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EXHIBIT 10.19
August 31, 1999
Mr. Glen F. Ceiley
Chairman of the Board
Family Steak Houses of Florida, Inc.
2113 Florida Boulevard
Neptune Beach, FL 32266
Dear Glen:
This letter is to serve as an amendment to the Agreement between Ryan's
Properties, Inc. ("Ryan's") and Family Steak Houses of Florida, Inc. ("FSH")
dated July 11, 1994, and amended on October 17, 1994 and October 3, 1996 (the
"Agreement"). The Agreement itself constituted an amendment of the Franchise
Agreement (as defined in the Agreement)(as amended, the "Franchise Agreement").
This letter also serves to amend the Franchise Agreement.
1. Clause (b) of Section 7 (Store Requirements) of the Agreement is deleted and
replaced with the following:
"At the end of each calendar year, FSH agrees to have at least the following
number of Ryan's Family Steak House restaurants in operation:
Number of Ryan's Family Steak House
End of Calendar Year restaurants Required to be in Operation
-------------------- ---------------------------------------
1999 21
2000 23
2001 25
2002 27
2003 29
Subsequent Years Increases by Two per Year"
The remaining provisions of Section 7 of the Agreement remain in full force and
effect.
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August 31, 1999
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2. Section XV (TERMINATION AND DEFAULTS) of the Franchise Agreement is amended
by the addition at the end of paragraph B thereof of a new subparagraph 5 of
paragraph B, which new subparagraph 5 is set forth on the attached Rider A.
3. Section XVIII (TRANSFERABILITY OF INTEREST) of the Franchise Agreement is
amended by the addition at the end thereof of new subparagraphs 5 and 6 of
paragraph B, which new subparagraphs 5 and 6 are set forth on the attached
Rider B.
Except as explicitly modified herein, the Agreement and the Franchise Agreement
shall continue in full force and effect in all respects.
RYAN'S PROPERTIES, INC.
Charles D. Way
President
The undersigned has read the above amendments and agrees to the provisions
contained therein.
FAMILY STEAK HOUSES OF FLORIDA, INC.
By:
----------------------------------------
Mr. Glen F. Ceiley
Chairman of the Board
Family Steak Houses of Florida, Inc.
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Rider A
(Additional Event of Default)
5. If at the end of any calendar year the number of Restaurants
in operation is less than 80% of the number of Restaurants required to be in
operation as of that date pursuant to the terms of this Agreement, as amended.
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Rider B
(Additional Transferability Provisions)
5. For purposes of this paragraph XVIII.B, any of the following
shall be deemed to be an assignment and transfer of this Agreement that
requires FRANCHISOR's prior written consent under this Paragraph XVIII.B:
(a) any person or group of persons (within the meaning
of the Securities Exchange Act of 1934, as amended
(the "34 Act")) (other than any person that
beneficially owned 15% or more of the issued and
outstanding shares of voting capital stock of
FRANCHISEE as of December 15, 1998) shall have
acquired after December 15, 1998 beneficial
ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange
Commission (the "SEC") under the 34 Act) of 25% or
more of the issued and outstanding shares of capital
stock of FRANCHISEE (or FRANCHISEE's direct or
indirect parent) having the right to vote for the
election of directors of FRANCHISEE (or such parent)
under ordinary circumstances, or
(b) during any period of twelve consecutive calendar
months ending after August 15, 1999, individuals who
at the beginning of such period constituted the
board of directors of FRANCHISEE (or any direct or
indirect parent of FRANCHISEE) (together with any
new directors whose election by the board of
directors of FRANCHISEE (or such parent), or whose
nomination for election by the stockholders of
FRANCHISEE (or such parent), was approved by a vote
of at least two-thirds of the directors then still
in office who either were directors at the beginning
of such period or whose election or nomination for
election was previously so approved) cease for any
reason other than death or disability to constitute
a majority of the directors then in office, or
(c) FRANCHISEE, or any individual or entity that,
directly or indirectly, controls, is controlled by
or is under common control with FRANCHISEE, directly
or indirectly, owns, maintains, engages in,
participates in or has any interest in, the
operation of any other family-oriented steak house
restaurant. For purposes of this subparagraph (c),
the term "control" has the meaning of that term
under the regulations promulgated by the SEC under
the 34 Act.
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For purposes of this paragraph 5, any entity that, directly or indirectly,
controls (within the meaning of the regulations promulgated by the SEC under
the 34 Act) FRANCHISEE shall be deemed a direct or indirect (as the case may
be) "parent" of FRANCHISEE.
6. In the event that FRANCHISOR declines to grant its consent to
any transaction requiring its consent under this paragraph XVIII.B., the
proposed transaction may nonetheless be consummated (subject, in the case of an
asset transfer, to FRANCHISOR's right of first refusal) if the following
conditions are satisfied to the reasonable satisfaction of FRANCHISOR:
(a) FRANCHISEE shall have paid or cause to be paid to
FRANCHISOR in immediately available funds all
amounts due and owing to FRANCHISOR under this
Agreement or accrued under this Agreement with
respect to any period prior to the effective date of
such transaction (the "Transaction Effective Date");
(b) No event of default has occurred and is continuing
under this Agreement as of the Transaction Effective
Date;
(c) All documents and information in the possession of
FRANCHISEE that FRANCHISOR deems to be confidential
trade secrets shall have been returned to FRANCHISOR
prior to the Transaction Effective Date;
(d) On or prior to the Transaction Effective Date,
FRANCHISEE or the transferee (as applicable), on the
one hand, and FRANCHISOR, on the other hand, shall
have executed and delivered an amendment agreement
pursuant to which:
(i) This Agreement is modified solely (except
as provided in clause (ii) below) to
eliminate any requirement that FRANCHISOR
provide to FRANCHISEE or such transferee
(as applicable) information deemed
confidential trade secrets by FRANCHISOR;
(ii) The transferee (if applicable) assumes all
of FRANCHISEE's obligations under this
Agreement; and
(iii) This Agreement shall otherwise remain in
full force and effect and binding on
FRANCHISEE or the transferee (as
applicable).
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