Exhibit 10.1



  


CONSENT AND FORBEARANCE AGREEMENT


 


March 31, 2020


 


Good Times Restaurants Inc.


141 Union Blvd., #400


Lakewood, Colorado 80228


 


Re: Credit Agreement, dated as of September
8, 2016 (as amended, modified, extended, restated, replaced, or supplemented in writing from time to time, the “Credit
Agreement”), by and among Good Times Restaurants Inc., a Nevada corporation (the “Borrower”), the
Guarantors, the Lenders from time to time party thereto and Cadence Bank, National Association, as administrative agent (the “Administrative
Agent”).


 


Ladies and Gentlemen:


 


1.             Defined
Terms. Reference is hereby made to the above-referenced Credit Agreement. Capitalized terms used herein without definition
shall have the meanings ascribed to such terms in the Credit Agreement. As used in this Consent, the following terms shall have
the meanings set forth below:


 


“Consent”
means this Consent and Forbearance Agreement.


 


“Forbearance
Period” means the period from the date hereof to (but excluding) the earliest date that a Forbearance Termination Event
occurs.


 


“Forbearance
Termination Event” means the earliest of the following to occur: (a) any Default or Event of Default other than the Potential
Events of Default, (b) the breach by the Borrower or any Guarantor of any covenant or provisions of this Consent and (c) 11:59
p.m. (Eastern time) on June 30, 2020.


 


2.             Payment
Deferral.


 


(a)       The
Borrower acknowledges and agrees that, pursuant to Section 2.06 of the Credit Agreement, the Borrower is required to pay to the
Administrative Agent, for the benefit of the Lenders, certain payments of principal on the Loans as set forth therein. The Borrower
has requested permission from the Administrative Agent and the Lenders to defer the principal payment on the Loans due on March
31, 2020 until the Maturity Date (the “Payment Deferral”).


 


(b)       The
Administrative Agent and the Lenders hereby consent to the Payment Deferral. Notwithstanding anything to the contrary contained
in Section 2.05(d) or Section 2.06 of the Credit Agreement, it is acknowledged and agreed that the Commitments shall not be reduced
by the amount of the payment on the Loans otherwise required to be made on March 31, 2020. For the avoidance of doubt, nothing
contained in this Consent shall limit, postpone or otherwise impact any other payments under the Credit Agreement and the other
Loan Documents (including, without limitation, the payment of interest and fees by the Borrower to Administrative Agent as set
forth in the Credit Agreement).


 


3.           Potential
Events of Default. The Borrower has informed the Administrative Agent and the Lenders that certain Events of Default may occur
as a result of: (a) the Borrower’s failure to comply with the Consolidated Leverage Ratio set forth in Section 7.11(a) of
the Credit Agreement for the Fiscal Quarter ended on or about March 31, 2020; (b) the Borrower’s failure to comply with
the Consolidated Pre-Distribution Fixed Charge Coverage Ratio set forth in Section 7.11(b) of the Credit Agreement for the Fiscal
Quarter ended on or about March 31, 2020; and (c) the Borrower’s failure to comply with the Consolidated Post-Distribution
Fixed Charge Coverage Ratio set forth in Section 7.11(c) of the Credit Agreement for the Fiscal Quarter ended on or about March
31, 2020 (collectively, the “Potential Events of Default”).


 



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4.            Forbearance.


 


(a)       Subject
to the terms and conditions set forth herein, the Administrative Agent and the Lenders shall, during the Forbearance Period, forbear
from exercising any and all of the rights and remedies available to them under the Loan Documents and applicable laws (including
the implementation of the Default Rate in accordance with Section 2.07(b) of the Credit Agreement), but only to the extent that
such rights and remedies arise exclusively as a result of the existence of the Potential Events of Default; provided, however,
that the Administrative Agent and the Lenders shall be free to exercise any or all of their rights and remedies arising on account
of the Potential Events of Default at any time upon or after the occurrence of a Forbearance Termination Event.


 


(b)       Nothing
set forth herein or contemplated hereby is intended to constitute an agreement by the Administrative Agent or any Lender to forbear
from exercising any of the rights or remedies available to the Administrative Agent and the Lenders under the Loan Documents or
applicable laws (all of which rights and remedies are hereby expressly reserved by the Administrative Agent and the Lenders) upon
or after the occurrence of a Forbearance Termination Event.


 


(c)       Notwithstanding
anything to the contrary contained in the Credit Agreement, during the Forbearance Period, the Borrower shall be permitted to exercise
the continuation and conversion options set forth in Section 2.02 of the Credit Agreement, in each case subject to the requirements
set forth in the Credit Agreement (other than any requirement or representation in the Credit Agreement relating solely to the
occurrence and continuance of the Potential Events of Default).


 


5.            Prohibitions
on Certain Actions. Notwithstanding anything to the contrary set forth in the Loan Documents, during the Forbearance Period,
the Borrower and the Loan Parties shall not, and shall not permit any Subsidiary to: (a) take any action that is prohibited under
the Credit Agreement or any other Loan Document during the existence of a Default or Event of Default (other than as expressly
set forth in Section 4(c)), regardless of whether any of the Potential Events of Default has occurred; (b) make any requests
for borrowings of Loans or other Credit Extensions; (c) incur or pay any capital expenditures (other than maintenance capital expenditures
in the ordinary course of business) in an aggregate amount not to exceed $300,000; or (d) declare or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, set forth in Section 7.06 of the Credit Agreement.
Failure of Borrower to comply in any material respect with this Section 5 shall be deemed to be an immediate Event of Default
under the Credit Agreement.


 


6.            Equity
Injections. For the avoidance of doubt, notwithstanding anything to the contrary set forth in the Credit Agreement, during
the Forbearance Period the Borrower shall not be required to make a prepayment of the net cash proceeds of any equity investment
made in the Borrower so long as (a) such net cash proceeds are used for working capital and (b) no Change of Control results from
such equity investment.


 






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7.            COVID-19
Relief.


 


(a)       The
Borrower and the other Loan Parties hereby certify that (i) this Consent is being entered into as a result of the effects of the
national emergency related to COVID-19 pandemic and (ii) as of December 31, 2019, the Borrower was not more than 30 days past due
on all payment obligations under the Credit Agreement and the other Loan Documents (including, for the avoidance of doubt, payments
of interest, principal and fees required thereunder).


 


(b)       At
least three (3) Business Days before the Borrower or any Guarantor applies to any Governmental Authority for the provision of monetary
aid or other relief (in the form of a loan, grant or otherwise) from such Governmental Authority due to the adverse impact of COVID-19,
the Borrower shall deliver a true and complete copy of such application, together with all supporting materials, to the Administrative
Agent.  The Borrower and the Guarantors shall not apply, disburse or distribute any funds received from any Governmental Authority
in respect of such aid or other relief other than as permitted by applicable law under which such funds were provided and otherwise
permitted by the Credit Agreement without the prior written consent of the Administrative Agent (acting at the direction of the
Required Lenders).


 


8.            Additional
Reporting. During the Forbearance Period, the Borrower shall provide to the Administrative Agent, in addition to all reporting
required by the Credit Agreement, within three (3) Business Days of the end of each fiscal month, (i) a report of sales per location,
as well as labor costs for each location, for the monthly period then ended, (ii) a forward-looking cash projection of the Borrower
for the subsequent fiscal month and (iii) a comparative report of sales for the corresponding fiscal month of the previous fiscal
year.


 


9.            Acknowledgement
and Reaffirmation. Each of the Borrower and the other Loan Parties hereby: (a) acknowledges that (i) the Potential Events of
Default have not been waived and (ii) no Potential Event of Default is being waived pursuant to this Consent; (b) acknowledges
and consents to this Consent and the terms and provisions hereof; (c) reaffirms the covenants and agreements contained in each
Loan Document to which such Person is party, including, in each case, as such covenants and agreements may be modified by this
Consent and the transactions contemplated hereby; (d) reaffirms that each of the Liens created and granted in or pursuant to the
Loan Documents in favor of the Administrative Agent for the benefit of the holders of the Obligations is valid and subsisting,
and acknowledges and agrees that this Consent shall in no manner impair or otherwise adversely affect such Liens; and (e) confirms
that each Loan Document to which such Person is a party is and shall continue to be in full force and effect and the same is hereby
ratified and confirmed in all respects, except that upon the effectiveness of this Consent, all references in such Loan Documents
to the “Credit Agreement”, “thereunder”, “thereof” or words of like import shall mean the Credit
Agreement and the other Loan Documents, as the case may be, as in effect and as modified by this Consent.


 


10.           Fees
and Expenses. Without in any way limiting the obligations of the Borrower under the Loan Documents, including without limitation
Section 11.04 of the Credit Agreement, the Borrower shall on the date hereof, reimburse the Administrative Agent for the reasonable
documented and invoiced fees and expenses reasonably incurred by the Administrative Agent in connection with this Consent and any
related transactions (including, without limitation, the reasonable documented and invoiced fees and expenses of Moore & Van
Allen PLLC, as counsel to the Administrative Agent).


 


11.           Release.
The Borrower and each Guarantor hereby releases and forever discharges the Administrative Agent, each Lender, the L/C Issuer and
their respective predecessors, successors, assigns, attorneys and Related Parties (each and every of the foregoing, a “Lender
Party”) from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action
of any nature whatsoever, in each case to the extent arising in connection with any of the Loan Documents through the date hereof,
whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated,
whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted, which any Loan Party may have or
claim to have against any Lender Party.


 






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12.           Miscellaneous.
This Consent may be executed in any number of counterparts, each of which when so executed and delivered shall be an original,
but all of which shall constitute one and the same instrument. Delivery of executed counterparts of this Consent by telecopy or
other secure electronic format (.pdf) shall be effective as an original. The governing law, submission to jurisdiction, waiver
of venue, service of process and waiver of jury trial provisions contained in Sections 11.14 and 11.15 of the Credit Agreement
are hereby incorporated by reference mutatis mutandis. This Consent shall be effective upon the Administrative Agent’s
receipt of signature pages from the Borrower, the other Credit Parties and the Lenders.


 


 


[Signature pages to follow]







 






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	 	 	Very truly yours,
	 	 	 
	ADMINISTRATIVE AGENT:	:	CADENCE BANK, NATIONAL ASSOCIATION
	 	 	 
	 	 	 
	 	 	By:	 
	 	 	Name: Charles M. Joye III
	 	 	Title: Senior Vice President


 


 


	LENDERS:	 	CADENCE BANK, NATIONAL ASSOCIATION
	 	 	as a Lender
	 	 	 
	 	 	 
	 	 	By:	 
	 	 	Name: Charles M. Joye III 
	 	 	Title: Senior Vice President







 


CONSENT AND FORBEARANCE AGREEMENT


 






    	 	 	 



    	 



    

 





Accepted and agreed as of the date first above written:


 


 


	BORROWER:	GOOD TIMES RESTAURANTS INC.,
	 	a Nevada corporation
	 	 
	 	By:	 
	 	Name:  Ryan M. Zink
	 	Title:  Chief Executive Officer 


 


 


 


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


 


 


	 	BD OF COLORADO LLC,
	 	a Colorado limited liability company
	 	 
	 	 	By: GOOD TIMES RESTAURANTS INC.,
	 	 	a Nevada corporation, its manager
	 	 	 	 
	 	 	By:	 
	 	 	Name:  Ryan M. Zink
	 	 	Title:  Chief Executive Officer 







 


CONSENT AND FORBEARANCE AGREEMENT


 



    	 	 	 



    	 	 



    

 





	 	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:	 
	 	 	 	Name:  Ryan M. Zink
	 	 	 	Title:  Chief Executive Officer 







 


 





	 	 	By: GOOD TIMES RESTAURANTS INC.,
	 	 	a Nevada corporation, its member
	 	 	 	 
	 	 	By:	 
	 	 	Name:  Ryan M. Zink
	 	 	Title:  Chief Executive Officer 


 


 


 








	 	BAD DADDY’S INTERNATIONAL, LLC,
	 	a North Carolina limited liability company
	 	 
	 	 	By: GOOD TIMES RESTAURANTS INC.,
	 	 	a Nevada corporation, its sole member
	 	 	 	 
	 	 	By:	 
	 	 	Name:  Ryan M. Zink
	 	 	Title:  Chief Executive Officer 







 


CONSENT AND FORBEARANCE AGREEMENT


 



    	 	 	 



    	 	 



    




 





	 	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:	 
	 	 	 	Name:  Ryan M. Zink
	 	 	 	Title:  Chief Executive 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:	 
	 	 	 	Name:  Ryan M. Zink
	 	 	 	Title:  Chief Executive 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:	 
	 	 	 	Name:  Ryan M. Zink
	 	 	 	Title:  Chief Executive Officer







 


CONSENT AND FORBEARANCE AGREEMENT


 



    	 	 	 



    	 	 



    




 





	 	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:	 
	 	 	 	Name:  Ryan M. Zink
	 	 	 	Title:  Chief Executive Officer 










 


CONSENT AND FORBEARANCE AGREEMENT