Exhibit 10.1

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated February 21,
2019, is by and among GOOD TIMES RESTAURANTS INC., a Nevada corporation (the
“Borrower”), the Guarantors, the Lenders and CADENCE BANK, NATIONAL ASSOCIATION,
as Administrative Agent (in such capacity, the “Administrative Agent”).

 

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent
are parties to that certain Credit Agreement, dated September 8, 2016 (as
amended by that certain First Amendment to Credit Agreement, dated September 11,
2017, that certain Second Amendment to Credit Agreement, dated as of October 31,
2018, and as further amended, modified, extended, restated, replaced, or
supplemented from time to time, the “Credit Agreement”; capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed thereto
in the Credit Agreement);

 

WHEREAS, Bad Daddy’s International LLC (“BDI”) has, on or about February 6,
2019, acquired 100% of the Equity Interests of (i) Bad Daddy’s Burger Bar Of
Seaboard, LLC (“BDBB Seaboard”), (ii) Bad Daddy’s Burger Bar Of Cary, LLC (“BDBB
Cary”), and (iii) BDBB Of Olive Park NC, LLC (“BDBB Olive Park”; collectively
with BDBB Seaboard and BDBB Cary, the “2019 JVs”) not previously owned by BDI,
such that, after giving effect thereto, the 2019 JVs became wholly-owned
Subsidiaries of BDI (the “2019 JV Acquisitions”);

 

WHEREAS, the Administrative Agent and the Lenders have provided consent to the
2019 JV Acquisitions pursuant to that certain Consent dated February 5, 2019;

 

WHEREAS, the Loan Parties have requested that the Lenders make certain
amendments to the Credit Agreement as set forth herein; and

 

WHEREAS, the Lenders have agreed to amend the Credit Agreement on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

 

 

ARTICLE I

AMENDMENTS TO CREDIT AGREEMENT

 

1.1         Amendments to Credit Agreement.

 

(a)           The definition of “Consolidated EBITDA” in Section 1.01 of the
Credit Agreement is hereby amended by adding a new paragraph to the end thereof
as follows:

 

Notwithstanding the foregoing, Consolidated EBITDA for any period which includes
the fiscal quarter ending on or about (1) June 26, 2018 shall be deemed to
include $200,070 in connection with the 2019 JV Acquisitions, (2) September 25,
2018 shall be deemed to include $135,463 in connection with the 2019 JV
Acquisitions, (3) December 25, 2018 shall be deemed to include $144,869 in
connection with the 2019 JV Acquisitions and (4) March 26, 2019 shall be deemed
to include $51,620 in connection with the 2019 JV Acquisitions.

 

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(b)          The definition of “Excluded Subsidiary” in Section 1.01 of the
Credit Agreement is hereby amended and restated in its entirety as follows:

 

“Excluded Subsidiary” (a) Fast Restaurants Co-Development Limited Partnership,
(b) [RESERVED], (c) [RESERVED], (d) Bad Daddy’s Burger Bar of Winston-Salem,
LLC, (e) [RESERVED], (f) BD of Greenville, LLC, (g) BD of Wendover Commons, LLC,
(h) BD of McDaniel Village, LLC and (i) any other Subsidiary of the Loan Parties
that is a joint venture any portion of the Equity Interests of which are held by
a third party, unless consent of the third party to such Subsidiary guaranteeing
the Obligations is obtained.

 

(c)           Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definition in the appropriate alphabetical order
therein:

 

“2019 JV Acquisitions” means the acquisitions made by Bad Daddy’s International
LLC, on or about February 6, 2019, of 100% of the Equity Interests of (i) Bad
Daddy’s Burger Bar Of Seaboard, LLC, (ii) Bad Daddy’s Burger Bar Of Cary, LLC
and (iii) BDBB Of Olive Park NC, LLC not previously owned by Bad Daddy’s
International LLC, such that, after giving effect thereto, each of the foregoing
became wholly-owned Subsidiaries of Bad Daddy’s International LLC.

 

(d)          Schedule 5.19(a) to the Credit Agreement is hereby amended and
restated in its entirety as set forth on Schedule 5.19(a) hereto.

 

 

ARTICLE II

CONDITIONS

 

2.1         Closing Conditions. This Amendment shall be deemed effective as of
the date set forth above upon receipt by the Administrative Agent of:

 

(a)          a copy of this Amendment duly executed by each of the Borrower, the
Guarantors, the Administrative Agent and the Lenders;

 

(b)          a Joinder Agreement duly executed by each of the 2019 JVs, the
Borrower and the Administrative Agent;

 

(c)          with respect to each of the 2019 JVs, the following items, in each
case in form and substance satisfactory to the Administrative Agent:

 

(i) (A) searches of UCC filings in the jurisdiction of incorporation or
formation, as applicable, of each of the 2019 JVs, (B) copies of the financing
statements on file in such jurisdictions and evidence that no Liens exist other
than Permitted Liens, and (C) tax lien, judgment and bankruptcy searches;

 

(ii) searches of ownership of Intellectual Property in the appropriate
governmental offices and such patent/trademark/copyright filings as requested by
the Administrative Agent in order to perfect the Administrative Agent’s security
interest in the Intellectual Property;

 

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(iii) completed UCC financing statements for each appropriate jurisdiction as is
necessary, in the Administrative Agent’s sole discretion, to perfect the
Administrative Agent’s security interest in the Collateral with respect to each
of the 2019 JVs;

 

(iv) Pledged Equity with respect to each of the 2019 JVs (to the extent such
Pledged Equity is certificated); and

 

(v) to the extent required to be delivered, filed, registered or recorded
pursuant to the terms and conditions of the Collateral Documents, all
instruments, documents and chattel paper in the possession of any of the 2019
JVs, together with allonges or assignments as may be necessary or appropriate to
create and perfect the Administrative Agent’s and the Lenders’ security interest
in the Collateral with respect to each of the 2019 JVs;

 

(d)          an officer’s certificate dated as of the date hereof, executed by a
Responsible Officer of each of the 2019 JVs, certifying as to the Organization
Documents of each of the 2019 JVs (which, to the extent filed with a
Governmental Authority, shall be certified as of a recent date by such
Governmental Authority), the resolutions of the governing body of each of the
2019 JVs, the good standing, existence or its equivalent of each of the 2019 JVs
and of the incumbency (including specimen signatures) of the Responsible
Officers of each of the 2019 JVs;

 

(e)          an opinion or opinions of counsel for the Loan Parties, dated the
date hereof and addressed to the Administrative Agent and the Lenders, with
respect to the 2019 JVs and the matters contemplated in this Amendment, in form
and substance acceptable to the Administrative Agent; and

 

(f)           any fees and expenses owing to the Administrative Agent in
connection with this Amendment.

 

ARTICLE III
MISCELLANEOUS

 

3.1         Amended Terms. On and after the date hereof, all references to the
Credit Agreement in each of the Loan Documents shall hereafter mean the Credit
Agreement as amended by this Amendment. Except as specifically amended hereby or
otherwise agreed, the Credit Agreement is hereby ratified and confirmed and
shall remain in full force and effect according to its terms.

 

3.2         Representations and Warranties of the Loan Parties. Each of the Loan
Parties represents and warrants as follows:

 

(a)           Each Loan Party has all requisite power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Amendment in accordance with its terms.

 

(b)          The execution, delivery and performance by each Loan Party of this
Amendment been duly authorized by all necessary corporate or other
organizational action and constitutes a legal, valid and binding obligation of
such Loan Party, enforceable against such Loan Party in accordance with its
terms.

 

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(c)           No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or any other Person
is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, the Loan Parties of this Amendment.

 

(d)          The representations and warranties set forth in the Loan Documents
are true and correct in all material respects as of the date hereof (except for
those that are qualified by materiality, which are true and correct in all
respects).

 

(e)           No event has occurred and is continuing which constitutes a
Default or an Event of Default.

 

(f)            The Collateral Documents continue to create a valid security
interest in, and Lien upon, the Collateral, in favor of the Administrative
Agent, for the benefit of the Lenders, which security interests and Liens are
perfected in accordance with the terms of the Collateral Documents and prior to
all Liens other than Permitted Liens.

 

(g)          The Obligations of the Loan Parties are not reduced or modified by
this Amendment and are not subject to any offsets, defenses or counterclaims.

 

3.3         Reaffirmation of Obligations. Each Loan Party hereby ratifies the
Credit Agreement and each other Loan Document and acknowledges and reaffirms
(a) that it is bound by all terms of the Credit Agreement and each other Loan
Document and (b) that it is responsible for the observance and full performance
of its respective obligations under the Loan Documents.

 

3.4         Loan Document. This Amendment shall constitute a Loan Document under
the terms of the Credit Agreement.

 

3.5         Expenses. The Loan Parties agree to pay all reasonable costs and
expenses of Administrative Agent in connection with the preparation, execution
and delivery of this Amendment, including without limitation the reasonable fees
and expenses of the Administrative Agent’s legal counsel.

 

3.6         Entirety. This Amendment and the other Loan Documents embody the
entire agreement among the parties hereto and supersede all prior agreements and
understandings, oral or written, if any, relating to the subject matter hereof.

 

3.7         Counterparts; Telecopy. This Amendment may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Delivery of an executed counterpart of a
signature page of this Amendment by facsimile or other electronic imaging means
(e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed
counterpart of this Amendment.

 

3.8         GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

3.9         Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.

 

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3.10       Consent to Jurisdiction; Service of Process; Waiver of Jury Trial.
The jurisdiction, services of process and waiver of jury trial provisions set
forth in Sections 11.14 and 11.15 of the Credit Agreement are hereby
incorporated by reference, mutatis mutandis.

 

 

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly
executed on the date first above written.

 

 

BORROWER: GOOD TIMES RESTAURANTS INC.,   a Nevada corporation           By: /s/
Ryan M. Zink     Name:  Ryan M. Zink
Title:  Treasurer and Chief Financial Officer

 

 

GUARANTORS: GOOD TIMES DRIVE THRU INC.,   a Colorado corporation           By:
/s/ Ryan M. Zink     Name:  Ryan M. Zink
Title:  Treasurer and Chief Financial Officer

 

 

 

BD OF COLORADO LLC,

a Colorado limited liability company

          By: GOOD TIMES RESTAURANTS INC.,
a Nevada corporation, its manager                 By: /s/ Ryan M. Zink      
Name:  Ryan M. Zink       Title: Treasurer and Chief Financial Officer  

 

GOOD TIMES RESTAURANTS INC.

THIRD AMENDMENT

   

 

 

BAD DADDY’S FRANCHISE DEVELOPMENT, LLC,

  a North Carolina limited liability company            

By: BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company, its member

             

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                              By: /s/ Ryan M. Zink         Name:  Ryan M. Zink  
      Title: Treasurer and Chief Financial Officer                    

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its member

                      By: /s/ Ryan M. Zink         Name:  Ryan M. Zink        
Title: Treasurer and Chief Financial Officer  

 

 

 

 

BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company

         

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                By: /s/ Ryan M. Zink       Name:  Ryan M. Zink       Title:
Treasurer and Chief Financial Officer  

 

GOOD TIMES RESTAURANTS INC.

THIRD AMENDMENT

   

 

 

 

BAD DADDY’S BURGER BAR, LLC,

a North Carolina limited liability company

           

By: BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company, its sole member

             

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                      By: /s/ Ryan M. Zink         Name:  Ryan M. Zink        
Title: Treasurer and Chief Financial Officer  

 

 

BAD DADDY’S BURGER BAR OF BALLANTYNE,

LLC,

a North Carolina limited liability company

           

By: BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company, its sole member

             

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                      By: /s/ Ryan M. Zink         Name:  Ryan M. Zink        
Title: Treasurer and Chief Financial Officer  

 

 

BAD DADDY’S BURGER BAR OF BIRKDALE, LLC,

a North Carolina limited liability company

           

By: BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company, its sole member

             

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                      By: /s/ Ryan M. Zink         Name:  Ryan M. Zink        
Title: Treasurer and Chief Financial Officer  

 

GOOD TIMES RESTAURANTS INC.

THIRD AMENDMENT

   

 

 

 

BAD DADDY’S BURGER BAR OF MOORESVILLE, LLC,

a North Carolina limited liability company

           

By: BAD DADDY’S INTERNATIONAL, LLC,

a North Carolina limited liability company, its sole member

             

By: GOOD TIMES RESTAURANTS INC.,

a Nevada corporation, its sole member

                      By: /s/ Ryan M. Zink         Name:  Ryan M. Zink        
Title: Treasurer and Chief Financial Officer  

 

GOOD TIMES RESTAURANTS INC.

THIRD AMENDMENT

   

 

 

ADMINISTRATIVE   AGENT: CADENCE BANK, NATIONAL ASSOCIATION,   as Administrative
Agent       By: /s/ Josh Taylor     Name:  Josh Taylor     Title: Senior Vice
President  

 

 

LENDERS:

CADENCE BANK, NATIONAL ASSOCIATION

as a Lender

      By: /s/ Josh Taylor     Name:  Josh Taylor     Title: Senior Vice
President  

 

GOOD TIMES RESTAURANTS INC.

THIRD AMENDMENT

   

 

 

Schedule 5.19(a)

Subsidiaries of Loan Parties

 

 

1)Subsidiaries of Good Times Restaurants Inc., a Nevada corporation (“GTIM”)

a)Good Times Drive Thru Inc., a Colorado corporation

i)Number of Shares of each class outstanding - 1,000,000 shares – Common Stock

ii)Wholly Owned by GTIM– 1,000,000 shares – 100%

iii)Nature of the Interest – Common Stock - voting

iv)No Series A stock is outstanding

v)No Series C stock is outstanding

b)BD of Colorado LLC, a Colorado limited liability company

i)Number of Units outstanding – 100

ii)Wholly owned by GTIM – 100 Units -- 100% membership interest

iii)Nature of the Interest single class membership interest - voting

c)Bad Daddy’s Franchise Development, LLC, a North Carolina limited liability
company

i)Number of Units outstanding –10,000 Class A Units

ii)Wholly owned – 100% Class A membership interest:

(4,800 Units or 48% owned by GTIM) and (5,200 Units or 52% owned by BDI)

iii)Nature of the Interest single class membership interest - voting

d)Bad Daddy’s International, LLC, a North Carolina limited liability company
(“BDI”)

i)No Units issued

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest single class membership interest - voting

 

2)Subsidiaries of Good Times Drive Thru Inc., a Colorado corporation

a)Fast Restaurants Co-Development LLLP, a Colorado limited liability limited
partnership

i)Joint Venture consists of 50% ownership in 6 Good Times Drive Thru restaurants
and 78.5% ownership in 1 Good Times Drive Thru restaurant.

ii)Nature of the partnership interest owned is General Partner

 

3)Subsidiaries of BD of Colorado LLC, a Colorado limited liability company

a)None

 

4)Subsidiaries of Bad Daddy’s Franchise Development, LLC, a North Carolina
limited liability company

a)None

 

5)Subsidiaries of Bad Daddy’s International, LLC, a North Carolina limited
liability company

a)Bad Daddy’s Burger Bar, LLC, a North Carolina limited liability company

i)No Units issued

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest – Single class membership interest - voting

 

   

 

 

b)Bad Daddy’s Franchise Development, LLC, a North Carolina limited liability
company

i)Number of Units outstanding –10,000 Class A Units

ii)Wholly owned – 100% Class A membership interest:

(4,800 Units or 48% owned by GTIM) and (5,200 Units or 52% owned by BDI)

iii)Nature of the Interest single class membership interest - voting

 

c)Bad Daddy’s Burger Bar of Ballantyne, LLC, a North Carolina limited liability
company

i)No Units issued

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest – Single class membership interest - voting

 

d)Bad Daddy’s Burger Bar of Birkdale, LLC, a North Carolina limited liability
company

i)No Units issued

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest -- Single class membership interest - voting

 

e)Bad Daddy’s Burger Bar of Mooresville, LLC, a North Carolina limited liability
company

i)No Units issued

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest -- Single class membership interest - voting

 

f)Bad Daddy’s Burger Bar of Seaboard, LLC, a North Carolina limited liability
company

i)10,000 Units of Class A and 526 Units of Class B outstanding

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest –Class A membership interest - voting

 

g)Bad Daddy’s Burger Bar of Cary, LLC, a North Carolina limited liability
company

i)10,000 Units of Class A and 0 Units of Class B outstanding

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest – Class A membership interest - voting

 

h)Bad Daddy’s Burger Bar of Winston-Salem, LLC, a North Carolina limited
liability company

i)9,700 Units of Class A and 1,077.78 Units of Class B outstanding

ii)2,500 Units (25.78%) of Class A owned by BDI - 23.202% of all membership
interests

iii)Nature of the Interest -- Class A membership interest - voting

 

i)BDBB of Olive Park NC, LLC, a North Carolina limited liability company

i)10,000 Units of Class A and 0 Units of Class B outstanding

ii)Wholly owned – 100% membership interest

iii)Nature of the Interest Class A membership interest - voting

 

j)Bad Daddy’s of Fayetteville, LLC, a North Carolina limited liability company

i)94,000 Units of Class A and 6,000 Units of Class B outstanding

ii)50,000 Units (53.191%) of Class A owned by BDI – 50% of all membership
interests

iii)Nature of the Interest Class A membership interest – voting

 

   

 

 

k)[RESERVED]

 

l)BD of Greenville, LLC, a North Carolina limited liability company

i)10,000 Units of Class A and 0 Units of Class B outstanding

ii)5,790 (58%) Class A units owned by BDI – 58% of all membership interests

iii)Nature of the Interest Class A membership interest – voting

 

m)BD of Wendover Commons, LLC, a North Carolina limited liability company

i)100,000 Units of Class A and 0 Units of Class B outstanding

ii)51,000 (51%) Class A units owned by BDI – 51% of all membership interests

iii)Nature of the Interest Class A membership interest – voting

 

n)BD of McDaniel Village, LLC, a South Carolina limited liability company

i)100,000 Units of Class A and 0 Units of Class B outstanding

ii)51,000 (51%) Class A units owned by BDI – 51% of all membership interests

iii)Nature of the Interest Class A membership interest – voting

 

6)Bad Daddy’s Burger Bar, LLC, a North Carolina limited liability company

a)None

 

7)Bad Daddy’s Burger Bar of Ballantyne, LLC, a North Carolina limited liability
company

a)None

 

8)Bad Daddy’s Burger Bar of Birkdale, LLC, a North Carolina limited liability
company

a)None

 

9)Bad Daddy’s Burger Bar of Mooresville, LLC, a North Carolina limited liability

a)None