MODIFICATION AGREEMENT NO. 2
TO REIMBURSEMENT AGREEMENT AND STANDBY NOTE
THIS MODIFICATION AGREEMENT NO. 2 TO REIMBURSEMENT AGREEMENT
AND STANDBY NOTE (the "Modification No. 21") is made as of the 1st
day of April, 1994, by and between SHONEY'S, INC. (the
"Borrower"), a Tennessee corporation, and NATIONSBANK OF TENNESSEE,
N.A. ("NationsBank") (formerly known as Sovran Bank/ Central
South), a national banking association having its principal place
of business in the City of Nashville, Tennessee.
WITNESSETH:
WHEREAS, the parties heretofore entered into a Reimbursement
Agreement dated as of October 1, 1990 (the "Agreement"), as
modified and amended by Modification Agreement No. 1 to
Reimbursement Agreement and Standby Note dated July 21, 1993 (the
"Modification No. 1") (the Agreement, as modified by Modification
No. 1, is hereinafter referred to as the "Reimbursement
Agreement"); and
WHEREAS, pursuant to the Reimbursement Agreement, the Borrower
has issued its $9,580,000.00 Standby Promissory Note dated October
5, 1990 (the "Note"), as modified and amended by Modification No.
1 (the Note, as modified and amended by Modification No. 1, is
hereinafter referred to as the "Standby Note"); and
WHEREAS, the Borrower has requested that NationsBank amend
certain provisions of the Reimbursement Agreement and the Standby
Note as set forth herein; and
WHEREAS, NationsBank is willing to amend such provisions, but
only on the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Certain Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in
this Modification No. 2, including its preamble and recitals, have
the following meanings (such meanings to be equally applicable to
the singular and plural forms thereof):
"Borrower" has the meaning assigned to such term in the
preamble.
"Modification Effective Date" has the meaning assigned to such
term in Section 3.1.
"Modification No. 1" has the meaning assigned to such term in
the first recital.
"Modification No. 2" means this Modification Agreement No. 2
to Reimbursement Agreement and Standby Note.
"NationsBank" has the meaning assigned to such term in the
preamble.
"Reimbursement Agreement" has the meaning assigned to such
term in the first recital.
"Standby Note" has the meaning assigned to such term in the
second recital.
SECTION 1.2. Other Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in
this Modification No. 2, including its preamble and recitals, have
the meanings assigned to such terms in the Reimbursement Agreement.
ARTICLE II.
MODIFICATION OF REIMBURSEMENT AGREEMENT AND
STANDBY NOTE AS OF THE MODIFICATION EFFECTIVE DATE
Effective on (and subject to the occurrence of) the
Modification Effective Date, the provisions of the Reimbursement
Agreement and Standby Note referred to below are hereby amended and
modified in accordance with this Article II. Except as expressly so
amended, the Reimbursement Agreement and Standby Note shall
continue in full force and effect in accordance with their terms,
and the Borrower hereby reaffirms its obligations under the
Reimbursement Agreement and the Standby Note as amended and
modified hereby and under the other Note Documents.
SECTION 2.1. Modification of Reimbursement Agreement.
The Reimbursement Agreement is hereby amended in the following
manner:
SECTION 2.1.1. The following definition of "First
Step-Down" is hereby added to Article I of the
Reimbursement Agreement in appropriate alphabetical
order:
"First Step-Down" shall mean the time at
which the Borrower has delivered a Compliance
Certificate (as defined in the CIBC
Agreement) pursuant to the CIBC Agreement
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demonstrating that the Borrower's Funded Debt
Ratio (as defined in the CIBC Agreement) is
equal to or less than 3:1 and the Borrower's
Adjusted Interest Coverage Ratio (as defined
in the CIBC Agreement) is greater than 3:1.1"
SECTION 2.1.2. Section 3.02(a) of the
Reimbursement Agreement is hereby deleted and
the following is inserted in lieu therefor:
"(a) In addition to any other fees
payable to the Letter of Credit Issuer, the
Borrower will pay to the Letter of Credit
Issuer in advance, on the Date of Issuance and
on each Commission Payment Date thereafter
until the Termination Date, a letter of credit
fee for the period from such Commission
Payment Date (or, in the case of the first
such payment, the Date of Issuance) to and
including the day before the next Commission
Payment Date, in an amount equal to the
product of (i) one and one-half percent (1 1/2%)
per annum (the "Fee Percentage") of the Stated
Amount of the Letter of Credit (as determined
on such Commission Payment Date) multiplied by
(ii) a fraction, the numerator of which equals
the actual number of days from and including
such Commission Payment Date (or the Date of
Issuance, as the case may be) to and including
the day before the next Commission Payment
Date and the denominator of which equals the
actual number of days in such year, provided,
however, that, upon the occurrence of the
First Step-Down, the Fee Percentage shall be
reduced to one and one-quarter percent (l 1/4%)
per annum. The Borrower shall be entitled to a
pro-rata refund of such fee paid in advance if
and to the extent that the Stated Amount of
the Letter of credit is reduced during the
period for which such fee was prepaid pursuant
to the provisions of Section 5.10(b) of the
Note Issuance Agreement."
SECTION 2.2. Modification of Standby Note. The Standby Note is
hereby amended in the following manner:
SECTION 2.2.1. The date "September 1, 19951"
appearing in the fourth full paragraph of the Standby
Note is hereby deleted and the date "September 1, 1997"
is inserted in lieu therefor.
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ARTICLE III.
CONDITIONS TO EFFECTIVENESS
SECTION 3.1. Modification Effective Date. This modification
No. 2 shall become effective as of the date first above written
(the "Modification Effective Date") when counterparts of this
Modification No. 2 shall have been duly executed by the Borrower
and NationsBank.
ARTICLE IV.
MISCELLANEOUS
SECTION 4.1. Cross References. References in this
Modification No. 2 to any article or section are, unless otherwise
specified, to such article or section of this Modification No. 2.
SECTION 4.2. Instrument Pursuant to Reimbursement Agreement;
Limited Waiver. This Modification No. 2 is a document executed
pursuant to the Reimbursement Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered, and
applied in accordance with all of the terms and provisions of the
Reimbursement Agreement. Any term or provision of and any
modification effected by this Modification No. 2 may be modified in
any manner by an instrument in writing executed by the parties
hereto. Except as expressly amended hereby, all of the
representations, warranties, terms, covenants, and conditions of
the Reimbursement Agreement, the Standby Note and the other Note
Documents shall remain unmodified and unwaived. The modifications
set forth herein shall be limited precisely as provided for herein
to the provisions expressly modified herein.
SECTION 4.3. Successors and Assigns. This Modification No.
2 shall be binding upon and inure to the benefit of.the parties
hereto and their respective successors and assigns.
SECTION 4.4. Counterparts. This Modification No. 2 may be
executed by the parties hereto in several counterparts which shall
be executed by the Borrower and NationsBank, as the case may be,
all of which shall be deemed to be an original and which shall
constitute together but one and the same agreement.
SECTION 4.5. Event of Default. It is understood and agreed
that any breach of any representation or warranty or covenant
contained herein shall constitute an Event of Default.
SECTION 4.6. Expenses. The Borrower hereby agrees that it
will pay all out-of-pocket expenses incurred by NationsBank in
connection with this Modification No. 2, including reasonable
attorneys' fees and expenses.
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IN WITNESS WHEREOF, the parties hereto have caused this
Modification No. 2 to be executed by their respective officers
hereunder duly authorized as of the day and year first above
written.
SHONEY'S, INC.
By:
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Title:
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NATIONSBANK OF TENNESSEE, N.A.
(formerly known as Sovran
Bank/Central South)
By:
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Title:
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