EXHIBIT - 10(f)(4)
THIRD AMENDMENT AGREEMENT
The THIRD AMENDMENT AGREEMENT (this "Amendment"), dated as of
December 29, 1994, among SHOWBIZ PIZZA TIME, INC., a Kansas
corporation (the "Borrower"), BHC ACQUISITION CORPORATION, a Texas
corporation ("Monterey"), and THE FIRST NATIONAL BANK OF BOSTON
(the "Bank") amends the Second Amended and Restated Revolving
Credit Agreement dated as of November 19, 1992 between the Borrower
and the Bank (as heretofore amended by a First Amendment to Second
Amended and Restated Revolving Credit Agreement dated as of
December 15, 1993 and a Second Amendment to Second Amended and
Restated Revolving Credit Agreement dated as of July 1, 1994, the
"Credit Agreement"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Credit Agreement.
WHEREAS, the Borrower and the Bank have heretofore entered into
the Credit Agreement; and
WHEREAS, Monterey and the Bank entered into a certain Second
Amended and Restated Guaranty Agreement, dated as of November 19,
1992, pursuant to which Monterey guaranteed the Obligations of the
Borrower under the Credit Agreement and the other Loan Documents;
and
WHEREAS, the Borrower has requested that certain terms and
provisions of the Credit Agreement be amended as specified herein;
and
WHEREAS, the Bank, subject to the terms and provisions hereof, is
willing to amend the Credit Agreement as specified herein;
NOW THEREFORE, the parties hereto hereby agree as follows:
Section 1. -
----------
Amendment to Credit Agreement. Subject to the satisfaction of
the conditions precedent and the other terms and conditions set
forth in Section 4 hereof, the Credit Agreement is hereby amended
as follows:
Section 1.1. -
------------
Amendment to Section 1.1 of the Credit Agreement. Section 1.1 of
the Credit Agreement is hereby amended by:
(a) deleting in their entirety the definitions of "Eurocurrency
Reserve Rate", "Eurodollar Business Day", "Eurodollar Lending
Office", "Eurodollar Rate", "Eurodollar Rate Loans" and "Type"
contained in such Section 1.1;
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(b) deleting the definition of "Applicable Margin" in its
entirety and substituting in lieu thereof the following new
definition:
"Applicable Margin. During all or any part of any period within
any Interest Period with respect to a Loan (regardless of when such
Loan is made), the Applicable Margin in effect with respect to such
Loan on any date shall be the percentage per annum set forth
opposite the period containing such date in the table below:
Period Applicable Margin
------ -----------------
Until June 30, 1995 1.00%
July 1, 1995 - July 31, 1995 1.25%
August 1, 1995 - August 31, 1995 1.50%
September 1, 1995 - September 30, 1995 1.75%
October 1, 1995 - October 31, 1995 2.00%
November 1, 1995 - November 30, 1995 2.25%
December 1, 1995 - December 31, 1995 2.50%
January 1, 1996 - and thereafter 2.75%
(c) amending the definition of "Commitment" contained in such
Section 1.1 by deleting the dollar amount "$32,000,000" contained
therein and substituting in lieu thereof the dollar amount
"$30,800,000";
(d) deleting the definition of "Interest Payment Date" in its
entirety and substituting in lieu thereof the following new
definition:
"Interest Payment Date. As to any Loan, the last day of the
calendar quarter which includes the Drawdown Date thereof."; and
(e) deleting the definition of "Interest Period" in its entirety
and substituting in lieu thereof the following new definition:
"Interest Period. -- With respect to each Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and ending
on the last day of the calendar quarter; and (b) thereafter, each
period commencing on the last day of the next preceding Interest
Period applicable to such Loan and ending on the last day of the
period set forth above; provided that if any Interest Period with
respect to a Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding Business
Day."
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Section 1.2 Amendment to Section 2.3 of the Credit Agreement.
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Paragraph (b) of Section 2.3 of the Credit Agreement is hereby
deleted in its entirety and the following new paragraph (b) is
substituted in lieu thereof:
"(b) To the extent not already reduced or terminated pursuant to
Section 2.3(a), the Commitment shall automatically be reduced to
the amount set forth below as of the date set forth opposite such
amount below:
Date Commitment
--- ----------
07/01/95 $29,800,000
08/01/95 $28,300,000
09/01/95 $26,300,000
10/01/95 $24,300,000
11/01/95 $22,300,000
12/01/95 $20,300,000
01/01/96 $18,300,000
Upon each such reduction, the Borrower shall pay to the Bank the
full amount of any commitment fee then accrued on the amount of
such reduction. No such reduction of the Commitment may be
reinstated."
Section 1.3 - Amendment to Section 2.5 of the Credit Agreement.
---------------------------------------------------------------
Section 2.5 of the Credit Agreement is hereby deleted in its
entirety, and the following new Section 2.5 is hereby substituted
in lieu thereof:
"Section 2.5. - Interest on Loans.
------------------------------------
Except as provided in Section 2.6, each Loan shall bear interest
for the period commencing with the Drawdown Date thereof and ending
on the last day of the Interest Period with respect thereto at the
rate per annum which is the lesser of (i) the Base Rate plus the
Applicable Margin and (ii) the maximum rate permitted by applicable
law (after taking into account, without limitation, all payments
and benefits that, pursuant to applicable law, are deemed to be
interest or are deemed to reduce the principal balance of the
Note)."
Section 1.4. - Amendment to Section 2.6 of the Credit
------------------------------------------------------
Agreement.
-----------
Section 2.6 of the Credit Agreement is hereby amended by deleting
the text "four percent (4%) above the Base Rate" and substituting in
lieu thereof the text "four percent (4%) above the rate of interest
otherwise applicable to such Loans pursuant to Section 2.5".
Section 1.5. - Amendment to Section 2.7 of the Credit
-------------------------------------------------------
Agreement.
-----------
Section 2.6 of the Credit Agreement is hereby amended by deleting
the first two sentences thereof in their entirety and substituting
in lieu thereof the following text:
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"The Borrower shall give to the Bank written notice in the form
of Exhibit B hereto (or telephonic notice confirmed in writing in
the form of Exhibit B hereto, if requested by the Bank) of each
request for a Loan hereunder (a "Loan Request") no later than 1:00
p.m., Boston time, on the proposed Drawdown Date of any Loan. Each
such note shall specify (i) the principal amount of the Loan
requested, (ii) the proposed Drawdown Date of such Loan and (iii)
the Interest Period for such Loan."
Section 1.6. - Amendment to Section 2.8 of the Credit Agreement.
-----------------------------------------------------------------
Section 2.8 of the Credit Agreement is hereby deleted in its
entirety, and the following text is hereby substituted in lieu
thereof:
"Section 2.8. - Restructuring Fee.
-----------------------------------
The Borrower shall pay to the Bank, in immediately available
funds, a restructuring fee in the amount of $308,000 with one-half
of such restructuring fee ($154,000) payable upon the closing of
the Third Amendment Agreement dated as of December 29, 1994 among
the Borrower, Monterey and the Bank and the remaining one-half of
such restructuring fee ($154,000) (The "Remaining Restructuring
Fee") payable on July 1, 1995; provided however, that in the event
that, on or before June 30, 1995, the Borrower shall have paid the
Obligations in full in cash and the Commitment shall have been
reduced to zero, the Borrower shall not be obligated to pay to the
Bank the Remaining Restructuring Fee. The Borrower hereby
authorizes the Bank to debit, without notice, any of the Borrower's
accounts with the Bank in payment of all or any part of such
restructuring fee upon the same becoming due and payable."
Section 1.7. - Amendment to Section 2.9 of the Credit Agreement.
-----------------------------------------------------------------
Section 2.9 of the Credit Agreement is hereby deleted in its
entirety, and the following new Section 2.9 is hereby substituted
in lieu thereof:
"Section 2.9. - Intentionally Deleted."
Section 1.8.Amendment to Section 3.3 of the Credit Agreement.
-------------------------------------------------------------
Section 3.3 of the Credit Agreement is hereby deleted, and the
following new Section 3.3 is hereby substituted in lieu thereof:
"Section 3.3.Optional Repayments of Loans.
------------------------------------------
The Borrower shall have the right, at its election, to repay the
outstanding amounts of the Loans, as a whole or in part, at any
time without penalty or premium. The Borrower shall give the Bank,
no later than 1:00 p.m., Boston time, on the date of any proposed
prepayment pursuant to this Section 3.3 of Loans, written notice
specifying the proposed date of prepayment of the Loans and the
principal amount to be prepaid. Each partial prepayment of the
Loans shall be in an integral multiple of $100,000 and shall be
accompanied by the payment of accrued interest on the principal
prepaid to the date of prepayment."
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Section 1.9. - Amendment to Section 5.2 of the Credit Agreement.
----------------------------------------------------------------
Section 5.2 of the Credit Agreement is hereby amended by deleting
the text "Except as otherwise provided in the definition of the
term "Interest Period" with respect to Eurodollar Rate Loans,
whenever" in the second sentence thereof and substituting in lieu
thereof the word "Whenever".
Section 1.10. - Amendment to Section 5.3 of the Credit Agreement.
-----------------------------------------------------------------
Section 5.3 of the Credit Agreement is hereby deleted in its
entirety, and the following text is hereby substituted in lieu
thereof:
"Section 5.3. Intentionally Omitted."
Section 1.11. - Amendment to Section 5.4 of the Credit Agreement.
-----------------------------------------------------------------
Section 5.4 of the Credit Agreement is hereby deleted in its
entirety, and the following text is hereby substituted in lieu
thereof:
"Section 5.4. - Intentionally Omitted."
Section 1.12. - Amendment to Section 5.7 of the Credit Agreement.
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Section 5.7 of the Credit Agreement is hereby deleted in its
entirety, and the following text is hereby substituted in lieu
thereof:
"Section 5.7. - Intentionally Omitted."
Section 1.13. - Amendment to Section 6 of the Credit Agreement.
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Section 6 of the Credit Agreement is hereby amended by deleting
paragraph (c) thereof in its entirety and substituting in lieu
thereof the following new paragraph (c):
"(c) If a Default of Event of Default shall have occurred and be
continuing, and at any time following June 30, 1995, the Borrower
and Monterey shall, upon the request of the Bank, take all such
actions and execute all such documents, agreements, instruments
and financing statements, each in form and substance satisfactory
to the Bank, to grant, or confirm the grant to the Bank of, a
first priority, perfected security interest in and lien upon (i)
all Collateral described in Section 6(a) and (b) hereof, and (ii)
any or all fee and leasehold properties of the borrower and Monterey
not described in Section (6 (a) or (b) hereof including without
limitation, such filings with the United States Patent and Trademark
Office, such mortgages or deeds of trust, amendments of mortgages or
of deeds of trust, title policies, surveys, site assessments, legal
opinions and title searches or updates as the Bank may request."
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Section 1.14. - Amendment to Section 9.4 of the Credit Agreement.
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Paragraph (c) of Section 9.4 of the Credit Agreement is hereby
deleted in its entirety, and the following new paragraph (c) is
hereby substituted in lieu thereof:
"(c) from and after July 1, 1994, the Borrower shall be
permitted to repurchase, in an aggregate amount not to exceed
500,000 shares, solely those shares of its own issued and
outstanding common stock which employees or directors of the
Borrower transfer to the Borrower as payment for withholding or
payment obligations of such employees or directors arising from
the exercise of stock options under the Borrower's stock option
or stock grant plans."
Section 1.15. - Amendment to Section 9.7 of the Credit Agreement.
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Section 9.7 of the credit Agreement is hereby deleted in its
entirety, and the following new Section 9.7 is substituted in lieu
thereof:
"Section 9.7. - Liabilities to Tangible Net Worth Ratio.
---------------------------------------------------------
The Borrower will not cause or permit the ratio of
Consolidated Total Liabilities to Consolidated Tangible Net
Worth to exceed 0.70 to 1 at any time."
Section 1.16. - Amendment to Section 9.8 of the Credit Agreement.
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Section 9.8 of the Credit Agreement is hereby amended by deleting
the text "1.0 to 1" at the end thereof and substituting in lieu
thereof the text "1.3 to 1".
Section 1.17.- Amendment to Section 9.10 of the Credit Agreement.
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Section 9.10 of the Credit Agreement is hereby amended by
deleting the dollar figure "$130,000,000" set forth therein and
substituting in lieu thereof the dollar figure "$123,000,000".
Section 1.18.- Amendment to Section 9.15 of the Credit Agreement.
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Section 9.15 of the Credit Agreement is hereby deleted in its
entirety, and the following new Section 9.15 is substituted in lieu
thereof:
"Section 9.15.- Earnings Before Interest, Taxes,
--------------------------------------------------
Depreciation and Amortization.
-----------------------------
The Borrower will not cause or permit Earnings Before
Interest, Taxes, Depreciation and Amortization for the fiscal
quarter of the Borrower ending December 30, 1994 to be less
than $2,000,000 and for any other fiscal quarter of the
Borrower ending after December 30, 1994 to be less than
$5,100,000."
Section 1.19. - Addition of New Section 9.16 of the Credit
------------------------------------------------------------
Agreement.
----------
The Credit Agreement is hereby further amended by adding,
immediately Section 9.15 and immediately before Section 10, a new
Section 9.16 with the following text:
"Section 9.16. - Earnings Before Interest, Taxes, Depreciation
----------------------------------------------------------------
and Amortization to Consolidated Interest Expense.
--------------------------------------------------
The Borrower will not cause or permit the ratio of Earnings
Before Interest, Taxes, Depreciation and Amortization to
Consolidated Interest Expense for any fiscal quarter of the
Borrower ending after December 30, 1994 to be less than 6.0 to 1."
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Section 2. - Confirmation of Security Documents.
------------------------------------------------
The Security Documents are hereby ratified and confirmed as
follows:
Section 2.1. - ShowBiz Security Agreement.
------------------------------------------
The Borrower hereby ratifies and confirms the ShowBiz Security
Agreement and the security interests created thereby and
acknowledges and agrees that the Obligations under the Credit
Agreement, as amended hereby, continue to be secured by such
agreement.
Section 2.2. - ShowBiz Stock Pledge Agreement.
----------------------------------------------
The Borrower hereby ratifies and confirms the ShowBiz Stock
Pledge Agreement and the pledges and security interests created
thereby and acknowledges and agrees that the Obligations under the
Credit Agreement, as amended hereby, continue to be secured by such
agreement.
Section 2.3. - ShowBiz Mortgages.
---------------------------------
The Borrower hereby ratifies and confirms the ShowBiz Mortgages
and the mortgages and security interests created thereby and
acknowledges and agrees that the Obligations under the Credit
Agreement, as amended hereby, continue to be secured by the ShowBiz
Mortgages.
Section 2.4. - Monterey Security Agreement.
-------------------------------------------
Monterey hereby ratifies and confirms the Monterey Security
Agreement, as modified by the consent letter dated as of May 4,
1994 from the Bank to the Borrower and Monterey, and the security
interests created thereby and acknowledges and agrees that the
Guaranty Obligations (as defined in the Monterey Security
Agreement), including without limitation the obligation of Monterey
to guaranty the Obligations under the Credit Agreement as amended
hereby, continue to be secured by such agreement.
Section 2.5. - Guaranty.
------------------------
Monterey hereby ratifies and confirms the Guaranty and
acknowledges and agrees that the Obligations under the Credit
Agreement, as amended hereby, continue to be guaranteed by such
agreement.
Section 3. - Representations and Warranties.
---------------------------------------------
Each of the Borrower and Monterey hereby represents and warrants
to the Bank as follows:
(a) Representations and Warranties in Credit Agreement and
Other Loan Documents; No Default. The representations and
warranties of the Borrower and Monterey contained in the
Credit Agreement and the other Loan Documents were true and
correct in all material respects when made and continue to
be true and correct in all material respects on the
Effective Date (as hereinafter defined), except, in each
case to the extent of changes resulting from transactions
contemplated or permitted by the Loan Documents and the
Amendment and changes occurring in the ordinary course of
business which singly or in the aggregate are not
materially adverse, and to the extent that such
representations and warranties relate expressly to an
earlier date. No Default or Event of Default has occurred
and is continuing as of the Effective Date.
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(b) Authority, No Conflicts, Enforceability of Obligations,
Etc. Each of the Borrower and Monterey hereby confirms that
the representations and warranties of the Borrower and
Monterey contained in Sections 7.1 and 7.2 of the Credit
Agreement are true and correct on and as of the date hereof
as if made on the date hereof, treating this Amendment, the
Credit Agreement as amended hereby, and the other Loan
Documents, as amended hereby, as "Loan Documents" for the
purposes of making said representations and warranties.
Section 4. - Conditions to Effectiveness.
-----------------------------------------
Except as provided in the last sentence of this Section 4, this
Amendment shall be effective as of the date first written above
(the "Effective Date"), upon the delivery to the Bank of (a)
facsimile counterparts of this Amendment (to be followed
immediately by original counterparts) signed by each of the
Borrower, Monterey, and the Bank, in form and substance
satisfactory to the Bank, (b) the amount of $154,000, in
immediately available funds, representing one-half of the
restructuring fee referenced in Section 1.6 of this Amendment and
in Section 2.8 of the Credit Agreement, as amended hereby, with the
Bank hereby being authorized to debit, without notice, any of the
Borrower's accounts with the Bank in payment of all or any portion
of such fee, and (c) a certificate, duly certified by the President
or Treasurer of the Borrower and Monterey and in form and substance
satisfactory to the Bank, as to the lack of the existence or
continuance of any Default or Event of Default as of the date
thereof. Notwithstanding the foregoing, the amendments set forth
in Section 1.1(a), (b), (d), and (e), Section 1.3, Section 1.5, the
deletion of existing Section 2.8 of the Credit Agreement set forth
in Section 1.6, Section 1.8, Section 1.9, Section 1.10, Section
1.11 and Section 1.12 shall be effective as of March 22, 1995.
Section 5.- No Other Amendments; Etc.
-------------------------------------
Except as otherwise expressly provided by this Amendment, all of
the terms, conditions and provisions of the Credit Agreement and
the other Loan Documents are hereby ratified and confirmed in all
respects and shall remain in full force and effect. Each of the
Borrower and Monterey confirms and agrees that the Obligations of
the Borrower to the Bank under the Loan Documents, as amended and
supplemented hereby, are secured by, guaranteed under, and entitled
to the benefits, of the Security Documents. The Borrower, Monterey
and the Bank hereby acknowledge and agree that all references to
the Credit Agreement and the Obligations thereunder contained in
any of the Loan Documents shall be references to the Credit
Agreement and the Obligations, as affected hereby and as the same
may be amended, modified, supplemented, or restated from time to
time. The Security Documents and the perfected first priority
security interests of the Bank thereunder shall continue in full
force and effect, and the collateral security and guaranties
provided for in the Security Documents shall not be impaired by
this Amendment. This Amendment may be executed in any number of
counterparts, but all such counterparts shall together constitute
but one instrument. In making proof of this Amendment it shall not
be necessary to produce or account for more than one counterpart
signed by each party hereto by and against which enforcement hereof
is sought.
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Section 6. - No Implied Amendment, Etc.
----------------------------------------
Except as expressly provided herein, nothing contained herein
shall constitute an amendment or waiver of, impair or otherwise
affect any Obligations, any other obligations of the Borrower or
Monterey or any right of the Bank consequent thereon. The
amendments provided herein are limited strictly to their terms.
The Bank shall have no obligation to issue any further amendment
with respect to the subject matter hereof or any other matter.
Section 7. - Governing Law.
----------------------------
This Amendment shall be construed according to and governed by
the internal laws of The Commonwealth of Massachusetts without
reference to principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly
authorized.
SHOWBIZ PIZZA TIME, INC.
By:__________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF BOSTON
By:__________________________________
Title:_______________________________
BHC ACQUISITION CORPORATION
d/b/a Monterey
By:__________________________________
Title:_______________________________
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