AMENDMENT NO. 2
Dated as of April 6,1999
AMENDMENT NO. 2 TO THE CREDIT AGREEMENT (this "Amendment") is entered
into among Shoney's, Inc., a Tennessee corporation (the "Borrower") the
banks, financial institutions and other institutional lenders listed on the
signature pages hereof as the Initial Lenders (the "Initial Lenders"),
NATIONSBANK, NA. ("NationsBank"), as the initial issuing bank (in such
capacity, the "Initial Issuing Bank"), FIRST AMERICAN NATIONAL BANK, as the
swing line bank (in such capacity, the "Swing Line Bank") (the Initial
Lenders, Initial Issuing Bank and Swing Line Bank collectively, the "Lender
Parties"), NATIONSBANK, as administrative agent (together with any successor
appointed pursuant to Article VII of the Credit Agreement, the
"Administrative Agent") for the Lender Parties, and NATIONSBANC XXXXXXXXXX
SECURITIES, INC. ("NMSI"), as arranger (in such capacity, the "Arranger") and
as syndication agent (in such capacity, the "Syndication Agent") (together
the "Agents").
PRELIMINARY STATEMENTS:
(1) The parties hereto have entered into a Credit Agreement dated as
of November 28, 1997, as amended by Amendment No. 1 dated as of June 16, 1998
(as so amended, the "Credit Agreement'). Capitalized terms not otherwise
defined in this Amendment have the meanings specified in the Credit
Agreement.
(2) The parties hereto have agreed to amend the Credit Agreement as
hereinafter set forth.
SECTION 1. Amendments to the Credit Agreement. The Credit Agreement
is, effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 3, hereby amended as follows:
(a) The definition of "Debt" in Section 1.01 is amended by adding at
the end thereof the following sentence:
"For all purposes of this Agreement, 'Debt' shall not include any
monetary obligations of the Borrower (up to an amount not in excess
of $18 million) in respect of the Borrower's settlement (which was
announced publicly on March 22, 1999) of three wage-hour class action
lawsuits pending against the Borrower for $18.0 million."
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(b) The definition of "EBITDA" in Section 1.01 is amended by adding
at the end of clause (g) therein the following clause:
"p1us" (h) all amounts (up to an amount not in excess
of $18 million) deducted in arriving at such net income in
respect of the Borrower's settlement (which was announced
publicly on March 22, 1999) of three wage-hour class action
lawsuits pending against the Borrower for $18.0 million".
(c) The definition of "Leverage Ratio" in Section 1.01 is amended by
(i) adding immediately after the word "less" therein the phrase "the excess
of (x)" and (ii) adding immediately after the second reference to "such
fiscal quarter" therein the phrase "over (y) the aggregate amount remaining
to be paid by the Borrower at the end of such fiscal quarter in respect to
the Borrower's settlement (which was announced publicly on March 22, 1999) of
three wage-hour class action lawsuits pending against the Borrower for $18.0
million".
(d) Section 4.01(i) is amended by adding at the end thereof a
parenthetical to read as follows:
"(other than the Borrower's settlement (which was announced
publicly on March 22, 1999) of the three wage-hour class
action lawsuits pending against the Borrower for $18.0
million)".
(e) Section 5.02(b) is amended by (i) deleting the reference to the
number "$100,000,000" in clause (i) thereof and replacing such number with
the number "$200,000,000", (ii) by deleting the "and" at the end of clause
(iii) thereof, (iii) by deleting the period at the end of clause (iv) thereof
and replacing the period with the phrase "; and" and (iv) by adding the
following clause (v) immediately after clause (iv) therein:
"(v) in the case of the Borrower, Debt in respect of
letters of credit in an aggregate amount not to exceed
$10,000,000 at any time outstanding"
(f) Section 5.02(e) is amended by (i) deleting the parenthetical in
clause (iv) thereof and replacing the parenthetical with the parenthetical
"(as determined by (x) in the case of a sale for cash consideration of less
than or equal to $2,000,000, a person authorized by the Borrower's board of
directors and (y) in all other cases, the Borrower's board of directors)",
(ii) deleting the word "and" at the end of clause (viii) thereof and (iii)
adding the following clauses (x) and (xi) immediately after clause (ix)
therein:
"(x) the transfer of fixtures and equipment to Shoney's
SPV or TPI SPV in connection with the leases of such
restaurant by Shoney's SPV or TPI SPV, as the case may be,
permitted by clause (vii) above, and
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(xi) (A) the contribution by the Borrower of all of the
capital stock of Shoney's Investments, Inc. and Corporate
Benefits Services, Incorporated of Nashville to a newly-
created Delaware limited liability company ("HoldCo") of
which the Borrower will be the sole member and (B) the
transfer by Shoney's Investments, Inc of its profits
interest in Shoney's SPV to HoldCo, provided, in the case of
clauses (A) and (B), that HoldCo shall become an additional
grantor pursuant to the terms of the Security Agreement and
a Subsidiary Guarantor pursuant to the terms of the
Subsidiary Guaranty,".
(g) Section 5.04(c) is amended by replacing each reference therein
(other than in respect of the fiscal quarter ending August 5, 2001) to the
ratio "4.00: 1" with the ratio "4.25:1".
(h) Section 5.04(d) is amended by adding immediately after the
phrase "tax expense" in clause (ii)(c) thereof the phrase "(in the case of
any fiscal quarter ending prior to the second fiscal quarter of 1999, greater
than or equal to zero)".
SECTION 2. Consent. (a) Subject to the satisfaction of the conditions
precedent set forth in Section 3, each of the Lender Parties executing this
Amendment hereby consents to the amendment of the governing documents of
Shoney's SPV to permit the conversion of Shoney's SPV to a manager-managed
limited liability company, provided that all such documentation shall be in
form and substance reasonably satisfactory to the Administrative Agent.
(b) Subject to the satisfaction of the conditions precedent set
forth in Section 3, each of the Lender Parties executing this Amendment
hereby consents to the settlement (which was announced publicly on March 22,
1999) of the three wage-hour class action lawsuits pending against the
Borrower for $18.0 million which will be paid in three installments as
follows: $11.0 million upon receipt of court approval of such settlement,
$3.5 million on October 1, 1999 and $3.5 million on March 1, 2000.
SECTION 3. Conditions of Effectiveness. (a) This Amendment shall become
effective as of the date first above written on the Business Day when, and
only when, the Administrative Agent shall have received counterparts of this
Amendment executed by the Borrower and the Required Lenders or, as to any of
the Lenders, advice satisfactory to the Administrative Agent that such Lender
Party has executed this Amendment; and the consent attached hereto executed
by each other Loan Party.
(b) This Amendment is subject to the provisions of Section 8.01 of
the Credit Agreement.
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SECTION 4. Reference to and Effect on the Credit Agreement. (a) On
and after the effectiveness of this Amendment, each reference in the Credit
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Credit Agreement, and each reference in each of the other
Loan Documents to "the Credit Agreement", "thereunder", "thereof" or words of
like import referring to the Credit Agreement, shall mean and be a reference
to the Credit Agreement, as amended by this Amendment.
(b) The Credit Agreement, as specifically amended by this Amendment,
and each of the Loan Documents are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender Party or any of the Loan Documents or
the Administrative Agent under any of the Loan Documents, or constitute a
waiver of any provisions of any of the Loan Documents.
SECTION 5. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Amendment by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment.
SECTION 6. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
SHONEY'S, INC.
By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
------------------------------
Title: Vice President and Treasurer
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Agreed as of the date first above written:
NATIONSBANK, N.A.
as Administrative Agent, as Lender
and as Issuing Bank
By /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Title: Sr. Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ Xxxxxx X. Kadlish
--------------------------------
Title: Duly Authorized Signatory
XXXXXX XXXXXXX XXXX XXXXXX
PRIME INCOME TRUST
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title:
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By
--------------------------------
Title:
ML CLO XII PILGRIM AMERICA
(CAYMAN) LTD.
By
--------------------------------
Title:
6
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisors (Bermuda), Ltd.
By
--------------------------------
Title:
By: TCW Investment Management
Company, as Investment Advisor
By
--------------------------------
Title:
FREMONT FINANCIAL CORPORATION
By /s/ Xxxxxx X. Xxxx
--------------------------------
Title:
CRESCENT/MACH I
PARTNERS, L.P.,
By: TCW Asset Management
Company, as Investment Manager
By
--------------------------------
Title:
XXX XXXXXX AMERICAN
CAPITAL PRIME
RATE INCOME TRUST
By /s/
--------------------------------
Title:
FIRST AMERICAN NATIONAL BANK
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title:
7
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.
By
--------------------------------
Title:
SENIOR HIGH INCOME PORTFOLIO, INC.
By
--------------------------------
Title:
CAPTIVA II FINANCE LTD.
By
--------------------------------
Title:
AERIES FINANCE LTD.
By
--------------------------------
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisors
By
--------------------------------
Title:
STRATA FUNDING LTD.
By
--------------------------------
Title:
8
ML CBO IV (CAYMAN) LTD.
By: Protective Asset Management
Company, as Collateral Manager
By
--------------------------------
Title:
CERES FINANCE LTD.
By
--------------------------------
Title:
XXXXXX FINANCIAL, INC.
By
--------------------------------
Title:
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By /s/
--------------------------------
Title: Exec Vice President
DEUTSCHE FINANCIAL SERVICES
CORPORATION
By /s/ Xxxxxxx X. Xxxx
--------------------------------
Title: Vice President
GREEN TREE FINANCIAL SERVICING
CORPORATION
By /s/ C.A. Gouskos
--------------------------------
Title: Sr. Vice President
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THE TORONTO DOMINION BANK
By /s/ Xxxxx X. Xxxxxx
--------------------------------
Title: Mgr. Cr. Admin.
BALANCED HIGH-YIELD FUND I LTD., as Assignee
By: BHF-BANK AKTIENGESELLSCHAFT
acting through its New York Branch,
as attorney-in-fact
By /s/ Xxxxxxxx X. Given /s/ Xxxxxxx Xxxxxx
--------------------------------
Title: Assistant Vice President AVP
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxx X. Xxxx
--------------------------------
Title:
CYPRESSTREE INVESTMENT PARTNERS I, LTD.
By: CypressTree Investment Management Company, Inc.,
as Portfolio Manager
By /s/Xxxxxxx X. Xxxxx
--------------------------------
Title: Principal
CONSENT
Each of the undersigned corporations, as a Guarantor under the
Subsidiary Guaranty dated November 28, 1997 (the "Guaranty") in favor of the
Lender Parties and the Agents parties to the Credit Agreement referred to in
the foregoing Amendment and as a grantor under the Security Agreement dated
November 28, 1997 (the "Security Agreement") made by each of the undersigned
corporations in favor of the Administrative Agent, hereby consents to such
Amendment and hereby confirms and agrees that notwithstanding the
effectiveness of such Amendment, (a) each of the Guaranty and the Security
Agreement is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in each of the Guaranty and
the Security Agreement to the "Credit Agreement", "thereunder", "thereof or
words of like import shall mean and be a reference to the Credit Agreement,
as amended by such Amendment, and (b) the Collateral Documents to which such
corporation is a party and all of the Collateral described therein do, and
shall continue to, secure the payment of all of the Secured Obligations (in
each case, as defined therein).
TPI RESTAURANTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
TPI PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
SHN PROPERTIES, LLC
By: Corporate Benefit Services,
Incorporated of Nashville,
its Managing Member
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
By: /s/ X.X. XxXxxxxx, Xx.
Title:
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SHONEY'S OF MICHIGAN, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
COMMISSARY OPERATIONS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
PARGO'S OF XXXXXXXXX, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
SHONEY'S EQUIPMENT CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
CORPORATE BENEFIT SERVICES,
INCORPORATED OF NASHVILLE
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
PARGO'S OF YORK, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
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SHONEY'S INVESTMENTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
TPI ENTERTAINMENT, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
TPI TRANSPORTATION, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
TPI COMMISSARY, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------
Title:
