Document:

ex10_2.htm

    Exhibit
10.2

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    AMENDMENT
NO. 2 TO MASTER REPURCHASE AGREEMENT AND ANNEX I TO 

    MASTER
REPURCHASE AGREEMENT SUPPLEMENTAL TERMS AND 

    CONDITIONS

    

    

    AMENDMENT
NO. 2 TO MASTER REPURCHASE AGREEMENT AND ANNEX I TO MASTER REPURCHASE AGREEMENT
SUPPLEMENTAL TERMS AND CONDITIONS, dated as of July 8, 2008 (this “Amendment”), by and
between ANTHRACITE FUNDING, LLC (“Seller”) and DEUTSCHE
BANK AG, CAYMAN ISLANDS BRANCH, a branch of a German banking institution (“Buyer”), and agreed
to and accepted by AHR CAPITAL DB LIMITED, an Irish private limited company
(“Removed
Seller”) and DEUTSCHE BANK AG, LONDON BRANCH, a branch of a German
banking institution (“Removed
Buyer”).  Capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Repurchase Agreement (as
hereinafter defined).

    

    RECITALS

    

    WHEREAS,
Seller, Removed Seller, Buyer and Removed Buyer are parties to that certain
Master Repurchase Agreement and Annex I to Master Repurchase Agreement
Supplemental Terms And Conditions (“Annex I”), dated as
of December 23, 2004, as supplemented by the English Loan Supplement dated
December 23, 2004, the Joinder, dated August 24, 2005, and the Joinder, dated
October 24, 2005, and as amended by that certain Amendment No. 1 to Annex I to
Master Repurchase Agreement Supplemental Terms and Conditions, dated February 8,
2007 (and as otherwise amended, restated, supplemented or otherwise modified
from time to time, including by this Amendment, the “Repurchase
Agreement”); and

    

    WHEREAS,
Seller, Removed Seller, Buyer and Removed Buyer wish to further amend the
Repurchase Agreement, as more particularly set forth herein.

    

    NOW
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer hereby agree as follows:

    

    SECTION 1. Amendments.

    

    (a)         Commencing
on the date hereof and thereafter, all references in the Repurchase Agreement
and the Transaction Documents to the “Seller” shall be deemed to refer only to
Anthracite Funding, LLC, and not the Removed Seller.

    

    (b)         Commencing
on the date hereof and thereafter, all references in the Repurchase Agreement
and the Transaction Documents to the “Buyer” shall be deemed to refer only to
Deutsche Bank AG, Cayman Islands Branch, and not the Removed Buyer.

    

    (c)         Section
2 of Annex I is hereby amended by adding the following definitions:

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “Amendment No. 2”
shall mean Amendment No. 2 To Master Repurchase Agreement and Annex I To Master
Repurchase Agreement Supplemental Terms And Conditions, dated as of July 8,
2008, by and between Buyer and Seller.

     

    “BOA 9/08 Facility”
shall mean that debt facility (whether documented as a repurchase agreement or
loan agreement) in a maximum principal amount equal to $100,000,000 which
currently matures in September, 2008, between an Affiliate of the Sponsor and
Bank of America, N.A. or its Affiliate.

     

    “BOA 9/09 Facility”
shall mean that debt facility (whether documented as a repurchase agreement or
loan agreement) in a maximum principal amount equal to $275,000,000 which
currently matures in September, 2009, between an Affiliate of the Sponsor and
Bank of America, N.A. or its Affiliate.

     

    “Environmental Law”
shall mean, any federal, state, foreign or local statute, law, rule, regulation,
ordinance, code, guideline, written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. §
7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning the
Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. § 1801 et seq.; and the Occupational
Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to
time.

     

    “Ground Lease” shall
mean a ground lease containing the following terms and conditions: (a) a
remaining term (exclusive of any unexercised extension options) of thirty (30)
years or more from the Purchase Date of the Purchased Loan; (b) the right of the
lessee to mortgage and encumber its interest in the leased property without the
consent of the lessor or with such consent given; (c) the obligation of the
lessor to give the holder of any mortgage lien on such leased property written
notice of any defaults on the part of the lessee and agreement of such lessor
that such lease will not be terminated until such holder has had a reasonable
opportunity to cure or complete foreclosures, and fails to do so; (d) reasonable
transferability of the lessee’s interest under such lease, including ability to
sublease; and (e) such other rights customarily required by mortgagees making a
loan secured by the interest of the holder of the leasehold estate demised
pursuant to a ground lease.

     

    “MS 2/09 Facility”
shall mean that debt facility (whether documented as a repurchase agreement or
loan agreement) in a maximum principal amount equal 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    to
$300,000,000 which currently matures in February, 2009, between an Affiliate of
the Sponsor and Morgan Stanley Incorporated or its Affiliate.

     

    “Restructure Date”
shall mean July 8, 2008.

     

    (d)         Section
2 of Annex I is hereby amended by deleting the definition of “Applicable Spread”
and by inserting the following definition of “Applicable Spread”:

    

    “Applicable Spread”
shall mean, with respect to a Transaction involving Purchased Securities in any
Rating Category and/or Purchased Loans in any Collateral Type Grouping, the
rates indicated on Schedule 1 of
Amendment No. 2.

     

    (e)         Section
2 of the Repurchase Agreement is hereby amended by deleting the definition of
“Buyer’s Margin Percentage” and by inserting the following definition of
“Buyer’s Margin Amount”:

     

    “Buyer’s Margin
Percentage” shall mean, with respect to any Transaction as of any date,
the reciprocal of the “Advance Rate” for such Transaction, as specified on Schedule 2 of
Amendment No. 2 (i.e., the percentage that when multiplied by the applicable
Advance Rate equals 1.00).  The Buyer’s Margin Percentage for each of
the applicable Advance Rate is as specified on Schedule 2 of
Amendment No. 2.

     

    (f)          All
references in Annex I to “CF Sweep Event” and “CF Sweep Purchase Percentage,” or
any term or provision related to either of the foregoing, are hereby deleted in
their entirety.

     

    (g)         Section
2 of Annex I is hereby amended by deleting the definition of “Deficit Cure
Amount” and by inserting the following definition of “Deficit Cure
Amount”:

     

    “Deficit Cure Amount”
shall mean, as of any date, with respect to any Purchased Loan, the amount
(expressed in United States Dollars) obtained by dividing (i) the Repurchase
Price of such Purchased Loan as of such date by (ii) the Affirmed Original
Purchase Percentage for such Purchased Loan, and with respect to any Purchased
Security, the amount (expressed in United States Dollars) obtained by dividing
(i) the Repurchase Price of such Purchased Security as of such date by (ii) the
then current Target Original Purchase Percentage for such Purchased
Security.

     

    (h)         Section
2 of Annex I is hereby amended by deleting the definition of “Extension
Conditions” and “Extension Date Repurchase Price” in their
entirety.

     

    (i)          Section
2 of Annex I is hereby amended by deleting the existing definition of “LIBOR”
and by inserting the following definition of “LIBOR”:

     

    “LIBOR” shall mean,
with respect to each Pricing Rate Period, the rate (expressed as a percentage
per annum and rounded upward, if necessary, to the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      next
nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period, that
appears on Reuters Screen LIBOR01 (or the successor thereto) as of 11:00 a.m.,
London time, on the related Pricing Rate Determination Date.  If such
rate does not appear on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on
such Pricing Rate Determination Date, Buyer shall request the principal London
office of any four major reference banks in the London interbank market selected
by Buyer to provide such bank’s offered quotation (expressed as a percentage per
annum) to prime banks in the London interbank market for deposits in U.S.
dollars for a one-month period as of 11:00 a.m., London time, on such Pricing
Rate Determination Date for amounts of not less than the Repurchase Price of the
Transaction.  If at least two such offered quotations are so provided,
LIBOR shall be the arithmetic mean of such quotations.  If fewer than
two such quotations are so provided, Buyer shall request any three major banks
in New York City selected by Buyer to provide such bank’s rate (expressed as a
percentage per annum) for loans in U.S. dollars to leading European banks for a
one-month period as of approximately 11:00 a.m., New York City time on the
applicable Pricing Rate Determination Date for amounts of not less than the
Repurchase Price of the Transaction.  If at least two such rates are
so provided, LIBOR shall be the arithmetic mean of such rates.  LIBOR
shall be determined by Buyer or its agent, which determination shall be
conclusive absent manifest error.

    

     

    (j)          Section
2 of Annex I is hereby amended by deleting the existing definition of “Pricing
Rate” and by inserting the following definition of “Pricing Rate”:

     

    “Pricing Rate” shall
mean, for any Pricing Rate Period, with respect to a Transaction involving
Purchased Securities in any Rating Category and/or Purchased Loans in any
Collateral Type Grouping on Schedule I-A of this Annex I, an annual rate
calculated in accordance with Schedule 3 of
Amendment No. 2.

     

    (k)         Section
2 of Annex I is hereby amended by deleting the definition of “Reference
Banks.”

     

    (l)          Section
2 of Annex I is hereby amended by deleting the existing definition of
“Repurchase Date” and by inserting the following definition of “Repurchase
Date”:

     

    “Repurchase Date”
shall mean July 8, 2010.

     

    (m)        Sections
3(a), 3(b) and 3(l) of the Repurchase Agreement are hereby deleted in their
entirety.

     

    (n)         Section
3(e) of Annex I is hereby replaced in its entirety as follows:

     

    (e)          On
the Repurchase Date, termination of the applicable Transactions will be effected
by transfer to Seller or its agent of the Purchased Securities and Purchased
Loans and any Income in respect thereof received by Buyer (and not previously
credited or transferred to, or applied to the obligations 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    of,
Seller pursuant to Section 5 of this Annex I) against the simultaneous transfer
of the Repurchase Price to an account of Buyer.

    

    (o)         The
following shall be added as Section 3(d)(vi) of the Annex I:

     

    (vi)         If
any individual Purchased Security which Seller proposes to repurchase pursuant
to this Section 3(d) is rated “BB” (or the equivalent) or higher, then at the
time such individual Purchased Security is repurchased, Seller shall also
repurchase all other Purchased Securities from the same issue which are rated
lower than such individual Purchased Security.

    

    (p)         Section
4(a) of the Repurchase Agreement is hereby replaced in its entirety as
follows:

    

    (a)  If
at any time, either (i) the Market Value of any of the Purchased Securities or
any of the Purchased Loans shall be less than the Buyer’s Margin Amount for such
Purchased Securities or Purchased Loans, respectively (a “Margin Deficit”), or
(ii) a Credit Loss shall occur with respect to the Purchased Securities in any
Rating Category subject to the last sentence of this Paragraph 4(a) or a Credit
Loss shall occur with respect to the Purchased Loans in any Collateral Type
Grouping, then Buyer may by notice to Seller require Seller to transfer to Buyer
(A) cash or (B) additional collateral or a letter of credit acceptable to Buyer
in its sole and absolute discretion, so that the sum obtained by adding the
Market Value of such Purchased Securities or Purchased Loans plus such cash and
additional collateral or letter of credit shall equal or exceed the Deficit Cure
Amount for such Purchased Securities or Purchased Loans, respectively, as of the
same date.  Seller’s failure to cure any Margin Deficit as required by
the preceding sentence shall constitute an Event of Default under the
Transaction Documents and shall entitle Buyer to exercise its remedies under
Section 14 of Annex I (including, without limitation, the liquidation remedy
provided for in Section 14(c)(iv) of Annex I).  For purposes of this
Paragraph 4(a), a Credit Loss shall only be deemed to have occurred with respect
to the Purchased Securities in any Rating Category if and to the extent such
Credit Loss shall not have been offset by Credit Gains with respect to Purchased
Securities in the same Rating Category.

    

    (q)         Notwithstanding
anything contained in the Repurchase Agreement to the contrary, in no event
shall Buyer advance any Margin Excess to Seller.  Consequently,
Section 4(b) of the Repurchase Agreement is hereby deleted in its
entirety.

    

    (r)         
Section 5(e) of Annex I in hereby deleted in its entirety.

    

    (s)         Section
10(a)(viii) of Annex I is hereby replaced in its entirety as
follows:

    

    (viii)        Representations and
Warranties Regarding Purchased Securities.  Seller represents
and warrants to the Buyer that each Purchased Security sold 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      hereunder,
as of each Purchase Date for a Transaction conforms to the applicable
representations and warranties set forth in Exhibit VI attached hereto in all
material respects, except as disclosed to the Buyer in
writing.

    

    

    (t)          Section
10(a)(xv) of Annex I is hereby replaced in its entirety as follows:

    

    (xv)        Federal
Regulations.  Seller is not an “investment company,” or a
company “controlled by an investment company,” within the meaning of the
Investment Company Act of 1940, as amended.

    

    (u)         Section
14(a) of Annex I shall be amended by adding the text indicated on Schedule 4 of
Amendment No. 2.

    

    (v)         The
following shall be added to Annex I as Section 14(b)(ix):

    

    (ix)         Upon
the designation of any Accelerated Repurchase Date, the Buyer may, without prior
notice to the Seller, set off any sum or obligation (whether or not arising
under this Agreement, whether matured or unmatured, whether or not contingent
and irrespective of the currency, place of payment or booking office of the sum
or obligation) owed by Seller to Buyer or any Affiliate of Buyer against any sum
or obligation (whether or not arising under this Agreement, whether matured or
unmatured, whether or not contingent and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by Buyer or any
Affiliate of Buyer to Seller.  Buyer will give notice to the other
party of any set off effected under this Section 14(b)(ix).  If a sum
or obligation is unascertained, Buyer may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.  Nothing in this
Section 14(b)(ix) shall be effective to create a charge or other security
interest.  This Section 14(b)(ix) shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or other rights
to which any party is at any time otherwise entitled (whether by operation of
law, contract or otherwise).

    

    (w)        The
second sentence of the second paragraph of Section 16 of Annex I shall hereby be
replaced in its entirety with the following:

    

    “A
copy of all notices, consents, approvals and requests directed to Seller (other
than Confirmations) shall be delivered concurrently to the
following:  Latham & Watkins, 885 Third Avenue, New York, New York
10019, Attention:  David M. Stewart, Esq.  A notice shall be
deemed to have been given: (a) in the case of hand delivery, at the time of
delivery, (b) in the case of registered or certified mail, when delivered or the
first attempted delivery on a Business Day, (c) in the case of expedited prepaid
delivery upon the first attempted delivery on a Business Day, or (d) in the case
telecopier, upon receipt of answerback confirmation, provided that such
telecopied notice was also delivered as required in this Section.”

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (x)         On
the date hereof, and as a condition to the effectiveness of this Amendment,
Seller shall reduce the outstanding Repurchase Price (excluding accrued Price
Differential) of each Purchased Security and Purchased Loan to an amount equal
to the product of (x) its then current Market Value multiplied by (y) the
Original Purchase Percentage for such Purchased Security or Purchased Loan set
forth on Schedule
5 attached hereto (such percentage, the “Affirmed Original Purchase
Percentage,” and such reduced Repurchase Price, the “Restructure Date Repurchase
Price”).

    

     
Notwithstanding anything contained in the Repurchase Agreement to the contrary,
Seller shall, on the second Remittance Date of each month, reduce the Repurchase
Price with respect to each Purchased Security by an amount equal to the product
of (x) its then current Market Value multiplied by (y) the Target Original
Purchase Percentage (as hereinafter defined).  The “Target Original
Purchase Percentage” for each Purchased Security will be a percentage equal to
(a) the Affirmed Original Purchase Percentage minus (b) the product of (i) a
percentage equal to the quotient of (x) one (1) divided by the “amortization
flag” (as specified on Schedule 5 attached
hereto for each Purchased Security) of the Restructure Date Repurchase Price of
such Purchased Security, divided by (y) the Market Value of such Purchased
Security as of the date hereof multiplied by (ii) the number of Remittance Dates
that have occurred since the date (including the Remittance Date on which the
percentage is being calculated).

    

    (y)         Notwithstanding
anything contained in the Repurchase Agreement to the contrary, Seller
acknowledges and agrees that from and after the date hereof, Seller may not
propose any new Transactions, and in no event shall Buyer be obligated to enter
into any new Transactions.

    

    (z)         Schedule
I-A to Annex I is hereby deleted in its entirety.

    

    (aa)       Exhibit
VI to Annex I is hereby replaced in its entirety by the Representations and
Warranties attached hereto as Schedule
6.

    

    SECTION
2.      Representation and
Warranties. Seller hereby represents, covenants and warrants to Buyer
that he representations and warranties contained in the Repurchase Agreement and
the other Transaction Documents, as modified by this Amendment, are true and
correct as of the date hereof.

     

    SECTION
3.      Conditions
Precedent.  This Amendment and its provisions shall become
effective on the first date on which this Amendment is executed and delivered by
a duly authorized officer of each of the Seller and the Buyer (the “Amendment Effective
Date”).

     

    SECTION
4.      Counterparts. This
Amendment may be executed by each of the parties hereto on any number of
separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment in Portable Document Format
(PDF) or by facsimile transmission shall be effective as delivery of a manually
executed original counterpart thereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    SECTION
5.      GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     

    

    

    [NO
FURTHER TEXT ON THIS PAGE]

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.

     

    

    
      	 
      	
              SELLER

            
	 
      	 
      
	 
      	
              ANTHRACITE
      FUNDING, LLC, a

            
	 
      	
              Delaware
      limited liability company

            
	 
      	 
      
	 
      	
              By:

            	
              Anthracite
      Capital, Inc., a Maryland

            
	 
      	 
      	
              corporations,
      its sole member

            
	 
      	 
      
	 
      	 
      	
              By:

            	/s/
      Richard Shea	
               

            
	 
      	 
      	 
      	
              Name:  Richard
      Shea

            
	 
      	 
      	 
      	
              Title:  
        COO

            
	 
      	 
      	 
      
	 
      	 
      
	 
      	
              BUYER

            
	 
      	 
      
	 
      	
              DEUTSCHE
      BANK AG, CAYMAN

            
	 
      	
              ISLANDS
      BRANCH

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Christopher E. Tognola

            	
               

            
	 
      	 
      	
              Name:  Christopher
      E. Tognola

            
	 
      	 
      	
              Title:    
      Managing Director

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/
      Christine Belbusti

            	 
      
	 
      	 
      	
              Name:  Christine
      Belbusti

            	 
      	 
      
	 
      	 
      	
              Title:   
       Director

            	 
      	 
      

    

    

    

    [SIGNATURES
CONTINUE ON FOLLOWING PAGE]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AGREED TO AND ACCEPTED
BY:

     

    
      
        	
                AHR
      CAPITAL DB LIMITED,

              
	
                an
      Irish private limited company

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /s/
      Richard Shea

              	
                 

              
	 
      	
                Name:  Richard
      Shea

              
	 
      	
                Title:   
       Director

              
	 
      	 
      
	 
      	 
      
	
                DEUTSCHE
      BANK AG,

              
	
                LONDON
      BRANCH

              
	 
      	 
      
	 
      	 
      
	
                By:

              	
                /s/
      David Butler

              	
                 

              
	 
      	
                Name:  David
      Butler

              
	 
      	
                Title:    
      Director

              
	 
      	 
      
	
                By:

              	
                /s/
      Emma Winning

              	
                 

              
	 
      	
                Name:  Emma
      Winning

              
	 
      	
                Title:    
      Vice President

              

      

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      SCHEDULE
1

       

      [APPLICABLE
SPREAD]

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
2

       

      [BUYER’S
MARGIN PERCENTAGE]

       

      

       

       

      

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      SCHEDULE
3

       

      [PRICING
RATE]

       

      

       

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
4

       

      [TEXT
TO BE ADDED TO ANNEX I SECTION 14(a)(xiii) AND SECTION
14(a)(xiv)]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
5

       

      [LIST
OF AFFIRMED ORIGINAL PURCHASE PERCENTAGES FOR THE

      PURCHASED
SECURITIES AND PURCHASED LOANS]

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
6

       

      [REVISED
EXHIBIT VI TO ANNEX I]ex10_1.htm

EXHIBIT
    10.1

     

     

    RESIGNATION
      AGREEMENT AND COMPLETE GENERAL RELEASE

     

        This
      Resignation Agreement and Complete General Release (the “Agreement”) is entered
      into effective this 11th
      day of July, 2008 by and between Jeffrey A. Blade (“Mr. Blade”) and The Steak n
      Shake Company and its corporate affiliates and subsidiaries (collectively
“SNS”).  

    

    
      	
              
                1.  

              

            	
              Resignation. 
                In consideration for the representations, promises, and warranties
                made
                herein, Mr. Blade resigns his employment and his position as an officer
                of
                SNS effective July 11, 2008 (the “Resignation Date”).
                

            

    

    

    
      	
              2.  

            	
              Consideration
                and Settlement Amount.  In consideration of the mutual
                promises and representations made herein by the parties, SNS will
                provide
                Mr. Blade with certain pay and benefits in accordance with this Paragraph
                2:

            

    

    

    
      	
              a.  

            	
              SNS
                shall pay to Mr. Blade an amount equal to Mr. Blade’s gross annual salary
                less applicable withholdings and deductions authorized by law or
                Mr. Blade
                (the “Settlement Amount”).  The Settlement Amount shall be paid
                in a lump sum within five (5) days after the expiration of any revocation
                periods contained in this
                Agreement.

            

    

    
      	
              b.  

            	
              SNS
                pay a provider of Mr. Blade’s choice to provide him with outplacement
                services at a cost that shall not exceed $12,000 (the “Outplacement
                Payment”).  Should Mr. Blade not select a provider of
                outplacement services within six (6) months of the date of this Agreement
                SNS shall pay the Outplacement Payment to him in a lump sum, less
                applicable withholdings and deductions authorized by law or Mr.
                Blade.

            

    

    
      	
              c.  

            	
              Mr.
                Blade may retain and continue to use his company-owned automobile
                in,
                compliance with SNS’s automobile policy, for up to 60 days, or until he
                obtains a personal vehicle, whichever is
                sooner.

            

    

     

        Mr.
      Blade
      agrees and understands that the Settlement Amount, the Outplacement Payment
      and
      other consideration provided pursuant to this Agreement constitute money and
      consideration to which he is not otherwise entitled, and he agrees that a
      portion of the Settlement Amount and Outplacement Payment is specifically
      allocable to the waiver of any claims under the Age Discrimination in Employment
      Act and/or the Older Workers Benefits Protection Act.

    

    
      	
              3.  

            	
              Confidentiality
                and Non-Disparagement.  Mr. Blade’s service at SNS
                provided him with knowledge of certain financial, business, marketing
                and
                other information that constitutes confidential information of a
                proprietary nature to Steak n Shake and “Material Non Public Information”
                as that term is defined under the Federal Securities laws (collectively
                the “Confidential Information”).  Mr. Blade agrees that he will
                take all steps necessary to safeguard the Confidential Information
                and
                that he will not, directly or indirectly use, disclose or disseminate
                to
                any other person, entity, business or corporation or otherwise share
                any
                Confidential Information.  Mr. Blade also agrees that he will
                not communicate (verbally or non-verbally) anything that a reasonable
                person would perceive as having the effect of diminishing or injuring
                the
                goodwill and/or reputation of SNS, its officers, directors or
                associates.   

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

        No
      officer or
      other person authorized to act on behalf of the Company with regard to such
      action will make any statements that would be reasonably likely to injure Mr.
      Blade’s goodwill or reputation.  If Mr. Blade becomes aware of such a
      statement being made he shall notify the Company’s Senior Vice President, Human
      Resources or General Counsel, who shall investigate and use their best efforts
      to cure any statement made in violation of this provision within five (5)
      business days of their receipt of such notice.

    

    
      	
              4.  

            	
              Raiding
                of Employees.  Mr. Blade agrees that for a period of one
                (1) year after the date of this Agreement he will not directly or
                indirectly, on his own behalf or on behalf of any other person or
                entity:  (1) hire, solicit, recruit, or otherwise attempt to
                hire or enter into any employment, consulting or contractual relationship
                with any individual employed by the Company, (2) share the names,
                addresses, telephone numbers, e-mail addresses or other means of
                contacting any Company employee with any other person or entity,
                or (3)
                share information regarding the salaries, benefits or other renumeration
                paid by the Company to any of its employees with any other person
                or
                entity.

            

    

    

    
      	
              5.  

            	
              Return
                of SNS’s Property.  Except
                as set forth under Section 2.C. above, Mr. Blade will return to SNS
                all of
                its property, including copies thereof, in his possession by 5 p.m.
                on the
                Resignation Date.  Notwithstanding the foregoing, Mr. Blade may
                retain the Blackberry issued to him by SNS.

            

    

    

    
      	
              6.  

            	
              Breach
                of this Agreement.  If Mr. Blade breaches any term or
                condition of this Agreement, all of which are material terms, Mr.
                Blade
                agrees to repay to SNS the entire Settlement Amount and Outplacement
                Payment, and to indemnify and reimburse SNS for any other costs,
                expenses
                and attorneys fees reasonably incurred in defending against any such
                lawsuit, or in enforcing the terms of this
                Agreement.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              7.  

            	
              Mr.
                Blade’s Waiver of Claims.  Mr. Blade, in consideration of
                the mutual promises and benefits contained herein, knowingly and
                voluntarily waives, releases, discharges and holds SNS and its directors,
                officers, agents, insurers and employees harmless (on behalf of himself
                and his family, heirs, executors, successors and assigns) from any
                and all
                complaints, causes of action and any other claims, costs, damages,
                expenses, liabilities, taxes, judgments, compensation, attorneys’ fees, or
                any other relief or costs arising out of Mr. Blade’s employment,
                resignation from employment, or any other relationship with SNS,
                whether
                these claims are known or unknown.  Mr. Blade specifically
                waives any right he may have to pursue and/or recover monetary, pecuniary,
                punitive, or any other personal benefits of any kind pursuant to
                any
                lawsuit, claim, charge or other cause of action of any kind that
                Mr. Blade
                files or that is filed on Mr. Blade’s behalf, except as otherwise provided
                by applicable law or regulation.  Mr. Blade agrees to waive any
                and all rights or claims to pursue and/or recover monetary, pecuniary,
                punitive or any other personal benefits of any kind he may have against
                SNS arising out of the Indiana Civil Rights Act, (or its equivalent),
                The
                Equal Pay Act, any Payment of Wages Act, The Americans with Disabilities
                Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
                §2000e et seq, the 1866 Civil Rights Act, The Civil Rights Act of
                1991,
                The Federal Rehabilitation Act of 1973, the Employee Retirement Income
                Security Act, The Age Discrimination in Employment Act, 29 U.S.C.
§621 et
                seq, the Older Workers Benefits Protection Act, the Fair Labor Standards
                Act, the Family and Medical Leave Act, the Indiana Worker’s Compensation
                Act (or its equivalent), and any other applicable federal, state
                and/or
                local civil rights law, regulation or statute, and any common law
                claims
                and/or tort claims.  In addition to the foregoing, Mr. Blade
                specifically waives any rights that he has under the letter in which
                SNS
                offered him employment, dated on or about February 2, 2004, a “Change in
                Control Benefits Agreement” dated on or about November 7, 2007 and any
                amendments thereto, as well as any other contracts or agreements
                into
                which Mr. Blade entered with SNS during or prior to his employment
                with
                SNS.  In addition to the foregoing, Mr. Blade acknowledges that
                SNS has not (a) discriminated against him, (b) breached any contract
                with
                him, (c) committed any civil wrong against him, or (d) otherwise
                acted
                unlawfully toward him.  Notwithstanding the foregoing, Mr. Blade
                and SNS agree that Mr. Blade shall be entitled to elect continuation
                of
                his group health insurance benefits under the Consolidated Omnibus
                Budget
                Reconciliation Act.  

            

    

     

    
      	
              
                8.  

              

            	
              Right
                to Revoke, Right to Review, and Right to Seek Legal
                Advice.  Mr. Blade is hereby advised that:
                

            

    

    

    
      	
              a.  

            	
              He
                has up to 21 days to review and consider this Agreement, and the
                Agreement
                may not be withdrawn during his period of
                review;

            

    

    
      	
              b.  

            	
              After
                he executes this Agreement he has seven (7) days to revoke his execution
                thereof, in which case this Agreement shall be null and
                void;

            

    

    
      	
              c.  

            	
              He
                has the right to seek legal counsel to review this Agreement and
                his
                decision to do so shall not result in the withdrawal of this Agreement
                by
                SNS.

            

    

     

        To
      revoke
      this Agreement after signing it, Mr. Blade must send written notice of
      revocation to Wayne Kelley at the Company’s corporate office.  For
      revocation to be effective, it must be received by Mr. Kelley no later than
      the
      close of business on the seventh day after Mr. Blade signs this
      Agreement.  If Mr. Blade revokes this Agreement, it shall not be
      effective or enforceable and Mr. Blade will not receive any of the benefits
      or
      the payments described herein and Mr. Blade shall return any payments made
      hereunder.

    

    
      	
              
                9.  

              

            	
              Modification
                and
                Waiver.  This Agreement may only be modified by a
                written document signed by both parties hereto.  The failure to
                enforce this Agreement or the waiver of any breach of this Agreement
                shall
                not constitute the waiver of any future breach or any other rights
                contained herein. 

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              
                10.  

              

            	
              Successors
                and Assigns.  This Agreement shall be binding upon Mr.
                Blade and SNS, and upon their heirs, administrators, representatives,
                executors, successors and assigns, and shall inure to the benefit
                of Mr.
                Blade and SNS, and to their heirs, administrators, representatives,
                executors, successors and assigns. 

            

    

     

    
      	
              
                11.  

              

            	
              Venue,
                Jurisdiction and Governing Law.  Mr. Blade and SNS agree
                that any suit or claim arising out of this Agreement, seeking to
                remedy a
                breach of this Agreement, or otherwise arising out of Mr. Blade’s
                employment with SNS shall only be brought in the Federal District
                Court
                for the Southern District of Indiana, Indianapolis Division or the
                Indiana
                state courts located in Marion County, Indiana.  This Agreement
                shall be construed only under the laws of the State of Indiana,
                notwithstanding any conflict of laws provisions or decision.  In
                the event that a court finds that a provision of this Agreement is
                not
                enforceable, the court shall strike the offending provision and the
                remainder of this Agreement shall be fully enforceable.
                

            

    

    

    
      	
              
                12.  

              

            	
              Complete
                Agreement.  Mr. Blade agrees that this written Agreement
                is the complete and entire agreement between himself and SNS and
                that it
                completely supersedes any and all other agreements between the
                parties.  Notwithstanding the foregoing or anything else
                contained herein the Indemnity Agreement into which Mr. Blade entered
                with
                SNS on or around October 7, 2007 shall remain in full force and effect.
                

            

    

    

    THIS
      AGREEMENT IS ENTERED INTO AS OF THE DATE ABOVE WRITTEN AND THE PARTIES AGREE
      TO
      BE BOUND TO ITS TERMS BY SIGNING BELOW:

    

    
      
        	Mr.
                Blade:	SNS
                (as defined in
                the first paragraph):
	/s/
                Jeffrey A. Blade	By:
/s/
                Wayne L. Kelley
	Dated:
                July 11,
                2008	Printed:
                Wayne L.
                Kelley, Interim Chief Executive Officer
	 	Dated:
                July 11,
                2008

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