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                                                                                                                                                         Exhibit
10.1

 

Loan Agreement

 

This LOAN AGREEMENT (as amended, restated or
otherwise modified from time to time, this “Agreement”)
is made as of September 13, 2017, by and between
NOBLE
ROMAN’S, INC., an Indiana
corporation and FIRST FINANCIAL
BANK,an Ohio state chartered
bank, located at 255 East Fifth Street, Suite 800, Cincinnati, Ohio
45202 (“Lender”). Borrower and Lender hereby agree as
follows:

 

1.            

Recitals.

 

WHEREAS, it is the desire of Borrower to obtain from
Lender loans and other financial accommodations, as hereinafter
provided, (a) to consummate the Closing Date Transactions and (b)
for other general corporate and working capital purposes not
otherwise prohibited by this Agreement;

 

WHEREAS, Lender has indicated its willingness to so extend
such loans and other financial accommodations on the terms and
subject to the conditions set forth herein; and

 

NOW, THEREFORE,
in consideration of the premises and
the agreements, provisions and covenants herein contained, the
parties hereto agree as follows, intending to be legally
bound:

 

2.            

Loans and
Terms.

 

2.1.           Loans
and Notes.

 

(a)           Term
Loan. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties of Borrower herein, Lender agrees to make a term loan to
Borrower on the Closing Date in the maximum principal amount of
$4,500,000 (the “Term Loan”). On the Closing Date,
Borrower shall duly execute, issue and deliver to Lender a Term
Note payable to the order of Lender in the principal amount of the
Term Loan (the “Term Note”) to evidence the Term Loan.
The Term Loan will bear interest at such rate, and will be payable
upon such terms, as are specified in the Term Note and this
Agreement.

 

(b)           Development
Line of Credit; Development Loans.

 

(i) Development
Line of Credit and Development Loans. Subject to the terms and conditions hereof and
the other Loan Documents, and in reliance upon the representations
and warranties of Borrower herein, Lender agrees to: (A) extend the
Development Line of Credit to Borrower in the maximum principal
amount of the Development Line Amount and (B) extend
eachDevelopment Loan under such Development Line of Credit to
Borrower in the maximum principal amount of the Development Loan
Amount.

 

(ii) Development
Notes. On the Closing Date,
Borrower shall duly execute, issue and deliver to Lender: (A) the
Development Line Note payable to the order of Lender in the
principal amount of the Development Line Dollar Cap to evidence the
Development Line of Credit and (B) each Development Loan Note
payable to the order of Lender in the principal amount of the
Development Loan Dollar Cap to evidence the applicable Development
Loan. Each Development Loan will bear interest at such rate, and
will be payable upon such terms, as are specified in the applicable
Development Loan Note and this Agreement.

 

(iii) Additional
Conditions Precedent. In
addition to, and without limiting any of, the other conditions
precedent set forth in this Agreement or any other Loan Document,
Lender shall have no obligation to: (1) enter into any Development
Loan under the Development Line of Credit at any time after the
Development Line Draw Period Expiration Date, (2) enter into more
than a total of three Development Loans under the Development Line
of Credit, (3) enter into any Development Loan with respect to
which the proceeds will be used for more than one unit, (4) enter
into any single Development Loan under the Development Line of
Credit in a principal amount in excess of $550,000, (5) make more
than two Advances in the aggregate under any Development Loan, (6)
make any Advance under a Development Loan at any time after the
applicable Development Loan Draw Period Expiration Date or, if
earlier, at any time after the date of the Final Advance
thereunder, or (7) advance all or any portion of any Advance unless
Borrower shall have furnished to Lender the following, all of which
must be strictly satisfactory to Lender (and, as applicable,
Lender’s counsel) in form, content and
execution:

 

(A)

The
budget with respect to the applicable Development
Project;

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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(B)           All
required construction permits for the applicable Development
Project;

 

(C)           Evidence
that Borrower has deposited not less than $50,000 with respect to
the applicable Development Project in a separate
“blocked” deposit account at Lender (each, a
“Special Account”), which amounts therein may be drawn
for the Development Project to pay for items on the Schedule of
Ineligible Costs; and

 

(D)           If
required by Lender in the exercise of its Permitted Discretion,
Lender shall be in receipt of an Acceptable Site Inspection with
respect to the applicable Development Loan.

 

(iv) Additional
Covenants. In addition to, and
without limiting any of, Borrower’s covenants and obligations
set forth in this Agreement or any other Loan Document, Borrower
covenants with, and represents and warrants to, Lender that, from
and after the Closing Date, until the Obligations are paid and
satisfied in full:

 

(A)           

Borrower
hereby agrees to pay or reimburse Lender for the reasonable costs
and expenses (including Attorneys’ Fees, if any) associated
with the review and approval of all Development Asset Agreements
and Advance Requests;

 

(B)           

Borrower shall notify Lender, promptly after
Borrower’s obtaining knowledge thereof, of any of the
following (provided that nothing herein is intended, or shall be
construed, to constitute Lender’s consent to, or waiver of
any Event of Default arising from, any of the following events or
occurrences): (I) any default or breach by Borrower or any other
party under any Development Asset Agreement, or the receipt by
Borrower of any notice of default or breach under any Development
Asset Agreement; and/or (II) the creation or imposition of any Lien
against the Development Assets other than any Permitted
Lien;

 

(v) Advance
Requests. In order to request
an Advance under a Development Loan, Borrower shall furnish to
Lender, all in form and substance acceptable to Lender, at least
two (2) Business Days prior to the requested Advance (or at such
later date as may be acceptable to Lender in its sole discretion):
(A) Borrower’s request therefor (each an “Advance
Request”) in the form reasonably acceptable to Lender and
otherwise in accordance with the terms and conditions of this
Agreement, (B) all Development Asset Agreements applicable to the
Development Assets to which the Advance Request relates, and (C)
all such other documents, instruments, and agreements reasonably
requested by Lender in connection with any of the foregoing. The
amount of the Advance requested in the Advance Request shall not
exceed: (I) with respect to any Advance, the Development Loan
Advance Rate multiplied by
the Eligible Costs of the specific
Development Assets, as set forth in the Budget to which the Advance
Request relates, or (II) together with all prior Advances
previously made by Lender to Borrower under the applicable
Development Loan, the then applicable Development Loan Amount. Each
such Advance Request shall be deemed to be Borrower’s request
that Lender, and irrevocable authorization to Lender to, disburse
the funds requested by such Advance Request from the proceeds of
the applicable Development Loan in accordance with this Agreement
and such Advance Request. Under no circumstances shall Lender be
responsible or liable to any Person, for or on account of any
disbursement of, or failure to disburse, any Advance or any part
thereof, and no such Person shall have any right or claim against
Lender under this Agreement or in connection with the
administration of the Development Line of Credit or any Development
Loan (provided that the foregoing shall not relieve Lender of its
express obligations to Borrower pursuant to, and subject to the
terms and conditions of, the Loan Documents). To the extent that
Lender may acquiesce (whether intentionally or unintentionally) in
Borrower’s failure to comply with and satisfy any condition
precedent to any Advance, such acquiescence shall not constitute a
waiver by Lender of any condition precedent set forth in this
Agreement or any other Loan Document with respect to any other
Advance requested by Borrower, and Lender at any time thereafter
may require Borrower to comply with and satisfy all conditions and
requirements of this Agreement and the other Loan Documents, as
applicable, with respect to any such Advance requested by
Borrower.

 

Borrower may write checks on the applicable Special Account to pay
for items on the Schedule of Ineligible Costs as and when such
items are incurred as set forth on the Budget for the respective
Development Project. Upon Lender’s request from time to time,
Borrower shall provide Lender a written accounting of Ineligible
Costs incurred and paid for from the applicable Special Account,
along with such invoices and receipts as Lender reasonably
requests. To the extent any funds remain in the applicable Special
Account after the applicable Development Project is completed,
Lender may apply such remaining funds to the applicable Development
Loan.

 

 

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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2.2.           Maturity
of the Loans; Termination of the Development Line of
Credit.

 

(a)           The
commitment of Lender to make any further Advances under the
Development Line of Credit shall terminate (if not sooner
terminated pursuant to the terms and conditions hereof) on the
Development Line Draw Period Expiration Date. The entire unpaid
balance of each Development Loan, plus all accrued and unpaid
interest thereon, shall be due and payable on the Termination Date
applicable to such Development Loan.

 

(b)           The
entire unpaid balance of the Term Loan, plus all accrued and unpaid
interest thereon, shall be due and payable on the Termination Date
applicable to the Term Loan.

 

(c)           Borrower
may voluntarily terminate this Agreement (i) by giving Lender
written notice of the date on which this Agreement is to terminate
(“Voluntary Termination Date”) at least five (5)
Business Days before the Voluntary Termination Date, and (ii) by
paying on any such Voluntary Termination Date (A) all of the
Obligations and (B) as compensation to Lender for loss of bargain
with respect to the credit advanced hereunder, and not as a
penalty, a termination fee, if applicable, in an amount equal to
the then effective Termination Fee. Upon the Voluntary Termination
Date, (1) all Loans and all other Obligations will automatically
and immediately become due and payable and (2) Lender’s
obligations under this Agreement and the other Loan Documents
arising on and after the effective time of the Payment in Full of
the Obligations will automatically terminate immediately, without
notice or demand, which Borrower hereby expressly
waives.

 

2.3.           Loan
Fee. On the Closing Date,
Borrower shall pay to Lender a nonrefundable loan fee in the
aggregate amount of $15,250 (the “Loan Fee”). The Loan
Fee shall be in addition to all other fees, charges and amounts
required by the Loan Documents and Borrower’s reimbursement
of Lender’s costs and expenses as required by this Agreement
or the other Loan Documents. The Loan Fee shall be fully earned
upon the Closing Date.

 

2.4.           Maximum
Interest. In no event shall the
interest rate or any of the other charges hereunder exceed the
highest rate permissible under any Law which a court of competent
jurisdiction shall, in a final, non-appealable determination, deem
applicable hereto. In the event that such court in a final,
non-appealable judgment determines that Lender has received
interest or other charges hereunder in excess of the highest rate
applicable thereto, such excess shall be deemed received on account
of, and shall automatically be applied to reduce, the outstanding
principal amount of the Term Loan and the Advances, other than
interest in respect thereof, on a pro rata basis (and in the
inverse order of maturity, with respect to the Term Loan) until
paid in full, and the provisions hereof shall be deemed amended to
provide for the highest permissible rate. If there are no amounts
outstanding under the Notes after such application by Lender,
Lender shall refund excess to Borrower or as a court of competent
jurisdiction orders.

 

2.5.           Treasury
Management.

 

(a)           Borrower
has established one or more checking accounts (each a
“Checking Account” and, collectively, the
“Checking Accounts”) with Lender.

 

(b)           Without
limiting any obligations of Borrower under Section 5.1(k) or any
other provision of this Agreement, Borrower agrees that all
reasonable service charges and costs related to the establishment
and maintenance of the Checking Accounts, and Lender’s
treasury and cash management services for Borrower shall be the
sole responsibility of Borrower, whether the same are incurred by
Lender or Borrower, and Lender, in its Permitted Discretion, may
charge the same against Borrower and any account maintained by
Borrower with Lender and the same shall be deemed part of the
Obligations.

 

(c)           If
there is any conflict, ambiguity, or inconsistency, in
Lender’s judgment, between the terms of the Treasury
Management Agreements, on the one hand, and this Agreement or any
of the other Loan Documents, on the other hand, then the applicable
terms and provisions, in Lender’s judgment, providing Lender
with greater rights, remedies, powers, privileges, or benefits will
control. From time to time, Lender may adopt such regulations and
procedures and changes it may deem reasonable and appropriate (to
the extent such regulations and procedures are applicable to
Lender’s other similarly situated customers) with respect to
the Treasury Management Agreements, the operation of the Checking
Accounts, and the other services to be provided by Lender under
this Agreement, the Treasury Management Agreements, and such
regulations, procedures and changes need not be reflected by an
amendment to this Agreement in order to be effective. Lender will
use commercially reasonable efforts to give written notice of such
regulations, procedures and changes to Borrower in the ordinary
course of Lender’s business.

 

 

 

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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2.6           Mandatory
Prepayments.

 

2.6.1           The
following payments shall be made to, or retained by, Lender and
applied as provided in this Section 2.6.1 and Section
2.6.2:

 

(a)           On
each Excess Cash Flow Payment Date, Borrower will make a payment to
Lender (each, an “Excess Cash Flow Payment”) in an
aggregate amount equal to (i) the Excess Cash Flow Percentage of
Excess Cash Flow for the immediately preceding Excess Cash Flow
Period then ended minus
(ii) the aggregate amount of voluntary
prepayments of unpaid principal on the Term Loan during the
immediately preceding Excess Cash Flow Period;

 

(b)           On
or before the fifth(5th)
Business Day following the date of receipt thereof by any Loan
Party, an amount equal to 100% of the Net Proceeds from any sale or
other disposition of any asset, other than: (i) sales of assets
permitted under Section 5.2(n) and (ii) sales of Equipment yielding
Net Proceeds of less than $100,000 in the aggregate in any calendar
year; providedthat
once such aggregate Net Proceeds
exceed $100,000 in any calendar year, then all further Net Proceeds
(i.e., above $100,000) received in such calendar year
with respect to such Equipment will be delivered to Lender to be
applied in accordance with Section 2.6.2. Notwithstanding the
foregoing, no prepayment of Net Proceeds of Equipment shall be
required if: (A) Borrower delivers to Lender a certificate of an
authorized officer of Borrower to the effect that Borrower intends
to apply such Net Proceeds to purchase replacement Equipment which
becomes part of the Collateral for use in the business of Borrower,
(B) all such Net Proceeds are in fact used by Borrower to purchase
such Equipment that becomes part of the Collateral (or any excess
is promptly paid to Lender for application to the Term Loan) and
(C) Borrower, within 90 days after the sale or other disposition of
the relevant Equipment, purchases the replacement Equipment, and at
the time of such purchase: (x) such replacement Equipment is
of substantially equivalent value or better to the Equipment which
was sold or otherwise disposed of by Borrower, (y) no Event of
Default has occurred and is continuing (and if an Event of Default
has occurred before effecting any such replacement the Net Proceeds
shall be applied in accordance with Section 2.6.2) and (z) such
replacement Equipment is free and clear of all Liens except
Permitted Liens;

 

(c)           On
or before the fifth (5th)
Business Day following the date of receipt thereof by any Loan
Party, 100% of the Net Proceeds from any insurance or condemnation
proceeds payable in respect of, or arising out of, any loss or
damage to Borrower’s properties other than insurance or
condemnation proceeds in connection with (1) dispositions of
Inventory which are the subject of an Event of Loss, to the extent
such insurance or condemnation proceeds are used to replace such
Inventory or repay the Term Loan, at Borrower’s discretion,
(2) dispositions of Equipment to the extent such insurance or
condemnation proceeds are used to replace such Equipment or repay
the Term Loan, at Borrower’s discretion or (3) dispositions
of improvements to real estate which are the subject of an Event of
Loss, to the extent such insurance or condemnation proceeds are
used to replace such real estate improvements; provided that, if an Event of Default then exists, such Net
Proceeds shall be payable to Lender to be applied in accordance
with Section 2.6.2;

 

(d)           On
or before the fifth(5th)
Business Day following the date of receipt thereof by any Loan
Party, an amount equal to 100% of (1) any Net Proceeds from the
issuance by any Loan Party of any additional Ownership Interests
after the Closing Date, exclusive of issuances by Borrower of any
Ownership Interests to employees and officers of Borrower pursuant
to equity option plans or other incentive compensation arrangements
previously disclosed to Lender or upon the conversion of the
Subordinated Debt to common stock as contemplated in the
Convertible Notes and (2) any dividend or distribution to any Loan
Party from a Person other than an Affiliate of such Loan Party;
and

 

(e)           On
or before the fifth (5th)
Business Day following the date of receipt by any Loan Party of any
Extraordinary Receipts, an amount equal to 100% of such
Extraordinary Receipts in excess of $100,000.

 

(f)           With
respect to any mandatory prepayment described in this Section,
Borrower shall not incur nor be liable for any prepayment penalty
whatsoever.

 

2.6.2           With
respect to mandatory prepayments described in Section 2.6.1, such
prepayments shall be applied first
to the remaining installments of
principal under the Term Loan, in the inverse order of maturity,
until the Term Loan has been paid in full, second
to the remaining installments of
principal under the Development Loans, in the inverse order of
maturity, until the Development Loans have been paid in full (to be
allocated among the separate Development Loans in Lender’s
discretion) and third
to any unpaid Advances until paid in
full (to be allocated among the separate Development Loans in
Lender’s discretion). Nothing in Section 2.6.1 or this
Section 2.6.2 shall be construed to constitute consent to any
transaction that is not expressly permitted by other provisions of
this Agreement or the other Loan Documents. Nopartial prepayment of
the Term Loan will change the due dates or the amount of the
principal payments otherwise required hereunder and under the Term
Note.

 

 

 

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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2.7           One
General Obligation; Cross-Collateralized. All advances of credit to, or for the benefit
of, Borrower under this Agreement and under any other Loan Document
constitute one loan, and all of the Obligations constitute one
obligation. The Loans and all other advances or extensions of
credit to, or for the benefit of, Borrower under this Agreement or
the other Loan Documents and all other Obligations are made on the
security of all of the Collateral.

 

2.8           Payments.
All payments to Lender under this Agreement and the other Loan
Documents shall be payable to Lender in U.S. dollars unless
otherwise expressly agreed to by Lender. All amounts payable
hereunder by Borrower will be paid to Lender at its address set
forth in this Agreement hereof or at such other place as Lender may
give notice from time to time, in immediately available funds in
the currency specified by Lender, without set off, defense,
recoupment, deduction, cross-claim or counterclaim of any kind; and
free and clear of, and without deduction for, any present or future
Taxes. If Lender or Borrower pays any Taxes, whether or not
correctly or legally assessed, the amounts payable hereunder will
be increased so that, after the payment of such Taxes, Lender will
have received an amount equal to the sum Lender would have received
had no such Taxes been paid. If any amount payable under the Loan
Documents is denominated in a currency other than U.S. dollars,
Borrower will make payment in such currency or, at Lender's option,
will pay the Dollar Equivalent thereof. To effect any payment due
hereunder, Lender may debit any account that Borrower may have with
Lender. As used herein, "Dollar Equivalent" means, with respect to
an amount in any currency other than U.S. dollars, as of any date,
the amount of U.S. dollars determined at the selling rate of
exchange then offered at the time of payment by Lender for cable
transfers to the place of payment in the currency in which the
acceptance or draft is payable, plus all costs of settlement,
including any payments made by Lender to comply with any
governmental exchange regulations applicable to the purchase of
such foreign currency.Borrower shall pay to Lender on demand, in
addition to any such increased costs set forth in the Notes, any
increased cost to Lender of making any Loan resulting from any
change in any law or regulation or interpretation thereof by any
court or administration or Governmental Authority, or in GAAP, as
set forth on a certificate from Lender to Borrower describing in
reasonable detail the increased cost incurred or to be incurred by
Lender.

 

3.            

Disbursement of Loans;
Post-Closing Covenants.

 

3.1.           Conditions
to Disbursement of Term Loan and Initial
Advances. Upon execution and
delivery of this Agreement and the other Loan Documents, Lender may
disburse Loans to allow Borrower to consummate the Closing Date
Transactions. The obligation of Lender to make or advance the Term
Loan and the initial Advances shall be subject to the satisfaction
of the following conditions:

 

(a)           Lender
has received all of the items set forth in Section
3.2;

 

(b)           There
shall be no Event of Default under this Agreement or the other Loan
Documents as of the Closing Date after giving effect to the Closing
Date Transactions;

 

(c)           The
Loan Fee and all costs and expenses are paid as due pursuant to the
terms of this Agreement;

 

(d)           The
Senior Leverage Ratio on the Closing Date (after giving pro forma
effect to the Closing Date Transactions) shall not exceed 1.50 to
1.00; and

 

The acceptance by Borrower of the proceeds of the initial Loans
shall be deemed to constitute a representation and warranty by
Borrower that the conditions in this Section 3.1, other than those
that have been waived in writing by Lender, have been
satisfied.

 

3.2.           Required
Items. The items to be
delivered to Lender by Borrower as required by Section 3.1(a) are
as follows:

 

(a)           This
Agreement and the other Loan Documents required by Lender to be
executed by Borrower or any one or more of the Guarantors, as
applicable, including the Development Notes, the Term Note, the
Security Documents and the Guaranties, all in form and substance
satisfactory to Lender;

 

(b)           Certified
copies of the Organizational Documents of the Loan
Parties;

 

(c)           An
opinion letter of Loan Parties’ counsel in a form reasonably
satisfactory to Lender;

 

(d)           A
payoff letter from each Prior Lender; and

 

 

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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(f)           Such
other opinions, certificates and documents as Lender shall
reasonably request, including those on the closing checklist
prepared by Lender’s counsel.

 

3.3.           Conditions
to Each Advance. Lender shall
have no obligation to make any Loans to Borrower unless,
immediately before and after giving effect to any such Loan, the
following statements are true and correct:

 

(a)           Each
of the representations and warranties of Borrower and any Guarantor
contained herein and in the other Loan Documents shall be correct
in all material respects (except to the extent qualified by
materiality, in which case such representation and warranty shall
be true and correct in all respects) as of the date of the making
of each such Loan, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case
they shall be true and correct in all material respects (or if
qualified by materiality, in all respects) as of such earlier
date;

 

(b)           No
Event of Default shall have occurred and be continuing or would
result from the incurrence of such Loan (including any event that
would constitute an Event of Default but for the requirement that
notice be given or lapse of time or both); and

 

(c)           No
Law prohibits, and no order, judgment or decree of any arbitrator
or Governmental Authority enjoins or restrains, Lender from making
the requested advance.

 

The acceptance by Borrower of each advance of Loans shall be deemed
to constitute a representation and warranty by Borrower that the
conditions in this Section 3.3, other than those that have been
waived in writing by Lender, have been satisfied.

 

3.4.           Use
of Loans. Borrower shall use
the proceeds of the Loans solely for the purposes described in
Section 1.

 

3.5           Banking
Services; Third Party Deposit Accounts. Until Payment in Full of the Obligations,
Borrower will, and will cause each other Loan Party to, maintain
its banking services with Lender and will grant Lender an
opportunity to provide any banking services required by Loan
Parties The interim use of any Third Party Deposit Account will not
diminish or alter the obligations under this Section 3.5. Upon
Lender’s request, Borrower shall cause each Third Party
Deposit Account to be subject to a Deposit Account Control
Agreement in favor of Lender. Any amounts paid by Lender under a
Deposit Account Control Agreement shall be part of the Obligations
payable by Borrower upon Lender’s demand. Borrower will, and
will cause Loan Parties to, close all Third Party Deposit Accounts
on or before the date that is 90 days after the Closing
Date; provided
that, Loan Parties may maintain
the following Third Party Deposit Accounts so long as the amount on
deposit for each location does not exceed $10,000 and the aggregate
amount on deposit do not exceed $50,000: account number ending 0420
at National Bank of Indianapolis (Pizzaco), account Number ending
7842 at National Bank of Indianapolis (Borrower), account number
ending 1121 at BB&T (Borrower), account number ending 3521 at
Suntrust (Roanoke) and any other Third Party Deposit Account for
which, after the Closing Date, Lender agrees to add to the
foregoing list after notice from Borrower.

 

3.6           Post-Closing.
Borrower shall work in good faith after closing to complete the
items set forth on Schedule 3.6
by the time frame set forth
therein.

 

4.            

Representations and
Warranties. For the purpose of
inducing Lender to enter into this Agreement and extend the Loans
and the other financial accommodations hereunder, Borrower hereby
makes the following representations and warranties to Lender, all
of which shall be deemed made as of the date hereof and on each
date that a request for an extension of credit hereunder is
made:

 

4.1.           Organization
and Qualification. Borrower (a)
is duly organized, validly existing and in good standing under the
Laws of its jurisdiction of organization, (b) has the power and
authority to carry on its business and to enter into and perform
all documents relating to the transactions contemplated by the Loan
Documents, and (c) is qualified and licensed to do business in each
jurisdiction in which such qualification or licensing is required
except to the extent that failure to do so would not reasonably be
expected to have a Material Adverse Effect. All information
provided by Borrower to Lender with respect to Borrower and its
operations is true and correct in all material respects when
provided.

 

 

 

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Capital Form – January, 2017

Loan
Agreement – Single Borrower

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4.2.           Due
Authorization. The execution,
delivery and performance by Borrower of the Loan Documents to which
it is a party (a) have been duly authorized by all necessary
corporate action, (b) does not contravene (i) any Law applicable to
Borrower or in respect to which any of its assets is bound or (ii)
Borrower’s Organizational Documents, (c) does not violate any
agreement or instrument by which Borrower is bound where such
violation would reasonably be expected to have a Material Adverse
Effect, and (d) does not result in the creation of a Lien on any of
its assets except the Lien granted to Lender herein and in the
Security Documents. Borrower has duly executed and delivered to
Lender the Loan Documents to which it is a party, and such Loan
Documents are valid and binding obligations of Borrower enforceable
according to their respective terms, except as limited by equitable
principles and by bankruptcy, insolvency or similar Laws affecting
the rights of creditors generally.

 

4.3.                 Litigation.
Except as set forth in Schedule 4.3, there are no
suits or proceedings pending or, to Borrower’s knowledge,
threatened against or affecting Loan Party, and no proceedings
before any Governmental Authority are pending or, to
Borrower’s knowledge, threatened against Loan Party which
would, if adversely determined, reasonably be expected to have a
Material Adverse Effect .

 

4.4.           Business.
Borrower is not a party to or subject to any restriction that would
reasonably be expected to have a Material Adverse Effect. All
Material Agreements to which Borrower is a party are in full force
and effect and are not in known conflict with the rights of others.
Borrower is not (a) party to or subject to any contract or
agreement containing a covenant restricting Borrower from competing
in any line of business with any Person or (b) party to a
distribution or supplier agreement with any supplier of Inventory
to Borrower which limits the disposition of Inventory by Borrower
or its successors, assigns or creditors.

 

4.5.           Licenses,
etc. Borrower has obtained any
and all licenses, permits, franchises, governmental authorizations,
patents, trademarks, copyrights or other rights necessary for the
ownership of its properties and the advantageous conduct of its
business. Borrower possesses adequate licenses, patents, patent
applications, copyrights, trademarks, trademark applications, trade
names, and other proprietary rights to continue to conduct its
business as heretofore conducted by it, without any conflict with
the rights of any other Person. All of the foregoing are in full
force and effect, and none of the foregoing are in known conflict
with the rights of others.

 

4.6.           Laws.
Borrower is in compliance with all Laws and all conditions or other
requirements applicable to or imposed upon it by any Law or by any
Governmental Authority except in such instances in which the
failure to comply therewith would not reasonably be expected to
have a Material Adverse Effect or are subject to a Contested
Claim.

 

4.7.           Title.
Borrower has good and marketable title to the assets owned by it,
free and clear from all Liens of any kind, except for any Permitted
Liens.

 

4.8.           Defaults.
Borrower is in compliance with all Material Agreements, and there
does not now exist (and the consummation of the Closing Date
Transactions will not result in) any default or violation by
Borrower of or under any of the terms, conditions or obligations of
(a) its Organizational Documents or (b) any Material Agreement
except in such instances in which such default or violation would
not reasonably be expected to have a Material Adverse Effect or are
subject to a Contested Claim.

 

4.9.           Subsidiaries
and Partnerships. Borrower (a)
has no Subsidiaries other than Affiliate Guarantors and N.R.
Realty, Inc. and (b) is not a party to any partnership agreement or
joint venture agreement. N. R. Realty, Inc. has no and since its
organization has had no assets and no business
operations.

 

4.10.           ERISA.
Borrower and all individuals or entities that, along with Borrower,
would be treated as a single employer (each such non-Borrower
individual or entity, an “ERISA Affiliate”) under ERISA
or the Internal Revenue Code of 1986 (the “IRC”) (in
each case, i.e., ERISA or the IRC, as amended) are in material
compliance with all of their obligations to contribute to any
“employee benefit plan “ as that term is defined in
Section 3(3) of ERISA. Borrower and each of its ERISA Affiliates
are in material compliance with ERISA, and there exists no event
described in Section 4043 thereof (“Reportable
Event”).

 

4.11.           Financial
Condition; Taxes.

 

(a)           All
Financial Statements and other financial information relating to
Borrower which have been, or may hereafter be, delivered by
Borrower to Lender are true and correct in all material respects as
of the date and for the periods indicated therein. The Financial
Statements, which have been or may hereafter be delivered by
Borrower to Lender, have been prepared in accordance with GAAP
subject to, in the case of unaudited interim Financial Statements,
normal year-end adjustments and the lack of footnote disclosures.
No Loan Party has any Indebtedness of any kind that is prohibited
by Section 5.2(a). No Loan Party suffered any damage, destruction
or loss which has materially and adversely affected its business or
assets since the submission of the most recent Financial Statements
to Lender.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

7

 

 

 

(b)           Each
Loan Party has filed all required tax returns and reports (or filed
appropriate extensions therefor) 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 such Loan Party or its
assets, including unemployment, social security, and real estate
taxes except those state or local tax returns that such Loan Party
may inadvertently (collectively, “Inadvertently Omitted Tax
Payments”) fail to file and with respect to which such
failure to file does not result in liabilities (including interest
and penalties) greater than, in the aggregate for all Loan Parties,
$100,000. Each Loan Party has paid all taxes which are due and
payable as of the Closing Date except (i) any Inadvertently Omitted
Tax Payments, and (ii) those taxes which are the subject of a
Contested Claim. No taxing authority has asserted or assessed in
writing any additional tax liabilities against any Loan Party for
any period for which a Loan Party has filed (or was required to
have previously filed) tax returns which are outstanding on the
Closing Date, and no Loan Party has previously filed for any
extension of time for the payment of any tax other than in the
ordinary course of business or as would not reasonably be expected
to result in a material adverse effect on any Loan Party. There are
not in effect any waivers by any Loan Party of applicable statutes
of limitations for federal, foreign, state or local taxes for any
period. No Loan Party is a party to any tax-sharing agreement or
arrangement.

 

(c)           The
Loan Parties fiscal year is from January 1st
to December 31st.

 

4.12.           Solvency.
Borrower is Solvent after giving effect to the Closing Date
Transactions, and Borrower shall continue to be Solvent.
“Solvent” means that: (a) at fair valuations, all
assets of Borrower are greater than the sum of the debts, including
subordinated and contingent liabilities, of Borrower, (b) the
present fair salable value of the properties and assets of the
Borrower will be greater than the amount that will be required to
pay the probable liabilities of Borrower on its debts and other
liabilities, subordinated, contingent or otherwise, as they become
absolute and matured, (c) Borrower is able to pay its debts and
other liabilities, including subordinated and contingent
liabilities and other commitments, as they become due and otherwise
mature in the ordinary course of business, (d) Borrower does not
intend to, nor does it believe that it will, incur debts and
liabilities beyond its ability to pay as such debts and liabilities
mature or become due, and (e) Borrower will not have an
unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is
proposed to be conducted.

 

4.13. Margin
Stock. No part of the Loans
shall be used by Borrower to purchase or carry, or to reduce or
retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulations U and X of the
Board of Governors of the Federal Reserve System) or to extend
credit to others for the purpose of purchasing or carrying any
margin stock. If requested by Lender, Borrower shall furnish to
Lender statements in conformity with the requirements of Federal
Reserve Form U-1.

 

4.14. Collateral
Secured. The security interests
in, and other Liens granted on, the Collateral in favor of Lender
(a) have been duly authorized and created and are in full force and
effect and (b) are first priority Liens subject to any Permitted
Liens.

 

4.15           Material
Adverse Effect; Franchise Matters. Since December 31, 2016, no event or events have
occurred or conditions exist that have had, or could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date,
there are no (a) enforcement actions by any of the Regulatory
Agencies against Borrower or (b) cease and desist letters or stop
orders denying the effectiveness of, or suspending or revoking, any
state or foreign franchise, business opportunity (or equivalent)
registration from any of the Regulatory Agencies, in each case,
still pending against Borrower other than as set forth on the
Franchise Schedule. The Franchise Schedule sets forth, as of the
Closing Date, a complete and accurate list of each of
Borrower’s (a) standard forms of Franchise Agreements in
effect as of the Closing Date, including the year or years during
which Borrower used such form of Franchise Agreement and (b)
effective Franchise Disclosure Documents for each of its
Franchises. As of the Closing Date, Borrower has provided Lender
with true and complete copies of each Franchise Disclosure Document
for its effective Franchise Disclosure Documents for each of its
Franchises. As of the Closing Date, Borrower is not in material
breach or default under any Franchise Agreement, and, to the
knowledge of Borrower, no event has occurred and no condition or
state of facts exists which, with the passage of time or the giving
of notice or both, would constitute such a default or breach by
Borrower under any Franchise Agreement. Except as set forth on the
Franchise Schedule, there is no material term, obligation,
understanding or agreement that would modify any material term of a
Franchise Agreement or any right or obligation of a party
thereunder which is not reflected on the face of such Franchise
Agreement (including any offers or promises with respect to any
future or contingent subsidies, rebates, discounts, advances or
allowances to, or for the benefit of, any or all Franchisees). As
of the Closing Date, Borrower’s Franchise Disclosure
Documents previously and currently in effect: (i) materially comply
and have materially complied with all applicable FTC rules and all
state and foreign franchise and business opportunity sales (and
equivalent) laws in effect at such time; (ii) have been timely
amended to reflect any material changes or developments in
Borrower’s franchise system, agreements, operations,
financial condition, litigation matters, or other matters requiring
disclosure under any applicable law; (c) include all material
documents (including audited financial statements) required by any
applicable law to be provided to prospective franchisees; and (d)
Borrower is and has been in material compliance with all applicable
laws relating to franchises and business opportunities (or
equivalent designations).As of the Closing Date, except as set
forth on the Franchise Schedule, Borrower has not received any
currently effective written notice of any threatened
administrative, criminal or civil action against it or any persons
disclosed in any of Borrower’s applicable Franchise
Disclosure Documents, where such threatened administrative,
criminal and/or civil action alleges a violation of a franchise
law, antitrust law, securities law, fraud, unfair or deceptive
practices, or comparable allegations, as well as any other actions.
Neither Borrower nor its employees have, in the three years prior
to the Closing Date, provided information to prospective
franchisees that materially contradicts the information contained
in the Franchise Disclosure Documents provided to such prospects
(including “financial performance representation claim”
information). No advertising funds are collected from franchisees
and maintained by Borrower. As of the Closing Date, except as set
forth on the Franchise Schedule, no franchisee association (either
independent or sponsored by Borrower) is currently in place on the
Closing Date. Other than as set forth on the Franchise Schedule,
the organization of a franchisee association is not currently
contemplated by Borrower, or, to the knowledge of Borrower, any
Franchisee, in each case, on the Closing Date. As of the Closing
Date, except as set forth on the Franchise Schedule, Borrower does
not currently employ or use any franchise brokers in connection
with Borrower’s franchising system sales. Borrower is duly
registered in accordance with all applicable state and foreign laws
in which Borrower has issued and maintains or otherwise offers a
Franchise as listed on the Franchise Schedule. None of the Supply
Agreements are franchise agreements, and none of the businesses
operated under the Supply Agreements would constitute a franchise
or a business opportunity (or equivalent) under any applicable
federal, state or foreign law.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

8

 

 

 

4.16           Full
Disclosure. No representation
or warranty made by Borrower or any of its Affiliates, as the case
may be, in this Agreement, any other Loan Document to which it is a
party, or any other document furnished from time to time in
connection herewith or therewith contained at the time such
representation or warranty was made or such document was furnished,
or, with respect to any information delivered after the date of
this Agreement, will contain at the time such representation is
made or such document is furnished, any untrue statement of a
material fact or omits or will omit to state any material fact
necessary to make the statements herein or therein not materially
misleading when read as a whole together with all other
representations and warranties related thereto. Notwithstanding the
foregoing, Borrower makes no representations or warranties
regarding the accuracy of any projections, predictions or other
estimation of future events, or any information or data, pertaining
generally to Borrower’s industry.

 

5.            

Covenants.

 

5.1.           Affirmative
Covenants. Borrower agrees
that, from the date of execution of this Agreement until the
Payment in Full of the Obligations, Borrower will and will cause
each of the other Loan Parties to:

 

(a)           Books
and Access. Maintain proper
books of account and other records and enter therein complete and
accurate entries and records of all its transactions in accordance
with GAAP. Borrower will give representatives of Lender (i) access
to each Loan Party’s books and records and the other
Collateral at all reasonable times, including permission to
examine, copy and make abstracts from any of such books and
records. In addition, Borrower will make available to Lender for
examination copies of any reports, statements or returns which
Borrower may make to or file with any Governmental Authority.
Lender may, whenever an Event of Default exists, at the sole
expense of Borrower, obtain field exams and appraisals (or updates
thereof) of Borrower’s assets from field examiners and
appraisers, and prepared on a basis, satisfactory to Lender in the
exercise of its Permitted Discretion, such field exams, appraisals
and updates to include information required by applicable Law and
by the internal policies of Lender. The appraisers performing the
appraisal and the methods of appraisal used by the appraisers doing
the appraisal are subject to Lender’s approval in the
exercise of its Permitted Discretion.

 

(b)           Financial
Statements; Other Reports Compliance Certificate. Furnish Lender, all in form and detail
satisfactory to Lender as soon as available, and in any event: (i)
within 30 days after the end of each calendar month, a complete
copy of Borrower’s revenue reports for the month, including
schedules showing all openings and closings of each Franchise, and
a monthly statement of revenues on a per unit basis for each newly
developed Noble Roman’s Craft Pizza and Pub unit
(provided
that such reporting for a
particular unit may cease after 12 months of operations), (ii)
within 45 days after the end of each calendar quarter,
company-prepared Financial Statements for Borrower and its
Subsidiaries for such calendar quarter, and (iii) within 120 days
after the end of each fiscal year, consolidated Financial
Statements for Borrower and its Subsidiaries for such fiscal year,
which annual Financial Statements shall be audited by an
independent certified public accounting firm acceptable to Lender.
The Financial Statements delivered pursuant to the preceding clause
(iii) shall contain the unqualified opinion of an independent
certified public accountant and its examination shall have been
made in accordance with GAAP. With each submission of Financial
Statements to Lender in accordance with the preceding clauses (ii)
and (iii), Borrower shall deliver to Lender a Financial Statement
Compliance Certificate in the form of Exhibit A attached hereto, which, among other things, (A)
certifies Borrower’s compliance with the financial covenants
set forth in Section 5.2, (B) shows Borrower’s calculations
thereof and (C) certifies that no Event of Default has occurred (or
if Borrower has obtained knowledge of any such Event of Default,
such certificate shall specify each such event and the nature and
status thereof), together with a management discussion in a form
acceptable to Lender.

 

(c)           Tax
Returns; Public Filings.
Furnish Lender with (i) a copy of its complete filed Federal tax
returns, including all schedules and K-1s, upon Lender’s
request and (ii) copies of all registration statements and other
reports Borrower files with the Securities and Exchange Commission
promptly upon the filing thereof and in any event within 10 days
after filing.

 

(d)           Tax
Obligations; Contested Claims.
Pay and discharge 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, provided that notwithstanding anything to the contrary
contained herein, for purposes of this Agreement, such amounts
shall not be considered to be due or otherwise imposed upon any
Loan Party until such amounts are shown as being due and payable:
(i) on a filed tax return, (ii) on an executed closing agreement
between the applicable taxing authority and Borrower, or (iii) on a
final, nonappealable order of a court of competent jurisdiction.
Each Loan Party shall pay when due all claims (including claims for
labor, services, materials, rent and supplies) for sums which by
Law might be a Lien or charge upon any of its assets;
provided
that no such charge or claim need be
paid if and for so long as each of the following conditions
continue to be met (“Contested Claims”): (A) such
Contested Claim is being diligently contested in good faith so long
as Lender is notified of such contest; (B) Loan Parties establish
an adequate reserve or other appropriate provision for the payment
of such Contested Claim and all other Contested Claims required by
GAAP; (C) any Lien arising from such Contested Claim does not, when
added to all amounts secured by all other than Contested Claims,
secure amounts in excess of $100,000 in the aggregate as of any
date; (D) no material property would reasonably be expected to be
lost, forfeited or materially damaged as a result of such Contested
Claim; and (E) any Lien arising from such Contested Claim, or from
any other then Contested Claim, will not prevent Lender from having
a perfected first priority security interest in, or as applicable,
mortgage Lien on, the Collateral or with respect to future advances
made hereunder subject to any Permitted Liens.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

9

 

 

 

(e)           Continue
Operations. Continue in
operation in substantially the same manner as at present; maintain
its existence as a corporation; refrain from entering into any
lines of business materially different from the business activities
in which such Loan Party is presently engaged; refrain from
operating or franchising any units other than under the concepts
described in the defined term Franchise, keep its properties and
all Collateral in good operating condition and repair; and make all
necessary and proper repairs, renewals, replacements, additions and
improvements thereto.

 

(f)           Insurance.
Maintain, with financially sound and reputable insurance companies,
(i) property insurance on its real and personal property against
loss or damage by hazards covered under policies acceptable to
Lender in its Permitted Discretion in an amount equal to not less
than 100% of the insurable value thereof on a replacement cost
basis, (ii) commercial general liability insurance under policies
acceptable to Lender in its Permitted Discretion, and (iii) such
other insurance that Lender, in its Permitted Discretion, may
request from time to time. In addition to the foregoing, if any
portion of any real property owned by Borrower is located in an
area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Act of 1968
(or any amendment or successor act thereto), then Borrower shall
maintain with a financially sound and reputable insurer, flood
insurance in an amount sufficient to comply with all applicable
rules and regulations promulgated pursuant to such act. Such
insurance shall name Lender as (A) lender loss payable under ACORD
certificates and endorsement(s) satisfactory to Lender and (B) as
an additional insured and such endorsements shall provide for,
among other things, thirty (30) days written notice to Lender
before any such policy is altered or canceled. Copies of all
insurance policies and schedules of all insurance of the Loan
Parties will be submitted to Lender upon request. Such schedules
will contain a description of the risks covered, the amounts of
insurance carried on each risk, the names of the insurers and the
costs of such insurance to the Loan Parties. Borrower will
supplement such schedules from time to time promptly to reflect any
change in insurance coverage. In the event of a conflict between
the provisions of this Section and the terms of any Security
Documents relating to insurance, the provisions in the Security
Documents will control.

 

(g)           Compliance
with Applicable Laws. Comply
with all Laws applicable to any Loan Party and to the operation of
its business (including any statute, rule or regulation relating to
employment practices, pension benefits, or environmental,
occupational and health standards and controls) except in such
instances in which such requirement of Law is being contested in
good faith by appropriately proceedings diligently conducted or the
failure to comply therewith would not reasonably be expected to
have a Material Adverse Effect and do all things necessary to
maintain, renew and keep in full force and effect all permits,
governmental authorizations, patents, trademarks, copyrights,
franchises or other rights necessary to enable it to continue its
business. Borrower shall, and shall cause the other Loan Parties
to, immediately notify Lender when such Loan Party receives written
notice of any (i) material violation of any Law, (ii) Law relating
to the public health or the environment or (iii) written complaint
or written notifications received by it relating to any
environmental or safety and health Law.

 

(h)           Use
of Proceeds. Use the proceeds
of the Loans for the purposes specified in Section
1.

 

(i)           Knowledge
of Defaults. Within three (3)
Business Days of Borrower’s obtaining knowledge thereof, give
written notice to Lender of: (i) the occurrence of any event or the
existence of any condition which could reasonably be expected to
result in an Event of Default, and (ii) the occurrence of any event
or the existence of any condition which would inhibit the ability
of any Loan Party to make or reaffirm any of the representations or
warranties, or to perform any of the covenants, set forth herein or
in any of the other Loan Documents.

 

(j)           Fees
and Costs. Reimburse Lender for
any and all fees, costs and expenses including Attorneys’
Fees, search and filing costs, title insurance costs, other
professionals’ fees, field exam fees, appraisal fees,
environmental assessment fees (including Phase I and Phase II
assessments), expert fees, court costs, litigation and other
expenses (collectively, the “Costs”) incurred or paid
by Lender or any of its officers, employees or agents in connection
with: (i) the preparation, negotiation (whether or not any
particular portion of the transactions contemplated during such
negotiations is ultimately consummated), procurement, review,
administration or enforcement of the Loan Documents or any
instrument, agreement, document, policy, consent, waiver,
subordination, release of lien, termination statement, satisfaction
of mortgage, financing statement or other lien search, recording or
filing related thereto (or any amendment, modification or extension
to, or any replacement or substitution for, any of the foregoing),
and (ii) the defense, preservation and protection of Lender’s
rights and remedies thereunder, including Lender’s security
interest in the Collateral pledged to secure the Obligations,
whether incurred in bankruptcy, insolvency, foreclosure or other
litigation or proceedings or otherwise. The Costs shall be due and
payable upon demand by Lender. If Borrower fails to pay the Costs
upon such demand, Lender is entitled to disburse to itself in
reimbursement thereof such sums as an Advance under the Development
Line of Credit. Thereafter, the Costs shall bear interest from the
date incurred or disbursed at the highest rate set forth in the
Notes. This provision shall survive the Payment in Full of the
Obligations.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

10

 

 

 

(k)           Further
Assurances. 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 requested by Lender from time to time to give
full effect to the Loan Documents and the transactions contemplated
thereby.

 

(l)           Compliance.
At all times comply with all covenants and conditions in the Loan
Documents to which any Loan Party is a party.

 

(m)           Life
Insurance. On or prior to the
date that is 90 days from the Closing Date, Borrower will execute
and deliver to Lender the Life Insurance Documents. Borrower will
promptly take all actions, if any, hereafter necessary or
appropriate in Lender’s judgment to cause the Life Insurer to
acknowledge and confirm Lender’s assignment and, as
appropriate, consent to the assignment of the Life Insurance to
Lender pursuant to the terms of this Agreement and the other Loan
Documents in accordance with the terms of the Life Insurance
Documents. The Life Insurance Documents in favor of Lender will be
prior to all other assignments or other Liens. All right, title,
and interest in, to and under the Life Insurance is part of the
Collateral for the benefit of Lender as security for the
Obligations. Until the Payment in Full of the Obligations, Borrower
will not: (i) make or grant any further assignments, transfers, or
other dispositions of any portion of the Life Insurance or any
right or interest therein nor grant or permit to exist any Lien on
any portion of the Life Insurance or any right or interest therein
except in favor of Lender; or (ii) make or seek any changes to any
of the terms or conditions of any of the Life Insurance. On the
date of receipt of any Life Insurance Proceeds, Borrower shall pay,
or shall cause to be paid, to Lender an amount equal to 100% of
such Life Insurance Proceeds, which shall be applied in accordance
with Section 2.6.

 

(n)           Projections.
As soon as available and, in any event, no later than the 30th day
before the end of each fiscal year, furnish to Lender
Borrower’s business plan, including projected balance sheet,
cash flows, and income statement for each month of the fiscal year
for which such projections are required to be delivered (the
“Projections”). All Projections delivered to Lender by
Borrower will be delivered with (i) a statement of the assumptions
on which the Projections were prepared and (ii) a representation
stating that such Projections are based on estimates, information
and assumptions believed by the management of Borrower to be
reasonable at the time made and that the responsible officer has no
reason to believe that such Projections, taken as a whole, are
incorrect or misleading in any material respect, it being
acknowledged and agreed by Lender that (A) such Projections as they
relate to future events are not to be considered as fact and that
actual results for the period or periods covered by such
Projections may differ from the results set forth therein, (B) the
Projections are subject to uncertainties and contingencies which
may be beyond the control of Borrower and (C) no assurances are
given by Borrower that the results forecasted in the Projections
will be realized.

 

(o)           Reports.
Furnish to Lender, if Lender so elects from time to time, certain
information, including reports and financial statements, otherwise
required by the terms of this Agreement or the other Loan Documents
(each, a “Report”) from Borrower via electronic mail
transmission (“e-mail”) or through a web based portal
made available by Lender. Lender will designate from time to time
its e-mail address to Borrower (the “Lender E-mail
Address”). All transmissions as permitted in this Section of
any Report from Borrower shall contain the information as specified
in this Agreement, shall be formatted or displayed in a manner and
order substantially similar to that shown in this Agreement or
otherwise reasonably required by Lender and shall conform to the
specifications described in this Agreement. Borrower will be solely
responsible for the confidentiality of the contents of its
transmissions during transmission to the Lender E-mail Address or
through the web based portal. Borrower will be responsible for the
accuracy of all information provided to Lender as permitted
pursuant to this Section, and any information so received by Lender
will be deemed to have been submitted by and received from Borrower
in accordance with this Agreement, including all representations
and warranties applicable to such information as set forth in this
Agreement and the other Loan Document as if sent in paper form.
Borrower consents to and represents that it is Borrower’s
intent that by Borrower’s insertion of its name on any Report
(including the header and/or the certification line), or by
submitting documents to the web based portal, that Borrower intends
such to constitute a legally binding and enforceable signature of
Borrower, and in all aspects the legal equivalent of
Borrower’s handwritten signature.

 

(p)           Franchise
Matters.

 

(i)           

Comply
with (A) each Franchise Agreement and (B) all applicable laws
relating to franchises and business opportunities except for such
instances which would not reasonably be expected to result in a
Material Adverse Effect;

 

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

11

 

 

 

 

(ii)           

Appear
in and defend any action challenging the validity or enforceability
of any Franchise Agreement, except for such actions which,
individually or in the aggregate, have not had and could not
reasonably be expected to result in a Material Adverse
Effect;

 

(iii)           

Give
prompt notice to Lender of (A) any written notice of default
delivered by Borrower under any Franchise Agreement which, when
aggregated at such time with all other Franchise Agreements then in
default (collectively, “Franchise Agreements Then In
Default”), have in the aggregate generated more than $125,000
in gross sales by the applicable Franchisees in the immediately
preceding calendar year with respect to each of the Franchise
businesses which are the subject of such Franchise Agreements Then
In Default, (B) any written notice by a Franchisee that (1)
terminates or threatens to terminate any Franchise Agreement which,
when aggregated at such time with all other Franchise Agreements
for which Borrower has received such a notice in the same calendar
year (collectively, “Franchise Agreements Subject To
Termination”), have in the aggregate generated more than
$125,000 in gross sales by the applicable Franchisees in the
immediately preceding calendar year with respect to each of the
Franchise businesses which are the subject of such Franchise
Agreements Subject To Termination or (2) withholds or threatens to
withhold any payments under any Franchise Agreement which, when
aggregated at such time with all other Franchise Agreements for
which Borrower has received such a withholding notice in the same
calendar year (collectively, “Franchise Agreements Subject To
Withheld Sums”), have in the aggregate generated more than
$125,000 in gross sales by the applicable Franchisees in the
immediately preceding [calendar year] with respect to each of the
Franchise businesses which are the subject of such Franchise
Agreements Subject To Withheld Sums, together with a copy or
statement of any information submitted or referenced in support of
such notices and any reply by Borrower, and (C) any notice or other
communication received by Borrower in which any other party to any
Franchise Agreement which, when aggregated at such time with all
other Franchise Agreements allegedly then in default by Borrower
(collectively, “Franchise Agreements Under Which Borrower Is
Claimed To Be In Default”), have in the aggregate generated
more than $125,000 in gross sales by the applicable Franchisees
which are the subject of such Franchise Agreements Under Which
Borrower Is Claimed To Be In Default; for purposes of this
paragraph, expiration of any Franchise Agreement in accordance with
its terms does not constitute termination;

 

(iv)           

Provide
prospective Franchisees with a Franchise Disclosure Document and
other disclosure documents of similar import as required by the
rules promulgated by the FTC and applicable state and foreign
law;

 

(v)           

Sell,
after the Closing Date, all Franchises to be granted under the
Franchise Agreements in material compliance with all applicable
laws, including franchise disclosure and registration requirements;
and

 

(vi)           

Promptly
upon any material amendment, revision or modification (except for
any new, modified, terminated or expired Franchise Agreements in
the ordinary course of business) to the information on the
Franchise Schedule deliver an updated Franchise Schedule to
Lender.

 

(q)           N.
R. Realty, Inc. Borrower will
cause N. R. Realty to be dissolved within six months of the Closing
Date.

 

5.2.           Negative
Covenants. Borrower covenants
and agrees that, from the date of execution of this Agreement until
the Payment in Full of the Obligations, Borrower will not, and will
not permit any other Loan Party to:

 

(a)           Incur
Indebtedness. Incur any
Indebtedness other than: (i) the Loans and any other Obligations;
(ii) open account obligations incurred in the ordinary course of
business having maturities of less than 90 days(unless in the
ordinary course of business extended maturities are available);
(iii) Permitted Purchase Money Indebtedness; (iv) underlying cash
deposits in connection with bids, tenders or leases or as security
for surety or appeal bonds, security deposits, earnest money and
other cash deposits incurred in the ordinary course of business,
(v) Indebtedness incurred by indorsement of drafts or checks for
deposit incurred in the ordinary course of business, (vi) the Life
Insurance Debt, (vii) the Subordinated Debt and (viii) inter-Loan
Party Indebtedness.

 

(b)           Create
Liens. Except for Permitted
Liens, create, assume or permit to exist any Lien upon any assets
or property now owned or hereafter acquired by Borrower or enter
into any arrangement for the acquisition of property subject to any
Lien.

 

(c)           Guarantee.
Guarantee, endorse, or become contingently liable for the
obligations of any Person, except (i) in favor of Lender and (ii)
in connection with the indorsement and deposit of checks in the
ordinary course of business for collection.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

12

 

 

 

(d)           Amend
Organizational Documents. Amend
or change any Loan Party’s Organizational Documents in a
manner adverse to Lender, recapitalize or otherwise change or
adjust its capital, or assume a trade name or otherwise do business
by any name other than the name reflected on the Organizational
Documents or as previously disclosed in writing to
Lender.

 

(e)           Additional
Ownership Interests. Issue any
additional Ownership Interests in a manner that would cause a
Change of Control to occur.

 

(f)           Ownership
Interest Repurchases. Purchase,
retire, redeem or otherwise acquire for value, directly or
indirectly, any of its Ownership Interests now or hereafter
outstandingprovided that
nothing herein shall prevent the
conversion of the Subordinated Debt to common stock as contemplated
in the Convertible Notes.

 

(g)           Distributions.
After the Closing Date Transactions completed on the Closing Date,
(i) declare or pay any dividend or distributions on its Ownership
Interests (including any return of capital)or (ii) make any
payments of any kind to its shareholders or officers (including
debt repayments, payments for goods or services or otherwise, but
excluding ordinary salary and benefit payments to officers employed
by Borrower and excluding any payments on the Subordinated Debt
expressly permitted in this Agreement)provided that
nothing herein shall prevent the
conversion of the Subordinated Debt to common stock as contemplated
in the Convertible Notes.

 

(h)           Transactions
with Affiliates. (i) Directly or indirectly issue or enter
into any guarantee for the benefit of any of its Affiliates other
than guaranties in favor of Lender; (ii) directly or indirectly
make any loans or advances to, or investments in, any of its
Affiliates other than a Loan Party and other than short term loans
or advances in the usual and ordinary course of business to
officers, directors and employees of a Loan Party for expenses
incidental to carrying on the business of such Loan Party; (iii)
enter into any transaction with any of its Affiliates other than
transactions (other than guarantees, loans or advances) entered
into in the ordinary course of business upon fair and commercially
reasonable terms determined by Lender to be no less favorable to
Borrower than could be obtained in a comparable arms-length
transaction with an unaffiliated Person; or (iv) divert (or permit
anyone to divert) any of its business opportunities to any
Affiliate or any other Person in which Borrower or any shareholder
of Borrower holds a direct or indirect interest.

 

(i)           Investments;
Purchases of Assets. Purchase,
acquire or hold (i) legally or beneficially any stock other
securities of, or any other Ownership Interests in, any other
Person, (ii) evidences of Indebtedness of any other Person, (iii)
except as provided in Section 5.2(h), make any loans or advances to
any other Person, (iv) make any other investment in any other
Person, (v) acquire any partnership interest in any other Person,
or (vi) acquire any other interest whatsoever in any other Person.
Borrower shall not create or form any Person (including a
Subsidiary). In addition, Borrower shall not purchase or otherwise
acquire all or substantially all of the assets of any Person or the
assets comprising any line of business or business unit or
division.

 

(j)           Change
of Control; Merger. (i) Take
any action or be subject to any action that results in a Change of
Control or (ii) merge or consolidate with any Person other than an
Affiliate Guarantor with the Borrower being the surviving
entity.

 

(k)           Patriot
Act. (i) Be or become subject
at any time to any Law or list of any Governmental Authority
(including the U.S. Office of Foreign Asset Control list) that
prohibits or limits Lender from making any advance or extension of
creditto Borrower or from otherwise conducting business with a Loan
Party, or (ii) fail to provide documentary and other evidence of
any Loan Party’s identity as may be requested by Lender at
any time to enable Lender to verify such Loan Party’s
identity or to comply with any applicable Law, including Section
326 of the USA Patriot Act of 2001, 31 U.S.C. Section
5318.

 

(l)           Voluntarily
Prepay. Voluntarily prepay any
Indebtedness owing by Borrower prior to the stated maturity date
thereof other than (i) the Obligations, subject to and in
accordance with the stated terms and conditions thereof, and (ii)
Indebtedness owing to trade creditors where such prepayment results
in a discount on the amount due.

 

(m)           Lease.
Enter into any lease (other than a capitalized lease to the extent
expressly permitted by this Agreement) of real or personal property
as the lessee, or become or remain liable under any such lease in
any way (whether by assignment, as guaranty or other surety), in
each case outside the ordinary course of
business.

 

(n)           No
Sale of Assets. Sell, contract
to sell, lease or otherwise transfer, or grant any Person an option
to acquire, or sell and leaseback, any of Borrower’s assets
other than (i) the sale of inventory in the ordinary course of
business as presently conducted by it, (ii) sales to Franchisees of
used Equipment not used in any of the Loan Parties’ business
activities and (iii) dispositions of Equipment (A) which has
suffered an Event of Loss, (B) which is obsolete or worn-out, or
(C) with a net book value of less than $100,000 in the aggregate
per year (with respect to any one or more pieces of Equipment for
all Loan Parties), so long as, in each instance
(i.e.,
under clauses (A), (B), and (C)), all
cash proceeds thereof (collectively, “Disposition
Proceeds”) are paid to Lender (exclusive of any Equipment
which is the subject of a Permitted Lien on which Lender does not
have a first priority security interest) to the extent required by
and to be applied in accordance with Section 2.6;
provided,
however, that Borrower may use
Disposition Proceeds to purchase replacement Equipment in
accordance with Section 2.6.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

13

 

 

 

(o)           Financial
Covenants:

 

(i)           Permit
the Fixed Charge Coverage Ratio to be less than 1.20 to 1, as of
the end of any Test Period ending on or after December 31,
2017.

 

(ii)           Permit
the Total Leverage Ratio, determined for any Test Period set forth
below, to exceed the ratio set forth below opposite such Test
Period:

 

	

Test Period

	
 

	

Ratio

	

December 31, 2017 and March 31, 2018 

	
 

	

2.75 to 1

	

June 30, 2018 and September 30, 2018 

	
 

	

2.50 to 1

	

December 31, 2018 

	
 

	

2.25 to 1

	

March 31, 2019 and thereafter

	
 

	

2.00
to 1

 

(iii)           Permit
the Senior Leverage Ratio, determined for any Test Period set forth
below, to exceed the ratio set forth below opposite such Test
Period:

 

	

Test Period

	
 

	

Ratio

	

December 31, 2017 and March 31, 2018 

	
 

	

2.25 to 1

	

June 30, 2018 and September 30, 2018 

	
 

	

2.00 to 1

	

December 31, 2018 

	
 

	

1.75 to 1

	

March 31, 2019 and thereafter

	
 

	

1.50
to 1

 

(p)           Subordinated
Debt; Subordinated Debt Documents. (i) Make any payment (including any principal,
premium, interest, fee or charge) with respect to any Subordinated
Debt provided that
Borrower may make regularly scheduled
payments of interest on the due date thereof so long as (A) no
Payment Default has occurred and is continuing and (B) Borrower has
not received written notice from Lender that an Event of Default
(other than a Payment Default) has occurred and is continuing, (ii)
repurchase, redeem, defease, acquire or reacquire for value any of
the Subordinated Debt (provided that
nothing herein shall prevent the
conversion of the Subordinated Debt to common stock as contemplated
in the Convertible Notes), or (iii) seek, agree to or permit,
directly or indirectly, the amendment, waiver or other change to
the Subordinated Debt Documents, other than to (i) extend the
maturity date thereof or reduce the interest rate thereon or (ii)
refinance the Subordinated Debt provided the Subordinated Debt is
not increased at the time of such refinancing, except by any
interest then accrued and unpaid added to principal, and the
principal terms of any such refinancing (including interest rate
and maturity date) are no less favorable in any material respect to
the Loan Parties or the Lender than the terms of the Subordinated
Debt being refinanced.

 

5.3.           Failure
to Pay. If Borrower fails to
(a) pay any tax, assessment, governmental charge or levy, (b)
maintain insurance within the time permitted or required by this
Agreement, (c) discharge any Lien prohibited hereby, or (d) 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 and the other Loan Documents may be increased to provide
for payment of such Obligations plus interest
thereon.

 

6.            

Events of Default and
Remedies.

 

6.1           Events
of Default. Each of the
following events (each, an “Event of Default”), whether
or not caused by or within the control of any Loan Party,shall be
an Event of Default under this Agreement:

 

(a)           Any
failure by Borrower to pay when due of any of the Obligations;
provided that with respect to Obligations comprised of fees or
reimbursements of Costs, Borrower shall have three Business Days
after written notice by Lender to pay the same;
or

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

14

 

 

 

(b)           (i)
Any representation or warranty of any Loan Party set forth in this
Agreement, the Notes or any other Loan Document was false or
misleading when made or reaffirmed in any material respect (except
to the extent qualified by materiality, in which case such
representation and warranty shall be accurate in all respects);
or

 

(c)           Any
Loan Party shall fail to observe or perform any other term or
condition of this Agreement, the Notes, any other Loan Document
(exclusive of those defaults covered by the other clauses of this
Section 6.1) or any Material Agreement, or any Loan Party shall
otherwise default in the observance or performance of any covenant
or agreement set forth in any of the foregoing;
or

 

(d)           The
dissolution of any Loan Party; or

 

(e)           (i)
The institution of any garnishment proceedings by attachment, levy
or otherwise against, the entry of a final non-appealable judgment
against, or the seizure of, all or any material part of the
property of any Loan Party, including any property deposited with
Lender or (ii) any final, non-appealable judgment for the payment
of money in an aggregate amount exceeding $100,000 is entered
against any Loan Party and the same is not fully covered by
insurance or satisfied within sixty (60) days;
or

 

(f)           (i)
A commencement by any Loan Party of a voluntary case under any
applicable bankruptcy, insolvency or other similar Law now or
hereafter in effect, including the Bankruptcy Code (an
“Insolvency Law”), (ii) the entry of a decree or order
for relief in respect of any Loan Party in a case under any
Insolvency Law or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of any
Loan Party, or for any part of the property of any Loan Party, or
ordering the wind-up or liquidation of the affairs of any Loan
Party, (iii) the filing of a petition initiating an involuntary
case under any such bankruptcy, insolvency or similar Law, (iv) the
making by any Loan Party of any general assignment for the benefit
of creditors, (v) the failure of any Loan Party generally to pay
its debts as such debts become due, or (vi) the taking of action by
any Loan Party in furtherance of any of the foregoing;
or

 

(f)           (i)
A Subordinated Debt Default occurs and has not been waived in
writing by the Subordinated Creditors, (ii) any Loan Party defaults
under the terms of any other Indebtedness or lease that,
individually or in the aggregate, involves Indebtedness or lease
payments in excess of $100,000, and such default gives any creditor
or lessor the right to accelerate the maturity of any such
Indebtedness for borrowed money or lease payments, (iii) any
Subordinated Creditor denies its, his or her obligations under the
subordination provisions (i.e., Section 6) of the applicable
Convertible Note, or (iv) any one or more of the Convertible Notes
fails to be either (A) fully converted to common stock of Borrower
by October 25, 2019 in accordance with the conversion provisions of
the applicable Convertible Note or (B) have the stated maturity
date extended to at least January 31, 2023; or

 

(g)           (i)
The revocation or attempted revocation of any Guaranty by a
Guarantor before the termination of such Guaranty in accordance
with its terms, (ii) the assignment or attempted assignment of any
Guaranty by a Guarantor, (iii) any Guarantor denies its obligations
under the Loan Documents to which such Guarantor is a party or
attempts to limit or terminate its obligations under such Loan
Documents, or (iv) the death of Individual Guarantor, unless within
60 days of the death of Individual Guarantor, Borrower provides to
Lender a substitute guarantor or collateral acceptable to Lender in
its sole discretion, to cover any expected Shortfall, if any (it
being agreed that if Lender determines, in good faith, that there
would not be any expected Shortfall within 60 days after the death
of Individual Guarantor, then there would not be an Event of
Default under this clause (iv); or

 

(h)
(i) The validity or effectiveness of any of the Loan Documents or
its transfer, grant, pledge, mortgage, or assignment by the party
executing such Loan Document is materially impaired (other than in
accordance with its express terms and conditions); (ii) any party
(other than Lender or any Affiliate of Lender) executing any of the
Loan Documents asserts that any of such Loan Documents is not a
legal, valid and binding obligation of the party thereto
enforceable in accordance with its terms; (iii) the security
interest or other Lien purporting to be created by any of the Loan
Documents shall for any reason cease to be (A) a valid, perfected
Lien (other than in accordance with its express terms and
conditions) or (B) a first priority Lien (subject to any Permitted
Liens,) unless, in either case, caused by the actions or inactions
of Lender; or (iv) any Person is released from any of its covenants
or obligations under any of the Loan Documents except as permitted
by Lender in writing or in accordance with the express terms and
conditions of such Loan Documents.

 

6.2.           Remedies.
If any Event of Default shall occur and be continuing, Lender may
elect to exercise any one or more of the following remedies, all
without presentment, demand, protest or notice of any kind, as the
same are hereby expressly waived by Borrower, unless otherwise
required by applicable Law:

 

(a)           Lender
may automatically terminate its commitment to lend hereunder, cease
making any advances of the Loans and declare all Obligations to be
due and payable, whereupon the Obligations shall become immediately
due and payable;

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

15

 

 

 

(b)           Lender
may set off against the Obligations, all Collateral, balances,
credits, deposits, accounts or monies of each Loan Party then or
thereafter held with Lender, including amounts represented by
certificates of deposit;

 

(c)           Lender
may resort to the rights and remedies of a secured party under the
Uniform Commercial Code, including the right to enter any premises
of any Loan Party, with or without legal process and take
possession of the Collateral and remove it and any records
pertaining thereto and/or remain on such premises and use it for
the purpose of collecting, preparing and disposing of the
Collateral;

 

(d)           Lender
may ship, reclaim, recover, store, finish, maintain and repair the
Collateral, and may sell or otherwise dispose of the Collateral at
public or private sale. Any requirement of reasonable notice of any
disposition of the Collateral shall be satisfied if such notice is
sent to Borrower ten (10) days prior to such disposition. Borrower
shall, upon request of Lender, assemble the Collateral and any
records pertaining thereto and make the foregoing available at a
place designated by Lender;

 

(e)           Lender
may use, in connection with any assembly or disposition of the
Collateral, any trademark, trade name, tradestyle, copyright,
patent right, trade secret or technical process owned or utilized
by Borrower;

 

(f)           Lender
may take such measures as Lender may deem necessary or advisable to
preserve, collect, process, develop, maintain, protect, care for or
insure the Collateral or any portion thereof, and Borrower
irrevocably appoints Lender as Borrower’s attorney-in-fact to
do all acts and things in connection therewith and in particular,
to indorse checks and other instruments payable to Borrower;
and

 

(g)           Lender
may exercise any and all of the rights and remedies provided for in
any of the other Loan Documents or by applicable Law or in
equity.

 

6.3.           No
Remedy Exclusive. No remedy set
forth herein is exclusive of any other available remedy or
remedies, but each is cumulative and in addition to every other
remedy given under this Agreement or any of the other Loan
Documents or now or hereafter existing at Law or in
equity.

 

6.4.           Agreement
to Pay Attorney’s Fees and Other Expenses. Without limiting the provisions of Section
5.1(k), in the event Borrower should default under any of the
provisions of this Agreement and Lender should employ attorneys or
incur other expenses, including appraisal and title fees, for the
collection of the Notes or the enforcement of performance or
observance of any Obligation or agreement on the part of Borrower
contained in this Agreement and the other Loan Documents or in or
represented by the Notes, Borrower shall on demand therefor
reimburse Lender’s Attorneys’ Fees and such other
expenses.

 

6.5.           Delays
and Waiver. No delay or
omission to exercise any right shall impair any such right or be a
waiver thereof, but any such right and power may be exercised from
time to time and as often as may be deemed expedient. Any waiver of
a breach of this Agreement shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach
hereunder.

 

7.            

Miscellaneous
Provisions.

 

7.1           

Definitions.
All capitalized terms used herein or in an Exhibit hereto and not
expressly defined herein or therein shall have the meanings set
forth for them below. All financial terms used in this Agreement,
other than those defined in this Agreement, shall have the meanings
given to them by GAAP. All other undefined terms shall have the
meanings given to them in the Uniform Commercial Code, as now or
hereafter enacted in the State of Ohio.

 

“Acceptable
Site Inspection” means results of an inspection of the unit
that is the subject of the applicable Development Project and the
applicable Advance, which inspection must be (a) completed at
Borrower’s sole cost and expense and (b) in form and content
satisfactory to Lender, in its sole discretion.

 

“Advance
Request” shall have the meaning given in Section
2.1(b)(v).

 

“Advances”
means, with respect to a Development Loan, all amounts advanced by
Lender as part of such Development Loan, whether advanced directly
to Borrower or otherwise, for the acquisition (and, as applicable,
installation) of the applicable Development Assets.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

16

 

 

 

“Affiliate”
means, as to any Person (the “Subject Person”), any
other Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, the Subject Person.
For purposes of this definition, “control” of a Person
means the power, direct or indirect, (a) to vote 10% or more of the
securities (or other Ownership Interests) having voting power for
the election of directors (or managers in the case of a limited
liability company) of the Person or (b) otherwise to direct or
cause the direction of the management and policies of the Person,
whether by contract or otherwise. Without limiting the generality
of the foregoing, each of the following will be deemed an Affiliate
of Borrower for purposes of this Agreement: (i) each of the other
Loan Parties and (ii) all of the officers, shareholders or members
(in each case who own 10% or more of such Person), and directors
(or managers in the case of a limited liability company), as
applicable, of each of the Loan Parties.

 

“Affiliate
Guarantors” means, collectively, (a) Pizzaco, Inc., an
Indiana corporation and(b) RH Roanoke, Inc., an Indiana
corporation, and their respective successors and assigns including
any receiver, custodian, and trustee or
debtor-in-possession.

 

“Affiliate
Guarantor Security Agreements” means, collectively, each
Security Agreement dated as of the Closing Date made by an
Affiliate Guarantor in favor of Lender, as the same may be amended,
restated or otherwise modified from time to time.

 

“Agreement”
has the meaning given in the introductory paragraph
hereof.

 

“Alternate
LIBOR Source” means any successor or replacement of ICE
Benchmark Administration Limited, in each case, as approved by
Lender.

 

“Approved
Bloomberg Successor” means any successor or replacement of
Bloomberg LP, in each case, as approved by Lender.

 

“Attorneys’
Fees” means the reasonable costs and expenses of the
attorneys (and all paralegals and other staff employed by such
attorneys) employed by Lender from time to time in connection with
this Agreement, the other Loan Documents, and the Obligations,
including all services (and all costs and expenses related to) to:
(a) take any action in or with respect to any suit or proceedings
(bankruptcy or otherwise) relating to the Collateral, this
Agreement, or the other Loan Documents; (b) protect, collect,
lease, sell or otherwise dispose of any of the Collateral; (c)
attempt to enforce any Lien on any of the Collateral or to give any
advice with respect to such enforcement; (d) enforce any of
Lender’s rights to collect any of the Obligations; (e) give
Lender advice with respect to this Agreement and the other Loan
Documents, including advice in connection with any default, workout
or bankruptcy; (f) prepare, process, document and/or close the
Loans, this Agreement or the other Loan Documents, and any
amendments, restatements or waivers to this Agreement or any of the
Loan Documents; and/or (g) otherwise establish or maintain any of
Lender’s rights or any Loan Party’s obligations under
any of the foregoing.

 

“Bankruptcy Code” means 11 U.S.C.
Section 101 et seq. as amended from time to
time.

 

“Borrower”
means Noble Roman’s, Inc., an Indiana corporation, and its
successors and assigns, including any receiver, custodian, and
trustee or debtor-in-possession.

 

“Borrower
Security Agreement” means the Security Agreement, dated as of
the Closing Date, made by Borrower in favor of Lender, as the same
may be amended, restated or otherwise modified from time to
time.

 

“Business
Day” means a day (other than a Saturday or Sunday) on which
commercial banks in Cincinnati, Ohio generally are open for the
conduct of substantially all of their commercial lending
activities.

 

“Capital
Expenditures” means, with respect to any Person, any
expenditure made or liability incurred that would be classified as
a capital expenditure and capitalized on the balance sheet of such
Person in each case in accordance with GAAP.

 

“Capital
Lease Obligations” of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) any personal
property, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with
GAAP.

 

“Change
in Control” means either of the following (or any combination
of the following) whether arising from any single transaction or
event or any series of transactions or events (whether as the most
recent transaction in a series of transactions) which, individually
or in the aggregate, results in: (a) the acquisition by any Person
or two or more Persons (other than Paul Mobley or Scott Mobley)
acting in concert (including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934), of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 35% or more of the outstanding voting Capital Stock
of Borrower or (b) Paul W. Mobley or A. Scott Mobley, or such other
individual consented to by Lender which consent shall not be
unreasonably withheld or delayed, no longer being the chief
executive officer of Borrower.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

17

 

 

 

“Closing
Date” means the date of this Agreement.

 

“Closing
Date Transactions” means, collectively, (a) the execution,
delivery and performance by each Loan Party of the Loan Documents
to which it is a party as of the Closing Date or within 90 days
after the Closing Date, (b) the making of the Loans hereunder on
the Closing Date, (c) the repayment of the Existing Indebtedness
and (d) the payment of fees, costs and expenses in connection with
the foregoing.

 

“Collateral”
means any property, real or personal, tangible or intangible, now
or in the future securing any or all of the Obligations, including
the property granted (or purported to be granted) by the Security
Documents and such term as may be further defined in the Loan
Documents.

 

“Commodity
Exchange Act” means the Commodity Exchange Act (7 U.S.C.
§ 1 et seq.), as amended from time to time and any successor
statute.

 

“Consolidated Adjusted EBITDA” means,
with respect to Borrower and its Subsidiaries determined on a
consolidated basis, for the applicable Test Period, the total
(without duplication) determined in accordance with GAAP of the sum
of: (a) EBITDA; plus
(b) to the extent included in the
determination of EBITDA for the applicable Test Period, non-cash
losses during the applicable Test Period; plus
(c) to the extent included in the
determination of EBITDA for the applicable Test Period, the actual
Transaction Costs incurred during the applicable Test Period to the
extent not capitalized under GAAP; plus
(d) such additional add-backs during
the applicable Test Period, if any, permitted by Lender in its sole
discretion; and minus
(e) to the extent included in the
determination of EBITDA of for the applicable Test Period, any (i)
extraordinary or non-recurring income or gains during the
applicable Test Period, (ii) any gain arising from the sale of
capital assets during the applicable Test Period, and (iii) any
gain arising from the write-up of any assets during the applicable
Test Period.

 

“Contested
Claims” has the meaning given in Section 5.1(d).

 

“Convertible
Notes” means the 10% Convertible Subordinated Unsecured Notes
Due 11-2-2019 issued by Borrower and dated November 2, 2016, with
an aggregate principal amount of $2,400,000, as amended, modified,
extended, renewed and/or refinanced as permitted in this
Agreement.

 

“Costs”
has the meaning given in Section 5.1(j).

 

             “Credit
Card Obligations” means any Indebtedness owing by Loan
Parties to Lender or Lender’s Affiliates under any credit
card agreements.

 

“Default Rate” means 3% per
annum plus
the highest rate of interest that
would otherwise be in effect under a Note, but not more than the
highest rate permitted by applicable Law.

 

“Deposit
Account Control Agreement” means a deposit account control
agreement, or similar agreement, each in form and substance
satisfactory to Lender, entered into by and among Borrower, Lender,
and the bank at which the applicable Third Party Deposit Account is
maintained that, among other things, grants Lender
“control” (as that term is used under the UCC) of such
Third Party Deposit Account.

 

“Development
Asset Agreements” means (in each case to the extent
applicable) any and all purchase and sale agreements, construction
or remodeling agreements, invoices and any other instruments,
documents and agreements relating to, as applicable, the
acquisition, remodeling, installation, or other development of the
Development Assets.

 

“Development
Assets” shall mean, with respect to a Development Loan, the
“Development Assets” as defined in the applicable
Development Loan Note.

 

“Development Line Amount” means, as of
any date of determination, an aggregate principal amount equal to
the lesser of: (a) the Development Loan Advance
Ratemultiplied by
the Eligible Costs of the then
existing Development Assets or (b) the Development Line Dollar
Cap.

 

“Development
Line Dollar Cap” means $1,600,000.

 

“Development
Line Draw Period Expiration Date” means the date that is 18
months after the Closing Date.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

18

 

 

“Development
Line of Credit” has the meaning given in the Development Line
Note.

 

“Development
Line Note” means that certain promissory note made by
Borrower to the order of Lender in the stated principal amount of
the Development Line Dollar Cap.

 

“Development
Loan” means each Loan by Lender to Borrower under the
Development Line of Credit, as each such Loan is more particularly
evidenced pursuant to, and in accordance with, the terms and
conditions of this Agreement and the applicable Development Loan
Note with respect to such Loan.

 

“Development Loan Amount” means, as of
any date of determination with respect to a Development Loan, an
aggregate principal amount equal to the lesser of: (a) the
Development Loan Advance Rate multiplied by
the Eligible Costs of the then
existing Development Assets applicable to such Development Loan or
(b) the Development Loan Dollar Cap.

 

“Development
Loan Principal Component” means, for purposes of clause (b)
of the definition of “Fixed Charges”, the principal
amount of the Development Loan which was scheduled to be paid
during the applicable Test Period (whether or not paid) (other than
any Excess Cash Flow Payment).

 

“Development
Loan Dollar Cap” means $550,000 (subject to the available
Development Line Amount).

 

“Development
Loan Draw Period Expiration Date” means, with respect to each
Development Loan, the earlier of: (a) the Development Line Draw
Period Expiration Date or (b) the date that is four months after
the date on which the first Advance under such Development Loan is
made.

 

“Development
Loan Advance Rate” means 100%.

 

“Development
Loan Note” means each promissory note made (or to be made) by
Borrower to the order of Lender in connection with, and as a
condition precedent to, a Development Loan under the Development
Line of Credit.

 

“Development
Notes” means each of, and collectively: (a) the Development
Line Note and (b) each of the Development Loan Notes.

 

“Development
Project” means, with respect to a Development Loan, the
“Development Project” as defined in the Development
Loan Note applicable to such Development Loan.

 

“EBITDA”
means, without duplication, the amount of Borrower and its
Subsidiaries’ earnings before interest, taxes, depreciation
and amortization expense for the applicable measurement period,
calculated on a consolidated basis in accordance with
GAAP.

 

“Eligible Costs” means, collectively,
the fees, costs and other amounts (as applicable) incurred by
Borrower, as more particularly set forth, and identified as
eligible, on the Schedule of Eligible
Costs below, less the amount of
any and all contributions, allowances and/or other amounts made
and/or paid (or to be made and/or paid) by any landlord or any
other third party with respect to any given Development Project, in
each case solely to the extent acceptable to Lender and in each
case solely to the extent that the applicable assets and property
constitute Collateral (as defined in the Borrower Security
Agreement); provided that, notwithstanding anything to the contrary in
the foregoing, in no event shall “Eligible Costs”
include any fees, costs or other amounts expressly identified as
ineligible on such Schedule of Ineligible
Costs below.

 

	

Schedule of Eligible Costs

	
 

	

Schedule of Ineligible Costs

	

Décor package

Dining area furniture

Kitchen equipment

Music equipment

Office furniture and equipment

POS equipment and computers

Refrigeration equipment (e.g. walk-in coolers)

Storage area shelving and equipment

Signage

Smallwares

Video training equipment

Freight

Installation

Installation permits, if applicable

Sales tax

Liquor Licenses

	
 

	

Attorney’s fees

Contingency costs

Loan interest

Franchise fees

Insurance

Loan fees (unless otherwise agreed by Lender)

Pre-opening expenses

Start-up costs

Training expenses

Uniforms

Utilities

Working capital

 

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

19

 

 

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, and any
regulations promulgated and rulings issued thereunder from time to
time, as amended or as may be replaced by successor
statute.

 

“Event
of Default” has the meaning given in Section
6.1.

 

“Event
of Loss” means, with respect to any property, (a) any loss,
destruction or damage of such property or (b) any condemnation or
taking by exercise of the power of eminent domain of such property
by any Governmental Authority.

 

“Excess Cash Flow” means, for each
Excess Cash Flow Period, an amount equal to the sum of (without
duplication): (a) EBITDA for such Excess Cash Flow Period,
plus
(b) all non-cash items added back to
EBITDA in the definition of Consolidated Adjusted EBITDA for such
Excess Cash Flow Period, minus
(c) the sum of (i) Fixed Charges for
such Excess Cash Flow Period, (ii) the aggregate amount of
Non-Financed Capital Expenditures paid in cash for such Excess Cash
Flow Period, and (iii) the aggregate amount of cash payments of
income, franchise or equivalent income-type taxes for such Excess
Cash Flow Period.

 

“Excess
Cash Flow Payment Date” means, for each fiscal year, the date
which is 135 days after the end of such fiscal year. For purposes
of this Agreement, the first Excess Cash Flow Payment Date will
occur 135 days after the Fiscal Year ending December 31, 2017, and
the Excess Cash Flow Payment Date will continue with respect to
each subsequent fiscal year thereafter.

 

“Excess Cash Flow Percentage” means
50%, provided that
if, on any Excess Cash Flow Payment
Date, the Senior Leverage Ratio shall be less than 1.50 to 1 but
greater than 1.00 to 1 for the immediately preceding Excess Cash
Flow Period then ended, the applicable percentage shall be
25%; provided further
if, on any Excess Cash Flow Payment
Date, the Senior Leverage Ratio shall be less than 1.00 to 1 for
the immediately preceding Excess Cash Flow Period then ended, the
applicable percentage shall be 0%.

 

“Excess Cash Flow Period” means each
fiscal year of the Loan Parties ending on and after December 31,
2017;providedthat,
solely with respect to the fiscal year of the Loan Parties ending
on December 31, 2017, the Excess Cash Flow Period shall be the Stub
Period.

 

“Excluded
Swap Obligations” means, with respect to any Guarantor and
solely in its capacity as Guarantor and not as a direct obligor
thereof, (a) as it relates to all or a portion of the guarantee of
such Guarantor, any Swap Obligation if, and to the extent that, all
or a portion of the guaranty of such Guarantor of, or the grant by
such Guarantor of a security interest to secure, such Swap
Obligation (or any guaranty thereof) is or becomes illegal under
the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such
Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the
Commodity Exchange Act and the regulations thereunder at the time
the guaranty of such Guarantor or the grant of such security
interest becomes effective with respect to such Swap Obligation or
(b) as it relates to all or a portion of the grant by such
Guarantor of a security interest, any Swap Obligation if, and to
the extent that, such Swap Obligation (or such security interest in
respect thereof) is or becomes illegal under the Commodity Exchange
Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation
of any thereof) by virtue of such Guarantor’s failure for any
reason to constitute an “eligible contract participant”
as defined in the Commodity Exchange Act and the regulations
thereunder at the time the security interest of such Guarantor
becomes effective with respect to such Swap Obligation; provided
that if a Swap Obligation arises under a master agreement governing
more than one swap, such exclusion shall apply only to the portion
of such Swap Obligation that is attributable to swaps for which
such guaranty or security interest is or becomes
illegal.

 

“Existing
Indebtedness” means the Indebtedness owing to Prior
Lenders.

 

“Extraordinary
Receipts” means any cash received by any Loan Party not in
the ordinary course of business, including (a) judgments, proceeds
of settlement or other cash consideration of any kind in connection
with any cause of action, (b) indemnity payments, (c) pension plan
reversions, (d) proceeds of insurance, including key person life
insurance and business interruption insurance, (e) the Life
Insurance Proceeds, (f) proceeds of the Litigation Collateral, (g)
proceeds from the Warrants and (h) Tax Refunds.

 

“Final Advance” means, with respect to
a Development Loan, the Advance made by Lender to Borrower,
pursuant to which such Development Loan shall be drawn in
full; provided that, to the extent that such Development Loan
will not be drawn in full in connection with the completion of the
applicable Development Project, the “Final Advance”
with respect to such Development Loan means the final Advance made
by Lender to Borrower, pursuant to which (or following which) the
applicable Development Project is completed.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

20

 

 

 

“Financial
Statements” means Borrower’s balance sheet, income
statement and statement of cash flows and reconciliation of net
worth.

 

“Fixed Charge Coverage Ratio” means,
for the Test Period then ended, the ratio resulting from
dividing
(a) Free Cash Flow for such Test
Period by (b) Fixed Charges for such Test
Period.

 

“Fixed Charges” means, with respect to
Borrower and its Subsidiaries determined on a consolidated basis,
for the applicable Test Period, the total (without duplication) of
(all as determined in accordance with GAAP): (a) aggregate cash
payments of interest made for such Test Period, including interest
paid on the Obligations, interest paid on the Subordinated Debt,
the interest portion of all Capital Lease Obligations, and any
other cash payments of interest as determined by GAAP on any other
Indebtedness for such Test Period; plus
(b) the principal amount of
Indebtedness which was scheduled to be paid during such Test Period
(whether or not paid), including under the Term Loan (other than
any Excess Cash Flow Payment) and the Development Notes; and
plus
(c) the principal portion of the
aggregate Capital Lease Obligations which were scheduled to be paid
during such Test Period (whether or not paid). For purposes of
clause (b) of this definition, the Development Loan Principal
Component and the Term Loan Principal Component for the first three
Test Periods shall as set forth in the definition of Test
Period.

 

“Franchise” means a franchise granted
by Borrower for a (a) non-traditional location (such as a
university building, hospital, or convenience store) for a pizza
restaurant business operating under the name “Noble
Roman’s Pizza®”
and/or “Tuscano’s®”
and (b) traditional location (such as
an outdoor strip mall) for a pizza restaurant business operating
under the name “Noble Roman’s Craft Pizza &
Pub®”
and/or “Noble Roman’s Pizza®”.

 

“Franchise
Agreement” means, as in effect as of any date of
determination, each and any then existing contract between a
Franchisee and Borrower pursuant to which such Person is granted a
Franchise”, as each such agreement is now in effect or, as at
any time after the date of this Agreement, as it is amended,
modified, supplemented, restated, or otherwise changed and any
substitute or replacement agreement therefor.

 

“Franchise
Disclosure Documents” means all disclosure documents
provided, as of any date of determination, by Borrower to any
Franchisee, including the franchise disclosure document required by
the rules promulgated by the FTC.

 

“Franchise Schedule” means
Schedule
7.1(a) attached to this
Agreement.

 

“Franchisee”
means, as applicable, each Person identified in the applicable
Franchise Agreement as “franchisee”.

 

“FTC”
means the United States Federal Trade Commission or its
successor.

 

“Free Cash Flow” means, with respect
to Borrower and its Subsidiaries determined on a consolidated basis
for the applicable Test Period, the total (without duplication), of
(all as determined in accordance with GAAP): (a) Consolidated
Adjusted EBITDA for such Test Period, minus
(b) Non-Financed Capital Expenditures
paid in cash for such Test Period, minus
(c) the aggregate amount of cash
payments of income, franchise or equivalent income-type taxes for
such Test Period, minus
(d) the aggregate amount of all cash
payments of dividends and distributions made during such Test
Period. Nothing herein shall be construed to constitute
Lender’s consent to any capital expenditures, dividends or
distributions not expressly permitted by this Agreement and the
other Loan Documents.

 

“GAAP”
means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other Person as have been
approved by a significant segment of the accounting profession,
which are in effect from time to time, and which are applied on a
consistent basis subject to Sections 7.3(a) and
7.3(b).

 

“GAAP
Change” means each of, and collectively: (a) any change in
GAAP or (b) any change in any GAAP method utilized by the Loan
Parties in their Financial Statements.

 

“Governmental
Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of,
or pertaining to, government or any agency or instrumentality
thereof (including any central bank).

 

“Guaranty”
means each Guaranty Agreement, dated as of, or after, the Closing
Date, made by a Guarantor in favor of Lender, in each case as the
same may be amended, restated or otherwise modified from time to
time.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

21

 

 

 

“Guarantor”
means each of, and collectively, (a) the Affiliate Guarantors, (b)
the Individual Guarantor, and (c) any and all Persons that in the
future deliver one or more Guaranties to Lender.

 

“Indebtedness”
of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such
Person in respect of the deferred purchase price of property or
services (other than accounts payable incurred in the ordinary
course of business and constituting current liabilities not more
than ninety (90) days in arrears measured from the date of
billing), (f) all indebtedness of others secured by (or for which
the holder of such indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the indebtedness secured
thereby has been assumed, (g) all guaranties of such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and
letters of guaranty, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers’ acceptances, (k)
obligations under any earn-out that have become a liquidated
amount, (l) the net mark to market value then outstanding pursuant
to (i) any Rate Management Agreement and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of
any Rate Management Agreement transaction, (m) any repurchase
obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (n) any indebtedness,
liability or obligation under any so-called “synthetic
lease” transaction entered into by such Person, or (o) any
indebtedness, liability or obligation arising with respect to any
other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on
the balance sheets of such Person (other than operating leases).
The Indebtedness of any Person shall include the Indebtedness of
any other Person (including any partnership in which such Person is
a general partner) to the extent such Person is liable therefor as
a result of such Person’s Ownership Interest in or other
relationship with such Person, except to the extent the terms of
such Indebtedness provide that such Person is not liable
therefor.

 

“Individual
Guarantor” means Paul W. Mobley.

 

“Insolvency
Law” has the meaning given in Section 6.1(f).

 

“Late
Fee” means 5% of the amount which is overdue or $100.00,
whichever is greater.

 

“Law(s)”
means all laws, statutes, ordinances, rules, orders, injunctions,
decrees, regulations, rulings, conditions, directions or other
requirements (including those relating to public health, employment
practices and pension benefits, and environmental, occupational and
health standards and controls) now or hereafter set forth by any
Governmental Authority.

 

“Lender”
means (a) Lender as identified in the opening paragraph of this
Agreement and, as applicable, (b) any Lender’s
Affiliate.

 

“Lender’s
Affiliate” means any Person that controls, is controlled by,
or is under common control with Lender. For purposes of this
definition, a Person has control over another Person if (a) the
Person directly or indirectly or acting through one or more other
Persons owns, controls, or has power to vote 25% or more of any
class of voting Ownership Interests in the other Person, (b) the
Person controls in any manner the election of a majority of the
directors, trustees or managers of the other Person, or (c) the
Person directly or indirectly exercises a controlling influence
over the management or policies of the other Person. For purposes
of any Rate Management Obligation, or foreign exchange or other
international transactions or services, or treasury management
services, “Lender’s Affiliate” shall also include
any agent, correspondent, or counterparty financial institution
used by Lender to provide any such products or services for the
benefit of or at the request of Lender or Borrower.

 

“LIBOR”
or “LIBOR Rate” means the rate (adjusted for reserves
if Lender is required to maintain reserves with respect to relevant
advances) (rounded up to the nearest 1/8 of 1%) fixed by the ICE
Benchmark Administration Limited (or any Alternate LIBOR Source) at
approximately 11:00 a.m., London time (or at the relevant time
established by an Alternate LIBOR Source or by Lender), relating to
quotations for the one month London InterBank Offered Rates on U.S.
dollar deposits, as displayed by Bloomberg LP (or any Approved
Bloomberg Successor), or such rate as shall be determined in good
faith by Lender from such sources as it shall determine to be
comparable to Bloomberg LP (or any Approved Bloomberg Successor),
in effect two New York Banking Days prior to the beginning of each
calendar month; provided,
that, at no time shall LIBOR or the LIBOR Rate be less than
0% (the “LIBOR Rate Minimum”); provided further, that notwithstanding
the foregoing, at any time during which a Rate Management Agreement
is then in effect with respect to the Loans or any portion thereof,
(a) the provision concerning rounding up to the nearest 1/8 of 1%
contained in this definition shall be disregarded, and this
provision shall not be applied again until such time as the Rate
Management Agreement is no longer in effect and (b) the LIBOR Rate
Minimum shall be disregarded and no longer of any force and effect
with respect to such portion of the Loans subject to such Rate
Management Agreement.

 

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

22

 

 

 

 

“Lien”
means any security interest, mortgage, pledge, hypothecation,
assignment, lien (statutory or otherwise) or other encumbrance of
any kind, including interests of vendors or lessors under
conditional sale contracts or capital leases.

 

“Life
Insurance” means, collectively, (a) the policy of life
insurance no. 15-701-397 (together with any supplementary contracts
issued in connection with that policy) insuring the life of Alan S.
Mobley, issued by the Life Insurer, (b) the policy of life
insurance no. 12-041-333 (together with any supplementary contracts
issued in connection with that policy) insuring the life of Paul W.
Mobley, issued by the Life Insurer and (c) the policy of life
insurance no. 12-048-318 (together with any supplementary contracts
issued in connection with that policy) insuring the life of Paul W.
Mobley, issued by the Life Insurer.

 

“Life
Insurance Loans” means the loans made to Borrower by Life
Insurer in respect of the applicable Life Insurance solely to the
extent the principal and interest thereof is less than the cash
surrender value of the applicable Life Insurance.

 

“Life
Insurance Documents” means, collectively, (a) the Agreement
Regarding Life Insurance Policy as Collateral between Borrower and
Lender, in form and substance satisfactory to Lender, (b) a
collateral assignment of the Life Insurance in favor of Lender, in
form and substance satisfactory to Lender, and (c) all other
related agreements, instruments or documents executed or delivered
in connection therewith.

 

“Life
Insurance Proceeds” means, collectively, any proceeds or
other amounts under the Life Insurance, including any cash
surrender value or death benefit.

 

“Life
Insurer” means The Northwestern Mutual Life Insurance
Company.

 

“Litigation Collateral” means,
collectively, the Net Proceeds received by any Loan Party from (i)
the $350,000 Promissory Note made payable by Collet Eugene
Harrington to Borrower and all collateral provided therefor,
including the two mortgages dated July 13, 2016 on real property in
Jefferson County, Kentucky and (ii) any litigation or claim (other
than any claim in the ordinary course of business)(including the
settlement thereof) held by a Loan Party against another Person,
including in respect of the lawsuits described on
Schedule
7.1(b).

 

“Loan(s)”
means any and all advances of funds under this Agreement and any of
the other Loan Documents, including the Advances and the Term
Loan.

 

“Loan
Documents” means, collectively, this Agreement, the Notes,
the Guaranties, the Security Documents, any and all Rate Management
Agreements, any and all Treasury Management Agreements and each and
every document or agreement executed by any party evidencing,
guarantying or securing any of the Obligations, and “Loan
Document” means any one of the Loan Documents.

 

“Loan
Parties” means each of, and collectively, (a) Borrower, and
(b) the Affiliate Guarantors.

 

“Material
Adverse Effect” means a material adverse effect, as
determined by Lender in good faith, on (a) Borrower’s and its
Subsidiaries’: (i) business, assets, operations, or financial
condition, taken as a whole or (ii) ability to perform any of its
payment, financial covenant or other negative covenants in this
Agreement, or other material obligations under this Agreement or
any of the other Loan Documents, (b) the recoverable value of the
Collateral or Lender’s rights or interests therein, (c) the
enforceability of any of the Loan Documents, or (d) the ability of
Lender to exercise any of its rights or remedies under the Loan
Documents or by law provided.

 

“Material
Agreements” means any agreement, commitment, arrangement or
instrument (other than the Loan Documents) to which, as of any
date, any Loan Party is a party or by which any Loan Party or any
of their respective properties is bound, including any note,
indenture, loan agreement, mortgage, lease, or deed, in each case,
which, if not in full force and effect, could reasonably be
expected to have a material adverse effect on Borrower’s and
its Subsidiaries’ business taken as a whole.

 

“New
York Banking Day” means any day (other than a Saturday or
Sunday) on which commercial banks are open for business in New
York, New York.

 

“Net
Proceeds” means any cash payments, proceeds, or other cash
amounts received with respect to any of the matters described in
Section 2.6.1, net of: (a) any applicable tax paid (or reasonably
estimated to be payable) by any Loan Party thereon, (b) any payment
required in respect of any Permitted Purchase Money Indebtedness
secured by a Lien on any Equipment on which Lender does not have a
first priority security interest to the extent permitted by this
Agreement, (c) any reasonable out-of-pocket expense incurred by any
Loan Party to obtain such payment, proceed or other amount which is
paid to any Person which is not an Affiliate of any Loan Party and
(d) the amount of any reserves established by the Loan Parties in
accordance with GAAP to fund indemnification obligations, purchase
price adjustments and other contingent liabilities, if any,
reasonably estimated to be payable, that are directly attributable
to such event.

 

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

23

 

 

 

 

“Non-Financed
Capital Expenditures” means the total amount of Capital
Expenditures for any period, as determined in accordance with GAAP,
made by the Loan Parties determined exclusive of (a) those Capital
Expenditures made using (i) funds borrowed by Borrower including
Advances or pursuant to any capitalized lease or (ii) the proceeds
of condemnation or eminent domain proceedings or any insurance
proceeds resulting from any Event of Loss and (b) any Transaction
Costs (to the extent included as a Capital Expenditure under
GAAP).

 

“Note(s)”
means each of, and collectively, the Development Notes, the Term
Note, and any note, now or in the future, between Borrower and
Lender, as any of the same may be amended, restated or otherwise
modified from time to time.

 

“Obligations” means all of the Loans,
all Rate Management Obligations, all Credit Card Obligations, and
all other loans, advances, and Indebtedness of, and each and every
other agreement, duty, obligation, indemnity. or liability of,
Borrower owed to any and each of Lender and/or any Lender’s
Affiliate, however created, of every kind and description, whether
now existing or hereafter arising, whether for principal, interest,
fees or other sums (including interest, fees or expenses that
accrue after the commencement of an insolvency proceeding,
regardless of whether allowed or allowable in whole or in part as a
claim in any such insolvency proceeding), and whether direct or
indirect, primary or as guarantor or surety, absolute or
contingent, liquidated or unliquidated, matured or unmatured,
related or unrelated, 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 all loans, advances,
Indebtedness and each and every obligation or liability arising
under the Loan Documents, any and all foreign exchange or other
international transactions or services, treasury management
services (including under, or arising out of, the Treasury
Management Agreements), 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 fees and expenses
(including Attorneys’ Fees) incurred by Lender hereunder or
any other document, instrument or agreement related to any of the
foregoing; provided,
however, that, with respect to
any Guarantor, the Obligations shall not include Excluded Swap
Obligations in respect of such Guarantor.

 

“Organizational
Documents” means for each Person, as applicable, such
Person’s certificate/articles of
incorporation/organization/formation/partnership, bylaws,
stockholders agreements, operating/limited liability
company/limited partnership agreement, or other applicable charter
or other governing documents or trust agreements.

 

“Ownership
Interests” means all shares, interests, participations,
rights to purchase, options, warrants, general or limited
partnership interests, or limited liability company interests or
other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent
entity, whether voting or nonvoting, including common stock,
preferred stock or any other “equity security” (as such
term is defined in Rule 3a11-1 of the Rules and Regulations
promulgated by the Securities and Exchange Commission (17 C.F.R.
§ 240.3a11-1) under the Securities Exchange Act of 1934, as
amended.

 

“Payment
Default” means an Event of Default under Section 6.1(a) as it
respects principal or interest on any Note.

 

“Payment
in Full of the Obligations” means, as of any date of
determination, that (a) the Obligations (other than contingent
indemnification and reimbursement obligations in respect of which
no claim for payment has yet been asserted by the Person entitled
thereto) are fully paid and satisfied, (b) all letters of credit,
if any, have been cancelled and returned to Lender or either (i)
replaced by an irrevocable letter of credit, on terms acceptable to
Lender, issued by a financial institution satisfactory to Lender or
(ii) cash collateralized, in each case, in an amount equal to at
least one hundred five (105%) percent of the then aggregate stated
face amount of all outstanding letters of credit and on terms
satisfactory to Lender, and (c) all commitments to lend under the
Loan Documents have been terminated.

 

“Permitted
Discretion” means the observance of reasonable commercial
standards from the perspective of a secured asset-based lender and
not acting in an arbitrary or capricious manner.

 

“Permitted Liens” means: (a) any Liens
securing the payment of current taxes and assessments not yet due
and payable; (b) any Liens on cash deposits (i) in connection with
deposits under workers’ compensation, unemployment insurance
and social security Laws (other than any Lien imposed by ERISA),
(ii) to secure the performance of bids, tenders, contracts (other
than for the repayment of Indebtedness) or leases, (iii) to secure
statutory obligations or appeal bonds, or (iv) to secure indemnity,
surety, performance or other similar bonds in the ordinary course
of business to the extent such bonds are permitted by this
Agreement; (c)any Liens of mechanics, materialmen, shippers,
warehousemen, and other like Liens for services or materials
incurred in the ordinary course of business for which payment is
not overdue; (d) Liens in favor of Lender; (e) reservations,
exceptions, encroachments and other similar title exceptions or
encumbrances affecting real properties; provided such do not materially detract from the use or
value thereof as used by the owner thereof; (f) any Liens arising
from a Contested Claim in the manner, and to the extent, provided
for in Section 5.1(d); (g) any Lien resulting from any judgment
that is not itself an Event of Default; and (h) any Lien arising in
connection with Permitted Purchase Money Indebtedness to the extent
that the incurrence of such Permitted Purchase Money Indebtedness
is expressly permitted by this Agreement and the other Loan
Documents.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

24

 

 

 

 

“Permitted
Purchase Money Indebtedness” means purchase money
Indebtedness or Capital Lease Obligations incurred by any Loan
Party to acquire or make improvements upon any Equipment, fixtures
or real property if each of the conditions is satisfied: (a) the
total amount of obligations secured by the purchase money security
interests and, as applicable, any Capital Lease Obligations
incurred does not exceed an aggregate amount equal to $100,000 per
fiscal year for all Loan Parties; (b) such purchase money
Indebtedness or Capital Lease Obligations will not be secured by
any of the Collateral other than the Equipment or fixtures so
acquired and any identifiable proceeds; (c) any Liens relating to
such purchase money Indebtedness or Capital Lease Obligations will
not extend to or cover any property of any Loan Party other than
the property so acquired and any identifiable proceeds; and (d) the
principal amount of such purchase money Indebtedness and, as
applicable, Capital Lease Obligations will not, at the time of the
incurrence thereof, exceed the value of the Equipment or fixtures
so acquired or real property so improved.

 

“Person”
means any individual, partnership, joint venture, trust, limited
liability company, business trust, joint stock company,
unincorporated association, corporation, institution, entity, or
any Governmental Authority.

 

“Prime
Rate” means (a) the rate per annum established by Lender from
time to time as its “prime rate” based on its
consideration of various factors, including money market, business
and competitive factors, which rate is not necessarily
Lender’s best or most favorable interest rate, or, (b) if
there is no such Prime Rate, such other rate as may be substituted
by Lender for the Prime Rate. Subject to any maximum or minimum
interest rate limitations specified herein or by applicable Law, if
and when such Prime Rate changes, the rate of interest payable
under this Agreement, the applicable Notes, the Security Documents
or any other Loan Documents based on the Prime Rate will change
automatically without notice effective the date of such
changes.

 

“Prior
Lenders” means, collectively, BMO Harris Bank, N.A., Super G
Funding, LLC, Paul and Jenny Mobley and Scott Mobley.

 

“Rate Management Agreement” means any
agreement, device or arrangement providing for payments which are
related to fluctuations of interest rates, commodities, exchange
rates, forward rates, or equity prices, including
dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap
or collar protection agreements, swaps, forward rate currency or
interest rate options, puts and warrants, and any agreement
pertaining to equity derivative transactions (e.g., equity or equity index swaps, options, caps,
floors, collars and forwards), including any ISDA Master Agreement
between a Borrower and Lender or any Lender’s Affiliate, and
any schedules, confirmations and documents and other confirming
evidence between the parties confirming transactions thereunder,
all whether now existing or hereafter arising, and in each case as
amended, restated or otherwise modified or supplemented from time
to time, and in each case for the purpose of hedging the applicable
exposure associated with Borrower’s operations and not for
speculative purposes.

 

“Rate
Management Obligations” means any and all obligations of
Borrower to Lender or any Lender’s Affiliate, whether
absolute, contingent or otherwise and howsoever and whensoever
(whether now or hereafter) created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefore), under or in connection with any and all
(a) Rate Management Agreements, and (b) cancellations, buy backs,
reversals, terminations or assignments of any Rate Management
Agreement.

 

“Regulatory
Agencies” means each applicable federal, state or local
authority or agency, including the FTC.

 

“Security
Documents” means, collectively, the Borrower Security
Agreement, the Trademark Security Agreement dated as of the Closing
Date between Borrower and Lender, the Patent Security Agreement
dated as of the Closing Date between Borrower and Lender, the
Collateral Assignment of Franchise Agreements dated as of the
Closing Date between Borrower and Lender, the Affiliate Guarantor
Security Agreements, the Life Insurance Documents, and all other
agreements, pledges, mortgages, security agreements,guaranties, or
other documents delivered by any Loan Party or any other Person to
Lender, whether previously, now or in the future to encumber the
Collateral in favor of Lender as security for the Obligations, as
the same may be amended, restated, or otherwise modified from time
to time.

 

“Senior Funded Debt” means Total
Funded Debt minus
the Subordinated
Debt.

 

“Senior Leverage Ratio” means, for the
Test Period then ended, the ratio resulting from
dividing(a)
Senior Funded Debt as of the end of such Test Period
by
(b) Consolidated Adjusted EBITDA for
such Test Period.

 

“Shortfall”
means the positive difference, if any, between, (a) (i) the
Obligations comprising interest, principal and fees under the
Development Loans and (ii) the maximum amount available to be drawn
under the Development Line of Credit and (b) the expected amount of
Life Insurance Proceeds to be received as a result of the death of
Individual Guarantor as determined by Lender in good faith. If
after the death of Individual Guarantor, Borrower notifies Lender
in writing of its termination of Lender’s commitment to fund
any Development Loan with respect to a Development Project that has
not been started, the amount available to be drawn under such
Development Loan shall reduce the amount in clause (a)(ii) of this
definition.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

25

 

 

 

“Stated
Maturity Date” means September 13, 2022.

 

“Stub
Period” means the period commencing on October 1, 2017 and
ending on, and including, December 31, 2017.

 

“Subordinated Creditors” means,
collectively, the holders of the Subordinated Debt reflected
on Exhibit
B and their respective heirs,
executors, successors and assigns.

 

“Subordinated Debt” means the
Indebtedness evidenced by the Convertible Notes and described
in Exhibit
B attached
hereto.

 

“Subordinated
Debt Default” means any of the following (or any combination
of the following): (a) a default or event of default by any Loan
Party or any other obligor with respect to the Subordinated Debt
Documents, after the lapse of any applicable notice and cure
periods or (b) any acceleration of the Subordinated Debt in
accordance with its terms.

 

“Subordinated
Debt Documents” means, collectively, (a) Convertible Notes
and (b) each and every document, instrument, or agreement executed
by any party evidencing, guarantying or securing any of the
Subordinated Debt, as any or all of the foregoing documents,
instruments, and agreements are now in effect or, subject to
Section 5.2, as at any time after the Closing Date amended,
modified, supplemented, restated, renewed, extended, or otherwise
changed and any documents, instruments, or agreements related
thereto.

 

“Subsidiary”
means any Person with respect to which a Loan Party (a) directly or
indirectly controls 25% or more of its Ownership Interests; (b)
controls in any manner the election of a majority of such
Person’s directors or managers, or (c) has the power,
directly or indirectly, to exercise a controlling influence in
respect of such Person’s management or policies.

 

“Supply
Agreement” means each “Noble Roman’s Pizza
Program Single-Unit Sign-Up Agreement” and each “Noble
Roman’s Pizza Program Multiple-Unit Sign-Up Agreement”
between Borrower and a “Retailer” party thereto for a
pizza foodservice operation under the name “Noble
Roman’s Take-N-Bake”, as each such agreement is now in
effect or, as at any time after the date of this Agreement, as it
is amended, modified, supplemented, restated, or otherwise changed
and any substitute or replacement agreement therefor.

 

“Swap
Obligation” means any obligation of any Person to pay or
perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section
1a(47) of the Commodity Exchange Act.

 

"Taxes"
means all taxes, fees, duties, levies, imposts, deduction, charges,
or withholdings of any kind (other than taxes on Lender's net
income).

 

“Tax
Refund” means any refund of any income, franchise, commercial
activity or like taxes, or fees or interest in respect thereof,
which are paid or credited to a Loan Party by any Governmental
Authority.

 

“Termination
Date” means, (a) with respect to each Development Loan, the
earlier of: (i) the Stated Maturity Date, (ii) the date upon which
the entire outstanding balance under the applicable Development
Loan Note shall become due pursuant to the provisions hereof
(whether as a result of acceleration by Lender or otherwise) and
(iii) the date upon which the principal and interest on the
applicable Development Loan Note shall be repaid in full and (b)
with respect to Term Loan, the earliest of: (i) the Stated Maturity
Date, (ii) the date upon which the entire outstanding balance under
the Term Note shall become due pursuant to the provisions hereof
(whether as a result of acceleration by Lender or otherwise), and
(iii) the date upon which Term Loan shall be repaid in
full.

 

“Termination
Fee” means an amount equal to (a) 3% of the sum of (i) the
then principal amount of the Development Notes and (ii) the then
principal amount of the Term Loan if the Voluntary Termination Date
is on or before the first anniversary of the Closing Date, (b) 2%
of the sum of (i) the then principal amount of the Development
Notes and (ii) the then principal amount of the Term Loan if the
Voluntary Termination Date is after the first anniversary of the
Closing Date and on or before the second anniversary of the Closing
Date and (c) 1% of the sum of (i) the then principal amount of the
Development Notes and (ii) the then principal amount of the Term
Loan if the Voluntary Termination Date is after the second
anniversary of the Closing Date and before the third anniversary of
the Closing Date.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

26

 

 

 

 

“Term
Loan Principal Component” means, for purposes of clause (b)
of the definition of “Fixed Charges”, the principal
amount of the Term Loan which was scheduled to be paid during the
applicable Test Period (whether or not paid) (for the avoidance of
doubt, excluding any Excess Cash Flow Payment).

 

“Test Period” means each 12 Month
Period; providedhowever,
with respect to determining the Fixed Charge Coverage Ratio (a) for
the Test Period ending on December 31, 2017, with respect to Fixed
Charges (other than the Term Loan Principal Component and the
Development Loan Principal Component): (i) “Test
Period” means the period commencing on October 1, 2017,
through, and including, December 31, 2017, (ii) the total Fixed
Charges determined for such Test Period pursuant to the immediately
preceding clause shall be divided
by 92 and then multiplied
by 365; (iii) the Term Loan Principal
Component for such Test Period shall be deemed to be an aggregate
amount equal to $642,857.14 and (iv) the Development Loan Principal
Component for such Test Period shall be deemed to be an amount
equal to the principal payments made on the Development Loan during
the period commencing on October 1, 2017, through, and including,
December 31, 2017; (b) for the Test Period ending on March 31,
2018, with respect to Fixed Charges (other than the Term Loan
Principal Component and the Development Loan Principal Component):
(i) “Test Period” means the period commencing on
January 1, 2018, through, and including, March 31, 2018, (ii) the
total Fixed Charges determined for such Test Period pursuant to the
immediately preceding clause shall be divided
by 92 and then multiplied
by 365; (iii) the Term Loan Principal
Component for such Test Period shall be deemed to be an aggregate
amount equal to $642,857.14 and (iv) the Development Loan Principal
Component for such Test Period shall be deemed to be an amount
equal to the principal payments made on the Development Loan during
the period commencing on January 1, 2018, through, and including,
March 31, 2018; and (c) for the Test Period ending on June 30,
2018, with respect to Fixed Charges (other than the Term Loan
Principal Component and the Development Loan Principal Component):
(i) “Test Period” means the period commencing on April
1, 2018, through, and including, June 30, 2018, (ii) the total
Fixed Charges determined for such Test Period pursuant to the
immediately preceding clause shall be divided
by 92 and then multiplied
by 365; (iii) the Term Loan Principal
Component for such Test Period shall be deemed to be an aggregate
amount equal to $642,857.14 and(iv) the Development Loan Principal
Component for such Test Period shall be deemed to be an amount
equal to the principal payments made on the Development Loan during
the period commencing on April 1, 2018 through and including June
30, 2018.

 

“Third
Party Deposit Account” means a deposit account maintained by
a Loan Party with a Person other than Lender.

 

“Total
Funded Debt” means all Indebtedness of Borrower and its
Subsidiaries.

 

“Total Leverage Ratio” means, for the
Test Period then ended, the ratio resulting from
dividing(a)
Total Funded Debt as of the end of such Test Period
by
(b) Consolidated Adjusted EBITDA for
such Test Period.

 

“Transaction
Costs” means reasonable fees and out-of-pocket transaction
costs and expenses incurred by the Loan Parties in connection with
the Closing Date Transactions, including reasonable fees,
commissions and costs of accountants, consultants, attorneys
related thereto, up to a maximum aggregate amount equal to the sum
of (a) $500,000 as of the Closing Date and (b) such additional
costs and expenses consented to by Lender in its sole
discretion.

 

“Treasury
Management Agreements” means, collectively, the agreements
and other documents between Lender and Borrower, or otherwise
provided by Lender to Borrower, relating to Borrower’s
deposit accounts and Lender’s treasury management services,
including Lender’s forms of Master Treasury Management
Services Agreement, Commercial Sweep Account Services –
Development Line of Credit/ZBA/Ultimate Sweep Addendum, and Lockbox
Services Addendum, in each case applicable to
Borrower.

 

“UCC” or “Uniform Commercial
Code” means the Uniform Commercial Code as now or hereafter
enacted in the State of Ohio; provided that, if perfection or the effect of perfection or
non-perfection or the priority of any security interest in any
property of a Loan Party is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of Ohio,
“UCC” means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction.

 

“Warrants”
means any warrants issued by Borrower.

 

“12 Month Period” means, in respect of
a date as of which the applicable financial covenant is being
calculated, the four consecutive fiscal quarters ending on or
immediately preceding the date as of which the financial covenant
is being calculated (i.e., a rolling and trailing four fiscal quarter
period).

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

27

 

 

 

7.2.           Waivers
of Borrower and each Guarantor.
Each of Borrower and each Guarantor, if any, hereby (a) waives
demand, presentment, protest and notice of dishonor, notice of
protest, notice of default, notice of Lender’s intention to
accelerate and any notice of acceleration, (b) waives relief under
valuation and appraisement Laws, (c) waives all suretyship
defenses, including all defenses based upon impairment of
Collateral and all suretyship defenses described in Section 3-605
of the Uniform Commercial Code, to the fullest extent permitted by
Section 3-605 (i) of the UCC, and (d) waives and agrees not to
assert any claim against Lender or any Lender’s Affiliate
under any theory for consequential, special, indirect or punitive
damages.

 

7.3.           Severability
and Interpretation; GAAP Changes; Survival.

 

(a)           If
any part of this Agreement or the application thereof to any Person
or circumstance is held invalid, the remainder of this Agreement
shall not be affected thereby. Unless the context otherwise
indicates, the singular includes the plural and vice versa, the
masculine includes the feminine and neuter, and the pronouns
“herein” and the like refer to this entire Agreement.
As used herein and in the other Loan Documents,
“including” is used by way of illustration and not by
way of limitation, unless the context clearly indicates otherwise.
If Borrower has any Subsidiaries (“Borrower
Subsidiaries”) at any time during the term of this Agreement
with the consent of Lender, the term “Borrower” in each
representation, warranty and covenant herein shall mean Borrower as
consolidated with each such Borrower Subsidiary, and Borrower shall
cause each Borrower Subsidiary thereof to be in compliance
therewith. The existence of references to a Borrower’s
Subsidiaries any place in this Agreement is for a matter of
convenience only. Any references to Subsidiaries of Borrower set
forth herein shall not in any way be construed as consent by Lender
to the establishment, maintenance or acquisition of any Subsidiary.
If there is any conflict, ambiguity, or inconsistency, in
Lender’s judgment, between the terms of this Agreement or any
of the other Loan Documents, then the applicable terms and
provisions, in Lender’s judgment, providing Lender with
greater rights, remedies, powers, privileges, or benefits will
control.

 

(b)           If,
after the Closing Date, (i) there occurs any GAAP Change that would
affect the computation of any financial covenant and (ii) either
Borrower or Lender shall so request, then in any such case Lender
and Borrower shall negotiate in good faith to amend each applicable
financial covenant to preserve the original intent and effect
thereof in light of such GAAP Change (subject to the final approval
of Lender); provided that, until so amended, (A) each such financial
covenant shall continue to be computed in accordance with GAAP (and
the Loan Parties’ methods utilized thereunder) prior to such
GAAP Change and (B) Borrower shall provide to Lender Financial
Statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation
between calculations of each such financial covenant made before
and after giving effect to such GAAP Change.

 

(c)           Notwithstanding
any other provision contained herein, all terms of an accounting or
financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be
made, without giving effect to any election under Accounting
Standards Codification 825-10 (or any other Financial Accounting
Standard having a similar result or effect) to value any
Indebtedness or other liabilities of a Loan Party at “fair
value”, as defined therein.

 

(d)           All
representations, warranties, covenants and agreements made by the
Loan Parties herein and in the other Loan Documents shall survive
the execution and delivery of this Agreement, the other Loan
Documents and the issuance of the Notes.

 

7.4.           Binding
Effect; Assignments. This
Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto;
provided
however, that Borrower may not assign
any of its rights or delegate any of its obligations hereunder.
Lender (and any subsequent assignee) shall have the unfettered
right to transfer and assign, and delegate its obligations under,
this Agreement, the other Loan Documents, the Loans and the
Collateral to an assignee selected by Lender, who shall thereupon
have all of the rights of Lender; and Lender (or such subsequent
assignee who in turn assigns as aforesaid) shall then be relieved
and discharged of any responsibility or liability under, or arising
out of, this Agreement, the other Loan Documents and the
Collateral. Lender may also assign partial interests in this
Agreement, the other Loan Documents and the Loans to other Persons.
Lender may disclose to all prospective and actual assignees all
financial, business and other information about the Loan Parties
which Lender may possess at any time. This Agreement, and all of
the understandings, agreements, representations and warranties
contained herein are solely for the benefit of the parties hereto,
and there are no other Persons who are intended to be benefited in
any way whatsoever by this Agreement.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

28

 

 

 

7.5.           Notices.
Except in the case of notices and other communications expressly
permitted to be given by telephone, facsimile transmission and
electronically, any notice required, permitted or contemplated
hereunder shall be in writing and addressed to the party to be
notified at the address set forth below or at such other address as
each party may designate for itself from time to time by notice
hereunder and shall be deemed duly sent: (a) when delivered in
hand, (b) on completion of a facsimile transmission to the number
listed below, so long as (i) receipt of confirmation of the
telecopy is made by the sending party and (ii) an original notice
is also sent to the receiving party contemporaneously with
facsimile by overnight courier or certified U.S. mail as provided
in this Section 7.5, (c) the next Business Day after such notice
was delivered to a regularly scheduled overnight delivery carrier
with delivery fees either prepaid or an arrangement, satisfactory
with such carrier, made for the payment of such fees, or (d) when
mailed by registered or certified mail, return receipt requested,
addressed as follows:

 

	

To Borrower:

	

Noble Roman’s, Inc.

One Virginia Avenue, Suite 300

Indianapolis, IN 46204

Attention: Paul W. Mobley

 

 

	

             With
a copy to:

	

Thompson Coburn LLP

One US Bank Plaza

505 N. 7th Street

Suite 2700

St. Louis, Missouri 63101

Attention: Thomas A. Litz, Esq.

 

	

To Lender:

	

First Financial Bank

255 E. Fifth Street, Suite 800

Cincinnati, Ohio 45202

Attention: Mr. Alain F. Kamdem

	
 

	

 

and

	
 

	
 

	

With
a copy to:

	

Vorys, Sater, Seymour and Pease LLP

301 E. Fourth Street

Suite 3500 Great American Tower

Cincinnati, OH 45202

Attention: Hani R. Kallas, Esq.

	
 

	
 

Any party may change such address by sending
written notice of the change to the other party;
provided,
however, that (A) notice given
to a party’s legal counsel is not deemed notice to that party
and (B) a party’s failure to deliver any notice to the other
party’s legal counsel will not affect the validity or
effectiveness of any notice or notification given to the other
party.

 

7.6.           Complete
Agreement; Amendments; Counterparts. This Agreement, together with the other Loan
Documents, is the complete agreement of the parties hereto and
supersedes all previous understandings and agreements relating to
the subject matter hereof. This Agreement may be amended only in
writing signed by Borrower and Lender. The section headings herein
are included for convenience only and shall not be deemed to be a
part of this Agreement. This Agreement may be executed in
counterparts, each of which will be deemed an original and all of
which will constitute a single agreement, but none of which
separate counterparts shall become effective until both Lender and
Borrower have executed and delivered this Agreement. Delivery of an
executed counterpart of a signature page of this Agreement or any
other Loan Document by facsimile or in electronic format (e.g.
“pdf”) shall be effective as delivery of a manually
executed original counterpart of this
Agreement.

 

7.7           Time
is of the Essence. Time is of
the essence in carrying out all of the provisions in this
Agreement.

 

7.8.           Governing
Law; Consent to Jurisdiction.
This Agreement is delivered in, is intended to be performed in,
will be construed and enforceable in accordance with and governed
by the internal Laws of, the State of Ohio, without regard to
principles of conflicts of Law that would apply the Law of any
State other than the State of Ohio. Borrower and Lender each agree
that the state and federal courts in Hamilton County, Ohio or any
other court in which Lender initiates proceedings shall have
exclusive jurisdiction over all matters arising out of this
Agreement and the other Loan Documents, WITHOUT LIMITATION ON THE
ABILITY OF LENDER, ITS SUCCESSORS AND ASSIGNS, TO INITIATE AND
PROSECUTE IN ANY APPLICABLE JURISDICTION ACTIONS RELATED TO THE
REPAYMENT AND COLLECTION OF THE OBLIGATIONS AND THE EXERCISE OF ALL
OF LENDER’S RIGHTS AGAINST BORROWER WITH RESPECT THERETO AND
ANY SECURITY OR PROPERTY OF BORROWER, INCLUDING DISPOSITIONS OF THE
COLLATERAL and that service of process in any such proceeding shall
be effective if mailed to Borrower at the address set forth
herein.

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

29

 

 

 

7.9.           Jury
Waiver. BORROWER, ANY
GUARANTOR, AND LENDER EACH HEREBY WAIVE THE RIGHT TO A TRIAL BY
JURY OF ANY MATTERS ARISING OUT OF THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.

 

7.10.           Excluded
Swap Obligations.
Notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, in no event shall the
proceeds of Collateral of a Guarantor be applied by Lender to any
Excluded Swap Obligations in respect of such
Guarantor.

 

7.11           Indemnification.
If after receipt of any payment of all or part of the Obligations,
Lender is for any reason compelled to surrender such payment to any
Person because such payment is determined to be void or voidable as
a preference, impermissible setoff, or diversion of trust funds, or
for any other reason, this Agreement shall continue in full force
and effect and Borrower shall be liable to, and shall indemnify,
save and hold Lender, its officers, directors, attorneys, and
employees harmless of and from the amount of such payment
surrendered. The provisions of this Section 7.11 shall be and
remain effective notwithstanding any contrary action which may have
been taken by Lender in reliance on such payment, and any such
contrary action so taken shall be without prejudice to
Lender’s rights under this Agreement and the other Loan
Documents and shall be deemed to have been conditioned upon such
payment becoming final, indefeasible and irrevocable. In addition,
Borrower shall indemnify, defend, save and hold Lender, its
Affiliates, and their respective officers, directors, attorneys,
and employees harmless of, for, from and against all actual claims,
demands, liabilities, judgments, losses, damages, costs and
expenses (including all accounting fees and reasonable
Attorneys’ Fees) (collectively, “Losses”) that
Lender or any such indemnified party, jointly or severally, incurs
arising out of: (a) this Agreement or any of the other Loan
Documents, (b) the Closing Date Transactions or any other
transaction contemplated by, or referred to in, or any matter
related to, this Agreement or any of the other Loan Documents, (c)
the making of any Loan or the use of the proceeds thereof, (d) the
Collateral, or (e) any act taken by Lender hereunder except in any
such case arising out of the willful misconduct or gross negligence
of such indemnified party as established in a court of law by a
judgment that is final and non-appealable. The provisions of this
Section shall survive the termination of this Agreement.
NOTICE IS HEREBY
GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS IN
THIS SECTION 7.11 THAT APPLY TO, AND BORROWER HEREBY ACKNOWLEDGES
AND AGREES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO, ANY
LOSSES (AS DEFINED IN THIS SECTION 7.11) THAT HAVE RESULTED FROM OR
ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE
SOLE, JOINT OR CONCURRENT ORDINARY NEGLIGENCE OF LENDER OR ANY
OTHER INDEMNIFIED PARTY UNDER THIS SECTION 7.11.

 

8.            

No Fiduciary
Duty. Lender and its Affiliates
(collectively, solely for purposes of this paragraph, “First
Financial”), may have economic interests that conflict with
those of Borrower, its stockholders, members or other owners and/or
their respective Affiliates. Borrower agrees that nothing in the
Loan Documents or otherwise will be deemed to create an advisory,
fiduciary or agency relationship or fiduciary or other implied duty
between First Financial, on the one hand, and Borrower, its
stockholders or its Affiliates, on the other. Borrower acknowledges
and agrees that (a) the transactions contemplated by the Loan
Documents (including the exercise of rights and remedies hereunder
and thereunder) are arm’s-length commercial transactions
between First Financial, on the one hand, and Borrower, on the
other, and (b) in connection therewith and with the process leading
thereto, (i) First Financial has not assumed an advisory or
fiduciary responsibility in favor of Borrower, its stockholders,
members or other owners or their respective Affiliates with respect
to the transactions contemplated hereby (or the exercise of rights
or remedies with respect thereto) or the process leading thereto
(irrespective of whether First Financial has advised, is currently
advising or will advise Borrower, its stockholders or its
Affiliates on other matters) or any other obligation to Borrower
except the obligations expressly set forth in the Loan Documents
and (ii) First Financial is acting solely as principal and not as
the agent or fiduciary of Borrower, its management, stockholders,
members or other owners, creditors or any other Person. Borrower
acknowledges and agrees that it has consulted its own legal and
financial advisors to the extent it deemed appropriate and that it
is responsible for making its own independent judgment with respect
to such transactions and the process leading thereto. Borrower
shall not claim that First Financial has rendered advisory services
of any nature or respect, or owes a fiduciary or similar duty, to
Borrower, in connection with such transactions or the process
leading thereto.

 

9.            

Participations.

 

9.1           Participation.
Lender, in the ordinary course of its commercial banking business,
may at any time sell to one or more lenders or other Persons
(“Participants”) participating interests in the Loans,
the Collateral or other security provided to Lender, or any other
interests of Lender under this Agreement or the other Loan
Documents.

 

 

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

30

 

 

 

9.2           Participant
Consents. Borrower acknowledges
that Participants have and will have certain rights under their
respective participation agreements with Lender that may, subject
to the terms of the applicable participation agreements, require
Lender to obtain the consent (collectively, “Participant
Consents”) of some or all of the Participants before Lender
takes (or refrains from taking) certain actions (other than as
expressly required by the Loan Documents) or grants certain
waivers, consents or approvals in respect of the Loans, the Loan
Documents or the Collateral. None of the Participants, however,
will have Participant Consent rights which are greater than those
rights and remedies afforded to Lender under the Loan Documents.
Lender may from time to time request instructions from the
Participants in respect of the actions, waivers, consents or
approvals which Lender is permitted or required to take or to grant
or is permitted to refrain from taking or granting pursuant to the
terms of the Loan Documents (collectively, “Participant
Instructions”). If any Participant Consent is required, or if
any Participant Instruction is requested, in each case pursuant to
the terms of any participation agreement, Lender will (a) be
empowered to take (or refrain from taking) any action (other than
as expressly required by the Loan Documents) or withhold any
waiver, consent or approval until Lender has received the requisite
Participant Consents or, as applicable, the Participant
Instructions, and (b) not be subject to any liability to any
Person, including Borrower and any Participant, in connection with
Lender’s action or inaction or withholding of any waiver,
consent or approval under any of the Loan Documents. If a
Participant fails to fund its portion of any Loan requested by
Borrower after the date of this Agreement, Lender shall be under no
obligation to fund any portion of any Loan that was not funded by
such Participant.

 

9.3           Information.
Borrower hereby authorizes Lender to disclose to any Participant or
prospective Participant any and all information in Lender’s
possession concerning the Loan Parties which has been delivered to
Lender by, or on behalf of, a Loan Party pursuant to the Loan
Documents or in connection with Lender’s credit evaluation of
the Loan Parties or which has been obtained independently by Lender
in its credit evaluation or audit of the Loan
Parties.

 

9.4           

Law
Requirements. Nothing in the
Loan Documents will prohibit Lender from pledging or assigning its
interests in the Loans to any Federal Reserve Bank in accordance
with applicable Law.

 

 

[Signature
Page Follows]

 

 

Business
Capital Form – January, 2017

Loan
Agreement – Single Borrower

31

 

 

IN
WITNESS WHEREOF, Borrower and Lender have executed this Agreement
by their duly authorized officers as of the date first above
written.

 

 

	
 

	

NOBLE ROMAN’S, INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:/s/ Paul W.
Mobley 

	
 

	
 

	

Paul
W. Mobley, Executive Chairman and

Chief
Financial Officer

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

FIRST FINANCIAL BANK

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By: /s/ Shawn L.
Byerly 

	
 

	
 

	

     Shawn L. Byerly, Vice
President

	
 

	
 

	
 

	
 

 

 

 

 

32Ex 10-1

 

Exhibit 10.1

ImageWare Systems, Inc.

 

Subscription Form

 

Series A Convertible Preferred Stock

Liquidation Preference $1,000 per Share

 

	

Investor’s
Name:

	

_____________________________________________________

	
 

	
 

	

Investor’s
Address

	

_____________________________________________________

	
 

	

_____________________________________________________

	
 

	
 

	

Investor’s
Social Security or Federal Tax Identification Number:

	

 

_____________________________________________________

	
 

	
 

	

Brokerage
Firm (for delivering shares):

	

_____________________________________________________

	
 

	
 

	

Account
Number at Brokerage Firm:

	

 _____________________________________________________

	
 

	
 

	

DTC
Participant Number:

	

 _____________________________________________________

	
 

	
 

	

Number
of Shares Subscribed for:

	

 

______________________________________________________

	
 

	
 

	

Amount
Owed for Shares:

	

____________________________________
($_____ per share)

 

	

Wire
Information:

	
 

	
 

	

Date of
Wire: ___________________

	
 

	
 

	
 

	

Fed
Reference No.: ______________

 

Investor agrees and acknowledges that the Shares subscribed for
shall be issued as of the date of acceptance of this Subscription
Form by ImageWare Systems, Inc., and delivered to Investor within
five (5) business days thereafter

 

Representations, Warranties, Agreements:

 

By executing and returning this form, the undersigned represents,
warrants and agrees that:

 

(i)

he/she/it is the investor, or has full power and authority to act
on behalf of and bind the investor in subscribing as set forth
herein and making these representations, warranties and
agreements;

 

(ii)

the shares are being offered pursuant to ImageWare System,
Inc.’s (“ImageWare”) Prospectus dated May 4, 2017 and its
Prospectus Supplement dated September 15, 2017 (available
at http://iwsinc.com under
Investor Relations/ Preferred Stock Offering, or by email
to wwetherell@iwsinc.com;

 

(iii)

the investor has had full opportunity to read and review such
Prospectus and Prospectus Supplement and the additional documents
they incorporate by reference, and consult with an attorney
regarding such Prospectus, Prospectus Supplement and additional
documentation; and

 

(iv)

the information provided herein and these representations,
warranties and agreements are accurate and complete, and shall
remain so until the undersigned notifies ImageWare
otherwise.

 

 

 

 

 

	

Contact
information, if we have any questions:

	

 

__________________________________

	

 

(Phone)

	
 

	
 

	
 

	
 

	

 _________________________________

	

(Email)

 

	

 Signature:

	
 

	

______________________________

	
 

	
 

	

By:___________________________

	
 

	
 

	

Date:__________________________

 

  

Subscription Instructions:

 

1. 
Wire the funds to:

 

	
 

	

Bank name

	

 

	
 

	

Bank address

	

 

	
 

	

ABA routing #

	

	
 

	

Swift #

	

	
 

	

Account name

	

 

	
 

	

Account #

	

 

2. 
Execute the subscription form (being sure to include the date of
the wire and the wire Fed. Ref. No.) and email the form to
rcharest@disclosurelawgroup.com.

 

  

For questions please email: jsudweeks@disclosurelawgroup.com.

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