Item 1.01 Entry Into a Material Definitive Agreement.
On October 21, 2020, ARC Fat Patty's, LLC ("Borrower"), a wholly-owned
subsidiary of ARC Group, Inc. (the "Company"), executed a Loan and Security
Agreement (the "Loan Agreement"), a Promissory Note (the "Note"), and related
documents for a loan (the "Loan") in the aggregate amount of $3,180,900 for
which City National Bank of Florida ("City National Bank") served as lender
pursuant to the Main Street Priority Loan Facility as established by the Board
of Governors of the Federal Reserve System Section 13(3) of the Federal Reserve
Act. On October 27, 2020, the Company learned that the Loans had been funded and
closed.
The Note has a term of five years and bears interest at a rate per annum equal
to: (i) the London Interbank Offered Rate for 30-day U.S. dollar deposits as
published in the "Money Rates" column of the local edition of The Wall Street
Journal, plus (ii) three percent (3%). Commencing on November 22, 2021 and
continuing on the twenty-second (22nd) day of each month thereafter, Borrower
shall make consecutive monthly payments of accrued interest. On October 22, 2023
and October 22, 2024, Borrower must make an annual payment of principal plus
accrued but unpaid interest in an amount equal to fifteen percent (15%) of the
outstanding principal balance of the Note (inclusive of accrued but unpaid
interest). The entire outstanding principal balance of the note together with
all accrued and unpaid interest is due and payable in full on October 22, 2025.
Borrower may prepay the Loan at any time without incurring any prepayment
penalties. The Note provides for customary events of default, including, among
others, those relating to a failure to make payment, bankruptcy, breaches of
representations and covenants, and the occurrence of certain events. As security
for the Note, Borrower granted City National Bank a security interest in and to
any and all of its property.
The foregoing description of the Loan Agreement and Note does not purport to be
complete and is qualified in its entirety by reference to the Loan Agreement and
Note, copies of which are attached hereto as Exhibits 10.1 and 10.2,
respectively, and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 below is incorporated by reference
herein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1 Loan and Security Agreement, dated October 22, 2020, by and between ARC
WingHouse, LLC and City National Bank of Florida
10.2 Note, dated October 22, 2020, issued by ARC WingHouse, LLC in favor of
City National Bank of Florida
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