ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 23, 2020 (the "Fifth Amendment Effective Date"), Carrols Restaurant
Group, Inc. (the "Company") entered into the Fifth Amendment to Credit Agreement
(the "Fifth Amendment") among the Company, as borrower, certain subsidiaries of
the Company (collectively, the "Guarantors"), as guarantors, Wells Fargo Bank,
National Association (the "Administrative Agent"), as administrative agent, and
the lenders party thereto as further described in "Item 2.03. Creation of a
Direct Financial Obligation or an Obligation Under an Off-Balance Sheet
Arrangement of a Registrant" which is incorporated by reference in this Item
1.01.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The Fifth Amendment amends the Credit Agreement dated as of April 30, 2019 among
the Company, the Guarantors, the Administrative Agent and the lenders party
thereto (as previously amended by the First Amendment to Credit Agreement dated
as of December 13, 2019 among the Company, the Guarantors, the Administrative
Agent and the lenders party thereto, the Second Amendment to Credit Agreement
dated as of March 25, 2020 among the Company, the Guarantors, the Administrative
Agent and the lenders party thereto, the Third Amendment to Credit Agreement
dated as of April 8, 2020 among the Company, the Guarantors, the Administrative
Agent and the lenders party thereto and the Fourth Amendment to Credit Agreement
dated as of April 16, 2020 among the Company, the Guarantors, the Administrative
Agent and the lenders party thereto and as further amended from time to time,
the "Credit Agreement"). Capitalized terms used herein and not defined shall
have the meanings set forth in the Credit Agreement.
Pursuant to the Fifth Amendment, the Company incurred additional Term Loan
borrowings in the aggregate principal amount of $75 million of Incremental Term
B-1 Loans. The Incremental Term B-1 Loans constitute a new tranche of Term Loans
ranking pari passu in right of payment and security with the Initial Term Loans
for all purposes under the Credit Agreement. The Incremental Term B-1 Loans have
the same terms as outstanding borrowings under the Company's existing term loan
B facility pursuant to and in accordance with the Credit Agreement, provided
that (i) borrowings under the Incremental Term B-1 Loans will bear interest at a
rate per annum, at the Company's option, of (a) the Alternate Base Rate plus the
applicable margin of 5.25% or (b) the LIBOR Rate (which shall not be less than
1% for Incremental Term B-1 Loans) plus the applicable margin of 6.25% and (ii)
certain prepayments of the Incremental Term B-1 Loans by the Company prior to
the first anniversary of the Fifth Amendment Effective Date are subject to a
premium to the Administrative Agent, for the ratable account of each applicable
Term Loan Lender holding Incremental Term B-1 Loans on the date of such
prepayment equal to the Applicable Make-Whole Amount with respect to the
principal amount of the Incremental Term B-1 Loans so prepaid. The principal
amount of the Incremental Term B-1 Loans will amortize in an aggregate annual
amount equal to 1% of the original principal amount of the Incremental Term B-1
Loans and shall be repayable in consecutive quarterly installments on the last
day of the Company's fiscal quarters beginning on the third fiscal quarter of
2020 with the remaining outstanding principal amount of the Incremental Term B-1
Loan and all accrued but unpaid interest and other amounts payable with respect
to the Incremental Term B-1 Loan due on April 30, 2026 which is the Term Loan
Maturity Date. The Company intends to use the net proceeds of the Incremental
Term B-1 Loans for general corporate purposes.
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