NINTH AMENDMENT TO CREDIT
AGREEMENT
THE STEAK N
SHAKE COMPANY , an
Indiana corporation (the “Company”) and FIFTH THIRD
BANK, a Michigan banking corporation, formerly known as Fifth
Third Bank (Central Indiana), and Fifth Third Bank, Indiana
(Central) (the “Bank”), being parties to that certain
Credit Agreement dated as of November 16, 2001, as previously
amended (collectively, the “Agreement”), agree to
further amend the Agreement by this Ninth Amendment to Credit
Agreement (this “Amendment”) as follows.
1.
DEFINITIONS . All defined terms used
herein not otherwise defined in this Amendment shall have their
respective meanings set forth in the Agreement. In
addition, the following new definition is hereby added to Section 1
of the Agreement as follows:
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“
Ninth Amendment ” means that certain agreement
entitled “Ninth Amendment to Credit Agreement” entered
into by and between the Company and the Bank dated as of August 6,
2008, for the purpose of amending this Agreement.
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2.
THE REVOLVING LOAN . Section 2(a)(i) and
the first sentence of Section 2(a)(ii) of the Agreement are hereby
amended and restated in their respective entireties as
follows:
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The
Commitment -- Use of Proceeds . From the date of the Ninth
Amendment and until the Revolving Loan Maturity Date, the Bank
agrees to make Advances (collectively, the “Revolving
Loan”) to the Company from time to time under a revolving
line of credit of amounts not exceeding in the aggregate principal
amount at any time outstanding the amount of Thirty Million and
No/100 Dollars ($30,000,000.00). Proceeds of the Revolving Loan may
be used by the Company only to fund general corporate
purposes.
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Method of
Borrowing . The obligation of the Company to
repay the Revolving Loan shall be evidenced by a Promissory Note of
the Company in the form of Exhibit “A” attached
to the Ninth Amendment (the “Revolving
Note”).
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3.
FINANCIAL COVENANTS . Sections 5(g)(i) and
5(g)(ii) of the Agreement are hereby amended and restated in their
respective entireties as follows:
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Maximum
Ratio of Funded Debt to EBITDA . As of the end of each period of four (4)
consecutive fiscal quarters ending as of the last day of each
fiscal quarter, the Company shall maintain a ratio of Funded Debt
to EBITDA of not more than 4.75 to 1.00. On and after the date of
the Ninth Amendment, for purposes of calculating EBITDA, the
calculation of earnings shall exclude a one-time, non-cash
impairment charge of up to $17,500,000 pre-tax taken during the
Company’s third fiscal quarter in 2008.
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Debt Service
Coverage Ratio . As of the end of each period of
four (4) consecutive fiscal quarters ending as of the last day of
each fiscal quarter, the Company shall maintain a debt service
coverage ratio of not less than .70 to
1.00. For purposes of this covenant, the phrase "debt
service coverage ratio" means the ratio of: (A) the sum of net
income, interest expense, plus rent expense, to (B) the sum of
interest expense, rent expense, the Current Portion of all lease
obligations, plus the Current Portion of all long term debt. The
term “Current Portion” means all payments scheduled to
be paid over the twelve (12) month period immediately following the
date of determination. On and after the date of the
Ninth Amendment, the calculation of net income shall exclude a
one-time, non-cash impairment charge of up to $17,500,000 pre-tax
taken during the Company’s third fiscal quarter in
2008.
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4.
WAIVERS . The Bank hereby waives the
violations of: (i) Section 5(g)(i) of the Agreement with respect to
the failure by the Company to maintain a maximum ratio of Funded
Debt to EBITDA of not more than 4.75 to 1.00 for the period ending
at the end of the Company’s third fiscal quarter in
2008; and (ii) Section 5(g)(ii) of the
Agreement with respect to the failure of the Company to
maintain a debt service coverage ratio of not less than .70 to 1.00
for the period ending at the end of the Company’s third
fiscal quarter in 2008, as required therein, but strict compliance
with these covenants, as amended herein, shall be required at all
times hereafter. Nothing in this paragraph shall be
construed as a waiver of any other term or condition of the
Agreement or be construed as a commitment on the part of the Bank
to waive any subsequent violation of the same or any other term or
condition set forth in the Agreement, as amended by this
Amendment.
5.
REPRESENTATIONS AND WARRANTIES . In order
to induce the Bank to enter into this Amendment, the Company
affirms that the representations and warranties contained in the
Agreement are correct as of the date of this Amendment, except that
(i) they shall be deemed to also refer to this Amendment as well as
all documents named herein and, (ii) Section
3(d) of the Agreement shall be
deemed also to refer to the most recent audited and unaudited
financial statements of the Company delivered to the
Bank.
6.
EVENTS OF DEFAULT . The Company certifies
to the Bank that no Event of Default or Unmatured Event of Default
under the Agreement, as amended by this Amendment, has occurred and
is continuing as of the date of this Amendment, except as are
waived herein.
7.
CONDITIONS PRECEDENT . As conditions
precedent to the effectiveness of this Amendment, the Bank shall
have received the following contemporaneously with execution and
delivery of this Amendment, each duly executed, dated and in form
and substance satisfactory to the Bank:
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This Amendment
duly executed by the Company.
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The Revolving
Note in the form of Exhibit "A" attached hereto duly
executed by the Company.
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The
Reaffirmation of Guaranty Agreement in the form attached hereto as
Exhibit "B" duly executed by Steak n Shake Operations,
Inc.
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The
Reaffirmation of Guaranty Agreement in the form attached hereto as
Exhibit "C" duly executed by Steak n Shake Enterprises,
Inc.
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(v)
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The
Reaffirmation of Guaranty Agreement in the form attached hereto as
Exhibit "D" duly executed by SnS Investment
Company.
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Payment by the
Company to the Bank contemporaneously with the execution hereof of
an amendment and waiver fee in the amount of $30,000.
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Resolutions of
the Board of Directors of the Company authorizing the execution,
delivery and performance, respectively, of this Amendment, the
Revolving Note, and all other Loan Documents provided for in this
Amendment to which the Company is a party certified by the
Secretary of the Board of Directors of the Company as being in full
force and effect and duly adopted as of the date hereof.
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The Certificate
of the Secretary of the Board of Directors of the Company
certifying the names of the officer or officers authorized to
execute this Amendment, the Revolving Note, and all other Loan
Documents provided for in this Amendment to which the Company is a
party, together with a sample of the true signature of each such
officer, dated as of the date of this Amendment.
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Resolutions of
the Board of Directors of Steak n Shake Operations, Inc., an
Indiana corporation, authorizing the execution, delivery and
performance, respectively, of its Reaffirmation of Guaranty
Agreement and all other Loan Documents provided for in this
Amendment to which Steak n Shake Operations, Inc. is a party
certified by the Secretary of the Board of Directors of Steak n
Shake Operations, Inc. as being in full force and effect and duly
adopted as of the date hereof.
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The Certificate
of the Secretary of the Board of Directors of Steak n Shake
Operations, Inc. certifying the names of the officer or officers
authorized to execute its Reaffirmation of Guaranty Agreement and
all other Loan Documents provided for in this Amendment to which
Steak n Shake Operations, Inc. is a party, together with a sample
of the true signature of each such officer, dated as of the date of
this Amendment.
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Resolutions of
the Board of Directors of Steak n Shake Enterprises, Inc., an
Indiana corporation, authorizing the execution, delivery and
performance, respectively, of its Reaffirmation of Guaranty
Agreement and all other Loan Documents provided for in this
Amendment to which Steak n Shake Enterprises, Inc. is a party
certified by the Secretary of the Board of Directors of Steak n
Shake Enterprises, Inc. as being in full force and effect and duly
adopted as of the date hereof.
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The Certificate
of the Secretary of the Board of Directors of Steak n Shake
Enterprises, Inc. certifying the names of the officer or officers
authorized to execute its Reaffirmation of Guaranty Agreement and
all other Loan Documents provided for in this Amendment to which
Steak n Shake Enterprises, Inc. is a party, together with a sample
of the true signature of each such officer, dated as of the date of
this Amendment.
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Resolutions of
the Board of Directors of SnS Investment Company, an Indiana
corporation, authorizing the execution, delivery and performance,
respectively, of its Reaffirmation of Guaranty Agreement and all
other Loan Documents provided for in this Amendment to which SnS
Investment Company is a party certified by the Secretary of the
Board of Directors of SnS Investment Company as being in full force
and effect and duly adopted as of the date hereof.
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The Certificate
of the Secretary of the Board of Directors of SnS Investment
Company certifying the names of the officer or officers authorized
to execute its Reaffirmation of Guaranty Agreement and all other
Loan Documents provided for in this Amendment to which SnS
Investment Company is a party, together with a sample of the true
signature of each such officer, dated as of the date of this
Amendment.
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8.
PRIOR AGREEMENTS . The Agreement, as
amended by this Amendment, supersedes all previous agreements and
commitments made or issued by the Bank with respect to the Loans
and all other subjects of this Amendment, including, without
limitation, any oral or written proposals which may have been made
or issued by the Bank.
9.
EFFECT OF AMENDMENT . The provisions
contained herein shall serve to supplement and amend the provisions
of the Agreement. To the extent that the terms of this
Amendment conflict with the terms of the Agreement, the provisions
of this Amendment shall control in all respects.
10.
REAFFIRMATION . Except as expressly
amended by this Amendment, all of the terms and conditions of the
Agreement shall
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