Document:

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      

           
9exhibit10_31.htm

    EXHIBIT
      10.31 

    

    

    CHANGE
      IN CONTROL BENEFITS AGREEMENT

    

    

    This
      Change in Control Benefits Agreement (“Agreement”) is made and entered into as
      of November 7, 2007, by and between The Steak N Shake Company, an Indiana
      corporation (hereinafter referred to as the “Company”), and Jeffrey A. Blade
      (hereinafter referred to as “Executive”).

    

    WITNESSETH

    

    WHEREAS,
      Executive is an executive officer of the Company and/or its subsidiaries;
      and

    

    WHEREAS,
      the Company believes that Executive has made and will continue to make valuable
      contributions to the productivity and profitability of the Company;
      and

    

    WHEREAS,
      the Company desires to encourage Executive to continue to make such
      contributions and not to seek or accept employment elsewhere; and

    

    WHEREAS,
      the Company, therefore, desires to assure Executive of certain benefits in
      the
      event there is a Change in Control of the Company or in the case of any
      termination or significant redefinition of the terms of his employment with
      the
      Company subsequent to any Change in Control of the Company;

    

    NOW,
      THEREFORE, in consideration of the foregoing and of the mutual covenants herein
      contained and the mutual benefits herein provided, the Company and Executive
      hereby agree as follows:

    

    1.           The
      term of this Agreement shall be from the date hereof through December 31,
      2010; provided, however, that such term shall be automatically extended for
      an
      additional year each year thereafter unless either party hereto gives written
      notice to the other party not to so extend prior to June 30 of the final
      year of the Agreement prior to such extension, in which case no further
      automatic extension shall occur.

    

    2.           As
      used in this Agreement, “Change in Control” of the Company means:

    

    (A)           The
      acquisition, within a 12-month period ending on the date of the most recent
      acquisition, by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
      as amended (the “Exchange Act”) (a “Person”) of beneficial ownership (within the
      meaning of Rule 13d-3 promulgated under the Exchange Act as in effect from
      time to time) of fifty percent (50%) or more of the combined voting power of
      the
      then outstanding voting securities of the Company entitled to vote generally
      in
      the election of directors; provided, however, that the following acquisitions
      shall not constitute an acquisition of control:  (i) any
      acquisition by a Person who, immediately before the commencement of the 12-month
      period, already held beneficial ownership of fifty percent (50%) or more of
      that
      combined voting power; (ii) any acquisition directly from the Company (excluding an acquisition by virtue of
      the exercise of a
      conversion privilege), (iii) any acquisition by the Company, (iv) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company, or
      (v) any acquisition by any corporation pursuant to a reorganization, merger
      or consolidation, if, following such reorganization, merger or consolidation,
      the conditions described in clauses (i), (ii) and (iii) of
      subsection (C) of this definition are satisfied;

     

    (B)           The
      replacement of a majority of members of the Board of Directors during any
      12-month period, by members whose appointment or election is not endorsed by
      a
      majority of the members of the Board of Directors prior to the date of the
      appointment or election;

     

    (C)           A
      reorganization, merger or consolidation, in each case, unless, following such
      reorganization, merger or consolidation, (i) more than sixty percent (60%)
      of, respectively, the then outstanding shares of common stock of the corporation
      resulting from such reorganization, merger or consolidation and the combined
      voting power of the then outstanding voting securities of such corporation
      entitled to vote generally in the election of directors is then beneficially
      owned, directly or indirectly, by all or substantially all of the individuals
      and entities who were the beneficial owners, respectively, of the outstanding
      Company common stock and outstanding Company voting securities immediately
      prior
      to such reorganization, merger or consolidation in substantially the same
      proportions as their ownership, immediately prior to such reorganization, merger
      or consolidation, of the outstanding Company stock and outstanding Company
      voting securities, as the case may be, (ii) no Person (excluding the
      Company, any employee benefit plan or related trust of the Company or such
      corporation resulting from such reorganization, merger or consolidation and
      any
      Person beneficially owning, immediately prior to such reorganization, merger
      or
      consolidation, directly or indirectly, twenty-five percent (25%) or more of
      the
      outstanding Company common stock or outstanding voting securities, as the case
      may be) beneficially owns, directly or indirectly, twenty-five percent (25%)
      or
      more of, respectively, the then outstanding shares of common stock of the
      corporation resulting from such reorganization, merger or consolidation or
      the
      combined voting power of the then outstanding voting securities of such
      corporation entitled to vote generally in the election of directors and
      (iii) at least a majority of the members of the board of directors of the
      corporation resulting from such reorganization, merger or consolidation were
      members of the Incumbent Board at the time of the execution of the initial
      agreement providing for such reorganization, merger or
      consolidation;

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (D)           A
      complete liquidation or dissolution of the Company; or

     

    (E)           The
      sale or other disposition of all or substantially all of the assets of the
      Company, other than any of the following dispositions: (i) to a corporation
      with
      respect to which following such sale or other disposition (1) more than
      sixty percent (60%) of, respectively, the then outstanding shares of common
      stock of such corporation and the combined voting power of the then outstanding
      voting securities of such corporation entitled to vote generally in the election
      of directors is then beneficially owned, directly or indirectly, by all or
      substantially all of the individuals and entities who were the beneficial
      owners, respectively, of the outstanding Company common stock and outstanding
      Company voting securities immediately prior to such sale or other disposition
      in
      substantially the same proportion as their ownership, immediately prior to
      such
      sale or other disposition, of the outstanding Company common stock and
      outstanding Company voting securities, as the case may be, (2) no Person
      (excluding the Company and any employee benefit plan or related trust of the
      Company or such corporation and any Person beneficially owning, immediately
      prior to such sale or other disposition, directly or indirectly, twenty-five
      percent (25%) or more of the outstanding Company common stock or outstanding
      Company voting securities, as the case may be) beneficially owns, directly
      or
      indirectly, twenty-five percent (25%) or more of, respectively, the then
      outstanding shares of common stock of such corporation and the combined voting
      power of the then outstanding voting securities of such corporation entitled
      to
      vote generally in the election of directors and (3) at least a majority of
      the members of the board of directors of such corporation were members of the
      Incumbent Board at the time of the execution of the initial agreement or action
      of the Board providing for such sale or other disposition of assets of the
      Company; (ii) to a shareholder of the Company in exchange for or with
      respect to its stock; (iii) to a Person that owns, directly or indirectly,
      fifty percent (50%) or more of the total value or voting power of all
      outstanding stock of the Company; or (iv) to an entity, at least fifty
      percent (50%) or more of the total value or voting power of which is owned,
      directly or directly, by the Company or by a Person described in
      (iii).

     

    Despite
      any other provision of this definition to the contrary, an occurrence shall
      not
      constitute a Change in Control if it does not constitute a change in the
      ownership or effective control, or in the ownership of a substantial portion
      of
      the assets of, the Company within the meaning of Section 409A(a)(2)(A)(v) of
      the
      Internal Revenue Code of 1986, as amended (the “Code”) and its interpretive
      regulations.

     

    3.           The
      Company shall provide Executive with the benefits set forth in Section 6 of
      this Agreement upon any termination of Executive’s employment by the Company
      within twelve (12) months following a Change in Control for any reason except
      the following:

    

    (A)           Termination
      by reason of Executive’s death.

    

    (B)           Termination
      by reason of Executive’s “disability.”  For purposes hereof,
“disability” shall be defined as Executive’s inability by reason of illness or
      other physical or mental disability to perform the duties required by his
      employment for any consecutive ninety (90) day period.

    

    (C)           Termination
      for “Cause.”  As used in this Agreement, the term “Cause” shall mean
      the occurrence of one or more of the following
      events:  (i) Executive’s conviction for a felony or of any crime
      involving moral turpitude; (ii) Executive’s engaging in any fraudulent or
      dishonest conduct in his dealings with, or on behalf of, the Company (or its
      affiliates); (iii) Executive’s gross or habitual negligence in the
      performance of his employment duties for the Company (or its affiliates);
      (iv) Executive’s material violation of the Company’s business ethics or
      conflict-of-interest policies, as such policies currently exist or as they
      may
      be amended or implemented during Executive’s employment with the Company; or
      (v) Executive’s misuse of alcohol or illegal drugs which interferes with
      the performance of Executive’s employment duties for the Company or which
      compromises the reputation or goodwill of the Company.

    

    4.           Subject
      to the procedural conditions prescribed below, the Company shall also provide
      Executive with the benefits set forth in Section 6 of this Agreement upon
      any voluntary resignation of Executive if any one of the following events occurs
      within twelve (12) months following a Change in Control:

    

    (A)           A
      material diminution in Executive’s base compensation from the level of such base
      compensation immediately prior to the Change in Control;

    

    (B)           A
      material diminution in Executive's authority, duties, or responsibilities from
      his authority, duties, or responsibilities immediately prior to the Change
      in
      Control;

    

    (C)           A
      material change in the geographic location at which Executive is assigned to
      perform his duties and responsibilities on behalf of the Company from such
      geographic location immediately prior to the Change in Control;

    

    (D)           A
      material diminution in the budget over which Executive has authority from such
      budget immediately prior to the Change in Control; or

    

    (E)           Any
      other material breach by the Company of its obligations to Executive under
      this
      Agreement or any other agreement prescribing the terms and conditions of his
      employment.

    

    For
      the
      Executive to be entitled to benefits because of his resignation following the
      occurrence of one of the listed events, each of the following procedural
      conditions must be satisfied: (i) within ninety (90) days of the initial
      occurrence of the event, the Executive must give written notice to the Company
      of such occurrence; (ii) the Company must have failed to remedy that occurrence
      within thirty (30) days after receiving such notice, and (iii) the Executive
      must resign no later than one hundred eighty (180) days after the initial
      occurrence of the event.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    5.           Any
      termination by Company of Executive’s employment as contemplated by
      Section 3 hereof (except subsection 3(A)) or any resignation by
      Executive as contemplated by Section 4 hereof shall be communicated by a
      written notice to the other party hereto.  Any notice given by
      Executive in connection with a voluntary resignation pursuant to Section 4
      or given by the Company in connection with a termination as to which the Company
      believes it is not obligated to provide Executive with benefits set forth in
      Section 6 hereof shall indicate the specific provisions of this Agreement
      relied upon and shall set forth in reasonable detail the facts and circumstances
      claimed to provide a basis for such termination.

    

    6.           Subject
      to the conditions and exceptions set forth in Section 3 and Section 4
      hereof, the following benefits, less any amounts required to be withheld
      therefrom under any applicable federal, state or local income tax, other tax,
      or
      social security laws or similar statutes, shall be paid to
      Executive:

    

    (A)           On
      the next regular payday following such a termination, Executive shall be paid,
      at his then-effective salary, for services performed through the date of his
      termination.  In addition, any earned but unpaid amount of any bonus
      or incentive payment (which, for purposes of this Agreement, shall mean that
      amount computed in a fashion consistent with the manner in which Executive’s
      bonus or incentive plan for the year preceding the year of termination was
      computed, if Executive received a bonus or incentive payment during such
      preceding year in accordance with a plan or program of the Company, or, if
      not,
      then the total bonus or incentive payment received by the Executive during
      such
      preceding year, in either case prorated through the date of termination) shall
      be paid to Executive within thirty (30) days following the termination of his
      employment.

    

    (B)  Within
      thirty (30) days following such a termination, Executive shall be paid a lump
      sum payment of an amount equal of Executive’s current base salary (which shall
      not be lower than the Executive’s base salary on the date of this
      Agreement).

    

    (C)  Within
      thirty (30) days following the last day of any computation period under an
      incentive bonus plan or similar plan following such a termination, Executive
      shall be paid a lump sum payment equal to any bonus to which Executive would
      have been entitled had all requirements for earning the bonus been met,
      multiplied by a fraction, the denominator of which will be the number of days
      in
      any such computation period and the numerator of which shall be the number
      of
      days during the computation period the Executive was employed by the
      Company.  By way of example, should the computation period be one
      year, during which the Executive worked 75 days before the termination, then
      the
      fraction would be 75/365.

    

    (D)  Should
      Executive be provided with the use of an automobile owned or leased by the
      Company, Executive shall be entitled to continue to use such automobile on
      the
      same terms and conditions as he/she did prior to the termination for a period
      of
      up to sixty (60) days following such termination.

    

    (E)  For
      up to
      twelve (12) months following such a termination, the Company shall reimburse
      Executive for any amounts paid by Executive for COBRA insurance continuation
      coverage, reduced by an amount equal to the payments Executive made for such
      coverage immediately prior to such termination;

    

    (F)           At
      any time within the first twelve (12) months following such a termination,
      the
      Company shall, upon request, either pay for directly or reimburse Executive
      for
      up to $15,000 for outplacement services on Executive’s behalf.

    

    (G)           If
      as of the date his employment terminates, Executive is a “key employee” within
      the meaning of Section 416(i) of the Code, without regard to paragraph 416(i)(5)
      thereof, and the Company has stock that is publicly traded on an established
      securities market or otherwise, any payment that constitutes deferred
      compensation because of employment termination will be suspended until, and
      will
      be paid to Executive on, the first day of the seventh month following the month
      in which Executive’s last day of employment occurs.  For purposes of
      this Section 6, “deferred compensation” means compensation provided under a
      nonqualified deferred compensation plan as defined in, and subject to,
      Section 409A of the Code.

    

    7.           Should
      Executive be employed by Company on the date of any Change in Control of the
      Company that occurs on or prior to November 7, 2008 then Company shall pay
      to
      Executive in a lump sum on the date of the Change in Control or as soon
      thereafter as is reasonably practical, an amount equal to 30% of Executive’s
      then-current annual salary (the “Salary”) on the date of the Change in
      Control.  In computing the amount to be paid, the Salary shall not be
      less than Executive’s annual salary on the date of this
      Agreement.  The payment contemplated in this Section 7 shall be
      reduced by any tax or other withholdings required by law or elected by
      Executive.

    

    8.           Executive
      acknowledges and agrees that the Company’s payment of the severance compensation
      pursuant to Sections 6 and/or 7 of this Agreement shall be deemed to constitute
      a full settlement and discharge of any and all obligations of the Company to
      Executive arising out of this Agreement, Executive’s employment with the Company
      and/or the termination of Executive’s employment with the Company, except for
      any vested rights Executive may have under any insurance, stock option or equity
      compensation plan or any other employee benefit plans sponsored by the
      Company.  Executive further acknowledges and agrees that as a
      condition to receiving any of the severance compensation pursuant to
      Section 6 or 7 of this Agreement, Executive will execute and deliver to the
      Company a release agreement in form and substance reasonably satisfactory to
      the
      Company pursuant to which Executive will release and waive any and all claims
      against the Company (and its officers, directors, shareholders, employees and
      representatives) arising out of this Agreement, Executive’s employment with the
      Company, and/or the termination of Executive’s employment with the Company (as
      applicable under the relevant Section above), including without limitation
      claims under all federal, state and local laws; provided, however, that such
      Release Agreement shall not affect or relinquish (a) any vested rights
      Executive may have under any insurance, stock option or equity compensation
      plan, or other employee benefit plan sponsored by the Company, (b) any
      claims for reimbursement of business expenses incurred prior to the employment
      termination date, or (c) any rights to severance compensation under
      Section 6 of this Agreement.

    

    9.           Executive
      is not required to mitigate the amount of benefit payments to be made by the
      Company pursuant to this Agreement by seeking other employment or otherwise,
      nor
      shall the amount of any benefit payments provided for in this Agreement be
      reduced by any compensation earned by Executive as a result of employment by
      another employer or which might have been earned by Executive had Executive
      sought such employment, after the date of termination of his employment with
      the
      Company or otherwise.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    10.           In
      order to induce the Company to enter into this Agreement, Executive hereby
      agrees as follows:

    

    (A)           He
      will keep confidential and not improperly divulge for the benefit of any other
      party any of the Company’s confidential information and business secrets
      including, but not limited to, confidential information and business secrets
      relating to such matters as the Company’s finances and
      operations.  All of the Company’s confidential information and
      business secrets shall be the sole and exclusive property of the
      Company.

    

    (B)           For
      a period of one year after Executive’s employment with the Company ceases,
      Executive shall not either on his own account or for any other person, firm
      or
      company solicit or endeavor to cause any employee of the Company to leave his
      employment or to induce or attempt to induce any such employee to breach any
      employment agreement with the Company.

    

    In
      the
      event of a breach or threatened breach by Executive of the provisions of this
      Section 9, the Company shall be entitled to an injunction restraining
      Executive from committing or continuing such breach.  Nothing herein
      contained shall be construed as prohibiting the Company from pursuing any other
      remedies available to it for such breach or threatened breach including the
      recovery of damages from Executive.  The covenants of this
      Section 9 shall run not only in favor of the Company and its successors and
      assigns, but also in favor of its subsidiaries and their respective successors
      and assigns and shall survive the termination of this Agreement.

    

    11.           Should
      Executive die while any amounts are payable to him hereunder, this Agreement
      shall inure to the benefit of and be enforceable by Executive’s executors,
      administrators, heirs, distributees, devisees and legatees and all amounts
      payable hereunder shall be paid in accordance with the terms of this Agreement
      to Executive’s devisee, legatee or other designee or if there be no such
      designee, to his estate.

    

    12.           For
      purposes of this Agreement, notices and all other communications provided for
      herein shall be in writing and shall be deemed to have been given when delivered
      or mailed by United States registered or certified mail, return receipt
      requested, postage prepaid, addressed as follows:

    

    If
      to
      Executive:

    

    

    If
      to the
      Company:

    

    The
      Steak
      N Shake Company

    500
      Century Building

    36
      South
      Pennsylvania Street

    Indianapolis,
      Indiana  46204

    Attention:  Chief
      Executive Officer

    Copy
      to:    General Counsel

    

    or
      to
      such other address as any party may have furnished to the other party in writing
      in accordance herewith, except that notices of change of address shall be
      effective only upon receipt.

    

    13.           The
      validity, interpretation, and performance of this Agreement shall be governed
      by
      the laws of the State of Indiana.  The parties agree that all legal
      disputes regarding this Agreement will be resolved in Indianapolis, Indiana,
      and
      irrevocably consent to service of process in such City for such
      purpose.

    

    14.           No
      provision of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing signed by Executive
      and the Company.  No waiver by any party hereto at any time of any
      breach by any other party hereto of, or compliance with, any condition or
      provision of this Agreement to be performed by such other party shall be deemed
      a waiver of similar or dissimilar provisions or conditions at the same or any
      prior or subsequent time.  No agreements or representation, oral or
      otherwise, express or implied, with respect to the subject matter hereof have
      been made by any party which are not set forth expressly in this
      Agreement.

    

    15.           The
      invalidity or unenforceability of any provisions of this Agreement shall not
      affect the validity or enforceability of any other provision of this Agreement,
      which shall remain in full force and effect.

    

    16.           This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which together will constitute one and the same
      Agreement.

    

    17.           This
      Agreement is personal in nature and neither of the parties hereto shall, without
      the consent of the other, assign or transfer this Agreement or any rights or
      obligations hereunder, except as provided in Section 10
      above.  Without limiting the foregoing, Executive’s right to receive
      payments hereunder shall not be assignable or transferable, whether by pledge,
      creation of a security interest or otherwise, other than a transfer by will
      or
      by the laws of descent and distribution as set forth in Section 10 hereof,
      and in the event of any attempted assignment or transfer contrary to this
      Section 16, the Company shall have no liability to pay any amount so
      attempted to be assigned or transferred.

    

    18.           Any
      benefits payable under this Agreement shall be paid solely from the general
      assets of the Company.  Neither Executive nor Executive’s beneficiary
      shall have interest in any specific assets of the Company under the terms of
      this Agreement.  This Agreement shall not be considered to create an
      escrow account, trust fund or other funding arrangement of any kind or a
      fiduciary relationship between Executive and the Company.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    19.  This
      Agreement shall be interpreted and applied in a manner consistent with any
      applicable standards for nonqualified deferred compensation plans established
      by
      Section 409A of the Code and its interpretive regulations and other regulatory
      guidance.  To the extent that any terms of this Agreement would
      subject Executive to gross income inclusion, interest, or additional tax
      pursuant to Section 409A of the Code, those terms are to that extent superseded
      by, and shall be adjusted to the minimum extent necessary to satisfy, the
      applicable Section 409A of the Code standards.

    

    20.  This
      Agreement completely supersedes and replaces any other employment agreement
      or
      other agreement covering the same terms and conditions of this Agreement whether
      written or oral, between Company and Executive which was entered into prior
      to
      the date of this Agreement.

    

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed and
      delivered as of the day and year first above set forth.

    

    THE
      STEAK
      N SHAKE COMPANY

    

    
      	
               

            	
              By: 
                /s/ Alan B.
                Gilman                                                          
                 

            

    

    
      	
               

            	
              Alan
                B. Gilman, Interim Chief Executive
                Officer

            

    

    

    

    

                                                               
      /s/ Jeffrey A.
      Blade                                                             

                                                        Executive
      Vice President, Chief Financial and Administrative Officer

     

    5

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