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Exhibit 10.4
SIXTH AMENDMENT TO
LOAN AGREEMENT
THIS SIXTH AMENDMENT TO LOAN AGREEMENT made and entered into as of
this 24th day of October, 1996, ("this Sixth Amendment"), by and between
SHOLODGE, INC., a Tennessee corporation ("Borrower"); SHONEY'S INN OF LEBANON,
INC., a Tennessee corporation; SHONEY'S INN, INC., a Tennessee corporation;
NASHVILLE AIR ASSOCIATES, INC., a Tennessee corporation; XXXXX AND ASSOCIATES,
INC., a Tennessee corporation; SUNSHINE INNS, INC. (successor by change of name
to PenTal Inns, Inc. and successor by merger to Tampa Inn, Inc.), a Tennessee
corporation; LAFLA INN, INC., a Tennessee corporation; SOUTHEAST TEXAS INNS,
INC., a Tennessee corporation; DELAWARE INNS, INC., a Tennessee corporation;
ALABAMA LODGING CORPORATION (successor by change of name to Birmingham Inn,
Inc.), a Tennessee corporation; CAROLINA INNS, INC., a Tennessee corporation;
MIDWEST INNS, INC., a Tennessee corporation; FAR WEST INNS, INC., a Tennessee
corporation; SHONEY'S INN OF BATON ROUGE, a Tennessee general partnership; and
FRONT RANGE SUITES, INC., a Tennessee corporation (individually and
collectively "Co-Obligors"); and FIRST UNION NATIONAL BANK OF TENNESSEE, a
national banking corporation ("Lender").
RECITALS
WHEREAS, Borrower and Lender entered into that certain Loan Agreement
dated January 7, 1994 ("the Loan Agreement"), the terms of which are
incorporated herein by this reference;
WHEREAS, Borrower and Lender entered into that certain First Amendment
to Loan Agreement dated March 21, 1994 ("the First Amendment"), the terms of
which are incorporated herein by this reference;
WHEREAS, Borrower, Lender, and certain of Co-Obligors entered into
that certain Second Amendment to Loan Agreement dated June 20, 1994 ("the
Second Amendment"), the terms of which are incorporated herein by this
reference;
WHEREAS, Borrower, Lender, and certain of Co-Obligors entered into
that certain Third Amendment to Loan Agreement dated August 17, 1995 ("the
Third Amendment"), the terms of which are incorporated herein by this
reference;
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WHEREAS, Borrower, Lender, and certain of Co-Obligors entered into
that certain Fourth Amendment to Loan Agreement dated November 14, 1995 ("the
Fourth Amendment"), the terms of which are incorporated herein by this
reference;
WHEREAS, Borrower, Lender, and Co-Obligors entered into that certain
Fifth Amendment to Loan Agreement dated October 18, 1996 ("the Fifth
Amendment"), the terms of which are incorporated herein by this reference;
WHEREAS, Co-Obligors are Subsidiaries (as defined in the Loan
Agreement) of Borrower and Co-Obligors have and will directly or indirectly
benefit from extensions of credit made by Lender to Borrower;
WHEREAS, Borrower and Co-Obligors have requested that Lender make an
additional loan to Borrower in the original principal amount of Two Million
Five Hundred Thousand Dollars ($2,500,000) on the terms and conditions of the
Loan Agreement, as amended, and upon the terms and conditions of this Sixth
Amendment;
WHEREAS, in order to induce Lender to extend the above described
additional credit to Borrower and amend the Loan Agreement, as amended, as
outlined in this Sixth Amendment, Borrower and Co-Obligors have made certain
representations to Lender; and
WHEREAS, Lender, in reliance on representations and inducements of
Borrower and Co-Obligors, has agreed to make this additional Two Million Five
Hundred Thousand Dollars ($2,500,000) loan to Borrower and further amend the
Loan Agreement as provided in this Sixth Amendment.
NOW, THEREFORE, for and in consideration of the agreement of Lender to
amend the Loan Agreement as set out in this Sixth Amendment, the mutual
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Lender, relying on the representations and warranties contained in the Loan
Agreement, as amended, agrees to further amend the Loan Agreement as follows:
1. Definitions. All terms used herein will be further
defined in the Loan Agreement, as amended.
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2. The Loan. Section 2.1 of the Loan Agreement, as amended,
is hereby deleted in its entirety and the following is substituted
in lieu thereof:
2.1 Evidence of Indebtedness; Repayment.
(a) The Loan will be evidenced by the Note, which
will include: (i) Promissory Note dated November 14, 1995, in the
original principal amount of Twenty Five Million Dollars ($25,000,000)
made and executed by Borrower and Co-Obligors, payable to Lender and
having been delivered to Lender by Borrower and Co-Obligors (other
than Carolina Inns, Inc., Midwest Inns, Inc., Far West Inns, Inc.,
Shoney's Inn of Baton Rouge, and Front Range Suites, Inc.); (ii)
Addendum to Promissory Note dated December 27, 1995, executed by
Carolina Inns, Inc., Midwest Inns, Inc., Far West Inns, Inc., and
Shoney's Inn of Baton Rouge, as additional co-obligors; (iii) Second
Addendum to Promissory Note dated October 18,1996, executed by Front
Range Suites, Inc., as an additional co-obligor; and (iv) First
Amendment to Promissory Note of even date, wherein the principal
amount of the Note is increased to Twenty Seven Million Five Hundred
Thousand Dollars ($27,500,000) made and executed contemporaneously
herewith by Borrower and Co- Obligors, payable to Lender and having
been delivered to Lender by Borrower and Co-Obligors. Interest on
LIBOR Rate Loans will be payable on the earlier of quarterly (i.e.
January 1, April 1, July 1, and October 1) or the last day of the
Interest Period. Interest on Prime Rate Loans will be payable
quarterly (i.e. January 1, April 1, July 1, and October 1). The entire
outstanding principal amount of the Note, plus all accrued and unpaid
interest, will be due and payable on or before the Maturity Date. The
Loan will be repayable in accordance with the additional terms set out
in the Note.
(b) So long as no Event of Default has occurred and
is continuing hereunder, and so long as no event has occurred that
with the giving of notice, the passage of time or both, will
constitute an Event of Default hereunder, and, subject to the
restrictions set forth herein, Borrower may borrow, repay, and
re-borrow
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funds under the Loan as needed, so long as the maximum principal
amount outstanding does not exceed Twenty Seven Million Five Hundred
Thousand Dollars ($27,500,000) during the time period beginning on the
date hereof, and except as hereinafter provided, ending on the
Maturity Date. Provided, however, Borrower will be required to make a
mandatory prepayment in the principal amount of Two Million Five
Hundred Thousand ($2,500,000) on November 22,1996; Borrower will not
be permitted to re- borrow this Two Million Five Hundred Thousand
Dollars ($2,500,000) and thereafter the maximum principal amount that
may be outstanding under the Note at anytime will be reduced to Twenty
Five Million Dollars ($25,000,000).
3. Conditions Precedent. Notwithstanding any other provisions of this
Sixth Amendment, it is understood and agreed that Lender will have no
obligation to fund at any time unless and until the following conditions have
been met and continue to be met, to the reasonable satisfaction of Lender and
its counsel:
(a) Lender will have received such documents, instruments,
and agreements, including, but not limited to, the Sixth Amendment and all
modifications and/or amendments thereto, in form satisfactory to Lender, as
Lender will reasonably request to evidence the agreement set out herein, which
will include a First Amendment to Promissory Note, in form acceptable to
Lender;
(b) A Certificate of Existence of Borrower and each of
the Co-Obligors (other than Shoney's Inn of Baton Rouge) issued by
the Secretary of State of Tennessee; and
(c) Opinion of counsel for Borrower and each of the Co-
Obligors in form and substance satisfactory to Lender.
4. Costs. Borrower agrees to pay all reasonable fees and costs
incurred by Lender in connection with the preparation, execution, and delivery
of all documentation reasonably required to evidence the agreement set out
herein, including Lender's counsel fees.
5. Continuing Representation and Warranty by Borrower and Co-Obligors.
Borrower and Co-Obligors represent and warrant to Lender that all of the
covenants, agreements, representations, and
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warranties made by Borrower and Co-Obligors in the Loan Agreement, as amended,
in any writing delivered pursuant to the Loan Agreement, as amended, and in
this Sixth Amendment, are true and correct, and have been fully complied with,
in all material respects, as of such date.
6. Continuing Effect. Except as specifically set forth in this Sixth
Amendment, the Loan Agreement, as amended by the First Amendment, the Second
Amendment, the Third Amendment, the Fourth Amendment, and the Fifth Amendment,
and all of the Loan Documents remain in full force and effect as originally
written.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
LENDER:
First Union National Bank of
Tennessee
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Vice President
BORROWER:
ShoLodge, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
CO-OBLIGORS:
Shoney's Inn of Lebanon, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
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Shoney's Inn, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
Nashville Air Associates, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
Xxxxx and Associates, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
Sunshine Inns, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
LAFLA Inn, Inc.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
Southeast Texas Inns, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
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Delaware Inns, Inc.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
Alabama Lodging Corporation
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
Carolina Inns, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
Midwest Inns, Inc.
By: /s/ Xxxx Xxxxx
------------------------------
Xxxx Xxxxx, President
Far West Inns, Inc.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
Shoney's Inn of Baton Rouge
By: Two Seventeen, Inc.
General Partner
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By: /s/ Xxxx Xxxxx
--------------------------
Its: President
-------------------------
By: Inn Partners, Inc.
General Partner
By: /s/ Xxxx Xxxxx
--------------------------
Its: President
-------------------------
Front Range Suites, Inc.
By: /s/ Xxxx Xxxxx
-----------------------------------
Xxxx Xxxxx, President
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FIRST AMENDMENT TO PROMISSORY NOTE
$27,500,000
Nashville, Tennessee October 24, 1996
WHEREAS, on November 14, 1995, SHOLODGE, INC. ("Borrower"); SHONEY'S
INN OF LEBANON, INC., SHONEY'S INN, INC., NASHVILLE AIR ASSOCIATES, INC., XXXXX
AND ASSOCIATES, INC., SUNSHINE INNS, INC. (successor by name change to PenTal
Inns, Inc. and successor by merger to Tampa Inn, Inc.), LAFLA INN, INC.,
SOUTHEAST TEXAS INNS, INC., DELAWARE INNS, INC., ALABAMA LODGING CORPORATION
(successor by name change to Birmingham Inns, Inc.), as co-obligors
(individually and collectively "Co-Obligors"), executed a certain Promissory
Note in the original principal amount of Twenty Five Million Dollars
($25,000,000),payable to FIRST UNION NATIONAL BANK OF TENNESSEE ("Payee") ("the
Note");
WHEREAS, on December 27, 1995, CAROLINA INNS, INC., MIDWEST INNS,
INC., FAR WEST INNS, INC., and SHONEY'S INN OF BATON ROUGE, as co-obligors
(included in the defined term, individually and collectively, "Co-Obligors"),
executed an Addendum to Promissory Note (included in the defined term "the
Note");
WHEREAS, on October 18, 1996, FRONT RANGE SUITES, INC., as co-obligor
(included in the defined term, individually and collectively, "Co-Obligors"),
executed a Second Addendum to Promissory Note (included in the defined term
"the Note"); and
WHEREAS, Borrower and Co-Obligors have requested that Payee make an
additional loan to Borrower in the original principal amount of Two Million
Five Hundred Thousand Dollars ($2,500,000) on the terms and conditions of that
certain Loan Agreement dated January 7, 1994, as amended by: (i) First
Amendment to Loan Agreement dated Xxxxx 00, 0000, (xx) Second Amendment to Loan
Agreement dated June 20, 1994 , (iii) Third Amendment to Loan Agreement dated
August 17, 1995, (iv) Fourth Amendment to Loan Agreement dated November 14,
1995, (v) Fifth Amendment to Loan Agreement dated October 18, 1996, and
(vi)Sixth Amendment to Loan Agreement of even date with this First Amendment to
Promissory Note.
NOW, THEREFORE, for and in consideration of the agreement of Payee to
accept this First Amendment to Promissory Note, the mutual covenants and
agreements hereinafter set forth and other good and
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valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Note is amended as follows:
Borrower, Co-Obligors, and Payee hereby delete the first paragraph of
the Note in its entirety and substitute the following in lieu thereof:
FOR VALUE RECEIVED, the undersigned, SHOLODGE, INC., a
Tennessee corporation ("Borrower"); SHONEY'S INN OF LEBANON, INC., a
Tennessee corporation; SHONEY'S INN, INC., a Tennessee corporation;
NASHVILLE AIR ASSOCIATES, INC., a Tennessee corporation; XXXXX AND
ASSOCIATES, INC., a Tennessee corporation; SUNSHINE INNS, INC.
(successor by change of name to PenTal Inns, Inc. and successor by
merger to Tampa Inn, Inc.), a Tennessee corporation; LAFLA INN, INC.,
a Tennessee corporation; SOUTHEAST TEXAS INNS, INC., a Tennessee
corporation; DELAWARE INNS, INC., a Tennessee corporation; ALABAMA
LODGING CORPORATION (successor by change of name to Birmingham Inn,
Inc.), a Tennessee corporation; FAR WEST INNS, INC., a Tennessee
corporation; SHONEY'S INN OF BATON ROUGE, a Tennessee general
partnership; and FRONT RANGE SUITES, INC., a Tennessee corporation
(individually and collectively "Co- Obligors"), promise to pay to the
order of FIRST UNION NATIONAL BANK OF TENNESSEE, a national banking
corporation ("Payee"; Payee and/or any subsequent holder(s) hereof,
"Holder"), at Payee's address X.X. Xxx 0000, Xxxxxxxxx, Xxxxxxxxx
00000-0000, or at such other place as Holder will designate from time
to time in writing, the principal sum of Twenty Seven Million Five
Hundred Thousand Dollars ($27,500,000), or so much thereof as may have
been advanced, together with interest on the unpaid principal balance
of such indebtedness from time to time outstanding from the date
hereof at the rates hereinafter set forth, in lawful money of the
United States of America, such principal and interest being due and
payable as provided in the Note.
Section 3 of the Note is hereby deleted in its entirety and the
following is substituted in lieu thereof:
3. Payment Terms. Interest on LIBOR Rate Loans will be
payable the earlier of quarterly (i.e. January 1, April 1, July 1, and
October 1) or the last day of each Interest Period. Interest on Prime
Rate Loans will be payable
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quarterly (i.e. January 1, April 1, July 1, and October 1). The entire
outstanding principal amount of the Note, plus all accrued and unpaid
interest, penalties, and fees will be due and payable on or before the
Maturity Date. Borrower will be required to make a mandatory
prepayment in the principal amount of Two Million Five Hundred
Thousand Dollars ($2,500,000) on November 22, 1996; Borrower will not
be permitted to re-borrow this Two Million Five Hundred Thousand
Dollars ($2,500,000) and thereafter the maximum principal amount that
may be outstanding under the Note at anytime will be reduced to Twenty
Five Million Dollars ($25,000,000).
Except as specifically set out in this First Amendment, the Note will
remain in full force and effect as originally written.
SIGNED, SEALED, AND DELIVERED, as of the 24th day of October, 1996.
BORROWER:
ShoLodge, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
CO-OBLIGORS:
Shoney's Inn of Lebanon, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Shoney's Inn, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
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Nashville Air Associates, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Xxxxx and Associates, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Sunshine Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
LAFLA Inn, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Southeast Texas Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Delaware Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Alabama Lodging Corporation
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By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Carolina Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Midwest Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Far West Inns, Inc.
By: /s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx, President
Shoney's Inn of Baton Rouge
By: Two Seventeen, Inc.
General Partner
By: /s/ Xxxx Xxxxx
----------------------------
Its: President
----------------------------
By: Inn Partners, Inc.
General Partner
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By: /s/ Xxxx Xxxxx
----------------------------
Its: President
----------------------------
Front Range Suites, Inc.
By: /s/ Xxxx Xxxxx
---------------------------------
Xxxx Xxxxx, President
The undersigned Payee hereby consents to this First amendment to
Promissory Note.
PAYEE:
First Union National Bank of
Tennessee
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
Vice President
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