirmation of Guarantees and Amendment and
Confirmation of Security Agreements.

     4. Its Guarantee and Security Agreement are in full force and effect, have
not been terminated, rescinded, amended or modified (except as the Security
Agreement is amended by paragraph 2 hereof), and the undersigned has no defenses
or offset with respect to its obligations to the Bank under its Guarantee or
Security Agreement.

Dated:  New York, New York
        February 12, 2003

                                            Conis Realty Corp.
                                            d/b/a Metropolitan Cafe


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                       2




<PAGE>

                                            MEB On First Inc.
                                            d/b/a Canyon Road Grill


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            MEB Emporium Corp.
                                            d/b/a Ernie's


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            MEB Dining 18 Inc.
                                            d/b/a America


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark 47th Street Corp.
                                            d/b/a B. Smith's


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Seventh Avenue South Corp.
                                            d/b/a Woody's


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark 474 Corp.
                                            d/b/a Columbus Bakery


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Venus Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Freemont, Inc.


                                            By:
                                               ----------------------------


                                       3




<PAGE>

                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Whiskey Bar, Inc.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Rio Corp.
                                            d/b/a El Rio Grande


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Operating Corp.
                                            d/b/a El Rio Grande


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Union Station, Inc.
                                            d/b/a America


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark D.C. Kiosk, Inc.
                                            d/b/a Center Cafe


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Sub-One Corp.
                                            d/b/a Gonzalez y Gonzalez


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Potomac Corporation
                                            d/b/a Sequoia


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                       4




<PAGE>

                                            Ark of the Seaport, Inc.
                                            d/b/a Sequoia


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Bryant Park Corp.
                                            d/b/a Bryant Park Grill


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Fifth Avenue Corp.
                                            (Corporate Headquarters)


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Lutece, Inc.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Islamorada Corp.
                                            d/b/a Lorelei Restaurant &
                                            Cabana Bar


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Steak House Corp.
                                            d/b/a Gallagher's Steak House


                                            By:
                                               ----------------------------
                                               Robert Towers, Treasurer


                                            Ark Las Vegas Restaurant Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers, Treasurer


                                            Las Vegas Festival Food Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers, Treasurer


                                       5




<PAGE>

                                            Las Vegas America Corp.
                                            d/b/a America


                                            By:
                                               ----------------------------
                                               Robert Towers, Treasurer


                                            Ark WFC Corp.
                                            d/b/a The Grill Room


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                       6




<PAGE>

                                            Sam & Emma's Deli, Inc.
                                            d/b/a Stage Deli


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Fulton Street Corp.
                                            d/b/a Red


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Ark Southwest D.C. Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Downstairs Deli Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Mexico Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Asia Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Lutece Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Venice Deli Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers
                                               Executive Vice President


                                            Las Vegas Venice Food Corp.


                                            By:
                                               ----------------------------


                                       7




<PAGE>

                                               Robert Towers
                                               Executive Vice President

                                            AFC Restaurant, Inc.


                                            By:
                                               ----------------------------
                                               Robert Towers, Secretary


                                            Ark JMR Corp.


                                            By:
                                               ----------------------------
                                               Robert Towers, Treasurer


                                            Aroc and Ark Corp.


                                            By:
                                               ----------------------------
                                              Robert Towers, Treasurer


                                       8




<PAGE>

                                   EXHIBIT C-2

                               INACTIVE GUARANTORS

1.   Ark Boston Corp.

2.   Ark Southfield Corp.

3.   Tyson's America Corp.

4.   Al's Pizza, Inc.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>ex99-1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

<PAGE>

                                                                    EXHIBIT 99.1

                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ark Restaurants Corp. (the "Company")
on Form 10-Q for the period ending March 29, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), the undersigned,
Michael Weinstein, Chief Executive Officer of the Company certifies, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents in all material
     respects, the financial condition and results of operations of the Company.


                                      /s/ Michael Weinstein
                                      ------------------------------------------
                                      Michael Weinstein, Chief Executive Officer
                                      May 13, 2003

In connection with the Quarterly Report of Ark Restaurants Corp. (the "Company")
on Form 10-Q for the period ending March 29, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, Robert J. Stewart, Chief Financial Officer of the Company
certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents in all material
     respects, the financial condition and results of operations of the Company.


                                      /s/ Robert J. Stewart
                                      ------------------------------------------
                                      Robert J. Stewart, Chief Financial Officer
                                      May 13, 2003


                                       21

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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