MODIFICATION AGREEMENT NO. 4
TO
REDUCING REVOLVING
CREDIT AGREEMENT
This MODIFICATION AGREEMENT NO. 4 (the "Modification Agreement
No. 4"), dated as of October 27, 1994, to the Reducing Revolving
Credit Agreement, dated as of July 21, 1993, as amended by
Modification Agreement No. 1 to Reducing Revolving Credit
Agreement, dated as of July 21, 1993, by Modification Agreement No.
2 to Reducing Revolving Credit Agreement, dated as of December 21,
1993, and by Modification No. 3 to Reducing Revolving Credit
Agreement, dated as of May 3, 1994 (collectively, the "Existing
Credit Agreement"), among SHONEY'S, INC., a Tennessee corporation
(the "Borrower"), CIBC INC., acting through its Atlanta Office and
various other financial institutions, which are now, or in
accordance with Section 10.10 of the Existing Credit Agreement
hereafter become, parties thereto (collectively, the "Lenders" and,
individually, a "Lender"), and CANADIAN IMPERIAL BANK OF COMMERCE,
a Canadian chartered bank acting through its New York Agency, as
Agent and Collateral Agent (the "Agent" and the "Collateral Agent",
respectively) for the Lenders;
W I T N E S S E T H:
WHEREAS, the Borrower has requested that certain provisions of
the Existing Credit Agreement be amended in certain respects as set
forth herein; and
WHEREAS, the Lenders are willing to amend certain provisions
of the Existing Credit Agreement and to take or permit the taking
of certain actions as set forth herein, but only on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements herein
contained, the parties hereto 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 Agreement No. 4, including its preamble and
recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Agent has the meaning assigned to such term in the preamble.
"Borrower" has the meaning assigned to such term in the
preamble.
"Collateral Agent" has the meaning assigned to such term in
the preamble.
"Collateral Restaurants" has the meaning assigned to such term
in the Marriott Agreement.
"Existing Credit Agreement" has the meaning assigned to such
term in the preamble.
"Lenders" and "Lender" have the respective meanings assigned
to such terms in the preamble.
"Marriott Agreement" means the Restaurant Sale and Purchase
Agreement, dated May 20, 1992, as amended by the Closing Agreement,
dated October 2, 1992, and by the First Amendment to Restaurant
Sale and Purchase Agreement, dated May 18, 1994, among Host
Marriott Corporation, Marriott Family Restaurants, Inc., Thompson
Hospitality, L.P. and the Borrower.
"Modification Agreement No. 4" has the meaning assigned to
such term in the preamble.
"Modification Effective Date" has the meaning assigned to such
term in Section 4.1.
SECTION 1.2. Other Definitions. Unless otherwise defined
herein or the context otherwise requires, capitalized terms used in
this Modification Agreement No. 4, including its preamble and
recitals, have the meanings provided in the Existing Credit
Agreement.
ARTICLE II
AMENDMENT OF EXISTING CREDIT AGREEMENT
AS OF THE MODIFICATION EFFECTIVE DATE
Effective on (and subject to the occurrence of) the
Modification Effective Date, the provisions of the Existing Credit
Agreement referred to below are hereby amended in accordance with
this Article II. Except as expressly so amended, the Existing
Credit Agreement shall continue in full force and effect in
accordance with its terms.
SECTION 2.1. Modification of Article VII (Covenants).
Article VII of the Existing Credit Agreement is hereby modified as
follows:
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SECTION 2.1.1 Section 7.1.10 of the Existing Credit
Agreement is hereby deleted in its entirety and the following
Section 7.1.10 is substituted in lieu thereof:
"SECTION 7.1.10. Rate Protection. As of the 1994
Fiscal Year end and as of each Fiscal Year end thereafter
through and including the end of the Borrower's Fiscal
Year 1996, the Borrower shall have in effect, interest
rate swap, hedge, cap, collar or similar arrangements
satisfactory in form and substance and pursuant to
documentation satisfactory to the Agent in a notional
amount equal to $50,000,000."
SECTION 2.1.2. Section 7.2.7 of the Existing Credit
Agreement is hereby amended by deleting the phrase "1996
Fiscal Year" in the parenthetical in clause (ii) of the first
proviso to Section 7.2.7 and substituting the phrase "1997
Fiscal Year" in lieu thereof.
ARTICLE III
CONSENT TO MARRIOTT EXTENSION
SECTION 3.1. Consent to Extension. The Lenders hereby
consent to Borrower's extension of Borrower's purchase obligations
with respect to the Collateral Restaurants pursuant to Article 18
of the Marriott Agreement through and including July 2, 1997.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
SECTION 4.1. Modification Effective Date. This Modification
Agreement No. 4 shall become effective as of the date first above
written, when all of the conditions set forth in Sections 4.1.1 and
4.1.2 shall have been satisfied (the "Modification Effective
Date").
SECTION 4.1.1. Resolutions, etc. The Agent shall have
received from the Borrower, a certificate, dated the
Modification Effective Date, of its Secretary or any Assistant
Secretary as to:
(a) resolutions of its Board of Directors then in
full force and effect authorizing the execution,
delivery, and performance of this Modification Agreement
No. 4 and each other Loan Document to be executed by it;
(b) the incumbency and signatures of the officers
of the Borrower authorized to act with respect to this
Modification Agreement No. 4 and each other Loan Document
to be executed by it (upon which certificate the Agent
and each Lender may conclusively rely until the Agent
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shall have received a further certificate of the
Secretary of the Borrower canceling or amending such
prior certificate, which further certificate shall be
reasonably satisfactory to the Agent).
SECTION 4.1.2. Execution of Counterparts. The Agent
shall have received counterparts of this Modification
Agreement No. 4 duly executed by the Borrower, the Agent, and
the Required Lenders.
SECTION 4.1.3. Compliance with Warranties; No Default
etc. The Agent shall have received from an Authorized Officer
of the Borrower a certificate, dated the date first above
written, stating that
(a) the representations and warranties set forth in
Article VI of the Existing Credit Agreement (excluding,
however, those contained in Section 6.7 thereof) and the
representations and warranties set forth in each of the
other Loan Documents, in each case as modified in
accordance herewith, are true and correct in all material
respects with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case
such representations and warranties were true and correct
as of such earlier date);
(b) except as disclosed by the Borrower to the
Agent and the Lenders pursuant to Section 6.7 of the
Existing Credit Agreement:
(i) no labor controversy, litigation,
arbitration or governmental investigation or
proceeding is pending or, to the knowledge of the
Borrower, threatened against the Borrower or any of
its Subsidiaries which might have a Materially
Adverse Effect; and
(ii) no development has occurred in any labor
controversy, litigation, arbitration or
governmental investigation or proceeding disclosed
pursuant to Section 6.7 of the Existing Credit
Agreement which might have a Materially Adverse
Effect; and
(c) no Default has occurred and is continuing, and
neither the Borrower nor any of its Subsidiaries is in
material violation of any law or government regulation or
court order or decree.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. Cross References. References in this
Modification Agreement No. 4 to any article or section are, unless
otherwise specified, to such article or section of this
Modification Agreement No. 4.
SECTION 5.2. Instrument Pursuant to Existing Credit
Agreement; Limited Waiver. This Modification Agreement No. 4 is a
Loan Document executed pursuant to the Existing Credit Agreement
and shall (unless otherwise expressly indicated therein) be
construed, administered, and applied in accordance with all of the
terms and provisions of the Existing Credit Agreement. Any term or
provision of and any modification effected by this Modification
Agreement No. 4 may be modified in any manner by an instrument in
writing executed by the Borrower and the Required Lenders (or the
Agent on behalf of and with the consent of the Required Lenders).
Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Existing Credit
Agreement shall remain unmodified and unwaived. The modifications
set forth herein shall be limited precisely as provided for herein
to the provisions expressly modified herein and shall not be deemed
to be a waiver of, amendment of, consent to or modification of any
other term or provision of any other Loan Document or of any
transaction or further or future action on the part of the Borrower
which could require the consent of any of the Lenders under the
Existing Credit Agreement.
SECTION 5.3. Successors and Assigns. This Modification
Agreement No. 4 shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
SECTION 5.4. Counterparts. This Modification Agreement No.
4 may be executed by the parties hereto in several counterparts
which shall be executed by the Borrower, each of the Required
Lenders and the Agent, 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 5.5. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this
Modification Agreement No. 4 to be executed by the respective
officers hereunder duly authorized as of the day and year first
above written.
SHONEY'S, INC.
By:
---------------------------
Title: Treasurer
CANADIAN IMPERIAL BANK OF
COMMERCE, acting through
its NEW YORK AGENCY, as
Agent
By:
---------------------------
Title: Authorized Signatory
CIBC INC., acting through
its Atlanta Office
By:
---------------------------
Title: Authorized Signatory
NATIONSBANK OF TENNESSEE, N.A.
By:
---------------------------
Title:
THE BANK OF NEW YORK
By:
---------------------------
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By:
---------------------------
Title:
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THE BANK OF NOVA SCOTIA
By:
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Title:
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:
---------------------------
Title:
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:
---------------------------
Title:
THE FUJI BANK, LIMITED
By:
---------------------------
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By:
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Title:
KREDIETBANK N.V.
By:
---------------------------
Title:
THE BANK OF TOKYO TRUST COMPANY
By:
---------------------------
Title:
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FIRST AMERICAN NATIONAL BANK
By:
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Title:
ALLIED IRISH BANK
By:
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Title:
MERCHANTILE BANK OF ST. LOUIS, N.A.
By:
---------------------------
Title:
PNC BANK, KENTUCKY, INC.
By:
---------------------------
Title:
THE ROYAL BANK OF SCOTLAND
By:
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Title:
GIROCREDIT BANK
By:
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Title:
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