Item 1.01.
Entry Into a Material Definitive Agreement.
On September 11, 2017, Good Times Restaurants Inc. (the “
Company
”) and each of its wholly-owned subsidiaries, as guarantors (the “
Subsidiary Guarantors
”), entered into a First Amendment to Credit Agreement (the “
Amendment
”) with Cadence Bank, N.A., as lender (“
Cadence
”) which amends the Credit Agreement (“
Senior Credit Facility
”) entered into by the Company with Cadence on September 8, 2016. The Amendment provides for the expansion of the senior revolving loan under the Senior Credit Facility from $9.0 million to $12.0 million (the “
Revolver
”).
Proceeds from the Senior Credit Facility will be used (i) to fund new restaurant development, (ii) for general corporate purposes, and (iii) to pay transactions costs associated with the Senior Credit Facility.
Under the Amendment, the Revolver will be available until December 31, 2020. The loans may from time to time consist of a mixture of Eurodollar Rate Loans and Base Rate Loans with differing interest rates based upon varying additions to the Federal Funds Rate, the Cadence prime rate or LIBOR. The Senior Credit Facility also carries an upfront fee of 0.50% and a commitment fee of 0.25% per annum on the unused portion of the Senior Credit Facility. No principal payments are required to be made until maturity of the Senior Credit Facility.
The Senior Credit Facility includes customary affirmative and negative covenants and events of default and also requires the Company to maintain various financial condition ratios.
In connection with the Senior Credit Facility, the Company and its wholly owned Subsidiaries, and Cadence entered into a Security and Pledge Agreement (the “
Security Agreement
”). Under the Security Agreement, the Senior Credit Facility is secured by a first priority security interest in substantially all the assets of the Company and those Subsidiaries.
The above descriptions of the Amendment, Senior Credit Facility, and the Security Agreement are qualified in their entirety by the Amendment, Senior Credit Facility, and the Security Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2, and 10.3, respectively, and are incorporated herein by reference.