AMENDMENT AND
CANCELLATION OF 
KEY EXECUTIVE EMPLOYMENT
AND SEVERANCE AGREEMENT 



        THIS
AGREEMENT, made and entered into as of the 5th day of December, 2005, by
and among FRESH BRANDS, INC., a Wisconsin corporation (the “Company”),
PILLOW ACQUISITION CORP., a Wisconsin corporation (“Certified”), and
JOHN H. DAHLY (the “Executive”). 



W I T N E S S E T H : 



        WHEREAS,
the Executive and the Company entered into that certain Key Executive Employment and
Severance Agreement dated December 15, 2003 (the “KEESA”) to ensure that any
proposal for a change in control or acquisition of the Company will be considered by the
Executive objectively, with reference only to the best interests of the Company and its
shareholders and without undue regard for the Executive’s personal interests; 



        WHEREAS,
the Company has entered into that certain Agreement and Plan of Merger among Certified
Holdings, Inc., Pillow Acquisition Corp. and the Company, dated as of this date (the
“Merger Agreement”) that provides for the merger of Certified and the Company
(the “Merger”); 



        WHEREAS,
the Company, Certified and Executive have agreed, in connection with and contingent upon
the proposed Merger, to terminate the Executive’s KEESA (other than the provisions
providing for a gross-up payment for Internal Revenue Code Section 280G excise taxes) in
exchange for a cash payment to be made upon the Effective Time, as that term is defined in
the Merger Agreement; 



        WHEREAS,
the KEESA may be considered a deferred compensation agreement within the meaning of Code
Section 409A; 



        WHEREAS,
pursuant to IRS Notice 2005-1, Q&A-19, a deferred compensation arrangement may be
amended prior to December 31, 2005 to provide for a new time of payment; 



        WHEREAS,
pursuant to the KEESA, the amounts payable under the KEESA are paid upon a separation from
service, and the parties desire that, in order to effectuate the agreement between
Certified and Executive, payment now be made upon the Effective Time of the Merger, which
is considered a Change in Control under Code Section 409A; 



        WHEREAS,
the parties desire to amend the KEESA to reflect the new payment date and provide for a
single sum payment of the value of the KEESA to the Executive on the Effective Time; and 



        WHEREAS,
the parties desire to amend the provisions of the KEESA that will remain in effect after
the Effective Time of the Merger for purposes of complying with Code Section 409A to
the extent applicable. 



        NOW,
THEREFORE, in consideration of the foregoing, the parties hereto agree as follows: 



        1.    Amendment
of KEESA. Effective on the date hereof, the KEESA is amended to           provide
that if the Executive is employed by the Company immediately prior to           the
Effective Time, the Company shall pay to Executive on the Effective Time two
          hundred and twenty thousand dollars ($220,000), which the Company and the
          Executive agree is the value of the Executive’s vested benefit under the
          KEESA.  














        2.    Termination
of KEESA. On the Effective Time, the KEESA shall terminate,           except for the
provisions of Section 9(c) (280G gross-up provisions), Section 15           (Expenses and
Interest), and Section 22 (Governing Law; Resolution of Disputes),           which shall
survive the termination of the KEESA and shall apply to this           Agreement as if
incorporated herein by reference; provided that Section           9(c) shall be
amended to provide that the Company shall pay (or cause to be           paid) or
distribute (or cause to be distributed) to or for the benefit of           Executive such
amounts as are then due to Executive under Section 9(c) of the           KEESA no later
than 21⁄2 months after the end of the calendar year in which           the payment
under Section 1 of this Agreement is made. For each subsequent           calendar year,
the Company shall pay (or cause to be paid) or distribute (or           cause to be
distributed) to or for the benefit of the Executive such additional           amounts
then due as required by Section 9(c) of the KEESA on March 15th (or as           soon as
practicable thereafter) of the following calendar year.  




        3.    Successors.
Upon the Effective Time, the term “Company” as used           in this Agreement
shall mean Certified. If, after the Effective Time, the           Company sells, assigns
or transfers all or substantially all of its business and           assets to any person,
or if the Company merges into or consolidates or otherwise           combines with any
person, then the Company shall assign all of its right, title           and interest in
this Agreement as of the date of such event to such person, and           the term “Company” shall
thereafter mean such person. This Agreement           and all rights of the Executive
shall inure to the benefit of and be enforceable           by the Executive’s
personal or legal representatives, executors,           administrators, heirs and
beneficiaries.  




        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written above. 



		
		FRESH BRANDS, INC.
	

 	By:  /s/ Walter G. Winding
		        Walter G. Winding, III
		        Chairman of the Board
	

 	PILLOW ACQUISITION CORP.
	

 	By:  /s/ Kenneth R. Koester
		        Kenneth R. Koester
		        President and Chief Executive Officer
	

 	EXECUTIVE
	

 	/s/ John H. Dahly
		John H. Dahly
		Address: 2051 W. Hidden Reserve Circle
		Mequon, WI 53092