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                                                                  EXHIBIT 10.34

                    REVOLVING LINE OF CREDIT PROMISSORY NOTE
                            (Variable Interest Rate)
         $750,000.00                                Memphis, Tennessee
                                                    November 1, 2000

         FOR VALUE RECEIVED, the undersigned, BACK YARD BURGERS, INC., A
Delaware corporation (the "Maker"), promises to pay to the order of FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association having its
principal place of business in Memphis, Tennessee (the "Bank"), the principal
sum of SEVEN HUNDRED FIFTY THOUSAND AND NO/i 00 DOLLARS ($750,000.00) together
with interest from date on the amount of said principal sum disbursed and
remaining from time to time unpaid, until maturity, whether by acceleration or
in due course, at a variable rate of interest per annum equal to the base
commercial rate of interest established from time to time by the Bank (the
"Base Rate"), both principal and interest being payable in lawful money of the
United States of America on the dates and in the manner as follows:

         Commencing on the 1st day of December, 2000, and continuing on the
         same day of each and every month thereafter, equal monthly
         installments of interest only on the principal sum disbursed and
         remaining from time to time unpaid computed at the variable rate set
         forth above, shall be paid to the holder hereof, to and including the
         1ST day of April, 2002, and on the 30th day of April, 2002, the entire
         principal balance, together with all accrued and unpaid interest, if
         not sooner paid, shall be due and payable in full. Interest shall be
         computed on the basis of a 360 day year.

         In the event any installment of interest payable hereunder has not
been received by the Bank or the holder hereof within fifteen (15) days of the
date when due, the disbursed and unpaid principal balance of the indebtedness
hereby evidenced shall bear interest from the first day of the preceding month
until such payment is received at a variable rate (the "Default Rate") per
annum which shall, from day to day, be equal to the lesser of (a) the maximum
rate of interest the Bank may lawfully charge under applicable law the
("Maximum Rate") or (b) a rate equal to (i) four percent (4%) per annum, plus
(ii) the Base Rate established from time to time by the Bank, each change in
the rate to be charged thereon to become effective, without notice to the
undersigned, on the effective date of each change in the Maximum Rate or the
Base Rate, as the case may be. Furthermore, in the event that the principal
balance of the indebtedness hereby evidenced shall not be paid when due
hereunder (whether at its stated maturity or by acceleration) the indebtedness
evidenced hereby shall bear interest after maturity at the Default Rate.

         The Base Rate is one of several interest rate indices employed by the
Bank. The Maker acknowledges that the Bank has made, and may hereafter make
loans bearing interest at rates which are higher or lower than the Base Rate.

         This note is secured by two Deeds of Trust and Fixture Filings,
Assignments of Rents and Security Agreements (the "Mortgages") dated of even
date herewith encumbering certain real property (the "Real Property") located
in Shelby County and Rutherford County, Tennessee, the rents, issues and
profits derived and to be derived from the Real Property, and by certain
personal property, both tangible and intangible, present and future, now or
hereafter located upon or related to the Real Property.


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         All installments of interest, and the principal hereof, are payable at
the office of First Tennessee Bank National Association, 165 Madison Avenue,
Memphis, Tennessee 38103, or at such other place as the holder may designate in
writing, in lawful money of the United States of America, which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment.

         If the Maker shall fail to make payment of any installment of
principal or interest, as above provided and same shall be unremedied for a
period of fifteen (15) days, or upon any default in the terms and provisions of
the Mortgages or upon any default in any other mortgage, trust deed, security
agreement, or other instrument of pledge or hypothecation which now or
hereafter secures the payment of the indebtedness evidenced hereby, or upon the
occurrence of any default by Maker in the terms and provisions of the Loan
Agreement, or upon any default in the payment or performance of any other
indebtedness, liability or obligation now or hereafter owed by the Maker to the
holder hereof, then and in any such event, the entire unpaid principal balance
of the indebtedness evidenced hereby, together with all interest then accrued,
shall, at the absolute option of the holder hereof, at once become due and
payable, without demand or notice, the same being expressly waived.

         If this Note is placed in the hands of an attorney for collection, by
suit or otherwise, or to protect the security for its payment, or to enforce
its collection, or to represent the rights of the Bank in connection with any
loan documentation executed in connection herewith, or to defend successfully
against any claim, cause of action or suit brought by the Maker against the
Bank, the Maker shall pay on demand all costs of collection and litigation
(including court costs), together with a reasonable attorney's fee.

         The Maker and any endorsers or guarantors hereof waive protest,
demand, presentment, and notice of dishonor, and agree that this Note may be
extended, in whole or in part, without limit as to the number of such
extensions or the period or periods thereof, without notice to them and without
affecting their liability thereon.

         It is the intention of the Bank and the Maker to comply strictly with
applicable usury laws; and, accordingly, in no event and upon no contingency
shall the holder hereof ever be entitled to receive, collect, or apply as
interest any interest, fees, charges or other payments equivalent to interest,
in excess of the maximum effective contract rate which the Bank may lawfully
charge under applicable statutes and laws from time to time in effect; and in
the event that the holder hereof ever receives, collects, or applies as
interest any such excess such amount which, but for this provision would be
excessive interest, shall be applied to the reduction of the principal amount
of the indebtedness hereby evidenced; and if the principal amount of the
indebtedness evidenced hereby, all lawful interest thereon and all lawful fees
and charges in connection therewith, are paid in full, any remaining excess
shall forthwith be paid to the Maker, or other party lawfully entitled thereto.
All interest paid or agreed to be paid by the Maker shall, to the maximum
extent permitted under applicable law, be amortized, prorated, allocated and
spread throughout the full period until payment in full of the principal so
that the interest hereon for such full period shall not exceed the maximum
amount permitted by applicable law. Any provision hereof, or of any other
agreement between the holder hereof and the Maker, that operates to bind,
obligate, or compel the Maker to pay interest in excess of such maximum
effective contract rate shall be construed to require the payment of the
maximum rate only. The provisions of this paragraph shall be given precedence
over any other provision contained herein or in any other agreement between the
holder hereof and the Maker that is in conflict with the provisions of this
paragraph.

         This Note shall be governed and construed according to the statutes
and laws of the State of Tennessee from time to time in effect, except to the
extent that Section 85 of Title 12 of the United States Code (or other


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applicable federal statute) may permit the charging of a higher rate of
interest than applicable state law, in which event, such applicable federal
statute, as amended and supplemented from time to time shall govern and control
the maximum rate of interest permitted to be charged hereunder; it being
intended that, as to the maximum rate of interest which may be charged,
received, and collected hereunder, those applicable statutes and laws, whether
state or federal, from time to time in effect, which permit the charging of a
higher rate of interest, shall govern and control; provided, always, however,
that in no event and under no circumstances shall the Maker be liable for the
payment of interest in excess of the maximum rate permitted by such applicable
law, from time to time in effect.

         The indebtedness evidenced hereby may be prepaid in part or in full at
any time without penalty. Any and all partial prepayments shall be applied to
the reduction of the indebtedness evidenced hereby in inverse order of its
maturity and shall not abridge or postpone the obligation to make the regular
payments as herein provided until the indebtedness evidenced hereby has been
paid in full.


                                    BACK YARD BURGERS, INC.

                                    By: /s/ Lattimore M. Michael
                                       ----------------------------------------


                                    Title: Chief Executive Officer
                                          -------------------------------------


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                                 LOAN AGREEMENT
                              (Back Yard Burgers)


This LOAN AGREEMENT ("Loan Agreement") is made this the 1st day of November,
2000, by and between BACK YARD BURGERS, INC. , a Delaware corporation, whose
principal place of business is located at 1657 N. Shelby Oaks Dr. Suite 105,
Memphis, TN 38134 (the Borrower"), AND FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, a national banking association organized and existing under the
statutes of the United States of America, with offices at 165 Madison Ave.,
Memphis, TN 38103 (the "Bank").

In Consideration of the Loan (as hereinafter defined) of the Bank to the
Borrower and the mutual covenants herein contained, the parties agree as
follows:

SECTION 1: DEFINITIONS AND ACCOUNTING TERMS

1.1 Certain Defined Terms. For purposes of this Loan Agreement, the following
terms shall have the following meanings:

"Debt Coverage Ratio" means EBITDA divided by interest expense and current
maturities of long term debt, excluding the balloon portion due on any debt
with maturities less than one (1) year, measured on a rolling four (4) quarter
basis.

"Debt to Worth Ratio" means total liabilities divided by 'tangible
stockholders' equity.

"Event of Default" has the meaning assigned to that phrase in Section 6.

"Environmental Laws" means all local, state or federal laws, rules or
regulations pertaining to environmental regulation, contamination or cleanup,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976 or any state lien or superlien or environmental cleanup statutes.

"Guarantors" shall mean Little Rock Back Yard Burgers, Inc., and BYB
Properties, Inc., both Delaware corporations.

"Guaranty Agreements" shall mean the guaranty agreements executed by the
Guarantors guaranteeing the payment of the indebtedness of the Borrower to the
Bank.

"Hazardous Substances" shall mean and include all hazardous and toxic
substances, wastes or materials, any pollutants or contaminants (including,
without limitation, asbestos and raw materials which included under or
regulated by any Environmental Laws.

"Loan" means the loan from the Bank to the Borrower in the principal amount of
$750,000 evidenced by the Note.

"Loan Documents" means this Loan Agreement, the Note, the Mortgages, the
Guaranty Agreements, the Security Agreement and all other documents,
instruments, guarantees, certificates and agreements executed and/or delivered
by the Borrower, the Guarantors or any other third party in connection with the
Loan.

"Mortgages" means those certain Deeds of Trust and Fixture Filings, Assignments
of Rents, and Security


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Agreements of even date herewith executed by the Borrower in favor of the Bank
securing the Loan, which Mortgages encumber real property located in Shelby
County and Rutherford County, Tennessee.

"Note" means the term note of even date herewith in the principal amount of
$750,000 as such Note may be modified, renewed or extended from time to time;
and any other note or notes executed at any time to evidence the indebtedness
under this Loan Agreement, in whole or in part, and any renewals, modifications
and extensions thereof, in whole or in part.

"Security Agreement" means the Security Agreement, which may be contained in
the Mortgage, pursuant to which the Borrower has granted to the Bank a security
interest in certain personal property of the Borrower.

"Tangible Net Worth" means stockholders' equity plus subordinated debt less
tangible assets.

1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of Borrower's financial
statements delivered pursuant to Section 2.1 hereof.

SECTION 2: THE LOAN

2.1 Conditions Precedent to Closing. The obligation of the Bank to fund the
Loan hereunder is subject to the condition precedent that the Bank shall have
received all of the following in form and substance satisfactory to the Bank:

(a)      This Loan Agreement.
(b)      The Note.
(c)      The Security Agreement, together with such financing statements as the
         Bank may require to perfect its security interest therein.
(d)      The Guaranty Agreements of the Guarantors.
(e)      Current signed financial statements of the Borrower and the Guarantors
         in form satisfactory to the Bank,
(f)      Certified copy of the Borrower's and the Guarantors' charters and
         bylaws and all amendments thereto, and certificates of good standing
         for the Borrowers and the Guarantors from the states of their
         formation and such other states as the Bank shall require.
(g)      Certificates of insurance from an insurance broker satisfactory to the
         Bank setting forth the information concerning insurance which is
         required by the Security Agreement and the Mortgages; or, if the Bank
         shall so require the original insurance policies evidencing such
         insurance.
(h)      The Mortgages, together with, unless waived by the Bank, title
         commitments from title insurance companies acceptable to the Bank,
         providing for the issuance of mortgagee's loan policies insuring the
         liens of the Mortgages in form, substance and amounts satisfactory to
         the bank, containing no exceptions which are unacceptable to the Bank,
         and containing such endorsements as the Bank may require.
(i)      Current surveys of the properties subject to the Mortgages, indicating
         the location of all building lines, easements (visible, reflected in
         the public records or otherwise) and any existing improvements or
         encroachments, which surveys shall contain no set of facts
         objectionable to the Bank and shall be certified by the surveyors to
         the Bank in a manner satisfactory to Bank.
(j)      Appraisals of the real estate described in the Mortgages.
(k)      Phase l environmental reports on the real estate described in the
         Mortgages showing no violation of any


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         Environmental Laws and no Hazardous Substances, and containing such
         facts, findings and recommendations as are acceptable to the Bank. (1)
         Such other information and documentation as the Bank shall deem to be
         necessary or desirable in connection with the finding of the Loan.

SECTION 3: REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants that:

3.1 Accuracy of Submissions. All documents and information submitted by the
Borrower or the Guarantors to the Bank were, as of the date of submission, and
now remain true, complete and correct in all material respects. All financial
statements submitted to the Bank in connection with the Loan are correct and
complete and fairly present the financial condition of the Borrower or the
Guarantor(s), as the case may be, as of the date or for the period therein
stated; and there are no material contingent liabilities or obligations which
are not duly noted therein.

3.2 No Material Change. There has occurred no material change in the business,
properties or condition, financial or otherwise, of the Borrower or the
Guarantors since the date of their financial statements submitted to the Bank.

3.3 Title to Assets Pledged. The Borrower has good and marketable title to all
properties and assets pledged or mortgaged to the Bank as security for the
Loan, subject only to liens and encumbrances to which the Bank has consented in
writing.

3.4 Hazardous Substances. No Hazardous Substances are located on or have been
stored, processed or disposed of on or released or discharged (including ground
water contamination) from any property owned by the Borrower and no above or
underground storage tanks exist on such property. No private or governmental
lien or judicial or administrative notice or action related to Hazardous
Substances or other environmental matters has been filed against any property
owned by the Borrower or otherwise issued to or received by the Borrower.

3.5 Good Standing. The Borrower and all Guarantors are duly organized, validly
existing and in good standing under the laws of their respective states of
organization and have the power and authority to own their property and to
carry on their business in each jurisdiction in which they do business.

3.6 Authority and Compliance. The Borrower and each Guarantor have full power
and authority to execute and deliver the Loan Documents to which each is a
party and to incur and perform the obligations provided for therein, all of
which have been duly authorized by all proper and necessary action of the
appropriate governing body of Borrower and each such Guarantor. No consent or
approval of any public authority or other third party is required as a
condition to the validity of any Loan Document, and the Borrower, and each
Guarantor is in material compliance with all laws and regulatory requirements
to which each is subject except where failure to comply would not have a
material adverse effect on the affairs and property of the Borrower or such
Guarantor.

3.7 Binding Agreement. This Loan Agreement and the other Loan Documents
executed by the Borrower and each Guarantor constitute valid and legally
binding obligations of the Borrower and each Guarantor enforceable in
accordance with their respective terms, except as enforceability may be limited
by: (1) applicable bankruptcy, reorganization, insolvency, moratorium or other
similar laws affecting the enforceability of creditors' rights generally; (2)
the effect of applicable fraudulent conveyance and/or transfer laws, both state
and federal; (3) general principles of equity (regardless of whether considered
in a proceeding in equity or law) including, without limitation, the possible


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unavailability of specific performance, injunctive relief or any other
equitable remedy; and (4) concepts of materiality, reasonableness, good faith
and fair dealing.

3.8 Litigation. There is no proceeding involving the Borrower or any Guarantor
pending or, to the knowledge of the Borrower, threatened before any court or
governmental authority, agency or arbitration authority, except as disclosed to
the Bank in writing and acknowledged by the Bank prior to the date of this Loan
Agreement.

3.9 No Conflicting Agreements. There is no charter, bylaw, stock provision, or
other document pertaining to the organization, power or authority of the
Borrower or any Guarantor, and no provision of any existing agreement,
mortgage, indenture or contract binding on the Borrower or any Guarantor, or
affecting its or their property which would conflict with or in any way prevent
the execution, delivery or carrying out the term of this Loan Agreement and the
other Loan Documents.

3.10 Taxes. All taxes and assessments due and payable by the Borrower and the
(Guarantors have been paid or are being contested in good faith by appropriate
proceedings and the Borrower and each Guarantor have filed all tax returns
which are required to be filed by any laws applicable thereto.

SECTION 4: FINANCIAL COVENANTS OF THE BORROWER

The Borrower agrees that at all times until payment in full of the Loan, unless
the Bank shall otherwise consent in writing, such consent to be at the sole
discretion of the Bank, the Borrower will maintain the following financial
covenants:

4.1 Tangible Net Worth. A minimum Tangible Net Worth of not less than Seven
Million and No/100 Dollars ($7,000,000.00).

4.2 Debt to Worth Ratio. A maximum Debt to Worth Ratio not to exceed 2.0 to
1.0.

4.3 Debt Coverage Ratio. A minimum Debt Coverage Ratio of at least 1.50 to 1.0.

SECTION 5: OTHER COVENANTS OF THE BORROWER

The Borrower covenants and agrees that at all times until payment in full of
the Loan, unless the Bank shall otherwise consent in writing, such consent to
be al the sole discretion of the Bank unless otherwise specifically provided
herein:

5.1 Financial Reports and Other Data. The Borrower shall provide to the Bank
its quarterly 1OQ financial statement within fifty (50) days of its fiscal
quarter end, and its annual report/10K within one hundred (100) days of its
fiscal year end. The Borrower shall also provide a quarterly compliance
certificate within ten (10) days of its fiscal quarter end, certifying
compliance with all financial covenants. The Borrower shall cause each
Guarantor to provide a current financial statement within thirty (30) days
after the end of each calendar year, to include assets, liabilities, contingent
liabilities and income sources.

5.2 Additional Information. The Borrower will furnish such other information
regarding the operations, business affairs and financial condition of the
Borrower as the Bank may reasonably request, including but not limited to
copies of its books of account and tax returns, and all information furnished
to any governmental authority, will permit the copying of the same, and will
permit any person designated by the Bank to visit and inspect any of the
properties, books and


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financial reports of the Borrower and to discuss its affairs, finances and
accounts, at all such reasonable times and as often as the Bank may reasonably
request.

5.3 Environmental Laws. The Borrower will maintain at all times all of the
Borrower's property in compliance with all Environmental Laws, and immediately
notify the Bank of any notice, action, lien or other similar action alleging
either the location of any Hazardous Substances or the violation of any
Environmental Laws with respect to any of the Borrower's property or
operations.

5.4 Consolidation of Merger; Sale or Acquisition of Assets. The Borrower will
not enter into any transaction of merger or consolidation, acquire any other
business or corporation, acquire all or substantially all of the property or
assets of any other individual, partnership, corporation, trust, association or
other form of organization, or sell, lease transfer or dispose of all or a
substantial part of its assets without the Bank's prior written consent, such
consent not to be unreasonably withheld, it being understood and acknowledged
that the Borrower does on occasion purchase stores from franchisees.

5.5 Notice of Default. At the time of the Borrower's first knowledge or notice,
the Borrower will furnish the Bank with written notice of the occurrence of any
event or the existence of any condition which constitutes or upon written
notice or lapse of time or both would constitute an Event of Default under the
terms of this Loan Agreement.

SECTION 6:   EVENTS OF DEFAULT

An "Event of Default" shall exist if any of the following shall occur":

6.1 Payment or Performance of Obligations. The Borrower defaults in the prompt
payment (within any grace period allowed by the Note) or performance of any
obligations under the Notes (after the expiration of any applicable notice and
right to cure period contained in the Note), this Loan Agreement or any
instrument or document securing the Loan; or in the prompt payment or
performance when due of any other indebtedness, liabilities, or obligations to
the Bank, whether now existing or hereafter created or arising, direct or
indirect, absolute or contingent; or there shall occur an event which, under
the terms of the Notes or any instrument or document securing the Loan, would
permit the Bank to accelerate the maturity of the Loan; or

6.2 Payment of Other Obligations. The Borrower defaults with respect to any
other agreement to which it is a party or with respect to any other
indebtedness when due; or

6.3 Representation or Warranty. Any representation or warranty made by the
Borrower herein, or in any report, certificate, financial statement or other
writing furnished in connection with or pursuant to the Loan Agreement shall
prove to be false, misleading or incomplete in any material respect on the date
as of which made; or

6.4 Bankruptcy, Etc. The Borrower or any of the Guarantors shall make an
assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a custodian, receiver
or any trustee for it or him or a substantial part of its or his assets, or
shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or if there shall have been
filed any such petition or application, or any such proceeding shall have been
commenced against the Borrower, in which an order for relief is entered or
which remains undismissed for a period of thirty (30) days or more; or the
Borrower by any act or omission shall indicate its or his consent to, approval
of or


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acquiescence in any such petition, application or proceeding or order for
relief or the appointment of a custodian, receiver or any trustee for it or him
or any substantial part of part of its or his properties, or shall suffer any
such custodianship, receivership or trusteeship to continue undischarged for a
period of thirty (30) days or more; or the Borrower or any of the Guarantors
shall generally not pay its or his debts as such debts become due; or

6.5 Insecurity. The Bank shall in good faith deem itself insecure, in that the
prospect of payment or performance of the Loan or any obligations in connection
therewith is impaired.

6.6 Remedy. Upon the occurrence of any Event of Default, as specified herein,
the Bank may, at its option, declare the entire unpaid principal balances of
the Notes, all interest accrued and unpaid thereon and all amounts payable
under this Loan Agreement to be immediately due and payable for all purposes,
and may exercise all rights and remedies available to it under any instrument
or document securing the Loan, or available at law or in equity. All such
rights and remedies are cumulative and nonexclusive, and may be exercised by
the Bank concurrently or sequentially, in such order as the Bank may choose.

SECTION 7: MISCELLANEOUS

7.1 Amendments. The provisions of this Loan Agreement, the Notes or any
instrument or document executed pursuant hereto or securing the indebtedness
may be amended or modified only by an instrument in writing signed by the
parties hereto.

7.2 No Waiver, Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Waiver of any
right, power, or privilege is a waiver only as to the specified item. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.

7.3 Indemnification. The Borrower agrees to indemnify the Bank from and against
any and all claims, losses and liabilities, including, without limitation,
reasonable attorneys' fees, growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities resulting solely and directly from the Bank's gross
negligence or willful misconduct. The indemnification provided for in this
Section shall Survive the payment in full of the Loan.

7.4 Successors. This Loan Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights
hereunder or any interest therein.

7.5 Liens; Setoff by the Bank. The Borrower hereby grants to the Bank a
continuing lien, as security for the Loan and all other indebtedness of the
Borrower to the Bank, upon any and all of its moneys, securities and other
property and the proceeds thereof, flow or hereafter held or received by or in
transit to, the Bank from or for the Borrower, and also upon any and all
deposits (general or special, matured or unmatured) and credits of the Borrower
against the Bank, at any time existing. Upon thc occurrence of any Event of
Default as specified above, the Bank is hereby authorized at any time and from
time to time, without notice to the Borrower to set off, appropriate, and apply
any and all items herein above referred to against any or all indebtedness of
the Borrower to the Bank.

7.6 Governing Law. This Loan Agreement shall be governed and construed in
accordance with the laws of the State of


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Tennessee; except (a) that the provisions hereof which relate to the payment of
interest shall be governed by (i) the laws of the United States or, (ii) the
laws of the State of Tennessee, whichever permits the Bank to charge the higher
rate, and (b) to the extent that the liens in favor of the Bank, the perfection
thereof, and the rights and remedies of the Bank with respect thereto, shall,
under mandatory provisions of law, be governed by the laws of a state other
than Tennessee.

7.7 Terminology; Section Headings. All personal pronouns used in this Loan
Agreement whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice
versa. Section headings are for convenience only and neither limit nor amplify
the provisions of the Loan Agreement.

7.8 Severability. Should any one or more of the provisions of this Loan
Agreement be determined to be illegal or unenforceable, all other provisions,
nevertheless, shall remain effective and binding on the parties hereto.

7.9 Interest Limitations. (a) The Loan and the Notes evidencing the Loan,
including any renewals or extensions thereof, may provide for the payment of
any interest rate (i) permissible at the time the contract to make the Loan is
executed, (ii) permissible at the time the Loan is made or any advance
thereunder is made, or (iii) permissible at the time of any renewal or
extension of file Loan.

(b) It is the intention of the Bank and the Borrower to comply strictly with
applicable usury laws; and, accordingly, in no event and upon no contingency
shall the Bank ever be entitled to receive, collect, or apply as interest any
interest, fees, charges or other payments equivalent to interest, in excess of
the maximum rate which the Bank may lawfully charge under applicable statutes
and laws from time to time in effect; and in the event that the holder of the
Notes ever receives, collects, or applies as interest any such excess, such
amount which, but for this provision, would be excessive interest, shall be
applied to the reduction of the principal amount of the indebtedness thereby
evidenced; and if the principal amount of the indebtedness evidenced thereby,
and all lawful interest thereon, is paid in full, any remaining excess shall
forthwith be paid to the Borrower, or other party lawfully entitled thereto. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the highest rate which the Bank may lawfully charge under
applicable law from time to time in effect, the Borrower and the Bank shall, to
the maximum extent permitted under applicable law, characterize any
non-principal payment as a reasonable loan charge, rather than as interest. Any
provision hereof, or of any other agreement between the Bank and the Borrower,
that operated to bind obligate, or compel the Borrower to pay interest in
excess of such maximum rate shall be construed to require the payment of the
maximum rate only. The provisions of this paragraph shall be given precedence
over any other provision contained herein or in any other agreement between the
Bank and the Borrower that is in conflict with the provisions of this
paragraph.

7.10 Fees and Expenses. The Borrower agrees to pay, or reimburse the Bank for,
the actual out-of-pocket expenses, including counsel fees and fees of any
accountants, inspectors or other similar experts, as deemed necessary by the
Bank, incurred by the Bank in connection with the development, preparation,
execution, amendment, recording, administration (excluding the salary of Bank's
employees and Bank's normal and usual overhead expenses) or enforcement of; or
the preservation of any rights under this Loan Agreement, the Notes, and any
instrument or document now or hereafter securing the Loan.

7.11 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH


                                      10
<PAGE>   11


RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED
HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

IN WITNESS WHEREOF, the Borrower and the Bank have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year 1st
above written.



                                    Borrower:

                                    BACK YARD BURGERS, INC.


                                    By:      /s/ Lattimore M. Michael
                                       ----------------------------------------
                                    Title:   Chief Executive Officer
                                          -------------------------------------



                                    Bank:

                                    FIRST TENNESSEE BANK NATIONAL ASSOCIATION


                                    By:      /s/ Bob Nieman
                                       ----------------------------------------
                                    Title:   Senior Vice President
                                          -------------------------------------


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