AMENDMENT NO. 1 TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment") dated as
of May 30, 1997, by and among RUBY TUESDAY, INC., a Georgia corporation,
formerly known as Ruby Tuesday (Georgia), Inc. (the "Borrower"), SUNTRUST
BANK, ATLANTA, ("SunTrust"), AMSOUTH BANK OF ALABAMA, WACHOVIA BANK OF
GEORGIA, N.A., FIRST AMERICAN NATIONAL BANK, XXXXXXX BANK, N.A., formerly
known as Xxxxxxx Bank of Jacksonville, N.A. and HIBERNIA NATIONAL BANK
(collectively, the "Lenders") and SUNTRUST BANK, ATLANTA, as agent and
administrative agent for the Lenders (in such capacity, the "Agent" and
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, Borrower, the Lenders, the Agent and the Administrative
Agent are parties to a certain Credit Agreement dated as of March 6, 1996
(as heretofore amended or modified, the "Credit Agreement"; defined terms
used herein without definition shall have the meanings ascribed to such
terms in the Credit Agreement);
WHEREAS, Borrower has requested, and the Lenders have agreed, that
the Credit Agreement be amended to make certain modifications to the
covenants set forth therein and the related definitions, all as more
specifically set forth below;
WHEREAS, the parties wish to amend the Credit Agreement to reflect
this agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
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 1. Amendments to Credit Agreement. Subject to the
satisfaction of the conditions precedent set forth in Section 2 hereof,
and effective as of the Effective Date (as hereinafter defined), the
Credit Agreement is hereby amended as follows:
1. Section 1.01 of the Credit Agreement is hereby amended by
adding the following new defined terms in alphabetical order, as follows:
""Franchisee Loan Program" shall mean that transaction evidenced by
(i) that certain Loan Facility Agreement dated as of May 30, 1997 by and
among the Borrower, SunTrust Bank, Atlanta, as servicer and the other
financial institutions party thereto wherein the Borrower has guaranteed,
to the extent set forth therein, certain obligations of franchisees of
the Borrower, and (ii) the other "Operative Documents" (as such term is
defined therein) executed by the Consolidated Companies in connection
therewith.
"LIBOR Lease Transaction" shall mean, collectively, (a) that
transaction evidenced by (i) that certain Lease Agreement, dated as of
May 30, 1997, by and between Borrower, as lessee and Atlantic Financial
Group, LLP, as lessor, (ii) that certain Participation Agreement, dated
as of May 30, 1997 by and among Borrower, Atlantic Financial Group, LLP,
SunTrust Bank, Atlanta, as agent and the other financial institutions
named therein and (iii) the other Operative Documents (as such term is
defined in such Participation Agreement) executed by the Consolidated
Companies in connection therewith and (b) certain similar lease
transaction entered into hereafter by the Consolidated Companies with a
syndicate of lenders agented by SunTrust Bank, Atlanta providing an
aggregate amount of financing to the Consolidated Companies in the
approximate amount of $75,000,000."
"Standard & Poor's" shall mean Standard & Poor's Rating Service, a
division of The XxXxxx-Xxxx Companies.
2. Section 1.01 of the Credit Agreement is hereby amended by
deleting the existing definitions of "Consolidated Net Worth", "Funded
Debt" and "Rental Obligations" and substituting therefor the following:
"Consolidated Net Worth" shall mean the shareholders' equity of the
Borrower and its Subsidiaries calculated in accordance with GAAP, less
treasury stock.
"Funded Debt" shall mean, as applied to any Person, all Indebtedness
of such Person which by its terms or by the terms of any instrument or
agreement relating thereto matures, or which is otherwise payable or
unpaid, one year or more from, or is directly or indirectly renewable or
extendable at the option of the debtor to a date one year or more
(including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period
of one year or more) from, the date of the creation thereof, provided
that Funded Debt shall include, as at any date of determination, any
portion of such Indebtedness outstanding on such date which matures on
demand or within one year from such date (whether by sinking fund, other
required prepayment, or final payment at maturity) and shall also include
(i) all Indebtedness of such Person for borrowed money under a line of
credit, guidance line, revolving credit, bankers acceptance facility or
similar arrangement for borrowed money, including, without limitation,
all unpaid drawings under letters of credit and unreimbursed amounts
pursuant to letter of credit reimbursement agreements, regardless of the
maturity date thereof, and (ii) as of any date of determination with
respect to the Borrower, the aggregate guaranty obligations of the
Borrower calculated as of such date (without giving effect to any
liability of the Borrower on any subsequent date) pursuant to the
Franchise Loan Program, regardless of the maturity date thereof. In
addition, there shall also be included in Funded Debt the present value
of all minimum lease commitments to make payments with respect to
operating leases of such Person, determined based upon a discount rate of
10% in accordance with discounted present value analytical methodology,
and with respect to the Borrower, shall include the rental obligations of
the Borrower arising pursuant to the LIBOR Lease Transaction assuming,
for the purposes of such calculation regardless of the Borrower's actual
election pursuant to the documents executed in connection therewith, that
the Borrower has exercised and will exercise all optional extensions
thereof and will exercise its option to remarket the leased properties at
the end of the lease term.
"Rental Obligations" shall mean, with reference to any period, the
aggregate amount of all rental obligations for which the Consolidated
Companies are directly or indirectly liable (as lessee or as guarantor or
other surety but without duplication) under all leases in effect at any
time during such period (other than operating leases for motor vehicles,
computers, office equipment and other similar items used in the ordinary
course of business of the Consolidated Companies), including all such
amounts for which any Person was liable during the period immediately
prior to the date such Person became a Subsidiary of the Borrower or was
merged into or consolidated with the Borrower or a Subsidiary of the
Borrower, as determined in accordance with GAAP and expressly including
all rental obligations arising pursuant to the LIBOR Lease Transaction
(excluding supplemental or contingent lease obligations thereunder).
3. Section 8.01 of the Credit Agreement is hereby amended by
deleting subsection (e) thereof in its entirety and substituting the
following in lieu thereof:
"(e) Indebtedness of Borrower or any of its Subsidiaries arising
under (i) Interest Rate Contracts, (ii) the Franchisee Loan Program, and
(iii) to the extent constituting Indebtedness, the LIBOR Lease
Transaction;"
4. Section 8.02 of the Credit Agreement is hereby amended by
deleting subsection (b) thereof in its entirety and substituting the
following in lieu thereof:
"(b) any Lien on any property and proceeds thereof securing
Indebtedness incurred or assumed for the purpose of financing all or any
part of the acquisition cost of such property and any refinancing
thereof, provided that such Lien does not extend to any other property
(other than the proceeds of such property), including any Lien arising
pursuant to the LIBOR Lease Transaction;"
5. Section 8.02 of the Credit Agreement is hereby further
amended by deleting the last proviso thereof in its entirety and
substituting the following in lieu thereof:
"provided that, the aggregate amount of Indebtedness secured by
Liens permitted pursuant to this Section 8.02, excluding Indebtedness,
if any, arising pursuant to the LIBOR Lease Transaction, shall at no time
exceed 15% of the Consolidated Net Worth of the Borrower calculated as of
the last day of the most recently ended fiscal quarter of the Borrower."
6. Section 8.04 of the Credit Agreement is hereby amended by
deleting subsection (a) thereof in its entirety and substituting the
following in lieu thereof:
"(a) Investments in Subsidiaries of Borrower existing as of the
Closing Date and Investments in franchisees of Borrower arising pursuant
to the Franchisee Loan Program;"
SECTION 2. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written (the "Effective
Date") on the first day when all of the foregoing shall have occurred:
1. This Amendment shall have been executed and delivered by
Borrower and the Lenders to the Agent; and
2. All conditions precedent to the effectiveness of the
Franchisee Loan Program and the LIBOR Lease Transaction shall have been
fulfilled or waived and the Administrative Agent shall be satisfied that
such transactions are in full force and effect.
SECTION 3. Representations and Warranties of Borrower.
Borrower, without limiting the representations and warranties provided in
the Credit Agreement, represents and warrants to the Lenders and the
Agent as follows:
1. The execution, delivery and performance by Borrower of this
Amendment are within Borrower'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
Borrower or any indenture, agreement or other instrument to which
Borrower is a party or by which Borrower 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.
2. This Amendment constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with
its terms.
3. No Default or Event of Default has occurred and is continuing
as of the Effective Date.
SECTION 4. Survival. Each of the foregoing representations and
warranties and each of the representations and warranties made in the
Credit 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 Borrower under the Credit Agreement, and
it shall be an Event of Default 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 Credit Agreement (including those made herein) shall survive
and not be waived by the execution and delivery of this Amendment or any
investigation by the Lenders or the Agent or the Administrative Agent.
SECTION 5. No Waiver, Etc. Borrower hereby agrees that nothing
herein shall constitute a waiver by the Lenders of any Default or Event
of Default, whether known or unknown, which may exist under the Credit
Agreement. Borrower hereby further agrees that no action, inaction or
agreement by the Lenders, including without limitation, any indulgence,
waiver, consent or agreement altering the provisions of the Credit
Agreement which may have occurred with respect to the non-payment of any
obligation during the terms of the Credit Agreement or any portion
thereof, or any other matter relating to the Credit Agreement, shall
require or imply any future indulgence, waiver, or agreement by the
Lenders. In addition, Borrower acknowledges and agrees that it has no
knowledge of any defenses, counterclaims, offsets or objections in its
favor against any Lender with regard to any of the obligations due under
the terms of the Credit Agreement as of the date of this Amendment.
SECTION 6. Affirmation of Covenants. Borrower hereby affirms
and restates as of the date hereof all covenants set forth in the Credit
Agreement, as amended hereby, and such covenants are incorporated by
reference herein as if set forth herein directly.
SECTION 7. Ratification of Credit Agreement. Except as
expressly amended herein, all terms, covenants and conditions of the
Credit Agreement and the other Loan Documents shall remain in full force
and effect, and the parties hereto do expressly ratify and confirm the
Credit Agreement as amended herein. All future references to the Credit
Agreement shall be deemed to refer to the Credit Agreement as amended
hereby.
SECTION 8. 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 9. Costs, Expenses and Taxes. Borrower agrees to pay on
demand all reasonable costs and expenses of the Agent and the
Administrative Agent 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 Agent and the
Administrative Agent with respect thereto and with respect to advising
the Agent and the Administrative Agent as to its rights and
responsibilities hereunder and thereunder. In addition, Borrower 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 Agent, the Administrative Agent and each Lender 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 10. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of Georgia.
SECTION 11. 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 12. 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:
Name:
Title:
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF
Signed, sealed and delivered
in the presence of:
Notary Public
Date Executed by Notary:
My commission expires:
[NOTARIAL SEAL]
SUNTRUST BANK, ATLANTA,
individually and as Agent and Administrative
Agent
By:
Name:
Title:
By:
Name:
Title:
AMSOUTH BANK OF ALABAMA
By:
Name:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By:
Name:
Title:
FIRST AMERICAN NATIONAL BANK
By:
Name:
Title:
XXXXXXX BANK, N.A., formerly known as
XXXXXXX BANK OF JACKSONVILLE, N.A.
By:
Name:
Title:
HIBERNIA NATIONAL BANK
By:
Name:
Title:
