FIRST AMENDMENT TO LOAN FACILITY AGREEMENT
AND GUARANTY
THIS FIRST AMENDMENT TO LOAN FACILITY AGREEMENT AND GUARANTY (this
"Amendment") dated as of October 30, 1997, by and between RUBY TUESDAY,
INC., a Georgia corporation ("Sponsor"), each of the financial
institutions listed on the signature pages hereof (the "Participants")
and SUNTRUST BANK, ATLANTA, a Georgia banking corporation, as servicer
(in such capacity, the "Servicer");
W I T N E S S E T H:
WHEREAS, Sponsor and Servicer, in order to make available a loan
facility to certain franchisees of Sponsor, entered into that certain
Loan Facility Agreement and Guaranty dated as of May 30, 1997 (as
hereafter amended or modified, the "Loan Facility Agreement") by and
among Sponsor, Servicer and the Participants;
WHEREAS, in order to expedite the ongoing operations of the loan
facility, Sponsor and the Servicer entered into that certain Servicing
Agreement, dated as of May 30, 1997 (the "Servicing Agreement") to set
forth certain agreements regarding fees and operations;
WHEREAS, the Sponsor has requested, and the Servicer and the
Participants have agreed, to enter into certain amendments to the Loan
Facility Agreement to allow for, and set forth provisions governing the
issuance of, standby letters of credit by the Servicer on behalf of the
franchisees;
WHEREAS, the Sponsor, the Participants and the Servicer wish to
enter into this Amendment to set forth their understandings regarding the
issuance of such letters of credit, all as more particularly set forth
below;
NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
SECTION I. Definitions. All terms used herein without definition
shall have the meanings set forth for such terms in the Loan Facility
Agreement.
SECTION II. Amendments.
1. Amendments to Section 1.1 of the Loan Facility Agreement.
Section 1.1 of the Loan Facility Agreement is hereby amended as follows:
(a) By adding the following new definitions to such Section 1.1
in alphabetical order:
"Letter of Credit" shall mean a standby letter of credit issued by
the Servicer on behalf of a Borrower pursuant to the terms of the
applicable Loan Commitment on the terms and conditions set forth in the
applicable Loan Agreement.
"Letter of Credit Fee" shall mean the fee paid by each Borrower
pursuant to the terms of the applicable Loan Agreement with respect to
all outstanding Letter of Credit Obligations thereunder.
"Letter of Credit Obligations" shall mean, with respect to each
Borrower, the aggregate of the face amount of all outstanding Letters of
Credit issued by the Servicer on behalf of such Borrower pursuant to the
applicable Loan Agreement plus, without duplication, the aggregate amount
of unreimbursed draws on such Letters of Credit.
"Letter of Credit Outstandings" shall mean the aggregate amount of
all Letter of Credit Obligations.
"Participant's Letter of Credit Fee" shall have the meaning set
forth in Section 2.4(b).
"Servicer's Letter of Credit Fee" shall have the meaning set forth
in the Servicing Agreement.
"Sponsor's Letter of Credit Fee" shall have the meaning set forth in
the Servicing Agreement.
(b) By deleting the definitions of "Loan Documents", "Loan
Indebtedness", and "Participant's Unused Commitment" in their entirety
and substituting the following in lieu thereof:
"Loan Documents" means the Loan Agreement, the Promissory Note, any
Personal Guaranty, any Spousal Consent, the Collateral Agreements, any
Letters of Credit and any other documents relating to the Loan or Letters
of Credit delivered by any Borrower or any guarantor or surety thereof to
the Servicer and any amendments thereto (provided that such amendments
are made with the consent of Sponsor, where such consent is required
under this Agreement).
"Loan Indebtedness" means all amounts due and payable by a Borrower
under the terms of the Loan Documents for a given Loan and outstanding
Letters of Credit, including, without limitation, outstanding principal,
accrued interest, any commitment fees, letter of credit fees and all
reasonable costs and expenses of any legal proceeding brought by the
Servicer to collect any of the foregoing (including without limitation,
reasonable attorneys' fees actually incurred).
"Participant's Unused Commitment" shall mean, with respect to any
Participant, the difference between such Participant's Participating
Commitment and such Participant's Funded Participant's Interest, as
further reduced by such Participant's Pro Rata Share of the Letter of
Credit Outstandings.
2. Amendment to Article II of the Loan Facility Agreement.
Article II of the Loan Facility Agreement is hereby amended by deleting
Sections 2.1, 2.2, 2.3, 2.4 and 2.10 thereof and substituting the
following in lieu thereof:
"2.1 Establishment of Commitment; Terms of Loans and Letters of
Credit.
(a) Commitment. Subject to and upon the terms and conditions
set forth in this Agreement and the other Operative Documents, and in
reliance upon the guaranty of the Sponsor set forth herein, the Servicer
hereby establishes a Commitment to the Sponsor to establish Loan
Commitments and make Advances to such Franchisees (and to issue Letters
of Credit on behalf of such Franchisees) as may be designated by the
Sponsor in its Funding Approval Notices during a period commencing on the
date hereof and ending on May 29, 1998 (as such period may be extended
for one or more subsequent 364-day periods pursuant to Section 2.8
hereof, the "Commitment Termination Date") in an aggregate committed
amount at any one time outstanding not to exceed THIRTY-FIVE MILLION AND
NO/100 DOLLARS ($35,000,000) (the "Commitment").
(b) Authorization of Loan Commitments; Loan Terms; Letter of
Credit Terms. Within the limits of the Commitment and in accordance with
the procedures set forth in the Servicing Agreement, the Sponsor may
authorize the Servicer to establish a Loan Commitment in favor of a
Franchisee who meets the credit criteria established by the Sponsor. The
amount of each Loan Commitment shall be determined by the Sponsor but
shall not be less than $250,000 nor exceed $3,500,000 for any Franchisee.
Pursuant to the Loan Commitment, the Servicer shall agree to make
Advances to the Borrower thereunder in a minimum amount of $25,000 and in
integral multiples of $1,000, such Advances not to exceed six (6) per
month unless the Servicer shall otherwise agree. In addition, the
Servicer shall agree to issue Letters of Credit on behalf of such
Borrower in an aggregate amount at any one time outstanding not to exceed
$250,000. Each Loan shall bear interest at the Borrower Rate designated
by Sponsor in the applicable Funding Approval Notice, and interest shall
be payable on each Payment Date and on the Maturity Date of such Loan
when all principal and interest shall be due and payable in full. Each
Loan may be prepaid in full or in part on any Business Day, without
premium or penalty. The Loan Term of each Loan shall not exceed
thirty-seven months. Each Letter of Credit shall be for a term of not
more than one year (unless otherwise agreed by the Servicer) and shall
mature on a date which is at least ten (10) days prior to the Maturity
Date. Any drawing upon a Letter of Credit which is not reimbursed by the
applicable Borrower on the same Business Day, the applicable Borrower
shall be deemed to have requested an Advance to repay such amount and the
Servicer shall make such Advance regardless of the minimum requirements
set forth above and regardless of whether or not a Default or Event of
Default exists under the applicable Loan Documents, which amounts shall
be Advances for all purposes hereunder.
(c) Obligation to Establish Loan Commitments. Servicer's
obligation to establish each Loan Commitment under the Operative
Documents is subject to the fulfillment of the following conditions as of
the Closing Date of such Loan:
(i) this Agreement and each of the other Operative Documents
shall be in full force and effect;
(ii) the representations and warranties of the Sponsor contained
in Sections 5.1 and 5.2 hereof shall be true and correct with the same
effect as though such representations and warranties had been made on the
Closing Date of such Loan;
(iii) the Servicer shall have received a Funding Approval Notice
from the Sponsor authorizing such Loan Commitment;
(iv) all precedents and conditions to the Loan Commitment
specified in the Servicing Agreement, together with such additional
precedents and conditions as may, at Sponsor's election, be included in
the applicable Funding Approval Notice, shall have been completed to the
Servicer's reasonable satisfaction; and
(v) no Credit Event or Unmatured Credit Event shall have
occurred and be continuing.
2.2 Conveyance of Participant's Interest.
(a) The Servicer hereby sells, assigns, transfers and conveys to
the Participants, without recourse or warranty, and each Participant
hereby purchases from the Servicer, an undivided percentage ownership
interest (which percentage shall be equal to each Participant's Pro Rata
Share) in (i) the Commitment, (ii) the Loan Commitments, (iii) the Loans
and Letter of Credit Obligations, (iv) the Collateral, (v) all rights
against any guarantor of any Loan, including the Sponsor, and (vi) all
right, title and interest to any payment or right to receive payment with
respect to the foregoing (collectively, the "Participant's Interest").
Notwithstanding the foregoing, each Participant's right to receive
payments of interest, commitments fees, letter of credit fees or other
fees with respect to the Commitment, the Loan Commitments, the Loans and
the Letter of Credit Obligations shall not exceed the amounts which such
Participant is entitled to receive pursuant to the terms of this
Agreement.
(b) In consideration of the entry by each Participant into this
Agreement and the obligation of each Participant hereunder, the Servicer
shall issue to each Participant on the Closing Date, a Participation
Certificate. Each Participation Certificate shall be in the amount of
the relevant Participant's Participating Commitment, and the Funded
Participant's Interest outstanding thereunder shall bear interest as
hereinafter set forth and shall be payable as hereinafter set forth.
(c) In accordance with the terms and conditions hereof, and in
consideration of the sale of the Participant's Interest to such
Participant, each Participant severally agrees from time to time, during
the period commencing on the Closing Date and ending on the Final
Termination Date, to fund its Pro Rata Share of outstanding Loans
(including Advances made by the Servicer in connection with unreimbursed
drawing upon outstanding Letters of Credit) made by the Servicer in an
aggregate amount at any one outstanding not to exceed such Participant's
Participating Commitment (subject to each Participant's obligations
pursuant to Section 2.3(d) hereof).
2.3 Funding of Advances; Funding of Participant's Interest in
Loans; Purchase of Participation in Letters of Credit.
(a) Funding of Advances and Issuance of Letters of Credit.. The
Servicer shall fund Advances requested by the Borrowers pursuant to the
terms of the Loan Documents in accordance with the terms of the
applicable Loan Documents and the Servicing Agreement. On the date of
any such funding, the Servicer shall elect whether or not to require the
Participants to fund their respective Pro Rata Share of such Advance or
Advances to be made on such date. In the event that the Servicer elects
not to require the Participants to fund their Pro Rata Share of the
Advances on such date, the Servicer shall make such Advance (each, a
"Fronting Advance") to the Borrower for the account of the Servicer;
provided that, the aggregate amount of Fronting Advances outstanding on
any date shall not exceed the amount of STBA's Participating Commitment
and further provided that the sum of (x) the aggregate Fronting Advances
plus (y) the aggregated Funded Participant's Interest plus (z) the
aggregate Letter of Credit Outstandings shall not exceed the amount of
the Commitment. If (i) any Credit Event shall have occurred, (ii) after
giving effect to any Advance, the aggregate Fronting Advances outstanding
hereunder would exceed STBA's Participating Commitment, or (iii) the
Servicer otherwise determines in its sole discretion to request a
Participant Funding hereunder, then the Servicer shall notify the
Participants pursuant to subsection (b) requesting a Participant Funding.
The Servicer shall issue Letters of Credit requested by the Borrowers
pursuant to the terms of the Loan Documents in accordance with the terms
of the applicable Loan Documents and the Servicing Agreement. The
Participants shall be notified in each Servicing Report of the aggregate
amount of Letter of Credit Outstandings.
(b) Notification of Participant Funding. In the event that the
Servicer desires that the Participants fund their respective Pro Rata
Shares of Advances or Loans made or outstanding pursuant to the Loan
Documents, the Servicer shall deliver written or telecopy notice to the
Participants (or telephonic notice promptly confirmed in writing or by
telecopy) (a "Participant Funding Request") by no later than 10:00 a.m.
(Atlanta, Georgia time) on the date which is the requested date of the
Participant Funding which shall specify (x) the date of the Participant
Funding, which shall be a Business Day, and (y) each Participant's Pro
Rata Share of the Loans outstanding to be funded in connection with such
Participant Funding.
(c) Participant Obligation. Each Participant shall make its
Participant Funding in the amount of its Pro Rata Share on the proposed
date thereof by wire transfer of immediately available funds to the
Servicer in Atlanta, Georgia by not later than 2:00 P.M. (Atlanta,
Georgia time). Unless the Servicer shall have received notice from a
Participant prior to the date of any Participant Funding that such
Participant will not make available to the Servicer such Participant's
Pro Rata Share of such Participant Funding, the Servicer may assume that
the Participant has made such portion available to the Servicer on the
date of such Participant Funding in accordance with this subsection (c)
and the Servicer may, in reliance on such assumption, make available to
the Borrowers a corresponding amount or credit the same to Fronting
Advances. If and to the extent that such Participant shall not have made
such portion available to the Servicer, such Participant and the Sponsor
shall severally agree to repay the Servicer forthwith (on demand in the
case of the Participant and within three (3) days of such demand in the
case of the Sponsor), without duplication, such amount with interest at
the Federal Funds Rate plus 2% per annum and, until such time as such
Participant has repaid to the Servicer such amount, such Participant
shall (i) have no right to vote regarding any issue on which voting is
required or advisable under this Agreement or the other Operative
Documents, and (ii) shall not be entitled to receive any payments of
interest, fees or repayment of the principal amount of such Advance which
the Participant has failed to pay to the Servicer. If such Participant
shall repay to the Servicer such amount, then such amount shall
constitute part of such Participant's Funded Participant's Interest.
(d) Participant's Obligation Absolute and Unconditional. Each
Participant's obligations to fund its Pro Rata Share of any requested
Participant Funding shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any
setoff, counterclaim, recoupment, defense, or other right which such
Participant may have against the Servicer, the Sponsor, any Borrower or
any other Person for any reason whatsoever, (ii) the occurrence of any
Credit Event or Unmatured Credit Event, (iii) the occurrence of any Loan
Default, (iv) any adverse change in the condition (financial or
otherwise) of the Sponsor or any other Credit Party or any Borrower, (v)
the acceleration or maturity of any Loan or the Sponsor's obligations
hereunder or the termination of the Commitment, Loan Commitment or the
Participating Commitments after the making of any Fronting Advance, (vi)
any breach of this Agreement by the Sponsor or any other Participant, or
(vii) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(e) Fundings Following Default. Notwithstanding the foregoing
provisions of this Section 2.3, no Participant shall be required to fund
its Pro Rata Share of any requested Participant Funding for purposes of
refunding a Fronting Advance pursuant to subsection (d) above if a Credit
Event, Unmatured Credit Event or Loan Default with respect to the
relevant Loan has occurred and is continuing and, prior to the making by
the Servicer of such Fronting Advance, the Servicer had received written
notice from Sponsor, the relevant Borrower or any Participant specifying
that such Credit Event, Unmatured Credit Event or Loan Default had
occurred and was continuing (and identifying the same as a Credit Event,
Unmatured Credit Event or Loan Default, as the case may be); provided
that , in the case of an Unmatured Credit Event or Credit Event where the
Participants are not pursuing remedies, the Participants will be
obligated to fund their respective Pro Rata Shares of Fronting Advances
as long as the aggregate amount of such Fronting Advances does not exceed
$2,000,000. Each Participant expressly agrees, however, that it shall be
obligated to fund its Pro Rata Share of requested Participant Funding
with respect to Advances made by the Servicer with respect to
unreimbursed drawings upon outstanding Letters of Credit whether or not a
Credit Event, Unmatured Credit Event or Loan Default has occurred and is
continuing and whether or not made as a Fronting Advance.
2.4 Commitment Fees and Participant's Letter of Credit Fees.
(a) Each Participant will receive from amounts paid by the
Borrowers under the Loan Documents and the Sponsor under the Operative
Documents, a commitment fee (the "Commitment Fee") with respect to the
average daily amount of each Participant's Unused Commitment, for the
period commencing on the Closing Date and ending on the Final Termination
Date, or such earlier date as the Participating Commitment shall expire
or terminate, equal to 0.1875% per annum, such Commitment Fee to be
payable in arrears on each Payment Date which is the last day of a
calendar quarter (a "Quarterly Date") commencing on June 30, 1997,
calculated on the basis of a 360-day year and the actual number of days
elapsed. The Letters of Credit Outstanding shall be deemed to be a
utilization of the Commitment for purposes of calculating the Commitment
Fee.
(b) Each Participant will receive from amounts paid by the
Borrowers under the Loan Documents and the Sponsor under the Operative
Documents, a letter of credit fee (the "Participant's Letter of Credit
Fee") with respect to the average daily amount of each Participant's Pro
Rata Share of the Letter of Credit Outstandings, for the period
commencing on the Closing Date and ending on the Final Termination Date,
or such earlier date as the Participating Commitment shall expire or
terminate, equal to 0.90% per annum, such Participant's Letter of Credit
Fee to be payable in arrears on each Quarterly Date commencing on
December 31, 1997, calculated on the basis of a 360-day year and the
actual number of days elapsed.
(c) All Commitment Fees and Participant's Letter of Credit Fees
shall be paid on the dates due, in immediately available funds, to the
Participants by the Servicer from amounts received from the Borrowers and
Sponsor.
(d) In the event that (i) the commitment fees received by the
Servicer from the Borrowers and the Sponsor are not sufficient on any
Quarterly Date to pay the Commitment Fees to the Participants required
pursuant hereto, or (ii) the Letter of Credit Fees received by the
Servicer from the Borrowers and the Sponsor are not sufficient on any
Quarterly Date to pay the Participant's Letter of Credit Fees required
pursuant hereto, the Sponsor shall, upon demand of the Servicer,
immediately fund such difference to the Servicer (with such payment
allocated to specific Loan Payment Defaults as agreed by Sponsor and
Servicer) and either, at the election of the Sponsor, (x) the Sponsor
shall be reimbursed by the Servicer upon receipt of such amount from the
Borrower, (y) the Loan Indebtedness shall be deemed to be reduced by such
amount upon a repayment or purchase of such Defaulted Loan by Sponsor in
accordance with the terms of this Agreement, or (z) such amount shall be
deemed to have satisfied Sponsor's obligation to cure such Loan Payment
Default hereunder.
2.10. Pro Rata Treatment.
Subject to the application of payments pursuant to Article III and except
as specifically provided therein, each payment of principal of any Funded
Participant's Interest, each payment of interest with respect to the
Funded Participant's Interest, each payment of the Commitment Fees and
Participant's Letter of Credit Fees and each reduction of the Commitment
shall be allocated pro rata among the Participants in accordance with
their respective applicable Pro Rata Share. Each Participant agrees that
in computing such Participant's portion of any Funded Participant's
Interest to be made hereunder, the Servicer may, in its discretion, round
each Participant's percentage of such Participant Funding Request to the
next higher or lower whole dollar amount."
3. Amendment to Article III of the Loan Facility Agreement.
Article III of the Loan Facility Agreement is hereby amended by deleting
such Article in its entirety and substituting the following in lieu
thereof:
III. SERVICER'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
3.1 Servicer's Obligations with Respect to Loans; Collateral;
Non-Recourse.
(a) The Servicer shall, for itself and the benefit of all of the
Participants and the Sponsor, (i) document, close, manage, administer and
collect the Loans and issue and administer the Letters of Credit in
accordance with the terms of this Agreement and the Servicing Agreement
and exercise all discretionary powers involved in such management,
administration and collection and (ii) shall distribute the funds
received with respect to the Loans and Letter of Credit Obligations and
from the Sponsor in accordance with the terms of this Agreement. The
Servicer agrees that it will exercise the same care in administering the
Loans as it exercises with respect to loans of similar size and type in
which no participations are allocated, and each of the Participants
agrees that the Servicer shall have no further responsibility to the
Participants.
(b) The forms of Loan Agreement and Promissory Note used by the
Servicer as documentation for each Loan shall be substantially in the
forms attached hereto. The Sponsor shall have the right to direct the
Servicer to make modifications to such forms and amendments thereto from
time but the Sponsor may not direct the Servicer to revise or amend such
forms so as to be inconsistent with the terms of Section 2.1 hereof.
(c) Notwithstanding anything in this Agreement to the contrary,
each of the Participants acknowledges and agrees that the Servicer shall
have no obligation to the Participants with respect to (i) the creation,
perfection, priority or continuation of any Lien on any Collateral
obtained by the Servicer with respect to the Loans at the request of the
Sponsor, or (ii) the obtaining or retention of any guaranties required by
the Sponsor (other than to distribute any proceeds therefrom in
accordance with the terms of this Article III). The Participants
acknowledge and agree that the Sponsor has the right to release or modify
the terms of, any Collateral or any Personal Guaranty.
(d) Each of the Participants acknowledges and agrees that all
payments made to the Participants pursuant to this Agreement by the
Servicer shall be made solely from amounts received from the Sponsor, the
Borrowers and other obligors or Collateral under the applicable Loan
Documents and the Servicer shall have no personal liability for any
amounts payable to the Participants hereunder.
3.2 Application of Payments.
(a) The Servicer and the Sponsor shall instruct each Borrower to
make payments with respect to Loans, Letter of Credit Obligations and the
Loan Commitments directly to the Servicer, either by mail, wire transfer
or debit pursuant to an ACH Authorization (as such term is defined in the
Servicing Agreement).
(b) On each Payment Date which is the last day of a calendar
quarter, all payments of commitments fees received by the Servicer from
the Borrowers and the Sponsor and not previously distributed, shall be
applied to pay the Commitment Fees, with any excess amount applied in
accordance with the terms of the Servicing Agreement.
(c) On each Payment Date, all payments of interest received by
the Servicer from the Borrowers and the Sponsor pursuant to its Guaranty
contained herein with respect to the Loans and not previously distributed
by the Servicer, shall be applied to pay all accrued but unpaid interest
on the Funded Participant's Interest pursuant to this Agreement, then to
pay all accrued but unpaid Servicing Fees and then to pay the Sponsor's
Fee, in accordance with the terms of the Servicing Agreement.
(d) On each Payment Date, all payments of Letter of Credit Fees
received by the Servicer from the Borrowers and the Sponsor pursuant to
its Guaranty contained herein with respect to the Letter of Credit
Obligations and not previously distributed by the Servicer, shall be
applied to pay all accrued but unpaid Participant's Letter of Credit Fees
on the Funded Participant's Letter of Credit Interest pursuant to this
Agreement, then to pay all accrued but unpaid Servicer's Letter of Credit
Fees and then to pay the Sponsor's Letter of Credit Fee, in accordance
with the terms of the Servicing Agreement.
(e) On any Business Day on which the Servicer shall receive any
payment in respect of the principal amount of any Loan, whether from a
Borrower, the Sponsor pursuant to its Guaranty contained herein, or any
other obligor with respect thereto, the Servicer may elect, in its sole
discretion to (i) apply such principal payment to fund any requested
Advances, (ii) apply such amount to repay any outstanding Fronting
Advances, or (iii) to either (x) distribute such amount to the
Participants to reduce each Participant's Funded Participant's Interest
or (y) apply such amount to STBA's Funded Participant's Interest only
(with the understanding that the Funded Participant's Interest of each
Participant shall not be deemed to have been repaid until such amount is
actually received by such Participant); provided that, in the event that
the Servicer elects to apply any repayment to reduce STBA's Funded
Participant's Interest without a corresponding reduction of the other
Participant's Funded Participant's Interest, STBA shall be obligated to
make a payment to each Participant equal to such Participant's Pro Rata
Share of such payment upon the earlier of (i) the next Payment Date and
(ii) the occurrence of a Credit Event hereunder.
(f) If during any period when no Credit Event has occurred and
is continuing, amounts received by Servicer are not capable of being
allocated to any specific Loan or Letter of Credit Obligations or, in the
case of amounts allocable to a specific Loan or Letter of Credit
Obligations, are not sufficient to repay all obligations then due and
owing with respect thereto, such amounts shall be applied by the Servicer
as follows: (i) first, to the payment of Commitment Fees and
Participant's Letter of Credit Fees owing to the Participants hereunder,
(ii) second, to the payment of accrued interest on the Funded
Participant's Interest hereunder, (iii) third, to the payment of the
Servicing Fees and Servicer's Letter of Credit Fees owing under the
Servicing Agreement, (iv) fourth, to the repayment of the Funded
Participant's Interests outstanding hereunder, (v) fifth, to the payment
of all other amounts owing to the Servicer or any Participant hereunder,
and (vi) sixth, if all obligations of the Sponsor pursuant to the
Operative Documents have been satisfied in full, to the Sponsor.
(g) During any period when a Credit Event has occurred and is
continuing, any amounts received by Servicer with respect to the Loans or
the Letter of Credit Obligations shall be applied, after deduction of any
expenses incurred in the collection of any such amounts, as follows (i)
first, to the payment of any accrued and unpaid Servicing Fees and
Servicer's Letter of Credit Fees, (ii) second, to each Participant in
accordance with Pro Rata Share, and (iii) thereafter, to such Persons as
may be legally entitled thereto.
(h) If not sooner repaid, all amounts due and payable to the
Servicer and the Participants shall be due and payable in full on the
Final Termination Date, and if any Letter of Credit Obligations are
outstanding on such date, the Sponsor shall be required to post cash
collateral for such Letter of Credit Obligations in an amount equal to
105% thereof.
3.3. Servicing Report.
On each Payment Date, the Servicer shall telecopy to the Sponsor and
each Participant a servicing report in the form of Exhibit F attached
hereto (the "Servicing Report") setting forth the following information
with respect the Loans:
a. the aggregate principal balance of the Loans as of the close
of business on the last Business Day of the preceding Payment Period;
b. the aggregate amount of Loans repurchased by the Sponsor or
amounts collected with respect to the Collateral for the Loans;
c. the aggregate amount of Letter of Credit Outstandings as of
the close of business on the last Business Day of the preceding Payment
Period;
d. the aggregate Loan Commitments as of the close of business on
the last Business Day of the preceding Payment Period; and
e. each Loan which is fifteen days or more past due (including
the past due amount and the number of days past due)."
4. Amendment to Article IV of the Loan Facility Agreement
Article IV of the Loan Facility Agreement is hereby amended by deleting
Sections 4.3 and 4.4 thereof and substituting the following in lieu
thereof:
4.3 Defaulted Loan Guaranty Demand.
(a) In the event that following the end of a Response Period, a
Loan Payment Default is not cured or in the event that any other Loan
Default is not then waived, the Servicer shall have the right at any time
thereafter, to demand payment of the entire Loan Indebtedness with
respect to such Loan from the Sponsor pursuant to Article VIII hereof,
which amount, subject to the limitations set forth therein, shall be due
and payable on the date which is five (5) days following demand. The
Sponsor hereby acknowledges and agrees that the requirement for payment
in full of the Loan Indebtedness shall include the posting of cash
collateral with the Servicer in an amount equal to 105% of the
outstanding Letter of Credit Obligations of such Borrower.
(b) In the event that the Sponsor is not obligated to repay the
Loan Indebtedness with respect to a Defaulted Loan pursuant to the
Article VIII hereof or in the event that a Credit Event has occurred and
is continuing and Sponsor has not purchased all outstanding Loans
hereunder, the Sponsor agrees that the Servicer shall be released from
its obligations to the Sponsor hereunder with respect to administering
and enforcing all Loans and may administer and enforce such Loans and
Letter of Credit Obligations as it deems appropriate, without regard to
any limitations or restrictions set forth herein (but subject to
Article III hereof in all events) or in any other Operative Document."
4.4 No Waiver or Cure Available.
Notwithstanding anything contained in this Article to the contrary,
the Sponsor shall, within seven (7) days of its receipt of a written
demand from the Servicer instructing it to do so, make payment of the
Loan Indebtedness of any Loan and assume the Loan Commitment of a
Defaulted Borrower whose Loan Default either arises from the bankruptcy
or insolvency of the Borrower or the termination of the Sponsor's
franchise agreement with such Borrower. The Sponsor hereby acknowledges
and agrees that the requirement for payment in full of the Loan
Indebtedness shall include the posting of cash collateral with the
Servicer in an amount equal to 105% of the outstanding Letter of Credit
Obligations of such Borrower."
5. Amendment to Section 7.1 of the Loan Facility Agreement.
Section 7.1 of the Loan Facility Agreement is hereby amended by adding
the following sentence at the end thereof:
"The Sponsor hereby acknowledges and agrees that its obligation
hereunder to purchase all outstanding Loans and Loan Commitments shall
include the obligation to immediately post cash-collateral for all
outstanding Letter of Credit Obligations in an amount equal to 105% of
the amount thereof."
6. Amendment to Section 9.1 of the Loan Facility Agreement.
Section 9.1(b) of the Loan Facility Agreement is hereby amended by
deleting such subsection in it entirety and substituting the following in
lieu thereof:
(b) In addition to amounts payable elsewhere provided in this
Agreement, without duplication, the Sponsor hereby agrees to protect,
indemnify, pay and save the Servicer and each Participant harmless from
and against any and all claims, demands, liabilities, damages, losses,
costs, charges and reasonable expenses (including reasonable attorney's
fees and disbursements) which the Servicer or any Participant may incur
or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit for the account of a Borrower, other
than as a result of the gross negligence or willful misconduct of the
Servicer; (ii) the failure of the Servicer to honor a drawing under any
Letter of Credit due to any act or omission (whether rightful or
wrongful) of any present or future de jure or de facto government or
governmental authority; or (iii) any third party claim arising
therefrom."
7. Amendment to Article X of the Loan Facility Agreement
Article X of the Loan Facility Agreement is hereby amended by deleting
such Article in its entirety and substituting the following in lieu
thereof:
ARTICLE X
The terms of this Loan Facility Agreement shall survive the
termination of the Commitment hereunder and the termination of any Loan
Commitment established pursuant the terms hereof until (x) the
indefeasible payment in full of each of the Loans, (y) the termination of
each of the Letters of Credit outstanding, and (z) the indefeasible
payment in full of all outstanding Letter of Credit Obligations.
Notwithstanding the foregoing, Article IX hereof shall survive the
termination of this Agreement upon such repayment and termination."
8. Amendment to Exhibits to the Loan Facility Agreement The
Loan Facility Agreement is hereby amended by deleting Exhibits C and F
thereto in their entirety and substituting the forms of Exhibits C and F
attached hereto in lieu thereof.
SECTION III. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written (the "Effective
Date") when this Amendment shall have been executed and delivered by
Sponsor and the Participants to the Servicer.
SECTION IV. Representations and Warranties of Sponsor. Sponsor,
without limiting the representations and warranties provided in the Loan
Facility Agreement, represents and warrants to the Participants and the
Servicer as follows:
(a) The execution, delivery and performance by Sponsor of this
Amendment are within Sponsor's corporate powers, have been duly
authorized by all necessary corporate action (including any necessary
shareholder action) and do not and will not (a) violate any provision of
any law, rule or regulation, any judgment, order or ruling of any court
or governmental agency, the articles of incorporation or by-laws of
Sponsor or any indenture, agreement or other instrument to which Sponsor
is a party or by which Sponsor or any of its properties is bound or (b)
be in conflict with, result in a breach of, or constitute with notice or
lapse of time or both a default under any such indenture, agreement or
other instrument.
(b) This Amendment constitutes the legal, valid and binding
obligations of Sponsor, enforceable against Sponsor in accordance with
their respective terms.
(c) No Unmatured Credit Event or Credit Event has occurred and
is continuing as of the Effective Date.
SECTION V. Survival. Each of the foregoing representations and
warranties and each of the representations and warranties made in the
Loan Facility Agreement shall be made at and as of the Effective Date.
Each of the foregoing representations and warranties shall constitute a
representation and warranty of Sponsor under the Loan Facility Agreement,
and it shall be an Credit Event if any such representation and warranty
shall prove to have been incorrect or false in any material respect at
the time when made. Each of the representations and warranties made
under the Loan Facility Agreement (including those made herein) shall
survive and not be waived by the execution and delivery of this Amendment
or any investigation by the Participants or the Servicer.
SECTION VI. No Waiver, Etc. Sponsor hereby agrees that nothing
herein shall constitute a waiver by the Participants of any Unmatured
Credit Event or Credit Event, whether known or unknown, which may exist
under the Loan Facility Agreement. Sponsor hereby further agrees that no
action, inaction or agreement by the Participants, including without
limitation, any indulgence, waiver, consent or agreement altering the
provisions of the Loan Facility Agreement which may have occurred with
respect to the non-payment of any obligation during the terms of the Loan
Facility Agreement or any portion thereof, or any other matter relating
to the Loan Facility Agreement, shall require or imply any future
indulgence, waiver, or agreement by the Participants. In addition,
Sponsor acknowledges and agrees that it has no knowledge of any defenses,
counterclaims, offsets or objections in its favor against any Participant
with regard to any of the obligations due under the terms of the Loan
Facility Agreement as of the date of this Amendment.
SECTION VII. Ratification of Loan Facility Agreement. Except as
expressly amended herein, all terms, covenants and conditions of the Loan
Facility Agreement and the other Operative Documents shall remain in full
force and effect, and the parties hereto do expressly ratify and confirm
the Loan Facility Agreement as amended herein. All future references to
the Loan Facility Agreement shall be deemed to refer to the Loan Facility
Agreement as amended hereby.
SECTION VIII. Binding Nature. This Amendment shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
successors, successors-in-titles, and assigns.
SECTION IX. Costs, Expenses and Taxes. Sponsor agrees to pay on
demand all reasonable costs and expenses of the Servicer in connection
with the preparation, execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Servicer with respect thereto and with respect to
advising the Servicer as to its rights and responsibilities hereunder and
thereunder. In addition, Sponsor shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the
execution and delivery of this Amendment and the other instruments and
documents to be delivered hereunder, and agrees to save the Servicer and
each Participant harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such
taxes.
SECTION X. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
SECTION XI. Entire Understanding. This Amendment sets forth the
entire understanding of the parties with respect to the matters set forth
herein, and shall supersede any prior negotiations or agreements, whether
written or oral, with respect thereto.
SECTION XII. Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts and may be delivered by telecopier. Each counterpart so
executed and delivered shall be deemed an original and all of which taken
together shall constitute but one and the same instrument.
[Signatures Set Forth on Next Page]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
through their authorized officers as of the date first above written.
RUBY TUESDAY, INC.
By: /s/ J. Xxxxxxx Xxxxxxxxxx
Title: C.F.O.
Attest: /s/ Xxxxxx X. Xxxx
Secretary
[CORPORATE SEAL]
SUNTRUST BANK, ATLANTA, as Servicer
By:
Title:
By:
Title:
SUNTRUST BANK, ATLANTA
By:
Title:
By:
Title:
AMSOUTH BANK OF ALABAMA
By:
Title:
WACHOVIA BANK, N.A.
By:
Title:
XXXXXXX BANK, N.A.
By:
Title:
HIBERNIA NATIONAL BANK
By:
Title:
FIRST TENNESSEE BANK
By:
Title:
