Exhibit 10.36
LOAN AGREEMENT
BY AND AMONG
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
"BANK"
AND
BACK YARD BURGERS, INC
"BORROWER"
AND
THE SUBSIDIARIES
"GUARANTORS"
Dated: February 11, 2003
TABLE OF CONTENTS
1. DEFINITIONS AND REFERENCE TERMS........................................1
2. LOANS..................................................................5
3. CONDITIONS OF LENDING..................................................6
4. REPRESENTATIONS AND WARRANTIES.........................................7
5. AFFIRMATIVE COVENANTS.................................................10
6. DEFAULTS AND REMEDIES.................................................14
7. NOTICE................................................................16
8. COSTS, EXPENSES AND ATTORNEYS' FEES...................................17
9. MISCELLANEOUS.........................................................17
10. ARBITRATION...........................................................19
11. NO ORAL AGREEMENT.....................................................20
12. EXHIBIT A.............................................................21
13. EXHIBIT B.............................................................23
14. EXHIBIT C.............................................................25
15. EXHIBIT D.............................................................27
16. EXHIBIT E.............................................................28
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LOAN AGREEMENT
(Back Yard Burgers, Inc.)
This Loan Agreement ("Agreement") dated as of February 11, 2003, by and
among FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association
("Bank"), and BACKYARD BURGERS, INC., a Delaware Corporation ("Borrower"), and
is joined herein by THE SUBSIDIARIES, whose names appear below.
RECITALS:
A. Borrower has applied to Bank for certain loan facilities as
hereinafter described (each loan hereinafter referred to as a "Loan" and
collectively as the "Loans") to be used for the purposes of hereinafter set
forth.
B. Bank has issued its commitment to Borrower dated October
21, 2002 (the "Commitment") setting forth the basic terms and conditions of the
Loans.
C. One of the conditions of the Commitment from Bank to
Borrower is the execution of this Agreement setting forth the full terms and
conditions of the Loans according to the terms and conditions set forth in the
Commitment.
NOW THEREFORE, in consideration of the Loans described below and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, Bank and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other
terms defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. ACCOUNTING TERMS: All accounting terms not specifically
defined or specified herein shall have the meanings generally attributed to such
terms under generally accepted accounting principles ("GAAP"), as in effect from
time to time, consistently applied.
B. ADVANCE: Advance means each separate advance of funds under
a Line of Credit.
C. ADVANCE REQUEST: Advance Request means a written request
for an Advance under a Line of Credit executed by an authorized officer of
Borrower in the form attached hereto as Exhibit A, or in such other form and
content as may be acceptable to Bank.
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D. BORROWING BASE: Borrowing Base means an aggregate amount
equal to the sum of seventy five percent (75%) of the Implied Value of the
Properties.
E. BORROWING BASE CERTIFICATE: Borrowing Base Certificate
shall mean the certification submitted by Borrower to Bank each month in the
form attached hereto as Exhibit B, or in such other form and content as may be
acceptable to Bank showing the Borrowing Base, the aggregate outstanding
balances under the Loans, and the then existing availability under the Lines of
Credit.
F. BORROWING LIMIT: Borrowing Limit under the Revolving Line
of Credit shall mean Five Hundred Thousand and No/100 Dollars ($500,000.00), and
under the Draw Down Line shall mean Two Million and no/100 Dollars
($2,000,000.00), and Two Million Five Hundred Thousand and No/100 Dollars under
the Term Loan.
G. CLOSING DATE: Closing Date shall mean the date of this
Agreement as set forth in the introductory paragraph of this Agreement.
H. COLLATERAL: Collateral means all real and personal property
of every type and kind belonging to Borrower now or hereafter pledged to secure
the Loans and Borrower's obligations under this Agreement or any of the other
Loan Documents, and includes, without limitation, the Deeds of Trust encumbering
the Properties.
I. COMMITMENT: Commitment shall have the meaning set forth in
the Recitals of fact hereinabove set forth.
J. COMPLIANCE CERTIFICATE: Compliance Certificate shall mean
the certification submitted by Borrower to Bank each quarter in the form
attached hereto as Exhibit C, or in such other form and content as may be
acceptable to Bank, showing compliance with the financial covenants set forth in
this Agreement.
K. DEBT COVERAGE RATIO: Debt Coverage Ratio means EBITDA minus
tax expense divided by interest expense plus scheduled principal payments on any
term loans or capital leases.
L. DEEDS OF TRUST: Deed or Deeds of Trust shall mean those
certain Deeds of Trust or mortgages executed by Borrower or any of the
Subsidiaries from time to time encumbering one or more of the Properties as part
of the Collateral.
M. DRAW DOWN LINE: Draw Down Line shall mean the Loan
evidenced by the Draw Down Note.
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N. DRAW DOWN NOTE: Draw Down Note shall mean that certain
Master Secured Promissory Note in the principal amount of Two Million and No/100
Dollars ($2,000,000.00) of even date herewith evidencing the Draw Down Line.
O. FINANCING STATEMENTS: Financing Statements means those
certain UCC-1 Financing Statements executed by Borrower or certain of the
Subsidiaries, as debtor therein, to be filed in the appropriate filing office(s)
in order to perfect the security interests in such of the Collateral in which
security interests may be perfected by filing.
P. GUARANTORS: Guarantors shall mean all Subsidiaries
executing Guaranty Agreements and any other Person from time to time executing a
guaranty agreement in connection with the Loans.
Q. GUARANTY AGREEMENTS: Guaranty Agreements means the
agreements executed by the Guarantors.
R. IMPLIED NOI: Implied NOI means a figure arrived at by
multiplying 97% times Implied Rent.
S. IMPLIED RENT: Implied Rent means a figure arrived at by
multiplying 8% times the most recent twelve (12) months' volume of sales for all
stores located on the Properties.
T. IMPLIED VALUE: Implied Value shall mean the sum arrived at
as set forth in the Borrowing Base Certificate attached hereto as Exhibit B.
U. LINE OR LINES OF CREDIT: Line or Lines of Credit shall mean
either the Revolving Line of Credit evidenced by the Revolving Note or the Draw
Down Line evidenced by the Draw Down Note, or both.
V. LOAN OR LOANS: Loan or Loans shall have the meaning set
forth in the Recitals of fact hereinabove set forth.
W. LOAN DOCUMENTS: Loan Documents means this Agreement, the
Term Note, the Revolving Note, the Draw Down Note, the Deeds of Trust, the
Guaranty Agreements, and any and all other documents, instruments, guarantees,
certificates and agreements evidencing, securing or relating to the Loans.
X. NOTES: Notes shall mean collectively the Term Note, the
Revolving Note, and the Draw Down Note.
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Y. PERSON: Person means any individual, partnership,
corporation, trust, unincorporated organization, limited liability company,
association, joint venture or other legally recognized entity having the
capacity to contract in its own name.
Z. PROPERTIES: Properties means the real property and all
improvements thereon now or hereafter owned by Borrower or a Subsidiary and
pledged to Bank as part of the Collateral. The Properties existing on the date
hereof are listed in Exhibit D attached hereto.
AA. REVOLVING LINE OF CREDIT: Revolving Line of Credit shall
mean the Loan evidenced by the Revolving Note.
BB. REVOLVING NOTE: Revolving Note shall mean that certain
Master Secured Promissory Note in the principal amount of Five Hundred Thousand
and No/100 Dollars ($500,000.00) of even date herewith evidencing the Revolving
Line of Credit, as such note may be modified, amended or restated from time to
time.
CC. SECURED OBLIGATIONS: Secured Obligations shall mean all
indebtedness and obligations of Borrower to Bank, whether now existing or
hereafter arising.
DD. SUBSIDIARIES: Subsidiaries means those corporations or
other entities now or hereafter existing in which Borrower owns a controlling
interest, all of which existing on the date hereof are listed in Exhibit E
attached hereto.
EE. TANGIBLE STOCKHOLDERS' EQUITY: Tangible Stockholders'
Equity means stockholders' equity less intangible assets, plus subordinated debt
acceptable to Bank.
FF. TERM LOAN: Term Loan shall mean the Loan evidenced by the
Term Note.
GG. TERM NOTE: Term Note shall mean that certain promissory
note in the principal amount of Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000.00) of even date herewith, as such note may be modified,
amended, or restated from time to time.
HH. TERMINATION DATE: Termination Date of the Revolving Line
of Credit and the Draw Down Line shall mean the maturity dates set forth in the
Revolving Note and in the Draw Down Note, or such later dates if extended by
Bank in its sole discretion from time to time after request from Borrower.
II. UCC: UCC means the Uniform Commercial Code as in effect in
the State of Tennessee from time to time.
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2. LOANS.
A. REVOLVING LINE OF CREDIT. Prior to the Termination Date set
forth in the Revolving Note, and so long as no default (or event that with the
giving of notice or the passage of time or both would constitute a default) has
occurred and is in existence hereunder, Bank shall advance proceeds under the
Revolving Line of Credit to Borrower upon receipt from Borrower of an Advance
Request in an aggregate amount outstanding at any one time not to exceed the
lessor of (a) the Borrowing Base in effect from time to time, less the
outstanding principal balances of the Term Loan and the Draw Down Line or (b)
the Borrowing Limit for the Revolving Line of Credit.
(i) The indebtedness of Borrower to Bank in
connection with the Revolving Line of Credit shall be evidenced by, and payable
in accordance with the terms of, the Revolving Note. Amounts outstanding under
the Revolving Line of Credit shall bear interest at the variable rate set forth
in the Revolving Note.
(ii) The Revolving Line of Credit shall consist of a
revolving loan facility under which Borrower may from time to time borrow, repay
and re-borrow funds. Any outstanding balances under the Revolving Line of Credit
shall be repaid on the Termination Date as set forth in the Revolving Note.
Interest shall be paid monthly in arrears in the manner and at such rates per
annum as are more fully provided in the Revolving Note.
(iii) The Revolving Line of Credit shall be used for
the general working capital needs of Borrower.
B. DRAW DOWN LINE. Prior to the Termination Date set forth in
the Draw Down Note, and so long as no default (or event that with the giving of
notice or the passage of time or both would constitute a default) has occurred
and is in existence hereunder, Bank shall advance proceeds under the Draw Down
Line of Credit to Borrower upon receipt from Borrower of an Advance Request in
an aggregate amount outstanding at any one time not to exceed the lessor of (a)
the Borrowing Base in effect from time to time, less the outstanding principal
balances of the Term Loan and the Revolving Line of Credit or (b) the Borrowing
Limit for the Draw Down Line.
(i) The indebtedness of Borrower to Bank in
connection with the Draw Down Line shall be evidenced by, and payable in
accordance with the terms of, the Draw Down Note. Amounts outstanding under the
Draw Down Line shall bear interest at the variable rate set forth in the Draw
Down Note.
(ii) The Draw Down Line shall consist of a
non-revolving draw down loan facility under which Borrower may from time to time
borrow up to the Borrowing Limit for the Draw Down Line, whereby the Draw Down
Line is permanently reduced by any such draw. Any outstanding balances under the
Draw Down Line shall be repaid on the Termination Date as set forth in the Draw
Down Note. Interest shall be paid monthly in arrears in the manner and at such
rates per annum as are more fully provided in the Draw Down Note.
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(iii) The Draw Down Line shall be used for
construction of new stores by Borrower which have been submitted to and approved
by Bank in its reasonable discretion as acceptable as part of the Collateral.
Any real property acquired by Borrower or a Subsidiary using proceeds from the
Draw Down Line shall be pledged to Bank as part of the Collateral.
C. TERM LOAN. The Term Loan shall be evidenced by the Term
Note, shall be fully amortized over a five (5) year term, and shall be payable
in equal monthly installments of principal and interest at a fixed rate set
forth in the Term Note. The Term Loan shall be used to refinance existing
indebtedness of Borrower and/or its Subsidiaries.
3. CONDITIONS OF LENDING.
A. CONDITIONS PRECEDENT TO CLOSING. The obligation of Bank to
close and make the Loans available to Borrower is subject to the conditions
precedent that Borrower shall have delivered or provided, on or before the
Closing Date, and thereafter provide, as applicable or required by Bank, all of
the following in form and substance satisfactory to Bank:
(i) The Commitment.
(ii) This Agreement.
(iii) The Revolving Note.
(iv) The Draw Down Note
(v) The Term Note.
(vi) The Guaranty Agreements.
(vii) The Deeds of Trust
(viii) The Financing Statements.
(ix) Proof of insurance for the Collateral and Borrower.
(x) Title searches acceptable on all of the Properties.
(xi) The certified charter for Borrower, as well as
certified resolutions of Borrower, as well as all
Guarantors, authorizing the execution, delivery and
performance of this Agreement, the Loan, and all
other documents executed in connection therewith, and
certificates of existence, good standing and/or
authority, as the case may be, on Borrower and all
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Guarantors, from the states in which Borrower and
Guarantors were organized and/or authorized to do
business.
(xii) Such other information and documentation required by
the Commitment and as Bank may otherwise now or
hereafter reasonably require.
B. CONDITIONS PRECEDENT TO ADVANCES UNDER THE LINES OF CREDIT.
Advances under the Lines of Credit shall be subject to the following additional
conditions precedent:
(i) Borrower shall have furnished to Bank each of the
items referred to in Section 3.A. hereof, including
new documents in connection with any new Collateral
pledged to Bank since the date hereof, all of which
shall remain in full force and effect as of the date
of each Advance under the Line of Credit.
(ii) Borrower shall not be in default of any of the terms
and provisions hereof or of any of the other Loan
Documents, or of any other indebtedness or obligation
of Borrower to Bank. Each of the representations and
warranties, as set out in Section 4 hereof, shall
remain true and correct in all material respects as
of the date of each such Advance.
(iii) No material adverse change, as determined in Bank's
sole discretion, shall have occurred with respect to
the business or financial conditions of Borrower or
any Guarantor from that existing as represented in
the financial statements previously provided to Bank
prior to the Closing Date.
(iv) Bank shall be in receipt of Borrower's Advance
Request revealing that the requested Advance if made
shall not cause the total outstanding balance under
the Line of Credit to exceed the Borrowing Limit.
4. REPRESENTATIONS AND WARRANTIES. Borrower and Guarantors hereby
represent and warrant to Bank as follows:
A. STATUS. Each is duly organized, validly existing and in
good standing under the laws of the state of its formation, and has the
necessary power to own and operate all its properties, to carry on its business
as now conducted and to enter into and to perform its obligations under this
Agreement and the other Loan Documents. Each is duly qualified to do business
and in good standing in each state in which a failure to be so qualified would
have a material adverse effect on its financial position or its ability to
conduct its respective businesses in the manner now conducted.
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B. AUTHORIZATION. Each has the full legal right, power and
authority to conduct its business and affairs in the manner contemplated by the
Loan Documents, and to enter into and perform its obligations thereunder,
without the consent or approval of any other person, firm, governmental agency
or other legal entity. The execution and delivery of this Agreement, the
borrowing hereunder, the execution and delivery of each Loan Document to which
each is a party, and the performance by each one of its obligations thereunder
are within its powers and has been duly and properly authorized by all necessary
company action, has received all necessary governmental approvals, if any were
required, and does not and will not contravene or conflict with any provision of
law, any applicable judgment, ordinance, regulation or order of any court or
governmental agency, its charter, articles of incorporation or by-laws or
operating agreement, or any agreement binding upon it or its properties. The
Persons executing this Agreement and all of the other Loan Documents to which
each is a party are duly authorized to act on behalf of Borrower or Guarantor,
as applicable.
C. VALIDITY AND BINDING EFFECT. This Agreement and the other
Loan Documents are the legal, valid and binding obligations of the parties
thereto, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance, and other laws affecting creditors' rights generally from time to
time in effect and to general equitable principles (whether considered in a
proceeding at law or in equity).
D. OTHER TRANSACTIONS. Except as specifically set forth in
this Agreement and the other Loan Documents, there are no prior loans, liens,
security interests, agreements or other financings upon which each is obligated
or by which each is bound that will in any way permit any third person to have
or obtain priority over Bank as to any of the security interests or liens
granted to Bank pursuant to this Agreement and the other Loan Documents.
Consummation of the transactions hereby contemplated and the performance of the
obligations of each under and by virtue of the Loan Documents will not result in
any breach of, or constitute a default under, any mortgage, security deed or
agreement, deed of trust, lease, bank loan or credit agreement, corporate
charter or by-laws, agreement or certificate of limited partnership, partnership
agreement, license, franchise or any other instrument or agreement to which each
is a party or by which each or its properties may be bound or affected.
E. PLACES OF BUSINESS. The records with respect to all
Collateral for the Secured Obligations are maintained at its chief place of
business and chief executive office, which has the address of 0000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
F. LITIGATION. There are no actions, suits or proceedings
pending, or, to its knowledge, threatened, against or affecting it or involving
the validity or enforceability of any of the Loan Documents or the priority of
the liens thereof, at law or in equity, or before any governmental or
administrative agency, except actions, suits and proceedings that are fully
covered by insurance and that, if adversely determined, would not impair its
ability to perform each and every one of its obligations under and by virtue of
the Loan Documents; and it is not in
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default with respect to any order, writ, injunction, decree or demand of any
court or any governmental authority.
G. FINANCIAL STATEMENTS. The financial statement of Borrower
and each Guarantor heretofore delivered to Bank are true and correct in all
respects, have been prepared in accordance with generally applied accounting
principles consistently applied, and fairly present the financial condition of
the subjects thereof as of the date(s) thereof. No material adverse change has
occurred in the financial condition of Borrower or any Guarantor since the
date(s) thereof.
H. NO DEFAULTS. No default or event of default exists under
this Agreement or any of the other Loan Documents, or under any other instrument
or Agreement to which Borrower is a party or by which it or its properties may
be bound or affected, and no event has occurred and is existing that with notice
or the passage of time or both would constitute a default or event of default
thereunder.
I. COMPLIANCE WITH LAW. It has obtained all necessary
licenses, permits and governmental approvals and authorizations necessary or
proper in order to conduct its businesses and affairs as heretofore conducted
and as intended to be conducted hereafter. To its knowledge, it is in compliance
with all laws, regulations, decrees and orders applicable to it (including but
not limited to laws, regulations, decrees and orders relating to occupational
and health standards and controls, antitrust, monopoly, restraint of trade or
unfair competition). It has not received, and does not expect to receive, any
order or notice of any violation or claim of violation of any law, regulation,
decree, rule, judgment or order of any governmental authority or agency relating
to the ownership and/or operation of their respective properties, as to which
the cost of compliance is or might be material and the consequences of
noncompliance would or might be materially adverse to their respective
businesses, operations, properties or financial conditions, or which would or
might impair their abilities to perform its obligations under the Loan
Documents.
J. NO BURDENSOME RESTRICTIONS. No instrument, document or
agreement to which it is a party, or by which it or its properties may be bound
or affected, materially adversely affects, or may reasonably be expected so to
affect, its businesses, operations, properties or financial conditions.
K. TAXES. It has filed or caused to be filed all tax returns
that are required to be filed (except for returns that are not yet due), and had
paid all taxes shown to be due and payable on said returns and all other taxes,
impositions, assessments, fees or other charges imposed on it by any
governmental authority, agency or instrumentality, prior to any delinquency with
respect thereto (other than taxes, impositions, assessments, fees and charges
currently being contested in good faith by appropriate proceedings, for which
appropriate amounts have been reserved). No tax liens have been filed against it
or any of its properties.
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L. EFFECT OF REQUEST FOR ADVANCE. Each Advance Request shall
constitute an affirmation that the representations and warranties of this
Section 4 remain true and correct on and as of the date of such Advance Request.
M. SUBSIDIARIES. There are no subsidiaries of Borrower
existing on the date hereof other than the Persons listed on Exhibit E. Atlanta
Burgers BYB Corporation has no assets and receives no income. In the event it
does acquire any assets in the future, Borrower will immediately notify Bank and
cause such entity to execute a Guaranty Agreement.
N. ERISA. It is in compliance with all applicable provisions
of the Employees Retirement Income Security Act of 1974 ("ERISA") and all other
laws, state or federal, applicable to any employees' retirement plan maintained
or established by them.
5. AFFIRMATIVE COVENANTS. Until full payment and performance of
all Secured Obligations, Borrower and Guarantors each covenant and agree as
follows:
A. PAYMENT OF SECURED OBLIGATIONS. It shall pay the
indebtednesses evidenced by the Notes according to the terms thereof, and
Borrower shall timely pay or perform, as the case may be, all of the other
Secured Obligations.
B. SALES OF AND ENCUMBRANCES ON COLLATERAL. It will not sell,
exchange, lease, negotiate, pledge, assign or grant any security interest in, or
otherwise dispose of, the Collateral to anyone other than Bank, except in the
ordinary course of business, nor permit any other lien of any kind to attach
thereto, nor permit any of the Collateral to be attached to or commingled with
other goods or property, without Bank's prior written consent.
C. FURTHER ASSURANCES. It will take all actions reasonably
requested by Bank to create and maintain in Bank's favor valid liens upon,
security titles to and/or perfected security interests in, any Collateral
described in the Loan Documents, and all other Collateral now or hereafter held
by or for Bank. Without limiting the foregoing, it agrees to execute such
further instruments (including financing statements and continuation statements)
as may be reasonably required or permitted by Bank or any law relating to
notices of, or affidavits in connection with, the perfection of Bank's security
interests or liens, to cooperate with Bank in the filing or recording and
renewal thereof.
D. FINANCIAL STATEMENTS AND REPORTS. It shall furnish to Bank
such financial data as Bank may reasonably request, which information may be
provided on a consolidated basis unless Bank should otherwise request separate
information. Without limiting the foregoing, it shall furnish to Bank (or cause
to be furnished to Bank) the following:
(i) As soon as practicable and in any event within one
hundred twenty (120) days after the end of each
fiscal year, an audited financial
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statement/10-K as of the close of such fiscal year,
all in reasonable detail, prepared by an accounting
firm reasonably acceptable to Bank in accordance with
generally accepted accounting principles consistently
applied, and accompanied by a certificate of the
chief executive or chief financial officer stating
that, to the best of the knowledge of such officer,
the company has kept, observed, performed and
fulfilled each covenant, term and condition of this
Agreement and the other Loan Documents during such
fiscal year, and that to his knowledge no default
hereunder has occurred and is continuing (or if a
default has occurred and is continuing, specifying
the nature of same, the period of existence of same
and the action the company proposes to take in
connection therewith);
(ii) Within forty-five (45) days after the end of each
calendar quarter, a 10-Q financial statement as of
the close of such quarter, as well as a Compliance
Certificate, all in reasonable detail, and prepared
in accordance with generally accepted accounting
principles consistently applied, certified by its
chief executive or chief financial officer.
(iii) Within fifteen (15) days after the end of each month,
a Borrowing Base Certificate.
E. FINANCIAL COVENANTS. Guarantor shall at all times maintain
its financial condition as follows and as determined in accordance with GAAP
applied on a consistent basis:
(i) Maintain a minimum Tangible Stockholders' Equity of
not less than $9,000,000.
(ii) Maintain a maximum total liabilities to Tangible
Stockholders' Equity ratio not greater than 1.5
to 1.0.
(iii) Maintain a minimum Debt Coverage Ratio of at least
1.50 to 1.0.
(iv) Maintain a maximum funded debt to EBITDA not greater
than 3.0 to 1.0.
F. MAINTENANCE OF BOOKS AND RECORDS; INSPECTION. It shall
maintain its books, accounts and records in accordance with GAAP consistently
applied, and shall permit Bank, its officers and employees and any professionals
designated by Bank, at any reasonable time upon reasonable advance notice and
during regular business hours, to visit and inspect any of the Collateral,
corporate books and financial records, and to discuss its accounts, affairs and
finances with any employee, officer, director or shareholder.
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G. TAXES AND ASSESSMENTS; TAX INDEMNITY. It shall (i) file all
tax returns and appropriate schedules thereto that are required to be filed
under applicable law, prior to the date of delinquency, inclusive of any
extension for filing granted; (ii) pay and discharge all taxes, assessments and
governmental charges or levies imposed upon income and profits or upon any
properties belonging to it, prior to the date on which penalties attach thereto;
and (iii) pay all taxes, assessments and governmental charges or levies that, if
unpaid, might become a lien or charge upon any of its properties; provided,
however, that it in good faith may contest any such tax, assessment,
governmental charge or levy described in the foregoing clauses (ii) and (iii),
so long as appropriate reserves acceptable to Bank are maintained with respect
thereto.
H. EXISTENCE. It shall maintain its existence and good
standing in the state of its formation, and its qualification and good standing
as a foreign organization in each jurisdiction in which such qualification is
necessary pursuant to applicable law.
I. COMPLIANCE WITH LAW AND OTHER AGREEMENTS. It shall maintain
its business operations and properties owned or used in connection therewith in
compliance with (i) all applicable federal, state and local laws, regulations
and ordinances governing such business operations and the use and ownership of
such properties, and (ii) all agreements, licenses, franchises, indentures and
mortgages to which it is a party or by which it or any of its properties is
bound, except where any failure to comply would not have a material adverse
effect on its ability to perform its obligations under the Loan Documents.
Without limiting the foregoing, it shall pay all of its indebtedness promptly in
accordance with the terms thereof, except for any indebtedness that is contested
diligently and in good faith by proper proceedings reasonably satisfactory to
Bank.
J. NOTICE OF DEFAULT. It shall give written notice to Bank of
the occurrence of any default under this Agreement or any other Loan Document
promptly upon the occurrence thereof.
K. NOTICE OF LITIGATION. It shall give notice, in writing, to
Bank of (i) any material actions, suits or proceedings instituted by any persons
against its, or affecting any of its assets in any material manner, and (ii) any
material dispute, not resolved within sixty (60) days of the commencement
thereof, between it on the one hand and any governmental or regulatory body on
the other hand, which might interfere with its normal operations.
L. MERGERS, CONSOLIDATIONS, ACQUISITIONS AND SALES. Without
the prior express written consent of Bank, it shall not (i) be a party to any
merger, consolidation or corporate reorganization, (ii) purchase or otherwise
acquire all or substantially all of the assets or ownership interest of any
corporation, partnership or joint venture interest in, any other person, firm or
entity, (iii) sell, transfer, convey, grant a security interest in or lease all
or any substantial part of its assets, or (iv) create any subsidiaries nor
convey any of its assets to any subsidiary.
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M. MANAGEMENT, OWNERSHIP. It shall not voluntarily permit any
significant change in its ownership, executive staff or management without the
prior written consent of Bank. It acknowledges that the ownership, executive
staff and management of its are material factors in Bank's willingness to
institute and maintain a lending relationship with Borrower.
N. DIVIDENDS, ETC. Other than in connection with Borrower's
existing share repurchase program allowing Borrower to repurchase up to 500,000
shares of its corporate stock, it shall not declare or pay any dividend of any
kind, in cash or in property, on any class of its membership or capital stock,
nor purchase, redeem, retire or otherwise acquire for value any shares of such
stock or membership, nor make any distribution of any kind in respect thereof,
nor make any return of capital to shareholders or members, nor make any payments
in respect of any pension, profit sharing, retirement, stock option, stock
bonus, incentive compensation or similar plan without the prior written consent
of Bank, which consent shall not be unreasonably withheld.
O. GUARANTIES; LOANS. It shall not guarantee nor be liable in
any manner, whether directly or indirectly, or become contingently liable after
the date of this Agreement in connection with the obligations or indebtedness of
any person or persons, except for the endorsement of negotiable instruments
payable for deposit or collection in the ordinary course of business. It shall
not make any loan, advance or extension of credit to any person other than in
the normal course of Business.
P. DEBTS. It shall not create, incur, assume or suffer to
exist indebtedness of any description whatsoever in an aggregate amount in
excess of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00) (excluding
the indebtedness evidenced by the Notes, trade accounts payable and accrued
expenses incurred in the ordinary course of business and accrued expenses
incurred in the ordinary course of business and the endorsement of negotiable
instruments payable for deposit or collection in the ordinary course of
business) without the prior written consent of Bank, which consent shall not be
unreasonably withheld.
Q. CONDUCT OF BUSINESS. It will continue to engage in an
efficient and economical manner, in a business of the same general type as
conducted on the date of this Agreement.
R. PLACES OF BUSINESS. It will not change the location of its
chief business, chief executive office or any place of business disclosed to
Bank, nor will it change the location at which it maintains its records
concerning the Collateral, without thirty (30) days' prior written notice to
Bank in each instance, except in the case of a bonafide emergency such as a fire
or other casualty when immediate removal is necessary to protect the Collateral
or records concerning same.
13
6. DEFAULTS AND REMEDIES.
A. EVENTS OF DEFAULT. Subject to any applicable grace or
notice and right to cure provisions contained herein or in the other Loan
Documents, the occurrence of any of the following shall constitute an Event of
Default hereunder:
(i) Failure to make any payment of principal and/or
interest of the indebtedness evidenced by the Note in
accordance with the terms thereof.
(ii) Any misrepresentation as to any material matter
hereunder or under any of the other Loan Documents,
or delivery of any schedule, statement, resolution,
report, certificate, notice or writing to Bank that
is untrue in any material respect on the date as of
which the facts set forth therein are stated or
certified;
(iii) Failure to perform any obligations under this
Agreement, the Notes, or any of the other Loan
Documents;
(iv) Borrower or any Guarantor (a) shall generally not pay
or shall be unable to pay its or their debts as such
debts become due; or (b) shall make an assignment for
the benefit of creditors or petition to apply to any
court or tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of
its assets; or (c) shall commence any proceeding or
case under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or (d) shall have
had any such petition or application filed or any
such proceeding or case commenced against it in which
an order for relief is entered or an adjudication or
appointment is made; or (e) shall indicate, by any
act or omission, its consent to, approval of, or
acquiescence in any such petition, application, case,
proceeding or order for relief or the appointment of
a custodian, receiver or trustee for it or a
substantial part of its assets; or (f) shall suffer
any such custodianship, receivership or trusteeship
to continue undischarged for a period of sixty (60)
days or more;
(v) Borrower or any Guarantor shall die or be liquidated,
dissolved, partitioned or terminated, or the charter
or certificate of authority thereof shall expire or
be revoked;
(vi) A default or event of default shall occur under any
of the other Loan Documents;
14
(vii) Borrower or any Guarantor shall default in the timely
payment or performance of any other Secured
Obligations.
(viii) Bank shall reasonably suspect the occurrence of one
or more of the aforesaid events of default and
Borrower, upon the written request of Bank, shall
fail within thirty (30) days of such request to
provide evidence reasonably satisfactory to Bank that
such event or events of default have not in fact
occurred.
B. ACCELERATION OF MATURITY; REMEDIES. Upon the occurrence of
any Event of Default described in subsection 6.A.(iv) hereof, the indebtedness
evidenced by the Notes, as well as any and all other indebtedness of Borrower to
Bank shall be immediately due and payable in full; and upon the occurrence of
any other default described above, subject to any applicable notice and right to
cure period contained herein; Bank at any time thereafter may at its option
accelerate the maturity of the indebtedness evidenced by the Notes, as well as
any and all other indebtedness of Borrower to Bank. Upon the occurrence of any
such default and the acceleration of the maturity of the indebtedness evidenced
by the Notes:
(i) Any obligation of Bank to advance any proceeds under
the Lines of Credit shall immediately cease and be of
no further force or effect, and Bank shall be
immediately entitled to exercise any and all rights
and remedies possessed by Bank pursuant to the terms
hereof, and all of the other Loan Documents;
(ii) Bank shall have all of the rights and remedies of a
secured party under the UCC; and
(iii) Bank shall have any and all other rights and remedies
that Bank may now or hereafter possess at law, in
equity or by statute.
C. RIGHT OF SETOFF. Without limitation of the foregoing, upon
the occurrence and during the continuance of any default, Bank is hereby
authorized at any time and from time to time, without notice to Borrower or any
Guarantor (any such notice being expressly waived by Borrower and Guarantors),
to set off and apply and all deposits (general or special, time or demand,
provisional or final) at any time held by Bank or any of its Subsidiaries, and
any other indebtedness at any time owing by Bank or its Subsidiaries to or for
the credit or the account of Borrower, against any and all of the Secured
Obligations, irrespective of whether Bank shall have made any demand under this
Agreement or the Notes or any other Loan Document, and although such obligations
may be unmatured. The rights of Bank under this Section 6.C are in addition to
any other rights and remedies (including, without limitation, other rights of
setoff) that Bank may have. Borrower hereby grants to Bank a security interest
in and to all such deposits and accounts held by Bank or any of its affiliates.
15
D. REMEDIES CUMULATIVE; NO WAIVER. No right, power or remedy
conferred upon or reserved to Bank by this Agreement or any of the other Loan
Documents is intended to be exclusive of any other right, power or remedy, but
each and every such right, power and remedy shall be cumulative and concurrent
and shall be in addition to any other right, power or remedy accruing upon the
occurrence of any default shall exhaust or impair any such right, power or
remedy or shall be construed to be a waiver of any such default or an
acquiescence therein, and every right, power and remedy given hereunder, under
any of the other Loan Documents or now or hereafter existing at law, in equity
or by statute. No delay or omission by Bank to exercise any right, power or
remedy accruing upon the occurrence of any default shall exhaust or impair any
such right, power or remedy or shall be construed to be a waiver of any such
default or an acquiescence therein, and every right, power and remedy given by
this Agreement and the other Loan Documents to Bank may be exercised from time
to time and as often as may be deemed necessary by Bank.
E. PROCEEDS OF REMEDIES. Any or all proceeds resulting from
the exercise of any or all of the foregoing remedies shall be applied as set
forth in the Loan Documents providing the remedy or remedies exercised; if none
is specified, or if the remedy is provided by this Agreement, then as follows:
First, to the costs and expenses, including reasonable
attorney's fees and expenses, incurred by Bank in connection with the
exercise of its remedies;
Second, to the expenses of curing the default that has
occurred, in the event that Bank elects, in its sole discretion, to
cure the default that has occurred;
Third, to the payment of the Secured Obligations, including
but not limited to the payment of the principal of and interest on the
indebtedness evidenced by the Note, in such order of priority as Bank
shall determine in its sole discretion;
Fourth, the remainder, if any, to Borrower or to any other
person lawfully thereunto entitled.
7. NOTICE. All notices, requests or demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to the other party at the following
address:
Borrower and Guarantors:
0000 Xxxxx Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000.
16
Bank:
First Tennessee Bank, N.A.
X.X. Xxx 00
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Metropolitan Department
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be effective and deemed
given or made as follows:
A. If sent by mail, upon the earlier of the date of receipt or
three (3) days after deposit in the U.S. Mail, first class postage prepaid;
B. If sent by any other means, upon delivery.
8. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all costs and expenses,
including reasonable attorneys' fees incurred by Bank in connection with (a)
negotiation and preparation of this Agreement and each of the Loan Documents as
set forth in the Commitment, and (b) all other costs and attorneys' fees
incurred by Bank for which Borrower is obligated to reimburse Bank in accordance
with the terms of the Loan Documents.
9. MISCELLANEOUS. Borrower, Guarantor and Bank further covenant
and agree as follows, without limiting any requirement of any other Loan
Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right
granted to Bank under any Loan Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Bank, and no delay in exercising any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Bank of any right preclude
any other or future exercise thereof or the exercise of any other right. Except
as otherwise expressly provided herein, Borrower and Guarantor expressly waive
any presentment, demand, protest or other notice of any kind, including but not
limited to notice of intent to accelerate and notice of acceleration. No notice
to or demand on Borrower or Guarantor in any case shall, of itself, entitle
Borrower or Guarantor to any other or future notice or demand in similar or
other circumstances.
B. APPLICABLE LAW. This Loan Agreement and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the state of Tennessee and applicable United States
federal law.
C. AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Loan Agreement, nor consent to any departure by Borrower
or Guarantor therefrom, shall be effective unless the same shall be in writing
and signed by an officer of Bank, and then shall be effective only in the
specified instance and for the purpose for which given. This Loan Agreement is
binding upon Borrower and Guarantor, as well as their respective
17
successors and assigns, and inures to the benefit of Bank, its successors and
assigns; however, no assignment or other transfer of Borrower's or Guarantor's
rights or obligations hereunder shall be made or be effective without Bank's
prior written consent, nor shall it relieve Borrower or Guarantor of any
obligations hereunder. There is no third party beneficiary of this Loan
Agreement.
D. DOCUMENTS. All documents, certificates and other items
required under this Loan Agreement to be executed and/or delivered to Bank shall
be in form and content satisfactory to Bank and its counsel. Borrower and
Guarantor agree to execute such additional documents, and provide such
additional items, as Bank may require in order to fully obtain and perfect the
security interests in the Collateral.
E. PARTIAL INVALIDITY. The unenforceability or invalidity of
any provision of this Loan Agreement shall not affect the enforceability or
validity of any other provision herein and the invalidity or unenforceability of
any provision of any Loan Document to any person or circumstance shall not
affect the enforceability or validity of such provision as it may apply to other
persons or circumstances.
F. INDEMNIFICATION. Borrower and Guarantor shall indemnify,
defend and hold Bank and its successors and assigns harmless from and against
any and all claims, demands, suits, losses, damages, assessments, fines,
penalties, costs or other expenses (including reasonable attorneys' fees and
court costs) arising from or in any way related to any of the transactions
contemplated hereby, other than any of the foregoing which arise from Bank's own
gross negligence or willful conduct.
G. SURVIVABILITY. All covenants, agreements, representations
and warranties made herein or in the other Loan Documents shall survive the
making of the Loan and shall continue in full force and effect so long as the
Loan is outstanding or the obligation of the Bank to make any advances under the
Loan shall not have expired.
H. NOTICE AND CURE. No notice of any monetary default in the
payment of any installment of principal and interest payable under the Notes
within fifteen (15) days of the due date thereof shall be required hereunder. As
for any other monetary default, or any non-monetary default which is capable of
cure, the Bank shall give the written notice of default, specifying the nature
thereof, and the Borrower shall have thirty (30) days from the date of such
notice to cure any such default. If the Borrower has not cured such default
within such thirty (30) day period, or if such default is curable but not within
thirty (30) days and the Borrower fails to institute curative action promptly
upon such notice from the Bank and diligently and continuously prosecute the
same to conclusion, then the Bank may exercise any or all remedies available
hereunder or under any of the Loan Documents.
18
10. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS, INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS
OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT,
SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL
ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF
PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF
J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES
SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING
A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
MEMPHIS, TENNESSEE, AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR;
IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION,
THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
ARBITRATION PROVISION; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. ss. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR
(III) LIMIT THE RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH
AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF
SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
19
11. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER: BANK:
FIRST TENNESSEE BANK
BACK YARD BURGERS, INC. NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx X. Xxxxxxx By: /s/ Xxx Xxxxxx
------------------------ --------------
Name: Xxxxxxxxx X. Xxxxxxx Name: Xxx Xxxxxx
-------------------- ----------
Title: Chief Executive Officer Title: Senior Vice President
----------------------- ---------------------
GUARANTORS:
LITTLE ROCK BACK YARD BURGERS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx M. Michael
--------------------
Title: Chief Executive Officer
-----------------------
BYB PROPERTIES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxxx M. Michael
--------------------
Title: Chief Executive Officer
-----------------------
20
EXHIBIT A
ADVANCE REQUEST
(BACK YARD BURGERS, INC.)
This Advance Request is furnished pursuant to the Loan Agreement dated
as of February 11, 2003 (as the same may be amended, modified, supplemented or
replaced from time to time, the "Loan Agreement"), by and between BACK YARD
BURGERS, INC., a Delaware corporation ("Borrower"), and FIRST TENNESSEE BANK
NATIONAL ASSOCIATION, a national banking association ("Bank"). Unless otherwise
defined herein, capitalized terms defined in the Loan Agreement are used herein
as defined therein.
1. Advance Request Calculation.
(a) Aggregate outstanding principal amount of all
Loans: $___________
(b) Available balance (aggregate Borrowing Limit
minus line (a) above): $___________
(c) The Implied Value of all Properties:
$___________
(d) 75% of (c) above: $___________
(e) Equals Borrowing Base $___________
2. Advance Request amount (not to exceed the lesser
of line (b) or line (e) above): $___________
Certification of Borrower
In consideration of Bank funding the Advance under one of the Lines of Credit
requested hereby, the undersigned authorized officer of Borrower represents,
warrants and certifies to Bank as follows:
(a) Borrower has kept, observed and/or performed all of its
obligations under the Loan Agreement and the other Loan
Documents;
21
(b) All conditions precedent to the making of the Advance under
one of the Lines of Credit requested hereby have been
satisfied;
(c) No default under the Loans or the Loan Documents has occurred
and is continuing;
(d) All representations and warranties made by Borrower in the
Loan Agreement and the other Loan Documents are true and
correct in all material respects as of the date hereof; and
BACK YARD BURGERS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
Date: ______________________________
22
EXHIBIT B
BORROWING BASE CERTIFICATE
(BACK YARD BURGERS, INC.)
This Borrowing Base Certificate is furnished pursuant to the Loan
Agreement dated as of February 11, 2003 (as the same may be amended, modified,
supplemented or replaced from time to time, the "Loan Agreement"), by and
between BACK YARD BURGERS, INC., a Delaware corporation ("Borrower"), and FIRST
TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association ("Bank").
Unless otherwise defined herein, capitalized terms defined in the Loan Agreement
are used herein as defined therein.
1. Calculation of Borrowing Base
(a) Most recent 12 months' volume of sales for all stores located
on the Properties
$______________
(b) .08 Times (a) = Implied Rent $______________
(c) Implied Rent times 97% = Implied NOI $______________
(d) Implied NOI divided by 11.5% CAP Rate =
Implied Value $______________
(e) Implied value times 75% = Borrowing Base $______________
2. Calculation of Availability
(a) Aggregate Borrowing Limits: $ 5,000,000.00
(b) Less Outstanding Principal Balance of
Term Loan $______________
(c) Less outstanding principal
amount under Revolving Line of Credit $______________
(d) Less outstanding principal
amount under Draw Down Line $______________
(e) Equals unused balance: $______________
(f) Lesser of 1(e) and 2(e) above
equals available balance: $______________
23
Certification of Borrower
The undersigned authorized officer on behalf of Borrower hereby
certifies as follows:
(a) Borrower has kept, observed and/or performed all of its obligations
under the Loan Agreement and the other Loan documents;
(b) No default under the Loan or the Loan Documents has occurred and is
continuing; and
(c) All representations and warranties made by Borrower in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects as of the date hereof.
BACK YARD BURGERS, INC.
By:____________________________________
Name: _________________________________
Title:_________________________________
Date: _________________________________
24
EXHIBIT C
COMPLIANCE CERTIFICATE
(BACK YARD BURGERS, INC.)
This Compliance Certificate is furnished pursuant to the Loan Agreement dated
as of February 11, 2003 (as the same may be amended, modified, supplemented or
replaced from time to time, the "Loan Agreement"), by and between BACK YARD
BURGERS, INC., a Delaware corporation ("Borrower"), and FIRST TENNESSEE BANK
NATIONAL ASSOCIATION, a national banking association ("Bank"). Unless otherwise
defined herein, capitalized terms defined in the Loan Agreement are used herein
as defined therein.
1. Tangible Stockholders' Equity
(a) Loan Agreement: $9,000,000
(b) Actual: $_________
(i) stockholders' equity, less
(ii) intangible assets, plus
(iii) subordinated debt acceptable to Bank
2. Total Liabilities to Tangible Stockholders' Equity
(a) Loan Agreement 1.50 to 1.0
(b) Actual: ___________
3. Debt Coverage Ratio
(a) Loan Agreement: 1.50 to 1.0
(b) Actual: ___________
(i) EBITDA, minus
(ii) tax expense, divided by
(iii) interest expense, plus
(iv) scheduled payments on term loans or capital leases
4. Funded Debt to EBITDA
(a) Loan Agreement: 3.0 to 1.0
(b) Actual: __________
5. The resulting LIBOR applicable spread is: __________
25
Funded Debt/EBITDA Spread
------------------ ------
a. >2.50 3.00%
b. >2.00 #2.50 2.75%
c. >1.50 #2.00 2.25%
d. >1.00 #1.50 2.00%
e. #1.00 1.75%
The undersigned authorized officer on behalf of Borrower hereby certifies that
the foregoing covenant calculations are true and correct as of the end of the
prior reporting period.
"BORROWER"
BACK YARD BURGERS, INC.
By:_____________________________
Name:___________________________
Title___________________________
26
EXHIBIT D
PROPERTIES
STORE # ADDRESS CITY/STATE/ZIP
------- ------- --------------
1. 10 0000 Xxxxxx Xxxxx Xxxxxxx, XX 00000
2. 14 0000 Xxxx Xxxxxx Xxxxxxxxxx, XX 00000
3. 18 0000 Xxxxxxxxxx Xxxxxxx Xxxxxxx, XX 00000
4. 22 000 Xxxxxxx Xxxx X. Xxxxxxxxx, XX 00000
5. 23 0000 Xxxxxxx Xxxx Xxxxx Xxxxxx, XX 00000
6. 37 000 Xxxx Xxxxxx Xxxxxxxxxxxx, XX 00000
7. 50 0000 X.X. Xxxxx Xxxx Xxxxxx Xxxx, XX 00000
8. 101 000 X. Xxxxxxxxxxx Xxxxxx Xxxx, XX 00000
9. 102 0000 XxXxxx Xxxx X. Xxxxxx Xxxx, XX 00000
27
EXHIBIT E
SUBSIDIARIES
1. Little Rock Back Yard Burgers, Inc.
2. BYB Properties, Inc.
3. Atlanta Burgers BYB Corporation
28
