RYAN'S FAMILY STEAK HOUSES, INC.
AMENDMENT AGREEMENT
As of July 25, 2003
TO EACH OF THE CURRENT HOLDERS
NAMED IN ANNEX 1 HERETO
Ladies and Gentlemen:
Ryan's Family Steak Houses, Inc., a South Carolina
corporation (hereinafter, the "Company"), together with its
successors and assigns, agrees with you as follows:
1. PRELIMINARY STATEMENTS.
1.1. Note Issuance, etc.
The Company issued and sold Seventy Five Million Dollars
($75,000,000) in aggregate principal amount of its 9.02% Senior
Notes due January 28, 2008 (as they may be amended, restated or
otherwise modified from time to time, the "Notes") pursuant to
separate Note Purchase Agreements, each dated as of January 28,
2000, between the Company and the purchasers identified on
Schedule A thereto, (as in effect immediately prior to the
effectiveness of the amendments provided for by this Amendment
Agreement (this "Amendment Agreement"), the "Existing Note
Agreements", and as amended by this Amendment Agreement, the
"Note Agreements").
The register for the registration and transfer of the Notes
indicates that the Persons named in Annex 1 hereto (the "Current
Holders") are currently the holders of the entire outstanding
principal amount of the Notes.
2. DEFINED TERMS.
Capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Existing Note
Agreements.
3. AMENDMENTS TO EXISTING NOTE AGREEMENTS.
The Company has requested that the Current Holders consent
to the amendment of certain provisions of the Existing Note
Agreements in the manner specified in Exhibit A hereto
(collectively, the "Amendments"). Subject to the satisfaction by
the Company of the terms and conditions hereof, the Current
Holders hereby agree to the Company's request.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce you to enter into this Amendment Agreement and to
consent to the Amendments, the Company represents and warrants as
follows:
4.1. Reaffirmation of Representations and Warranties.
Except as noted on Schedule 4.1, all of the representations
and warranties contained in Section 5 of the Existing Note
Agreements are true in all material respects with the same force
and effect as if made by the Company on the date hereof.
4.2. Organization, Power and Authority, etc.
The Company is a corporation duly incorporated and validly
existing in good standing under the laws of South Carolina and
has all requisite corporate power and authority to enter into and
perform its obligations under this Amendment Agreement.
4.3. Legal Validity.
The execution and delivery of this Amendment Agreement by
the Company and compliance by the Company with its obligations
hereunder and under the Note Agreements: (a) are within the
corporate powers of the Company; and (b) are legal and do not
conflict with, result in any breach of, constitute a default
under, or result in the creation of any Lien upon any property of
the Company under the provisions of: (i) any charter instrument
or bylaw to which the Company is a party or by which the Company
or any of its property may be bound; (ii) any order, judgment,
decree or ruling of any court, arbitrator or Governmental
Authority applicable to either the Company or its property; or
(iii) any agreement or instrument to which the Company is a party
or by which the Company or any of its property may be bound or
any statute or other rule or regulation of any governmental
authority applicable to the Company or its property, except where
such conflict, breach or default could not reasonably be expected
to have a Material Adverse Effect.
This Amendment Agreement has been duly authorized by all
necessary action on the part of the Company, has been executed
and delivered by a duly authorized officer of the Company, and
each of the Amendment Agreement and the Note Agreements
constitutes a legal, valid and binding obligation of the Company,
enforceable in accordance with its respective terms, except that
enforceability may be limited by applicable bankruptcy,
reorganization, arrangement, insolvency, moratorium, or other
similar laws affecting the enforceability of creditors' rights
generally and subject to the availability of equitable remedies.
4.4. No Defaults.
After giving effect to the Amendments set forth in this
Amendment Agreement, no Default or Event of Default will exist.
5. EFFECTIVENESS OF AMENDMENTS.
The Amendments shall become effective as of July 25, 2003
(the "Effective Date") upon (a) receipt by the Company of the
written consent of the Required Holders, (b) the Intercreditor
Agreement shall have been amended on terms satisfactory to
Current Holders, (c) receipt by the Current Holders of an
amendment to the Pledge Agreement in the form attached hereto as
Exhibit B, and (d) payment of the fees and expenses of Bingham
McCutchen LLP pursuant to an estimated invoice delivered at least
one Business Day prior to the Effective Date.
6. EXPENSES.
Whether or not the Amendments become effective, the Company
will promptly (and in any event on the Effective Date as provided
in Section 5 and otherwise within thirty (30) days of receiving
any statement or invoice therefor) pay all fees, expenses and
costs relating to this Amendment Agreement, including, but not
limited to, the reasonable fees of your special counsel, Bingham
McCutchen LLP, incurred in connection with the preparation,
negotiation and delivery of this Amendment Agreement and any
other documents related thereto. Nothing in this Section shall
limit the Company's obligations pursuant to Section 15.1 of the
Existing Note Agreements.
7. MISCELLANEOUS.
7.1. Part of Existing Note Agreements; Future References, etc.
This Amendment Agreement shall be construed in
connection with and as a part of the Existing Note
Agreements and, except as expressly amended by this
Amendment Agreement, all terms, conditions and covenants
contained in the Existing Note Agreements are hereby
ratified and shall be and remain in full force and effect.
Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and
delivery of this Amendment Agreement may refer to the
Existing Note Agreements without making specific reference
to this Amendment Agreement, but nevertheless all such
references shall include this Amendment Agreement unless the
context otherwise requires.
7.2. Pledge Agreement Amendment
By their execution below, each of the Holders consent
to the Amendment to the Pledge Agreement in the form
attached hereto as Exhibit B and instruct the Collateral
Agent to execute and deliver such Amendment to the Company.
7.3. Counterparts.
This Amendment Agreement may be executed in any number
of counterparts, each of which shall be an original but all
of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the
parties hereto.
7.4. Governing Law.
THIS AMENDMENT AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES
SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE
THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN NEW YORK.
[Remainder of page intentionally left blank; next page
is signature page.]
If you are in agreement with the foregoing, please so
indicate by signing the acceptance below on the accompanying
counterpart of this agreement and returning it to the Company,
whereupon it will become a binding agreement among you and the
Company.
RYAN'S FAMILY STEAK HOUSES,
INC.
By: /s/ Fred T. Grant,
Jr.
Name: Fred T. Grant, Jr.
Title: Senior Vice
President - Finance
The foregoing Amendment Agreement is hereby accepted as of
the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By___/s/ Christopher H. Carey _______
Name: Christopher H. Carey
Title: Vice President
J. ROMEO & CO., as nominee for
MONY LIFE INSURANCE COMPANY
By____/s/ Michael Kurzyna______________
Name: Michael Kurzyna
Title: As Partner
UNITED OF OMAHA LIFE INSURANCE COMPANY
By____/s/ Edwin H. Garrison, Jr.____________
Name: Edwin H. Garrison, Jr.
Title: First Vice President
MUTUAL OF OMAHA INSURANCE COMPANY
By____/s/ Edwin H. Garrison, Jr.____________
Name: Edwin H. Garrison, Jr.
Title: First Vice President
COMPANION LIFE INSURANCE COMPANY
By____/s/ Edwin H. Garrison, Jr.____________
Name: Edwin H. Garrison, Jr.
Title: Authorized Representative
FLEET NATIONAL BANK
By__/s/ Cristin M. O'Hara _____________
Name: Cristin M. O'Hara
Title: Director
Annex 1
<table>
CURRENT HOLDERS AND PRINCIPAL AMOUNTS
Name of Current Holder Aggregate Principal
Amount
of Notes Held
<s> <c>
The Prudential Insurance Company of $40,000,000
America
MONY Life Insurance Company $15,000,000
United of Omaha Life Insurance Company $4,000,000
Mutual of Omaha Insurance Company $4,000,000
Companion Life Insurance Company $2,000,000
Nationwide Life Insurance Company $3,000,000
Nationwide Life and Annuity Insurance $2,000,000
Company
Fleet National Bank $5,000,000
</table>
Exhibit A
AMENDMENTS TO EXISTING NOTE AGREEMENTS
1. Section 4.12 of each of the Existing Note Agreements is
hereby amended and restated in its entirety to read as follows:
"4.12 Intercreditor Agreement.
An amended and restated intercreditor and collateral agency
agreement substantially in the form of Exhibit 4.12 (as amended,
supplemented, restated or otherwise modified from time to time,
the "Intercreditor Agreement") shall have been duly executed and
delivered, in each case to the extent required by the
Intercreditor Agreement as defined in the Existing Note
Agreements, by the Purchasers, the holders of the 2003 Senior
Notes, the Collateral Agent and Bank of America, N.A., as
administrative agent for the Lenders, and acknowledged and agreed
to by the Company and the Subsidiary Guarantors, and a copy
thereof evidencing the due execution and delivery shall be
delivered to you."
2. Section 7.1(i) of each of the Existing Note Agreements is
hereby amended and restated in its entirety to read as follows:
"(i) Amendments to Credit Facility and 2003 Note Agreement -
promptly, copies of any amendments, modifications or supplements
to any agreement or instrument evidencing any obligation in
respect of the Credit Facility or the 2003 Note Agreement;"
3. Section 7.1(k) of each of the Existing Note Agreements is
hereby amended and restated in its entirety to read as follows:
"(k) Information Provided to Lenders - at any time during
the existence of any "Default" or "Event of Default" under and as
defined in the Credit Facility or the 2003 Note Agreement or
during the existence of any Default or Event of Default, promptly
upon their becoming available, copies of any statement, report,
notice or certificate furnished to the Lenders or any agent for
the Lenders under the Credit Facility or the holders of the 2003
Senior Notes, to the extent that the information contained
therein has not already been delivered to each holder of Notes;
and"
4. Section 8.1 of each of the Existing Note Agreements is
hereby amended by deleting the phrase "January 29" therein and
substituting "January 28" in lieu thereof.
5. Section 9.7(a)(i) - a(ii) of each of the Existing Note
Agreements are hereby amended and restated in their entirety to
read as follows:
"(a) if it is a Domestic Subsidiary, become a party to
(i) the Subsidiary Guarantee, by executing and delivering a
joinder agreement in the form of Exhibit A thereto, and
(ii) the Contribution Agreement, by executing and delivering a
joinder agreement in the form of Exhibit A thereto;"
6. Section 9.9 of each of the Existing Note Agreements is
hereby amended and restated in its entirety to read as follows:
"9.9 Pari Passu Ranking.
To the extent that proceeds from the Collateral would not at
any time be sufficient to satisfy in full all obligations owing
in respect of the Notes and the Subsidiary Guarantee at such
time, the portion of such obligations which would not be so
satisfied shall rank pari passu, without preference or priority,
with all other outstanding, unsecured, unsubordinated obligations
of the Company and the Subsidiary Guarantors (as the case may
be), present and future, that have not been accorded by law
preferential rights. Without limitation of the foregoing, all
obligations of the Company and the Subsidiaries owing in respect
of this Agreement, the Notes and the Subsidiary Guarantee shall
rank pari passu, without preference or priority, with all
obligations of the Company and the Subsidiaries owing in respect
of the Credit Facility and the 2003 Note Agreement and all
Guaranties of such obligations executed by any Subsidiaries in
connection therewith."
7. Section 10.4 of each of the Existing Note Agreements are
hereby amended and restated in their entirety to read as follows:
"10.4. Fixed Charge Coverage Ratio.
The Company shall not permit the Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Company,
to be less than 2.25 to 1.00; provided, however, that if
scheduled principal payments are due and payable with respect to
both the Notes and the 2003 Senior Notes during the four fiscal
quarter period of the Company included in any calculation of the
Fixed Charge Coverage Ratio, the minimum Fixed Charge Coverage
Ratio required by this Section 10.4 as of the last day of such
four fiscal quarter period shall be stepped down to 2.00:1.00."
8. Section 10.5 of each of the Existing Note Agreements are
hereby amended and restated in their entirety to read as follows:
"10.5. Restricted Payments and Restricted Investments.
The Company will not, and will not permit any of its
Subsidiaries to, declare, make or incur any liability to declare
or make any Restricted Payment or any Restricted Investment
unless, immediately prior, and immediately after giving effect,
to the making of such Restricted Payment or Restricted
Investment, no Default or Event of Default would exist and, with
respect to Restricted Payments, immediately after giving effect
to such action, the aggregate amount of such Restricted Payments
of the Company and its Subsidiaries declared or made during the
period commencing on June 30, 2003, and ending on the date such
Restricted Payment is declared or made, inclusive, would not
exceed the sum of:
(a) $11,049,500, plus
(b) 50% of Net Income for such period (or minus 100% of Net
Income for such period if Net Income for such period is a loss),
plus
(c) the aggregate amount of net proceeds arising from sales of
the Company's Capital Stock during such period, plus
(d) the Carryforward Restricted Payment Basket (as determined
below).
As used herein, the term "Unused Capital Expenditure Allowance"
means, for any fiscal year, the amount by which Permitted Capital
Expenditures for such fiscal year exceeds the aggregate amount of
Capital Expenditures actually made by the Company and its
Subsidiaries during such fiscal year. As used herein, the term
"Carryforward Capital Expenditure Basket" shall mean the portion,
if any, of all Unused Capital Expenditure Allowance allocated by
the Company pursuant to the paragraph below in Section 10.5 for
Capital Expenditures in future fiscal years. The term
"Carryforward Restricted Payment Basket" shall mean the portion,
if any, of all Unused Capital Expenditure Allowance allocated by
the Company pursuant to the paragraph below in Section 10.5 for
permitted Restricted Payments in future fiscal years.
(c) Within 90 days after the end of each fiscal year,
commencing with fiscal year 2003, after or with delivery of the
audited annual financial statements with respect to such fiscal
year, the Company shall notify the holders of the Notes of (i)
the Unused Capital Expenditure Allowance for such immediately
preceding fiscal year and (ii) the Company's allocation of such
Unused Capital Expenditure Allowance in whole or in part to the
Carryforward Capital Expenditure Basket and/or the Carryforward
Restricted Payment Basket, whereupon the Carryforward Capital
Expenditure Basket and Carryforward Restricted Payment Basket
shall be immediately increased by the amounts allocated thereto.
Notwithstanding the foregoing, (x) the Carryforward Capital
Expenditure Basket may not be increased in any fiscal year by
more than $10,000,000, (y) the Carryforward Restricted Payment
Basket may not be increased in any fiscal year by more than
$25,000,000, and (z) no increase in the Carryforward Restricted
Payment Basket shall be permitted if the aggregate amount of
Capital Expenditures made in the immediately preceding fiscal
year was less than $40,000,000." If the Company fails to
deliver such notice to the holders of the Notes in the time
required, the Unused Capital Expenditure Allowance shall be
allocated first to the Carryforward Restricted Payment Basket and
then to the Carryforward Capital Expenditure Basket.
9. The following definitions are hereby added to Schedule B of
each of the Existing Note Agreements in its proper alphabetical
order to read as follows:
"`2003 Senior Notes' means, collectively those certain
4.65% Senior Notes due July 25, 2013 issued by the Company
in the aggregate original principal amount of $100,000,000
pursuant to the 2003 Note Agreement.
"2003 Note Agreement" means that certain Note Purchase
Agreement dated as of July 25, 2003 among the Company and
the purchasers listed on Schedule A thereto.
"Capital Expenditures" means, as applied to any Person,
all expenditures by such Person which, in accordance with
GAAP, would be classified as capital expenditures,
including, without limitations, Capital Leases.
"Permitted Capital Expenditures" means the dollar
amounts set forth below opposite the fiscal year for the
relevant testing period:
<table>
Fiscal Year Amount
<c> <c>
2003 $ 87,000,000
2004 $ 90,000,000
2005 $ 94,000,000
2006 $ 98,000,000
2007 $102,000,000
</table>
10. The definition of "Secured Parties" appearing in Schedule B
of each of the Existing Note Agreements is hereby amended and
restated in its entirety to read as follows:
"`Secured Parties' means and includes the lenders and
the holders from time to time of the Notes and the 2003
Senior Notes."
11. Exhibit 4.11(a) to each of the Existing Note Agreement is
hereby deleted and replaced with Exhibit C hereto.
12. Exhibit 4.11(b) to each of the Existing Note Agreement is
hereby deleted and replaced with Exhibit D hereto
12. Exhibit 4.12 to each of the Existing Note Agreement is
hereby deleted and replaced with Exhibit E hereto.
EXHIBIT B
Form of Amended and Restated Pledge Agreement
See Attached
EXHIBIT C
Form of Subsidiary Guarantee
See Attached
EXHIBIT D
Form of Contribution Agreement
See Attached
EXHIBIT E
Form of Intercreditor Agreement
See Attached