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Exhibit 10.5
 KRISPY KREME DOUGHNUT CORPORATION  DEVELOPMENT AGREEMENT
 THIS AGREEMENT
 BACKGROUND FACTS
    THE PARTIES AGREE:
 1.
    
    DEFINITIONS
 Affiliate
 Agreement Term
 Approvals
 Competitive Business




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Development Area
 Development Fee
 Development Period
 Development Quota
 Development Rights
 Expansion Criteria
 Franchise
 Franchise Agreement
 Franchise Documents
 Franchise Term
 Good Standing
 Krispy Kreme System
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Managing Director
 Manuals
 Marks
 New Concept
 Non-Core Products
 Plans
 Products
 Site
 STORE
 Transfer
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2.
    
    TERM/ FEES /DEVELOPMENT QUOTA2.1
    
    Company grants Franchisee the right to develop (as long as Franchisee remains in Good
Standing and meets the Expansion Criteria), and Franchisee accepts the obligation to develop,
Krispy Kreme Stores in the Development Area during the Agreement Term and in compliance with
the Development Quota attached as Exhibit B hereto.2.2
    
    Subject to the right to extend the Agreement Term contained in Section 12 and the Development
Rights granted herein, Companys obligation to grant Franchises to Franchisee to operate
Krispy Kreme Stores in the Development Area, will expire upon the expiration of the Agreement
Term.2.3
    
    Franchisee agrees that during the Agreement Term, it will strictly and diligently perform its
obligations hereunder and will continuously exert its best efforts to promote and enhance the
development and operation of Krispy Kreme Stores within the Development Area. Without
limiting the foregoing obligations, Franchisee agrees to meet the Development Quota with
respect to each Development Period, as set forth in Exhibit B attached hereto.2.4
    
    Franchisee will pay to Company the Development Fee as set forth in Schedule A. The
Development Fee will be fully earned by Company upon execution of this Agreement.2.5
    
    For each Franchise granted to Franchisee pursuant to this Agreement during the Agreement
Term: (1) the Initial Franchise Fee (defined in the Franchise Agreement) will be as set forth
in Schedule A; and (2) royalties (defined in the Franchise Agreement) and other fees will be
as set forth in the Franchise Agreement.3.
    
    BUSINESS PLAN/ APPROVALS/ HUMAN RESOURCES/ NEW CONCEPTS3.1
    
    Prior to execution of this Agreement, and on an annual basis thereafter, Franchisee will
submit for review and approval by Company, a written business plan for the development and
financing of Krispy Kreme Stores in the Development Area in accordance with the Development
Quota.3.2
    
    Franchisee will secure and maintain in force in its name all required licenses, permits and
certificates relating to the conduct of its business pursuant to this Agreement. Franchisee
will at all times remain in Good Standing. Franchisee will comply with all applicable laws,
ordinances and regulations. Franchisee will refrain from any business or advertising practice
that may be injurious to the business or reputation of Company or Franchisee and the goodwill
associated with the Marks and Krispy Kreme Stores.3.3
    
    Concurrently with the execution of this Agreement, Franchisee will designate a Managing
Director of its business pursuant to this Agreement. The initial Managing
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Director is identified in Exhibit D attached hereto. Franchisee and the Managing Director
will use their full-time efforts to fulfill Franchisees obligations under this Agreement
and will not directly or indirectly engage in any other business or activity that requires
any significant management responsibility or time commitments, or that otherwise conflict
with Franchisees obligations under this Agreement. If the Managing Director is terminated
in that role, or if the Managing Director does not carry out his or her responsibilities or
otherwise perform in accordance with this Agreement, Franchisee will promptly designate a
replacement.4.
    
    EXPANSION CRITERIA4.1
    
    Franchisee must comply with the Expansion Criteria each year during the Agreement Term.
Company will review Franchisees compliance with the Expansion Criteria on an annual basis.4.2
    
    If Company determines after its annual review that Franchisee is not in compliance with the
Expansion Criteria, Company will notify Franchisee of its non-compliance and Franchisee will
have forty-five (45) days from the receipt of such notice to remedy such non-compliance.4.3
    
    At the end of the forty-five (45) day period, Company will undertake a further review, at
Franchisees cost, to determine whether Franchisee has remedied its non-compliance to
Companys satisfaction.4.4
    
    Franchisees ongoing development rights under this Agreement will be suspended and Franchisee
will not be entitled to enter into any new commitments in respect of any proposed sites until
Company has undertaken the further review pursuant to Section 4.3 and has notified Franchisee
in writing that Company is satisfied that Franchisee is in compliance with the Expansion
Criteria.4.5
    
    Franchisee acknowledges that the forty-five (45) day cure period provided for under this
Section applies only for the purposes of determining Franchisees compliance with the
Expansion Criteria and will not limit Companys rights or ability to act in respect of any
breach of any other provision of this Agreement or of any provision of any Franchise Agreement
between the parties.5.
    
    STORE DEVELOPMENT PROCEDURE5.1
    
    Provided that Franchisee (a) is then in full compliance with all of the terms and conditions
of this Agreement and is otherwise in Good Standing with Company and (b) has obtained written
confirmation of Companys approval of sites for the STORES, Company agrees to offer Franchisee
one (1) or more Franchises to develop and operate one (1) or more STORES subject to the
obligations set forth in this Agreement, and Company agrees to offer to Franchisee the right
to use the Krispy Kreme System in the operation thereof. Franchisee will not take any steps
toward developing a STORE without first obtaining Companys written approval of the site for
the proposed STORE. The following approval procedure will apply:
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(a)
    
    Franchisee will submit a written site evaluation to Company, including the site
location, dimensions, building type and placement, proposed layout and other relevant
documents and information relating to the site as may be required by Company.(b)
    
    Within thirty (30) days of receipt of the site evaluation, Company will
complete its evaluation of the proposed site and notify Franchisee of its approval or
rejection of the proposed site and, if approved, any conditions applying to the
approval.(c)
    
    Within thirty (30) days of receipt of Companys notice of approval of any
proposed site, Franchisee will:
 (i)
    
    confirm to Company that it has the necessary rights to the site
to enable it to develop and operate the STORE, and in the case of a leasehold
interest, on terms and conditions approved by Company; and(ii)
    
    submit to Company two (2) copies of the proposed Plans.
 (d)
    
    Within fourteen (14) days of receipt of the proposed Plans, Company will notify
Franchisee of any modifications to the Plans required by Company. Franchisee must
resubmit the modified Plans to Company within ten (10) days of receipt of Companys
notice of the modifications. Within ten (10) days of receipt of the modified Plans,
Company will notify Franchisee whether or not the Plans have been given final approval.(e)
    
    Franchisee will be responsible for ensuring that all necessary Approvals have
been obtained in respect of the Plans.
 5.2
    
    Prior to the commencement of construction of the relevant STORE, Franchisee will execute and
deliver to Company the Franchise Documents.5.3
    
    Within six (6) months of receipt of Companys notice and approval of a Site, Franchisee will
complete the construction of the STORE so that it is ready for opening and will notify Company
of its intention to open the STORE for business. Franchisee will not open any STORE for
business without first obtaining Companys written approval to open.5.4
    
    If Company fails to notify Franchisee of any approval, disapproval or required modifications
within the time periods applying to Company in this Section 5, Companys approval will be
deemed to have been given.5.5
    
    All costs associated with the development by Franchisee of any STORE pursuant to this
Agreement will be borne by Franchisee.5.6
    
    Company may withdraw, without liability, its offer to grant a Franchise for a STORE and may
withdraw its approval of a Site if Franchisee is in default under this Agreement or any other
agreement between the parties.
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6.
    
    TRANSFER6.1
    
    This Agreement is fully transferable by Company and will inure to the benefit of any assignee
or other legal successor to Companys interests. Franchisee agrees that Company will have the
right, from time to time, to delegate the performance of any portion of or all of its
obligations and duties under this Agreement to designees, whether the same are Companys
agents or independent contractors with which Company has contracted to provide these services.6.2
    
    Franchisee understands and acknowledges (and hereby represents and warrants that its owners
understand and acknowledge) that the rights and duties created by this Agreement are personal
to Franchisee and its owners and that Company has entered into this Agreement in reliance upon
the character, skill, attitude, business ability, and financial capacity of Franchisee and its
owners. Therefore, neither this Agreement, a Franchise, a STORE, any ownership interest in
Franchisee, nor the lease for or ownership of a Site of a STORE, will be transferred without
Companys prior written approval. Subject to the other provisions of this Section:
 (a)
    
    a Transfer of ownership, possession or control of a STORE will be made only in
conjunction with a Transfer of the Franchise related to that STORE. This rule also
applies where the Transfer is one of a series of Transfers which in the aggregate
constitute the Transfer of a STORE;(b)
    
    a Transfer of a Franchise will be made only in conjunction with a Transfer,
approved by Company, of this Agreement and all Franchises granted under this Agreement.
This rule also applies where the Transfer is one of a series of Transfers which in the
aggregate constitute the Transfer of a Franchise; and(c)
    
    a Transfer of this Agreement will be made only in conjunction with a Transfer
of all Franchises for STORES located in the Development Area. This rule also applies
where the Transfer is one of a series of Transfers which in the aggregate constitute
the Transfer of this Agreement.
 7.
    
    RIGHT OF FIRST REFUSAL7.1
    
    If Franchisee determines to sell, assign or transfer an interest in this Agreement or the
Development Rights granted hereunder or a controlling ownership interest in Franchisee, in
accordance with Section 6 of this Agreement, Franchisee will obtain (a) a bona fide, arms
length, executed written offer and (b) an earnest money deposit (in the amount of five percent
(5%) or more of the offering price) from a qualified, responsible, bona fide and fully
disclosed purchaser. Franchisee will immediately submit to Company a true and complete copy
of such offer (conditioned on Companys first refusal rights) and any proposed ancillary
agreements, which include details of the payment terms of the proposed sale and the sources
and terms of any financing for the proposed purchase price.7.2
    
    Company will have the right, exercisable by written notice delivered to Franchisee within
thirty (30) days from the date of delivery to Company of an exact copy of such offer (and any
ancillary agreements), a complete executed application for Companys approval of
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the Transfer and all other information Company requests, to purchase such interest for the
price and on the terms and conditions contained in such offer, provided that Company may
substitute cash for any form of payment proposed in such offer; Companys credit will be
deemed equal to the credit of any proposed purchaser and Company will have at least ninety
(90) days after giving notice to prepare for closing.7.3
    
    Whether or not contained in the offer documents, Company will be entitled to purchase such
interest in reliance on, and Franchisee shall give, in writing, all representations and
warranties customarily given by the seller of a business including, without limitation,
representations and warranties as to (a) ownership, condition and title to stock and/or
assets, (b) liens and encumbrances relating to the stock and/or assets, and (c) validity of
contracts and liabilities, contingent or otherwise, of the business being purchased.7.4
    
    If Company does not exercise its right of first refusal, Franchisee may complete the sale to
such purchaser pursuant to and on the exact terms of such offer, subject to Subsection 6.2 of
this Agreement, provided that if the sale to such purchaser is not completed within one
hundred twenty (120) days after delivery of such offer to Company, or if there is any change
in the terms of the sale (which Franchisee agrees promptly to communicate to Company), Company
will again have an additional right of first refusal for thirty (30) days on the same terms
and conditions as are applicable to the initial right of first refusal.8.
    
    COMPANYS RIGHTS AND LIMITATIONS/EXCLUSIVITY8.1
    
    Except as hereinafter provided, and provided that Franchisee is in Good Standing, neither
Company nor its Affiliates will, during the Agreement Term, own or operate, or grant
franchises for the ownership or operation of Krispy Kreme Stores in the Development Area.
Upon the termination or expiration of the Agreement Term and subject, in the case of
expiration, to Companys right of first refusal, Company and its Affiliates will have the
right to own and operate, and to grant others development rights and franchises to own and
operate, Krispy Kreme Stores within the Development Area. Except as specifically provided
herein, Company grants no other territorial or other rights to Franchisee.8.2
    
    Except as expressly limited by Subsection 8.1 above, Company (on behalf of itself and its
Affiliates) retains all rights with respect to Krispy Kreme Stores, the Marks and the sale of
Products and services, anywhere in the world, including, without limitation the right to:
 (a)
    
    operate or grant others the right to operate Krispy Kreme Stores at any
location and on such terms and conditions Company deems appropriate;(b)
    
    acquire and operate, or be acquired by, a business operating one or more
businesses located or operating within the Development Area which compete with the
STORES;(c)
    
    develop, manufacture, distribute and/or sell, and license others to develop,
market, distribute and/or sell, Products to customers located within the
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Development Area through any channel of distribution other than through retail
stores physically located within the Development Area; and(d)
    
    develop, manufacture, distribute and/or sell, and license others to develop,
market, distribute and/or sell Non-Core Products to customers located within the
Development Area through any channel of distribution including through any retail
stores physically located within the Development Area.
 8.3
    
    Franchisee acknowledges that Company has granted Development Rights to Franchisee in
consideration of and reliance upon Franchisees agreement that it and its owners will deal
exclusively with Company. Franchisee therefore agrees that, during the Agreement Term,
neither Franchisee, nor any of its owners will, anywhere in the world: (a) have any direct or
indirect ownership interest in any Competitive Business (this restriction is not applicable to
the ownership of shares of a class of securities listed on a stock exchange or traded on a
public stock market that represent less than three percent (3%) of the number of shares of
that class of securities issued and outstanding); (b) perform services as a director, officer,
manager, employee, consultant, representative, agent or otherwise for any Competitive
Business; or (c) recruit or hire any person who is Companys employee or the employee of any
Krispy Kreme franchisee or who has been Companys employee or the employee of any Krispy Kreme
franchisee within the past six (6) months without obtaining prior written permission from
Company or that persons employer. Franchisee acknowledges and agrees that the failure of any
person or entity restricted by this Section to comply with this Section will constitute a
breach of this Agreement by Franchisee.9.
    
    MARKS / COPYRIGHTED WORKS / CONFIDENTIAL INFORMATION9.1
    
    Notwithstanding any provision to the contrary contained herein, it is understood and agreed
that this Agreement does not grant Franchisee any right to use the Marks or any of Companys
confidential information (as further defined in the Franchise Agreement). Further, it is
understood and agreed that this Agreement does not grant Franchisee and Franchisee does not
have any right to any copyrighted work (as further defined in the Franchise Agreement) or
patent which Company now own or may hereinafter own. Rights to the Marks, confidential
information or copyrighted works are granted only under the Franchise Agreements to be
executed by Company and Franchisee.10.
    
    TERMINATION AND EXPIRATION OF DEVELOPMENT RIGHTS10.1
    
    Company will have the right to terminate the Development Rights, effective upon delivery of
notice of termination to Franchisee, if:
 (a)
    
    Franchisee or any of its owners are convicted by a court, plead guilty to or do
not contest any charge, of any crime or offense that may adversely affect the
reputation of Krispy Kreme Stores or the goodwill associated with the Marks;(b)
    
    any person makes an unauthorized Transfer of this Agreement, a Franchise or an
ownership interest in Franchisee or the STORE;
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(c)
    
    Franchisee (or any of its owners) fails on two (2) or more separate occasions
within any period of twelve (12) consecutive months to comply with this Agreement,
whether or not such failures to comply are corrected after written notice thereof is
delivered to Franchisee;(d)
    
    Franchisee is unable to pay its debts as and when they become due or makes an
assignment for the benefit of creditors or admits in writing its insolvency or
inability to pay its debts generally as they become due; Franchisee consents to the
appointment of a receiver, trustee or liquidator of all or the substantial part of its
property; a STORE is attached, seized, subjected to a writ or distress warrant or
levied upon, unless such attachment, seizure, writ, warrant or levy is vacated within
thirty (30) days; or any order appointing a receiver, trustee or liquidator of
Franchisee or a STORE is not vacated within thirty (30) days following the entry of
such order; or(e)
    
    Company notifies Franchisee that Franchisee has breached any term or condition
of this Agreement and Franchisee does not fully cure the breach within the cure period
which is specified by Company in the notice.
 10.2
    
    Company will have the right to terminate the Development Rights if Franchisee fails to comply
with its obligations hereunder and does not correct such failure within thirty (30) days after
written notice of such failure is delivered to Franchisee, in particular if:
 (a)
    
    Franchisee or any of its owners, violate the restrictions on holding interests
in or performing services for Competitive Businesses, or owners who have access to
Companys confidential information violate the covenants concerning competition and
confidentiality contained in a form of confidentiality and non-competition agreement
prescribed by Company from time to time;(b)
    
    Franchisee fails to satisfy its cumulative development obligations as set forth
in Exhibit B attached hereto, unless such failure is (i) the direct result of Companys
non-performance under this Agreement or (ii) force majeure;(c)
    
    Company determines that Franchisee is not in compliance with the Expansion
Criteria as set forth in Schedule B; or(d)
    
    Company has delivered a notice of termination of any Franchise in accordance
with the terms and conditions of any Franchise Agreement; provided, however, that, upon
the request of Franchisee, the period for correcting such failure may be extended, in
Companys sole discretion, for one or more thirty (30) day periods, provided that
Franchisee is at the time of such request making good faith efforts to correct such
failure.
 10.3
    
    Companys exercise of any of its rights under this Section 10 will be in addition to and not
in limitation of any other rights and remedies it may have in the event of any breach or
default by Franchisee.
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11.
    
    CONSEQUENCES OF TERMINATION OR EXPIRATION11.1
    
    Upon the termination of the Development Rights or the last Franchise, whichever is later:
 (a)
    
    Franchisee will not directly or indirectly at any time or in any manner (except
with respect to other Krispy Kreme Stores Franchisee lawfully owns and operates)
identify itself or its business as a current or former Krispy Kreme Store; use any
Mark, any colorable imitation thereof or other indicia of a Krispy Kreme Store in any
manner or for any purpose, or utilize for any purpose any trade name, trade or service
mark, other commercial symbol or trade dress that suggests or indicates a connection or
association with Company including, but not limited to, by use of a website; and(b)
    
    Franchisee will take such action as may be required to cancel or, at Companys
request, transfer to Company or its designee all fictitious, assumed name or equivalent
registrations relating to its use of any Mark.
 11.2
    
    Upon termination or expiration of the Development Rights or the last Franchise, whichever is
later, Franchisee, its owners and its employees will immediately cease to use and will
maintain the absolute confidentiality of any confidential information disclosed to or
otherwise learned or acquired by Franchisee or its owners or employees, will refrain from
using such confidential information in any business or otherwise and will return to Company
all copies of the Manuals and any other confidential materials which have been loaned or made
available to Franchisee by Company pursuant to this Agreement or any Franchise.11.3
    
    Upon expiration of the Agreement Term or upon Companys termination of the Development Rights
in accordance with the terms and conditions of this Agreement or Franchisees termination of
the Development Rights without cause, neither Franchisee nor any of its owners will for a
period of two (2) years commencing on the effective date of such termination or expiration, or
the date on which Franchisee ceases to conduct its activities hereunder, whichever is later,
directly or indirectly:
 (a)
    
    have any direct or indirect interest as a legal or beneficial owner of, or
perform services as a director, officer, manager, employee, consultant, representative,
agent, or otherwise for any Competitive Business located or operating within the Site
of any STORE, the Development Area, or eight (8) kilometers of any other Krispy Kreme
Store in operation or under construction on the effective date of the termination or
expiration of this Agreement;(b)
    
    own or hold the right to vote any record or beneficial ownership interest of a
Competitive Business located or operating within the Site of any STORE, the Development
Area, or eight (8) kilometers of any other Krispy Kreme Store in operation or under
construction on the effective date of the termination or expiration of this Agreement;
or(c)
    
    employ or seek to employ, any person who is employed (as an employee or
independent contractor) by Company, its Affiliates or by any other developer or
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franchisee of Krispy Kreme Stores, nor induce nor attempt to induce any such person
to leave said employment without the prior written consent of such persons
employer.
 12.
    
    EXTENSION OF AGREEMENT TERM12.1
    
    If Franchisee is in Good Standing and meets the Expansion Criteria as set forth in Schedule
B, then, no earlier than twelve (12) months before the expiration of the Agreement Term,
Company will forward to Franchisee a written proposal for the grant to Franchisee of rights to
develop additional Krispy Kreme Stores in the Development Area. Such written proposal, which
will be consistent with Companys then current fees and operating practices, will indicate the
number and general location of the additional Krispy Kreme Stores to be opened and the order
and time frame in which they are to be opened. Franchisee will be given a right of first
refusal to execute Companys written proposal. Franchisee must exercise its right of first
refusal by providing written notice to Company within sixty (60) days of the date of receipt
of Companys written proposal. If Franchisee accepts Companys written proposal, the parties
will enter into good faith negotiations to finalize the remaining details of the successor
development agreement. If Franchisee fails to accept Companys written proposal as required
herein, Company will have the right to develop, or grant rights to another to develop,
additional Krispy Kreme Stores in the Development Area.13.
    
    ENFORCEMENT13.1
    
    If any part of this Agreement is held to be void, invalid or otherwise unenforceable, Company
may elect either to modify the void, invalid or unenforceable part to the extent necessary to
render it legal, valid and enforceable or to sever the void, invalid or unenforceable part, in
which event the remainder of this Agreement will continue in full force and effect.13.2
    
    If any applicable and binding law or rule of any jurisdiction requires greater prior notice
than is required hereunder for the termination of any rights under this Agreement or the
taking of some other action not required hereunder, the prior notice and/or other action
required by such law or rule will be substituted for the comparable provisions hereof.13.3
    
    Company and Franchisee acknowledge that certain disputes may arise that they are unable to
resolve, but may be resolved through mediation. To facilitate such resolution, Company and
Franchisee agree that either of them has the right, prior to commencement of an arbitration
proceeding by a party as provided herein, to require that a dispute first be submitted for
non-binding mediation at a mutually agreeable location (if the parties cannot agree on a
location, the mediation will be conducted in Winston-Salem, North Carolina). Such mediation
will be conducted pursuant to the rules of the American Arbitration Association (AAA). The
parties agree that statements made by any party in such mediation proceeding will not be
admissible for any purpose in a subsequent arbitration or other legal proceeding.
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13.4
    
    Subject to Subsection 13.3, and except for controversies, disputes or claims related to or
based on Franchisees use of the Marks after the expiration or termination of the Development
Rights or any Franchise, all controversies, disputes or claims arising between Company, its
Affiliates and their respective shareholders, officers, directors, employees and agents (in
their representative capacity) and Franchisee (and its owners and the guarantors of this
Agreement) arising out of or related to the relationship of the parties hereto, this Agreement
or any other agreement between the parties or any provision of such agreement and the validity
thereof, will be submitted for binding arbitration to the AAA on demand of either party.13.5
    
    Such arbitration proceedings will be conducted in New York, New York, and, except as
otherwise provided herein, will be heard before a panel of three (3) arbitrators and conducted
in accordance with the then current commercial arbitration rules of the AAA for international
arbitrations. All matters relating to arbitration will be governed by the United States
Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by any state or foreign
arbitration law.13.6
    
    Company and Franchisee will each appoint one (1) arbitrator and the two (2) arbitrators so
appointed will appoint a third arbitrator to act as chairman of the tribunal. If a party
fails to nominate an arbitrator within thirty (30) days from the date when a partys request
for arbitration has been communicated to the other party, such appointment will be made by the
AAA. The two (2) arbitrators thus appointed will attempt to agree upon the third arbitrator
to act as chairman. If said two (2) arbitrators fail to nominate the chairman within thirty
(30) days from the date of appointment of the second arbitrator to be appointed, the chairman
will be appointed by the AAA.13.7
    
    The arbitrators will have the right to award or include in their award any relief which they
deem proper in the circumstances, including, without limitation, money damages (with interest
on unpaid amounts from date due), specific performance, injunctive relief and attorneys fees
and costs, provided that the arbitrators will not have the right to declare any Mark generic
or otherwise invalid or, except as otherwise provided herein, to award exemplary,
consequential, special or punitive damages. The award and decision of the arbitrators will be
conclusive and binding upon all parties hereto and judgment upon the award may be entered in
any court of competent jurisdiction, and Franchisee and Company waive any right to contest the
validity or enforceability of such award.13.8
    
    The parties further agree to be bound by the provisions of any applicable limitation on the
period of time in which claims must be brought under applicable law or this Agreement,
whichever is less. The parties further agree that in connection with any such arbitration
proceeding each will submit or file all claims which it has against the other party within the
same proceeding as the claim to which it relates. Any such claim which is not submitted or
filed as described above will forever be barred. The parties further agree that arbitration
will be conducted on an individual, not a class-wide basis, and that any arbitration
proceeding between Company and Franchisee will not be consolidated with any other arbitration
proceeding involving Company and any other person.
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13.9
    
    Notwithstanding anything to the contrary contained in this Section 13, each party has the
right, in a proper case, to obtain temporary restraining orders and temporary or preliminary
injunctive relief from a court of competent jurisdiction, provided, however, that the parties
to the dispute agree to submit their dispute for contemporaneous, non-binding mediation as
provided in Subsection 13.3 and, if such dispute cannot be resolved through such mediation and
is subject to arbitration pursuant to the terms of this Section, for arbitration as provided
in this Section. The arbitration provision contained herein will continue in full force and
effect subsequent to and notwithstanding expiration or termination of this Agreement.14.
    
    MISCELLANEOUS14.1
    
    Company will not be deemed, by any delay, action or inaction, to have waived or impaired any
right, power or option reserved by this Agreement.14.2
    
    Neither Company nor Franchisee will be liable for loss or damage or deemed to be in breach of
this Agreement if its failure to perform its obligations results from: (a) transportation
shortages, inadequate supply or equipment, products, supplies, labor, material or energy or
the voluntary foregoing of the right to acquire or use any of the foregoing in order to
accommodate or comply with any law, ruling, order, regulation, requirement, or instruction of
any government or any department or agency thereof; (b) acts of God; or (c) fires, strikes,
embargoes, war or riot. Any delay resulting from any of said causes will extend performance
accordingly or excuse performance, in whole or in part, as may be reasonable, except that said
causes will not excuse payment of amounts owed to Company or designated suppliers. In the
event that such causes or occurrences continue for a period of twelve (12) months or more,
Company, at its sole and exclusive option, may terminate this Agreement, effective upon
delivery of notice thereof to Franchisee.14.3
    
    Except with respect to (a) each partys obligation to indemnify the other in accordance with
provisions herein and (b) claims Company brings against Franchisee for its unauthorized use of
the Marks or unauthorized use or disclosure of Companys confidential information, Company and
Franchisee hereby waive to the fullest extent permitted by law, any right to or claim for any
punitive or exemplary damages against the other and agree that in the event of a dispute
between them, each will be limited to the recovery of equitable relief and to recovery of any
actual damages it sustains. Company and Franchisee irrevocably waive trial by jury in any
action, proceeding or counterclaim, whether at law or in equity, brought by either of them.14.4
    
    Any and all claims arising out of or relating to this Agreement or the relationship of
Franchisee and Company will be barred unless a judicial proceeding, or a mediation or
arbitration proceeding in accordance with this Agreement, is commenced within one (1) year
from the date Company or Franchisee knew or should have known of the facts giving rise to such
claims, whichever occurs first.14.5
    
    If Company incurs expenses in connection with Franchisees failure to pay when due amounts
owed to Company, to submit when due any reports, information or supporting
 14




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records or otherwise to comply with this Agreement, Franchisee will reimburse Company for
costs and expenses Company incurs, including, without limitation, reasonable accounting,
attorneys, arbitrators and related fees.14.6
    
    Franchisee and Company agree that, except to the extent governed by the United States Federal
Arbitration Act (9 U.S.C. §1 et seq.), the United States Trademark Act of 1946
(Lanham Act, 15 U.S.C. § 1051 et seq.), or other United States federal law,
this Agreement and all claims arising from the relationship between the parties will be
governed by the internal laws of the State of New York and the parties agree to submit to the
jurisdiction of the U.S. District Court for the Southern District of New York. Notwithstanding
the foregoing, any party may bring an action to obtain a restraining order or temporary or
preliminary injunction, or to enforce an arbitration award, in any court of general
jurisdiction in the state or country in which Franchisee resides or in which the Development
Area is located.14.7
    
    This Agreement is binding upon the parties hereto and their respective executors,
administrators, heirs, beneficiaries, assigns and successors in interest, and will not be
modified except by written agreement signed by both parties.14.8
    
    This Agreement (including, without limitation, the preambles and Exhibits hereto) together
with the Manuals and Companys other written policies, constitutes the entire agreement of the
parties, except as provided below, and there are no other oral or written understandings,
representations, warranties or agreements between the parties relating to the subject matter
of this Agreement.14.9
    
    This Agreement is executed in English, and any translation of any of the foregoing into any
other language will not be an official version thereof. In the event of any conflict in
interpretation between the English version of this Agreement or any deed, document or notice
relating to this Agreement and a translation thereof, the English version will control.15.
    
    GUARANTEE / NOTICES15.1
    
    Upon Companys request, Franchisee will procure the execution by guarantors approved by
Company of a guarantee of Franchisees obligations and liabilities under this Agreement and
all Franchise Agreements entered into pursuant to this Agreement, in the form required by
Company.15.2
    
    All written notices and reports permitted or required to be delivered by the provisions of
this Agreement or the Manuals will be deemed so delivered: (a) at the time delivered by hand;
(b) one (1) business day after transmission by telegraph, facsimile or other electronic system
(evidenced by machine generated receipt); or (c) one (1) business day after being placed in
the hands of an international commercial courier service for next business day delivery.
 IN WITNESS WHEREOF
 15




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KRISPY KREME DOUGHNUT CORPORATION
    
    [FRANCHISEE]By:
    
    
    
    
    
    By:Name:
    
    
    
    
    
    Name:Title:
    
    
    
    
    
    Title:
 16




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EXHIBIT A
 DEVELOPMENT AREA
 Ex. A-1




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EXHIBIT B
 DEVELOPMENT QUOTA
 Ex. B-1




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EXHIBIT C
 FORM FRANCHISE AGREEMENT
 Ex. C-1




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EXHIBIT E
 BUSINESS ORGANIZATION, OWNERS,  AND MANAGING DIRECTOR
 Ex. E-1




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SCHEDULE A
 INFORMATION SCHEDULE
 CONCEPT:
 DEEMED POSTAL RECEIPT DATE:
 DEVELOPMENT AREA:
 INITIAL FRANCHISE FEE:
 DEVELOPMENT FEE:
 AGREEMENT TERM:
 Sch. A-1




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SCHEDULE B
 EXPANSION CRITERIA