SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
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THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION
MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO
REGISTERED HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE LYONS CONSENT DEADLINE. HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT
TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
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March 27, 2000
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal (as it may be supplemented or
amended from time to time, the "Letter of Transmittal," and, together with
the Purchase Offer, the "Offer"), all of its outstanding Liquid Yield Option
Notes Due 2004 (Zero Coupon - Subordinated) (the "LYONs"). Enclosed for
your consideration are copies of the Purchase Offer and Letter of
Transmittal. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the LYONs (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding LYONs (the "Consents") to the
proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of April 1, 1989, between the Company
and The Bank of New York, as successor to Sovran Bank/Central South, as
trustee, pursuant to which the LYONs were issued (the "Indenture"). The
Proposed Amendments would remove limitations on the ability of the Company to
consolidate with or merge into, or to convey, transfer or lease all or
substantially all its assets to, another person. HOLDERS OF LYONS CAN NOT
CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS
CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
For your information and for forwarding to your clients for whom you hold the
LYONs registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Purchase Offer;
2. A Letter of Transmittal for the LYONs for your use and for
the information of your clients, together with Guidelines
for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup
U.S. federal income tax withholding;
3. A printed form of letter, including a Letter of
Instructions, which may be sent to your clients for whose
accounts you hold LYONs registered in your name or in the
name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer; and
4. A return envelope addressed to The Bank of New York, the
Depositary.
DTC participants will be able to execute tenders and, after the LYONs
solicitation materials receive regulatory clearance and are mailed in
definitive form to the LYONs Holders, deliver Consents through the DTC
Automated Tender Offer Program.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE TO OBTAIN
THEIR INSTRUCTIONS.
Any inquiries you may have with respect to the Offer should be addressed
to D.F. King & Co., Inc., the Information Agent for the Offer, or Banc of
America Securities LLC, the Dealer Manager for the Offer, at their respective
addresses and telephone numbers as set forth on the back cover of the
enclosed Purchase Offer. Additional copies of the enclosed materials may be
obtained from the Information Agent or the Dealer Manager.
Very truly yours,
SHONEY'S, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
IMPORTANT: THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), WITH ANY
REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE LYONS AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY AND CONSENT, MUST BE RECEIVED
BY THE DEPOSITARY AT OR PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE IN ORDER FOR HOLDERS TO RECEIVE THE TENDER OFFER
CONSIDERATION. IN ORDER TO RECEIVE THE CONSENT PAYMENT, HOLDERS OF LYONS MUST
TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE PROPOSED AMENDMENTS (AND
NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE LYONS CONSENT DEADLINE.
HOLDERS OF LYONS CAN NOT CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS
INDENTURE UNTIL THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY
CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS
EXPECTED TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000.
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