**Exhibit10.47**

 

**EQUIPMENT FINANCE AGREEMENT**

 

American Express BusinessFinance Corporation (“Secured Party”)

600 Travis Street, Suite1300

Houston, TX  77002

PHONE  800-745-9292        FAX 866-878-7866

 

Agreement Number:  412209/809094

 
| **A. Debtor:**         | **Supplier:**                                                       |   |
|------------------------|---------------------------------------------------------------------|--------|
| Schlotzsky’s Inc. | See attached invoice(s)  or equipment list for Supplier information |   |
| 203 Colorado Street    |                                                                |   |
| Austin, TX 78701       |                                                                |   |
| (512) 236-3620         |                                                                |   |

 

**B.****                                    Collateral**(Quantity, Description & Serial No.)

See attached invoice(s)  orequipment list (“Collateral”)

**Location**:203 Colorado Street, Sustin, TX  78701

 

**C.****                                    Scheduleof Payments:**

 
| Initial Term (In Months):   | 60        |
|-----------------------------|-----------|
| Total Number of Payments:   | 60        |
| Amount of Each Payment ($): | 10,186.11 |
| Total Initial Payment ($):  | 10,586.11 |
| First ($):                  | 10,186.11 |
| Last ($):                   | 0.00      |
| Doc. Fee ($):               | 200.00    |
| Deposit ($):                | 0.00      |

 

**D.****                                    DISCLAIMER OF WARRANTIES AND CLAIMS:**** LIMITATION OF REMEDIES.**  THERE ARE NO WARRANTIES BY OR ON BEHALF OFSECURED PARTY AND NEITHER THE SUPPLIER NOR ANY OTHER PARTY IS SECURED PARTY’SAGENT. DEBTOR ACKNOWLEDGES AND AGREES BY ITS SIGNATURE BELOW AS FOLLOWS:  (A) SECURED PARTY MAKES NO WARRANTIES EITHEREXPRESS OR IMPLIED AS TO THE CONDITION OF THE COLLATERAL, ITS MERCHANTABILITY,ITS FITNESS OR SUITABILITY FOR ANY PARTICULAR PURPOSE, ITS DESIGN, ITSCONDITION, ITS CAPACITY, ITS QUALITY, OR WITH RESPECT TO ANY CHARACTERISTICS OFTHE COLLATERAL; (B) DEBTOR ACCEPTS COLLATERAL “AS IS” AND WITH ALL FAULTS;  (C) DEBTOR ACKNOWLEDGES THAT THE COLLATERALWILL BE USED SOLELY FOR COMMERCIAL OR BUSINESS PURPOSES; (D) IF THE COLLATERALIS NOT PROPERLY INSTALLED, DOES NOT OPERATE AS REPRESENTED OR WARRANTED BY THESUPPLIER OR MANUFACTURER, OR IS UNSATISFACTORY FOR ANY REASON, REGARDLESS OFCAUSE OR CONSEQUENCE, DEBTOR’S ONLY REMEDY, IF ANY, SHALL BE AGAINST THESUPPLIER OR MANUFACTURER OF THE COLLATERAL AND NOT AGAINST SECURED PARTY; (E)DEBTOR SHALL HAVE NO REMEDY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES AGAINSTSECURED PARTY; AND (F) NO DEFECT, DAMAGE OR UNFITNESS OF THE COLLATERAL FOR ANYPURPOSE SHALL RELIEVE DEBTOR OF THE OBLIGATION TO MAKE PAYMENTS OR RELIEVEDEBTOR OF ANY OTHER OBLIGATION UNDER THIS AGREEMENT.

 

**E.****                                     ****Amendments:**No term or provision of this Agreement may be amended, altered, waived ordischarged except by a written instrument signed by all parties to this Agreement.

 

**THISAGREEMENT, THE TERMS OF WHICH HAVE BEEN FREELY NEGOTIATED BY EACH PARTY, ISSUBJECT TO THE TERMS AND CONDITIONS ON THE REVERSE SIDE OR FOLLOWING PAGE WHICHARE MADE A PART HEREOF AND WHICH DEBTOR AND SECURED PARTY ACKNOWLEDGE THEY HAVEREAD AND ACCEPTED.**

 

**THIS ISA NON-CANCELABLE AGREEMENT.**

 
| Secured Party: | American Express  Business Finance Corporation | Debtor:     | Schlotzsky’s, Inc. |
|----------------|------------------------------------------------|-------------|-------------------------|
| By:            | /s/  M.A. OWEN                                 |        | By:                     | /s/  JOHN C. WOOLEY |   |
| Title:         | Team Leader                                    | Print Name: | John  C. Wooley         |
|           |                                           | Title:      | CEO and President       |
|                |                                                |             |                         |  |  |

 

**Certificateof acceptance:** The undersigned Debtor certifies to SecuredParty that all items of Collateral referred to above or on the attachment(s)hereto have been received and irrevocably accepted by the Debtor and were atthe time of receipt in good order and condition and acceptable to use.  Debtor approves payment by Secured Party tothe Supplier.  Debtor hereby certifiesthat Secured Party has fully and satisfactorily performed all covenants andconditions to be performed by it under the Agreement.  Debtor agrees to enforce, in its own name,all warranties, agreements or representations, if any, which may be made by theSupplier in respect to the Collateral.

 
|   | /s/  JOHN C. WOOLEY |
|--------|---------------------|
|   | Signature           | Date |

 

**REQUESTFOR ELECTRONIC PAYMENT**

**Pleaseattach a voided check from the account to be debited**

 

The undersigned herebyauthorizes and requests Secured Party to initiate electronic debit entries (andcredit entries and adjustments for any debit entries in error) or affect acharge by any other commercially accepted practice to the account indicatedbelow in the financial institution named below (“Depository”).  The undersigned hereby authorizes andrequests the Depository to honor the debit and/or credit entries initiated bySecured Party.  This authorization is forpayments due under the referenced Agreement. This authority is to remain inforce until such time as all amounts due under the Agreement are paid in fullor until Secured Party and Depository have received written notification fromthe undersigned terminating this authorization in such time and manner as toafford Secured Party and Depository a reasonable opportunity to act on it.

 
| Customer Name  Printed:  Schlotzsky’s, Inc. | Agreement Number:  412209/809094 |
|-------------------------------------------------------|---------------------------------------|
| Depository Name and  Branch:                          |                                  |   | Account Number: |   |
| Depository Address  (city & state):               |                                  |   |   |
| Depository Telephone  Number:                         |                                  |   | Customer Signature: |   |
|                                                       |                                       |  |  |  |  |  |  |

 

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##### **TERMSAND CONDITIONS**

 

**Agreement Number:  412209/809094**

 

**1.****                                      Definitions**;**Reports:**  The words “you” and “your” refer to theDEBTOR, its successors and assigns, as shown on the reverse side or precedingpage, as applicable (the “first page”). The words “we”, “us” and “our” refer to the SECURED PARTY, itssuccessors and assigns, as shown on the first page. You authorize us and ourdesignees to obtain investigative credit reports, regarding you and eachguarantor, from a credit bureau or a credit agency and to investigate thereferences given on any statement or data obtained and to share such reportswith others.

 

**2.****                                      Acceptance:**We agree to lend to you, and you agree to borrow from us, an amount for thepurchase of: equipment, items, products, software, services, and other personalproperty described or referenced on the first page (“Collateral”), for the termshown on the first page (“Initial Term”), which shall commence on thecommencement of Secured Party’s billing cycle following the funding of the loanevidenced by the Agreement (the “Loan”). We shall have no obligations hereunder until we accept and sign this Agreementat our offices.  If this Agreement isexecuted by you and thereafter sent to us by facsimile transmission, then untilsuch time as we have received the Agreement with your manual signature thereon,such facsimile transmission shall constitute, upon acceptance and execution byus in our offices, the original Agreement and chattel paper and shall beadmissible for all purposes as the original Agreement.  You agree to promptly forward to us theAgreement with your manual signature thereon and upon receipt by us, theAgreement with your manual signature thereon shall constitute the chattel paperin lieu of such facsimile transmission.

 

**3.****                                      SecurityInterest:** You hereby grant to us a security interest under the UniformCommercial Code (“UCC”) in the property described or referenced as Collateraland all accessions and additions thereto and replacements thereof and allproceeds and products of the foregoing (collectively, the “Collateral” andindividually an “Item” or “Item of Collateral”).  Such security interest is granted to secure payment andperformance by you of your obligations hereunder and under any other present orfuture agreement with us.

 

**4.****                                      Payments:**You promise to pay us the payments shown on the same page, in advance,commencing as of the first day of the Initial Term and continuing on the firstday of each (each, a “Payment) month in which a payment is due (each day aPayment is due hereunder a “Payment Date”), without need of an invoice;provided, as indicated in the Schedule of Payments, the payments included inthe Total Initial Payment shall be paid upon your execution of thisAgreement.  We reserve the right toadjust the payment shown in the Schedule of Payments, by up to 10% to reflectchanges in the final amounts paid to the Supplier or amount borrowed.  Any such adjustment shall be reflected on asubsequent invoice to be sent to you within 30 days.  If the contemplated transaction is not consummated, the TotalInitial Payment may be retained, by us, as partial compensation for costs and expensesincurred in preparation for the transaction. On second Payment Date in addition to the Payment due on such date youagree to pay us an amount equal to 1/30th of the Payment Amount foreach day from and including the date the loan is funded to but excluding thefirst day of the Interim Term.  Yourobligation to make payments and pay other amounts hereunder is absolute andunconditional and not subject to abatement, reduction or set-off for any reasonwhatsoever. The Initial Term shall continue for the number of months indicatedon the first page. The Deposit shown on the first page shall not bear interestand we may apply the Deposit to cure any default, in which event you willpromptly restore the Deposit to its full amount.  After all of the obligations under this Agreement are fully paidand performed, any remaining balance of the Deposit shall be refunded toyou.  Provided that no event of defaulthas occurred or is continuing, Lessee may terminate this EFA at any time on orbefore the 30th day following the date of this Addendum by making acash payment in the amount of $494,712.03; or terminate this EFA 30 days afterbut before the 60th day following the date of this Addendum bymaking a cash payment in the amount of $489,371.18; or terminate this EFA afterthe 60th day but before the 90th day following the dateof this Addendum by making a cash payment in the amount of $483,976.92.

 

**5.****                                      Location**:You agree to maintain records showing the location of each item ofCollateral.  You shall report suchlocation to us upon our request.  Yourfailure, to maintain records showing the location of each item of Collateraland/or to report the location of each item of Collateral shall constitute adefault.

 

**6.****                                      Maintenance;Installation:** You are responsible for installing and keeping the Collateralin good working order. You shall not make any alterations, additions orimprovements to the Collateral, which detract from its economic value orfunctional utility.  All additions andimprovements made to the Collateral shall be deemed accessions thereto, andshall not be removed if removal would impair the Collateral’s economic value orfunctional utility.  If the Collateralis damaged or lost, you agree to continue making scheduled payments unless youpay the Casualty Value pursuant to Section 13.

 

**7.**                                      **Insurance:**  You agree to keep the Collateral fullyinsured against loss until this Agreement is paid in full and to have us namedas loss payee. You also agree to obtain a general public liability insurancepolicy, with minimum limits of $100,000/$300,000 for bodily injury and $50,000for property damage,  from anyone who isacceptable to us. You agree to provide us with certificates or other evidenceof insurance acceptable to us, before the Initial Term begins, and during theterm.  If at any time you have failed todeliver to us a valid certificate of insurance reflecting such insurance asbeing in effect, then we will have the right, but no obligation, to have suchinsurance protecting us placed for the term of the Agreement at your expense;and if so placed, we will add to your payment and you will pay us our costs ofobtaining such insurance and any customary charges or fees of ours or ourdesignee associated with such insurance together with interest thereon at the maximumrate permitted by applicable law.

 

**8.****                                      Taxesand Fees:** You agree to pay when due or reimburse us for all taxes, fees,fines and penalties relating to use or ownership of the Collateral or to thisAgreement, including documentary stamp taxes, now or hereafter imposed, leviedor assessed by any federal, state or local government or agency.  If any federal, state, county or localgovernment or agency requires any taxes, charges or fees to be paid in advance,and we pay such taxes, charges or fees, we reserve the right to adjust thepayment shown in the Schedule of Payments, to reflect the payment of suchtaxes, charges or fees.  Any suchadjustment shall be reflected on a subsequent invoice to be sent to you within30 days.

 

**9.****                                      PersonalProperty:**  The Collateral will beand shall remain personal property and, if requested by us, you will obtainreal property waivers satisfactory to us. You shall keep the Collateral free from any and all liens andencumbrances.  You shall give usimmediate notice of any attachment or other judicial process, liens orencumbrances affecting the Collateral. You hereby authorize us and appoint usas your attorney-in-fact with the power of attorney to file this Agreement andany financing statement(s) or security agreement(s) with respect to theCollateral in any state in the United States. You further authorize us to filethis Agreement and such financing statements or security agreements withoutyour signature thereon. If your signature on any financing statement isrequired by law, you shall execute such supplemental instruments and financingstatements we deem to be necessary and advisable and shall otherwise cooperateto defend our title by filing or otherwise. You also agree to pay us on demand filing, registration and releasingfees prescribed by the UCC or other law. Any Collateral that is subject to title registration laws shall betitled and registered as directed by us.

 

**10.****                               Default;Remedies:** If you do not pay when due or if you breach or fail to performany of your other covenants and promises under this Agreement or any otheragreement entered into by you and held or serviced by us or if you declarebankruptcy or insolvency or if you terminate your entity existence or take anyactions regarding the cessation or winding up of your business affairs, youwill be in default. If you are in default, at our election, we can accelerateand require that you pay, as reasonable liquidated damages for loss of bargain,the “Accelerated Balance”.  TheAccelerated Balance will be equal to the total of (i) accrued and unpaidamounts, and (ii) the remaining payments. We can also pursue any of theremedies available to us under the UCC or any other law. In addition, you agreeto pay our reasonable attorneys’ fees and actual costs including repossessionand collection costs, and all non-sufficient funds charges and similar charges.

 

**11.****                               LateCharge:**  If any part of a payment islate, you agree to pay a late charge equal to the lesser of (a) the greater of10% of the payment or $25.00 or (b) the maximum amount permitted by applicablelaw.

 

**12.**                               **Assignment;Inspection:**  YOU HAVE NORIGHT TO SELL, TRANSFER, ASSIGN, LEASE OR ENCUMBER THE COLLATERAL OR THISAGREEMENT.  We may sell, transfer,assign, or encumber this Agreement.  Youagree that if we sell, transfer, assign, or encumber this Agreement, theassignee will have the rights and benefits that we assign to the assignee andwill not have to perform any of our obligations.  You agree that the rights of the assignee will not be subject toany claims, defenses or set-offs that you may have against us.  We and our agents and representatives shallhave the right at any time during regular business hours to inspect theCollateral and for that purpose to have access to the location of the Collateral.

 

**13.**                            **Risk ofLoss:**  You hereby assume andshall bear the entire risk of loss, theft, damage and destruction of theCollateral from any cause whatsoever and no loss, theft, damage or destructionof the Collateral shall relieve you of the obligation to make scheduledpayments or any other obligation under this Agreement, and this Agreement shallremain in full force and effect except as provided below.  You shall promptly notify us in writing ofsuch loss, theft, damage or destruction. If damage of any kind occurs to any item of Collateral, you, at ouroption, shall at your expense (a) place the item in good repair, condition orworking order, or (b) if the Collateral cannot be repaired or is lost, stolenor suffers a constructive loss under an insurance policy covering theCollateral, pay to us the “Casualty Value.” The Casualty Value will be equal to the total of (i) accrued and unpaidamounts, and (ii) the remaining payments discounted to present value using theFederal Funds rate as of the date of payment.

 

**14.****                               Choiceof Law; Consent to Jurisdiction; Venue:**This Agreement shall beinterpreted, and all rights and liabilities of the parties hereto andthereunder shall be determined and governed as to validity, interpretation,enforcement and effect, by the laws of the State of California.  Without limiting the right of SecuredParty to bring any action or proceeding against Debtor in the courts of otherjurisdictions, Debtor hereby irrevocably submits to the jurisdiction of anyState or Federal court located in California or in any other state whereSecured Party has an office.  SecuredParty and Debtor expressly waive any right to a trial by Jury.

 

**15.****                               Miscellaneous:**  During the term of this Agreement, you agreeto provide us with all financial statements and copies of federal or state taxreturns as we may reasonably request. If we supply you with labels, you shall label any and all items ofCollateral and shall keep the same affixed in a prominent place.  If any provision hereof or any remedy hereinprovided is found to be invalid under any applicable law, such provision shallbe inapplicable and deemed omitted, but the remaining provisions hereof,including remaining default remedies, shall be given effect in accordance withthe manifest intent hereof.  You agreethat any delay or failure to enforce our rights under this Agreement does notprevent us from enforcing any rights at a later time. You agree that the termsand conditions indicated above and on the first page are a complete andexclusive statement of our agreement and they may be modified only by writtenagreement signed by all of the parties hereto and not by course of performance.You agree that the original of this Agreement may be microfilmed orelectronically duplicated and a photostatic copy of such microfilm orelectronic duplication may be introduced in lieu of the original thereof andwithout further foundation. The parties hereto expressly waive the secondaryevidence rule. You acknowledge receipt of a copy of this Agreement.  You agree that this Agreement will bebinding upon your successors, assigns, heirs and legal representatives.  You agree that our waiver of any provisionhereunder shall not constitute a waiver of any other matter. It is the expressintent of the parties not to violate any applicable usury laws or to exceed themaximum amount of interest permitted to be charged or collected by applicablelaw, and any such excess payment will be applied to the payments in inverseorder of maturity, and any remaining excess will be refunded to you.

 

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