FIRST AMENDMENT TO AMENDED AND RESTATED
LOAN FACILITY AGREEMENT AND GUARANTY
THIS FIRST AMENDMENT TO LOAN FACILITY AGREEMENT AND GUARANTY
(this "First Amendment") dated as of February 28, 2001, by and between RUBY
TUESDAY, INC., a Georgia corporation ("Sponsor"), each of the financial
institutions listed on the signature pages hereto (the "Participants") and
SUNTRUST BANK, a Georgia banking corporation, as servicer (in such capacity, the
"Servicer");
W I T N E S S E T H:
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WHEREAS, the Sponsor, Participants and Servicer, in order to
make available a loan facility to certain franchisees of Sponsor, entered into
that certain Amended and Restated Loan Facility Agreement and Guaranty dated as
of October 11, 2000 (as 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 Servicer entered into that certain Amended and
Restated Servicing Agreement, dated as of October 11, 2000 (as amended or
modified from time to time, the "Servicing Agreement") to set forth certain
agreements regarding fees and operations;
WHEREAS, at the request of Sponsor, Sponsor, the Participants
and Servicer are entering into this First Amendment to modify certain terms and
provisions set forth in the Loan Facility Agreement;
WHEREAS, the Participants and Servicer are willing to agree to
the foregoing upon the terms and subject to the conditions set forth herein;
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:
1. Amendment to Section 2.1 of the Loan Facility Agreement. Section
2.1 of the Loan Facility Agreement is hereby amended by
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replacing the subsection (b) thereof in its entirety with the following:
(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 $50,000 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 (i)
$10,000 for Loans in the amount of $50,000 to $250,000 and in integral
multiples of $1,000 and (ii) $25,000 for Loans in the amount of
$250,001 to $3,500,000 and in integral multiples of $1,000, such
Advances not to exceed four (4) per month unless the Servicer shall
otherwise agree, and except that any Loan Commitments outstanding on
the date hereof that provide otherwise may remain in effect until such
time as such Loan Commitments are renewed or refinanced. 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 twenty-four 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. If any drawing is made upon a Letter of Credit and not
reimbursed by the applicable Borrower on the same Business Day, then
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.
Notwithstanding the foregoing, the terms of all Loans and Loan
Commitments governed by Loan Documents executed and delivered by
Borrowers prior to the Effective Date shall be subject in all respects
to Section 11.2.2.
2. Amendment to Section 2.4 of the Loan Facility Agreement. Section
2.4 of the Loan Facility Agreement is hereby amended by
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replacing the subsections (a) and (b) thereof in their entirety with the follow-
ing:
(a) Each Participant will receive from the Sponsor under the Operative
Documents a commitment fee (the "Sponsor's Commitment Fee") with
respect to the average daily amount of each Participant's Unused
Commitment, for the period commencing on the Effective Date and ending
on the Final Termination Date, or such earlier date as the
Participating Commitment shall expire or terminate, equal to 0.375% per
annum, such Sponsor's 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 December 31, 2000, calculated on the basis of a
360-day year and the actual number of days elapsed;
(b) Intentionally Omitted.
3. Amendment to Section 3.1 of the Loan Facility Agreement. Section
3.1 of the Loan Facility Agreement is hereby amended by
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replacing the subsection (b) thereof in its entirety with the following:
(b) The forms of the 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 to time provided that, the Servicer shall receive $250 from
the Borrower for each such modification and amendment and provided
further that, 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;
4. Amendment to Exhibit D. Exhibit D to the Loan Facility Agreement is hereby
amended by deleting Exhibit D in its entirety and substituting in lieu thereof
Exhibit D attached hereto.
5. Effectiveness. This First Amendment shall become effective as of
the date first above written (the "Effective Date") when this First Amendment
shall have been executed and delivered by Sponsor and the Required Participants
to the Servicer.
6. Representations and Warranties of Sponsor. Sponsor, without
limiting the representations and warranties provided in the
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Loan Facility Agreement, represents and warrants to the Participants and
Servicer as follows:
1. The execution, delivery and performance by Sponsor of this First
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 First 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.
7. 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 First
Amendment or any investigation by the Participants or the Servicer.
8. 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 First Amendment.
9. 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.
10. Binding Nature. This First Amendment shall be binding upon and
inure to the benefit of the parties hereto, their
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respective heirs, successors, successors-in-titles, and assigns.
11. 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 First 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 First 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.
12. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
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GEORGIA.
13. Entire Understanding. This First Amendment sets forth the entire
understanding of the parties with respect to the matters
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set forth herein, and shall supersede any prior negotiations or agreements,
whether written or oral, with respect thereto.
14. Counterparts. This First Amendment may be executed in any number
of counterparts and by different parties hereto in
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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.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
Address for Notices: RUBY TUESDAY, INC.
Ruby Tuesday, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title: CFO
Telecopy: (865) 379 - 6816
STATE OF TENNESSEE
COUNTY OF ▇▇▇▇▇▇
Signed, sealed and delivered in the presence of:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
Notary Public
Date Executed by Notary:
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▇▇ commission expires:
November 1, 2004
[NOTARIAL SEAL]
Address for Notices: SUNTRUST BANK, as Servicer
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
Attn: Center 1923 Title: Vice President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SunTrust Bank
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Attn: ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices: SUNTRUST BANK
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇▇▇▇▇
Attn: Center 1923 Title: Vice President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SunTrust Bank
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Attn: ▇▇▇▇▇ ▇▇▇▇▇
Participating Commitment: $9,000,000.00
Pro Rata Share: 17.14286%
Address for Notices: AMSOUTH BANK
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/▇▇▇▇ Scwarzentraub
Attention: Mr. ▇▇▇▇ Scwarzenbraub Name: ▇▇▇▇ Scwarzentraub
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Title: SVP
Participating Commitment: $12,750,000
Pro Rata Share: 24.28571%
Address for Notices: BANK OF AMERICA, N.A.
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Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
location code: NC1-007-17-14 Title: Managing Director
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Participating Commitment: $8,250,000.00
Pro Rata Share: 15.71429%
Address for Notices: HIBERNIA NATIONAL BANK
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Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇ By:/s/▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: AVP
Participating Commitment: 6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: FIRST UNION NATIONAL BANK
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Participating Commitment: $6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: WACHOVIA BANK, N.A.
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Attention: ▇▇. ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ By:______________________________
Name:
Title:
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
Address for Notices: THE FUJI BANK, LIMITED
World Trade Center, ▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ By:______________________________
Name:
Title:
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
EXHIBIT D
FORM OF LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT dated as of ____________ ___, 20__, is
made between _______________________, a __________________________ ("Borrower")
and SUNTRUST BANK ("Bank"), a Georgia banking corporation having its principal
office in Atlanta, Georgia.
W I T N E S S E T H:
WHEREAS, Borrower engages in the business of owning and operating one
or more restaurants under the name "Ruby Tuesday's" pursuant to a franchise
agreement with Ruby Tuesday, Inc., a Georgia corporation ("Sponsor");
WHEREAS, Borrower has requested and Bank has agreed to extend credit in
the form of loans and letters of credit to Borrower to provide working capital
for use in connection with its Ruby Tuesday franchise; and
WHEREAS, Borrower and Bank wish to enter into this Agreement to set
forth the terms and conditions of Bank's extension of credit to Borrower;
NOW THEREFORE, upon the terms and conditions hereinafter stated, and in
consideration of the mutual premises set forth above and other adequate
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 As used in this Agreement, the following terms shall have the meanings set
forth below (terms defined in the singular to have the same meaning when used in
the plural and vice versa):
"Advance" shall mean an advance of funds by Bank on behalf of Borrower
pursuant to the Master Note executed by Borrower.
"Agreement" means this Line of Credit Agreement and all exhibits,
riders and schedules at any time executed by the parties and made a part hereof
by reference, either as originally executed or as hereafter amended, modified or
supplemented from time to time.
"Applicable Law" means all laws, rules and regulations applicable to
the Person, conduct, transaction, covenant or Loan Documents in question,
including, without limitation, all applicable law and equitable principles; all
provisions of all applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies; and all orders, judgments and
decrees of all courts and arbitrators.
"Books and Records" means all of Borrower's books and records
evidencing or relating to its business, financial condition or any Collateral,
including but not limited to, ledgers, invoices, purchase orders, financial
statements, computer tapes and disks.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in Atlanta, Georgia are authorized by law to
close.
"Closing Date" means the date upon which the initial Advance with
respect to the Loan is funded.
"Closing Fee" shall have the meaning set forth in Section 2.5.
"Collateral" means any assets of the Borrower in which a Lien is
granted to the Bank to secure the Loan Indebtedness.
"Collateral Agreement" means any security agreement, mortgage, deed to
secure debt, deed of trust or other similar document granting a Lien on
Borrower's assets to the Bank to secure the Loan Indebtedness.
"Commitment Fee" shall have the meaning set forth in Section 2.6(a).
"Debt" shall mean, without duplication, (i) indebtedness for borrowed
money or for the deferred purchase price of property or services (other than
trade accounts payable on customary terms in the ordinary course of business),
(ii) financial obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) financial obligations as lessee under leases which
shall have been or should be, in accordance with GAAP, recorded as capital
leases, and (iv) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
financial obligations of others of the kinds referred to in clauses (i) through
(iii) above.
"Debt Service" means, for any period, the sum of (A) interest expense
paid in cash during such period plus (B) scheduled amortization of all Debt
(excluding Debt of the type described in clause (iv) of the definition of
"Debt") for such period, in each case measured for Borrower and its subsidiaries
on a consolidated basis in accordance with GAAP.
"Default Condition" means the occurrence of any event which, after
satisfaction of any requirement for the giving of notice or the lapse of time,
or both, would become an Event of Default.
"Default Rate" means the annual percentage interest rate applied to the
principal of the Loan not paid when due under the terms of the applicable Loan
Documents, which rate shall equal the sum of Prime Rate plus an additional
______ percent (__%) per annum.
"EBITDAR" means, for any period, (1) net income (loss) for such period,
plus, (2) to the extent subtracted in determining such net income (loss), (a)
interest expense for such period, (b) tax expense for such period, (c)
depreciation, amortization and other non-cash charges for such period, (d) Rents
for such period, (e) Non-recurring Expenses for such period, and (f) Excluded
Management Salary for such period, if any, minus (3) Non-recurring Income for
such period to the extent included in such net income (loss), in each case
measured for Borrower and its Subsidiaries on a consolidated basis
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning given to such term in Section
7 hereof.
"Excluded Management Salary" shall mean, for any period, (1) two-thirds
of the salary and expenses paid to the Franchisee Partner of the Borrower during
any period that the Borrower has only one Qualified Store and (2) one-third of
the salary and expenses paid to the Franchisee Partner of the Borrower during
any period that the Borrower has only two Qualified Stores.
"Fixed Charge Coverage Ratio" shall mean, as of any date, the ratio of
(i) EBITDAR to (ii) the sum of (A) Debt Service plus (B) Rents, in each case for
the immediately preceding four fiscal quarters ended on or closest to such date;
provided, however, that Sponsor may elect to exclude from the calculation of the
Fixed Charge Coverage Ratio the EBITDAR, the Debt Service and the Rents incurred
by Borrower and its subsidiaries that are attributable to any stores that are
not Qualified Stores; provided, further, however, that if the Sponsor at any
time includes any store that is not a Qualified Store in the calculation of the
Fixed Charge Coverage Ratio, such store shall thereafter be included in all
subsequent calculations of the Fixed Charge Coverage Ratio.
"Floating Rate" means a rate of interest per annum equal to the Prime
Rate plus an additional ____ percent (__%) per annum, such rate to change as and
when the Prime Rate changes.
"Franchise Documents" means, collectively, (i) the participation and
operating agreements for any Borrower that is a limited liability company or the
limited partnership agreement for any Borrower that is a limited partnership and
(ii) the written agreements between Sponsor and Borrower whereby Borrower is
authorized to establish one or more "Ruby Tuesday" franchises, including,
without limitation the Ruby Tuesday, Inc. Operating Agreements between Sponsor
and a Borrower and each other operating agreement and development agreement
related to each franchise location, all as amended or modified from time to
time.
"Franchisee Partner" means, collectively, the Person other than the
Sponsor that owns an equity interest in the Borrower and any Person who directly
or indirectly owns or controls such Person.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied.
"Guarantor" means each Person who now or hereafter guarantees payment
of the whole or any part of the Loan Indebtedness.
"Guaranty" means any guaranty executed by each of the partners,
shareholders, members and where not prohibited by law, the spouses of such
persons, of Borrower, or such other Persons as may be required by the Bank, in
favor of the Bank with respect to the obligations of Borrower with respect to
the Loan in the form provided by the Bank, as the same may be amended, restated
or supplemented from time to time.
"Letter of Credit" shall have the meaning set forth in Section 2.8
hereof.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.6(b) hereof.
"Letter of Credit Obligations" means the total face amount of all
outstanding Letters of Credit hereunder plus, without duplication, the aggregate
amount of all draws on Letters of Credit which have not been reimbursed by
Borrower, whether with Advances or otherwise.
"Lien" means any interest in property securing an obligation, whether
such interest is based on the common law, statute or contract, including,
without limitation, a security interest, lien or security title arising from a
security agreement, mortgage, security deed, trust deed, pledge or condition
sale, or a lease, consignment or bailment for security purposes.
"Loan" means, as of any date of determination, the aggregate amount of
Advances outstanding pursuant to the Loan Commitment from the Bank to Borrower
established pursuant to Section 2 hereof.
"Loan Commitment" means the committed amount of the loan facility
established by the Bank in favor of Borrower in the amount not exceeding, and
upon the terms described in, this Agreement.
"Loan Documents" means this Agreement, the Master Note, the Collateral
Agreements, any other documents relating to the Loan delivered by Borrower or
any guarantor or surety thereof to the Bank and any amendments thereto.
"Loan Indebtedness" means all amounts due and payable by Borrower under
the terms of the Loan Documents with respect to the Loan Commitment and the
Advances made thereunder, and Letters of Credit issued hereunder, including,
without limitation, Letter of Credit Obligations, outstanding principal, accrued
interest, fees, any late charges, and all reasonable costs and expenses of any
legal proceeding brought by the Bank to collect any of the foregoing (including
without limitation, reasonable attorneys' fees actually incurred).
"Loan Term" shall mean the period commencing on the date hereof and
ending on the Maturity Date.
"Master Note" means the note of Borrower, substantially in the form
attached hereto as Exhibit A, setting forth the obligation of Borrower to repay
the Loan.
"Maturity Date" shall have the meaning set forth in Section 2.3 hereof.
"Non-recurring Expenses" shall mean, for any period, all expenses of
the Borrower and its Subsidiaries for such period that are extraordinary and
generally not reflected in any prior period or reasonably anticipated to be
incurred in any subsequent period.
"Non-recurring Income" shall mean, for any period, all income of the
Borrower and its Subsidiaries for such period that is extraordinary and
generally not reflected in any prior period or reasonably anticipated to be
incurred in any subsequent period.
"Payment Date" means with respect to the Loan, the last day of each
calendar month, provided, however, if such day is not a Business Day, the next
succeeding Business Day.
"Permitted Liens" means (i) Liens in favor of Bank or Sponsor, (ii)
Liens for taxes not yet due or payable, (iii) statutory Liens securing the
claims of materialmen, mechanics, carriers and landlords for labor, materials,
supplies or rentals incurred in the ordinary course of Borrower's business, but
only if payment thereof is not at the time required and such Liens are at all
times junior in priority to the Liens in favor of Bank, (iv) Liens created
(whether in the past or in the future) in favor of lenders loaning money to
Borrower in connection with (y) the acquisition from Sponsor (or its successors,
assigns or affiliates) of existing Ruby Tuesday restaurants, or (z) the
development and/or construction or permanent financing of Ruby Tuesday
restaurants developed and operated pursuant to any Franchise Document between
Borrower, as franchisee, and the Sponsor (or its successors, assigns or
affiliates) as franchisor, (v) Liens shown on Exhibit B (if any), and (vi) Liens
hereafter consented to by Bank in writing.
"Person" means a corporation, an association, partnership, an
organization, a business, a business trust, a limited liability company, an
individual, a government or political subdivision thereof or a governmental
agency.
"Prime Rate" means the per annum rate of interest designated from time
to time by the Bank to be its prime rate, with any change in the rate of
interest resulting from a change in the Prime Rate to be effective as of the
opening of business of the Bank on the day of such change. The prime rate is one
of several reference rates used by the Bank and the Bank makes loans at rates
both higher and lower than the Prime Rate.
"Qualified Store" shall mean any store that has been open for at least
twelve months and was not acquired by Borrower from the Sponsor during the last
twelve months.
"Rents" means, for any period, the aggregate amount of all required
lease and rent payments for which the Borrower and its subsidiaries are directly
or indirectly liable (as lessee or as guarantor or other surety) under all
operating leases in effect at any time during such period, determined on a
consolidated basis in accordance with GAAP.
"Solvent" means, as to any Person, such Person (i) is able to pay, and
does pay, its debts as they mature and (ii) has a positive tangible net worth
determined in accordance with GAAP.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by Borrower.
1.2 Accounting terms used in this Agreement such as "net income (loss)",
"interest expense", "tax expense", "amortization," "depreciation," and "tangible
net worth" shall have the meaning normally given them by, and shall be
calculated (both as to amounts and classification of items) in accordance with,
GAAP. Any pronoun used herein shall be deemed to cover all genders. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations, and all references to any
instruments or agreements, including, without limitation, references to any of
the Loan Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof.
SECTION 2. LOAN COMMITMENT; MASTER NOTE.
2.1 Establishment of Loan Commitment. (a) Bank hereby establishes until the
Maturity Date (as hereinafter defined), a line of credit in favor of Borrower in
an amount equal to [$50,000 to $3,500,000] in aggregate principal amount at any
one time outstanding (the "Loan Commitment"), as reduced by the aggregate amount
of Letter of Credit Obligations from time to time outstanding. Within the limits
of the Loan Commitment, the Borrower may borrow, repay and re-borrow; provided,
however, that the Borrower may neither borrow nor re-borrow should there exist a
Default Condition or an Event of Default.
2.2 Advances. Borrower may request Advances pursuant to the Loan Commitment by
submitting a Request for Advance in the form attached hereto as Exhibit B to the
Bank, with a copy to Sponsor, on the Business Day prior to the date of the
requested Advance (which shall be a Business Day). Each Advance shall be in a
minimum amount of (i) $10,000 for Loans in the amount of $10,000 to $250,000 and
in integral multiples of $1,000 and (ii) $25,000 for Loans in the amount of
$250,001 to $3,500,000 and in integral multiples of $1,000. Borrower may not
request more than four (4) Advances in any calendar month. The Borrower may not
request Advances if as a result thereof, the amount of the Loan would exceed the
amount of the Loan Commitment. Borrower hereby irrevocably appoints the Sponsor
as the sole Person authorized to execute and deliver a Request for Advance
hereunder to the Bank. In furtherance of the foregoing, Borrower hereby makes,
constitutes and appoints Sponsor, and its agents and designees, the true and
lawful agents and attorneys-in-fact of Borrower, with full power of
substitution, to endorse its name and take all actions necessary to request
Advances hereunder and issue all Requests for Advances. The powers granted
herein are coupled with an interest and shall be irrevocable during the term
hereof.
2.3 Master Note; Repayment. The Loan Commitment and the Advances outstanding
thereunder shall be evidenced by a note executed by Borrower in favor of Bank,
substantially in the form of Exhibit A attached hereto (the "Master Note"). The
Master Note shall be dated as of the date hereof and shall be payable to the
order of Bank in the stated principal amount of the Loan Commitment. All amounts
outstanding pursuant to the Master Note shall mature on the date (the "Maturity
Date") that is earlier of (i) the occurrence of an Event of Default in
consequence of which Bank elects to accelerate the maturity and payment of the
Loan Indebtedness, or (iii) the __________ of the Closing Date, as such date may
be extended pursuant to Section 2.9 below, at which time all of the Loan
Indebtedness shall be due and payable in full. All payments of principal of, or
interest on, the Loan Documents and all other sums due under the terms of the
Loan and all payments with respect to Letter of Credit Obligations shall be made
in either (x) immediately available funds, or (y) checks or money orders made
payable to the Loan Operations section of the Bank at its principal office in
Atlanta, Georgia in accordance with written instructions provided by the Bank.
2.4 Interest. (a) From and after the date hereof, interest shall accrue on the
unpaid principal amount of the Loan Indebtedness at the Floating Rate. Interest
shall be calculated daily and shall be computed on the basis of actual days
elapsed over the period of a 365-day year. Interest shall be due and payable on
each Payment Date. After the occurrence of an Event of Default and during the
continuance thereof, the outstanding principal balance of the Loan shall bear
interest at the Default Rate.
(b) In no contingency or event whatsoever shall the amount
paid or agreed to be paid to Bank for the use, forbearance or detention of money
advanced under this Agreement exceed the highest lawful rate permissible under
Applicable Law. It is the intent hereof that Borrower will not pay or contract
to pay, and that Bank not receive or contract to receive, directly or indirectly
in any manner whatsoever, interest in excess of that which may be charged to and
paid by Borrower under Applicable Law. All interest (and charges deemed
interest) paid or agreed to be paid to Bank shall, to the extent permitted by
Applicable Law, be amortized, pro rated, allocated and spread in equal parts
throughout the full term hereof until payment in full of the principal amount of
the Loan Indebtedness owing hereunder (including the period of any renewal or
extension hereof) so that interest on the principal amount of the Loan
Indebtedness outstanding hereunder for such full period will not exceed the
maximum amount permitted by Applicable Law.
2.5 Closing Fee. On the Closing Date, the Borrower shall pay to the Bank in
immediately available funds a closing fee (the "Closing Fee") equal to the
greater of (i) 0.10% of the Loan Commitment or (ii) $500.00. The Closing Fee
shall be fully earned and nonrefundable as of the Closing Date.
2.6 Commitment Fee; Letter of Credit Fees. On each Payment Date which
is the last day of a calendar quarter, commencing on
----------------------------------------
______________ and continuing throughout the Loan Term, the Borrower shall pay
to the Bank, in arrears:
(a) A commitment fee (the "Commitment Fee") equal to _____% per annum
of the average daily unused amount of the Loan Commitment (with the express
understanding that Letters of Credit issued hereunder shall be deemed to be an
utilization of the Loan Commitment).
(b) A letter of credit fee (the "Letter of Credit Fee") equal to _____%
per annum multiplied by the daily average Letter of Credit Obligations
outstanding hereunder; provided that, if the aggregate Letter of Credit Fees
payable by Borrower with respect to any Letter of Credit issued hereunder do not
exceed $1,000 per annum, the Borrower shall be required to, on the Payment Date
which next follows the annual anniversary of the issuance of such Letter of
Credit, make an additional payment equal to $1,000 minus the Letter of Credit
Fees payable with respect to such Letter of Credit during the preceding year.
(c) The Commitment Fee and the Letter of Credit Fee shall be calculated
on the basis of the actual number of days elapsed in 360-day year.
2.7 Loan Prepayment. Borrower shall have the right to prepay the Loan
in whole or in part at any time and from time to time.
----------------
Partial prepayments of the Loan shall be in a minimum amount of $25,000.
2.8 Letters of Credit. The Bank shall, from time to time upon request of the
Borrower prior to the Maturity Date, but subject to the terms and conditions
hereof, issue stand-by letters of credit in such form as requested by the
Borrower and approved by the Bank from time to time (the "Letters of Credit");
provided, however, that the Borrower shall not be entitled to request the
issuance of any Letter of Credit if there exists a Default or an Event of
Default; and further provided that (i) no Letter of Credit shall be issued if,
as a result of such issuance, the aggregate amount of outstanding Letter of
Credit Obligations would exceed the lesser of (x) $250,000 and (y) the Loan
Commitment; (ii) no Letter of Credit shall have a maturity date longer than one
year from the date of issuance unless the Bank, in its sole discretion has
agreed to a longer term; (iii) no Letter of Credit shall have a maturity date
later than ten days prior to the Maturity Date; (iv) the Borrower shall give the
Bank at least five (5) days prior written notice of each request for a Letter of
Credit, which notice shall include the amount of the requested Letter of Credit,
the name and address of the beneficiary and a precise written description of the
terms of such Letter of Credit, together with the documents described in the
next paragraph; and (v) no Letter of Credit shall be requested unless the face
amount of such Letter of Credit does not exceed the unused portion of the Loan
Commitment. Borrower hereby irrevocably appoints the Sponsor as the sole Person
authorized to execute and deliver a request for a Letter of Credit and
application required hereunder to the Bank. In furtherance of the foregoing,
Borrower hereby makes, constitutes and appoints Sponsor, and its agents and
designees, the true and lawful agents and attorneys-in-fact of Borrower, with
full power of substitution, to endorse its name and take all actions necessary
to request Letters of Credit hereunder and issue all requests for Letters of
Credit and to execute and deliver all applications and other documents in
connection therewith. The powers granted herein are coupled with an interest and
shall be irrevocable during the term hereof.
In conjunction with any request for the issuance of a Letter of Credit,
the Borrower shall first deliver to Bank its form letter of credit application,
duly completed by a duly authorized officer of the Borrower. To the extent that
such letter of credit application's terms are inconsistent with the terms of
this Agreement, this Agreement controls. Upon delivery to the Bank of such
letter of credit application and other documents, instruments, or agreements
which the Bank may require from time to time hereafter in connection therewith,
each in form and substance satisfactory to the Bank, subject to the limitations
set forth in this Section 2.8, the Bank shall issue a Letter of Credit. Borrower
understands and agrees that the Bank may refuse upon any reasonable
circumstances to issue any Letter of Credit. Upon issuance, a Letter of Credit
shall be deemed to be an utilization of the Loan Commitment. Upon any draw upon
a Letter of Credit issued hereunder, the Borrower shall immediately reimburse
the Bank for such drawn amount and, in the event that the Borrower fails to
reimburse such amount on the same Business Day, the Bank shall be irrevocably
authorized to draw such amount upon the Loan Commitment at which point the
amount drawn shall be an Advance for all purposes hereunder, including without
limitation, the accrual of interest. Upon the occurrence of any Event of Default
pursuant to this Agreement, the Bank may require the Borrower to immediately
deposit with the Bank cash collateral in the amount of all outstanding Letter of
Credit Obligations pursuant to this Agreement.
2.9 Extension of Maturity Date. The Borrower, on and before ninety (90) days
prior to the Maturity Date, as it may from time to time exist, and with the
written consent of the Sponsor, request in writing that the Bank extend the
Maturity Date. Upon receipt of such notice and such consent, the Bank may, in
the exercise of its sole discretion, extend the Maturity Date for an additional
two-year period and will notify the Borrower and the Sponsor in writing of
whether the Bank will agree to such extension no later than sixty (60) days
prior to the Maturity Date. Failure of the Bank to respond to such request shall
be deemed to be an election by the Bank not to extend the Maturity Date.
SECTION 3. CONDITIONS PRECEDENT.
Borrower shall deliver and Bank shall have received the following
documents, each in form and substance satisfactory to Bank, as conditions
precedent of the initial Advance comprising the Loan or the initial Letter of
Credit issued hereunder, as the case may be:
(a) a validly executed copy of this Agreement;
(b) the validly executed Master Note;
(c) a validly executed copy of a Guaranty of each partner,
member or majority stockholder of Borrower, and to the extent not
prohibited by Applicable Law, the spouse of such Person;
[(d) a validly executed Collateral Agreement;
(e) a validly executed Landlord's Waiver for each
location of Borrower where the Collateral is located;
(f) validly executed Uniform Commercial Code Financing
Statements suitable to enable Bank to perfect the security interest
granted to it under the Collateral Agreement;]
(g) evidence of Borrower's good standing;
(h) a validly executed Officer's Certificate or such
other evidence acceptable to Bank evidencing
Borrower's authorization of the Loan and incumbency;
(i) a Certificate of Insurance from an insurer
acceptable to Bank naming the Bank as loss payee/additional
insured as follows:
SunTrust Bank
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ [30302]
Center Code 1923
Attention: Strategic Partners Group; and
(k) a validly executed Request for Advance, or a request
for issuance of
a Letter of Credit, as the case may be.
In addition, as conditions precedent of the initial Advance comprising
the Loan or the initial Letter of Credit issued hereunder, as the case
may be, (i) the Bank shall have satisfied itself that there are no
Liens on any of the Collateral, other than Permitted Liens, (ii) the
Bank shall be satisfied that all corporate or LLC proceedings necessary
for the authorization of the Loan Commitment and the execution,
delivery and performance of the Loan Documents, shall have been taken,
(iii) the Bank shall have received any other documents that it deems
reasonably necessary or advisable and (iv) the Bank shall have received
payment of the Closing Fee and, if required by the Bank at closing, (A)
an amount equal to Bank's out-of-pocket expenses and fees and expenses
of Bank's counsel incurred in connection with the negotiation,
documentation and closing of the transactions contemplated hereby, and
(B) an amount sufficient in the opinion of the Bank to reimburse the
Bank for all taxes, collateral filing fees and other fees and charges
payable on account of the execution, delivery or recording of any of
the Loan Documents or any loans or Letters of Credit outstanding
hereunder.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce Bank to enter into this Agreement, Borrower represents and
warrants as follows:
4.1 Organization and Qualification of Borrower. Borrower is [limited liability
company duly organized, validly existing and in good standing] [limited
partnership duly organized, validly existing and in good standing] under the
laws of the state shown on the first page hereof, and is qualified to do
business in all jurisdictions where the character of its properties or the
nature of its activities make such qualification necessary.
4.2 Trade Names, Subsidiaries and Location of Assets. Exhibit C attached hereto
and made a part hereof fully and accurately discloses any legal name, trade name
or style ever used by Borrower, any Subsidiaries owned by Borrower, and each
office, other place of business or location of assets of Borrower.
4.3 Corporate or Other Authority; No Violation of Other Agreements. The
execution, delivery and performance by Borrower of this Agreement and the other
Loan Documents have been duly authorized by all necessary action on the part of
Borrower and do not and will not (i) violate any provision of Borrower's
[Participation and Operating Agreement, Certificate of Formation] [partnership
agreement] or other organization documents or any Applicable Law, or (ii) be in
conflict with, result in a breach of, or constitute (following notice or lapse
of time or both) a default under any Franchise Document or any other agreement
to which Borrower is a party or by which Borrower or any of its property is
bound.
4.4 Enforceability. This Agreement and each of the other Loan Documents create
legal, valid and binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms.
4.5 Entire Agreement. The Master Note and accompanying Loan Documents executed
in connection with the Loan and delivered to Bank are the only contracts
evidencing the transaction described herein and constitute the entire agreement
of the parties hereto with respect to the transaction.
4.6 Genuineness of Signatures. The Master Note and each accompanying Loan
Document executed in connection the such Loan is genuine and all signatures,
names, amounts and other facts and statements therein and thereon are true and
correct.
4.7 Litigation. There are no actions, suits, proceedings or investigations
pending or, to the knowledge of Borrower, threatened before any court or
administrative or governmental agency that may, individually or collectively,
adversely affect the financial condition or business operations of Borrower.
4.8 Solvency. Borrower is now and will remain Solvent.
--------
4.9 Taxes. All federal, state and local tax returns have been duly filed, and
all taxes, assessments and withholdings shown on such returns or billed to
Borrower have been paid, and Borrower maintains adequate reserves and accruals
in respect of all such federal, state and other taxes, assessments and
withholdings. There are no unpaid assessments pending against Borrower for any
taxes or withholdings, and Borrower knows of no basis therefor.
4.10 Compliance with Laws. Borrower has duly complied with in all material
respects, and its properties and business operations are in compliance in all
material respects with, the provisions of all Applicable Laws, including,
without limitation ERISA, the Fair Labor Standards Act and OSHA. Borrower
possesses all permits, franchises, licenses, trademark rights, trade names,
patents and other authorizations reasonably necessary to enable it to conduct
its business operations as now conducted, and no filing with (other than
documents relating to the Collateral if the Loan is secured), and no consent,
authorization, order or license of, any Person is necessary in connection with
the execution or performance of this Agreement or the other Loan Documents.
4.11 No Default. No Default Condition or Event of Default exists.
----------
4.12 Use of Proceeds. None of the proceeds of any Advances by Bank have been or
will be used to purchase or carry (or to satisfy or refinance any indebtedness
incurred to purchase or carry) any "margin stock" (as defined in Regulation U of
the Federal Reserve Board). Advances shall be made for the sole purpose of
working capital needs of Borrower in connection with the operation of a
business, including, without limitation, the establishment of new locations, in
the form of one or more Ruby Tuesday restaurants.
Each submission of a Request for an Advance or a request for the issuance of a
Letter of Credit made by Borrower pursuant to this Agreement or any other Loan
Document shall constitute an automatic representation and warranty by Borrower
to Bank that there does not then exist any Default Condition or Event of Default
and a reaffirmation as of the date of said request that all representations and
warranties of Borrower contained in this Agreement and the other Loan Documents
are true in all material respects. All representations and warranties contained
in this Agreement or in any of the other Loan Documents shall survive the
execution, delivery and acceptance hereof by Bank and the closing of the
transactions described herein.
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS.
During the term of this Agreement, and thereafter for so long as there
are is any outstanding Loan Indebtedness to Bank, Borrower covenants that,
unless otherwise consented to by Bank in writing, it shall:
5.1 Financial Reports. Deliver to Bank or cause to be delivered to Bank:
-----------------
(i) within 90 days after the end of each fiscal year a balance
sheet and income statement of Borrower as of the end of such year,
prepared by Sponsor or by such firm of independent public accountants
as may be designated by Borrower and be satisfactory to Bank, and
certified as prepared in accordance with GAAP and, to the extent
delivered to Sponsor, audited financial statements for such period;
(ii) within 45 days after the end of each fiscal quarter a
balance sheet and income statement of Borrower as of the end of such
quarter, prepared by Sponsor and certified as prepared in accordance
with GAAP (except for the year-end adjustments); and
(iii) with reasonable promptness, all reports by Borrower to
its shareholders or partners and such other information as Bank may
reasonably request from time to time.
5.2 Books and Records. Maintain its Books and Records and accounts in accordance
with GAAP and permit any Person designated by Bank or Sponsor to visit
Borrower's premises, inspect any of the Collateral or any of the Books and
Records, and to make copies thereof and take extracts therefrom, and to discuss
Borrower's financial affairs with Borrower's financial officers and accountants
subject in each instance to reasonable prior written notice to Borrower, except
in the event of a default by Borrower, in which case notice shall not be
required.
5.3 Taxes. Promptly file all tax returns and pay and discharge all taxes,
assessments, withholdings and other governmental charges imposed upon it, its
income or profits, or upon any property belonging to it, prior to the date on
which penalties attach thereto.
5.4 Notices to Bank. Promptly notify Bank in writing of (i) the occurrence of
any Default Condition or Event of Default; (ii) any pending or threatened
litigation claiming damages in excess of $100,000 or seeking relief that, if
granted, would adversely affect the financial condition or business operations
of Borrower; and (iii) any asserted violation by Borrower of or demand for
compliance by Borrower with any Applicable Law.
5.5 Compliance with Applicable Laws. Comply in all material respects with
all Applicable Laws, including, without limitation,
-------------------------------
ERISA, the Fair Labor Standards Act and OSHA.
5.6 Existence. Maintain its separate corporate or partnership existence and all
rights, privileges and franchises in connection therewith, and maintain its
qualification and good standing in all jurisdictions where the failure to do so
could have a material adverse effect upon its ability to repay the Loan
Indebtedness.
5.7 Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio of not
less than 1.2 to 1.0. This ratio will be calculated as of the last day of each
fiscal quarter of the Borrower based upon the preceding twelve-month period,
commencing on the last day of the first fiscal quarter in which the Borrower or
its Subsidiaries own at least one Qualified Store.
SECTION 6. NEGATIVE COVENANTS.
During the term of this Agreement, and thereafter for so long as there
are is Loan Indebtedness outstanding, Borrower covenants that unless Bank has
first consented thereto in writing, it will not:
6.1 Merger; Disposal or Moving of Collateral. Merge or consolidate with or
acquire any substantial portion of the assets or stock of any Person; sell,
lease, transfer or otherwise dispose of all or any portion of its properties
(including any of the Collateral), except sales or rentals of Inventory in the
ordinary course of business; or, without having given Bank at least 60 days
prior written notice and having executed such instruments and agreements as Bank
shall require, change its name, the location of any Collateral or the location
of its chief executive office, principal place of business or the office at
which it maintains its Books and Records.
6.2 Liens. Grant or suffer to exist any Lien upon any of its assets except
Permitted Liens.
-----
6.3 Guarantees. Guarantee, assume, endorse or otherwise become contingently
liable for any obligation or indebtedness of any Person, either directly or
indirectly, exceeding $100,000 not existing as of this date, except by
endorsement of items of payment for deposit or collection or guarantees of
operating leases in the ordinary course of business and except as set forth on
Exhibit C attached hereto.
6.4 Loans. Make loans or advances of money to or investments in any Person, or
(except in the ordinary course of business and on fair and reasonable terms)
engage in any transaction with a subsidiary or affiliate.
SECTION 7. EVENTS OF DEFAULT.
7.1 List of Events of Default. The occurrence of any one or more of the
following conditions or events shall constitute an
-------------------------
"Event of Default":
(a) Borrower shall fail to pay any principal amount of the
Loan Indebtedness or any other amount of the Loan Indebtedness on the
due date thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise);
(b) any warranty, representation, or other statement by
Borrower herein or in any instrument, certificate or financial
statement furnished in compliance herewith proves to have been false or
misleading in any material respect when made;
(c) Borrower shall fail or neglect to perform, keep or observe
any covenant contained in this Agreement, any of the other Loan
Documents or any other agreement now or hereafter entered into with
Bank;
(d) Borrower or any Guarantor shall fail to pay when due any
amount owed to any creditor (other than Bank) or any Guarantor shall
fail to pay or perform any liability or obligation in accordance with
the terms of any agreement with Bank;
(e) Borrower or any Guarantor shall cease to be Solvent, shall
die or become incompetent, shall suffer the appointment of a receiver,
trustee, custodian or similar fiduciary, shall make an assignment for
the benefit of creditors, or shall make an offer of settlement or
composition to their respective unsecured creditors generally;
(f) any petition for an order for relief shall be filed by or
against Borrower or any Guarantor under the Bankruptcy Code (if against
Borrower or any Guarantor, the continuation of such proceeding for more
than 30 days);
(g) any judgment, writ of attachment or similar process is
entered or filed against Borrower or any Guarantor or any of Borrower's
or any Guarantor's property and such judgment, writ of attachment or
process is not dismissed, satisfied or vacated within ten (10) days
thereafter or results in the creation or imposition of any Lien upon
any Collateral that is not a Permitted Lien;
(h) Any Guarantor shall revoke or attempt to revoke the
guaranty signed by such Guarantor or shall repudiate
such Guarantor's liability thereunder;
(i) any Person, or group of Persons (whether or not related)
other than Sponsor or one of its affiliates, shall have or obtain legal
or beneficial ownership of a majority of the outstanding voting
securities or rights of Borrower, other than any Person, or group of
Persons, that has such majority ownership on the date of execution of
this Agreement as shown on Exhibit C;
(j) any of Borrower's Franchise Documents shall terminate or
be revoked for any reason, or Borrower shall have received notice from
the Sponsor that a default has occurred under any Franchise Documents;
or
(k) Sponsor shall default in its obligations to the Bank
pursuant to any agreement between the Bank and Sponsor and Sponsor
shall not purchase the Loan, Letters of Credit and Loan Commitment
hereunder within five (5) Business Days.
7.2 Advances and Letters of Credit. In no event shall the Bank have any
obligation to make an Advance pursuant to the Loan Commitment or issue a Letter
of Credit hereunder if there exists a Default Condition or an Event of Default.
SECTION 8. REMEDIES.
All of the Loan Indebtedness shall become immediately due and payable
and the Loan Commitment shall be deemed immediately terminated (without notice
to or demand upon Borrower) upon the occurrence of an Event of Default under
Section 7(f) of this Agreement; and upon and after the occurrence of any other
Event of Default, Bank shall have the right to terminate immediately the Loan
Commitment and to declare the entire unpaid principal balance of and accrued
interest with respect to the Loan Indebtedness to be, and the same shall
thereupon become, immediately due and payable upon receipt by Borrower of
written notice and demand or, in the case of all outstanding Letter of Credit
Obligations, immediately subject to the cash collateral requirements of Section
2.8 hereof. From and after the date on which the Loan Indebtedness becomes
automatically due and payable or is declared by Bank to be due and payable as
aforesaid, Bank shall have and may exercise from time to time any and all rights
and remedies afforded to a secured party or otherwise under any Loan Document or
Applicable Law. If the Loan Indebtedness is collected by or through an attorney
at law, Bank shall be entitled to collect reasonable attorneys' fees and court
costs from Borrower.
SECTION 9. WAIVERS.
Borrower waives notice of Bank's acceptance hereof. Borrower hereby
waives any requirement on the part of Bank to post any bond or other security as
a condition to Bank's right to obtain an immediate writ of possession with
respect to any Collateral. Bank shall not be deemed to have waived any of its
rights upon or remedies hereunder or any Event of Default unless such waiver be
in writing and signed by Bank. No delay or omission on the part of Bank in
exercising any right shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right on any future occasion.
SECTION 10. NOTICES.
All notices and demands to or upon a party hereto shall be in writing
and shall be sent by certified mail, return receipt requested, personal delivery
against receipt or by telecopier or other facsimile transmission add shall be
deemed to have been validly served, given or delivered when delivered against
receipt or one Business Day after deposit in the mail, postage prepaid, or, in
the case of facsimile transmission, when indicated by verification receipt
printed by the sending machine as having been received at the office of the
noticed party, addressed in each case as follows:
If to Borrower: _________________________
=========================
Attention _________________
---------
Telecopier No.:_____________
If to Bank: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Center No. 1923
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Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice
given in accordance with this Section.
SECTION 11. INDEMNIFICATION.
Borrower hereby agrees to indemnify Bank and hold Bank harmless from
and against any liability, loss, damage, suit, action or proceeding ever
suffered or incurred by Bank as the result of Borrower's failure to observe,
perform or discharge Borrower's duties hereunder or the issuance of any Letters
of Credit hereunder. Without limiting the generality of the foregoing, this
indemnity shall extend to any claims asserted against Bank by any Person under
any environmental laws. If any taxes, collateral filing fees or other fees or
charges shall be payable by Borrower or Bank on account of the execution,
delivery or recording of any of the Loan Documents or any loans or Letters of
Credit outstanding hereunder, Borrower will pay (or reimburse Bank's payment of)
all such taxes, collateral filing fees or other fees or charges, including any
applicable interests and penalties, and will indemnify and hold Bank harmless
from and against liability in connection therewith. The indemnity obligations of
Borrower under this Section shall survive the payment in full of the Loan
Indebtedness.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement and the other Loan Documents embody the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof, and this Agreement may not be modified or amended except
by an agreement in writing signed by Borrower and Bank.
SECTION 13. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; but Borrower shall
not assign this Agreement or any right or benefit hereunder to any Person. The
Bank may assign its rights and obligations hereunder at any time and to any
Person, including without limitation, to Sponsor.
SECTION 14. GOVERNING LAW.
THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS HEREUNDER, INCLUDING MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF GEORGIA (WITHOUT REGARD TO THE LAWS OF CONFLICTS THEREOF) AND IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT.
SECTION 15. MISCELLANEOUS.
Time is of the essence of this Agreement. Bank reserves the right to
participate, sell or assign the Loan made hereunder and provide any participant
or assignee all information in Bank's possession regarding Borrower, its
business and the Collateral. Borrower shall reimburse Bank for Bank's
out-of-pocket expenses and for the fees and expenses and disbursements of Bank's
counsel in connection with the negotiation, documentation and closing of the
transactions contemplated hereby, and Borrower will pay all expenses incurred by
Borrower in connection with the transactions. The Section headings are for
convenience only and shall not limit or otherwise affect any of the terms
hereof.
SECTION 16. RELATIONS WITH SPONSOR.
Borrower recognizes and acknowledges that the Bank has made the Loan
Commitment available to Borrower hereunder at the behest of, as an accommodation
to, and based upon the credit support of, Sponsor. Accordingly, Borrower agrees
that from time to time the Bank may release to Sponsor such information about
Borrower and the Loan as Sponsor may request, and the Bank may condition its
agreement to any waiver, modification or amendment on the prior written consent
of Sponsor. Borrower further agrees that upon the occurrence of an Event of
Default hereunder, the Bank may notify Sponsor of such Event of Default prior to
notifying Borrower thereof, and the Bank shall not be liable to Borrower for
failure to give simultaneous notice to Borrower. Borrower further agrees that
the Bank shall not be liable to Borrower as a result of any information or
document obtained by Bank regarding Borrower which is shared by Bank with
Sponsor or any action taken under the Loan Documents based upon instructions
from the Sponsor.
In addition, the Borrower acknowledges and agrees that to the extent
that the Sponsor makes any payments to the Bank as a result of the credit
support that Sponsor has provided to the Bank with respect to the Borrower, the
Sponsor will be subrogated to the rights of the Bank pursuant to this Agreement
and all related Loan Documents and may exercise and enforce in its own right the
rights and remedies of the Bank hereunder and thereunder to the fullest extent
provided by law or at equity or by the terms of the Agreement and related Loan
Documents.
WITNESS the hand and seal of the parties hereto on the date first above
written.
Accepted in Atlanta, Georgia:
----------------------------
BORROWER:
By:
-----------------------------------------
Title:
-----------------------------------
Attest:
-------------------------------------
Secretary
[CORPORATE SEAL]
BANK:
SUNTRUST BANK
By:------------------------------------
Title:---------------------------------
EXHIBIT A
MASTER NOTE
[date] Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, ____________________, a
__________________________ (the "Borrower"), promises to pay to the order of
SUNTRUST BANK, a Georgia banking corporation (the "Bank") at Bank's principal
office in Atlanta, Georgia, or at such other place as the holder hereof may
designate by notice in writing to Borrower, in immediately available funds in
lawful money of the United States of America, on the Maturity Date, as set forth
in that certain Line of Credit Agreement, dated as of even date herewith (the
"Agreement") by and between the Borrower and Bank, the lesser of (i) principal
sum of [FIFTY THOUSAND to THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($50,000 to $3,500,000.00)], or (ii) so much thereof as shall have been from
time to time disbursed hereunder in accordance with the Agreement and not
theretofore repaid, as shown on the grid schedule attached hereto (the "Grid
Schedule").
In addition to principal, Borrower agrees to pay interest on
the principal amounts disbursed hereunder from time to time from the date of
each disbursement until paid at such rates of interest per annum and upon such
dates as provided for in the Agreement. Interest shall accrue on the outstanding
principal balance from the date hereof up to and through the date on which all
principal and interest hereunder is paid in full, and shall be computed on the
basis of the actual number of days elapsed in a 365-day year. Such interest is
to be paid to Bank at its address set forth above. Any principal amount due
under this Note that is not paid on the due date therefor whether on the
Maturity Date, or resulting from the acceleration of maturity upon the
occurrence of an Event of Default (as defined in the Agreement), shall bear
interest from the date due until payment in full at the Default Rate, as such
term is defined in the Agreement.
This Master Note ("Note") evidences a loan incurred pursuant
to the terms and conditions of the Agreement to which reference is hereby made
for a full and complete description of such terms and conditions, including,
without limitation, provisions for the acceleration of the maturity hereof upon
the existence or occurrence of certain conditions or events, and the terms of
any permitted prepayments hereof. All capitalized terms used in this Note shall
have the same meanings as set forth in the Agreement.
Upon the existence or occurrence of any Event of Default, the
principal and all accrued interest hereof shall automatically become, or may be
declared, due and payable in the manner and with the effect provided in the
Agreement.
36
Bank shall at all times have a right of set-off against any
deposit balances of Borrower in the possession of the Bank and the Bank may
apply the same against payment of this Note or any other indebtedness of
Borrower to the Bank. The payment of any indebtedness evidenced by this Note
prior to the Maturity Date shall not affect the enforceability of this Note as
to any future, different or other indebtedness incurred hereunder by the
Borrower. In the event the indebtedness evidenced by this Note is collected by
legal action or through an attorney-at-law, the Bank shall be entitled to
recover from Borrower all costs of collection, including, without limitation,
reasonable attorneys' fees if collected by or through an attorney-at-law.
Borrower acknowledges that the actual crediting of the amount
of any disbursement under the Agreement to an account of Borrower or recording
such amount in the Grid Schedule shall, in the absence of manifest error,
constitute presumptive evidence of such disbursement and that such Advance was
made and borrowed under the Agreement. Such account records or Grid Schedule
shall constitute, in the absence of manifest error, presumptive evidence of
principal amounts outstanding and the payments made under the Agreement at any
time and from time to time, provided that the failure of Bank to record on the
Grid Schedule or in such account the type or amount of any Advance shall not
affect the obligation of the undersigned to repay such amount actually advanced
together with interest thereon in accordance with this Note and the Agreement.
Failure or forbearance of Bank to exercise any right
hereunder, or otherwise granted by the Agreement or by law, shall not affect or
release the liability of Borrower hereunder, and shall not constitute a waiver
of such right unless so stated by Bank in writing. THIS NOTE SHALL BE DEEMED TO
BE MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF). Time is of the essence of this Note.
PRESENTMENT FOR PAYMENT, NOTICE OF DISHONOR AND PROTEST ARE
HEREBY WAIVED.
Executed under hand and seal of the Borrower as of the day and
year first above written.
[NAME OF BORROWER]
By:________________________
Name:
Title:
Attest:____________________
Name:
Title:
[CORPORATE SEAL]
GRID SCHEDULE
ADVANCES
Unpaid Principal
Bearing Interest
Amount of Amount of at the Above- Notation
Date Advance Advance Repaid Reference Rate Made By
$---------- $---------- $----------
EXHIBIT B
SunTrust Bank
Ruby Tuesday, Inc. Franchisee Loan Program
REQUEST FOR ADVANCE
SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. [Date]
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Strategic Partners
Center 1923
Re: Name of Borrower: _________________________
Closing Date: _________________________
Requested Advance:_________________________
Ladies and Gentlemen:
The above-referenced Borrower hereby requests an Advance in the amount
of $________________________ pursuant to the Line of Credit Agreement and
Promissory Note dated as of the date set forth above, such Advance to be made on
_____________________.
The Borrower hereby directs the Bank to fund such Advance in accordance
with the following wiring instructions:
Name of Bank: _________________________
City, State: _________________________
ABA No. _________________________
Account No. _________________________
Account Name:________________________
The Borrower represents and warrants to the Bank that no Event of
Default exists pursuant to the Line of Credit Agreement and Promissory Note
referenced above and that all representations and warranties set forth in said
Line of Credit Agreement are true and correct on the date hereof.
[Name of Borrower]
By:________________________
Title:_______________________
Fax to ▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and to Ruby Tuesday, Inc. at ____________
A. Permitted Liens
The following described Liens are Permitted Liens (if none, so state):
Name of Lien Holder Date of Recording Collateral
B. Trade Names and Styles
The following are the only trade names or trade styles ever used by
Borrower (if none, so state):
C. Subsidiaries
The following are all of the subsidiaries owned by Borrower (if none,
so state).
D. Business Locations
The following are all of the locations where Borrower has an office or
other place of business or owns assets:
E. Stockholders/Members
The following are all of the stockholders or members of Borrower and
the percentage of Borrower's equity owned by each:
Stockholder's Name Percentage of Equity Owned
F. Guarantees
