Exhibit 10.1

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated October
[31], 2018, 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, 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, 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        Amendment to Preliminary Statements. The first Preliminary Statement
of the Credit Agreement is hereby amended and restated in its entirety as
follows:

 

WHEREAS, the Loan Parties (as hereinafter defined) have requested that the
Lenders and the L/C Issuer make loans and other financial accommodations to the
Loan Parties in an aggregate amount of up to $17,000,000.

 

1.2       Amendments to Section 1.01.

 

(a)        The definition of “Applicable Rate” in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“Applicable Rate” means, for any day, a rate per annum equal to (a) 3.50%, in
the case of Eurodollar Rate Loans, and (b) 2.50%, in the case of Base Rate
Loans.

 

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

 

The Commitments of all of the Lenders on the Second Amendment Effective Date
shall be $17,000,000.

 

 

 

 

(c)        Clause (b) of the definition of “Eurodollar Rate” in Section 1.01 of
the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(b)       for any interest calculation with respect to a Base Rate Loan on any
date, the rate per annum equal to the LIBOR Rate, at or about 11:00 a.m., London
time, two (2) Business Days prior to such date for Dollar deposits with a term
of one (1) month commencing that day; provided that: (i) to the extent a
comparable or successor rate is approved by the Administrative Agent in
connection herewith, the approved rate shall be applied in a manner consistent
with market practice; provided, further that to the extent such market practice
is not administratively feasible for the Administrative Agent, such approved
rate shall be applied in a manner as otherwise reasonably determined by the
Administrative Agent and (ii) if the Eurodollar Rate shall be less than 0.25%,
such rate shall be deemed to be 0.25% for purposes of this Agreement.

 

(d)       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) Bad Daddy’s Burger Bar of Seaboard, LLC, (c) Bad Daddy’s Burger Bar of Cary,
LLC, (d) Bad Daddy’s Burger Bar of Winston-Salem, LLC, (e) BD of Brier Creek,
LLC, (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.

 

(e)       The definition of “Maturity Date” in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“Maturity Date” means December 31, 2021; provided, however, that if such date is
not a Business Day, the Maturity Date shall be the next preceding Business Day.

 

(f)       The following definition is hereby added to Section 1.01 of the Credit
Agreement in appropriate alphabetical order:

 

“Second Amendment Effective Date” means October [31], 2018.

 

1.3       Amendment to Section 2.03(h). Section 2.03(h) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

 

(h)       Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance, subject to Section 2.14,
with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit
Fee”) for each Letter of Credit equal to 2.00% times the daily amount available
to be drawn under such Letter of Credit. Letter of Credit Fees shall be (1) due
and payable on the first Business Day following each fiscal quarter end,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand and
(2) computed on a quarterly basis in arrears.

 

1.4       Amendment to Section 4.02(d). Section 4.02(d) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

 

(d)       [RESERVED]

 

2 

 

 

1.5       Amendment to Section 5.19(a). Section 5.19(a) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

 

(a)       Subsidiaries. Set forth on Schedule 5.19(a) is the following
information which is true and complete in all respects as of the Second
Amendment Effective Date: (i) a complete and accurate list of all Subsidiaries
of the Loan Parties as of the Second Amendment Effective Date, (ii) the number
of shares of each class of Equity Interests in each Subsidiary outstanding,
(iii) the number and percentage of outstanding shares of each class of Equity
Interests owned by the Loan Parties and their Subsidiaries and (iv) the class or
nature of such Equity Interests (i.e. voting, non-voting, preferred, etc.). The
outstanding Equity Interests in all Subsidiaries are validly issued, fully paid
and non-assessable and are owned free and clear of all Liens. There are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options granted to employees or directors and
directors’ qualifying shares) of any nature relating to the Equity Interests of
any Loan Party or any Subsidiary thereof, except as contemplated in connection
with the Loan Documents.

 

1.6       Amendment to Section 7.11(d). Section 7.11(d) of the Credit Agreement
is hereby amended and restated in its entirety as follows:

 

(d)       Minimum Liquidity. The Borrower shall at all times maintain Liquidity
in an aggregate amount not less than $2,000,000.

 

1.7       Amendment to Schedule 1.01(b). Schedule 1.01(b) of the Credit
Agreement is hereby amended and restated in its entirety as set forth on Exhibit
A hereto.

 

1.8       Amendment to Schedule 5.19(a). Schedule 5.19(a) of 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)       an officer’s certificate dated the date hereof, executed by a
Responsible Officer of each Loan Party, certifying as to (i) the Organization
Documents of each Loan Party which, to the extent filed with a Governmental
Authority, shall be certified as of a recent date by such Governmental Authority
or, with respect to any Organization Document of such Loan Party delivered to
the Administrative Agent on the Closing Date that has not been amended,
supplemented or otherwise modified, and that remains in full force and effect on
the date hereof, certification by a Responsible Officer that such Organization
Document has not been amended, supplemented or otherwise modified since the
Closing Date and remains in full force and effect on the date hereof, and (ii)
the resolutions of the governing body of each Loan Party; and

 

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

 

3 

 

  

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.

 

(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.

 

4 

 

 

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.

 

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]

 

5 

 

 

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

 

GOOD TIMES RESTAURANTS INC.

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

 

GOOD TIMES RESTAURANTS INC.

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

 

GOOD TIMES RESTAURANTS INC.

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

 

GOOD TIMES RESTAURANTS INC.

SECOND AMENDMENT

 

 

 

ADMINISTRATIVE   AGENT: CADENCE BANK, NATIONAL ASSOCIATION,   as Administrative
Agent       By: /s/ Vance Waldron     Name: Vance Waldron     Title: Vice
President           LENDERS: CADENCE BANK, NATIONAL ASSOCIATION   as a Lender  
        By: /s/ Vance Waldron     Name: Vance Waldron     Title: Vice President
 

 

GOOD TIMES RESTAURANTS INC.

SECOND AMENDMENT

 

 

 

Exhibit A

 

Schedule 1.01(b)

Initial Commitments and Applicable Percentages

 

 

Lender Commitment Applicable
Percentage of
Commitment Cadence Bank, National Association $17,000,000.00 100.000000000%
TOTAL $17,000,000.00 100.000000000%

 

 

 

 

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)5,250 Units (52.5%) of Class A owned by BDI – 49.875% of all membership
interests

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)5,250 Units (52.5%) of Class A owned by BDI - 52.5% of all membership
interests

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)5,100 Units (51%) of Class A owned by BDI – 51% of all membership interests

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)BD of Brier Creek, LLC, a North Carolina limited liability company*

i)No units issued

ii)To be dissolved

 

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

 

*Joint Venture Operating Agreement was not executed. Entity to be dissolved as
it will no longer be used.