Exhibit 10 (n)(1)
THIRD MODIFICATION AGREEMENT
----------------------------
Date: Effective December 4, 1998
Bank One: BANK ONE,
TEXAS, NATIONAL
ASSOCIATION, a
national banking
association
Bank One's Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Company: CEC ENTERTAINMENT, INC.
(f/k/a ShowBizPizza Time,
Inc.), a Kansas corporation
Company's Address: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
R E C I T A L S:
A. Bank One and Company entered into a loan
evidenced, inter alia, by the following documents:
1. Loan Agreement dated as of June 27,
1995 by and between Company and Bank One for an aggregate
loan in the amount of $5,000,000.
2. Revolving Credit Note dated June 27,
1995 in the original principal amount of $5,000,000
signed by Company and payable to Bank One.
B. Bank One and Company modified the Loan to
increase its principal balance to $15,000,000, extend the
maturity date to June 15, 1998 and make certain other
changes in the terms and conditions of the Loan
evidenced, inter alia, by the following documents:
1. Modification and Extension Agreement
dated August 1, 1996 by and between Company and Bank One
for an aggregate loan in the amount of $15,000,000.
2. Restated Revolving Credit Note dated
August 1, 1996 in the original principal amount of
$15,000,000 signed by Company and payable to Bank One.
C. Bank One and Company modified the Loan to allow
for transfer of certain assets and make certain other
changes in the terms and conditions of the Loan
evidenced, inter alia, by the following documents:
1. Supplemental Agreement ("Supplemental
Agreement") dated as of September 29, 1997 by and between
Company and Bank One.
2. Guarantee Agreement - ShowBiz Nevada,
Inc. dated as of September 29, 1997 made by ShowBiz
Nevada, Inc. in favor of Bank One.
3. Guarantee Agreement - ShowBiz
Merchandising, Inc. dated as of September 29, 1997 made
by ShowBiz Merchandising, Inc. in favor of Bank One.
4. Guarantee Agreement - SPT Properties
Company, Inc. dated as of September 29, 1997 made by SPT
Properties Company, Inc. in favor of Bank One.
5. Guarantee Agreement - ShowBiz Cayman
Islands, Inc. dated as of September 29, 1997 made by
ShowBiz Cayman Islands, Inc. in favor of Bank One.
D. Bank One and Company modified the Loan to
extend the maturity date to June 1, 2000 and make certain
other changes in the terms and conditions of the Loan
evidenced, inter alia, by the following documents:
1. Second Modification and Extension
Agreement dated effective June 14, 1998 by and between
Company and Bank One for an aggregate loan in the amount
of $15,000,000.00.
2. Second Restated Revolving Credit Note
dated effective June 14, 1998 in the original principal
amount of $15,000,000.00 signed by Company and payable to
Bank One.
E. Bank One is the owner and holder of the Note,
Loan Agreement, and other Loan Documents.
F. Company has requested that Bank One (i) modify
all Loan Documents to evidence Company's new name "CEC
Entertainment, Inc.", (ii) increase the principal amount
of the Note to $30,000,000.00 and (iii) modify certain
other terms of the Note or Loan Documents regarding
financial reporting or covenants, and Bank One is willing
to do so on the terms set out in this Agreement.
IT IS AGREED:
1. Definitions. The definition of terms
used in the Loan Agreement and Supplemental Agreement
shall have the same meanings in this Agreement unless
otherwise defined. The term "Loan Documents" in Section
1.1 of the Loan Agreement shall be amended to include all
the documents described above and this Agreement.
2. Principal Balance. Bank One and
Company acknowledge that as of the date hereof the
outstanding principal balance of the Note is Zero Dollars
($-0-).
3.Change of Name. The definition of
Company in all Loan Documents shall be changed from
"ShowBiz Pizza Time, Inc." to "CEC Entertainment, Inc."
to reflect the change of name of the Company adopted by
the Company through the action of its shareholders and
board of directors on or about June 25, 1998 as filed
with the Secretary of State of Kansas by a Certificate of
Amendment to the Restated Articles of Incorporation of
Company on June 25, 1998.
4. Revolving Credit Commitment. The
definition of "Revolving Credit Commitment" in Section
1.1. Defined Terms of the Loan Agreement shall be amended
as follows:
"Revolving Credit Commitment" shall mean an
amount equal to Thirty Million and No/100 Dollars
($30,000,000.00) less the Unsecured LC Exposure Amount,
as the same may be reduced from time to time or
terminated pursuant to Sections 2.4, 2.11 or 9.1 hereof.
5. Restated Note. The Note shall be
restated in a form entitled "Third Restated Revolving
Credit Note" which shall state its original principal
amount as being Thirty Million and No/100 Dollars
($30,000,000.00) to conform to the amended definition of
"Revolving Credit Commitment" stated in this Agreement,
a copy of the form is attached as Exhibit "A". The terms
"Note(s)" or "Revolving Credit Note(s)" shall include the
Third Restated Revolving Credit Note for all purposes and
in all Loan Documents. Bank One shall retain the written
instrument evidencing the original Revolving Credit Note
dated June 27, 1995 in the original principal amount of
$5,000,000, the original Restated Revolving Credit Note
dated August 1, 1996 in the original principal amount of
$15,000,000, and the original Second Restated Revolving
Credit Note dated effective June 14, 1988 in the original
principal amount of $15,000,000, all of which shall be
deemed to be superseded by the written instrument
evidencing the Third Restated Revolving Credit Note dated
on even date with this Agreement in the original
principal amount of $30,000,000. Each such superseded
note shall be maked "SUPERSEDED BY THE WRITTEN INSTRUMENT
EVIDENCING THE THIRD RESTATED REVOLVING CREDIT NOTE DATED
EFFECTIVE DECEMBER 4, 1998" and copies of such notes will
be delivered to Company contemporaneously with the
execution of this Agreement.
6. Guaranties. Section 5.2. Conditions
to All Revolving Credit Loans of the Loan Agreement shall
be amended by adding the following paragraph and an
additional Section 6.13. Guaranty shall be added to the
Loan Agreement as follows:
Section 5.2. Conditions to All Revolving Credit
Loans. (d) If a Guaranty from one or more Subsidiary of
the Company is reasonably deemed necessary by Bank One,
those Subsidiaries of the Company shall have executed and
delivered an unconditional Guaranty of payment and
performance, in a form reasonably satisfactory to Bank
One, of all of the Indebtedness or other obligations of
the Company arising or incurred by reason of this
Agreement.
Section 6.13. Guaranty. If (i) the Company or
any Subsidiary at any time after the Effective Date and
prior to the Termination Date shall create or acquire any
Subsidiary in any manner whatsoever, and (ii) a Guaranty
from any such Subsidiary is reasonably deemed necessary
by Bank One, such Subsidiary shall promptly execute a
form of Guaranty, in a form reasonably satisfactory to
Bank One, guaranteeing the payment and performance of all
of the Indebtedness or other obligations of the Company
arising or incurred by reason of this Agreement.
The Company and each Subsidiary and any
Subsidiary created or acquired in the future, acknowledge
that there is adequate consideration for the execution of
a Guaranty, including but not limited to the continuing
availability of the Commitment, and that the foregoing
affirmative covenant is a material inducement to Bank One
to make the Commitment during the Commitment Period.
7. Financial Statements and Other
Information. Section 6.1. Financial Statements and Other
Information of the Loan Agreement shall be amended by
adding the following paragraph as follows:
(i) Contingent Liabilities - promptly,
and in any event within thirty (30) days after a
Responsible Officer of the Company becomes aware of any
Material actual or contingent liability affecting the
Company or any of its Subsidiaries and which, is required
to be disclosed in accordance with GAAP, a written
statement of a Responsible Officer describing the nature,
amount and status of such matters and what action the
Company or a Subsidiary has taken, is taking, or proposes
to take with respect thereto.
8. Lease-Backs. Section 8.7. Lease-
Backs of the Loan Agreement shall be amended and restated
as follows:
SECTION 8.7.Lease-Backs. Notwithstanding the provisions of
Section 8.2 hereof, the Company will not and will not
permit any Subsidiary to enter into any arrangements,
directly or indirectly, with any Person, whereby the
Company or any of its Subsidiaries shall sell or
transfer any property, whether now owned or hereafter
acquired, used or useful in their respective businesses
in connection with the rental or lease of the property
so sold or transferred or of other property which the
Company or any of its Subsidiaries intends to use for
substantially for the same purpose or purposes as the
property so sold or transferred. Notwithstanding the
foregoing prohibition, the Company or its Subsidiaries
may enter into an arrangement commonly referred to as a
"Sale and Lease-Back ", directly or indirectly, with
any Person, whereby the Company or any of its
Subsidiaries shall sell or transfer real or personal
property used for a restaurant location or operation
for a restaurant utilizing the "▇▇▇▇▇ ▇. Cheese"
restaurant theme or another restaurant theme or concept
developed or utilized by the Company or any of its
Subsidiaries, provided, however that (i) the aggregate
amount, value or obligations of or related to such "Sales
and Lease-Backs" shall not exceed $10,000,000 at any one
time, and (ii) such "Sales and Lease-Backs" shall be used
only for real or personal property acquired or
constructed by the Company or any of its Subsidiaries on
or after December 4, 1998.
9. Loans. An additional Section 8.9.
Company Indebtedness shall be added to the Loan Agreement
as follows:
SECTION 8.9. Company Indebtedness. Except for
(i) loans among the Company and its Subsidiaries and
Affiliates and (ii) as stated below in this section, on
or after October 1, 1998, the Company shall not, and
shall not permit any Subsidiary or Affiliate to directly
or indirectly, make any loans, otherwise extend credit or
make financial accommodations to or for the benefit of
any unrelated Person or Persons. The Company or its
Subsidiaries or Affiliates may make loans, otherwise
extend credit or make financial accommodations to or for
the benefit of any unrelated Person or Persons in the
ordinary course of business of the Company, Subsidiaries
or Affiliates provided that the aggregate of such loans,
credit or accommodations to all such Persons shall not
exceed $5,000,000 at any one time without the prior
written approval of Bank One, which approval may be
granted or withheld in the sole discretion of Bank One.
10. Acknowledgment of Indebtedness.
Company acknowledges that as of the date of this
Agreement, it is well and truly indebted to Bank One
pursuant to the terms of the Note, as modified hereby.
Company hereby promises to pay to Bank One the
indebtedness evidenced by the Note in accordance with the
terms thereof, as modified hereby, and shall observe,
comply with, and perform all of the obligations, terms,
and conditions under or in connection with the Note and
all other Loan Documents.
11. Ratification of Loan Documents.
Except as provided herein, the terms and provisions of
the Note and the other Loan Documents shall remain
unchanged and shall remain in full force and effect. Any
modification herein of the Note, Loan Agreement and the
other Loan Documents shall in no way impair the security
of the Loan Documents for the payment of the Note. The
promissory notes defined herein and in all other Loan
Documents as the "Note" or "Revolving Credit Note(s)"
shall hereafter mean the Note as modified by this
Agreement. The Loan Agreement, the Note and the other
Loan Documents as modified and amended hereby are hereby
ratified and confirmed in all respects.
12. Ratification by Guarantors. Each of
ShowBiz Nevada, Inc., a Nevada corporation, ShowBiz
Merchandising, Inc., a Nevada corporation, SPT Properties
Company, Inc., a Nevada corporation, and ShowBiz Cayman
Islands, Inc., a Cayman Islands corporation, ratifies and
confirms its respective Guarantee Agreements dated as of
September 29, 1997, as being binding and continuing and
consent to the terms of this Agreement.
13. No Waiver. Company acknowledges that
the execution of this Agreement by Bank One is not
intended nor shall it be construed as (I) an actual or
implied waiver of any default under the Note or any other
Loan Document or (ii) an actual or implied waiver of any
condition or obligation imposed upon Company pursuant to
the Note or any other Loan Document, except to the extent
expressly set forth herein.
14. Expenses. Contemporaneously with the
execution and delivery hereof, Company shall pay, or
cause to be paid, all reasonable costs and expenses
incident to the preparation hereof and the consummation
of the transactions specified herein, including without
limitation fees and expenses of legal counsel to Bank
One.
15. Counterparts. This Agreement may be
executed in any number of counterparts with the same
effect as if all parties hereto had signed the same
document. All such counterparts shall be construed
together and shall constitute one instrument; but in
making proof hereof it shall only be necessary to produce
one such counterpart.
16. Benefit. The terms and provisions
hereof shall be binding upon and inure to the benefit of
the parties hereto, their heirs, representatives,
successors and permitted assigns.
17. Release and Waiver of Usury Claim.
Company hereby releases Bank One, its successors and
assigns, from all claims, demands, liabilities and causes
of action which Company may be entitled to assert
(although no such claims are known to exist) against Bank
One by reason of Bank One's contracting, charging or
receiving for the use, forbearance or detention of money,
interest on the Loan evidenced by the Note prior to the
execution of this Agreement in excess of that permitted
to be charged to Company under applicable law.
18. Release and Waiver of Other Claims.
In consideration of the terms, conditions and provisions
of this Agreement and the other benefits received by
Company hereunder, Company further hereby releases,
relinquishes and forever discharges Bank One, as well as
its parent and subsidiary corporations, predecessors,
successors, assigns, agents, officers, directors,
employees, representatives, attorneys and accountants of
and from any and all claims, demands, actions, causes of
action of any and every kind or character, whether known
or unknown, which Company may have against Bank One and
its parent and subsidiary corporations, predecessors,
successors, assigns, agents, officers, directors,
employees, representatives, attorneys or accountants
arising out of or with respect to any and all
transactions solely relating to the Note or any renewal
thereof, and/or the Loan Documents, but excluding any
other transactions between the parties, occurring prior
to the date hereof, including any other loss, expense
and/or detriment, of any kind or character, growing out
of or in any way connected with or in any way resulting
from the acts, actions or omissions of Bank One and its
parent and subsidiary corporations, predecessors,
successors, assigns, agents, officers, directors,
employees, representatives, attorneys, or accountants,
and including any loss, cost or damage in connection with
any breach of fiduciary duty, breach of any duty of fair
dealing, breach of confidence, breach of funding
commitment, undue influence, duress, economic coercion,
conflict of interest, negligence, bad faith, malpractice,
violations of the racketeer influenced and corrupt
organizations act, intentional or negligent infliction of
mental duress, tortuous interference with contractual
relations, tortuous interference with corporate
governance or prospective business advantage, breach of
contract, deceptive trade practices, libel, slander or
conspiracy.
19. Construction. The parties
acknowledge that the parties and their counsel have
reviewed and had the opportunity to revise this Agreement
and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the
drafting party shall not be employed in the
interpretation of this Agreement or any amendments or
exhibits hereto.
20. Entire Agreement. THIS AGREEMENT,
THE NOTE AND THE WRITTEN LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, this Agreement is executed
effective as of the date first above written.
BANK ONE, TEXAS, National Association
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
CEC ENTERTAINMENT, INC.
By:
Name: ▇▇▇▇▇ ▇. Page
Title: Executive Vice President, Chief
Financial Officer and Treasurer
SHOWBIZ NEVADA, INC.
By:
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director and President
SHOWBIZ MERCHANDISING, INC.
By:
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director and President
SPT PROPERTIES COMPANY, INC.
By:
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director and President
SHOWBIZ CAYMAN ISLANDS, INC.
By:
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Director and President
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇▇ ▇. ▇▇▇▇, Vice President of
BANK ONE, TEXAS, NATIONAL ASSOCIATION, a national banking
association, on behalf of said national association.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires:
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇▇▇ ▇. Page, Executive Vice
President, Chief Financial Officer and Treasurer of CEC
ENTERTAINMENT, INC., a Kansas corporation, on behalf of
said corporation.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires:
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇ ▇▇▇▇▇▇▇▇▇, Director and
President of SHOWBIZ NEVADA, INC. a Nevada corporation,
on behalf of said corporation.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires:
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇ ▇▇▇▇▇▇▇▇▇, Director and
President of SHOWBIZ MERCHANDISING, INC. a Nevada
corporation, on behalf of said corporation.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires:
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇ ▇▇▇▇▇▇▇▇▇, Director and
President of SPT PROPERTIES COMPANY, INC. a Nevada
corporation, on behalf of said corporation.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires:
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ &
&
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ &
This instrument was acknowledged before me on
December 10, 1998, by ▇▇▇ ▇▇▇▇▇▇▇▇▇, Director and
President of SHOWBIZ CAYMAN ISLANDS, INC. a Cayman
Islands corporation, on behalf of said corporation.
Notary Public, State of Texas
(SEAL)
(Please Print Name of Notary)
My Commission expires: