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EXHIBIT 10.31
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT ("Amendment") is made and
entered into effective as of July __, 1996 by and among EATERIES, INC., an
Oklahoma corporation ("Eateries"), PEPPERONI GRILL, INC., an Oklahoma
corporation ("PGI") (Eateries and PGI are hereinafter collectively referred to
as the "Borrowers" and individually as a "Borrower"), and LIBERTY BANK AND
TRUST COMPANY OF OKLAHOMA CITY, NATIONAL ASSOCIATION (hereinafter referred to
as the "Bank").
RECITALS
A. The Borrowers and the Bank entered into that certain Loan
Agreement dated August 31, 1995 (the "Loan Agreement"), pursuant to which the
Bank agreed, on the terms and conditions set forth therein, to establish a
revolving loan facility in favor of the Borrowers in the principal amount not
to exceed $3,000,000 (the "Loan").
B. The Borrowers have requested that the Bank increase the
aggregate principal amount that may be drawn under the Loan from $3,000,000 to
$5,000,000 and have also requested that the Bank renew and extend the Loan for
a one year period until August 31, 1999.
C. The Bank is willing to increase the aggregate principal amount
that may be drawn under the Loan to $5,000,000 and is willing to renew and
extend the Loan to August 31, 1999, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby amend
the Loan Agreement as follows:
1. DEFINITIONS.
1.1 Definitions Incorporated by Reference. Capitalized terms used
herein and not otherwise defined have the respective meanings assigned to them
in the Loan Agreement.
1.2 Definition Used Only in This Amendment. For purposes of this
Amendment only, the following term has the meaning indicated below:
"REPLACEMENT REVOLVING NOTE" shall mean the promissory note to be
executed and delivered by the Borrowers pursuant to this Amendment, in
substantially the form attached hereto as Exhibit "A-1."
1.3 Amendments to Definitions in Loan Agreement. The definitions
of the terms "Clean-Down Amount" and "Revolving Commitment" are hereby amended,
from and after the date of this Amendment, to read as follows:
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"CLEAN-DOWN AMOUNT" means $2,000,000 for each of the Clean-Down
Periods commencing November 30, 1996, and ending January 31, 1999.
"REVOLVING COMMITMENT" shall mean the sum of Five Million Dollars
($5,000,000), unless reduced by the Borrowers in accordance with the
provisions of Subsection 2.10 hereof.
The parties agree that, from and after the date of this Amendment, unless the
context otherwise requires: (i) all references to the "Revolving Note"
appearing in the Loan Agreement or any other Loan Documents shall mean and
refer to the Replacement Revolving Note, together with any and all renewals,
extensions or replacements thereof, amendments or modifications thereto or
substitutions therefor, and (ii) the term "Loan Documents" shall include the
Replacement Revolving Note.
2. EXTENSION OF REVOLVING LOAN AND MATURITY DATE.
2.1 Renewal and Extension of the Revolving Loan. Subject to the
terms and conditions and relying on the representations and warranties
contained herein and in the Loan Agreement, the Bank agrees to renew and
increase the Revolving Loan from the original principal amount of $3,000,000 to
the amended principal amount of $5,000,000, and further agrees to extend the
maturity of the Revolving Loan to August 31, 1999. Accordingly, the Loan
Agreement is amended as follows:
(a) the definition of "Revolving Commitment" is amended
as set forth in Subsection 1.3 above;
(b) Subsection 2.1 of the Loan Agreement is amended by
replacing the date "August 31, 1998" with the date "August 31, 1999";
and
(c) Subsection 2.7.1 of the Loan Agreement is amended by
replacing the date "August 31, 1998" with the date "August 31, 1999".
2.2 Revolving Note. The Borrowers agree to execute and deliver
the Replacement Revolving Note in renewal, continuation and extension of the
existing Revolving Note, but not in payment or satisfaction thereof.
3. AMENDMENTS TO NEGATIVE COVENANTS IN THE LOAN AGREEMENT.
3.1 Amendment to Subsection 7.5. Subsection 7.5 of the Loan
Agreement is amended by replacing the phrase "(ii) more than fourteen (14) new
Stores during the fiscal year ending December 31, 1996," with the new phrase
"(ii) more than ten (10) new Stores during the fiscal year ending December 31,
1996."
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3.2 Amendment to Subsection 7.6. Subsection 7.6 of the Loan
Agreement is amended by replacing the phrase "(ii) $6,400,000 during the fiscal
year ending December 31, 1996," with the new phrase "(ii) $5,200,000 during the
fiscal year ending December 31, 1996."
3.3 Amendment to Subsection 7.8.1. Subsection 7.8.1 of the Loan
Agreement is hereby stricken, and a new Subsection 7.8.1 is hereby added to the
Loan Agreement reading as follows:
7.8.1 Tangible Net Worth. The Tangible Net Worth of the
Borrowers must not at any time be less than: (i) $8,300,000 for
the period commencing on May 1, 1996, and ending April 30,
1997; (ii) $9,100,000 for the period commencing on May 1, 1997,
and ending April 30, 1998; or (iii) $10,000,000 for the period
commencing on May 1, 1998, and ending August 31, 1999.
4. CONDITIONS PRECEDENT. The closing of the transactions contemplated by
this Amendment shall occur simultaneously with the execution and delivery
hereof. At or as of such closing, each of the following conditions precedent
shall be satisfied:
4.1 Execution of Documents. The following document shall have
been duly and validly authorized, executed and delivered by the respective
parties thereto, all in a form and substance satisfactory to the Bank:
(a) This Amendment; and
(b) The Replacement Revolving Note.
4.2 No Defaults. No Default or Event of Default shall have
occurred or be continuing.
5. REPRESENTATIONS AND WARRANTIES. All representations and warranties of
the Borrowers contained in the Loan Agreement are hereby restated and
reaffirmed as of the date hereof (except to the extent any representation or
warranty contained in the Loan Agreement as to the financial condition of the
Borrowers relates solely to an earlier date) and shall survive the execution
and delivery of this Amendment. The Borrowers further represent and warrant to
the Bank as follows:
5.1 Binding Obligations. This Amendment, the Loan Agreement (as
amended by this Amendment), and the Replacement Revolving Note constitute valid
and legally binding obligations of the Borrowers, enforceable in accordance
with their respective terms.
5.2 Conflicting Agreements and Restrictions. The Borrowers'
execution, delivery and performance of this Amendment, the Loan Agreement (as
amended by this Amendment), and the Replacement Revolving Note do not and will
not (i) conflict with, or result in a breach of the
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terms, conditions or provisions of, or constitute a default under, or result in
any violation of any agreement, instrument, undertaking, judgment, decree,
order, writ, injunction, statute, law, rule or regulation to which the
Borrowers are subject or by which any of their Properties are bound, or (ii)
result in the creation or imposition of any Lien on any Property on any
Property pursuant to the provisions of any mortgage, indenture, security
agreement, contract, undertaking or other agreement, except for security
interests created in favor of the Bank.
5.3 No Consent. The Borrowers' execution, delivery and
performance of this Amendment, the Loan Agreement (as amended by this
Amendment), and the Replacement Revolving Note, do not and will not require any
authorization, consent, license, approval or authorization of or other action
by, or notice or declaration to, or registration with, any Governmental
Authority, or, to the extent that any such consent or other action may be
required, either (i) such consent or other action has been validly procured or
duly taken, or (ii) the Borrowers' failure to procure such consent or take such
other action would not subject the Borrowers to a penalty, or otherwise have a
Material Adverse Effect.
6. MISCELLANEOUS.
6.1 Effect of Amendment. The Loan Agreement, as amended, modified
and supplemented by this Amendment, shall continue in full force and effect in
accordance with its terms and is hereby reaffirmed in every respect as of the
date hereof. To the extent that the terms of this Amendment are inconsistent
with the terms of the Loan Agreement, this Amendment shall control and the Loan
Agreement shall be amended, modified or supplemented so as to give full effect
to the transactions contemplated by this Amendment.
6.2 Exhibits. All exhibits attached hereto are incorporated
herein by reference and constitute a part of this Amendment.
6.3 Descriptive Headings. The descriptive headings of the several
paragraphs of this Amendment are inserted for convenience only and shall not be
used in the construction of the content of this Amendment.
6.4 Reimbursement of Expenses. The Borrowers agree to pay all
reasonable out-of-pocket expenses, including, without limitation, filing fees,
recording costs and attorney's fees and expenses, incurred by the Bank in
connection with preparation of this Amendment and the consummation of the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the Borrowers and the Bank have caused this
Amendment to be duly executed effective the day and year first above written.
EATERIES, INC.,
an Oklahoma corporation
By: /S/ XXXXXXX X. XXXX, XX.
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Xxxxxxx X. Xxxx, Xx., President
PEPPERONI GRILL, INC.,
an Oklahoma corporation
By: /S/ XXXXXXX X. XXXX, XX.
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Xxxxxxx X. Xxxx, Xx., President
LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, NATIONAL
ASSOCIATION
By: /S/ XXXX XXXXXXX XXXXXX
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Xxxx Xxxxxxx Xxxxxx, Vice President
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