RUTH » Topics » [FORM OF] SOLVENCY CERTIFICATE

This excerpt taken from the RUTH 10-K filed Jun 25, 2009.

[FORM OF] SOLVENCY CERTIFICATE

This SOLVENCY CERTIFICATE (this “Solvency Certificate”) is delivered in connection with that certain First Amended and Restated Credit Agreement dated as of [February     ], 2008 (the “Credit Agreement”), by and among RUTH’S CHRIS STEAK HOUSE, INC., a Delaware corporation (“Company”), the financial institutions from time to time party thereto as Lenders (“Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (“Administrative Agent”). Capitalized terms used herein without definition have the same meanings as in the Credit Agreement.

This Solvency Certificate is being delivered pursuant to subsection 4.1O of the Credit Agreement. The undersigned is the Chief Financial Officer of Company and hereby further certifies as of the date hereof, in his/her capacity as an officer of Company, and not individually, as follows:

1. I have responsibility for (a) the management of the financial affairs of Company and the preparation of financial statements of Company, and (b) reviewing the financial and other aspects of the transactions contemplated by the Credit Agreement.

2. I have carefully prepared and/or reviewed the contents of this Solvency Certificate and have conferred with counsel for Company for the purpose of discussing the meaning of any provisions hereof that I desired to have clarified.

3. In preparation for the consummation of the transactions contemplated by the Credit Agreement, I have prepared and/or reviewed a pro forma balance sheet as at [                         ], 2008 and pro forma income projections and pro forma cash flow projections for each fiscal year during the term of the Credit Agreement for Company and its Subsidiaries on a consolidated basis, in each case after giving effect to the consummation of the transactions contemplated by the Credit Agreement. The pro forma balance sheet has been prepared utilizing what I believe are reasonable estimates of the “fair valuation” and “fair saleable value” of the assets of Company and its Subsidiaries. Although any projections may by necessity involve uncertainties and approximations, the projections are based on good faith estimates and assumptions believed by me to be reasonable.

4. Based upon the foregoing and upon the best of my knowledge after due diligence, I have concluded as follows:

a. The “fair valuation” and “fair saleable value” of the property of Company and its Subsidiaries on a consolidated basis is: (x) greater than the total amount of debts and liabilities of Company and its Subsidiaries on a consolidated basis (including unliquidated liabilities, unmatured liabilities, contingent liabilities and liabilities that would not be required to be reported under GAAP), and (y) not less than the amount that will be required to pay the probable liabilities on the existing debts and liabilities of Company and its Subsidiaries on a consolidated basis (including unliquidated liabilities, unmatured liabilities, contingent liabilities and liabilities that would not be required to be reported under GAAP) as they become absolute and due considering all financing alternatives and potential asset sales reasonably available to Company and its Subsidiaries.

 

   XI-1    Solvency Certificate


b. Company and its Subsidiaries on a consolidated basis have the ability to pay their debts and liabilities (including unliquidated liabilities, unmatured liabilities, contingent liabilities and liabilities that would not be required to be reported under GAAP) as they become absolute and due considering all financing alternatives and potential asset sales reasonably available to Company and its Subsidiaries.

c. Company and its Subsidiaries do not have an unreasonably small amount of capital in relation to their business or any contemplated or undertaken transaction.

d. Neither Company nor any of its Subsidiaries has executed the Loan Documents or made any transfer or incurred any obligations thereunder, with actual intent to hinder, delay or defraud either present or future creditors.

e. Neither Company nor any of its Subsidiaries intends to incur, or believes (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due.

In computing the amount of contingent liabilities as of the date hereof, such liabilities have been computed at the amount that, in the light of all the facts and circumstances existing as of the date hereof, represents the amount that can reasonably be expected to become an actual liability.

As reflected in the pro forma income projections and pro forma cash flow projections, I believe that it is reasonable to assume that Company and its Subsidiaries will continue as a going concern. Thus, for the purpose of the above analysis, the values of the assets of Company and its Subsidiaries on a consolidated basis have been computed by considering Company and its Subsidiaries to be a going concern.

I understand that Administrative Agent and Lenders are relying on this Solvency Certificate in extending credit to Company pursuant to the Credit Agreement.

[signature follows]

 

   XI-2    Solvency Certificate


The undersigned has executed this Solvency Certificate, in his/her capacity as an officer of Company and not individually, as of the          day of                     , 2008.

 

 
Name:    
Title:   Chief Financial Officer

 

   XI-3    Solvency Certificate


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