UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 12, 2008
____________________________________
DIVERSIFIED RESTAURANT HOLDINGS, INC.
(Name of small business in its charter)
_____________________________________
Nevada |
| 333-145316 |
| 20-5621294 |
(State or other jurisdiction of incorporation) |
| (Commission File Number) |
| (IRS Employer Identification No.) |
|
| 21751 W. Eleven Mile Road Suite 208 Southfield, MI 48076 |
|
|
(Address of principal executive offices) |
Registrant's telephone number: (248) 223-9160
______________________________________
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Item 1.01 Entry into a Material Definitive Agreement.
On Thursday, June 12, 2008, AMC Troy, Inc., a wholly owned subsidiary of Diversified Restaurant Holdings, Inc. (the “Company”), closed on a loan with Charter One Bank (the “Loan”). The proceeds of the Loan are to be used for construction and start-up costs for a new Buffalo Wild Wing restaurant to be located in Troy, Michigan. The date of the note is June 12, 2008, and it has a maturity date of June 12, 2015.
The Loan is for the amount of $1,013,270.00 with a term of seven years and amortized over seven years. AMC Troy, Inc. shall pay consecutive monthly installments of principal as follows commencing July 12, 2008.
Months 1-12
$ 9,642
Months 13-24
10,354
Months 25-36
11,119
Months 37-48
11,941
Months 49-60
12,823
Months 61-72
13,771
Months 73-84
14,788
Months 85-96
15,881
Months 97-108
17,055
Months 109-120
18,315
AMC Troy, Inc. shall pay interest on the Loan monthly on the twelfth day of each month. The Loan earns interest at a fixed rate of 7.28% per annum. A SWAP derivative has been assigned. The Loan is secured by the assets of AMC Troy, Inc. The Bank is authorized to accelerate the payment of the Loan on the occurrence of an event of default under the terms of the Loan Agreement.
The Loan is guaranteed by the following persons:
T. Michael Ansley, President (personally)
Flyer Enterprises, Inc., a related entity
TMA Enterprises of Ferndale, LLC, a related entity
Diversified Restaurant Holdings, Inc.
AMC Wings, Inc., a wholly owned subsidiary
AMC Group, Inc., a wholly owned subsidiary
AMC Grand Blanc, Inc., a wholly owned subsidiary
AMC Petoskey, Inc., a wholly owned subsidiary
Two financial covenants govern this Loan:
1.
The Borrower and Corporate Guarantors on a combined basis shall not permit the ratio of its EBITDA, minus taxes paid in cash, Distributions, shareholder advances, increases in intercompany or affiliated company receivables and unfinanced CAPEX, to Interest Expense plus CMLTD, to be less than (i) 1.0 to 1.0 at June 30, 2008; (ii) 1.1 to 1.0 at September 30, 2008 and (iii) 1.2 to 1.0 at December 31, 2008 and thereafter for the 4 consecutive fiscal quarters ending at the end of each fiscal quarter.
2.
The Borrower and Corporate Guarantors on a combined basis shall not permit the ratio of its Funded Indebtedness to EBITDA to be greater than 3.5 to 1.0 for any fiscal year beginning June 30, 2008. Only EBITDA and funded debt of stores open for a period more than three months will be used in covenant
Item 2.03. Creation of a Direct Financial Obligation or An Obligation Under an Off Balance Sheet
Arrangement of a Registrant.
The information required by this item 2.03 is set forth in item 1.01 above, which is incorporated herein by reference.
2
Item 9.01 Financial Statements and Exhibits
(d)
The following exhibits are included with this Report.
Exhibit 10.1
Loan and Security Agreement dated June 12, 2008 by and between Charter One Bank and AMC Troy, Inc.
Exhibit 10.2
Term Note dated June 12, 2008 by and between Charter One Bank and AMC Troy, Inc.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DIVERSIFIED RESTAURANT HOLDINGS, INC. | |
Dated: June 12, 2008 | By: | /s/ T. Michael Ansley |
| Name: | T. Michael Ansley |
| Title: | President |
3