Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
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As previously disclosed, J.
Alexanders Holdings, Inc. (the Company) is party to that certain Second Amended and Restated Loan Agreement, dated May 20, 2015, by and between J. Alexanders, LLC and Pinnacle Bank, as amended (the Loan
Agreement). The Loan Agreement consists of the following loans: (i) a $5,000,000 term loan that matures on September 3, 2021 (the Mortgage Loan), (ii) a $20,000,000 development line of credit that matures on
September 3, 2021 (the Development Line of Credit), (iii) a $10,000,000 term loan that matures on May 3, 2020 (the Term Loan), and (iv) a $1,000,000 revolving line of credit that matures on September 3,
2021 (the Revolving Line of Credit). As of December 29, 2019, approximately $4,584,000 and $1,389,000, was outstanding under the Mortgage Loan and the Term Loan, respectively. As of December 29, 2019, approximately $4,000,000
and $0 was outstanding under the Development Line of Credit and the Revolving Line of Credit, respectively, and a total of $17,000,000 was available to the Company for borrowing under these lines of credit on this date. For additional information on
the terms and conditions of the Loan Agreement, please see Part II, Item 8. Financial Statements and Supplementary Data Notes to Consolidated Financial Statements, Note 10 Debt in the Companys Annual
Report on Form 10-K for the fiscal year ended December 29, 2019, which is incorporated herein by reference.
On March 24, 2020, the Company announced it drew down the remaining $17,000,000 available under the Development Line of Credit and
the Revolving Line of Credit (the Credit Draw). Following the Credit Draw, a total of approximately $25,722,000 was outstanding under the Loan Agreement. Pursuant to the terms of the Loan Agreement, the borrowings under the Loan
Agreement bear interest at 30-day LIBOR plus a sliding interest rate scale determined by a maximum adjusted debt to EBITDAR ratio (following the Credit Draw, currently set at
30-day LIBOR plus 1.85%).
The Credit Draw was undertaken as a precautionary measure to provide
increased liquidity and preserve financial flexibility in light of current disruption and uncertainty resulting from the novel coronavirus (COVID-19) outbreak. The proceeds from the Credit Draw will be
available to be used for general corporate purposes, including working capital.