FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY

FOURTH AMENDMENT

TO AMENDED AND RESTATED

LOAN FACILITY AGREEMENT AND GUARANTY

 

THIS FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY dated as of May 21, 2008 (the “ Agreement ”) is entered into among Ruby Tuesday, Inc., a Georgia corporation (the “ Sponsor ”), the Guarantors, the Participants party hereto and Bank of America, N.A., as servicer and agent for the Participants (in such capacity, the “ Servicer ”). All capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Loan Facility Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Sponsor, the Participants and the Servicer entered into that certain Amended and Restated Loan Facility Agreement and Guaranty dated as of November 19, 2004 (as amended or modified from time to time, the “ Loan Facility Agreement ”);

 

WHEREAS, the Sponsor has requested that the Participants amend the Loan Facility Agreement as set forth below subject to the terms and conditions specified in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.	Amendments . The Loan Facility Agreement is hereby amended as follows:

 

(a)        Section 1.1 of the Loan Facility Agreement is hereby amended by adding the following defined terms in proper alphabetical order:

 

“ Authoritative Guidance ” shall have the meaning set forth in Section 6.1(h) .

 

“ Collateral Agent ” shall mean Bank of America in its capacity as collateral agent under any of the Collateral Documents and the Intercreditor Agreement or any successor collateral agent.

 

“ Collateral Documents ” shall mean a collective reference to the Pledge Agreement and such other security documents as may be executed and delivered by the Credit Parties pursuant to the terms of Section 6.10A.

 

“ Consolidated Entities ” shall have the meaning set forth in Section 6.1(h) .

 

“ Consolidated Working Capital ” shall mean, at any time, the excess of (i) current assets (excluding cash and those Permitted Investments identified in clauses (a.), (b.), (c.) and (e.) of the definition of Permitted Investments) of the Sponsor and its Subsidiaries on a consolidated basis at such time over (ii) current liabilities (excluding current maturities of Indebtedness) of the Sponsor and its Subsidiaries on a consolidated basis at such time, all as determined in accordance with GAAP.

 

“ Control Event ” shall mean (1) the execution by the Sponsor or any of its Subsidiaries or Affiliates of any agreement or letter of intent with respect to any proposed transaction or event or series of transactions or events which, individually or in the

 

 

aggregate, may reasonably be expected to result in a Change in Control, (2) the execution of any written agreement which, when fully performed by the parties thereto, would result in a Change in Control or (3) the making of any written offer by any person (as such term is used in Section 13(d) and Section 14(d)(2) of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) or related persons constituting a group (as such term is used in Section 13(d)-5 under the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) to the holders of the common stock of the Sponsor or of any of its Affiliates, which offer, if accepted by the requisite number of holders, would result in a Change in Control.

 

“ Domestic Subsidiary ” shall mean any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.

 

“ Equity Interests ” shall mean, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ Equity Issuance ” means any issuance by the Sponsor or any Subsidiary to any Person of its Equity Interests.

 

“ FIN 46R ” shall have the meaning set forth in Section 6.1(h) .

 

“ Fourth Amendment Effective Date ” shall mean May 21, 2008.

 

“ Intercreditor Agreement ” shall mean that certain Intercreditor and Collateral Agency Agreement dated as of the Fourth Amendment Effective Date among the Sponsor, the Guarantors, the Purchasers, the Servicer, on behalf of all of the Participants, Bank of America, N.A., as the administrative agent on behalf of all the lenders under the Revolving Credit Facility and the Collateral Agent, as amended or modified from time to time.

 

“ Investments ” shall have the meaning set forth in Section 6.17 .

 

“ Permitted Liens ” shall mean the Liens permitted by Section 6.15 .

 

“ Pledge Agreement ” shall mean that certain Pledge Agreement dated as of the Fourth Amendment Effective Date in favor of the Collateral Agent, for the benefit of the holders of the Senior Secured Obligations executed by each of the Sponsor, the Guarantors and the Collateral Agent, as amended or modified from time to time.

 

“ Pledged Collateral ” shall have the meaning set forth in the Pledge Agreement.

 

“ Purchasers ” shall mean the “Purchasers” under and as defined in the Senior Note Purchase Agreement.

 

 

 

“ Senior Notes ” shall mean the “Notes” under and as defined in the Senior Note Purchase Agreement.

 

“ Senior Secured Obligations ” shall have the meaning set forth in the Intercreditor Agreement.

 

(b)       The following definitions in Section 1.1 of the Loan Facility Agreement are hereby amended to read as follows:

 

“ Applicable Margin ” shall mean, as of any date, the following percentages per annum determined by reference to the applicable Adjusted Total Debt to EBITDAR Ratio in effect on such date as set forth below

 

 

 

provided , that a change in the Applicable Margin resulting from a change in such ratio shall be effective on the second Business Day after which the Sponsor is required to deliver the financial statements required by Section 6.1(a) or (b) and the compliance certificate required by Section 6.1(c) ; provided , further , that if at any time the Sponsor shall have failed to deliver such financial statements and such certificate, the Applicable Margin shall be at Level V until such time as such financial statements and certificate are delivered, at which time the Applicable Margin shall be determined as provided above. Notwithstanding the foregoing, the Applicable Margin from the Fourth Amendment Effective Date until the financial statements and compliance certificate are required to be delivered for the Sponsor’s fiscal year ending in June of 2008 shall be determined based upon Pricing Level V.

 

“ Business Day ” shall mean (i) any day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina are authorized or required by law to close and (ii) if such day relates to an Advance of, a payment or prepayment of principal or interest on, a Payment Period for, an Adjusted LIBO Rate Loan or a notice

 

 

with respect to any of the foregoing, any day on which dealings in Dollars are carried on in the London interbank market.

 

“ Capital Expenditures ” shall mean all expenditures of the Credit Parties and their Subsidiaries which, in accordance with GAAP, would be classified as capital expenditures, including, without limitation, Capital Lease Obligations.

 

“ Change in Control ” shall mean the occurrence of one or more of the following events: (a) any sale, lease, exchange or other transfer (in a single transaction or a series of related transactions) of all or substantially all of the assets of the Sponsor to any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder in effect on the date hereof), (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or “group” (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of 30% or more of the outstanding shares of the voting stock of the Sponsor; (c) occupation of a majority of the seats on the board of directors of the Sponsor by Persons who were neither (i) nominated by the current board of directors nor (ii) appointed by directors so nominated, (d) the occurrence of a “Change in Control” under and as defined in the Senior Note Purchase Agreement or (e) the occurrence of a “Change in Control” under and as defined in the Revolving Facility Credit Agreement.

 

“ Consolidated EBITDA ” shall mean, for the Sponsor and its Subsidiaries for any period, an amount equal to the sum of (a) Consolidated Net Income for such period minus (b) to the extent included in calculating Consolidated Net Income for such period, any non-cash gains during such period minus (c) any actual cash payments made during such period related to non-cash charges included in (d)(v) below for a prior period plus (d) to the extent deducted in determining Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii) income tax expense determined on a consolidated basis in accordance with GAAP, (iii) depreciation and amortization determined on a consolidated basis in accordance with GAAP, (iv) for the Fiscal Quarters ending June 3, 2008, September 2, 2008, December 2, 2008 and March 3, 2009 only, actual costs determined on a consolidated basis in accordance with GAAP incurred in connection with the closing of any stores or units during any such Fiscal Quarter; provided , that the amount of such costs shall not exceed $10,000,000 in the aggregate for all such Fiscal Quarters and (v) all other non cash charges, in each case, that do not represent a cash item in such period, all as determined in accordance with GAAP.

 

“ Fixed Charge Coverage Ratio ” shall mean, as of any date of determination, the ratio of (a) Consolidated EBITDAR to (b) Consolidated Fixed Charges, in each case measured for the four Fiscal Quarter period ending on such date.

 

“ Material Indebtedness ” shall mean Indebtedness (other than the Loans and Letters of Credit) or obligations in respect of one or more Hedging Agreements, of any one or more of the Sponsor and the Subsidiaries in an aggregate principal amount exceeding $10,000,000. For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Sponsor or any Subsidiary in respect to any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Sponsor or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

 

 

“ Operative Documents ” shall mean this Agreement, the Collateral Documents, the Intercreditor Agreement, the Subsidiary Guaranty Agreement, the Indemnity and Contribution Agreement, the Servicing Agreement, the Fee Letter and any other documents delivered by Sponsor or any Guarantor to the Servicer or the Participants in connection herewith or therewith.

 

“ Revolving Facility ” shall mean that certain revolving credit facility in the amount of up to $500,000,000 extended to the Sponsor by a syndicate of lenders with Bank of America as their agent, all pursuant to the Revolving Facility Credit Agreement.

 

“ Revolving Facility Credit Agreement ” shall mean that certain Amended and Restated Revolving Credit Agreement, dated as of February 28, 2007, among the Sponsor, a syndicate of lenders and Bank of America, as administrative agent for such lenders, as amended, extended, replaced or refinanced from time to time.

 

“ Senior Note Purchase Agreement ” shall mean that certain Amended and Restated Note Purchase Agreement dated as of May 21, 2008 among the Sponsor and the Purchasers, as amended or modified from time to time.

 

(c)        The definitions of “ Consolidated EBITR ”, “ Change of Control Provision ” and “ Subordinated Debt ” are each hereby deleted from Section 1.1 of the Loan Facility Agreement in their entireties.

 

(d)       The second paragraph of Section 1.2 of the Loan Facility Agreement is hereby amended to read as follows:

 

Notwithstanding the above, the parties hereto acknowledge and agree that all calculations of the financial covenants in Section 6.11, 6.12 and 6.13 (including for purposes of determining the Applicable Margin) shall be made on a Pro Forma Basis.

 

(e)        Section 2.4(a) of the Loan Facility Agreement is hereby amended by deleting the reference to “0.375%” therein and replacing it with a reference to “0.50%”

 

(f)        Section 2.8 of the Loan Facility Agreement is hereby amended to read as follows:

 

            Section 2.8         ( Reserved .)

 

(g)       Clause (i) in Section 2.10 of the Loan Facility Agreement is hereby amended to read as follows:

 

(i) the Commitment Termination Date occurs,

 

(h)       Section 3.2(g) of the Loan Facility Agreement is hereby amended to read as follows:

(g)       During any period when a Credit Event has occurred and is continuing, any amounts received by the Servicer with respect to the Loans or the Letter of Credit Obligations shall be applied as follows:

 

First, to payment of that portion of such amounts constituting fees, indemnities, expenses and other amounts (including fees, charges and

 

 

disbursements of counsel to the Servicer and amounts payable under Article II) payable to the Servicer in its capacity as such;

 

Second, to payment of that portion of such Guaranteed Obligations constituting fees, indemnities and other amounts (other than principal, interest and letter of credit fees) payable to the Participants and the Servicer (including fees, charges and disbursements of counsel to the respective Participants and the Servicer and amounts payable under Article II), ratably among them in proportion to the amounts described in this clause Second payable to them;

 

Third, to payment of that portion of such Guaranteed Obligations constituting accrued and unpaid letter of credit fees and interest on the Loans and outstanding Letters of Credit and fees, premiums and any interest accrued thereon, ratably among the Participants in proportion to the respective amounts described in this clause Third held by them;

 

Fourth, to (a) payment of that portion of such Guaranteed Obligations constituting unpaid principal of the Loans and outstanding Letters of Credit, (b) to cash collateralize that portion of LC Exposure comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Participants and the Servicer in proportion to the respective amounts described in this clause Fourth held by them; and

 

Last, the balance, if any, after all of such Guaranteed Obligations have been indefeasibly paid in full, to the Sponsor or as otherwise required by law;

 

provided that, amounts used to cash collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as cash collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to such other Guaranteed Obligations, if any, in the order set forth above.

 

(i)        References to “Loan Document” or “Loan Documents” in each of Sections 5.2, 5.3, 5.5, 5.12, 7.1(d), 9.1(a)(iii) and 12.3 shall be replaced with “Operative Document” or “Operative Documents”, as applicable.

 

(j)        Section 5.14 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 5.14

Subsidiaries; Equity Interests .

 

As of the Fourth Amendment Effective Date, Schedule 5.14 sets forth the name of each Subsidiary and identifies each Material Subsidiary, together with (i) jurisdiction of formation, (ii) number of shares of each class of Equity Interests outstanding, (iii) number and percentage of outstanding shares of each class owned (directly or indirectly) by any Credit Party or any Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto. The outstanding Equity Interests of each Subsidiary of any Credit Party are validly issued, fully paid and non assessable.

 

 

(k)       Article V of the Loan Facility Agreement is hereby amended by adding new Sections 5.17 and 5.18 at the end thereof which shall read as follows:

 

Section 5.17

Perfection of Security Interests .

 

The Pledge Agreement creates a valid security interest in, and Lien on, the Pledged Collateral, which security interests and Liens are currently perfected security interests and Liens in favor of the Collateral Agent, prior to all other Liens.

 

Section 5.18

Guaranteed Obligations Rank Pari Passu .

 

The Guaranteed Obligations rank at least pari passu in right of payment with all obligations of the Credit Parties under the Senior Note Purchase Agreement (and the Senior Notes) and all obligations of the Credit Parties under the Revolving Facility.

 

(l)        Section 6.1 of the Loan Facility Agreement is hereby amended by deleting the period after subsection (f) thereof and replacing such period with a semi-colon and by inserting new subsections (g) and (h) following subsection (f) thereof which shall read as follows:

 

(g)       concurrently with the financial statement referred to in clause (a) above, beginning with the fiscal year ending June 2, 2009, (i) financial projections for the Sponsor and its Subsidiaries containing pro forma income statement, balance sheet and cash flow statement for each quarter of the next fiscal year and (ii) an updated corporate chart for the Sponsor and its Subsidiaries; and

 

(h)       commencing with the Sponsor’s first fiscal quarter for which the Sponsor is required, and continuing for so long as the Sponsor is required, pursuant to FASB Interpretation 46(R) (“ FIN 46R ”) or any other authoritative accounting guidance (collectively, “ Authoritative Guidance ”), to consolidate its Franchise Partners or any other less than 100% owned entity not previously required, under GAAP as in effect on December 31, 2002, to be so consolidated (collectively, the “ Consolidated Entities ”), each set of financial statements delivered pursuant to paragraphs (a) and (b) above shall be accompanied by unaudited financial statements of the character and for the dates and periods as in said paragraphs (a) and (b) covering each of the following:

 

(i)        the Sponsor and its Subsidiaries on a consolidated basis, before giving effect to any consolidation of the Consolidated Entities;

 

(ii)

the Consolidated Entities on a consolidated basis; and

 

(iii)      consolidating statements reflecting eliminations or adjustments required in order to reconcile the consolidated statements referred to in subclauses (i) and (ii) above with the consolidated financial statements of the Sponsor and its Subsidiaries delivered pursuant to paragraphs (a) and (b) above,

 

setting forth in each case (commencing, in the case of the consolidation of any Consolidated Entity pursuant to Authoritative Guidance, with the Sponsor’s fiscal quarter that is four fiscal quarters following such consolidation) in comparative form the figures for the corresponding periods in the previous fiscal year.

 

 

 

(m)      Section 6.2 of the Loan Facility Agreement is hereby amended by deleting the period at the end of subsection (e) thereof and replacing it with the following text “; and” and by adding a new Section 6.2(f) after subsection (e) thereof which shall read as follows:

 

(f)

the occurrence of a Control Event.

 

(n)

Section 6.9 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.9

Additional Subsidiaries .

 

If any additional Material Subsidiary is acquired or formed after the Fourth Amendment Effective Date or any Subsidiary becomes a Material Subsidiary after the Fourth Amendment Effective Date, the Sponsor will, within thirty (30) days after such Material Subsidiary is acquired or formed or such Subsidiary becomes a Material Subsidiary, notify the Servicer, the Collateral Agent and the Participants thereof and will (A) cause such Material Subsidiary to become a Credit Party by executing an agreement in the form of Annex I to Exhibit B in form and substance satisfactory to the Servicer, (B) cause such Material Subsidiary to deliver simultaneously therewith similar documents applicable to such Material Subsidiary required under Section 11.1 as reasonably requested by the Servicer or Collateral Agent including, without limitation, a supplement to the Pledge Agreement and all certificates evidencing any certificated Equity Interests required to be pledged pursuant to the Pledge Agreement, together with duly executed in blank and undated stock powers attached thereto and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clauses (A) and (B) and (C)) and (C) become a party to the Intercreditor Agreement by executing and delivering to the Servicer a joinder agreement to the Intercreditor Agreement, all in form and substance reasonably satisfactory to the Servicer and the Collateral Agent.

 

(o)        Section 6.10 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.10

Additional Guaranties .

 

If at the end of any Fiscal Quarter of the Sponsor:

 

(a)        the total assets of Subsidiaries that are not Guarantors constitute more than five percent (5%) of the total assets of the Consolidated Companies, or

 

(b)       the Consolidated Net Income of Subsidiaries that are not Guarantors constitute more than five percent (5%) of the Consolidated Net Income of the Consolidated Companies,

 

then the Sponsor shall (i) notify the Servicer thereof in the certificate delivered pursuant to Section 6.1(c) for such fiscal quarter and (ii) within 15 days thereafter, (A) cause the appropriate number of Subsidiaries to become Guarantors (by execution of an agreement in the form of Annex I to Exhibit B in form and substance satisfactory to the Servicer, (B) cause such Subsidiary to deliver simultaneously therewith similar documents required under Section 11.1 as reasonably requested by the Servicer or the Collateral Agent, including without limitation, a supplement to the Pledge Agreement and all certificates

 

 

evidencing any certificated Equity Interests required to be pledged pursuant to the Pledge Agreement, together with duly executed in blank and undated stock powers attached thereto and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clauses (A) and (B) and (C)) and (C) cause such Subsidiary to become a party to the Intercreditor Agreement by executing and delivering to the Servicer a joinder agreement to the Intercreditor Agreement, all in form and substance reasonably satisfactory to the Servicer and the Collateral Agent.

 

(p)        Article VI of the Loan Facility Agreement is hereby amended by adding new Sections 6.10A and 6.10B after Section 6.10 thereof which shall read as follows:

 

Section 6.10A

Pledged Assets .

 

The Sponsor will cause (a) 100% of the issued and outstanding Equity Interests of each Domestic Subsidiary owned by the Sponsor or any other Credit Party and (b) 66% (or such greater percentage that, due to a change in an applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for United States federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s United States parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956 2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956 2(c)(2)) in each Foreign Subsidiary directly owned by a Credit Party to be subject at all times to a first priority, perfected Lien in favor of the Collateral Agent, for the benefit of the holders of the Senior Secured Obligations, pursuant to the terms and conditions of the Collateral Documents, together with opinions of counsel and any filings and deliveries reasonably necessary in connection therewith to perfect the security interests therein, all in form and substance reasonably satisfactory to the Servicer and the Collateral Agent.

 

Section 6.10B

Additional Guarantors .

 

Notwithstanding the provisions of Section 6.9 , if at any time any Domestic Subsidiary that is not a Guarantor provides a guarantee of any Person’s obligations with respect to the Senior Note Purchase Agreement, then promptly (and in any event within five (5) days), the Sponsor will cause such Domestic Subsidiary to (A) become a Guarantor by executing and delivering to the Servicer executing an agreement in the form of Annex I to Exhibit B in form and substance satisfactory to the Servicer or such other documents as the Servicer shall reasonably deem appropriate for such purpose, (B) deliver simultaneously therewith similar documents applicable to such Domestic Subsidiary required under Section 11.1 as reasonably requested by the Servicer or the Collateral Agent including, without limitation, a supplement to the Pledge Agreement and all certificates evidencing any certificated Equity Interests required to be pledged pursuant to the Pledge Agreement, together with duly executed in blank and undated stock powers attached thereto and favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clauses (A) and (B) and (C)), all in form, content and scope reasonably satisfactory to the Servicer and the Collateral Agent and (C) become a party to the Intercreditor Agreement by executing and delivering to the Servicer a joinder

 

 

agreement to the Intercreditor Agreement, all in form and substance reasonably satisfactory to the Servicer and the Collateral Agent.

 

(q)         Section 6.11 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.11

Minimum Fixed Charge Coverage Ratio .

 

The Consolidated Companies will maintain as of the last day of each Fiscal Quarter, a Fixed Charge Coverage Ratio of not less than (a) 2.25 to 1.0 from the Fourth Amendment Effective Date through and including March 1, 2011 and (b) 2.50 to 1.0 thereafter.

 

(r)         Section 6.12 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.12

Maximum Adjusted Total Debt to EBITDAR Ratio .

 

The Consolidated Companies will maintain, as of the last day of each Fiscal Quarter, an Adjusted Total Debt to EBITDAR Ratio of not greater than (a) 4.50 to 1.0 from the Fourth Amendment Effective Date through and including June 3, 2008, (b) 4.60 to 1.0 from June 4, 2008 through and including September 2, 2008, (c) 4.50 to 1.0 from September 3, 2008 through and including December 2, 2008, (d) 4.25 to 1.0 from December 3, 2008 through and including September 1, 2009, (e) 4.00 to 1.0 from September 2, 2009 through and including March 2, 2010, (f) 3.75 to 1.0 from March 3, 2010 through and including March 1, 2011 and (g) 3.50 to 1.0 thereafter.

 

(s)         Section 6.14 of the Loan Facility Agreement is hereby amended to read as follows which Section 6.14 shall be inserted above the phrase “Negative Covenants” in Article VI of the Loan Facility Agreement:

 

Section 6.14.

Capital Expenditures .

 

The Consolidated Companies will not permit Capital Expenditures to exceed (i) $30,000,000 in the aggregate for the fiscal year ending June 2, 2009, (ii) $30,000,000 in the aggregate for the fiscal year ending June 1, 2010 and (iii) for each fiscal year thereafter, an aggregate amount of 30% of the Consolidated EBITDA for the prior fiscal year; provided , however , if subsequent to the Fourth Amendment Effective Date, the Adjusted Total Debt to EBITDAR Ratio is less than 3.0 to 1.0 as of the last day of two consecutive Fiscal Quarters, the limitation on Capital Expenditures provided for above shall no longer apply.

 

(t)

Section 6.15 of the Loan Facility Agreement is hereby amended to read as

 

follows:

 

Section 6.15

Negative Pledge .

 

The Sponsor will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of its assets or property now owned or hereafter acquired or, except:

 

 

(a)         Permitted Encumbrances;

 

 

(b)         any Liens on any property or asset of the Sponsor or any Subsidiary existing on the Fourth Amendment Effective Date set forth on Schedule 6.15 ; provided , that such Lien shall not apply to any other property or asset of the Sponsor or any Subsidiary;

 

(c)        Liens securing Indebtedness permitted under Section 6.27(e) ; provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, (ii) the Indebtedness secured thereby does not exceed the cost of the property being acquired on the date of acquisition and (iii) such Liens attach to such property concurrently with or within ninety days after the acquisition thereof;

 

(d)        Liens securing Indebtedness permitted by Section 6.27(f) assumed by the Sponsor or any Subsidiary in connection with a Permitted Acquisition;

 

(e)        Liens in favor of the Collateral Agent to secure the Senior Secured Obligations and

 

(f)        extensions, renewals, or replacements of any Lien referred to in paragraphs (a) and (b) of this Section; provided , however , that the principal amount of the Indebtedness secured thereby is not increased and that any such extension, renewal or replacement is limited to the assets originally encumbered thereby

 

(u)           Section 6.17 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.17

Investments, Loans, Etc .

 

The Sponsor will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger), any common stock, evidence of indebtedness or other securities (including any option, warrant, or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guaranty any obligations of, or make or permit to exist any investment or any other interest in, any other Person (all of the foregoing being collectively called “ Investments ”), or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person that constitute a business unit, or create or form any Subsidiary, except:

 

(a)        Investments (other than Permitted Investments) existing on the Fourth Amendment Effective Date and set forth on Schedule 6.17 (including Investments in Subsidiaries);

 

(b)        Permitted Investments;

 

(c)        Guaranties of Indebtedness under (i) the Revolving Facility and (ii) other Indebtedness in an amount not to exceed $10,000,000 in the aggregate at any one time outstanding;

 

(d)       Investments made by any Credit Party in or to any other Credit Party;

 

 

(e)        loans or advances to employees, officers or directors of the Sponsor or any Subsidiary in the ordinary course of business for travel, relocation and related expenses;

 

(f)        Hedging Agreements permitted by Section 6.23 ;

 

(g)        Investments in franchise operators through the Franchise Partner Program; provided , that such Investments made pursuant to this subsection (g) together with Investments made pursuant to subsection (h) below shall not exceed $10,000,000 in the aggregate at any one time outstanding;

 

(h)        Investments in franchise operators through the Traditional Franchisee program pursuant to the purchase option agreements entered into with those operators; provided , that such Investments made pursuant to this subsection (h) together with Investments made pursuant to subsection (g) above shall not exceed $10,000,000 in the aggregate at any one time outstanding;

 

(i)        Investments received in settlement of Indebtedness created in the ordinary course of business;

 

(j)        Acquisitions by any Credit Party meeting the following requirements (each such Acquisition constituting a “ Permitted Acquisition ”):

 

(i)        as of the date of the consummation of such Acquisition, no Credit Event or Unmatured Credit Event shall have occurred and be continuing or would result from such Acquisition, and the representations and warranties contained herein shall be true both before and after giving effect to such Acquisition;

 

(ii)       such Acquisition is consummated on a non-hostile basis pursuant to a negotiated acquisition agreement approved by the board of directors or other applicable governing body of the seller or entity to be acquired, and no material challenge to such Acquisition shall be pending or threatened by any shareholder or director of the seller or entity to be acquired;

 

(iii)      the business to be acquired in such Acquisition is similar or related to one or more of the lines of business in which the Sponsor and its Subsidiaries are engaged on the Closing Date;

 

(iv)      as of the date of consummation of such Acquisition, all material approvals required in connection therewith shall have been obtained;

 

(v)      after giving effect to such Acquisition, the aggregate consideration (including cash and non-cash consideration, any assumption of Indebtedness, deferred purchase price and any earn-out obligations) paid for all Acquisitions in any fiscal year shall not exceed $35,000,000; provided , however , if subsequent to the Fourth Amendment Effective Date, the Adjusted Total Debt to EBITDAR Ratio is less than 3.0 to 1.0 as of the last day of two consecutive Fiscal Quarters, the annual basket provided for above shall no longer apply so long as (A) the Adjusted Total Debt to EBITDAR Ratio on a Pro Forma Basis after giving effect to any such Acquisition is less than 3.0 to 1.0 and (B) in the

 

 

case where after giving effect to any such Acquisition, the aggregate consideration paid for all Acquisitions in the applicable fiscal year exceeds $5,000,000 the Sponsor shall have delivered to the Servicer not less than five (5) days prior to the consummation of such Acquisition a pro form compliance certificate demonstrating that the Adjusted Total Debt to EBITDAR Ratio on a Pro Form Basis (after giving effect to any such Acquisition and all extensions of credit funded in connection therewith as if made on the first day of the applicable period) is less than 3.0 to 1.0; and

 

(vi)      in the case where after giving effect to any Acquisition, the aggregate consideration for all Acquisitions occurring in the applicable fiscal year is greater than $5,000,000, not less than five (5) days prior to the consummation of such Acquisition, the Sponsor shall have delivered to the Servicer, a pro forma compliance certificate, which shall reflect that, on a Pro Forma Basis, the Sponsor would have been in compliance with the financial covenants set forth in Article VI for the four fiscal quarter period reflected in the compliance certificate most recently delivered to the Servicer pursuant to Section 6.1(c) prior to the consummation of such Acquisition (giving effect to such Acquisition and all extensions of credit funded in connection therewith as if made on the first day of such period); and

 

(k)        Investments in common stock of the Sponsor to the extent permitted under Section 6.18 .

 

Investments under Section 6.17 shall not be permitted if, before or after giving effect to the making of such Investment, a Credit Event or Unmatured Credit Event has occurred and is continuing.

 

(v)           Section 6.18 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.18

Restricted Payments .

 

The Sponsor will not, and will not permit its Subsidiaries to, (x) declare or make, or agree to pay or make, directly or indirectly, any dividend or other distribution on any class of its Equity Interests, or (y) make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, retirement, defeasance or other acquisition of, any Equity Interests or Indebtedness subordinated to the Guaranteed Obligations of the Sponsor or any options, warrants, or other rights to purchase such Equity Interests or such Indebtedness, whether now or hereafter outstanding (each, a “ Restricted Payment ”) except for (i) dividends payable by the Sponsor solely in shares of any class of its Equity Interests, (ii) Restricted Payments made by any Subsidiary to the Sponsor or to another Credit Party and (iii) subsequent to the Fourth Amendment Effective Date, after the Adjusted Total Debt to EBITDAR Ratio has been less than 3.0 to 1.0 as of the last day of two consecutive Fiscal Quarters, cash dividends paid on, and cash redemptions of, the Equity Interests of the Sponsor; provided , that (i) no Credit Event or Unmatured Credit Event shall have occurred and be continuing before or after giving effect to the payment of such dividend or redemption and (ii) the Adjusted Total Debt to EBITDAR Ratio on a Pro Forma Basis after giving effect to the payment of any such dividend or redemption is less than 3.0 to 1.0.

 

 

(w)          Section 6.19(c) of the Loan Facility Agreement is hereby amended to read as follows:

 

(c)      the sale, lease or transfer of assets of any Subsidiary to the Sponsor or any other Credit Party; provided , that if the sale, lease or transfer of assets is made by a Subsidiary that is not a Credit Party, such sale, lease or transfer must not be for consideration that exceeds the fair market value of the assets sold, leased or transferred;

 

(x)          Section 6.20 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.20

Transactions with Affiliates .

 

The Sponsor will not, and will not permit any of its Subsidiaries to enter into or permit to exist any transaction of any kind with any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Sponsor or such Subsidiary than could be obtained on an arm’s length basis from unrelated third parties, (b) transactions between or among the Credit Parties not involving any other Affiliates and (c) any Restricted Payment permitted by Section 6.18.

 

(y)           Section 6.21 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 6.21

Restrictive Agreements.

 

The Sponsor will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement that prohibits, restricts or imposes any condition upon (a) the ability of the Sponsor or any Subsidiary to create, incur or permit any Lien upon any of its assets or properties, whether now owned or hereafter acquired, (b) the ability of any Credit Party to guarantee the Guaranteed Obligations or otherwise be a Credit Party pursuant to the Operative Documents or (c) the ability of any Subsidiary to pay dividends or other distributions with respect to its common stock, to make or repay loans or advances to the Sponsor or any other Subsidiary, to Guaranty Indebtedness of the Sponsor or any other Subsidiary or to transfer any of its property or assets to the Sponsor or any Subsidiary of the Sponsor; provided , however , that (i) the foregoing shall not apply to restrictions or conditions set forth in Schedule 6.21 or restrictions or conditions imposed by law or by this Agreement or any other Operative Document, the Revolving Facility or the Senior Note Purchase Agreement, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is sold and such sale is permitted hereunder and (iii) clause (a) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted hereby if such restrictions and conditions apply only to the property or assets securing such Indebtedness.

 

(z)        Article VI of the Loan Facility Agreement is hereby amended by adding new sections 6.27 and 6.28 at the end thereof which shall read as follows:

 

Section 6.27

Indebtedness .

 

 

 

The Sponsor will not create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist, any Indebtedness, except:

 

(a)

Indebtedness under the Operative Documents;

 

(b)       Indebtedness of the Sponsor and the Guarantors under the Revolving Facility;

 

(c)        Indebtedness of the Sponsor and the Guarantors under the Senior Note Purchase Agreement in an aggregate principal amount not to exceed $150,000,000;

 

(d)       Indebtedness of the Sponsor and its Subsidiaries existing on the Fourth Amendment Effective Date and set forth in Schedule 6.27 ;

 

(e)        purchase money Indebtedness (including Capital Lease Obligations or Synthetic Lease Obligations) incurred by the Sponsor or any of its Subsidiaries to finance the purchase of fixed assets, and renewals, refinancings and extensions thereof; provided , that (i) the aggregate principal amount of all such Indebtedness at any one time outstanding shall not exceed $20,000,000, (ii) such Indebtedness when incurred shall not exceed the purchase price of the asset(s) financed; and (iii) no such Indebtedness shall be refinanced for a principal amount in excess of the principal balance outstanding thereon at the time of such refinancing;

 

(f)        secured Indebtedness of the Credit Parties assumed in connection with a Permitted Acquisition so long as such Indebtedness (i) was not incurred in anticipation of or in connection with the respective Permitted Acquisition and (ii) does not exceed $50,000,000 in the aggregate at any time outstanding;

 

(g)       obligations (contingent or otherwise) of the Sponsor or any Subsidiary existing or arising under any Hedging Agreement, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such Hedging Agreement does not contain any provision exonerating the non defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

(h)       Indebtedness in the form of Guaranties of Indebtedness permitted by Section 6.17(c) ; and

 

(i)        other unsecured Indebtedness of the Sponsor and its Subsidiaries not to exceed $10,000,000 in the aggregate at any one time outstanding;

 

Section 6.28

Prepayment of Other Indebtedness, Etc.

 

The Sponsor will not make (or give any notice with respect thereto), or permit any Subsidiary to make (or give notice with respect thereto), any voluntary or optional

 

 

payment or prepayment or redemption or acquisition for value of (including without limitation, by way of depositing money or securities with the trustee with respect thereto before due for the purpose of paying when due), refund, refinance or exchange of any Indebtedness, except (i) Indebtedness under the Operative Documents, (ii) Indebtedness under the Revolving Credit Facility, (iii) Indebtedness under the Senior Note Purchase Agreement to the extent permitted by the Revolving Credit Agreement and (iv) intercompany debt owed to any Credit Party.

 

(aa)        Section 7.1(c) of the Loan Facility Agreement is hereby amended to read as follows:

 

(c)         Sponsor shall fail to observe or perform any covenant or agreement contained in Sections 6.1, 6.2, 6.3 (with respect to the Sponsor’s existence) or 6.11 through 6.28; or

 

(bb)        Sections 7.1(i) and (j) of the Loan Facility Agreement are hereby amended to read as follows:

 

(i)         an ERISA Event shall have occurred that, in the opinion of the Required Participants, when taken together with other ERISA Events that have occurred, could reasonably be expected to result in liability to the Sponsor and the Subsidiaries in an aggregate amount exceeding $10,000,000; or

 

(j)         one or more judgments or orders for the payment of money in excess of $10,000,000 in the aggregate shall be rendered against the Sponsor or any Subsidiary, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order or (ii) there shall be a period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or

 

(cc)        Section 7.1 of the Loan Facility Agreement is hereby amended by adding the word “or” after the semicolon at the end of subsection (n) thereof and by adding a new subsection (o) immediately thereafter to read as follows

 

(o)        any Operative Document purporting to grant a Lien to secure any Senior Secured Obligation shall, at any time after the delivery of such Operative Document, fail to create a valid and enforceable Lien on any Pledged Collateral purported to be covered thereby or such Lien shall fail or cease to be a perfected Lien with the priority required in the relevant Operative Document;

 

(dd)        The first paragraph of Section 8.1 of the Loan Facility Agreement is hereby amended to read as follows:

 

The obligation of the Sponsor pursuant to this Article VIII with respect to the Limited Guaranty Pool shall be limited, as of any date that Guaranty Payments are made by the Sponsor, or demanded by the Servicer, with respect to any Loans in the Limited Guaranty Pool, to an amount (the “ Maximum Amount ”) equal to the greater of (a) fifty percent (50%) of the aggregate outstanding principal amount of the Loans on such date (after giving effect to any payments, recoveries on Collateral or other recoveries made by the Servicer or any Participant on such date with respect to the Loans), (b) three (3) times the largest aggregate outstanding Loan, or (c) $10,000,000; provided that the maximum

 

 

cumulative amount of Guaranty Payments that the Sponsor shall be required to make with respect to Loans in the Limited Guaranty Pool shall be $24,000,000 (the “Maximum Cumulative Amount”).

 

(ee)        Section 12.1 of the Loan Facility Agreement is hereby amended to read as follows:

 

Section 12.1

Appointment of Servicer as Agent .

 

(a)         To the extent of its ownership interest in the Loans, each Participant hereby designates Servicer as its agent to administer all matters concerning the Loans and to act as herein specified. Each Participant hereby irrevocably authorizes the Servicer to take such actions on its behalf under the provisions of this Agreement, the other Operative Documents, and all other instruments and agreements referred to herein or therein, and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Servicer by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Servicer may perform any of its duties hereunder by or through its agents or employees

 

(b)        Each of the Participants hereby consents to and approves the terms of the Intercreditor Agreement, a copy of which is attached hereto as Exhibit G . The Participants acknowledge and agree to the terms of the Intercreditor Agreement and authorize and direct the Servicer to enter into the Intercreditor Agreement on behalf of all of the Participants.

 

(c)         Each of the Participants hereby consents to and approves the terms of the Pledge Agreement, a copy of which is attached hereto as Exhibit H . The Participants acknowledge and agree to the terms of the Pledge Agreement and authorize and direct the Collateral Agent to enter into the Pledge Agreement on behalf of all of the Participants.

 

(d)        The Participants irrevocably authorize the Collateral Agent, at its option and in its discretion, to release any Lien on any Collateral granted to or held by the Collateral Agent under any Operative Document (a) upon termination of the Commitments and payment in full of all Guaranteed Obligations (other than contingent indemnification obligations), (b) that is transferred or to be transferred as part of or in connection with any transaction permitted hereunder or under any other Operative Document, or (c) as approved in accordance with Section 13.2. Upon request by the Collateral Agent at any time, the Required Participants will confirm in writing the Collateral Agent’s authority to release its interest in particular types or items of Collateral pursuant to this Section 12.1(d) .

 

(ff)       Schedules 5.14, 6.15, 6.17 and 6.21 of the Loan Facility Agreement are hereby amended to read as provided on Schedule 5.14, 6.15, 6.17 and 6.21 and attached hereto and a new Schedule 6.27 Indebtedness is hereby added to the Loan Facility Agreement and shall read as provided on Schedule 6.27 attached hereto.

 

(gg)      Annex I to Exhibit B of the Loan Facility Agreement is hereby amended to read as provided on Annex I to Exhibit B attached hereto.

 

(hh)      A new Exhibit G is hereby added to the Loan Facility Agreement to read as provided on Exhibit G attached hereto.

 

 

 

2. Conditions Precedent . This Agreement shall be effective upon the satisfaction of the following conditions precedent:

 

(a)        the Servicer shall have received counterparts of this Agreement, duly executed by the Sponsor, the Guarantors, the Servicer and the Required Participants;

 

(b)       the Servicer shall have received counterparts of that certain Intercreditor and Collateral Agency Agreement dated as of the date hereof (the “ Intercreditor Agreement ”) duly executed by the Sponsor, the Guarantors, the purchasers under and as defined in the Senior Note Purchase Agreement (the “ Purchasers ”), the Servicer, the Administrative Agent (as defined in the Revolving Credit Facility Agreement) and Bank of America, N.A. as collateral agent (the “ Collateral Agent ”);

 

(c)        the Servicer shall have received counterparts of that certain Pledge Agreement dated as of the date hereof (the “ Pledge Agreement ”) duly executed by the Sponsor, the Guarantors and the Collateral Agent;

 

(d)       the Servicer shall have received favorable opinions of legal counsel to the Sponsor and each other Credit Party, addressed to the Servicer, the Collateral Agent and each Participant, dated as of the Fourth Amendment Effective Date, in form and substance reasonably satisfactory to the Servicer;

(e)        the Servicer shall have received a certified copy of (i) the fully executed Amended and Restated Senior Note Purchase Agreement of even date herewith and (ii) the fully executed amendment agreement to the Revolving Facility Credit Agreement of even date herewith, each in form and substance satisfactory to the Servicer;

 

(f)        the Collateral Agent shall have received all certificates evidencing any certificated equity interests pledged to the Collateral Agent pursuant to the Pledge Agreement, together with duly executed in blank stock powers attached thereto;

 

(g)        the Servicer shall have received a certificate of a Responsible Officer of the Sponsor and each other Credit Party, in form and substance satisfactory to the Servicer attaching resolutions of each Credit Party approving and adopting this Agreement, the transactions contemplated herein and authorizing the execution and delivery of this Agreement, the Pledge Agreement, the Intercreditor Agreement and any documents, agreements or certificates related thereto and certifying that such resolutions have not been amended, supplemented or otherwise modified and remain in full force and effect as of the Fourth Amendment Effective Date;

 

(h)       the Servicer shall have received UCC financing statements for the Sponsor and each other Credit Party for each appropriate jurisdiction as is necessary, in the Servicer’s reasonable judgment, to perfect the Collateral Agent’s security interest in the Pledged Collateral (as defined in the Pledge Agreement);

 

(i)        the Servicer shall have received, for the benefit of each Participant signing this Agreement on or before May 20, 2008, an amendment fee equal to 0.25% of such Participant’s Participating Commitment; and

 

(j)        the Servicer shall have received all other fees and expenses due and payable in connection with this Agreement.

 

 

 

3.

Miscellaneous .

 

(a)        Except as herein specifically agreed, the Loan Facility Agreement, and the obligations of the Credit Parties thereunder and under the other Operative Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms.

 

(b)        Each Guarantor (a) acknowledges and consents to all of the terms and conditions of this Agreement, (b) affirms all of its obligations under the Operative Documents and (c) agrees that this Agreement and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Loan Facility Agreement or the other Operative Documents.

 

(c)

The Sponsor and each Guarantor hereby represent and warrant as follows:

 

(i)        Each Credit Party has taken all necessary action to authorize the execution, delivery and performance of this Agreement.

 

(ii)       This Agreement has been duly executed and delivered by the Credit Parties and constitutes the legal, valid and binding obligations of each of the Credit Parties, enforceable in accordance with its terms, except as such enforceability may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (B) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(iii)      No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by any Credit Party of this Agreement.

 

(d)        The Sponsor represents and warrants to the Participants that (i) the representations and warranties set forth in Article V of the Loan Facility Agreement and in each other Operative Document are true and correct in all material respects (before and after giving effect to this Agreement) as of the date hereof with the same effect as if made on and as of the date hereof, except to the extent such representations and warranties expressly relate to an earlier date and (ii) no event has occurred and is continuing which constitutes a Credit Event or Unmatured Credit Event.

 

(e)        This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by telecopy shall be effective as an original and shall constitute a representation that an executed original shall be delivered.

 

(f)          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.

 

[remainder of page intentionally left blank]

 

 

            Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.

 

SPONSOR :

RUBY TUESDAY, INC.,

 

a Georgia corporation

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Senior Vice President

 

 

GUARANTORS :

RTBD, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:  President

 

RT FINANCE, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:  Vice President

 

RUBY TUESDAY GC CARDS, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT TAMPA FRANCHISE, L.P.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT ORLANDO FRANCHISE, L.P.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

 

RT SOUTH FLORIDA FRANCHISE, L.P.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT NEW YORK FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT SOUTHWEST FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT MICHIANA FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT FRANCHISE ACQUISITION, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT KENTUCKY RESTAURANT HOLDINGS, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT FLORIDA EQUITY, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

 

RTGC, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

RT WEST PALM BEACH FRANCHISE, L.P.

 

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RT MICHIGAN FRANCHISE, LLC

 

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

RT DETROIT FRANCHISE, LLC

 

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

RUBY TUESDAY, LLC

 

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

Title:   Vice President

 

 

 

 

SERVICER :

BANK OF AMERICA, N.A.,

in its capacity as Servicer

 

By: /s/ Anne Zeschke

Name: Anne Zeschke

Title:   Assistant Vice President

 

PARTICIPANTS :

BANK OF AMERICA, N.A.

 

 

By: /s/ John H. Schmidt

Name: John H. Schmidt

Title:   Vice President

 

REGIONS BANK,

successor by merger to AmSouth Bank

 

By: /s/ Matthew B. Ashworth

Name: Matthew B. Ashworth

Title:   Vice President

 

WACHOVIA BANK, N.A.

 

By: /s/ Martha M. Winters

Name: Martha M. Winters

Title:   Director

 

SUNTRUST BANK

 

By: /s/ Dan Komitor

Name:  Dan Komitor

Title:   Director

 

SCHEDULE 5.14

 

SUBSIDIARIES

 

PERCENTAGE OF OWNERSHIP OF SUBSIDIARIES AND RESTRICTIONS THEREON

 

1.         The following are subsidiaries of Sponsor (owned, in the percentage indicated, by Sponsor unless otherwise noted):

 

 

Loan Party	State of Formation (i)	Number of Shares of each class of Equity Interests (ii)	Number of Shares Owned or Percentage of Membership/Partnership Interests Held (iii)	Number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and other similar rights (iv)
RTBD, Inc. (A)	Delaware	1000 shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT Finance, Inc. (A)	Delaware	1000 shares $.01 par common	100 shares – RTBD, Inc.	None
Ruby Tuesday GC Cards, Inc. (A)	Colorado	1000 shares $.01 par common	100 shares – RTGC, LLC	None
RT Tampa Franchise, L.P. (A)	Delaware	None issued	1% - RT Tampa, Inc. (General Partner) 99%-RT Florida Equity, LLC	N/A
RT Orlando Franchise, L.P. (A)	Delaware	None issued	1% - RT Orlando, Inc. (General Partner) 99% - RT Florida Equity, LLC	N/A
RT South Florida Franchise, L.P. (A)	Delaware	None issued	1% - RT South Florida, Inc. (Gen. Partner) 99% - RT Florida Equity, LLC	N/A
RT New York Franchise, LLC (A)	Delaware	None issued	100% - Ruby Tuesday, Inc.	N/A
RT Southwest Franchise, LLC ( A)	Delaware	None issued	1% - RT One Percent Holdings, Inc. 99%- RT Franchise Acquisition, LLC	N/A
RT Michiana Franchise, LLC (A)	Delaware	None issued	1% - RT One Percent Holdings, LLC 99% -Ruby Tuesday, Inc.	N/A
RT Franchise Acquisition, LLC (A)	Delaware	None issued	100% - RTBD, Inc.	N/A
RT Kentucky Restaurant Holdings, LLC (A)	Delaware	None issued	100% - RTBD, Inc.	N/A
RT Florida Equity, LLC (A)	Delaware	None issued	100% - Ruby Tuesday, Inc.	N/A
RTGC, LLC (A)	Colorado	None issued	100% - Ruby Tuesday, Inc.	N/A
RT West Palm Beach Franchise, L.P. (A)	Delaware	None issued	1% - RT West Palm Beach, Inc. (Gen.Partner) 99% - RT Florida Equity, LLC	N/A
RT Michigan Franchise, LLC (A)	Delaware	None issued	100% - RT Franchise Acquisition, LLC	N/A
RT Detroit Franchise, LLC (A)	Delaware	None issued	50% - RT Franchise Acquisition, LLC 50% - Ruby Tuesday, Inc.	N/A
Ruby Tuesday, LLC (A)	Delaware	None issued	100% - Ruby Tuesday, Inc.	N/A
Quality Outdoor Services, Inc.	Tennessee	200 shares with no par or nominal value	All 90 shares outstanding purchased by Ruby Tuesday, Inc. per Stock Purchase Agreement/closing docs—NO CERTIFICATE ISSUED	None

 

 

 

RT Airport, Inc.	Delaware	1000 shares $.01 par common	100 shares subscribed to Ruby Tuesday, Inc. per Share Subscription Agt -- NO CERTIFICATE ISSUED	None
RT Louisville Franchise, LLC	Delaware	None issued	99% - RT Franchise Acquisition, LLC 1% - RT Louisville, Inc.	N/A
RT McGhee Tyson, LLC	Delaware	None issued	99% - Ruby Tuesday, Inc. 1% - RT Airport, Inc.	N/A
RT One Percent Holdings, LLC	Delaware	None issued	100% - Ruby Tuesday, Inc.	N/A
RT One Percent Holdings, Inc.	Delaware	1000 shares $.01 par common	100 Shares - Ruby Tuesday, Inc.	None
RT Minneapolis Holdings, LLC	Delaware	None issued	100% - RTBD, Inc.	N/A
RT Omaha Holdings, LLC	Delaware	None issued	100% - RTBD, Inc.	N/A
RT Denver, Inc.	Georgia	1000 shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT Louisville, Inc.	Georgia	1000 Shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT Orlando, Inc.	Georgia	1000 Shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT South Florida, Inc.	Georgia	1000 Shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT Tampa, Inc.	Georgia	1000 Shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT West Palm Beach, Inc.	Georgia	1000 Shares $.01 par common	100 Shares – Ruby Tuesday, Inc.	None
RT New Hampshire Restaurant Holdings, LLC	Delaware	None issued	100% - RTBD, Inc.	N/A
RT Restaurant Services, LLC	Delaware	None issued	100% - Ruby Tuesday, Inc.	N/A
RT Northern California Franchise, LLC	Delaware	None issued	99% - RT Franchise Acquisition, LLC 1% - RT Finance, Inc.	N/A
Wok Hay 2, LLC	Delaware	None issued	90% - Ruby Tuesday, Inc. 10% - James Cornett	N/A
RTTA, L.P.	Texas	None issued	1% - RTBD, Inc. (Gen. Partner) 99% - RT Franchise Acquisition, LLC	N/A
RT Distributing, LLC	Tennessee	None issued	100% - Ruby Tuesday, Inc.	N/A

(A) Material Subsidiary

 

2.          The following “liquor clubs/corporations” are owned by the members thereof and controlled by a Board of Directors, who are typically employees of Sponsor or it’s Subsidiaries and Affiliates. These “clubs” enter into service agreements with Sponsor to provide the services necessary to conduct alcoholic beverage sales and related service at Sponsor’s restaurants located in the relevant states.

 

Name

State of Organization

 

4721 RT of Pennsylvania, Inc.

Pennsylvania

 

Name

State of Organization

 

Orpah, Inc.

Maryland

 

RT Hospitality – York JV

Pennsylvania

 

Ruby Tuesday of St. Mary’s, Inc.

Maryland

 

Ruby Tuesday of Allegany County, Inc.

Maryland

 

Ruby Tuesday of Columbia, Inc.

Maryland

 

Ruby Tuesday of Linthicum, Inc.

Maryland

 

Ruby Tuesday of Salisbury, Inc.

Maryland

 

Ruby Tuesday Sunday Club, Inc.

Alabama

 

Ruby Tuesday of Frederick, Inc.

Maryland

 

RT of Cecil County, Inc.

Maryland

 

RT of Clarksville, Inc.

Maryland

 

RT of Riverside, Inc.

Maryland

 

Ruby Tuesday of Pocomoke City, Inc.

Maryland

 

RT of Fruitland, Inc.

Maryland

 

RTMB Lodging Joint Venture

Pennsylvania

 

RT Stonebridge Joint Venture

Pennsylvania

 

RT of Annapolis, Inc.

Maryland

 

Ruby Tuesday of Marley Station, Inc.

Maryland

 

RTT Texas, Inc.

Texas

 

RTTT, LLC

Texas

 

RT/Sayosha Chambersburg Joint Venture

Pennsylvania

 

Schedule 6.15

 

Existing Liens

 

1.

Liens arising from or related to indebtedness incurred by RT Tampa Franchise, L.P., a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, and in favor of AMRESCO Capital, LP or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

2.

Liens arising from or related to indebtedness incurred by RT Michiana Franchise, LLC, a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, and in favor of AMRESCO Capital, LP or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

3.

Liens arising from or related to indebtedness incurred by RT Orlando Franchise, L.P., a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

4.

Liens arising from or related to indebtedness incurred by RT South Florida Franchise, L.P., a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

5.

Liens arising from or related to indebtedness incurred by RT West Palm Beach Franchise, L.P., a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

6.

Liens arising from or related to indebtedness incurred by RT Detroit Franchise, LLC, a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, and in favor of Irwin Franchise Capital or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

7.

Liens arising from or related to indebtedness incurred by RT Michigan Franchise, LLC, a Subsidiary (see Schedule 5.14), in favor of GE Capital Franchise Finance Corporation or its affiliates, which secures assets or property of such Subsidiary at the sites identified (see Schedule 6.27, Item 7 for a listing of such Debt and sites).

 

Schedule 6.17

 

Existing Investments

 

See Schedule 5.14 for a listing of direct and indirect Subsidiaries of Sponsor in which Sponsor has made an Investment.

 

Various promissory notes issued to Sponsor by franchise partners or other entities as listed below on this Schedule 6.17.

 

Limited liability company interests or limited partner interests held by Sponsor or a Subsidiary in franchise partners as follows:

 

(a)

50% ($501,000) in connection with RT Minneapolis Franchise, LLC;

 

(b)

50% ($501,000) in connection with RT Omaha Franchise, LLC;

 

(c)

50% ($501,000) in connection with RT KCMO Franchise, LLC;

 

(d)

50% ($501,000) in connection with RT New England Franchise, LLC;

 

(e)

50% ($501,000) in connection with RT Western Missouri Franchise, LLC;

 

(f)

50% ($501,000) in connection with RT St. Louis Franchise, LLC;

 

(g)

1% each ($1,000 each) in connection with each other Franchise Partner and the right to increase such ownership to 50% or more as allowed in the Franchise Partner Program.

 

Effective as of May 1, 2008:

 

	Original	Outstanding	Note	Payoff
	Debt	Balance	Date	Date
RT Chicago Franchise, LLC.................	7,038,000	719,000	03/27/00	03/27/11
RT Long Island Franchise, LLC............	1,437,000	1,437,000	03/31/06	05/10/09
RT St. Louis Franchise, LLC..................	2,055,000	1,987,000	12/05/01	12/05/15
RT Minneapolis Franchise, LLC...............	1,528,000	1,007,000	10/12/98	08/12/10
RT Indianapolis Franchise, LLC...............	1,250,000	1,446,000	12/05/01	12/05/12
RT Utah Franchise, LLC.......................	1,300,000	1,300,000	01/07/05	01/01/09
RTI Lines of credit:
RT Denver Franchise, L.P...................		265,000
RT Seattle Franchise, LLC.............		65,000
RT Las Vegas Franchise, LLC.............		45,000
RT Minneapolis Franchise, LLC...........		300,000
		8,571,000

 

 

Schedule 6.21

 

Restrictive Agreements

 

          1. Restrictive agreements provided for in, or in other documents or agreements executed in connection with, the Amended and Restated Revolving Credit Agreement in the amount of $500,000,000 by and among Sponsor, Bank of America, N.A., as Administrative Agent, and each of the lenders party thereto dated as of February 28, 2007 as amended or modified from time to time, together with any renewal or replacement thereof.

 

          2. Liens and/or restrictive agreements provided for in, or in other documents or agreements executed in connection with, the Financing Agreement between Sponsor and Citicorp Leasing, Inc. (“Citicorp”) as amended or modified from time to time whereby Sponsor agrees to provide a letter of credit to Citicorp as partial guaranty of up to $20 million in construction/development financing by Citicorp to Sponsor’s Franchise Partners. The maximum amount of Sponsor’s possible letter of credit under the Citicorp facility is $8.0 million.

 

          3. Liens and/or restrictive agreements provided for in, or in other documents or agreements executed in connection with, the Program and Support Agreement by and between Sponsor and General Electric Capital Business Asset Funding Corporation dated as of January 2002 as amended or modified from time to time, whereby Company guarantees no more than 30% of the then outstanding aggregate of franchisee loans subject to the Program and Support Agreement if an unpaid balance remains under any such loan to a franchisee after lender has realized its rights in the collateral subject to the loan.

 

 

Schedule 6.27

 

Indebtedness

 

1. Indebtedness in the estimated contingent amount of $842,103 arising under the Program and Support Agreement by and between Company and General Electric Capital Business Asset Funding Corporation dated as of January 2002 as amended or modified from time to time, whereby Company guarantees no more than 30% of the then outstanding aggregate of franchisee loans subject to the Program and Support Agreement if an unpaid balance remains under any such loan to a franchisee after lender has realized its rights in the collateral subject to the loan. The Program and Support Agreement was terminated effective July 1, 2004.

 

2. Indebtedness in the estimated contingent amount of $4,108,808 arising under the Financing Agreement by and between Company and CitiCorp Leasing, Inc. dated as of July 1, 2004 as amended or modified from time to time, whereby Company guarantees up to $2,666,000 of a participating franchisee’s loan subject to the program. The Financing Agreement was terminated on July 1, 2007. This loan is secured by a letter of credit in the amount of $4,200,335.

 

3. Indebtedness totaling $12,880,278 evidenced pursuant to various letters of credit issued primarily in connection with Company’s workers compensation and casualty insurance programs.

 

4. From time to time, Company indemnifies certain lenders to Company’s franchisees, wherein Company agrees to pay a portion of franchisee debt allocated to specific leased property encumbered by such debt if such franchisee defaults under its loan to the indemnified lender due to a failure to obtain (i) certain landlord consents to subletting the property by the Company to the franchisee or (ii) lease extensions for specific leased property. In the event of such payment, the indemnified lender assigns to Company all of its rights in the related collateral.

 

5. Company’s covenants in favor of Metropolitan Knoxville Airport Authority (the “Authority”) in connection with the Food and Beverage Concession Agreement dated September 1, 1999, between the Authority and RT McGhee-Tyson, LLC, a Subsidiary, wherein Company agrees to provide continuing working capital to RT McGhee Tyson, LLC during the term of the Concession Agreement.

 

6. The Company has entered into a Distribution Agreement and an Agreement Respecting Employee Benefit Matters as amended or modified from time to time (collectively referred to as sharing agreements) with Morrison Fresh Cooking, Inc. (acquired by Piccadilly Cafeterias, Inc.) and Morrison Management Specialists, Inc. (formerly Morrison Health Care, Inc. and acquired by Compass Group, PLC) providing for the assumption of liabilities and cross-indemnities designed to allocate, generally, among these three companies, financial responsibility for liabilities arising out of or in connection with business activities prior to the March, 1996 “spin-off” transaction.

 

 

 

 

7. FORMER FRANCHISE PARTNER (ACQUIRED) INDEBTEDNESS
(all figures in 000's)
	MORTGAGEE		TOTAL
	RT Tampa Franchise, L.P. Debt:
		GE - Cooper Creek Construction	609
		GE - Healthpark Construction	1,192
	RT Michiana Franchise, LLC Debt:
		GE - Acquisition - Note 28525	1,775
		GE - Acquisition - Note 28651	2,713
		GE - Battle Creek Construction	848
	RT Orlando Franchise, L.P. Debt:
		GE - Bellair	785
		GE - Leesburg	797
		GE - Palm Coast Construction	1,496
	RT South Florida Franchise, L.P. Debt:
		GE - Deerfield Construction	599
		GE - Homestead Construction	488
		GE - Pompano Construction	754
	RT West Palm Beach Franchise, L.P. Debt:
		GE - Wellington FF&E	186
		GE - Palm City Construction	1,462
		GE - Palm City FF&E	164
		GE - Royal Palm Construction	1,448
		GE - Royal Palm FF&E.	70
		GE - Sebastian	1,591
		GE - Stuart	1,548
		GE - Acquisition Debt	731
	RT Detroit Franchise, LLC Debt:
		GE - Saline Construction	1,413
		GE - Saline FF&E	191
		GE - Novi Construction	1,949
		GE - Novi FF&E	260
		GE - S. Canton Construction	1,246
		GE - S. Canton FF&E	312
		GE - Acquisition Debt	3,108
	RT Michigan Franchise, LLC Debt:
		GE - Cadillac Construction	1,325
		GE - Port Huron Construction	881

 

 

 

		GE - Gaylord Construction		1,608
		GE - Traverse City Construction		287
		GE - Traverse City FF&E		133
		GE - Acquisition Debt		4,804
		GE - Clarkston Construction		1,241
		GE - Clarkston FF&E		212
		GE - Mt. Pleasant Construction		1,188
		GE - Mt. Pleasant FF&E		130
	Total GE Capital			39,544
	Irwin – RT Detroit Franchise, LLC			2,961
	Amresco – RT Tampa Franchise, L.P.			2,039
	Amresco – RT Orlando Franchise, L.P.			1,403
	Mortage for Gulfport Restaurant			50
	Capital Lease – Housing facility for training			170
	Capital Lease – Equipment leases			15
	TOTAL RUBY TUESDAY, INC.			46,187
* Former franchise partner (acquired) indebtedness balances are as of May 1, 2008.

 

 

 

 

Annex I to Exhibit B

 

 

ANNEX 1 TO THE SUBSIDIARY GUARANTY AGREEMENT

 

SUPPLEMENT NO. [ ] dated as of [ ], to the Subsidiary Guaranty Agreement (the “ Guaranty Agreement ”) dated as of November 19, 2004 among each of the subsidiaries listed on Schedule I thereto (each such Subsidiary individually, a “ Guarantor ” and collectively, the “ Guarantors ”) of RUBY TUESDAY, INC., a Georgia corporation (the “ Sponsor ”), in favor of BANK OF AMERICA, N.C., a national banking association, as Servicer (the “ Servicer ”) and the Participants (as defined in the Loan Facility Agreement referred to below).

 

          A.        Reference is made to (i) the Amended and Restated Loan Facility Agreement dated as of November 19, 2004 (as amended, supplemented or otherwise modified from time to time, the “ Loan Facility Agreement ”), among the Sponsor, the banks and financial institutions from time to time party thereto (the “ Participants ”) and Bank of America, N.A., as Servicer and (ii) the Pledge Agreement dated as of May __, 2008 (as amended, restated, supplemented or otherwise modified from time to time, the “ Pledge Agreement ”), by and among the Sponsor and the Guarantors and Bank of America, N.A., as collateral agent (the “ Collateral Agent ”) for the benefit of the Secured Creditors (as such term is defined in the Pledge Agreement).

 

          B.        Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guaranty Agreement, the Loan Facility Agreement and the Pledge Agreement.

 

          C.        The Guarantors have entered into the Guaranty Agreement in order to induce the Servicer, on behalf of the Participants, to make Loans and to issue Letters of Credit. . [Pursuant to Section 6.9 of the Loan Facility Agreement, each Material Subsidiary acquired or formed after the Fourth Amendment Closing Date or any Subsidiary that becomes a Material Subsidiary after the Fourth Amendment Closing Date is required to enter into the Guaranty Agreement as a Guarantor.] [Pursuant to Section 6.10 of the Loan Facility Agreement, if at the end of any Fiscal Quarter of the Sponsor, (i) the total assets of Subsidiaries that are not Guarantors constitute more than five percent (5%) of the total assets of the Consolidated Companies, or (ii) the Consolidated Net Income of Subsidiaries that are not Guarantors constitute more than five percent (5%) of the Consolidated Net Income of the Consolidated Companies, then the appropriate number of Subsidiaries are required is required to enter into the Guaranty Agreement as Guarantors.] [Pursuant to Section 6.10B of the Credit Agreement, if at any time any Domestic Subsidiary that is not a Guarantor provides a guarantee of any Person’s obligations with respect to the Senior Note Purchase Agreement, then such Domestic Subsidiary is required to enter into the Guaranty Agreement as a Guarantor.] Section 19 of the Guaranty Agreement provides that additional Subsidiaries of the Sponsor may become Guarantors under the Guaranty Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary of the Sponsor (the “ New Guarantor ”) is executing this Supplement in accordance with the requirements of the Loan Facility Agreement to become a Guarantor under the Guaranty Agreement in order to induce the Servicer, on behalf of the Participants, to make additional Loans and to issue additional Letters of Credit and as consideration for Loans previously made and Letters of Credit previously issued.

 

Accordingly, the Servicer and the New Guarantor agree as follows:

 

          SECTION 1.  In accordance with Section 19 of the Guaranty Agreement, the New Guarantor by its signature below becomes a Guarantor under the Guaranty Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Guaranty Agreement applicable to it as Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the Guaranty Agreement shall be deemed to include the New Guarantor. The Guaranty Agreement is hereby incorporated herein by reference.

 

          SECTION 2.  The New Guarantor represents and warrants to the Servicer, the Collateral Agent and the Participants that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

          SECTION 3.  The New Guarantor represents and warrants to the Servicer, the Collateral Agent and the Participants that the exact legal name of the New Guarantor, as it appears in its certificate of incorporation, is as set forth on the signature page hereto. The New Guarantor further represents and warrants that its (i) jurisdiction of incorporation, (ii) number of shares of each class of capital stock outstanding, (iii) number and percentage of outstanding shares of each class owned by the New Guarantor or any of its subsidiaries and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect to such capital stock is as set forth on Schedule 1.

 

          SECTION 4.  This Supplement may be executed in counterparts each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Servicer shall have received counterparts of this Supplement that bear the signatures of the New Guarantor. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.

 

          SECTION 5.  Except as expressly supplemented hereby, the Guaranty Agreement shall remain in full force and effect.

 

          SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.

 

          SECTION 7.  In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guaranty Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the

 

economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

          SECTION 8.  All communications and notices hereunder shall be in writing and given as provided in Section 13 of the Guaranty Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Sponsor.

 

          SECTION 9.  The New Guarantor agrees to reimburse the Servicer for its out-of-pocket expenses in connection with this Supplement, including the reasonable fees, disbursements and other charges actually incurred of counsel for the Servicer.

 

                        IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplement to the Guaranty Agreement as of the day and year first above written.

 

[Name of New Guarantor]

 

By:_____________________________

 

Name:

 

Title:

 

Address:

 

Schedule 1

 

1.          Corporate Structure.  Set forth below hereof is a complete and accurate list as of the date hereof with respect to the New Guarantor: (i) jurisdiction of incorporation, (ii) number of shares of each class of capital stock outstanding, (iii) number and percentage of outstanding shares of each class owned by the New Guarantor or any of its subsidiaries and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect to such capital stock.

 

 

 

Exhibit G

 

Intercreditor Agreement

 

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

Dated as of May 21, 2008

 

By and Among

 

BANK OF AMERICA, N.A.,

as Collateral Agent

 

And

 

BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT FOR THE REVOLVING CREDIT FACILITY ON BEHALF OF THE REVOLVING CREDIT FACILITY LENDERS,

 

BANK OF AMERICA, N.A., AS SERVICER FOR THE FRANCHISE LOAN FACILITY ON BEHALF OF THE FRANCHISE LOAN FACILITY PARTICIPANTS,

 

And

 

THE INSTITUTIONAL INVESTORS LISTED ON SCHEDULE 3 HERETO, AS NOTEHOLDERS

 

TABLE OF CONTENTS
SECTION	HEADING	PAGE

 

SECTION 1.

Definitions

3

 

Section 1.1.

Definitions

3

 

Section 1.2.

Effectiveness of this Agreement

9

 

SECTION 2.

Relationships Among Secured Parties

9

 

Section 2.1.

Equal and Ratable Sharing of Collateral

9

 

Section 2.2.

Restrictions on Actions

10

 

Section 2.3.

Representations and Warranties

11

 

Section 2.4.

Cooperation; Accountings

12

 

Section 2.5.

Termination Note Agreement, Revolving CreditFacility Agreement or Franchise Loan Facility Agreement                                                          12

 

SECTION 3.

Appointment and Authorization of Collateral Agent

12

 

SECTION 4.

Agency Provisions

13

 

Section 4.1.

Delegation of Duties

13

 

Section 4.2.

Exculpatory Provisions

13

 

Section 4.3.

Reliance by Collateral Agent

14

 

Section 4.4.

Knowledge or Notice of Default or Event of Default

14

 

Section 4.5.

Non-Reliance on Collateral Agent and Other Creditors

14

 

Section 4.6.

Indemnification

15

 

Section 4.7.

Collateral Agent in Its Individual Capacity

16

 

Section 4.8.

Successor Collateral Agent

16

 

SECTION 5.

Actions by the Collateral Agent

18

 

Section 5.1.

Duties and Obligations

18

 

Section 5.2.

Notification of Default

18

 

Section 5.3.

Exercise of Remedies

18

 

Section 5.4.

Changes to Security Documents

18

 

Section 5.5.

Release of Collateral

18

 

Section 5.6.

Other Actions

18

 

Section 5.7.

Cooperation

19

 

Section 5.8.

Distribution of Proceeds

19

 

Section 5.9.

Authorized Investments

20

 

Section 5.10.

Determination of Amount of Senior Secured Obligations

21

 

Section 5.11.

Reinstatement

22

 

SECTION 6.

Bankruptcy Proceedings

22

 

SECTION 7.

Miscellaneous

23

 

Section 7.1.

Creditors; Other Collateral

23

 

Section 7.2.

Marshalling

23

 

Section 7.3.

Consents, Amendments, Waivers

23

 

Section 7.4.

Governing Law

23

 

Section 7.5.

Parties in Interest

23

 

Section 7.6.

Counterparts

24

 

Section 7.7.

Termination

24

 

Section 7.8.

Notices

24

 

ATTACHMENTS TO INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT:

 

Schedule 1 – Information relating to the Noteholders

 

Exhibit A – List of Security Documents

 

 

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

THIS INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT dated as of May 21, 2008 (this “Agreement” ) , is entered into by and among Bank of America, N.A., in its capacity as Collateral Agent (as hereinafter defined), Bank of America, N.A., in its capacity as administrative agent (the “Revolving Credit Facility Agent” ) under the Revolving Credit Facility Agreement (as hereinafter defined) on behalf of itself and each of the Revolving Credit Facility Secured Creditors (as hereinafter defined), Bank of America, N.A., in its capacity as servicer (the “Franchise Loan Facility Servicer” ) under the Franchise Loan Facility Agreement (as hereinafter defined) on behalf of itself and each of the Franchise Loan Facility Secured Creditors (as hereinafter defined), each of the institutional investors listed on Schedule 1 attached hereto (each a “Noteholder” and collectively, the “Noteholders” ), the Company (as hereinafter defined) and the Guarantors (as hereinafter defined).

RECITALS:

A.  Ruby Tuesday, Inc., a Georgia corporation (the “Company” ), is concurrently herewith entering into that certain Amended and Restated Note Purchase Agreement dated as of May 21, 2008 (the “Note Agreement” ) with the institutional investors listed on Schedule A attached thereto, (the “Holders” ), said Note Agreement amends and restates that certain Note Purchase Agreement dated as of April 1, 2003 (as amended by that certain First Amendment dated as of October 1, 2003 and that certain Second Amendment dated as of November 30, 2007, the “Original Note Agreement” ) pursuant to which the original purchasers purchased $150,000,000 aggregate principal amount of the Company’s Senior Notes consisting of $85,000,000 aggregate principal amount of its 4.69% Senior Notes, Series A, due April 1, 2010 (as heretofore amended, the “Original Series A Notes” ) and $65,000,000 aggregate principal amount of its 5.42% Senior Notes, Series B, due April 1, 2013 (as heretofore amended, the “Original Series B Notes” ; said Original Series B Notes together with the Original Series A Notes are collectively referred to herein as the “Original Notes” ). Pursuant to the Note Agreement, the Company is concurrently herewith amending and restating the Original Notes to be in the forms of the Notes (as defined in the Note Agreement) attached to the Note Agreement and is issuing such Notes (herein, the “Senior Secured Notes” ) to the Holders.

B.  The Company has heretofore entered into that certain Amended and Restated Revolving Credit Agreement dated as of February 28, 2007 with the Revolving Credit Facility Lenders, the Revolving Credit Facility Agent, Bank of America, N.A., as issuing bank (the “Issuing Bank” ) and swingline lender (as amended by that certain First Amendment to Amended and Restated Revolving Credit Agreement dated as of November 30, 2007 and that certain Limited Waiver Agreement dated as of February 29, 2008, the “Original Revolving Credit Facility Agreement” ), pursuant to which the Revolving Credit Facility Lenders provide to the Company a revolving credit loan maturing February 23, 2012 in an amount not to exceed $500,000,000. The Company is concurrently herewith entering into that certain Second Amendment to Amended and Restated Revolving Credit Agreement dated as of May 21, 2008 (the “Second Amendment to Revolving Credit Facility Agreement” ) to the Original Revolving Credit Facility Agreement (the Original Revolving Credit Facility Agreement as amended by the Second Amendment to Revolving Credit Facility Agreement being herein referred to as the “Revolving Credit Facility Agreement” ).

 

 

C.  The Company has heretofore entered that certain Amended and Restated Loan Facility Agreement and Guaranty dated as of November 19, 2004 with the Franchise Loan Facility Servicer, AmSouth Bank, as Documentation Agent, SunTrust Bank, as Co-Syndication Agent, and Wachovia Bank, N.A., as Co-Syndication Agent, and the Participants party thereto (as amended by that certain First Amendment to Amended and Restated Loan Facility Agreement and Guaranty dated as of September 8, 2006, that certain Second Amendment to Amended and Restated Loan Facility Agreement and Guaranty dated as of February 28, 2007 and that certain Third Amendment to Amended and Restated Loan Facility Agreement and Guaranty dated as of November 30, 2007, the “ Original Franchise Loan Facility Agreement ”), pursuant to which the Franchise Loan Facility Participants provide to certain franchisees of the Company revolving credit loans maturing no later than October 5, 2011 in an aggregate amount not to exceed $48,000,000 and which revolving credit loans are guaranteed by the Company. The Company is concurrently herewith entering into that certain Fourth Amendment to Amended and Restated Loan Facility Agreement and Guaranty dated as of May 21, 2008 (the “Fourth Amendment to Franchise Loan Facility Agreement” ) to the Original Franchise Loan Facility Agreement (the Original Franchise Loan Facility Agreement as amended by the Fourth Amendment to the Franchise Loan Facility Agreement being herein referred to as the “Franchise Loan Facility Agreement” ).

D.  The obligations of the Company to the Noteholders under the Note Agreement, the Senior Secured Notes and the other Senior Note Documents (as hereafter defined), the obligations of the Company to the Revolving Credit Facility Lenders, the Revolving Credit Facility Agent and the Issuing Bank under the Revolving Credit Facility Agreement and the other Revolving Credit Facility Loan Documents (as hereinafter defined), the obligations of the Company to the Franchise Loan Facility Servicer and the Franchise Loan Facility Participants under the Franchise Loan Facility Agreement and the other Franchise Loan Facility Documents (as hereinafter defined) and the other Senior Secured Obligations (as hereinafter defined) will be secured equally and ratably by the Collateral (as hereinafter defined) pursuant to certain documents set forth on Exhibit A hereto and the other Security Documents and administered in accordance with the terms and conditions hereof. The Noteholders, the Revolving Credit Facility Agent on behalf of the Revolving Credit Facility Lenders and the Franchise Loan Facility Servicer on behalf of the Franchise Loan Facility Participants desire to appoint Bank of America, N.A. as the collateral agent (the “Collateral Agent” ) to act on behalf of the Noteholders, the Revolving Credit Facility Lenders and the Franchise Loan Facility Participants regarding the Collateral, all as more fully provided herein. The parties hereto have entered into this Agreement to, among other things, further define the rights, duties, authority and responsibilities of the Collateral Agent and the relationship between the Noteholders, the Revolving Credit Facility Lenders and the Franchise Loan Facility Participants regarding their equal and ratable interests in the Collateral.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

 

SECTION 1.

DEFINITIONS.

Section 1.1.       Definitions. The following terms shall have the meanings assigned to them below in this Section 1.1 or in the provisions of this Agreement referred to below:

“Affiliate” shall mean at any time, and (a) with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and (b) with respect to the Company or any Subsidiary, any Person beneficially owning or holding, directly or indirectly, 5% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 5% or more of any class of voting or equity interests. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Aff