Exhibit 10.1

LOAN AGREEMENT

(Loan 1)

THIS LOAN AGREEMENT (“Agreement”) is made as of December 2, 2016, by and between
FAMOUS DAVE’S OF AMERICA, INC., a Minnesota corporation, and MINWOOD PARTNERS,
INC., a Delaware corporation (collectively, the “Borrower”) and VENTURE BANK, a
Minnesota banking corporation (“Lender”).

RECITALS:

A. Lender has agreed to make a loan (“Loan”) to Borrower in the principal amount
of three million seven hundred thousand and no/100 dollars ($3,700,000.00) for
the following purposes: (1) refinancing certain debt obligations of the
Borrowers; and (2) paying certain other costs approved by Lender, all in
accordance with this Agreement.

B. To evidence the Loan, the Borrower is executing and delivering to the Lender
a promissory note of even date herewith in the amount of the Loan.

C. As security for repayment of the Loan, Borrower is executing and delivering a
mortgage and security agreement and fixture financing statement of even date
herewith that grants Lender a security interest in the Real Property.

D. Famous Dave’s Of America, Inc. and D&D Of Minnesota, Inc., a Minnesota
corporation, Famous Dave’s Ribs Of Maryland, Inc., a Minnesota corporation,
Famous Dave’s Ribs, Inc., a Minnesota corporation, Famous Dave’s Ribs-U, Inc., a
Minnesota corporation, and Lake & Hennepin BBQ & Blues, Inc., a Minnesota
corporation, all of which are affiliates of the Borrower, are entering into a
separate loan agreement of even date herewith under which Lender has agreed to
make two loans in the aggregate principal amount of seven million three hundred
thousand and no/100 dollars ($7,300,000.00), one in the principal amount of six
million three hundred thousand and no/100 dollars ($6,300,000.00) (“Loan 2”) and
the other in the principal amount of one million and no/100 dollars
($1,000,000.00) (“Loan 3”).

NOW, THEREFORE, in consideration of the making of the Loan and other good and
valuable consideration, the receipt of which is hereby acknowledged by the
parties, the parties hereto agree as follows:

Section 1. Definitions. For the purposes of this Agreement and any amendments or
supplements, the following terms have the following meanings:

1.1 “Affiliate” means a person or entity who controls, is controlled by or is
under common control with another person or entity.

1.2 “Agreement” has the meaning set forth in the preamble and includes any
amendments or supplements.

 

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1.3 “Assignment of Rents” means the Assignment of Rents and Leases of even date
herewith from Borrower to Lender, including any amendments or supplements.

1.4 “Borrower” means Famous Dave’s of America, Inc., a Minnesota corporation,
and Minwood Partners, Inc., a Delaware corporation, jointly and severally.

1.5 “Capital Expenditures” means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on the balance sheet of
the Borrower prepared in accordance with GAAP.

1.6 “Collateral” means all property and assets granted as security for this
Loan, including, but not limited to, the Land and Improvements, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future and whether granted in the form of a security interest,
mortgage, assignment, pledge, conditional sale, lien or lease, or any other
security or lien interest whatsoever, whether created by law, contract or
otherwise.

1.7 “Commitment for Title Insurance” means a title commitment for a loan policy
of title insurance in the amount of three million seven hundred thousand and
no/100 dollars ($3,700,000.00) issued by Title, by which Title commits to issue
a loan policy of title insurance that:

1.7.1 specifically insures that the Mortgage is a first and prior lien on the
Mortgaged Property;

1.7.2 waives the standard exceptions and insures over (A) rights and claims of
parties in possession and (B) mechanic’s, contractor’s or materialmen’s liens
and lien claims;

1.7.3 waives the survey exception and provides survey coverage;

1.7.4 is subject only to those exceptions specifically approved by Lender; and

1.7.5 includes such endorsements required by Lender.

1.8 “Deposit Account” means the primary deposit account of Borrower maintained
with the Lender, which deposit account has been initially created as checking
account no. 049031.

1.9 “EBITDA” means, for any period, the sum of the following determined on a
consolidated basis, without duplication, for the Borrower and its subsidiaries
in accordance with GAAP, (a) consolidated net income for the most recently
completed period plus (b) the following to the extent deducted in calculating
such consolidated net income (without duplication): (i) interest expense,
(ii) the provision for federal, state, local and foreign income taxes payable,
(iii) depreciation and amortization expense, (iv) non-cash charges and losses,
including any write-offs or write-downs and in respect of equity-based
compensation and asset impairment, (v) any non-recurring legal or severance
costs, fees or charges paid in cash during the period, and (vi) any other
non-recurring costs, fees or charges paid in cash during the period and approved
by the Lender in its sole and absolute discretion.

 

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1.10 “GAAP” has the meaning set forth in Section 4.3.

1.11 “Growth Capital Expenditures” means Capital Expenditures related to the
construction, acquisition or opening of new restaurants during any fiscal year.

1.12 “Improvements” means all buildings, improvements, structures and fixtures
now or hereafter existing on the Land; including, but not limited to, the
following: all machinery, appliances and equipment used to supply heat, gas,
electricity, air conditioning, water, light, waste disposal, power,
refrigeration, ventilation, fire and sprinkler protection, and other building
services; all building materials, supplies and goods intended to be incorporated
into the foregoing; all draperies, carpeting, floor coverings, screens, storm
windows and window coverings, blinds, awnings, shrubbery and plants; and all
elevators, escalators and shafts, motors, machinery, fittings and supplies
necessary for their use, and all parking areas, roadways, curbing, sidewalks and
walkways, loading docks, landscaping and signs (it being understood that the
enumeration of any specific articles of property will in no way be held to
exclude any items of property not specifically enumerated).

1.13 “Indebtedness” means all loans, including this Loan, together with all
other obligations, debts and liabilities of Borrower to Lender, as well as all
claims by Lender against Borrower, whether now or hereafter existing, voluntary
or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly with
others; whether Borrower may obligated as guarantor, surety or otherwise;
whether recovery upon such indebtedness may be or hereafter may become barred by
any statute of limitations and whether such indebtedness may be or hereafter may
become unenforceable.

1.14 “Indemnity Agreement” means the Environmental Indemnification Agreement of
even date herewith from Borrower, as indemnitor to Lender, including any
amendments or supplements.

1.15 “Land” means the real estate, interests in real estate and other rights
described in Exhibit A to the Mortgage.

1.16 “Lease(s)” means any lease for space within the Mortgaged Property.

1.17 “Leasing Documents” means the following documents for each Lease, as the
same from time to time may be amended or supplemented:

1.17.1 Lease;

1.17.2 Subordination, non-disturbance and attornment agreement for a Lease (to
the extent not provided for in the terms of the Lease); and

1.17.3 Tenant’s estoppel certificate for a Lease.

 

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1.18 “Lender” has the meaning set forth in the preamble, and includes Lender’s
successors and assigns.

1.19 “Loan” has the meaning set forth in the recitals.

1.20 “Loan Agreement 2” means that certain loan agreement of even date herewith
under which Lender has agreed to make a loan in the principal amount of Loan 2
and Loan 3 to Famous Dave’s Of America, Inc., D&D Of Minnesota, Inc., Famous
Dave’s Ribs Of Maryland, Inc., Famous Dave’s Ribs, Inc., Famous Dave’s Ribs-U,
Inc., and Lake & Hennepin BBQ & Blues, Inc.

1.21 “Loan Charges” means all costs and expenses incurred by Borrower or Lender
in connection with the Loan, including, but not limited to, commitment fees paid
to Lender, brokerage fees, interest charges, service fees, document preparation
expenses, title and conveyancing charges, recording and filing fees and taxes,
mortgage or registration taxes, escrow fees, revenue and tax stamp expenses,
real estate taxes, special assessments, insurance premiums (including title
insurance premiums), utility charges, finder’s fees, placement fees, surveyor
fees, photographer fees, appraiser fees, architect fees, travel expenses
incurred by Lender in connection with inspections of the Mortgaged Property,
accountants’ fees and attorneys’ fees (including Lender’s attorneys’ fees and
legal expenses incurred in connection with the preparation, administration or
enforcement of the Loan Documents). Loan Charges also means all costs and
expenses incurred by Borrower or Lender with respect to the prosecution or
defense of any action or proceeding or other litigation affecting Borrower, the
Mortgaged Property or any other security given for the Loan.

1.22 “Loan Documents” means the following documents, as the same from time to
time may be amended or supplemented, each of which must be satisfactory to
Lender in form and substance:

1.22.1 Loan Proposal;

1.22.2 this Agreement;

1.22.3 Note;

1.22.4 Mortgage;

1.22.5 Assignment of Rents and Leases;

1.22.6 Indemnity Agreement;

1.22.7 Security Agreement;

1.22.8 UCC-1 Financing Statement;

1.22.9 all other documents related to the Loan.

 

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For purposes of this Agreement, “Material Loan Documents” means the Loan
Documents described in Sections 1.22.2 through 1.22.8 above.

1.23 “Loan Origination Fee” means a non-refundable loan origination fee payable
by Borrower to Lender in the amount of eighteen thousand five hundred dollars
and no/100ths ($18,500.00) for making the Loan.

1.24 “Loan Proposal” means the loan proposal letter dated October 13, 2016 by
and between Borrower and Lender together with any amendments or supplements.

1.25 “Mortgage” means the mortgage and security agreement and fixture financing
statement of even date herewith from Borrower to Lender securing the Loan,
including any amendments or supplements.

1.26 “Mortgaged Property” means the Land and Improvements and any other land and
property, tangible or intangible, mortgaged pursuant to the Mortgage.

1.27 “Note” means a promissory note from Borrower to Lender in the original
principal amount of three million seven hundred thousand and no/100 dollars
($3,700,000.00), which evidences Borrower’s obligation to repay the Loan with
interest, and each amendment, modification, extension or renewal thereof.

1.28 “Organizational Documents” means the following documents, each of which
must be satisfactory to Lender in form and substance:

1.28.1 Articles of Incorporation of each Borrower;

1.28.2 Bylaws of each Borrower;

1.28.3 Certificate of Secretary of Borrower;

1.28.4 Resolutions of Directors of Borrower approving the transaction and
authorizing one or more persons to sign documents on behalf of the entity; and

1.28.5 Certificate or other evidence of good standing of Borrower.

1.29 “Permitted Liens” has the meaning set forth in Schedule 5.2.

1.30 “Permitted Indebtedness” has the meaning set forth in Schedule 5.3.

1.31 “Phase II Environmental Assessment” means the phase II environmental
assessment on the Mortgaged Property located in Plymouth, Minnesota that must be
obtained by the Borrower after closing as described in Section 4.19.3 below

1.32 “Related Party” means a party that is any of the following: (i) an
Affiliate of Borrower; (ii) an individual or entity that has, directly or
indirectly, a 10% or more ownership interest in the Borrower; or (iii) an entity
that is owned entirely or in part by the Borrower.

 

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1.33 “Security Agreement” means the security agreement of even date herewith
from Borrower to Lender, including any amendments or supplements.

1.34 “Title” means DCA Title as an agent of Old Republic National Title
Insurance Company.

1.35 “Transfer” means any sale, grant, pledge, assignment, mortgage,
encumbrance, security interest, consensual lien, hypothecation, lease (other
than bona fide third party leases for actual occupancy by a tenant), transfer or
divesture of an interest in (i) the Collateral (except as permitted by clause
(ii)) or the Mortgaged Property, or (ii) all or any substantial part of the
assets of the Borrower except for assets sold in the ordinary course of
Borrower’s business. Any change in the legal or equitable title of the
Collateral or the Mortgaged Property whether or not of record and whether or not
for consideration will be deemed a Transfer.

Section 2. The Loan and Conditions of Lending.

2.1 Loan. Subject to the conditions and terms of this Agreement, Lender agrees
to make the Loan to Borrower in the principal amount of three million seven
hundred thousand and no/100 dollars ($3,700,000.00). Borrower agrees to borrow
the amount of the Loan from Lender in accordance with this Agreement. The Loan
will be made simultaneously in a single advance upon the closing of the Loan,
subject to satisfaction of the conditions precedent set forth in Section 2.2.

2.2 Conditions Precedent to the Loan. The obligations of the Lender to make the
Loan under this Agreement are subject to the following conditions precedent
being satisfied, in Lender’s sole discretion, on the date of such advance:

2.2.1 Approval by Lender’s Counsel. All legal matters incidental to the
extension of credit by Lender under this Agreement and the Loan Documents are
reasonably satisfactory to Lender’s counsel.

2.2.2 Loan and Organizational Documentation. Borrower must deliver, without
expense to Lender, originals of each of the Loan Documents and copies of the
Organizational Documents, duly executed to the extent required by Lender, all in
accordance with terms and conditions acceptable to Lender. The documents
required by Lender to be recorded or filed must have been recorded or filed,
without expense to Lender, and all recording fees, filing fees, charges,
expenses and taxes (including, but not limited to, mortgage registration tax)
must have been paid by Borrower.

2.2.3 No Default; True and Correct Representations. There is no default, or no
occurrence of an event that would become a default, under the terms of this
Agreement or any of the Material Loan Documents. The representations and
warranties in Section 3 of this Agreement must be true and correct in all
material respects as of the date of the advance.

2.2.4 Financial Statements and Change in Financial Condition. Borrower will
deliver, without expense to Lender, copies of all financial statements of the

 

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Borrower as requested by the Lender for loan approval and thereafter in
accordance with this Agreement. There has not been any material adverse change,
as determined by Lender, in the financial condition or business of Borrower, nor
any material decline in the market value of any Collateral or the Mortgaged
Property or a substantial or material portion of the assets of Borrower.

2.2.5 Leasing Documents. Borrower will deliver, without expense to Lender,
copies of the Leasing Documents, duly executed to the extent required by Lender,
all in accordance with terms and conditions acceptable to Lender.

2.2.6 Legal Opinion. Opinion of Lindquist & Vennum LLP as counsel for Borrower
delivered to the Lender, providing customary legal opinions (subject to
customary and reasonable assumptions and qualifications) ordinarily delivered in
transactions of the type contemplated hereby

2.2.7 Payment of Fees. Payment of all reasonable and out-of-pocket fees and
expenses then due and payable pursuant to this Agreement and the Loan Documents.

2.2.8 Appraisal. Lender obtaining, without expense to Lender, an appraisal of
the Mortgaged Property prepared by a licensed appraiser approved by Lender that
shows a fair market value that is acceptable to Lender.

2.2.9 Title to the Land. The title to the Land must be satisfactory in all
respects to Lender, and Title must have agreed to provide the Commitment for
Title Insurance and agreed to insure Lender in accordance with a title insurance
policy and endorsements satisfactory in all respects to Lender.

2.2.10 Governmental Compliance and Approvals. Evidence satisfactory to the
Lender that the Improvements are permitted by and comply in all material
respects with all applicable governmental regulations and all applicable
restrictions and requirements.

2.2.11 Environmental Assessment. Borrower must deliver, without expense to
Lender, a phase I environmental assessment that is acceptable to Lender.

2.2.12 Insurance. Borrower must deliver, without expense to Lender, evidence
satisfactory to the Lender of the insurance required to be maintained by
Borrower under this Agreement and the Mortgage.

2.2.13 UCC Searches. Lender obtaining, without expense to Lender, Uniform
Commercial Code searches and federal and state lien searches as of the date of
the Mortgage or the most current date for which such searches are available,
showing no financing statements or tax liens of record with respect to the
Borrower.

2.2.14 Deposit Account. Borrower opening and maintaining the Deposit Account
with Lender for all funds of Borrower related to its operation and the
authorization to deduct payments made under the Note directly from the Deposit
Account.

 

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2.3 Partial Release of Mortgaged Property. Lender agrees to release from the
lien of the Mortgage and the other Loan Documents, as applicable, portions of
the Mortgaged Property upon the closing of the sale thereof or by request of the
Borrower (hereinafter referred to as a “Release Parcel”), upon satisfaction by
Borrower of the following terms and conditions:

2.3.1 Lender approves such release in writing, which consent will not be
unreasonably withheld;

2.3.2 Borrower shall have made such request at least ten (10) business days
prior to the requested release date;

2.3.3 On requested release date, and on the actual release date, no Default or
Event of Default shall exist under the Mortgage and Loan Documents;

2.3.4 A Release Parcel must be released as a whole and not in part; and

2.3.5 Upon any such release of a Release Parcel, Borrower shall pay Lender in
immediately available funds an amount (hereinafter referred to as a “Release
Amount”) equal to the greater of (i) the fair market value of the Release Parcel
as determined by a new appraisal completed at the time of requested release by
an appraiser acceptable to the Lender and agreed to by the Borrower, or (ii) the
value for the Release Parcel shown on Exhibit 2.3 attached hereto. The Release
Amount for the release of each Release Parcel shall be applied to the principal,
interest, fees, costs and expenses due to Lender under Loan 1, whether then due
and payable or not, and if Loan 1 is paid in full then to the principal,
interest, fees, costs and expenses due to Lender under Loan 2, whether then due
and payable or not, and will not be subject to any pre-payment penalty. The cost
of the appraisal for the Release Parcel will be paid by the Borrower.

Section 3. Representations and Warranties. Borrower represents and warrants to
Lender, as of the date of this Agreement, as follows:

3.1 Legal Existence and Authorization. Each Borrower is a corporation duly
organized and in good standing under the laws of the State of Minnesota and has
the power to enter into and has authorized execution and delivery of this
Agreement, the Loan Documents and the Leasing Documents to which it is a party.
Borrower will, at all times, preserve and maintain its existence and all of its
rights, privileges and franchises and will comply in all material respects with
all applicable laws and regulations regarding its existence.

3.2 Validity of Documents. Each Loan Document and Leasing Document to which
Borrower is a party has been duly executed and delivered by Borrower and is the
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as may be limited by any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors’ rights generally, and no default exists under any such
documents.

 

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3.3 No Violation. The execution and delivery of this Agreement, the Loan
Documents and the Leasing Documents to which Borrower is a party, the
consummation of the transactions contemplated hereby and the fulfillment of the
terms and conditions hereof do not and will not violate the Organizational
Documents or conflict with or result in a breach of or constitute a default
under any of the terms or conditions of any mortgage, indenture, loan agreement
or any instrument to which Borrower is now a party or which is binding upon
Borrower or its properties and do not and will not result in violation of any
order, decree, statute, rule or regulation of any court or of any state or
federal regulatory body having jurisdiction over Borrower or its properties, and
do not and will not result in the creation or imposition of any lien, charge or
encumbrance of any nature upon any property or assets of Borrower contrary to
the terms of any indenture, mortgage or other agreement or instrument to which
Borrower is a party or by which its assets are bound.

3.4 Litigation and Judgments. Except as set forth on Schedule 3.4, there is no
suit, action, proceeding or investigation pending or threatened against or
affecting Borrower (or any basis therefor) at law or in equity or by or before
any court, arbitrator, administrative agency or other federal, state or local
governmental authority which individually or in the aggregate, if adversely
determined, might have a material adverse effect on, or affect the validity as
to Borrower of, any of the transactions contemplated hereby or the ability of
Borrower to perform their obligations under this Agreement or the Loan
Documents. There are no judgments against Borrower that have not been satisfied.

3.5 Title to the Collateral. All of Borrower’s assets are titled in its legal
name. Except for Permitted Liens, Borrower owns and has good title to all of the
Collateral free and clear of all security interests, and Borrower has not
executed any security documents or financing statements relating to such assets.
Except for the Permitted Liens, all mortgages and UCC financing statements,
together with any amendments and continuations, filed against the Collateral or
Borrower with respect to the Collateral have been satisfied, terminated or
released and said documents evidencing the same will be filed with the
appropriate governmental authority upon the closing of the Loan. In the event
that any termination or release is not filed as required, Lender is authorized
to file the termination and/or release.

3.6 Tax Returns. To the best of Borrower’s knowledge, all tax returns and
reports of Borrower required to be filed, have been filed, and all taxes,
assessments and other governmental charges have been paid in full, except those
disclosed by Borrower to Lender that are presently being or to be contested by
Borrower in good faith in the ordinary course of business and for which adequate
reserves have been provided.

3.7 Correctness of Financial Statements. Any and all financial statements
delivered to Lender by Borrower are true and correct in all respects and fairly
present the financial conditions of Borrower as of the date of the financial
statement. No material adverse change has occurred in the financial conditions
reflected in these financial statements of Borrower since the date of the
statement and no additional borrowing has been made by Borrower since such date
other than the borrowing contemplated under this Agreement or otherwise approved
by Lender. Neither the

 

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financial statements or any certificate or statement furnished to Lender by or
on behalf of Borrower in connection with this transaction, nor the
representations and warranties contained in this Agreement, contain any untrue
statements of a material fact or omit to state a material fact necessary in
order to make any statements not misleading. To the best knowledge of Borrower,
there is no fact which materially or adversely effects or in the future (so far
as Borrower can now foresee) may materially or adversely affect the business or
prospects or condition (financial or other) of Borrower or their properties or
assets, including the Collateral, which has not been set forth in a certificate
or statement furnished to Lender by Borrower.

3.8 Organizational Documents. All Organizational Documents of the Borrower have
been delivered to Lender and are true and correct in all respects and fairly
present the organization of the entity. No material adverse change has occurred
in the organization of the entity reflected in these Organizational Documents
since their respective dates and no additional agreements have been made by
Borrower concerning the organization of the entity.

3.9 Other Obligations. Except as described on Schedule 3.9, Borrower is not in
default on any obligation for borrowed money, any purchase money obligation or
any other material lease, commitment, contract, instrument or obligation.

3.10 Environmental Matters. Except as described on Schedule 3.10, Borrower is in
compliance in all material respects with all applicable federal or state
environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any of Borrower’s
operations and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976, and the Federal Toxic Substances Control Act, as any
of the same may be amended, modified or supplemented from time to time. None of
the operations of Borrower is the subject of any federal or state investigation
evaluating whether any remedial action involving a material expenditure is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment. Borrower has no material contingent liability in connection
with any release of any toxic or hazardous waste or substance into the
environment.

3.11 Compliance. Except as otherwise disclosed herein, the Land and Improvements
are in material compliance requirements of law, including requirements of any
federal, state, county, city or other governmental authority having
jurisdiction. All material requirements and permits and approvals (including
without limitation all building permits and zoning, environmental and land use
approvals) necessary to enable Borrower to acquire and operate the Land and
Improvements have been obtained and will be maintained in full force and effect.
Except as set forth in the Commitment for Title Insurance, the Improvements are
entirely within the Land and do not encroach upon any easement or land of
others.

3.12 Condition of Mortgaged Property. Borrower has inspected the Mortgaged
Property and it is in good condition, repair and operating condition, normal
wear and tear excluded, free from any material defect, misuse, or item of
repair.

 

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3.13 No Ownership of Other Parcels related to the Mortgaged Property. Neither
Borrower owns any property related or adjacent to the Mortgaged Property that is
not encumbered by the Mortgage and defined as Mortgaged Property under this
Agreement. Borrower will provide Lender with written notice of the purchase of
any property related or adjacent to the Mortgaged Property by Borrower.

3.14 Leases. Borrower is the landlord with all of landlord’s right, title and
interest with respect to the Leases. There is no default under any Lease and all
Leases specifically set forth in this Agreement are in full force and effect.
Any rights of tenant to purchase the Land under any Lease have been properly
waived and released by tenant. All Leases will be subordinate to the Mortgage
unless Lender agrees in writing that the Mortgage is subordinate to such Lease.
Borrower must, upon request by Lender, provide Lender with a copy of each
proposed or executed Lease and with financial information on the proposed tenant
in the possession or control of Borrower. Borrower must, upon request by Lender,
provide Lender with a status report of all Leases of space within the Mortgaged
Property that shows the names of all tenants, the areas leased, the major terms
of all Leases, the current status and amount of rents payable of each Lease, and
all letters of intent or agreements to lease.

Section 4. Affirmative Covenants of Borrower. Borrower covenants, that so long
as Lender remains committed to extend credit to Borrower pursuant to this
Agreement, or any liabilities (whether direct or contingent, liquidated or
unliquidated) of Borrower to Lender under any of the Loan Documents remain
outstanding (other than inchoate indemnification obligations for which no claim
has been made), and until payment in full of all obligations of Borrower in
connection with the Loan, or unless Lender otherwise consents in writing, that
Borrower must do the following:

4.1 Punctual Payments. Punctually pay all principal, interest, fees, Loan
Charges and other liabilities due under any of the Loan Documents at the times
and place and in the manner specified therein, and immediately upon demand by
Lender, pay the amount by which the outstanding principal balance of any credit
advanced under this Agreement exceeds any applicable limitation on borrowings.
Borrower will reimburse Lender all expenses paid to third parties of the nature
described in this Section which have been or may be incurred by Lender with
respect to the Loan. Lender may pay or deduct from the Loan proceeds any of such
expenses, and any Loan proceeds so applied will be deemed advances under this
Agreement.

4.2 Financial Statements and Reporting Requirements. Borrower must furnish to
Lender the following information at the following times:

4.2.1 Annual Financial Statements. As soon as available, and in any event within
ninety (90) days after the end of each fiscal year, Borrower must furnish to
Lender the following: (i) annual financial statements of Borrower for the
calendar year end, which financial statements must include, but not be limited
to, a balance sheet, a statement of liabilities and shareholder equity, a
statement of income or loss and retained earnings, statement of cash flows, and
a statement of changes in financial position, all with footnotes, if any,
included; and (ii) any other financial statements and information that Lender
reasonably requests. All annual financial statements furnished by Borrower must
be prepared in reasonable

 

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detail and in accordance with GAAP (or tax accounting reconciled to GAAP) and
audited by a reputable accounting firm in form and substance acceptable to
Lender and with such certifications as Lender may specify. The foregoing
financial statements shall have been deemed delivered to the Lender (and
Borrower shall have complied in all respects with the requirements of this
Section 4.2.1) without any other action required by Borrower upon the filing of
the Borrower’s 10-K each year with the Securities Exchange Commission.

4.2.2 Quarterly Financial Statements. As soon as available, and in any event
within forty-five (45) days after the end of each calendar quarter, and as
otherwise reasonably requested by Lender, Borrower must furnish to Lender the
following: (i) financial statements of Borrower for the fiscal quarter end,
which financial statements must include, but not be limited to, a balance sheet,
a statement of income or loss; and (ii) any other financial statements and
information that Lender reasonably requests. All quarterly financial statements
furnished by Borrower must be prepared in reasonable detail and in accordance
with GAAP (or tax accounting reconciled to GAAP). The foregoing financial
statements shall have been deemed delivered to the Lender (and Borrower shall
have complied in all respects with the requirements of this Section 4.2.2)
without any other action required by Borrower upon the filing of the Borrower’s
10-Q each quarter with the Securities Exchange Commission.

In the event Borrower fails to furnish any of the foregoing financial statements
in accordance with the terms of Sections 4.2.1 and 4.2.2, the same will be an
Event of Default and in addition to any other remedies available, Lender may
cause an audit to be made of the respective books and records at the sole cost
and expense of Borrower. Lender will also have the right to examine at their
place of safekeeping at reasonable times mutually agreeable between Borrower and
Lender (but in no event more than two (2) business days after the request from
Lender) all books, accounts and records relating to the operation of the
Mortgaged Property.

4.3 Books and Records; Inspection and Examination. Maintain accurate books and
records in accordance with generally accepted accounting principles (“GAAP”)
consistently applied, as applicable. Upon request and reasonable notice by
Lender, Borrower must permit any representative of Lender, at any reasonable
time mutually agreeable between Borrower and Lender (but in no event more than
two (2) business days after the request from Lender) during business hours, to
inspect, audit, examine, and make copies of all corporate and financial books
and records of Borrower and to inspect the Collateral and other property of the
Borrower.

4.4 Compliance with Laws. Borrower will comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority in the conduct of its business.

4.5 Documents. Borrower will duly perform and observe all of the covenants,
agreements and conditions on its part to be performed and observed under the
Agreement, Loan Documents, Organizational Documents, and Leasing Documents, and
any and all other agreements and instruments to which Borrower is a party
related to the Mortgaged Property. Borrower will not, without the prior written
consent of Lender, surrender, terminate, cancel,

 

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rescind, supplement, alter, revise, modify, amend or assign or pledge its
interest in any of the foregoing documents. Borrower must not excuse or waive a
default of a third party under any of these documents without the prior consent
of Lender. Borrower will, upon request by Lender, provide Lender with a fully
executed copy of each of these documents together with all exhibits and
attachments and all amendments and modifications.

4.6 Payment of Taxes and Other Claims. Borrower must file when due all required
tax returns and will pay when due all material taxes, assessments and other
governmental charges and will pay when due all lawful claims for labor, material
and supplies, which, if unpaid, might become a lien against the Collateral,
except any such taxes, assessments or other governmental charges which are being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.

4.7 Insurance. Borrower must provide and maintain at all times insurance in such
forms and covering such risks and hazards and in such amounts and with such
companies as are reasonably satisfactory to Lender and as may be required by the
Mortgage. Losses will be payable in accordance with the provisions of the
Mortgage. Upon request of Lender, Borrower must furnish to Lender reports of
each existing insurance policy showing such information as Lender may reasonably
request, including without limitation the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the policy; (d) the properties
insured; (e) the then current property values on the basis of which insurance
has been obtained and the manner of determining those values and (f) the
expiration date of the policy.

4.8 Legal Existence and Operation of the Business. Borrower will preserve and
maintain its legal existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business and will conduct
its business affairs in a reasonable and prudent manner in compliance with all
applicable federal, state and municipal laws, ordinances, rules and regulations
respecting its properties, business and operations, except where the failure to
so maintain such rights, privileges and franchises could not reasonably be
expected to have a material adverse effect on the Borrower or its ability to
perform its obligations hereunder. Borrower will not make any substantial change
in the nature of Borrower’s business as conducted as of the date of this
Agreement.

4.9 Maintenance of the Collateral and Mortgaged Property. Borrower must not
abandon the Mortgaged Property. Borrower must keep and maintain the Collateral
in good condition, repair and operating condition, normal wear and tear
excluded, free from any waste or misuse. Borrower must keep and maintain all
property, buildings, improvements or structures now or hereafter located on the
Mortgaged Property in good condition, repair and operating condition, normal
wear and tear excluded, and will from time to time make necessary repairs,
renewals and replacements.

4.10 Inspection of the Collateral. Lender or its designated representative,
will, at all times during the making of the Loan, have the right of entry and
free access during regular business hours at times mutually agreeable to the
Borrower and Lender (but in no event more than two (2) business days after the
request from Lender) to the Collateral, including the Mortgaged Property, and
the right to inspect all work done regarding the Improvements, labor performed
and materials, if any, furnished in and about the Mortgaged Property and the
right to inspect all books, contracts and records of Borrower relating to the
Collateral; provided that suitable arrangements are made to minimize disruption
of business.

 

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4.11 Litigation. Borrower must promptly advise Lender in writing of all
litigation and all notices, complaints and charges made by any governmental
authority which could reasonably be expected to have a material adverse effect
on a material portion of the Collateral, the Land, Improvements or Borrower, or
its business or the ability of the Borrower to perform its obligations
hereunder.

4.12 Notice to Lender. Promptly (but in no event more than five (5) days after
the occurrence of each such event or matter) give written notice to Lender in
reasonable detail of: (a) the occurrence of any Event of Default, or any
condition, event or act which with the giving of notice or the passage of time
or both would constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of any
reportable event or prohibited transaction, each as defined in ERISA, or any
funding deficiency with respect to any plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower’s property in
excess of an aggregate of $250,000.

4.13 Payment of Loan Origination Fee. Borrower must pay to Lender the entire
Loan Origination Fee not later than the closing of the Loan. The Lender will be
entitled to disburse the Loan Origination Fee directly to itself out of the
Loan.

4.14 Additional Acts. Borrower agrees upon demand of Lender to do any act or
execute any additional documents (including, but not limited to, mortgages
against real property and security agreements on any personal property included
or to be included in the Collateral) as may be reasonably required by Lender to
secure the Note or confirm the lien of the Mortgage or the other Loan Documents.
Upon the demand of Lender for reasonable cause, from time to time and at any
time, Borrower agrees to deliver to Lender updated and recertified copies of the
Loan Documents.

4.15 Updated Appraisal. Upon reasonable request of Lender, Borrower, at its cost
and expense, further agrees to furnish Lender with an updated appraisal of the
Mortgaged Property and a certificate from Title setting forth all owners of and
encumbrances on the Mortgaged Property, provided that Borrower will not be
required to provide such appraisal and such certificate more than once in any
twelve (12) month period. Any updated appraisal must be prepared by an appraiser
approved by Lender and the appraisal must be prepared in a manner reasonably
acceptable to Lender and in accordance with all applicable laws.

4.16 Deposit Account. Borrower must maintain the Deposit Account with Lender at
all times during the term of this Agreement for the funds of Borrower related to
the Mortgaged Property with the authorization to deduct payments made under the
Note directly from this account. All rents received under any and all Leases
must be deposited into this account.

 

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4.17 Financial Covenants.

4.17.1 Debt Service Coverage Ratio. Borrower will not permit Borrower’s debt
service coverage ratio as determined by Lender as of the last day of any fiscal
quarter of the Borrower to be less than 1.15 to 1. The debt service coverage
ratio means the ratio of (a) the Borrower’s EBITDA to (b) the aggregate amount
of principal and interest due and payable by the Borrower under the Loan and any
other loans.

The debt service coverage ratio shall each be calculated quarterly using the
preceding 12 months of the Borrower’s operations utilizing the Borrower’s public
financial statements and Borrower-prepared supplemental schedules.

Notwithstanding anything to the contrary contained herein, in the event that
Borrower desires to cure any default of the financial covenant contained in this
Section 4.17.1 for any period, the Borrower (x) has a right to cure an EBIDTA
Shortfall of less than one hundred thousand dollars ($100,000.00), and (y) has a
right to request that the Lender permit a cure of an EBIDTA Shortfall, as set
forth herein.

(a) In the event the EBITDA Shortfall is less than one hundred thousand dollars
($100,000.00) for any period and the Borrower desires to cure any default of the
financial covenant contained in this Section 4.17.1 for said period, Borrower
shall (i) provide Lender with written notice of such intention to cure no later
than five (5) calendar days prior to the date that the financial statements for
such period are required to be delivered pursuant to Section 4.2 (the “Cure
Notice”) and (ii) within five (5) calendars days after delivery of the Cure
Notice, make a voluntary prepayment of the Loan (the “Cure Payment”) in an
amount equal to the EBITDA Shortfall.

If a Cure Notice has been delivered, then from the last day of the period
related to such Cure Notice until the earlier to occur of receipt by the Lender
of the Cure Payment or expiration of the five (5) day period described in clause
(ii) of the prior paragraph, Lender shall not impose default interest, assess
any late charge, accelerate any obligations owing under any Loan Document,
terminate any commitment to lend or exercise any enforcement remedy against
Borrower or any of its properties solely as a result of the financial covenant
default that has been (or is to be) cured pursuant to the terms hereof. Upon
timely receipt by Lender of the Cure Payment (which shall be applied by Lender
as voluntary prepayment of the Loan in accordance with the terms hereof), the
Event of Default on account of such failure to satisfy the financial covenants
set forth in this Section 4.17.1 shall be deemed cured, and for all other
purposes and calculations hereunder, the Cure Payment shall be deemed to be
included in the calculation of EBITDA for the period with respect to which the
Cure Notice was delivered. If the Borrower fails to deliver the Cure

 

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Payment prior to expiration of the five (5) day period described in clause
(ii) of the prior paragraph, an Event of Default will exist and the Lender may
exercise all of the remedies to which it is entitled.

(b) In the event the EBITDA Shortfall is one hundred thousand dollars
($100,000.00) or more for any period and the Borrower desires to cure any
default of the financial covenant contained in this Section 4.17.1 for said
period, Borrower shall (i) provide Lender with a written request to cure the
EBITDA Shortfall no later than five (5) calendar days prior to the date that the
financial statements for such period are required to be delivered pursuant to
Section 4.2 (the “Cure Request”). Upon receipt of the Cure Request, the Lender
will promptly respond to the Borrower (a “Cure Response”) regarding whether the
Lender will permit Borrower to cure the default and the amount that is necessary
to pay as the Cure Payment. If the Lender does not respond to the Cure request
within five (5) calendar days after delivery of the Cure Request, the Cure
Request will be deemed to be denied. Borrower will have five (5) days after
receipt of the Cure Response to pay the Cure Payment specified in the Cure
Response.

If a Cure Request has been delivered, then from the date of delivery of the Cure
Request until the earlier to occur of receipt by the Lender of the Cure Payment
specified in the Cure Response or Lender’s delivery of a Cure Response declining
Borrower’s request to cure the default, the Lender shall not impose default
interest, assess any late charge, accelerate any obligations owing under any
Loan Document, terminate any commitment to lend or exercise any enforcement
remedy against Borrower or any of its properties solely as a result of the
financial covenant default that has been (or is to be) cured pursuant to the
terms hereof. Upon timely receipt by Lender of the Cure Payment specified in the
Cure Response (which shall be applied by Lender as voluntary prepayment of the
Loan in accordance with the terms hereof), the Event of Default on account of
such failure to satisfy the financial covenants set forth in this Section 4.17.1
shall be deemed cured, and for all other purposes and calculations hereunder,
the Cure Payment shall be deemed to be included in the calculation of EBITDA for
the period with respect to which the Cure Notice was delivered. If the Borrower
fails to deliver the Cure Payment specified in the Cure Response prior to
expiration of the five (5) day period after receipt of the Cure Response, an
Event of Default will exist and the Lender may exercise all of the remedies to
which it is entitled.

For purposes of this section, “EBITDA Shortfall” shall mean that amount which,
if included in the calculation of EBITDA for the period with respect to which
the Cure Notice has been delivered, would cause the Borrower to be in compliance
with the financial covenant set forth in this Section 4.17.1 for such period.

4.17.2 Growth Capital Expenditures. The Borrower shall not make, or become
legally obligated to make for each fiscal year, Growth Capital

 

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Expenditures costing in excess of two million dollars ($2,000,000) in the
aggregate during any such fiscal year, unless the Borrower shall have had at
least a trailing 12 month average of $2,000,000 in cash in deposits with the
Lender at the time of the making of any such Growth Capital Expenditure.

4.18 Delivery of Quarterly Compliance Certificate. The Borrower shall furnish to
the Lender at the time it delivers (or is deemed to deliver) each set of
financial statements required by Section 4.2.2 hereof a Compliance Certificate
in substantially the form of Schedule 4.18 hereto, duly executed by either the
Borrower’s chief executive officer, chief financial officer or chief accounting
officer, which shall set forth in reasonable detail the computations necessary
to determine whether the Borrower is in compliance with the financial covenants
contained in Section 4.17 hereof.

4.19 Post-Closing Covenants.

4.19.1 Letters of Credit. Within forty-five (45) days after the date of this
Agreement, Borrower must (i) obtain from the beneficiaries thereof all letters
of credit (the “WF L/Cs”) issued by Wells Fargo Bank, National Association
(“Wells Fargo”) under that certain Third Amended and Restated Credit Agreement
dated as of May 8, 2015 by and among Wells Fargo and the Borrowers, (ii) obtain
the release of all cash collateral held by Wells Fargo securing the WF L/Cs,
(iii) deposit the cash collateral released by Wells Fargo with Lender to
collateralize the following letters of credit to be issued by the Lender under
separate written agreements between Borrower and Lender:

 

Letter of Credit Number

   Location    Amount  

#338

   Lyndi    $ 140,000.00   

#340

   Algonquin    $ 135,000.00   

#341

   KDR-Oswego    $ 120,000.00   

#342

   Broaddale    $ 200,000.00   

4.19.2 Surveys. Within ninety (90) days after the date of this Agreement,
Borrower must deliver, without expense to Lender, current surveys for the
Mortgaged Property certified to Lender and Title that are acceptable to Lender
and which are sufficient for Title to append a “same as survey” endorsement to
the title policy.

4.19.3 Environmental Matters. Within ninety (90) days after the date of this
Agreement, Borrower must deliver, without expense to Lender, the Phase II
Environmental Assessment.

Section 5. Negative Covenants of Borrower. Borrower further covenants, that so
long as Lender remains committed to extend credit to Borrower pursuant to this
Agreement, or any liabilities (whether direct or contingent, liquidated or
unliquidated) of Borrower to Lender under

 

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any of the Loan Documents remain outstanding (other than inchoate
indemnification obligations for which no claim has been made), and until payment
in full of all obligations of Borrower in connection with the Loan, that
Borrower will not do, and will not permit any Affiliate or other person to do,
without Lender’s prior written consent, any of the following:

5.1 Use of Funds. Use any of the proceeds of any credit extended under this
Agreement, except for the purposes stated in this Agreement.

5.2 Liens. Except for the Permitted Liens listed in Schedule 5.2, Borrower must
not create, incur or cause to exist any mortgage, deed of trust, pledge, lien,
security interest, assignment or transfer with respect to all or any portion of
the Collateral to secure any Indebtedness, and Borrower will continue to own and
have good title to all of the Collateral free and clear of all liens and
security interests. Except with respect to the Permitted Liens, Borrower must
not execute or authorize any party to execute any security documents or
financing statements with respect to the Collateral.

5.3 Indebtedness. Borrower must not incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or unliquidated,
joint or several, except (a) the liabilities of Borrower to Lender,
(b) subordinated debt approved in writing by Lender, and (c) the Indebtedness
secured by the Permitted Liens, (d) any other liabilities of Borrower existing
as of the date hereof and disclosed to Lender in writing as Permitted
Indebtedness and listed in Schedule 5.3, and (e) any extension, renewal or
replacement of such excepted Indebtedness (so long as such Indebtedness is not
increased above the amount outstanding immediately prior to giving effect to any
such extension, renewal or replacement).

5.4 Restrictions on the Sale or Transfer of Assets and Ownership Interests;
Acceleration upon Transfer. Borrower will not cause a Transfer to occur and will
not change the person or entity controlling or managing Borrower, without
obtaining, in each instance, the written approval of Lender.

5.5 Consolidation and Merger. Borrower will not consolidate with or merge into
any other entity, or permit any other entity to merge into Borrower, or acquire
(in a transaction analogous in purpose or effect to a consolidation or merger)
all or substantially all the assets of any other entity.

5.6 No Expansion of Improvements. Borrower further agrees that it will not
expand any material Improvements or erect any new material Improvements,
provided nothing herein precludes Borrower from constructing Improvements
necessary or desirable for Borrower’s business purposes which are non-structural
in nature and which do not constitute material alterations, affect the nature of
use, structure or utility, or decrease the market value of the Mortgaged
Property.

5.7 Transactions With a Related Party. Borrower must not enter into or be a
party to any transaction with any Related Party except in the ordinary course of
and pursuant to the reasonable requirements of such business and upon fair and
reasonable terms that are no less favorable than would be obtained in a
comparable arms-length transaction with a third party.

 

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5.8 Restrictions on Nature of Business. Borrower will not make any substantial
change in the nature of Borrower’s business as conducted as of the date of this
Agreement.

Section 6. Events of Default.

6.1 Events of Default. Each of the following events will constitute an “Event of
Default” under this Agreement:

6.1.1 Borrower’s failure to make a payment of principal, interest or other
amounts as and when due under the Note.

6.1.2 If at any time any representation or warranty made by Borrower in this
Agreement or in any other Material Loan Document or under any financial
statement or certificate provided by Borrower to Lender proves to be incorrect,
false or misleading in any material respect when furnished or made.

6.1.3 If Borrower fails to perform, without expense to Lender and within a
reasonable period of time after receipt of the Phase II Environmental
Assessment, any remediation of environmental matters on the Mortgaged Property
which are both (x) recommended by the environmental consultant performing the
post-closing Phase II Environmental Assessment, and (y) deemed reasonable and
appropriate by Lender; provided, however, that any such Event of Default
pursuant to this Section 6.1.3 shall be deemed cured in all respects
automatically if and to the extent Borrower promptly pays to Lender the Release
Amount (as set forth on Schedule 2.3) with respect to the Mortgaged Property to
which the Phase II Environmental Assessment applies.

6.1.4 If Borrower fails to perform or observe (subject to any cure right
provided for herein) any of the covenants, conditions or terms contained in this
Agreement (other than covenants, conditions or terms otherwise specifically
addressed in this Section 6) or any Material Loan Document.

6.1.5 If at any time title to any part of the Collateral or the Mortgaged
Property is not satisfactory to Lender by reason of any lien, encumbrance or
other defect (even though the same may have existed at the time of any advance)
except those matters affecting title which have at any time been consented to in
writing by Lender, and such lien, encumbrance or other defect is not corrected
to Lender’s satisfaction within thirty (30) days after notice to Borrower,

6.1.6 If Borrower fails to comply with any requirement of any governmental
authority within thirty (30) days after notice in writing of such requirement
has been given to Borrower by such governmental authority, subject to any rights
of Borrower to contest such requirement as provided in the Mortgage or
hereunder.

6.1.7 If a petition in bankruptcy or for reorganization or for an arrangement
under any bankruptcy or insolvency law or for a custodian, receiver or trustee
for any of its property is filed by Borrower, or if a petition in

 

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bankruptcy or for reorganization or for an arrangement under any bankruptcy or
insolvency law or for a custodian, receiver or trustee of any of Borrower’s
property is filed against Borrower which is not dismissed within sixty
(60) days, or if a custodian, receiver or trustee of any property of Borrower is
appointed and is not discharged within sixty (60) days, or if Borrower makes an
assignment for the benefit of creditors or generally does not pay its debts as
they become due, or if Borrower be adjudged insolvent by any state or federal
court of competent jurisdiction, or if an attachment or execution is levied
against any substantial portion of the property of Borrower which is not
discharged within sixty (60) days.

6.1.8 If Borrower is dissolved, liquidated or otherwise not in existence, or any
of Borrower’s directors, governors, shareholders, members or owners initiate any
such action.

6.1.9 If any other Material Loan Document is revoked or terminated.

6.1.10 Failure to timely provide financial statements as required hereunder.

6.1.11 A default in the payment or performance by Borrower of any of the terms
and conditions of the Leasing Documents.

6.1.12 If Borrower is in default under any other agreement with Lender (whether
in connection with the Loan or otherwise) other than any Letter of Credit
Agreement and any required notice has been given and any time in which to cure
the default has elapsed; it being understood that any default or event of
default under any Letter of Credit Agreement shall not itself cause an Event of
Default hereunder or under any other Loan Document. For purposes of the
foregoing, “Letter of Credit Agreement” shall mean any business loan agreement,
promissory note or other similar agreement or instrument supporting, evidencing
or otherwise executed in connection with each letter of credit now or hereafter
issued by the Lender for the benefit of the Borrower or any affiliate of the
Borrower.

6.2 Remedies. If any Event of Default occurs, except where otherwise provided in
this Agreement or the Loan Documents, all commitments and obligations of Lender
under this Agreement or the Loan Documents or any other agreement will
immediately be suspended or terminated (including any obligation to make
advances for which Lender will not be obligated to make upon the happening of
any event set forth in Section 6.1 regardless of whether or not any required
notice was given) at Lender’s option, and/or Lender may, at its option, declare
the entire Indebtedness owed to Lender immediately due and payable and may
foreclose the Mortgage and any other collateral given as security for the Loan,
all without notice of any kind to Borrower, except that in the case of an Event
of Default described in Section 6.1.7), such acceleration will be automatic and
not optional. Following an Event of Default, Lender will have all remedies
available under the Loan Documents and at law or in equity, and all such
remedies will be cumulative and not exclusive.

 

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Section 7. Miscellaneous.

7.1 No Waiver. No delay, failure or discontinuance of Lender in exercising any
right, power or remedy under any of the Loan Documents will affect or operate as
a waiver of such right, power or remedy; nor will any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other
or further exercise of those rights, powers or remedies or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Lender of any breach of or default under any of the Loan Documents must
be in writing and is effective only to the extent set forth in the writing.

7.2 Notices. Any notices and other communications permitted or required by the
provisions of this Agreement (except for telephonic notices expressly permitted)
must be in writing and will be deemed to have been properly given or served by
depositing the same with the United States Postal Service, or any official
successor thereto, designated as Certified Mail, Return Receipt Requested,
bearing adequate postage, or deposited with reputable private courier or
overnight delivery service, and addressed as hereinafter provided. Each such
notice will be effective upon being deposited or delivered as aforesaid. The
time period within which a response to any such notice must be given, however,
will commence to run from the date of receipt of the notice by the addressee
thereof. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no notice was given will be deemed to be
receipt of the notice sent. By giving to the other party hereto at least ten
(10) days’ notice thereof, either party hereto will have the right from time to
time to change its address and will have the right to specify as its address any
other address within the United States of America.

Each notice to Lender will be addressed as follows:

Venture Bank

2640 Eagan Woods Drive

Eagan, MN 55121

Attn: Bryan Frandrup

Phone No:      (651) 289-2222

Fax No.:         (651) 289-0200

Each notice to Borrower will be addressed as follows:

Famous Dave’s of America, Inc.

Minwood Partners, Inc.

12701 Whitewater Drive, Suite 200

Minnetonka, MN 55343

Attn: Chief Executive Officer

Phone No:      (952) 294-1300

Fax No.:         (        )                     

 

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7.3 Costs, Expenses and Attorneys’ Fees. Borrower agrees to pay to Lender
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of Lender’s in-house counsel), expended or
incurred by Lender in connection with: (a) the negotiation and preparation of
this Agreement and the other Loan Documents, Lender’s continued administration
of this Agreement and the Loan Documents, and the preparation of any amendments
and waivers of this Agreement and the Loan Documents; (b) the enforcement of
Lender’s rights and/or the collection of any amounts that become due to Lender
under any of the Loan Documents; and (c) the prosecution or defense of any
action in any way related to any of the Loan Documents including, without
limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion brought
by Lender or any other person) relating to Borrower or any other person or
entity.

7.4 Successors; Assignment. This Agreement is binding upon and inures to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; except that Borrower may not assign or
transfer its interest under this Agreement without Lender’s prior written
consent. Lender reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Lender’s rights and
benefits under each of the Loan Documents. In connection therewith, Lender may
disclose all documents and information that Lender now has or may later acquire
relating to any credit subject to the Loan Documents, Borrower or its business,
or any collateral required under the Loan Documents.

7.5 Entire Agreement; Amendment. This Agreement and the other Loan Documents
constitute the entire agreement between Borrower and Lender with respect to each
credit subject to the Agreement and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
contained in the Agreement and the Loan Documents. The terms and provisions of
the Loan Proposal are hereby terminated and superseded by this Agreement. This
Agreement may be amended or modified only in writing signed by each party.

7.6 No Third Party Beneficiaries. This Agreement is made and entered into for
the sole protection and benefit of the parties hereto and their respective
permitted successors and assigns, and no other person or entity may be a third
party beneficiary of, or have any direct or indirect cause of action or claim in
connection with this Agreement or any other of the Loan Documents to which it is
not a party.

7.7 Time. Time is of the essence for each and every provision of this Agreement
and each of the other Loan Documents.

7.8 Severability. If any provision of this Agreement is prohibited by or invalid
under applicable law, the provision will be ineffective only to the extent of
the prohibition or invalidity without invalidating the remainder of the
provision or any remaining provisions of this Agreement.

 

22

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7.9 Counterparts. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered is deemed to be an original, and all
of which when taken together constitute one and the same Agreement.

7.10 Consent to Jurisdiction. The Borrower submits and consents to personal
jurisdiction of the Courts of the State of Minnesota and Courts of the United
States of America sitting in such State for the enforcement of this instrument
and waives any and all personal rights under the laws of any state or the United
States of America to object to jurisdiction in the State of Minnesota.
Litigation may be commenced in any state court of general jurisdiction for the
State of Minnesota or the United States District Court located in that state, at
the election of the Lender. Nothing contained herein prevents Lender from
bringing any action against any other party or exercising any rights against any
security given to Lender, or against the Borrower personally, or against any
property of the Borrower, within any other state. Commencement of any such
action or proceeding in any other state does not constitute a waiver of consent
to jurisdiction or of the submission made by the Borrower to personal
jurisdiction within the State of Minnesota.

7.11 Governing Law. Notwithstanding the place of execution of this Agreement,
the parties to this Agreement have contracted for Minnesota law to govern this
Agreement and it is agreed that this Agreement is made pursuant to and will be
construed and governed by the laws of the State of Minnesota without regard to
principles of conflicts of laws.

7.12 Waiver of Jury Trial. THE BORROWER WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING TO WHICH ANY PARTIES TO THIS AGREEMENT ARE INVOLVED DIRECTLY OR
INDIRECTLY AND ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED
WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, AND WHETHER
ARISING OR ASSERTED BEFORE OR AFTER THE DATE OF THIS AGREEMENT.

7.13 Right of Setoff. To the extent permitted by applicable law, Lender reserves
a right of setoff in all Borrower’s accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
indebtedness against any and all such accounts, and, at Lender’s option, to
administratively freeze all such accounts to allow Lender to protect Lender’s
charge and setoff rights provided in this paragraph.

7.14 Cross Collateralization. In addition to the Note, this Agreement secures
all obligations, debts and liabilities, plus interest thereon, of Borrower to
Lender, or any one or more of them, as well as all claims by Lender against
Borrower or any one or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, direct or indirect, determined or
undetermined, absolute or contingent, liquidated or unliquidated, whether
Borrower may be liable individually or jointly with others, whether obligated as
guarantor, surety, accommodation party or otherwise, and whether recovery upon
such amounts may be or hereafter may become barred by any statute of
limitations, and whether the obligation to repay such amounts may be or
hereafter may become otherwise unenforceable.

 

23

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7.15 Joint and Several Liability. Since two corporations are executing this
Agreement as Borrower, the liability of each such corporation to pay and perform
all obligations under the Loan Agreement and the other Loan Documents shall be
joint and several. Each Borrower shall remain liable for all obligations under
the Loan and Loan Documents notwithstanding any provisions of law that may
prevent the Lender from enforcing such obligations against the other Borrower.

7.16 Changes to Financial Reporting. Notwithstanding anything to the contrary
contained herein, the parties acknowledge and agree that if, after the date
hereof, there are any changes to GAAP or if GAAP is replaced by another set of
accounting rules and principles to which the Borrower is subject, the parties
shall mutually agree to revise the financial covenants and definitions affected
thereby so that they conform to such modifications after giving effect thereto.

7.17 Waiver and Subordination of Co-Borrower Claims. Each Borrower
unconditionally and absolutely waives:

7.17.1 all claims, rights and remedies, and all rights of subrogation,
indemnity, exoneration, contribution or reimbursement whatsoever, and any right
of recourse to the security given to the Lender, that a Borrower may have
against the other Borrower until all of the obligations under the Loan and Loan
Documents are fully paid and discharged. Borrower understands that Borrower may
have rights under applicable law to be subrogated to such security and knowingly
waives and relinquishes such rights and any claim that any subrogation rights
were abrogated by any acts of Lender. Borrower agrees that all current and
future obligations under the Loan and Loan Documents shall be superior to all
current and future claims, rights and remedies that a Borrower may have against
the other Borrower. Borrower subordinates all current and future claims, rights
and remedies that Borrower may have against the other Borrower to all current
and future claims, rights and remedies that Lender may have against Borrower;
and

7.17.2 any right that Lender prosecutes collection of the Loan or resorts to any
instrument or security given to secure the Loan or proceeds against the other
Borrower or against any other guarantor or surety prior to enforcing the Loan
and Loan Documents against a Borrower. Lender may, in its sole discretion,
proceed in joint or separate action against each Borrower and pursue its
remedies against each Borrower or any other guarantor or surety without
affecting its rights against the other Borrower.

signature pages follow

 

24

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IN WITNESS WHEREOF, the parties have executed this Loan Agreement as of the date
first above written.

BORROWER:

 

FAMOUS DAVE’S OF AMERICA, INC.,

a Minnesota corporation,

By:  

/s/ Dexter Newman

  Dexter Newman, its Chief Financial Officer

MINWOOD PARTNERS, INC.,

a Delaware corporation,

By:  

/s/ Dexter Newman

  Dexter Newman, its Chief Financial Officer

signature page to Loan Agreement

- re: Famous Dave’s Loan 1

 

S-1

--------------------------------------------------------------------------------

LENDER: VENTURE BANK, a Minnesota banking corporation By:  

/s/ Bryan Frandrup

  Bryan Frandrup, its VP and Commercial Loan Officer

signature page to Loan Agreement

- re: Famous Dave’s Loan 1

 

S-2

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SCHEDULE 2.3 TO LOAN AGREEMENT

RELEASE AMOUNTS

 

Property Address

   City    Release Amount  

14601 Highway 7

   Minnetonka    $ 2,460,000   

1490 Donegal Drive

   Woodbury    $ 2,370,000   

3211 Northdale Boulevard

   Coon Rapids    $ 2,580,000   

11308 Highway 55

   Plymouth    $ 1,310,000   

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SCHEDULE 3.4 TO LOAN AGREEMENT

LITIGATION AND JUDGMENTS

Famous Dave’s of America, Inc. v. SR El Centro, Inc., et al., Superior Court of
the State of California, County of Los Angeles, Central Division, Case No.
BC589329, filed July 24, 2015.

SR El Centro, Inc., et al. v. Famous Dave’s of America, Inc., Superior Court of
the State of California, County of Los Angeles, Case No. NC060189, filed
July 28, 2015.

Cascade PDX Partners, LLC, et al. v. Kurt Schneiter, et al., Superior Court of
the State of California, County of Orange, Central Justice Center, Case
No. 30-2014-00752683-CU-BC-CJC, filed October 23, 2014.

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SCHEDULE 3.9 TO LOAN AGREEMENT

EXCEPTIONS TO OTHER OBLIGATIONS

NONE

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SCHEDULE 3.10 TO LOAN AGREEMENT

EXCEPTIONS TO ENVIRONMENTAL MATTERS

NONE

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SCHEDULE 4.18 TO LOAN AGREEMENT

COMPLIANCE CERTIFICATE

Pursuant to Section 4.18 of the Loan Agreement, dated as of December 2, 2016,
(the terms defined therein being used herein as therein defined and terms used
herein and not otherwise defined therein being used herein as defined in the
Loan Agreement) between FAMOUS DAVE’S OF AMERICA, INC., a Minnesota corporation,
and MINWOOD PARTNERS, INC., a Delaware corporation (collectively, the
“Borrower”), and VENTURE BANK, a Minnesota banking corporation (“Lender”), the
Borrower hereby certifies to Lender as follows:

1. The financial statements of the Borrower attached hereto for the period
ending             , 20    , are maintained on a consolidated and consolidating
reporting basis and are complete and correct in all material respects and fairly
present the financial condition of the Borrower as of the date of said financial
statements and results of its business operations for the period covered
thereby, and are prepared in reasonable detail and in accordance with GAAP (or
tax accounting reconciled to GAAP).

2. As of             , 20     (the “Reporting Date”), the Borrower is in
compliance with Section 4.17.1 of the Loan Agreement. The calculations made to
determine compliance with such provision were as follows:

DEBT SERVICE COVERAGE RATIO:

The Ratio of:

 

On a consolidated basis:

  

net income (net loss)

   $                           

 

 

 

interest expense

   +                           

 

 

 

income tax expense

   +                           

 

 

 

depreciation and amortization expense

   +                            

 

 

 

non-cash charges and losses, including any write-offs or write-downs and in
respect of equity-based compensation and asset impairment

   +                           

 

 

 

non-recurring legal or severance costs, fees or charges paid in cash

   +                           

 

 

 

Subtotal

   $                           

 

 

 

--------------------------------------------------------------------------------

To   

the aggregate amount of principal and interest due and payable by the Borrower
under the Loan and any other loans

   $                           

 

 

 

Actual Ratio

     

 

 

 

Minimum Required per Covenant This Period

     1.15   

2. As of             , 20     (the “Reporting Date”), the Borrower is in
compliance with Section 4.17.2 of the Loan Agreement. The calculations made to
determine compliance with such provision were as follows:

 

GROWTH CAPITAL EXPENDITURES   

Total Growth Capital Expenditures this reporting period

   $                           

 

 

 

Total Growth Capital Expenditures to date for current fiscal year

   $                           

 

 

 

Remaining allowable Growth Capital Expenditures for current fiscal year

   $                           

 

 

 

[remainder of page internationally left blank]

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Dated:             , 20    

 

FAMOUS DAVE’S OF AMERICA, INC.,

a Minnesota corporation,

By:  

 

  Dexter Newman, its Chief Financial Officer

MINWOOD PARTNERS, INC.,

a Delaware corporation,

By:  

 

  Dexter Newman, its Chief Financial Officer

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SCHEDULE 5.2

PERMITTED LIENS

Permitted Liens means the following:

1. Mortgages, deeds of trust, pledges, liens, security interests and assignments
with respect to all or any portion of the Collateral to secure any indebtedness
in existence as of the date of this Agreement and listed as follows:

 

  (a) The Mortgage as defined under this Agreement; and

The aforesaid excludes any such lien as to Collateral described in the lien that
has been released or limited but includes any subsequent extension or renewal of
such lien to the extent (i) the related extension or renewal of the indebtedness
secured thereby is otherwise permitted under this Agreement, (ii) the principal
amount secured thereby is not increased above the amount outstanding immediately
prior to such extension or renewal, and (iii) the property securing the lien is
not increased.

2. Liens for taxes or assessments or other governmental charges to the extent
specifically not required to be paid under this Agreement.

3. Liens and security interests granted to Lender.

4. Bankers’ liens, rights of set-off or similar rights as to accounts maintained
with a financial institution.

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SCHEDULE 5.3 TO LOAN AGREEMENT

PERMITTED INDEBTEDNESS

Permitted Indebtedness means the following:

NONE