AMENDED AND RESTATED LOAN FACILITY AGREEMENT
AND GUARANTY
by and among
RUBY TUESDAY, INC.,
SUNTRUST BANK, as Servicer
and
EACH OF THE PARTICIPANTS PARTY HERETO
Dated as of October 11, 2000
AMENDED AND RESTATED
LOAN FACILITY AGREEMENT AND GUARANTY
Table of Contents Page
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ARTICLE I DEFINITIONS.....................................................6
Section 1.1 Definitions..................................................7
Section 1.2 Accounting Terms and Determination..........................28
Section 1.3 Terms Generally.............................................28
Section 1.4 Exhibits and Schedules......................................29
ARTICLE II LOAN FACILITY..................................................29
Section 2.1 Establishment of Commitment; Terms of Loans and Letters
of Credit...................................................29
Section 2.2 Conveyance of Participant's Interest........................31
Section 2.3 Funding of Advances; Funding of Participant's Interest in
Loans; Purchase of Participation in Letters of Credit.......31
Section 2.4 Commitment Fees and Participant's Letter of Credit Fees.....33
Section 2.5 Interest on Funded Participant's Interest...................35
Section 2.6 Default Interest............................................35
Section 2.7 Voluntary Reduction of the Unutilized Commitment............36
Section 2.8 Extension of Commitment.....................................36
Section 2.9 Reserve Requirements; Change in Circumstances...............37
Section 2.10 Wind-Down Event.............................................38
Section 2.11 Pro Rata Treatment..........................................39
Section 2.12 Payments....................................................39
Section 2.13 Sharing of Setoffs..........................................39
ARTICLE III SERVICER'S SERVICING OBLIGATIONS; DISTRIBUTION
OF PAYMENTS.................................................40
Section 3.1 Servicer's Obligations with Respect to Loans; Collateral;
Non-Recourse................................................40
Section 3.2 Application of Payments.....................................41
Section 3.3 Servicing Report............................................42
ARTICLE IV LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND....................43
Section 4.1 Default Notice Of Loan......................................43
Section 4.2 Waiver or Cure By The Sponsor; Fully Guaranteed Pool........43
Section 4.3 Standstill Period; Defaulted Loan Guaranty Demand...........44
Section 4.4 No Waiver or Cure Available.................................44
Section 4.5 Fixed Charge Coverage Ratio for Loan Documents
executed under the Prior Loan Agreement.....................45
Section 4.6 Movement of Loans into and out of Fully Guaranteed Pool.....45
Section 4.7 Extension of Maturity Date of Defaulted Loans during the ...
Response Period and the Standstill Period...................46
ARTICLE V REPRESENTATIONS AND WARRANTIES..............................46
Section 5.1 Existence; Power............................................46
Section 5.2 Organizational Power; Authorization.........................46
Section 5.3 Governmental Approvals; No Conflicts........................47
Section 5.4 Financial Statements........................................47
Section 5.5 Litigation and Environmental Matters........................47
Section 5.6 Compliance with Laws and Agreements.........................48
Section 5.7 Investment Company Act, Etc.................................48
Section 5.8 Taxes.......................................................48
Section 5.9 Margin Regulations..........................................48
Section 5.10 ERISA.......................................................49
Section 5.11 Ownership of Property.......................................49
Section 5.12 Disclosure..................................................49
Section 5.13 Labor Relations.............................................50
Section 5.14 Subsidiaries................................................50
Section 5.15 Representations and Warranties with Respect to Specific
Loans.......................................................50
ARTICLE VI COVENANTS......................................................51
Section 6.1 Financial Statements and Other Information..................51
Section 6.2 Notices of Material Events..................................52
Section 6.3 Existence; Conduct of Business..............................53
Section 6.4 Compliance with Laws, Etc...................................53
Section 6.5 Payment of Obligations......................................54
Section 6.6 Books and Records...........................................54
Section 6.7 Visitation, Inspection, Etc.................................54
Section 6.8 Maintenance of Properties; Insurance........................54
Section 6.9 Additional Subsidiaries.....................................55
Section 6.10 Additional Guaranties.......................................55
Financial Covenants
Section 6.11 Minimum Fixed Charge Coverage Ratio.........................55
Section 6.12 Maximum Adjusted Total Debt to EBITDAR Ratio................56
Section 6.13 Maximum Adjusted Total Debt to Adjusted Total Capital
Ratio.......................................................56
Negative Covenants
Section 6.14 Indebtedness................................................56
Section 6.15 Negative Pledge.............................................57
Section 6.16 Fundamental Changes.........................................58
Section 6.17 Investments, Loans, Etc.....................................58
Section 6.18 Restricted Payments.........................................60
Section 6.19 Sale of Assets..............................................60
Section 6.20 Transactions with Affiliates................................61
Section 6.21 Restrictive Agreements......................................61
Section 6.22 Sale and Leaseback Transactions.............................61
Section 6.23 Hedging Agreements..........................................61
Section 6.24 Amendment to Material Documents.............................62
Section 6.25 Accounting Changes..........................................62
Section 6.26 ERISA.......................................................62
ARTICLE VII CREDIT EVENTS................................................62
Section 7.1 Credit Events...............................................62
ARTIII GUARANTY
Unconditional Guaranty........................................................66
Section 8.1 Limitation on Guaranty of Loans..........................66
Section 8.2 Obligations of Sponsor With Respect to Loans.............66
Section 8.3 Continuing Guaranty......................................68
Section 8.4 Waivers..................................................68
Section 8.5 Additional Actions.......................................69
Section 8.6 Additional Waivers.......................................69
Section 8.7 Postponement of Obligations..............................70
Section 8.8 Effect on additional Guaranties..........................70
Section 8.9 Reliance on Guaranty and Purchase Obligation; Disclaimer
of Liability.............................................70
Section 8.10 Reinstatement of Obligations.............................71
Section 8.11 Right to Bring Separate Action...........................71
ARTICLE IX INDEMNIFICATION.............................................72
Section 9.1 Indemnification..........................................72
Section 9.2 Notice Of Proceedings; Right To Defend...................73
Section 9.3 Third Party Beneficiaries................................74
ARTICLE X SURVIVAL OF LOAN FACILITY...................................74
Section 10.1 Survival of Loan Facility................................74
ARTICLE XI CONDITIONS PRECEDENT........................................75
Section 11.1 Conditions to Effective Date.............................75
11.1.1 Receipt of Documents.....................................75
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11.1.2 Corporate Actions........................................75
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11.1.3 Payment of Fees..........................................75
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Section 11.2 Effect of Amendment and Restatement......................76
ARTICLE XII THE SERVICER..............................................77
Section 12.1 Appointment of Servicer as Agent.........................77
Section 12.2 Nature of Duties of Servicer.............................77
Section 12.3 Lack of Reliance on the Servicer.........................78
Section 12.4 Certain Rights of the Servicer...........................78
Section 12.5 Reliance by Servicer.....................................78
Section 12.6 Indemnification of Servicer..............................79
Section 12.7 The Servicer in its Individual Capacity..................79
Section 12.8 Holders of Participation Certificates....................79
ARTICLE XIII MISCELLANEOUS...................................................80
Section 13.1 Notices..................................................80
Section 13.2 Amendments, Etc..........................................80
Section 13.3 No Waiver; Remedies Cumulative...........................81
Section 13.5 Right of Setoff..........................................82
Section 13.6 Benefit of Agreement; Assignments; Participations........82
Section 13.7 Governing Law; Submission to Jurisdiction................84
Section 13.8 Counterparts.............................................85
Section 13.9 Severability.............................................85
Section 13.10 Independence of Covenants................................85
Section 13.11 Change in Accounting Principles, Fiscal Year or Tax Laws.85
Section 13.12 Headings Descriptive; Entire Agreement...................86
EXHIBITS
Exhibit A.........-........Form of Assignment and Acceptance
Exhibit B.........-........Form of Subsidiary Guaranty Agreement
Exhibit C.........-........Form of Indemnity and Contribution Agreement
Exhibit D - Form of Loan Agreement
Exhibit E - Form of Participation Certificate
Exhibit F - Form of Servicing Report
SCHEDULES
Schedule 5.14..............- Subsidiaries
Schedule 6.14..............- Outstanding Indebtedness
Schedule 6.15..............- Existing Liens
Schedule 6.17..............- Existing Investments
AMENDED AND RESTATED
LOAN FACILITY AGREEMENT AND GUARANTY
THIS AMENDED AND RESTATED LOAN FACILITY AGREEMENT AND GUARANTY (the "Agreement")
made as of this 11th day of October, 2000 by and among RUBY TUESDAY, INC., a
Georgia corporation having its principal place of business and chief executive
office at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Sponsor"), SUNTRUST
BANK ("SunTrust") and each of the other lending institutions listed on the
signature pages hereto (SunTrust, such lenders, together with any assignees
thereof becoming "Participants" pursuant to the terms of this Agreement, the
"Participants") and SUNTRUST BANK, a banking corporation organized and existing
under the laws of Georgia having its principal office in Atlanta, Georgia, as
Servicer and agent for the Participants (in such capacity, the "Servicer").
W I T N E S S E T H:
WHEREAS, the Sponsor, Participants and Servicer, in order to make
available a loan facility to certain franchisees of Sponsor, entered into that
certain Amended and Restated Loan Facility Agreement and Guaranty dated as of
October 2, 1998, as amended by that certain First Amendment to Amended and
Restated Loan Facility Agreement and Guaranty, dated as of March _, 1999 (as so
amended and as otherwise amended or modified, the "Prior Loan Facility
Agreement") by and among Sponsor, Servicer and the Participants;
WHEREAS, in order to expedite the ongoing operations of the loan
facility, Sponsor and Servicer entered into that certain Amended and Restated
Servicing Agreement, dated as of October 2, 1998 (as amended or modified from
time to time, the "Prior Servicing Agreement") to set forth certain agreements
regarding fees and operations;
WHEREAS, at the request of Sponsor, Sponsor, the Participants and
Servicer are entering into this Agreement to amend and restate the terms of the
Prior Loan Facility Agreement to extend the termination date of such Commitments
and to modify certain other terms and provisions thereof, including without
limitation, the provisions of Article 8 thereof, all as is more fully set forth
below;
THEREFORE, upon the terms and conditions hereinafter stated, and in
consideration of the mutual premises set forth above and other adequate
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree that the Prior Loan
Facility Agreement is amended and restated as follows:
ARTICLE I
DEFINITIONS
Section I.1 Definitions. In addition to the other terms defined herein,
the following terms used herein shall have the meanings herein specified (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Adjusted LIBO Rate" shall mean, with respect to each Payment Period,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100
of 1%) determined pursuant to the following formula:
"Adjusted LIBO Rate" = ____LIBOR_________________
------------------------------
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Payment
Period for any Funded Participant's Interest outstanding hereunder, the
reserve percentage (expressed as a decimal) equal to the then stated
maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or against any
successor category of liabilities as defined in Regulation D).
"Adjusted Total Capital" shall mean, as of any date of determination,
the sum of (i) Adjusted Total Debt as of such date and (ii)
Consolidated Net Worth as of such date.
"Adjusted Total Debt" shall mean, as of any date of determination, (i)
all Indebtedness of the Sponsor and its Subsidiaries on a consolidated
basis, including without limitation all Loans and LC Exposure, but
excluding all Indebtedness of the type described in subsection (xi) of
the definition of Indebtedness and excluding any Synthetic Lease
Obligations to the extent that such Synthetic Lease Obligations are
included in clause (ii) below, plus (ii) to the extent not included in
clause (i), the present value of all lease obligations arising under
operating leases of Sponsor and its Subsidiaries as determined in
accordance with GAAP, applying a discount rate of ten percent (10%).
"Adjusted Total Debt to Adjusted Total Capital Ratio" shall mean, as of
any date of determination, the ratio of (i) Adjusted Total Debt as of
such date to (ii) Adjusted Total Capital as of such date. "Adjusted
Total Debt to EBITDAR Ratio" shall mean, as of any date of
determination, the ratio of (i) Adjusted Total Debt as of such date to
(ii) Consolidated EBITDAR as of such date, measured for the four Fiscal
Quarter period ending on such date.
"Advance" shall mean a funding of an advance pursuant to the Loan
Commitment of any Borrower pursuant to a Funding Request.
"Affiliate" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls,
is Controlled by, or is under common Control with, such Person.
"Agreement" shall mean this Loan Facility Agreement and Guaranty as it
may hereafter be amended or modified.
"American Cafe" shall mean "American Cafe", "Silverspoon" or
"Mozzarella's American Cafe", an operating concept of the Sponsor.
"Approved Fund" shall mean any Person (other than a natural Person)
that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business and that is administered
or managed by (a) a Participant, (b) an Affiliate of a Participant or
(c) an entity or an Affiliate of an entity that administers or manages
a Participant.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Participant and an Eligible Assignee in accordance
with the terms of this Agreement and substantially in the form of
Exhibit A.
"Borrower" shall mean a Franchisee or other affiliated Person who is
primarily liable for repayment of a Loan as a result of having executed
Loan Documents as maker, or its permitted assignee.
"Borrowers' Commitment Fee" shall have the meaning set forth in Section
2.4.
"Borrower Rate" shall mean, with respect to each Loan, the Prime Rate
per annum plus any additional margin per annum specified for such Loan
by Sponsor in the applicable Funding Approval Notice, such margin not
to exceed four percent (4.0%) per annum.
"Business Day" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia are authorized
or required by law to close and (ii) if such day relates to a Borrowing
of, a payment or prepayment of principal or interest on, a conversion
of or into, or an Interest Period for, a Eurodollar 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 for any period, without duplication,
(a) the additions to property, plant and equipment and other capital
expenditures of the Sponsor and its Subsidiaries that are (or would be)
set forth on a consolidated statement of cash flows of the Sponsor for
such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Sponsor and its Subsidiaries during such
period.
"Capital Lease Obligation" of any Person shall mean all obligations of
such Person to pay rent or other amounts under any lease (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified
and accounted for as capital leases on a balance sheet of such Person
under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.
"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 Securities and Exchange Commission 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
Securities and Exchange Commission thereunder as in effect on the date
hereof) of 30% or more of the outstanding shares of the voting stock of
the Sponsor; or (c) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Sponsor by Persons who
were neither (i) nominated by the current board of directors or (ii)
appointed by directors so nominated.
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or
document evidencing or governing Indebtedness of Sponsor evidencing
debt or a commitment to extend loans in excess of $2,000,000 which
requires, or permits the holder(s) of such Indebtedness of Sponsor to
require that such Indebtedness of Sponsor be redeemed, repurchased,
defeased, prepaid or repaid, either in whole or in part, or the
maturity of such Indebtedness of Sponsor to be accelerated in any
respect, as a result of a change in ownership of the capital stock of
Sponsor or voting rights with respect thereto.
"Closing Date" shall mean, for any Loan, the date upon which the Loan
Documents with respect to such Loan are executed and delivered and the
Loan Commitment is established thereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.
"Collateral" shall mean property subject to a security interest or lien
which secures a Loan.
"Collateral Agreement" shall mean an agreement executed by a Borrower
and any other Persons primarily or secondarily liable for all or part
of the Loan, granting a security interest to the Servicer in specified
Collateral as security for such Loan.
"Commitment" shall have the meaning set forth in Section 2.1(a).
"Commitment Fee" shall have the meaning set forth in Section 2.4.
"Commitment Termination Date" shall have the meaning set forth in
Section 2.1(a).
"Consolidated Companies" shall mean, collectively, Sponsor and all of
its Subsidiaries, and "Consolidated Company" shall mean, individually,
the Sponsor or any of its Subsidiaries.
"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 plus (b) 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 and (iv) all other
non-cash charges determined on a consolidated basis in accordance with
GAAP, in each case for such period.
"Consolidated EBITDAR" shall mean, for the Sponsor and its Subsidiaries
for any period, an amount equal to the sum of (a) Consolidated EBITDA
plus (b) Consolidated Lease Expense, in each case for such period.
"Consolidated EBITR" 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 plus (b) 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) all other non-cash charges, determined on a
consolidated basis in accordance with GAAP, and (iv) Consolidated Lease
Expense, in each case for such period.
"Consolidated Fixed Charges" shall mean, for the Sponsor and its
Subsidiaries for any period, the sum (without duplication) of (a)
Consolidated Interest Expense for such period and (d) Consolidated
Lease Expense for such period.
"Consolidated Interest Expense" shall mean, for the Sponsor and its
Subsidiaries for any period determined on a consolidated basis in
accordance with GAAP, the sum of (i) total cash interest expense,
including without limitation the interest component of any payments in
respect of Capital Leases Obligations capitalized or expensed during
such period (whether or not actually paid during such period) plus (ii)
the net amount payable (or minus the net amount receivable) under
Hedging Agreements during such period (whether or not actually paid or
received during such period).
"Consolidated Lease Expense" shall mean, for any period, the aggregate
amount of fixed and contingent rental and operating lease expense
payable by the Sponsor and its Subsidiaries with respect to leases of
real and personal property (excluding Capital Lease Obligations)
determined on a consolidated basis in accordance with GAAP for such
period.
"Consolidated Net Income" shall mean, for any period, the net income
(or loss) of the Sponsor and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, but
excluding therefrom (to the extent otherwise included therein) (i) any
extraordinary gains or losses, (ii) any gains attributable to write-ups
of assets, (iii) any equity interest of the Sponsor or any Subsidiary
of the Sponsor in the unremitted earnings of any Person that is not a
Subsidiary and (iv) any income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary or is merged into or consolidated with
the Sponsor or any Subsidiary on the date that such Person's assets are
acquired by the Sponsor or any Subsidiary.
"Consolidated Net Worth" shall mean, as of any date, (i) the total
assets of the Sponsor and its Subsidiaries that would be reflected on
the Sponsor's consolidated balance sheet as of such date prepared in
accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries, minus the sum of (i) the total liabilities of the Sponsor
and its Subsidiaries that would be reflected on the Sponsor's
consolidated balance sheet as of such date prepared in accordance with
GAAP and (ii) the amount of any write-up in the book value of any
assets resulting from a revaluation thereof or any write-up in excess
of the cost of such assets acquired reflected on the consolidated
balance sheet of the Sponsor as of such date prepared in accordance
with GAAP.
"Control" shall mean the power, directly or indirectly, either to (i)
vote 5% or more of securities having ordinary voting power for the
election of directors (or persons performing similar functions) of a
Person or (ii) direct or cause the direction of the management and
policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. The terms "Controlling", "Controlled
by", and "under common Control with" have meanings correlative thereto.
"Credit Event" shall have the meaning set forth in Section 7.1 of this
Agreement.
"Credit Parties" shall mean, collectively, each of the Sponsor and the
Guarantors.
"Deemed Loan Default " shall have the meaning set forth in Section
4.5(a) of this Agreement.
"Defaulted Borrower" means a Borrower under a Defaulted Loan.
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"Defaulted Loan" means a Loan evidenced by Loan Documents under the
terms of which exist one or more Loan Defaults which have not been
cured or waived as permitted herein.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful money of
the United States of America.
"Effective Date " means October 11, 2000.
"Eligible Assignee" shall mean (a) the Servicer or any Participant; (b)
an Affiliate of the Servicer or any Participant; (c) an Approved Fund;
and (d) any other Person (other than a natural Person) approved by the
Servicer, and unless an Event of Default has occurred and is
continuing, the Sponsor (each such approval not to be unreasonably
withheld or delayed). If the consent of the Sponsor to an assignment or
to an Eligible Assignee is required hereunder, the Sponsor shall be
deemed to have given its consent five Business Days after the date
notice thereof has actually been delivered by the assigning Servicer or
Participant to the Sponsor, unless such consent is expressly refused by
the Sponsor prior to such fifth Business Day.
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any
Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight,
fines, natural resource damages, penalties or indemnities), of the
Sponsor or any Subsidiary directly or indirectly resulting from or
based upon (a) any actual or alleged violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or
threatened Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated), which, together with the Sponsor, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the
purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30-day notice period is
waived); (b) the existence with respect to any Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section
302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan;
(d) the incurrence by the Sponsor or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of
any Plan; (e) the receipt by the Sponsor or any ERISA Affiliate from
the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Sponsor or
any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan;
or (g) the receipt by the Sponsor or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from the Sponsor or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
"Excluded Management Salary" shall mean, with respect to any Borrower
for any period, (1) two-thirds of the salary and expenses paid to the
Franchisee Partner of such Borrower during any period that the Borrower
has only one Qualified Store and (2) one-third of the salary and
expenses paid to the Franchisee Partner of such Borrower during any
period that the Borrower has only two Qualified Stores.
"Executive Officer" shall mean with respect to any Person, the
President, Vice Presidents, Chief Financial Officer, Treasurer,
Secretary and any Person holding comparable offices or duties.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with member banks of the Federal Reserve System arranged by Federal
funds brokers, as published by the Federal Reserve Bank of New York on
the next succeeding Business Day or if such rate is not so published
for any Business Day, the Federal Funds Rate for such day shall be the
average rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations for such day on such transactions received by the Servicer
from three Federal funds brokers of recognized standing selected by the
Servicer.
"Fee Letter" shall mean that certain letter agreement dated as of even
date herewith, by and between the Sponsor and the Servicer, setting
forth certain fees applicable to the loan facility described herein,
either as originally executed or as hereafter amended or modified.
"Final Termination Date" shall mean the date which is sixty (60) days
after the expiration of the last Loan Commitment established hereunder.
"Fiscal Quarter" shall mean any fiscal quarter of the Sponsor or the
Consolidated Companies, as applicable.
"Fixed Charge Coverage Ratio" shall mean, as of any date of
determination, the ratio of (a) Consolidated EBITR to (b) Consolidated
Fixed Charges, in each case measured for the four Fiscal Quarter period
ending on such date.
"Foreign Subsidiary" shall mean any Subsidiary that is organized under
the laws of a jurisdiction other than one of the fifty states of the
United States or the District of Columbia.
"Franchisee Debt" shall mean, for any Borrower without duplication, (i)
indebtedness for borrowed money or for the deferred purchase price of
property or services (other than trade accounts payable on customary
terms in the ordinary course of business), (ii) financial obligations
evidenced by bonds, debentures, notes or other similar instruments,
(iii) financial obligations as lessee under leases which shall have
been or should be, in accordance with GAAP, recorded as capital leases,
and (iv) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or financial obligations of others of the kinds referred
to in clauses (i) through (iii) above.
"Franchisee Debt Service " means, for any period for any Borrower whose
Loans were extended, or Letters of Credit issued pursuant to, Loan
Documents executed under the Prior Loan Facility Agreement, the sum of
(A) interest expense paid in cash during such period plus (B) scheduled
amortization of all Franchisee Debt (excluding Franchisee Debt of the
type described in clause (iv) of the definition of "Franchisee Debt")
for such period, in each case measured for such Borrower and its
subsidiaries on a consolidated basis in accordance with GAAP.
"Franchise Documents" means, collectively, (i) the participation and
operating agreements for any Borrower that is a limited liability
company or limited partnership agreement for any Borrower that is a
limited partnership and (ii) the written agreements between Sponsor and
a Borrower whereby the Borrower is authorized to establish one or more
"Ruby Tuesday" franchises, including without limitation the Ruby
Tuesday, Inc. Operating Agreements between Sponsor and a Borrower and
each other operating agreement and development agreement related to
each franchise location, all as amended or modified from time to time.
"Franchisee EBITDAR" means, for any period for any Borrower whose Loans
were extended, or Letters of Credit issued pursuant to, Loan Documents
executed under the Prior Loan Facility Agreement, (1) net income (loss)
for such period, plus, (2) to the extent subtracted in determining such
net income (loss), (a) interest expense for such period, (b) tax
expense for such period, (c) depreciation, amortization and other
non-cash charges for such period, (d) Franchisee Rents for such period,
(e) Non-recurring Expenses for such period, and (f) Excluded Management
Salary for such period, if any, minus (3) Non-recurring Income for such
period to the extent included in such net income (loss), in each case
measured for such Borrower and its subsidiaries on a consolidated
basis.
"Franchisee Fixed Charge Coverage Ratio" shall mean, as of any date for
any Borrower whose Loans were extended, or Letters of Credit issued
pursuant to, Loan Documents executed under the Prior Loan Facility
Agreement, the ratio of (i) Franchisee EBITDAR to (ii) the sum of (A)
Franchisee Debt Service plus (B) Franchisee Rents, in each case for the
immediately preceding four fiscal quarters ended on or closest to such
date; provided, however, that Sponsor may elect to exclude from the
calculation of the Franchisee Fixed Charge Coverage Ratio for any
Borrower the Franchisee EBITDAR, the Franchisee Debt Service and the
Franchisee Rents incurred by such Borrower and its subsidiaries that
are attributable to any stores that are not Qualified Stores; provided,
further, however, that if the Sponsor at any time includes any store
that is not a Qualified Store in the calculation of the Franchisee
Fixed Charge Coverage Ratio, such store shall thereafter be included in
all subsequent calculations of the Franchisee Fixed Charge Coverage
Ratio.
"Franchisee Loan Program" shall mean that transaction evidenced by (i)
this Agreement wherein the Sponsor has guaranteed, to the extent set
forth herein, certain obligations of franchisees of the Sponsor, and
(ii) the other "Operative Documents" (as such term is defined herein)
executed by the Consolidated Companies in connection herewith and
therewith.
"Franchisee Partner" means, collectively, the Person other than the
Sponsor that owns an equity interest in the Borrower and any Person who
directly or indirectly owns or controls such Person.
"Franchise Partner Program" shall mean the optional financing and
business structuring program offered by the Sponsor to a limited number
of qualified restaurant operators, such operators to be determined by
the Sponsor in its sole discretion, which provides such restaurant
operators a business structure for organizing, owning and funding the
establishment and operation of restaurants doing business under
operating concepts owned by Sponsor.
"Franchisee Rents" means, for any period for any Borrower whose Loans
were extended, or Letters of Credit issued pursuant to, Loan Documents
executed under the Prior Loan Facility Agreement, the aggregate amount
of all lease and rent payments for which such Borrower and its
subsidiaries are directly or indirectly liable (as lessee or as
guarantor or other surety) under all operating leases in effect at any
time during such period, determined on a consolidated basis in
accordance with GAAP.
"Fronting Advance" shall have the meaning set forth in Section 2.3.
"Fully Guaranteed Pool" shall mean Loans which are subject to the full
and unlimited guaranty of the Sponsor pursuant to the terms of Section
4.2 and Article VIII of this Agreement.
"Funded Participant's Interest" means the aggregate outstanding amount
of Advances made by a Participant hereunder with respect to the Loans,
and shall include, with respect to SunTrust, the aggregate outstanding
amount of Fronting Advances.
"Funding Approval Notice" means a written notice to the Servicer from
Sponsor setting forth the conditions of a proposed Loan Commitment,
consistent with the requirements therefor as set forth in this
Agreement, and containing such information and in substantially such
form as shall be agreed to by Servicer and Sponsor pursuant to the
Servicing Agreement.
"Funding Request" means (x) a request from a Borrower to the Servicer
to fund a portion of such Borrower's Loan Commitment, and (y) the
Initial Funding Request.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Guaranteed Obligations" means the aggregate amount of the Loan
Indebtedness outstanding under the Loan Documents and guaranteed by the
Sponsor pursuant to this Agreement to include, without limitation (i)
all principal, interest and commitment fees due with respect to all
Loans, including post-petition interest in any proceeding under federal
bankruptcy laws, (ii) all fees, expenses, and amounts payable by any
Borrower for reimbursement or indemnification under the terms of the
Loan Agreement or any other Loan Document executed in connection with
the Loan to such Borrower, (iii) all amounts advanced by Servicer to
protect or preserve the value of any security for the Loans, and (iv)
all renewals, extensions, modifications, and refinancings (in whole or
in part) of any of the amounts referred to in clauses (i) and (ii)
above).
"Governmental Authority" shall mean the government of the United States
of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative
powers or functions of or pertaining to government.
"Guarantor" shall mean each Subsidiary Loan Party now or hereafter a
party to the Subsidiary Guaranty Agreement or any Subsidiary that
becomes a party to the Subsidiary Guaranty Agreement pursuant to
Section 6.9, and their respective successors and permitted assigns.
"Guaranty" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of Guaranteeing any Indebtedness or other
obligation of any other Person (the "primary obligor ") in any manner,
whether directly or indirectly and including any obligation, direct or
indirect, of the guarantor (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other
obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to enable
the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of
guaranty issued in support of such Indebtedness or obligation;
provided, that the term "Guaranty" shall not include endorsements for
collection or deposits in the ordinary course of business. The amount
of any Guaranty shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
Guaranty is made or, if not so stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person
in good faith. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guaranty Payments" mean all payments made by the Sponsor pursuant to
Section 8.2 of this Agreement with respect to Loans in the Limited
Guaranty Pool, and shall exclude all payments made by the Sponsor
hereunder with respect to Loans in the Fully Guaranteed Pool.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, commodity agreements
and other similar agreements or arrangements designed to protect
against fluctuations in interest rates, currency values or commodity
values, in each case to which any Sponsor or any Subsidiary is a party.
"Hostile Acquisition" shall mean any Investment resulting in control of
a Person involving a tender offer or proxy contest that has not been
recommended or approved by the board of directors of the Person that is
the subject of the Investment prior to the first public announcement or
disclosure relating to such Investment.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect of the
deferred purchase price of property or services (other than trade
payables incurred in the ordinary course of business; provided, that
for purposes of Section 7.1(e), trade payables overdue by more than 120
days shall be included in this definition except to the extent that any
of such trade payables are being disputed in good faith and by
appropriate measures), (iv) all obligations of such Person under any
conditional sale or other title retention agreement(s) relating to
property acquired by such Person, (v) all Capital Lease Obligations of
such Person, (vi) all obligations, contingent or otherwise, of such
Person in respect of letters of credit, acceptances or similar
extensions of credit, (vii) all Guarantees of such Person of the type
of Indebtedness described in clauses (i) through (vi) above, (viii) all
Indebtedness of a third party secured by any Lien on property owned by
such Person, whether or not such Indebtedness has been assumed by such
Person, (ix) all obligations of such Person, contingent or otherwise,
to purchase, redeem, retire or otherwise acquire for value any common
stock of such Person, (x) Off-Balance Sheet Liabilities and (xi) all
obligations under Hedging Agreements. The Indebtedness of any Person
shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, except to
the extent that the terms of such Indebtedness provide that such Person
is not liable therefor.
"Initial Funding Request" means the Funding Request submitted by a
Borrower for the initial Advance on the Closing Date of such Loan.
"Indemnity and Contribution Agreement" shall mean the Indemnity and
Contribution Agreement, as amended, restated, supplemented or otherwise
modified from time to time, substantially in the form of Exhibit C,
among the Sponsor, the Subsidiary Loan Parties and the Servicer, as
amended, restated, supplemented or otherwise modified from time to
time.
"Investment" shall have the meaning assigned to such term in Section
6.17.
"Letter of Credit" shall mean a standby letter of credit issued by the
Servicer on behalf of a Borrower pursuant to the terms of the
applicable Loan Commitment on the terms and conditions set forth in the
applicable Loan Agreement.
"LC Exposure" shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus
(ii) the aggregate amount of all LC Disbursements that have not been
reimbursed by or on behalf of the Sponsor at such time. The LC Exposure
of any Participant shall be its Pro Rata Share of the total LC Exposure
at such time.
"Letter of Credit Fee" shall mean the fee paid by each Borrower
pursuant to the terms of the applicable Loan Agreement with respect to
all outstanding Letter of Credit Obligations thereunder.
"Letter of Credit Obligations" shall mean, with respect to each
Borrower, the aggregate of the face amount of all outstanding Letters
of Credit issued by the Servicer on behalf of such Borrower pursuant to
the applicable Loan Agreement plus, without duplication, the aggregate
amount of unreimbursed draws on such Letters of Credit.
"Letter of Credit Outstandings" shall mean the aggregate amount of all
Letter of Credit Obligations.
"LIBOR" shall mean, for each Payment Period, the British Bankers'
Association Interest Settlement Rate per annum for deposits in U.S.
Dollars for a period of one month and in an amount comparable to the
aggregate outstanding Funding Participant's Interest as of the first
day of such Payment Period, appearing on the display designated as Page
3750 on the Dow ▇▇▇▇▇ Markets Service (or such other page on that
service or such other service designated by the British Banker's
Association for the display of such Association's Interest Settlement
Rates for Dollar deposits) as of 11:00 A.M. (London, England time) on
the day that is two (2) Business Days prior to the first day of the
Payment Period. If two or more of such rates appear on such Page 3750,
the rate for that Payment Period shall be the arithmetic mean of such
rates. If the foregoing rate is unavailable from such Page 3750 for any
reason, then such rate shall be determined by the Servicer from the
Reuters Screen ISDA Page as of such date and such time. If such rate is
also unavailable on such service, then on any other interest rate
reporting service of recognized standing designated in writing by the
Servicer to Sponsor; in any such case rounded, if necessary, to the
next higher 1/100 of 1.0%, if the rate is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation,
assignment, deposit arrangement, or other arrangement having the
practical effect of the foregoing or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention
agreement and any capital lease having the same economic effect as any
of the foregoing).
"Limited Guaranty Pool" shall mean each of the Loans outstanding
hereunder other than the Loans comprising the Fully Guaranteed Pool.
"Loan" means the aggregate Advances made pursuant to a Loan Commitment,
as evidenced by the relevant Promissory Note.
"Loan Commitment" means the commitment of the Servicer to each Borrower
to make Advances to such Borrower in the aggregate amount specified in
the relevant Promissory Note, subject to the terms and conditions set
forth therein.
"Loan Agreement" means the Line of Credit Agreement setting forth the
terms and conditions, as between a Borrower and the Servicer, under
which the Servicer has established a Loan Commitment to make Advances
to the Borrower, substantially in the form of Exhibit D.
"Loan Default" means an occurrence with respect to a Loan which is
defined by the applicable Loan Documents to be an event of default
(including but not limited to a Loan Payment Default).
"Loan Documents" means the Loan Agreement, the Promissory Note, any
Personal Guaranty, any Spousal Consent, the Collateral Agreements, any
Letters of Credit and any other documents relating to the Loan or
Letters of Credit delivered by any Borrower or any guarantor or surety
thereof to the Servicer and any amendments thereto (provided that such
amendments are made with the consent of Sponsor, where such consent is
required under this Agreement).
"Loan Indebtedness" means all amounts due and payable by a Borrower
under the terms of the Loan Documents for a given Loan and outstanding
Letters of Credit, including, without limitation, outstanding
principal, accrued interest, any commitment fees, letter of credit fees
and all reasonable costs and expenses of any legal proceeding brought
by the Servicer to collect any of the foregoing (including without
limitation, reasonable attorneys' fees actually incurred).
"Loan Parties" shall mean the Sponsor and the Subsidiary Loan Parties.
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"Loan Payment Default" means the failure of a Borrower to make a
payment of principal, accrued interest thereon or any other amounts,
within the cure period following the due date therefor, as provided
under the applicable Loan Documents.
"Loan Term" means the period from the Closing Date of a Loan Commitment
until the Maturity Date of such Loan Commitment and the Loan
outstanding thereunder, which period shall not exceed twenty-four
months.
"L&N" shall mean "L&N Seafood" or L&N Seafood Grill", which are
operating concepts of Sponsor.
"Margin Regulations" shall mean Regulation G, Regulation T, Regulation
U and Regulation X of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.
"Material Adverse Effect" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental
investigation or proceeding), whether singularly or in conjunction with
any other event or events, act or acts, condition or conditions,
occurrence or occurrences whether or not related, a material adverse
change in, or a material adverse effect on, (i) the business, results
of operations, financial condition, assets, liabilities or prospects of
the Sponsor or of the Sponsor and its Subsidiaries taken as a whole,
(ii) the ability of the Credit Parties to perform any of their
respective obligations under the Operative Documents, (iii) the rights
and remedies of the Servicer and the Participants under any of the
Operative Documents or (iv) the legality, validity or enforceability of
any of the Operative Documents.
"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 $2,500,000. 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.
"Material Subsidiary" shall mean (i) each Credit Party other than the
Sponsor, and (ii) each other Subsidiary of the Sponsor, now existing or
hereafter established or acquired, that at any time prior to the
Maturity Date, has or acquires total assets in excess of $5,000,000, or
that accounted for or produced more than 5% of the Consolidated Net
Income (Loss) of the Sponsor on a consolidated basis during any of the
three most recently completed Fiscal Years of the Sponsor, or that is
otherwise material to the operations or business of the Sponsor or
another Material Subsidiary.
"Maturity Date" means, with respect to any Loan Commitment, the date
set forth under the applicable Loan Documents when such Loan Commitment
terminates and all principal and interest with respect to the Loan
outstanding thereunder shall become due and payable in full; provided
that, each Maturity Date shall be a Payment Date.
"Maximum Amount" shall have the meaning set forth in Section 8.1
hereof.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
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"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Non-recurring Expenses " shall mean, for any Borrower for any period,
all expenses of such Borrower and its Subsidiaries for such period that
are extraordinary and generally not reflected in any prior period or
reasonably anticipated to be incurred in any subsequent period.
"Non-recurring Income " shall mean, for any Borrower for any period,
all income of such Borrower and its Subsidiaries for such period that
is extraordinary and generally not reflected in any prior period or
reasonably anticipated to be incurred in any subsequent period.
"Off-Balance Sheet Liabilities" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to
accounts or notes receivable sold by such Person, (ii) any liability of
such Person under any sale and leaseback transactions which do not
create a liability on the balance sheet of such Person, (iii) any
Synthetic Lease Obligation or (iv) any obligation arising with respect
to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the
balance sheet of such Person in accordance with GAAP.
"Operative Documents" shall mean this 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.
"OSHA" shall mean the Occupational Safety and Health Act of 1970, as
amended from time to time, and any successor statute.
"Participant" shall mean SunTrust, the other lending institutions
listed on the signature pages hereof and each assignee thereof, if any,
pursuant to the terms hereof.
"Participating Commitment " shall mean the amount set forth opposite
each Participant's name on the signature pages hereof, as such amount
may be modified by assignment pursuant to the terms hereof; provided
that, following the termination of the Commitment, each Participant's
Participating Commitment shall be deemed to be its Pro Rata Share of
the aggregate Loan Commitments.
"Participant Funding" shall mean a funding by the Participants of their
Pro Rata Share of Loans outstanding.
"Participant's Interest" shall have the meaning set forth in Section
2.2.
"Participant's Letter of Credit Fee " shall have the meaning set forth
in Section 2.4(c).
"Participant's Unused Commitment" shall mean, with respect to any
Participant, the difference between such Participant's Participating
Commitment and such Participant's Funded Participant's Interest, as
further reduced by such Participant's Pro Rata Share of the Letter of
Credit Outstandings.
"Participant's Unused Sponsor Commitment" shall mean, with respect to
any Participant, the difference between such Participant's
Participating Commitment and such Participant's Pro Rata Share of all
outstanding Loan Commitments.
"Participation Certificate" shall mean, a certificate issued by the
Servicer to a Participant, substantially in the form of Exhibit E
attached hereto, evidencing such Participant's ownership interest
conveyed hereunder.
"Payment Date" means the last day of each calendar month, provided,
however, if such day is not a Business Day, the next succeeding
Business Day.
"Payment Period" shall mean a period of one (1) month; provided that
(i) the first day of a Payment Period must be a Business Day, (ii) any
Payment Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day, (iii) the
first Payment Period hereunder shall commence on the date hereof and
shall end on the last day of the next succeeding calendar month and
(iv) the first day of any succeeding Payment Period shall be the last
day of the preceding Payment Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar
functions.
"Permitted Encumbrances" shall mean
a. Liens imposed by law for taxes not yet due or
which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;
b. statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained in
accordance with GAAP;
c. pledges and deposits made in the ordinary course of
business in compliance with workers' compensation,
unemployment insurance and other social security laws or regulations;
d. deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature,
in each case in the ordinary course of business;
e. judgment and attachment liens not giving rise to an Event
of Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP; and
f. easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
materially interfere with the ordinary conduct of business of the
Sponsor and its Subsidiaries taken as a whole;
provided, that the term "Permitted Encumbrances" shall not include any
Lien securing Indebtedness.
"Permitted Investments" shall mean:
a. direct obligations of, or obligations the principal of and
interest on which are unconditionally Guaranteed by, the United States
(or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States), in each case maturing
within one year from the date of acquisition thereof;
b. commercial paper having the highest rating, at the
time of acquisition thereof, of S&P or ▇▇▇▇▇'▇ and in either
case maturing within six months from the date of acquisition thereof;
c. certificates of deposit, bankers' acceptances and time
deposits maturing within 180 days of the date of acquisition thereof
issued or Guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States or any state thereof
which has a combined capital and surplus and undivided profits of not
less than $500,000,000;
d. fully collateralized repurchase agreements with a
term of not more than 30 days for securities described in
clause (i) above and entered into with a financial institution
satisfying the criteria described in clause (iii) above; and
e. mutual funds investing solely in any one or more
of the Permitted Investments described in clauses (i)
through (iv) above.
"Person" shall mean an individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other
entity, or any Governmental Authority.
"Personal Guaranty" shall mean any guaranty from a principal of a
Borrower substantially in the form attached to the Servicing Agreement.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of
which the Sponsor or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Prior Loan Facility Agreement" shall have the meaning as set forth in
the Recital paragraphs above.
"Prior Servicing Agreement" shall have the meaning as set forth in the
Recital paragraphs above.
"Pro Rata Share" shall mean, with respect to each of the Participants,
the percentage designated as such Participant's Pro Rata Share on the
signature pages hereof, as such percentage may change from time to time
as a result of assignments or amendments pursuant to this Agreement.
"Promissory Note" means a Master Note of a Borrower, substantially in
the form attached hereto as Exhibit D setting forth the obligation of
such Borrower to repay the Loan evidenced thereby.
"Qualified Store" shall mean any store that has been open for at least
twelve months and was not acquired by a Borrower from the Sponsor
during the last twelve months.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time,
and any successor regulations.
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's
Affiliates.
"Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching
or migration into the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or within any
building, structure, facility or fixture.
"Required Participants" shall mean at any time, the Participants
holding at least 51 % of the sum of (x) aggregate Funded Participant's
Interest, plus (y) the Participant's Unused Commitments, or, following
the termination of the Commitment and the Loan Commitments, the
Participants holding at least 51 % of the aggregate outstanding Funded
Participant's Interests at such time.
"Response Period" means a period of sixty (60) days commencing on the
day on which a Loan Payment Default or Loan Default occurs; provided
that no Response Period shall extend beyond the Final Termination Date.
"Responsible Officer" shall mean any of the president, the chief
executive officer, the chief operating officer, the chief financial
officer, the treasurer or a vice president of the Sponsor or such other
representative of the Sponsor as may be designated in writing by any
one of the foregoing with the consent of the Administrative Agent; and,
with respect to the financial covenants only, the chief financial
officer or the treasurer of the Sponsor.
"Restricted Payment" shall have the meaning set forth in Section 6.18.
"Ruby Tuesday" shall mean "Ruby Tuesday", an operating concept of
Sponsor.
"Servicer's Letter of Credit Fee" shall have the meaning set forth in
the Servicing Agreement.
"Servicing Agreement" shall mean that certain Amended and Restated
Servicing Agreement, dated as of the date hereof, by and between the
Sponsor and the Servicer, as amended, restated, supplemented or
otherwise modified from time to time.
"Servicing Fee" shall mean the fee payable to the Servicer pursuant to
the terms of the Servicing Agreement.
"Servicing Report" shall have the meaning set forth in Section 3.3.
"Servicer" shall mean SunTrust Bank and its successors and assigns.
"Sponsor's Commitment Fee" shall have the meaning set forth in Section
2.4.
"Sponsor's Fee" shall have the meaning set forth in the Servicing
Agreement.
"Sponsor's Letter of Credit Fee " shall have the meaning set forth in
the Servicing Agreement.
"Spousal Consent" shall mean a consent of the spouse of a Person
executing a Personal Guaranty, substantially in the form attached to
the Servicing Agreement.
"Standard & Poor's" shall mean Standard & Poor's Rating Service, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies.
"Standstill Period" means a sixty (60) day period commencing on the
date immediately following the date that the Response Period expires
during which the Servicer and the Participants will continue to refrain
from exercising remedies against a Defaulted Borrower while a Defaulted
Loan remains in the Limited Guaranty Pool.
"Subordinated Debt" shall mean all Indebtedness of Sponsor subordinated
to all obligations of Sponsor or any other Credit Party arising under
this Agreement and the Subsidiary Guaranty Agreement, created, incurred
or assumed on terms and conditions satisfactory in all respects to the
Servicer and the Participants, including without limitation, with
respect to interest rates, payment terms, maturities, amortization
schedules, covenants, defaults, remedies, and subordination provisions,
as evidenced by the written approval of the Servicer and Required
Participants.
"Subsidiary" shall mean, with respect to any Person (the "parent"),
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated
with those of the parent in the parent's consolidated financial
statements if such financial statements were prepared in accordance
with GAAP as of such date, as well as any other corporation,
partnership, joint venture, limited liability company, association or
other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the
ordinary voting power, or in the case of a partnership, more than 50%
of the general partnership interests are, as of such date, are directly
or indirectly owned, controlled (intentionally lowercase) or held by
the parent. Unless otherwise indicated, all references to "Subsidiary"
hereunder shall mean a Subsidiary of the Sponsor.
"Subsidiary Guaranty Agreement" shall mean the Subsidiary Guaranty
Agreement, substantially in the form of Exhibit B, made by the
Subsidiary Loan Parties in favor of the Administrative Agent for the
benefit of the Lenders, as amended, restated, supplemented or otherwise
modified from time to time.
"Subsidiary Loan Party" shall mean any Material Subsidiary that is not
a Foreign Subsidiary..
"Synthetic Lease" means a lease transaction under which the parties
intend that (i) the lease will be treated as an "operating lease" by
the lessee pursuant to Statement of Financial Accounting Standards No.
13, as amended and (ii) the lessee will be entitled to various tax and
other benefits ordinarily available to owners (as opposed to lessees)
of like property.
"Synthetic Lease Obligations" shall mean, with respect to any Person,
the sum of (i) all remaining rental obligations of such Person as
lessee under Synthetic Leases which are attributable to principal and,
without duplication, (ii) all rental and purchase price payment
obligations of such Person under such Synthetic Leases assuming such
Person exercises the option to purchase the lease property at the end
of the lease term.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Tia's" shall mean Tia's Mexican Restaurants", an operating concept of
Tia's, LLC, a Delaware limited liability company, a wholly owned
subsidiary of Sponsor.
"Unmatured Credit Event" shall mean any condition or event which, with
notice or the passage of time or both, would constitute a Credit Event.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of
ERISA.
Section I.2 Accounting Terms and Determination.
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Unless otherwise defined or specified herein, all accounting
terms shall be construed herein, all accounting determinations hereunder shall
be made, all financial statements required to be delivered hereunder shall be
prepared, and all financial records shall be maintained in accordance with,
GAAP.
Section I.3 Terms Generally.
---------------
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". In the computation of periods of time
from a specified date to a later specified date, the word "from" means "from and
including" and the word "to" means "to but excluding". Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to include
such Person's successors and permitted assigns, (iii) the words "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular provision hereof, (iv)
all references to Articles, Sections, Exhibits and Schedules shall be construed
to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v)
all references to a specific time shall be construed to refer to the time in the
city and state of the Servicer's principal office, unless otherwise indicated.
Section I.4 Exhibits and Schedules.
----------------------
All Exhibits and Schedules attached hereto are by reference made a part
hereof.
ARTICLE II
LOAN FACILITY
Section II.1 Establishment of Commitment; Terms of Loans and
Letters of Credit.
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(a) Commitment. Subject to and upon the terms and conditions
set forth in this Agreement and the other Operative Documents, and in reliance
upon the guaranty of the Sponsor set forth herein, the Servicer hereby
establishes a Commitment to the Sponsor to establish Loan Commitments and make
Advances to such Franchisees as may be designated by the Sponsor in its Funding
Approval Notices during a period commencing on the Effective Date and ending on
October 10, 2001 (as such period may be extended for one or more subsequent
364-day periods pursuant to Section 2.8 hereof, the "Commitment Termination
Date") in an aggregate committed amount at any one time outstanding not to
exceed FIFTY-TWO MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($52,500,000.00) (the "Commitment").
(b) Authorization of Loan Commitments; Loan Terms; Letter of
Credit Terms. Within the limits of the Commitment and in accordance with the
procedures set forth in the Servicing Agreement, the Sponsor may authorize the
Servicer to establish a Loan Commitment in favor of a Franchisee who meets the
credit criteria established by the Sponsor. The amount of each Loan Commitment
shall be determined by the Sponsor but shall not be less than $250,000 nor
exceed $3,500,000 for any Franchisee. Pursuant to the Loan Commitment, the
Servicer shall agree to make Advances to the Borrower thereunder in a minimum
amount of $25,000 and in integral multiples of $1,000, such Advances not to
exceed four (4) per month unless the Servicer shall otherwise agree, and except
that any Loan Commitments outstanding on the date hereof that provide otherwise
may remain in effect until such time as such Loan Commitments are renewed or
refinanced. In addition, the Servicer shall agree to issue Letters of Credit on
behalf of such Borrower in an aggregate amount at any one time outstanding not
to exceed $250,000. Each Loan shall bear interest at the Borrower Rate
designated by Sponsor in the applicable Funding Approval Notice, and interest
shall be payable on each Payment Date and on the Maturity Date of such Loan when
all principal and interest shall be due and payable in full. Each Loan may be
prepaid in full or in part on any Business Day, without premium or penalty. The
Loan Term of each Loan shall not exceed twenty-four months. Each Letter of
Credit shall be for a term of not more than one year (unless otherwise agreed by
the Servicer) and shall mature on a date which is at least ten (10) days prior
to the Maturity Date. If any drawing is made upon a Letter of Credit and not
reimbursed by the applicable Borrower on the same Business Day, then the
applicable Borrower shall be deemed to have requested an Advance to repay such
amount and the Servicer shall make such Advance regardless of the minimum
requirements set forth above and regardless of whether or not a Default or Event
of Default exists under the applicable Loan Documents, which amounts shall be
Advances for all purposes hereunder. Notwithstanding the foregoing, the terms of
all Loans and Loan Commitments governed by Loan Documents executed and delivered
by Borrowers prior to the Effective Date shall be subject in all respects to
Section 11.2.2.
(c) Obligation to Establish Loan Commitments. Servicer's
obligation to establish each Loan Commitment under
the Operative Documents is subject to the fulfillment
of the following conditions as of the Closing Date of
such Loan:
(i) this Agreement and each of the other
Operative Documents shall be in full force and effect;
(ii) the representations and warranties of the
Sponsor contained in Article V hereof shall be true and
correct with the same effect as though such representations
and warranties had been made on the Closing Date of such Loan;
(iii) the Servicer shall have received a Funding
Approval Notice from the Sponsor authorizing such Loan
Commitment;
(iv) all precedents and conditions to the Loan
Commitment specified in the Servicing Agreement, together with
such additional precedents and conditions as may, at Sponsor's
election, be included in the applicable Funding Approval
Notice, shall have been completed to the Servicer's reasonable
satisfaction; and
(v) no Credit Event or Unmatured Credit Event
shall have occurred and be continuing.
Section II.2 Conveyance of Participant's Interest.
------------------------------------
(a) The Servicer hereby sells, assigns, transfers and conveys
to the Participants, without recourse or warranty, and each Participant hereby
purchases from the Servicer, an undivided percentage ownership interest (which
percentage shall be equal to each Participant's Pro Rata Share) in (i) the
Commitment, (ii) the Loan Commitments, (iii) the Loans and Letter of Credit
Obligations, (iv) the Collateral, (v) all rights against any guarantor of any
Loan, including the Sponsor, and (vi) all right, title and interest to any
payment or right to receive payment with respect to the foregoing (collectively,
the "Participant's Interest"). Notwithstanding the foregoing, each Participant's
right to receive payments of interest, commitments fees, letter of credit fees
or other fees with respect to the Commitment, the Loan Commitments, the Loans
and the Letter of Credit Obligations shall not exceed the amounts which such
Participant is entitled to receive pursuant to the terms of this Agreement.
(b) In consideration of the entry by each Participant into
this Agreement and the obligation of each Participant hereunder, the Servicer
shall issue to each Participant on the Closing Date, a Participation
Certificate. Each Participation Certificate shall be in the amount of the
relevant Participant's Participating Commitment, and the Funded Participant's
Interest outstanding thereunder shall bear interest as hereinafter set forth and
shall be payable as hereinafter set forth.
(c) In accordance with the terms and conditions hereof, and in
consideration of the sale of the Participant's Interest to such Participant,
each Participant severally agrees from time to time, during the period
commencing on the Closing Date and ending on the Final Termination Date, to fund
its Pro Rata Share of outstanding Loans (including Advances made by the Servicer
in connection with unreimbursed drawing upon outstanding Letters of Credit) made
by the Servicer in an aggregate amount at any one outstanding not to exceed such
Participant's Participating Commitment (subject to each Participant's
obligations pursuant to Section 2.3(d) hereof).
Section II.3 Funding of Advances; Funding of Participant's
Interest in Loans; Purchase of Participation in Letters of Credit.
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(a) The Servicer shall fund Advances requested by the
Borrowers pursuant to the terms of the Loan Documents in accordance with the
terms of the applicable Loan Documents and the Servicing Agreement. On the date
of any such funding, the Servicer shall elect whether or not to require the
Participants to fund their respective Pro Rata Share of such Advance or Advances
to be made on such date. In the event that the Servicer elects not to require
the Participants to fund their Pro Rata Share of the Advances on such date, the
Servicer shall make such Advance (each, a "Fronting Advance") to the Borrower
for the account of the Servicer; provided that, the aggregate amount of Fronting
Advances outstanding on any date shall not exceed the amount of SunTrust's
Participating Commitment and further provided that the sum of (x) the aggregate
Fronting Advances plus (y) the aggregated Funded Participant's Interest plus (z)
the aggregate Letter of Credit Outstandings shall not exceed the amount of the
Commitment. If (i) any Credit Event shall have occurred, (ii) after giving
effect to any Advance, the aggregate Fronting Advances outstanding hereunder
would exceed SunTrust's Participating Commitment, or (iii) the Servicer
otherwise determines in its sole discretion to request a Participant Funding
hereunder, then the Servicer shall notify the Participants pursuant to
subsection (b) requesting a Participant Funding. The Servicer shall issue
Letters of Credit requested by the Borrowers pursuant to the terms of the Loan
Documents in accordance with the terms of the applicable Loan Documents and the
Servicing Agreement. The Participants shall be notified in each Servicing Report
of the aggregate amount of Letter of Credit Outstandings.
(b) Notification of Participant Funding. In the event that the
Servicer desires that the Participants fund their respective Pro Rata Shares of
Advances or Loans made or outstanding pursuant to the Loan Documents, the
Servicer shall deliver written or telecopy notice to the Participants (or
telephonic notice promptly confirmed in writing or by telecopy) (a "Participant
Funding Request") by no later than 10:00 a.m. (Atlanta, Georgia time) on the
date three Business Days prior to the requested date of the Participant Funding
which shall specify (x) the date of the Participant Funding, which shall be a
Business Day, and (y) each Participant's Pro Rata Share of the Loans outstanding
to be funded in connection with such Participant Funding.
(c) Participant Obligation. Each Participant shall make its
Participant Funding in the amount of its Pro Rata Share on the proposed date
thereof by wire transfer of immediately available funds to the Servicer in
Atlanta, Georgia by not later than 2:00 P.M. (Atlanta, Georgia time). Unless the
Servicer shall have received notice from a Participant prior to the date of any
Participant Funding that such Participant will not make available to the
Servicer such Participant's Pro Rata Share of such Participant Funding, the
Servicer may assume that the Participant has made such portion available to the
Servicer on the date of such Participant Funding in accordance with this
subsection (c) and the Servicer may, in reliance on such assumption, make
available to the Borrowers a corresponding amount or credit the same to Fronting
Advances. If and to the extent that such Participant shall not have made such
portion available to the Servicer, such Participant and the Sponsor shall
severally agree to repay the Servicer forthwith (on demand in the case of the
Participant and within three (3) days of such demand in the case of the
Sponsor), without duplication, such amount with interest at the Federal Funds
Rate plus 2% per annum and, until such time as such Participant has repaid to
the Servicer such amount, such Participant shall (i) have no right to vote
regarding any issue on which voting is required or advisable under this
Agreement or the other Operative Documents, and (ii) shall not be entitled to
receive any payments of interest, fees or repayment of the principal amount of
such Advance which the Participant has failed to pay to the Servicer. If such
Participant shall repay to the Servicer such amount, then such amount shall
constitute part of such Participant's Funded Participant's Interest.
(d) Participant's Obligation Absolute and Unconditional. Each
Participant's obligations to fund its Pro Rata Share of any requested
Participant Funding shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense, or other right which such Participant may
have against the Servicer, the Sponsor, any Borrower or any other Person for any
reason whatsoever, (ii) the occurrence of any Credit Event or Unmatured Credit
Event, (iii) the occurrence of any Loan Default, (iv) any adverse change in the
condition (financial or otherwise) of the Sponsor or any other Credit Party or
any Borrower, (v) the acceleration or maturity of any Loan or the Sponsor's
obligations hereunder or the termination of the Commitment, Loan Commitment or
the Participating Commitments after the making of any Fronting Advance, (vi) any
breach of this Agreement by the Sponsor or any other Participant, or (vii) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.
(e) Fundings Following Default. Notwithstanding the foregoing
provisions of this Section 2.3, no Participant shall be required to fund its Pro
Rata Share of any requested Participant Funding for purposes of refunding a
Fronting Advance pursuant to subsection (d) above if a Credit Event, Unmatured
Credit Event or Loan Default with respect to the relevant Loan has occurred and
is continuing and, prior to the making by the Servicer of such Fronting Advance,
the Servicer had received written notice from Sponsor, the relevant Borrower or
any Participant specifying that such Credit Event, Unmatured Credit Event or
Loan Default had occurred and was continuing (and identifying the same as a
Credit Event, Unmatured Credit Event or Loan Default, as the case may be);
provided that , in the case of an Unmatured Credit Event or Credit Event where
the Participants are not pursuing remedies, the Participants will be obligated
to fund their respective Pro Rata Shares of Fronting Advances as long as the
aggregate amount of such Fronting Advances does not exceed $2,000,000. Each
Participant expressly agrees, however, that it shall be obligated to fund its
Pro Rata Share of requested Participant Funding with respect to Advances made by
the Servicer with respect to unreimbursed drawings upon outstanding Letters of
Credit whether or not a Credit Event, Unmatured Credit Event or Loan Default has
occurred and is continuing and whether or not made as a Fronting Advance.
Section II.4 Commitment Fees and Participant's Letter of Credit Fees.
-------------------------------------------------------
(a) Each Participant will receive from the Sponsor under the
Operative Documents a commitment fee (the "Sponsor's Commitment Fee") with
respect to the average daily amount of each Participant's Unused Sponsor
Commitment, for the period commencing on the Effective Date and ending on the
Final Termination Date, or such earlier date as the Participating Commitment
shall expire or terminate, equal to 0.25% per annum, such Sponsor's Commitment
Fee to be payable in arrears on each Payment Date which is the last day of a
calendar quarter (a "Quarterly Date") commencing on December 31, 1998,
calculated on the basis of a 360-day year and the actual number of days elapsed;
(b) Each Participant will also receive from the Borrowers
under the Loan Documents a commitment fee (the "Borrowers' Commitment Fees", and
collectively with the Sponsor's Commitment Fee, the "Commitment Fee") with
respect to the average daily amount of each Participant's Unused Borrower
Commitment, for the period commencing on the Effective Date and ending on the
Final Termination Date, or such earlier date as the Participating Commitment
shall expire or terminate, equal to 0.375% per annum, such Borrowers' Commitment
Fees to be payable in arrears on each Payment Date which is the last day of a
calendar quarter (a "Quarterly Date") commencing on December 31, 1998,
calculated on the basis of a 360-day year and the actual number of days elapsed,
subject in all respects to Section 11.2.2. To the extent that the commitment fee
set forth in the Loan Documents to which a Borrower is a party on the date
hereof is less than 0.375% per annum, then until such time as the Loan
Commitment to such Borrower is renewed or refinanced (at which time the
commitment fee must be increased to 0.375% per annum), the Sponsor shall pay a
portion of the Borrowers' Commitment Fee for Loans in an amount equal to (A) (i)
0.375% minus (ii) the commitment fee percentage set forth in such Loan
Documents, multiplied by (B) the average daily amount of each Participant's
Unused Borrower Commitment, which amount shall be payable in arrears on each
Quarterly Date commencing on December 31, 1998 and continuing thereafter,
calculated on the basis of a 360-day year and the actual number of days elapsed,
which amount paid by the Sponsor under this Section 2.4(b) shall not constitute
Guaranty Payments with respect to Loans in the Limited Guaranty Pool.
(c) Each Participant will receive from amounts paid by the
Borrowers under the Loan Documents and the Sponsor under the Operative
Documents, a letter of credit fee (the "Participant's Letter of Credit Fee")
with respect to the average daily amount of each Participant's Pro Rata Share of
the Letter of Credit Outstandings, for the period commencing on the Closing Date
and ending on the Final Termination Date, or such earlier date as the
Participating Commitment shall expire or terminate, equal to 1.75% per annum,
such Participant's Letter of Credit Fee to be payable in arrears on each
Quarterly Date commencing on December 31, 1998, calculated on the basis of a
360-day year and the actual number of days elapsed. To the extent that the
letter of credit fee set forth in the Loan Documents to which a Borrower is a
party is less than 1.75% per annum, the Sponsor shall pay a portion of the
Participant's Letter of Credit Fee in an amount equal to (A) (i) 1.75% minus
(ii) the letter of credit fee percentage set forth in the Loan Documents to
which the Borrower is a party, multiplied by (B) the average daily amount of
each Participant's Pro Rata share of the Letter of Credit Outstandings, which
amount shall be payable in arrears on each Quarterly Date commencing on December
31, 1998 and continuing thereafter, calculated on the basis of a 360-day year
and the actual number of days elapsed, which amount paid by the Sponsor under
this Section 2.4(c) shall not constitute Guaranty Payments with respect to Loans
in the Limited Guaranty Pool.
(d) All Commitment Fees and Participant's Letter of Credit
Fees shall be paid on the dates due, in immediately available funds, to the
Participants by the Servicer from amounts received from the Borrowers and
Sponsor.
(e) In the event that (i) the Commitment Fees received by the
Servicer from the Borrowers and the Sponsor are not sufficient on any Quarterly
Date to pay the Commitment Fees to the Participants required pursuant hereto, or
(ii) the Letter of Credit Fees received by the Servicer from the Borrowers and
the Sponsor are not sufficient on any Quarterly Date to pay the Participant's
Letter of Credit Fees required pursuant hereto, the Sponsor shall, upon demand
of the Servicer, immediately fund such difference to the Servicer (with such
payment allocated to specific Loan Payment Defaults as agreed by Sponsor and
Servicer) and the Sponsor shall promptly be reimbursed by the Servicer upon
receipt of such amount from the Borrower.
Section II.5 Interest on Funded Participant's Interest.
-----------------------------------------
(a) Subject to the provisions of Section 2.6, each
Participant's Funded Participant's Interest shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Payment Period in which such
Funded Participant's Interest is outstanding (with the Payment Period being
automatically reset on each Payment Date for the next Payment Period regardless
of the date of any Participant Funding hereunder) plus an additional one hundred
seventy-five basis points (1.75%) per annum.
(b) Interest on each Participant's Funded Participant's
Interest shall be payable by the Servicer to the Participants on each Payment
Date from interest payments received on the Loans on such Payment Date.
(c) In the event that the interest received by the Servicer on
any Payment Date is not sufficient to pay the interest to the Participants
required pursuant hereto, the Sponsor shall, upon demand of the Servicer,
immediately fund such difference to the Servicer (with such payment allocated to
specific Loan Payment Defaults as agreed by Sponsor and Servicer) and if such
shortfall results from Loan Payment Defaults rather than interest rate
variances, either, at the election of the Sponsor, (x) the Sponsor shall be
reimbursed by the Servicer upon receipt of such amount from the Borrower, (y)
the Loan Indebtedness shall be deemed to be reduced by such amount upon a
repayment or purchase of such Defaulted Loan by Sponsor in accordance with the
terms of this Agreement, or (z) such amount shall be deemed to have satisfied
Sponsor's obligation to cure such Loan Payment Default hereunder.
Section II.6 Default Interest.
----------------
If any amount payable to the Servicer or the Participants by the
Sponsor under the Operative Documents is not paid on the date due hereunder,
such amount shall bear interest (to the extent permitted by law) for each day
from such date up to (but not including) the date of actual payment (after as
well as before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to the Prime Rate
plus 2% per annum.
Section II.7 Voluntary Reduction of the Unutilized Commitment.
------------------------------------------------
Upon at least three (3) Business Days' prior telephonic notice
(promptly confirmed in writing) to the Servicer, Sponsor shall have the right,
without premium or penalty, to terminate the Commitment, in part or in whole,
provided that (i) any such termination shall apply to proportionately and
permanently reduce the Participating Commitments of each of the Participants,
(ii) any partial termination pursuant to this Section 2.7 shall be in an amount
of at least $5,000,000 and integral multiples of $1,000,000, and (iii) the
Commitment may not be reduced to an amount which is less than the
aggregate sum of all outstanding Loan Commitments.
Section II.8 Extension of Commitment.
-----------------------
(a) The Sponsor may, by written notice to the Servicer (which
shall promptly deliver a copy to each of the Participants), given not more than
sixty (60) days prior to any anniversary of the date of this Agreement while the
Commitment is effect, request that the Participants extend the then scheduled
Commitment Termination Date (the "Existing Date") for an additional 364-day
period. Each Participant shall, by notice to the Sponsor and the Servicer given
within fifteen (15) Business Days after receipt of such request, advise the
Sponsor and the Servicer whether or not such Participant consents to the
extension request (and any Participant which does not respond during such 15-day
period shall be deemed to have advised the Sponsor and the Servicer that it will
not agree to such extension).
(b) In the event that, on the 15th Business Day after receipt
of the notice delivered pursuant to subsection (a) above, all of the
Participants shall have agreed to extend their respective Participating
Commitments, the Commitment Termination Date shall be deemed to have been
extended, effective as of the Existing Date, to the date which is 364 days
thereafter.
(c) In the event that, on the 15th Business Day after receipt
of the notice delivered pursuant to subsection (a) above, all of the
Participants shall not have agreed to extend their respective Participating
Commitments, the Sponsor shall notify the consenting Participants ("Consenting
Participants") of the amount of the Participating Commitments of the
non-extending Participants ("Non-Consenting Participants") and such Consenting
Participants shall, by notice to the Sponsor and the Servicer given within ten
(10) Business Days after receipt of such notice, advise the Servicer and Sponsor
whether or not such Participant wishes to purchase all or a portion of the
Participating Commitments of the Non-Consenting Participants (and any
Participant which does not respond during such 10-Business Day period shall be
deemed to have rejected such offer). In the event that more than one Consenting
Participant agrees to purchase all or a portion of such Participating
Commitments, the Sponsor and the Servicer shall allocate such Participating
Commitments among such Consenting Participants so as to preserve, to the extent
possible, the relative pro rata shares of the Consenting Participants of the
Participating Commitments prior to such extension request. If Consenting
Participants do not elect to assume all of the Participating Commitments of the
Non-Consenting Participants, the Sponsor shall have the right to arrange for one
or more banks (any such bank being called a "New Participant"), to purchase the
Participating Commitment of any Non-Consenting Participant. Each Non-Consenting
Participant shall assign its Commitment and the Loans outstanding hereunder to
the Consenting Participant or New Participant purchasing such Participating
Commitment in accordance with Section 13.6, in return for payment in full of all
principal, interest and other amounts owing to such Non-Consenting Participant
hereunder, on or before the Existing Date and, as of the effective date of such
assignment, shall no longer be a party hereto, provided that each New
Participant shall be subject to the approval of the Servicer (which approval
shall not be unreasonably withheld). If (and only if) Participants (including
New Participants) holding Participating Commitments representing at least an
amount equal to the greater of (x) the sum of all outstanding Loan Commitments
and (y) 66 2/3 % of the aggregate Participating Commitments on the date of such
extension request shall have agreed to such extension by the Existing Date (the
"Continuing Participants"), then (i) the Commitment Termination Date shall be
extended for an additional 364-day period and (ii) the Participating Commitment
of any Non-Consenting Participant which has not been assigned to a Consenting
Participant or a New Participant shall terminate (with the result that the
amount of the Commitment shall be decreased by the amount of such Participating
Commitment), and all amounts owing to such Non-Consenting Participant shall
become due and payable, together with all interest accrued thereon and all other
amounts owed to such Non-Consenting Participant hereunder, on the Existing Date
applicable to such Participant without giving effect to any extension of the
Commitment Termination Date.
Section II.9 Reserve Requirements; Change in Circumstances
(a) Notwithstanding any other provision herein, if, by reason
of (i) after the Effective Date, the introduction of or any change (including
any change by way of imposition or increase of reserve requirements) in or in
the interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority or
quasi-Governmental Authority exercising control over banks or financial
institutions generally (whether or not having the force of law), any reserve
(including any imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar requirement that
takes the form of a tax) against assets of, deposits with or for the account of,
or credit extended by, any Participant's office through which it funds its
obligations hereunder shall be imposed or deemed applicable or any other
condition affecting its obligation to make or maintain its Funded Participant's
Interest at a rate based upon the Adjusted LIBO Rate shall be imposed on any
Participant or its office through which it funds its obligations hereunder or
the interbank Eurodollar market; and as a result thereof there shall be any
increase in the cost to such Participant of agreeing to make or making, funding
or maintaining funds its obligations hereunder (except to the extent already
included in the determination of the applicable Adjusted LIBO Rate), or there
shall be a reduction in the amount received or receivable by that Participant or
its office through which it funds its obligations hereunder, then the Sponsor
shall from time to time, upon written notice from and demand by the Participant
(with a copy of such notice and demand to the Servicer), pay to the Servicer for
the account of that Participant within five Business Days after the date
specified in such notice and demand, additional amounts sufficient to indemnify
that Participant against such increased cost. A certificate as to the amount of
such increased cost submitted to the Sponsor and the Servicer by that
Participant, shall, except for manifest error, be final, conclusive and binding
for all purposes.
(b) If while the Commitment or any Loan Commitments are
outstanding, any Participant (including any the Servicer) determines that the
adoption of any law, rule or regulation regarding capital adequacy or capital
maintenance, or any change in any of the foregoing or in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Participant (or any lending office of such Participant) or any
Participant's holding company with any request or directive regarding capital
adequacy or capital maintenance (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Participant's capital or on the capital
of such Participant's holding company, if any, as a consequence of this
Agreement, the Loan Documents or the purchases made by such Participant pursuant
hereto to a level below that which such Participant or such Participant's
holding company could have achieved but for such adoption, change or compliance
(taking into consideration such Participant's policies and the policies of such
Participant's holding company with respect to capital adequacy) by an amount
reasonably deemed by such Participant to be material, then from time to time,
within 15 days after written demand by such Participant, the Sponsor pay to such
Participant such additional amount or amounts as will compensate such
Participant or such Participant's holding company for such reduction. A
certificate as to the amount of any such additional amount or amounts, submitted
to the Sponsor and the Servicer by such Participant, shall, except for manifest
error, be final, conclusive and binding for all purposes.
Section II.10 Wind-Down Event.
---------------
In the event that (i) the Commitment is not extended for any reason and
the Commitment Termination Date occurs, (ii) the Sponsor has made Guaranty
Payments of $5,000,000 or more in the aggregate since the Effective Date, or
(iii) three or more Loans become Defaulted Loans since the Effective Date
(provided, that for purposes of this clause (iii), (A) any Defaulted Loan that
remains in the Limited Guaranty Pool because a new Franchisee Partner has
acquired an interest in the Defaulted Borrower shall be treated as a separate
Loan for purposes of the three Defaulted Loan test above and (B) any Defaulted
Loans that are moved to the Fully Guaranteed Pool shall not be treated as a
Defaulted Loan for purposes of the three Defaulted Loan test above unless and
until such Loan is returned to the Limited Guaranty Pool and another Loan
Default occurs) (each, a "Wind Down Event"), then the Sponsor shall not have the
right to request that any further Loan Commitments be established or that any
Loan Commitments be extended or renewed. The occurrence of a Wind Down Event
shall not affect the obligation of (x) the Servicer to make Advances pursuant to
existing Loan Commitments, (y) the Participants to fund their Participant's
Interest as provided herein, or (z) the Credit Parties under the Operative
Documents.
Section II.11 Pro Rata Treatment.
------------------
Subject to the application of payments pursuant to Article III and
except as specifically provided therein, each payment of principal of any Funded
Participant's Interest, each payment of interest with respect to the Funded
Participant's Interest, each payment of the Commitment Fees and Participant's
Letter of Credit Fees and each reduction of the Commitment shall be allocated
pro rata among the Participants in accordance with their respective applicable
Pro Rata Share. Each Participant agrees that in computing such Participant's
portion of any Funded Participant's Interest to be made hereunder, the Servicer
may, in its discretion, round each Participant's percentage of such Participant
Funding Request to the next higher or lower whole dollar amount.
Section II.12 Payments.
--------
(a) The Sponsor shall make each payment required to be made by
Sponsor hereunder and under any other Operative Document to any Participant or
the Servicer not later than 1:00 p.m. (Atlanta, Georgia time), on the date when
due in dollars to the Servicer at its offices in Atlanta, Georgia in immediately
available funds.
(b) Whenever any payment hereunder or under any other
Operative Document shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or Commitment Fees, if applicable.
Section II.13 Sharing of Setoffs.
------------------
Each Participant agrees that if it shall, in accordance with applicable
law, through the exercise of a right of banker's lien, setoff or counterclaim
against the Sponsor or any Borrower, or pursuant to a secured claim under
Section 506 or Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by the Participant
under any applicable bankruptcy, insolvency or other similar law or otherwise,
or by any other means, obtain payment (voluntary or involuntary) in respect of
any Funded Participant's Interest under this Agreement as a result of which the
unpaid principal portion of its Funded Participant's Interest shall be
proportionately less than the unpaid principal portion of the Funded
Participant's Interest of any other Participant, it shall be deemed
simultaneously to have purchases from such other Participant at face value, and
shall promptly pay to such other Participant the purchase price for, a
participation in the Funded Participant's Interest of such other Participant, so
that the aggregate unpaid principal amount of the Funded Participant's Interest
and participations in Funded Participant's Interests held by each Participant
shall be in the same proportion to the aggregate unpaid principal amount of all
Funded Participant's Interests then outstanding as the principal amount of its
Purchases prior to such exercise of banker's lien, setoff or counterclaim or
other event was to the principal amount of all Funded Participant's Interests
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that, if any such purchase or purchases or
adjustments shall be made pursuant to this Section and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or adjustments
shall be rescinded to the extent of such recovery and the purchase price or
prices or adjustment restored without interest. The Sponsor expressly consents
to the foregoing arrangements and agrees, to the extent permitted by applicable
law, that any Participant holding a Funded Participant's Interest or a
participation in a Funded Participant's Interest deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Sponsor to such
Participant by reason thereof.
ARTICLE III
SERVICER'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
Section III.1 Servicer's Obligations with Respect to Loans;
Collateral; Non-Recourse
(a) The Servicer shall, for itself and the benefit of all of
the Participants and the Sponsor, (i) document, close, manage, administer and
collect the Loans and issue and administer the Letters of Credit in accordance
with the terms of this Agreement and the Servicing Agreement and exercise all
discretionary powers involved in such management, administration and collection
and (ii) shall distribute the funds received with respect to the Loans and
Letter of Credit Obligations and from the Sponsor in accordance with the terms
of this Agreement. The Servicer agrees that it will exercise the same care in
administering the Loans as it exercises with respect to loans of similar size
and type in which no participations are allocated, and each of the Participants
agrees that the Servicer shall have no further responsibility to the
Participants.
(b) The forms of the Loan Agreement and Promissory Note used
by the Servicer as documentation for each Loan shall be substantially in the
forms attached hereto. The Sponsor shall have the right to direct the Servicer
to make modifications to such forms and amendments thereto from time to time but
the Sponsor may not direct the Servicer to revise or amend such forms so as to
be inconsistent with the terms of Section 2.1 hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, each of the Participants acknowledges and agrees that the Servicer
shall have no obligation to the Participants with respect to (i) the creation,
perfection, priority or continuation of any Lien on any Collateral obtained by
the Servicer with respect to the Loans at the request of the Sponsor, or (ii)
the obtaining or retention of any guaranties required by the Sponsor (other than
to distribute any proceeds therefrom in accordance with the terms of this
Article III). The Participants acknowledge and agree that the Sponsor has the
right to release or modify the terms of any Collateral or any Personal Guaranty.
(d) Each of the Participants acknowledges and agrees that all
payments made to the Participants pursuant to this Agreement by the Servicer
shall be made solely from amounts received from the Sponsor, the Borrowers and
other obligors or Collateral under the applicable Loan Documents and the
Servicer shall have no personal liability for any amounts payable to the
Participants hereunder.
Section III.2 Application of Payments.
-----------------------
(a) The Servicer and the Sponsor shall instruct each Borrower
to make payments with respect to Loans, Letter of Credit Obligations and the
Loan Commitments directly to the Servicer, either by mail, wire transfer or
debit pursuant to an ACH Authorization (as such term is defined in the Servicing
Agreement).
(b) On each Payment Date which is the last day of a calendar
quarter, all payments of commitments fees received by the Servicer from the
Borrowers and the Sponsor and not previously distributed, shall be applied to
pay the Commitment Fees, with any excess amount applied in accordance with the
terms of the Servicing Agreement.
(c) On each Payment Date, all payments of interest received by
the Servicer from the Borrowers and the Sponsor pursuant to its Guaranty
contained herein with respect to the Loans and not previously distributed by the
Servicer, shall be applied to pay all accrued but unpaid interest on the Funded
Participant's Interest pursuant to this Agreement, then to pay all accrued but
unpaid Servicing Fees and then to pay the Sponsor's Fee, in accordance with the
terms of the Servicing Agreement.
(d) On each Payment Date, all payments of Letter of Credit
Fees received by the Servicer from the Borrowers and the Sponsor pursuant to its
Guaranty contained herein with respect to the Letter of Credit Obligations and
not previously distributed by the Servicer, shall be applied to pay all accrued
but unpaid Participant's Letter of Credit Fees on the Funded Participant's
Letter of Credit Interest pursuant to this Agreement, then to pay all accrued
but unpaid Servicer's Letter of Credit Fees and then to pay the Sponsor's Letter
of Credit Fee, in accordance with the terms of the Servicing Agreement.
(e) On any Business Day on which the Servicer shall receive
any payment in respect of the principal amount of any Loan, whether from a
Borrower, the Sponsor pursuant to its Guaranty contained herein, or any other
obligor with respect thereto, the Servicer may elect, in its sole discretion to
(i) apply such principal payment to fund any requested Advances, (ii) apply such
amount to repay any outstanding Fronting Advances, or (iii) to either (x)
distribute such amount to the Participants to reduce each Participant's Funded
Participant's Interest or (y) apply such amount to SunTrust's Funded
Participant's Interest only (with the understanding that the Funded
Participant's Interest of each Participant shall not be deemed to have been
repaid until such amount is actually received by such Participant); provided
that, in the event that the Servicer elects to apply any repayment to reduce
SunTrust's Funded Participant's Interest without a corresponding reduction of
the other Participant's Funded Participant's Interest, SunTrust shall be
obligated to make a payment to each Participant equal to such Participant's Pro
Rata Share of such payment upon the earlier of (i) the next Payment Date and
(ii) the occurrence of a Credit Event hereunder.
(f) If during any period when no Credit Event has occurred and
is continuing, amounts received by Servicer are not capable of being allocated
to any specific Loan or Letter of Credit Obligations or, in the case of amounts
allocable to a specific Loan or Letter of Credit Obligations, are not sufficient
to repay all obligations then due and owing with respect thereto, such amounts
shall be applied by the Servicer as follows: (i) first, to the payment of
Commitment Fees and Participant's Letter of Credit Fees owing to the
Participants hereunder, (ii) second, to the payment of accrued interest on the
Funded Participant's Interest hereunder, (iii) third, to the payment of the
Servicing Fees and Servicer's Letter of Credit Fees owing under the Servicing
Agreement, (iv) fourth, to the repayment of the Funded Participant's Interests
outstanding hereunder, (v) fifth, to the payment of all other amounts owing to
the Servicer or any Participant hereunder, and (vi) sixth, if all obligations of
the Sponsor pursuant to the Operative Documents have been satisfied in full, to
the Sponsor.
(g) During any period when a Credit Event has occurred and is
continuing, any amounts received by Servicer with respect to the Loans or the
Letter of Credit Obligations shall be applied, after deduction of any expenses
incurred in the collection of any such amounts, as follows (i) first, to the
payment of any accrued and unpaid Servicing Fees and Servicer's Letter of Credit
Fees, (ii) second, to each Participant in accordance with Pro Rata Share, and
(iii) thereafter, to such Persons as may be legally entitled thereto.
(h) If not sooner repaid, all amounts due and payable to the
Servicer and the Participants shall be due and payable in full on the Final
Termination Date, and if any Letter of Credit Obligations are outstanding on
such date, the Sponsor shall be required to post cash collateral for such Letter
of Credit Obligations in an amount equal to 105% thereof.
Section III.3 Servicing Report.
----------------
On each Payment Date, the Servicer shall telecopy to the Sponsor and
each Participant a servicing report in the form of Exhibit F attached hereto
(the "Servicing Report") setting forth the following information with respect
the Loans:
(a) the aggregate principal balance of the Loans as of
the close of business on the last Business Day of the
preceding Payment Period;
(b) the aggregate amount of Loans repurchased by the
Sponsor or amounts collected with respect to the
Collateral for the Loans;
(c) the aggregate amount of Letter of Credit Outstandings
as of the close of business on the last Business Day
of the preceding Payment Period;
(d) the aggregate Loan Commitments as of the close of
business on the last Business Day of the preceding
Payment Period; and
(e) each Loan which is fifteen days or more past due
(including the past due amount and the number of days past due).
ARTICLE IV
LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND
Section IV.1 Default Notice Of Loan .
-----------------------
The Servicer shall notify the Sponsor and the relevant Borrower of a
Loan Payment Default within fifteen (15) days following the occurrence thereof
and of any other Loan Default in accordance with the terms of the Servicing
Agreement.
Section IV.2 Waiver or Cure By The Sponsor; Fully Guaranteed Pool.
----------------------------------------------------
Unless a Credit Event or Unmatured Credit Event has occurred and is
continuing, within the Response Period, the Sponsor shall be entitled (but not
obligated) to, in the case of a Loan Payment Default, cure such Loan Payment
Default and shall be entitled to waive any other Loan Default except as set
forth in Section 4.4. During a Response Period, the Servicer shall refrain from
taking any legal action against the Defaulted Borrower under the Defaulted Loan
which is the subject of such Response Period, and from accelerating payment of
the Loan Indebtedness under such Defaulted Loan but the Servicer shall cease
funding any further Advances pursuant to the Loan Commitment or issuing any
Letters of Credit. If the Sponsor cures a Loan Payment Default prior to the
expiration of a Response Period and waives any other Loan Default (subject to
Section 4.4) prior to the expiration of a Response Period, then as to each Loan
Payment Default or other Loan Default so waived or so cured, the Defaulted
Borrower's and the Servicer's respective rights and obligations under the Loan
Documents shall be restored to the same status as if such waived or cured Loan
Default never occurred except that, with respect to any Loan Payment Default
cured by the Sponsor hereunder, such Loan shall be deemed to have been moved
from the Limited Guaranty Pool into the Fully Guaranteed Pool and shall
thereafter be guaranteed fully and completely by the Sponsor as provided herein.
Section IV.3 Standstill Period; Defaulted Loan Guaranty Demand.
-------------------------------------------------
(a) In the event that following the end of a Response Period,
a Loan Payment Default is not cured or in the event that any other Loan Default
is not then waived, then unless a Credit Event has occurred and is continuing,
the Servicer will continue to refrain from exercising remedies against such
Borrower during the Standstill Period provided that the Sponsor immediately pays
all past due interest and fees owing to the Servicer pursuant to the applicable
Loan Documents, if any, on such Defaulted Loans. After the Standstill Period
ends, the Servicer shall have the right at any time thereafter, to demand
payment of the entire Loan Indebtedness with respect to such Loan from the
Sponsor pursuant to Article VIII hereof (unless the events set forth in Section
8.2(b)(ii) or (iii) have occurred), which amount, subject to the limitations set
forth therein, shall be due and payable on the date which is five (5) days
following demand. The Sponsor hereby acknowledges and agrees that the
requirement for payment in full of the Loan Indebtedness shall include the
posting of cash collateral with the Servicer in an amount equal to 105% of the
outstanding Letter of Credit Obligations of such Borrower, unless the
outstanding Letters of Credit are canceled and returned to the Servicer. The
provisions of this Section 4.3(a) are subject in all respects to Section 8.1
below.
(b) In the event that the Sponsor is not obligated to repay
the Loan Indebtedness with respect to a Defaulted Loan pursuant to Article VIII
hereof or in the event that a Credit Event has occurred and is continuing and
Sponsor has not purchased all outstanding Loans hereunder, the Sponsor agrees
that the Servicer shall be released from its obligations to the Sponsor
hereunder with respect to administering and enforcing all Loans and may
administer and enforce such Loans and Letter of Credit Obligations as it deems
appropriate, without regard to any limitations or restrictions set forth herein
(but subject to Article III hereof in all events) or in any other Operative
Document.
Section IV.4 No Waiver or Cure Available.
---------------------------
Notwithstanding anything contained in this Article to the contrary, but
subject to the limitations set forth in Section 8.1 below, the Sponsor shall,
within seven (7) days of its receipt of a written demand from the Servicer
instructing it to do so, make payment of the Loan Indebtedness of any Loan and
assume the Loan Commitment of a Defaulted Borrower whose Loan Default either
arises from the bankruptcy or insolvency of the Borrower or the termination of
the Franchise Documents with such Borrower. The Sponsor hereby acknowledges and
agrees that, subject to the limitations set forth in Section 8.1 below, the
requirement for payment in full of the Loan Indebtedness shall include the
posting of cash collateral with the Servicer in an amount equal to 105% of the
outstanding Letter of Credit Obligations of such Borrower.
Section IV.5 Fixed Charge Coverage Ratio for Loan Documents
executed under the Prior Loan Agreement.
-----------------------------------------------------
(a) The parties hereto acknowledge that certain of the Loan
Documents executed under the Prior Loan Facility Agreement do not contain a
fixed charge coverage ratio in the form required under the Loan Agreement
attached hereto as Exhibit D. Notwithstanding the fact that no Loan Default can
arise under such Loan Documents as a result of the applicable Borrower failing
to meet such fixed charge coverage ratio, a Loan Default shall be deemed to have
occurred for purposes of this Agreement if the Franchisee Fixed Charge Coverage
Ratio for any Borrower that executed Loan Documents under the Prior Loan
Facility Agreement is less than 1.2 to 1.0, as of the last day of any fiscal
quarter based upon the preceding twelve-month period, commencing on the last day
of the first fiscal quarter of such Borrower in which such Borrower or its
Subsidiaries own at least one Qualified Store.
(b) During the sixty-day period immediately following the date
that the Sponsor delivers the Borrower Compliance Certificate to the Servicer
setting forth any Deemed Loan Default, the Sponsor shall have the right, by
written notice to the Servicer, to move the Loan with respect to which the
Deemed Loan Default has occurred from the Limited Guaranty Pool and into the
Fully Guaranteed Pool. If such Loan has not been moved into the Fully Guaranteed
Pool at the end of such sixty-day period, then the Sponsor must purchase such
Loan and assume the related Loan Commitment for a purchase price equal to the
outstanding Loan Indebtedness, including the posting of cash collateral with the
Servicer in an amount equal to 105% of the outstanding Letter of Credit
Obligations of such Borrower (unless the outstanding Letters of Credit are
canceled and returned to the Servicer), on the date which is 120 days after the
date that the Sponsor delivers the Borrower Compliance Certificate to the
Servicer setting forth any Deemed Loan Default, unless prior to the expiration
of such 120-day period, the events set forth in Section 8.2(c)(i) or (ii) have
occurred with respect to such Loan. Any amounts paid by the Sponsor to
repurchase such Loans from the Limited Guaranty Pool shall be deemed Guaranty
Payments and shall be subject to the limitations set forth in Section 8.1.
Section IV.6 Movement of Loans into and out of Fully Guaranteed Pool.
(a) If no Loan Payment Default or Loan Default have occurred
for four consecutive fiscal quarters with respect to any Loan in the Fully
Guaranteed Pool, the Sponsor shall have the right, by written notice to the
Servicer, to move such Loan out of the Fully Guaranteed Pool and into the
Limited Guaranty Pool.
(b) If a Loan that otherwise must be repurchased by the
Sponsor pursuant to Section 8.2(b) or 8.2(c) instead remains in the Limited
Guaranty Pool as a result of the events described in 8.2(b)(ii) or 8.2(c)(ii),
the Sponsor shall have the right to place such Loan in the Fully Guaranteed Pool
within thirty (30) days of such new Franchise Partner acquiring an interest in
the applicable Borrower, by delivering written notice thereof to the Servicer.
The Sponsor shall also have the right to move any Loan placed in the Fully
Guaranteed Pool pursuant to this Section 4.6(b) from the Fully Guaranteed Pool
and into the Limited Guaranty Pool at any time by delivering written notice
thereof to the Servicer.
Section IV.7 Extension of Maturity Date of Defaulted Loans during
the Response Period and the Standstill Period
-----------------------------------------------------
The Servicer, Participants and the Sponsor agree that (x) during any
Response Period, the maturity date of any Loans that have matured prior to, or
mature during, such Response Period shall automatically be extended to the last
day of such Response Period and (y) during any Standstill Period, the maturity
date of any Loans that have matured prior to, or mature during, such Standstill
Period shall automatically be extended to the last day of such Standstill
Period.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Sponsor (as to itself and each of the Consolidated Companies) hereby
represents and warrants to the Servicer and each of the Participants that:
Section V.1 Existence; Power
The Sponsor and each of its Subsidiaries (i) is duly organized, validly
existing and in good standing as a corporation or a limited liability company
under the laws of the jurisdiction of its organization, (ii) has all requisite
power and authority to carry on its business as now conducted, and (iii) is duly
qualified to do business, and is in good standing, in each jurisdiction where
such qualification is required, except where a failure to be so qualified could
not reasonably be expected to result in a Material Adverse Effect.
Section V.2 Organizational Power; Authorization.
-----------------------------------
The execution, delivery and performance by each Credit Party of the
Loan Documents to which it is a party are within such Credit Party's
organizational powers and have been duly authorized by all necessary
organizational, and if required, shareholder action. This Agreement has been
duly executed and delivered by the Sponsor, and constitutes, and each other Loan
Document to which any Credit Party is a party, when executed and delivered by
such Credit Party, will constitute, valid and binding obligations of the Sponsor
or such Credit Party (as the case may be), enforceable against it in accordance
with their respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
Section V.3 Governmental Approvals; No Conflicts.
------------------------------------
The execution, delivery and performance by the Sponsor of this
Agreement, and by each Credit Party of the other Loan Documents to which it is a
party (a) do not require any consent or approval of, registration or filing
with, or any action by, any Governmental Authority, except those as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law, rule or regulation or the charter, bylaws or other
organizational documents of the Sponsor or any of its Subsidiaries or any
judgment, order or ruling of any Governmental Authority, (c) will not violate or
result in a default under any indenture, material agreement or other material
instrument binding on the Sponsor or any of its Subsidiaries or any of its
assets or give rise to a right thereunder to require any payment to be made by
the Sponsor or any of its Subsidiaries and (d) will not result in the creation
or imposition of any Lien on any asset of the Sponsor or any of its
Subsidiaries, except Liens (if any) created under the Loan Documents.
Section V.4 Financial Statements.
--------------------
The Sponsor has furnished to each Lender the audited consolidated
balance sheet of the Sponsor and its Subsidiaries as of June 4, 2000 and the
related consolidated statements of income, shareholders' equity and cash flows
for the fiscal year then ended prepared by KPMG L.L.P. Such financial statements
fairly present the consolidated financial condition of the Sponsor and its
Subsidiaries as of such dates and the consolidated results of operations for
such periods in conformity with GAAP consistently applied. Since June 4, 2000,
there have been no changes with respect to the Sponsor and its Subsidiaries
which have had or could reasonably be expected to have, singly or in the
aggregate, a Material Adverse Effect.
Section V.5 Litigation and Environmental Matters.
------------------------------------
(a) No litigation, investigation or proceeding of or before
any arbitrators or Governmental Authorities is pending against or, to the
knowledge of the Sponsor, threatened against or affecting the Sponsor or any of
its Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination that could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect or (ii) which in any manner draws
into question the validity or enforceability of this Agreement or any other Loan
Document.
(b) Neither the Sponsor nor any of its Subsidiaries (i) has
failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability, except for any failure or
Environmental Liability that would not have a Material Adverse Effect.
Section V.6 Compliance with Laws and Agreements.
-----------------------------------
The Sponsor and each Subsidiary is in compliance with (a) all
applicable laws, rules, regulations, judgments, orders and rulings of any
Governmental Authority, and (b) all indentures, agreements or other instruments
binding upon it or its properties, except in either case where non-compliance,
either singly or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section V.7 Investment Company Act, Etc
Neither the Sponsor nor any of its Subsidiaries is (a) an "investment
company", or is "controlled" by an "investment company", as such terms are
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended or (c)
otherwise subject to any other regulatory scheme limiting its ability to incur
debt.
Section V.8 Taxes.
-----
The Sponsor and its Subsidiaries and each other Person for whose taxes
the Sponsor or any Subsidiary could become liable have timely filed or caused to
be filed all Federal income tax returns and all other material tax returns that
are required to be filed by them, and have paid all taxes shown to be due and
payable on such returns or on any assessments made against it or its property
and all other taxes, fees or other charges imposed on it or any of its property
by any Governmental Authority, except (i) to the extent the failure to do so
would not have a Material Adverse Effect or (ii) where the same are currently
being contested in good faith by appropriate proceedings and for which the
Sponsor or such Subsidiary, as the case may be, has set aside on its books
adequate reserves in accordance with GAAP. As of the Closing Date, the charges,
accruals and reserves on the books of the Sponsor and its Subsidiaries in
respect of such taxes are adequate, and no tax liabilities that could be
materially in excess of the amount so provided are anticipated.
Section V.9 Margin Regulations.
------------------
None of the proceeds of any of the Loans or Letters of Credit will be
used for "purchasing" or "carrying" any "margin stock" with the respective
meanings of each of such terms under Regulation U as now and from time to time
hereafter in effect or for any purpose that violates the provisions of the
applicable Margin Regulations.
Section V.10 ERISA.
-----
No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used
for purposes of Statement of Financial Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of all such underfunded Plans.
Section V.11 Ownership of Property.
---------------------
(a) As of the Closing Date, each of the Sponsor and its
Subsidiaries has good title to, or valid leasehold or other appropriate legal
interests in, all of its real and personal property material to the operation of
its business, free and clear of any Encumbrances except Permitted Encumbrances.
(b) The Sponsor and each of its Subsidiaries owns, or is
licensed, or otherwise has the right, to use, all patents, trademarks, service
marks, trade names, copyrights, franchises, licenses, and other intellectual
property material to its business, and the use thereof by the Sponsor and its
Subsidiaries does not infringe on the rights of any other Person, except for any
such infringements that, individually or in the aggregate, would not have a
Material Adverse Effect.
Section V.12 Disclosure.
----------
The Sponsor has disclosed to the Servicer all agreements, instruments,
and corporate or other restrictions to which the Sponsor or any of its
Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the
reports (including without limitation all reports that the Sponsor is required
to file with the Securities and Exchange Commission), financial statements,
certificates or other information furnished by or on behalf of the Sponsor to
the Servicer or any Participant or anyone on their behalf in connection with the
negotiation or syndication of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading.
Section V.13 Labor Relations
There are no strikes, lockouts or other material labor disputes, or
grievances against the Sponsor or any of its Subsidiaries, or, to the Sponsor's
knowledge, threatened against or affecting the Sponsor or any of its
Subsidiaries, and no significant unfair labor practice, charges or grievances
are pending against the Sponsor or any of its Subsidiaries, or to the Sponsor's
knowledge, threatened against any of them before any Governmental Authority. All
payments due from the Sponsor or any of its Subsidiaries pursuant to the
provisions of any collective bargaining agreement have been paid or accrued as a
liability on the books of the Sponsor or any such Subsidiary, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
Section V.14 Subsidiaries.
------------
As of the Closing Date, Schedule 5.14 sets forth the name of, the
ownership interest of the Sponsor in, the jurisdiction of incorporation or
organization of, and the type of, each Subsidiary and identifies each Material
Subsidiary that is a Subsidiary Loan Party.
Section V.15 Representations and Warranties with Respect to
Specific Loans.
----------------------------------------------------
The Sponsor represents and warrants to the Servicer and each
Participant with respect to each Loan Commitment established and each Advance
made pursuant to the Operative Documents that:
(a) The Promissory Note, Loan Agreement and each other Loan
Document executed in connection with such Loan Commitment each constitutes a
valid and binding agreement of each Borrower or guarantor party thereto and is
enforceable against each such party in accordance with its terms.
(b) The Promissory Note and accompanying Loan Documents
executed in connection with such Loan and delivered to the Servicer are the only
contracts evidencing the transaction described therein and constitute the entire
agreement of the parties thereto with respect to such transaction and Sponsor
has not made any other promises, agreements or representations and warranties
with respect to the transactions evidenced by such Promissory Note.
(c) The Promissory Note and each accompanying Loan Document
executed in connection with such Loan is genuine and all signatures, names,
amounts and other facts and statements therein and thereon are true and correct.
(d) All disclosures required to be made under applicable
federal and state law in connection with such Loan have been properly and
completely made with respect to each Promissory Note, the other Loan Documents
and the Loan and each such Promissory Note, other Loan Documents and Loan is in
full compliance with all applicable federal and state laws, including without
limitation, applicable state and federal usury laws and regulations.
(e) The proceeds of each Promissory Note will be solely for
the purpose of financing the acquisition and expansion of restaurants franchised
by the Sponsor and operated by the relevant Borrower and not for any
non-business purposes.
ARTICLE VI
COVENANTS
The Sponsor covenants and agrees that so long as the Commitment remains
outstanding or any Loans or Letters of Credit remain outstanding or the Sponsor
has any obligations under the Operative Documents:
Affirmative Covenants
Section VI.1 Financial Statements and Other Information.
------------------------------------------
The Sponsor will deliver to the Servicer and each Participant:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of Sponsor, a copy of the annual audited report for
such fiscal year for the Sponsor and its Subsidiaries, containing consolidated
balance sheets of the Sponsor and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, stockholders' equity and
cash flows (together with all footnotes thereto) of the Sponsor and its
Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
reported on by KPMG L.L.P or other independent public accountants of nationally
recognized standing (without a "going concern" or like qualification, exception
or explanation and without any qualification or exception as to scope of such
audit) to the effect that such financial statements present fairly in all
material respects the financial condition and the results of operations of the
Sponsor and its Subsidiaries for such fiscal year on a consolidated basis in
accordance with GAAP and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(b) as soon as available and in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of the
Sponsor, an unaudited consolidated balance sheet of the Sponsor and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Sponsor and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such fiscal
year, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Sponsor's previous fiscal
year, all certified by the chief financial officer or treasurer of the Sponsor
as presenting fairly in all material respects the financial condition and
results of operations of the Sponsor and its Subsidiaries on a consolidated
basis in accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer or treasurer, (i) certifying as to whether there exists a Default or
Event of Default on the date of such certificate, and if a Default or an Event
of Default then exists, specifying the details thereof and the action which the
Sponsor has taken or proposes to take with respect thereto, (ii) setting forth
in reasonable detail calculations demonstrating compliance with Article VI,
(iii) setting forth whether the Borrower is in compliance with Section 6.11, and
(iv) stating whether any change in GAAP or the application thereof has occurred
since the date of the Sponsor's audited financial statements referred to in
Section 6.1 or which have been previously delivered hereunder and, if any change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with the delivery of the financial statements
referred to in clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained any
knowledge during the course of their examination of such financial statements of
any Default or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all functions of said Commission, or with any national
securities exchange, or distributed by the Sponsor to its shareholders
generally, as the case may be; and
(f) promptly following any request therefor, such other
information regarding the results of operations, business affairs and financial
condition of the Sponsor or any Subsidiary as the Servicer or any Participant
may reasonably request.
Section VI.2 Notices of Material Events.
--------------------------
The Sponsor will furnish to the Servicer and each Participant prompt
written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or, to
the knowledge of the Sponsor, affecting the Sponsor or any Subsidiary which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any event or any other development by
which the Sponsor or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) becomes subject to any
Environmental Liability, (iii) receives notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability and in each of the preceding clauses, which individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Sponsor and its Subsidiaries in an aggregate amount
exceeding $2,500,000; and
(e) any other development that results in, or could
reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
Section VI.3 Existence; Conduct of Business.
------------------------------
The Sponsor will, and will cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and maintain in full
force and effect its legal existence and its respective rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade names
material to the conduct of its business and will continue to engage in the same
business as presently conducted or such other businesses that are reasonably
related thereto; provided, however, that nothing in this Section shall prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.16.
Section VI.4 Compliance with Laws, Etc.
The Sponsor will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and requirements of any Governmental Authority
applicable to its business and properties, including without limitation, all
Environmental Laws, ERISA, and OSHA except where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section VI.5 Payment of Obligations.
The Sponsor will, and will cause each of its Subsidiaries to, pay and
discharge at or before maturity, all of its obligations and liabilities
(including without limitation all tax liabilities and claims that could result
in a statutory Lien) before the same shall become delinquent or in default,
except where (i) (a) the validity or amount thereof is being contested in good
faith by appropriate proceedings and (b) the Sponsor or such Subsidiary has set
aside on its books adequate reserves with respect thereto in accordance with
GAAP or (ii) the failure to make payment thereof, when aggregated with all other
such unpaid obligations and liabilities, could not reasonably be expected to
result in a Material Adverse Effect or (iii) the failure to make payment thereof
could not result in a statutory Lien.
Section VI.6 Books and Records.
-----------------
The Sponsor will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries shall
be made of all dealings and transactions in relation to its business and
activities to the extent necessary to prepare the consolidated financial
statements of Sponsor in conformity with GAAP.
Section VI.7 Visitation, Inspection, Etc.
The Sponsor will, and will cause each of its Subsidiaries to, permit
any representative of the Servicer or any Participant, to visit and inspect its
properties, to examine its books and records and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with any
of its officers and with its independent certified public accountants, all at
such reasonable times and as often as the Servicer or any Participant may
reasonably request after reasonable prior notice to the Sponsor; provided,
however, if an Event of Default has occurred and is continuing, no prior notice
shall be required.
Section VI.8 Maintenance of Properties; Insurance.
------------------------------------
The Sponsor will, and will cause each of its Subsidiaries to, (a) keep
and maintain good and marketable title to all property subject to no Liens
except Permitted Encumbrances and keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear except where the failure to do so, either individually or it the aggregate,
could not reasonably be expected to result in a Material Adverse Effect and (b)
maintain with financially sound and reputable insurance companies, insurance
with respect to its properties and business, and the properties and business of
its Subsidiaries, against loss or damage of the kinds customarily insured
against by companies in the same or similar businesses operating in the same or
similar locations.
Section VI.9 Additional Subsidiaries.
-----------------------
If any additional Material Subsidiary is acquired or formed after the
Closing Date, the Sponsor will, within thirty (30) days after such Material
Subsidiary is acquired or formed, notify the Servicer and the Participants
thereof and will cause such Material Subsidiary to become a Loan Party by
executing agreements in the form of Exhibit B and Exhibit C in form and
substance satisfactory to the Servicer and the Required Participants and will
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.
Section VI.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 ten percent (10%) of the total assets of the Consolidated
Companies, or
(b) the Consolidated Net Income of Subsidiaries that are not
Guarnators constitute more than ten percent (10%) 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, cause the appropriate number of Subsidiaries to become
Guarantors (by execution of a joinder agreement to the Subsidiary Guaranty in
form and substance satisfactory to the Servicer) such that the statements set
forth in clauses (a) and (b) above are not true.
Financial Covenants
Section VI.11 Minimum Fixed Charge Coverage Ratio.
-----------------------------------
The Consolidated Companies will maintain, as of the last day of each
Fiscal Quarter, through and including the Fiscal Quarter ending June 3, 2001 a
Fixed Charge Coverage Ratio of not less than 2.00:1.00, and for each Fiscal
Quarter thereafter, a Fixed Charge Coverage Ratio of not less than 2.50:1.00.
Section VI.12 Maximum Adjusted Total Debt to EBITDAR Ratio.
--------------------------------------------
The Consolidated Companies will maintain, as of the end of each Fiscal
Quarter, an Adjusted Total Debt to EBITDAR Ratio of not greater than 3.00:1.00.
Section VI.13 Maximum Adjusted Total Debt to Adjusted Total Capital
Ratio.
-----------------------------------------------------
The Consolidated Companies will maintain, as of the end of each Fiscal
Quarter, an Adjusted Total Debt to Adjusted Total Capital Ratio of not greater
than 0.60:1.00.
Negative Covenants
Section VI.14 Indebtedness.
------------
The Sponsor will not, and will not permit any of its Subsidiaries to,
create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness created pursuant to the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth on
Schedule 6.14 and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(c) Indebtedness of the Sponsor or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets of secured by a Lien on any
such assets prior to the acquisition thereof; provided, that such Indebtedness
is incurred prior to or within 180 days after such acquisition or the completion
of such construction or improvements or extensions, renewals, and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal or
replacement) or shorten the maturity or the weighted average life thereof;
provided, further, that the aggregate principal amount of such Indebtedness does
not exceed $5,000,000;
(d) Indebtedness of the Sponsor owing to any Subsidiary and of
any Subsidiary owing to the Sponsor or any other Subsidiary; provided, however,
that any such Indebtedness that is owed to a Subsidiary that is not a Subsidiary
Loan Party shall be subject to Section 6.17;
(e) Guaranties by the Sponsor of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Sponsor or any other
Subsidiary; provided, however, that Guaranties by any Credit Party of
Indebtedness of any Subsidiary that is not a Subsidiary Loan Party shall be
subject to Section 6.17;
(f) Subordinated Debt of the Sponsor (but not
Subsidiaries of the Sponsor);
(g) Indebtedness in respect of obligations under Hedging
Agreements permitted by Section 6.23;
(h) Synthetic Lease Obligations so long as no Default or Event
of Default has occurred and is continuing or would result after giving pro forma
effect to the incurrence of such Synthetic Lease Obligation, including without
limitation under the covenants set forth in Article V; and
(i) other unsecured Indebtedness of the Sponsor and its
Subsidiaries in an aggregate principal amount at any time outstanding not to
exceed 10% of Consolidated Net Worth of the Sponsor as calculated on the last
day of Fiscal Quarter for which the Sponsor has delivered, or is required to
have delivered, financial statements to the Participants pursuant to this
Agreement.
Section VI.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 Closing 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) purchase money Liens upon or in any fixed or capital
assets to secure the purchase price or the cost of construction or improvement
of such fixed or capital assets or to secure Indebtedness incurred solely for
the purpose of financing the acquisition, construction or improvement of such
fixed or capital assets (including Liens securing any Capital Lease
Obligations); provided, however, that (i) such Lien secures Indebtedness
permitted by Section 6.14, (ii) such Lien attaches to such asset concurrently or
within 180 days after the acquisition, improvement or completion of the
construction thereof; (iii) such Lien does not extend to any other asset; and
(iv) the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets;
(d) any Lien (i) existing on any asset of any Person at the
time such Person becomes a Subsidiary of the Sponsor, (ii) existing on any asset
of any Person at the time such Person is merged with or into the Sponsor any
Subsidiary of the Sponsor or (iii) existing on any asset prior to the
acquisition thereof by the Sponsor or any Subsidiary of the Sponsor; provided,
however, that any such Lien was not created in the contemplation of any of the
foregoing and any such Lien secures only those obligations which it secures on
the date that such Person becomes a Subsidiary or the date of such merger or the
date of such acquisition; and
(e) extensions, renewals, or replacements of any Lien referred
to in paragraphs (a) through (d) 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.
Section VI.16 Fundamental Changes.
-------------------
(a) Except as permitted in Section 6.19, the Sponsor will not,
and will not permit any Subsidiary to, merge into or consolidate into any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, lease, transfer or otherwise dispose of (in a single transaction or a
series of transactions) all or substantially all of its assets (in each case,
whether now owned or hereafter acquired) or all or substantially all of the
stock of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired) or liquidate or dissolve; provided, however, that if at the time
thereof and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing (i) the Sponsor or any Subsidiary
may merge with a Person if the Sponsor (or such Subsidiary if the Sponsor is not
a party to such merger) is the surviving Person, (ii) any Subsidiary may merge
into another Subsidiary; provided, however, that if any party to such merger is
a Subsidiary Loan Party, the Subsidiary Loan Party shall be the surviving
Person, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of
all or substantially all of its assets to the Sponsor or to a Subsidiary Loan
Party and (iv) any Subsidiary (may liquidate or dissolve into a Subsidiary Loan
Party) or into the Sponsor if the Sponsor determines in good faith that such
liquidation or dissolution is in the best interests of the Sponsor and is not
materially disadvantageous to the Participants; provided, however, that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.19.
(b) The Sponsor will not, and will not permit any of its
Subsidiaries to, engage in any business other than businesses of the type
conducted by the Sponsor and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
Section VI.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 date hereof and set forth on Schedule 6.17
(including Investments in Subsidiaries);
(b) Permitted Investments;
(c) Guaranties constituting Indebtedness permitted by
Section 6.14;
(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; and
------------
(g) promissory notes issued to the Sponsor as a part of
the purchase price in connection with the sale, if any,
of American Cafe, Tia's or L&N Seafood;
(h) Investments in franchise operators through the
Franchise Partner Program; and
(i) Investments received in settlement of Indebtedness
created in the ordinary course of business;
(j) Investments in the stock or other assets of any other
Person that is engaged in a business permitted by Section 6.17(b) that, as a
result of such Investment, becomes a Subsidiary of Sponsor (other than Hostile
Acquisitions); provided, however, that the aggregate purchase price of
Investments made pursuant to this subsection (i) shall not exceed at any time
ten percent (10%) of the Consolidated Net Worth of the Sponsor as calculated on
the last day of Fiscal Quarter for which the Sponsor has delivered, or is
required to have delivered, financial statements to the Participants pursuant to
this Agreement; and
(k) Investments in common stock of the Sponsor to the
extent permitted under Section 6.17.
Section VI.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
on any class of its stock, 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 shares of common stock or
Indebtedness subordinated to the Obligations of the Sponsor or any options,
warrants, or other rights to purchase such common stock 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 common
stock, (ii) Restricted Payments made by any Subsidiary to the Sponsor or to
another Credit Party and (iii) cash dividends paid on, and cash redemptions of,
the common stock of the Sponsor; provided, however, that no Event of Default has
occurred and is continuing before or after giving effect to the payment of such
dividend or redemption.
Section VI.19 Sale of Assets.
--------------
The Sponsor will not, and will not permit any of its Subsidiaries to,
convey, sell, lease, assign, transfer or otherwise dispose of, any of its
assets, business or property, whether now owned or hereafter acquired, or, in
the case of any Subsidiary, issue or sell any shares of such Subsidiary's common
stock to any Person other than the Sponsor or any wholly owned Subsidiary of the
Sponsor or a Subsidiary Loan Party (or to qualify directors if required by
applicable law), except:
(a) the sale or other disposition for fair market value of
obsolete or worn out property or other property not necessary for operations,
disposed of in the ordinary course of business;
(b) the sale of inventory and Permitted Investments in
the ordinary course of business;
(c) the sale, lease or transfer of assets of any
Subsidiary to the Sponsor or any other Credit Party;
(d) the sale of any assets of American Cafe, Tia's, or
L&N Seafood;
(e) the sale of any assets pertaining to Ruby Tuesday
units pursuant to the Sponsor's Franchise Partner Program;
(f) any other sale of the Sponsor's assets with an aggregate
book value, when aggregated with all other such sales since the Closing Date,
not exceeding 7.5% of the aggregate book value of all of the Sponsor's assets on
the date of such transfer; provided, however, that no Default or Event of
Default has occurred and is continuing or would occur as a result of such
transaction.
Section VI.20 Transactions with Affiliates.
----------------------------
The Sponsor will not, and will not permit any of its Subsidiaries to,
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions 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 Sponsor and
its wholly owned Subsidiaries not involving any other Affiliates and (c) any
Restricted Payment permitted by Section 6.18.
Section VI.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, or (b) 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 imposed by law or by this Agreement or any
other Loan Document, (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 under Section 6.14 of this
Agreement if such restrictions and conditions apply only to the property or
assets securing such Indebtedness.
Section VI.22 Sale and Leaseback Transactions.
-------------------------------
The Sponsor will not, and will not permit any of the Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereinafter acquired, and thereafter rent or lease such property or
other property that it intends to use for substantially the same purpose or
purposes as the property sold or transferred (such arrangement referred to as a
"Sale Leaseback"). Notwithstanding the preceding limitation, Sponsor may enter
into any Sale Leaseback provided the aggregate amount of such transactions does
not exceed $50,000,000.
Section VI.23 Hedging Agreements.
------------------
The Sponsor will not, and will not permit any of the Subsidiaries to,
enter into any Hedging Agreement, other than Hedging Agreements entered into in
the ordinary course of business to hedge or mitigate risks to which the Sponsor
or any Subsidiary is exposed in the conduct of its business or the management of
its liabilities. Solely for the avoidance of doubt, the Sponsor acknowledges
that a Hedging Agreement entered into for speculative purposes or of a
speculative nature (which shall be deemed to include any Hedging Agreement under
which the Sponsor or any of the Subsidiaries is or may become obliged to make
any payment (i) in connection with the purchase by any third party of any common
stock or any Indebtedness or (ii) as a result of changes in the market value of
any common stock or any Indebtedness) is not a Hedging Agreement entered into in
the ordinary course of business to hedge or mitigate risks.
Section VI.24 Amendment to Material Documents.
-------------------------------
The Sponsor will not, and will not permit any Subsidiary to, amend,
modify or waive any of its rights in a manner materially adverse to the
Sponsor's or Subsidiary's duties or the Participants' rights under this
Agreement under (a) its certificate of incorporation, bylaws or other
organizational documents or (b) any contract, agreement, document, or instrument
to which the Sponsor or Subsidiary is a party.
Section VI.25 Accounting Changes.
------------------
The Sponsor will not, and will not permit any Subsidiary to, make any
significant change in accounting treatment or reporting practices, except as
required by GAAP or approved by the Sponsor's independent accountants, or change
the fiscal year of the Sponsor or of any Subsidiary, except to change the fiscal
year of a Subsidiary to conform its fiscal year to that of the Sponsor and
except that the Sponsor or any Subsidiary may change its fiscal year end from
the first Sunday following May 30th to the first Tuesday or Wednesday following
May 30th.
Section VI.26 ERISA.
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The Sponsor will not, and will not permit any Subsidiary to engage in
any transaction in connection with which the Sponsor or such Subsidiary could
reasonably be expected to be subject to a civil penalty assessed pursuant to
ERISA which would have a Material Adverse Effect on the Sponsor or such
Subsidiary.
ARTICLE VII
CREDIT EVENTS
Section VII.1 Credit Events.
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In the event that:
(a) Sponsor shall fail to pay any amount due and payable under
this Agreement or any other Operative Document, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three (3) Business Days; or
(b) any representation or warranty made or deemed made by or
on behalf of the Sponsor or any Subsidiary in or in connection with this
Agreement or any other Operative Document (including the Exhibits and Schedules
attached thereto) and any amendments or modifications hereof or waivers
hereunder, or in any certificate, report, financial statement or other document
submitted to the Servicer or the Participants by any Credit Party or any
representative of any Credit Party pursuant to or in connection with this
Agreement or any other Operative Document shall prove to be incorrect in any
material respect when made or deemed made or submitted; or
(c) Sponsor shall fail to observe or perform any covenant or
agreement contained in Sections 6.1, 6.2, or 6.3 (with respect to the Borrower's
existence) or Article VI; or
(d) any Credit Party shall fail to observe or perform any
covenant or agreement contained in this Agreement or any other Loan Document
(other than those referred to in clauses (a) and (c) above), and such failure
shall remain unremedied for 30 days after the earlier of (i) any officer of the
Sponsor becomes aware of such failure, or (ii) written notice thereof shall have
been given to the Sponsor by the Servicer or any Participant; or
(e) the Sponsor or any Subsidiary (whether as primary obligor
or as guarantor or other surety) shall fail to pay any principal of or premium
or interest on any Material Indebtedness that is outstanding, when and as the
same shall become due and payable (whether at scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument evidencing such Material Indebtedness; or any other event shall occur
or condition shall exist under any agreement or instrument relating to such
Material Indebtedness and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or permit the acceleration of, the maturity of such
Material Indebtedness; or any such Material Indebtedness shall be declared to be
due and payable; or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or any offer to prepay, redeem, purchase or defease such Material Indebtedness
shall be required to be made, in each case prior to the stated maturity thereof;
or
(f) the Sponsor or any Material Subsidiary shall (i) commence
a voluntary case or other proceeding or file any petition seeking liquidation,
reorganization or other relief under any federal, state or foreign bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a custodian, trustee, receiver, liquidator or other similar
official of it or any substantial part of its property, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (i) of this Section, (iii) apply for
or consent to the appointment of a custodian, trustee, receiver, liquidator or
other similar official for the Sponsor or any such Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Sponsor or any Material Subsidiary or its debts,
or any substantial part of its assets, under any federal, state or foreign
bankruptcy, insolvency or other similar law now or hereafter in effect or (ii)
the appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Sponsor or any Material Subsidiary or for a substantial part of
its assets, and in any such case, such proceeding or petition shall remain
undismissed for a period of 60 days or an order or decree approving or ordering
any of the foregoing shall be entered; or
(h) the Sponsor or any Material Subsidiary shall become unable
to pay, shall admit in writing its inability to pay, or shall fail to pay, its
debts as they become due; or
(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 $2,500,000; or
(j) any judgment or order for the payment of money in excess
of $2,500,000 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
(k) any nonmonetary judgment or order shall be rendered
against the Sponsor or any Subsidiary that could reasonably be expected to have
a Material Adverse Effect, and 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
(l) a Change in Control shall occur or exist; or
(m) any provision of any Subsidiary Guaranty Agreement shall
for any reason cease to be valid and binding on, or enforceable against, any
Subsidiary Loan Party, or any Subsidiary Loan Party shall so state in writing,
or any Subsidiary Loan Party shall seek to terminate its Subsidiary Guaranty
Agreement (except to the extent that Tia's is automatically released from the
Subsidiary Guaranty Agreement pursuant to the terms thereof);
(n) (x) there shall exist or occur any default as provided
under the terms of any other Operative Document, or any Operative Document
ceases to be in full force and effect or the validity or enforceability thereof
is disaffirmed by or on behalf of Sponsor or any other Credit Party, or at any
time it is or becomes unlawful for Sponsor or any other Credit Party to perform
or comply with its obligations under any Operative Document, or the obligations
of Sponsor or any other Credit Party under any Operative Document are not or
cease to be legal, valid and binding on Sponsor or any such Credit Party or (y)
any party to the Sharing Agreements shall default with respect to its covenants
or obligations thereunder where such default results in a Materially Adverse
Effect with respect to the Credit Parties;
then upon the occurrence and continuation of any such event (each, a "Credit
Event"):
the Servicer may, and upon the written request of the Required Participants,
shall, take any or all of the following actions, without prejudice to the rights
of the Servicer or any Participant to enforce its claims against Sponsor, any
other Credit Party, any Borrower or other obligor with respect to any Loan: (i)
declare the Commitment terminated, whereupon the Commitment shall terminate
immediately and any commitment fee shall forthwith become due and payable
without any other notice of any kind; (ii) demand that the Sponsor purchase
specified or all outstanding Loans and Loan Commitments by paying to the
Servicer the Loan Indebtedness of each such Loan and assuming the Servicer's
obligations thereunder; whereupon such amount shall become, forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Sponsor; provided, that, if a Credit Event
specified in Section 7.1(f) or (g) shall occur, the result which would occur
upon the giving of notice by the Servicer to any Credit Party, shall occur
automatically without the giving of any such notice, and (iii) may exercise any
other rights or remedies available under the Operative Documents, at law or in
equity. In addition, the Servicer may, and upon the written request of the
Required Participants, shall (x) cease funding further Advances pursuant to the
Loan Commitments and (y) declare all Loan Indebtedness thereunder to be
immediately due and payable in accordance with the terms of the Loan Documents
and exercise all rights and remedies provided under the Loan Documents; provided
that, the Servicer shall not take the actions authorized under clause (y) unless
the Sponsor has failed to honor its obligation to pay the entire Loan
Indebtedness demanded by the Servicer (or deemed demanded) within ten (10)
Business Days. The Sponsor hereby acknowledges and agrees that its obligation
hereunder to purchase all outstanding Loans and Loan Commitments shall include
the obligation to immediately post cash-collateral for all outstanding Letter of
Credit Obligations in an amount equal to 105% of the amount thereof.
ARTICLE VIII
GUARANTY
In addition to its obligations to repurchase the Loans upon the
occurrence of a Credit Event and its other obligations hereunder, the Sponsor
hereby agrees as follows:
Unconditional Guaranty
The Sponsor hereby unconditionally and irrevocably guarantees to the
Servicer, each Participant and any permitted assignee thereof, the full and
prompt payment of all Guaranteed Obligations and all costs, charges and
expenses (including reasonable attorneys' fees) actually incurred or sustained
by the Servicer or any Participant in enforcing the obligations of the Sponsor
hereunder or the obligations of the Borrowers under the applicable Loan
Documents. If any portion of the Guaranteed Obligations is not paid when due,
Sponsor hereby agrees to and will immediately pay same, without resort by
Servicer or any Participant to any other person or party. The obligation of
Sponsor to Servicer and each Participant hereunder is primary, absolute and
unconditional, except as may be specifically set forth herein. This is a
guaranty of payment and not of collection. This guaranty is subject to the
limitations set forth in Sections 8.1 and 8.2 below.
Section VIII.1 Limitation on Guaranty of Loans
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, and (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
$26,250,000.
The foregoing limitation shall not in any way limit the obligation of
the Sponsor with respect to the Guaranteed Obligations relating to the Fully
Guaranteed Pool or any obligation of the Sponsor to purchase the Loans and
assume the Loan Commitments relating thereto upon the occurrence of a Credit
Event without regard to any limitations set forth in this Article VIII.
Section VIII.2 Obligations of Sponsor With Respect to Loans
(a) If a Loan Payment Default occurs and is not cured by
Sponsor during the Response Period, or if a Loan Default other than a Loan
Payment Default occurs and is not waived by Sponsor during the Response Period,
then the Standstill Period shall commence and the Sponsor shall immediately pay
all past due interest and fees owing to the Servicer pursuant to the applicable
Loan Documents, if any, on such Defaulted Loans and shall continue to make
timely payment of interest and fees, if any, on such Defaulted Loans during the
Standstill Period, which payment of interest and fees shall not constitute
Guaranty Payments made against Loans in the Limited Guaranty Pool.
(b) On the date that the Standstill Period expires, the
Sponsor agrees to cause one of the following to have occurred: (i) all Loan
Indebtedness with respect to such Defaulted Loans shall have been repaid in
full, (ii) the Sponsor has acquired one hundred percent (100%) of the Borrower
owing such Defaulted Loans; or (iii) the Sponsor and a new Franchise Partner
have acquired one hundred percent (100%) of the Borrower owing such Defaulted
Loans and such new Franchise Partner (x) has agreed to permit the entire Loan
Indebtedness with respect to the Defaulted Loans to remain outstanding or (y)
has agreed to permit a portion of the Loan Indebtedness with respect to the
Defaulted Loans to remain outstanding and the Sponsor has repaid the remaining
portion of the Loan Indebtedness, which repayment shall constitute Guaranty
Payments made against Loans in the Limited Guaranty Pool. If either of the
conditions set forth in clauses (ii) or (iii) above occur, then all Loan Payment
Defaults must be immediately cured and all Loan Defaults shall be deemed waived
by the Servicer. If none of the events set forth in clauses (i) through (iii)
above have occurred by the end of the Standstill Period, the Sponsor shall be
deemed to have failed to perform its agreement hereunder for purposes of Section
7.1(c) above.
(c) Notwithstanding anything set forth in subsection (b)(i)
above, the Sponsor shall not be required to repay any Loan Indebtedness with
respect to any such Defaulted Loans beyond the amounts set forth in Section 8.1;
provided, however, that (i) the Sponsor shall remain obligated to cause one of
the events set forth in clause (b)(ii) and (b)(iii) above to have occurred by
the date that the Standstill Period expires and (ii) to the extent that the
Sponsor is not obligated to repay all Loan Indebtedness with respect to such
Defaulted Loan pursuant to Section 8.1, the Sponsor agrees that (A) the Servicer
shall be released from its obligations to the Sponsor hereunder with respect to
administering and enforcing such Defaulted Loans and may administer and enforce
such Loans and Letter of Credit Obligations as it deems appropriate, without
regard to any limitations or restrictions set forth herein (but subject to
Article III hereof in all events) or in any other Operative Document and (B) it
shall not amend, modify, rescind or terminate any Franchise Documents with any
Borrower that owes any Defaulted Loan or related Letter of Credit Obligations to
the Servicer, without the consent of the Servicer, and any Franchise Documents
with any such Borrower that have previously been rescinded or terminated shall
immediately and automatically be reinstated, and all such Franchise Documents
shall remain in full force and effect at all times until (x) the Servicer has
been paid in full with respect to such Loan Indebtedness and all commitments of
the Servicer to make additional advances to such Borrower have been terminated
or (y) the Servicer has otherwise, in its opinion, exhausted all rights and
remedies against the Borrower and has terminated all commitments to such
Borrower; provided, further, however, that the Sponsor may continue to enforce
the proper use of the "Ruby Tuesday" servicemark (or other trademark or
servicemark used in the operation of the store) and the maintenance of required
systems and standards, in each case as required by the Franchisee Documents, so
long as the remedy the Sponsor uses to enforce such compliance is not
termination of the "Ruby Tuesday" franchise held by such Borrower.
(d) On the date that Sponsor is required to purchase any Loan
with respect to which a Deemed Loan Default has occurred pursuant to Section 4.5
above, one of the following must have occurred: (i) the Sponsor shall have
purchased such Loan and assumed the related Loan Commitment from the Servicer by
paying the Servicer an amount equal to the Loan Indebtedness with respect to
such Loan, (ii) the Sponsor have acquired one hundred percent (100%) of the
Borrower that owes such Loan or (iii) the Sponsor and a new Franchise Partner
have acquired one hundred percent (100%) of the Borrower that owes such Loan.
Notwithstanding anything set forth in clause (i) of the foregoing sentence, the
Sponsor shall not be required to repurchase such Loan to the extent the Sponsor
would be required to repay any Loan Indebtedness with respect to any such Loan
beyond the amounts set forth in Section 8.1; provided, however, that to the
extent that the Sponsor is not obligated to repay all Loan Indebtedness with
respect to such Loan pursuant to Section 8.1, the Sponsor agrees that it will
not amend, modify, rescind or terminate any Franchise Documents with any
Borrower that owes such Loan or related Letter of Credit Obligations to the
Servicer, without the consent of the Servicer, and (y) all such Franchise
Documents shall remain in full force and effect at all times until the Servicer
has been paid in full with respect to such Loan Indebtedness and all commitments
of the Servicer to make additional advances to such Borrower have been
terminated; provided, further, however, that the Sponsor may continue to enforce
the proper use of the "Ruby Tuesday" servicemark (or other trademark or
servicemark used in the operation of the store) and the maintenance of required
systems and standards, in each case as required by the Franchisee Documents, so
long as the remedy the Sponsor uses to enforce such compliance is not
termination of the "Ruby Tuesday" franchise held by such Borrower.
(e) To the extent that the Sponsor makes any payments on Loans
owed by Borrowers that are wholly owned by the Sponsor, such payments shall not
constitute Guaranty Payments made against Loans in the Limited Guaranty Pool.
Section VIII.3 Continuing Guaranty
The obligations of the Sponsor pursuant to this Article VIII constitute
a guarantee which is continuing in nature and shall be effective with respect to
the full amount outstanding under all Guaranteed Obligations, now existing or
hereafter made or extended, regardless of the amount, subject only to the
limitations set forth in the preceding Section 8.1 and Section 8.2.
Section VIII.4 Waivers.
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The Sponsor hereby waives notice of Servicer's and each Participant's
acceptance of this Agreement and the creation, extension or renewal of any Loans
or other Guaranteed Obligations. Sponsor hereby consents and agrees that, at any
time or times, without notice to or further approval from Sponsor, and without
in any way affecting the obligations of Sponsor hereunder, Servicer and the
Participants may, with or without consideration (i) release, compromise with, or
agree not to ▇▇▇, in whole or in part, any Borrower or any other obligor,
guarantor, endorser or surety on any Loans or any other Guaranteed Obligations,
(ii) renew, extend, accelerate, or increase or decrease the principal amount of
any Loans or other Guaranteed Obligations, either in whole or in part, (iii)
amend, waive, or otherwise modify any of the terms of any Loans or other
Guaranteed Obligations or of any mortgage, deed of trust, security agreement, or
other undertaking of any of the Borrowers or any other obligor, endorser,
guarantor or surety in connection with any Loans or other Guaranteed
Obligations, and (iv) apply any payment received from Borrowers or from any
other obligor, guarantor, endorser or surety on the Loans or other Guaranteed
Obligations to any of the liabilities of Borrowers or of such other obligor,
guarantor, endorser, or surety which Servicer may choose; provided, however,
that during the Response Period and the Standstill Period, the Servicer and
Participants shall not intentionally take any of the actions set forth in clause
(i) through (iv) above.
Section VIII.5 Additional Actions
Sponsor hereby consents and agrees that the Servicer may at any time or
times, either with or without consideration, surrender, release or receive any
property or other Collateral of any kind or nature whatsoever held by it or for
its account securing any Loans or other Guaranteed Obligations, or substitute
any Collateral so held by Servicer for other Collateral of like or different
kind, without notice to or further consent from Sponsor, and such surrender,
receipt, release or substitution shall not in any way affect the obligations of
Sponsor hereunder; provided, however, that during the Response Period and the
Standstill Period, the Servicer and Participants shall not intentionally take
any of the actions described above. Servicer shall have full authority to
adjust, compromise, and receive less than the amount due upon any such
Collateral, and may enter into any accord and satisfaction agreement with
respect to the same as Servicer may deem advisable without affecting the
obligations of Sponsor hereunder. Servicer shall be under no duty to undertake
to collect upon such Collateral or any part thereof, and Sponsor's obligations
hereunder shall not be affected by Servicer's alleged negligence or mistake in
judgment in handling, disposing of, obtaining, or failing to collect upon or
perfect a security interest in, any such Collateral.
Section VIII.6 Additional Waivers
Sponsor hereby waives presentment, demand, protest, and notice of
dishonor of any of the liabilities guaranteed hereby. Neither Servicer nor any
Participant shall have any duty or obligation (i) to proceed or exhaust any
remedy against any Borrower, any other obligor, guarantor, endorser, or surety
on any Loans or other Guaranteed Obligations, or any other security held by
Servicer or any Participant for any Loans or other Guaranteed Obligations, or
(ii) to give any notice whatsoever (except as expressly provided herein of in
the Loan Documents) to Borrowers, Sponsor, or any other obligor, guarantor,
endorser, or surety on any Loans or other Guaranteed Obligations, before
bringing suit, exercising rights to any such security or instituting
proceedings of any kind against Sponsor, any Borrower, or any of them, and
Sponsor hereby waives any requirement for such actions by Servicer or any
Participant. Upon default by any Borrower and Servicer's demand to Sponsor
hereunder, Sponsor shall be held and bound to Servicer and each Participant
directly as principal debtor in respect of the payment of the amounts hereby
guaranteed, such liability of Sponsor being joint and several with each
Borrower and all other obligors, guarantors, endorsers and sureties on the
Loans or other Guaranteed Obligations.
Section VIII.7 Postponement of Obligations
Until the Loan and other Guaranteed Obligations of any Borrower to the
Servicer and the Participants have been paid in full (i) all present and future
indebtedness of such Borrower to Sponsor is hereby postponed to the present and
future indebtedness of such Borrower to Servicer and each Participant, and all
monies received from such Borrower or for its account by Sponsor with respect to
such indebtedness shall be received in trust for Servicer and the Participants,
and promptly upon receipt, shall be paid over to Servicer for distribution to
the Participants in accordance herewith until such Borrower's indebtedness to
Servicer and the Participants is fully paid and satisfied, all without prejudice
to and without in any way affecting the obligations of Sponsor hereunder;
provided that unless and until the occurrence of a Loan Default or Loan Payment
Default, the Sponsor may accept and retain any payments made by any Borrower to
the Sponsor in the ordinary course of business, and (ii) Sponsor shall not have
any rights of subrogation or otherwise to participate in any security held by
the Servicer for any Loan to such Borrower or any other Guaranteed Obligations
arising therefrom, and Sponsor hereby waives such rights until such time as such
Loan and other Guaranteed Obligations have been paid in full to the Servicer and
each Participant (whether by repurchase by the Sponsor, pursuant to this Article
VIII or otherwise).
Section VIII.8 Effect on additional Guaranties.
The obligations of the Sponsor pursuant to this Article VIII are in
addition to, and are not intended to supersede or be a substitute for any other
guarantee, suretyship agreement, or instrument which Servicer may hold in
connection with any Loans or other Guaranteed Obligations.
Section VIII.9 Reliance on Guaranty and Purchase Obligation;
Disclaimer of Liability.
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Sponsor expressly acknowledges and agrees that each of the Servicer and
the Participants, in making its credit decision with regard to the funding of
the Loans, will rely solely upon the guaranty and purchase obligation of Sponsor
set forth above and in Article VII and that neither the Servicer nor any
Participant is under any obligation or duty to perform any credit analysis or
investigation with regard to the creditworthiness of any Borrower. In addition,
the Servicer expressly disclaims any responsibility or liability for the
authenticity of signatures on any of the Loan Documents (other than the
Servicer's), the authority of the Persons executing the Loan Documents (other
than the Servicer) or the enforceability or compliance with laws of any of the
Loan Documents.
SPONSOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT SPONSOR'S OBLIGATIONS TO
PURCHASE LOANS UNDER THIS AGREEMENT ARE ABSOLUTE AND UNCONDITIONAL. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SPONSOR'S OBLIGATION SHALL NOT BE
AFFECTED BY THE EXISTENCE OF ANY DEFAULT BY ANY BORROWER UNDER THE APPLICABLE
LOAN DOCUMENTS, ANY EXCHANGE, RELEASE OR NONPERFECTION OF ANY LIEN WITH RESPECT
TO ANY COLLATERAL SECURING PAYMENT OF ANY LOAN, THE SUBSTITUTION OR RELEASE OF
ANY ENTITY PRIMARILY OR SECONDARILY LIABLE FOR ANY LOAN, ANY LACK OF
ENFORCEABILITY OF ANY LOAN DOCUMENT, ANY LAW, REGULATION, OR ORDER OF ANY
JURISDICTION AFFECTING ANY LOAN OR LOAN DOCUMENT OR THE RIGHTS OF THE HOLDER
THEREOF, ANY CHANGE IN THE CONDITION OR PROSPECTS OF THE BORROWER, INCLUDING
WITHOUT LIMITATION, INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING, OR ANY OTHER CIRCUMSTANCE WHICH MIGHT, BUT FOR THE PROVISIONS OF
THIS PARAGRAPH, CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF SPONSOR'S
OBLIGATIONS HEREUNDER. SPONSOR'S OBLIGATIONS HEREUNDER SHALL NOT BE AFFECTED BY
ANY SET-OFF OR CLAIM WHICH IT MIGHT HAVE AGAINST THE SERVICER OR ANY
PARTICIPANT, WHETHER ARISING OUT OF THIS AGREEMENT OR OTHERWISE.
Section VIII.10 Reinstatement of Obligations
The obligations of the Sponsor pursuant to the Operative Documents
shall continue to be effective or be reinstated, as the case may be, if at any
time payment or any part thereof, of principal of, interest on or any other
amount with respect to any Loan or any obligation of Sponsor pursuant to the
Operative Documents is rescinded or must otherwise be restored by the Servicer
or any Participant upon the bankruptcy or reorganization of Sponsor, any
Borrower or any guarantor or otherwise.
Section VIII.11 Right to Bring Separate Action.
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Nothing contained in this Article VIII shall be construed to affect any
other right that Sponsor may otherwise have under this Agreement, or any
Operative Document, at law or in equity to institute an action or assert a claim
against the Servicer or any Participant based upon a breach of Servicer's or
such Participant's obligations set forth in the Operative Documents or to assert
a compulsory counterclaim with respect thereto and any waiver of notice or other
matter set forth in this Article VIII shall not affect Sponsor's right to seek
damages arising from the failure of the Servicer to give such notice otherwise
required by the terms of the Operative Documents.
ARTICLE IX
INDEMNIFICATION
Section IX.1 Indemnification.
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(a) In addition to the other rights of the Servicer and the
Participants hereunder, Sponsor hereby agrees to protect, indemnify and save
harmless the Servicer, each Participant, and the officers, directors,
shareholders, employees, agents and representatives thereof (each an
"Indemnified Party") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs (including, without
limitation, reasonable attorney's fees and costs actually incurred), expenses or
disbursements of any kind or nature whatsoever, whether direct, indirect,
consequential or incidental, whether brought by the Borrowers or any other
party, with respect to or in connection with or arising out of (i) the execution
and delivery of this Agreement, any other Operative Document or any agreement or
instrument contemplated hereby or thereby, including without limitation, the
Loan Documents, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby, (ii) the making or administration of the Loan
Commitments, the Loans or any of them, including any violation of federal or
state usury or other laws, provided that with respect to clauses (i) and (ii),
Sponsor shall have no obligation to indemnify the Servicer and all Participants
for more than one (1) counsel's reasonable fees and expenses, (iii) the
enforcement, performance and administration of this Agreement or the Loan
Documents or any powers granted to the Servicer hereunder or under any Loan
Documents, (iv) any misrepresentation of the Sponsor hereunder, (v) any matter
arising pursuant to any Environmental Laws as a result of the Collateral or (vi)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether or not the Indemnified Party is a named party thereto, except to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnified Party; provided, that the Sponsor shall not be obligated to
indemnify any Indemnified Party for any of the foregoing arising out of such
Indemnified Party's gross negligence or willful misconduct or a breach by an
Indemnified Party of its obligations under the Loan Agreement, in each case, as
determined by a court of competent jurisdiction in a final and nonappealable
judgment; provided, however, that the Sponsor waives and agrees not to bring, or
to permit any of its Affiliates to bring, any claim against any Indemnified
Party for any action other than a claim for losses arising out of gross
negligence or willful misconduct
(b) In addition to amounts payable elsewhere provided in this
Agreement, without duplication, the Sponsor hereby agrees to protect, indemnify,
pay and save the Servicer and each Participant harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and reasonable
expenses (including reasonable attorney's fees and disbursements) which the
Servicer or any Participant may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit for the account of a
Borrower, other than as a result of the gross negligence or willful misconduct
of the Servicer; (ii) the failure of the Servicer to honor a drawing under any
Letter of Credit due to any act or omission (whether rightful or wrongful) of
any present or future de jure or de facto government or governmental authority;
or (iii) any third party claim arising therefrom.
(c) The foregoing indemnitees shall survive the
termination of this Agreement.
Section IX.2 Notice Of Proceedings; Right To Defend
(a) Any Person with an indemnification claim (or potential
claim) pursuant to Section 9.1 ("Potential Indemnitee") agrees to notify Sponsor
(the "Potential Indemnitor") in writing within a reasonable time after receipt
by it of written notice of the commencement of any administrative, legal or
other proceeding, suit or action by a Person (other than Indemnitee or an
affiliate thereof), if a claim for indemnification may be made by the Potential
Indemnitee against the Potential Indemnitor under this Article IX.
(b) Following receipt by the Potential Indemnitor of any such
notice from a Potential Indemnitee, (an "Indemnity Notice"), the Potential
Indemnitor shall be entitled at its own cost and expense to investigate and
participate in the proceeding, suit or action referred to in the Indemnity
Notice. At such time as the Potential Indemnitor shall have acknowledged in
writing to the Potential Indemnitee that it will pay any judgment, damages, or
losses incurred by the Potential Indemnitee in the proceeding, suit or action
referred to in the Indemnity Notice other than those for gross negligence or
willful misconduct on the part of the Potential Indemnitee (at which time the
"Potential Indemnitor" shall be deemed to be the "Indemnitor" and the "Potential
Indemnitee" shall be deemed to be the "Indemnitee"), the Indemnitor shall be
entitled, to the extent that it shall desire, to assume the defense of such
proceeding, suit or action, with counsel reasonably satisfactory to the
Indemnitee. If the Indemnitor shall so assume the defense of such proceeding,
suit or action, the Indemnitor shall conduct such defense with due diligence and
at its own cost and expense.
(c) In the event that the Indemnitor so assumes the defense of
such proceeding, suit or action, the Indemnitor shall not be entitled to settle
such proceeding, suit or action without the written consent of the Indemnitee,
provided that in the event that the Indemnitee does not consent to such
settlement not to be unreasonably withheld or delayed (i) the Indemnitor's
indemnification liability in connection with such proceeding, suit or action
shall not exceed the amount of such proposed settlement and (ii) Indemnitee
shall assume and pay all costs and expenses, including reasonable attorneys'
fees, incurred by Indemnitor from the date that the Indemnitor presented the
Indemnitee the terms of the proposed settlement. An Indemnitor shall not be
liable to an Indemnitee for any settlement of a claim in any proceeding, suit or
other action referred to in an Indemnity Notice, consented to by the Indemnitee
without the consent of the Indemnitor.
(d) A Potential Indemnitor shall be liable to a Potential
Indemnitee for a settlement of a claim in any proceeding, suit or other action
referred to in an Indemnity Notice consented to by such Potential Indemnitee
only if (i) such Potential Indemnitor first had a reasonable opportunity to
investigate such claim and participate in such proceeding, suit or action, (ii)
the Potential Indemnitee gave the Potential Indemnitor at least ten (10)
Business Days notice of the proposed terms of such settlement prior to entering
into such settlement and (iii) the Potential Indemnitor did not acknowledge in
writing to the Potential Indemnitee, by the expiration of such ten (10) Business
Days period, or such longer period as may be agreed to by the Potential
Indemnitee and Potential Indemnitor that it would pay any judgment, damages or
losses incurred by the Potential Indemnitee in such proceeding suit or action.
Section IX.3 Third Party Beneficiaries.
No Persons shall be deemed to be third party beneficiaries of this
Agreement. Except as expressly otherwise provided in this Agreement, this
Agreement is solely for the benefit of Sponsor and the Servicer, the
Participants and their respective successors and permitted assigns, and no other
Person shall have any right, benefit, priority or interest under, or because of
the existence of, this Agreement.
ARTICLE X
SURVIVAL OF LOAN FACILITY
Section X.1 Survival of Loan Facility
The terms of this Loan Facility Agreement shall survive the termination
of the Commitment hereunder and the termination of any Loan Commitment
established pursuant the terms hereof until (x) the indefeasible payment in full
of each of the Loans, (y) the termination of each of the Letters of Credit
outstanding, and (z) the indefeasible payment in full of all outstanding Letter
of Credit Obligations. Notwithstanding the foregoing, Article IX hereof shall
survive the termination of this Agreement upon such repayment and termination.
ARTICLE XI
CONDITIONS PRECEDENT
CONDITIONS TO EFFECTIVE DATE; EFFECT OF AMENDMENT AND RESTATEMENT;
EXTENSIONS OF CREDIT ON AND AFTER EFFECTIVE DATE
Section XI.1 Conditions to Effective Date.
----------------------------
Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of the Participants and Servicer hereunder,
it is understood and agreed that this Agreement shall not become effective, and
the Prior Loan Facility Agreement shall remain in full force and effect, Sponsor
shall have no rights under this Agreement and Servicer and Participants shall
not be obligated to take, fulfill or perform any action hereunder, until the
following conditions have been fulfilled
11.1.1 Receipt of Documents.
--------------------
The Servicer shall have received the following, each
dated as of the Effective Date, in form and substance
satisfactory to the Servicer and (except in the case
of the Servicing Agreement and the Fee Letter) the
Participants:
(a) Duly executed counterparts of this Agreement.
(b) Duly executed counterparts of the Servicing
Agreement and the Fee Letter.
(c) Duly executed counterparts of the Guaranty
Agreement.
(d) Certified copies of the articles of
incorporation or other charter documents of
each Loan Party, together with certificates
of good standing or existence, as may be
available from the Secretary of State of the
jurisdiction of incorporation or formation
of such Loan Party and each other
jurisdiction as requested by the Servicer;
(e) A certificate of the Secretary or Assistant
Secretary of each Loan Party, attaching and
certifying copies of its bylaws and of the
resolutions of its boards of directors,
authorizing the execution, delivery and
performance of the Loan Documents and
Operative Documents to which it is a party
and certifying the name, title and true
signature of each officer of such Loan Party
executing the Loan Documents and Operative
Documents to which it is a party;
(f) A favorable written opinion of Powell,
Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for
Sponsor and Guarantor, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
general counsel to the Sponsor, in a form
satisfactory to the Servicer and each
Participant and covering such matters
relating to the transactions contemplated
hereby as the Servicer may reasonably
request.
(g) In addition, each of the Participants shall
have received a duly executed Participation
Certificate from the Servicer.
11.1.2 Corporate Actions
All corporate and other proceedings taken or to be
taken in connection with the transactions
contemplated hereby and all documents incident hereto
or delivered in connection therewith shall be
satisfactory in form and substance to the Servicer
and the Participants.
Section XI.2 Effect of Amendment and Restatement. .
------------------------------------
11.2.1. Upon the effectiveness of this Agreement on the
Effective Date pursuant to Section 11.1:
(a) the terms and conditions of the Prior Loan Facility
Agreement shall be amended as set forth herein and, as so amended, shall be
restated in their entirety, but only with respect to the rights, duties and
obligations between Sponsor, Servicer and Participants accruing from and after
the Effective Date;
(b) this Agreement shall not in any way release or impair the
rights, duties, or obligations created pursuant to the Prior Loan Facility
Agreement and any other Operative Document or affect the relative priorities
thereof, in each case to the extent in force and effect thereunder as of the
Effective Date and except as modified hereby or by documents, instruments and
agreements executed and delivered in connection herewith, and all of such
rights, duties, and obligations are assumed, ratified and affirmed by Sponsor;
(c) all indemnification obligations of Sponsor under the Prior
Loan Facility Agreement and any other Operative Documents shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect for the benefit of Servicer, each Participant and any other Person
indemnified under the Prior Loan Facility Agreement or any other Operative
Document at any time prior to the Effective Date (including, without limitation,
to the extent set forth in Section 9.1 of the Prior Loan Facility Agreement as
in effect on the Effective Date);
(d) all "Loans", "Letters of Credit" and "Loan Commitments"
extended by Servicer under the Prior Loan Facility Agreement shall, to the
extent outstanding on the Effective Date continue outstanding under this
Agreement and shall not be deemed to be paid, released, discharged or otherwise
satisfied by the execution of this Agreement, and this Agreement shall not
constitute a refinancing, substitution or novation of such Loans, Letters of
Credit, and Loan Commitments or any of the other rights, duties and obligations
of the parties hereunder; and
(e) any and all references to the Prior Loan Facility
Agreement shall, without further action of the parties, be deemed a reference to
the Prior Loan Facility Agreement, as amended and restated by this Agreement,
and as this Agreement shall be further amended or amended and restated from time
to time hereafter.
11.2.2 Notwithstanding anything herein to the contrary, the
Servicer and Participants agree that the interest rates, commitment fees, letter
of credit fees and other amounts payable by Borrowers with respect to Loans
extended under, and Letters of Credit issued pursuant to, the Prior Loan
Facility Agreement shall continue at the same rates and amounts set forth in the
Loan Documents for such Loan until such time as the Loan Commitments to such
Borrowers are renewed or refinanced, at which time the provisions set forth
herein shall apply. No amounts paid by the Sponsor under this Section 11.2.2
shall constitute Guaranty Payments.
ARTICLE XII
THE SERVICER
Section XII.1 Appointment of Servicer as Agent
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.
Section XII.2 Nature of Duties of Servicer.
----------------------------
The Servicer shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Operative Documents. None of
the Servicer nor any of its respective officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder or in
connection herewith, unless caused by its or their gross negligence or willful
misconduct. The Servicer shall not have by reason of this Agreement a fiduciary
relationship in respect of any Participant; and nothing in this Agreement,
express or implied, is intended to or shall be so construed as to impose upon
the Servicer any obligations in respect of this Agreement or the other Operative
Documents except as expressly set forth herein.
Section XII.3 Lack of Reliance on the Servicer.
--------------------------------
Independently and without reliance upon the Servicer, each Participant,
to the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of the
Credit Parties in connection with the taking or not taking of any action in
connection herewith, and (ii) its own appraisal of the creditworthiness of the
Credit Parties, and, except as expressly provided in this Agreement, the
Servicer shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Participant with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter.
The Servicer shall not be responsible to any Participant for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Guaranty
Agreement, and Loan Document or any other documents contemplated hereby or
thereby, or the financial condition of the Credit Parties or any Borrower, or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, the Guaranty
Agreement or the other documents contemplated hereby or thereby, or the
financial condition of the Credit Parties or any Borrower, or the existence or
possible existence of any Unmatured Credit Event or Credit Event.
Section XII.4 Certain Rights of the Servicer.
------------------------------
If the Servicer shall request instructions from the Required
Participants with respect to any action or actions (including the failure to
act) in connection with this Agreement, the Servicer shall be entitled to
refrain from such act or taking such act, unless and until the Servicer shall
have received instructions from the Required Participants; and the Servicer
shall not incur liability in any Person by reason of so refraining. Without
limiting the foregoing, no Participant shall have any right of action whatsoever
against the Servicer as a result of the Servicer acting or refraining from
acting hereunder in accordance with the instructions of the Required
Participants.
Section XII.5 Reliance by Servicer.
--------------------
The Servicer shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cable gram, radiogram, order or other
documentary, teletransmission or telephone message believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person. The
Servicer may consult with legal counsel (including counsel for any Credit
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
Section XII.6 Indemnification of Servicer.
To the extent the Servicer is not reimbursed and indemnified by the
Credit Parties, each Participant will reimburse and indemnify the Servicer,
ratably according to the respective Pro Rata Shares, in either case, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Servicer in performing its
duties hereunder, in any way relating to or arising out of this Agreement or the
other Operative Documents; provided that no Participant shall be liable to the
Servicer for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Servicer's gross negligence or willful misconduct.
Section XII.7 The Servicer in its Individual Capacity.
---------------------------------------
With respect to its obligations under this Agreement and the amounts
advanced by it, the Servicer shall have the same rights and powers hereunder as
any other Participant and may exercise the same as though it were not performing
the duties specified herein; and the terms "Participants", "Required
Participants", or any similar terms shall, unless the context clearly otherwise
indicates, include the Servicer in its individual capacity. The Servicer may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the Consolidated
Companies or any affiliate of the Consolidated Companies as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Consolidated Companies for services in connection with
this Agreement and otherwise without having to account for the same to the
Participants.
Section XII.8 Holders of Participation Certificates.
-------------------------------------
The Servicer may deem and treat the payee of any Participation
Certificate as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
the Servicer. Any request, authority or consent of any Person who, at the time
of making such request or giving such authority or consent, is the holder of any
Participation Certificate shall be conclusive and binding on any subsequent
holder, transferee or assignee of such Participation Certificate or of any
Participation Certificate or Certificates issued in exchange therefor.
ARTICLE XIII
MISCELLANEOUS
Section XIII.1 Notices.
-------
All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
applicable teletransmission number set forth on the signature pages hereof, or
such other address or applicable teletransmission number as such party may
hereafter specify by notice to the Servicer and Sponsor. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid, (iii) if given by telecopy, when such telecopy is
transmitted to the telecopy number specified in this Section and the appropriate
confirmation is received, or (iv) if given by any other means (including,
without limitation, by air courier), when delivered or received at the address
specified in this Section; provided that notices to the Servicer shall not be
effective until received.
Section XIII.2 Amendments, Etc.
---------------
No amendment or waiver of any provision of this Agreement or the other
Operative Documents, nor consent to any departure by any Credit Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Participants (and in the case of any amendment, the applicable
Credit Party), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that no
amendment, waiver or consent shall, unless in writing and signed by all the
Participants do any of the following: (i) waive any of the conditions specified
in Section 2.1 or 11.1, (ii) increase the Participating Commitments or
contractual obligations of the Participants to Servicer or Sponsor under this
Agreement, (iii) reduce the principal of, or interest on, the Participation
Certificates or any fees hereunder, (iv) postpone any date fixed for the payment
in respect of principal of, or interest on, the Participation Certificates or
any fees hereunder, (v) agree to release any Guarantor from its obligations
under any Guaranty Agreement or the Sponsor from its obligations pursuant to
Article VIII, (vi) modify the definition of "Required Participants," or (vii)
modify Article IV, Article VIII or this Section 13.2. Notwithstanding the
foregoing, no amendment, waiver or consent shall, unless in writing and signed
by the Servicer in addition to the Participants required hereinabove to take
such action, affect the rights or duties of the Servicer under this Agreement or
under any other Operative Document or Loan Document. In addition,
notwithstanding the foregoing, the Servicer and the Sponsor may, without the
consent of or notice to the Participants, enter into amendments, modifications
or waivers with respect to the Servicing Agreement and the Fee Letter as long as
such amendments or modifications do not conflict with the terms of this
Agreement.
Section XIII.3 No Waiver; Remedies Cumulative
No failure or delay on the part of the Servicer or any Participant in
exercising any right or remedy hereunder or under any other Operative Document,
and no course of dealing between any Credit Party and the Servicer or any
Participant shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy hereunder or under any other Operative Document
preclude any other or further exercise thereof or the exercise of any other
right or remedy hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or remedies
which the Servicer or any Participant would otherwise have. No notice to or
demand on any Credit Party not required hereunder or under any other Operative
Document in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Servicer or the Participants to any other or further action in any
circumstances without notice or demand.
Section XIII.4 Payment of Expenses, Etc.
(a) Sponsor shall whether or not the transactions hereby
contemplated are consummated, pay all reasonable, out-of-pocket costs and
expenses of the Servicer in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred relating to
advice of counsel as to the rights and duties of the Servicer and the
Participants with respect thereto) of, and in connection with the preparation,
execution and delivery of, preservation of rights under, enforcement of, and,
after a Unmatured Credit Event or Credit Event, refinancing, renegotiation or
restructuring of, this Agreement and the other Operative Documents and the
documents and instruments referred to therein, and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees
actually incurred and disbursements of counsel for the Servicer, accountants,
consultants, and other similar professional fees), and in the case of
enforcement of this Agreement or any Operative Document after an Credit Event,
all such reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and reasonable disbursements
and changes of counsel), for any of the Participants; and
(b) Pay and hold the Servicer and each of the Participants
harmless from and against any and all present and future stamp, documentary, and
other similar Taxes with respect to this Agreement, the Participation
Certificates, the Loan Documents and any other Operative Documents, any
collateral described therein, or any payments due thereunder, and save the
Servicer and each Participant harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such Taxes.
Section XIII.5 Right of Setoff.
---------------
In addition to and not in limitation of all rights of offset that any
Participant may have under applicable law, each Participant shall, upon the
occurrence of any Credit Event and whether or not such Participant has made any
demand or any Credit Party's obligations have matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations hereunder
and under the other Operative Documents, all deposits of any Credit Party
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Participant or other holder to any Credit Party, whether or not related to this
Agreement or any transaction hereunder.
Section XIII.6 Benefit of Agreement; Assignments; Participations
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that Sponsor may not assign or transfer any of its
interest hereunder without the prior written consent of the Participants.
(b) Any Participant may make, carry or transfer Loans at, to
or for the account of, any of its branch offices or the office of an Affiliate
of such Participant.
(c) Each Participant may assign all of its interests, rights
and obligations under this Agreement (including all of its Participating
Commitments and the Funded Participant's Interest at the time owing to it and
the Participation Certificates held by it) to any Eligible Assignee; provided,
however, that (i) the Sponsor has given its prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed) unless
such assignment is an Affiliate of the assigning Participant or unless a Credit
Event has occurred and is continuing hereunder, (ii) the amount of the
Participating Commitment of the assigning Participant subject to each assignment
(determined as of the date the assignment and acceptance with respect to such
assignment is delivered to the Servicer) shall not be less than the entire
Participating Commitment of such assignor and (iii) the parties to each such
assignment shall execute and deliver to the Servicer an Assignment and
Acceptance, together with the Participation Certificate subject to such
assignment and, unless such assignment is to an Affiliate of such Participant, a
processing and recordation fee of $2,500. Within ten (10) Business Days after
receipt of the notice and the Assignment and Acceptance, Servicer shall execute
and deliver, in exchange for the surrendered Participation Certificate, a new
Participation Certificate to the order of such assignee in a principal amount
equal to the applicable Participating Commitment assumed by it pursuant to such
Assignment and Acceptance. Such new Participation Certificate shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Participation Certificate, shall be dated the date of the
surrendered Participation Certificate which it replaces, and shall otherwise be
in substantially the form attached hereto.
(d) Each Participant may, without the consent of Sponsor or
the Servicer, sell participations to one or more banks or other entities in all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Participating Commitment and the Funded Participant's
Interest owing to it), provided, however, that (i) no Participant may sell a
participation in its Participating Commitment (after giving effect to any
permitted assignment hereof) unless it retains an aggregate exposure of 50% of
its original Participating Commitment, provided, however, sales of
participations to an Affiliate of such Participant shall not be included in such
calculation; provided, however, no such maximum amount shall be applicable to
any such participation sold at any time there exists an Credit Event hereunder,
(ii) such Participant's obligations under this Agreement shall remain unchanged,
(iii) such Participant shall remain solely responsible to the other parties
hereto for the performance of such obligations, and (iv) the participating bank
or other entity shall not be entitled to the benefit (except through its selling
Participant) of the cost protection provisions contained in Article II of this
Agreement, and (v) Sponsor, Servicer and the other Participants shall continue
to deal solely and directly with each Participant in connection with such
Participant's rights and obligations under this Agreement and the other
Operative Documents, and such Participant shall retain the sole right to enforce
the obligations of Sponsor relating to the Loans and to approve any amendment,
modification or waiver of any provisions of this Agreement (other than an
amendment requiring approval of 100% of the Participants). Each Participant
shall promptly notify in writing the Servicer and the Sponsor of any sale of a
participation hereunder and shall certify to Sponsor and Servicer its compliance
with the terms hereof.
(e) Any Participant or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant to
this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to Sponsor or the other Consolidated
Companies furnished to such Participant by or on behalf of Sponsor or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the purpose of making any necessary credit
judgments with respect to this credit facility and not to use the information in
any manner prohibited by any law, including without limitation, the securities
laws of the United States. The proposed participant or assignee shall agree not
to disclose any of such information except (i) to directors, employees, auditors
or counsel to whom it is necessary to show such information, each of whom shall
be informed of and shall acknowledge the confidential nature of the information,
(ii) in any statement or testimony pursuant to a subpoena or order by any court,
governmental body or other agency asserting jurisdiction over such entity, or as
otherwise required by law (provided prior notice is given to Sponsor and the
Servicer unless otherwise prohibited by the subpoena, order or law), and (iii)
upon the request or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee shall further agree to return
all documents or other written material and copies thereof received from any
Participant, the Servicer or Sponsor relating to such confidential information
unless otherwise properly disposed of by such entity.
(f) Any Participant may at any time assign all or any portion
of its rights in this Agreement to a Federal Reserve Bank; provided that no such
assignment shall release the Participant from any of its obligations hereunder.
Section XIII.7 Governing Law; Submission to Jurisdiction.
-----------------------------------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF
GEORGIA.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER OPERATIVE DOCUMENT MAY BE BROUGHT IN THE SUPERIOR COURT OF ▇▇▇▇▇▇
COUNTY, GEORGIA, OR ANY OTHER COURT OF THE STATE OF GEORGIA OR OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, SPONSOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY,
AND SPONSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
SPONSOR HEREBY IRREVOCABLY DESIGNATES PRENTICE HALL CORPORATION,
ATLANTA, GEORGIA, AS ITS DESIGNEE, APPOINTEE AND LOCAL AGENT TO RECEIVE, FOR
AND ON BEHALF OF SPONSOR, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
DOCUMENT RELATED THERETO. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED
ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY THE
SERVER OF SUCH PROCESS BY MAIL TO SPONSOR AT ITS ADDRESS SET FORTH OPPOSITE
ITS SIGNATURE BELOW, BUT THE FAILURE OF SPONSOR TO RECEIVE SUCH COPY SHALL NOT
AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. SPONSOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SPONSOR AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
Nothing herein shall affect the right of the Servicer, any Participant,
or any Credit Party to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against Sponsor in any
other jurisdiction.
Section XIII.8 Counterparts. .
--------------
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
Section XIII.9 Severability.
In case any provision in or obligation under this Agreement or the
other Operative Documents shall be invalid, illegal or unenforceable, in whole
or in part, in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
Section XIII.10 Independence of Covenants.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant, shall not avoid the occurrence of a Unmatured
Credit Event or an Credit Event if such action is taken or condition exists.
Section XIII.11 Change in Accounting Principles, Fiscal Year or Tax
Laws.
-----------------------------------------------------
If (i) any preparation of the financial statements referred to in
Section 6.1 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accounts (or successors
thereto or agencies with similar functions) result in a material change in the
method of calculation of financial covenants, standards or terms found in this
Agreement, (ii) there is any change in Sponsor's fiscal quarter or Fiscal Year,
except as permitted in Section 6.25 or (iii) there is a material change in
federal tax laws which materially affects any of the Consolidated Companies'
ability to comply with the financial covenants, standards or terms found in this
Agreement, Sponsor and the Required Participants agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
changes with the desired result that the criteria for evaluating any of the
Consolidated Companies' financial condition shall be the same after such changes
as if such changes had not been made. Unless and until such provisions have been
so amended, the provisions of this Agreement shall govern.
Section XIII.12 Headings Descriptive; Entire Agreement
The headings of the several sections and subsections of this Agreement
are inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement. This Agreement, the other
Operative Documents, and the agreements and documents required to be delivered
pursuant to the terms of this Agreement constitute the entire agreement among
the parties hereto and thereto regarding the subject matters hereof and thereof
and supersede all prior agreements, representations and understandings related
to such subject matters.
[Signatures Set Forth on Next Page]
- 92 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Address for Notices: RUBY TUESDAY, INC.
Ruby Tuesday, Inc.
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:______________________________
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Title:
Telecopy: (865) 379 - 6816
STATE OF GEORGIA
COUNTY OF _____________
Signed, sealed and delivered in the presence of:
-----------------------------
Notary Public
Date Executed by Notary:
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My commission expires:
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[NOTARIAL SEAL]
Address for Notices: SUNTRUST BANK, as Servicer
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:______________________________
Attn: Center 1923 Title:
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SunTrust Bank
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▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Address for Notices: SUNTRUST BANK
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:______________________________
Attn: Center 1923 Title:
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
SunTrust Bank
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Participating Commitment: $9,000,000.00
Pro Rata Share: 17.14286%
Address for Notices: AMSOUTH BANK
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▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:____________________________
Attention: Mr. ▇▇▇▇ Scwarzenbraub Name:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Participating Commitment: $12,750,000
Pro Rata Share: 24.28571%
Address for Notices: BANK OF AMERICA, N.A.
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▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By:_____________________________
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name:
location code: NC1-007-17-14 Title:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Participating Commitment: $8,250,000.00
Pro Rata Share: 15.71429%
Address for Notices: HIBERNIA NATIONAL BANK
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ Villaffara By:____________________________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Name:
Title:
Participating Commitment: 6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: FIRST UNION NATIONAL BANK
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By:____________________________
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Name:
Title:
Participating Commitment: $6,750,000.00
Pro Rata Share: 12.85714%
Address for Notices: WACHOVIA BANK, N.A.
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Attention: ▇▇. ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ By:______________________________
Name:
Title:
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
Address for Notices: THE FUJI BANK, LIMITED
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2 World Trade Center, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ By:______________________________
Name:
Title:
Participating Commitment: $4,500,000.00
Pro Rata Share: 8.57143%
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (the "Assignment
Agreement") dated as of _______________________, 20__ between __________
("Assignor") and __________________________________ ("Assignee"). All
capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Loan Facility Agreement referred
to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Assignor is a party to an Amended and Restated Loan
Facility Agreement and Guaranty, dated as of October __, 2000 (as amended to the
date hereof, the "Loan Facility Agreement"), among Ruby Tuesday, Inc., a Georgia
corporation (the "Sponsor"), various financial institutions (including Assignor,
the "Participants") and SunTrust Bank, as Servicer (the "Servicer"); and
WHEREAS, Assignor has a Participating Commitment of
$___________ under the Loan Facility Agreement pursuant to which it has
outstanding a Funded Participant's Interest of $______________; and
WHEREAS, Assignor and Assignee wish Assignor to assign to
Assignee its rights under the Loan Facility Agreement with respect to a portion
of its Participating Commitment and of its outstanding Funded Participant's
Interest; and
WHEREAS, Assignor and Assignee wish Assignee to assume the
obligations of Assignor under the Loan Facility Agreement to the extent of the
rights so assigned;
NOW THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
I. Assignment. Assignor hereby assigns to Assignee, without recourse,
or representation or warranty (other than expressly provided herein) and subject
to Section 4(b) hereof, ___% as the "Assignee's Share" ("Assignee's Share") of
all of Assignor's rights, title and interest arising under the Loan Facility
Agreement relating to Assignor's Participating Commitment and Funded
Participant's Interest heretofore made by the Assignor under the Loan Facility
Agreement. The dollar amount of Assignee's Share of Assignor's Participating
Commitment is $__________ and the dollar amount of Assignee's Share of
Assignor's outstanding Funded Participant's Interest is $__________.
II. Assumption. Assignee hereby assumes from Assignor all of Assignor's
obligations arising under the Loan Facility Agreement relating to Assignee's
Share of Assignor's Participating Commitment and of the Funded Participant's
Interest. It is the intent of the parties hereto that Assignor shall be released
from all of its obligations under the Loan Facility Agreement relating to
Assignee's Share.
III. Assignments; Participations. Assignee may not assign all or
----------------------------
any part of the rights granted to it hereunder or grant participations in all or
any part of the rights granted to it hereunder except in accordance with the
provisions of Section 13.6 of the Loan Facility Agreement.
IV. Payment of Interest and Fees to Assignee.
----------------------------------------
(a) As of the date hereof interest is payable in respect of
Assignee's Share of the Funded Participant's Interest at a rate equal
to [0.90%] per annum above LIBOR for the Calculation Periods, and a
Commitment Fee equal to [0.1875%] per annum on the Assignee's Share of
the average daily unused portion of the Participating Commitment.
(b) Notwithstanding anything to the contrary contained in this
Assignment Agreement, if and when Assignor receives or collects any
payment of interest on its Funded Participant's Interest attributable
to Assignee's Share or any payment of the Commitment Fee attributable
to Assignee's Share which, in any such case, are required to be paid to
Assignee pursuant to clause (a) above, Assignor shall distribute to
Assignee such payment but only to the extent such interest or fee
accrued after the Assignment Effective Date (as hereinafter defined).
(c) Notwithstanding anything to the contrary contained in this
Assignment Agreement, if and when Assignee receives or collects any
payment of interest on the Funded Participant's Interest or any payment
of the Commitment Fee which, in any such case, is required to be paid
to Assignor pursuant to clause (a) above, Assignee shall distribute to
Assignor such payment.
V. Payments on Assignment Effective Date. In consideration of the
assignment by Assignor to Assignee of Assignee's Share of Assignor's
Participating Commitment and Funded Participant's Interest as set forth above,
Assignee agrees to pay to Assignor on or prior to the Assignment Effective Date
an amount specified by Assignor in writing on or prior to the Assignment
Effective Date which represents Assignee's Share of the principal amount of the
Funded Participant's Interest of Assignor outstanding on the Assignment
Effective Date.
VI. Effectiveness.
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(a) This Assignment Agreement shall become effective on the
date (the "Assignment Effective Date") (which is at least five days
after the date hereof) on which (i) Assignor and Assignee shall have
signed a copy hereof (whether the same or different copies) and, in the
case of Assignee, shall have delivered same to Assignor, (ii) the
Sponsor shall have consented hereto, (iii) a copy of the fully executed
Assignment, a fee of $2,500 and the Participation Certificate
evidencing the Participating Commitment and Funded Participant's
Interest assigned hereby shall have been delivered to the Servicer, and
(iv) Assignee shall have paid to Assignor the amount set forth in
Section 5.
(b) It is agreed that all interest attributable to Assignee's
Share of the Funded Participant's Interest of Assignor and all
Commitment Fees attributable to Assignee's Share, which, in each case,
accrues on and after the Assignment Effective Date shall be paid
directly to the Assignee in accordance with the Loan Facility
Agreement.
VII. Amendment of Loan Facility Agreement. On the Assignment Effective
Date the Loan Facility Agreement shall be amended by deeming the signature of
Assignee herein as a signature to the Loan Facility Agreement. The Assignee
shall be deemed a "Participant" for all purposes under the Loan Facility
Agreement and shall be subject to and shall benefit from all of the rights and
obligations of a Participant under the Loan Facility Agreement. The address of
the Assignee for notice purposes shall be as set forth below, and the Loan
Facility Agreement shall be amended by deeming such signature page and address
to be included thereon. Without limiting the generality of the foregoing,
Assignee agrees that it will perform its obligations as a Participant under the
Loan Facility Agreement as required by the terms thereof and Assignee appoints
and authorizes the Servicer to take such actions as Servicer on its behalf and
exercise such powers under the Loan Facility Agreement and the other Operative
Documents as are delegated to the Servicer by the terms of the Loan Facility
Agreement and the other Operative Documents, together with such powers as are
reasonably incidental thereto.
VIII. Representations and Warranties. Each of the Assignor and the
-------------------------------
Assignee represents and warrants to the other party as follows:
(a) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment Agreement and to
fulfill its obligations under, and to consummate the transactions
contemplated by, this Assignment Agreement;
(b) the making and performance by it of this Assignment
Agreement and all documents required to be executed and delivered by it
hereunder do not and will not violate any law or regulation of the
jurisdiction of its incorporation or any other law or regulation
applicable to it;
(c) this Assignment Agreement has been duly executed and
delivered by it and constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms; and
(d) all consents, licenses, approvals, authorizations,
exemptions, registrations, filings, opinions and declarations from or
with any agency, department, administrative authority, statutory
corporation or judicial entity necessary for the validity or
enforceability of its obligations under this Assignment Agreement have
been obtained, and no governmental authorizations other than any
already obtained are required in connection with its execution,
delivery and performance of this Assignment Agreement.
IX. Expenses. The Assignor and the Assignee agree that each party
--------
shall bear its own expenses in connection
with the preparation and execution of this Assignment Agreement.
X. Miscellaneous.
(a) Assignor shall not be responsible to Assignee for the
execution (by any party other than the Assignor), effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of
the Loan Facility Agreement, the Participation Certificates or the
Guaranty Agreement or for any representations, warranties, recitals or
statements made therein or in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or
any other documents made or furnished or made available by Assignor to
Assignee or by or on behalf of the Sponsor or any Guarantor to Assignor
or Assignee in connection with the Loan Facility Agreement, the
Participation Certificates or the Guaranty Agreement and the
transactions contemplated thereby. Assignor shall not be required to
ascertain or inquire as to the performance or observance of any of the
terms, conditions, provisions, covenants or agreements contained in the
Loan Facility Agreement, the Participation Certificates or the Guaranty
Agreement or as to the existence or possible existence of any event
which constitutes a Credit Event or an Unmatured Credit Event.
(c) Assignee represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the
Sponsor and each Guarantor in connection with the assignment of
Assignee's Share of Assignor's Participating Commitment and of
Assignor's Participating Commitment to Assignee hereunder and has made
and shall continue to make its own appraisal of the creditworthiness of
the Sponsor and each Guarantor. Assignor shall have no duty or
responsibility either initially or on a continuing basis to make any
such investigation or any such appraisal on behalf of Assignee or to
provide Assignee with any credit or other information with respect
thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter and shall further have no
responsibility with respect to the accuracy of, or the completeness of,
any information provided to Assignee, whether by Assignor or by or on
behalf of either the Sponsor or any Guarantor.
(d) THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF
THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF GEORGIA.
(e) No term or provision of this Assignment Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by both parties.
(f) This Assignment Agreement may be executed in one or more
counterparts, each of which shall be an original but all of which,
taken together, shall constitute one and the same instrument.
(g) The Assignor may at any time or from time to time grant to
others assignments or participations in its Participating Commitment or
its Funded Participant's Interest but not in the portions thereof
assigned to Assignee pursuant to this Assignment Agreement. The
Assignor represents and warrants that it has not at any time prior to
the Assignment Effective Date encumbered or assigned the portion of its
Participating Commitment or its Funded Participant's Interest being
assigned hereunder.
(h) All payments hereunder or in connection herewith shall be
made in Dollars and in immediately available funds, if payable to the
Assignor, to the account of the Assignor at its address as designated
in the Loan Facility Agreement, and, if payable to the Assignee, to the
account of the Assignee's address, as designated on the signature page
hereof.
(i) This Assignment Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns. Neither of the parties hereto may assign or transfer any
of its rights or obligations under this Assignment Agreement without
the prior consent of the other party.
(j) All representations and warranties made herein and
indemnities provided for herein shall survive the consummation of the
transaction contemplated hereby.
(k) The Assignee acknowledges receipt of copies of the
documents received in connection with the transactions contemplated by
the Loan Facility Agreement, the Guaranty Agreement and this Assignment
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement as of the date first above written.
[NAME OF ASSIGNOR]
By:
Title:
Assignee's Share of [NAME OF ASSIGNEE]
Participating Commitment
$____________________________ By:
----------------------------
Title:
Assignee's Share of
Funded Participant's Interest:
$
Address:
Tel. No:
Fax No:
CONSENTED TO AS OF THE
DATE SET FORTH ABOVE:
RUBY TUESDAY, INC.
By:
Title:
EXHIBIT B
FORM OF SUBSIDIARY GUARANTY AGREEMENT
This SUBSIDIARY GUARANTY AGREEMENT dated as of October 11, 2000, among
each of the Subsidiaries (each such subsidiary individually, a "Guarantor" and
collectively, the "Guarantors") of Ruby Tuesday, Inc., a Georgia corporation
(the "Sponsor") from time to time parties hereto in favor of SunTrust Bank, a
Georgia banking corporation as servicer (the "Servicer") and the Participants
(as defined in the Loan Facility Agreement referred to below).
Reference is made to the Amended and Restated Loan Facility Agreement
dated as of October 11, 2000 (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 SunTrust Bank, as servicer. Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Loan Facility
Agreement.
The Servicer, on behalf of the Participants, has agreed to make Loans
to certain franchisees of Sponsor and to issue Letters of Credit for the account
of such franchisees of Sponsor, pursuant to, and upon the terms and subject to
the conditions specified in, the Loan Facility Agreement. Each of the Guarantors
is a direct or indirect wholly-owned Subsidiary of the Sponsor and acknowledges
that it will derive substantial benefit from the making of the Loans by the
Servicer, on behalf of the Participants, and the issuance of the Letters of
Credit by the Servicer, on behalf of the Participants. The obligations of the
Servicer, on behalf of the Participants, to make Loans and to issue Letters of
Credit is conditioned on, among other things, the execution and delivery by the
Guarantors of this Subsidiary Guaranty Agreement. As consideration therefor and
in order to induce the Servicer, on behalf of the Participants to make Loans and
to issue Letters of Credit, the Guarantors are willing to execute this
Subsidiary Guaranty Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guaranty. Each Guarantor unconditionally guaranties, jointly
with the other Guarantors and severally, as a primary obligor and not merely as
a surety, (a) the due and punctual payment of (i) the principal of and premium,
if any, and interest (including interest accruing at the Default Rate and
interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by the Sponsor under the Loan
Facility Agreement in respect of any Letter of Credit, when and as due,
including payments in respect of reimbursement or disbursements, interest
thereon and obligations to provide cash collateral, and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Loan Parties to the Servicer and the
Participants under the Loan Facility Agreement, the other Operative Documents,
and the Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
the Loan Facility Agreement, the other Operative Documents, and the Loan
Documents; and (c) the due and punctual payment and performance of all
obligations of the Sponsor, monetary or otherwise, under each Hedging Agreement
entered into with a counterparty that was a Participant or an Affiliate of a
Participant at the time such Hedging Agreement was entered into (all the
monetary and other obligations referred to in the preceding clauses (a) through
(c) being collectively called the "Guaranteed Obligations"). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Guaranteed Obligation.
SECTION 2. Guaranteed Obligations Not Waived. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Sponsor of any of the Guaranteed Obligations,
and also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of each Guarantor hereunder shall not be affected by (a) the failure of the
Servicer or any Participant to assert any claim or demand or to enforce or
exercise any right or remedy against the Sponsor or any other Guarantor under
the provisions of the Loan Facility Agreement, any other Operative Document, any
Loan Document or otherwise, (b) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of, this
Agreement, any other Operative Document, any Loan Document, any Guaranty or any
other agreement, including with respect to any other Guarantor under this
Agreement, or (c) the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the Servicer or any
Participant.
SECTION 3. Guaranty of Payment. Each Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Servicer or any
Participant to any of the security held for payment of the Guaranteed
Obligations or to any balance of any deposit account or credit on the books of
the Servicer or any Participant in favor of the Sponsor or any other person.
SECTION 4. No Discharge or Diminishment of Guaranty. The obligations of
each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Guaranteed
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor hereunder
shall not be discharged or impaired or otherwise affected by the failure of the
Servicer or any Participant to assert any claim or demand or to enforce any
remedy under the Loan Facility Agreement, any other Operative Document, any Loan
Document or any other agreement, by any waiver or modification of any provision
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or omission that
may or might in any manner or to the extent vary the risk of any Guarantor or
that would otherwise operate as a discharge of each Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of all the
Guaranteed Obligations).
SECTION 5. Defenses of Sponsor Waived. To the fullest extent permitted
by applicable law, each Guarantor waives any defense based on or arising out of
any defense of the Sponsor or the unenforceability of the Guaranteed Obligations
or any part thereof from any cause, or the cessation from any cause of the
liability of the Sponsor, other than the final and indefeasible payment in full
in cash of the Guaranteed Obligations. The Servicer and the Participants may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with the Sponsor or any other
guarantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Sponsor or any other Guarantor or guarantor, as the case may be, or
any security.
SECTION 6. Agreement to Pay; Subordination. In furtherance of the
foregoing and not in limitation of any other right that the Servicer or any
Participant has at law or in equity against any Guarantor by virtue hereof, upon
the failure of the Sponsor or any other Loan Party to pay any Obligation when
and as the same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Servicer for the benefit of the
Participants in cash the amount of such unpaid Guaranteed Obligations. Upon
payment by any Guarantor of any sums to the Servicer, all rights of such
Guarantor against the Sponsor arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Guaranteed Obligations. In addition, any
indebtedness of the Sponsor now or hereafter held by any Guarantor is hereby
subordinated in right of payment to the prior payment in full in cash of the
Guaranteed Obligations. If any amount shall erroneously be paid to any Guarantor
on account of (i) such subrogation, contribution, reimbursement, indemnity or
similar right or (ii) any such indebtedness of the Sponsor, such amount shall be
held in trust for the benefit of the Servicer and the Participants and shall
forthwith be paid to the Servicer to be credited against the payment of the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Loan and Operative Documents.
SECTION 7. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Sponsor's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
such Guarantor assumes and incurs hereunder, and agrees that none of the
Servicer or the Participants will have any duty to advise any of the Guarantors
of information known to it or any of them regarding such circumstances or risks.
SECTION 8. Representations and Warranties. Each Guarantor represents
and warrants as to itself that all representations and warranties relating to it
(as a Subsidiary of the Sponsor) contained in the Loan Facility Agreement are
true and correct.
SECTION 9. Termination. The guaranties made hereunder (a) shall
terminate when all the Guaranteed Obligations have been paid in full in cash and
the Participants have no further commitment to lend under the Loan Facility
Agreement, the LC Exposure has been reduced to zero and the Participants have no
further obligation to issue Letters of Credit under the Loan Facility Agreement
and (b) shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by any Participant or any Guarantor upon the bankruptcy or
reorganization of the Sponsor, any Guarantor or otherwise. Notwithstanding
anything to the contrary herein or in the Loan Facility Agreement, the guaranty
made hereunder by Tia's shall terminate automatically upon the sale of
substantially all of the assets of Tia's (including the sale of all of the
member interests of Tia's or the merger of Tia's into another entity where such
other entity is the surviving entity) to the extent permitted under the Loan
Facility Agreement. In connection with the foregoing, the Servicer shall execute
and deliver to such Guarantor or Guarantor's designee, at such Guarantor's
expense, any documents or instruments which such Guarantor shall reasonably
request from time to time to evidence such termination and release.
SECTION 10. Binding Effect; Several Agreement; Assignments. Whenever in
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Servicer, and a counterpart hereof
shall have been executed on behalf of the Servicer, and thereafter shall be
binding upon such Guarantor and the Servicer and their respective successors and
assigns, and shall inure to the benefit of such Guarantor, the Servicer and the
Participants, and their respective successors and assigns, except that no
Guarantor shall have the right to assign its rights or obligations hereunder or
any interest herein (and any such attempted assignment shall be void). If all of
the capital stock or other equity interest of a Guarantor, including Tia's, is
sold, transferred or otherwise disposed of (including the sale of all of the
member interests of Tia's or the merger of Tia's into another entity where such
other entity is the surviving entity) pursuant to a transaction permitted by the
Loan Facility Agreement, such Guarantor shall be released from its Guaranteed
Obligations under this Agreement without further action, and upon request of the
Guarantor or Sponsor, the Servicer will execute and deliver to the Sponsor or
such Guarantor, at the Sponsor's expense, such additional documents, instruments
or agreements (all of which shall be prepared by the Sponsor) as the Sponsor or
Guarantor shall reasonably request to further evidence the termination of this
Guaranty. This Agreement shall be construed as a separate agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any Guarantor without the approval of any other Guarantor and
without affecting the Guaranteed Obligations of any other Guarantor hereunder.
SECTION 11. Waivers; Amendment. (a) No failure or delay of the Servicer
of any in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and of the Servicer hereunder and of the Participants
under the other Operative Documents and Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver and consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Servicer, with the prior written consent of the
Required Participants (except as otherwise provided in the Loan Facility
Agreement).
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
SECTION 13. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 10.1 of the Loan Facility Agreement.
All communications and notices hereunder to each Guarantor shall be given to it
at its address set forth on Schedule I attached hereto.
SECTION 14. Survival of Agreement; Severability. (a) All covenants,
agreements representations and warranties made by the Guarantors herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement, any other Operative Document or any Loan
Documents shall be considered to have been relied upon by the Servicer and the
Participants and shall survive the making by the Participants of the Loans and
the issuance of the Letters of Credit by the Participants regardless of any
investigation made by any of them or on their behalf, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan
or any other fee or amount payable under this Agreement, any other Operative
Document or any Loan Document is outstanding and unpaid or the LC Exposure does
not equal zero and as long as the Commitments have not been terminated.
(b) In the event one or more of the provisions contained in
this Agreement, any other Operative Document or any Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties 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 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract (subject to Section 10), and
shall become effective as provided in Section 10. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of interpretation
specified in Section 1.4 of the Loan Facility Agreement
shall be applicable to this Agreement.
SECTION 17. Jurisdiction; Consent to Service of Process. (a) Each
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any Georgia State court or Federal
court of the United States of America sitting in Atlanta, Georgia, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, the other Operative Documents or the Loan Documents,
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such Georgia
State court or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Servicer or any Participant may otherwise have to
bring any action or proceeding relating to this Agreement, the other Operative
Documents or Loan Documents against any Guarantor or its properties in the
courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement, the other Operative
Documents or the Loan Documents in any Georgia State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 13. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 18. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS OR
LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS AND LOAN
DOCUMENTS AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 18.
SECTION 19. Additional Guarantors. Pursuant to Section 5.10 of the Loan
Facility Agreement, each Subsidiary Loan Party that was not in existence on the
date of the Loan Facility Agreement is required to enter into this Agreement as
a Guarantor upon becoming Subsidiary Loan Party. Upon execution and delivery
after the date hereof by the Servicer and such Subsidiary Loan Party of an
instrument in the form of Annex 1, such Subsidiary Loan Party shall become a
Guarantor hereunder with the same force and effect as if originally named as a
Guarantor herein. The execution and delivery of any instrument adding an
additional Guarantor as a party to this Agreement shall not require the consent
of any other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.
SECTION 20. Waiver of Certain Damages. To the extent permitted by
applicable law, no Guarantor shall assert, and each Guarantor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to actual or direct damages)
arising out of, in connection with or as a result of, this Subsidiary Guaranty
Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated therein, any Loan or any Letter of Credit or the use of proceeds
thereof.
Section 21. Savings Clause. It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum
Guaranteed Obligations hereunder shall be, but not in excess of:
(a) in a case or proceeding commenced by or against any
Guarantor under the Bankruptcy Code on or within one year from the date on which
any of the Guaranteed Obligations are incurred, the maximum amount which would
not otherwise cause the Guaranteed Obligations (or any other obligations of such
Guarantor to the Guaranteed Parties) to be avoidable or unenforceable against
such Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such case
or proceeding by virtue of Section 544 of the Bankruptcy Code; or
(b) in a case or proceeding commenced by or against any
Guarantor under the Bankruptcy Code subsequent to one year from the date on
which any of the Guaranteed Obligations are incurred, the maximum amount which
would not otherwise cause the Guaranteed Obligations (or any other obligations
of such Guarantor to the Guaranteed Parties) to be avoidable or unenforceable
against such Guarantor under any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(c) in a case or proceeding commenced by or against any
Guarantor under any law, statute or regulation other than the Bankruptcy Code
(including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation or
similar debtor relief laws), the maximum amount which would not otherwise cause
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) to be avoidable or unenforceable against such Guarantor
under such law, statute or regulation including, without limitation, any state
fraudulent transfer or fraudulent conveyance act or statute applied in any such
case or proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(d) To the extent set forth in Section 20(a),(b), and (c), but
only to the extent that the Guaranteed Obligations would otherwise be subject to
avoidance under the Avoidance Provisions, if any Guarantor is not deemed to have
received valuable consideration, fair value or reasonably equivalent value for
the Guaranteed Obligations, or if the Guaranteed Obligations would render such
Guarantor insolvent, or leave such Guarantor with an unreasonably small capital
to conduct its business, or cause such Guarantor to have incurred debts (or to
have intended to have incurred debts) beyond its ability to pay such debts as
they mature, in each case as of the time any of the Guaranteed Obligations are
deemed to have been incurred under the Avoidance Provisions and after giving
effect to the contribution by such Guarantor, the maximum Guaranteed Obligations
for which such Guarantor shall be liable hereunder shall be reduced to that
amount which, after giving effect thereto, would not cause the Guaranteed
Obligations (or any other obligations of such Guarantor to the Guaranteed
Parties), as so reduced, to be subject to avoidance under the Avoidance
Provisions. This Section 20 is intended solely to preserve the rights of the
Guaranteed Parties hereunder to the maximum extent that would not cause the
Guaranteed Obligations of such Guarantor to be subject to avoidance under the
Avoidance Provisions, and neither the Guarantors nor any other Person shall have
any right or claim under this Section 20 as against the Guaranteed Parties that
would not otherwise be available to such Person under the Avoidance Provisions.
SECTION 22. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Participant is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by such Participant to or
for the credit or the account of any Guarantor against any or all the Guaranteed
Obligations of such Guarantor now or hereafter existing under this Agreement,
the other Operative Documents and the Loan Documents held by such Participant,
irrespective of whether or not such Person shall have made any demand under this
Agreement, any other Operative Document or any Loan Document, and although such
Guaranteed Obligations may be unmatured. The rights of each Participant under
this Section 22 are in addition to other rights and remedies (including other
rights of setoff) which such Participant may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON
SCHEDULE I HERETO
By:
Name:
Title:
SCHEDULE I TO THE SUBSIDIARY GUARANTY AGREEMENT
Guarantor(s) Address
3
ANNEX 1 TO THE SUBSIDIARY GUARANTY AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Subsidiary Guaranty
Agreement (the "Guaranty Agreement") dated as of October 11, 2000 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 SUNTRUST BANK, a
Georgia banking corporation, as Servicer (the "Servicer") and the Participants
(as defined in the Loan Facility Agreement referred to below).
A. Reference is made to the Amended and Restated Loan Facility
Agreement dated as of October 11, 2000 (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 SunTrust Bank, as Servicer. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Loan Facility Agreement.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Guaranty Agreement and the Loan
Facility 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
Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party
on the date of the Loan Facility Agreement is required to enter into the
Guaranty Agreement as a Guarantor upon becoming a Subsidiary Loan Party. 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
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. 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 4. Except as expressly supplemented hereby, the Guaranty
Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. 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 7. 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 8. 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:
EXHIBIT C
FORM OF INDEMNITY AND CONTRIBUTION AGREEMENT
This INDEMNITY AND CONTRIBUTION AGREEMENT dated as of October 11, 2000
, among RUBY TUESDAY, INC., a Georgia corporation (the "Sponsor"), each
Subsidiary listed on Schedule I hereto (the "Guarantors"), and SUNTRUST BANK, a
Georgia banking corporation, as servicer (in such capacity, the "Servicer").
Reference is made to (a) the Amended and Restated Loan Facility
Agreement and Guaranty dated as of October 11, 2000 (as amended, supplemented or
otherwise modified from time to time, the "Loan Facility Agreement"), among the
Sponsor, the Participants from time to time party thereto (the "Participants"),
and SunTrust Bank, as Servicer and (b) the Amended and Restated Subsidiary
Guaranty Agreement dated as October 11, 2000 , among the Guarantors and the
Servicer (as amended, supplemented or otherwise modified from time to time, the
"Guaranty Agreement"). Capitalized terms used herein and not defined herein
shall have the meanings assigned to such terms in the Loan Facility Agreement.
The Servicer, on behalf of the Participants, has agreed to make Loans
to certain franchisees of the Sponsor, pursuant to, and upon the terms and
subject to the conditions specified in, the Loan Facility Agreement. The
Guarantors have guaranteed such Loans and the other Obligations (as defined in
the Guaranty Agreement) of the Sponsor under the Loan Facility Agreement
pursuant to the Guaranty Agreement. The obligations of the Servicer, on behalf
of the Participants, to make Loans are conditioned on, among other things, the
execution and delivery by the Sponsor and the Guarantors of an agreement in the
form hereof.
Accordingly, the Sponsor, each Guarantor and the Servicer agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), the Sponsor agrees that in the event a payment shall be
made by any Guarantor under the Guaranty Agreement, the Sponsor shall indemnify
such Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment.
SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the event a
payment shall be made by any other Guarantor under the Guaranty Agreement and
such other Guarantor (the "Claiming Guarantor") shall not have been fully
indemnified by the Sponsor as provided in Section 1, the Contributing Guarantor
shall indemnify the Claiming Guarantor in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, in each case multiplied by a fraction of which the
numerator shall be the net worth of the Contributing Guarantor on the date
hereof and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto executed and
delivered by such Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights
of such Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 1 and 2
and all other rights of indemnity, contribution or subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in full
in cash of the Obligations. No failure on the part of the Sponsor or any
Guarantor to make the payments required under applicable law or otherwise shall
in any respect limit the obligations and liabilities of any Guarantor with
respect to its obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in full
force and effect so long as any Obligation is outstanding and has not been
indefeasibly paid in full in cash, and so long as the LC Exposure has not been
reduced to zero or any of the Commitments under the Loan Facility Agreement have
not been terminated, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Lender or any Guarantor upon the
bankruptcy or reorganization of the Sponsor, any Guarantor or otherwise.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of the
Servicer or any Guarantor to exercise, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy by the Servicer or
any Guarantor preclude any other or further exercise thereof or the exercise of
any other right, power or remedy. All remedies hereunder are cumulative and are
not exclusive of any other remedies provided by law. None of the Servicer and
the Guarantors shall be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Sponsor, the Guarantors and the Servicer, with the prior written
consent of the Required Participants (except as otherwise provided in the Loan
Facility Agreement).
SECTION 7. Notices. All communications and notices hereunder shall
be in writing and given as provided
in the Guaranty Agreement and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the parties that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns. Neither the Sponsor nor any Guarantor may assign or transfer any of its
rights or obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required Participants.
Notwithstanding the foregoing, at the time any Guarantor is released from its
obligations under the Guaranty Agreement in accordance with such Guaranty
Agreement and the Loan Facility Agreement, such Guarantor will cease to have any
rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All covenants and
agreements made by the Sponsor and each Guarantor herein and in the certificates
or other instruments prepared or delivered in connection with this Agreement or
the other Loan Documents shall be considered to have been relied upon by the
Servicer, the Participants and each Guarantor and shall survive the making by
the Servicer of the Loans and the issuance of the Letters of Credit, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loans or any other fee or amount payable under the Loan Facility
Agreement or this Agreement or under any of the other Operative Documents or
Loan Documents is outstanding and unpaid or the LC Exposure does not equal zero
and as long as the Commitments have not been terminated.
(b) In case one or more of the provisions contained in this Agreement
should be held invalid, illegal or unenforceable in any respect, no party hereto
shall be required to comply with such provision for so long as such provision is
held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby. The parties 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 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts) each of
which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Agreement shall be effective with respect to
any Guarantor when a counterpart bearing the signature of such Guarantor shall
have been delivered to the Servicer. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of interpretation
specified in Section 1.3 of the Loan
Facility Agreement shall be applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 6.9 of the Loan
Facility Agreement, each Subsidiary Loan Party of the Sponsor that was not in
existence or not such a Subsidiary Loan Party on the date of the Loan Facility
Agreement is required to enter into the Guaranty Agreement as Guarantor upon
becoming such a Subsidiary Loan Party. Upon the execution and delivery, after
the date hereof, by the Servicer and such Subsidiary of an instrument in the
form of Annex I hereto, such Subsidiary shall become a Guarantor hereunder with
the same force and effect as if originally named as a Guarantor hereunder. The
execution and delivery of any instrument adding an additional Guarantor as a
party to this Agreement shall not require the consent of any Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
appearing above.
RUBY TUESDAY, INC.
By:
Name:
Title:
EACH OF THE SUBSIDIARIES
LISTED ON
SCHEDULE I HERETO, as a Guarantor
By:
Name:
Title:
SUNTRUST BANK, as
Servicer
By:
Name:
Title:
SCHEDULE I
TO THE INDEMNITY AND CONTRIBUTION AGREEMENT
Guarantors
Name Address
ANNEX I TO
THE INDEMNITY AND CONTRIBUTION AGREEMENT
SUPPLEMENT NO. [ ] dated as of [ ], to the Indemnity and Contribution
Agreement dated as of October 11, 2000 (as the same may be amended, supplemented
or otherwise modified from time to time, the "Indemnity and Contribution
Agreement") among RUBY TUESDAY, INC., a Georgia corporation (the "Sponsor"),
each Subsidiary listed on Schedule I thereto (the "Guarantors") and SUNTRUST
BANK, a Georgia banking corporation, as Servicer (the "Servicer").
A. Reference is made to (a) the Amended and Restated Loan Facility
Agreement dated as of October 11, 2000 (as amended, supplemented or otherwise
modified from time to time, the "Loan Facility Agreement"), among the Sponsor,
the lenders from time to time party thereto (the "Participants") and SunTrust
Bank, as the Servicer and (b) the Subsidiary Guaranty Agreement dated as October
11, 2000, among the Guarantors and the Servicer (as amended, supplemented or
otherwise modified from time to time, the "Guaranty Agreement").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indemnity and
Contribution Agreement and the Loan Facility Agreement.
C. The Sponsor and the Guarantors have entered into the
Indemnity and Contribution 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 Subsidiary Loan Party that was
not in existence or not such a Subsidiary Loan Party on the date of the Loan
Facility Agreement is required to enter into the Guaranty Agreement as a
Guarantor upon becoming a Subsidiary Loan Party. Section 12 of the Indemnity and
Contribution Agreement provides that additional Subsidiaries may become
Guarantors under the Indemnity and Contribution Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned
Subsidiary (the "New Guarantor") is executing this Supplement in accordance with
the requirements of the Loan Facility Agreement to become a Guarantor under the
Indemnity and Contribution 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 12 of the Indemnity and
Contribution Agreement, the New Guarantor by its signature below becomes a
Guarantor under the Indemnity and Contribution Agreement with the same force and
effect as if originally named therein as a Guarantor and the New Guarantor
hereby agrees to all the terms and provisions of the Indemnity and Contribution
Agreement applicable to it as Guarantor thereunder. Each reference to a
Guarantor in the Indemnity and Contribution Agreement shall be deemed to include
the New Guarantor. The Indemnity and Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the Servicer
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. This Supplement may be executed in counterparts (and by
different parties hereto on different 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, when taken together, bear
the signature of the New Guarantor and the Servicer. 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 4. Except as expressly supplemented hereby, the Indemnity and
Contribution Agreement shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so long
as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity and Contribution Agreement shall not in any way be
affected or impaired. 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 7. All communications and notices hereunder shall be in writing
and given as provided in Section 7 of the Indemnity and Contribution Agreement.
All communications and notices hereunder to the New Guarantor shall be given to
it at the address set forth under its signature.
SECTION 8. The New Guarantor agrees to reimburse the Servicer for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the Servicer
actually incurred.
IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplement
to the Indemnity and Contribution Agreement as of the day and year first above
written.
[Name of New Guarantor]
By:
Name:
Title:
Address:
[SIGNATURE PAGE TO SUPPLEMENT TO INDEMNITY AND CONTRIBUTION AGREEMENT]
SCHEDULE I TO SUPPLEMENT NO. ____ TO THE INDEMNITY AND CONTRIBUTION AGREEMENT
Guarantors
Name Address
EXHIBIT D
FORM OF LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT dated as of ____________ ___, 20__, is
made between _______________________, [a Delaware limited liability corporation]
[a _______ limited partnership] ("Borrower") and SUNTRUST BANK ("Bank"), a
Georgia banking corporation having its principal office in Atlanta, Georgia.
W I T N E S S E T H:
WHEREAS, Borrower engages in the business of owning and operating one
or more restaurants under the name "Ruby Tuesday's" pursuant to a franchise
agreement with Ruby Tuesday, Inc., a Georgia corporation ("Sponsor");
WHEREAS, Borrower has requested and Bank has agreed to extend credit in
the form of loans and letters of credit to Borrower to provide working capital
for use in connection with its Ruby Tuesday franchise; and
WHEREAS, Borrower and Bank wish to enter into this Agreement to set
forth the terms and conditions of Bank's extension of credit to Borrower;
NOW THEREFORE, upon the terms and conditions hereinafter stated, and in
consideration of the mutual premises set forth above and other adequate
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 As used in this Agreement, the following terms shall have the
meanings set forth below (terms defined in the singular to have the same meaning
when used in the plural and vice versa):
"Advance" shall mean an advance of funds by Bank on behalf of Borrower
pursuant to the Master Note executed by Borrower.
"Agreement" means this Line of Credit Agreement and all exhibits,
riders and schedules at any time executed by the parties and made a part hereof
by reference, either as originally executed or as hereafter amended, modified or
supplemented from time to time.
"Applicable Law" means all laws, rules and regulations applicable to
the Person, conduct, transaction, covenant or Loan Documents in question,
including, without limitation, all applicable law and equitable principles; all
provisions of all applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies; and all orders, judgments and
decrees of all courts and arbitrators.
"Books and Records" means all of Borrower's books and records
evidencing or relating to its business, financial condition or any Collateral,
including but not limited to, ledgers, invoices, purchase orders, financial
statements, computer tapes and disks.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which commercial banks in Atlanta, Georgia are authorized by law to
close.
"Closing Date" means the date upon which the initial Advance with
respect to the Loan is funded.
"Closing Fee" shall have the meaning set forth in Section 2.5.
"Collateral" means any assets of the Borrower in which a Lien is
granted to the Bank to secure the Loan Indebtedness.
"Collateral Agreement" means any security agreement, mortgage, deed to
secure debt, deed of trust or other similar document granting a Lien on
Borrower's assets to the Bank to secure the Loan Indebtedness.
"Commitment Fee" shall have the meaning set forth in Section 2.6(a).
"Debt" shall mean, without duplication, (i) indebtedness for borrowed
money or for the deferred purchase price of property or services (other than
trade accounts payable on customary terms in the ordinary course of business),
(ii) financial obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) financial obligations as lessee under leases which
shall have been or should be, in accordance with GAAP, recorded as capital
leases, and (iv) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
financial obligations of others of the kinds referred to in clauses (i) through
(iii) above.
"Debt Service" means, for any period, the sum of (A) interest expense
paid in cash during such period plus (B) scheduled amortization of all Debt
(excluding Debt of the type described in clause (iv) of the definition of
"Debt") for such period, in each case measured for Borrower and its subsidiaries
on a consolidated basis in accordance with GAAP.
"Default Condition" means the occurrence of any event which, after
satisfaction of any requirement for the giving of notice or the lapse of time,
or both, would become an Event of Default.
"Default Rate" means the annual percentage interest rate applied to the
principal of the Loan not paid when due under the terms of the applicable Loan
Documents, which rate shall equal the sum of Prime Rate plus an additional
______ percent (__%) per annum.
"EBITDAR" means, for any period, (1) net income (loss) for such period,
plus, (2) to the extent subtracted in determining such net income (loss), (a)
interest expense for such period, (b) tax expense for such period, (c)
depreciation, amortization and other non-cash charges for such period, (d) Rents
for such period, (e) Non-recurring Expenses for such period, and (f) Excluded
Management Salary for such period, if any, minus (3) Non-recurring Income for
such period to the extent included in such net income (loss), in each case
measured for Borrower and its Subsidiaries on a consolidated basis
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning given to such term in Section
7 hereof.
"Excluded Management Salary" shall mean, for any period, (1) two-thirds
of the salary and expenses paid to the Franchisee Partner of the Borrower during
any period that the Borrower has only one Qualified Store and (2) one-third of
the salary and expenses paid to the Franchisee Partner of the Borrower during
any period that the Borrower has only two Qualified Stores.
"Fixed Charge Coverage Ratio" shall mean, as of any date, the ratio of
(i) EBITDAR to (ii) the sum of (A) Debt Service plus (B) Rents, in each case for
the immediately preceding four fiscal quarters ended on or closest to such date;
provided, however, that Sponsor may elect to exclude from the calculation of the
Fixed Charge Coverage Ratio the EBITDAR, the Debt Service and the Rents incurred
by Borrower and its subsidiaries that are attributable to any stores that are
not Qualified Stores; provided, further, however, that if the Sponsor at any
time includes any store that is not a Qualified Store in the calculation of the
Fixed Charge Coverage Ratio, such store shall thereafter be included in all
subsequent calculations of the Fixed Charge Coverage Ratio.
"Floating Rate" means a rate of interest per annum equal to the Prime
Rate plus an additional ____ percent (__%) per annum, such rate to change as and
when the Prime Rate changes.
"Franchise Documents" means, collectively, (i) the participation and
operating agreements for any Borrower that is a limited liability company or the
limited partnership agreement for any Borrower that is a limited partnership and
(ii) the written agreements between Sponsor and Borrower whereby Borrower is
authorized to establish one or more "Ruby Tuesday" franchises, including,
without limitation the Ruby Tuesday, Inc. Operating Agreements between Sponsor
and a Borrower and each other operating agreement and development agreement
related to each franchise location, all as amended or modified from time to
time.
"Franchisee Partner" means, collectively, the Person other than the
Sponsor that owns an equity interest in the Borrower and any Person who directly
or indirectly owns or controls such Person.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied.
"Guarantor" means each Person who now or hereafter guarantees payment
of the whole or any part of the Loan Indebtedness.
"Guaranty" means any guaranty executed by each of the partners,
shareholders, members and where not prohibited by law, the spouses of such
persons, of Borrower, or such other Persons as may be required by the Bank, in
favor of the Bank with respect to the obligations of Borrower with respect to
the Loan in the form provided by the Bank, as the same may be amended, restated
or supplemented from time to time.
"Letter of Credit" shall have the meaning set forth in Section 2.8
hereof.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.6(b) hereof.
"Letter of Credit Obligations" means the total face amount of all
outstanding Letters of Credit hereunder plus, without duplication, the aggregate
amount of all draws on Letters of Credit which have not been reimbursed by
Borrower, whether with Advances or otherwise.
"Lien" means any interest in property securing an obligation, whether
such interest is based on the common law, statute or contract, including,
without limitation, a security interest, lien or security title arising from a
security agreement, mortgage, security deed, trust deed, pledge or condition
sale, or a lease, consignment or bailment for security purposes.
"Loan" means, as of any date of determination, the aggregate amount of
Advances outstanding pursuant to the Loan Commitment from the Bank to Borrower
established pursuant to Section 2 hereof.
"Loan Commitment" means the committed amount of the loan facility
established by the Bank in favor of Borrower in the amount not exceeding, and
upon the terms described in, this Agreement.
"Loan Documents" means this Agreement, the Master Note, the Collateral
Agreements, any other documents relating to the Loan delivered by Borrower or
any guarantor or surety thereof to the Bank and any amendments thereto.
"Loan Indebtedness" means all amounts due and payable by Borrower under
the terms of the Loan Documents with respect to the Loan Commitment and the
Advances made thereunder, and Letters of Credit issued hereunder, including,
without limitation, Letter of Credit Obligations, outstanding principal, accrued
interest, fees, any late charges, and all reasonable costs and expenses of any
legal proceeding brought by the Bank to collect any of the foregoing (including
without limitation, reasonable attorneys' fees actually incurred).
"Loan Term" shall mean the period commencing on the date hereof and
ending on the Maturity Date.
"Master Note" means the note of Borrower, substantially in the form
attached hereto as Exhibit A, setting forth the obligation of Borrower to repay
the Loan.
"Maturity Date" shall have the meaning set forth in Section 2.3 hereof.
"Non-recurring Expenses" shall mean, for any period, all expenses of
the Borrower and its Subsidiaries for such period that are extraordinary and
generally not reflected in any prior period or reasonably anticipated to be
incurred in any subsequent period.
"Non-recurring Income" shall mean, for any period, all income of the
Borrower and its Subsidiaries for such period that is extraordinary and
generally not reflected in any prior period or reasonably anticipated to be
incurred in any subsequent period.
"Payment Date" means with respect to the Loan, the last day of each
calendar month, provided, however, if such day is not a Business Day, the next
succeeding Business Day.
"Permitted Liens" means (i) Liens in favor of Bank or Sponsor, (ii)
Liens for taxes not yet due or payable, (iii) statutory Liens securing the
claims of materialmen, mechanics, carriers and landlords for labor, materials,
supplies or rentals incurred in the ordinary course of Borrower's business, but
only if payment thereof is not at the time required and such Liens are at all
times junior in priority to the Liens in favor of Bank, (iv) Liens created
(whether in the past or in the future) in favor of lenders loaning money to
Borrower in connection with (y) the acquisition from Sponsor (or its successors,
assigns or affiliates) of existing Ruby Tuesday restaurants, or (z) the
development and/or construction or permanent financing of Ruby Tuesday
restaurants developed and operated pursuant to any Franchise Document between
Borrower, as franchisee, and the Sponsor (or its successors, assigns or
affiliates) as franchisor, (v) Liens shown on Exhibit B (if any), and (vi) Liens
hereafter consented to by Bank in writing.
"Person" means a corporation, an association, partnership, an
organization, a business, a business trust, a limited liability company, an
individual, a government or political subdivision thereof or a governmental
agency.
"Prime Rate" means the per annum rate of interest designated from time
to time by the Bank to be its prime rate, with any change in the rate of
interest resulting from a change in the Prime Rate to be effective as of the
opening of business of the Bank on the day of such change. The prime rate is one
of several reference rates used by the Bank and the Bank makes loans at rates
both higher and lower than the Prime Rate.
"Qualified Store" shall mean any store that has been open for at least
twelve months and was not acquired by Borrower from the Sponsor during the last
twelve months.
"Rents" means, for any period, the aggregate amount of all required
lease and rent payments for which the Borrower and its subsidiaries are directly
or indirectly liable (as lessee or as guarantor or other surety) under all
operating leases in effect at any time during such period, determined on a
consolidated basis in accordance with GAAP.
"Solvent" means, as to any Person, such Person (i) is able to pay, and
does pay, its debts as they mature and (ii) has a positive tangible net worth
determined in accordance with GAAP.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by Borrower.
1.2 Accounting terms used in this Agreement such as "net income
(loss)", "interest expense", "tax expense", "amortization," "depreciation," and
"tangible net worth" shall have the meaning normally given them by, and shall be
calculated (both as to amounts and classification of items) in accordance with,
GAAP. Any pronoun used herein shall be deemed to cover all genders. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations, and all references to any
instruments or agreements, including, without limitation, references to any of
the Loan Documents, shall include any and all modifications or amendments
thereto and any and all extensions or renewals thereof.
SECTION 2. LOAN COMMITMENT; MASTER NOTE.
2.1 Establishment of Loan Commitment. (a) Bank hereby establishes until
the Maturity Date (as hereinafter defined), a line of credit in favor of
Borrower in an amount equal to [$250,000 to $3,500,000] in aggregate principal
amount at any one time outstanding (the "Loan Commitment"), as reduced by the
aggregate amount of Letter of Credit Obligations from time to time outstanding.
Within the limits of the Loan Commitment, the Borrower may borrow, repay and
re-borrow; provided, however, that the Borrower may neither borrow nor re-borrow
should there exist a Default Condition or an Event of Default.
2.2 Advances. Borrower may request Advances pursuant to the Loan
Commitment by submitting a Request for Advance in the form attached hereto as
Exhibit B to the Bank, with a copy to Sponsor, on the Business Day prior to the
date of the requested Advance (which shall be a Business Day). Each Advance
shall be in a minimum amount of $25,000 and in integral multiples of $1,000.
Borrower may not request more than six (6) Advances in any calendar month. The
Borrower may not request Advances if as a result thereof, the amount of the Loan
would exceed the amount of the Loan Commitment. Borrower hereby irrevocably
appoints the Sponsor as the sole Person authorized to execute and deliver a
Request for Advance hereunder to the Bank. In furtherance of the foregoing,
Borrower hereby makes, constitutes and appoints Sponsor, and its agents and
designees, the true and lawful agents and attorneys-in-fact of Borrower, with
full power of substitution, to endorse its name and take all actions necessary
to request Advances hereunder and issue all Requests for Advances. The powers
granted herein are coupled with an interest and shall be irrevocable during the
term hereof.
2.3 Master Note; Repayment. The Loan Commitment and the Advances
outstanding thereunder shall be evidenced by a note executed by Borrower in
favor of Bank, substantially in the form of Exhibit A attached hereto (the
"Master Note"). The Master Note shall be dated as of the date hereof and shall
be payable to the order of Bank in the stated principal amount of the Loan
Commitment. All amounts outstanding pursuant to the Master Note shall mature on
the date (the "Maturity Date") that is earlier of (i) the occurrence of an Event
of Default in consequence of which Bank elects to accelerate the maturity and
payment of the Loan Indebtedness, or (iii) the second anniversary of the Closing
Date, as such date may be extended pursuant to Section 2.9 below, at which time
all of the Loan Indebtedness shall be due and payable in full. All payments of
principal of, or interest on, the Loan Documents and all other sums due under
the terms of the Loan and all payments with respect to Letter of Credit
Obligations shall be made in either (x) immediately available funds, or (y)
checks or money orders made payable to the Loan Operations section of the Bank
at its principal office in Atlanta, Georgia in accordance with written
instructions provided by the Bank.
2.4 Interest. (a) From and after the date hereof, interest shall accrue
on the unpaid principal amount of the Loan Indebtedness at the Floating Rate.
Interest shall be calculated daily and shall be computed on the basis of actual
days elapsed over the period of a 365-day year. Interest shall be due and
payable on each Payment Date. After the occurrence of an Event of Default and
during the continuance thereof, the outstanding principal balance of the Loan
shall bear interest at the Default Rate.
(b) In no contingency or event whatsoever shall the amount
paid or agreed to be paid to Bank for the use, forbearance or detention of money
advanced under this Agreement exceed the highest lawful rate permissible under
Applicable Law. It is the intent hereof that Borrower will not pay or contract
to pay, and that Bank not receive or contract to receive, directly or indirectly
in any manner whatsoever, interest in excess of that which may be charged to and
paid by Borrower under Applicable Law. All interest (and charges deemed
interest) paid or agreed to be paid to Bank shall, to the extent permitted by
Applicable Law, be amortized, pro rated, allocated and spread in equal parts
throughout the full term hereof until payment in full of the principal amount of
the Loan Indebtedness owing hereunder (including the period of any renewal or
extension hereof) so that interest on the principal amount of the Loan
Indebtedness outstanding hereunder for such full period will not exceed the
maximum amount permitted by Applicable Law.
2.5 Closing Fee. On the Closing Date, the Borrower shall pay to the
Bank in immediately available funds a closing fee (the "Closing Fee") equal
to___% of the Loan Commitment. The Closing Fee shall be fully earned and
nonrefundable as of the Closing Date.
2.6 Commitment Fee; Letter of Credit Fees. On each Payment
Date which is the last day of a
calendar quarter, commencing on ______________ and continuing throughout the
Loan Term, the Borrower shall pay to
the Bank, in arrears:
(a) A commitment fee (the "Commitment Fee") equal to _____% per annum
of the average daily unused amount of the Loan Commitment (with the express
understanding that Letters of Credit issued hereunder shall be deemed to be an
utilization of the Loan Commitment).
(b) A letter of credit fee (the "Letter of Credit Fee") equal to _____%
per annum multiplied by the daily average Letter of Credit Obligations
outstanding hereunder; provided that, if the aggregate Letter of Credit Fees
payable by Borrower with respect to any Letter of Credit issued hereunder do not
exceed $1,000 per annum, the Borrower shall be required to, on the Payment Date
which next follows the annual anniversary of the issuance of such Letter of
Credit, make an additional payment equal to $1,000 minus the Letter of Credit
Fees payable with respect to such Letter of Credit during the preceding year.
(c) The Commitment Fee and the Letter of Credit Fee shall be calculated
on the basis of the actual number of days elapsed in 360-day year.
2.7 Loan Prepayment. Borrower shall have the right to prepay
the Loan in whole or in part at any
time and from time to time. Partial prepayments of the Loan shall be in a
minimum amount of $25,000.
2.8 Letters of Credit. The Bank shall, from time to time upon request
of the Borrower prior to the Maturity Date, but subject to the terms and
conditions hereof, issue stand-by letters of credit in such form as requested by
the Borrower and approved by the Bank from time to time (the "Letters of
Credit"); provided, however, that the Borrower shall not be entitled to request
the issuance of any Letter of Credit if there exists a Default or an Event of
Default; and further provided that (i) no Letter of Credit shall be issued if,
as a result of such issuance, the aggregate amount of outstanding Letter of
Credit Obligations would exceed the lesser of (x) $250,000 and (y) the Loan
Commitment; (ii) no Letter of Credit shall have a maturity date longer than one
year from the date of issuance unless the Bank, in its sole discretion has
agreed to a longer term; (iii) no Letter of Credit shall have a maturity date
later than ten days prior to the Maturity Date; (iv) the Borrower shall give the
Bank at least five (5) days prior written notice of each request for a Letter of
Credit, which notice shall include the amount of the requested Letter of Credit,
the name and address of the beneficiary and a precise written description of the
terms of such Letter of Credit, together with the documents described in the
next paragraph; and (v) no Letter of Credit shall be requested unless the face
amount of such Letter of Credit does not exceed the unused portion of the Loan
Commitment. Borrower hereby irrevocably appoints the Sponsor as the sole Person
authorized to execute and deliver a request for a Letter of Credit and
application required hereunder to the Bank. In furtherance of the foregoing,
Borrower hereby makes, constitutes and appoints Sponsor, and its agents and
designees, the true and lawful agents and attorneys-in-fact of Borrower, with
full power of substitution, to endorse its name and take all actions necessary
to request Letters of Credit hereunder and issue all requests for Letters of
Credit and to execute and deliver all applications and other documents in
connection therewith. The powers granted herein are coupled with an interest and
shall be irrevocable during the term hereof.
In conjunction with any request for the issuance of a Letter of Credit,
the Borrower shall first deliver to Bank its form letter of credit application,
duly completed by a duly authorized officer of the Borrower. To the extent that
such letter of credit application's terms are inconsistent with the terms of
this Agreement, this Agreement controls. Upon delivery to the Bank of such
letter of credit application and other documents, instruments, or agreements
which the Bank may require from time to time hereafter in connection therewith,
each in form and substance satisfactory to the Bank, subject to the limitations
set forth in this Section 2.8, the Bank shall issue a Letter of Credit. Borrower
understands and agrees that the Bank may refuse upon any reasonable
circumstances to issue any Letter of Credit. Upon issuance, a Letter of Credit
shall be deemed to be an utilization of the Loan Commitment. Upon any draw upon
a Letter of Credit issued hereunder, the Borrower shall immediately reimburse
the Bank for such drawn amount and, in the event that the Borrower fails to
reimburse such amount on the same Business Day, the Bank shall be irrevocably
authorized to draw such amount upon the Loan Commitment at which point the
amount drawn shall be an Advance for all purposes hereunder, including without
limitation, the accrual of interest. Upon the occurrence of any Event of Default
pursuant to this Agreement, the Bank may require the Borrower to immediately
deposit with the Bank cash collateral in the amount of all outstanding Letter of
Credit Obligations pursuant to this Agreement.
2.9 Extension of Maturity Date. The Borrower, on and before ninety (90)
days prior to the Maturity Date, as it may from time to time exist, and with the
written consent of the Sponsor, request in writing that the Bank extend the
Maturity Date. Upon receipt of such notice and such consent, the Bank may, in
the exercise of its sole discretion, extend the Maturity Date for an additional
two-year period and will notify the Borrower and the Sponsor in writing of
whether the Bank will agree to such extension no later than sixty (60) days
prior to the Maturity Date. Failure of the Bank to respond to such request shall
be deemed to be an election by the Bank not to extend the Maturity Date.
SECTION 3. CONDITIONS PRECEDENT.
Borrower shall deliver and Bank shall have received the following
documents, each in form and substance satisfactory to Bank, as conditions
precedent of the initial Advance comprising the Loan or the initial Letter of
Credit issued hereunder, as the case may be:
(a) a validly executed copy of this Agreement;
(b) the validly executed Master Note;
(c) a validly executed copy of a Guaranty of each partner,
member or majority stockholder of Borrower, and to the extent not
prohibited by Applicable Law, the spouse of such Person;
[(d) a validly executed Collateral Agreement;
(e) a validly executed Landlord's Waiver for each
location of Borrower where the
Collateral is located;
(f) validly executed Uniform Commercial Code Financing
Statements suitable to enable Bank to perfect the security interest
granted to it under the Collateral Agreement;]
(g) evidence of Borrower's good standing;
(h) a validly executed Officer's Certificate or such
other evidence acceptable to Bank
evidencing Borrower's authorization of the Loan and incumbency;
(i) a Certificate of Insurance from an insurer
acceptable to Bank naming the Bank as loss
payee/additional insured as follows:
SunTrust Bank
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ [30302]
Center Code 1923
Attention: Strategic Partners Group; and
(k) a validly executed Request for Advance, or a request
for issuance of
a Letter of Credit, as the case may be.
In addition, as conditions precedent of the initial Advance comprising
the Loan or the initial Letter of Credit issued hereunder, as the case
may be, (i) the Bank shall have satisfied itself that there are no
Liens on any of the Collateral, other than Permitted Liens, (ii) the
Bank shall be satisfied that all corporate or LLC proceedings necessary
for the authorization of the Loan Commitment and the execution,
delivery and performance of the Loan Documents, shall have been taken,
(iii) the Bank shall have received any other documents that it deems
reasonably necessary or advisable and (iv) the Bank shall have received
payment of the Closing Fee and, if required by the Bank at closing, (A)
an amount equal to Bank's out-of-pocket expenses and fees and expenses
of Bank's counsel incurred in connection with the negotiation,
documentation and closing of the transactions contemplated hereby, and
(B) an amount sufficient in the opinion of the Bank to reimburse the
Bank for all taxes, collateral filing fees and other fees and charges
payable on account of the execution, delivery or recording of any of
the Loan Documents or any loans or Letters of Credit outstanding
hereunder.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce Bank to enter into this Agreement, Borrower represents and
warrants as follows:
4.1 Organization and Qualification of Borrower. Borrower is [limited
liability company duly organized, validly existing and in good standing]
[limited partnership duly organized, validly existing and in good standing]
under the laws of the state shown on the first page hereof, and is qualified to
do business in all jurisdictions where the character of its properties or the
nature of its activities make such qualification necessary.
4.2 Trade Names, Subsidiaries and Location of Assets. Exhibit C
attached hereto and made a part hereof fully and accurately discloses any legal
name, trade name or style ever used by Borrower, any Subsidiaries owned by
Borrower, and each office, other place of business or location of assets of
Borrower.
4.3 Corporate or Other Authority; No Violation of Other Agreements. The
execution, delivery and performance by Borrower of this Agreement and the other
Loan Documents have been duly authorized by all necessary action on the part of
Borrower and do not and will not (i) violate any provision of Borrower's
[Participation and Operating Agreement, Certificate of Formation] [partnership
agreement] or other organization documents or any Applicable Law, or (ii) be in
conflict with, result in a breach of, or constitute (following notice or lapse
of time or both) a default under any Franchise Document or any other agreement
to which Borrower is a party or by which Borrower or any of its property is
bound.
4.4 Enforceability. This Agreement and each of the other Loan Documents
create legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms.
4.5 Entire Agreement. The Master Note and accompanying Loan Documents
executed in connection with the Loan and delivered to Bank are the only
contracts evidencing the transaction described herein and constitute the entire
agreement of the parties hereto with respect to the transaction.
4.6 Genuineness of Signatures. The Master Note and each accompanying
Loan Document executed in connection the such Loan is genuine and all
signatures, names, amounts and other facts and statements therein and thereon
are true and correct.
4.7 Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of Borrower, threatened before any
court or administrative or governmental agency that may, individually or
collectively, adversely affect the financial condition or business operations of
Borrower.
4.8 Solvency. Borrower is now and will remain Solvent.
4.9 Taxes. All federal, state and local tax returns have been duly
filed, and all taxes, assessments and withholdings shown on such returns or
billed to Borrower have been paid, and Borrower maintains adequate reserves and
accruals in respect of all such federal, state and other taxes, assessments and
withholdings. There are no unpaid assessments pending against Borrower for any
taxes or withholdings, and Borrower knows of no basis therefor.
4.10 Compliance with Laws. Borrower has duly complied with in all
material respects, and its properties and business operations are in compliance
in all material respects with, the provisions of all Applicable Laws, including,
without limitation ERISA, the Fair Labor Standards Act and OSHA. Borrower
possesses all permits, franchises, licenses, trademark rights, trade names,
patents and other authorizations reasonably necessary to enable it to conduct
its business operations as now conducted, and no filing with (other than
documents relating to the Collateral if the Loan is secured), and no consent,
authorization, order or license of, any Person is necessary in connection with
the execution or performance of this Agreement or the other Loan Documents.
4.11 No Default. No Default Condition or Event of Default exists.
4.12 Use of Proceeds. None of the proceeds of any Advances by Bank have
been or will be used to purchase or carry (or to satisfy or refinance any
indebtedness incurred to purchase or carry) any "margin stock" (as defined in
Regulation U of the Federal Reserve Board). Advances shall be made for the sole
purpose of working capital needs of Borrower in connection with the operation of
a business, including, without limitation, the establishment of new locations,
in the form of one or more Ruby Tuesday restaurants.
Each submission of a Request for an Advance or a request for the issuance of a
Letter of Credit made by Borrower pursuant to this Agreement or any other Loan
Document shall constitute an automatic representation and warranty by Borrower
to Bank that there does not then exist any Default Condition or Event of Default
and a reaffirmation as of the date of said request that all representations and
warranties of Borrower contained in this Agreement and the other Loan Documents
are true in all material respects. All representations and warranties contained
in this Agreement or in any of the other Loan Documents shall survive the
execution, delivery and acceptance hereof by Bank and the closing of the
transactions described herein.
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS.
During the term of this Agreement, and thereafter for so long as there
are is any outstanding Loan Indebtedness to Bank, Borrower covenants that,
unless otherwise consented to by Bank in writing, it shall:
5.1 Financial Reports. Deliver to Bank or cause to be delivered
to Bank:
(i) within 90 days after the end of each fiscal year a balance
sheet and income statement of Borrower as of the end of such year,
prepared by Sponsor or by such firm of independent public accountants
as may be designated by Borrower and be satisfactory to Bank, and
certified as prepared in accordance with GAAP and, to the extent
delivered to Sponsor, audited financial statements for such period;
(ii) within 45 days after the end of each fiscal quarter a
balance sheet and income statement of Borrower as of the end of such
quarter, prepared by Sponsor and certified as prepared in accordance
with GAAP (except for the year-end adjustments); and
(iii) with reasonable promptness, all reports by Borrower to
its shareholders or partners and such other information as Bank may
reasonably request from time to time.
5.2 Books and Records. Maintain its Books and Records and accounts in
accordance with GAAP and permit any Person designated by Bank or Sponsor to
visit Borrower's premises, inspect any of the Collateral or any of the Books and
Records, and to make copies thereof and take extracts therefrom, and to discuss
Borrower's financial affairs with Borrower's financial officers and accountants
subject in each instance to reasonable prior written notice to Borrower, except
in the event of a default by Borrower, in which case notice shall not be
required.
5.3 Taxes. Promptly file all tax returns and pay and discharge all
taxes, assessments, withholdings and other governmental charges imposed upon it,
its income or profits, or upon any property belonging to it, prior to the date
on which penalties attach thereto.
5.4 Notices to Bank. Promptly notify Bank in writing of (i) the
occurrence of any Default Condition or Event of Default; (ii) any pending or
threatened litigation claiming damages in excess of $100,000 or seeking relief
that, if granted, would adversely affect the financial condition or business
operations of Borrower; and (iii) any asserted violation by Borrower of or
demand for compliance by Borrower with any Applicable Law.
5.5 Compliance with Applicable Laws. Comply in all material
respects with all Applicable Laws,
including, without limitation, ERISA, the Fair Labor Standards Act and OSHA.
5.6 Existence. Maintain its separate corporate or partnership existence
and all rights, privileges and franchises in connection therewith, and maintain
its qualification and good standing in all jurisdictions where the failure to do
so could have a material adverse effect upon its ability to repay the Loan
Indebtedness.
5.7 Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio
of not less than 1.2 to 1.0. This ratio will be calculated as of the last day of
each fiscal quarter of the Borrower based upon the preceding twelve-month
period, commencing on the last day of the first fiscal quarter in which the
Borrower or its Subsidiaries own at least one Qualified Store.
SECTION 6. NEGATIVE COVENANTS.
During the term of this Agreement, and thereafter for so long as there
are is Loan Indebtedness outstanding, Borrower covenants that unless Bank has
first consented thereto in writing, it will not:
6.1 Merger; Disposal or Moving of Collateral. Merge or consolidate with
or acquire any substantial portion of the assets or stock of any Person; sell,
lease, transfer or otherwise dispose of all or any portion of its properties
(including any of the Collateral), except sales or rentals of Inventory in the
ordinary course of business; or, without having given Bank at least 60 days
prior written notice and having executed such instruments and agreements as Bank
shall require, change its name, the location of any Collateral or the location
of its chief executive office, principal place of business or the office at
which it maintains its Books and Records.
6.2 Liens. Grant or suffer to exist any Lien upon any of its
assets except Permitted Liens.
6.3 Guarantees. Guarantee, assume, endorse or otherwise become
contingently liable for any obligation or indebtedness of any Person, either
directly or indirectly, exceeding $100,000 not existing as of this date, except
by endorsement of items of payment for deposit or collection or guarantees of
operating leases in the ordinary course of business and except as set forth on
Exhibit C attached hereto.
6.4 Loans. Make loans or advances of money to or investments in any
Person, or (except in the ordinary course of business and on fair and reasonable
terms) engage in any transaction with a subsidiary or affiliate.
SECTION 7. EVENTS OF DEFAULT.
7.1 List of Events of Default. The occurrence of any one or
more of the following conditions or
events shall constitute an "Event of Default":
(a) Borrower shall fail to pay any principal amount of the
Loan Indebtedness or any other amount of the Loan Indebtedness on the
due date thereof (whether due at stated maturity, on demand, upon
acceleration or otherwise);
(b) any warranty, representation, or other statement by
Borrower herein or in any instrument, certificate or financial
statement furnished in compliance herewith proves to have been false or
misleading in any material respect when made;
(c) Borrower shall fail or neglect to perform, keep or observe
any covenant contained in this Agreement, any of the other Loan
Documents or any other agreement now or hereafter entered into with
Bank;
(d) Borrower or any Guarantor shall fail to pay when due any
amount owed to any creditor (other than Bank) or any Guarantor shall
fail to pay or perform any liability or obligation in accordance with
the terms of any agreement with Bank;
(e) Borrower or any Guarantor shall cease to be Solvent, shall
die or become incompetent, shall suffer the appointment of a receiver,
trustee, custodian or similar fiduciary, shall make an assignment for
the benefit of creditors, or shall make an offer of settlement or
composition to their respective unsecured creditors generally;
(f) any petition for an order for relief shall be filed by or
against Borrower or any Guarantor under the Bankruptcy Code (if against
Borrower or any Guarantor, the continuation of such proceeding for more
than 30 days);
(g) any judgment, writ of attachment or similar process is
entered or filed against Borrower or any Guarantor or any of Borrower's
or any Guarantor's property and such judgment, writ of attachment or
process is not dismissed, satisfied or vacated within ten (10) days
thereafter or results in the creation or imposition of any Lien upon
any Collateral that is not a Permitted Lien;
(h) Any Guarantor shall revoke or attempt to revoke the
guaranty signed by such Guarantor
or shall repudiate such Guarantor's liability thereunder;
(i) any Person, or group of Persons (whether or not related)
other than Sponsor or one of its affiliates, shall have or obtain legal
or beneficial ownership of a majority of the outstanding voting
securities or rights of Borrower, other than any Person, or group of
Persons, that has such majority ownership on the date of execution of
this Agreement as shown on Exhibit C;
(j) any of Borrower's Franchise Documents shall terminate or
be revoked for any reason, or Borrower shall have received notice from
the Sponsor that a default has occurred under any Franchise Documents;
or
(k) Sponsor shall default in its obligations to the Bank
pursuant to any agreement between the Bank and Sponsor and Sponsor
shall not purchase the Loan, Letters of Credit and Loan Commitment
hereunder within five (5) Business Days.
7.2 Advances and Letters of Credit. In no event shall the Bank have any
obligation to make an Advance pursuant to the Loan Commitment or issue a Letter
of Credit hereunder if there exists a Default Condition or an Event of Default.
SECTION 8. REMEDIES.
All of the Loan Indebtedness shall become immediately due and payable
and the Loan Commitment shall be deemed immediately terminated (without notice
to or demand upon Borrower) upon the occurrence of an Event of Default under
Section 7(f) of this Agreement; and upon and after the occurrence of any other
Event of Default, Bank shall have the right to terminate immediately the Loan
Commitment and to declare the entire unpaid principal balance of and accrued
interest with respect to the Loan Indebtedness to be, and the same shall
thereupon become, immediately due and payable upon receipt by Borrower of
written notice and demand or, in the case of all outstanding Letter of Credit
Obligations, immediately subject to the cash collateral requirements of Section
2.8 hereof. From and after the date on which the Loan Indebtedness becomes
automatically due and payable or is declared by Bank to be due and payable as
aforesaid, Bank shall have and may exercise from time to time any and all rights
and remedies afforded to a secured party or otherwise under any Loan Document or
Applicable Law. If the Loan Indebtedness is collected by or through an attorney
at law, Bank shall be entitled to collect reasonable attorneys' fees and court
costs from Borrower.
SECTION 9. WAIVERS.
Borrower waives notice of Bank's acceptance hereof. Borrower hereby
waives any requirement on the part of Bank to post any bond or other security as
a condition to Bank's right to obtain an immediate writ of possession with
respect to any Collateral. Bank shall not be deemed to have waived any of its
rights upon or remedies hereunder or any Event of Default unless such waiver be
in writing and signed by Bank. No delay or omission on the part of Bank in
exercising any right shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right on any future occasion.
SECTION 10. NOTICES.
All notices and demands to or upon a party hereto shall be in writing
and shall be sent by certified mail, return receipt requested, personal delivery
against receipt or by telecopier or other facsimile transmission add shall be
deemed to have been validly served, given or delivered when delivered against
receipt or one Business Day after deposit in the mail, postage prepaid, or, in
the case of facsimile transmission, when indicated by verification receipt
printed by the sending machine as having been received at the office of the
noticed party, addressed in each case as follows:
If to Borrower: _________________________
=========================
Attention _________________
Telecopier No.:_____________
If to Bank: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Center No. 1923
Telecopier No.:(▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice
given in accordance with this Section.
SECTION 11. INDEMNIFICATION.
Borrower hereby agrees to indemnify Bank and hold Bank harmless from
and against any liability, loss, damage, suit, action or proceeding ever
suffered or incurred by Bank as the result of Borrower's failure to observe,
perform or discharge Borrower's duties hereunder or the issuance of any Letters
of Credit hereunder. Without limiting the generality of the foregoing, this
indemnity shall extend to any claims asserted against Bank by any Person under
any environmental laws. If any taxes, collateral filing fees or other fees or
charges shall be payable by Borrower or Bank on account of the execution,
delivery or recording of any of the Loan Documents or any loans or Letters of
Credit outstanding hereunder, Borrower will pay (or reimburse Bank's payment of)
all such taxes, collateral filing fees or other fees or charges, including any
applicable interests and penalties, and will indemnify and hold Bank harmless
from and against liability in connection therewith. The indemnity obligations of
Borrower under this Section shall survive the payment in full of the Loan
Indebtedness.
SECTION 12. ENTIRE AGREEMENT; AMENDMENT.
This Agreement and the other Loan Documents embody the entire
understanding and agreement between the parties hereto with respect to the
subject matter hereof, and this Agreement may not be modified or amended except
by an agreement in writing signed by Borrower and Bank.
SECTION 13. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns; but Borrower shall
not assign this Agreement or any right or benefit hereunder to any Person. The
Bank may assign its rights and obligations hereunder at any time and to any
Person, including without limitation, to Sponsor.
SECTION 14. GOVERNING LAW.
THIS AGREEMENT AND ALL RIGHTS AND OBLIGATIONS HEREUNDER, INCLUDING MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF GEORGIA (WITHOUT REGARD TO THE LAWS OF CONFLICTS THEREOF) AND IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT.
SECTION 15. MISCELLANEOUS.
Time is of the essence of this Agreement. Bank reserves the right to
participate, sell or assign the Loan made hereunder and provide any participant
or assignee all information in Bank's possession regarding Borrower, its
business and the Collateral. Borrower shall reimburse Bank for Bank's
out-of-pocket expenses and for the fees and expenses and disbursements of Bank's
counsel in connection with the negotiation, documentation and closing of the
transactions contemplated hereby, and Borrower will pay all expenses incurred by
Borrower in connection with the transactions. The Section headings are for
convenience only and shall not limit or otherwise affect any of the terms
hereof.
SECTION 16. RELATIONS WITH SPONSOR.
Borrower recognizes and acknowledges that the Bank has made the Loan
Commitment available to Borrower hereunder at the behest of, as an accommodation
to, and based upon the credit support of, Sponsor. Accordingly, Borrower agrees
that from time to time the Bank may release to Sponsor such information about
Borrower and the Loan as Sponsor may request, and the Bank may condition its
agreement to any waiver, modification or amendment on the prior written consent
of Sponsor. Borrower further agrees that upon the occurrence of an Event of
Default hereunder, the Bank may notify Sponsor of such Event of Default prior to
notifying Borrower thereof, and the Bank shall not be liable to Borrower for
failure to give simultaneous notice to Borrower. Borrower further agrees that
the Bank shall not be liable to Borrower as a result of any information or
document obtained by Bank regarding Borrower which is shared by Bank with
Sponsor or any action taken under the Loan Documents based upon instructions
from the Sponsor.
In addition, the Borrower acknowledges and agrees that to the extent
that the Sponsor makes any payments to the Bank as a result of the credit
support that Sponsor has provided to the Bank with respect to the Borrower, the
Sponsor will be subrogated to the rights of the Bank pursuant to this Agreement
and all related Loan Documents and may exercise and enforce in its own right the
rights and remedies of the Bank hereunder and thereunder to the fullest extent
provided by law or at equity or by the terms of the Agreement and related Loan
Documents.
WITNESS the hand and seal of the parties hereto on the date first above
written.
Accepted in Atlanta, Georgia:
BORROWER:
By:
Title:
Attest:
Secretary
[CORPORATE SEAL]
BANK:
SUNTRUST BANK
By:
Title:
EXHIBIT A
MASTER NOTE
[date] [$]
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned, ____________, a [Delaware
limited liability company] [a ________ limited partnership] (the "Borrower"),
promises to pay to the order of SUNTRUST BANK, a Georgia banking corporation
(the "Bank") at Bank's principal office in Atlanta, Georgia, or at such other
place as the holder hereof may designate by notice in writing to Borrower, in
immediately available funds in lawful money of the United States of America, on
the Maturity Date, as set forth in that certain Line of Credit Agreement, dated
as of even date herewith (the "Agreement") by and between the Borrower and Bank,
the lesser of (i) principal sum of [TWO HUNDRED FIFTY MILLION to THREE MILLION
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($250,000 to $3,500,000.00)], or (ii)
so much thereof as shall have been from time to time disbursed hereunder in
accordance with the Agreement and not theretofore repaid, as shown on the grid
schedule attached hereto (the "Grid Schedule").
In addition to principal, Borrower agrees to pay interest on
the principal amounts disbursed hereunder from time to time from the date of
each disbursement until paid at such rates of interest per annum and upon such
dates as provided for in the Agreement. Interest shall accrue on the outstanding
principal balance from the date hereof up to and through the date on which all
principal and interest hereunder is paid in full, and shall be computed on the
basis of the actual number of days elapsed in a 365-day year. Such interest is
to be paid to Bank at its address set forth above. Any principal amount due
under this Note that is not paid on the due date therefor whether on the
Maturity Date, or resulting from the acceleration of maturity upon the
occurrence of an Event of Default (as defined in the Agreement), shall bear
interest from the date due until payment in full at the Default Rate, as such
term is defined in the Agreement.
This Master Note ("Note") evidences a loan incurred pursuant
to the terms and conditions of the Agreement to which reference is hereby made
for a full and complete description of such terms and conditions, including,
without limitation, provisions for the acceleration of the maturity hereof upon
the existence or occurrence of certain conditions or events, and the terms of
any permitted prepayments hereof. All capitalized terms used in this Note shall
have the same meanings as set forth in the Agreement.
Upon the existence or occurrence of any Event of Default, the
principal and all accrued interest hereof shall automatically become, or may be
declared, due and payable in the manner and with the effect provided in the
Agreement.
22
Bank shall at all times have a right of set-off against any
deposit balances of Borrower in the possession of the Bank and the Bank may
apply the same against payment of this Note or any other indebtedness of
Borrower to the Bank. The payment of any indebtedness evidenced by this Note
prior to the Maturity Date shall not affect the enforceability of this Note as
to any future, different or other indebtedness incurred hereunder by the
Borrower. In the event the indebtedness evidenced by this Note is collected by
legal action or through an attorney-at-law, the Bank shall be entitled to
recover from Borrower all costs of collection, including, without limitation,
reasonable attorneys' fees if collected by or through an attorney-at-law.
Borrower acknowledges that the actual crediting of the amount
of any disbursement under the Agreement to an account of Borrower or recording
such amount in the Grid Schedule shall, in the absence of manifest error,
constitute presumptive evidence of such disbursement and that such Advance was
made and borrowed under the Agreement. Such account records or Grid Schedule
shall constitute, in the absence of manifest error, presumptive evidence of
principal amounts outstanding and the payments made under the Agreement at any
time and from time to time, provided that the failure of Bank to record on the
Grid Schedule or in such account the type or amount of any Advance shall not
affect the obligation of the undersigned to repay such amount actually advanced
together with interest thereon in accordance with this Note and the Agreement.
Failure or forbearance of Bank to exercise any right
hereunder, or otherwise granted by the Agreement or by law, shall not affect or
release the liability of Borrower hereunder, and shall not constitute a waiver
of such right unless so stated by Bank in writing. THIS NOTE SHALL BE DEEMED TO
BE MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY, THE
INTERNAL LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THE CONFLICT OF LAW
PROVISIONS THEREOF). Time is of the essence of this Note.
PRESENTMENT FOR PAYMENT, NOTICE OF DISHONOR AND PROTEST ARE HEREBY WAIVED.
Executed under hand and seal of the Borrower as of the day and
year first above written.
[NAME OF BORROWER]
By:________________________
Name:
Title:
Attest:____________________
Name:
Title:
[CORPORATE SEAL]
GRID SCHEDULE
ADVANCES
Unpaid Principal
Bearing Interest
Amount of Amount of at the Above- Notation
Date Advance Advance Repaid Reference Rate Made By
$---------- $---------- $----------
EXHIBIT B
SunTrust Bank
Ruby Tuesday, Inc. Franchisee Loan Program
REQUEST FOR ADVANCE
SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. [Date]
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Strategic Partners
Center 1923
Re: Name of Borrower: _________________________
Closing Date: _________________________
Requested Advance: _________________________
Ladies and Gentlemen:
The above-referenced Borrower hereby requests an Advance in the amount
of $________________________ pursuant to the Line of Credit Agreement and
Promissory Note dated as of the date set forth above, such Advance to be made on
_____________________.
The Borrower hereby directs the Bank to fund such Advance in accordance
with the following wiring instructions:
Name of Bank: _________________________
City, State: _________________________
ABA No. _________________________
Account No. _________________________
Account Name:________________________
The Borrower represents and warrants to the Bank that no Event of
Default exists pursuant to the Line of Credit Agreement and Promissory Note
referenced above and that all representations and warranties set forth in said
Line of Credit Agreement are true and correct on the date hereof.
[Name of Borrower]
By:________________________
Title:_______________________]
Fax to ▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and to Ruby Tuesday, Inc. at _____________
A. Permitted Liens
The following described Liens are Permitted Liens (if none, so state):
Name of Lien Holder Date of Recording Collateral
B. Trade Names and Styles
The following are the only trade names or trade styles ever used by
Borrower (if none, so state):
C. Subsidiaries
The following are all of the subsidiaries owned by Borrower (if none,
so state):
2
D. Business Locations
The following are all of the locations where Borrower has an office or
other place of business or owns assets:
E. Stockholders/Members
The following are all of the stockholders or members of Borrower and
the percentage of Borrower's equity owned by each:
Stockholder's Name Percentage of Equity Owned
F. Guarantees
EXHIBIT E
FORM OF PARTICIPATION CERTIFICATE
SERVICER: SunTrust Bank CERTIFICATE NO. _____
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Center Code 1923
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DATE: October __, 2000
This is to certify that SunTrust Bank ("Servicer") has sold to
_________________________ ("Participant") and Participant has purchased from
Servicer an undivided ______ percent (_%) ownership interest in (i) the
Commitment, (ii) the Loan Commitments, (iii) the Loans, (iv) the Collateral, (v)
all rights against any guarantor of any Loan, including the Sponsor, and (vi)
all right, title and interest to any payment or right to receive payment with
respect to the foregoing (collectively, the "Participant's Interest").
Notwithstanding the foregoing, each Participant's right to receive payments of
interest, commitments fees or other fees with respect to the Commitment, the
Loan Commitments and the Loans shall not exceed the amounts which such
Participant is entitled to receive pursuant to the terms of the Loan Facility
Agreement referenced below.
This Certificate is issued pursuant to the terms and
conditions of an Amended and Restated Loan Facility Agreement and Guaranty dated
as of October __, 2000 by and among Servicer, Participant, Ruby Tuesday, Inc.
and certain other financial institutions named therein and from time to time a
party thereto (as hereafter amended or modified, the "Loan Facility Agreement").
Reference is made to said Loan Facility Agreement for the terms and conditions
of the participation evidenced hereby. All terms used in this Certificate shall
have the same meanings as set forth in said Loan Facility Agreement.
This Certificate is neither transferable nor negotiable.
SUNTRUST BANK,
as Servicer
By:___________________________________
Name:______________________________
Title:_______________________________
EXHIBIT F
FORM OF MONTHLY SERVICING REPORT
Ruby Tuesday, Inc. Franchisee Loan Program
Payment Date _________________
From: SunTrust Bank
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Loans Outstanding As Of Payment Date $_________________
Total Unfunded Commitments To Borrowers
As Of Payment Date $_________________
Amount of Loans Repurchased By Sponsor
During Preceding Calculation Period $_________________
Past Due Loans _____ See attached past due report
_____ None for this period
Amount of Letter of Credit Outstandings $__________________
