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IRG > SEC Filings for IRG > Form 8-K on 11-Apr-2013All Recent SEC Filings

Show all filings for IGNITE RESTAURANT GROUP, INC. | Request a Trial to NEW EDGAR Online Pro

Form 8-K for IGNITE RESTAURANT GROUP, INC.


11-Apr-2013

Entry into a Material Definitive Agreement, Termination of a Materi


Item 1.01. Entry into a Material Definitive Agreement.

Amended and Restated Credit Agreement

On April 9, 2013 (the "Closing Date"), Ignite Restaurant Group, Inc. ("we," "us," "our" or "the Company") entered into an Amended and Restated Credit and Security Agreement (the "New Credit Agreement"), with a syndicate of commercial banks and other financial institutions party, as lenders, KeyBank National Association, as joint lead arranger, joint book runner and administrative agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint lead arranger and joint book runner and Bank of America, N.A., as syndication agent, which amends and restates in its entirety the credit agreement entered into on October 29, 2012 (the "Original Credit Agreement").

The New Credit Agreement provides for a $100 million five-year senior secured revolving credit facility (the "Revolving Credit Facility"), which includes a letter of credit sub-facility of $15 million (increased from $10 million under the Old Credit Agreement) and a swing line sub-facility of up to $15 million. The New Credit Agreement also provides for a five-year senior secured term loan facility in an aggregate principal amount of $50 million (the "Term Loan Facility").

Immediately prior to the execution of the New Credit Agreement, we had $45 million of borrowings under the Revolving Credit Facility. We expect to use the proceeds from the Term Loan Facility to finance a portion of the Acquisition (as defined below).

We have the right, but not the obligation, to increase the commitment under the Revolving Credit Facility or add an additional term loan facility by an aggregate amount not to exceed $50 million, provided that no event of default has occurred and is continuing or would result therefrom.

The initial interest rate for borrowings under the Revolving Credit Facility and the Term Loan will be at the London Interbank Offered Rate ("LIBOR") plus a margin of 3.50%, or the Base Rate (as defined in the New Credit Agreement) plus a margin of 2.50%, as we may elect. Thereafter, the applicable margins are subject to adjustment based on our Maximum Leverage Ratio (as defined below), as determined on a quarterly basis, with the margins ranging from 1.25% to 4.25% on LIBOR based loans, and from 0.25% to 3.25% on Base Rate based loans. In addition, we are required to pay commitment fees on the unused portion of the Revolving Credit Facility, and swing line loans will not constitute usage. The commitment fee rate is initially 0.50% per annum, and is also subject to adjustment thereafter based on our Maximum Leverage Ratio, with the rates ranging from 0.20% to 0.50%.

The principal amount of the Term Loan is payable in consecutive quarterly installments, commencing on September 30, 2013, with the balance thereof payable in full on the fifth anniversary of the Closing Date. The Revolving Credit Facility will mature and all amounts outstanding thereunder will be due and payable on the fifth anniversary of the Closing Date.

Similar to the Old Credit Agreement, the New Credit Agreement contains customary covenants regarding, among other matters, the maintenance of insurance, the preservation and maintenance of our corporate existence, material compliance with laws and the payment of taxes and other material obligations. The New Credit Agreement also contains financial covenants including a leverage ratio ("Maximum Leverage Ratio") of rent adjusted debt to EBITDAR (earnings before interest, taxes, depreciation and amortization expense and rent expense, plus certain additional addbacks more particularly specified in the New Credit Agreement), and a minimum fixed charge coverage ratio, as described in the New Credit Agreement (the "Minimum Fixed Charge Coverage Ratio"). These ratios are computed at the end of each fiscal quarter for the most recent 12-month period. The New Credit Agreement allows for a Maximum Leverage Ratio of (i) 5.50x through December 29, 2013, (ii) 5.25x from December 30, 2013 through June 29, 2014, (iii) 5.0x from June 30, 2014 through December 28, 2014 and (iv) 4.75x thereafter. The New Credit Agreement allows for a Minimum Fixed Charge Ratio of 1.35x through December 29, 2013 and 1.50x thereafter. Furthermore, similar to the Old Credit Agreement, the New Credit Agreement


contains covenants which, among other things, limit our ability, and that of our subsidiaries (subject to certain exceptions), to:

incur additional indebtedness;

. . .



Item 1.02. Termination of a Material Definitive Agreement.

The information set forth in Item 1.01 related to the Old Credit Agreement and New Credit Agreement is incorporated into this Item 1.02 by reference.




Item 2.01. Completion of Acquisition or Disposition of Assets.

On April 9, 2013, the Company completed the Acquisition. Pursuant to the terms of the Purchase Agreement and the First Amendment, the Company acquired, directly or indirectly, all of the issued and outstanding equity interests of Mac Parent. The aggregate purchase price paid by the Company at closing was approximately $54.1 million, reflecting estimated working capital and other pre-closing adjustments. The final purchase price remains subject to additional working capital and other post-closing adjustments.

The foregoing description of the Purchase Agreement and First Amendment is only a summary, does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement and First Amendment. The Purchase Agreement is attached as Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2013 and incorporated herein by reference. The First Amendment is attached hereto as Exhibit 2.1 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 set forth in Item 1.01 related to the New Credit Agreement is incorporated into this Item 2.03 by reference.



Item 8.01. Other Events.

On April 9, 2013, the Company announced the completion of the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.



Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment within 71 calendar days after the date the Item 2.01 disclosure on this Form 8-K must be filed.

(b) Pro Forma Financial Information

The pro forma financial information required by Item 9.01(b) of Form 8-K will be filed by amendment within 71 calendar days after the date the Item 2.01 disclosure on this Form 8-K must be filed.

(d) Exhibits

2.1 First Amendment to the Purchase Agreement, dated as of April 8, 2013, by and between Ignite Restaurant Group, Inc. and Restaurant Holdings LLC - Series A (on behalf of the Sellers).
99.1 Press Release of Ignite Restaurant Group, Inc. dated April 9, 2013.


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