What is the 'Related Party Credit Facility' for Checkersrallys?

nce costs, net | (447) | (4,539) | | Total debt, financing obligations, and credit facility | 95,537 | 303,577 | | Less current maturities | (1,879) | (295,004) | | Total debt, financing obligations, and credit facility, less current maturities | $ 93,658 | $ 8,573 |

Predecessor Debt Agreements

Related Party Credit Facility

On April 25, 2017, Holdings entered into a first lien credit agreement (the "First Lien Credit Agreement") and second lien credit agreement (the "Second Lien Credit Agreement") with Jefferies Finance LLC as administrative agent, joint lead arranger and joint bookrunner, and the financial institutions party thereto. The First Lien Credit Agreement consisted of (i) a $192.5 million First Lien Term Loan maturing on April 25, 2024 and (ii) a $25.0 million Revolver maturing on April 25, 2022. The Second Lien Credit Agreement consisted of an $87.5 million Second Lien Term Loan maturing on April 25, 2025. The First Lien Term Loan and Second Lien Term Loan are collectively referred to as the "Term Loans" or the "2017 Senior Credit Facility". The proceeds from the Term Loans were used to fund the Merger.

The Company entered into an intercompany allocation agreement (the "Allocation Agreement") with Holdings on October 12, 2018. Under the terms of the Allocation Agreement, the Company jointly and severally unconditionally guarantees payment and performance of obligations under the 2017 Senior Credit Facility and covenants and agrees to pay as due all obligations, whether for principal, interest or otherwise, with respect to the 2017 Senior Credit Facility. Accordingly, the Company has recorded the

(Tabular Dollars in Thousands, Except Share and per Share Data)

debt obligation as "related party credit facility" with an offsetting amount against "additional paid-in capital" in the accompanying consolidated balance sheets. Obligations due by the Company to Holdings for amounts outstanding under the First Lien Term Loan and Second Lien Term Loan are referred to herein as the "Related Party Note" and amounts outstanding under the Revolver are referred to herein as the "Related Party Revolver" and amounts outstanding under the Restatement Date Term Loan are referred to herein as "Related Party Restatement Date Term Loan".

Subsequent to the execution of the Allocation Agreement, principal payments paid by the Company for the related party note were recorded in "principal payments on related party note" in the accompanying consolidated statements of cash flows, and draws and repayments under the related party revolver were recorded in "borrowings under related party revolver" and "payments on related party revolver", respectively. The terms of the Related Party Credit Facility were amended in the same manner as the amendments to Holdings First Lien Restated Credit Agreement and Second Lien Restated Credit Agreement dated August 21, 2019 as well as Holdings Second Amendment to the Amended and Restated First Lien and Second Lien Credit Agreements dated December 31, 2020 as discussed above.

Amendment to Related Party Credit Facility

On August 21, 2019, Holdings entered into an amendment to the First Lien Credit Agreement (the "First Lien Restated Credit Agreement") with Jefferies Finance LLC continuing as administrative agent, joint lead arranger and joint bookrunner, and the financial institutions party thereto. Holdings also entered into an amendment to the Second Lien Credit Agreement (the "Second Lien Restated Credit Agreement") with Wilmington Trust, National Association (as successor to Jefferies Finance LLC), as administrative agent and collateral agent for the lenders party thereto.

Holdings Restated Credit Agreement converted $19.9 million in aggregate principal amount of Revolver into Restatement Date Term Loans ("RDTL") maturing April 25, 2022 leaving $5.1 million of Revolver. Within fiscal 2021, the maturity date of the RDTL and Revolver was extended to April 25, 2023.

Holdings Restated Credit Agreement amended the terms in that any interest on the loans accrued on or prior to June 14, 2021, shall be payable "in kind", which interest shall be capitalized and added to the outstanding principal balance of the loans on the applicable interest payment dates. The capitalized interest was deemed to be principal on the loan and interest accrued on the capitalized interest until June 14, 2021. Within fiscal 2021, the treatment of interest as payable "in kind" was extended beyond June 14, 2021 through the maturity date of the Second Lien.

Borrowings under the Term Loans incurred interest at a floating rate which was, at Holdings' option, (i) the London Interbank Offer Rate ("LIBOR") for a specified interest period plus an applicable margin, or (ii) an alternative base rate, plus an applicable margin.

Second Amendment to Related Party Credit Facility

On December 31, 2020, (i) the Company entered into the Second Amendment to the Amended and Restated First Lien Credit Agreement ("Second Amendment to First Lien") and (ii) the Company and BossCo Holdings entered into the Exchange Agreement and Second Amendment and Joinder to Amended and Restated Second Lien Credit Agreement ("Second Amendment to Second Lien").

(Tabular Dollars in Thousands, Except Share and per Share Data)

The Second Amendment to First Lien extended the maturity of the Related Party Restatement Date Term Loan and Related Party Revolver from April 25, 2022 to April 25, 2023. The Second Amendment to First Lien also amended the leverage ratio covenant. The change in terms under the Second Amendment to First Lien were recorded as a modification as the amendment did not significantly impact the amount or timing of the cash flows. The modification resulted in an increase to deferred issuing costs of $1.6 million. In addition, the Company incurred $0.3 million of third-party costs that were expensed within "general and administrative expenses" within the Consolidated Statements of Operations for the year ended January 3, 2022. There was no gain or loss recorded as part of the Second Amendment to First Lien.

Under the Second Amendment to Second Lien, on December 31, 2020, 50% of the aggregate principal amount of Related Party Second Lien Term Loans outstanding (including all accrued and unpaid interest thereon) were exchanged for Series C-1 Preferred Stock of BossCo Holdings. The aggregate principal amount of Related Party Second Lien Term Loans and accrued interest exchanged for Series C-1 Preferred Stock was $52.4 million. Burger BossCo Intermediate, Inc. received a capital contribution from Parent of $52.9 million presented in "Additional paid-in capital" and the proceeds from this capital contribution were paid to the Second Lien lenders and presented within "Long-term debt, less current maturities and deferred financing costs" on the Consolidated Balance Sheets.

The change in terms under the Second Amendment to Second Lien were recorded as a modification as the amendment did not significantly impact the amount or timing of the cash flows. The modification resulted in an increase to deferred issuing costs of $1.3 million. In addition, the Company incurred $3.4 million of third-party costs that were expensed within "general and administrative expenses" within the consolidated statements of operations for the year ended January 3, 2022. There was no gain or loss recorded as part of the modification of the Second Lien. There was no change in the maturity date applicable to the Related Party Second Lien Term Loans. Subject to a refinancing of the indebtedness under the First Lien Credit Agreement satisfying certain terms, the maturity date of the Related Party Second Lien Term Loans could be extended.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)