RUTHS HOSPITALITY GROUP, INC. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an…

Item 1.01 Entry into a Material Definitive Agreement

On October 26, 2020, the Company entered into a Fifth Amendment to CreditAgreement (the "Fifth Amendment") which amends its existing Credit Agreement,dated as of February 2, 2017, as amended by the First Amendment thereto, datedas of September 18, 2019, the Second Amendment thereto, dated as of March 27,2020, the Third Amendment thereto, dated as of May 7, 2020 (the "ThirdAmendment"), and the Fourth Amendment thereto, dated as of May 18, 2020, withcertain direct and indirect subsidiaries of the Company as guarantors, WellsFargo Bank, National Association, as administrative agent, and the lenders andother agents party thereto.

The Fifth Amendment extended the term of the agreement by one year to February2, 2023, reduced the revolving credit facility to $120.0 million, adjusted themonthly liquidity covenant, added a provision to allow for non-maintenancecapital expenditures based on quarterly EBITDA performance and added provisionsto the Credit Agreement to address the contemplated phase out of LIBOR. Aftergiving effect to the Fifth Amendment, the credit facility will continue toprovide for a $5.0 million subfacility of letters of credit and a $5.0 millionsubfacility for swingline loans. The Fifth Amendment did not change theConsolidated Leverage Ratio and Fixed Coverage Charge Ratio requirements. TheConsolidated Leverage Ratio and Fixed Coverage Charge Ratio requirements fromthe Third Amendment remain in effect through February 2, 2023.

The Fifth Amendment requires the Company and its subsidiaries to meet minimumaggregate cash holding requirements through March 2021 in an amount equal to thefollowing amount for each month set forth below:

The Fifth Amendment also removes the requirement that the Company use 50% of theaggregate net cash proceeds from equity issuances after May 7, 2020 in excess of$30.0 million to repay loans outstanding until the Company could demonstratecompliance with certain financial covenants.

The Fifth Amendment now allows for non-maintenance capital expenditures when theLeverage Ratio is 2.50 to 1.0 or greater with 75% of consolidated EBITDA earnedduring a fiscal quarter in excess of $7.5 million ("Excess EBITDA"). The Companyand its subsidiaries may make non-maintenance capital expenditures with ExcessEBITDA at any time after such Excess EBITDA is earned until the Leverage Ratiohas been reduced to less than 2.50 to 1.0. Prior to the Fifth Amendment, theCredit Agreement had prohibited all non-maintenance capital expenditures whenthe Leverage Ratio was 2.50 to 1.0 or greater. As was also the case before theFifth Amendment, the credit agreement provides that the Company and itssubsidiaries may make capital expenditures in any fiscal year in an amount equalto 75% of consolidated EBITDA for the immediately preceding fiscal year when theLeverage Ratio is equal to or greater than 1.50 to 1.0 but less than 2.50 to1.0. When the Leverage Ratio is less than 1.50 to 1.0, the Company and itssubsidiaries may make capital expenditures in an unlimited amount.

In connection with the closing of the Fifth Amendment, the Company repaid $20.2million in loans so that a total of $115.0 million (excluding $4.8 million inletters of credit) is currently outstanding under the credit facility. Thecurrent interest rate for borrowings under the revolving credit facility is3.75%.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff- Balance Sheet Arrangement of a

Registrant

The discussion of the Fifth Amendment to Credit Agreement set forth underItem 1.01 of this Current Report on Form 8-K is incorporated herein by referencein this Item 2.03.

Item 9.01. Financial Statements and Exhibits

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RUTHS HOSPITALITY GROUP, INC. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an...

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