Can Potbelly Sandwich Works prepay the Revolving Commitments, and if so, are there any penalties?

According to Potbelly Sandwich Works's 2025 Franchise Disclosure Document, Potbelly Sandwich Works has the option to prepay its Revolving Commitments. The document specifies that Potbelly Sandwich Works may prepay these commitments at any time, either in full or partially. This prepayment can be made without incurring any premium or penalty. However, any prepayment is subject to providing prior notice as outlined in the Credit Agreement. This flexibility allows Potbelly Sandwich Works to manage its debt obligations strategically, taking advantage of favorable financial conditions without the burden of prepayment penalties, which is a beneficial term for the company.

The Credit Agreement, established on February 7, 2024, with Wintrust Bank, N.A. as the administrative agent, includes a revolving loan facility with an aggregate commitment of $30,000,000. These Revolving Commitments are set to expire on February 7, 2027. The funds from this facility are intended for general corporate and working capital purposes, providing Potbelly Sandwich Works with financial resources to support its operations and growth initiatives.

The loans under the Credit Agreement accrue interest based on either the one-month term secured overnight financing rate (SOFR) or the base rate, plus an applicable rate per annum. The applicable rate varies depending on the Consolidated Adjusted Leverage Ratio, as defined in the Credit Agreement. For borrowings based on the one-month term SOFR, the applicable rate ranges between 2.75% and 3.75%, while for borrowings based on the base rate, it ranges between 1.25% and 2.25%.