LIMITED WAIVER AGREEMENT

 

THIS LIMITED WAIVER AGREEMENT dated as of February 29, 2008 (the “Agreement”) is
entered into among Ruby Tuesday, Inc., a Georgia corporation (the “Borrower”),
the Lenders party hereto, the Guarantors and Bank of America, N.A., as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). All capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Credit Agreement (as defined
below).

 

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Administrative Agent entered into
that certain Amended and Restated Revolving Credit Agreement dated as of
February 28, 2007 (as amended or modified from time to time, the “Credit
Agreement”);

 

WHEREAS, the Borrower has requested that the Lenders waive the Applicable Events
of Default (as defined below) and continue to make available to the Borrower the
Loans provided under the Credit Agreement; and

 

WHEREAS, the Lenders are willing to provide a limited waiver of the Applicable
Events of Default and continue to make Loans to the Borrower during the Waiver
Period (as defined below) subject to the terms and conditions specified in this
Agreement;

 

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

 

1.          Reaffirmation. Each of the Loan Parties acknowledges and reaffirms
(a) that it is bound by all of the terms of the Credit Agreement and the Loan
Documents to which it is a party and (b) that it is responsible for the
observance and full performance of all Obligations, including without
limitation, the repayment of the Loans and reimbursement of any drawings on a
Letter of Credit. Without limiting the generality of the preceding sentence,
each of the Guarantors restates and reaffirms that it guarantees the prompt
payment when due of all Guaranteed Obligations, in accordance with, and pursuant
to the terms of its Subsidiary Guaranty Agreement. Furthermore, the Loan Parties
acknowledge and confirm (c) that the Administrative Agent and the Lenders have
performed fully all of their respective obligations under the Credit Agreement
and the other Loan Documents and (d) by entering into this Agreement, the
Lenders do not waive (except as specifically provided in Section 2 hereof) or
release any term or condition of the Credit Agreement or any of the other Loan
Documents or any of their rights or remedies under such Loan Documents or
applicable law or any of the obligations of the Loan Parties thereunder.

 

 

2.

Limited Waiver.

 

(a)        The Loan Parties acknowledge that (a) an Event of Default may exist
under the Credit Agreement as a result of the failure of the Consolidated
Companies to comply with the terms of Section 6.3 of the Credit Agreement during
the Waiver Period (as defined below) (the “Net Worth Event of Default”) and (b)
Events of Default will exist under the Credit Agreement on March 4, 2008 as a
result of the failure of the Consolidated Companies to comply with the terms of
Sections 6.1 and 6.2 of the Credit Agreement as of the fiscal quarter ending
March 4, 2008 (the Events of Default enumerated in (a) and (b) above, the
“Applicable Events of Default”).

 

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(b)       Subject to the other terms and conditions of this Agreement, the
Administrative Agent and the Lenders hereby waive the Applicable Events of
Default for the period from the date hereof until April 18, 2008 (the “Waiver
Period”), whether the Net Worth Event of Default exists as of the date of this
Agreement or arises at some other point during the Waiver Period, for all
purposes of the Credit Agreement (including, without limitation, Section 3.2(b)
thereof). Accordingly, during the Waiver Period, the Administrative Agent, the
Issuing Bank and the Lenders shall, subject to the terms and conditions set
forth herein, forbear exercising their rights and remedies arising exclusively
as a result of the Applicable Events of Default and continue to make Loans and
to issue, extend, amend or renew Letters of Credit to the Borrower in accordance
with the terms thereof. The limited waiver set forth herein shall be effective
only in this specific instance for the duration of the Waiver Period and shall
not obligate the Lenders or the Administrative Agent to waive any other Default
or Event of Default, now existing or hereafter arising. This limited waiver is
limited solely to the Applicable Events of Default, and nothing contained in
this Agreement shall (i) modify the Loan Parties’ obligations to comply fully
with Section 6.1, 6.2 and 6.3 of the Credit Agreement and all duties, terms,
conditions or covenants contained in the Credit Agreement and the other Loan
Documents and (ii) be deemed to constitute a waiver of any other rights or
remedies the Administrative Agent or any Lender may have under the Credit
Agreement or any other Loan Documents or under applicable law. This is a
one-time waiver, and the Administrative Agent and the Lenders shall have no
obligation to extend the limited waiver or otherwise amend, modify or waive any
provision of the Credit Agreement or any other Loan Document at the end of the
Waiver Period. The provisions and agreements set forth in this Agreement shall
not establish a custom or course of dealing or conduct between the
Administrative Agent, the Issuing Bank, any Lender, the Borrower or any other
Loan Party.

 

(c)        The Loan Parties acknowledge and agree that unless the Administrative
Agent and the Lenders, in their sole discretion, further amend the Credit
Agreement or otherwise agree in writing to continue this limited waiver beyond
the Waiver Period, Events of Default will occur under the Credit Agreement as of
April 19, 2008, for which no grace period or cure period shall apply, and the
Administrative Agent and the Lenders may pursue all rights and remedies
available to them under the Credit Agreement, the Loan Documents and applicable
law. The Loan Parties further acknowledge and agree that to the extent any
Defaults or Events of Default (other than the Applicable Events of Default) now
exist or hereafter arise during the Waiver Period, the Administrative Agent, the
Issuing Bank and the Lenders may immediately pursue all rights and remedies
available to them in respect thereof under the Credit Agreement, other Loan
Documents and applicable law.

 

(d)       The Loan Parties acknowledge and agree that the making of any Loans
and the issuance, extension, amendment or renewal of any Letter of Credit
pursuant to the Credit Agreement during the Waiver Period does not now, and will
not in the future, constitute (i) an agreement or obligation, whether implied or
express, on the part of the Lenders to make such Loans or of the Issuing Bank to
issue, extend, amend or renew such Letters of Credit in the future after the
expiration of the Waiver Period or (ii) a waiver by the Administrative Agent,
the Issuing Bank or the Lenders of any of their respective rights or remedies at
any time, now or in the future, with respect to any Default or Event of Default
(other than the Applicable Events of Default) or the Applicable Events of
Default after the expiration of the Waiver Period.

 

3.         Agreement Regarding Indebtedness. As consideration for the limited
waiver set forth in Section 2 above, the Borrower acknowledges that it has not,
and agrees that at no time will it, secure any Indebtedness outstanding under
the Franchise Facility Credit Agreement or the Senior Note Purchase Agreement
unless the Indebtedness in respect of the Credit Agreement is concurrently
equally and ratably secured pursuant to an agreement or agreements in form and
substance satisfactory to the

 

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Required Lenders. The Borrower further agrees that any failure by the Borrower
to comply with the terms of the immediately preceding sentence shall constitute
an immediate Event of Default under Article VIII of the Credit Agreement.

 

4.         Agreement Regarding Distributions. As further consideration for the
limited waiver set forth in Section 2 above, the Borrower agrees that it will
not, and will not permit any of its Subsidiaries to, declare or make, or incur
any liability to declare or make, any Distribution (as hereinafter defined) in
respect of the Borrower or any Subsidiary (other than on account of capital
stock or other equity interests of a Subsidiary owned legally and beneficially
by the Borrower or a wholly-owned Subsidiary), including, without limitation,
any Distribution resulting in the acquisition by the Borrower of Securities (as
hereinafter defined) which would constitute treasury stock. The Borrower further
agrees that any failure by the Borrower to comply with the terms of the
immediately preceding sentence shall constitute an immediate Event of Default
under Article VIII of the Credit Agreement. For purposes of this Section 4, the
term “Distribution” shall mean, in respect of any corporation, association or
other business entity (a) dividends or other distributions or payments on
capital stock or other equity interest of such corporation, association or other
business entity (except distributions in such stock or other equity interest)
and (b) the redemption or acquisition of such stock or other equity interests or
of warrants, rights or other options to purchase such stock or other equity
interests (except when solely in exchange for such stock or other equity
interests) unless made, contemporaneously from the net proceeds of a sale of
such stock or other equity interests. For purposes of this Section 4, the term
“Securities” shall have the meaning set forth in Section 2(1) of the Securities
Act of 1933, as amended from time to time.

 

5.         Conditions Precedent. This Agreement shall be effective as of the
date hereof when all of the conditions set forth below have been satisfied:

 

(a)        The Administrative Agent shall have received counterparts of this
Agreement, duly executed by the Borrower, the Guarantors and the Required
Lenders; and

 

(b)       The Administrative Agent shall have received a fully executed copy,
certified by a Responsible Officer of the Borrower as true and complete, of (i)
a waiver to the Senior Note Purchase Agreement and (ii) a waiver to the
Franchise Facility Credit Agreement, each in form and substance satisfactory to
the Administrative Agent.

 

 

6.

Miscellaneous.

 

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

 

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

 

 

(c)

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

 

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

 

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

 

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

 

(d)    The Loan Parties represent and warrant to the Lenders that (i) the
representations and warranties of the Loan Parties set forth in Article IV of
the Credit Agreement, in the Guaranty and in each other Loan Document are true
and correct in all material respects as of the date hereof with the same effect
as if made on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date and (ii) no
unwaived event has occurred and is continuing which constitutes a Default or an
Event of Default.

 

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

 

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

 

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

 

BORROWER:

RUBY TUESDAY, INC.,

 

a Georgia corporation

 

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

GUARANTORS:

RTBD, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   President

 

 

RT FINANCE, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RUBY TUESDAY GC CARDS, INC.

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT TAMPA FRANCHISE, LP

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT ORLANDO FRANCHISE, LP

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

 

 

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RT SOUTH FLORIDA FRANCHISE, LP

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT NEW YORK FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT SOUTHWEST FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT MICHIANA FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT FRANCHISE ACQUISITION, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT KENTUCKY RESTAURANT HOLDINGS, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT FLORIDA EQUITY, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

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RTGC, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT WEST PALM BEACH FRANCHISE, LP

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT MICHIGAN FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

RT DETROIT FRANCHISE, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

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RUBY TUESDAY, LLC

 

By: /s/ Marguerite N. Duffy

Name: Marguerite N. Duffy

 

Title:   Vice President

 

 

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BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

By

/s/ Anne M. Zeschke

Name: Anne M. Zeschke

Title: Assistant Vice President

 

BANK OF AMERICA, N.A.,

as a Lender, an Issuing Bank and

Swingline Lender

 

 

By

/s/ John H. Schmidt

Name: John H. Schmidt

Title: Vice President

 

SUNTRUST BANK,

as a Lender and an Issuing Bank

 

 

By

/s/ Jean-Paul Purdy

Name: Jean-Paul Purdy

Title: Director

 

WACHOVIA BANK,

NATIONAL ASSOCIATION,

as a Lender

 

 

By

/s/ Susan T. Gallagher

Name: Susan T. Gallagher

Title: Vice President

 

REGIONS BANK,

successor by merger to AmSouth Bank,

as a Lender

 

 

By

/s/ Amy Gillen

Name: Amy Gillen

Title: Senior Vice President

 

 

 

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BRANCH BANKING AND TRUST COMPANY,

as a Lender

 

 

By

/s/ R. Andrew Beam

Name: R. Andrew Beam

Title: Senior Vice President

 

U.S. BANK, NATIONAL ASSOCIATION,

as a Lender

 

 

By

                              

Name:

Title:

 

CITIBANK, N.A.,

as a Lender

 

 

By

/s/ Robert Marcus

Name: Robert Marcus

Title: Vice President

 

WELLS FARGO BANK, N.A.,

as a Lender

 

 

By

/s/ David Cortz

Name: David Cortz

Title: Vice President

 

FIFTH THIRD BANK,

an Ohio banking corporation,

as a Lender

 

 

By

/s/ John K. Perez

Name: John K. Perez

Title: Vice President

 

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