Tender-Offer Statement — Issuer Tender Offer — Schedule TO
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC TO-I Shoney's, Inc. Schedule to and Schedule 13E-3 With 14± 52K
Respect to Shoney's Lyons and Tpi
Debentures
2: EX-1 Exhibit (A)(1) to Schedule to and Schedule 13E-3 52± 203K
3: EX-2 Exhibit (A)(2) to Schedule to and Schedule 13E-3 18± 75K
4: EX-3 Exhibit (A)(3) to Schedule to and Schedule 13E-3 19± 77K
5: EX-4 Exhibit (A)(4) to Schedule to and Schedule 13E-3 4± 17K
6: EX-5 Exhibit (A)(5) to Schedule to and Schedule 13E-3 4± 17K
7: EX-6 Exhibit (A)(6) to Schedule to and Schedule 13E-3 2± 13K
8: EX-7 Exhibit (A)(7) to Schedule to and Schedule 13E-3 3± 14K
9: EX-8 Exhibit (A)(8) to Schedule to and Schedule 13E-3 3± 16K
10: EX-9 Exhibit (A)(9) to Schedule to and Schedule 13E-3 3± 17K
11: EX-10 Exhibit (A)(10) to Schedule to and Schedule 13E-3 4± 20K
12: EX-11 Exhibit (A)(11) to Schedule to and Schedule 13E-3 2± 12K
13: EX-12 Exhibit (B) to Schedule to and Schedule 13E-3 15± 57K
14: EX-13 Exhibit (D)(1) to Schedule to and Schedule 13E-3 6± 29K
15: EX-14 Exhibit (D)(10) to Schedule to and Schedule 13E-3 7± 30K
EX-13 — Exhibit (D)(1) to Schedule to and Schedule 13E-3
June 27, 2000
CIBC World Markets
Henry Pizzitello
425 Lexington Ave.
New York, NY 10017
Dear Holder:
Shoney's, Inc., a Tennessee corporation ("Shoney's"), intends to offer
(the "Offer") to purchase for cash any and all of the outstanding Liquid
Yield Option Notes due 2004 (zero coupon) (the "Debentures") issued by
Shoney's, and to solicit consents (the "Consents") to certain proposed
amendments to the indenture (the "Indenture") pursuant to which the
Debentures were issued. The Offer (including any Consent payment) will be
for $250.00 per $1,000.00 in principal amount at maturity (which, as of the
date of this Letter Agreement, is an aggregate of $177,358,000) of the
Debentures (the "Purchase Price"), net to the Seller in cash, and upon such
other terms and subject to such conditions as shall be set forth in Shoney's
Purchase Offer and Consent Solicitation Statement (the "Statement"). The
Statement and the Offer will contain conditions, terms and procedures that
are the same in all material respects as were contained in the previous offer
for the Debentures made by Shoney's on March 27, 2000 with the exception of
price and proposed amendments that might be made to the indenture pursuant to
which the Debentures were issued. Shoney's anticipates that the Offer will
expire no later than August 31, 2000.
This letter agreement (the "Letter Agreement") sets forth the terms and
conditions by which you (the "Seller"): (1) irrevocably and unconditionally
agree to deposit your Debentures pursuant to the Offer; and (2) grant an
Option (as defined below) to Shoney's to purchase all of your Debentures.
This Letter Agreement also is your agreement to ensure that your affiliates
are bound by and perform your obligations as Seller hereunder, and any
reference to "you" or "Seller" in this Letter Agreement shall include your
affiliates, all to the extent applicable.
Shoney's understands and, by your acceptance of this Letter Agreement,
you represent and warrant to Shoney's that as of the date hereof, you
beneficially own, directly or indirectly, and exercise direction or control
over, the aggregate principal amount of Debentures set forth opposite your
name on the signature page to this Letter Agreement. Upon Shoney's receipt of
(i) fully executed counterparts of letter agreements in the form of this
Letter Agreement between Shoney's and the beneficial owners of not less than
58% of the outstanding principal amount of the Debentures and (ii) fully
executed counterparts of letter agreements between Shoney's and the
beneficial owners of not less than 72% of the outstanding principal amount at
maturity of the 8-1/4% Convertible Subordinated Debentures due 2002 (the "TPI
Debentures") originally issued by TPI Enterprises, Inc. and subsequently
assumed by Shoney's (by which such beneficial owners also grant to Shoney's
options to purchase their TPI Debentures on terms acceptable to Shoney's),
Shoney's will pay $125,000.00 to the firm of Pachulski, Stang, Ziehl, Young
& Jones P.C. (the "Committee Counsel") as its fee, which shall be deemed
fully and unconditionally earned by Committee Counsel at that time.
Notwithstanding this fee arrangement being contained in multiple counterparts
of this Letter Agreement being executed by other holders of Debentures and
TPI Debentures, Committee Counsel shall be entitled only to one payment of
$125,000.00 for services on behalf of all signatories to counterparts of this
Letter Agreement and shall not be entitled to any further payment from
Shoney's in connection with the transactions contemplated by this Letter
Agreement, other counterparts of this Letter Agreement or the Offer.
SECTION 1. DEPOSIT PURSUANT TO OFFER.
1.1 Deposit. Subject to Section 7 of this Letter Agreement, Seller
hereby irrevocably and unconditionally agrees to deposit all of his, her or
its Debentures, together with a completed and executed letter of transmittal,
pursuant to and in accordance with the terms of the Offer prior to the
initial expiration date of the Offer.
June 27, 2000
Page 2
1.2 Non-Withdrawal. Notwithstanding any statutory or other rights as
may be granted by the terms of the Offer or otherwise that Seller might have,
Seller, subject to Section 7 of this Letter Agreement, hereby irrevocably and
unconditionally agrees not to withdraw or take any action to withdraw any
portion of his, her or its Debentures or Consents following the deposit of
such Debentures and the giving of such Consents pursuant to the Offer.
SECTION 2. OPTION TO PURCHASE DEBENTURES.
2.1 Grant of Option. On the terms and subject to the conditions set
forth in this Letter Agreement (including, without limitation, Section 7),
Seller hereby grants to Shoney's an irrevocable option (the "Option") to
purchase all of the right, title and interest of Seller in and to all of
Seller's Debentures for the Purchase Price.
2.2 Exercise of the Option. The Option shall become exercisable two
(2) business days following the date on which the Offer terminates or
expires, without being extended by Shoney's. Shoney's may exercise the
Option in whole, but not in part, in accordance with the terms of Section 2.1
of this Letter Agreement at any time on or before September 3, 2000 (the
"Exercise Period"). If Shoney's exercises the Option, it must do so with
respect to all Debentures of all persons or entities that have executed
counterparts of this Letter Agreement. In the event that Shoney's is
entitled to and wishes to exercise the Option, Shoney's shall send or give a
written notice (the "Notice" and the date on which the Notice is sent or
given shall be referred to herein as the "Notice Date") to Seller at the
address set forth above specifying the place and the date (which shall be no
later than September 6, 2000)(the "Closing Date") for the closing of such
purchase (the "Closing"). Any exercise of the Option shall be deemed to have
occurred on the Closing Date.
2.3 Closing. At the Closing, simultaneously with the payment by
Shoney's of the Purchase Price for Seller's Debentures, Seller shall deliver,
or cause to be delivered, to Shoney's certificates representing Seller's
Debentures duly endorsed to Shoney's or accompanied by bond powers duly
executed by Seller in blank, together with any necessary bond transfer stamps
properly affixed or, if Seller's Debentures are held by a nominee in street
name, an irrevocable instrument of transfer in such form as Shoney's shall
provide.
SECTION 3. SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller hereby represents and warrants to and in favor of Shoney's that:
(a) Seller has the power and capacity and has received all
requisite approvals to enter into this Letter Agreement and to perform its
obligations hereunder and this Letter Agreement is a valid and binding
agreement enforceable by Shoney's against Seller in accordance with its
terms;
(b) Seller is (and, if applicable, upon the deposit of Seller's
Debentures pursuant to the Offer, will be) the sole beneficial owner of
Seller's Debentures and has and will have the exclusive right to dispose of
Seller's Debentures as provided in this Letter Agreement;
(c) Seller's Debentures are, or prior to the expiration of the
Offer, will be owned (and, if applicable, will be acquired by Shoney's) with
good and marketable title, free and clear of any and all mortgages, liens,
charges, encumbrances and adverse claims;
(d) no person, firm or corporation has any agreement or option, or
any right or privilege (whether by law, pre-emptive or contractual) capable
of becoming an agreement or option, for the purchase, acquisition or transfer
of any of Seller's Debentures or any interest therein or right thereto,
except pursuant to this Letter Agreement; and
June 27, 2000
Page 3
(e) the execution and delivery of this Letter Agreement and the
fulfillment of the terms hereof by Seller do not and will not result in a
breach of any agreement or instrument to which Seller is a party or by which
Seller is contractually bound.
SECTION 4. COVENANTS OF SELLER.
Seller hereby covenants that during the term of this Letter Agreement Seller
will:
(a) not sell, assign, convey or otherwise dispose of any of Seller's
Debentures except pursuant to and in accordance with this Letter Agreement;
(b) not exercise any rights or remedies available at common law or
pursuant to applicable corporate and securities laws to delay, hinder, upset
or challenge the Offer; provided, however, that this provision is not
intended to limit Seller's right to require Shoney's to comply with
applicable securities laws or the terms of this Letter Agreement;
(c) not assist, and will oppose, any proposed action by Shoney's
noteholders or others that might reasonably be regarded as being directed
towards or likely to prevent or delay the successful completion of the Offer;
provided, however, that this provision shall not require Seller to incur any
cost or expense or initiate any litigation or other proceeding in order to
comply with these obligations; and
(d) use Seller's reasonable efforts to assist Shoney's to successfully
complete the Offer and the acquisition of the Debentures; provided, however,
that this provision shall not require Seller to incur any cost or expense or
initiate any litigation or other proceeding in order to comply with these
obligations.
SECTION 5. Shoney's Representations and Warranties.
Shoney's hereby represents and warrants to and in favor of Seller that:
(a) Shoney's has the power and capacity and has received all requisite
approvals to enter into this Letter Agreement and to perform its obligations
hereunder and this Letter Agreement is a valid and binding agreement
enforceable by Seller against Shoney's in accordance with its terms; and
(b) the execution and delivery of this Letter Agreement and the
fulfillment of the terms hereof by Shoney's do not and will not result in a
breach of any agreement or instrument to which Shoney's is a party or by
which Shoney's is contractually bound.
SECTION 6. COVENANTS OF SHONEY'S.
Shoney's hereby covenants that it will:
(a) announce the Offer within two (2) business days of receiving letter
agreements in the form of this Letter Agreement from holders of not less than
a majority of the outstanding principal amount of the Debentures;
(b) within five (5) business days following announcement of the Offer,
file with the United States Securities and Exchange Commission ("SEC") the
Statement and any required ancillary documents relating to the Offer;
June 27, 2000
Page 4
(c) within five (5) business days following regulatory clearance of the
Statement by the SEC, commence the Offer;
(d) use its reasonable commercial efforts to successfully complete the
Offer and, subject to the terms and conditions of the Offer, will consummate
the Offer if 90% or more of each of the Debentures and the TPI Debentures
have been tendered in the Offer; provided, however, that nothing in this
Letter Agreement shall obligate Shoney's: (1) to keep the Offer open for
acceptance beyond the expiration date of the Offer (as it may be extended
from time to time); or (2) to complete the Offer if less than 90% of each of
the Debentures and the TPI Debentures have been tendered in the Offer;
(e) provide Committee Counsel, on a weekly basis, the percentage of
Debentures that have been tendered pursuant to the Offer as of the end of the
preceding week; and
(f) comply with the Indenture.
SECTION 7. TERMINATION.
If the Option is not exercised in accordance with the terms and conditions of
Section 2.2, then, after the expiration of the Exercise Period, neither
Seller nor Shoney's shall have any further rights or obligations under this
Letter Agreement, which shall terminate (including the Option granted
hereunder). In the event of such termination of this Letter Agreement,
Seller may withdraw all of his, her or its Debentures deposited in accordance
with the terms and conditions of the Offer, this Letter Agreement shall
forthwith be of no further force and effect as between Seller and Shoney's
and there shall be no liability on the part of either Seller or Shoney's,
except to the extent that either such party has not fulfilled its obligations
under this Letter Agreement that arose prior to its termination. In
addition, Seller may withdraw its Debentures from the Offer (and terminate
the Option granted hereunder) upon the earlier to occur of (i) the expiration
of the Exercise Period, or (ii) any default by Shoney's in the performance of
its obligations under this Letter Agreement, the Offer or the Statement.
Notwithstanding anything in this Letter Agreement to the contrary, no
termination as between Shoney's and Seller will in any way affect Committee
Counsel's right to retain the fees paid pursuant to the third paragraph of
this Letter Agreement.
SECTION 8. GENERAL.
8.1 Disclosure. Prior to the first public disclosure of the existence
and terms and conditions of this Letter Agreement, none of the parties hereto
shall disclose the existence of this Letter Agreement, or any details hereof,
to any person without the prior written consent of the other parties hereto,
except to the extent required by law or as necessary to enforce that party's
rights under this Letter Agreement or the Indenture. The existence and terms
and conditions of this Letter Agreement may be disclosed by Shoney's in press
releases issued in connection with the Offer and in the Statement and the
documents related thereto and may be disclosed by Seller to Seller's
affiliates and professional advisors and consultants and as otherwise may be
required by law or as necessary to enforce that party's rights under this
Letter Agreement or the Indenture.
8.2 Survival of Representations and Warranties. The representations
and warranties made by Shoney's and Seller herein shall survive the Closing.
No investigations made by or on behalf of either party or any of their
respective authorized agents at any time shall have the effect of waiving,
diminishing the scope of or otherwise affecting any representation, warranty
or covenant made by the other party herein or pursuant hereto.
8.3 Specific Performance and other Equitable Rights. Each of the
parties recognizes and acknowledges that this Letter Agreement is an integral
part of the Offer, that Shoney's would not contemplate causing the Offer to
be made unless this Letter Agreement was executed, and that a breach by any
party of any
June 27, 2000
Page 5
covenants or other commitments contained in this Letter Agreement will cause
the other party to sustain injury for which such party would not have an
adequate remedy at law for money damages. Therefore, each of the parties
agrees that in the event of any such breach, the aggrieved party shall be
entitled to the remedy of specific performance of such covenants or
commitments and preliminary and permanent injunctive and other equitable
relief in addition to any other remedy to which it or they may be entitled,
at law or in equity.
8.4 Expenses. Shoney's and Seller shall each pay his, her or its
legal, financial advisory and accounting costs and expenses incurred in
connection with the preparation, execution and delivery of this Letter
Agreement and all documents and instruments executed or prepared pursuant to
this Letter Agreement.
8.5 Governing Law; Counterparts; Amendments; Entire Agreement; Time.
This Letter Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee. This Letter Agreement may be executed in
one or more counterparts which together shall be deemed to constitute one
valid and binding agreement, and delivery of the counterparts may be effected
by means of a telecopier transmission. This Letter Agreement may not be
amended except by written agreement signed by the parties hereto. This
Letter Agreement constitutes the entire agreement and understanding between
the parties pertaining to the subject matter of this Letter Agreement. Time
shall be of the essence of this Letter Agreement.
If the terms and conditions of this Letter Agreement are acceptable to
you, please so indicate by executing and returning the enclosed copy hereof
to the undersigned prior to 11:59 p.m. (Central Daylight time) on June 27,
2000, failing which this letter shall be null and void.
Yours truly,
SHONEY'S, INC.
By: /s/ V. Michael Payne
----------------------------
ACCEPTANCE:
The foregoing Letter Agreement is
agreed to and accepted this
27 day of June, 2000.
/s/ Henry Pizzitello $15,250,000
--------------------------------- -----------------------
Name: Henry Pizzitello $$ Principal Amount
Title: Executive Director of Debentures
Dates Referenced Herein and Documents Incorporated by Reference
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