jpmamendmentno8






Execution Version    AMENDMENT NO. 8  TO   SECOND AMENDED AND RESTATED CREDIT AGREEMENT    THIS AMENDMENT NO. 8 TO SECOND AMENDED AND RESTATED  CREDIT AGREEMENT (this “Amendment”) is entered into as of September 23, 2022 among  POTBELLY SANDWICH WORKS, LLC, an Illinois limited liability company (“Borrower”),  the other Loan Parties (as such term is defined in the Credit Agreement), the financial institutions  listed on the signature pages hereto as lenders (the “Lenders”), and JPMORGAN CHASE  BANK, N.A., as administrative agent for the Lenders (in such capacity, the “Administrative  Agent”).   W I T N E S S E T H:  WHEREAS, the Loan Parties, the Lenders and the Administrative Agent have  entered into that certain Second Amended and Restated Credit Agreement dated as of August 7,  2019 (as amended, supplemented or otherwise modified from time to time, the “Credit  Agreement”, and as amended hereby, the “Amended Credit Agreement”); and  WHEREAS, the Loan Parties desire to amend the Credit Agreement as set forth  herein, and the Administrative Agent and the Lenders are willing to do so on the terms and  subject to the conditions set forth herein;  NOW, THEREFORE, in consideration of the premises set forth above, the terms  and conditions contained herein, and for other good and valuable consideration, the receipt and  sufficiency of which are hereby acknowledged, the parties hereto agree as follows:  1. Definitions.  Terms defined in the Amended Credit Agreement that are  used herein shall have the same meanings as are set forth in the Amended Credit Agreement for  such terms unless otherwise defined herein.  2. Amendments to Credit Agreement.  Subject to the satisfaction of the  conditions set forth in Section 3 of this Amendment:  (a) The following defined term set forth in Section 1.01 of the Credit  Agreement is amended and restated in its entirety as follows:   “Maturity Date” means December 31, 2023 or any earlier date on which  the Commitments are reduced to zero or otherwise terminated pursuant to the  terms hereof.  (b) Section 6.12 of the Credit Agreement is amended and restated in its  entirety as follows:   SECTION 6.12. Financial Covenants.   





 






 -2-    (a) EBITDA.  The Loan Parties shall not permit EBITDA for any  Computation Period set forth below to be less than the applicable amount set forth  below for such Computation Period:  Computation Periods ending on or about   (all dates are inclusive):      Minimum EBITDA:  August 31, 2022 $ 4,560,000  September 30, 2022    4,160,000  October 31, 2022    5,360,000  November 30, 2022    6,480,000  December 31, 2022     7,680,000  January 31, 2023    8,580,000  February 28, 2023    9,240,000  March 31, 2023  10,540,000  April 30, 2023   12,140,000  May 31, 2023  13,000,000  June 30, 2023  13,500,000  July 31, 2023   14,000,000  August 31, 2023  14,500,000  September 30, 2023  14,500,000  October 31, 2023  15,000,000  November 30, 2023 and thereafter  15,500,000      (b) Liquidity.  The Loan Parties shall not permit Liquidity on the last  day of any month set forth below to be less than the applicable amount set forth  below for such month:   





 






 -3-   Months (all dates are inclusive):    Minimum Liquidity:  August 2022 $15,300,000  September 2022   13,100,000  October 2022   12,500,000  November 2022   14,300,000  December 2022    14,100,000  January 2023   11,700,000  February 2023   12,600,000  March 2023   10,000,000  April 2023    10,000,000  May 2023   12,100,000  June 2023   16,900,000  July 2023    16,900,000  August 2023   19,000,000  September 2023   19,000,000  October 2023   19,000,000  November 2023 and thereafter   23,000,000         As used herein, the term “Liquidity” means, at any time, the sum of (i) the  Available Revolving Commitment at such time, plus (ii) the Consolidated Cash  Balance maintained with Chase at such time (excluding the aggregate amount of  the Consolidated Cash Balance of non-wholly owned Subsidiaries and Permitted  J/Vs in excess of $2,500,000).  3. Conditions.  When each of the following conditions has been completely  satisfied as determined by the Administrative Agent in its reasonable discretion on the date of  this Amendment (the “Effective Date”), the amendments to the Credit Agreement described in  Section 2 of this Amendment shall be deemed to have become effective as of the date hereof:  (a) Documents.  The Administrative Agent shall have received each of the  following agreements, instruments and other documents, in each case in form and substance  reasonably satisfactory to the Administrative Agent:  (i) this Amendment duly executed and delivered by the Loan Parties,  the Lenders and the Administrative Agent; and  (ii) such other documents, agreements, instruments, certificates,  opinions and other items as the Administrative Agent may reasonably request in  connection with this Amendment, including the documents, agreements, instruments,  certificates, opinions and other items listed on the document checklist attached hereto as  Exhibit A.  (b) Representations and Warranties; No Default.  As of the date hereof  (and, if different, also as of the Effective Date): (i) the representations and warranties contained  herein, in the Amended Credit Agreement (other than with respect to the second sentence of  Section 3.05(a) therein) and in each other Loan Document shall be true and correct in all material  





 






 -4-   respects (both immediately before and after giving effect to consummation of the amendments  and other transactions contemplated hereby), except to the extent any such representation and  warranty expressly refers to an earlier date, in which case such representation and warranty shall  be true and correct in all material respects as of such earlier date; provided, however, that, solely  for the purposes of the representation and warranty set forth in Section 3.04(b) of the Credit  Agreement, the term “Material Adverse Effect” will exclude the known and reasonably  foreseeable effects, as reflected in financial statements and projections delivered to the  Administrative Agent prior to the Effective Date on the Loan Parties and their Subsidiaries  (including, without limitation, on the business, assets, operations or condition, financial or  otherwise, thereof) of the COVID-19 epidemic, pandemic and disease; and (ii) no Default or  Event of Default shall exist (after giving effect hereto and consummation of the transactions  contemplated hereby).  (c) Proceedings.  All resolutions, consents and other corporate or limited  liability company proceedings taken or to be taken in connection with the transactions  contemplated hereby, and all agreements, instruments, certificates and other documents relating  thereto, shall be in form and substance satisfactory to the Administrative Agent, as determined in  its sole and absolute discretion, and shall be in full force and effect.  (d) Fees.  The Borrower shall have paid to the Administrative Agent, for the  account of Lenders in accordance with their respective Applicable Percentages, a non-refundable  amendment fee in the aggregate amount of $50,000 and all reasonable, out-of-pocket expenses  required to be paid to the Administrative Agent’s special counsel on or prior to the Effective  Date pursuant to Section 9.03 of the Amended Credit Agreement shall have been paid in full.  4. Release.  The Borrower and each other Loan Party hereby release,  discharge, and agree to hold harmless the Administrative Agent, each Lender and their respective  representatives, agents, employees, attorneys, directors, officers, parents, affiliates, assigns,  insurers, subsidiaries, and their successors and assigns (collectively, the “Released Parties”) from  any and all claims, defenses, affirmative defenses, setoffs, counterclaims, actions, causes of  action, suits, controversies, agreements, provisions, liabilities and demands in law or in equity or  under statute, whether known or unknown (collectively, the “Claims”) which any one or more of  the Borrower and the other Loan Parties ever had, now has, or may hereafter have against or  related to the Released Parties through the date of this Amendment relating to or arising out of (i)  this Amendment, the Credit Agreement, the Amended Credit Agreement, the other Loan  Documents or the transactions described herein or therein, (ii) any proposal letter, commitment  letter or term sheet, (iii) the Secured Obligations, (iv) the Administrative Agent’s or any  Lender’s administration of this Amendment, the Credit Agreement, the Amended Credit  Agreement or the other Loan Documents, or (v) the banking relationship of any one or more of  the Borrower and the other Loan Parties with the Administrative Agent or any Lender.  5. Representations and Warranties of the Loan Parties.  Each Loan Party  represents and warrants that: (a) the execution and delivery by such Loan Party of this  Amendment, each other document, instrument and agreement to be executed and delivered by  such Loan Party in connection herewith (this Amendment and such other documents, instruments  and agreements are referred to herein, collectively, as the “Amendment Documents”) and the  performance of such Loan Party’s obligations hereunder, thereunder and under the Amended  





 






 -5-   Credit Agreement: (i) are within the corporate or limited liability company powers of such Loan  Party, (ii) are duly authorized by the board of directors or managers of such Loan Party, and, if  necessary, the shareholders or members of such Loan Party, (iii) are not in contravention of the  terms of such Loan Party’s articles or certificate of incorporation or formation, by-laws,  operating, management or partnership agreement or other organizational documents, (iv) are not  in (x) contravention of the terms of the provisions of any indenture, instrument or agreement to  which such Loan Party is a party or is subject, or by which it, or its property, is bound, or (y)  conflict therewith, nor will constitute a default thereunder, or result in, or require, the creation or  imposition of any Lien in, of or on the property of such Loan Party pursuant to the terms of any  such indenture, instrument or agreement (other than Liens in favor of the Administrative Agent,  for the benefit of itself and the Lenders, under the Security Agreement and any other Permitted  Encumbrances), (v) will not violate any Requirement of Law applicable to any Loan Party or any  of its Subsidiaries, which individually or in the aggregate, could not reasonably be expected to  have a Material Adverse Effect; and (vi) do not require any consent or approval of, registration  or filing with, or any other action by, any Governmental Authority, except (i) such as have been  obtained or made and are in full force and effect, (ii) for filings necessary to perfect Liens  created pursuant to the Loan Documents or (iii) those that individually or in the aggregate, could  not reasonably be expected to have a Material Adverse Effect; (b) each of this Amendment and  the other Amendment Documents has been duly executed and delivered by such Loan Party and  constitutes the legal, valid and binding obligation of such Loan Party, enforceable against such  Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency,  reorganization, moratorium or other laws affecting creditors’ rights generally and subject to  general principles of equity, regardless of whether considered in a proceeding in equity or at law;  (c) the Amended Credit Agreement, and each other Loan Document, after giving effect hereto,  constitutes the legal, valid and binding obligation of such Loan Party, enforceable against such  Loan Party in accordance with its terms, subject to applicable bankruptcy, insolvency,  reorganization, moratorium or other laws affecting creditors’ rights generally and subject to  general principles of equity, regardless of whether considered in a proceeding in equity or at law;  (d) as of the date hereof, and (after giving effect hereto and consummation of the transactions  contemplated hereby) as of the Effective Date, there exists no Default or Event of Default; (e) no  Domestic Subsidiaries have been formed or acquired after August 7, 2019 (except for Permitted  J/Vs, if any); and (f) all conditions set forth in Section 3 of this Amendment have been satisfied  in full (provided that no representation or warranty is made as to the Administrative Agent’s or  any Lender’s acceptance or satisfaction with any matter).  All representations and warranties  contained in this Amendment shall survive the execution and delivery of this Amendment.  6. Consent of Loan Guarantor.  Each Loan Party (other than Borrower), in  its capacity as a Loan Guarantor under Article X of the Credit Agreement, hereby consents to  this Amendment and the amendments contained herein and confirms and agrees that,  notwithstanding this Amendment and the effectiveness of the amendments contained herein, the  Loan Guaranty is, and shall continue to be, in full force and effect and is hereby confirmed and  ratified in all respects notwithstanding the terms of this Amendment or any other amendment to  the Credit Agreement.  Nothing herein is intended or shall be deemed to limit the Administrative  Agent’s or any Lender’s rights under the Loan Guaranty to take actions without the consent of  any Loan Guarantor.  7. Reference to/Effect on the Credit Agreement, Etc.  





 






 -6-   (a) On and after the Effective Date: (i) each reference in the Credit Agreement  to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import shall mean and be  a reference to the Amended Credit Agreement, and (ii) each reference to the Credit Agreement in  all other Loan Documents shall mean and be a reference to the Amended Credit Agreement.  (b) Except as otherwise provided herein, the Credit Agreement, all other Loan  Documents, all covenants, representations and warranties made therein, and all other documents,  instruments and agreements executed and/or delivered in connection therewith, shall remain in  full force and effect, and are hereby reaffirmed, ratified and confirmed.  (c) The execution, delivery and effectiveness of this Amendment and the  other Amendment Documents shall not (i) except as specifically stated herein, amend the Credit  Agreement or any other Loan Document, (ii) operate as a waiver of any right, power or remedy  of the Administrative Agent or any Lender, or (iii) except as specifically stated herein, constitute  a waiver of, or consent to any departure from, any provision of the Credit Agreement or any  other Loan Document or any other documents, instruments and agreements executed or delivered  in connection therewith.  (d) Each Loan Party acknowledges and agrees that: (i) as of the date hereof  (and, if different, also as of the Effective Date), such Loan Party has no defenses, claims or set- offs to the payment of the Secured Obligations or to the enforcement of the Secured Obligations,  the Amended Credit Agreement or any of the other Loan Documents; and (ii) the Liens granted  to the Administrative Agent, for the benefit of itself and the Lenders, by such Loan Party are and  remain valid perfected Liens in the assets of such Loan Party securing the payment and  performance of the Secured Obligations.  (e) This Amendment and the other Amendment Documents shall each be  deemed a Loan Document for the purposes of the Amended Credit Agreement.  8. Miscellaneous.  (a) Choice of Law.  This Amendment shall be governed by and construed in  accordance with the internal laws of the State of Illinois, but giving effect to federal laws  applicable to national banks.  (b) Severability. Any provision of any Amendment Document held to be  invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to  the extent of such invalidity, illegality or unenforceability without affecting the validity, legality  and enforceability of the remaining provisions thereof; and the invalidity of a particular  provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.   (c) WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT  IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR  INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT, ANY OTHER  AMENDMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR  THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).   EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER  





 






 -7-   AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE  EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND  (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN  INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE  MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.  (d) Headings.  Section headings used herein are for convenience of reference  only, are not part of this Amendment and shall not affect the construction of, or be taken into  consideration in interpreting, this Amendment.  (e) Counterparts.  This Amendment may be executed and accepted in any  number of counterparts (and by different parties hereto on 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 and any  Amendment Document that is an Electronic Signature transmitted by telecopy, emailed pdf. or  any other electronic means that reproduces an image of an actual executed signature page shall  be effective as delivery of a manually executed counterpart of this Agreement and such  Amendment Document.  The words “execution,” “signed,” “signature,” “delivery,” and words of  like import in or relating to this Amendment and any Amendment Document shall be deemed to  include Electronic Signatures, deliveries or the keeping of records in any electronic form  (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an  image of an actual executed signature page), each of which shall be of the same legal effect,  validity or enforceability as a manually executed signature, physical delivery thereof or the use  of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall  require the Administrative Agent or any Lender to accept Electronic Signatures in any form or  format without its prior written consent and pursuant to procedures approved by it.  If the  Administrative Agent or any Lender agrees to accept any Electronic Signature, it shall be entitled  to rely on such Electronic Signature purportedly given by or on behalf of the signers without  further verification thereof and without any obligation to review the appearance or form of any  such Electronic Signature and any Electronic Signature shall be promptly followed by a  manually executed counterpart.  Without limiting the generality of the foregoing, the signers  hereby (a) agree that, for all purposes, including without limitation, in connection with any  workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among  any one or more of the Administrative Agent, the Lenders and signers of the Credit Agreement,  this Amendment or any Amendment Document, Electronic Signatures transmitted by telecopy,  emailed pdf. or any other electronic means that reproduces an image of an actual executed  signature page and/or any electronic images of the Credit Agreement, any Loan Document, this  Amendment and any Amendment Document shall have the same legal effect, validity and  enforceability as any paper original, (b) agree that the Administrative Agent and each Lender  may, at its option, create one or more copies of the Credit Agreement, any Loan Document, this  Amendment and any Amendment Document in the form of an imaged electronic record in any  format, which shall be deemed created in the ordinary course of such Person’s business, and  destroy the original paper document (and all such electronic records shall be considered an  original for all purposes and shall have the same legal effect, validity and enforceability as a  paper record), (c) waives any argument, defense or right to contest the legal effect, validity or  enforceability of the Credit Agreement, any Loan Document, this Amendment and any  





 






 -8-   Amendment Document based solely on the lack of paper original copies of the Credit  Agreement, any Loan Document, this Amendment and any Amendment Document, respectively,  including with respect to any signature pages thereto and (d) waives any claim against the  Administrative Agent and each Lender for any liabilities arising solely from the Administrative  Agent’s or such Lender’s reliance on or use of Electronic Signatures and/or transmissions by  telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual  executed signature page, including any liabilities arising as a result of the failure of the signers  hereto to use any available security measures in connection with the execution, delivery or  transmission of any Electronic Signature.      [signature page(s) follow]  





 






        EXHIBIT A  Document Checklist  See Attached  





 






    AMENDMENT NO. 8 TO SECOND AMENDED AND RESTATED CREDIT  AGREEMENT  among  POTBELLY SANDWICH WORKS, LLC,   as Borrower and as a Loan Party  THE OTHER LOAN PARTIES PARTY THERETO,  THE LENDERS PARTY THERETO  and  JPMORGAN CHASE BANK, N.A.,  as Administrative Agent  September 23, 2022    Definitions  Borrower  Potbelly Sandwich Works, LLC, an Illinois limited liability company   Loan Parties  Borrower    Potbelly Corporation, a Delaware corporation     Potbelly Illinois, Inc., an Illinois corporation     Potbelly Franchising, LLC, an Illinois limited liability company     Potbelly Sandwich Works DC-1, LLC, an Illinois limited liability company    PSW West Jackson, LLC, an Illinois limited liability company    PSW 555 Twelfth Street, LLC, an Illinois limited liability company    PSW Rockville Center, LLC, an Illinois limited liability company    PSW DC Acquisition LLC, an Illinois limited liability company    PSW PBD Acquisition LLC, an Illinois limited liability company    Administrative Agent JPMorgan Chase Bank, N.A.  Lender   JPMorgan Chase Bank, N.A. (“Chase”)  AFS    ArentFox Schiff LLP  SA    Sidley Austin LLP    





 






   2   Facility Information  Potbelly Sandwich Works, LLC  UCN: 790278964000  Facility ID: 198731685      Contact Information for Counsel for Administrative Agent  ArentFox Schiff LLP  233 S. Wacker Drive - Suite 7100  Chicago, Illinois 60606  Attention:  Scott E. Pickens  Electronic Mail: scott.pickens@afslaw.com  Telephone:  312.258.5515      Signed by:   __________________________    Scott E. Pickens       Document Checklist Responsible  Party  1. Amendment No. 8 to Second Amended and Restated Credit Agreement by and  among the Loan Parties, the Lenders and the Administrative Agent   Exhibit A             Document Checklist    AFS  2. Secretary’s Certificate of each Loan Party certifying as to (a) no change to the  certificate or articles of formation or incorporation, as applicable, of such Loan  Party since August 7, 2019, (b) no change to the by-laws or limited liability  company agreement, as applicable, of such Loan Party since August 7, 2019, (c)  no change since February 26, 2021 to the names and true signatures of the  officers of such Loan Party authorized to execute, deliver and perform the  Amendment and certified to the Lenders and the Administrative Agent on such  date, and (d) resolutions of the applicable governing body of such Loan Party  authorizing the execution, delivery and performance of the Amendment   SA  





 






   3   3. Certificate of good standing of each Loan Party from the applicable office set  forth below for such Loan Party  Loan Party    Office    Potbelly Sandwich Works, LLC Secretary of State of Illinois  Potbelly Corporation  Secretary of State of Delaware  Potbelly Illinois, Inc.  Secretary of State of Illinois  Potbelly Franchising, LLC  Secretary of State of Illinois  Potbelly Sandwich     Works DC-1, LLC  Secretary of State of Illinois  PSW West Jackson, LLC  Secretary of State of Illinois  PSW 555 Twelfth Street, LLC Secretary of State of Illinois  PSW Rockville Center, LLC Secretary of State of Illinois  PSW DC Acquisition LLC  Secretary of State of Illinois  PSW PBD Acquisition LLC Secretary of State of Illinois    SA