printer-friendly

Sample Business Contracts

Agreement and Plan of Merger - Benihana Inc., Rudy's Restaurant Group Inc., Bayview Partners and Douglas M. Rudolph

Free Customizable Merger Forms

Sponsored Links

                                    AGREEMENT

                                       and

                                 PLAN OF MERGER

                                  by and among

                                 BENIHANA INC.,
                             BENIHANA MERGER CORP.,
                         RUDY'S RESTAURANT GROUP, INC.,
                                BAYVIEW PARTNERS

                                       and

                               DOUGLAS M. RUDOLPH















                                                          Dated:  July 22, 1997


<PAGE>






                                  EXHIBIT LIST

8.1.12            Severance Letters
10.1.4            Rudy's Counsel Option
10.2.3            Benihana's Counsel Opinion
10.2.4            Non-Competition Agreement
10.2.5            Benihana Warrant



                                    SCHEDULES

1.1               The Adjustment Amount
5.1.1             Foreign Qualification of Rudy's
5.1.2             Officers and Directors of Rudy's
5.2               Subsidiaries
5.6               No Violation
5.8               No Undisclosed Liabilities
5.9               Certain Changes
5.10.1            Owned Real Properties
5.11.1            Leases
5.12.1            Restaurants
5.12.2            Liquor Licenses
5.13.1            List of Patents, Trademarks, etc.
5.13.2            Licenses
5.13.3            Infringements
5.15.1            Taxes, Assessments and Deficiencies
5.15.2            States Where Returns Filed
5.15.3            NOL's
5.16.1            Transactions with Affiliates
5.17.             Contracts and Commitments
5.19.1            Insurance Policies
5.19.2            Group Insurance Policies
5.20              Labor Matters
5.22              Litigation
5.26              Employee Benefit Plans
5.27              Brokers and Finders
5.28              Consents
8.1.12            Severance and Bonus Payments
10.1.6            Required Consents



<PAGE>



         AGREEMENT  AND PLAN OF MERGER  (the  "Agreement")  dated as of July 22,
1997  by  and  among  RUDY'S  RESTAURANT  GROUP,   INC.,  a  Nevada  corporation
("Rudy's"),  DOUGLAS  M.  RUDOLPH  ("Rudolph"),   BAYVIEW  PARTNERS,  a  general
partnership  organized under the laws of Texas  ("Bayview"),  BENIHANA,  INC., a
Delaware   corporation   ("Benihana")   and  BENIHANA  MERGER  CORP.,  a  Nevada
corporation and a wholly-owned subsidiary of Benihana ("Newco").  Each of Rudy's
and  Bayview  are  parties  to  the   Agreement   solely  for  purposes  of  the
representations and covenants set forth in Sections 6 and 8.10.


                                R E C I T A L S:

     A. The  Boards of  Directors  of Rudy's and  Benihana  and the Board of
Directors and sole stockholder of Newco, respectively,  deem it advisable and in
the  best  interests  of  Rudy's,  Benihana,  and  Newco  and  their  respective
stockholders that Benihana acquire the business and assets of Rudy's through the
merger  (the  "Merger")  of Rudy's  with Newco upon the terms and subject to the
conditions of this Agreement.

     B. The Boards of Directors of Rudy's, Benihana and Newco, respectively, and
the stockholders of Newco have approved and adopted this Agreement. Accordingly,
the Parties hereto hereby agree as follows:  1. DEFINITIONS:  1.1 Defined Terms.
As used in this  Agreement,  the following  terms have the  following  meanings:
"Adjustment  Amount"  shall have the meaning  set forth on Schedule  1.1 hereto.
"Affiliate"  means,  as to any Person,  a Person  controlling,  controlled by or
under common control with such Person. "Agreement" means this Agreement and Plan
of Merger,  as amended,  supplemented  or otherwise  modified from time to time.
"Approvals" has the meaning set forth in Section 5.14.  "Articles of Merger" has
the meaning set forth in Section 2.2. "Balance Sheet Date" means March 16, 1997.
"Benihana  Reports" means Benihana's  Annual Reports on Form 10-K filed pursuant
to Section 13 or 15(d) of the  Exchange Act for the fiscal years ended March 26,
1995,

                                  -1-

<PAGE>



March 31,  1996 and March 30,  1997 and all other  registration  statements  and
reports  required to be or  otherwise  filed by it since March 26, 1995 with the
SEC pursuant to the Securities Act or the Exchange Act.

           "Cash Consideration" means the amount of $5.00 per share plus the
Adjustment Amount payable in cash as the consideration for the Merger to holders
of Rudy's Shares.

           "Class A Stock" means the Class A Common Stock, par value $.10 per
share, of Benihana.

                           "Closing" has the meaning set forth in Section 4.1.

           "Code" means the Internal Revenue Code of 1986, as amended from time
to time, and the regulations and rulings issued thereunder.

           "Common Control Entity" has the meaning set forth in Section 5.26.1.

           "Contracts" has the meaning set forth in Section 5.17.

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

           "Effective Date" means the date upon which the Effective Time occurs.

           "Effective Time" means has the meaning set forth in Section 2.2.

           "Employment Plans" has the meaning set forth in Section 5.26.1.

           "Environmental Laws" means any and all federal, state, local or
municipal Laws,  rules,  orders,  regulations,  statutes,  ordinances,  codes,
decrees or requirements of any Governmental  Authority regulating,  relating to
or imposing liability or standards of conduct concerning  environmental protec-
tion matters, including without  limitation,  Hazardous  Materials,  as now or
may at any time hereafter be in effect.

           "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and rulings issued thereunder.

           "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

           "Exchange Agent" has the meaning set forth in Section 3.2.

                                  -2-

<PAGE>



           "Fairness Opinion" has the meaning set forth in Section 5.30.

           "Fiduciary Obligations" has the meaning set forth in Section 8.8.

           "GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.

           "Governmental Authority" means any nation, state, county, local or
other governmental  authority or any  political  subdivision  thereof and any
federal, state,  county,   local  or  foreign  entity  or  body  exercising
executive, legislative,  judicial,  regulatory or administrative functions of
or pertaining to government.

           "Hazardous Materials" means any (i) "hazardous substance," "waste,"
"pollutants,"  or  "contaminant"  (as  defined in Sections  101(14),(33)  of the
Comprehensive  Environmental  Response Compensation and Liability Act ("CERCLA")
or the  regulations  issued  pursuant  to Section  102 of CERCLA and found at 40
C.F.R.  ss.302),  including  any  element,  compound,   mixture,  solutions,  or
substance that is or may be designated  pursuant to Section 102 of CERCLA;  (ii)
substance that is or may be designated  pursuant to Section  311(b)(2)(A) of the
Federal  Water  Pollution  Control  Act,  as  amended  (33  U.S.C.   ss.ss.1251,
1321(b)(2)(A)  ("FWPCA");  (iii)  hazardous  waste  having  the  characteristics
identified under or listed pursuant to Section 3001 of the Resource Conservation
and  Recovery  Act, as amended (42 U.S.C.  ss.ss.  6901,  6921)  ("RCRA");  (iv)
substance  containing  petroleum,  as that term is defined in Section 9001(8) of
RCRA;  (v) toxic  pollutant  that is or may be listed  under  Section  307(a) of
FWPCA;  (vi)  hazardous air pollutant that is or may be listed under Section 112
of the Clean Air Act, as amended (42 U.S.C.  ss.ss. 7401, 7412); (vii) asbestos,
asbestos-containing material, or urea formaldehyde or material that contains it;
and (viii) waste oil and other petroleum products.

           "Higher Offer" has the meaning set forth in Section 8.8.

           "IRS" means the Internal Revenue Service.

           "Leases" has the meaning set forth in Section 5.12

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

           "Liquor License" has the meaning set forth in Section 5.12.


                                  -3-

<PAGE>



       "Material Adverse Effect" means for a specified party, a material adverse
effect on (a) the business, operations, property, condition, or prospects of the
specified party and its  Subsidiaries  taken as a whole,  (b) the ability of the
specified party to perform its material obligations under this Agreement, or (c)
the validity or enforceability  against the specified party of this Agreement or
the rights or remedies of any other party  hereunder to such an extent that such
other  party  would be deprived of the  practical  realization  of the  benefits
contemplated  by this  Agreement  to be derived  by such  other  party from this
Agreement and the transactions expressly referenced in this Agreement, including
the  exhibits to this  Agreement;  provided,  however,  that the  existence of a
Material  Adverse Effect shall be deemed not to include (x) the adverse  impact,
if any,  of  changes  in  laws,  rules,  regulations,  interpretations  or other
promulgations  of any  Governmental  Authority,  or changes in GAAP,  regulatory
accounting  requirements  and market  conditions  applicable to companies in the
same line of business as the specified  party, or (y) the impact of the fees and
expenses of all counsel, accountants and financial advisors, and the other costs
and expenses  reasonably incurred by the specified party, in connection with the
Shareholders'  Meeting,  this Agreement and the transactions  referenced in this
Agreement and the exhibits to this Agreement.

             "Merger" shall have the meaning set forth in Recital A.

             "Multiemployer Plans" has the meaning set forth in Section 5.26.1.

             "NASDAQ" means National Association of Securities Dealers, Inc.
Automated Quotation System.

             "Nevada Law" means the Nevada Corporation Law including Chapters 78
and 92A of the Nevada Revised Statutes.

             "NLRB" means the U.S. National Labor Relations Board.

             "Owned Real Estate" has the meaning set forth in Section 5.10.

             "PBGC" means the Pension Benefit Guaranty Corporation.

             "Pension Plan" has the meaning set forth in Section 5.27.1.

             "Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

             "Plans" has the meaning set forth in Section 5.27.1.

             "Principal Shareholders" means each of Rudolph and Bayview;
"Principal Shareholder" means either of them.

                                  -4-

<PAGE>



       "Proxy Statement" has the meaning set forth in Section 8.3.

       "Requirement of Law" means as to any Person, any law, treaty, rule or
regulation or  determination  of an arbitrator or a court or other  Governmental
Authority,  in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

       "Restaurant" has the meaning set forth in Section 5.12.

       "Rudy's" means Rudy's Restaurant Group, Inc., a Nevada corporation,
and its  Subsidiaries,  except where the context indicates that reference is
made to the parent company only.

       "Rudy's Audited Financial Statements" has the meaning set forth in
Section 5.7.

       "Rudy's Reports" means Rudy's Annual Reports on Form 10-KSB filed
pursuant to Sections 13 or 15(d) of the  Exchange Act for the fiscal years ended
October  2,  1994,  October  1,  1995 and  September  29,  1996,  and all  other
registration  statements  and reports  required to be or  otherwise  filed by it
since  October  2,  1994  with the SEC  pursuant  to the  Securities  Act or the
Exchange Act.

       "Rudy's Shares" means the issued and outstanding shares of Rudy's
Common Stock, par value $.01 per share.

       "Rudy's Unaudited Financial Statements" has the meaning set forth in
Section 5.7.

       "SEC" means the United States Securities and Exchange Commission.

       "Securities Act":  means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

       "Shareholders' Meeting" means the special meeting of the shareholders
of Rudy's called  pursuant to the  provisions of Section 8.3 hereof to approve
this Agreement and the Merger.

       "Significant Employee" means as to any Person, "significant employees"
of such Person as that term is defined in Regulation S-K of the Securities Act.

       "Subsidiary" means any Person of which shares of stock or other ownership
interests  having ordinary voting power (other than stock having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such

                                  -5-

<PAGE>



Person  are at  the  time  owned,  or  the  management  of  which  is  otherwise
controlled, directly or indirectly through one or more intermediaries,  or both,
by  Rudy's.  A  Subsidiary  shall  include a  partnership  which has Rudy's or a
Subsidiary as a general partner of such partnership.

       "Surviving Corporation" means Rudy's, as the surviving corporation of the
Merger as provided by Section 2.1 hereof.

       "Tangible Property" means as to any Person, the plant, machinery,
equipment,  leasehold improvements,  vehicles, and structures of such Person and
related  capitalized  items and other tangible property material to the business
of such Person.  Tangible  Property  shall not be deemed to include the personal
property of Rudolph referred to in Section 12.1.

       "Taxes" shall mean all foreign, federal, state, county, local and other
taxes, levies, impositions,  deductions,  charges and withholdings,  including,
without limitation, income or franchise taxes or other taxes imposed on or with
respect to net income or capital gain, gross receipts,  profits, sales, use,
occupation, value added, ad valorem, transfer,  withholding,  payroll, employ-
ment, excise or property taxes, and shall include any interest, penalties or
additions thereto.

       "Tax Returns and Statements" has the meaning set forth in Section 5.15.1.

       "Transmittal Letter" has the meaning set forth in Section 3.2.

       "Unaudited Balance Sheet" means the unaudited consolidated balance sheet
of Rudy's and the  Subsidiaries  as at March 16, 1997  previously  delivered  to
Benihana pursuant to Section 5.7.

       "Warrant" shall mean the Warrant to purchase an aggregate of 200,000
shares of the Class A Stock of Benihana referred to in Section 10.2.5.

       "Warrant Shares" means the shares of Class A Stock issuable upon a due
exercise of the Warrant.

       "Welfare Plan" has the meaning set forth in Section 5.26.1.

                 1.2      Other Definitional Provisions; Interpretation.

                 1.2.1    Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined  meanings when used in any certificate
or other agreement, instrument or document made or delivered pursuant hereto.

                 1.2.2    The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any

                                  -6-    

<PAGE>



particular provision of this Agreement,  and Section and Schedule references are
to this Agreement unless otherwise specified.

                 1.2.3    The headings in this Agreement are included for
convenience of reference only and shall not in any way affect the meaning or
interpretation of this Agreement.

                 1.2.4    The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

         2.       THE MERGER.

                  2.1 The  Merger  and Its  Effect.  Subject  to the  terms  and
conditions of this Agreement,  at the Effective Time, Newco shall be merged with
and into Rudy's and Rudy's shall be the  Surviving  Corporation,  in  accordance
with this  Agreement.  Upon the  effectiveness  of the Merger:  (a) the separate
corporate  existence of Newco shall cease; (b) the Surviving  Corporation  shall
possess  all  of  the  rights,  privileges,  powers,  immunities,  purposes  and
franchises,  both public and private,  of each of Rudy's and Newco; (c) all real
and personal  property,  tangible and intangible,  of every kind and description
belonging  to Rudy's  and Newco  shall be  vested in the  Surviving  Corporation
without  further act or deed,  and the title to any real estate or any  interest
therein  vested in  either  Rudy's  or Newco  shall not  revert or in any way be
impaired by reason of the Merger; (d) the Surviving  Corporation shall be liable
for all the  obligations  and  liabilities  of each of Rudy's  and Newco and any
claim  existing or action or proceeding  pending by or against  either Rudy's or
Newco may be enforced as if the Merger had not taken place;  and (e) neither the
rights of creditors  nor any Liens upon the  property of either  Rudy's or Newco
shall be impaired by the Merger.

                  2.2 Effective  Time of the Merger.  Upon the  satisfaction  or
waiver of the  conditions set forth in Sections 10.1 and 10.2 and the Closing of
the Merger in accordance  with Articles 4 and 11, the parties hereto shall cause
Articles of Merger meeting the requirements of Section 92A.200 of the Nevada Law
(the "Articles of Merger") to be properly  executed and filed in accordance with
the terms of this Agreement and the applicable provisions of the Nevada Law. The
Merger  shall  become  effective  at the time of the filing of the  Articles  of
Merger as  provided  above,  or at such later time as the  parties  hereto  have
theretofore  agreed upon and designated in such filings as the effective time of
the Merger (the "Effective Time").

                  2.3  Articles  of  Incorporation   and  By-laws  of  Surviving
Corporation.  From and after the Effective  Time, the Articles of  Incorporation
and By-laws of Rudy's as in effect immediately prior to the Effective Time shall
be the Articles of Incorporation and By-laws of the Surviving  Corporation until
further amended.


                                  -7-

<PAGE>



         3.       CONVERSION OF SHARES ON THE MERGER EFFECTIVE DATE.


                  3.1 Manner and Basis of  Conversion.  Pursuant  to the Merger,
the manner and basis of converting the capital stock of each of Rudy's and Newco
into or for capital stock of the Surviving Corporation or the Cash Consideration
shall be as follows:

                  3.1.1    At the Effective Time each share of common stock of
Newco issued and outstanding  immediately prior to the Effective Time shall be
converted into one (1) share of common stock of Rudy's as the Surviving
Corporation.

                  3.1.2    At the Effective Time each of the Rudy's Shares
issued and outstanding  immediately  prior to the  Effective  Time shall,  by
virtue of the Merger and without any action on the part of the holder  thereof,
be  converted into the right to receive an amount equal to the Cash
Consideration per share.

                  3.1.3    The Rudy's Shares to be converted into cash pursuant
to Section 3.1.2 are sometimes hereinafter referred to as the "Converted Rudy's
Shares."

                  3.2  Procedure  for  Conversion  of  Share  Certificates.   As
promptly as possible on or after the  Effective  Date,  a letter of  transmittal
("Transmittal  Letter")  and  instructions  will be  mailed  or  otherwise  made
available  for use in  surrendering  to the First Union  National  Bank of North
Carolina or other agent  appointed  by Benihana  (the  "Exchange  Agent")  stock
certificates which immediately prior to the Effective Time represented Converted
Rudy's Shares.  The  Transmittal  Letter will authorize the Exchange Agent to do
all things  necessary to accomplish the exchange of such stock  certificates for
the  consideration  therefor.  Each holder of record of Converted  Rudy's Shares
will be  entitled  to  receive,  promptly  upon  proper  surrender  of the stock
certificate  or  certificates  representing  such shares to the  Exchange  Agent
together with a properly  completed and duly executed  Transmittal  Letter,  and
compliance with the terms of the  Transmittal  Letter,  the Cash  Consideration.
From and after the Effective  Time and until so  surrendered,  each  certificate
representing  Converted Rudy's Shares shall be deemed for all corporate purposes
to evidence  only the right to receive,  upon proper  surrender  together with a
properly completed and duly executed Transmittal Letter, the Cash Consideration.

         4.       CLOSING.

                  4.1 Time and  Place.  The  Merger  shall be  consummated  at a
closing  (the  "Closing")  at the offices of Berman Wolfe & Rennert,  P.A.,  100
Southeast Second Street,  Miami, Florida 33131, or at such other place as may be
agreed by the parties. The Closing shall take place at 10:00 a.m. on a date that
is as soon as practicable  following the  fulfillment  or waiver,  in accordance
with the terms of this  Agreement,  of all  conditions  to the Closing but in no
event later than January 31, 1998,  subject  only to the  provisions  of Section
13.1.4. As promptly as possible

                                  -8- 

<PAGE>



following  the  Closing,  the Merger shall be  consummated  by the filing of the
Articles of Merger, as specified in Section 2.2.

                  4.2 Delivery of Cash Consideration.  At the Closing,  Benihana
will deliver an amount equal to the Cash  Consideration  per share multiplied by
the number of Rudy's Shares owned by the  shareholders of Rudy's to the Exchange
Agent for delivery to the shareholders of Rudy's.

         5.       REPRESENTATIONS AND WARRANTIES OF RUDY'S.

         In order to induce  Benihana and Newco to enter into this Agreement and
to consummate the Merger and the other transactions  contemplated  herein Rudy's
makes each of the  representations and warranties set forth in this Article 5 as
follows:

                  5.1      Corporate Organization of Rudy's.

                  5.1.1    Rudy's is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada and has
full  corporate  power and authority to carry on its business as it is now being
conducted and to own the properties and assets it now owns; is duly qualified or
licensed to do business as a foreign  corporation and is in good standing in the
jurisdictions listed on Schedule 5.1.1, which are all the jurisdictions in which
ownership  or leasing of property or the conduct of its business  requires  such
qualification,  except where the failure to be so qualified or licensed or to be
in good standing  would not have a Material  Adverse  Effect.  The copies of the
Articles of Incorporation and By-Laws of Rudy's heretofore delivered to Benihana
are complete and correct copies of such instruments as presently in effect.

                  5.1.2    Schedule 5.1.2 hereto sets forth the name, position
     and total  compensation  of each  officer  and  director of Rudy's and each
Subsidiary,  and the  name,  position  and  total  compensation  for each  other
employee of or consultant to Rudy's whose total  compensation in the fiscal year
ended  September 29, 1996 was, or in the current  fiscal year is expected to be,
in excess of $60,000.

                  5.2 Subsidiaries.  Schedule 5.2 hereto sets forth the name and
state of incorporation of each direct and indirect Subsidiary of Rudy's.  Except
as set forth on Schedule 5.2,  Rudy's does not own,  directly or indirectly,  or
have any obligation to acquire,  any capital stock or other equity securities of
any corporation, nor does Rudy's have any direct or indirect equity or ownership
investment,  or any  obligation to incur such  investment,  in any  corporation,
limited liability company, partnership,  joint venture, trust or other business,
organization or entity. Each Subsidiary is a corporation duly organized, validly
existing  and in good  standing  under  the  laws  of its  respective  state  of
incorporation  set forth on Schedule 5.2 hereto and has full corporate power and
authority to carry on its business as it is now being  conducted  and to own the
properties  and assets it now owns; is duly qualified or licensed to do business
as a  foreign  corporation  in good  standing  in the  jurisdictions  listed  on
Schedule 5.2, which are all the jurisdictions in which

                                  -9-

<PAGE>



ownership  or leasing of property or the conduct of its business  requires  such
qualification,  except where the failure to be so qualified or licensed or to be
in good standing  would not have a Material  Adverse  Effect.  The copies of the
Certificate of Incorporation  or Articles of  Incorporation  and By-Laws of each
Subsidiary  heretofore  delivered to Benihana are complete and correct copies of
such instruments as presently in effect.

                  5.3      Capitalization of Rudy's; Title to Shares.

                  5.3.1    The authorized capital stock of Rudy's consists of
     30,000,000  shares of Common  Stock,  $.01 par  value per  share,  of which
3,765,000  shares are issued and outstanding and 10,000,000  shares of preferred
stock,  par value $.01, of which no shares are issued or outstanding.  There are
no other shares of capital  stock issued  except for shares of Common Stock held
in treasury,  if any. All of the outstanding  shares of Rudy's capital stock are
validly  issued,  fully paid and  nonassessable.  There are no  outstanding  (i)
securities  convertible  into or  exchangeable  for any of Rudy's capital stock;
(ii) options,  warrants,  calls or other rights  (including  conversion  rights,
preemptive rights or stock  appreciation  rights) with respect to the issued and
outstanding  stock of  Rudy's,  or to  purchase  or  subscribe  to any  class of
authorized   capital  stock  of  Rudy's  or  securities   convertible   into  or
exchangeable  for  capital  stock of Rudy's;  or (iii)  contracts,  commitments,
agreements, understandings or arrangements of any kind relating to the issuance,
sale, transfer,  and/or assignment of any shares of capital stock of Rudy's, any
convertible or exchangeable securities or any such options, warrants or rights.

                  5.3.2    Rudolph is the owner, beneficially and of record, of
     2,086,000   Rudy's  Shares  which   constitute  55.4%  of  the  issued  and
outstanding  Rudy's  Shares  as of  the  date  hereof,  Bayview  is  the  owner,
beneficially  and of record,  of 450,000 Rudy's Shares which constitute 12.0% of
the  issued and  outstanding  Rudy's  Shares as of the date  hereof and each has
good,  valid and  marketable  title to such Rudy's  Shares free and clear of all
liens, encumbrances,  security interests or claims, whatsoever,  with full power
and authority to transfer and convey the same.

                  5.4 Capitalization of Subsidiaries. Rudy's is the record owner
of all issued and outstanding  shares of capital stock of each Subsidiary listed
on Schedule  5.2..  All issued and  outstanding  shares of capital stock of each
Subsidiary  are  equal in their  rights,  preferences  and  privileges,  validly
issued,  fully  paid  and  nonassessable.   There  are,  with  respect  to  each
Subsidiary,  no outstanding (a) securities  convertible into or exchangeable for
any of the capital stock of such  Subsidiary;  (b) options,  warrants,  calls or
other  rights  (including   conversion   rights,   preemptive  rights  or  stock
appreciation  rights) with respect to the issued and  outstanding  stock of such
Subsidiary,  or to  purchase  or  subscribe  to capital  stock of or  securities
convertible  into or  exchangeable  for capital  stock of such  Subsidiary;  (c)
contracts, commitments,  agreements,  understandings or arrangements of any kind
relating to the issuance, sale, transfer, and/or assignment of any capital stock
of such Subsidiary, any such convertible or exchangeable securities, or any such
options,  warrants  or  rights;  or (d) any  shares  of  capital  stock  of such
Subsidiary pledged as collateral to secure any agreement or obligation.

                                  -10-

<PAGE>



                  5.5  Authorization,  Etc.  This  Agreement  has been  duly and
validly authorized by all necessary  corporate action of Rudy's (subject only to
the  approval of the  shareholders  of Rudy's to this  Agreement  and the Merger
under Nevada Law) and has been duly and validly executed by Rudy's,  Bayview and
Rudolph.  Without  limiting the  generality  of the  foregoing,  Rudy's has full
corporate  power and  authority  to enter into this  Agreement,  subject to such
approval by the  shareholders  of Rudy's,  and to  consummate  the  transactions
contemplated  hereby.  This Agreement is the legal, valid and binding obligation
of  Rudy's  and,  with  respect  to  Sections  6  and  8.10,  of  the  Principal
Shareholders  enforceable  against  Rudy's  and the  Principal  Shareholders  in
accordance with its terms, as applicable.

                  5.6  No  Violation.   Neither  the   execution,   delivery  or
performance  of  this  Agreement  nor  the   consummation  of  the  transactions
contemplated   hereby  will  violate  any  provision  of  the   Certificate   of
Incorporation,  Articles  of  Incorporation  or  By-Laws  or  similar  corporate
documents of Rudy's or any  Subsidiary  or will (a)  violate,  or be in conflict
with, or  constitute a breach or default (or an event which,  with the giving of
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or acceleration of the performance required by, or cause the
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any security  interest,  lien or other encumbrance
upon any property or assets of Rudy's or any  Subsidiary  under any  Contractual
Obligation  to which Rudy's or any  Subsidiary  is a party or by which Rudy's or
any Subsidiary is bound, or to which the property of Rudy's or any Subsidiary is
subject, except where such violation,  conflict,  breach, default,  termination,
acceleration,  security  interest,  lien or other  encumbrance  would not have a
Material  Adverse  Effect;  or (b) violate  any statute or law or any  judgment,
decree,  order,  regulation  or rule of any court or  Governmental  Authority to
which Rudy's is subject,  except where such violation  would not have a Material
Adverse Effect.

                  5.7 Financial  Statements.  Rudy's has heretofore delivered to
Benihana:  (a)  consolidated  balance sheets of Rudy's as at September 29, 1996,
October 1,  1995,  October 2, 1994,  October  3, 1993 and  September  27,  1992,
together with consolidated statements of income, changes in stockholders' equity
and changes in  financial  position (or  statements  of cash flow) for the years
then ended  (the  "Rudy's  Audited  Financial  Statements"),  all  certified  by
Deloitte & Touche LLP, independent  certified public accountants,  whose reports
thereon are included  therein;  and (b) the  Unaudited  Balance  Sheet,  and the
unaudited  consolidated  statements  of income and cash flow for the six periods
ended March 16, 1997.  Such  consolidated  balance  sheets and notes thereto are
true,  complete  and accurate in all  material  respects  and fairly  present in
accordance with generally accepted  accounting  principles GAAP the consolidated
assets, liabilities and financial condition of Rudy's as at the respective dates
thereof,   and  all  such   consolidated   statements  of  income,   changes  in
stockholders'  equity and changes in financial  position (or  statements of cash
flow) and the notes  thereto are true,  complete  and  accurate in all  material
respects and fairly  present in  accordance  with GAAP the results of operations
for the periods therein referred to. All of the foregoing  financial  statements
were  prepared in  accordance  with GAAP  consistently  applied  throughout  the
periods  involved  (except  in the case of the  Unaudited  Balance  Sheet to the
extent subject to normal year end adjustments).

                                  -11-

<PAGE>



                  5.8  No   Undisclosed   Liabilities;   Etc..   Rudy's  has  no
liabilities  or  obligations  of any nature  (absolute,  accrued,  contingent or
otherwise) which were not properly  reflected or adequately  reserved against in
accordance with GAAP on the Unaudited Balance Sheet,  except for liabilities and
obligations incurred in the ordinary course of business and consistent with past
practice since the date thereof and except as set forth in this  Agreement.  The
reserves reflected on the Unaudited Balance Sheet are adequate,  appropriate and
reasonable in light of historical practices.

                  5.9  Absence of Certain  Changes.  Except as and to the extent
set forth on Schedule  5.9, or  disclosed in a Rudy's  Report,  from the Balance
Sheet Date through the date hereof, Rudy's and its Subsidiaries have not (except
as contemplated by, or disclosed in, this Agreement):

                  5.9.1    amended any certificate or articles of incorporation
     or by-laws or merged with or into or  consolidated  with any other  Person,
subdivided or in any way reclassified any shares of its capital stock or changed
or agreed to change in any manner the rights of its  outstanding  capital  stock
or, in any material manner, the character of its business;

                  5.9.2    issued or sold or purchased any convertible
securities, or entered into any contracts or commitments to issue or sell or
purchase, any shares of its capital stock;

                  5.9.3    entered into or amended any material employment
agreement, entered into any agreement with any labor union or association
representing any material employee or entered into or amended any material
Plan; amended any certificate;

                  5.9.4    incurred any liabilities or obligations (absolute,
     accrued,  contingent or otherwise) except nonmaterial items incurred in the
ordinary  course of business  and  consistent  with past  practice  which do not
exceed  $25,000.00  individually,  or  $50,000.00  in the  aggregate,  (counting
obligations  or liabilities  arising from any single  transaction or a series of
similar transactions,  and all periodic installments or payments under any lease
or other agreement providing for periodic  installments or payments, as a single
obligation  or  liability),  or  increased,  or  experienced  any  change in any
assumptions  underlying or methods of calculating,  any bad debt, contingency or
other reserves not in accordance with GAAP or entered into any lease or sublease
of real  property or exercised  any purchase  options or rights of first refusal
contained in any of the Leases (as  hereinafter  defined) except in the ordinary
course of business and consistent with past practice;

                  5.9.5    paid, discharged or satisfied any material claim,
     liabilities or  obligations  (absolute,  accrued,  contingent or otherwise)
other than the payment,  discharge  or  satisfaction  in the ordinary  course of
business  and  consistent  with past  practice of  liabilities  and  obligations
reflected on or reserved  against on the Unaudited  Balance Sheet or incurred in
the ordinary  course of business and  consistent  with past  practice  since the
Balance Sheet Date;


                                  -12-

<PAGE>



                 5.9.6    permitted or allowed any of its Owned Real Property,
     or property  demised under the Leases or assets  (real,  personal or mixed,
tangible or intangible) to be subjected to any mortgage,  pledge, lien, security
interest, encumbrance, assignment, restriction or charge of any kind, except for
liens  for  current  taxes  not yet due;  5.9.7  written  down the  value of any
     inventory  (including  write-downs  by reason of shrinkage or mark-down) or
written  off as  uncollectible  any notes or  accounts  receivable,  except  for
immaterial  write-downs  and  write-offs in the ordinary  course of business and
consistent with past practice;

                 5.9.8    cancelled any debts or waived any claims or rights
involving more than $5,000;

                 5.9.9    sold, transferred, abandoned or otherwise disposed of
any of its Owned  Real  Property,  or any  interest  therein,  or its other
properties  or assets  (real,  personal  or mixed,  tangible or  intangible,  or
entered into any lease (as lessor or Lessee))  except in the ordinary  course of
business and consistent with past practice;

                 5.9.10  disposed  of or  permitted  to lapse  (except by its
own terms) any rights to the use of any existing patent,  trademark,  trade
name or  copyright,  or disposed of or  disclosed  (except as  necessary  in the
conduct of its business) to any person,  other than representatives of Benihana,
any trade  secret,  formula,  process or know-how  not  theretofore  a matter of
public knowledge;

                 5.9.11  granted or committed to grant any general increase in
     the  compensation of officers,  directors or employees  (including any such
increase  pursuant  to any  bonus,  pension,  profit  sharing  or other  plan or
     commitment)  or any  increases  in the  compensation  payable  or to become
payable to any officer, director or employee,  including payments or commitments
to pay  severance  or  termination  pay,  except  for  increases  granted in the
ordinary  course of  business  consistent  with past  practices  or  pursuant to
existing agreements;

                 5.9.12  made any single capital expenditure or commitment in
     excess of  $50,000.00  for  additions  to  property,  plant,  equipment  or
intangible capital assets or made aggregate capital expenditures and commitments
in excess of $100,000.00 since the Balance Sheet Date for additions to property,
plant, equipment or intangible capital assets;

                 5.9.13  declared, paid or set aside for payment any dividend or
     other  distribution  in respect of its capital stock (other than "upstream"
dividends  from  Subsidiaries)  or redeemed,  purchased  or otherwise  acquired,
directly  or  indirectly,  any shares of capital  stock or other  securities  of
Rudy's or a Subsidiary;

                 5.9.14  made any material change in any method of accounting or
accounting practice except as required by GAAP;

                                  -13- 

<PAGE>



                 5.9.15  paid, distributed, loaned or advanced any amount to, or
sold,  transferred  or leased any  properties or assets (real,  personal or
mixed,  tangible or intangible) to, or entered into any agreement or arrangement
with any  Affiliates,  officers or  directors  of Rudy's,  or any  Affiliate  or
associate of any officers or directors of Rudy's except for directors' fees, and
compensation  to officers at rates not  exceeding the rates of  compensation  in
effect during the period ended on the Balance Sheet Date;

                 5.9.16  entered into or amended any written contract or other
agreement pursuant to which it agrees to indemnify any party or to refrain from
competing with any party;

                 5.9.17  except for  inventory,  supplies or equipment
     acquired in the ordinary course of business, made any acquisition of all or
any part of the  assets,  properties,  capital  stock or  business  of any other
entity which is material to Rudy's;

                 5.9.18  entered into any transaction other than in the ordinary
course of business; or

                 5.9.19  terminated, surrendered, cancelled or assigned any of
its properties demised under the Leases, or any part thereof, except in the
ordinary course of business consistent with past practice; or

                 5.9.20  agreed, whether in writing or otherwise, to take any
action described in this Section.

                 5.10  Title to  Properties;  Encumbrances.  Rudy's  has  good,
valid,  marketable and  indefeasible  fee simple title to all the properties and
assets  which  it  purports  to  own,  including,  without  limitation,  all the
properties  and assets  reflected in the Unaudited  Balance  Sheet,  and all the
properties  and  assets  purchased  by Rudy's  since  the date of the  Unaudited
Balance  Sheet.  Schedule  5.10.1  hereto  lists  each and every  parcel of real
property  owned in fee by Rudy's  (such real  property  is referred to herein as
"Owned Real  Properties").  Properties  and assets  reflected  in the  Unaudited
Balance Sheet,  including,  without limitation,  the Owned Real Properties,  are
free and clear of all title defects or objections,  liens,  mortgages,  deeds of
trust, claims,  charges,  security interests or other encumbrances of any nature
whatsoever,   including,  without  limitation,   leases,  subleases,  rights  of
occupancy,  deed restrictions,  chattel mortgages,  conditional sales contracts,
collateral   security   arrangements  and  other  title  or  interest  retention
arrangements,  and are not, in the case of the Owned Real Properties  subject to
any  rights  of  way,  building  use  restrictions,   exceptions,  variances  or
reservations of any nature whatsoever  except,  (a) liens shown on the Unaudited
Balance Sheet as securing specified liabilities or obligations,  with respect to
which no material  defaults  exist,  (b)  imperfections  of title,  covenants or
restrictions,  if any, none of which are  substantial  in amount and which would
not have a Material  Adverse  Effect,  (c) zoning or land use  ordinances  which
would not have a Material Adverse Effect and (d) liens for taxes not yet due and
payable.  Rudy's is in actual  possession of the Owned Real  Properties.  To the
knowledge of Rudy's, no portion of any of the improvements  erected on the Owned
Real

                                  -14-

<PAGE>



Properties  encroaches on adjoining property or public streets and no portion of
any of the Owned  Real  Properties  is, or has been,  subjected  to a special ad
valorem  tax  valuation  such that a change in  ownership  or use  (whether  now
existing or in the future) has caused or will cause  additional ad valorem taxes
to be imposed upon the Owned Real Properties.

                  5.11     Leases.

                  5.11.1  Schedule 5.11.1 hereto is an accurate and complete
     list of all leases or rights of occupancy  pursuant to which Rudy's and any
Subsidiary leases or subleases any real property or interest therein or material
personal property (the "Leases"). A true and correct copy of each Lease has been
delivered to Benihana  together with all amendments and  modifications  thereto,
and all  subordination,  non-disturbance  and/or attornment  agreements  related
thereto, and no changes have been made thereto since the date of delivery.  Each
Lease is valid and in full force and effect  except  where  such  invalidity  or
ineffectiveness  would not have a Material Adverse Effect. There are no existing
defaults under any provision of any Lease, and no event has occurred which (with
or without notice, lapse of time or both) would constitute a default thereunder,
where any such default would have a Material Adverse Effect.

                  5.11.2  Rudy's is in actual possession of the properties
demised  under the Leases  and to the  knowledge  of  Rudy's,  has good and
indefeasible  title to the leasehold  estates conveyed under the Leases free and
clear of all title defects or objections,  mortgages,  liens,  claims,  charges,
security interests or other  encumbrances of any nature  whatsoever,  including,
without limitation,  leases, subleases, rights of occupancy,  chattel mortgages,
conditional sales contracts, deed restrictions, collateral security arrangements
and other title or interest retention arrangements,  and are not, in the case of
the properties  demised under the Leases subject to any rights of way,  building
use  restrictions,  exceptions,  variances,  reservations  or limitations of any
nature  whatsoever  except,  (i) liens shown on the  Unaudited  Balance Sheet as
securing  specific  liabilities or obligations with respect to which no material
default exists, (ii) imperfections of title, covenants or restrictions,  if any,
none of which are substantial in amount or would have a Material Adverse Effect,
(iii) zoning or land use  ordinances or which would not have a Material  Adverse
Effect and (iv) liens for taxes not yet due and  payable.  To the  knowledge  of
Rudy's, no portion of any of the improvements erected by and under the direction
of Rudy's on the  properties  demised  under the Leases  encroach  on  adjoining
property or public streets and no portion of any of the properties demised under
the Leases are, or have been,  subjected  to a special ad valorem tax  valuation
such that a change in  ownership  or use (whether now existing or in the future)
has caused or will cause  additional  ad  valorem  taxes to be imposed  upon the
properties demised under the Leases.

                  5.11.3  The basic rent and all additional rent payable under
     the Leases have been paid to date.  To the  knowledge of Rudy's,  except as
set forth on Schedule 5.11.3, all work required to be performed under the Leases
by the landlords  thereunder  or by Rudy's has been  performed and to the extent
that Rudy's is responsible for payment of such work, has been fully

                                  -15-

<PAGE>



paid for,  whether  directly to the contractor  performing  such work or to such
landlord as reimbursement therefor except for items which Rudy's is disputing in
good faith.

                  5.11.4  There have been no casualties which could result in
the termination of any Lease or the application of any buy-out provisions
contained in any Lease relative to damage by casualty.

                  5.12 Restaurants; Liquor Licenses. Schedule 5.12.1 hereto is a
complete and accurate  list of each  restaurant or other  facility  owned and/or
operated by Rudy's or any Subsidiary (the  "Restaurants").  Schedule 5.12.2 is a
complete  and  accurate  list of all  liquor  licenses  held by  Rudy's  and the
Subsidiaries in connection  with the operation of the  Restaurants  (the "Liquor
Licenses").  Each of the Liquor  Licenses is presently in full force and effect,
duly and  validly  issued  and  appropriate  and  adequate  for the  conduct  of
operations  at the  Restaurant  for  which  it is  issued  to be in  the  manner
conducted as of the date hereof.

                  5.13    Patents, Trademarks, Trade Names, Etc.

                          5.13.1  Schedule 5.13.1 sets forth:

                          (a)     all patents held by Rudy's and each Subsidiary
and all  reissues,  divisions,  continuations,  continuations  in part  and
extensions thereof and all pending patent applications by Rudy's, including, for
each such patent,  the serial or patent number,  filing and expiration  date and
title;
                          (b) all registered trademarks and service marks of
Rudy's and each  Subsidiary  and  pending  applications  by Rudy's and each
Subsidiary  to register  trademarks,  including,  for each such  trademark,  the
registration or application  number,  filing and expiration  date, and mark, and
all  unregistered  trademarks  and  service  marks  used by  Rudy's  and/or  any
Subsidiary; and

                          (c)     all registered copyrights of Rudy's and
applications by Rudy's and each Subsidiary for  registration  of copyrights,
including the  registration  number,  and filing and expiration date of each
such copyright.

                 5.13.2  Schedule 5.13.2 identifies all licenses and other
contracts or commitments  to which Rudy's and each  Subsidiary is a party
(either as licensor or licensee)  or  otherwise  subject  relating to patents,
trademarks,  service
marks,  trade names or copyrights (or applications or registration as applicable
for any  thereof),  trade  secrets or other  proprietary  know-how or  technical
assistance,  and,  except as set forth on Schedule  5.13.2,  no claims have been
asserted by any person to the use of any such patents,  trademarks, trade names,
copyrights,  technology, know-how or processes or challenging or questioning the
validity or effectiveness of any such license or agreement,  and Rudy's actually
knows of any valid basis for any such claim.


                                  -16-

<PAGE>



                  5.13.3  Except as set forth on Schedule 5.13.3, Rudy's and its
     Subsidiaries  have not (during the past five  years),  nor is Rudy's or any
Subsidiary  the  subject  of  any  pending  or,  to  the  knowledge  of  Rudy's,
threatened,  claim  alleging that it has infringed  upon any patent,  trademark,
trade name or  copyright  or  misappropriated  or misused any  invention,  trade
secret or other proprietary information entitled to legal protection. Other than
as set  forth  on  Schedule  5.13.3,  Rudy's  has  not  asserted  any  claim  of
infringement, misappropriation or misuse within the past five (5) years.

                  5.14  Business  Permits.  Except  for  immaterial  items,  the
failure of which would not have a Material  Adverse Effect,  Rudy's has obtained
all  approvals,   authorizations,   consents,  licenses,   franchises,   orders,
certificates  or other  permits  of all  governmental  or  regulatory  agencies,
whether  federal,  state,  local  or  foreign  (collectively,  the  "Approvals")
necessary to the operations of the business as presently  conducted,  including,
without limitation, the constructions, alterations, operation, use and occupancy
of the Owned Real  Properties or any part  thereof,  or the  properties  demised
under  the  Leases  or any part  thereof,  or any of the  improvements  thereon,
including,  but not  limited  to the  certificates  of  occupancy  or the  local
equivalents,  if any, and certificates relating to fire and health approval. All
such Approvals are in full force and effect and good standing,  Rudy's is not in
material  default  under  any  Approval  and  there  exists  no  basis  for  the
termination, suspension or revocation of any such Approvals.

                  5.15     Tax Matters.

                           5.15.1  Rudy's and each of the Subsidiaries files
     consolidated  federal income tax returns.  Rudy's and each  Subsidiary have
(i)  filed or has  caused  to be filed  all  federal,  foreign,  state and local
franchise,  income or other tax returns and statements which were required to be
filed prior to the date hereof (the "Tax  Returns and  Statements")  on a timely
basis in accordance with the laws,  regulations and administrative  requirements
of the  appropriate  Governmental  Authorities  except for such Tax  Returns and
Statements  of which  the  failure  to file  would not have a  Material  Adverse
Effect,  and (ii) paid within the time and in the manner  prescribed  by law all
material  amounts  of Taxes (as  defined  below)  shown on any Tax  Returns  and
Statements,  due for all periods ending on or prior to the date hereof.  All Tax
Returns and  Statements  were,  when filed,  and  continue to be,  complete  and
accurate in all material respects,  and there exist no material  inaccuracies in
the Tax Returns and Statements.  Except as set forth on Schedule 5.15.1,  no tax
assessments  or  deficiency  has been  made or  proposed  against  Rudy's or any
Subsidiary nor has any notice been given of any actual or proposed assessment or
deficiency.  Except  as set  forth  on  Schedule  5.15.1,  the Tax  Returns  and
Statements are not presently the subject of any audit or other administrative or
court  proceeding  by any  Governmental  Authority.  No consents  extending  any
applicable statute of limitations have been filed and no Governmental  Authority
has made a written request for such a consent.  None of the matters disclosed on
Schedule  5.15.1 have had or could  reasonably be anticipated to have a Material
Adverse Effect.

                                  -17-

<PAGE>



                 5.15.2  Rudy's and the Subsidiaries file Tax Returns and
Statements  with respect to the income,  capital  gain,  gross  receipts or
profits  earned by them in the states and localities  listed on Schedule  5.15.2
and in no other states or localities.

                 5.15.3  The net operating loss (as defined in Section 172 of
the Code) of Rudy's and the  Subsidiaries  on a  consolidated  basis for federal
income tax purposes as of September 29, 1997 is as set forth on Schedule 5.15.3.

                 5.15.4  All taxes that Rudy's or the Subsidiaries were required
 by law to
withhold  or collect  have been duly  withheld or  collected  and, to the extent
required, have been paid to the appropriate  Governmental Authority,  except for
those  Taxes of which  the  failure  to  withhold  or  collect  would not have a
Material  Adverse  Effect.  There are no liens with respect to Taxes upon any of
the properties or assets, real or personal, tangible or intangible, of Rudy's or
the Subsidiaries (except for Taxes not yet due) and except for liens which would
not have a Material Adverse Effect.

                 5.15.5  No consent to the application of Section 341(f)(2) of
the Code has been filed with respect to any assets acquired by Rudy's or the
Subsidiaries.

                 5.15.6  No property owned by Rudy's or the Subsidiaries is
property as to which an election  was made under  Section  168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect  immediately  before the
enactment of the Tax Reform Act of 1986, or is "tax-exempt use property"  within
the meaning of Section 168(h)(1) of the Code.

                 5.15.7  Rudy's and the Subsidiaries:  (i) have not agreed to
or been required to make any  adjustment  pursuant to Section 481(a) of the
Code; (ii) have received no written notice that the Internal Revenue Service has
proposed any such  adjustment or change in accounting  method;  and (iii) do not
have an application pending with any Governmental Body requesting permission for
any change in accounting method.

                 5.15.8  None of Rudy's or any of the Subsidiaries has in effect
any tax elections under Section 108, 168, 338, 441, 471, 1017, 1033 or 4977 of
the Code.

                 5.15.9  Rudy's and the Subsidiaries are not a party (other than
as an investor) to any industrial development bond.

                 5.15.10  During the previous two fiscal years Rudy's and the
Subsidiaries have not engaged in any exchange  under which the gain realized on
such exchange was not recognized due to Section 1031 of the Code.

                 5.15.11  No written claim has ever been received from any
Governmental Authority  representing  any jurisdiction in which Rudy's or the
Subsidiaries do not file Tax Returns  that  Rudy's  or any of the Subsidiaries
are or may be subject to taxation by that jurisdiction.

                                  -18-

<PAGE>



                 5.15.12  Rudy's and the Subsidiaries are not and have not been
a party to any tax sharing or similar agreement or arrangement.

                 5.15.13  Rudy's has provided Benihana with copies of:  (i) all
     material  Tax Returns and  Statement  of or with  respect to Rudy's and the
Subsidiaries  for the period  January 1, 1992 through the date hereof;  (ii) any
written notices,  protests,  or closing agreements relating to issues arising in
any audit,  litigation or similar  proceeding  with respect to the liability for
Taxes of Rudy's or the Subsidiaries; (iii) any elections or disclosures filed by
or on behalf of Rudy's or the Subsidiaries with any taxing authority (whether or
not filed with any Tax Returns and  Statements);  and (iv) any letter,  rulings,
determination  letters or similar  documents issued by any taxing authority with
respect to Rudy's or the Subsidiaries.

                 5.15.14  Rudy's is not a U.S. Real Property Holding Corpora-
tion within the meaning of Section 897(c)(2) of the Code.

                 5.16 Transactions with Affiliates. To the knowledge of Rudy's,
except as set forth on Schedule 5.16.1 hereto, no Affiliate,  officer,  director
or employee of Rudy's has any interest,  directly or  indirectly,  in any lease,
lien, contract, license, encumbrance, loan or other Agreement to which Rudy's or
any  Subsidiary  is a party,  or any  interest  in any  competitor,  supplier or
customer of Rudy's or any  Subsidiary.  Except as set forth on  Schedule  5.16.1
hereto,  neither Rudy's nor any Subsidiary is indebted,  directly or indirectly,
or to any Affiliate for any liability or obligation,  whether  arising by reason
of stock ownership, contract, oral or written agreement or otherwise.

                 5.17 Contracts and Commitments.  Schedule 5.17 hereto contains
a complete,  current and correct  list of all material  contracts,  commitments,
obligations or agreements of Rudy's and the Subsidiaries (other than the Leases)
whether  written or oral (the  "Contracts).  For purposes of this Section 5.17 a
contract which is "material"  shall mean a single  contract,  whether written or
oral:

                 5.17.1  pursuant to which any party thereto is obligated to
make annual payments aggregating more than $50,000;

                 5.17.2  which constitutes an employment agreement or an agree-
ment with any union or member organization;

                 5.17.3  which is not subject to cancellation by Rudy's or a
Subsidiary, as the case may be, on not more than thirty (30)days notice without
material penalty;

                 5.17.4  which constitutes a purchase or sale contract or
commitment which continues for a period of more than twelve (12) months;


                                  -19-

<PAGE>



                 5.17.5  which constitutes an agreement which restricts Rudy's
or any Subsidiary from carrying out its business anywhere in the world or from
competing with any other person;

                 5.17.6  which constitutes an agreement by Rudy's or any
Subsidiary with any Affiliate.

                  True,  correct and  complete  copies of all written  contracts
described in this Section 5.17 have been  delivered to Benihana.  Neither Rudy's
nor any Subsidiary is materially in default,  nor does Rudy's have any knowledge
of any factual  circumstances which can reasonably be expected to give rise to a
claim of default under any contract,  except for defaults which would not have a
Material Adverse Effect.

                 5.18 Compliance  with  Contracts.  To the knowledge of Rudy's,
each of the  Contracts  and Leases is valid and in full force and effect  except
when  such  invalidity  or  ineffectiveness  would not have a  Material  Adverse
Effect.  Neither Rudy's nor any Subsidiary is in material  default under any the
Contracts  or Leases and, to the  knowledge  of Rudy's,  no act or omission  has
occurred which,  with notice or lapse of time or both, would constitute a breach
or default  under any term or  provision  of any such  Contract  or Lease and no
party is in breach or default under any of the  Contracts or Leases,  and no act
or omission  has  occurred by any party  which,  with notice or lapse of time or
both,  would  constitute  such a breach or default  under any term or  provision
thereof  except where such breach or default  would not have a Material  Adverse
Effect.

                  5.19     Insurance.

                           5.19.1  Schedule 5.19.1 contains an accurate and
complete description of all policies of fire, business interruption, liability,
worker's compensation and other forms of insurance owned or held by Rudy's. All
     such  policies  are in full force and effect,  all  premiums  with  respect
thereto covering all periods up to and including the date hereof have been paid,
and no notice of  cancellation  or termination has been received with respect to
any  such  policy.   Such  policies  are  sufficient  for  compliance  with  all
requirements of law and of all of the Contracts and Leases except where any such
non-compliance  would  not have a  Material  Adverse  Effect;  provide  adequate
insurance  coverage for the assets and  operations of Rudy's in light of current
industry  practice;  will remain in full force and effect through the respective
dates set forth on Schedule  5.19.1.  Neither Rudy's nor any Subsidiary has been
unable to obtain any insurance with respect to its assets or operations, nor has
its coverage been limited by any  insurance  carrier to which it has applied for
any such insurance or with which it has carried  insurance  during the last five
(5) years.

                  5.19.2  Schedule 5.19.2 sets forth a true and complete list of
all group insurance programs in effect for employees of Rudy's and the subsid-
iaries.  Rudy's and the Subsidiaries are not in default with respect to

                                  -20-

<PAGE>



any of its obligations with respect to any such group insurance  program except
where such default would not have a Material Adverse Effect.

                  5.20     Labor Relations.  Except to the extent set forth on
Schedule 5.20:

                           5.20.1 Rudy's and the Subsidiaries are in compliance
with all applicable  laws  respecting  employment and employment  practices
(including  matters  related to immigration or  citizenship  status),  terms and
conditions of employment  and wages and hours,  and is not engaged in any unfair
labor practice  except for such minor  violations  that,  individually or in the
aggregate, would have no Material Adverse Effect;

                           5.20.2  there is no unfair labor practice charge or
complaint against Rudy's or any Subsidiary pending before the NLRB;

                           5.20.3  there is no labor strike, dispute, slowdown
or stoppage actually pending or threatened against or affecting Rudy's or any
Subsidiary;

                           5.20.4  no representation question is pending before
the NLRB exists respecting the employees of Rudy's or any Subsidiary;

                           5.20.5  no grievance against Rudy's or any Subsidiary
or the conduct of its business, nor any arbitration proceeding arising out of or
under collective bargaining agreements is pending;

                           5.20.6  neither Rudy's nor any Subsidiary is a party
to any collective bargaining agreement; and

                           5.20.7  neither Rudy's nor any Subsidiary has
experienced any work stoppage or other labor difficulty since January 1, 1992.

                  5.21     Public Reports; Compliance.

                           5.21.1  Rudy's has heretofore delivered to Benihana
     true and complete copies of the Rudy's Reports.  Each of the Rudy's Reports
complied with all applicable  rules and regulations of the Securities Act or the
Exchange Act, as the case may be, as of their respective  dates of filing.  None
of the Rudy's  Reports  contained  any untrue  statement  of a material  fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the  statements  therein  not  misleading  (in each case as of the
respective dates thereof).

                           5.21.2  Rudy's Shares are registered under Section 12
     (g) of the Exchange Act, are quoted in the NASDAQ,  and Rudy's is currently
subject to the periodic reporting requirements of Section 13 or Section 15(d) of
the  Exchange  Act.  Rudy's has filed and will file all  reports  required to be
filed by it pursuant to the Exchange Act and the regulations promulgated

                                  -21-

<PAGE>



thereunder  through the date hereof and the Closing.  No such  reports  filed by
Rudy's after the date hereof and prior to the Effective  Time will contain,  and
the Proxy Statement will not contain, any untrue statement of a material fact or
omit to state any material  fact  required to be stated  therein or necessary in
order to make the statements therein not misleading (in each case as of the date
filed).

                 5.22  Litigation.  Except as set forth on Schedule 5.22 hereto:
                       ----------                          -------------

                           5.22.1  there is no claim, action, suit or arbitra-
tion proceeding, before any federal, state, municipal, foreign or other court or
governmental or administrative  body or agency, or any private  arbitration
tribunal or any investigation or inquiry before any federal,  state,  municipal,
foreign or other  court or  governmental  or  administrative  body now  pending,
relating to or affecting  Rudy's or any  Subsidiary  or any  director,  officer,
agent or employee thereof in his capacity as such, or the assets,  properties or
business of Rudy's or any Subsidiary,  or the transactions  contemplated by this
Agreement,  nor has Rudy's, any Subsidiary received written notice of any threat
to institute such a proceeding;

                           5.22.2  there is not in effect any order, judgment or
     decree of any  court or  governmental  or  administrative  body  enjoining,
barring, suspending,  prohibiting or otherwise limiting Rudy's or any Subsidiary
or any officer,  director,  employee or agent of Rudy's or any  Subsidiary  from
conducting or engaging in any aspect of its business, or requiring Rudy's or any
Subsidiary  or any  officer,  director,  employee  or  agent  of  Rudy's  or any
Subsidiary to take certain action with respect to any aspect of the its business
which could reasonably be anticipated to have a Material Adverse Effect; and

                           5.22.3  neither Rudy's nor any Subsidiary is in
violation of or default under any order, judgment,  writ, injunction  or decree
of any court or  regulatory authority  except for such  violations  or defaults
as would not have a Material Adverse Effect.

                           5.22.4  None of the matters identified on Schedule
5.22 have had or could reasonably be anticipated to have a Material Adverse
Effect.

                  5.23 No Condemnation or Expropriation.  Neither the Owned Real
Properties,  or any portion thereof or the properties  demised under the Leases,
or any portion  thereof or any other  assets of Rudy's and its  Subsidiaries  is
subject  to any  governmental  decree  or order to be sold of which  Rudy's  has
received  notice or is being  condemned,  expropriated or otherwise taken by any
public authority with or without payment of compensation  therefor,  nor, to the
knowledge of Rudy's,  has any such  condemnation,  expropriation  or taking been
proposed.

                  5.24  Compliance  with  Law.  Except  to the  extent  any such
non-compliance  or  violation  would not have a  Material  Adverse  Effect,  the
operations  of  Rudy's  and each of the  Subsidiaries  have  been  conducted  in
accordance with all applicable laws,  regulations and other  requirements of all
national governmental authorities, and of all states, municipalities and other

                                   -22- 

<PAGE>



political subdivisions and agencies thereof,  having jurisdiction over Rudy's or
any  of  its  Subsidiaries,   including,  without  limitation,  all  such  laws,
regulations and requirements relating to antitrust,  consumer protection,  equal
opportunity,  discrimination  on the basis of race,  national origin,  sex, age,
immigration,  health, occupational safety, plant closing, pension,  requirements
of any Board of Fire Underwriters or similar body, building, zoning, subdivision
matters,  Environmental  Laws or toxic  waste  laws.  During  the past three (3)
years,  neither Rudy's nor any Subsidiary has received any  notification  of any
asserted present or past failure by Rudy's or any Subsidiary to comply with such
laws, rules or regulations.

                  5.25     Environmental Protection.

                           5.25.1  None of the Owned Real Properties or the
properties  demised under the Leases or real property  previously  owned or
leased by Rudy's (which shall mean Rudy's,  the Subsidiaries and all corporation
or other  business  entities  substantially  all of the  capital  stock or other
interest of which, or all or substantially all of the assets of which, Rudy's or
Subsidiaries  has  acquired) has been used at any time during which Rudy's owned
or leased such real property,  or otherwise has been in possession or control of
such real property or leased property,  and, to the knowledge of Rudy's, none of
the Owned Real Properties or the properties  demised under the Lease or the real
property  previously owned or leased by Rudy's was used at any time prior to the
time such company owned,  leased,  possessed or controlled such real property or
leased  property  (i) as a  site  for  the  disposal  or  storage  of  Hazardous
Materials,  or (ii) so as (x) to cause a material  violation or (y) to give rise
to a material  removal or restoration  obligation or material  liability for the
costs of removal or restoration by others or a material liability for damages to
others under, any Environmental Law or under the regulations of any Governmental
Authority having jurisdiction over any of such real property. Each of Rudy's and
the  Subsidiaries  have  complied  and are in  compliance  with  all  applicable
Environmental  Laws except where such  non-compliance  would not have a Material
Adverse Effect.

                           5.25.2  Rudy's and each of the Subsidiaries have
obtained and are in compliance  with (except where any such  non-compliance
would not have a Material Adverse Effect) all  environmental  permits,  licenses
and other authorizations which are required with respect to the operation of its
business,  except for such permits,  licenses and other  authorizations of which
the failure to obtain would not have a Material  Adverse Effect.  As to any such
permit,  license or other authorization which has or is about to expire,  Rudy's
or its  respective  Subsidiary  has timely  applied  for renewal  thereof  under
Environmental  Laws  except  where  failure  to renew  would not have a Material
Adverse Effect.

                           5.25.3  There is no civil, criminal or administrative
action, suit, demand, claim, hearing,  notice of violation,  investigation,
proceeding,  notice or demand  letter  pending or, to the  knowledge  of Rudy's,
threatened  against  Rudy's  or  any  Subsidiary  relating  in  any  way  to the
Environmental  Laws or any regulation,  code,  plan,  order,  decree,  judgment,
injunction,  notice or demand letter  issued,  entered,  promulgated or approved
thereunder.


                                  -23-

<PAGE>



                          5.25.4  No release, spill, seepage, leak or emission
has occurred on the Owned Real Property or to the  knowledge of Rudy's,  on
the properties demised under the Leases or on any real property previously owned
or leased by Rudy's during the time of Rudy's ownership or possession.

                          5.25.5  There are no underground storage tanks located
     on any of the Owned Real  Properties,  or on any of the properties  demised
under the Leases, nor to the knowledge of Rudy's have there been any underground
storage  tanks  removed  from any real  property  owned or leased by any company
during the period such real  property  was owned or leased by Rudy's,  except to
the extent that such  underground  storage tanks were removed in compliance with
all  applicable  laws or  required by  applicable  laws,  ordinances,  rules and
regulations,  and, to the extent such removal was performed upon notice and with
the  approval  of, and the  inspection  and  confirmation  of closure as to such
removal  was  performed  by,  all  applicable   governmental   agencies   having
jurisdiction.

                          5.25.6  Rudy's has delivered to Benihana true, correct
     and  complete  copies  or  results  of  any  reports  inspections,   safety
procedures,  logs,  data,  contracts,  invoices,  studies or tests  initiated by
Rudy's or landlords or by any Governmental Authority which are in the possession
of Rudy's  pertaining  to  Hazardous  Materials,  at any part of the Owned  Real
Properties or the  properties  demised under the Lease or Rudy's with respect to
the  business,  any of Rudy's  predecessors  or  concerning  compliance  with or
liability  under  Environmental  Laws and  other  environmental  matters  in the
operation of the business and such properties.

                  5.26    Employee Benefit Plans.

                          5.26.1  Schedule 5.26 hereto contains a complete list
of "Plans" consisting of each:

                                   (a)  "multiemployer  pension plan," as
defined in Section 3(37)of ERISA, to which Rudy's or any Subsidiary (or any
entity that is treated as a single employer with Rudy's or any Subsidiary  under
Section  414(b),  (c),  (m)  or  (o)  of  the  Code  ("Common  Control  Entity")
contributes  or is  required  to  contribute,  or with  respect  to which any of
Rudy's,  any  Subsidiary  or a Common  Control  Entity  has any  liability  (the
foregoing plans and any additional  multiemployer  pension plan to which Rudy's,
any Subsidiary or any Common  Control Entity has previously  contributed or been
required to contribute at any time after September 25, 1980 (the  "Multiemployer
Plans");

                                   (b)     "employee welfare benefit plan," as
     defined in Section 3(l) of ERISA,  sponsored or maintained  by Rudy's,  any
Subsidiary or any Common Control Entity,  or to which Rudy's,  any Subsidiary or
any Common  Control Entity  contributes or is required to contribute,  including
each multiemployer welfare plan ("Welfare Plan");

                                  -24-

<PAGE>



                                   (c)     "employee pension benefit plan," as
defined  in  Section  3(2) of  ERISA  (other  than a  Multiemployer  Plan),
sponsored or maintained by Rudy's,  any  Subsidiary or any Common Control Entity
or to which Rudy's,  any Subsidiary or any Common Control Entity  contributes or
is required to contribute ("Pension Plan"); and

                                   (d)    any other bonus, deferred or incentive
compensation,  pension,  profit-sharing,  retirement, stock purchase, stock
grant,  stock option,  disability,  sick pay,  salary  continuation,  cafeteria,
flexible  spending  account,  dependent  care  assistance,  or any other  fringe
benefit plan, arrangement or practices,  other than normal payroll practices and
policies concerning holidays and vacations, sponsored or maintained by Rudy's or
any Subsidiary, whether formal or informal (collectively, "Employment Plans").

                           5.26.2  There are no "accumulated funding
deficiencies," as defined in Section  302(a)(2) of ERISA and Section 412 of the
Code,  whether or not waived, with respect to any of the Pension Plans.

                           5.26.3  The Unaudited Balance Sheet reflects, to the
     extent  required by GAAP as consistently  applied by Rudy's,  an accrual of
all accrued but unpaid  contributions to any Pension Plan, a Multiemployer Plan,
and an accrual of all amounts accrued but unpaid under the Welfare Plans and the
Employment Plans, all as of the Balance Sheet Date.

                           5.26.4  Each Pension Plan and each related trust
agreement, annuity contract,  or other  funding  instrument,  is qualified and
tax exempt under the provisions of Sections 401(a) (or 403(a) as  appropriate)
and 501(a) of the Internal Revenue Code ("Code"), and a determination letter has
been received from the Internal Revenue Service as to such qualified status.

                           5.26.5  Each Pension Plan, Welfare Plan and Employ-
ment Plan  complies  in all  material  respects  with all  applicable  laws
(including to the extent applicable, without limitation, the Code and ERISA) and
is operated in accordance with its terms, except where such non-compliance would
have no Material Adverse Effect.

                           5.26.6  Each of Rudy's, any Subsidiary and any Common
Control  Entity has paid all premiums (and  interest  charges and penalties
for late payment,  if  applicable),  due  heretofore to the PBGC with respect to
each  Pension  Plan.  Except as described  on Schedule  5.26,  there has been no
"reportable  event",  as  defined  in  Section  4043(b)  of  ERISA  and the PBGC
regulations  under that  Section,  with  respect to any Pension Plan as to which
notice has not been waived  under  applicable  PBGC under PBGC  regulations.  No
liability to the PBGC has been incurred by Rudy's,  any Subsidiary or any Common
Control Entity,  on account of the termination of any Pension Plan. The PBGC has
not instituted proceedings to terminate any Pension Plan and to the knowledge of
Rudy's, there exists no condition or set of circumstances which could

                                  -25-

<PAGE>



reasonably be expected to present a significant risk of the termination of any
Pension Plan by the PBGC.

                           5.26.7  Except as set forth on Schedule 5.26, none of
Rudy's, any Subsidiary nor any Common Control Entity has withdrawn from a Multi-
employer Plan in a "complete withdrawal" or a "partial withdrawal" as defined in
Sections 4203 and 4205 of ERISA, respectively.

                           5.26.8  True and complete copies of each of the
     following  documents  have been  delivered by Rudy's to Benihana:  (i) each
Welfare  Plan,  each Pension Plan and each  Multiemployer  Plan,  related  trust
agreements,   annuity  contracts,  or  other  funding  instruments;   (ii)  each
Employment  Plan and  complete  descriptions  of any such  plans that are not in
writing;  (iii) the most  recent  determination  letter  issued by the  Internal
Revenue  Service with respect to each Pension Plan;  (iv) Annual Reports on Form
5500 Series required to be filed with any  governmental  agency for each Welfare
Plan and each  Pension  Plan for the two most  recent  plan  years;  and (v) all
actuarial  reports  prepared  for the last two  available  plan  years  for each
Pension Plan.

                           5.26.9 Except as described on Schedule 5.26, neither
     Rudy's, any Subsidiary nor any Welfare Plan or Employment Plan is obligated
to make any  payment  of  post-retirement  life,  accidental  death,  medical or
disability  insurance  benefits of any type,  excluding,  for this purpose,  the
provisions of any such benefit as a result of an individual's exercise of his or
her health  care  continuation  rights  under the  Consolidated  Omnibus  Budget
Reconciliation  Act of  1985,  as  amended,  to or with  respect  to any  former
employee of Rudy's or a Subsidiary.

                  5.27  Brokers  and  Finders.  Except as set forth on  Schedule
5.27, Rudy's is not a party to any agreement with any person that would obligate
Rudy's or any of the Subsidiaries to pay any brokerage fee, commission, finder's
fees or investment banking fee in connection with the transactions  contemplated
by this Agreement.

                  5.28  Consents.  Except  as set forth in this  Agreement,  the
consummation of the  transactions  contemplated  hereby in respect to Rudy's and
Principal  Shareholders  and the  fulfillment  of the terms of this Agreement in
respect of Rudy's and the  Principal  Shareholders  do not require the  consent,
approval,  filing with, registration or release of any governmental authority or
any other Person including,  without limitation,  any Person who is a party to a
contract  or  a  lease,   except  for  those   approvals,   consents,   filings,
registrations  or releases the failure of which to file or obtain would not have
a Material Adverse Effect.

                  5.29 Books and  Records.  Rudy's has  maintained  complete and
correct copies of: (a) the Articles or Certificate of Incorporation  and by-laws
and other  charter  documents  of Rudy's  and each of the  Subsidiaries  and all
amendments thereto; (b) the stock records of Rudy's and each Subsidiary; and (c)
the minutes and other records of the meetings and other proceedings of the

                                  -26-

<PAGE>



shareholders and directors of Rudy's and each Subsidiary are complete and
current in all material respects.

                  5.30  Fairness  Opinion.  The Board of Directors of Rudy's has
received the written  opinion (the "Fairness  Opinion") of Ladenburg  Thalmann &
Co., Inc. to the effect that the Cash  Consideration  is fair,  from a financial
point of view,  to the holders of the Rudy's  Shares,  other than the  Principal
Shareholders.  Benihana has been  furnished with a true and complete copy of the
Fairness Opinion.

         6.       REPRESENTATIONS AND WARRANTIES OF PRINCIPAL SHAREHOLDERS.

                  6.1      Representations and Warranties of Rudolph.

                  In order to  induce  Benihana  and  Newco to enter  into  this
Agreement and to consummate the Merger and the other  transactions  contemplated
herein, Rudolph represents and warrants as follows:

                           6.1.1  Rudolph is the owner, beneficially and of
record, of 2,086,000 Rudy's Shares and Rudolph has good,  valid and  marketable
title to such Rudy's Shares free and clear of all liens,  encumbrances,
security interests or claims whatsoever.

                           6.1.2  This Agreement has been duly and validly
executed by Rudolph as to the  provisions of Sections 6 and 8.10. The provisions
of Sections 6 and 8.10 are the legal,  valid and binding  obligations  of
Rudolph  enforceable  against Rudolph in accordance with their terms.

                           6.1.3  Rudolph is acquiring the Warrant for
     investment  and  not  with a view to  distribution  of the  Warrant  or the
Warrant  Shares  without  compliance  with the  registration  provisions  of the
Securities   Act  or  the   availability   of  an   exemption   therefrom.

                 6.2    Representations and Warranties of Bayview.

                  In order to  induce  Benihana  and  Newco to enter  into  this
Agreement and to consummate the Merger and the other  transactions  contemplated
herein, Bayview represents and warrants as follows:

                           6.2.1  Bayview is the owner, beneficially and of
record, of 450,000 Rudy's Shares.  Bayview has good, valid and marketable title
to such Shares free and clear of all liens, encumbrances, security interests or
claims whatsoever.

                           6.2.2  This Agreement has been duly and validly
authorized and executed by all necessary corporate action of Bayview as to the
provisions of Section 6 and 8.10.  The

                                  -27-


<PAGE>



provisions of Sections 6 and 8.10 are legal,  valid and binding  obligations  of
Bayview enforceable against Bayview in accordance with their terms.

         7.       REPRESENTATIONS AND WARRANTIES OF BENIHANA AND NEWCO.

         In  order  to  induce  Rudy's  to  enter  into  this  Agreement  and to
consummate the Merger and the other transactions  contemplated herein,  Benihana
and Newco represent and warrant to Rudy's as follows:

                  7.1      Corporate Organizations; Etc..  Benihana and Newco
are corporations duly organized, validly existing and in good standing under the
laws of the States of Delaware and Nevada, respectively.

                  7.2  Authorization,  Etc..  This Agreement and each agreement,
document  and  instrument  required to be  delivered by Benihana at the Closing,
including,   without  limitation,  the  Warrant,  have  been  duly  and  validly
authorized by all necessary  corporate action of Benihana and Newco, as the case
may be. Benihana and Newco each have full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. This
Agreement is the valid and binding  agreement of Benihana and Newco  enforceable
against them in accordance with its terms.

                  7.3 Warrant Shares. The Warrant Shares, when issued upon a due
exercise of the Warrant, will be fully paid, validly issued, duly authorized and
non-assessable shares of the Class A Stock of Benihana.

                  7.4  No  Violation.   Neither  the   execution,   delivery  or
performance  of  this  Agreement  nor  the   consummation  of  the  transactions
contemplated   hereby  will  violate  any  provision  of  the   Certificate   of
Incorporation,  Articles  of  Incorporation  or  By-Laws  or  similar  corporate
documents of Benihana or any  subsidiary of Benihana or will (a) violate,  or be
in conflict with, or constitute a breach or default (or an event which, with the
giving of notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or acceleration of the performance required by, or
cause the acceleration of the maturity of any debt or obligation pursuant to, or
result in the creation or  imposition  of any security  interest,  lien or other
encumbrance  upon any  property  or  assets of  Benihana  or any  subsidiary  of
Benihana under any Contractual Obligation to which Benihana or any subsidiary of
Benihana is a party or by which Benihana or any subsidiary of Benihana is bound,
or to which the property of Benihana or any  subsidiary  of Benihana is subject,
except  where  such   violation,   conflict,   breach,   default,   termination,
acceleration,  security  interest,  lien or other  encumbrance  would not have a
Material  Adverse  Effect;  or (b) violate  any statute or law or any  judgment,
decree,  order,  regulation  or rule of any court or  Governmental  Authority to
which Benihana is subject, except where such violation would not have a Material
Adverse Effect.


                                 -28-

<PAGE>



                  7.5 Approvals of Governmental Authorities. No action, consent,
approval or  authorization  of or declaration,  filing or registration  with any
person or entity,  including without limitation,  any Governmental  Authority is
required  to be  obtained  or made by or on  behalf  of  Benihana  or  Newco  in
connection with the execution, delivery and performance by Benihana and Newco of
this Agreement or the  consummation of the transactions  contemplated  hereby in
respect of Benihana and Newco.

                  7.6 Brokers and Finders. Neither Benihana nor Newco is a party
to any  agreement  with any person or entity which would  obligate  Rudy's,  any
Subsidiary or the Principal  Shareholders to pay any  commission,  finder's fee,
investment  banking fee, or brokerage  fee in connection  with the  transactions
contemplated by this Agreement.

                  7.7  Public  Reports;  Compliance.   Benihana  has  heretofore
delivered to Rudy's true and complete  copies of the Benihana  Reports.  Each of
the Benihana  Reports  complied with all applicable rules and regulations of the
Securities  Act or the Exchange Act, as the case may be, as of their  respective
dates of filing.  None of the Benihana Reports contained any untrue statement of
a material  fact or omitted to state any  material  fact  required  to be stated
therein or necessary in order to make the statements  therein not misleading (in
each case as of the respective dates thereof).

                  7.8 The Class A Stock. The Class A Stock and the Common Stock,
par value $.10 per share, of Benihana are registered  under Section 12(g) of the
Exchange  Act, are quoted on NASDAQ,  and  Benihana is currently  subject to the
periodic  reporting  requirements of Section 13 or Section 15(c) of the Exchange
Act.  Benihana  has filed and will file all  reports  required to be filed by it
pursuant to the Exchange Act and the regulations  promulgated thereunder through
the date hereof and the Closing.

         8.       COVENANTS OF RUDY'S AND THE PRINCIPAL SHAREHOLDERS.

                  A.       Covenants of Rudy's

                  8.1  Conduct of Business - Negative  Covenants.  From the date
hereof through the Effective Time and except as  contemplated by this Agreement,
Rudy's and the  Subsidiaries  shall not,  without the prior  written  consent of
Benihana,  conduct the business of Rudy's and the Subsidiaries other than in the
ordinary  course or  commit  or cause or  authorize  any act or  omission  which
deviates from the ordinary course of business.  Without  limiting the generality
of the foregoing, prior to the Effective Time, none of the following shall occur
without the prior written consent of Benihana:

                           8.1.1  Rudy's and the Subsidiaries shall not
institute any new methods of purchase, sale, lease, management,  accounting
or operation or engage in any transaction or activity,  enter into any agreement
or make any commitment or amend any existing material  agreement,  except in the
ordinary course of business and consistent with past practice.

                                  -29-

<PAGE>



                           8.1.2  Rudy's and the Subsidiaries shall not change
or amend their articles or certificates of incorporation or by-laws or propose
any such change or amendment.

                           8.1.3  Rudy's and the Subsidiaries shall not offer,
issue or sell any shares of the capital stock or other  securities  (such term
     as used in this subsection to include, without limitation, debt securities)
of  Rudy's  or any  Subsidiary  of any  kind  whatsoever,  acquire  directly  or
indirectly,  by redemption or otherwise,  any such capital stock,  reclassify or
split-up any such capital stock,  declare or pay any dividends  thereon in cash,
securities  or other  property,  or make any  other  distribution  with  respect
thereto, or grant or enter into any stock options,  warrants, or other rights to
acquire securities of Rudy's or any Subsidiary or enter into any other contracts
or commitments of any kind with respect to the issuance of additional  shares of
capital stock or other securities of Rudy's or any Subsidiary.

                           8.1.4  Rudy's and the Subsidiaries shall not borrow
or agree to borrow any funds or incur,  or assume or become subject to, whether
     directly or by way of guaranty or  otherwise,  any  obligation or liability
(absolute or  contingent),  except in the ordinary court of business  consistent
with past practices or pursuant to existing credit  arrangements copies of which
have previously been furnished to Benihana.

                           8.1.5  Rudy's and the Subsidiaries shall not pay,
discharge,  waive, satisfy or compromise or adjust any claim,  liability or
obligation (absolute, accrued, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business and consistent with
past practice of liabilities or  obligations  reflected or reserved  against the
Unaudited  Balance  Sheet or incurred  in the  ordinary  course of business  and
consistent with past practice since the date of the Unaudited Balance Sheet.

                           8.1.6  Rudy's and the Subsidiaries shall not make any
single capital expenditure or commitment in excess of $50,000 for additions to
     property, plant, equipment or intangible capital assets or make any capital
expenditure  or commitments  so that the aggregate of capital  expenditures  and
commitments do not exceed $100,000 since the Balance Sheet Date for additions to
property, plant, equipment or intangible capital assets;

                           8.1.7  Rudy's and the Subsidiaries shall not prepay
any obligation having a fixed maturity of more than sixty (60) days from the
date such  obligation was incurred.

                           8.1.8  Rudy's and the Subsidiaries shall not permit
     or allow any of its property or assets (real,  personal or mixed,  tangible
or intangible)  to be subjected to any mortgage,  pledge,  lien or  encumbrance,
except in the ordinary  course of business and consistent  with past practice or
pursuant to existing credit arrangements which have been disclosed to Benihana.

                           8.1.9  Rudy's and the Subsidiaries shall not write
down the value of any inventory (including write-downs by reason of shrinkage or
markdown) or write off as

                                  -30-

<PAGE>



uncollectible   any  notes  or  accounts   receivable,   except  for  immaterial
write-downs  of  inventory  or accounts  receivable  in the  ordinary  course of
business and consistent with past practice.

                           8.1.10  Rudy's and the Subsidiaries shall not cancel
     any debts or waive any claims or rights involving more than $1,000 or sell,
transfer, or otherwise dispose of any of its properties or assets, except in the
ordinary course of business and consistent with past practice.

                           8.1.11  Rudy's and the Subsidiaries shall not dispose
of any rights to the use of any patent, trademark, trade name or copyright,
or dispose of or disclose to any person any trade  secret,  formula,  process or
know-how  not  theretofore  a matter  of  public  knowledge  except  where  such
disposition or disclosure would not have a Material Adverse Effect.

                           8.1.12  Rudy's and the Subsidiaries shall not grant
     any  increase in the  compensation  of officers or general  increase in the
compensation  of employees  (including any such increase  pursuant to any bonus,
pension,  profit  sharing or other plan or  commitment)  or any  increase in the
compensation  payable or to become  payable to any officer or  employee,  except
increases granted in the ordinary course of business and reasonable increases to
employees  who are not officers  consistent  with past  practice and pursuant to
existing  agreements.  Notwithstanding  the  preceding  or  any  other  term  or
condition  hereof,  Rudy's shall be entitled to expend or commit to expend on or
before the  Effective  Time, an amount not to exceed an aggregate of $787,500 to
be paid as  severance  payments  or  bonuses  to  certain  employees  of Rudy's.
Schedule  8.1.12 sets forth the names of each employee with respect to whom such
payments will be made and the  respective  amounts of each such payment.  Rudy's
shall cause each of such  employees  (except  any who have  accepted an offer of
continued employment following the Effective Time from the Surviving Corporation
or Benihana) to deliver a letter  (each a "Severance  Letter") to the  Surviving
Corporation at the Closing  providing for the terms as annexed hereto as Exhibit
8.1.12.

                           8.1.13  Rudy's and the Subsidiaries shall not sell, 
     transfer, surrender,  terminate, sublease or lease any properties or assets
to, or enter into any agreement or  arrangement  with,  any of their officers or
directors,  except  pursuant to existing  arrangements  with such  directors and
officers relating to directors' fees and compensation to officers.

                           8.1.14  Rudy's and the Subsidiaries shall not modify
any  collective  bargaining  or other labor  agreement  to which they are a
party or by which it may be bound,  except for immaterial  modifications  in the
ordinary  course of business which are consistent with past practice or required
by applicable law.

                           8.1.15  Rudy's and the Subsidiaries shall not
terminate any Plan or withdraw from  any  Multiemployer  Plan or fail to notify
Benihana  of any  "prohibited transaction",  as such term is defined in Section
4975 of the  Internal  Revenue Code.


                                 -31-

<PAGE>



                           8.1.16  Rudy's and the Subsidiaries shall not enter
into or  consent  to any  amendment  of, or  sublease  with  respect to the
properties  demised under the Leases  except in the ordinary  course of business
and consistent with past practice.

                           8.1.17  Rudy's and the Subsidiaries shall not take
     any action, or omit the taking of any action,  which would cause any of the
representations or warranties made in Article 5 hereof to be or become untrue or
incorrect in any material respect as of the Closing Date.

                           8.1.18  Rudy's and the Subsidiaries shall not agree
or commit, whether in writing or otherwise, to do any of the foregoing.

                  8.2 Conduct of Business - Affirmative Covenants.  Prior to the
Effective  Time,  Rudy's and each  Subsidiary  will  conduct its business in the
ordinary course and consistent  with past practice,  except where the failure to
do so would not have a Material Adverse Effect.  Without limiting the generality
of  the  foregoing,  prior  to  the  Effective  Time  each  of  Rudy's  and  the
Subsidiaries:

                           8.2.1  will maintain its good standing and qualifi-
cation to do  business  in all  jurisdictions  where it is  required  to be
qualified to do business,  and all  licenses,  permits,  franchises,  rights and
privileges which are necessary for the conduct of the its business;

                           8.2.2  shall continue at its expense to maintain its
property and equipment in customary  repair,  order and working  condition,
reasonable wear and use excepted,  and keep in full force and effect the Leases,
except those which expire by their terms, and, if any Leases expire by their own
terms,  renew the same if such renewal is in the ordinary course of business and
consistent with past custom and practice;

                           8.2.3  shall duly comply with all laws, regulatory
requirements and agreements to which it is subject or by which it is bound;

                           8.2.4  shall maintain the current insurance upon its
properties and with respect to the conduct of its business;

                           8.2.5  shall pay and discharge, before the same shall
     become delinquent, all Taxes imposed on it or against its income or profits
or any of its properties,  and all other  Liabilities  which,  if unpaid,  might
become  an  encumbrance,  except to the  extent  and so long as (i) the same are
being contested in good faith and by appropriate proceedings,  and (ii) it shall
have set aside on its books reasonable  reserves with respect thereto under GAAP
consistently  applied;

                           8.2.6  shall use commercially  reasonable efforts to
keep intact its present business organizations, keep available the services
of its present  officers,  employees and agents and use commercially  reasonable
efforts to  preserve  its present  relationships  with all  customers,  clients,
accounts,  suppliers and other entities or persons having business relationships
with it, in

                                 -32-

<PAGE>



each case in theordinary course of business or in a manner consistent with
customary historical practices or course of conduct;

                           8.2.7  shall furnish to Benihana for its examination
     (i) its minute books containing all records required to be set forth of all
proceedings,  consents,  actions and meetings of the  shareholders  and Board of
Directors;  (ii) all permits,  orders,  and consents issued by any  governmental
authority with respect to Rudy's and such  Subsidiary,  and all applications for
such permits,  orders, and consents;  and (iii) its stock transfer books setting
forth all  transfers of any shares of capital  stock;  8.2.8 shall  maintain its
books, records and accounts with accuracy and
consistently with past practices; and

                           8.2.9  shall comply with the requirements of any
state,  city or local law, statute,  ordinance,  regulation or otherwise in
any  state,  city or  locality  in which any of the Owned  Real  Properties  are
located  and/or in which any of the  properties  demised  under the  Leases  are
located,  which law,  statute,  ordinance or  regulation  imposes a transfer tax
and/or filing  requirement  in  connection  with the  transactions  contemplated
hereby.

                  8.3      Shareholders' Meeting; Proxy Statement.

                           8.3.1  Promptly following the date hereof, Rudy's 
will prepare and file with the SEC a proxy  statement (the "Proxy  Statement")
for a special meeting of the shareholders of Rudy's to be held pursuant to
     Section 8.3.2.  The Proxy Statement shall contain all information  required
by Schedule 14A promulgated under the Exchange Act. Benihana will cooperate with
Rudy's in the  preparation of the Proxy  Statement,  including the furnishing of
all information with respect to Benihana, including financial statements, to the
extent required to be included in the Proxy Statement.

                           Rudy's covenants and warrants that at the time it is
furnished to the  shareholders  of Rudy's,  the Proxy  Statement  shall not
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated therein in order to make the  statements  therein not
misleading.  Such covenant shall not be deemed to apply to information furnished
in writing by Benihana specifically for inclusion in the Proxy Statement.

                           8.3.2  At the earliest practicable date following the
date that the Proxy  Statement  has been  cleared  for  mailing by the SEC,
Rudy's shall distribute the Proxy Statement to its shareholders giving notice of
the  Shareholders'  Meeting  for the  purposes of adopting  this  Agreement  and
approving the Merger and soliciting proxies in favor thereof.  The Shareholders'
Meeting  shall be held as soon as  practicable  (but in no event less than 30 or
more than 60 days)  following the date that the Proxy Statement has been cleared
for mailing by the SEC.

                                  -33- 

<PAGE>



                  8.4  Access  to  Information  and  Personnel.  Subject  to the
confidentiality obligations under Section 9.1 hereof, at reasonable times before
the Effective Time,  Benihana,  through its duly appointed  representatives  and
agents,  during  normal  business  hours and in a manner  which  does not unduly
interfere  with the business  operations  of Rudy's or any of the  Subsidiaries,
shall have the right to speak  with,  interview  and discuss  the  business  and
operations  of  Rudy's  and  the  Subsidiaries  with  the  officers,  employees,
attorneys and agents of Rudy's and the  Subsidiaries and shall have the right to
visit the  premises of Rudy's and the  Subsidiaries,  to examine,  to the extent
permitted  by  law,  any  and  all  records,  books,   contracts,   commitments,
shareholder lists, files,  working papers and drafts prepared by accountants and
any independent  public accounting firms retained by Rudy's and the Subsidiaries
and other documents  pertaining to the business and operations of Rudy's and the
Subsidiaries  and the ownership of its  properties  and to undertake  such other
steps as Benihana  considers  appropriate to familiarize  itself with Rudy's and
the Subsidiaries.  All of such interviews,  discussions and inspections shall be
coordinated reasonably in advance with the President of Rudy's.

                  8.5 Estoppel  Certificates or Consents.  Immediately  upon its
execution of this  Agreement,  Rudy's shall  exercise its best efforts to obtain
and  deliver to Benihana at the Closing  customary  estoppel  certificates  from
landlords under the leases and, with respect to Leases which require the consent
of the landlord thereunder for the transactions  contemplated  hereby,  landlord
consents (such consents not to be  conditioned  on any increased  rental,  other
payment,  reduced  term,  or other change of lease terms) in form and  substance
reasonably satisfactory to Benihana.

                  8.6  Confidentiality.  During the period  before the Effective
Time, each of Rudy's and the Principal  Shareholders severally covenants that it
shall not disclose or assist in the  disclosure by any person or entity,  or use
to the  competitive  detriment  of Benihana,  any  confidential  or  proprietary
information  regarding Benihana,  except that disclosure of such information may
be made to their  respective  legal counsel,  accountants,  financial  advisors,
investment bankers and their other authorized agents and representatives, and to
such persons only to the extent required for activities  directly related to the
transactions  contemplated  by this  Agreement,  or  except to the  extent  that
disclosure is required by law or by a court of competent jurisdiction. Following
the Closing,  the Principal  Shareholders shall not disclose or acquiesce in the
disclosure  by  any  person  or  entity  (other  than  Rudy's),  or  use  to the
competitive  detriment of Benihana or Rudy's,  any  confidential  or proprietary
information regarding Benihana or Rudy's.

                  8.7 No Solicitation. Neither the Principal Shareholders, their
representatives   or   agents,   nor  Rudy's   not  its   officers,   directors,
representatives or agents shall,  directly or indirectly,  solicit,  initiate or
participate in discussions or negotiations  with, or provide any information to,
any  Person  (other  than  Benihana  or  Newco)  concerning,  or enter  into any
agreement  providing for any merger,  sale of material assets, sale of shares of
capital stock or similar transactions involving Rudy's;  provided that the Board
of  Directors  of Rudy's may furnish  information  and may  participate  in such
discussion or negotiations if required to satisfy the Fiduciary  Obligations (as
hereinafter   defined)  of  the  Board  of  Directors   of  Rudy's.   "Fiduciary
Obligations"  shall  arise if the Board of  Directors  believes,  in good faith,
after consultation with

                                  -34-

<PAGE>



its financial and legal advisors, that such Person may make a bona fide proposal
for a transaction materially more favorable to the stockholders of Rudy's from a
financial  point of view than the  transactions  contemplated  hereby (a "Higher
Offer"). The Board of Directors will communicate to Benihana within one business
day of receipt the terms of any proposal  received,  or the fact that Rudy's has
received inquiry with respect to, any such transactions.

                  8.8 Best Efforts. So long as this Agreement remains in effect,
Rudy's and the Principal  Shareholders shall use their best efforts to cause the
transactions  contemplated herein to be consummated at the earliest  practicable
date. Rudy's shall proceed as soon as practicable in the procurement of permits,
consents  and  approvals  and in  the  taking  of  any  other  action,  and  the
satisfaction of all other requirements  prescribed by law or otherwise necessary
for  consummation  of the  acquisition on the terms herein  provided,  and shall
diligently prosecute the same.

                  8.9 Tax Returns;  Section 338 Election. For all periods ending
on or prior to the  Effective  Time,  Rudy's  shall  file  all Tax  Returns  and
Statements  which are required by  applicable  law to be filed,  all in a manner
consistent with past practices. In connection therewith,  Rudy's agrees that any
decision as to whether to make an election under Section 338 of the Code (or any
corresponding  or similar  provision  under state or local law) shall be made by
Benihana in its sole discretion and Rudy's will cooperate at Benihana's  expense
as requested in connection with all such elections.
                  B.       Covenants of Principal Shareholders.

                  8.10     Covenants of Principal Shareholders.

                           8.10.1   Prior to the Effective Time, the Principal
     Shareholders  shall not, directly or indirectly,  sell,  transfer,  pledge,
hypothecate,  encumber or otherwise dispose or surrender possession of, or enter
into any contract or agreement for the sale,  transfer or other  disposition  of
the Rudy Shares, except by will, intestacy or otherwise by operation of law.

                           8.10.2   The Principal Shareholders shall not permit
Rudy's or the Subsidiaries to take any actions in contravention of Section 8.1.

                           8.10.3   The Principal Shareholders shall use their
reasonable efforts to cause Rudy's and the Subsidiaries to comply with the
covenants of Section 8.2.

                           8.10.4   At the Shareholders' Meeting, the Principal
Shareholders will vote, or cause to be voted, all of Rudy's Shares owned
beneficially by each of them in favor of approving the Merger and this
Agreement.

                           8.10.5   The Principal Shareholders shall comply with
 the covenants set forth in Sections 8.6, 8.7 and 8.8 to the extent applicable
 to them.

         9.       COVENANTS OF BENIHANA AND NEWCO.

                                  -35-

<PAGE>



                  9.1 Confidentiality.  Prior to the Closing, Benihana and Newco
shall not disclose or acquiesce in the  disclosure by any Person,  or use to the
competitive  detriment of Rudy's,  any  confidential or proprietary  information
regarding  Rudy's or its  business  or  financial  condition,  contained  in any
documents  or  otherwise  furnished  by or on behalf of Rudy's or the  Principal
Shareholders,  or  otherwise  learned  by  Benihana  or  Newco  as a  result  of
participation in the transactions  contemplated hereby, to any Person except its
legal counsel, accountants,  financial advisors, bankers, investment bankers and
other  authorized  agents and  representatives,  and to such persons only to the
extent required for activities directly related to the transactions contemplated
by this Agreement,  including,  without limitation,  the financing of Benihana's
obligation hereunder. If the transaction  contemplated by this Agreement for any
reason  does not  close,  Benihana  and  Newco  agree to,  and shall  thereafter
continue to,  abide by the  preceding  provisions  of this Section 9.1 and in so
doing, and without limitation,  shall permanently protect the confidentiality of
all confidential or proprietary  information provided to it by Rudy's and return
to Rudy's all written information  provided to Benihana and Newco by Rudy's, and
also  shall  return or, at Rudy's  election,  destroy  all  copies  made of such
written  information  and submit its affidavit of its duly  authorized  officers
that all such written  information  and copies have been returned.  In addition,
neither Benihana nor any subsidiary of Benihana will,  without the prior written
consent  of  Rudy's,  solicit  or make an offer  of  employment  to any  present
employee of Rudy's for a period of 12 months from the date of any termination of
this Agreement without a Closing.

                  9.2 Best Efforts. So long as this Agreement remains in effect,
Benihana  and Newco  shall  use their  best  efforts  to cause the  transactions
contemplated hereby to be consummated at the earliest practicable date. Benihana
and Newco shall proceed as soon as  practicable  in the  procurement of permits,
consents  and  approvals   (including,   without   limitation,   Liquor  License
applications  or  transfers)  and in the  taking  of any other  action,  and the
satisfaction of all other requirements  prescribed by law or otherwise necessary
for  consummation  of the  acquisition on the terms herein  provided,  and shall
diligently prosecute the same.

         10.      CONDITIONS TO CLOSING.

                  10.1  Conditions  Precedent to the Performance of Benihana and
Newco.  The  obligations of Benihana and Newco to consummate the  acquisition in
accordance  with this  Agreement  is subject to the  fulfillment  of each of the
following  conditions,  any of which may be waived in  writing by  Benihana,  in
whole or in part, in its sole discretion:

                           10.1.1  Compliance with this Agreement.

                                    (a)     Rudy's and the Principal
         Shareholders shall have performed and  satisfied in all material
         respects  all  covenants,  obligations, agreements  and  conditions
         required by this Agreement to be performed and satisfied by each of
         them, on or prior to the Effective Date;


                                  -36-

<PAGE>



                                    (b)     The representations and warranties
         contained in Articles 5 and 6 hereof  shall  be in all  material
         respects  true,  correct and complete as of the date when made and at
         and as of the  Effective Date as though such  representations  and
         warranties  were made at and as of such date,  except for changes
         expressly  permitted or contemplated by the terms of this  Agreement.
         For purposes of this  condition  and the certificate  required by
         subsection (c) below,  any decline in sales or net income of Rudy's
         arising from  operations in the ordinary  course, consistent with past
         practices and not resulting from a violation of any covenant of Rudy's
         hereunder shall be deemed a change expressly permitted or contemplated
         by the terms of this Agreement;

                                    (c)     Rudy's shall have delivered to
         Benihana a certificate signed by its Chief Executive Officer and Chief
         Financial Officer dated as of the Effective  Date.  Such  certificate
         shall certify as to the truth, completeness  and  correctness in all
         material respects of each of the representations and  warranties  set
         forth in Article 5 made by Rudy's and as to the fulfillment in all
         material respects of the covenants set forth in Article 8A hereof which
         are required by this Agreement to be performed and satisfied by Rudy's
         on or before the Effective Date.

                           10.1.2  Approvals.  All corporate action, including
approval  by the  shareholders  of  Rudy's  at the  Shareholders'  Meeting,
necessary for Rudy's to approve the execution and delivery of this Agreement and
the consummation of the  transactions  contemplated by this Agreement shall have
been taken and not revoked by the Board of Directors and shareholders of Rudy's,
and Rudy's shall have delivered to Benihana  certified  copies of resolutions of
the Board of Directors and shareholders of Rudy's evidencing such action.

                           10.1.3  No Material Adverse Effect.  As of the
Effective  Date,  there  shall  have  been  no  condition,  development  or
occurrence in respect of the assets, business,  financial condition or prospects
of Rudy's and the Subsidiaries  which would constitute a Material Adverse Effect
when  compared to such  condition as at the Balance  Sheet Date,  other than any
such  condition,  development  or  occurrence  arising  from  operations  in the
ordinary  course and  consistent  with past  practices  or course of conduct and
which does not consist of or result from a violation  of any  covenant of Rudy's
hereunder,  and, on the Effective  Date,  Rudy's shall deliver a certificate  to
such effect signed by the Chief Financial Officer of Rudy's.

                           10.1.4  Opinion of Counsel for Rudy's.  Benihana
shall have received the legal  opinion of counsel for Rudy's,  including  an
opinion of Nevada  counsel, dated as of the  Effective  Date,  which opinion
shall opine as to the items set forth on Exhibit 10.1.4, subject to customary
exceptions and qualifications (the "Rudy's Counsel Opinion").

                           10.1.5  No Injunction.  On the Effective Date, there
shall  be  no  effective   injunction,   writ,   preliminary  or  temporary
restraining  order  or  order  of any  nature  issued  by a court  of  competent
jurisdiction directing that the transactions provided for herein or any of them

                                  -37-

<PAGE>



not be consummated as so provided or imposing any conditions on the consummation
of the transaction  contemplated  hereby that Benihana deems unacceptable in its
sole discretion.

                           10.1.6  Consents and Approvals.  Benihana shall have
received  any  necessary  approvals  and consents  from all third  parties,
including, without limitation, the landlords under the Leases to the extent such
consent is required by the terms of the Leases, and the approval of all relevant
state  authorities  with  respect to Newco's and  Benihana's  acquisition  of an
interest  in the  Restaurants  pursuant to the Merger,  and such  approvals  and
consents shall not have expired or been withdrawn as of the Effective Date. Each
of such required consents is set forth on Schedule 10.1.6 hereof.

                           10.1.7  No Litigation.  As of the Effective Date, no
 writ,  action,  investigation,  inquiry,  litigation  or  other  proceeding
relating to or affecting  Rudy's or any  Subsidiary  or any of their  respective
directors,  officers,  employees  or agents  in their  capacities  as such,  the
assets,  properties or business of Rudy's or the  transactions  contemplated  by
this Agreement shall have been instituted  seeking any relief which, if granted,
would have a Material  Adverse Effect or challenging the legality of the Merger,
seeking to restrain the  consummation  thereof or seeking  damages in connection
therewith.

                           10.1.8  Approval of Documentation.  The form and
substance of all certificates,  instruments,  opinions, and other documents
delivered to Benihana under this Agreement shall be reasonably  satisfactory in
all material  respects to Benihana and its counsel.

                           10.1.9  Appraisal Rights.  Holders of Rudy's Shares
representing no more than 7.5% of the outstanding  Rudy's Shares shall have
duly submitted valid written requests for the payment of the fair value of their
Rudy's  Shares in  accordance  with Section  92A.380 of the Nevada Law.  10.1.10
Severance Letters. Benihana shall have received duly executed
copies of the Severance Letters referred to in Section 8.1.12.

                           10.1.11  Fairness Opinion.  The Fairness Opinion
shall have been confirmed in writing by Ladenburg Thalmann & Co., Inc. as of
the date of mailing of the Proxy Statement.

                           10.1.12  Resignations.   Each of the directors and
officers of Rudy's and the Subsidiaries immediately prior to the Effective Time
shall have resigned from all offices held by a written letter of resignation,
copies of which shall be delivered to Benihana at the Closing.

                  10.2     Conditions Precedent to Rudy's Performance.  The
obligation of Rudy's to consummate the Merger in accordance with this Agreement
is subject to the fulfillment of each

                                  -38-

<PAGE>



of the following conditions, any of which may be waived in writing by Rudy's, in
whole or in part, in its sole discretion:

                           10.2.1  Compliance with This Agreement.

                                    (a)     Benihana and Newco shall have
         performed and satisfied in all  material respects all  covenants,
         obligations, agreements and conditions  required by this Agreement to
         be performed and satisfied by Benihana and Newco on or prior to the
         Effective Date;

                                    (b)     The representations and warranties
         of Benihana and Newco contained  in Article 7 hereof  shall be true,
         correct and complete in all  material  respects  as of the date  when
         made and at and as of the Effective Date as though such representations
         and warranties had been made  on  such  date,  except  for  changes
         expressly   permitted  on contemplated by the terms of this Agreement;

                                    (c)     Benihana shall have delivered to
         Rudy's a certificate, signed by its President and its Chief  Financial
         Officer,  dated as of the Effective Date, certifying as to the  truth,
         completeness and correctness in all material respects of each of the
         representations and warranties  set forth in  Article 7 hereof and the
         fulfillment in all material  respects  of each of the  covenants  set
         forth in  Article 9 hereof.

                           10.2.2  Approvals.  All corporate action by Benihana
and Newco necessary to approve the execution and delivery of this Agreement
and the consummation of the transactions contemplated by this Agreement prior to
the Effective Date shall have been taken and not revoked and Benihana shall have
delivered to Rudy's certified copies of resolutions of the Board of Directors of
Benihana and Newco evidencing such actions.

                           10.2.3  Opinions of Counsel for Benihana.  Rudy's
shall have received the opinion of Dornbush Mensch  Mandelstam & Schaeffer,
LLP,  counsel  for  Benihana  and Newco,  dated as of the  Effective  Date,  and
addressed  to Rudy's,  which  opinion  shall  opine as to the items set forth on
Exhibit  10.2.3,   subject  to  customary  exceptions  and  qualifications  (the
"Benihana's Counsel Opinion").

                           10.2.4  Non-Competition Agreement.  The Surviving
     Corporation and Benihana shall have offered to enter into a Non-Competition
Agreement  with each of Marie  Peterson  and Rudolph  substantially  in the form
annexed as Exhibit 10.2.4 hereto.

                           10.2.5  Warrant.  Benihana shall have issued the
Warrant to Rudolph, providing  for the right to  purchase  200,000  shares of
the Class A Stock at a price of $8.00 per share and containing the further terms
and conditions, and in substantially the form, as annexed hereto as Exhibit
10.2.5.


                                  -39-

<PAGE>



                           10.2.6  Fairness Opinion.  The Fairness Opinion shall
have been confirmed in writing by Ladenburg Thalmann & Co., Inc. as of the date
of mailing of the Proxy Statement.

                           10.2.7  Approval of Documentation.  The form and
substance of all certificates,  instruments,  opinions,  and other documents
delivered to Rudy's under this Agreement shall be reasonably  satisfactory in
all material  respects to Rudy's and its counsel.

                           10.2.8  Absence of Legal Challenge to Merger.  As of
     the Effective Date,  there shall be in effect no order,  writ,  injunction,
judgment or decree of any court or  Governmental  Authority in the United States
or any state or territory thereof, prohibiting the consummation of the Merger or
any of the other  transactions  specified  in or  required  by the terms of this
Agreement,  and there shall be no action,  suit or proceeding or pending  before
any court,  Governmental Authority or other body challenging the legality of the
Merger or any of the transactions  specified in or required by the terms of this
Agreement,  seeking  to  restrain  their  consummation  or  seeking  damages  in
connection therewith.

         11.      DELIVERIES AT CLOSING.

                  11.1     Rudy's Obligations.  At the Closing, Rudy's shall
deliver to Benihana or as Benihana may designate:

                           11.1.1  the certificates required by Section 10.1.1
and 10.1.3 hereof;

                           11.1.2  Rudy's Counsel Opinion required by Section
10.1.4 hereof;

                           11.1.3  a true and complete copy of the letter from
Ladenburg Thalmann & Co., Inc. as to the Fairness Opinion required by Section
10.1.11 hereof;

                           11.1.4  the certified resolutions required by Section
10.1.2 hereof;

                           11.1.5  the duly executed resignations required by
Section 10.1.12 hereof;

                           11.1.6  the duly executed consents required by
Section 10.1.6; and

                           11.1.7  the Severance Letters.

                  11.2  Obligations of Benihana and Newco.  At the Closing,  and
against  delivery of each of the items  required to be delivered by Rudy's under
Section 11.1 above, Benihana and Newco shall deliver the following.

                           11.2.1  the Certificate required under Section
10.2.1(c);


                                 -40-

<PAGE>



                           11.2.2  the certified resolutions required by Section
10.2.2;

                           11.2.3  Benihana's Counsel Opinion required by
Section 10.2.3. hereof;

                           11.2.4  The Non-Competition Agreement with Rudolph
and Marie Peterson required by Section 10.2.4;

                           11.2.5  The Warrant; and

                           11.2.6  The Cash Consideration will be delivered to
the Exchange Agent and the Escrow Agent as contemplated by Section 4.3 hereof.

                  11.3 Filings.  Promptly  upon the  completion or waiver of the
conditions  set  forth in  Article  10 hereof  and the  deliveries  required  by
Sections 11.1 and 11.2 hereof, the Surviving Corporation will cause the Articles
of Merger to be filed in Nevada, thereby consummating the Merger.

         12.      POST CLOSING MATTERS.

                  12.1  Offices of Rudy's.  Benihana  shall cause the  Surviving
Corporation  to continue to maintain the executive  offices of Rudy's located at
11900 Biscayne Boulevard,  Suite 806, Miami, Florida until the expiration of the
current lease on such offices in August,  1998.  During such period Benihana and
the Surviving  Corporation will permit Rudolph and his affiliates to occupy such
offices in accordance with their present  practices.  Benihana and the Surviving
Corporation also  acknowledge  that the furniture,  equipment and other personal
items in such  offices are the  personal  property of Rudolph and may be removed
from such offices, at Rudolph's election.

         13.      TERMINATION.

                  13.1     Termination.  This Agreement and the transactions
contemplated herein may be terminated and/or abandoned at any time before the
Closing:

                           13.1.1  By the written mutual consent of Rudy's and
Benihana;

                           13.1.2  By Rudy's, by giving written notice to the
     other parties to this Agreement,  if there is a continuing  material breach
by Benihana of any of the representations,  warranties, covenants or obligations
of  Benihana  set  forth  herein;  provided,  however,  that at the time of such
termination,  Rudy's is not in  material  breach of any of its  representations,
warranties,  covenants  or  obligations  hereunder  (or,  if  Rudy's  is in such
material breach,  Rudy's has not commenced to cure and is not then continuing to
diligently  pursue the cure of such breach);  provided  further,  however,  that
Benihana has a period of 20 days in which to cure such default;

                                 -41-

<PAGE>



                           13.1.3  By Benihana by giving written notice to the
     other parties to this Agreement,  if there is a continuing  material breach
by Rudy's or Principal  Shareholders of any of the representations,  warranties,
covenants or  obligations of Rudy's or the Principal  Shareholders,  as the case
may  be,  set  forth  herein;  provided,  however,  that  at the  time  of  such
termination,  Benihana  and  Newco  are not in  material  breach of any of their
representations,  warranties,  covenants or obligations hereunder (or, if either
is in such  material  breach,  Benihana  or Newco,  as the case may be,  has not
commenced to cure and is not then  continuing to  diligently  pursue the cure of
such  breach);   provided  further,  however,  that  Rudy's  and  the  Principal
Shareholders have a period of 20 days in which to cure such default;

                           13.1.4  By either Benihana or Rudy's, if the Closing
     shall not have taken place by January 31, 1998 (the "Final Date"), provided
that at the time of such  termination the  terminating  party is not in material
breach  of any of its  representations,  warranties,  covenants  or  obligations
hereunder (or, if in such material breach,  has not commenced to cure and is not
then continuing to diligently pursue the cure of such breach). In addition,  if,
at the Final  Date,  the sole reason that the Closing has not taken place is the
failure of a third party to have taken any action  required to be taken in order
to satisfy any party's  obligation  to consummate  the Merger (for example,  the
issuing or transfer of a liquor license for a Restaurant)  and each party hereto
has taken all steps  required  hereunder of such party to cause such third party
to take such  action,  then  either  party may elect to extent  the Final  Date,
effective upon notice to the other party, to a date no later than July 31, 1998;

                           13.1.5  By Rudy's, subject to Section 13.2.3, if,
     prior to the  Shareholders  Meeting,  the  Board  of  Directors  of  Rudy's
determines,  solely due to its Fiduciary Obligations, that it will not recommend
the approval of this Agreement or the Merger by the  Shareholders  of Rudy's (or
if such  recommendation  is withdrawn) and shall have recommended a Higher Offer
to the shareholders of Rudy's.

                  13.2     Effect of Termination.

                           13.2.1  Wilful Breach  By Rudy's or the Principal
     Shareholders.  If this  Agreement  is  terminated  by Benihana  pursuant to
Sections  13.1.3 as the result of any wilful breach of any covenant or agreement
of Rudy's or the Principal  Shareholders,  then Rudy's shall be fully liable for
any and all costs,  expenses or damages  incurred or suffered by the other party
in  connection  with,  or in respect of,  this  Agreement  and the  transactions
contemplated hereby (including, without limitation, any commitment fees or other
amounts  paid or  payable  by  Benihana  to any  financing  source or  otherwise
incurred in  connection  with  arranging  for,  soliciting or obtaining any such
financing).

                           13.2.2  Breach by Benihana or Newco. If this
Agreement is terminated by Rudy's pursuant to Section 13.1.2, then Benihana
shall promptly pay Rudy's the sum of $1,000,000,  which  represents a good faith
estimate  of the  cost  and  expenses  incurred  by  Rudy's  in  developing  the
transactions contemplated by this Agreement. Nothing in this Section 13.2.2

                                 -42-

<PAGE>



shall relieve  Benihana or Newco from any liability for breach of this Agreement
or limit  the  availability  of any  remedy  available  to Rudy's  provided  for
hereunder or by law.

                           13.2.3  Termination Because of Fiduciary Obligations.
     In the event this  Agreement  is  terminated  by the Board of  Directors of
Rudy's pursuant to Section 13.1.5,  Rudy's agrees to pay Benihana a fee equal to
the  greater of (i)  Benihana's  out-of-pocket  fees and  expenses  incurred  in
developing  and  negotiating  this Agreement and the  transactions  contemplated
hereby and (ii)  $1,000,000,  which represents a good faith estimate of the cost
and   expenses   incurred  by  Benihana,   together   with  the  value  of  lost
opportunities, in developing the transactions contemplated by this Agreement.

                           13.2.4  Other Terminations.  If this Agreement is
terminated  as permitted by  Subsection  13.1.1,  or otherwise  pursuant to
Section 13.1 and Subsections 13.2.1 , 13.2.2 and 13.2.3 are not applicable, such
termination  shall  be  without  liability  of any  party  (or any  shareholder,
director,  employee,  agent,  consultant or representative of such party) to any
other party.

                  13.3 Procedure Upon  Termination.  In the event of termination
and  abandonment  pursuant to this  Article 13,  written  notice  thereof  shall
forthwith be given to the other party and the transactions  contemplated by this
Agreement shall be terminated  and/or  abandoned,  without further action by any
party. If the transactions  contemplated by this Agreement are terminated and/or
abandoned as provided herein:

                           13.3.1  Each party will redeliver all documents, work
     papers and other material of any other party  relating to the  transactions
contemplated  hereby,  whether so obtained before or after the execution hereof,
to the party furnishing the same; and

                           13.3.2  All confidential information received by any
party hereto with respect to the business of any other party or its subsidiaries
shall be treated in accordance with Sections 8.7 and 9.1 hereof.

                  13.4     Survival.  The provisions of Sections 13.2 and 13.3
shall survive termination of this Agreement.

         14.      GUARANTY OF INDEMNIFICATION.


                  14.1  Guaranty.  From and after the Effective  Time,  Benihana
hereby unconditionally guarantees (the "Benihana Guarantee") the indemnification
obligations  of Rudy's to its officers  and  directors  ("Indemnified  Persons")
immediately  prior to the Effective Time, to the extent provided by the Articles
of  Incorporation  and  By-Laws  of Rudy's in  effect  immediately  prior to the
Effective Time and to the extent permitted by the Nevada Law. Benihana hereby

                                  -43-

<PAGE>



waives  any  requirement  of any  Indemnified  Person  to  pursue  their  rights
hereunder  directly against Rudy's before proceeding  against Benihana under the
Benihana Guarantee and waives all other requirements of notice or demand, except
as set forth in Section 14.2 hereof.  This  guarantee  shall survive the Closing
until the  expiration of the statute of  limitations  of Rudy's  indemnification
obligations to the Indemnified Persons.  Each Indemnified Person shall be deemed
a third party beneficiary of the Benihana Guarantee.

                  14.2 Procedure. Any person seeking indemnification pursuant to
the Benihana  Guarantee shall provide prompt notice to Benihana of the assertion
of any claim as to which such person may seek indemnification. Benihana shall be
entitled to assume the defense of any such matter with counsel of it choice, who
shall be reasonably acceptable to the Indemnified Person. The Indemnified Person
shall furnish reasonable  cooperation to Benihana and its counsel in the defense
of any such matter and may participate in such defense with its own counsel,  at
its own expense.  Notwithstanding the preceding,  Benihana shall be obligated to
pay the  reasonable  fees  and  expenses  of no more  than  one  counsel  for an
Indemnified  Person,  if Benihana receives a written opinion of counsel for such
Indemnified  Person  to the  effect  that  there  may  exist  defenses  to  such
Indemnified   Person's  potential  liability  which  are  different  from  those
available to Benihana or Rudy's or that there is a significant  possibility of a
conflict of interest  between  such  Indemnified  Person,  on the one hand,  and
Benihana  and  Rudy's,  on the other,  in  connection  with the  defense of such
matter.

         15.      NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

                  The respective  representations  and warranties of the parties
contained herein or in any certificates or other documents delivered prior to or
at the Effective  Date shall not be deemed  waived or otherwise  affected by any
investigation  made by any party  hereto.  The  representations  and  warranties
contained  herein shall not survive the  Closing.  This Article 15 shall have no
effect upon any other obligation of the parties hereto,  whether to be performed
before or after the Effective Date.
         16.      MISCELLANEOUS.

                  16.1  Expenses.  Except  as  otherwise  provided  hereto,  the
parties  hereto  shall  each  bear  its own  expenses  in  connection  with  the
transactions  contemplated by this  Agreement,  including the fees of attorneys,
accountants, advisors, brokers, investment bankers and other representatives and
transfer taxes.

                  16.2  Notices  and  Legal  Process.   All  notices  and  other
communications  and legal  process  shall be in writing and shall be  personally
delivered,  transmitted by telecopier, telex or cable, or transmitted by postage
prepaid,  registered  or  certified  mail with return  receipt  requested  or by
recognized  courier  service,  as  elected  by the  party  giving  such  notice,
addressed as follows:




                                 -44-

<PAGE>



                  (a) If to Rudy's or the Principal Shareholders:

                           Rudy's Restaurant Group, Inc.
                           11900 Biscayne Boulevard, Suite 806
                           Miami, Florida  33181
                           Attention:  Mr. Douglas Rudolph
                           Fax:   (305) 895-2881

                  With copies to:

                           Berman Wolfe & Rennert
                           100 Southeast Second Street, 35th Floor
                           Miami, Florida 33131
                           Attention:  Charles J. Rennert, Esq.
                           Fax:  (305) 373-6036

                  (b) If to Benihana, Newco or the Surviving Corporation:

                           Benihana Inc.
                           8685 Northwest 53rd Terrace
                           Miami, Florida  33166
                           Attention:  Mr. Joel A. Schwartz
                           Fax:  (305) 594-9492

                  With copies to:

                           Dornbush Mensch Mandelstam & Schaeffer, LLP
                           747 Third Avenue
                           New York, NY 10017
                           Attn:  Darwin C. Dornbush, Esq.
                           Fax:   (212) 753-7673

Notices  shall be  deemed  to have  been  given,  made and  received  only  when
delivered (personally,  by facsimile transmission or by courier services such as
FedEx, or by other  messenger),  addressed as set forth above.  Any party hereto
may change its address for purpose hereof by notice to the other parties hereto.

                  16.3  Disclosure.   Each  party  shall  provide  the  other  a
reasonable  opportunity for  consultation  with respect to the text of any press
release   announcing  the  execution  of  this  Agreement  or  the  transactions
contemplated hereby.

                  16.4  Counterparts.  This  Agreement  may be  executed  in any
number  of  counterparts,   each  of  which  shall  be  an  original,  but  such
counterparts together shall constitute one and the same instrument.

                                  -45-

<PAGE>




                  16.5  Waiver  and  Amendment.   The  parties  may  by  written
instrument  extend the time for the  performance  of any of the  obligations  or
other  acts of the other  hereunder  and may waive (i) any  inaccuracies  of the
other in the representations or warranties contained in this Agreement or in any
document delivered  pursuant hereto,  (ii) compliance with any of the covenants,
undertakings  or  agreements  of  the  other,  or  satisfaction  of  any  of the
conditions to its or their obligations, contained in this Agreement or (iii) the
performance  (including  performance  to  the  satisfaction  of a  party  or its
counsel) by the other of any of its or their  obligations  set out  herein.  Any
waiver, amendment or supplement hereof shall be in writing.

                  16.6 Entire Agreement. Unless otherwise specifically agreed in
writing,  this  Agreement and the  Schedules  and Exhibits  hereto and the other
agreements  anticipated hereby represent the entire understanding of the parties
with  reference to the  transactions  set forth herein and  supersede  all prior
representations,  warranties,  understandings and agreements  heretofore made by
the  parties,  and  neither  this  Agreement  nor any  provisions  hereof may be
amended, waived, modified or discharged except by an Agreement in writing signed
by the party against whom the  enforcement of any amendment,  waiver,  change or
discharge is sought.

                  16.7 Binding  Agreement.  This Agreement shall be binding upon
and inure to the  benefit  of the  parties  hereto and their  respective  heirs,
successors and permitted assigns except that no party may assign or transfer its
rights or obligation  sunder this Agreement without the prior written consent of
the other parties to this Agreement. Notwithstanding the foregoing, Benihana and
Newco may assign  all or any  portion of its  rights  hereunder:  as  collateral
security to one or more Persons that provide the financing for the Merger.

                  16.8 Governing Law. The  interpretation  and enforceability of
this  Agreement  shall be  governed  by and  construed  in  accordance  with the
internal laws of the State of Florida without reference to the conflicts of laws
provisions thereof. The Merger shall comply with the Nevada Law.

                  16.9     Submission to Jurisdiction. The parties hereto hereby
irrevocably and unconditionally each:

                                    (a)     submits for itself and its property
          in any legal action or proceeding  relating to this Agreement,  or for
          recognition and  enforcement  of any  judgment in respect  thereof, to
          the nonexclusive  general  jurisdiction  of the State of Florida  and
          its courts and the courts of the United States of America for the
          Southern District of Florida located in Dade County; (b) consentsthat
          any such action or proceeding may be brought in such courts,  and
          waives any objection  that it may now or hereafter have to the venue
          of any such action or proceeding in any such court or that such action
          or proceeding was brought in an inconvenient court and agrees not to
          plead or claim the same; and

                                  -46-

<PAGE>



                                    (c)     agrees that nothing herein shall
          affect the right to effect service of process in any other manner
          permitted by law or shall limit the right to sue in any other
          jurisdiction.

                  16.10 Severability;  Construction.  In the event any provision
hereof is determined to be invalid or  unenforceable,  the remaining  provisions
hereof shall be deemed  severable  therefrom  and shall remain in full force and
effect.  Words and  phrases  defined  in the  plural  shall  also be used in the
singular  and  vice  versa  and  be  construed  in the  plural  or  singular  as
appropriate  and apparent in the context  used.  Unless  otherwise  specifically
provided  herein,  accounting  terms  shall be given and  assigned  their  usual
meaning and effect as defined or used in GAAP.

                  16.11    References to Dollars.  All references to "dollars"
and "$" shall mean United States dollars.



                                   -47-

<PAGE>



                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the day and year first above written:

                        BENIHANA INC.


                        By:_____________________________
                           Joel A. Schwartz, President


                        BENIHANA MERGER CORP.


                        By:_____________________________
                           Joel A. Schwartz, President


                        RUDY'S RESTAURANT GROUP, INC.


                        By:_____________________________
                           Douglas M. Rudolph, President


                        BAYVIEW PARTNERS*


                        By:_______________________________
                           William Van Pelt, IV,
                           Managing Partner


                        ---------------------------------
                           Douglas M. Rudolph*




* Solely for the purposes of Sections 6 and 8.10

                                   -48-

<PAGE>



Schedule 1.1

         The Adjustment Amount shall be determined as follows:

                  (a) The Net Working  Capital of Rudy's shall be  determined as
of the close of business on the business day immediately preceding the Effective
Time (the  "Computation  Date").  The term "Net Working Capital of Rudy's" shall
mean,  as of the  Computation  Date,  the amount by which  consolidated  Current
Assets of Rudy's exceeds  consolidated  Current  Liabilities of Rudy's as at the
Computation  Date. All capitalized terms used in this Schedule and not otherwise
defined  shall  have the  meanings  ascribed  to them under  generally  accepted
accounting   principles  ("GAAP"),   as  applied  to  the  financial  statements
consistent with past practices reflected in the historical  financial statements
of Rudy's, and all computations to be made hereunder shall be made in accordance
with  GAAP,  and shall  include  a  reasonable  allowance  for  normal  year-end
adjustments,  if any, on a basis  consistent  with the  historical  practices of
Rudy's.

                  (b) The  amount of  $1,937,127  (the "Base  Amount")  shall be
subtracted from the Net Working Capital of Rudy's as at the Computation Date.

                  (c) To the amount derived in subsection (b) shall be added (i)
all out-of-pocket  amounts paid or accrued by Rudy's directly in connection with
the transactions  contemplated by this Agreement,  including, but not limited to
all  amounts  payable  under  Section  8.1.12 of this  Agreement  and all legal,
accounting and investment  banking fees and amounts payable under Section 8.1.12
of the  Agreement  incurred  in  connection  with the  Merger or this  Agreement
(except to the extent such expenses have been  capitalized  by Rudy's as Current
Assets),  (ii) the amount of all capital  expenditures  incurred by Rudy's since
April 13, 1997 (which  expenditures are not capitalized as Current Assets),  and
(iii) an amount  equal to 50% of the  payments  since  April 13, 1997 of current
maturities of principal under notes or covenants not to compete payable to third
parties who are not  affiliates  of Rudy's and which  notes  payable or covenant
obligations are reflected in the Unaudited Balance Sheet.

                  (d) The result  determined in accordance  with  subsection (c)
shall be divided by the number of Rudy's Shares outstanding immediately prior to
the Effective Time and rounded to the nearest whole cent.

                  (e) Notwithstanding  anything to the contrary set forth in the
Agreement or in this Schedule,  in the event that the parties have not completed
the determination of the Adjustment  Amount as of the date of Closing,  the Cash
Consideration  without the  Adjustment  Amount shall be paid in accordance  with
Section 4.2 and the  Adjustment  Amount shall be paid in the same manner when so
determined  (such  determination  in no event to take  place  later than 30 days
following  the  date of  Closing).  Any  disagreement  between  the  parties  or
uncertainty  concerning  the  calculation  of the  Adjustment  Amount  shall  be
submitted for determination by Deloitte & Touche, LLP, whose determination shall
be final and binding on all parties.

                                   -49-

<PAGE>



Exhibit 8.1.12



         Each  Severance  Letter will contain an  acknowledgement  of the amount
received, an agreement to the termination of employment  (including  termination
of all written or oral  agreements  of  employment)  and a release of all claims
against Rudy's of every nature whatsoever.




                                   -50-

<PAGE>



Exhibit 10.1.4



         Rudy's Counsel Opinion


         The opinion will cover the matters set forth in Sections 5.1, 5.2, 5.3,
5.4, 5.5, 5.6 and 5.22 of the Agreement.

         Factual  matters  need  only be  addressed  to the  best  of  counsel's
knowledge. Customary exceptions and qualifications will apply.



                                  -51-

<PAGE>



Schedule 10.1.6


         Required Consents


                  The consent to the transfer of each Liquor  License  possessed
by a Restaurant (or the approval of applications therefor or amendments thereto)
by the appropriate Governmental Authority required to permit the conduct by each
Restaurant of its business as conducted as of the date hereof is required.



                                  -52-

<PAGE>



Exhibit 10.2.3


         Benihana's Counsel Opinion


         The opinion will cover the matters set forth in Sections 7.1, 7.2, 7.3,
7.4, 7.5 and 7.8 of the Agreement.

         Factual  matters  need  only be  addressed  to the  best  of  counsel's
knowledge. Customary exceptions and qualifications will apply.



                                  -53-

<PAGE>



Schedule 8.1.12

                  Douglas M. Rudolph
                  Marie Petersen
                  Sho Miyazawa
                  Sara Morales
                  Shari Grossnickle
                  Shirley Thomas

                  Sara Morales will be offered  employment by Benihana Inc. at a
salary  of  $28,000  per  year.  In the  event  Sara  Morales  does  not  accept
employment, the $787,500 shall be amended to $815,500.

                  Notwithstanding  the  provisions  of  Section  8.1.12  of  the
Agreement,  the amounts  which Rudy's is entitled to expend  pursuant to Section
8.1.12 of the Agreement shall be reduced,  on a  dollar-for-dollar  basis by the
amount, if any, (the "Reduction Amount"), calculated as that amount by which the
Net  Working  Capital  of  Rudy's  as at the  Computation  Date  as  defined  in
subparagraph (a) of Schedule 1.1 to this Agreement, increased by the amounts set
forth in  subparagraph  (c) of Schedule 1.1 to this  Agreement,  does not exceed
$1,937,127.

                  To the extent the  Reduction  Amount is greater than  $787,500
(the  "Greater  Amount"),  the payments  payable to Douglas  Rudolph  under that
certain  Non-Competition  Agreement  will be  reduced  dollar for dollar by such
Greater Amount.


                                  -54-

<PAGE>



Schedule 5.8 No Undisclosed Liabilities

Obligations not on Balance Sheet and except as otherwise provided herein

1.  State of Florida sales tax assessment (audit completed - no assessment yet,
    but expected)

         Have reserve on books; expect assessment have a net effect of approxi-
         mately $8,000 - $10,000

2.  State of Florida Alcoholic Beverage Surtax Assessment

         Current assessment approximately $4,300; contesting; believe existing
    reserve will suffice

3.  IRS

         IRS has identified  The Samurai & Maxwell's as potentially  responsible
         for  underpayment of payroll taxes on unreported tips and has requested
         we sign TRAC  agreements,  which Buyer has  authorized  Rudy's to sign.
         Potential  for  liability is min.  $15,000 to over $100,000 if assessed
         vis-a-vis employer only audits;  there is no reserve for this potential
         liability

Note:    Buyer has been advised of the above contingencies

4.  Rudy's Cafeteria Plan          

         Obligations  & funding of same  netted in  financial  statements  since
         obligations thereunder are fully funded.


Schedule 5.28

                  Consents

                           None.

                                  -55-