EXECUTION COUNTERPART
SECOND AMENDMENT TO LOAN FACILITY
AGREEMENT AND GUARANTY
THIS SECOND AMENDMENT TO LOAN FACILITY AGREEMENT AND GUARANTY (this
"Second Amendment") dated as of March 4, 1998, 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, the Sponsor, Participants 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 amended by that certain First Amendment to Loan Facility
Agreement and Guaranty, dated as of October 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 (as amended or modified, 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;
WHEREAS, the Sponsor, the Participants and the Servicer wish to
enter into this Second Amendment to set forth their understandings
regarding the amendments;
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:
I. Definitions. All terms used herein without definition shall
have the meanings set forth for such terms in the Loan Facility
Agreement.
II. Amendments.
A. Amendments to Section 1.1 of the Loan Facility Agreement.
Section 1.1 of the Loan Facility Agreement is hereby amended by adding
the following new definitions to such Section 1.1 in alphabetical order:
"Franchise Partner Program" shall mean the optional financing
and business structuring program offered by the Sponsor to a limited
number of qualified restaurant operators, such operators to be determined
by the Sponsor in its sole discretion, which provides such restaurant
operators a business structure for organizing, owning and funding the
establishment and operation of at least 8 to 10 restaurants doing
business under operating concepts owned by Sponsor.
"Mozzarella's" shall mean "Mozzarella's American Cafes", an
operating concept of the Sponsor.
"Ruby Tuesday" shall mean "Ruby Tuesday", an operating concept
of Sponsor.
"Tia's" shall mean "Tia's Mexican Restaurants", an operating
concept of Tias, Inc., a Texas corporation, a wholly owned subsidiary of
Sponsor.
B. Amendment to Section 6.1 of the Loan Facility Agreement.
Section 6.1 of the Loan Facility Agreement is hereby amended by deleting
Section 6.1(h)(iii) thereof and substituting the following in lieu
thereof:
"(iii) Consolidated Net Worth. Maintain at all times
Consolidated Net Worth in an amount not less than the sum of (i)
$180,000,000, plus (ii) an amount equal to 100% of the Net Proceeds of
all issuances of stock, warrants, Subordinated Debt, or other equity of
the Sponsor issued following the date hereof."
C. Amendment to Section 6.2 of the Loan Facility Agreement.
Section 6.2 of the Loan Facility Agreement is hereby amended by deleting
Section 6.2(c) thereof and substituting the following in lieu thereof:
"(c) Mergers, Sales, Etc.(A) Merge or consolidate with any
other Person, except that this Section 6.2(c) shall not apply to (i) any
merger or consolidation of Sponsor with any other Person provided that
the Sponsor is the surviving corporation after such merger or
consolidation, (ii) any merger or consolidation of any of the Sponsor's
Subsidiaries with any other Person provided that any such Subsidiary
shall be the surviving corporation after such merger or consolidation or
(iii) any merger between Subsidiaries of Sponsor, and (B) sell, lease,
transfer or otherwise dispose of its accounts, property or other assets
(including capital stock of any Subsidiary of Sponsor), except that this
Section 6.2(c) shall not apply to (i) any sale, lease, transfer or other
disposition of assets of any Subsidiary of the Sponsor to the Sponsor or
any of its Material Subsidiaries, (ii) sales of inventory in the ordinary
course of business of the Sponsor and its Subsidiaries, (iii) disposition
of equipment or inventory determined in good faith to be obsolete or
unusable by the Sponsor or its Subsidiaries, or (iv) any other sale of
the Sponsor's assets during the term of this Agreement (excluding the
sale of any assets pertaining to Mozzarella's or Tia's units or any Ruby
Tuesday units pursuant to the Company's Franchise Partner Program) with
an aggregate book value, when aggregated with all other such sales since
may 30, 1997, not exceeding 7.5% of the aggregate book value of all of
the Sponsor's assets on the date of such transfer; provided, however,
that no transaction pursuant to clause (A), clause (B)(i) or clause
(B)(iv) above shall be permitted if any Unmatured Credit Event or Credit
Event exists at the time of such transaction or would exist as a result
of such transaction."
III. Conditions of Effectiveness. This Second Amendment shall
become effective as of the date first above written (the "Effective
Date") when this Second Amendment shall have been executed and delivered
by Sponsor and the Required Participants to the Servicer.
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:
1. The execution, delivery and performance by Sponsor of this
Second 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.
2. This Second Amendment constitutes the legal, valid and
binding obligations of Sponsor, enforceable against Sponsor in accordance
with their respective terms.
3. No Unmatured Credit Event or Credit Event has occurred and
is continuing as of the Effective Date.
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 a 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 Second
Amendment or any investigation by the Participants or the Servicer.
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 Second Amendment.
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.
VIII. Binding Nature. This Second Amendment shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs,
successors, successors-in-titles, and assigns.
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 Second 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 Second 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.
X. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
XI. Entire Understanding. This Second 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.
XII. Counterparts. This Second 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment through their authorized officers as of the date first above
written.
RUBY TUESDAY, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: C.F.O.
Attest:
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:
FIRST AMERICAN NATIONAL BANK
By:
Title
WACHOVIA BANK, N.A.
By:
Title:
▇▇▇▇▇▇▇ BANK, N.A.
By:
Title:
HIBERNIA NATIONAL BANK
By:
Title:
FIRST TENNESSEE BANK
By:
Title:
