FIRST RESTATED LOAN AGREEMENT

 

 

EXHIBIT 10.8.3

 

 

                          FIRST RESTATED LOAN AGREEMENT

                          -----------------------------

 

         THIS FIRST RESTATED LOAN AGREEMENT made and entered into this 1st day

of October 2003 by and among INTRUST Bank, N.A. (herein referred to as "Bank"),

TENT Finance, Inc., a Delaware corporation, and Total Entertainment Restaurant

Corp., a Delaware corporation (herein collectively referred to as "Borrower")

and the Subsidiaries, as defined below (herein collectively referred to as

"Guarantor").

 

         WITNESSETH:

 

         WHEREAS, the parties have previously executed a Loan Agreement dated

September 1, 1998 (the "Loan Agreement"); and

 

         WHEREAS, Borrower has that Bank extend the maturity date of the

Facility and Bank has agreed to this on certain terms and conditions; and

 

 

         WHEREAS, Guarantor has agreed to continue to guarantee the

Indebtedness.

 

         NOW, THEREFORE, in consideration of the terms and conditions contained

herein, the parties agree as follows:

 

                            ARTICLE I -- DEFINITIONS

 

         1.1. DEFINITIONS. When used in this Agreement, the following terms

shall have the following meanings:

 

                (a) "Accounts" shall mean the accounts of the Borrower and

Guarantor, as that term is defined in the UCC. "Accounts" include all

receivables, third-party claims, instruments, documents, chattel paper and

executory contract rights.

 

         (b) "Agreement" shall mean this First Restated Loan Agreement together

with all amendments and supplements hereto.

 

                (c) "Capital Lease Excess" shall mean the amount by which the

total outstanding under all Capital Leases of Borrower or Guarantor on a

consolidated basis exceeds the sum of one million dollars ($1,000,000.00).

 

         (d) "Capital Leases" shall mean leases of personal property that are

eligible for capital treatment under generally accepted accounting principles

consistently applied.

 

         (e) "Collateral" shall mean all of Borrower's and Guarantor's right,

title and interest in its Accounts, Equipment, Inventory, Fixtures, Chattel

Paper, Instruments, Documents, Deposit Accounts, Contracts, General Intangibles

(as each of those terms are defined in the UCC), executory contract rights and

third-party claims, along with all Borrower's and Guarantor's right, title and

interest in its Restaurants, including but not limited to, the Real Estate,

Leaseholds, FF&E, Accounts, Contracts, General Intangibles, Inventory, Licenses

and Permits and Trademark Licenses relating to the Restaurants, whether now

owned or hereafter acquired, including all proceeds from the disposition or

collection thereof.

 

         (f) "Contracts" shall mean all contracts, agreements and warranties

governing the use, occupancy, operation, management, name, or chain affiliation

and/or repair and service of a Restaurant, and all leases and occupancy

agreements, and all amendments, modifications, and supplements to any of the

foregoing, of Borrower and Guarantor.

 

                (g) "EBITDA" shall mean the aggregate of Borrower's and

Guarantor's consolidated net income before interest expense, tax expense,

depreciation expense and amortization expense cumulated for the fifty two (52)

weeks immediately preceding the date of determination, excluding EBITDA

generated by any New Restaurant.

 

         (h) "EBITDA Multiple" shall mean the factor 2.25.

 

         (i) "Equipment" shall mean Borrower's and each of Guarantor's equipment

as that term is defined in the UCC.

 

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         (j) "Event of Default" shall mean an event described in Article VII.

 

         (k) "Facility" shall mean the revolving credit facility extended to

Borrower by Bank evidenced by the Facility Note, as further described in Section

2.1 hereof.

 

                (l) "FF&E" shall mean Borrower's and each of Guarantor's

fixtures, furnishings, Equipment, furniture and other items of tangible personal

property now or hereafter located in the Restaurant or used in connection with

the operation, and the maintenance of all or any part of the Restaurant,

including, without limitation, appliances, machinery, equipment, signs, artwork,

furnishings, and specialized equipment for kitchens, laundries, bars,

restaurants, public rooms, linens, dishware, awnings, shades, blinds, floor

coverings, hall and lobby equipment, heating, lighting, plumbing, ventilating,

refrigerating, incinerating, elevators, escalators, air conditioning and

communication systems, security systems, sprinkler systems, fire prevention and

extinguishing apparatus, cash registers, computers and related equipment,

equipment for the maintenance, repair and cleaning of parking areas, walks,

driveways and common areas.

 

         (m) "General Intangibles" shall mean Borrower's and each of Guarantor's

general intangibles as that term is defined in the UCC.

 

         (n) "Indebtedness" shall refer to all debt, including all contract,

tort and statutory obligations of any nature of Borrower or Guarantor to Bank of

every kind and description, direct or indirect, primary or secondary, secured or

unsecured (including overdrafts), joint and several, absolute or contingent, due

or to become due, now existing or hereafter arising, regardless of how it may be

evidenced.

 

         (o) "Inventory" shall mean Borrower's and each of Guarantor's inventory

as that term is defined in the UCC.

 

         (p) "Leasehold" shall mean the interest of Borrower or Guarantor under

any ground lease or lease of improvements, including the leasehold estate

created thereby, and the buildings, structures, fixtures, additions,

enlargements, extensions, modifications, repairs, replacements and improvements

now or hereafter located thereon, plus all modifications, extensions and

renewals of any lease and all credits, deposits, options, privileges and rights

of Borrower or Guarantor as lessee under a lease, including, but not limited to,

the right, if any, to renew or extend the lease for a succeeding term or terms;

all the estates, rights, title, claims or demands whatsoever of Borrower or

Guarantor either in law or in equity, in possession or expectancy, of, in and to

the real estate covered by any lease or improvements located thereon; and all

easements, rights-of-way, strips of land, streets, ways, alleys, passages, sewer

rights, water, water courses, water rights and powers, air rights and

development rights.

 

                (q) "Licenses & Permits" shall mean all building permits,

certificates of occupancy and other permits, licenses, memberships, franchises,

contracts, approvals and authorizations necessary for Borrower or Guarantor to

own, use, occupy, operate or maintain a Restaurant or any part thereof as

operated now or in the future, including any license required for the service of

alcoholic beverages.

 

                 (r) "Loan Documents" shall mean and refer to this Agreement, the

Note, all mortgages or deeds of trust, all security agreements and assignments,

all guaranty agreements, and all other documents and agreements required to be

executed herein or executed pursuant hereto, and as any of them may be extended,

renewed, amended or supplemented from time to time.

 

         (s) "National Prime Rate" shall mean the Prime Rate as published in the

Wall Street Journal, Money Rates Table, as of the date of any interest rate

adjustment.

 

         (t) "Net Worth" shall mean at any date the net worth of Borrower,

consolidated with Guarantor, including intangible assets not to exceed

$6,000,000, as determined under GAAP.

 

         (u) "New Restaurant' shall mean a Restaurant under construction or in

its first fiscal quarter of operation, if the results of its operation are not,

and have not previously been, included in Borrower's EBITDA calculation.

 

         (v) "Note" shall mean the Facility Note, and all extensions, renewals,

modifications or replacements thereof.

 

         (w) "Operating Leases" shall mean leases of personal or real property

by Borrower or Guarantor, the payment of which is deducted from the results of

operations of Borrower or Guarantor prior to calculation of EBITDA.

 

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         (x) "Real Estate" shall mean the real estate, all buildings or

improvements situated thereof, together with all easements, servitudes, rights

of way, sewer rights and all appurtenances whatsoever, in any way now or

hereafter belonging to the real estate and the rents, issues and profits

thereof.

 

         (y) "Restaurant" shall mean the Real Estate, if owned by Borrower or

Guarantor; any Leasehold interest of Borrower or Guarantor; all improvements,

buildings, structures and appurtenances located on the Real Estate or any

leasehold, including bars, banquet, meeting and other public rooms, garage and

parking spaces, kitchens, storerooms and maintenance workshops and all public

grounds; and all Accounts, Contracts, General Intangibles, Inventory, Licenses

and Permits, FF&E, plans and specifications, Trademark Licenses and all other

property of every kind and description used or useful in the ownership,

occupancy, operation, and maintenance of the restaurant as currently operated or

proposed to be operated in the future, together with any and all proceeds of the

foregoing, including, without limitation, any and all cash and noncash

consideration received from the sale, exchange, lease, collection or other

disposition of any of the foregoing, any payment received from any insurer or

other person or entity as a result of the destruction, loss, theft, damage or

other involuntary conversion of whatever nature of any of the foregoing, and all

replacements, substitutions for the foregoing or accessions thereto.

 

                (z) "Subsidiaries" shall mean on the date of this Agreement, the

entities identified on Attachment "A" hereto. "Subsidiaries" shall further

include all future entities owned in whole or in part by TENT Finance, Inc. to

the extent such entities own and operate Fox & Hound Restaurants, Bailey's

Sports Grilles, or other ventures financed in whole or in part by proceeds of

the Facility.

 

                (aa) "Trademark Licenses" shall mean all trademark rights, trade

names, trade name rights, patents, patent rights, and fictitious name rights

necessary to enable Borrower or Guarantor to conduct its business without

conflict with the rights of others, including contracts granting to Borrower or

Guarantor any right to use any Trademark or name with regard to a Restaurant or

part thereof.

 

                (bb) "UCC" shall mean the Uniform Commercial Code as from time

to time in effect in the State of Kansas.

 

                          ARTICLE II -- NOTE AND SECURITY

 

         Section 2.1. FACILITY. Pursuant to the terms and conditions of this

Agreement, Bank agrees to establish a Facility of $20,000,000 in favor of

Borrower, to be evidenced by a Facility Note, which shall mature on October 1,

2006. A copy of the Facility Note is attached hereto as Attachment "B". Advances

under the Facility will be made by Bank to Borrower from time to time in

accordance with the terms and conditions of this Agreement. Borrower shall use

all advances solely for the purposes set forth in Section 2.4 hereof.

 

         Section 2.2. TERMS OF PAYMENT ON FACILITY. Interest on the Note, or any

advance thereunder, shall be adjusted on the first day of each month to National

Prime Rate as of such date less 1/2%. Accrued interest shall be due on the first

day of each month beginning October 1, 2003. Principal shall be due and payable

at maturity.

 

         Section 2.3. LIMITATIONS ON THE FACILITY. Borrower may borrow,

partially or wholly repay its borrowings, and reborrow, by requesting advances

from the Facility, so long as:

 

         (a) The total Indebtedness owed Bank, including all principal and

accrued interest does not exceed the Facility at any one time;

 

         (b) None of the terms and conditions of this Agreement are in default

 

         (c) Bank has not determined that there has been a material adverse

change in the financial condition of Borrower on a consolidated basis;

 

         (d) Neither Borrower nor Guarantor is in default under any loan, any

other financial obligation, or any other material agreement;

 

         (e) The advance, when aggregated with all outstanding Indebtedness of

Borrower, will not result in a breach of the financial covenants set forth in

Section 5.12 hereof, as of the date of such loan or advance hereunder; and

 

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         (f) The advance, when aggregated with all outstanding loans, advances

or loan commitments by Bank, to Borrower (or to other persons or entities

required by law to be aggregated with the outstanding loans of Borrower), would

not exceed Bank's legal lending limit determined pursuant to federal regulations

and issuances of the Office of the Comptroller of the Currency, as of the date

of such loan or advance hereunder.

 

         Section 2.4. USE OF PROCEEDS. The proceeds from the Facility shall be

used for working capital and restaurant development, including acquisition of

furnishings, fixtures, equipment and leaseholds for Fox & Hound restaurants,

English Pub & Grille restaurants, Bailey's Sports Grille, Baileys Pub & Grille

restaurants, or other ventures approved by Bank. Additionally, in strict

accordance with the prior written consent of Bank, which may be withheld in

Bank's sole discretion, Borrower may use proceeds from this Facility to purchase

treasury stock.

 

         Section 2.5. SECURITY. As security for the entire Indebtedness to Bank,

Borrower and Guarantor hereby pledge, assign and grant a first security interest

in favor of Bank in the Collateral of Borrower and Guarantor. It is acknowledged

that Borrower may from time to time form additional Subsidiaries for the purpose

of operating additional locations. From the date of formation of such new

Subsidiary, it shall be deemed a Guarantor hereunder, subject to the terms and

condition of this Agreement. Borrower agrees to promptly notify Bank of the

formation of any new Subsidiary and to cause such Subsidiary to deliver to Bank

an unlimited guaranty of the Indebtedness and other Loan Documents reasonably

requested by Bank to grant and perfect in Bank a first and prior security

interest in the Collateral held by such new Subsidiary.

 

         Section 2.6. RENEWALS AND EXTENSIONS. If no Event of Default has

occurred or is continuing, Borrower shall have the option to renew the

Indebtedness outstanding under the Facility Note on its maturity date. Such

renewal shall be evidenced by a term note having a maturity date of October 1,

2010 (the "Renewal Note"). Interest on the Renewal Note shall be adjusted on the

first day of each month to National Prime Rate as of such date less 1/2%. The

Renewal Note shall provide for equal installments of principal and interest

commencing on November 1, 2006 and continuing each month thereafter as necessary

to fully amortize the Indebtedness plus future interest over the term. As a

precondition of such renewal, Borrower and Guarantor agree to execute and

deliver to Bank such additional documents as may be required by Bank to grant,

continue or perfect Bank's interest in the Collateral, as it may exist at the

time of such renewal.

 

Any renewal, extension or modification of the Facility Note, or any advance made

pursuant to the terms of such note, or any other indebtedness which Borrower may

have with Bank in the future, shall be subject to the terms of this Agreement.

Except as expressly set forth herein, Bank is under no obligation to renew any

obligation when it matures.

 

 

ARTICLE III -- REPRESENTATIONS AND WARRANTIES

 

         Borrower and Guarantor hereby represent and warrant, and so long as any

indebtedness from Borrower to the Bank remains outstanding, continuously

represents and warrants as follows:

 

         Section 3.1. LEGAL STATUS. Borrower is a corporation duly organized and

existing under the laws of the State of Delaware, and is qualified to do

business, and is in good standing, in all jurisdictions in which it conducts its

business. Guarantor is an entity as described on Attachment "A", organized and

existing under the laws set forth on Attachment "A", and is qualified to do

business, and is in good standing, in all jurisdictions in which it conducts its

business.

 

         Section 3.2. NO VIOLATION. The making and performance by Borrower and

Guarantor of this Agreement does not violate any provision of law, or result in

a breach of, or constitute a default under, Borrower's or Guarantor's articles

of incorporation and bylaws, or any Loan Documents, agreement, indenture or

other instrument to which Borrower or Guarantor may be a party or by which it

may be bound.

 

          Section 3.3. LITIGATION. There are no pending or threatened actions or

proceedings before any court or administrative agency against Borrower or any

Guarantor which would have a material adverse effect upon the financial

condition or results of operations of Borrower or any Guarantor other than those

heretofore disclosed to Bank in writing.

 

         Section 3.4. CORRECTNESS OF FINANCIAL STATEMENTS. The financial

statements heretofore and hereafter delivered by Borrower to Bank present fairly

the financial condition of Borrower, consolidated with Guarantor, and have been

prepared in accordance with generally accepted accounting principles

consistently applied. As of the date of each such financial statement, and since

such date, there has been no material adverse change in the financial condition

or results of operations of Borrower or Guarantor, nor has Borrower or Guarantor

mortgaged, pledged or granted a security interest in, or encumbered, any assets

or properties since such date.

 

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         Section 3.5. AUTHORIZATION. The Loan Documents have been duly

authorized, executed and delivered by Borrower and Guarantor and are the legal,

valid and binding obligations of Borrower and Guarantor enforceable in

accordance with their respective terms except as rights to indemnity and

contribution contained in the Loan Documents may be limited by applicable law

and except as enforceability may be limited by bankruptcy, insolvency,

moratorium and similar laws affecting creditors' rights.

 

         Section 3.6. NO SUBORDINATION. The obligations of Borrower and

Guarantor under this Agreement and the Loan Documents are not subordinated in

right of payment or in lien priority to any obligation of Borrower or Guarantor.

 

          Section 3.7. PERMITS AND FRANCHISES. The Borrower or Guarantor, as

applicable, now possesses, and will hereafter possess, all Licenses and Permits

and Trademark Licenses, except where the failure to possess such Licenses and

Permits and Trademark Licenses would not have a material adverse effect upon the

financial condition or results of operations of the Borrower or any Guarantor.

 

 

                       ARTICLE IV -- CONDITIONS PRECEDENT

 

         The obligation of Bank to make any advance under the Loan Agreement, is

subject to the fulfillment of the following conditions:

 

         Section 4.1. APPROVAL OF BANK COUNSEL. All legal matters incidental to

all such advances hereunder shall be satisfactory to legal counsel of Bank.

 

         Section 4.2. COMPLIANCE. The representations and warranties contained

herein shall be true as of the date of the signing of this Agreement and on the

date of any advance, no Event of Default, as defined in Article VII herein, and

no condition, event or act which, with the giving of notice or the lapse of time

or both, would constitute an Event of Default, shall have occurred.

 

         Section 4.3. DOCUMENTATION. Borrower shall have delivered to Bank in

form and substance satisfactory to Bank the following described documents:

 

         (a) This Agreement and other Loan Documents duly executed by Borrower

and Guarantor granting to Bank a first and prior perfected security interest in

the Collateral;

 

         (b) Certified copy of Corporate Resolution of Borrower ratifying this

Agreement and authorizing the execution of the Loan Documents;

 

         (c) Certified copy of Resolution of Guarantor ratifying this Agreement

and authorizing the Guaranty Agreement and other Loan Documents;

 

         (d) Unlimited unconditional Guaranty Agreement from the Guarantors; and

 

         (e) Such other documentation as the Bank may reasonably require.

 

 

ARTICLE V -- AFFIRMATIVE COVENANTS

 

         Borrower and Guarantor covenant that so long as Borrower is indebted to

Bank under this Agreement, Borrower and Guarantor will:

 

         Section 5.1. PUNCTUAL PAYMENT. Punctually pay to Bank all payments

required to be made under this Loan Agreement and any Note.

 

         Section 5.2. ACCOUNTING RECORDS. Maintain adequate books and accounts

in accordance with generally accepted accounting principles consistently

applied, so that any time, and from time to time, the true and complete

financial condition of Borrower consolidated with Guarantor is fairly presented

and can be readily determined, and permit any representative of Bank at any

reasonable time, to inspect, audit and examine such books and accounts of

Borrower or any Guarantor and permit Bank to make and obtain copies of any such

books and accounts, and to permit any representative of Bank to inspect the

properties of Borrower and any Guarantor.

 

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         Section 5.3.   FINANCIAL STATEMENTS:   Furnish Bank:

 

         (a) Not later than 105 days after, and as of the end of each fiscal

year, a financial statement of Borrower prepared by a certified public

accountant to include balance sheet and income statement;

 

         (b) Not later than 50 days after the end of each calendar quarter, a

balance sheet and statement of income of Borrower, consolidated with Guarantor,

in a form satisfactory to Bank, certified correct by an officer of Borrower;

 

         (c) From time to time such other information as Bank may reasonably

request.

 

         Section 5.4. NOTICE TO ACCOUNTANTS. Notify Borrower's and Guarantor's

accountants in writing that Bank intends to rely upon financial information

prepared by such accountants on behalf of Borrower and each Guarantor in

determining whether to make any extension of credit covered by this Loan

Agreement, including any advance, renewal or extension thereto.

 

         Section 5.5. EXISTENCE. Preserve and maintain the existence and all of

the rights, privileges and franchises of Borrower and Guarantor; conduct all

business in an orderly, efficient, and regular manner; and comply in all

material respects with the requirements of all applicable laws, rules,

regulations and orders of a governmental authority except where the failure to

preserve and maintain such rights, privileges and franchises or where the

failure to comply with such laws, rules, regulations and orders would not have a

material adverse effect upon the financial condition or results of operations of

Borrower or any Guarantor. Provided, further, that upon the prior written

consent of Bank which shall not be unreasonably withheld or delayed, Borrower or

Guarantor may relocate, consolidate or close any Restaurant if such relocation,

consolidation or discontinuance would not have a material adverse effect upon

the financial condition or results of operations of Borrower or any Guarantor.

 

         Section 5.6. INSURANCE. Maintain and keep in force insurance of the

types and in amounts customarily carried in the line of business similar to that

of Borrower and Guarantor, including, but not limited to, fire, public

liability, property damage, workers' compensation, and carried with companies

and in amounts reasonably satisfactory to Bank; and Borrower and Guarantor shall

deliver to Bank from time to time, at Bank's request, schedules setting forth

all insurance then in effect. Borrower and Guarantor shall maintain and keep in

force product liability insurance in such amounts deemed adequate and

economically feasible by the parties.

 

         Section 5.7. FACILITIES. Keep all Borrower's and Guarantor's properties

in good repair and condition, and from time to time make necessary repairs,

renewals and replacements thereto as shall be reasonably necessary for the

proper conduct of its business. . Provided, further, that upon the prior written

consent of Bank which shall not be unreasonably withheld or delayed, Borrower or

Guarantor may relocate, consolidate or close any of its facilities if such

relocation, consolidation or discontinuance would not have a material adverse

effect upon the financial condition or results of operations of Borrower or any

Guarantor. Borrower and Guarantor shall promptly satisfy any and all mechanic's

or materialmen's liens filed on any of its facilities.

 

         Section 5.8. TAXES AND OTHER LIABILITIES. Pay and discharge when due

any and all indebtedness, obligations, assessments, and taxes of Borrower or

Guarantor, except such as it may in good faith contest or as to which a bona

fide dispute may arise.

 

         Section 5.9. LITIGATION. Promptly give notice