THIRD AMENDMENT
TO
CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
dated as of July 25, 2003 is entered into by and among RYAN'S
FAMILY STEAK HOUSES, INC., a South Carolina corporation (the
"Parent"), RYAN'S FAMILY STEAK HOUSES EAST, INC., a Delaware
corporation ("Ryan's East"; together with the Parent, the
"Borrowers"), the Domestic Subsidiaries of the Parent identified
as "Guarantors" on the signature pages hereto, the Lenders
identified on the signature pages hereto and BANK OF AMERICA,
N.A., as Administrative Agent for the Lenders (in such capacity,
the "Administrative Agent"). Except as otherwise defined in this
Amendment, terms defined in the Credit Agreement referred to
below (as amended by this Amendment) are used as defined therein.
RECITALS
WHEREAS, a $200 million credit facility has been established
in favor of the Borrowers pursuant to that Credit Agreement (as
amended, modified, supplemented and extended, the "Credit
Agreement") dated as of January 28, 2000 among the Borrowers, the
Guarantors, the Lenders identified therein, First Union National
Bank (now known as Wachovia Bank, National Association), as
Syndication Agent, Wachovia Bank, N.A. (now known as Wachovia
Bank, National Association), as Documentation Agent, SunTrust
Bank, Atlanta, as Senior Managing Agent, and Bank of America,
N.A., as Administrative Agent;
WHEREAS, the Credit Parties have requested certain
modifications and amendments to the Credit Agreement; and
WHEREAS, the Lenders have agreed to the requested
modifications and amendments on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Amendments. The Credit Agreement is hereby
amended and modified in the following manner:
1.1 The following definitions in Section 1.1 are hereby
amended and restated in their entirety to read as follows:
"Collateral Agent" means Bank of America, N.A., in its
capacity as collateral agent for the Lenders, the
Noteholders and the 2003 Noteholders under the Intercreditor
Agreement and the Pledge Agreement, together with any
successor that becomes such in accordance with the
provisions of the Pledge Agreement and the Intercreditor
Agreement.
"Intercreditor Agreement" means that certain Amended
and Restated Intercreditor and Collateral Agency Agreement
dated as of July 25, 2003 among the Collateral Agent, the
Administrative Agent, the Noteholders and the 2003
Noteholders, as amended, modified, supplemented or restated
from time to time.
"Pledge Agreement" means that certain Amended and
Restated Pledge Agreement dated as of July 25, 2003 executed
and delivered by each of the Credit Parties in favor of the
Collateral Agent, for the benefit of the Lenders (and any
Affiliate of a Lender that enters into a Hedging Agreement
with a Credit Party), the Noteholders and the 2003
Noteholders, as amended, modified, extended, supplemented,
restated, renewed or replaced from time to time.
"Required Holders" means, at any time, the holders of
at least a majority in principal amount of the Senior Notes
and the 2003 Senior Notes at the time outstanding (exclusive
of Senior Notes and 2003 Senior Notes then owned by the
Parent or any of its Affiliates).
"Revolving Committed Amount" means ONE HUNDRED MILLION
DOLLARS ($100,000,000) or such lesser amount to which the
Revolving Committed Amount may be reduced pursuant to
Section 3.4.
"Secured Parties" means a collective reference to the
Lenders, the Noteholders and the 2003 Noteholders, and
"Secured Party" means any one of them.
1.2 The following definitions are hereby added to Section
1.1 in the appropriate alphabetical order and shall read as
follows:
"Third Amendment Effective Date" means July 25, 2003.
"2003 Noteholders" means the holders from time to time
of the 4.65% Senior Notes due July 25, 2013 (and any notes
issued in substitution thereof) issued pursuant to the 2003
Note Purchase Agreement.
"2003 Note Purchase Agreement" means the 2003 Note
Purchase Agreement dated as of July 25, 2003 among the
Parent and each of the respective purchasers identified
therein, as the same may be amended, modified, supplemented
or restated from time to time.
"2003 Senior Notes" means the senior notes purchased by
the 2003 Noteholders pursuant to the 2003 Note Purchase
Agreement.
1.3 Prepayments on Senior Notes. Subsection 3.3(b)(ii) is
hereby amended and restated in its entirety to read as follows:
(ii) Prepayments on Senior Notes and 2003 Senior Notes.
Contemporaneously with any prepayment of (i) the Senior
Notes pursuant to Section 8.3 of the Note Purchase
Agreements or (ii) the 2003 Senior Notes pursuant to Section
8.3 of the 2003 Note Purchase Agreement, the Borrowers shall
make a principal payment to the Administrative Agent in an
amount necessary to prepay the Loans on a pro rata basis
according to the aggregate unpaid principal amount of the
Senior Notes and the 2003 Senior Notes and the aggregate
unpaid principal amount of the Loans.
1.4 Prepayments on Senior Notes. Section 3.4(b)(iii) is
hereby amended and restated in its entirety to read as follows:
(iii) Prepayments on Senior Notes and 2003 Senior
Notes. Immediately upon the occurrence of any voluntary or
optional prepayment of (i) the Senior Notes pursuant to
Section 8.2 of the Note Purchase Agreements or (ii) the 2003
Senior Notes pursuant to Section 8.2 of the 2003 Note
Purchase Agreement, the Revolving Committed Amount shall be
permanently reduced on a pro rata basis according to the
aggregate unpaid principal amount of the Senior Notes and
the 2003 Senior Notes and the amount of the Revolving
Committed Amount on the date of such prepayment.
1.5 Indebtedness under Note Purchase Agreements. Section
6.30 is hereby amended and restated in its entirety to read as
follows:
6.30 Indebtedness under Note Purchase Agreements.
The Credit Party Obligations and all other Indebtedness
under the Credit Agreement is pari passu with the
Indebtedness arising under the Note Purchase Agreements and
the Indebtedness arising under the 2003 Note Purchase
Agreement.
1.6 Tax Shelter Regulations. A new Section 6.31 is hereby
added and shall read as follows:
6.31 Tax Shelter Regulations.
The Borrowers do not intend to treat the Loans and
related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-
4). In the event the Borrowers determine to take any action
inconsistent with such intention, they will promptly notify
the Administrative Agent thereof. If the Borrowers so
notify the Administrative Agent, the Borrowers acknowledge
that one or more of the Lenders may treat theirs Loans as
part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records
required by such Treasury Regulation.
1.7 Information Covenants. Clause (k) of Section 7.1 is
hereby amended and restated in its entirety to read as follows:
(k) Amendments to Note Purchase Agreements and the
2003 Note Purchase Agreement. Promptly upon receipt
thereof, a copy of (i) any amendments, modifications or
supplements to any agreement or instrument evidencing any
obligation of the Parent under the Note Purchase Agreements
or any agreement or instrument related thereto or (ii) any
amendments, modifications or supplements to any agreement or
instrument evidencing any obligation of the Parent under the
2003 Note Purchase Agreement or any agreement or instrument
related thereto.
1.8 Information Covenants. Clause (l) of Section 7.1 is
hereby amended and restated in its entirety to read as follows:
(l) Notices provided to Noteholders and 2003
Noteholders.
(i) At the time of delivery to the Noteholders
pursuant to the Note Purchase Agreements, copies of any
notice provided to the Noteholders (including without
limitation any notice required pursuant to Section 8.3
of the Note Purchase Agreements) pursuant to the Note
Purchase Agreements, to the extent any such notice has
not already been delivered to the Lenders pursuant to
the terms hereof.
(ii) At the time of delivery to the 2003
Noteholders pursuant to the 2003 Note Purchase
Agreement, copies of any notice provided to the 2003
Noteholders (including without limitation any notice
required pursuant to Section 8.3 of the 2003 Note
Purchase Agreement) pursuant to the 2003 Note Purchase
Agreement, to the extent any such notice has not
already been delivered to the Lenders pursuant to the
terms hereof.
1.9 New Section 7.1(p). A new clause (p) is hereby added
to Section 7.1 and shall read as follows:
(p) Promptly after any Borrower has notified the
Administrative Agent of any intention by such Borrower
to treat the Loans and related transactions as being a
"reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed
copy of IRS Form 8886 or any successor form.
1.10 Indebtedness. A new clause (i) is hereby added after
clause (h) at the end of Section 8.1 and shall read as follows:
(i) (i) Indebtedness of the Parent arising under
the 2003 Note Purchase Agreement and the 2003 Senior
Notes (and renewals, refinancings and extensions
thereof on terms and conditions no less favorable to
the Parent than such existing Indebtedness evidenced by
the 2003 Note Purchase Agreement and the 2003 Senior
Notes) in an aggregate principal amount not to exceed
$100,000,000 at any one time and (ii) all Guaranty
Obligations of the Guarantors with respect to such
Indebtedness arising under the 2003 Note Purchase
Agreement and 2003 Senior Notes.
1.11 Restricted Payments. Clause (b) of Section 8.8 is
hereby amended and restated in its entirety to read as follows:
(b) purchase, redeem, make a sinking fund or similar payment
or otherwise acquire or retire or make any provisions for
redemption, acquisition or retirement of any shares of its
Capital Stock of any class or any warrants or options to
purchase any such shares; provided, that, the Parent may
repurchase shares of its Capital Stock pursuant to the Share
Repurchase Program in an amount not to exceed during the
term of this Credit Agreement an aggregate amount equal to
the sum of (i) $55 million plus (ii) an amount equal to 50%
of Net Income for each fiscal quarter after September 29,
1999 plus (iii) an amount up to $10 million of the unused
allowance for Capital Expenditures for each of the fiscal
years ending December 31, 2003 and December 29, 2004 as
permitted by Section 8.13 so long as at the time of such
repurchase and after giving effect thereto, no Default or
Event of Default shall exist or be continuing.
1.12 No Limitations. Section 8.11 is hereby amended and
restated in its entirety to read as follows:
8.11 No Limitations.
No Credit Party will, nor will it permit its
Subsidiaries to, directly or indirectly, create or otherwise
cause, incur, assume, suffer or permit to exist or become
effective any consensual encumbrance or restriction of any
kind on the ability of any such Person to (a) pay dividends
or make any other distribution on any of such Person's
Capital Stock, (b) pay any Indebtedness owed to any other
Credit Party, (c) make loans or advances to any other Credit
Party, (d) sell, lease or transfer any of its properties or
assets to any other Credit Party or (e) act as a Credit
Party and pledge its Collateral pursuant to the Credit
Documents or any renewals, refinancings, exchanges,
refundings or extensions thereof, except (in respect of any
of the matters referred to in subsections (a)-(d) above) for
encumbrances or restrictions existing under or by reason of
(i) applicable law, (ii) this Credit Agreement and the other
Credit Documents, (iii) the Note Purchase Agreements as in
effect on the Closing Date or as amended in accordance with
Section 8.15, (iv) the 2003 Note Purchase Agreement as in
effect on the Third Amendment Effective Date or as amended
in accordance with Section 8.15 and (iv) customary non-
assignment or net worth provisions in any lease governing a
leasehold interest.
1.13 No Other Negative Pledges. Section 8.12 is hereby
amended and restated in its entirety to read as follows:
8.12 No Other Negative Pledges.
No Credit Party will, nor will it permit its
Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation
or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired, or requiring the
grant of any security for such obligation if security is
given for some other obligation except (a) as set forth in
the Credit Documents, (b) agreements entered into in
connection with Indebtedness permitted by Section 8.1(c) so
long as such agreements do not prohibit Liens in favor of
the Lenders and the restrictions contained in such
agreements relate only to the asset or assets acquired or
constructed in connection therewith, (c) as set forth in
Section 10.6 of the Note Purchase Agreement and (d) as set
forth in Section 10.6 of the 2003 Note Purchase Agreement.
1.14 Capital Expenditures. Section 8.13 is hereby amended
and restated in its entirety to read as follows:
8.13 Capital Expenditures.
The Credit Parties will not permit Capital Expenditures
(a) for the fiscal year ending January 1, 2003 to exceed
$71,000,000 in the aggregate, (b) for the fiscal year ending
December 31, 2003 to exceed $87,000,000 in the aggregate and
(c) for the fiscal year ending December 29, 2004 to exceed
$90,000,000 in the aggregate; provided, however, that up to
$10,000,000 of the unused allowance for Capital Expenditures
in any fiscal year, if not expended in the fiscal year for
which it is permitted or expended to repurchase shares of
the Parent's Capital Stock as permitted by Section 8.8, may
be carried over for expenditure in the immediate succeeding
fiscal year; provided, further, that up to $10,000,000 of
the unused allowance for the Parent's repurchase of its
Capital Stock pursuant to the Share Repurchase Program as
permitted by Section 8.8 may be added to the amount of
Capital Expenditures permitted to be expended in each of the
fiscal years ending December 31, 2003 and December 29, 2004
in addition to the amounts permitted above.
1.15 Modification of Indebtedness. The proviso at the end
of Section 8.15 is hereby amended and restated in its entirety as
follows:
provided, that, the Borrower may enter into an amendment or
modification of the Note Purchase Agreements or the 2003
Note Purchase Agreement in a manner adverse to the Borrower
so long as the Borrower agrees to make amendments or
modifications to the Credit Documents in a manner consistent
with such amendments or modifications made to the Note
Purchase Agreements or the 2003 Note Purchase Agreement.
1.16 Prepayment of Indebtedness. Subclauses (a) and (b) at
the end of Section 8.16 are hereby amended and restated in its
entirety to read as follows:
except that (a) the Parent may make a voluntary or optional
prepayment on (I) the Senior Notes in accordance with
Section 8.2 of the Note Purchase Agreements and (II) the
2003 Senior Notes in accordance with Section 8.2 of the 2003
Note Purchase Agreement; provided that (A) the Parent
provides the Administrative Agent with written notice of
such prepayments five (5) Business Days prior to the date of
such prepayment and (B) the Revolving Committed Amount is
permanently reduced on a pro rata basis according to the
aggregate unpaid principal amount of the Senior Notes and
the 2003 Senior Notes and the amount of the Revolving
Committed Amount on the date of such prepayment in
accordance with Section 3.4(b) and (b) the Parent may make a
prepayment on (I) the Senior Notes in accordance with
Section 8.3 of the Note Purchase Agreements and (II) the
2003 Senior Notes in accordance with Section 8.3 of the 2003
Note Purchase Agreement; provided that (A) the Parent
provides the Administrative Agent with all notices related
to such prepayments required by Section 7.1(l) and (B) the
Loans are prepaid on a pro rata basis according to the
aggregate unpaid principal amount of the Senior Notes and
the 2003 Senior Notes and the aggregate unpaid principal
amount of the Loans in accordance with Section 3.3(b)(ii).
1.17 Events of Default. A new clause (l) is hereby added at
the end of Section 9.1 to read as follows:
(l) 2003 Note Purchase Agreement. There shall occur a
default or an event of default under (i) the 2003 Note
Purchase Agreement, (ii) the 2003 Senior Notes or (iii) any
other related agreement, document, or instrument issued or
delivered in connection with the 2003 Note Purchase
Agreement.
1.18 Schedule 1.1(a). Schedule 1.1(a) is hereby amended and
restated in its entirety to read as provided on Schedule 1.1(a)
attached hereto.
1.19 Schedule 6.15. Schedule 6.15 is hereby amended and
restated in its entirety to read as provided on Schedule 6.15
attached hereto.
1.20 Schedule 10.1(b). Each Lender hereby consents to and
approves the terms of the Intercreditor Agreement, a copy of
which is attached hereto as Schedule 10.1(b). Schedule 10.1(b)
is hereby amended and restated in its entirety to read as
provided on Schedule 10.1(b) attached hereto.
Section 2. Conditions Precedent. This Amendment shall
become effective on the date (the "Effective Date") on which the
following conditions precedent have been satisfied:
(a) receipt by the Administrative Agent of multiple
counterparts of this Amendment, duly executed and delivered
by each of the Credit Parties, the Required Lenders and the
Administrative Agent;
(b) receipt by the Administrative Agent of duly
executed copies of the amended and restated Pledge Agreement
and the amended and restated Intercreditor Agreement, each
in form and substance satisfactory to the Administrative
Agent and the Lenders;
(c) receipt by the Administrative Agent of (i) copies,
certified by an officer of the Parent as true and complete,
of the 2003 Note Purchase Agreement (including all exhibits
and schedules thereto) as originally executed and delivered,
together with any amendments or modifications to such 2003
Note Purchase Agreement, such 2003 Note Purchase Agreement
and amendments or modifications to be acceptable to the
Administrative Agent and (ii) evidence that all of the
proceeds from the issuance of the 2003 Senior Notes have
been used to prepay the Loans;
(d) receipt by the Administrative Agent of copies,
certified by an officer of the Parent as true and complete,
of the amendments to each of the Note Purchase Agreements,
each in form and substance satisfactory to the
Administrative Agent;
(e) The Administrative Agent shall have received an
opinion, or opinions, in form and substance satisfactory to
the Administrative Agent dated as of the Effective Date from
counsel to the Credit Parties; and
(f) Copies of resolutions of the Board of Directors of
each Credit Party approving and adopting the Amendment, the
transactions contemplated herein and authorizing execution
and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
force and effect as of the date hereof.
Section 3. Miscellaneous.
3.1 Reaffirmation of Representations and Warranties. The
Credit Parties hereby affirm that the representations and
warranties set forth in the Credit Agreement and the other Credit
Documents are true and correct as of the date hereof (except such
representations and warranties that expressly relate to an
earlier period).
3.2 Reaffirmation of Guaranty. Each Guarantor (i)
acknowledges and consents to all of the terms and conditions of
this Amendment, (ii) affirms all of its obligations under the
Credit Documents and (iii) agrees that this Amendment and all
documents executed in connection herewith do not operate to
reduce or discharge such Guarantor's obligations under the Credit
Agreement or the other Credit Documents.
3.3 Reaffirmation of Liens. Each Credit Party affirms the
liens and security interests created and granted by it in the
Credit Documents and agrees that this Amendment shall in no
manner adversely affect or impair such liens and security
interests.
3.4 No Other Changes. Except as modified hereby, all of
the terms and provisions of the Credit Agreement and the other
Credit Documents (including schedules and exhibits thereto) shall
remain in full force and effect.
3.5 Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed and
delivered shall be deemed an original and it shall not be
necessary in making proof of this Amendment to produce or account
for more than one such counterpart.
3.6 Governing Law. This Amendment shall be deemed to be a
contract made under, and for all purposes shall be construed in
accordance with, the laws of the State of South Carolina.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of the parties hereto has caused
this Amendment to be duly executed and delivered by its duly
authorized officer as of the day and year first above written.
BORROWERS: RYAN'S FAMILY STEAK HOUSES, INC.,
a South Carolina corporation
By:
Name:
Title:
RYAN'S FAMILY STEAK HOUSES EAST, INC.,
a Delaware corporation
By:
Name:
Title:
GUARANTORS: BIG R PROCUREMENT COMPANY, LLC,
a Delaware limited liability company
By: RYAN'S FAMILY STEAK HOUSES, INC.,
a South Carolina corporation, its sole
manager
By:
Name:
Title:
RYAN'S PROPERTIES, INC.,
a Delaware corporation
By:
Name:
Title:
RYMARK HOLDINGS, INC.,
a Delaware corporation
By:
Name:
Title:
FIRE MOUNTAIN PROPERTIES, LLC,
a Delaware limited liability company
By: RYAN'S FAMILY STEAK HOUSES EAST, INC.,
a Delaware corporation, its sole manager
By:
Name:
Title:
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
in its capacity as
Administrative Agent
By:
Name:
Title:
LENDERS: BANK OF AMERICA, N.A.,
in its capacity as a
Lender
By:
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly
First Union National Bank)
By:
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly
Wachovia Bank, N.A.)
By:
Name:
Title:
SUNTRUST BANK, ATLANTA
By:
Name:
Title:
SOUTHTRUST BANK, N.A.
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Name:
Title:
FLEET NATIONAL BANK
By:
Name:
Title:
CAROLINA FIRST BANK
By:
Name:
Title:
