Exhibit 10.1
DEVELOPMENT LINE OF CREDIT AGREEMENT
THIS DEVELOPMENT LINE OF CREDIT AGREEMENT (this “Agreement”), dated as of May 5,
2010, is entered into by and between the borrowing entities identified on
Exhibit A attached hereto (jointly and severally, the “Borrower”), DIVERSIFIED
RESTAURANT HOLDINGS, INC., a Nevada corporation, acting as “Borrowing Agent” for
Borrower, and RBS CITIZENS, N.A., a national banking association, and its
successors and assigns (the “Lender”).
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement agree as follows:
1. Loan Terms.
(a) Amount of Loan. Subject to the terms and conditions set forth in this
Agreement, Lender shall make a loan to Borrower in the maximum principal amount
of Six Million and no/100 Dollars ($6,000,000) (the “Loan”), which is the
maximum aggregate amount of DLOC Advances that may be made and converted to a
Term Loan pursuant to this Agreement. Borrower’s obligation to repay the Loan
shall be evidenced by a promissory note substantially in the form attached
hereto as Exhibit B (the “Note”). During the Draw Period, DLOC Advances will be
made in accordance with Section 2 of this Agreement. From and after the Term
Loan Effective Date, no additional DLOC Advances will be available.
Notwithstanding any provision of this Agreement and the Loan Documents to the
contrary, during the Draw Period the Loan is a straight line of credit and not a
revolving line of credit and, accordingly, principal amounts paid and prepaid
may not be re-borrowed or re-advanced. The DLOC Advances will be converted to a
Term Loan on the Term Loan Effective Date, as provided in this Agreement.
(b) Maturity Date.
(i) Each DLOC Advance together with any accrued and unpaid interest shall, in
the aggregate, be converted to a Term Loan on the Term Loan Effective Date.
(ii) The Term Loan shall have a term of sixty-six (66) months from the first day
of the first month after the Term Loan Effective Date. The Term Loan shall
mature and be due and payable in full on May 5, 2017 (the “Maturity Date”).
(iii) On the Maturity Date, in addition to any required Monthly Payment,
Borrower shall also pay accrued and unpaid interest with respect to the Loan,
together with any other amounts payable under this Agreement and the other Loan
Documents.
(c) Payments.
(i) Interest on each DLOC Advance shall be due and payable in arrears on the
fifth (5th) day of each month following the Closing Date. Borrower hereby
authorizes Lender to automatically deduct from any deposit account of Borrower
each monthly payment of interest and any other fees the Lender may assess
Borrower from time to time pursuant to this Agreement. If the funds in the
account are insufficient to cover any payment due to Lender, Lender will not be
obligated to advance funds to cover the payment. Failure of Lender to charge any
account or to give any notice shall not affect the obligation of Borrower to pay
all amounts due hereunder or under the Note.

 

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(ii) With respect to the Term Loan, Borrower hereby authorizes Lender to
automatically deduct from any deposit account of Borrower for each Monthly
Payment based upon the Term Loan Period, payable on or before the eighth (8th)
day of each month, beginning on the eighth (8th) day of the first (1st) month
following the Term Loan Effective Date and continuing on the last day of each
succeeding month thereafter (each a “Term Loan Payment Date”) until the Maturity
Date, along with any other fees the Lender may assess Borrower from time to time
pursuant to this Agreement. All outstanding payments of interest, principal, and
other sums shall be paid in full on the Maturity Date. If the funds in the
account are insufficient to cover any payment due to Lender, Lender will not be
obligated to advance funds to cover the payment. Failure of Lender to charge any
account or to give any notice shall not affect the obligation of Borrower to pay
all amounts due hereunder or under the Note.
(iii) Borrower shall pay Lender a fee in an amount equal to one-quarter percent
(0.25%) per annum on the unused portion of the Loan during the Draw Period,
calculated using the average balance of the Note, such fee to be payable
quarterly in arrears on the last day of March, June, September and December,
commencing on the last day of June, 2010. Any unused fee that has accrued and
not paid shall be due and payable on the Term Loan Effective Date.
(d) Interest.
(i) Interest shall be set and accrue beginning on the first date a DLOC Advance
is made by Lender to Borrower and shall bear interest at a rate per annum equal
to the sum of the LIBOR Advantage Rate for such LA Interest Period plus the LA
Margin.
(ii) Upon the Term Loan Effective Date, the principal sum outstanding on the
Loan shall bear interest at the Term Interest Rate. All computations of interest
shall be computed upon the basis of the actual number of days elapsed in a year
consisting of 360 days.
(iii) Upon the occurrence of an Event of Default and while such Event of Default
is continuing, the Term Interest Rate on the Loan shall increase by five percent
(5.0%) per annum over the existing Interest Rate, compounded annually (the
“Default Rate”).
(iv) Notwithstanding any provision to the contrary in this Agreement, in no
event shall the Interest Rate charged on the Loan exceed the maximum rate of
interest permitted under applicable state and/or federal usury law. Any payment
of interest that would be deemed unlawful under applicable law for any reason
shall be deemed received on account of, and will automatically be applied to
reduce, the principal sum outstanding on the Loan and any other sums (other than
interest) due and payable to Lender under this Agreement, and the provisions of
this Agreement shall be deemed amended to provide for the highest rate of
interest permitted under applicable law.
(e) Use of Proceeds. Each DLOC Advance shall be used in connection with the
development and operation of Buffalo Wild Wings franchised locations and the
development and operation of Bagger Dave’s locations as follows:

 

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(i) up to seventy percent (70%) of the development cost for Buffalo Wild Wings
locations; or
(ii) up to fifty percent (50%) of the development cost for Bagger Dave’s
locations; or
(iii) purchases of real estate, limited to the lesser of eighty percent (80%) of
appraised value of the said real estate or eighty percent (80%) of the purchase
price of said real estate. Any DLOC Advance related to the purchase of real
estate (“Real Estate Advance”) shall be subject to receipt of satisfactory real
estate appraisals, environmental reports, construction monitoring (including
architectural inspection) (collectively, the “Real Estate Due Diligence”) and
such other items as may be required by Lender including, but not limited to the
filing of mortgages (including leasehold mortgages), in Lender’s sole discretion
Borrower acknowledges that appropriate documentation, as requested by Lender,
may be required prior to any DLOC Advance and that no more than twenty-five
percent (25%) of the Loan shall be apportioned to Bagger Dave’s locations. No
DLOC Advance shall be used for personal, family, or household purposes.
(f) Transaction Costs; Reimbursement of Expenses. On the Closing Date, Borrower
shall pay Lender a sum equal to all of Lender’s transaction-related expenses,
including attorneys’ fees and costs and fees for real estate evaluations,
background checks, transaction related travel, any and all required due
diligence and Lender’s closing fee, all of which will be in addition to any
commitment or related fees due to Lender. In addition, Borrower shall reimburse
Lender for all fees, costs and expenses incurred by Lender in connection with
the exercise of Lender’s rights and duties under this Agreement and the other
Loan Documents, the preservation and protection of the Collateral, and the
enforcement or attempted enforcement of Borrower’s obligations under the Loan
Documents, including, without limitation, attorneys’ fees. Further, Borrower
shall reimburse Lender for all trustee, receiver and property manager fees and
commissions and all costs, expenses and charges incurred by those parties in
connection with this Agreement, the other Loan Documents, and the Collateral.
Unless specified otherwise in this Section, all of Lender’s costs, expenses and
charges (collectively, the “Reimbursement Expenses”) shall be payable by
Borrower to Lender within five (5) days after demand from Lender and, if not
paid when due, shall accrue interest at the Default Rate. The Reimbursement
Expenses shall be Obligations under this Agreement and shall be secured by the
Lien of this Agreement and the Security Agreement.
(g) Right of Lender to Make DLOC Advance. At the sole option of Lender, and
regardless of whether or not required conditions precedent have been satisfied,
Lender may disburse a DLOC Advance to itself to pay any interest, fees, costs,
expenses, and other amounts from time to time due and payable to Lender pursuant
to the Loan Documents. In no event shall Lender have any obligation to make such
disbursements. The making of any such DLOC Advance by Lender to itself shall not
be a cure or waiver of any Event of Default of Borrower under the Loan
Documents.
2. Conditions to DLOC Advances. The obligation of Lender to make a DLOC Advance
is subject to the satisfaction of each of the following conditions, unless
waived in writing by Lender, as determined in its sole and absolute discretion:

 

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(a) No Default; Representations. At the time of the request for a DLOC Advance
and at the time the DLOC Advance is to be made, no Event of Default under any of
the Loan Documents shall have occurred and be continuing or would occur as a
result of the making of such DLOC Advance. At the time of the request for the
DLOC Advance and at the time the DLOC Advance is to be made, all representations
and warranties of the Borrower and Guarantor in the Loan Documents shall be
true, correct and complete.
(b) Payment of Costs, Expenses and Fees. All costs, expenses and fees to be paid
by Borrower under the Loan Documents on or before the date of the DLOC Advance
will have been paid in full to Lender.
(c) No Material Adverse Effect. Lender shall have determined, in its sole
judgment, that there has been no Material Adverse Effect on the financial
condition or prospects of the Borrower, any Guarantor, the Business or the
Property. “Material Adverse Effect” is defined as a change which (a) materially
impairs or is reasonably expected to impair the ability of Borrower or Guarantor
to pay and perform their obligations under the Loan Documents to which they are
a party; or (b) materially impairs or is reasonably expected to materially
impair the ability of Lender to enforce its rights and remedies under any Loan
Document; or (c) has or is reasonably expected to have any material adverse
effect on the Collateral, the lien of Lender in such Collateral or the priority
of such lien; or (d) is prejudicial to any Business, operations or financial
condition of the Borrower or any Guarantor.
(d) Borrower Delivery Requirements for each DLOC Advance. In order to request a
DLOC Advance, Borrower Borrowing Agent shall deliver to Lender the “Request for
DLOC Advance and Compliance Certificate” attached as Exhibit C (“DLOC Request”)
printed on Borrower’s letterhead with the amount of the DLOC Advance being
requested, the intended use, Borrower’s loan number and the identification of
the Borrower’s contact in connection with the DLOC Advance, including his/her
office phone number along with invoices to support the requested amount and to
insure that the requested DLOC Advance will meet the advance limitations
described in Section 1(e). For purposes of the written request, cellular phone
numbers for the contact person are not in compliance with Lender’s requirements.
In addition, the Borrower shall provide full and complete account information
where Lender shall deposit the DLOC Advance if such account is different than
the account from which Borrower’s automatic payments are made to Lender.
So long as the above conditions in Sections 2(a) through 2(d) are satisfied on
or before Noon (central standard time) on a business day, the DLOC Advance for
approved invoices will be funded no later than the next business day, except for
in the case of a Real Estate Advance in which case, the Lender shall have a
reasonable time to fund the Real Estate Advance following receipt of
satisfactory Real Estate Due Diligence. Borrower may not request more than five
(5) DLOC Advances in any calendar month. There is no minimum amount required to
be requested. In no event shall the amount of the collective DLOC Advances
exceed the amount of the Loan. Each DLOC Advance will be deposited into the
Borrower’s or Borrowing Agent’s account identified in Section 2(d) above.
3. Prepayment. Borrower may, at any time during the term of the Loan, prepay all
of the outstanding principal of the Loan in full, but not in part. Concurrently
with such prepayment in full, Borrower shall pay all accrued interest on such
principal amount being prepaid as of the date of prepayment, any other amounts
payable under this Agreement and an amount equal to any breakage costs incurred
in connection with the termination of any interest rate swap agreement, interest
rate cap agreement and interest rate collar agreement, or any other agreement or
arrangement entered into between Borrower and Lender and designed to protect
Borrower against fluctuations in interest rates or currency exchange rates.

 

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4. Representations and Warranties. Borrower hereby warrants and represents to
Lender on the Closing Date, at the time a DLOC Advance is made, and upon the
Term Loan Effective Date, the following:
(a) Organization and Qualification. Borrower is duly organized, validly existing
and in good standing under the laws of the state in which it was incorporated,
has the power and authority to carry on its business and to enter into and
perform all documents relating to this transaction, and is qualified and
licensed to do business in each jurisdiction in which such qualification or
licensing is required. All information provided to Lender with respect to
Borrower and its operations is true and correct.
(b) Due Authorization. The execution, delivery and performance by Borrower, and
Guarantor as applicable, of the Loan Documents (i) have been duly authorized by
all necessary company action, (ii) do not contravene any law, regulation,
ordinance, order, or decree of any Governmental Authority, (iii) do not
contravene any provision of the Organizational Documents of Borrower, (iv) do
not violate any agreement or instrument by which Borrower is bound (with the
permitted exception of the AMC Grand Blanc, Inc. lease), and (v) will not result
in the creation of a Lien on any assets of Borrower except the Lien granted to
Lender pursuant to this Agreement and the Security Agreement. Borrower has duly
executed and delivered to Lender the Loan Documents and they are valid and
binding obligations of Borrower enforceable according to their respective terms,
except as they may be limited by equitable principles and by bankruptcy,
insolvency or similar laws affecting the rights of creditors generally. No
notice to, or consent by, any Governmental Authority is needed in connection
with this transaction.
(c) Guaranty Agreement. Each Guarantor has duly executed and delivered to Lender
a Guaranty Agreement (the “Guaranty”) and it is a valid and binding obligation
of each Guarantor enforceable according to its terms, except as limited by
equitable principles and by bankruptcy, insolvency or similar laws affecting the
rights of creditors generally. Borrower further represents that it will provide
notice to Lender of any event resulting in the emergence of a Future Guarantor
and Borrower shall direct such Guarantor to execute and deliver to Lender a
Guaranty.
(d) Litigation. Except as set forth in Schedule 4(d), there is no claim,
litigation, proceeding, investigation or inquiry, administrative or judicial,
pending or threatened against or affecting Borrower or its shareholders,
officers, Properties or assets that is an uninsured claim.
(e) Business. Borrower is not a party to or subject to any agreement or
restriction that may have a Material Adverse Effect on Borrower’s Business,
Property to prospects.
(f) Licenses, etc. Borrower has obtained any and all licenses, permits,
franchises, authorizations from each Governmental Authority, patents,
trademarks, copyrights or other rights necessary for the ownership of the
Property and the advantageous conduct of its Business. Borrower possesses
adequate licenses, patents, patent applications, copyrights, trademarks,
trademark applications, and trade names to continue to conduct its business as
heretofore conducted by it, without any conflict with the rights of any other
person or entity. All of the foregoing is in full force and effect and none of
the foregoing are in known conflict with the rights of others.

 

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(g) Laws and Taxes. Borrower is in material compliance with all laws,
regulations, rulings, orders, injunctions, decrees, conditions or other
requirements applicable to or imposed upon Borrower by any law or by any
Governmental Authority, court or agency. Borrower has filed all required tax
returns and reports that are now required to be filed by it in connection with
any federal, state and local tax, duty or charge levied, assessed or imposed
upon Borrower or its assets, including unemployment, social security, and real
estate taxes. Borrower has paid all taxes which are now due and payable. No
taxing authority has asserted or assessed any additional tax liabilities against
Borrower which are outstanding on this date.
(h) Title. Borrower has good and marketable title to the assets reflected on the
most recent balance sheet submitted to Lender prior to the Closing Date and the
Collateral, free and clear from all liens and encumbrances of any kind, except
for (collectively, the “Permitted Liens”) (a) current taxes and assessments not
yet due and payable, (b) liens and encumbrances, if any, reflected or noted on
such balance sheet submitted to Lender prior to the Closing Date or notes
thereto, (c) assets disposed of in the ordinary course of business, (d) any
security interests, pledges, assignments or mortgages granted to Lender to
secure the repayment or performance of the Obligations; (e) pledges and deposits
of money securing statutory obligations under workmen’s compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding liens under ERISA); (f) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which Borrower is a party as lessee made in the ordinary
course of business; (g) inchoate and unperfected workers, mechanics’ or similar
Liens arising in the ordinary course of business; and (h) the liens and
encumbrances listed on Schedule 3(h).
(i) Subsidiaries and Partnerships. Except as set forth on Schedule 4(i),
Borrower has no Subsidiaries and is not a party to any partnership agreement or
joint venture agreement.
(j) Defaults. Borrower is in compliance with all Franchise Agreements, Lease
Agreements, and other material agreements applicable to it and the Property and
Collateral and there does not now exist any default or violation of or under any
of the terms, conditions or obligations of (a) its Organizational Documents, or
(b) any indenture, mortgage, deed of trust, franchise, lease, permit, contract
agreement or other instrument to which Borrower is a party or by which it is
bound, and the consummation of the transactions contemplated hereunder will not
result in such default or violation.
(k) ERISA. Borrower and all individuals or entities who along with Borrower
would be treated as a single employer under ERISA or the Internal Revenue Code
of 1986, as amended (an “ERISA Affiliate”), are in compliance with all of their
obligations to contribute to any “employee benefit plan” as that term is defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974, and any
regulations promulgated thereunder from time to time (“ERISA”). Borrower and
each of its ERISA Affiliates are in full compliance with ERISA, and there exists
no event described in Section 4043(b) thereof (“Reportable Event”).
(l) Insurance. Borrower has obtained, shall maintain or cause to be maintained
at all times, insurance for Borrower, the Property, the Business and Collateral
as set forth in Section 5(b) of this Agreement.
(m) Environmental Laws. Borrower, its Business operations (including, but not
limited to, the business and franchises) and its assets (including, but not
limited to the Collateral, the Business and the Property) are and shall be in
compliance with all Environmental Laws. “Environmental Laws” means all present
and future federal, state and local laws

 

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(including common law) and ordinances and rules, regulations, requirements,
orders, directives, injunctions and decrees of any Governmental Authority,
relating to Hazardous Materials or the protection of public and worker health
and safety or the environment in the jurisdictions where the Properties are
located or where any Hazardous Materials used, generated or disposed of with
respect to the Properties by Borrower are located. “Hazardous Materials” means
any substance, material or waste that is classified, regulated or otherwise
characterized under any Environmental Law as hazardous, toxic, a contaminant or
a pollutant or by other words of similar meaning or regulatory effect, including
petroleum or any fraction thereof, asbestos, polychlorinated biphenyls and
radioactive substances.
(n) Financial Statements. Borrower represents that all financial statements
provided to Lender, either prior to or contemporaneously herewith, are true,
correct and complete in all material respects, and that there has been no
material adverse change in the financial condition or prospects of Borrower, any
Guarantor or the Business since the date of such financial statements. Borrower
shall provide to Lender any and all additional financial information and
materials as Lender may request concerning Borrower, the Guarantor, the
Collateral, the Property or the Business, all of which shall be in form and
substance satisfactory to Lender in all respects. All of the financial
statements and other information and materials delivered or caused to be
delivered by Borrower to Lender have been and shall be prepared in accordance
with GAAP and shall be accurate and complete in all respects.
(o) Persons with Disabilities; Accessibility. The Collateral and the Property
presently do, and the Collateral and Property at all times shall, strictly
comply to the extent applicable with the requirements of the Americans with
Disabilities Act of 1990 as may be amended, all state and local laws and
ordinances related to accessibility for persons with disabilities and all rules,
regulations, and orders issued pursuant thereto including, without limitation,
the Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively, “Access Laws”). Notwithstanding any provisions set
forth herein or in any other document regarding Lender’s approval of alterations
of the Property, Borrower shall not alter the Property in any manner which would
increase Borrower’s responsibilities for compliance with the applicable Access
Laws without the prior written approval of Lender. The foregoing shall apply to
tenant improvements constructed by Borrower or by any of their tenants. Lender
may condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer or other person acceptable to Lender.
Further, Borrower agrees to give prompt written notice to Lender of the receipt
by Borrower of any complaints related to violation of any Access Laws and of the
commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws.
(p) Lease Agreements and Franchise Agreements. The Lease Agreements and the
Franchise Agreements each have an initial term, without exercised options,
greater than or equal to the term of the Loan, except as identified on
Schedule 4(p). Borrower agrees to seek the prior consent of Lender prior to
choosing not to exercise an available option to extend a Lease Agreement or
Franchise Agreement.
The representations and warranties contained in this Section 4 are true, correct
and complete in all material respects, and do not contain any untrue statement
of a material fact or omit to state any material fact necessary to make such
representation or warranty not misleading.
5. Affirmative Covenants. Borrower covenants with, and represents and warrants
to, Lender that, from and after the execution date of this Agreement until the
Obligations are paid and satisfied in full:

 

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(a) Financial Statements.
(i) Borrower will maintain a standard and modern system for accounting in
accordance with GAAP and will prepare and furnish to lender:
(1) within one hundred twenty (120) days after each fiscal year end, audited
consolidating and consolidated year-end financial statements for Borrower and
any Affiliates prepared by an independent certified public accountant in
accordance with GAAP (subject to standard exceptions) in the United States,
consistently applied, in form and substance reasonably satisfactory to Lender,
along with a Compliance Certificate, the form of which is attached hereto as
Exhibit C;
(2) within sixty (60) days after each quarter end, compiled quarterly financial
statements for Borrower and any Affiliates prepared in accordance with GAAP
(subject to standard exceptions) in the United States, consistently applied,
including year-to-date financial results, and comparisons to the previous year’s
financial results for such period, in form and substance reasonably satisfactory
to Lender, together with a Compliance Certificate, the form of which is attached
hereto as Exhibit C;
(3) within sixty (60) days after each quarter end, individual Property store
sales reports;
(4) within thirty (30) days after filing but no later than October 31 of any
year, copies of federal tax returns filed by the Personal Guarantor, along with
a personal financial statement in form and substance reasonably acceptable to
Lender for such Personal Guarantor.
(ii) Borrower shall give representatives of Lender access to its books and
records at all reasonable times, including permission to examine, copy and make
abstracts from any such books and records and such other information which might
be helpful to Lender in evaluating the status of the Loan as it may reasonably
request from time to time.
(iii) If at any time Borrower has any subsidiaries which have financial
statements that could be consolidated with those of Borrower under GAAP, the
financial statements required above shall be the financial statements of
Borrower and all such subsidiaries prepared on a consolidated and consolidating
basis.
(b) Insurance. At its own expense, Borrower shall obtain and maintain:
(i) insurance against (a) loss, destruction or damage to its Property and
Business of the kinds included within the classification “All Risks of Physical
Loss” and such insurance shall be maintained in an amount which, after the
application of any deductible, shall be equal to the full insurable value of the
Property and the tangible Collateral. The term “full insurable value” shall mean
the actual replacement cost of the Property and the Collateral (without taking
into account any depreciation, and exclusive of excavations, footings and
foundations, landscaping and paving) determined annually by an insurer, a
recognized independent insurance broker or an independent appraiser selected by
Lender and paid by Borrower. Such All Risks of Physical Loss insurance

 

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shall also include business interruption coverage for a minimum twelve
(12) months’ loss of income, including coverage for all amounts due under the
Note with the Lender named as a loss payee with respect to those payments,
(b) Commercial General Liability insurance covering bodily injury, death,
property damage, products liability and liability from the sale of liquor, beer
or wine (if applicable) in such amounts as are generally available at
commercially reasonable premiums and are generally required by institutional
lenders for businesses and assets comparable to the Property, Business and
Collateral but in any event for a combined single limit of at least
$1,000,000.00 per occurrence, and $3,000,000.00 in the aggregate, (c) statutory
workers’ compensation insurance with respect to any work in connection with the
Property and Business or on or about the Collateral and Property, (d) if any
Property is in an area identified by the Federal Emergency Management Agency as
having special flood hazards, flood insurance in an amount equal to the full
insurable value or the maximum limit of coverage available for the Collateral
and the Property under the National Flood Insurance Act of 1968, the Flood
Disaster Protection Act of 1973, or the National Flood Insurance Reform Act of
1994, as each may be amended from time to time, and (e) if any Property is in an
area subject to earthquakes, earthquake insurance equal to the full insurable
value of the Property. All such policies shall (i) be issued by financially
sound and reputable insurers with a rating of at least “A” or better by both
Standard & Poor’s Ratings Service and Moody’s Investors Service (or such other
credit rating agencies as may be designated by Lender) or a general policy
rating of “A-” or better and a financial class of VIII or better by A.M. Best
Company, Inc., (ii) if required, name Lender as a “loss payee”, “additional
insured” or “mortgagee”, as applicable, and (iii) shall provide for thirty
(30) days prior written notice to Lender before such policy is altered, canceled
or terminated. All of the insurance policies required hereby shall be evidenced
by one or more Certificates of Insurance delivered to Lender by Borrower on or
before the Closing Date and at such other times as Lender may request from time
to time.
(ii) any and all other insurance required under any of Borrower’s Franchise
Agreements and Lease Agreements.
(c) Taxes. Borrower shall pay when due all taxes, assessments and other
governmental charges imposed upon it or its assets, franchises, business, income
or profits before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums which by law might be a lien or charge upon any of its
assets, provided that (unless any material item or property would be lost,
forfeited or materially damaged as a result thereof) no such charge or claim
need be paid if it is being diligently contested in good faith, if Lender is
notified in advance of such contest and if Borrower establishes an adequate
reserve or other appropriate provision required by GAAP and deposits with Lender
cash or bond in an amount acceptable to Lender.
(d) Compliance with Laws. Borrower shall comply with all federal, state and
local laws, regulations and orders applicable to Borrower or its assets
including but not limited to all environmental laws, in all respects material to
Borrower’s Business, assets or prospects and shall immediately notify Lender of
any violation of any rule, regulation, statute, ordinance, order or law relating
to the public health or the environment and of any complaint or notifications
received by Borrower regarding any environmental or safety and health rule,
regulation, statute, ordinance or law. Borrower shall obtain and maintain any
and all licenses, permits, franchises, authorizations from Governmental
Authorities, patents, trademarks, copyrights or other rights necessary for the
ownership of its Property and the advantageous conduct of its Business and as
may be required from time to time by applicable law.

 

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(e) Renewal of Lease Agreements and Franchise Agreements. Borrower agrees to
take all actions necessary to renew the Lease Agreements and Franchise
Agreements that may require renewal during the term of the Loan or enter into a
comparable lease in the franchise territory, including, but not limited to those
identified on Schedule 4(p).
(f) Other Amounts Deemed Loans. If Borrower fails to pay any tax, assessment,
governmental charge or levy or to maintain insurance within the time permitted
or required by this Agreement, or to discharge any Lien prohibited hereby, or to
comply with any other Obligation, Lender may, but shall not be obligated to,
pay, satisfy, discharge or bond the same for the account of Borrower. To the
extent permitted by law and at the option of Lender, all monies so paid by
Lender on behalf of Borrower shall be deemed Obligations and Borrower’s payments
under this Agreement may be increased to provide for payment of such Obligations
plus interest thereon.
(g) Inspection Rights. Upon reasonable notice during customary business hours,
Lender or its duly authorized representative shall have the right to visit all
the facilities of Borrower, meet with managers and inspect all records and files
relevant to the operation of the Business, subject to the following limitations:
(i) Lender may conduct such inspection only one time in any twelve (12) month
period unless there is an Event of Default, in which case, the Lender has the
right to conduct an unlimited number of inspections; and
(ii) the costs of such inspection shall be borne equally between Borrower and
Lender; unless the inspections occur during an Event of Default, in which case
the entire cost of such inspections shall be borne by the Borrower.
(h) Death or Permanent Disability of Operator. Upon the death or permanent
disability of Operator (and the inability of Borrower to obtain Lender’s
approval of a suitable replacement within ninety (90) days of the event of death
or disability), Lender shall have the option to require Borrower to pay all
outstanding principal, interest and any other amounts due Lender pursuant to the
Obligations.
(i) Operating Accounts. Except for the Florida Entities, Borrower and all Entity
Guarantors shall maintain with Lender each of their primary operating and store
deposit accounts, so long as Lender has a branch within five (5) miles of such
store, and at the option of Lender, shall enter into agreements permitting the
Lender to deposit all advances made hereunder and debit all fees, charges and
expenses in respect of the Obligations.
(j) Further Assurances. Borrower shall execute, acknowledge and deliver, or
cause to be executed, acknowledged or delivered, any and all such further
assurances and other agreements or instruments, and take or cause to be taken
all such other action, as shall be reasonably necessary from time to time to
give full effect to the Loan Documents and the transactions contemplated
thereby. In connection with any assignment or transfer of all or any portion of
the Obligations or Collateral by Lender to any other person or entity, and such
other person or entity shall thereupon become vested with all the rights in
respect of such Obligations or Collateral, Borrower agrees to execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered any
and all other agreements, documents or instruments requested by Lender and/or
its assignee or transferee.

 

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6. Negative Covenants. Borrower covenants with, and represents and warrants to,
Lender that, from and after the execution date of this Agreement until the
Obligations are paid and satisfied in full:
(a) Limitation on Liens. Borrower will not create or suffer to exist any Lien in
respect of any property of any character of Borrower including, but not limited
to, the Collateral (whether owned on the date hereof or hereafter acquired)
except for Permitted Liens.
(b) Limitation on Transactions. Borrower may enter into transactions so long as
they are with members of the Borrower, a Guarantor or any Affiliate or with
officers, shareholders, or management employees of a Borrower, Guarantor, or any
Affiliate, so long as payments under any such transaction are subordinate to the
payments due to Lender under the Loan Documents.
(c) Limitation on Investments. Borrower will not form or acquire any Subsidiary
or acquire any interest in any business enterprise other than the Business.
(d) Limitation on Borrower’s Consolidation, Merger and Sales. Borrower will not
sell, lease, assign, or transfer all, substantially all or any material portion
of the assets of Borrower, or enter into or approve any liquidation,
dissolution, combination, consolidation or merger involving Borrower, or any
reclassification or recapitalization of Borrower.
(e) Limitation on Disposition of Assets. Borrower will not sell or otherwise
dispose of any assets (other than the sale of inventory in the ordinary course
of business and the disposition of obsolete or inoperable equipment) of Borrower
unless the following conditions are satisfied: (i) the assets are sold at fair
value, (ii) the assets are obsolete or are not necessary to operate the
Business, (iii) the proceeds from the sale or disposition are one hundred
percent (100%) in cash, and (iv) the proceeds are, within ten (10) days of
receipt, applied, with Lender’s written approval, to permanently reduce the
amount outstanding on the Note or are reinvested in assets used in the Business.
(f) Change in the Business. Borrower will not authorize, approve or otherwise
change in any substantive way the Business of Borrower.
(g) Limitation on Distributions. Borrower shall not distribute any Excess Cash
to the shareholders of Borrower, as shareholders, if:
(i) any Event of Default has occurred and is continuing;
(ii) any due and payable payment required to be made by Borrower to Lender under
this Agreement is outstanding;
(iii) there were any overdue payments required to be made by Borrower to Lender
within the twelve (12) month period immediately preceding the proposed date of
distribution, regardless of whether Lender declared an Event of Default;
(iv) Borrower is not in strict compliance with all obligations and covenants
contained in this Agreement; or
(v) the distribution would reduce Borrower’s liquidity to an extent that could
be reasonably expected to damage the day-to-day operations of Borrower.

 

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(h) Limitations on Development. Neither Borrower, Guarantor nor any Affiliate of
Borrower or Guarantor shall develop any other Business locations (signing a
lease agreement or franchise agreement or acquiring the property on which a
Business will be located) without Lender’s consent, if:
(i) any Event of Default has occurred and is continuing;
(iii) Borrower is not in strict compliance with all obligations and covenants
contained in this Agreement; or
(iv) the distribution would reduce Borrower’s liquidity to an extent that could
be reasonably expected to damage the day-to-day operations of Borrower.
(i) Limitation on Payment of Management Expenses. Borrower shall not pay any
Management Expenses unless (a) each Property is open for business to the general
public and (b) Borrower is current on all of its payments and other obligations
to Lender.
(j) Limitation on Indebtedness. Borrower will not create, assume, incur, or
suffer to exist any Indebtedness other than liabilities incurred by Borrower in
the ordinary course of conducting its business and loans related to the
acquisition of real estate located at 2055 Badlands Dr., Brandon, Florida in an
amount not to exceed Two Million Five Hundred Seventy-ThreeThousand and Sixty
Dollars ($2,573,060.00).
(k) Margin Securities. No amount advanced to Borrower under the Note shall be
used for the purpose of purchasing or carrying any “margin stock” or “margin
security,” as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 CFR 221 and 224.
7. Financial Covenants.
(a) Debt Service Coverage Ratio. Borrower shall cause to be maintained as of the
end of each fiscal quarter a Debt Service Coverage Ratio for the trailing twelve
(12) month period of greater than or equal to 1.20 to 1.0.
(b) Lease Adjusted Leverage Ratio (tested on a quarterly basis). Borrower shall
not cause the Lease Adjusted Leverage Ratio of Borrower on a consolidated basis
to be greater than the Applicable Ratio, said ratio to be tested on a quarterly
basis for the trailing twelve (12) month period. “Applicable Ratio” shall mean
5.75:1.00 for calculations made on or before December 31, 2010; 5.50:1.00 for
calculations made on or before December 31, 2011; and 5.00:1.00 for calculations
made thereafter.
(c) Lease Adjusted Leverage Ratio (tested at the time of each DLOC Advance).
Borrower shall not cause the Lease Adjusted Leverage Ratio of Borrower on a
consolidated basis to be greater than the Applicable Ratio, said ratio to be
tested on a quarterly basis for the trailing twelve (12) month period.
“Applicable Ratio” shall mean 5.25:1.00 for calculations made on or before
December 31, 2010; 5.00:1.00 for calculations made on or before December 31,
2011; and 4.50:1.00 for calculations made thereafter.
(d) Adjustments for New Businesses. The Debt Service Coverage Ratio and the
Lease Adjusted Leverage Ratio will be modified so that calculation of such
ratios will not include results from Businesses open for a period of less than
12 months. In addition all figures for Businesses in their second year of
operation will be adjusted so that such figures are tested on annualized basis
rather than a trailing twelve (12) month basis.

 

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8. Events of Default. Upon the occurrence of any of the following events (each,
an “Event of Default”), Borrower hereby agrees to refuse any payment under an
Inter-Affiliate Loan, and Lender may, at its option, without any demand or
notice whatsoever, declare the Note and all Obligations to be fully due and
payable in their aggregate amount, together with accrued interest and all
prepayment premiums, fees, and charges applicable thereto:
(a) Except as otherwise provided in this Agreement, any failure to make any
payment when due of principal or accrued interest under this Agreement, the Note
or any other Obligation and such nonpayment remains uncured for a period of ten
(10) days thereafter;
(b) Any representation or warranty of Borrower, or Guarantor as applicable, set
forth in this Agreement, the Loan Documents or in any agreement, instrument,
document, certificate or financial statement evidencing, guarantying, securing
or otherwise related to, this Agreement or any other Obligation is materially
inaccurate or misleading;
(c) Borrower fails to observe or perform any other term or condition of this
Agreement, the Loan Documents or any other term or condition set forth in any
agreement, instrument, document, certificate or financial statement evidencing,
guarantying or otherwise related to this Agreement, the Loan Documents or any
other Obligation, or Borrower otherwise defaults in the observance or
performance of any covenant or agreement set forth in any of the foregoing for a
period of thirty (30) days after notice to Borrower of such failure or default;
(d) An Event of Default occurs under the Security Agreement, the Guaranty or any
other Loan Document;
(e) The death, permanent disability, legal incompetence or dissolution of any
Borrower, Operator or of any Guarantor of the Obligations (and the inability of
Borrower to obtain Lender’s approval of a suitable replacement within ninety
(90) days of the event of death or disability), or the merger or consolidation
of any of the foregoing with a third party, or the lease, sale or other
conveyance of a material part of the assets or business of any of the foregoing
to a third party outside the ordinary course of its business, or the lease,
purchase or other acquisition of a material part of the assets or business of a
third party by any of the foregoing;
(f) The occurrence of any event that causes a Material Adverse Effect on
Borrower’s or Guarantors’ business operations (including, but not limited to,
the Businesses), financial condition, assets or Collateral;
(g) The creation of any Lien (except a lien to Lender and the Permitted Liens)
on, the institution of any garnishment proceedings by attachment, levy or
otherwise against, the entry of a judgment against, or the seizure of, any of
the property of Borrower or any Guarantor hereof including, without limitation,
the Collateral for a period of thirty (30) days after notice of such default to
Borrower;
(h) A commencement by Borrower or any Guarantor of the Obligations of a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or the entry of a decree or order for relief in
respect of Borrower or any Guarantor of the Obligations in a case under any such
law or appointing a receiver, liquidator, assignee,

 

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custodian, trustee, sequestrator (or other similar official) of Borrower or any
Guarantor of the Obligations, or for any substantial part of the property of
Borrower or any Guarantor of the Obligations, or ordering the wind-up or
liquidation of the affairs of Borrower or any Guarantor of the Obligations; or
the filing of a petition initiating an involuntary case in which Borrower or any
Guarantor is the debtor under any such bankruptcy, insolvency or similar law; or
the making by Borrower or any Guarantor of the Obligations of any general
assignment for the benefit of creditors; or the failure of Borrower or any
Guarantor of the Obligations generally to pay its debts as such debts become
due; or the taking of action by Borrower or any Guarantor of the Obligations in
furtherance of any of the foregoing;
(i) Any sale, conveyance or transfer of any rights in the Collateral securing
the Obligations, or any destruction, loss or damage of or to any material
portion of the Collateral;
(j) The occurrence of a default or an event of default under one or more of the
Franchise Agreements or Lease Agreements or any other material agreement to
which Borrower is a party for a period of thirty (30) days after notice of such
default to Borrower; or
(k) The occurrence of any Event of Default beyond any applicable grace or cure
period under any loan agreement and loan documents evidencing and/or securing
any of the Obligations owed by Borrower, an Affiliate or any Guarantor to
Lender.
9. Remedies. In addition to any other remedy permitted by law, Lender may at any
time after the occurrence and during the continuance of an Event of Default,
without notice, apply the Collateral to the Note or such other Obligations,
whether due or not, and Lender may, at its option, proceed to enforce and
protect its rights by an action at law or in equity or by any other appropriate
proceedings; provided that the Note and the Obligations shall be accelerated
automatically and immediately if the Event of Default arises under Section 8(i)
above. Borrower shall pay all costs of collection incurred by Lender, including
its reasonable attorney’s fees, if this Agreement is referred to an attorney for
collection, whether or not payment is obtained before entry of judgment, which
costs and fees are Obligations secured by the Collateral.
Lender’s rights and remedies hereunder are cumulative, and may be exercised
together, separately, and in any order. No delay on the part of Lender in the
exercise of any such right or remedy shall operate as a waiver. No single or
partial exercise by Lender of any right or remedy shall preclude any other
further exercise of it or the exercise of any other right or remedy. No waiver
or indulgence by Lender of any Event of Default is effective unless in writing
and signed by Lender, nor shall a waiver on one occasion be construed as a
waiver of any other occurrence in the future.
10. Miscellaneous.
(a) Surveys and Environmental Reports. Intentionally omitted.
(b) Entire Agreement. This Agreement constitutes the complete and exclusive
agreement and understanding between Lender and Borrower, and supersedes all
prior agreements and understandings relating to the subject matter hereof. No
usage of trade, course of performance, or course of dealing evidence may be used
by a party to contradict, explain, supplement, or otherwise affect this
Agreement, and no extrinsic evidence may be used by a party to resolve or
introduce an ambiguity in the Agreement.

 

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(c) Severability. The declaration of invalidity of any provision of this
Agreement shall not affect any part of the remainder of the provisions.
(d) Assignment. Borrower may not assign any of its rights, remedies or
obligations described in this Agreement without the prior written consent of
Lender, which consent may be withheld in Lender’s sole discretion. Lender may
assign some or all of its rights and remedies described in this Agreement
without notice to, or prior consent from, Borrower.
(e) Waiver of Borrower. Borrower, and any Guarantor hereof, hereby waives
demand, presentment, protest and notice of dishonor, notice of protest and
notice of default except as otherwise specified in this Agreement. Borrower,
including but not limited to all co-makers and accommodation makers of the Note,
hereby waives all suretyship defenses including but not limited to all defenses
based upon impairment of collateral and all suretyship defenses described in
Section 3-605 of the Uniform Commercial Code (the “UCC”). Such waiver is entered
to the full extent permitted by Section 3-605 (i) of the UCC.
(f) Waiver; Amendments.
(i) No failure or delay by Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of Lender under the Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any Loan Document or consent to any departure
by Borrower therefrom shall in any event be effective unless the same shall be
permitted by Section 10(f)(ii) of this Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(ii) No Loan Document, this Agreement or provision thereof may be waived,
amended or modified except, in the case of this Agreement, by an agreement or
agreements in writing entered into by Borrower and Lender or, in the case of any
other Loan Document, by an agreement or agreements in writing entered into by
the parties thereto with the consent of Lender.
(g) Jury Waiver. BORROWER, AND ANY GUARANTOR HEREOF, WAIVES THE RIGHT TO A TRIAL
BY JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT,
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Illinois, without reference to
principles of conflicts of law.
(i) Notices. Except as otherwise specifically provided herein, all notices,
requests, consents, and other communications hereunder must be in writing and
delivered (i) if to Lender, RBS Citizens, N.A., 28 State Street, Boston, MA
02109, Attn: Timothy Shanahan, Senior Vice President, and (ii) if to Borrower,
to the address set forth on the signature page of this Agreement. All
communications hereunder shall be in writing and shall be deemed given upon the
earlier of receipt, one (1) business day after being sent by facsimile
transmission or by reputable overnight courier, or three (3) business days after
being sent by certified mail. Each party, by notice so given, may specify a
different notice address. Any notice of change of address shall be effective
only upon receipt.

 

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(j) Successors and Assigns. This Agreement shall inure to the benefit of and
shall bind the parties hereto, their heirs, legal representatives, successors
and permitted assigns.
(k) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same Agreement.
(l) Lender Discussions with Franchisor. On the occurrence of an Event of Default
beyond any applicable grace or cure period, Borrower hereby authorizes Lender to
discuss with Buffalo Wild Wings International, Inc., or its successors or
assigns (“Franchisor”) Borrower’s financial condition, operations and any other
matters relating to Borrower, the Business or the Property. Borrower further
(i) consents to the release to Lender by Franchisor of any information relating
to the foregoing matters, and (ii) instructs Franchisor to release any
information relating to the foregoing matters upon the request of Lender.
(m) Loan Sales; Participations. Borrower agrees that Lender may elect, at any
time in its sole discretion, to assign, convey, sell, transfer, securitize or
grant a participation in (a “Disposition”) all or any portion of Lender’s rights
and obligations under this Agreement and the other Loan Documents, including any
and all servicing rights, and that any such Disposition may be to one or more
financial institutions, private investors, public securities marketplace, trust
and/or other entities, in Lender’s sole discretion (“Additional Creditors”).
Borrower further agrees that whether or not the Loan or any interest therein is
sold or transferred, Lender may disseminate to any actual or potential
Additional Creditors and to any servicer of the Loan, Governmental Authority,
securities rating agency, bond insurer, and any other Person in connection with
a Disposition (“Other Disposition Parties”), all financial and other information
and materials which have been or shall be provided to or known by Lender with
respect to this Agreement, the other Loan Documents, the Loan, Borrower, its
business operations (including, but not limited to, the Enterprises), or their
assets (including, but not limited to, the Collateral and Properties). Borrower
shall promptly execute and deliver to Lender any estoppel certificates or other
documents requested by Lender in connection with a Disposition of the Loan
within fifteen (15) days from the date of such request. The indemnity and hold
harmless obligations of Borrower under this Agreement and the other Loan
Documents also shall also inure to the benefit of the Additional Creditors and
the Other Disposition Parties and their respective owners, directors, managers,
officers, employees, and agents.
(n) Grammatical Interpretation; Construction. The headings of sections and
subsections and divisions in this Agreement and the other Loan Documents are
only for convenience of reference and will not govern the interpretation of any
of the provisions of this Agreement or the other Loan Documents. All grammatical
changes shall be made to this Agreement and the other Loan Documents to maximize
the rights and benefits belonging to Lender, including, without limitation, so
that the singular shall include the plural and the masculine the feminine and
vice versa.
(o) Time is of the Essence. Time is of the essence with respect to this
Agreement and the other Loan Documents.

 

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(p) Joint and Several Liability. If more than one person is liable for any
indebtedness, liabilities and obligations to Lender described in this Agreement
or the other Loan Documents or grants Lender a Lien against their assets
(x) their liability shall be joint and several in nature and affect their
jointly and/or severally-owned assets and (y) except as prohibited by applicable
state law, each person waives (a) any right to require Lender to: (i) proceed
against any other person, (ii) proceed against or exhaust any security received
from any other person, or (iii) pursue any other remedy whatsoever; (b) any
defense arising by reason of the application by any other person of the proceeds
of any borrowing; (c) any defense resulting from the absence, impairment or loss
of any right of reimbursement, subrogation, contribution or other right or
remedy of any person against any other person, or any security, whether
resulting from an election by Lender to foreclose upon security by non-judicial
sale, or otherwise; (d) any setoff or counterclaim of any other person or any
defense which results from any disability or other defense of any other person
or the cessation or stay of enforcement from any cause whatsoever of the
liability of any other person (including, without limitation, the lack of
validity or enforceability of any Loan Document); (e) any right to exoneration
of sureties which would otherwise be applicable; (f) any right of subrogation or
reimbursement and, if there are any guarantors of the Obligations, any right of
contribution, and right to enforce any remedy which Lender now has or may
hereafter have against any other person and any benefit of, and any right to
participate in, any security now or hereafter received by Lender; (g) all
presentments, diligence, demands for performance, notices of non-performance,
notices delivered under this Agreement or any other Loan Document, protests,
notice of dishonor, and notices of acceptance of the Note and of the existence,
creation or incurring of new or additional Obligations and notices of any public
or private foreclosure sale; (h) the benefit of any statute of limitations to
the extent permitted by law; (i) any appraisement, valuation, stay, extension,
moratorium, redemption or similar law or similar rights for marshaling; (j) any
right to be informed by Lender of the financial condition of any other person or
any change therein or any other circumstances bearing upon the risk of
nonpayment or nonperformance of the Obligations; and (k) the benefit of all
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms of this Agreement or any other Loan Document, and
agrees that the Obligations of each person shall not be affected by any
circumstances, whether or not referred to in this Agreement or any other Loan
Document, which might otherwise constitute a legal or equitable discharge of any
person. Each person has the ability and assumes the responsibility for keeping
informed of the financial condition of any other person and of other
circumstances affecting such nonpayment and nonperformance risks. Without
limiting the generality of any of the foregoing, each person hereby waives any
right to be reimbursed by any other person for any payment of the Obligations
made directly or indirectly by either person or from any property of any person,
whether arising by way of any statutory, contractual or other right of
subrogation, contribution, indemnification or otherwise.
(q) Capital Adequacy. Borrower shall pay directly to Lender from time to time on
request such amounts as Lender may determine to be necessary to compensate
Lender or its parent or holding company for any costs which it determines are
attributable to the maintenance by Lender or its parent or holding company,
pursuant the requirement of any Governmental Authority, of capital in respect of
maintaining its loans (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of
Lender or its parent or holding company to a level below that which such Lender
or its parent or holding company could have achieved but for such requirement of
the Governmental Authority). Lender will notify Borrower that it is entitled to
compensation pursuant to this Section as promptly as practicable after it
determines to request such compensation. Such notice to Borrower will set forth
in reasonable detail the basis and amount of the request for compensation. Any
request for additional compensation under this Section shall be paid by Borrower
within thirty (30) days of the receipt by Borrower of the notice described in
this Section.

 

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(r) Lost Note. Borrower shall, if the Note is mutilated, destroyed, lost or
stolen (a “Lost Note”), promptly deliver to Lender, upon receipt from Lender of
an affidavit in a form reasonably acceptable to Lender and Borrower stipulating
that such Note has been mutilated, destroyed, lost or stolen, in substitution
therefor, a new promissory note containing the same terms and conditions as such
Lost Note with a notation thereon of the unpaid principal and accrued and unpaid
interest. Borrower shall provide fifteen (15) days’ prior notice to Lender
before making any payments to third parties in connection with a Lost Note.
(s) Cross-Collateral. All Loans and advances by Lender to Borrower or an
Affiliate under this Agreement, the Loan Documents or any other loan agreement
or loan documents between such parties constitute one transaction, and all
Indebtedness and the Obligations of Borrower or an Affiliate to Lender under
this Agreement, the Loan Documents or any other loan agreement or loan
documents, present and future, constitute one obligation secured by the
Collateral of the Loan or the Collateral of an Affiliate loan and security held
and to be held by Lender hereunder and by virtue of all other assignments and
security agreements between Borrower and Lender now and hereafter existing, as
may be amended, restated, supplemented, extended or renewed.
11. Definitions. All financial terms used herein but not defined on the
exhibits, in the Security Agreement or any other Loan Document have the meanings
given to them by GAAP. All other undefined terms have the meanings given to them
in the Uniform Commercial Code as adopted in the state whose law governs this
instrument. The following definitions are used herein:
“Access Laws” has the meaning set forth in Section 4(p) of this Agreement.
“Affiliate” means, as to Borrower, (a) any person or entity which, directly or
indirectly, is in control of, is controlled by or is under common control with,
Borrower, or (b) any person who is a director, officer or employee (i) of
Borrower or (ii) of any person described in the preceding clause (a).
“Borrower” has the meaning given to such term in the Introduction to this
Agreement.
“Borrowing Agent” means Diversified Restaurant Holdings, Inc., a Nevada
corporation, who has the authority from each Borrower to act on its behalf for
limited purposes, including but not limited to, making requests to Lender,
providing payments due under the Loan, and other communications with Lender as
necessitated by the Loan Documents.
“Business” means (i) the current and future Buffalo Wild Wings franchised
restaurants operated by Borrower or an Affiliate pursuant to a Franchise
Agreement, (ii) the current and future Bagger Dave’s restaurants operated by
Borrower or an Affiliate, (iii) Bagger Dave’s Franchising Corporation’s
franchise and licensing business, (iv) real estate owned by the Borrower or an
Affiliate, (v) restaurant management services provided by the Borrower,
Guarantor or an Affiliate, and (vi) ownership or operations of other concepts
within the hospitality industry.
“Closing Date” means the date of this Agreement.
“Collateral” means all property of Borrower in which Lender has a lien, security
interest or collateral assignment pursuant to the terms of this Agreement or any
other Loan Document.

 

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“Debt Service Coverage Ratio” means for the period in question, on a
consolidated basis for Borrower and all Affiliates, the calculation described as
a ratio of (i) (a) EBITDA, less (b) cash taxes, less (c) maintenance capital
expenditures ($10,000 per store), less (d) distributions, less (e) changes in
Borrower shareholder notes, divided by (ii) “Interest Expense and Principal
Payments of the Indebtedness.” For purposes of this calculation, Interest
Expense and Principal Payments of the Indebtedness shall include payments under
all loan arrangements between Borrower and all Affiliates and its
members/shareholders, whether now existing or hereafter arising and whether or
not reflected on Borrower’s internal financial statements.
“Default Rate” has the meaning set forth in Section 1(d)(iii) of this Agreement.
“DLOC Advance” means each disbursement of the Loan made during the Draw Period
pursuant to this Agreement upon the satisfaction or waiver of the conditions
precedent to such DLOC Advance set forth in Section 2 of this Agreement.
“Draw Period” means the eighteen (18) month period from the Closing Date to the
Term Loan Effective Date.
“Earnings Before Interest and Taxes” means for any period the sum of (i) net
income (or loss) for such period (excluding extraordinary gains and losses),
plus (ii) all interest expense for such period, plus (iii) all charges against
income for such period for federal, state and local taxes.
“EBITDA” means for any period the sum of (i) Earnings Before Interest and Taxes
for such period plus (ii) depreciation expenses for such period, plus
(iii) amortization expenses for such period.
“Entity Guarantor” means Diversified Restaurant Holdings, Inc., a Nevada
corporation, AMC Group, Inc., a Michigan corporation; AMC Wings, Inc., a
Michigan corporation, AMC Burgers, Inc., a Michigan corporation, and Bagger
Dave’s Franchising Corporation, a Michigan corporation, Bagger Dave’s
Franchising Corporation, a Michigan corporation.
“ERISA” has the meaning set forth in Section 4(l) of this Agreement.
“ERISA Affiliate” has the meaning set forth in Section 4(l) of this Agreement.
“Event of Default” has the meaning set forth in Section 8 of this Agreement.
“Excess Cash” means Borrower’s net income under GAAP less (a) all payments to
lenders, (b) reserves for capital improvements, replacements and contingencies,
and (c) any other amounts reasonably necessary to be retained by Borrower for
the effective maintenance of the Business as determined in good faith by
Operator.
“Florida Entities” shall include Buckeye Group, LLC, Buckeye Group II, LLC, MCA
Enterprises Brandon, Inc., AMC North Port, Inc., AMC Riverview, Inc., and any
future entities affiliated with Borrower organized or conducting business in the
State of Florida.
“Franchise Agreements” means the agreements listed on Schedule 1 between Buffalo
Wild Wings International, Inc. and an Affiliate of Borrower for the operation of
a Buffalo Wild Wings Business at a Property.

 

19

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“Funded Debt” of any person as of any date means the sum of all current and
long-term obligations (including all current and long-term obligations with
respect to capital leases) of such person as of such date.
“Future Guarantor” is defined as any person who becomes a twenty-five percent
(25%) or greater owner in any Borrower or Entity Guarantor.
“GAAP” means generally accepted accounting principles as in effect from time to
time.
“Governmental Authority” means any nation, sovereign or government; any state or
other political subdivision thereof; any agency, authority or instrumentality
thereof or of any such state or political subdivision; and any entity or
authority exercising executive, legislative, taxing, judicial, regulatory or
administrative functions of or pertaining to government, including any central
bank, stock exchange, regulatory body, arbitrator, public sector entity,
supra-national entity and any self-regulatory organization.
“Guarantor” means, jointly and severally, the Personal Guarantor and the Entity
Guarantors.
“Guaranty” has the meaning set forth in Section 4(c) of this Agreement.
“Hedge Agreement” means any hedge agreement, interest rate swap, cap, collar or
floor agreement or any other interest rate management devise entered into by
Borrower with any Person in connection with any Indebtedness of Borrower.
“Indebtedness” means (i) all items (except items of capital stock, of capital
surplus, of general contingency reserves or of retained earnings, deferred
income taxes, and amount attributable to minority interest if any) which in
accordance with generally accepted accounting principles would be included in
determining total liabilities on a consolidated basis (if Borrower should have a
subsidiary) as shown on the liability side of a balance sheet as at the date as
of which indebtedness is to be determined, (ii) all indebtedness secured by any
mortgage, pledge, lien or conditional sale or other title retention agreement to
which any property or asset owned or held is subject, whether or not the
indebtedness secured thereby shall have been assumed (excluding non-capitalized
leases which may amount to title retention agreements but including capitalized
leases), and (iii) all indebtedness of others which Borrower or any subsidiary
has directly or indirectly guaranteed, endorse (otherwise than for collection or
deposit in the ordinary course of business), discounted or sold with recourse or
agreed (contingently or otherwise) to purchase or repurchase or otherwise
acquire, or in respect of which Borrower or any subsidiary has agreed to apply
or advance funds (whether by way of loan, stock purchase, capital contribution
or otherwise) or otherwise to become directly or indirectly liable and all net
obligations under any interest rate swap or other interest rate management
device or any Hedge Agreement.
“Interest Rate” means an amount per annum equal to the sum of the LIBOR
Advantage Rate and the LIBOR Margin, or the Term Interest Rate, as applicable.
“LA Interest Period” means, with respect to any LIBOR Advantage Loan, the period
commencing on and including the date hereof (the “Start Date”) and ending on but
excluding the date which numerically corresponds to such date one month later,
and thereafter, each one month period ending on the day of such month that
numerically corresponds to the Start Date. If an LA Interest Period is to end in
a month for which there is no day which numerically corresponds to the Start
Date, the LA Interest Period will end on the last day of such month.
Notwithstanding the date of commencement of any LA Interest Period, interest
shall only begin to accrue as of the Closing Date.

 

20

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“LA Margin” means four percent (4%).
“Lease Adjusted Ratio” as of any date means the ratio of (a) the sum of
(i) Funded Debt as of such date and (ii) Third Party Rent for the twelve
(12) month period ending on such date multiplied by eight (8), to (b) the sum of
EBITDA and Third Party Rent for the twelve (12) month period ending on such
date.
“Lease Agreements” means the Lease Agreements listed on Schedule 2, which
agreements are by and between the parties so indicated on such Schedule.
“Lender” has the meaning given to such term in the introduction to this
Agreement.
“LIBOR Advantage Loan” shall mean any loan or advance for which the applicable
rate of interest is based upon the LIBOR Advantage Rate.
“LIBOR Advantage Rate” means, relative to any LA Interest Period, the offered
rate for delivery in two London Banking Days of deposits of U.S. Dollars for a
term coextensive with the designated LA Interest Period which the British
Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London time on the
day on which such LA Interest Period commences. If the first day of any LA
Interest Period is not a day which is both a (i) business day, and (ii) a London
Banking Day, the LIBOR Advantage Rate shall be determined by reference to the
next preceding day which is both a business day and a London Banking Day. If for
any reason the LIBOR Advantage Rate is unavailable and/or the Lender is unable
to determine the LIBOR Advantage Rate for any LA Interest Period, the Lender
may, at its discretion, either: (a) select a replacement index based on the
arithmetic mean of the quotations, if any, of the interbank offered rate by
first class banks in London or New York for deposits with comparable maturities
or (b) accrue interest at a rate per annum equal to the Lender’s Prime Rate as
of the first day of any LA Interest Period for which the LIBOR Advantage Rate is
unavailable or cannot be determined.
“Lien” means any security interest, mortgage, pledge, assignment, lien or other
encumbrance of any kind, including interests of vendors or lessors under
conditional sale contracts or capital leases.
“Loan” has the meaning set forth in Section 1(a) of this Agreement.
“Loan Documents” means each and every document or agreement executed by any
party evidencing, guarantying or securing any of the Obligations, including, but
not limited to, this Agreement, the Note, the Security Agreement, any Hedge
Agreement, the Trademark Security Agreement, the Guaranty, the Undertaking
Letter and any insurance policy; “Loan Document” means any one of the Loan
Documents.
“London Banking Day” means any day on which dealings in U.S. Dollar deposits are
transacted in the London interbank market.

 

21

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“Management Expenses” means any and all expenses not directly attributable to a
particular franchised store, including salaries, bonuses or other compensation
to non-store level personnel.
“Material Adverse Effect” has the meaning set forth in Section 2(c) of this
Agreement.
“Maturity Date” has the meaning set forth in Section 1(b) of this Agreement.
“Monthly Payment” means the monthly payment due each month during the Term Loan
Period which shall be calculated based on the use attributed to each DLOC
Advance as follows: (a) eighty-four (84) months for equipment and leaseholds;
(b) one hundred forty-four (144) months for leasehold mortgages; or (c) one
hundred eighty (180) months for fee simple real estate.
“Note” has the meaning set forth in Section 1(a) of this Agreement.
“Obligation(s)” means all loans, advances, indebtedness and each and every other
obligation or liability of Borrower owed to Lender, however created, of every
kind and description whether now existing or hereafter arising and whether
direct or indirect, primary or as guarantor or surety, absolute or contingent,
liquidated or unliquidated, matured or unmatured, participated in whole or in
part, created by trust agreement, lease overdraft, agreement or otherwise,
whether or not secured by additional collateral, whether originated with Lender
or owed to others and acquired by Lender by purchase, assignment or otherwise,
and including, without limitation, all loans, advances, indebtedness and each
and every obligation or liability arising under this Agreement, all obligations
to perform or forbear from performing acts, and agreements, instruments and
documents evidencing, guarantying, securing or otherwise executed in connection
with any of the foregoing, together with any amendments, modifications and
restatements thereof, and all expenses and attorneys’ fees incurred by Lender
hereunder or any other document, instrument or agreement related to any of the
foregoing.
“Operator” means T. Michael Ansley, an individual residing in Michigan.
“Organizational Documents” means any articles, bylaws, certificates, operating
agreements, limited liability company agreements or similar organizational
documents of Borrower.
“Permitted Liens” has the meaning set forth in Section 4(h) of this Agreement.
“Personal Guarantor” means T. Michael Ansley, an individual residing in Michigan
and any Future Guarantor.
“Property” means the Buffalo Wild Wings and Bagger Dave’s properties listed on
Schedule 3 attached hereto and made a part hereof.
“Reportable Event” has the meaning set forth in Section 4(k) of this Agreement.
“Security Agreement” means that certain Security Agreement executed by Borrower
in favor of Lender of even date herewith.

 

22

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“Subsidiary” means any corporation, limited liability company or other entity in
which Borrower owns a majority of the voting equity interests or has the ability
to control or direct management of the business of such entity.
“Term Interest Rate” means a fixed rate of interest equal to Lender’s best
wholesale rate plus four percent (4%) per annum, compounded annually, as of the
Term Loan Effective Date.
“Term Loan” means the amortizing term loan that results from a conversion of
DLOC Advances in accordance with Section 2.
“Term Loan Period” means, with respect to the Term Loan, a period of sixty-six
(66) months, commencing on the first day of the month immediately following the
Term Loan Effective Date.
“Term Loan Effective Date” means the date which is eighteen (18) months after
the Closing Date, on which date there shall be an automatic conversion of DLOC
Advances to a Term Loan.
“Term Loan Payment Date” has the meaning set forth in Section 1(c)(ii) of this
Agreement.
“Third Party Rent” of any person for any period means all operating lease
expense for such period paid to third parties which are not Affiliates of such
person.
“Undertaking Letter” shall mean that certain Undertaking Letter dated of even
date herewith by and among Lender, Borrower and Operator.
[Remainder of page intentionally left blank.]

 

23

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IN WITNESS WHEREOF, the parties hereto have executed this Credit Agreement on
the date first written above.

          RBS CITIZENS, N.A.,
a national banking association
      By:   /s/ Timothy Shanahan         Name:   Timothy Shanahan       
Title:   Senior Vice President        FLYER ENTERPRISES, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        ANKER, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        TMA ENTERPRISES OF NOVI, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        TMA ENTERPRISES OF FERNDALE, LLC,
a Michigan limited liability company
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   Manager   

 

24

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          AMC WARREN, LLC,
a Michigan limited liability company
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   Manager        AMC GRAND BLANC, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        AMC PETOSKEY, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        AMC TROY, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        AMC FLINT, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        AMC PORT HURON, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President   

 

25

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          AMC CHESTERFIELD, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        AMC MARQUETTE, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        MCA ENTERPRISES BRANDON, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        BUCKEYE GROUP, LLC,
a Michigan limited liability company
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   Manager        BUCKEYE GROUP II, LLC,
a Michigan limited liability company
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   Manager        AMC NORTH PORT, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President   

 

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          AMC RIVERVIEW, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        BERKLEY BURGERS, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        TROY BURGERS, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        ANN ARBOR BURGERS, INC.,
a Michigan corporation
      By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President        BORROWING AGENT:

DIVERSIFIED RESTAURANT HOLDINGS, INC.,
a Nevada corporation
    By:   /s/ T. Michael Ansley         Name:   T. Michael Ansley       
Title:   President     

     
ADDRESS FOR NOTICE:
Attn: T. Michael Ansley
  WITH A COPY TO (which copy is intended only as information and does not
constitute legal notice hereunder):
27680 Franklin Road
Southfield, MI 48034
  Fahey Schultz Burzych Rhodes PLC
Attn: Mark J. Burzych, Esq.
4151 Okemos Road
Okemos, MI 48864

 

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STATE OF MICHIGAN
COUNTY OF MACOMB
Acknowledged by T. Michael Ansley, as the President of Berkley Burgers, Inc.,
Ann Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker,
Inc., TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc.,
AMC Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc.,
AMC Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC
Riverview, Inc., Diversified Restaurant Holdings, Inc., and as the Manager of
TMA Enterprises of Ferndale, LLC, AMC Warren, LLC, Buckeye Group, LLC and
Buckeye Group II, LLC, before me on the 5 day of May, 2010.

         
 
  Signature   /s/ Janelle Garavaglia
 
         
 
  Printed name   Janelle Garavaglia
 
       
 
            Notary public, State of Michigan, County of Macomb
My commission expires January 27, 2011
Acting in the County of Macomb

 

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EXHIBIT A
BORROWING ENTITIES

•  
Berkley Burgers, Inc.
  •  
Ann Arbor Burgers, Inc.
  •  
Troy Burgers, Inc.
  •  
Flyer Enterprises, Inc.
  •  
Anker, Inc.
  •  
TMA Enterprises of Novi, Inc.
  •  
TMA Enterprises of Ferndale, LLC
  •  
AMC Warren, LLC
  •  
AMC Grand Blanc, Inc.
  •  
AMC Petoskey, Inc.
  •  
AMC Troy, Inc.
  •  
AMC Flint, Inc.
  •  
AMC Port Huron, Inc.
  •  
AMC Chesterfield, Inc.
  •  
AMC Marquette, Inc.
  •  
MCA Enterprises Brandon, Inc.
  •  
Buckeye Group, LLC
  •  
Buckeye Group II, LLC
  •  
AMC North Port, Inc.
  •  
AMC Riverview, Inc.

 

 

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EXHIBIT B
FORM OF NOTE

      $6,000,000.00   May 5, 2010

FOR VALUE RECEIVED, the borrowing entities identified on Exhibit A attached
hereto (jointly and severally, the “Borrower”), promise to pay to the order of
RBS Citizens, N.A., a national banking association (the “Lender”), the principal
sum of Six Million and no/100 Dollars ($6,000,000.00) or such lesser amount that
is the aggregate unpaid principal amount of the Loan made by Lender to Borrower
pursuant to Article 1 of the Credit Agreement (as hereinafter defined), in
immediately available funds at the office of Lender, 28 State Street, Boston, MA
02109, together with interest on the unpaid principal amount hereof at the rates
and on the dates set forth in the Credit Agreement.
Lender is hereby authorized to record based on the loan payment schedule
attached hereto, or to otherwise record in accordance with its usual practice
(including, without limitation in Lender’s electronic data processing system),
the date and amount of each advance and the date and amount of each interest and
principal payment hereunder.
This Note is issued pursuant to, and is entitled to the benefits of, the
Development Line of Credit Agreement dated of even date herewith (which, as it
may be amended or modified and in effect from time to time, is herein called the
“Credit Agreement”), between Borrower and Lender, to which Credit Agreement
reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be
prepaid or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Credit Agreement.

            FLYER ENTERPRISES, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
ANKER, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President   

 

2

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            TMA ENTERPRISES OF NOVI, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
TMA ENTERPRISES OF FERNDALE, LLC,
a Michigan limited liability company
      By:           Name:   T. Michael Ansley        Title:   Manager        AMC
WARREN, LLC,
a Michigan limited liability company
      By:           Name:   T. Michael Ansley        Title:   Manager        AMC
GRAND BLANC, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC PETOSKEY, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC TROY, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President   

 

3

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            AMC FLINT, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC PORT HURON, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC CHESTERFIELD, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC MARQUETTE, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
MCA ENTERPRISES BRANDON, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
BUCKEYE GROUP, LLC,
a Michigan limited liability company
      By:           Name:   T. Michael Ansley        Title:   Manager   

 

4

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            BUCKEYE GROUP II, LLC,
a Michigan limited liability company
      By:           Name:   T. Michael Ansley        Title:   Manager        AMC
NORTH PORT, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
AMC RIVERVIEW, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
BERKLEY BURGERS, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
TROY BURGERS, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President       
ANN ARBOR BURGERS, INC.,
a Michigan corporation
      By:           Name:   T. Michael Ansley        Title:   President   

 

5

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STATE OF                     
COUNTY OF                     
Acknowledged by T. Michael Ansley, the President of Berkley Burgers, Inc., Ann
Arbor Burgers, Inc., Troy Burgers, Inc., Flyer Enterprises, Inc., Anker, Inc.,
TMA Enterprises of Novi, Inc., AMC Grand Blanc, Inc., AMC Petoskey, Inc., AMC
Troy, Inc., AMC Flint, Inc., AMC Port Huron, Inc., AMC Chesterfield, Inc., AMC
Marquette, Inc., MCA Enterprises Brandon, Inc., AMC North Port, Inc., AMC
Riverview, Inc., as the Manager of TMA Enterprises of Ferndale, LLC, AMC Warren,
LLC, Buckeye Group, LLC and Buckeye Group II, LLC, before me on the
                     day of May, 2010.

         
 
  Signature  
 
         
 
  Printed name  
 
       
 
            Notary public, State of Michigan, County of
 
My commission expires
 
Acting in the County of
 

 

6

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Exhibit A to Note

•  
Berkley Burgers, Inc.
  •  
Ann Arbor Burgers, Inc.
  •  
Troy Burgers, Inc.
  •  
Flyer Enterprises, Inc.
  •  
Anker, Inc.
  •  
TMA Enterprises of Novi, Inc.
  •  
TMA Enterprises of Ferndale, LLC
  •  
AMC Warren, LLC
  •  
AMC Grand Blanc, Inc.
  •  
AMC Petoskey, Inc.
  •  
AMC Troy, Inc.
  •  
AMC Flint, Inc.
  •  
AMC Port Huron, Inc.
  •  
AMC Chesterfield, Inc.
  •  
AMC Marquette, Inc.
  •  
MCA Enterprises Brandon, Inc.
  •  
Buckeye Group, LLC
  •  
Buckeye Group II, LLC
  •  
AMC North Port, Inc.
  •  
AMC Riverview, Inc.