TWMC Trans World Entertainment

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

As previously reported, on January 17, 2017, Trans World Entertainment Corporation (the “Company”) entered into a Second Amended and Restated Credit Agreement (as amended by that certain letter agreement dated as of October 29, 2018 (the “October Letter Agreement”), the “Credit Agreement”) with Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, under which the lenders party thereto committed to provide up to $75 million in loans under a five-year, secured revolving credit facility.

In accordance with Section 6.01(a) of the Credit Agreement, the Company is required to deliver to the administrative agent within 90 days after the end of each fiscal year of the Company (which for this fiscal year such due date was May 3, 2019), a consolidated and consolidating balance sheet of the Company and its subsidiaries as at the end of each fiscal year, and the related consolidated and consolidating statements of income or operations, shareholders’ equity, and cash flows for each fiscal year, including a report and opinion shall be prepared in accordance with generally accepted auditing standards which shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit (collectively, the “Annual Financial Statements”).

As reported by the Company, it was not able to file its Audited Financial Statements by such date. On May 3, 2019, the Company entered into a letter agreement (the “Letter Agreement”) with Wells Fargo in accordance with Section 10.01 of the Credit Agreement in which Wells Fargo provided consent to the late filing of the Audited Financial Statements and conditional waiver of any default or event of default that otherwise would be occasioned by such late filing (the “Consent and Waiver”) so long as the Company actually delivers the Annual Financial Statements in accordance with the terms and conditions of the Credit Agreement no later than May 20, 2019.

The Consent and Waiver provided in the Letter Agreement is a one-time consent and conditional waiver related to the delivery of the Annual Financial Statements in May, 2019 only, and is not an amendment to the Credit Agreement with respect to the timely delivery of any other Annual Financial Statements on any other occasion, nor is it a waiver of (x) the requirement to comply with any other term or condition of the Credit Agreement or the other loan documents, or (y) any other default or event of default whether now existing or hereafter arising under the Credit Agreement.  

The preceding descriptions of the Credit Agreement, the October Letter Agreement and the Letter Agreement are qualified in their entirety, respectively, by reference to the copy of the Credit Agreement filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 19, 2017, the copy of the October Letter Agreement filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 1, 2018 and the copy of the Letter Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.