Re: Amendment No. 6 to Amended and Restated Note Purchase and Private Shelf Agreement
EXHIBIT
4.20
EXECUTION
VERSION
December
5, 2007
The
Steak
N Shake Company
500
Century Building
00
Xxxxx
Xxxxxxxxxxxx Xxxxxx
Indianapolis,
Indiana 46204
Attention: Chief
Financial Officer
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Re:
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Amendment
No. 6 to Amended and Restated Note Purchase and Private Shelf
Agreement
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Ladies
and Gentlemen:
Reference
is made to that certain
Amended 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 and that
certain Amendment dated October 30, 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 date this letter becomes effective in accordance with its terms,
the Note Agreement is amended as follows:
1.1 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) 1.25 to 1.00 at any time during the period beginning
on (or nearest to) March 31, 2007 and ending on (or nearest to) June 29, 2007,
(ii) 1.05 to 1.00 at any time during the period beginning on (or nearest to)
June 30, 2007 and ending on (or nearest to) September 29, 2007, (iii) 0.95
to
1.00 for the period beginning on (or nearest to) September 30, 2007 and ending
on (or nearest to) December 30, 2007, (iv) 0.90 to 1.00 for the period beginning
December 31, 2007 and ending on (or nearest to) March 30, 2008, (v) 0.95 to
1.00
for the period beginning on (or nearest to) March 31, 2008 and ending on (or
nearest to) June 29, 2008, (vi) 1.05 to 1.00 for the period beginning on (or
nearest to) June 30, 2008 and ending on (or nearest to) September 29, 2008
and
(vii) 1.25 to 1.00 at any other time.”
1.2 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
therefor:
“provided
that for each period of four
(4) consecutive fiscal quarters commencing with the period of four (4)
consecutive fiscal quarters ending on (or nearest to) September 30, 2002, the
Company shall, at all times maintain a ratio of Consolidated Debt to
consolidated EBITDA (the “Leverage Ratio”) not exceeding (i)
2.75 to 1.00 for the four (4) consecutive fiscal quarter periods ending on
(or
nearest to) June 29, 2007, (ii) 3.25 to 1.00 for the four (4) consecutive fiscal
quarter periods ending on (or nearest to) September 29, 2007, (iii)
3.75 to 1.00 for the four (4) consecutive fiscal quarter periods ending on
(or
nearest to) December 30, 2007, (iv) 4.00 to 1.00 for the four (4) consecutive
fiscal quarter periods ending on (or nearest to) March 30, 2008, (v) 3.75 to
1.00 for the four (4) consecutive fiscal quarter periods ending on (or nearest
to) June 29, 2008, (vi) 3.50 to 1.00 for the four (4) consecutive fiscal quarter
periods ending on (or nearest to) September 29, 2008 and (vii) 2.75 to 1.00
for
each other period of four (4) consecutive fiscal quarters; 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.”
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1.3 The
following new paragraph 6C(2A) is added to the Note Agreement after paragraph
6C(2) (Debt) and before paragraph 6C(3) (Consolidated Net Worth):
“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) December 30, 2007, 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) .005 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, 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.”
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); and (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.
SECTION
3. Conditions
Precedent. This letter shall be deemed
effective as of December 5, 2007 upon the return to Prudential on or before
December 12, 2007 of a counterpart hereof duly executed by the Company and
the
undersigned holders of the Notes. Upon execution hereof by the
Company, this letter should be returned to: Prudential Capital Group,
Two Prudential Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx X. Xxxxxxx.
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).
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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.
Very
truly yours,
PRUDENTIAL
INVESTMENT MANAGEMENT, INC.
By: /s/ Xxxxx Xxxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxxx
Title: Vice
President
THE
PRUDENTIAL INSURANCE COMPANY
OF
AMERICA
By: /s/ Xxxxx Xxxxxxxxxxx
Name:
Xxxxx Xxxxxxxxxxx
Title: Vice
President
PRUCO
LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxxxxxx
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/ Xxxxx Xxxxxxxxxxx
Vice
President
Agreed
and Accepted:
THE
STEAK N SHAKE COMPANY
By: /s/ Xxxxxxx
X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Executive Vice President, Chief Financial and Administrative
Officer
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