<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO REPORT ON 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): July 3, 1996
-------------
DENAMERICA CORP.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 1-13226 58-1861457
- ------------------------------ --------------------- --------------------
(State or other jurisdiction (Commission File No.) (IRS Employer ID No.)
of incorporation)
7373 N. Scottsdale Road, Suite D-120, Scottsdale, Arizona 85253
---------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (602) 483-7055
---------------
<PAGE> 2
DENAMERICA CORP.
FORM 8-K/A
CURRENT REPORT
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
ACQUISITION OF BLACK-EYED PEA U.S.A., INC.
On July 3, 1996, DenAmerica Corp. (the "Company" or "DenAmerica")
acquired all of the issued and outstanding common stock of Black-eyed Pea
U.S.A., Inc. ("BEP") from BEP Holdings, Inc. (the "BEP Acquisition"). The
purchase price for the stock of BEP consisted of (i) cash of approximately $50.0
million, and (ii) a promissory note in the principal amount of $15.0 million
issued to BEP Holdings, Inc. (the "BEP Purchase Note"). On July 3, 1996, the
accounts of BEP included cash of approximately $4.2 million. BEP operates
approximately 100 casual dining restaurants in 11 states under the "Black-Eyed
Pea" concept and franchises the right to operate an additional 30 Black-eyed Pea
restaurants to third parties.
In connection with the BEP Acquisition, the Company repaid all of the
$6.0 million principal amount outstanding on its Series A 13% Subordinated Notes
due 2003 (the "Series A Notes"), plus accrued and unpaid interest on the Series
A Notes. The Company repaid the Series A Notes by (a) paying to the holder of
the Series A Notes cash of approximately $5.2 million and (b) issuing to such
holder 250,000 shares of Common Stock valued at $4.00 per share, which was the
fair market value of the Common Stock on the date of the agreement with respect
to the repayment of the Series A Notes.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
(A) CONSOLIDATED FINANCIAL STATEMENTS OF BLACK-EYED PEA U.S.A. INC. AND
SUBSIDIARIES
Independent Auditors' Report
Consolidated Balance Sheets as of April 1, 1996 and April 3, 1995
Consolidated Statements of Operations for the Years Ended April 1,
1996, April 3, 1995, and March 28, 1994
Consolidated Statements of Stockholders' Equity for the Years Ended
April 1, 1996, April 3, 1995, and March 28, 1994
Consolidated Statements of Cash Flows for the Years Ended April 1,
1996, April 3, 1995, and March 28, 1994
Notes to Consolidated Financial Statements
(B) PRO FORMA FINANCIAL STATEMENTS.
Introduction
Unaudited Condensed Consolidated Pro Forma Statement of Operations
For the Year Ended December 27, 1995
Unaudited Condensed Consolidated Statement of Operations For the 27-
Week Period Ended July 3, 1996
Notes to Unaudited Condensed Consolidated Pro Forma Statements of
Operations
3
<PAGE> 4
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Black-eyed Pea U.S.A., Inc.:
We have audited the accompanying consolidated balance sheets of Black-eyed Pea
U.S.A., Inc. and subsidiaries as of April 1, 1996 and April 3, 1995, and the
related consolidated statements of operations, stockholder's equity, and cash
flows for each of the years in the three-year period ended April 1, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Black-eyed Pea
U.S.A., Inc. and subsidiaries as of April 1, 1996 and April 3, 1995, and the
results of their operations and their cash flows for each of the years in the
three-year period ended April 1, 1996, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Dallas, Texas
May 10, 1996, except as to note 11,
which is as of July 3, 1996
4
<PAGE> 5
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
April 1, April 3,
Assets 1996 1995
------ ------- -------
<S> <C> <C>
Current assets:
Cash $ 1,695 1,683
Accounts receivable:
Trade 799 686
Other 404 853
Income taxes receivable 1,602 -
Inventories 1,147 1,200
Prepaid expenses and other current assets 495 530
Deferred income taxes (note 7) 14,945 2,849
-------- -------
Total current assets 21,087 7,801
Net property and equipment (notes 2, 8 and 11) 72,789 93,428
Excess of cost over fair value of net assets acquired, net
(note 11) - 26,853
Other assets (note 6) 677 572
-------- -------
$ 94,553 128,654
======== =======
Liabilities and Stockholder's Equity
------------------------------------
Current liabilities:
Current installments:
Long-term debt (note 4) $ 656 591
Capital lease obligations (note 8) 64 46
Accounts payable 1,415 3,157
Affiliates payable (notes 4 and 10) 38,048 28,050
Accrued liabilities (note 3) 8,363 9,429
Reserve for restaurant closures (note 5) 10,384 1,519
Income taxes payable - 156
-------- -------
Total current liabilities 58,930 42,948
Long-term debt, less current installments (note 4) 51,918 52,574
Capital lease obligations, less current installments (note 8) 1,652 2,011
Deferred income taxes (note 7) 1,834 791
Other long-term liabilities (notes 1(h) and 5) 719 1,262
-------- -------
Total liabilities 115,053 99,586
-------- -------
Stockholder's equity:
Common stock, $.01 par value; 500,000 shares
authorized; 22,499 shares issued and outstanding 1 1
Additional paid-in capital 7,569 7,569
Retained earnings (28,070) 21,498
-------- -------
Total stockholder's equity (20,500) 29,068
-------- -------
Commitments and contingencies (notes 8 and 9) $ 94,553 128,654
======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands)
<TABLE>
<CAPTION>
Years ended
---------------------------------
April 1, April 3, March 28,
1996 1995 1994
------- ------- --------
<S> <C> <C> <C>
Revenues:
Restaurant $143,259 153,269 153,109
Franchise 2,196 2,331 2,227
-------- ------- -------
145,455 155,600 155,336
-------- ------- -------
Restaurant costs and expenses:
Cost of sales 43,229 45,843 44,935
Operating expenses 80,603 83,577 82,754
Depreciation, amortization and accretion 8,792 7,828 7,022
Provision for restaurant closures (note 5) 10,225 1,458 1,000
Provision for loss on impairment of assets
(note 11) 50,384 -- --
-------- ------- -------
Total restaurant costs and expenses 193,233 138,706 135,711
-------- ------- -------
General and administrative expenses (note 10) 8,588 9,027 8,350
-------- ------- -------
Operating (loss) income (56,366) 7,867 11,275
Interest expense (notes 2 and 4) 5,362 5,189 4,572
Other expense (income), net (note 10) 717 353 (208)
-------- ------- -------
(Loss) earnings before income taxes
and cumulative effect of change
in accounting principle (62,445) 2,325 6,911
Income tax (benefit) expense (note 7) (12,877) 753 2,541
-------- ------- -------
(Loss) earnings before cumulative
effect of change in accounting
principle (49,568) 1,572 4,370
Cumulative effect at March 30, 1993 of change
in accounting for income taxes (notes 1(g)
and 7) -- -- 807
-------- ------- -------
Net (loss) earnings $(49,568) 1,572 3,563
======== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Consolidated Statements of Stockholder's Equity
(In thousands)
<TABLE>
<CAPTION>
Additional Total
Common paid-in Retained stockholder's
stock capital earnings equity
------ ---------- -------- -------------
<S> <C> <C> <C> <C>
Balance at March 29, 1993 $ 1 7,569 16,363 23,933
Net earnings -- -- 3,563 3,563
----- ----- ------- -------
Balance at March 28, 1994 1 7,569 19,926 27,496
Net earnings -- -- 1,572 1,572
----- ----- ------- -------
Balance at April 3, 1995 1 7,569 21,498 29,068
Net loss -- -- (49,568) (49,568)
----- ----- ------- -------
Balance at April 1, 1996 $ 1 7,569 (28,070) (20,500)
===== ===== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Years ended
----------------------------------
April 1, April 3, March 28,
1996 1995 1994
------- ------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net (loss) earnings $(49,568) 1,572 3,563
Adjustments to reconcile net (loss) earnings to net
cash provided by operating activities:
Depreciation, amortization and accretion 8,792 7,828 7,022
Loss on disposition of assets 1,193 218 126
Provision for restaurant closures 10,225 1,458 1,000
Provision for loss on impairment of assets 50,384 -- --
Gain on retirement of capital lease obligation (18) -- (148)
Changes in assets and liabilities:
Accounts receivable 336 (810) 166
Inventories 53 49 (214)
Prepaid expenses and other current assets 35 (57) (227)
Other assets (105) 80 (82)
Accounts payable (1,742) 166 252
Affiliates payable 9,998 4,319 7,619
Accrued liabilities (1,066) 1,876 1,174
Income taxes (1,758) (550) 278
Deferred income taxes (11,053) (378) 195
Other long-term liabilities 247 (1,288) (526)
-------- ------- -------
Net cash provided by operating activities 15,953 14,483 20,198
-------- ------- -------
Cash flows from investing activities:
Additions to property and equipment (19,007) (14,177) (20,711)
Proceeds from sales of assets 3,700 9 78
-------- ------- -------
Net cash used in investing activities (15,307) (14,168) (20,633)
-------- ------- -------
Cash flows from financing activities:
Payments of long-term debt obligations (591) (533) (479)
Payments of capital lease obligations (43) (40) (47)
-------- ------- -------
Net cash used in financing activities (634) (573) (526)
-------- ------- -------
Net increase (decrease) in cash 12 (258) (961)
Cash at beginning of year 1,683 1,941 2,902
-------- ------- -------
Cash at end of year $ 1,695 1,683 1,941
======== ======= =======
Supplemental cash flow information:
Interest paid, net of amount capitalized $ 4,990 4,536 4,470
======== ======= =======
Income taxes paid, net of refunds $ -- 1,719 2,798
======== ======= =======
Supplemental schedule of noncash financing
activity - increases in property resulting
from capital lease obligations $ -- -- 1,068
======== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE> 9
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
April 1, 1996, April 3, 1995 and March 28, 1994
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The consolidated financial statements include the accounts of
Black-eyed Pea U.S.A., Inc. and subsidiaries (collectively, the
Company). All significant intercompany transactions and balances have
been eliminated in consolidation.
The Company is a subsidiary of BEP Holdings, Inc. (BEPHI), which is
wholly owned by Black-eyed Pea Restaurants, Inc. (BPRI) and operates 99
restaurants as of April 1, 1996, primarily located in the southern
region of the United States with a high concentration in Texas,
Georgia, Maryland and Virginia. BEPHI acquired all the outstanding
shares of the Company's common stock on November 24, 1986.
(b) Definition of Fiscal Year
The Company's fiscal year ends on the Monday closest to March 31.
Fiscal years 1996, 1995 and 1994 are comprised of fifty-two,
fifty-three and fifty-two weeks, respectively.
(c) Inventories
Inventories, consisting mainly of food, beverages and supplies, are
stated at the lower of cost (first-in, first-out method) or market.
(d) Property and Equipment
Property and equipment of the Company existing at November 24, 1986 was
revalued to fair market value at that date. Subsequent additions to
property and equipment are recorded at cost. Depreciation and
amortization is provided for in amounts sufficient to relate the cost
of depreciable assets to operations over their estimated useful lives
(see note 2), principally on a straight-line basis for financial
reporting purposes, while accelerated methods are used for tax
purposes. Leasehold improvements are amortized over the lives of the
respective leases or the service lives of the improvements, whichever
is shorter.
Lease renewal option periods are included in determining leasehold
improvement useful lives when, in management's opinion, such renewal
options will be exercised.
Repairs and maintenance are charged to operations as incurred.
Remodeling costs that materially extend the useful lives of associated
assets are generally capitalized.
(Continued)
9
<PAGE> 10
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(e) Excess of Cost over Fair Value of Net Assets Acquired
Excess of cost over fair value of net assets acquired relates to the
acquisition of Black-eyed Pea U.S.A., Inc. (formerly Prufrock
Restaurants, Inc.) in November 1986. This transaction was accounted for
under the purchase method. In connection with this acquisition, the
assets and liabilities of the Company were revalued to fair market
value. The excess of acquisition cost over fair value of net assets
acquired was capitalized and was being amortized on a straight-line
basis over a forty-year period since, in the opinion of management, the
value would not diminish. Excess of cost over fair value of net assets
acquired is recorded net of accumulated amortization of $7,932,000 and
$7,083,000 at April 1, 1996 and April 3, 1995, respectively, in the
accompanying consolidated balance sheets. However, as a result of the
sale of the stock of the Company on July 3, 1996, it was determined
that the excess of cost over fair value of net assets acquired was not
recoverable. Accordingly, an additional reserve of $26,004,000 was
recorded in the consolidated financial statements at April 1, 1996 (see
note 11).
(f) Preopening Costs
Labor costs and costs of hiring and training personnel and certain
other costs relating to the opening of new restaurants are expensed as
incurred.
(g) Franchise Revenues
Initial franchise fee revenues are recognized when substantially all of
the services required by the franchise agreement have been performed
and no other material conditions or obligations related to the
determination of substantial performance exist, which approximates
restaurant opening.
Area development fees are paid to the Company, in addition to initial
franchise fees, in exchange for franchisee's right to develop multiple
restaurants in a defined geographic region. These fees are deferred and
recognized as revenue as the related initial franchise fee for each
restaurant is recognized or upon expiration of development rights.
Franchise royalties are paid monthly by franchisees for the use of the
Company's proprietary trademarks, service marks and operating methods,
and for services provided by the Company to the franchisees, consisting
of guidance in initial opening activities and ongoing operational
guidance as needed. Royalties are based on a percentage of franchise
restaurant sales and are recognized in the period in which services are
provided and the related franchisee sales occur. Royalty revenues were
approximately $2,046,000, $2,241,000 and $1,947,000 during the fiscal
years 1996, 1995 and 1994, respectively.
(h) Income Taxes
The Company files a consolidated U.S. federal income tax return with
BPRI and its subsidiaries. The Company computes federal income taxes on
a separate return basis.
(Continued)
10
<PAGE> 11
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 109 (Statement 109), Accounting for Income Taxes,
effective March 30, 1993 (see note 7). Under the asset and liability
method of Statement 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered
or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date.
The Company has reported the cumulative effect of adopting Statement
109 as a change in the method of accounting for income taxes in the
fiscal year 1994 consolidated statement of operations.
(i) Deferred Credit on Lease Interests
Deferred credit on lease interests represents the present value of the
excess of future contractual lease payments over the fair value of
lease rights on noncancellable operating leases on the date of
acquisition by BEPHI. Deferred credit on lease interests is amortized
on a straight-line basis over the remaining life of the leases.
Deferred credit on lease interests of approximately $303,000 and
$445,000, net of accumulated accretion of approximately $725,000 and
$714,000, are included in other long-term liabilities in the
consolidated balance sheets at April 1, 1996 and April 3, 1995,
respectively.
(j) Advertising Expenses
The Company expenses advertising production costs and media costs as
incurred. Gross advertising expenses before contributions from
franchisees were approximately $6,615,000, $6,002,000 and $7,827,000
during the fiscal years 1996, 1995 and 1994, respectively.
(k) Use of Estimates
The preparation of the consolidated financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and
the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
(Continued)
11
<PAGE> 12
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(l) Reclassifications
Certain previously reported financial information has been reclassified
to conform with the April 1, 1996 presentation.
(2) Property and Equipment
A summary of property and equipment and the range of useful lives used
in the calculation of depreciation and amortization follows (in
thousands):
<TABLE>
<CAPTION>
Useful April 1, April 3,
life range 1996 1995
---------- ---- ----
<S> <C> <C> <C>
Land $ 21,709 21,128
Buildings and improvements and
leasehold improvements 5-20 years 75,176 66,709
Equipment, furniture and fixtures 2-8 years 36,218 33,065
Construction-in-progress 1,813 5,015
Furniture and equipment held for
future restaurants 490 1,256
-------- -------
135,406 127,173
Less:
Accumulated depreciation
and amortization (38,237) (33,745)
Reserve for impairment (note 11) (24,380) -
------- -------
$ 72,789 93,428
======= =======
</TABLE>
Capitalized interest related to construction-in-progress was
approximately $201,000 in fiscal year 1996, $167,000 in fiscal year
1995 and $274,000 in fiscal year 1994.
(3) Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
<TABLE>
<CAPTION>
April 1, April 3,
1996 1995
---- ----
<S> <C> <C>
Labor and related costs $ 2,480 2,360
Insurance 4,684 5,662
Sales taxes 367 382
Other 832 1,025
------- -----
$ 8,363 9,429
======= =====
</TABLE>
(Continued)
12
<PAGE> 13
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(4) Long-term Debt
A summary of long-term debt follows (in thousands):
<TABLE>
<CAPTION>
April 1, April 3,
1996 1995
---- ----
<S> <C> <C>
Note payable to BEPHI, at 11% interest,
payable in 20 annual installments of
principal and interest through maturity
date, March 20, 2012 $22,575 $23,166
Note payable to BEPHI, interest payable
at prime rate (8.25% at April 1, 1996),
principal and interest payable at
maturity, April 1, 1997 29,999 29,999
------ ------
52,574 53,165
Less current installments (656) (591)
------- -------
$51,918 $52,574
======= =======
</TABLE>
On March 27, 1991, the Company issued a $25,000,000 note payable upon
declaration of a dividend payable to BEPHI. The scheduled maturities of
the note payable at April 1, 1996 are approximately $656,000 in fiscal
year 1997, $728,000 in fiscal year 1998, $808,000 in fiscal year 1999,
$898,000 in fiscal year 2000, $996,000 in fiscal year 2001 and
$18,489,000 thereafter.
On April 3, 1995, the $29,999,000 note payable to BEPHI, due April 1,
1996 was renewed to the current maturity date. The Company and BEPHI
intend to renew the note payable for an additional year upon maturity.
As BEPHI will not require payment on such note payable within one
fiscal year from the April 1, 1996 balance sheet date, such amount is
classified as long-term in the consolidated balance sheet.
Interest incurred on the notes payable to BEPHI was approximately
$5,159,000 in fiscal year 1996, $5,051,000 in fiscal year 1995 and
$4,460,000 in fiscal year 1994. The interest payable related to notes
payable to BEPHI was approximately $2,661,000 and $2,444,000 at April
1, 1996 and April 3, 1995, respectively, and these amounts are included
in affiliates payable in the consolidated balance sheets.
The fair values of the notes payable to BEPHI are estimated based on
the amount of future cash flows discounted using the Company's current
borrowing rate for loans of comparable maturity. The estimated fair
value of the note payable to BEPHI maturing on March 20, 2012
approximates $26,466,000 at April 1, 1996. The carrying amount of the
$29,999,000 note payable to BEPHI approximates estimated fair value at
April 1, 1996. The carrying values of other financial instruments
including cash, receivables and payables approximate fair values
because of the short maturity of those instruments.
(Continued)
13
<PAGE> 14
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(5) Reserve for Restaurant Closures
The Company periodically evaluates for closure restaurants which are
generally unprofitable and, in the opinion of management, are unlikely
to become profitable or meet earnings expectations. Upon making this
determination and committing the Company to a closure plan for such
restaurants, a reserve for restaurant closures is recorded to recognize
the estimated exit costs associated with the planned closings,
including the write-off of net assets (net of estimated salvage value),
operating costs from the estimated closing date through the estimated
date of disposition, and other qualifying disposal costs. The reserve
for restaurant closures is presented as a current liability, net of the
estimated noncurrent portion (presented in other long-term liabilities)
as determined by Company management based on projected restaurant
closure dates and costs to be incurred. During the years ended April 1,
1996, April 3, 1995 and March 28, 1994, the Company charged to
operations $10,225,000, $1,458,000 and $1,000,000 to provide for the
costs of closing nineteen, six and three Black-eyed Pea restaurants,
respectively. For the year ended April 1, 1996, revenues for the
restaurants identified for closure aggregated approximately
$17,343,000.
(6) Employee Retirement Plans
BEPHI has a qualified defined contribution retirement plan covering
eligible employees of BEPHI and subsidiaries who have reached the age
of twenty-one and completed one year of service. On April 1, 1990,
BEPHI and subsidiaries adopted a nonqualified defined contribution
retirement plan for highly compensated employees (HCE Plan), as
defined. Under these plans, the Company makes discretionary
contributions each year. Expense charged in the form of contributions
by the Company for these plans for the years ended April 1, 1996, April
3, 1995 and March 28, 1994 aggregated approximately $329,000, $545,000
and $604,000, respectively.
The Company has a Rabbi Trust to fund HCE Plan benefits and accrued
benefits are included in other long-term liabilities. As of April 1,
1996, assets of the trust aggregated approximately $416,000 and are
included in other assets. Assets of the trust are primarily invested in
equities and fixed income instruments.
On April 1, 1990, a subsidiary of BPRI adopted a nonqualified defined
benefit plan (SERP Plan) in order to supplement retirement benefits of
specified employees. The benefits are based on years of service and the
employees' average annual earnings, as defined, and are reduced by
certain other retirement benefits. The net periodic pension cost is
funded on an annual basis. The Company's allocated portion of the net
periodic pension expense (income) was approximately $(13,000), $158,000
and $75,000 in fiscal years 1996, 1995 and 1994, respectively.
Allocated curtailment gains of approximately $134,000 and $85,000 are
reflected in net periodic pension expense (income) for fiscal years
1996 and 1994, respectively.
In addition to the above retirement benefits, the Company provides
certain health care and life insurance benefits to certain active
employees. Postretirement benefits are not provided by the Company. The
health care benefits in excess of certain limits and the life insurance
benefits are
(Continued)
14
<PAGE> 15
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
insured. The Company recognizes the cost of providing these benefits by
expensing the insurance premiums and estimated costs of claims
incurred. The cost of providing these benefits for the Company's active
employees was approximately $1,014,000 in fiscal year 1996, $918,000 in
fiscal year 1995, and $1,359,000 in fiscal year 1994. At April 1, 1996,
there were approximately 984 active full-time employees receiving the
benefits.
(7) Income Taxes
As discussed in note 1(h), the Company adopted Statement 109 as of
March 30, 1993. The cumulative effect of this change in accounting for
income taxes of approximately $807,000 was determined as of March 30,
1993 and reported separately in the consolidated statement of
operations for the year ended March 28, 1994.
Components of income tax (benefit) expense are as follows (in
thousands):
<TABLE>
<CAPTION>
Years ended
----------------------------------------
April 1, April 3, March 28,
1996 1995 1994
------- ------- ---------
<S> <C> <C> <C>
Current:
Federal $ (1,809) 1,105 3,134
State (17) 26 61
Deferred - federal (11,051) (378) (654)
-------- ------ -----
Total $(12,877) 753 2,541
======== ====== =====
</TABLE>
Actual income tax (benefit) expense differs from the "expected" income
tax (benefit) expense (computed by applying the U.S. federal corporate
tax rate of 35% to (loss) earnings before income taxes and cumulative
effect of change in accounting principle for the years ended April 1,
1996, April 3, 1995 and March 28, 1994) as follows (in thousands):
<TABLE>
<CAPTION>
Years ended
-------------------------------------
April 1, April 3, March 28,
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Computed "expected" income tax
(benefit) expense $(21,855) 814 2,419
Loss on impairment of excess of
acquisition cost over fair
value of net assets acquired 9,101 - -
Amortization of excess of acquisition cost
over fair value of net assets acquired 297 297 297
State income taxes, net of federal benefit (11) 17 40
Targeted jobs tax credit - (106) (33)
FICA tax on tips credit (311) (280) (77)
Change in temporary differences due to
tax rate change - - (31)
Other, net (98) 11 (74)
-------- ---- -----
Actual income tax (benefit)
expense $(12,877) 753 2,541
======== ==== =====
</TABLE>
(Continued)
15
<PAGE> 16
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
The tax effects of the primary temporary differences giving rise to the
deferred federal income tax assets and liabilities as determined under
Statement 109 are as follows (in thousands):
<TABLE>
<CAPTION>
April 1, April 3,
1996 1995
------- ----
<S> <C> <C>
Deferred tax assets:
Reserve for self-insurance in excess of claims paid $ 1,630 $1,979
Deferred lease liabilities 791 767
Provision for restaurant closures 4,490 709
Provision for loss on impairment of assets 8,533 --
Vacation accrual 193 213
Miscellaneous items 209 227
------- -----
Total deferred tax assets 15,846 3,895
------- -----
Deferred tax liabilities:
Basis in property and equipment 2,665 1,818
Miscellaneous items 70 19
------- -----
Total deferred tax liabilities 2,735 1,837
------- -----
Net deferred tax asset $13,111 $2,058
======= ======
Included in the consolidated balance sheets (in thousands):
April 1, April 3,
1996 1995
------- ------
Current deferred tax asset $14,945 $2,849
Noncurrent deferred tax liability (1,834) (791)
------- ------
Net deferred tax asset $13,111 $2,058
======= ======
</TABLE>
In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Realization of
deferred tax assets (in excess of deferred tax liabilities) is
dependent upon the generation of future taxable income or the
availability to carryback those temporary differences against tax
expense provided for in previous years. Management expects to realize
the 1996 deferred tax assets by carrying back net operating losses to
offset tax expense provided for in previous years. Accordingly,
management has concluded on a more likely than not basis that net
deferred tax assets will be realized.
(8) Leases
At April 1, 1996, the Company operates 64 restaurants which are leased
under operating leases and five under capital leases. Administrative
offices (see note 10) and certain equipment are also leased.
(Continued)
16
<PAGE> 17
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(a) Capital Leases
The Company leases certain property under various leases which are
classified as capital leases. These leases cover initial periods of
three to twenty years and substantially all of these leases contain
renewal options of five to ten years.
Property under capital leases included in property and equipment by
major class is as follows (in thousands):
<TABLE>
<CAPTION>
April 1, April 3,
1996 1995
------- -------
<S> <C> <C>
Buildings and leasehold improvements $1,893 2,192
Less accumulated depreciation and amortization (598) (499)
------ -----
$1,295 1,693
====== =====
</TABLE>
(b) Operating Leases
The Company leases restaurant facilities, administrative offices, and
certain equipment under operating leases covering initial periods of
three to twenty years and substantially all of these leases contain
renewal options of five to ten years. In addition to fixed lease
obligations, the Company pays a percentage of sales for various
restaurants and additional costs for property taxes and certain other
expenses. A summary of rental expense for all operating leases follows
(in thousands):
<TABLE>
<CAPTION>
Years ended
----------------------------------
April 1, April 3, March 28,
1996 1995 1994
-------- -------- ---------
<S> <C> <C> <C>
Minimum rentals $ 4,983 $ 5,352 $ 5,234
Contingent rentals 91 152 239
------- ------- -------
$ 5,074 $ 5,504 $ 5,473
======= ======= =======
</TABLE>
(c) Commitments
The present value of capital lease payments and the future minimum
lease payments under operating leases with an initial or remaining
noncancellable lease term in excess of one year at April 1, 1996 are as
follows (in thousands):
(Continued)
17
<PAGE> 18
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
<TABLE>
<CAPTION>
Capital Operating
Fiscal year leases leases
----------- ------ ------
<S> <C> <C>
1997 $ 309 4,791
1998 312 4,243
1999 314 4,095
2000 319 3,730
2001 330 3,539
Later years 2,261 21,132
----- ------
Total minimum lease payments 3,845 41,530
======
Less amounts representing interest (2,129)
-----
Present value of minimum lease payments 1,716
Less current installments (64)
-----
$ 1,652
</TABLE>
At April 1, 1996, the Company remains contingently liable for
approximately $1,886,000 of future minimum rentals under restaurant
facility lease assignments to certain third parties expiring at various
dates through 2012.
(9) Contingencies
The Company is engaged in various legal proceedings and has certain
unresolved claims pending. The ultimate liability, if any, for the
aggregate amounts claimed cannot be determined at this time. Management
of the Company, based upon consultation with legal counsel, is of the
opinion that there are no matters pending or threatened which are
expected to have a material adverse effect on the Company's
consolidated financial condition, results of operations or liquidity.
(10) Transactions with Affiliates
The Company's corporate administrative functions, including accounting
and data processing, are combined with the administrative functions of
an affiliate. The cost of these administrative functions is allocated
to the companies in proportion to the budgeted net revenues of each
company. General and administrative expenses include approximately
$7,749,000 in fiscal year 1996, $8,182,000 in fiscal year 1995 and
$7,686,000 in fiscal year 1994 of these allocated expenses. Included in
these allocated expenses is office rent expense which approximated
$675,000 in fiscal year 1996, $621,000 in fiscal year 1995 and $557,000
in fiscal year 1994.
The Company participates in a cash sharing arrangement with affiliates,
whereby cash is combined for investing or borrowing purposes. This
arrangement resulted in a net affiliates payable (including accrued
interest) for the Company at April 1, 1996 and April 3, 1995. Funding
activities under this arrangement bear interest at the prime rate. The
Company recorded interest expense (income) on a net basis of
approximately $130,000 in fiscal year 1996, $(21,000) in fiscal year
1995 and $3,000 in fiscal year 1994 under this arrangement (included in
other expense (income) in the consolidated statements of operations).
(Continued)
18
<PAGE> 19
BLACK-EYED PEA U.S.A., INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Effective April 1, 1994, the board of directors of BPRI adopted the
1994 Stock Appreciation Rights Plan (the Plan). The Plan provides for
the granting of stock appreciation rights (SARs) to key employees of
BPRI and subsidiaries subject to certain conditions and limitations, as
defined by the Plan. The Plan provides, in the aggregate, a maximum of
1,780,000 SARs. SARs permit the option holder to surrender an
exercisable SAR for an amount equal to the excess of the value assigned
to a share of common stock of BPRI over the value assigned to the SAR
as of the grant date. The value of a share of common stock of BPRI is
to be determined by an independent valuation two times per fiscal
year. A summary of SAR activity follows (in thousands):
<TABLE>
<CAPTION>
Number
of SARs
-------
<S> <C>
Issued 1,422
Forfeited (122)
-----
Outstanding at April 3, 1995 1,300
Issued 190
Forfeited (7)
-----
Outstanding at April 1, 1996 1,483
=====
</TABLE>
The outstanding SARs vest equally on each of the first four
anniversaries of the date of grant, and 677,000 are vested at April 1,
1996. All SARs which have not been exercised will expire ten years from
the date of grant. No expense was incurred or allocated to the Company
for the Plan during fiscal years 1996 and 1995 as the value assigned to
a share of common stock of BPRI during such fiscal years did not exceed
the value assigned to the SARs as of the respective grant dates.
(11) Sale of Company
On May 31, 1996, BEPHI entered into a Stock Purchase Agreement (the
Agreement) with DenAmerica Corp., an unrelated third party, to sell
BEPHI's interest in the Company. The final closing of the sale occurred
on July 3, 1996 at which time DenAmerica Corp. exchanged $50 million
cash and a $15 million note for BEPHI's interest in the Company. As the
net assets of the Company, including intercompany balances which were
assumed by BEPHI at the time of the sale, exceeded the selling price,
an impairment of the assets of the Company was determined to exist at
April 1, 1996. Accordingly, an impairment of approximately $50,384,000
has been recorded in the April 1, 1996 consolidated financial
statements to reflect the assets of the Company at their estimated fair
value. The impairment is comprised of the write-off of the remaining
$26,004,000 of excess cost over fair value of net assets acquired and
the write-down of property and equipment in the amount of $24,380,000.
The impairment results in a net tax benefit of approximately $8,533,000
which has also been reflected in the consolidated financial statements.
The terms of the Agreement will substantially affect the Company's
current affiliate debt and cash sharing arrangements as well as the
availability of existing corporate administrative facilities shared by
the Company. Such funding and administrative functions will be provided
by and shared with DenAmerica Corp.
19
<PAGE> 20
DENAMERICA CORP.
UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA STATEMENTS OF OPERATIONS
INTRODUCTION
On March 29, 1996, Denwest Restaurant Corp. ("DRC") merged with and
into American Family Restaurants, Inc. ("AFR"), with AFR as the surviving
corporation (the "Merger"). In connection with the Merger, the name of AFR was
changed to DenAmerica Corp. Upon consummation of the Merger, the former
shareholders of DRC owned an aggregate of approximately 53.0% of the Company's
outstanding Common Stock. Accordingly, the Merger has been accounted for as a
reverse purchase under generally accepted accounting principals, pursuant to
which DRC is considered the acquiring company for accounting purposes, even
though the Company is the surviving legal entity. As a result, the historical
financial statements of DRC are the continuing historical financial statements
of the Company. The transactions related to the Merger are more fully described
in the Company's Current Report on Form 8-K as filed with the Securities and
Exchange Commission on April 15, 1996, as amended by Form 8-K/A as filed by the
Company on June 12, 1996.
The following unaudited condensed consolidated pro forma statements of
operations of DenAmerica Corp. for the year ended December 27, 1995 and the
27-week period ended July 3, 1996, give effect to (i) the acquisition of BEP
which had an effective accounting date of June 24, 1996, as if it occurred at
the beginning of each period; (ii) the reverse purchase accounting for the
acquisition of AFR by DRC as of March 27, 1996, as if it had occurred at the
beginning of each period; (iii) the repayment of the $6.0 million outstanding
principal of the Series A Notes, together with accrued and unpaid interest on
the Series A Notes, as if it had occurred at the beginning of each period; and
(iv) the net reduction in operating expenses of AFR and BEP after the Merger and
the BEP Acquisition that occurred as a result of employee terminations, closing
of duplicate administrative facilities, or contractual changes. The financial
statements of AFR and BEP for the fiscal year ended December 27, 1995, include
(a) AFR's financial statements for its fiscal year ended September 27, 1995, and
(b) BEP's financial statements for its fiscal year ended April 1, 1996. The
financial statements of AFR and BEP for the 27-week period ended July 3, 1996
include, prior to their acquisition by the Company, (1) AFR's financial
statements for the three-month period ended March 27, 1996, and (2) BEP's
financial statements for the period from January 9, 1996 to June 24, 1996. The
unaudited condensed consolidated pro forma statements of operations presented
herein do not purport to represent what the Company's actual results of
operations would have been had the Merger, the BEP Acquisition, or the other
transactions described above occurred on those dates or to project the Company's
results of operations for any future period.
20
<PAGE> 21
DENAMERICA CORP.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA
STATEMENT OF OPERATIONS FOR THE
FISCAL YEAR ENDED DECEMBER 27, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
ACQUIRED PRO FORMA ADJUSTMENTS
COMPANIES DR (CR)
HISTORICAL ----------------- --------------------- PRO
DENAMERICA AFR BEP AFR BEP FORMA
---------- --- --- --- --- -----
<S> <C> <C> <C> <C> <C> <C>
Restaurant sales:
Denny's restaurants $70,429 $ 74,679 $ $ $ $ 145,108
Black-eyed Pea's restaurants 145,455 145,455
Other restaurants 4,254 32,218 36,472
------- ---------- ----------- ------ -------- -----------
Total restaurant sales 74,683 106,897 145,455 -- -- 327,035
Restaurant operating expenses:
Cost of food and beverage 20,343 30,529 39,914 (328) (a) 90,458
Payroll and payroll related costs 25,025 36,329 48,897 (164) (b) 110,087
Depreciation and amortization 2,936 3,462 8,792 (212) (c) (6,806) (aa) 8,172
Other restaurant operating costs 19,213 27,654 35,021 (239) (d) 5,728 (bb) 87,377
Provision for restaurant closures 10,225 (10,225) (cc) --
Provision for loss on impairment
of assets 523 50,384 (50,384) (dd) 523
------- ---------- ----------- ------ --------- -----------
Total restaurant operating
expenses 68,040 97,974 193,233 (943) (61,687) 296,617
Restaurant operating income 6,643 8,923 (47,778) 943 61,687 30,418
Administrative expenses 3,380 5,166 8,588 (1,869) (e) (3,982)(ee) 11,283
------- ---------- ----------- ------ -------- -----------
Operating income 3,263 3,757 (56,366) 2,812 65,669 19,135
Other (income) expense (156) 717 (717)(ff) (156)
Interest expense, net 2,467 1,714 5,362 3,640 (f) (4,942)(gg) 8,776
535 (g)
------- ---------- ----------- ------ -------- -----------
Income (loss) before minority
interest in joint ventures
and income taxes 796 2,199 (62,445) (1,363) 71,328 10,515
Minority interest in joint ventures (291) 85 (206)
------- ---------- ----------- ---------- -------- -----------
Income (loss) before income taxes 505 2,284 (62,445) (1,363) 71,328 10,309
Income taxes 305 578 (12,877) (341) (h) 16,252 (hh) 3,917
------- ---------- ----------- ------ -------- -----------
Income (loss) from continuing
operations $ 200 $ 1,706 $ (49,568) $(1,022) $ 55,076 $ 6,392
======= ========== =========== ======= ======== ===========
Income (loss) from continuing
operations per common
and common equivalent share $ 0.28 $ 0.49
========== ===========
Weighted average number of common
and common equivalent shares
outstanding(i) 6,171,444 13,108,944
========== ===========
</TABLE>
21
<PAGE> 22
DENAMERICA CORP.
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA
STATEMENT OF OPERATIONS FOR THE
27 WEEK PERIOD ENDED JULY 3, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
ACQUIRED PRO FORMA ADJUSTMENTS
COMPANIES DR (CR)
HISTORICAL --------------- --------------------- PRO
DENAMERICA AFR BEP AFR BEP FORMA
---------- --- --- --- --- -----
(13 weeks) (24 weeks)
<S> <C> <C> <C> <C> <C> <C>
Restaurant sales:
Denny's restaurants $ 64,078 $ 20,417 $ $ $ $ 84,495
Black-eyed Pea's restaurants 3,402 66,645 70,047
Other restaurants 11,693 8,047 19,740
----------- ----------- -------- ------- ---------- -----------
Total restaurant sales 79,173 28,464 66,645 -- -- 174,282
Restaurant operating expenses:
Cost of food and beverage 21,971 8,628 19,832 (79)(a) 50,352
Payroll and payroll related costs 27,416 11,686 20,206 59,308
Depreciation and amortization 2,836 1,134 4,231 (322)(c) (3,238)(aa) 4,641
Other restaurant operating costs 20,074 8,726 13,745 3,852 (bb) 46,397
Provision for restaurant closures 10,225 (10,225)(cc) --
Provision for loss on impairment
of assets 50,384 (50,384)(dd) --
----------- ----------- -------- ------- ---------- -----------
Total restaurant operating
expenses 72,297 30,174 118,623 (401) (59,995) 160,698
Restaurant operating income 6,876 (1,710) (51,978) 401 59,995 13,584
Administrative expenses 3,181 1,687 5,543 (467)(e) (3,240)(ee) 6,704
----------- ----------- -------- ------- -------- -----------
Operating income 3,695 (3,397) (57,521) 868 63,235 6,880
Other (income) expense (31) 229 (229)(ff) (31)
Interest expense, net 3,651 583 2,549 910 (f) (2,249)(gg) 5,588
134 (g)
----------- ----------- -------- ------- -------- -----------
Income (loss) before minority
interest in joint ventures
and income taxes 44 (3,959) (60,299) (176) 65,713 1,323
Minority interest in joint ventures (11) 95 84
----------- ----------- -------- ------- -------- -----------
Income (loss) before income taxes 33 (3,864) (60,299) (176) 65,713 1,407
Income taxes 13 (1,156) (11,699) 14 (h) 13,369 (hh) 541
----------- ----------- -------- ------- -------- -----------
Income (loss) from continuing
operations $ 20 $ (2,708) $(48,600) $ (162) $ 52,344 $ 866
=========== =========== ======== ======= ======== ===========
Income (loss) from continuing
operations per common
and common equivalent share $ 0.00 $ 0.08
=========== ===========
Weighted average number of common
and common equivalent shares
outstanding(i) 10,293,000 10,293,000
============ ===========
</TABLE>
22
<PAGE> 23
DENAMERICA CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
The following explanations serve to describe the assumptions used in
determining the pro forma adjustments necessary to present the pro forma results
of operations of AFR and DRC for the year ended December 27, 1995 and the
27-week period ended July 3, 1996:
<TABLE>
<CAPTION>
27-WEEK
FISCAL PERIOD
YEAR ENDED ENDED
DEC. 27, 1995 JULY 3, 1996
------------- ------------
<S> <C> <C>
(a) Adjust food costs for discounts not taken by AFR $ (328) $ (79)
======= ======
(b) Adjustment for inclusion of DRC employees under
the new workers' compensation costs $ (164) $ -
======= ======
(c) Adjustment for new depreciation and amortization for AFR
Property and equipment 1,700 425
Goodwill 1,550 387
------- ------
3,250 812
Amount recorded in financial statements 3,462 1,134
------- ------
Pro forma adjustment $ (212) $ (322)
======= ======
(d) Adjustment for inclusion of DRC under the new insurance $ (239) $
======= ======
(e) Adjustment for consolidation of administrative expenses $(1,869) $ (467)
======= ======
(f) Adjustment for additional interest on subordinated notes
Interest expense at 13% $ 3,153 $ 788
Amortization of discount 487 122
------- ------
$ 3,640 $ 910
======= ======
(g) Adjustment for additional interest expense
Additional borrowings of $5,096 for Merger-related
expenses at an effective rate of 10.5% $ 535 $ 134
======= ======
(h) Adjustment for income taxes for above adjustments
at an effective rate of 38% $ (341) $ (14)
======= ======
</TABLE>
(i) The weighted average number of common shares outstanding includes the
number of common shares of AFR outstanding as of the Merger increased
by the number of shares issued to the former shareholders of DRC in
connection with the Merger
23
<PAGE> 24
DENAMERICA CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
PRO FORMA STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
The following explanations serve to describe the assumptions used in
determining the pro forma adjustments necessary to present the pro forma results
of operations of BEP for the year ended December 27, 1995 and the 24-week
period ended July 3, 1996:
<TABLE>
<CAPTION>
24-WEEK
FISCAL PERIOD
YEAR ENDED ENDED
DEC. 27, 1995 JULY 3, 1996
------------- ------------
<S> <C> <C>
(aa) Adjustment for new depreciation and amortization
for BEP principally arising from the sale
and leaseback of restaurant property and
equipment:
Property and equipment $ 1,986 $ 993
Amount recorded in financial statements 8,792 4,231
-------- --------
Pro forma adjustment $ (6,806) $ (3,238)
-------- --------
(bb) Adjustment to reflect new operating lease
payments for land, building and equipment
which were sold and leased back $ 5,728 $ 3,852
======== ========
(cc) Adjustment to reflect the elimination of the
historical provision for restaurant closures $(10,225) $(10,225)
======== ========
(dd) Adjustment to reflect the elimination of the
historical provision for loss on impairment
of assets resulting from the sale to DenAmerica $(50,384) $(50,384)
======== ========
(ee) Adjustment for consolidation of administrative
expenses arising from the elimination of
employees and other costs when administrative
facilities were consolidated $ (3,982) $ (3,240)
======== ========
(ff) Adjustment to eliminate historical loss on
disposal of assets $ (717) $ (229)
======== ========
(gg) Adjustment for interest expense:
Elimination of historical interest $ (5,182) $ (2,369)
Interest on the BEP Purchase Note 1,800 900
Elimination of interest on the Series A Notes (1,560) (780)
-------- --------
$ (4,942) $ (2,249)
======== ========
(hh) Adjustment for income taxes for the above
adjustments at an effective rate of 38% $(16,252) $(13,369)
======== ========
</TABLE>
24
<PAGE> 25
(C) EXHIBITS.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
2.5 Stock Purchase Agreement dated May 31, 1996, between BEP
Holdings, Inc. and DenAmerica Corp.(1)
4.6 Supplemental Indenture (Series B Notes) between DenAmerica Corp.
and State Street Bank and Trust Company, as trustee.(1)
4.7 Common Stock Purchase Warrant dated July 3, 1996, issued to BEP
Holdings, Inc.(1)
4.8 Common Stock Purchase Warrant dated July 3, 1996, issued to
Banque Paribas.(1)
10.92A Amended and Restated Credit Agreement dated as of July 3, 1996,
among DenAmerica Corp., the Banks named therein, and Banque
Paribas, as Agent.(1)
10.96 Senior Subordinated Promissory Note dated July 3, 1996, in the
principal sum of $15,000,000, payable by DenAmerica Corp. to BEP
Holdings, Inc.(1)
10.97 Registration Rights Agreement dated as of July 3, 1996, between
DenAmerica Corp. and BEP Holdings, Inc.(1)
10.98 Intercreditor Agreement among DenAmerica Corp., certain holders
of DenAmerica's Series B Notes, and State Street Bank and Trust
Company.(1)
10.99 Sale and Lease Agreement dated July 3, 1996, among FFCA
Acquisition Corporation, Black-eyed Pea U.S.A., Inc., and Texas
BEP, L.P.(1)
10.100 Form of Lease dated July 3, 1996, between FFCA Acquisition Corp.
and DenAmerica Corp.(1)
10.101 Form of Sublease dated July 3, 1996, between DenAmerica Corp.
and Black-eyed Pea U.S.A., Inc.(1)
10.102 Form of Sublease dated July 3, 1996, between DenAmerica Corp.
and Texas BEP, L.P.(1)
10.103 Equipment Purchase Agreement and Bill of Sale dated July 3,
1996, between LH Leasing Company, Inc. and Black-eyed Pea
U.S.A., Inc.(1)
10.104 Equipment Purchase Agreement and Bill of Sale dated July 3,
1996, between LH Leasing Company, Inc. and Texas BEP, L.P.(1)
10.105 Equipment Lease dated July 3, 1996, between LH Leasing Company,
Inc. and DenAmerica Corp.(1)
10.106 Equipment Sublease dated July 3, 1996, between DenAmerica Corp.
and Black-eyed Pea, U.S.A., Inc.(1)
10.107 Equipment Sublease dated July 3, 1996, between DenAmerica Corp.
and Texas BEP, L.P.(1)
10.108 Asset Purchase Agreement effective as of July 3, 1996, among
Mid-American Restaurants, Inc., Haig V. Antranikian, and
DenAmerica Corp.(1)
21.2 List of Subsidiaries of DenAmerica Corp.(1)
- -------------------
(1) Incorporated by reference to the Registrant's Current Report on
Form 8-K as filed on July 18, 1996.
25
<PAGE> 26
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
September 16, 1996 DENAMERICA CORP.
By: /s/ Todd S. Brown
-------------------------------------------
Todd S. Brown
Vice President and Chief Financial Officer
26
