exhibit4_21.htm


    
      EXHIBIT
        4.21

      


      EXECUTION
        VERSION

      


      


      


      SEVENTH
        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 Seventh 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.

      


      
        	
                 

              	
                (a)
                  

              	
                 
                  Amended Definitions.  The following definitions
                  appearing under Section 1 of the Agreement are hereby amended and
                  restated
                  in their respective entireties as
                  follows:

              


      

      


      
        	
                ·  

              	
                "Applicable
                  Spread" means that number of Basis Points to be taken into account
                  in
                  determining the per annum at which the LIBOR-based Rate of interest
                  on the
                  Revolving Loan shall be calculated, and which shall be 70 Basis
                  Points at
                  all times on and after the date of the Seventh
                  Amendment.

              


      

      


      
        	
                ·  

              	
                "Revolving
                  Loan Maturity Date" means January 30,
                  2009.

              


      

      


      
        	
                 

              	
                (b)

              	
                 
                  New Definition.  The following new definition is
                  hereby added to Section 1 of the Agreement as
                  follows:

              


      

      


      
        	
                ·  

              	
                “Seventh
                  Amendment” means that certain agreement entitled “Seventh Amendment to
                  Credit Agreement” entered into by and between the Company and the Bank
                  dated as of December 7, 2007, for the purpose of amending this
                  Agreement.

              


      

      


      2.           RENEWAL
        OF THE LOAN.  In order to document the renewal of the
        Loan, the first sentence of Section 2(a)(ii) of the Agreement is hereby amended
        and restated in its entirety as follows:

      


      
        	
                 

              	
                (ii)

              	
                 
                  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 Seventh
                  Amendment (the “Revolving Note”).

              


      

      


      


      3.           UNUSED
        FEE.  Section 2(a)(iv) of the Agreement is hereby amended
        and restated in its entirety as follows:

      


      
        	
                 

              	
                (iv)

              	
                 
                  Unused Fee.  The Company  shall pay to the Bank
                  a facility  or unused fee for each partial or full calendar
                  quarter during which the Commitment is outstanding equal to, effective
                  as
                  of the date of the Seventh Amendment, ten (10) Basis Points per
                  annum of
                  the average daily excess of the Commitment over the aggregate outstanding
                  principal balance of the Revolving Loan. For purposes of calculating
                  the
                  unused fee, the aggregate amount available to be drawn under all
                  outstanding Letters of Credit shall be added to the aggregate outstanding
                  principal balance of the Revolving Loan for the same
                  period.  Unused fees for each calendar quarter shall be due and
                  payable within ten (10) days following the Bank's submission of
                  a
                  statement of the amount due.  Such fees may be debited by the
                  Bank when due to any demand deposit account of the Company carried
                  with
                  the Bank without further authority.  Such fees shall be
                  calculated on the basis of a year of 360 days and actual days
                  elapsed.

              


      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      4.           FINANCIAL
        COVENANTS.  Section 5(g)(i) is hereby amended and
        restated in its entirety and a new Section 5(g)(ii) is hereby added to the
        Agreement as follows:

      


      
        	
                (i) 

              	
                 
                  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 shown in the table below, commencing with
                  the
                  period of four (4) consecutive fiscal quarters ending on December
                  19,
                  2007, the Company shall maintain a ratio of Funded Debt to EBITDA
                  of not
                  more than that shown opposite such fiscal
                  quarter:

              


      

      


      
        	
                Period

              	
                Ratio

              


      

      


      
        	
                first
                  fiscal quarter of fiscal year 2008

              	
                3.75
                  to 1.00

              


      

      


      
        	
                second
                  fiscal quarter of fiscal year 2008

              	
                4.00
                  to 1.00

              


      

      


      
        	
                third
                  fiscal quarter of fiscal year 2008

              	
                3.75
                  to 1.00

              


      

      


      
        	
                fourth
                  fiscal quarter of fiscal year 2008

              	
                3.50
                  to 1.00

              


      

      


      
        	
                first
                  fiscal quarter of fiscal year 2009, and as of the end of each fiscal
                  quarter thereafter

              	
                2.75
                  to 1.00

              


      

       

      
        	
                (ii)  

              	
                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 shown in the table below, commencing with the period
                  of
                  four (4) consecutive fiscal quarters ending on December 19, 2007,
                  the
                  Company shall maintain a debt service coverage ratio of not less
                  than that
                  shown opposite such fiscal quarter:

              


      

      


      
        	
                      Period

              	
                Ratio

              


      

       

      
        	
                first
                  fiscal quarter of fiscal year 2008

              	
                .95
                  to 1.00

              


      

      


      
        	
                second
                  fiscal quarter of fiscal year 2008

              	
                .90
                  to 1.00

              


      

      


      
        	
                third
                  fiscal quarter of fiscal year 2008

              	
                .95
                  to 1.00

              


      

      


      
        	
                fourth
                  fiscal quarter of fiscal year 2008

              	
                1.05
                  to 1.00

              


      

      


      
        	
                first
                  fiscal quarter of fiscal year 2009, and as of the end of each fiscal
                  quarter thereafter

              	
                1.25
                  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.

      


      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.

      


      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:

      


      
        	
                 

              	
                (i)

              	
                 
                  This Amendment duly executed by the
                  Company.

              


      

      


      
        	
                 

              	
                (ii)

              	
                 
                  The Revolving Note in the form of Exhibit "A" attached hereto duly
                  executed by the Company.

              


      

      


      
        	
                 

              	
                (iii)

              	
                 
                  The Reaffirmation of Guaranty Agreement in the form attached hereto
                  as
                  Exhibit "B" duly executed by Steak n Shake Operations,
                  Inc.

              


      

      


      
        	
                 

              	
                (iv)

              	
                 
                  The Reaffirmation of Guaranty Agreement in the form attached hereto
                  as
                  Exhibit "C" duly executed by Steak n Shake Enterprises,
                  Inc.

              


      

      


      
        	
                 

              	
                (v)

              	
                 
                  The Reaffirmation of Guaranty Agreement in the form attached hereto
                  as
                  Exhibit "D" duly executed by SnS Investment
                  Company.

              


      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                (vi)

              	
                  
                  Resolutions of the Board of Directors of the Company authorizing
                  the
                  execution, delivery and performance, respectively, of this Amendment
                  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.

              


      

      


      
        	
                 (vii)

              	
                  
                  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 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.

              


      

      


      
        	
                (viii)

              	
                   
                  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.

              


      

      


      
        	
                 

              	
                 (ix)

              	
                  
                  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.

              


      

      


      
        	
                 

              	
                (x)

              	
                  
                  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.

              


      

      


      
        	
                 

              	
                 (xi)

              	
                   
                  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.

              


      

      


      
        	
                 

              	
                (xii)

              	
                  
                  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.

              


      

      


      
        	
                 (xiii)

              	
                  
                  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.

              


      

      


      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 remain in full force and effect as originally written and
        as
        previously amended.

      


      11.           COUNTERPARTS.  
        This Amendment may be executed in any number of counterparts, each of which
        shall be an original and all of which when taken together shall be one and
        the
        same agreement.

      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the Company and the Bank have executed and delivered in Indiana this Seventh
        Amendment Credit Agreement by their respective duly authorized officers as
        of
        December 7, 2007.

      


      


      
        	
                 

              	
                THE
                  STEAK N SHAKE COMPANY, an Indiana
                  corporation

              


      

      


      


      


      
        	
                 

              	
                By:

              	   /s/ David C. Milne 
                	 


      

       

      
        	
                 

              	
                  
                  David C. Milne, Vice President, General Counsel and Corporate
                  Secretary

              


      

      


      


      FIFTH
        THIRD BANK, a Michigan banking corporation, formerly known as Fifth
        Third Bank (Central Indiana), and Fifth Third Bank, Indiana
        (Central)

      


       

      
        	
                 

              	
                By:

              	
                   
                  /s/ Andrew M. Cardimen  


              


      

      
        	
                 

              	
                   
                  Andrew M. Cardimen, VicePresident and Senior
                  RelationshipManager

              


      

      



      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      


      


      


      SCHEDULE
        OF EXHIBITS

      


      


      
        	
                Exhibit
                  "A"

              	
                 

              	
                Promissory
                  Note (Revolving Loan)($50,000,000.00) (The Steak n Shake
                  Company)

              


      

      


      
        	
                Exhibit
                  "B"

              	
                 

              	
                Reaffirmation
                  of Guaranty Agreement (Steak n Shake Operations,
                  Inc.)

              


      

      


      
        	
                Exhibit
                  "C"

              	
                 

              	
                Reaffirmation
                  of Guaranty Agreement (Steak n Shake Enterprises,
                  Inc.)

              


      

      


      
        	
                Exhibit
                  "D"

              	
                 

              	
                Reaffirmation
                  of Guaranty Agreement (SnS Investment
                  Company)

              


      

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      Exhibit
        A

       

       

      PROMISSORY
        NOTE

      (Revolving
        Loan)

      


      Indianapolis,
        Indiana

      $50,000,000.00                                                                                            Dated:
        December 7, 2007

      Final
        Maturity: January 30,
        2009

      


      On
        or before January 30, 2009 (“Final
        Maturity”), THE STEAK N SHAKE COMPANY, an Indiana corporation
        (the “Maker”) promises to pay to the order of FIFTH THIRD BANK,
a Michigan banking corporation, formerly known as Fifth
        Third Bank
        (Central Indiana), and Fifth Third Bank, Indiana (Central) (the “Bank”) at the
        principal office of the Bank at Indianapolis, Indiana, the principal sum
        of
        Fifty Million and 00/100 Dollars ($50,000,000.00), or so much of the principal
        amount of the Loan represented by this Note as may be disbursed by the Bank
        under the terms of the Credit Agreement described below, and to pay interest
        on
        the unpaid principal balance outstanding from time to time as provided in
        this
        Note.

      


      This
        Note evidences indebtedness (the
“Loan”) incurred or to be incurred by the Maker under a revolving line of credit
        extended to the Maker by the Bank under a Credit Agreement dated as of November
        16, 2001, as amended.  All references in this Note to the Credit
        Agreement shall be construed as references to that Agreement as it may be
        amended from time to time.  The Loan is referred to in the Credit
        Agreement as the “Revolving Loan.”  Subject to the terms and
        conditions of the Credit Agreement, the proceeds of the Loan may be advanced
        and
        repaid and re-advanced until Final Maturity.  The principal amount of
        the Loan outstanding from time to time shall be determined by reference to
        the
        books and records of the Bank on which all Advances under the Loan and all
        payments by the Maker on account of the Loan shall be recorded.  Such
        books and records shall be deemed primafacie to be correct as to
        such matters. The terms “Advance” and “Banking Day” are used in this Note as
        defined in the Credit Agreement.

      


      Interest
        on the unpaid principal
        balance of the Loan outstanding from time to time prior to and after maturity
        will accrue at the rate or rates provided in the Credit
        Agreement.  Prior to maturity, accrued interest shall be due and
        payable on the last Banking Day of each month commencing on the last Banking
        Day
        of December, 2007.  After maturity, interest shall be due and payable
        as accrued and without demand.  Interest will be calculated by
        applying the ratio of the annual interest rate over a year of 360 days,
        multiplied by the outstanding principal balance, multiplied by the actual
        number
        of days the principal balance is outstanding.

      


      The
        entire outstanding principal
        balance of this Note shall be due and payable, together with accrued interest,
        at Final Maturity.  Reference is made to the Credit Agreement for
        provisions requiring prepayment of principal under certain
        circumstances.  Principal may be prepaid, but only as provided in the
        Credit Agreement.

      


      If
        any installment of interest due
        under the terms of this Note is not paid when due, then the Bank or any
        subsequent holder of this Note may, subject to the terms of the Credit
        Agreement, at its option and without notice, declare the entire principal
        amount
        of the Note and all accrued interest immediately due and
        payable.  Reference is made to the Credit Agreement which provides for
        acceleration of the maturity of this Note upon the happening of other “Events of
        Default” as defined therein.

      


      If
        any installment of interest due
        under the terms of this Note prior to maturity is not paid in full within
        ten
        (10) days when due, then the Bank at its option and without prior notice
        to the
        Maker, may assess a late payment fee in an amount equal to the greater of
        $20.00
        or five percent (5%) of the amount past due.  Each late payment fee
        assessed shall be due and payable on the earlier of the next regularly scheduled
        interest payment date or the maturity of this Note.  Waiver by the
        Bank of any late payment fee assessed, or the failure of the Bank in any
        instance to assess a late payment fee shall not be construed as a waiver
        by the
        Bank of its right to assess late payment fees thereafter.

      


      All
        payments on account of this Note
        shall be applied first to expenses of collection, next to any late payment
        fees
        which are due and payable, next to interest which is due and payable, and
        only
        after satisfaction of all such expenses, fees and interest, to
        principal.

      


      The
        Maker and any endorsers severally
        waive demand, presentment for payment and notice of nonpayment of this Note,
        and
        each of them consents to any renewals or extensions of the time of payment
        of
        this Note without notice. All amounts payable under the terms of this Note
        shall
        be payable with expenses of collection, including attorneys' fees, and without
        relief from valuation and appraisement laws.

      


      This
        Note supersedes and replaces that
        certain Promissory Note (Revolving Loan) made by the Maker payable to the
        order
        of the Bank dated January 30, 2005, in the principal amount of $50,000,000.00
        and maturing on January 30, 2008.

      


      This
        Note is made under and will be
        governed in all cases by the substantive laws of the State of Indiana,
        notwithstanding the fact that Indiana conflicts of law rules might otherwise
        require the substantive rules of law of another jurisdiction to
        apply.

      


      
        	
                 

              	
                THE
                  STEAK N SHAKE COMPANY, an Indiana
                  corporation

              


      

      


       
        By:      /s/ David C.
        Milne

       

      
        	
                 

              	
                  David
                  C. Milne, Vice President, General Counsel and Corporate
                  Secretary

              



        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        
Exhibit B
 

       

      REAFFIRMATION
        OF GUARANTY AGREEMENT

      (Steak
        n
        Shake Operations, Inc.)

      


      The
        undersigned (the “Guarantor”), being the Guarantor under that certain Guaranty
        Agreement dated as of November 16, 2001 (the “Guaranty”), pursuant to which the
        undersigned guaranteed the obligations of THE STEAK N SHAKE
        COMPANY, an Indiana corporation (the “Company”) to FIFTH THIRD
        BANK, a Michigan banking corporation, formerly known as Fifth Third
        Bank (Central Indiana),and  Fifth Third Bank, Indiana (Central) (the
“Bank”) under the terms  of that certain Credit Agreement (the
“Agreement”) dated as of November 16, 2001, entered into by and between the
        Company and the Bank, as previously amended, hereby consents to the execution
        of
        that certain Seventh Amendment to Credit Agreement to be entered into by
        and
        between the Company and the Bank dated as of even date herewith (the
“Amendment”), and hereby agrees that the Obligations (as defined in the
        Guaranty) shall include the obligations of the Company to the Bank under
        the
        Agreement as amended by the Amendment, which Amendment, among other things,
        renews the maturity date of that certain Revolving Loan (as described in
        the
        Agreement)  to January 30, 2009, and the undersigned reaffirms its
        Obligations under, and agrees to be bound by, the terms of the
        Guaranty.

      


      Further,
        the Guarantor acknowledges that while it may be the present practice of the
        Bank
        to obtain the undersigned’s consent to the execution and delivery of the
        Amendment, the Bank may discontinue any such practice in the future and such
        discontinuance shall not be construed as a waiver of the Bank’s right, in its
        discretion, to enter into any further amendments to or grant any further
        waivers
        of any of the terms and conditions of the Agreement without the consent of
        the
        undersigned, and the Bank’s failure to request or obtain the consent of the
        undersigned to any such amendment or waiver shall not affect the liability
        of
        the undersigned to the Bank under the Guaranty.

      


      


      IN
        WITNESS WHEREOF, the undersigned has executed this Reaffirmation of
        Guaranty Agreement as of December 7, 2007.

      


      


      STEAK
        N SHAKE OPERATIONS, INC., an Indiana corporation

       

      

         
          By:      /s/ David C.
          Milne

         

        
          	
                   

                	
                    David
                    C. Milne, Vice President, General Counsel and Corporate
                    Secretary

                


        

      

       

      


       

      


      


      


      
        	
                STATE
                  OF INDIANA

              	
                 

              


      

      SS:

      
        	
                COUNTY
                  OF  Marion      

              	
                 

              


      

      


      Before
        me, a Notary Public in and for said County and State, personally
        appeared David C. Milne, the Vice President, General Counsel and
        Corporate Secretary of STEAK N SHAKE OPERATIONS, INC., an
        Indiana corporation, who as such authorized officer acknowledged execution
        of
        the foregoing Reaffirmation of Guaranty Agreement on behalf of said corporation
        this 10th day of December, 2007.

      


      


      Signature:                      
        /s/ Donna
        Haynes                                   

      Printed:                      
               Donna
        Haynes                                    
Notary Public

      My
        Commission Expires:  2-17-2008  

      


      My
        County
        of Residence: Marion      

      


      
        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

      Exhibit
        C


       

       

      REAFFIRMATION
        OF GUARANTY AGREEMENT

      (Steak
        n
        Shake Enterprises, Inc.)

      


      The
        undersigned (the “Guarantor”), being the Guarantor under that certain Guaranty
        Agreement dated as of August 21, 2006 (the “Guaranty”), pursuant to which the
        undersigned guaranteed the obligations of THE STEAK N SHAKE
        COMPANY, an Indiana corporation (the “Company”) to FIFTH THIRD
        BANK, a Michigan banking corporation, formerly known as Fifth Third
        Bank (Central Indiana), and Fifth Third Bank, Indiana (Central) (the “Bank”)
        under the terms  of that certain Credit Agreement (the “Agreement”)
        dated as of November 16, 2001, entered into by and between the Company and
        the
        Bank, as previously amended, hereby consents to the execution of that certain
        Seventh Amendment to Credit Agreement to be entered into by and between the
        Company and the Bank dated as of even date herewith (the “Amendment”), and
        hereby agrees that the Obligations (as defined in the Guaranty) shall include
        the obligations of the Company to the Bank under the Agreement as amended
        by the
        Amendment, which Amendment, among other things, renews the maturity date
        of that
        certain Revolving Loan (as described in the Agreement) to January 30, 2009,
        and
        the undersigned reaffirms its Obligations under, and agrees to be bound by,
        the
        terms of the Guaranty.

      


      Further,
        the Guarantor acknowledges that while it may be the present practice of the
        Bank
        to obtain the undersigned’s consent to the execution and delivery of the
        Amendment, the Bank may discontinue any such practice in the future and such
        discontinuance shall not be construed as a waiver of the Bank’s right, in its
        discretion, to enter into any further amendments to or grant any further
        waivers
        of any of the terms and conditions of the Agreement without the consent of
        the
        undersigned, and the Bank’s failure to request or obtain the consent of the
        undersigned to any such amendment or waiver shall not affect the liability
        of
        the undersigned to the Bank under the Guaranty.

      


      


      IN
        WITNESS WHEREOF, the undersigned has executed this Reaffirmation of
        Guaranty Agreement as of December 7, 2007.

      


      


      STEAK
        N SHAKE ENTERPRISES, INC., an Indiana corporation

      


      

         
          By:       /s/ David C.
          Milne   

         

        
          	
                   

                	
                    
                    David C. Milne, Vice President, General Counsel and Corporate
                    Secretary
                    

                




      

      


      


      


      


      
        	
                STATE
                  OF INDIANA

              	
                 

              


      

      SS:

      
        	
                COUNTY
                  OF  Marion   

              	
                 

              


      

      


      Before
        me, a Notary Public in and for said County and State, personally appeared
        David C. Milne, the Vice President, General Counsel and Corporate
        Secretary of STEAK N SHAKE ENTERPRISES, INC., an Indiana
        corporation, who as such authorized officer acknowledged execution of the
        foregoing Reaffirmation of Guaranty Agreement on behalf of said corporation
        this
10th day of December, 2007.

      


      
        
          


          


          Signature:                      
            /s/ Donna
            Haynes                                   

          Printed:                      
                   Donna
            Haynes                                    
Notary Public

          My
            Commission Expires:  2-17-2008  

          


          My
            County
            of Residence: Marion     


        

      

      
        
           

          
            8

            
              

            

          

          
            
            

          

        

      

      Exhibit
        D



       

      REAFFIRMATION
        OF GUARANTY AGREEMENT

      (SnS
        Investment Company)

      


      The
        undersigned (the “Guarantor”), being the Guarantor under that certain Guaranty
        Agreement dated as of November 16, 2001 (the “Guaranty”), pursuant to which the
        undersigned guaranteed the obligations of THE STEAK N SHAKE
        COMPANY, an Indiana corporation (the “Company”) to FIFTH THIRD
        BANK, a Michigan banking corporation, formerly known as Fifth Third
        Bank (Central Indiana), a Michigan banking corporation and formerly known
        as
        Fifth Third Bank, Indiana (Central) (the “Bank”) under the terms  of
        that certain Credit Agreement (the “Agreement”) dated November 16, 2001, entered
        into by and between the Company and the Bank, as previously amended, hereby
        consents to the execution of that certain Seventh Amendment to Credit Agreement
        to be entered into by and between the Company and the Bank dated as of even
        date
        herewith (the “Amendment”), and hereby agrees that the Obligations (as defined
        in the Guaranty) shall include the obligations of the Company to the Bank
        under
        the Agreement as amended by the Amendment, which Amendment, among other things,
        renews the maturity date of that certain Revolving Loan (as described in
        the
        Agreement) to January 30, 2009, and the undersigned reaffirms its Obligations
        under, and agrees to be bound by, the terms of the Guaranty.

      


      Further,
        the Guarantor acknowledges that while it may be the present practice of the
        Bank
        to obtain the undersigned’s consent to the execution and delivery of the
        Amendment, the Bank may discontinue any such practice in the future and such
        discontinuance shall not be construed as a waiver of the Bank’s right, in its
        discretion, to enter into any further amendments to or grant any further
        waivers
        of any of the terms and conditions of the Agreement without the consent of
        the
        undersigned, and the Bank’s failure to request or obtain the consent of the
        undersigned to any such amendment or waiver shall not affect the liability
        of
        the undersigned to the Bank under the Guaranty.

      


      IN
        WITNESS WHEREOF, the undersigned has executed this Reaffirmation of
        Guaranty Agreement as of December 7, 2007.

      


      


      SnS
        INVESTMENT COMPANY, an Indiana corporation

      


      

         
          By:      /s/ David C.
          Milne

         

        
          	
                   

                	
                    David
                    C. Milne, Vice President, General Counsel and Corporate Secretary
                    

                





      

      


      


      


      
        	
                STATE
                  OF INDIANA

              	
                 

              


      

       SS:

      
        	
                COUNTY
                  OF  Marion   

              	
                 

              


      

      


      Before
        me, a Notary Public in and for said County and State, personally appeared
        David C. Milne, the Vice President, General Counsel and Corporate
        Secretary  of SnS INVESTMENT COMPANY, an Indiana
        corporation, who as such authorized officer acknowledged execution of the
        foregoing Reaffirmation of Guaranty Agreement on behalf of said corporation
        this
10th day of December, 2007.

      


      
        
          


          


          Signature:                      
            /s/ Donna
            Haynes                                   

          Printed:                      
                   Donna
            Haynes                                    
Notary Public

          My
            Commission Expires:  2-17-2008  

          


          My
            County
            of Residence: Marion      

           
9