Re: Amendment No. 7 to Amended and Restated Note Purchase and Private Shelf Agreement
EXHIBIT
4.01
EXECUTION
VERSION
May
16,
2008
The
Steak
N Shake Company
500
Century Building
▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Indianapolis,
Indiana 46204
Attention: Chief
Financial Officer
|
|
Re:
|
Amendment
No. 7 to Amended and Restated Note Purchase and Private Shelf
Agreement
|
Ladies
and Gentlemen:
Reference
is made to that certain
▇▇▇▇▇▇▇ and Restated Note Purchase and Private Shelf Agreement dated as of
September 20, 2002, as amended by that certain Amendment No. 1 dated December
18, 2002, that certain Amendment No. 2 dated May 21, 2003, that certain
Amendment No. 3 dated September 17, 2003, that certain Amendment dated November
7, 2005, that certain Amendment No. 5 dated October 30, 2007 and that certain
Amendment No. 6 dated December 5, 2007 (as so amended, the “Note Agreement”) among The
Steak N Shake Company, an Indiana corporation (the “Company”), Prudential
Investment Management, Inc., The Prudential Insurance Company of America and
each Prudential Affiliate which has or may become a party thereto in accordance
with the terms thereof (collectively, “Prudential”), pursuant to
which the Company issued and sold and Prudential purchased the Company’s senior
fixed rate notes from time to time. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms
in
the Note Agreement.
Pursuant
to the request of the Company
and in accordance with the provisions of paragraph 11C of the Note Agreement,
the parties hereto agree as follows:
SECTION
1. Amendment. From
and after
the Effective Date (as defined in Section 3 below), the Note Agreement is
amended as follows:
1.1
Paragraph 4B of the Note Agreement is amended in its entirety as
follows:
“4B. Required
Prepayments of Shelf Notes
and under Intercreditor Agreement.
4B(1). Required
Prepayments of Shelf Notes.
Each Series of Shelf Notes shall be subject to required prepayments,
if
any, set forth in the Notes of such Series.
4B(2). Required
Prepayment Pursuant to
Intercreditor Agreement. If any amounts are to be applied to
the principal of the Notes on any date pursuant to the terms of the
Intercreditor Agreement, such principal amount of the Notes, together with
interest thereon to such date and together with the Yield-Maintenance Amount,
if
any, with respect to each Note, shall be due and payable on such
date. Any partial prepayment of the Notes pursuant to this paragraph
4B(2) shall be applied in satisfaction of the required payments of principal
thereof (including the required payment of principal due upon the maturity
thereof) in the inverse order of their scheduled due dates.
1.2
Paragraph 4E of the Note Agreement is amended in its entirety as
follows:
“4E. Application
of
Prepayments. In the case of each prepayment of less than the
entire unpaid principal amount of all outstanding Notes of any Series pursuant
to paragraphs 4A or 4B(1), the amount to be prepaid shall be applied pro rata
to
all outstanding Notes of such Series (including, for the purpose of this
paragraph 4E only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
other
than by prepayment pursuant to paragraph 4A, 4B or 4C) according to the
respective unpaid principal amounts thereof. In the case of each
prepayment of less than the entire unpaid principal amount of all outstanding
Notes pursuant to paragraph 4B(2) or 4C, the amount to be prepaid shall be
applied pro rata to all outstanding Notes (excluding any Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any
of
its Subsidiaries or Affiliates) according to the respective unpaid principal
amounts thereof.”
1.3
Paragraph 5A is amended by deleting the “and” at the end of clause (iv) thereof,
renumbering clause (v) therein as clause (vi) and adding a new clause (v)
thereto as follows:
“(v) Simultaneously
with the transmission thereof, copies of all notices, reports, financial
statements or other communications given to the Bank Agent or any Bank under
a
Credit Agreement, excluding routine borrowing requests; and”
1.4
Paragraph 5G of the Note Agreement is amended in its entirety as
follows:
“5G. Change
in Control Put
Option. The Company covenants that within three Business Days
after any Responsible Officer shall obtain knowledge of the occurrence of a
Change in Control Event, the Company shall provide each holder of Notes written
notice thereof, describing in reasonable detail the facts and circumstances
constituting such Change in Control Event. Following the occurrence
of any Change in Control Event, if at any time prior to 15 Business Days after
receipt of notice thereof, the holder of any Note requests in writing that
the
Company purchase the Note(s) held by such holder, the Company shall, on the
20th
Business Day after such receipt of such notice, purchase (and each such holder
thereof shall sell) such Note(s) at a purchase price equal to the aggregate
outstanding principal amount thereof, together with interest thereon to the
date
of purchase and the Yield-Maintenance Amount, if any, with respect
thereto.
No
holder of any Note to be sold
pursuant to the paragraph 5G shall be required to make any representation or
warranty in connection with such sale, other than with respect to its ownership
of its Note.”
1.5
New paragraph 5I is added to the Note Agreement as follows:
5I. Deliveries;
Further
Assurances. The Company covenants to, and to cause each
Guarantor to, at its sole expense, promptly execute and deliver, or cause to
be
executed and delivered, to the holders of the Notes or the Collateral Agent,
in
due form for filing or recording (the Company hereby agrees to pay the cost
of
filing or recording the same (including without limitation any and all filing
fees and recording taxes)) in all public offices necessary or deemed necessary
by the Required Holder(s) or the Collateral Agent, such collateral assignments,
security agreements, pledge agreements, warehouse receipts, bailee letters,
consents, waivers, financing statements and other instruments and documents,
and
do such other acts and things, including, without limitation, all acts and
things as the Required Holder(s) or the Collateral Agent may from time to time
reasonably request, to establish and maintain to the satisfaction of the
Required Holder(s) and the Collateral Agent a valid and perfected first priority
security interest in favor of the Collateral Agent in all of the present and/or
future Collateral free of all other Liens whatsoever (subject only to the Liens
permitted by clauses (i), (ii), (iii), (iv) and (vi) of paragraph 6C(1)), and
to
deliver to the Collateral Agent or the holders of the Notes such certificates,
documents, instruments and opinions in connection therewith as may be reasonably
requested by the Collateral Agent or the Required Holder(s), each in form and
substance reasonably satisfactory to the Collateral Agent and the Required
Holder(s). The Company hereby irrevocably makes, constitutes and
appoints the Collateral Agent (and all other persons designated by the
Collateral Agent for that purpose) as the Company’s true and lawful agent and
attorney-in-fact to, if the Company fails to do so as required upon the request
of the Required Holder(s) or the Collateral Agent, sign the Company’s name on
any such agreements, instruments and documents referred to in the preceding
sentences and to deliver such agreements, instruments and documents to such
Persons as the Required Holder(s) or the Collateral Agent in their sole
discretion may elect.”
1.6
Paragraph 6A of the Note Agreement is amended in its entirety to read as
follows:
“6A. Debt
Service Coverage
Ratio. The Company will not permit the Debt Service Coverage
Ratio to be less than (i) 0.90 to 1.00 at any time on or prior to the fiscal
period ending on (or nearest to) December 19, 2007, (ii) 0.70 to 1.00 at any
time on or after the fiscal period beginning on (or nearest to)
December 19, 2007 to the fiscal period ending on (or nearest to) March
31, 2009 and (iii) 1.25 to 1.00 at any other time.”
1.7
Paragraph 6C(1) (Liens) of the Note Agreement is amended by deleting the “and”
at the end of clause (iv) thereof, amending clause (v) therein in its entirety
as follows and adding a new clause (vi) thereto as follows:
“(v)
Liens in favor of the Collateral Agent securing the Senior Indebtedness (as
defined in the Intercreditor Agreement); provided that the Intercreditor
Agreement is in full force and effect; and
(vi) other
Liens of the Company or Subsidiaries, so long as Priority Debt at no time
exceeds $750,000 (notwithstanding the foregoing in this clause (vi), the basket
provided in this clause (vi) shall not be used to provide credit enhancements
(in any form, including Liens and Guarantees) to the lenders under a Credit
Agreement);”.
1.8
Clauses (i), (ii) and (v) of paragraph 6C(2) (Debt) of the Note Agreement are
amended and restated to read in their entirety as follows:
“(i)
Debt
of any Subsidiary to the Company or a Wholly-Owned Subsidiary and Debt of the
Company to any Wholly-Owned Subsidiary;
(ii)
Debt
of any Subsidiary under a Guarantee of Indebtedness or other obligations of
the
Company under a Credit Agreement, provided that such Subsidiary is party to
the
Guaranty Agreement and the Intercreditor Agreement is in full force and effect
and applicable to such Guarantee;”
....
(v)
other
Debt of the Company or Subsidiaries, so long as Priority Debt at no time exceeds
$750,000 (notwithstanding the foregoing clause (v), the Debt basket provided
in
this clause (v) shall not be used to provide credit enhancements (in any form,
including Guarantees or Liens) to the lenders under a Credit
Agreement);”
1.9
The proviso appearing at the end of paragraph 6C(2) (Debt) of the Note Agreement
is amended in its entirety and the following is hereby substituted
therefore:
“provided
that for each period of four
(4) consecutive fiscal quarters, the Company shall, at all times, maintain
a
ratio of Consolidated Debt to consolidated EBITDA (the “Leverage Ratio”) not exceeding
(i) 3.75 to 1.00 for the four (4) consecutive fiscal quarter periods ending
on
(or nearest to) December 30, 2007, (ii) 4.75 to 1.00 for the four (4)
consecutive fiscal quarter periods ending on (or nearest to) March 30, 2008,
June 29, 2008 and September 30, 2008, (iii) 4.00 to 1.00 for the four
consecutive fiscal quarter periods ending on (or nearest to) December 31, 2008,
(iv) 3.50 to 1.00 for the four consecutive fiscal quarter periods ending on
(or
nearest to) March 31, 2009, and (v) 2.75 to 1.00 at any other time; further
provided that for purposes of the Leverage Ratio, all current and future
Capitalized Lease Obligations shall, for so long as the underlying leases are
in
effect, at all times be included in the computation of Consolidated Debt of
the
Company notwithstanding any subsequent reclassification of such Capitalized
Lease Obligations as operating leases under generally accepted accounting
principles (and with respect to such rental obligations that are reclassified
as
operating leases, the amount of such rental obligations included in the
computation of Consolidated Debt shall be the amount that would otherwise be
required to be capitalized in accordance with generally accepted accounting
principles if such rental obligations were in fact Capitalized Lease Obligations
(it being understood and agreed that if the Company and/or its Subsidiaries
has
Capitalized Lease Obligations at the time of calculating the capitalized amount
of such operating leases, such calculation of the capitalized amount of such
operating leases shall be performed consistent with the methodology used to
calculate the capitalized amount of such Capitalized Lease
Obligations)). Together with the delivery of financial statements
required by paragraphs 5A(i) and (ii), for each Capitalized Lease Obligation
reclassified as an operating lease the Company will deliver to each Significant
Holder an Officer’s Certificate demonstrating the computation (including
disclosing the discount rate used in each such computation) of the capitalized
portion of such operating lease required to be included in the computation
of
Consolidated Debt for purposes of the Leverage Ratio pursuant to the immediately
preceding proviso.”
1.10
Paragraph 6C(2A) is amended in its entirety to read as follows:
“6C(2A). Leverage
Fee. In
addition to interest accruing on the Notes, the Company agrees to pay to the
holders of the Notes a fee (the “Leverage Fee”) with respect
to each fiscal quarter of the Company, beginning with the fiscal quarter ending
on (or nearest to) March 31, 2008, on the last day of which the Leverage Ratio
for the four most recent fiscal quarters then ended is equal to or greater
than
3.00 to 1.00. The Leverage Fee payable with respect to each Note
shall be a dollar amount equal to (a) the product obtained by multiplying (i) (A)
.010 if the Leverage Ratio is less than 4.00 to 1.00, and (B) .025 if the
Leverage Ratio is equal to or greater than 4.00 to 1.00, in either case times (ii) the
Weighted Dollar Average (as defined below) of the principal balance of such
Note
during the fiscal quarter to which the Leverage Fee relates and (b) dividing
the
product thus obtained by four. The Leverage Fee for each applicable
fiscal quarter shall be payable in arrears on the date upon which the financial
statements for such fiscal quarter are to be delivered under paragraph 5A(i)
(or
paragraph 5A(ii), if the applicable fiscal quarter is the last fiscal quarter
in
a fiscal year). If the Company fails to deliver financial statements
under paragraphs 5A(i) or 5A(ii) for any fiscal quarter or fiscal year by the
date such delivery is due, and fails to provide such financial statements within
five (5) days of written notice of such failure given to the Company, then
the
Company shall be deemed to owe the Leverage Fee for such fiscal quarter and
shall make the payment required for such fiscal quarter on the date due pursuant
to the preceding sentence. Payment of the Leverage Fee shall be made
pursuant to the terms of paragraph 11A.
The
acceptance of the Leverage Fee by any holder of a Note shall not constitute
a
waiver of any Default or Event of Default, including, without limitation, any
Default or Event of Default under paragraph 6C(2). The consequences
for the failure to pay the Leverage Fee when due shall be governed by paragraph
7A(ii) hereof, treating the Leverage Fee, for such purposes and for the purpose
of determining the amount payable upon acceleration of the Notes, as
interest.
As
used
in this paragraph 6C(2A), “Weighted Dollar Average”
shall mean, with respect to any Note, during any fiscal quarter of the Company,
a dollar amount determined by adding together the daily outstanding principal
balance of such Note during such fiscal quarter and dividing the amount thus
obtained by the total number of days in such fiscal quarter.”
1.11
Paragraph 6C(3) of the Note Agreement is amended in its entirety to read as
follows:
“6C(3). Consolidated
Net
Worth. The Company will at all times keep and maintain
Consolidated Net Worth at an amount not less than $270,000,000.”
1.12
Paragraph 6C(4)(vi) of the Note Agreement is amended in its entirety to read
as
follows:
“(vi)
[Intentionally Omitted]; and”
1.13
Clause (ii) of paragraph 6C(6) is amended in its entirety as
follows:
“(ii) any
Guarantor may merge or consolidate with or into another Guarantor and any
Subsidiary that is not a Guarantor may merge or consolidate with or into a
Wholly-Owned Subsidiary, and”
1.14
Paragraph 6C(7) of the Note Agreement is amended by amending clauses (ii) and
(iii) thereof in their entirety as follows:
“(ii) any
Guarantor may Transfer assets to the Company or another Guarantor and any
Subsidiary that is not a Guarantor may Transfer assets to the Company or a
Wholly-Owned Subsidiary, and
(iii) the
Company and Subsidiaries may otherwise Transfer assets for fair market value
(as
determined in good faith by the Company); provided that (a) the aggregate
proceeds realized for all Transfers of assets pursuant to this clause (iii)
does
not exceed $50,000,000, (b) the proceeds from any such Transfer are used for
working capital purposes or applied to reduce the Indebtedness outstanding
under
the Credit Agreement or to prepay the Notes pursuant to paragraph 4C and (c)
the
aggregate amount of proceeds from all such Transfers that are used for working
capital purposes and are not used to reduce Indebtedness outstanding under
the
Credit Agreement or prepay Notes pursuant to paragraph 4C does not exceed
$10,000,000.”
1.15
A new paragraph 6C(11) is added to the Note Agreement as follows:
“6C(11). Restricted
Payments. At any time declare or make, or become obligated to
declare or make, any Restricted Payment, except that the Company may repurchase
outstanding shares of its common stock so long as, at the time of any such
repurchase and after giving effect thereto (i) the Leverage Ratio for the four
(4) consecutive fiscal quarter periods ending on the fiscal quarter most
recently ended (assuming for this purpose that such share repurchase had
occurred on the last day of such fiscal quarter) is not greater than 2.75 to
1.00, (ii) the Debt Service Coverage Ratio (assuming for this purpose that
such
share repurchase had occurred on the last day of the fiscal quarter most
recently ended) is not less than 1.25 to 1.00, and (iii) no Default or Event
of
Default shall exist.”
1.16
A new paragraph 6D is added to the Note Agreement as follows:
“6D. Availability
under Credit
Agreement. The Company shall not permit at any time there not
to be in full force and effect a commitment by the Banks under a Credit
Agreement to make revolving loans to the Company in an aggregate outstanding
principal amount of up to at least $30,000,000.”
1.17
Paragraph 7A of the Note Agreement is amended by amending clauses (iv) and
(vi)
in their entirety, adding “or” at the end of clause (xiv) thereof and adding a
new clause (xv) as follows:
“(iv)
any representation or warranty made by the Company or any Guarantor herein
or in
any other Transaction Document or by the Company or any Guarantor or any of
its
respective officers in any writing furnished in connection with or pursuant
to
this Agreement or any other Transaction Document shall be false or misleading
in
any material respect on the date as of which made; or”
…
“(vi)
the Company fails to perform or observe any other agreement, term or
condition contained herein and such failure shall not be remedied within 30
days
after any Responsible Officer obtains actual knowledge thereof, or the Company
or any Guarantor fails to perform or observe any agreement contained in any
other Transaction Document and such failure shall not be remedied within the
grace period, if any, provided therefor in such Transaction Document;
or”
…
“(xv) any
Guaranty Agreement or any Collateral Document shall cease to be in full force
and effect, or the Company or any Guarantor shall contest or deny the validity
or enforceability of, or deny that it has any liability or obligations under,
any Guaranty Agreement or any Collateral Document, or the Collateral Agent
does
not have or ceases to have a valid first priority perfected security interest
(subject only to Liens permitted by clauses (i), (ii), (iii), (iv) and (vi)
of
paragraph 6C(1)) in any Collateral for the benefit of the holders of the
Notes;”
1.18
Paragraph 7D of the Note Agreement is amended in its entirety as
follows:
“7D. Other
Remedies. If
any Event of Default or Default shall occur and be continuing, the holder of
any
Note may proceed to protect and enforce its rights under this Agreement, the
other Transaction Documents and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by
suit
in equity or by action at law, or both, whether for specific performance of
any
covenant or other agreement contained in this Agreement or the other Transaction
Documents or in aid of the exercise of any power granted in this Agreement
or
any Transaction Document. No remedy conferred in this Agreement or
the other Transaction Documents upon the holder of any Note or the Collateral
Agent is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or by statute
or otherwise.”
1.19
Paragraph 8A(1) of the Note Agreement is amended by adding the following
sentence to the end thereof:
“Schedule
8A(1) hereto sets forth, as of the Seventh Amendment Effective Date, a correct
list of each Subsidiary, its jurisdiction of incorporation and its ownership,
and whether such Subsidiary is a guarantor or otherwise Guarantees any of the
Indebtedness or other obligations of the Company or any Guarantor under the
Credit Agreement.”
1.20
New paragraphs 8R and 8S are added to the Note Agreement as
follows:
“8R. Absence
of Financing Statements,
Etc. Except with respect to the Liens permitted by paragraph
6C(1) hereof, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future Lien on, or security interest
in, any assets or property of the Company or any Subsidiary or any rights
relating thereto.
8S.
Establishment of Security
Interest. Schedule 8S sets forth as of the Seventh Amendment
Effective Date a complete and accurate list of (i) the name, jurisdiction of
organization and organizational identification number of the Company and each
of
its Subsidiaries, (ii) if the Company or any Subsidiary is not a “registered
organization” (as defined in the UCC) organized under that law of a “State” (as
defined in the UCC), the location of its place of business (if it has only
one
place of business) or its chief executive office (if it has more than one place
of business), (iii) all real property owned or leased by the Company or any
of
its Subsidiaries, and (iv) all patents, trademarks, trade names, service marks,
services names or copyrights owned or licensed by the Company or any of its
Subsidiaries. As of the Seventh Amendment Effective Date, all
filings, assignments, pledges and deposits of documents or instruments have
been
made, and all other actions have been taken, that are necessary or advisable
under applicable law and are required to be made or taken on or prior to the
Seventh Amendment Effective Date under the provisions of this Agreement and
the
other Transaction Documents to create and perfect a security interest in the
Collateral in favor of the Collateral Agent to secure the Notes, the Company’s
obligations under the Credit Agreement and each Guarantor’s obligations under
its Guaranty Agreement, subject to no Liens other than Liens permitted under
clauses (i), (ii), (iii), (iv) and (vi) of paragraph 6C(1). The
Collateral and the Collateral Agent’s rights with respect to the Collateral are
not subject to any setoff, claims, withholdings or other defenses (except any
such setoff, claim or defense which could not, individually or in the aggregate,
materially impair the rights of the Collateral Agent with respect to the
Collateral). The Company or a Subsidiary is the owner of the
Collateral described in the Collateral Documents free from any Lien, security
interest, encumbrance and any other claim or demand, except for Liens permitted
under paragraph 6C(1).”
1.21
Paragraph 10A of the Note Agreement is amended by amending the following defined
terms therein in their entirety as follows:
“Called
Principal” shall mean,
with respect to any Note, the principal of such Note that is to be prepaid
pursuant to paragraph 4B(2), 4C, is put to the Company pursuant to paragraph
5G
or is declared to be immediately due and payable pursuant to paragraph 7A,
as
the context requires.
“Settlement
Date” shall mean,
with respect to the Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to paragraph 4B(2) or 4C, is put to the
Company pursuant to paragraph 5G or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
1.22
Paragraph 10B of the Note Agreement is amended by adding, or amending and
restating, as applicable, the following defined terms:
“Banks”
shall mean Fifth Third
Bank, and its respective successors and assigns, and any other lender from
time
to time party to a Credit Agreement.
“Bank
Agent” shall mean any
Person which may from time to time be an agent for the Banks under a Credit
Agreement.
“Collateral”
shall mean all
accounts, accounts receivable, inventory, machinery, equipment, general
intangibles, fixtures and all other tangible or intangible personal property
of
the Company and its Subsidiaries, whether now owned or hereafter acquired and
whether now or hereafter existing.
“Collateral
Agent” shall mean
Fifth Third Bank, in its capacity as collateral agent under the Intercreditor
Agreement, and its successor and assigns in that capacity.
“Collateral
Documents” shall
mean the Security Agreement and any other agreement, document or instrument
in
effect on the Seventh Amendment Effective Date or executed by the Company or
any
Subsidiary after the Seventh Amendment Effective Date under which the Company
or
such Subsidiary has granted a lien upon or security interest in any property
or
assets to the Collateral Agent to secure all or any part of the obligations
of
the Company under this Agreement or the Notes or of any Guarantor under any
Guaranty Agreement, and all financing statements, certificates, documents and
instruments relating thereto or executed or provided in connection therewith,
each as amended, restated, supplemented or otherwise modified from time to
time.
“Credit
Agreement” shall mean
the Credit Agreement dated as of November 16, 2001 between the Company and
the
Fifth Third Bank, N.A., as amended, restated, supplemented or otherwise modified
from time to time, or any agreement under which the Company refinances or
replaces the loan facility under any Credit Agreement with a loan facility
obtained from one or more financial institutions.
“Debt
Service Coverage Ratio”
shall mean the ratio of (i) consolidated net income of the Company and
Subsidiaries plus, to the extent deducted in determining the same, interest
expense and rental expense to (ii) the sum of interest expense, rental expense,
the current portion of all lease obligations and the current portion of Debt,
in
each case for the period of four consecutive fiscal quarters (or in the case
of
the current portion of Debt, as of the last day of the fiscal quarter) of the
Company most recently ended as of any time of determination.
“Distribution”
shall mean, in
respect of any corporation, association or other business entity,
(i) dividends or other distributions or payments on capital stock or other
equity interest of such corporation, association or other business entity
(except distributions in such stock or other equity interest); and (ii) the
redemption or acquisition of such stock or other equity interests or of
warrants, rights or other options to purchase such stock or other equity
interests (except when solely in exchange for such stock or other equity
interests) unless made, contemporaneously, from the net proceeds of a sale
of
such stock or other equity interests. Notwithstanding the foregoing,
a Distribution shall not occur as a result of a participant in one of the
Company’s shareholder-approved equity plans (an “Equity Plan”) paying any tax
obligation associated with the vesting of restricted stock thereunder with
shares pursuant to the terms of any such Equity Plan.
“Guarantor”
shall mean each
Subsidiary of the Company which may at any time be a party to a Guaranty
Agreement.
“Guaranty
Agreement” shall
mean that certain Guaranty Agreement, dated as of May 16, 2008, by certain
Subsidiaries in favor of the holders of the Notes, together with each joinder
thereto, as the same may be amended, modified or supplemented from time to
time
in accordance with the provisions thereof.
“Intercreditor
Agreement”
shall mean that certain Intercreditor and Collateral Agency Agreement, dated
as
of May 16, 2008, among Prudential, the holders of the Notes, the Banks and
the
Collateral Agent, as the same may be amended, modified or supplemented from
time
to time in accordance with the provisions thereof.
“Priority
Debt’ shall mean, as
of any time of determination thereof, the aggregate amount of (i) Debt of the
Company which is secured by any Lien (other than Liens permitted by paragraph
6C(1)(v)) and (ii) Debt of Subsidiaries (including any Debt of a Subsidiary
which consists of a Guarantee of Debt of the Company), excluding in each case
any Debt described in clause (i), (ii) or (iv) of paragraph 6C(2).”
“Restricted
Payment” shall
mean any Distribution in respect of the Company or any Subsidiary of the Company
(other than on account of capital stock or other equity interests of a
Subsidiary of the Company owned legally and beneficially by the Company or
another Subsidiary of the Company), including, without limitation, any
Distribution resulting in the acquisition by the Company of securities which
would constitute treasury stock. Notwithstanding the foregoing, a
Restricted Payment shall not occur as a result of a participant in one of the
Company’s shareholder-approved equity plans (an “Equity Plan”) paying any tax
obligation associated with the vesting of restricted stock thereunder with
shares pursuant to the terms of any such Equity Plan.
“Security
Agreement” shall
mean that certain Security Agreement, dated as of May 16, 2008, by the Company
and the Guarantors in favor of the Collateral Agent for the benefit of the
Banks
and the holders of the Notes, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions
thereof.
“Seventh
Amendment” shall mean
Amendment No. 7 to this Agreement, dated as of May 16, 2008, among the Company,
Prudential and the holders of the Notes.
“Seventh
Amendment Effective
Date” shall mean the “Effective Date”, as defined in the Seventh
Amendment.
“Transaction
Documents” shall
mean this Agreement, the Notes, the Intercreditor Agreement, the Company’s
Acknowledgment to Intercreditor Agreement, the Guaranty Agreement, the
Collateral Documents and the other agreements, documents, certificates and
instruments now or hereafter executed or delivered by the Company or any
Subsidiary or Affiliate in connection with this Agreement.
“UCC”
shall mean the Uniform
Commercial Code as in effect in the State of Illinois.
1.23
The first sentence of paragraph 11B of the Note Agreement is amended by deleting
the “and” at the end of clause (i) thereof, amending clause (ii) therein in its
entirety as follows and adding a new clause (iii) thereto as
follows:
“(ii)
the costs and expenses, including attorneys’ and financial advisory fees,
incurred by such Purchaser or such Transferee in enforcing (or determining
whether or how to enforce or cause the Collateral Agent to enforce) any rights
under this Agreement, the Notes or any other Transaction Document (including,
without limitation, to protect, collect, lease, sell, take possession of,
release or liquidate any of the Collateral) or in responding to any subpoena
or
other legal process or informal investigative demand issued in connection with
this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby or by reason of your or such Transferee’s having
acquired any Note, including without limitation costs and expenses incurred
in
any workout, restructuring or renegotiation proceeding or bankruptcy case;
and
(iii) all costs and expenses, including without limitation reasonable attorneys’
fees, preparing, recording and filing all financing statements, instruments
and
other documents to create, perfect and fully preserve and protect the Liens
granted in the Collateral Documents and the rights of the holders of the Notes
or of the Collateral Agent for the benefit of the holders of the Notes;
and”
1.24
The Note Agreement is amended by adding new Schedules 8A(1) and 8S thereto
in
the form of Schedules 8A(1) and 8S attached hereto.
SECTION
2. Representations
and Warranties. The Company
represents and warrants that (a) each representation and warranty set
forth in paragraph 8 of the Note Agreement is true and correct as of the date
of
execution and delivery of this letter by the Company with the same effect as
if
made on such date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they were true and correct
as
of such earlier date); (b) after giving effect to the amendments set forth
in
Section 1 hereof, no Event of Default or Default exists or has occurred and
is
continuing on the date hereof and (c) neither the Company nor any of its
Subsidiaries has paid or agreed to pay, and neither the Company nor any of
its
Subsidiaries will pay or agree to pay, any fees or other consideration to any
Bank or any other Person in connection with the amendment referenced in Section
3.4 hereof except as set forth therein.
SECTION
3. Conditions
Precedent. This letter
shall
be deemed effective on the date (the “Effective Date”) each of the
following conditions shall have been satisfied:
3.1
Documents. Prudential
shall have received original counterparts or, if satisfactory to Prudential,
certified or other copies of all of the following, each duly executed and
delivered by the party or parties thereto, in form and substance satisfactory
to
Prudential, dated the Effective Date unless otherwise indicated, and on the
Effective Date in full force and effect with no event having occurred and being
then continuing that would constitute a default thereunder or constitute or
provide the basis for the termination thereof:
(i) this
letter;
(ii)
the
Intercreditor Agreement;
(iii) the
Guaranty Agreement, in the form of Exhibit A attached
hereto;
(iv)
the Security Agreement;
(vi)
all chattel paper, instruments and documents of title in which the Collateral
Agent has been granted a security interest and are then required under the
Collateral Documents to be delivered to the Collateral Agent, together with
the
related transfer documents executed in blank, in each case received by the
Collateral Agent, all Uniform Commercial Code financing statements perfecting
the security interests and liens granted to the Collateral Agent, ready to
be
filed in all offices necessary to perfect such security interests and liens
or
deemed by Prudential to be advisable, and all such other certificates,
documents, agreements, recording and filings necessary to establish a valid
and
perfected first priority lien and security interest (subject only to Liens
described in clauses (i), (ii), (iii), (iv) and (vi) of paragraph 6C(1)) in
favor of the Collateral Agent in all of the Collateral or deemed by Prudential
to be advisable;
(vii) a
Secretary’s Certificate signed by the Secretary or an Assistant Secretary and
one other officer of the Company and each Guarantor certifying, among other
things, (a) as to the names, titles and true signatures of the officers of
the
Company or such Guarantor, as the case may be, authorized to sign the
Transaction Documents to be delivered on the Effective Date to which the Company
or such Guarantor, as the case may be, is a party, (b) that attached thereto
is
a true, accurate and complete copy of the certificate of incorporation or other
formation document of the Company or such Guarantor, as the case may be,
certified by the Secretary of State of the state of organization of the Company
or such Guarantor, as the case may be, as of a recent date, (c) that attached
thereto is a true, accurate and complete copy of the by-laws, operating
agreement, partnership agreement or other organizational document of the Company
or such Guarantor, as the case may be, which were duly adopted and are in effect
as of the Effective Date and have been in effect immediately prior to and at
all
times since the adoption of the resolutions referred to in clause (d), below,
(d) that attached thereto is a true, accurate and complete copy of the
resolutions of the board of directors or other managing body of the Company
or
such Guarantor, as the case may be, duly adopted at a meeting or by unanimous
written consent of such board of directors or other managing body, authorizing
the execution, delivery and performance of such Transaction Documents to which
the Company or such Guarantor, as the case may be, is a party, and that such
resolutions have not been amended, modified, revoked or rescinded, are in full
force and effect and are the only resolutions of the shareholders, partners
or
members of the Company or such Guarantor, as the case may be, or of such board
of directors or other managing body or any committee thereof relating to the
subject matter thereof, (e) that such Transaction Documents executed and
delivered to Prudential by the Company or such Guarantor, as the case may be,
are approved by its board of directors or other managing body in the resolutions
referred to in clause (d), above, and (f) that no dissolution or liquidation
proceedings as to the Company or any Subsidiary have been commenced or are
contemplated;
(viii) a
certificate of corporate or other type of entity and tax good standing for
the
Company and each Guarantor from the Secretary of State of the state of
organization of the Company and each Guarantor and of each state in which the
Company or any Guarantor is required to be qualified to transact business as
a
foreign organization, in each case dated as of a recent date;
(ix) Certified
copies of Requests for Information or Copies (Form UCC-11) or equivalent reports
listing all effective financing statements which name the Company, any
Subsidiary or any Guarantor (under its present name and previous names) as
debtor and which are filed in the office of the Secretary of State in any state
in which the Company, any Subsidiary or any Guarantor is located (as determined
under the UCC), and lien and judgment search reports from the county recorder
of
any county in which the Company, any Subsidiary or any Guarantor maintains
an
office or in which any assets of the Company, any Subsidiary or any Guarantor
are located; and
(x)
such other certificates, documents and agreements as Prudential may reasonably
request.
3.2
Certificates of
Insurance. The Company shall have delivered from insurance
carriers acceptable to Prudential certificates of insurance in such forms and
amounts acceptable to Prudential evidencing insurance required to be maintained
under paragraph 5E of the Note Agreement or under any of the Collateral
Documents under insurance policies with loss payable clauses in favor of the
Collateral Agent and acceptable to Prudential.
3.3
Amendment to Credit
Agreement. Prudential shall have received a copy of the
executed amendment to Credit Agreement, in form and substance satisfactory
to
Prudential, and such amendment shall be in full force and effect.
3.4
Proceedings. All
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in substance and form to Prudential, and Prudential shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
Upon
execution hereof by the Company, this letter and each of the
other foregoing documents should be returned to: Prudential Capital
Group, Two Prudential ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
SECTION
4. Reference
to and Effect on Note Agreement. Upon the
effectiveness of this letter, each reference to the Note Agreement and the
Notes
in any other document, instrument or agreement shall mean and be a reference
to
the Note Agreement and the Notes as modified by this letter. Except
as specifically set forth in Section 1 hereof, each of the Note Agreement and
the Notes shall remain in full force and effect and each is hereby ratified
and
confirmed in all respects. The execution, delivery and effectiveness
of this letter shall not be construed as a course of dealing or other
implication that Prudential or any holder of any Note has agreed to or is
prepared to grant any consents or agree to any amendments to the Note Agreement
in the future, whether or not under similar circumstances.
SECTION
5. Expenses. The
Company
hereby confirms its obligations under the Note Agreement, whether or not the
transactions hereby contemplated are consummated, to pay, promptly after request
by Prudential or any holder of any Note, all reasonable out-of-pocket costs
and
expenses, including attorneys’ fees and expenses, incurred by Prudential or any
holder of any Note in connection with this letter agreement or the transactions
contemplated hereby, in enforcing any rights under this letter, or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this letter or the transactions contemplated
hereby. The obligations of the Company under this Section 5 shall
survive transfer by any holder of any Note and payment of any Note.
SECTION
6. Governing
Law. THIS
LETTER SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY,
THE LAW OF THE STATE OF ILLINOIS (EXCLUDING ANY CONFLICTS OF LAW RULES WHICH
WOULD OTHERWISE CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED IN ACCORDANCE
WITH, OR THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER
JURISDICTION).
SECTION
7. Counterparts;
Section Titles. This letter
may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument. Delivery of an executed counterpart of a
signature page to this letter by facsimile or other electronic transmission
shall be effective as delivery of a manually executed counterpart of this
letter. The section titles contained in this letter are and shall be
without substance, meaning or content of any kind whatsoever and are not a
part
of the agreement between the parties hereto.
[signature
page follows]
Very
truly yours,
PRUDENTIAL
INVESTMENT MANAGEMENT, INC.
By:
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Vice
President
THE
PRUDENTIAL INSURANCE COMPANY
OF
AMERICA
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Vice
President
PRUCO
LIFE INSURANCE COMPANY
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Vice
President
UNITED
OF OMAHA LIFE INSURANCE
COMPANY
By: Prudential
Private Placement Investors,
L.P.
(as Investment
Advisor)
By: Prudential
Private Placement Investors, Inc.
(as
its
General Partner)
By:
/s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Vice
President
Agreed
and Accepted:
THE
STEAK N SHAKE COMPANY
By: /s/
▇▇▇▇▇ ▇.
▇▇▇▇▇
Name:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
Vice President, General Counsel and Corporate Secretary
EXHIBIT
A
[FORM
OF
GUARANTY AGREEMENT]
GUARANTY
AGREEMENT
This
GUARANTY AGREEMENT (the
“Guaranty”),
dated as of
May 16, 2008, is made by the guarantors named in the Guarantor
Schedule attached hereto and each guarantor that may become a party to this
Guaranty by executing a joinder hereto (herein referred to, individually, as
a
“Guarantor” and,
collectively, as “Guarantors”), in favor of
Prudential Investment Management, Inc. (“Prudential”) and the holders
of the Notes (as defined below) from time to time (the “Holders”).
WITNESSETH:
WHEREAS,
The Steak N Shake
Company, an Indiana corporation (the “Company”) has entered into
that certain ▇▇▇▇▇▇▇ and Restated Note Purchase and Private Shelf Agreement
dated as of September 20, 2002, as amended by that certain Amendment dated
December 18, 2002, that certain Amendment dated May 21, 2003, that certain
Amendment dated September 17, 2003, that certain Amendment dated November 7,
2005, that certain Amendment dated October 30, 2007, that certain Amendment
dated December 5, 2007 and that certain Amendment (the “Seventh Amendment”)
dated as of the date hereof (as so amended, the “Note Agreement”) among the
Company, Prudential Investment Management, Inc., The Prudential Insurance
Company of America and each Prudential Affiliate which has or may become a
party
thereto in accordance with the terms thereof, pursuant to which the Company
issued and sold and the Company’s senior fixed rate notes from time to time
(collectively, the “Notes”); and
WHEREAS,
each Guarantor is a
Subsidiary of the Company and derives substantial value and benefit from the
issuance of the Notes pursuant to the Note Agreement and the amendments being
made to the Note Agreement pursuant to the Seventh Amendment; and
WHEREAS,
as a condition to the
effectiveness of the Seventh Amendment, the Prudential has required that the
Guarantors execute and deliver this Guaranty for the benefit of Prudential
and
the Holders.
NOW
THEREFORE, for value
received, to satisfy one of the conditions precedent to the effectiveness of
the
Seventh Amendment, for the reasons set forth above, for and in consideration
of
the premises and mutual covenants herein contained, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor, intending to be legally bound, does hereby
covenant and agree as follows:
1. DEFINITIONS;
RECITALS. Capitalized terms that are used in this Guaranty and
not defined in this Guaranty shall have the meaning ascribed to them in the
Note
Agreement. The recitals in this Guaranty are incorporated into this
Guaranty.
2. THE
GUARANTY.
2A. Guaranty
of Payment and Performance
of Obligations. Each Guarantor, jointly and severally with
each other Guarantor, absolutely, unconditionally and irrevocably guarantees
the
full and prompt payment in United States currency when due (whether at maturity,
a stated prepayment date or earlier by reason of acceleration or otherwise)
and
at all times thereafter, and the due and punctual performance, of all of the
indebtedness, obligations and liabilities existing on the date hereof or arising
from time to time hereafter, whether direct or indirect, joint or several,
actual, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, of the Company to Prudential or any Holder under or in respect of
the
Note Agreement, the Notes, the other Transaction Documents or any other
agreements, documents, certificates and instruments now or hereafter executed
or
delivered by the Company, any Guarantor or any other guarantor in connection
with the Note Agreement, including, without limitation, the principal of and
interest (including, without limitation, interest accruing before, during or
after any bankruptcy, insolvency, reorganization, arrangement, readjustment
of
debt, liquidation or dissolution proceeding, and, if interest ceases to accrue
by operation of law by reason of any such proceeding, interest which otherwise
would have accrued in the absence of such proceeding, whether or not allowed
as
a claim in such proceeding) on the Notes and any Yield-Maintenance Amount with
respect to any of the Notes (collectively, the “Guarantied
Obligations”). This is a continuing guaranty of payment and
performance and not of collection. Notwithstanding the foregoing, the
aggregate amount of any Guarantor’s liability under this Guaranty shall not
exceed the maximum amount that such Guarantor can guaranty without violating,
or
causing this Guaranty or such Guarantor’s obligations under this Guaranty to be
void, voidable or otherwise rendered unenforceable under, any fraudulent
conveyance or fraudulent transfer law, including Section 548(a)(2) of the
Bankruptcy Code. Each Guarantor hereby agrees to pay and to indemnify
and save each Holder harmless from and against any damage, loss, cost or expense
(including attorneys’ fees and expenses) which such Holder may incur or be
subject to as a consequence of endeavoring to enforce this Guaranty or to
collect all or any part of the Guarantied Obligations from, or in pursuing
any
action against the Company or any other Guarantor or enforcing any rights of
any
Holder in any security for the Guarantied Obligations or the liabilities of
any
Guarantor hereunder, including, without limitation the Collateral, and any
taxes, fees or penalties which may be paid or payable in connection
therewith. Notwithstanding any provision of this Guaranty, all
covenants, obligations, waivers and agreements of the Guarantors under this
Guaranty shall be joint and several.
Upon
an
Event of Default, Prudential or any Holder may, at its sole election and without
notice, proceed directly and at once against any Guarantor to seek and enforce
performance of, and to collect and recover, the Guarantied Obligations, or
any
portion thereof, without first proceeding against the Company, any other
Guarantor, any other guarantor of the Guarantied Obligations or any other Person
or the Collateral, or any other security for the Guarantied Obligations or
for
the liability of any such other Person or any Guarantor hereunder. Prudential
and each Holder shall have the exclusive right to determine the application
of
payments and credits, if any, from any Guarantor, the Company or from any other
Person on account of the Guarantied Obligations or otherwise. This Guaranty
and
all covenants and agreements of each Guarantor contained herein shall continue
in full force and effect and shall not be discharged until such a time as all
of
the Guarantied Obligations shall be indefeasibly paid in full in
cash.
2B.
Obligations
Unconditional. The obligations of each Guarantor under this
Guaranty shall be continuing, absolute and unconditional, irrespective of (i)
the invalidity or unenforceability of the Note Agreement, the Notes, the other
Transaction Documents or any other agreements, documents, certificates and
instruments now or hereafter executed or delivered by the Company, any other
Guarantor or any other Person in connection with the Note Agreement or any
other
Transaction Document or any provision thereof; (ii) the absence of any attempt
by Prudential or any Holder to collect the Guarantied Obligations or any portion
thereof from the Company, any other Guarantor, any other guarantor of any
portion of the Guarantied Obligations or any other Person or other action to
enforce the same; (iii) any action taken by Prudential or any Holder whether
or
not authorized by this Guaranty; (iv) any failure by Prudential or any Holder
or
the Collateral Agent to acquire, perfect or maintain any security interest
or
lien in, or take any steps to preserve its rights to, the Collateral or any
other security for the Guarantied Obligations or any portion thereof or for
the
liability of such Guarantor hereunder or the liability of any other Guarantor
or
any other Person or any or all of the Guarantied Obligations; (v) any defense
arising by reason of any disability or other defense (other than a defense
of
payment, unless the payment on which such defense is based was or is
subsequently invalidated, declared to be fraudulent or preferential, otherwise
avoided and/or required to be repaid to the Company or any Guarantor, as the
case may be, or the estate of any such party, a trustee, receiver or any other
Person under any bankruptcy law, state or federal law, common law or equitable
cause, in which case there shall be no defense of payment with respect to such
payment) of the Company or any other Person liable on the Guarantied Obligations
or any portion thereof; (vi) Prudential’s or any Holder’s election, in any
proceeding instituted under Chapter 11 of Title 11 of the Federal Bankruptcy
Code (11 U.S.C. §101 et seq.) (the “Bankruptcy Code”), of the
application of Section 1111(b)(2) of the Bankruptcy Code; (vii) any borrowing
or
grant of a security interest to Prudential or any Holder or the Collateral
Agent
by the Company as debtor-in-possession, or extension of credit, under Section
364 of the Bankruptcy Code; (viii) the disallowance or avoidance of all or
any
portion of Prudential’s or any Holder’s claim(s) for repayment of the Guarantied
Obligations under the Bankruptcy Code or any similar state law or the avoidance,
invalidity or unenforceability of any Lien securing the Guarantied Obligations
or the liability of any Guarantor hereunder or under any of the other
Transaction Documents or of the Company or any other guarantor of all or any
part of the Guarantied Obligations; (ix) any amendment to, waiver or
modification of, or consent, extension, indulgence or other action or inaction
under or in respect of the Note Agreement, the Notes, the other Transaction
Documents or any other agreements, documents, certificates and instruments
now
or hereafter executed or delivered by the Company or any Guarantor or any other
guarantor in connection with the Note Agreement (including, without limitation,
the issuance of Notes from time to time under the Note Agreement and any
increase in the interest rate on the Notes); (x) any change in any provision
of
any applicable law or regulation; (xi) any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or foreign,
binding on or affecting any Guarantor, the Company or any other guarantor or
any
of their assets; (xii) the articles of incorporation, certificate of formation
or other formation document, or the by-laws, limited liability company
agreement, partnership agreement or similar formation documents of any
Guarantor, the Company or any other guarantor; (xiii) any mortgage, indenture,
lease, contract, or other agreement (including without limitation any agreement
with stockholders, partners or members of such Guarantor, as applicable),
instrument or undertaking to which any Guarantor or the Company is a party
or
which purports to be binding on or affect any such Person or any of its assets;
(xiv) any bankruptcy, insolvency, readjustment, composition, liquidation or
similar proceeding with respect to the Company, any Guarantor or any other
guarantor of all or any portion of any Guarantied Obligations or any such
Person’s property and any failure by Prudential or any Holder to file or enforce
a claim against any Guarantor or any such other Person in any such proceeding;
(xv) any failure on the part of the Company for any reason to comply with or
perform any of the terms of any other agreement with any Guarantor; or (xvi)
any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
2C. Obligations
Unimpaired. Prudential and each Holder is authorized, without
demand or notice, which demand and notice are hereby waived, and without
discharging or otherwise affecting the obligations of any Guarantor hereunder
(which shall remain absolute and unconditional notwithstanding any such action
or omission to act), from time to time to (i) renew, extend, accelerate or
otherwise change the time for payment of, or other terms relating to, the
Guarantied Obligations or any portion thereof, or otherwise modify, amend or
change the terms of the Note Agreement, the Notes, any other Transaction
Documents or any other agreements, documents, certificates and instruments
now
or hereafter executed or delivered by the Company. any Guarantor or any other
guarantor of all or any of the Guarantied Obligations in connection with the
Note Agreement; (ii) accept partial payments on the Guarantied Obligations;
(iii) take and hold security for the Guarantied Obligations or any portion
thereof or any other liabilities of the Company, the obligations of any
Guarantor under this Guaranty and the obligations under any other guaranties
and
sureties of all or any of the Guarantied Obligations, and exchange, enforce,
waive, release, sell, transfer, assign, abandon, fail to perfect, subordinate
or
otherwise deal with any such security (including, without limitation, the
Collateral); (iv) apply such security and direct the order or manner of sale
thereof as Prudential or any Holder may determine in its sole discretion; (v)
settle, release, compromise, collect or otherwise liquidate the Guarantied
Obligations or any portion thereof and any security therefor or guaranty thereof
in any manner; (vi) extend additional loans, credit and financial accommodations
to the Company or any other Guarantor and otherwise create additional Guarantied
Obligations, including, without limitation, by the purchase of Notes from time
to time under the Note Agreement; (vii) waive strict compliance with the terms
of the Note Agreement, the Notes, any other Transaction Document or any other
agreements, documents, certificates and instruments now or hereafter executed
or
delivered by the Company, any Guarantor or any other guarantor of all or any
of
the Guarantied Obligations in connection with the Note Agreement and otherwise
forbear from asserting Prudential’s or any Holder’s rights and remedies
thereunder; (viii) take and hold additional guaranties or sureties and enforce
or forbear from enforcing any guaranty or surety of any other guarantor or
surety of the Guarantied Obligations, any portion thereof or release or
otherwise take any action (or omit to take any action) with respect to any
such
guarantor or surety; (ix) assign this Guaranty in part or in whole in connection
with any assignment of the Guarantied Obligations or any portion thereof; (x)
exercise or refrain from exercising any rights against the Company or any
Guarantor; and (xi) apply any sums, by whomsoever paid or however realized,
to
the payment of the Guarantied Obligations as Prudential or any Holder in its
sole discretion may determine.
2D. Waivers
of
Guarantors. Each Guarantor waives for the benefit of
Prudential and the Holders:
(i)
any right to require Prudential or any Holder, as a condition of payment or
performance by such Guarantor or otherwise to (a) proceed against the Company,
any Guarantor, any other guarantor of the Guarantied Obligations or any other
Person, (b) proceed against or exhaust any security given to or held by
Prudential or any Holder or the Collateral Agent in connection with the
Guarantied Obligations or any other guaranty, or (c) pursue any other remedy
available to Prudential or any Holder whatsoever;
(ii)
any defense arising by reason of (a) the incapacity, lack of authority or any
disability or other defense of the Company, including, without limitation,
any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto,
(b) the cessation of the liability of the Company from any cause other than
indefeasible payment in full of the Guarantied Obligations in cash or (c) any
act or omission of Prudential or any Holder or the Collateral Agent or any
other
Person which directly or indirectly, by operation of law or otherwise, results
in or aids the discharge or release of the Company or any security given to
or
held by Prudential or any Holder or the Collateral Agent in connection with
the
Guarantied Obligations or any other guaranty;
(iii) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal;
(iv) any
defense based upon Prudential’s any Holder’s errors or omissions in the
administration of the Guarantied Obligations;
(v)
(a) any principles or provisions of law, statutory or otherwise, which are
or
might be in conflict with the terms of this Guaranty and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (b) the benefit of any
statute of limitations affecting the Guarantied Obligations or such Guarantor’s
liability hereunder or the enforcement hereof, (c) any rights to set-offs,
recoupments and counterclaims, and (d) promptness, diligence and any requirement
that Prudential or any Holder or the Collateral Agent protect, maintain, secure,
perfect or insure any Lien or any property subject thereto;
(vi) notices
(a) of nonperformance or dishonor, (b) of acceptance of this Guaranty by
Prudential or any Holder or by such Guarantor, (c) of default in respect of
the
Guarantied Obligations or any other guaranty, (d) of the existence, creation
or
incurrence of new or additional indebtedness, arising either from additional
loans extended to the Company or otherwise, including without limitation, as
a
result of the issuance of any Notes, (e) that the principal amount, or any
portion thereof, and/or any interest on any document or instrument evidencing
all or any part of the Guarantied Obligations is due, (f) of any and all
proceedings to collect from the Company, any Guarantor or any other guarantor
of
all or any part of the Guarantied Obligations, or from anyone else, (g) of
exchange, sale, surrender or other handling of any security or collateral given
to Prudential or any Holder or the Collateral Agent to secure payment of the
Guarantied Obligations or any guaranty therefor, (h) of renewal, extension
or
modification of any of the Guarantied Obligations, (i) of assignment, sale
or
other transfer of any Note to a Transferee, or (j) of any of the matters
referred to in paragraph 2B and any right to consent to any
thereof;
(vii) presentment,
demand for payment or performance and protest and notice of protest with respect
to the Guarantied Obligations or any guaranty with respect thereto;
and
(viii)
any defenses or benefits that may be derived from or afforded by law which
limit
the liability of or exonerate guarantors or sureties, or which may conflict
with
the terms of this Guaranty.
Each
Guarantor agrees that neither Prudential nor any Holder nor the Collateral
Agent
shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of such Guarantor
or against or in payment of any or all of the Guarantied
Obligations.
No
Guarantor will exercise any rights which it may have acquired by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
or
accept any payment on account of such subrogation rights, or any rights of
exoneration, reimbursement or indemnity or contribution or any rights or
recourse to any security for the Guarantied Obligations or this Guaranty unless
at the time of such Guarantor’s exercise of any such right there shall have been
performed and indefeasibly paid in full in cash all of the Guarantied
Obligations.
2E.
Revival. Each
Guarantor agrees that, if any payment made by the Company or any other Person
is
applied to the Guarantied Obligations and is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of Collateral or any other
security are required to be returned by Prudential or any Holder to the Company,
its estate, trustee, receiver or any other Person, including, without
limitation, any Guarantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
such Guarantor’s liability hereunder (and any lien, security interest or other
collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, or, if prior thereto
this Guaranty shall have been canceled or surrendered (and if any lien, security
interest or other collateral securing such Guarantor’s liability hereunder shall
have been released or terminated by virtue of such cancellation or surrender),
this Guaranty (and such lien, security interest or other collateral) shall
be
reinstated and returned in full force and effect, and such prior cancellation
or
surrender shall not diminish, release, discharge, impair or otherwise affect
the
obligations of any Guarantor in respect of the amount of such payment (or any
lien, security interest or other collateral securing such
obligation).
2F.
Obligation to Keep
Informed. Each Guarantor shall be responsible for keeping
itself informed of the financial condition of the Company and any other Persons
primarily or secondarily liable on the Guarantied Obligations or any portion
thereof, and of all other circumstances bearing upon the risk of nonpayment
of
the Guarantied Obligations or any portion thereof, and each Guarantor agrees
that neither Prudential nor any Holder shall have any duty to advise such
Guarantor of information known to Prudential or such Holder regarding such
condition or any such circumstance. If Prudential or any Holder, in
its discretion, undertakes at any time or from time to time to provide any
such
information to any Guarantor, neither Prudential nor such Holder shall be under
any obligation (i) to undertake any investigation, whether or not a part of
its
regular business routine, (ii) to disclose any information which Prudential
or
such Holder wishes to maintain confidential, or (iii) to make any other or
future disclosures of such information or any other information to any
Guarantor.
2G. Bankruptcy. If
any
Event of Default specified in clauses (viii), (ix) or (x) of paragraph 7A of
the
Note Agreement shall occur and be continuing, then each Guarantor agrees to
immediately pay to the Holders the full outstanding amount of the Guarantied
Obligations without notice.
3. REPRESENTATIONS
AND WARRANTIES.
Each
Guarantor represents, covenants and warrants as follows:
3A. Organization. Such
Guarantor is duly organized and existing in good standing under the laws of
its
state of formation and is qualified to do business and in good standing in
every
jurisdiction where the ownership of its property or the nature of the business
conducted by it makes such qualification necessary and in which the failure
to
be so qualified could be reasonably likely to result in a material adverse
effect.
3B.
Power and
Authority. Such Guarantor and each Subsidiary of such
Guarantor has all requisite power to conduct its business as currently conducted
and as currently proposed to be conducted. Such Guarantor has all
requisite power to execute, deliver and perform its obligations under this
Guaranty and the other Transaction Documents to which it is a
party. The execution, delivery and performance of this Guaranty and
the other Transaction Documents to which it is a party have been duly authorized
by all requisite action and this Guaranty and the other Transaction Documents
to
which it is a party have been duly executed and delivered by authorized officers
of such Guarantor and are valid obligations of such Guarantor, legally binding
upon and enforceable against such Guarantor in accordance with their terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’
rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
3C.
Conflicting Agreements and
Other Matters. The execution and delivery of this Guaranty and
the other Transaction Documents to which it is a party, the offering, issuance
and sale of the Notes, and the fulfillment of or the compliance with the terms
and provisions hereof will not conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result
in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of such Guarantor or any of its Subsidiaries pursuant
to,
the certificate of incorporation or certificate of formation or similar
formation document, the by-laws, partnership agreement, limited liability
company agreement or similar organizational document of such Guarantor or any
of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders, members or partners of such Guarantor or Persons
with direct or indirect ownership interests in stockholders, members or partners
of such Guarantor), instrument, order, judgment, decree, statute, law, rule
or
regulation to which such Guarantor or any of its Subsidiaries is
subject. Neither such Guarantor nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing any Indebtedness of such Guarantor or such Subsidiary, any agreement
relating thereto or any other contract or agreement (including its charter,
bylaws, partnership agreement or operating agreement) which limits the amount
of, or otherwise imposes restrictions on the incurring of, obligations of such
Guarantor of the type to be evidenced by this Guaranty.
3D. ERISA. The
execution and delivery of this Guaranty will be exempt from, or will not involve
any transaction which is subject to, the prohibitions of section 406 of ERISA
and will not involve any transaction in connection with which a penalty could
be
imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code.
3E.
Governmental
Consent. Neither the nature of such Guarantor or of any
Subsidiary of such Guarantor nor any of their respective businesses or
properties, nor any relationship between such Guarantor or any Subsidiary of
such Guarantor and any other Person, nor any circumstance in connection with
the
execution, delivery and performance of this Guaranty, nor the offering,
issuance, sale or delivery of the Notes is such as to require any authorization,
consent, approval, exemption or other action by or notice to or filing with
any
court or administrative or governmental body (excluding routine filings after
the Seventh Amendment Effective Date with the Securities and Exchange Commission
and/or state Blue Sky authorities and filings and recordings necessary to
perfect the Liens in the Collateral intended to be created by the Collateral
Documents).
3F.
Regulatory
Status. Neither such Guarantor nor any Subsidiary of such
Guarantor is (i) an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, (ii) a “holding company” or a “subsidiary company” or an “affiliate”
of a “holding company” or a “subsidiary company” of a “holding company”, within
the meaning of the Energy Policy Act of 2005, as amended, or (iii) a “public
utility” within the meaning of the Federal Power Act, as amended.
3G. Actions
by the Guarantor and its
Subsidiaries. Each Guarantor covenants that it will not take
any action that would directly or indirectly result in an Event of Default
or
Default.
4. MISCELLANEOUS.
4A. Successors,
Assigns and
Participants. This Guaranty shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of
Prudential and each Holder and their respective successors, transferees and
assigns; all references herein to each Guarantor shall be deemed to include
its
successors and assigns, and all references herein to Prudential or any Holder
shall be deemed to include their respective successors and
assigns. This Guaranty shall be enforceable by Prudential and each
Holder and any of Prudential’s or such ▇▇▇▇▇▇’s successors, assigns and
participants, and any such successors and assigns shall have the same rights
and
benefits with respect to each Guarantor under this Guaranty as Prudential or
such Holder hereunder.
4B.
Consent to
Amendments. This Guaranty may be amended, and each Guarantor
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if such Guarantor shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s)
of the Notes, except that, without the written consent of all of the Holders,
(i) no amendment to or waiver of the provisions of this Guaranty shall change
or
affect the provisions of this paragraph 4B insofar as such provisions relate
to
proportions of the principal amount of the Notes, or the rights of any
individual Holder, required with respect to any consent, (ii) no Guarantor
shall
be released from this Guaranty, and (iii) no amendment, consent or waiver with
respect to paragraph 2A or the definition of “Guarantied Obligations” (except to
add additional obligations of the Companies) shall be effective. Each
Holder at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 4B, whether or not the Notes held by such Holder
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of
dealing between any Guarantor and Prudential or any Holder, nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver
of
any rights of Prudential or any Holder. As used herein, the term
“this Guaranty” and references thereto shall mean this Guaranty as it may from
time to time be amended or supplemented. Notwithstanding the foregoing,
this
Guaranty may be amended by the addition of additional Guarantors pursuant to
a
Guaranty Joinder in the form of Exhibit
A hereto without any
consent by any Guarantor, Prudential or any Holder.
4C. Survival
of Representations and
Warranties; Entire Agreement. All representations and
warranties contained herein or made in writing by or on behalf of each Guarantor
in connection herewith shall survive the execution and delivery of this
Guaranty, the transfer by any Holder of any Note or portion thereof or interest
therein and the payment of any Note, and may be relied upon by any Transferee,
regardless of any investigation made at any time by or on behalf of Prudential,
any Holder or any Transferee. Subject to the two preceding sentences,
this Guaranty and the other Transaction Documents embody the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
4D. Notices. All
written communications provided for hereunder shall be sent by first class
mail
or telegraphic notice or nationwide overnight delivery service (with charges
prepaid) or by hand delivery or telecopy and addressed:
(i)
in the case of any Guarantor, to:
c/o
The
Steak N Shake Company
500
Century Building
▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Indianapolis,
Indiana 46204
Attention: Chief
Financial Officer
CC:
General Counsel
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
(ii)
in the case of Prudential or any Holder, to the address specified for notices
to
Prudential or such Holder under the Note Agreement;
or,
in
either case, at such other address as shall be designated by such Person in
a
written notice to the other parties hereto.
4E.
Descriptive Headings;
Advice
of Counsel;
Interpretation. The descriptive headings of the several
sections of this Guaranty are inserted for convenience only and do not
constitute a part of this Guaranty. Each Guarantor represents to
Prudential and the Holders that such Guarantor has been represented by counsel
in connection with this Guaranty, that such Guarantor has discussed this
Guaranty with its counsel and that any and all issues with respect to this
Guaranty have been resolved as set forth herein. No provision of this
Guaranty shall be construed against or interpreted to the disadvantage of
Prudential or any Holder by any court or other governmental or judicial
authority by reason of Prudential or such Holder having or being deemed to
have
structured, drafted or dictated such provision.
4F.
Satisfaction
Requirement. If any agreement, certificate or other writing,
or any action taken or to be taken, is by the terms of this Guaranty required
to
be satisfactory to Prudential, any Holder or the Required Holder(s) of the
Notes, the determination of such satisfaction shall be made by Prudential,
such
Holder or such Required Holder(s), as the case may be, in the sole and exclusive
judgment (exercised in good faith) of the Person or Persons making such
determination.
4G. Governing
Law. THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS GUARANTY
TO BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH, OR THE RIGHTS OF THE PARTIES
TO
BE GOVERNED BY, THE LAWS OF ANY OTHER JURISDICTION).
4H. Counterparts;
Facsimile
Signatures. This Guaranty may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall
constitute one and the same agreement. It shall not be necessary in
making proof of this Guaranty to produce or account for more than one such
counterpart. Delivery of an executed counterpart of a signature page
to this Guaranty by facsimile or electronic transmission shall be effective
as
delivery of a manually executed counterpart of this Guaranty.
4I.
Counsel’s
Opinion. Each Guarantor requests directs the counsel referred
to in Section 3.2 of the Seventh Amendment to deliver the opinion referred
to in
such paragraph.
4J.
SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL. ANY LEGAL ACTION OR
PROCEEDING WITH
RESPECT TO THIS GUARANTY OR THE OTHER TRANSACTION DOCUMENTS MAY BE BROUGHT
IN
THE COURTS OF THE STATE OF ILLINOIS IN COOK COUNTY, ILLINOIS, OR OF THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS AND, BY EXECUTION
AND DELIVERY OF THIS GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS,
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY
SUCH ACTION OR PROCEEDING. EACH GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS
IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR
CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN PARAGRAPH
4D(i), SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT. EACH GUARANTOR
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON SUCH
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF PRUDENTIAL OR ANY HOLDER TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY GUARANTOR IN ANY OTHER JURISDICTION. EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE
TO
THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING
OUT
OF OR IN CONNECTION WITH THIS GUARANTY BROUGHT IN ANY OF THE AFORESAID COURTS
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR MAY
HEREAFTER ACQUIRE IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OF NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE WITH RESPECT TO ITSELF
OR
ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS GUARANTY. EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
4K. Independence
of
Covenants. All covenants hereunder shall be given independent
effect so that if a particular action or condition is prohibited by any one
of
such covenants, the fact that it would be permitted by an exception to, or
otherwise be in compliance within the limitations of, another covenant shall
not
avoid the occurrence of a Default or an Event of Default if such action is
taken
or such condition exists.
4L.
Severability. Any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
4M. Contribution
with Respect to Guaranty
Obligations. At all times when there is more than one
Guarantor party hereto, each Guarantor party hereto agrees as
follows:
(i)
To
the
extent any Guarantor shall make a payment of all or any of the Guarantied
Obligations (a “Guarantor
Payment”) that exceeds the amount that such Guarantor would otherwise
have paid, taking into account all other Guarantor Payments then previously
or
concurrently made by any other Guarantor, if each Guarantor had paid the
aggregate Guarantied Obligations satisfied by all such Guarantor Payments in
the
same proportion that such Guarantor’s Allocable Amount (as determined
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of all Guarantors (as determined immediately prior to such Guarantor
Payment), then, after the Guarantied Obligations shall be indefeasibly paid
in
full in cash and no Holder shall have any commitment under the Note Agreement,
such Guarantor shall be entitled to receive contribution and indemnification
payments from and be reimbursed by each other Guarantor for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.
(ii)
As
of any
date of determination, the “Allocable Amount” of any Guarantor shall be equal to
the maximum amount of the claim that could then be recovered from such Guarantor
under this Section 4M without rendering such claim void, voidable or otherwise
unenforceable under, any fraudulent conveyance or fraudulent transfer law,
including Section 548 of the Bankruptcy Code.
(iii)
This
Section 4M is intended only to define the relative rights of Guarantors, and
nothing in this Section 4M is intended to or shall impair the obligations of
Guarantors, jointly and severally, to pay any amounts as and when the same
shall
become due and payable in accordance with this Guaranty.
(iv)
The
rights of contribution and indemnification hereunder shall constitute assets
of
the Guarantor to which such contribution and indemnification is
owing.
(v)
The
rights of the indemnifying Guarantors against other Guarantors under this
Section 4M shall be exercisable once the Guarantied Obligations shall be
indefeasibly paid in full in cash and no Holder shall have any commitment under
the Note Agreement.
[signature
pages follow]
IN
WITNESS WHEREOF, each
Guarantor has caused this Guaranty Agreement to be duly executed as of the
date
first above written.
STEAK
N SHAKE OPERATIONS, INC.,
an Indiana corporation
By: /s/
▇▇▇▇▇ ▇.
▇▇▇▇▇
Vice
President, General Counsel and Corporate Secretary
SNS
INVESTMENT COMPANY, an
Indiana Corporation
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice
President, General Counsel and Corporate Secretary
STEAK
N SHAKE ENTERPRISES, INC.,
an Indiana corporation
By: /s/
▇▇▇▇▇ ▇.
▇▇▇▇▇
Vice
President, General Counsel and Corporate Secretary
GUARANTOR
SCHEDULE
STEAK
N
SHAKE OPERATIONS, INC., an Indiana corporation
SNS
INVESTMENT COMPANY, an Indiana corporation
STEAK
N
SHAKE ENTERPRISES, INC., an Indiana corporation
EXHIBIT
A
[FORM
OF JOINDER AGREEMENT TO GUARANTY
AGREEMENT]
JOINDER
AGREEMENT NO. ____ TO GUARANTY
AGREEMENT
RE:
THE
STEAK N SHAKE
COMPANY
This
Joinder Agreement is made as of
______________, in favor of Prudential Investment Management, Inc. (“Prudential”)
and the Holders(as such term is defined
in the
Guaranty, as hereinafter defined).
A.
Reference
is made to the
Guaranty Agreement made as of May 16, 2008 (as such
guarantee may be
supplemented, amended, restated or consolidated from time to time, the
“Guaranty”)
by certain Persons in favor of
Prudential and the Holders, under which such Persons have guaranteed to
Prudential and the Holders the due payment and performance by The Steak N Shake
Company, an Indiana corporation (the “Company”) of
the Guarantied Obligations (as
defined in the Guaranty).
B.
Capitalized
terms used but not
otherwise defined in this Joinder Agreement have the respective meanings given
to such terms in the Guaranty, including the definitions of terms incorporated
in the Guaranty by reference to other agreements.
C.
Section
4B of the Guaranty
provides that additional Persons may from time to time after the date of the
Guaranty become Guarantors under the Guaranty by executing and delivering to
Prudential and the Holders a supplemental agreement to the Guaranty in the
form
of this Joinder Agreement.
For
valuable consideration, each of the
undersigned (each a “New Guarantor”) severally
(and not jointly, or jointly
and severally) agrees as follows:
1. Each
of the New Guarantors has received
a copy of, and has reviewed, the Guaranty and the Transaction Documents in
existence on the date of this Joinder Agreement and is executing and delivering
this Joinder Agreement to Prudential and the Holders pursuant to paragraph
4B of
the Guaranty.
2. Effective
from and after the date this
Joinder Agreement is executed and delivered to Prudential and the Holders by
any
one of the New Guarantors (and irrespective of whether this Joinder Agreement
has been executed and delivered by any other Person), such New Guarantor is,
and
shall be deemed for all purposes to be, a Guarantor under the Guaranty with
the
same force and effect, and subject to the same agreements, representations,
guarantees, indemnities, liabilities and obligations, as if such New Guarantor
was, effective as of the date of this Joinder Agreement, an original signatory
to the Guaranty as a Guarantor. In furtherance of the foregoing, each
of the New Guarantors jointly and severally guarantees to Prudential and the
Holders in accordance with the provisions of the Guaranty the due and punctual
payment and performance in full of each of the Guarantied Obligations as each
such Guarantied Obligation becomes due from time to time (whether because of
maturity, default, demand, acceleration or otherwise) and understands, agrees
and confirms
that Prudential and the Holders
may enforce the Guaranty and this Joinder Agreement against such New Guarantor
for the benefit of Prudential and the Holders up to the full amount of
the Guarantied Obligations without
proceeding against any other Guarantor, the Company, any other
Person, or any collateral securing
the Guarantied Obligations. The terms and provisions of the Guaranty
are incorporated by reference in this Joinder Agreement.
3. Upon
this Joinder Agreement bearing the
signature of any Person claiming to have authority to bind any New Guarantor
coming into the hands of Prudential or any Holder, and irrespective of whether
this Joinder Agreement or the Guaranty has been executed by any other Person,
this Joinder Agreement will be deemed to be finally and irrevocably executed
and
delivered by, and be effective and binding on, and enforceable against, such
New
Guarantor free from any promise or condition affecting or limiting the
liabilities of such New Guarantor and such New Guarantor shall be, and shall
be
deemed for all purposes to be, a Guarantor under the Guaranty. No
statement, representation, agreement or promise by any officer, employee or
agent of Prudential or any Holder forms any part of this Joinder Agreement
or
the Guaranty or has induced the making of this Joinder Agreement or the Guaranty
by any of the New Guarantors or in any way affects any of the obligations or
liabilities of any of the New Guarantors in respect of the Guarantied
Obligations.
4. This
Joinder Agreement may be executed
in counterparts. Each executed counterpart shall be deemed to be an
original and all counterparts taken together shall constitute one and the same
Joinder Agreement. Delivery of an executed counterpart of a signature
page to this Joinder Agreement by facsimile or electronic transmission shall
be
effective as delivery of a manually executed counterpart of this Joinder
Agreement.
5. This
Joinder Agreement is a contract
made under, and will for all purposes be governed by and interpreted and
enforced according to, the internal laws of the State of Illinois excluding
any
conflict of laws rule or principle which might refer these matters to the laws
of another jurisdiction.
6. This
Joinder Agreement and the Guaranty
shall be binding upon each of the New Guarantors and the successors of each
of
the New Guarantors. None of the New Guarantors may assign any
of its obligations or liabilities in respect of the Guarantied
Obligations.
IN
WITNESS OF WHICH
this Joinder Agreement
has
been duly executed and delivered by each of the New Guarantors as of the date
indicated on the first page of this Joinder Agreement.
[NEW
GUARANTOR]
By:
Name:
Title:
SCHEDULE
8A(1)
SUBSIDIARIES
EXHIBIT
8A(1)
|
Name
of Entity
|
State
of Incorporation
|
EIN
|
Owner
|
Guarantor
of Indebtedness
|
|
The
Steak n Shake Company
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Public
Company
|
YES
|
|
Steak
n Shake Enterprises, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Steak
n Shake Operations, Inc.
|
YES
|
|
Steak
n Shake Operations, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
YES
|
|
SNS
Investment Company, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
YES
|
|
Consolidated
Specialty Restaurants, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
NO
|
|
Steak
n Shake LLC
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Steak
n Shake Operations, Inc.
|
NO
|
SCHEDULE
8S
EXHIBIT
8(S)
|
Name
of Entity
|
State
of Incorporation
|
EIN
|
Owner
|
Guarantor
of Indebtedness
|
|
The
Steak n Shake Company
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Public
Company
|
YES
|
|
Steak
n Shake Enterprises, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Steak
n Shake Operations, Inc.
|
YES
|
|
Steak
n Shake Operations, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
YES
|
|
SNS
Investment Company, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
YES
|
|
Consolidated
Specialty Restaurants, Inc.
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
The
Steak n Shake Company
|
NO
|
|
Steak
n Shake LLC
|
IN
|
▇▇-▇▇▇▇▇▇▇
|
Steak
n Shake Operations, Inc.
|
NO
|