Document:

<PAGE>
                                                                 Exhibit 10.1(b)

                               FIRST AMENDMENT TO
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------

         FIRST AMENDMENT dated as of October 18, 2001 (this "AMENDMENT") to the
LOAN AND SECURITY AGREEMENT dated as of September 26, 2001 (the "LOAN
AGREEMENT"), by and among DAIRY MART CONVENIENCE STORES, INC., a Delaware
corporation, as debtor and debtor-in-possession (the "PARENT"), certain of the
Subsidiaries of the Parent identified on the signature pages hereof as
borrowers (together with the Parent, each a "BORROWER" and collectively the
"BORROWERS"), FOOTHILL CAPITAL CORPORATION, a California corporation
("FOOTHILL"), as agent for the Lenders referred to below (in such capacity, the
"AGENT"), the lenders listed on Schedule I hereto under the captions
"Continuing Lender" (the "CONTINUING LENDER") and "Additional Lenders" (the
"ADDITIONAL LENDERS" and together with the Continuing Lender, each a "LENDER"
and collectively the "LENDERS").

         WHEREAS, the Borrowers, the Continuing Lender and the Agent desire to
(i) add the Additional Lenders as a party to the Loan Agreement and (ii) amend
certain other terms and conditions of the Loan Agreement hereafter set forth. In
addition, (A) the Continuing Lender wishes to assign a portion of its interests
in the Term Loan outstanding under the Loan Agreement to the Additional Lenders
and the Additional Lenders wish to accept such assignment and (B) the Lenders
wish to allocate their respective shares of the Revolver Commitments under the
Loan Agreement.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and conditions hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

         1.  CAPITALIZED TERMS. All capitalized terms used in this Amendment
(including, without limitation, in the recitals hereto) and not otherwise
defined shall have their respective meanings set forth in the Loan Agreement.

         2.  DEFINITIONS. (a) The definition of the term "Agreed Administrative
Expense Priorities" set forth in Section 1.1 of the Loan Agreement is hereby
amended by deleting clause "FIRST" of such definition and inserting a new clause
"FIRST" therein to read as follows:

             "FIRST", (i) amounts payable pursuant to 28 U.S.C. Section
     1930(a)(6) and any fees payable to the Clerk of the Bankruptcy Court and
     (ii) allowed commissions of a trustee in a superseding chapter 7 case and
     allowed fees and expenses of attorneys, accountants and other professionals
     retained in the Chapter 11 Cases pursuant to Section 327 and 1103 of the
     Bankruptcy Code, and a trustee in a superseding chapter 7 case, but the
     amount entitled to priority under clause (ii) of this clause first shall
     not exceed (A) prior to the Revolver Facility Effective Date, $750,000
     outstanding in the aggregate at any time and (B) after the Revolver
     Facility Effective Date, $2,050,000 outstanding in the aggregate at any
     time (in each case inclusive of any holdbacks required by the Bankruptcy
     Court) (the "Permitted Professional Expenses Amount"); PROVIDED, HOWEVER,
     that (x) the aggregate

                                       1
<PAGE>

     amount of Carve-Out Expenses relating to a trustee in a superseding chapter
     7 case and such trustee's professionals shall not exceed $100,000, (y)
     after the occurrence and during the continuance of an Event of Default
     hereunder or a default under the Interim Financing Order or the Final
     Financing Order, any payments actually made to such trustee and such
     professionals after such occurrence or during such continuance (other than
     payments made out of pre-Filing Date retainers), under Section 330 and 331
     of the Bankruptcy Code or otherwise, shall reduce the Permitted
     Professional Expenses amount on a dollar-for-dollar basis, and (z) for the
     avoidance of doubt, any payment actually made to such professionals prior
     to the occurrence and during the continuance of an Event of Default
     hereunder or a default under the Interim Financing Order or the Final
     Financing Order may be retained by such professionals and not reduce the
     Permitted Professional Expenses Amount;"

             (b) The definition of the term "Eligible Transferee" set forth in
Section 1.1 of the Loan Agreement is hereby amended by deleting clauses (e) and
(f) of such definition and inserting a new clause (e) therein to read as
follows:

             "and (e) any other Person approved by Agent who can reasonably be
     expected to fulfill the obligations of a Lender hereunder as determined
     solely by Agent in its Permitted Discretion."

             (c) The definition of the term "Final Financing Order" set forth in
Section 1.1 of the Loan Agreement is hereby amended by (i) deleting the first
reference to the word "Agent" therein and inserting the word "Lenders" in lieu
thereof and (ii) deleting each reference to the phrase "Agent, or behalf of the
Required Lenders" therein and inserting the word "Lenders" in lieu thereof.

             (d) The definition of the term "Lender Group Expenses" set forth in
Section 1.1 of the Loan Agreement is hereby amended by (i) deleting the
phrase", provided, that, as between Agent's and each Lender's attorneys,
Agent's attorneys shall be primarily responsible for the actions described in
this clause (h)" contained in the parenthetical set forth in clause (h) of such
definition, (ii) deleting the phrase", provided, that, as between Agent's and
each Lender's attorneys, Agent's attorneys shall be primarily responsible for
the actions described in this clause (i)" contained in the first parenthetical
set forth in clause (i) of such definition, and (iii) deleting the
parenthetical   clause "(including, without limitation, Starshak & Associates,
Inc.)" set forth in clause (b) of such definition.

             (e) A definition of the term "Majority Lenders" is hereby inserted
in Section 1.1 of the Loan Agreement, in appropriate alphabetical order, to read
in its entirety as follows:

             "MAJORITY LENDERS" means, at any time, Lenders whose Pro Rata
     Shares aggregate at least 66-2/3% of the Total Commitments, or if the Total
     Commitments have been terminated irrevocably, 66-2/3% of the Obligations
     then outstanding, provided that if, on the applicable date of
     determination, the Pro Rata Share of Foothill equals or exceeds 66-2/3%,
     Foothill shall not constitute the Majority Lender without being joined by
     one additional Lender unaffiliated with Foothill."

                                       2
<PAGE>

         3.  DEFAULTING LENDERS. Section 2.3(c)(iii) of the Loan Agreement is
hereby amended by deleting clause (y) thereof and inserting a new clause (y)
therein to read as follows:

             "(y)  the non-Defaulting Lenders and Agent shall have waived such
     Defaulting Lender's default in writing, or"

         4.  MAKING OF ADVANCES. Section 2.3(c)(i) of the Loan Agreement is
hereby amended by (a) deleting the phrase "not later than 12:00 p.m.
(California time) on the Funding Date" set forth in the first sentence thereof
and inserting the phrase "not later than 1:00 p.m. (California time) on the
Business Day prior to the Funding Date" in lieu thereof, and (b) deleting the
phrase "not later than 2:00 p.m. (California time) on the Funding Date" set
forth in the second sentence thereof and inserting the phrase "not later
than 10:00 a.m. (California time) on the Funding Date" in lieu thereof.

         5.  AGENT ADVANCES. Section 2.3(e)(i) of the Loan Agreement is hereby
amended by deleting the number "$2,000,000" therein and inserting the number
"$1,000,000" in lieu thereof.

         6.  OPTIONAL OVERADVANCES. Section 2.3(i) of the Loan Agreement is
hereby amended by deleting each reference to the number "$2,000,000" therein and
inserting the number "$1,000,000" in lieu thereof.

         7.  DISTRIBUTIONS TO LENDERS. Section 2.4(b)(ii) of the Loan Agreement
is hereby amended by inserting the phrase", but in any event within 2 Business
Days," between the words "promptly" and "shall" set forth therein.

         8.  PRE-PETITION LETTERS OF CREDIT. (a) Section 2.12 of the Loan
Agreement is hereby amended by inserting a new sub-section (f) at the end of
such Section to read as follows:

             "(f)   Schedule 2.12(f) hereto contains a description of all
     letters of credit issued and outstanding under the Existing Credit
     Agreement immediately prior to the Filing Date (the "PRE-PETITION LETTERS
     OF CREDIT"). On the Revolver Facility Effective Date, Citizens Bank of
     Connecticut, as a Lender, shall become an Issuing Lender under this
     Agreement solely with respect to the Pre-Petition Letters of Credit. Each
     Pre-Petition Letter of Credit, including any extensions or renewals
     thereof, shall constitute a "Letter of Credit" for all purposes of this
     Agreement issued on the Revolver Facility Effective Date."

             (b) The Loan Agreement is hereby amended by attaching Schedule
2.12(f) thereto to read as set forth in Annex II to this Amendment.

         9.  FINAL FINANCING ORDER. (a) Section 3.2(a) of the Loan Agreement is
hereby amended by deleting the phrase "Agent, on behalf of the Required
Lenders," and inserting the word "Lenders" in lieu thereof.

             (b) Section 3.4(e) of the Loan Agreement is hereby amended by
deleting each reference to the phrase "Agent, on behalf of the Required
Lenders," and inserting the word "Lenders" in lieu thereof.

                                       3
<PAGE>
             (c) Section 3.5 of the Loan Agreement is hereby amended by deleting
the phrase "Agent, on behalf of the Required Lenders" and inserting the word
"Lenders" in lieu thereof.

             (d) Section 5.27(c) of the Loan Agreement is hereby amended by
deleting the phrase "Agent, on behalf of the Required Lenders" and inserting the
word "Lenders" in lieu thereof.

             (e) Section 7.24(a) of the Loan Agreement is hereby amended by
deleting the phrase "Agent, on behalf of the Required Lenders, in its Permitted
Discretion" and inserting the word "Lenders" in lieu thereof.

         10.  FINANCIAL CONSULTANT. Section 6.17 of the Loan Agreement is hereby
amended in its entirety to read as follows:

             "6.17 FINANCIAL CONSULTANT. (a) Within 45 days of the Revolver
     Facility Effective Date, retain Starshak & Associates, Inc. as a financial
     consultant to the Borrowers or (b) grant any financial consultant retained
     by the Agent to assist the Agent in monitoring the Collateral and the Loan
     Parties' operating performance access to each Loan Party's Books and
     properties as well as access to senior management of the Parent relating to
     the foregoing matters, in each case during normal business hours and upon
     reasonable prior notice."

         11.  NOTICES. Section 12 of the Loan Agreement is hereby amended by
inserting, immediately after the notice information of Agent's counsel, the
notice information for the Additional Lenders to read as follows:

         If to Lenders
         (other than Foothill):   CITIZENS BANK OF CONNECTICUT
                                  53 State Street, 9th Floor
                                  Boston, Massachusetts 02109
                                  Attn: Anne R. Hemmer
                                  Fax No. 617-742-9471

         with copies to:          BINGHAM DANA LLP
                                  One State Street
                                  Hartford, Connecticut 06103
                                  Attn: Bruce C. Silvers, Esq.
                                  Fax No. 860-240-2800

         12.  AMENDMENT AND WAIVERS. Section 15.1 of the Loan Agreement is
hereby amended in its entirety to read as follows:

             "15.1  AMENDMENTS AND WAIVERS. No amendment or waiver of any
     provision of this Agreement or any other Loan Document, and no consent with
     respect to any departure by any Loan Party therefrom, shall be effective
     unless the same shall be in writing and signed by the Required Lenders (or
     by Agent at the written request of the Required Lenders) and Borrowers and
     then any such waiver or consent shall be effective

                                       4

<PAGE>
only in the specific instance and for the specific purpose for which given;
provided, however, that:

         (i) no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Borrowers, do any of the
following:

             (a) increase, reduce or extend any Commitment of any Lender,

             (b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

             (c) reduce the principal of, or the rate of interest on, any loan
or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other Loan Document,

             (d) change the percentage of the Commitments that is required to
take any action hereunder,

             (e) amend, modify or waive this Section or any provision of the
Agreement providing for consent or other action by all Lenders,

             (f) release Collateral other than as permitted by SECTION 16.12,

             (g) change the definition of "Required Lenders", "Majority Lenders"
or "Pro Rata Share",

             (h) contractually subordinate any of the Agent's Liens,

             (i) release any Borrower or any Guarantor from any obligation for
the payment of money,

             (j) change the definition of Borrowing Base or the definitions of
Maximum Revolver Amount or Term Loan Amount,

             (k) modify, waive, release or subordinate the superpriority claim
status of the Obligations (except as permitted in this Agreement and the Loan
Documents), or

             (l) amend, modify or waive any of the provisions of Section 2.1,
Section 2.2, Sections 2.3(c), (e), (h) or (i), Section 2.4(a)(iii), Section
2.4(b), Section 2.5 or Section 16;

and (ii) no such waiver, amendment, or consent shall, unless in writing and
signed by the Majority Lenders and Borrowers, do any of the following:

             (a) amend, modify or waive any of the provisions of Section 2.12,
Section 7.1(d), Section 14.1 and Section 15.2, or

                                       5

<PAGE>
             (b) amend, modify or waive any of the provisions of Section 7.20
     (or any definition relative to financial terms used in such Section)."

         13.  REPLACEMENT OF HOLDOUT LENDER. Section 15.2(b) of the Loan
Agreement is hereby amended by inserting the phrase "in cash" immediately after
the phrase "being repaid its share of the outstanding Obligations" set forth in
the first sentence thereof.

         14.  AGENT AS PARTY IN INTEREST. Section 17.10 of the Loan Agreement is
hereby amended by inserting a new sentence at the end thereof to read as
follows:

             "For the avoidance of doubt, nothing contained in this Section
     17.10 shall be deemed to modify, limit, restrict or waive any right that
     the Existing Lender or any other financial institution party to the
     Existing Credit Agreement may have in the Chapter 11 Cases in respect of
     the Pre-Petition Obligations and the Cash Collateral Order."

         15.  ADDITIONAL LENDERS: REVOLVER COMMITMENTS. (a) On and as of the
Amendment Effective Date, the Continuing Lender and the Additional Lenders will
have a Revolver Commitment, and the Continuing Lender shall sell and assign and
the Additional Lenders shall purchase and assume, at the principal amount
thereof, such interests in the Term Loan outstanding on such date, in each case
as shall be necessary in order that, after giving effect to all such
allocations, assignments and purchases, the Commitments will be as set forth in
Annex I to this Amendment, and the Commitments, Advances and Letter of Credit
Usage and Term Loan will be held by the Lenders ratably in accordance with their
Pro Rata Shares in the Commitments as set forth in Annex I to this Amendment.
Such sales, assignments and purchases shall be without recourse, representation
or warranty, except that (i) the Continuing Lender represents that it is the
legal and beneficial owner of the interests assigned by it free and clear of any
adverse claim and (ii) paragraphs 3 and 4 of Exhibit A-1 to the Loan Agreement
is hereby incorporated by reference as if set forth herein and the Continuing
Lender shall be deemed to have made the representations, warranties and
statements of Assignor in such paragraphs and each Additional Lender shall be
deemed to have made the representations, warranties and statements of Assignee
in such paragraphs. Notwithstanding the terms of Section 14.1(a) of the Loan
Agreement, no processing fee shall be charged by the Agent in connection with
the sales, assignments and purchases described in this paragraph (a).

             (b) On the Amendment Effective Date, (i) each Additional Lender
shall pay the purchase price for the Term Loan purchased by it pursuant to
paragraph (a) of this Section 11 by wire transfer of immediately available funds
to the Agent, not later than 11:00 a.m. (California time) on such date, and (ii)
the Agent shall promptly pay to the Continuing Lender the purchase price for the
Term Loan sold by it pursuant to paragraph (a) of this Section 11, out of the
amounts received by it pursuant to clause (i) of this paragraph (b), by wire
transfer of immediately available funds to an account designated by the
Continuing Lender.

             (c) Borrowers hereby consent to the addition of the Additional
Lenders, to the allocation of the Revolver Commitments and to the sales,
assignments and purchases provided for in paragraphs (a) and (b) of this Section
11 and agree that the Additional Lenders shall have all of the rights of a
Lender under the Loan Agreement with respect to the Commitments provided by it
and the interests purchased by it pursuant to such paragraphs.

                                       6

<PAGE>
Commencing on the Amendment Effective Date, each of the Additional Lenders
hereby agrees that it will be a party to the Loan Agreement, will be bound by
the terms and conditions of the Loan Agreement and the Loan Documents and will
have all of the rights and obligations of a Lender under the Loan Agreement and
the Loan Documents.

         16.  SCHEDULE C-1; SCHEDULE 2.7(a). (a) Schedule C-1 to the Loan
Agreement is hereby amended in its entirety to read as set forth in the Annex I
to this Amendment.

             (b) Schedule 2.7(a) to the Loan Agreement is hereby amended in its
entirety to read as set forth in the Annex III to this Amendment.

         17.  CONDITIONS. This Amendment shall become effective only upon
satisfaction in full of the following conditions precedent (the first date
upon which all such conditions have been satisfied being herein called the
"AMENDMENT EFFECTIVE DATE"):

             (a)  REPRESENTATIONS AND WARRANTIES: NO EVENT OF DEFAULT. The
representations and warranties contained herein, in Section 5 of the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Agent and the Lenders pursuant hereto on or prior to the
Amendment Effective Date shall be correct in all material respects on and as of
the Amendment Effective Date as though made on and as of such date (except to
the extent that such representations and warranties expressly relate solely to
an earlier date in which case such representations and warranties shall be true
and correct on and as of such date); and no Default or Event of Default shall
have occurred and be continuing on the Amendment Effective Date or would result
from this Amendment becoming effective in accordance with its terms, unless any
such Event of Default has previously been waived in accordance with Section 15
of the Loan Agreement.

             (b)  DELIVERY OF DOCUMENTS. The Agent shall have received on or
before the Amendment Effective Date the following, each in form and substance
reasonably satisfactory to the Agent and, unless indicated otherwise, dated the
Amendment Effective Date:

                  (i) counterparts of this Amendment, duly executed by the
         Borrowers and the Lenders; and

                  (ii) such other agreements, instruments, approvals, opinions
         and other documents as the Agent may reasonably request.

             (c)  PROCEEDINGS. All proceedings in connection with the
transactions contemplated by this Amendment, and all documents incidental
thereto, shall be reasonably satisfactory to the Agent and its special counsel,
and the Agent and such special counsel shall have received all such information
and such counterpart originals or certified copies of documents, and such other
agreements, instruments, approvals, opinions and other documents, as the Agent
or such special counsel may reasonably request.

                                       7

<PAGE>

        18. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers represent and
warrant as follows:

                (a) Except as previously disclosed in writing to the Agent: (i)
the representations and warranties made by such Borrower herein, in the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Lenders on or prior to the Amendment Effective Date shall be
correct and accurate on and as of the Amendment Effective Date as though made
on and as of such date; and (ii) no Default or Event of Default shall have
occurred and be continuing on the Amendment Effective Date or would result from
this Amendment becoming effective in accordance with its terms.

                (b) Each of the Borrowers (i) is a corporation, duly organized,
validly existing and in good standing under the laws of its state of
organization, (ii) has all requisite power and authority to execute, deliver
and perform this Amendment, and to perform the Loan Agreement, as amended
hereby, and (iii) is duly qualified to do business and is in good standing in
each jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business makes such qualification
necessary.

                (c) The execution, delivery and performance by each Borrower of
this Amendment, and the performance by each such Borrower of the Loan
Agreement, as amended hereby, (i) have been duly authorized by all necessary
action, (ii) do not and will not contravene such Borrower's charter or by-laws,
any applicable law or any contractual restriction binding on or otherwise
affecting it or any of its properties, (iii) do not and will not result in or
require the creation of any lien or other encumbrance (other than pursuant to
any Loan Documents) upon or with respect to any of its properties, and (iv) do
not and will not result in any suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
its operations or any of its properties.

                (d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or agency or other
regulatory body is required in connection with the due execution, delivery and
performance by such Borrower of this Amendment, or for the performance of the
Loan Agreement, as amended hereby.

                (e) This Amendment, the Loan Agreement, as amended hereby, and
each other Loan Document to which such Borrower is a party is a legal, valid
and binding obligation of such Borrower, enforceable against such Borrower in
accordance with its terms, except as such enforceability may be limited by or
subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally.

        19. CONTINUED EFFECTIVENESS OF THE LOAN AGREEMENT. (a) Except as
otherwise expressly provided herein, the Loan Agreement and the other Loan
Documents are, and shall continue to be, in full force and effect and are
hereby ratified and confirmed in all respects, except that on and after the
Amendment Effective Date (i) all references in the Loan Agreement to "this
Agreement", "hereto", "hereof", "hereunder" or words of like import referring
to the Loan Agreement shall mean the Loan Agreement as amended by this
Amendment and (ii) all references in the other Loan Documents to the "Loan
Agreement", "thereto", "thereof",

                                      8

<PAGE>

"thereunder" or words of like import referring to the Loan Agreement shall mean
the Loan Agreement as amended by this Amendment.

                (b) The Borrowers hereby acknowledge and agree that this
Amendment constitutes a "Loan Document" under the Loan Agreement. Accordingly,
it shall be an Event of Default under the Loan Agreement if any representation
or warranty made by the Borrowers under or in connection with this Amendment
shall have been untrue, false or misleading in any material respect when made.

        20. COSTS AND EXPENSES. The Borrowers shall pay all reasonable
out-of-pocket costs and expenses of the Lender Group (including, without
limitation, the reasonable fees and service charges of counsel to any member of
the Lender Group) in connection with this Amendment.

        21. MISCELLANEOUS. (a) This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Amendment by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.

                (b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

                (c) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York except to the extent
governed by the Bankruptcy Code.

        22. THE BORROWERS, LENDERS AND THE AGENT EACH HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AMENDMENT OR THE ACTIONS OF THE LENDER GROUP IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

              [Remainder of this page intentionally left blank]

                                      9

<PAGE>

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

                                        DAIRY MART CONVENIENCE STORES, INC.
                                        a Delaware Corporation, as a Borrower

                                        By: /s/ Gregg R. Budoi
                                            ----------------------------------
                                            Title: Chief Financial Officer

                                        THE LAWSON COMPANY,
                                        a Delaware corporation, as a Borrower

                                        By: /s/ Gregg R. Budoi
                                            ----------------------------------
                                            Title: Chief Financial Officer

                                        QUIK SHOPS, INC.
                                        an Ohio corporation, as a Borrower

                                        By: /s/ Gregg R. Budoi
                                            ----------------------------------
                                            Title: Chief Financial Officer

                                        CONVENIENT INDUSTRIES OF AMERICA, INC.,
                                        a Kentucky corporation, as a Borrower

                                        By: /s/ Gregg R. Budoi
                                            ----------------------------------
                                            Title: Chief Financial Officer

<PAGE>

                                        FOOTHILL CAPITAL CORPORATION,
                                        as Agent and as the Continuing Lender

                                        By: /s/ Xavier Gannon
                                            ----------------------------------
                                            Name: Xavier Gannon
                                            Title: Vice President

                                        CITIZENS BANK OF CONNECTICUT,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        NATIONAL CITY BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        PROVIDENT BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                      11

<PAGE>

                                        FOOTHILL CAPITAL CORPORATION,
                                        as Agent and as the Continuing Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        CITIZENS BANK OF CONNECTICUT,
                                        as an Additional Lender

                                        By: /s/ Patrick C. Joyce
                                            ----------------------------------
                                            Name: Patrick C. Joyce
                                            Title: Vice President

                                        NATIONAL CITY BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        PROVIDENT BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                      11

<PAGE>

                                        FOOTHILL CAPITAL CORPORATION,
                                        as Agent and as the Continuing Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        CITIZENS BANK OF CONNECTICUT,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        NATIONAL CITY BANK,
                                        as an Additional Lender

                                        By: /s/ Joseph E. Manley, V.P.
                                            ----------------------------------
                                            Name: Joseph E. Manley
                                            Title: Vice President

                                        PROVIDENT BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                      11

<PAGE>

                                        FOOTHILL CAPITAL CORPORATION,
                                        as Agent and as the Continuing Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        CITIZENS BANK OF CONNECTICUT,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        NATIONAL CITY BANK,
                                        as an Additional Lender

                                        By:
                                            ----------------------------------
                                            Name:
                                            Title:

                                        PROVIDENT BANK,
                                        as an Additional Lender

                                        By: /s/ Stephen P. Wood
                                            ----------------------------------
                                            Name: Stephen P. Wood
                                            Title: Senior Vice President

                                      12<PAGE>
EXHIBIT 10.8

                              AMENDED AND RESTATED

                              EMPLOYMENT AGREEMENT

                  This Agreement is effective November 1, 2001, by and between
DAIRY MART CONVENIENCE STORES, INC., a Delaware corporation with its principal
offices at 300 Executive Parkway West, Hudson, Ohio 44236 (the "Company"), and
GREGORY G. LANDRY, with his residence located at 1803 Forest Oaks Drive, Hudson,
Ohio 44236 (the "Employee").

                              W I T N E S S E T H:

                  WHEREAS, the Company desires to continue to secure the
services of the Employee in the capacities set forth herein, and the Employee
has agreed to continue to supply his services in such capacities, upon the terms
and conditions set forth in this Agreement.

                  WHEREAS the Company and the Employee desire that this
Agreement replace and supercede that certain Employment Agreement effective as
of August 1, 2001 (the "Existing Employment Agreement"), between Employer and
Employee.

                  NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements hereinafter contained, the parties hereby agree
that the Existing Employment Agreement is amended and restated in its entirety
as follows:

                  1.       Definitions. For purposes of this Agreement, the
following capitalized terms used herein shall have the respective meanings set
forth below. Other capitalized terms used herein are defined elsewhere in this
Agreement.
<PAGE>
                                      -2-

                  "Cause" shall mean (i) the Employee's willful breach of duty
in the course of his employment, or his habitual neglect of his employment
duties, (ii) an act of fraud or theft committed by the Employee against the
Company or (iii) the Employee having been convicted by a court of competent
jurisdiction of a felony. For purposes of this Agreement, no act, or failure to
act, on the Employee's part shall be deemed "willful" unless done, or omitted to
be done, by him not in good faith and without reasonable belief that his action
or omission was in the best interests of the Company and its subsidiaries.
Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Company's Board of
Directors (the "Board") at a meeting of the Board called and held for such
purpose (after reasonable notice to the Employee and an opportunity for him,
together with his counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, the Employee was guilty of conduct set forth
above in this definition and specifying the particulars thereof in detail.

                  "Change of Control" shall mean any one or more of the
following:

                           (i) If any "person" (as the terms used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of Common
Stock of the Company representing 20% or more of the Company's outstanding
Common Stock;

                           (ii) If the individuals who constitute the Board on
the date hereof (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided, however, that any person becoming a
director subsequent to the date hereof whose election or nomination for election
by the Company's stockholders, was approved by a
<PAGE>
                                      -3-

vote of at least three-quarters of the directors then comprising the Incumbent
Board shall be considered as though he were a member of the Incumbent Board, but
excluding, for this purpose, any such person whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a person other than the Board;

                           (iii) A merger, consolidation, reorganization, sale
of all or substantially all of the assets of the Company or similar transaction
occurs in which the Company is not the resulting entity, other than a
transaction following which (A) at least 51% of the equity ownership interests
of the entity resulting from such transaction are beneficially owned (within the
meaning of Rule 13d-3 promulgated under Exchange Act) in substantially the same
relative proportions by persons who, immediately prior to such transaction,
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) at least 51% of the outstanding equity ownership interests in the
Company and (B) at least 51% of the securities entitled to vote generally in the
election of directors of the entity resulting from such transaction are
beneficially owned (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in substantially the same relative proportions by persons who,
immediately prior to such transaction, beneficially owned (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) at least 51% of the securities
entitled to vote generally in the election of directors of the Company; or

                           (iv) A tender offer is completed for 20% or more of
the voting securities of the Company then outstanding.

                  "Common Stock" shall mean the common stock of the Company.
<PAGE>
                                      -4-

                  "Date of Termination" shall mean (i) if the Employee's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Employee shall not have returned to the
full-time performance of his duties during such thirty (30) day period), and
(ii) if the Employee's employment is terminated for Cause or Good Reason or for
any other reason (other than Disability or death), the date specified in the
Notice of Termination (which, in the case of a termination for Cause shall not
be less than thirty (30) days, and in the case of a termination for Good Reason
shall not be less than thirty (30) nor more than ninety (90) days, respectively,
from the date such Notice of Termination is given).

                  "Disability" shall mean permanent and total disability as such
term is defined under Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"). Any questions as to the existence of the Employee's
Disability upon which he and the Company cannot agree shall be determined by a
qualified independent physician selected by the Employee (or, if he is unable to
make such selection, such selection shall be made by any adult member of the
Employee's immediate family or his legal representative), and approved by the
Company; said approval not to be unreasonably withheld. The determination of
such physician made in writing to the Company and to the Employee shall be final
and conclusive for all purposes of this Agreement.

                  "Good Reason" shall mean the occurrence, without the
Employee's express written consent, of any of the following circumstances:

                  (i) the assignment to the Employee of any duties or
responsibilities inconsistent with his status as Chief Executive Officer of the
Company, his removal from that position, or a diminution in the nature or status
of his responsibilities from those in effect as of the date hereof;
<PAGE>
                                      -5-

                  (ii) a reduction by the Company in the Employee's Base Salary
(as defined in Paragraph 5 hereof) or fringe benefits as in effect on the date
hereof or as the same may be increased from time to time during the Employment
Term (as hereinafter defined in Paragraph 3 hereof);

                  (iii) any failure by the Board to renominate the Employee for
election as a director of the Company, except in connection with his death or
the termination of this employment by him for other than Good Reason or by the
Company for his death, Disability or for Cause;

                  (iv) relocation of the Employee's principal place of
employment by more than 60 miles from its location as of the date hereof;

                  (v) a material breach of this Agreement by the Company that
remains uncured for a period of 30 days after Employee has provided the
Company's Board of Directors written notice that specifically identifies, in
reasonable detail, the manner in which the Company materially breached the
Agreement; or

                  (vi) notwithstanding the foregoing, the occurrence of a
"Change of Control" and the further occurrence of any event listed in items (i)
through (v) hereof within two years following a Change of Control.

                  "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated.
<PAGE>
                                      -6-

                  "Value of the Transaction" shall mean for the purpose of
calculating the Emergence Bonus (as defined in Paragraph 6(b) hereof) the total
proceeds and other consideration paid to or received by the Company, or any of
its affiliates or other parties in interest in connection with an event
described in item (iii) of the definition of "Change of Control" (the
"Transaction") (which consideration shall be deemed to include amounts in
escrow, any deposits or other amounts forfeited by an investor in the Company),
including, without limitation, cash, notes, securities, and other property;
payments made or the present value of payments to be made in installments;
amounts paid under consulting agreements, above-market employment contracts,
non-compete agreements or similar arrangements; and insurance proceeds upon the
occurrence of an insurable event that diminishes the value of the Company. Upon
a Change of Control where less than 100% of the ownership of the equity
interests are sold, the Value of the Transaction shall be calculated as if 100%
of the ownership of the equity interests of the Company had been sold by
dividing (i) the total consideration, whether in cash, securities, notes or
other forms of consideration, received or receivable by the Company and/or its
affiliates by (ii) the percentage of ownership which is sold. In addition, if
any of the Company's secured bank debt, public bond indebtedness, capitalized
lease obligations or other liabilities are assumed, decreased, satisfied or
otherwise paid off in conjunction with a Transaction (by the Company or any
investor in the Company, in the form of "cure" payments or otherwise), or any of
the Company's assets are retained, sold or otherwise transferred outside of the
Company's ordinary course of business to another party prior to the consummation
of a Transaction, the Value of the Transaction will be increased to reflect the
reasonable value of any such liabilities to the Company, as agreed upon between
the parties, and the fair market value of any such assets.
<PAGE>
                                      -7-

                  2.       Employment. The Company shall employ the Employee,
and the Employee shall serve the Company, upon the terms and conditions
hereinafter set forth.

                  3.       Term. The employment of the Employee by the Company
hereunder commenced as of July 30, 2001 and, unless sooner terminated on an
earlier date in accordance with the provisions hereinafter provided, shall
terminate on July 30, 2004; provided, however, that commencing on July 30, 2002
and each July 30 thereafter, the term of this Agreement shall automatically be
extended for one additional year such that the remaining unexpired term shall be
three years unless, not later than July 1 of such calendar year, either the
Company or the Employee shall have given notice to the other party that it or he
does not wish to extend the term of this Agreement. The period commencing on
July 30, 2001 and ending on July 30, 2004 or such earlier or later date to which
the term of the Employee's employment hereunder may be shortened or extended as
provided in this Agreement is referred to herein as the "Employment Term."

                  4.       Duties. During the Employment Term, the Employee
shall:

                  (i) Serve as Chief Executive Officer of the Company,
faithfully and to the best of his ability, subject to the direction and
supervision of the Board;

                  (ii) Serve as an officer and/or director of, and shall perform
such services on behalf of, any subsidiary or other affiliate of the Company as
may be designated by the Board, all without further compensation other than that
provided for in this Agreement; and

                  (iii) Devote his full business time, energy and skill to such
employment and shall not, without prior written approval of the Board, directly
or indirectly, engage or participate in, or become employed by, or become an
officer or partner of, or render advisory services to or
<PAGE>
                                      -8-

provide other services in connection with, any business activity other than that
of the Company or any of its subsidiaries or affiliates as provided above;
provided, however, that the Employee shall be permitted to (x) serve as a board
member of and render services to charitable organizations of his choice and (y)
personally invest in any corporation, partnership or other entity, so long as
any such investment does not require or involve the active participation of the
Employee in the management of the business of any such corporation, partnership
or other entity such as to materially interfere with the execution of the
Employee's duties hereunder and does not otherwise violate any provision of this
Agreement.

                  5.       Salary. During the term of this Agreement, the
Company shall pay to the Employee a salary for his services (the "Base Salary")
at a rate not less than $450,000 per year, payable in accordance with the
regular payroll practices of the Company. The Base Salary shall be subject to
annual review by the Board; provided, however, that such salary may be
increased, but not decreased, in the sole discretion of the Board.

                  6.       Bonus Arrangements.

                           (a) Retention Bonus. In addition to the Base Salary
and the Emergence Bonus, the Employee shall receive a bonus of $450,000 (the
"Retention Bonus") paid in three equal semi-annual installments payable on
February 1, 2002, August 1, 2002 and February 1, 2003, provided the Employee is
employed by the Company on such dates. If a plan of reorganization or
liquidation of the Company is confirmed, or the Employee's employment is
terminated by the Company without Cause or by the Employee for Good Reason, then
any unpaid balance (in whole or in part) of the Retention Bonus shall be paid
within 10 days following the effective date of such confirmation or termination
without Cause or for Good Reason, as applicable.
<PAGE>
                                       -9-

                           (b) Emergence Bonus. In addition to the Base Salary
and the Retention Bonus, the Employee shall receive a one-time bonus (the
"Emergence Bonus") equal to the amount that (I) either (A) $450,000 if either of
the following events occur: (x) a stand-alone plan of reorganization of the
Company is confirmed during the Employment Term prior to February 28, 2003, or
(y) the events described in items (i), (ii) or (iv) of the definition of "Change
of Control" occur during the Employment Term and the Employee's employment is
subsequently terminated by the Company without Cause or by the Employee for Good
Reason, or (B) in the event of the occurrence of an event described in item
(iii) of the definition of "Change of Control" prior to February 28, 2003 then
an amount equal to the respective value listed on Exhibit A based upon the Value
of the Transaction and the date on which the Change of Control is consummated,
exceeds (II) the Retention Bonus. The Emergence Bonus shall be paid within 10
days following the date of the Change of Control, confirmation or termination
without Cause or for Good Reason, as applicable.

                  7.       Expenses. It is contemplated that, in connection with
his employment hereunder, the Employee may be required to incur reasonable and
necessary travel, business entertainment and other business expenses. The
Company agrees to reimburse the Employee for all reasonable and necessary
travel, business entertainment and other business expenses incurred or expended
by him incident to the performance of his duties hereunder, upon submission by
the Employee to the Company of vouchers or expense statements (i) satisfactorily
evidencing the incurrence of such expenses and (ii) that would enable the
Company to deduct such expenses from its income under applicable tax laws.

                  8.       Employee Benefits, Vacation.
<PAGE>
                                      -10-

                           (a) The Employee shall be fully vested and entitled
to participate in any and all life insurance, medical insurance, disability
insurance, pension, incentive and savings and other employee benefit plans which
are made available by the Company during the Employment Term to executives of
the Company of the Employee's rank, to the extent that the Employee qualifies
under the eligibility provisions of such plans.

                           (b) The Employee shall be entitled to vacations
(taken consecutively or in segments), aggregating four (4) weeks for each fiscal
year of the Company during the Employment Term, to be taken at times consistent
with the effective discharge of the Employee's duties. Unused vacation time
shall not accumulate from year to year and, in the event any such unused
vacation time is remaining at the end of the fiscal year, the Employee shall not
be entitled to be paid for any such remaining time.

                  9.       Automobile. During the Employment Term, the Company
will, at the Company's sole cost and expense (including, without limitation,
insurance, gasoline and upkeep and repairs), provide the Employee with an
automobile for his use in accordance with past practice, provided that the net
lease costs of such automobile to the Company may not exceed $750 per month
during the Employment Term (which cap does not affect all other costs and
expenses of the automobile being paid by the Company as provided under this
Section 9).

                  10.      Permanent Disability. In the event of the Disability
of the Employee during the Employment Term, the Company shall have the right,
following the sending of a Notice of Termination to the Employee, to terminate
his employment hereunder. Effective on the Date of Termination, the Company
shall be discharged and released from any further obligations under the
Agreement, other than (a) (x) the obligation to continue to make periodic
payments to the Employee of his Base Salary then in effect (reduced by any
amounts received by
<PAGE>
                                      -11-

the Employee pursuant to any temporary disability plan or program maintained by
the Company and any federal or state disability plan or program) for the period,
if any, from the commencement of the period of Disability through and, if
necessary, after the Date of Termination until the time in respect of which full
payments to the Employee or his representatives are commenced under the
Company's permanent disability plan or program or (y) pursuant to the next
sentence, if applicable, and (b) the obligation to pay to the Employee the
portion of the Retention Bonus under Section 6(a) hereof which remains unpaid as
of the Date of Termination pro rated through the Date of Termination.
Notwithstanding the foregoing clause (a), if at the time the Employee's
employment hereunder is terminated in the event of Disability the Company does
not maintain a permanent disability plan or program or if the Employee does not
participate in a permanent disability plan or program offered or sponsored by
the Company, then the Company shall pay to the Employee, within 30 days after
the Date of Termination, an amount equal to (i) 100% of the annual Base Salary
in effect at the time of the Notice of Termination in accordance with the
provisions of Paragraph 5 hereof and (ii) an amount equal to the highest of the
aggregate bonus payments (excluding the Retention Bonus and the Emergence Bonus)
made to or earned by the Employee in respect of the last three twelve month
periods preceding the Date of Termination. Notwithstanding the foregoing, the
Employee shall have the continuing obligations provided for in Paragraph 13(b)
hereof, but shall be released from any obligations after the Date of Termination
pursuant to Paragraph 13(a) hereof. Disability benefits, if any, due under
applicable plans and programs of the Company shall be determined under the
provisions of such plans and programs.

                  11.      Death. In the event of the death of the Employee
during the Employment Term, the Base Salary to which the Employee is entitled
pursuant to Paragraph 5 hereof shall continue to be paid through the date of
death and the Company shall pay an additional amount
<PAGE>
                                      -12-

equal to the sum of (i) 100% of the annual Base Salary in effect at the time of
death in accordance with the provisions of Paragraph 5 hereof and (ii) an amount
equal to the highest of the aggregate bonus payments (excluding the Retention
Bonus and the Emergence Bonus) made to or earned by the Employee in respect of
the last three twelve month periods preceding the date of death and (iii) an
amount equal to the portion of the Retention Bonus under Section 6(a) hereof
which remains unpaid as of the date of death pro rated through the date of
death. Such additional sum shall be paid in lump sum within 30 days after the
date of death to the last beneficiary designated by the Employee by written
notice to the Company, or, failing such designation, to his estate. The Employee
shall have the right to name, from time to time, any one person as beneficiary
hereunder, or with the consent of the Company to make other forms of designation
of beneficiary or beneficiaries. The Employee's designated beneficiary or
personal representative, as the case may be, shall accept the payments provided
for in this Paragraph 11 in full discharge and release of the Company of and
from any further obligations under this Agreement. Any other benefits due under
applicable plans and programs of the Company shall be determined under the
provisions of such plans and programs.

                  12.      Termination.
<PAGE>
                                      -13-

                           (a) If the Employee's employment hereunder is
terminated by the Company for Cause or by the Employee other than for Good
Reason, the Company shall pay the Employee his full Base Salary through the Date
of Termination and shall pay any additional amounts to be paid to the Employee
pursuant to any compensation plans or programs then in effect and thereupon the
Company shall have no further obligations under this Agreement, but the Employee
shall have the continuing obligations provided for in Paragraph 13(b) hereof,
but shall be released from any obligations after the Date of Termination
pursuant to Paragraph 13(a) hereof.

                           (b) If the Employee's employment by the Company shall
be terminated by (x) the Company other than for Cause, his death, or Disability
or (y) the Employee for Good Reason, then the Employee shall be entitled to the
benefits provided below:

                                    (i) The Company shall pay the Employee his
full Base Salary and annual bonus in effect at the time the Notice of
Termination is given through the Date of Termination, no later than the fifth
day following the Date of Termination, plus all other amounts to which he is
entitled under any compensation plan of the Company applicable to him, at the
time such payments are due. For purposes of this Paragraph 12(b)(i) and (ii) and
the other provisions of this Agreement, the Employee's "annual bonus in effect
at the time the Notice of Termination is given" shall mean the highest of the
aggregate bonus payments (excluding the Retention Bonus and the Emergence Bonus)
made to or earned by the Employee in respect of the last three twelve month
periods preceding the date on which the Notice of Termination is given.

                                    (ii) The Company shall pay the Employee, as
severance pay and in consideration of the Employee's continued obligations
provided for in Paragraph 13(a) and (b) hereof, a payment (the "Severance
Payment") equal to 1.5 times the sum of his full Base
<PAGE>
                                      -14-

Salary, as in effect at the time the Notice of Termination is given. The
Severance Payment shall not be reduced by the amount of any other payment or the
value of any benefit received or to be received by him in connection with his
termination of employment (whether payable pursuant to the terms of this
Agreement or any other agreement, plan or arrangement with the Company or an
affiliate, predecessor or successor of the Company). The Severance Payment shall
be paid in installments with one-half of the Severance Payment paid on a date
which is no later than the fifth day following the Date of Termination and the
balance paid in 9 equal monthly installments commencing on the one month
anniversary of the Date of Termination and continuing for 8 months thereafter.
In addition, as provided in, and subject to the terms of, Paragraphs 6(a) and
(b) hereof, the Employee shall be entitled to the Retention Bonus and the
Emergence Bonus.

                                    (iii) In the event that any payment or
benefit received or to be received by the Employee pursuant to the terms of this
Agreement (the "Contract Payments") or in connection with his termination of
employment pursuant to any plan or arrangement or other agreement with the
Company (or any affiliate) ("Other Payments" and, together with the Contract
Payments, the "Payments") would be subject to the excise tax (the "Excise Tax")
imposed by Section 4999 of the Code, as determined below, the Company shall pay
to the Employee, at the time specified in Paragraph 12(b)(iv) below, an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Employee, after deduction of the Excise Tax on Contract Payments and Other
Payments and any federal, state and local income tax and Excise Tax upon the
payment provided for by this Paragraph 12(b) (iii), and any interest, penalties
or additions to tax payable by him with respect thereto, shall be equal to the
total present value of the Contract Payments and Other Payments at the time such
Payments are to be made. For purposes of determining whether any of the Payments
will be subject to the Excise Tax and the amounts of such Excise Tax, (1) the
total amount of the Payments shall be treated as
<PAGE>
                                      -15-

"parachute payments" within the meaning of Section 280G(b)(2) of the Code, and
all "excess parachute payments" within the meaning of Section 280G(b)(1) of the
Code shall be treated as subject to the Excise Tax, except to the extent that,
in the opinion of independent tax counsel selected by the Company's independent
auditors and reasonably acceptable to the Employee ("Tax Counsel"), a Payment
(in whole or in part) does not constitute a "parachute payment" within the
meaning of Section 280(b)(2) of the Code, or such "excess parachute payments"
(in whole or in part) are not subject to the Excise Tax, (2) the amount of the
Payments that shall be treated as subject to the Excise Tax shall be equal to
the lesser of (A) the total amount of the Payments or (B) the amount of "excess
parachute payments" within the meaning of Section 280G(b)(1) of the Code (after
applying clause (1) hereof), and (3) the value of any noncash benefits or any
deferred payment or benefit shall be determined by Tax Counsel in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Employee shall be deemed to
pay federal income tax at the highest marginal rates of federal income taxation
applicable to individuals in the calendar year in which the Gross-Up Payment is
to be made and state and local income taxes at the highest marginal rates of
taxation applicable to individuals as are in effect in the state and locality of
his residence in the calendar year in which the Gross-Up Payment is to be made,
net of the maximum reduction in federal income taxes that can be obtained from
deduction of such state and local taxes, taking into account any limitations
applicable to individuals subject to federal income tax at the highest marginal
rates.

                                    (iv) The Gross-Up Payments provided for in
Paragraph 12(b) (iii) hereof shall be made upon the earlier of (A) the payment
to the Employee of any Contract Payment or other Payment or (B) the imposition
upon him or payment by him of any Excise Tax.
<PAGE>
                                      -16-

                                    (v) If it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding or the
opinion of Tax Counsel that the Excise Tax is less than the amount taken into
account under Paragraph 12(b)(iii) hereof, the Employee shall repay to the
Company within five days of his receipt of notice of such final determination or
opinion the portion of the Gross-Up Payment attributable to such reduction (plus
the portion of the Gross-Up Payment attributable to the Excise Tax and federal,
state and local income tax imposed on the Gross-Up Payment being repaid by him
if such repayment results in a reduction in Excise Tax or a federal, state and
local income tax deduction) plus any interest received by him on the amount of
such repayment. If it is established pursuant to a final determination of a
court or an Internal Revenue Service proceeding or the opinion of Tax Counsel
that the Excise Tax exceeds the amount taken into account hereunder (including
by reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall make an additional
Gross-Up Payment in respect of such excess within five days of the Company's
receipt of notice of such final determination or opinion.

                                    (vi) On the Date of Termination, the Company
shall at its sole cost and expense transfer unrestricted ownership and legal
title, free and clear of any liens or other encumbrances, to the automobile made
available by the Company for the Employee's use as of the Notice of Termination,
including, without limitation, payment or reimbursement by the Company of any
sales or other similar taxes due and owing as a result of such transfer.

                                    (vii) For the period of time from the Date
of Termination through the earlier of three years thereafter or the date on
which the Employee and his dependents become eligible for substantially
equivalent coverage provided by a subsequent employer, the Company shall provide
the Employee and his eligible dependents with continued
<PAGE>
                                      -17-

coverage under all health, medical, dental and hospitalization plans maintained
by the Company or its successor during such time period on the same terms and
conditions applicable to executive officers of the Company. In the event of the
liquidation of the Company or in the event that the Company will not have a
successor to provide such benefits after the Date of Termination, the Company
shall provide the Employee with a lump sum upon the Date of Termination, based
on $1,500 per month for three years, in order to provide the Employee with the
same coverage the Employee is entitled to receive under this clause (vii).

                                    (vii) Upon the Date of Termination all
options to purchase stock and other rights to purchase or own stock (including
grants of stock) held by the Employee that are not vested shall immediately vest
and become exercisable and all options to purchase stock and other rights to
purchase or own stock (including grants of stock) then held by him shall remain
in effect and, in the case of rights to purchase stock, be exercisable for 18
months after the Date of Termination, notwithstanding any other provisions that
otherwise would be applicable.

                                    (ix) Upon the Date of Termination, the
Company shall assign and transfer to the Employee, or his designee, all of its
right, title and interest in and to the life insurance policies covering the
Employee's life that were held by the Company as of such date for the benefit of
the Employee. From and after the Date of Termination, the Employee shall, at his
election, assume and pay any and all premiums and other costs associated with
the continuation of such policies. The Company shall execute and deliver any and
all appropriate instruments necessary to evidence the foregoing assignment and
transfer as promptly as practicable after the Date of Termination. For avoidance
of doubt, the Company will not assign
<PAGE>
                                      -18-

any life insurance policy it owns for its own benefit insuring Employee's life
or any cash surrender value relating thereto.

                                    (x) Upon the Date of Termination, the
Company will assign to the Employee all of its right, title and interest in and
to the personal computer of the Company that Employee maintains in his household
for use for the benefit of the Company.

                                    (xi) The Employee shall not be required to
mitigate the amount of any payment provided for in this Paragraph 12(b) by
seeking other employment or otherwise, nor, except as otherwise specifically
provided herein, shall the amount of any payment or benefit provided for in the
Paragraph 12(b) be reduced by any compensation or benefit earned by the Employee
as the result of employment by another employer after the Date of Termination or
otherwise.

         The Employee shall accept the payments and other benefits provided for
in this Paragraph 12(b) in full discharge and release of the Company of and from
any further obligations under this Agreement but the Employee shall have the
continuing obligations provided for in Paragraphs 13(a) and 13(b) hereof.

                  (c) In the event that the Company elects to terminate the
Employee's Employment Term hereunder pursuant to the proviso to the first
sentence of Paragraph 3 of this Agreement, the Employee shall be entitled to all
of the payments and benefits provided for in Paragraphs 12(b) (i) - (x) hereof,
except that the payment and consideration provided for in, and subject to the
terms of, Paragraph 12(b) (ii) hereof to which the Employee will be entitled
will be equal to the sum of (y) his full Base Salary in effect for the last
fiscal year of the Company completed during the Employment Term and (z) the
Emergence Bonus to the extent that the
<PAGE>
                                      -19-

conditions to payment of the Emergence Bonus have been satisfied prior to the
end of the Employment Term but such Emergence Bonus has not yet been paid to the
Employee as of such date. All references in Paragraph 12(b) to the date of the
"Notice of Termination" or "Date of Termination" shall for purposes of this
Paragraph 12(c) be deemed to be references to the last day of the Employment
Term. The Employee shall accept the payments and other benefits provided for in
this Paragraph 12(c) in full discharge and release of the Company of and from
any further obligations under this Agreement but the Employee shall have the
continuing obligations provided for in Paragraphs 13(a) and 13(b) hereof.

                  13.      Restrictive Covenants and Confidentiality: Injunctive
Relief.

                           (a) The Employee agrees, as a condition to the
performance by the Company of its obligation hereunder, that during the
Employment Term and, except if the Employee's employment is terminated by the
Company for Disability or for Cause or by the Employee other than for Good
Reason, during the further period of one (1) year after the end of such
Employment Term, the Employee shall not, without the prior written approval of
the Company, directly or indirectly through any other person, firm or
corporation, (i) engage or participate or make any financial investment in or
become employed by or render advisory or other services to or for any person,
firm or corporation, or in connection with any business enterprise, whether for
compensation or otherwise, which is in competition with any of the business
operations or activities of the Company and its subsidiaries then existing in
all geographical places where the Company and its subsidiaries does or did
business during the Employment Term, or (ii) solicit, raid, entice or induce any
person who on the Date of Termination of employment of the Employee is, or
within the last twelve (12) months of the Employee's employment by the Company
was, an employee of the Company or any of its
<PAGE>
                                      -20-

subsidiaries, to become employed by any person, firm or corporation, and the
Employee shall not approach any such employee for such purpose or authorize or
knowingly approve the taking of such actions by any other person, or (iii)
solicit any person or entity who on the Date of Termination is a vendor of the
Company to terminate its relationship with the Company. Nothing herein
contained, however, shall restrict the Employee from making any investments in
any company, partnership or other entity, so long as such investment does not
require or involve the active participation of the Employee in the management of
any business or enterprise which is in competition with any of the business
operations or activities of the Company.

                           (b) Recognizing that the knowledge, information and
relationship with customers, suppliers, and agents, and the knowledge of the
Company's and its subsidiary companies' business methods, systems, plans and
policies which he shall hereafter establish, receive or obtain as an employee of
the Company or its subsidiary companies, are valuable and unique assets of the
respective businesses of the Company and its subsidiary companies, the Employee
agrees that, during and after the Employment Term he shall not (otherwise than
pursuant to his duties hereunder) disclose, publish, or furnish to any person,
firm or corporation (other than to representatives of the Company and its
affiliates in furtherance of the performance of the Employee's services
hereunder) any confidential or proprietary information, systems, programs, know
how or trade secrets or any other knowledge, information, documents or
materials, the confidentiality of which the Company and its affiliates take
reasonable measures to protect, acquired by the Employee during the term of this
Agreement as a result of the performance of his services hereunder.

                           (c) The Employee represents and acknowledges that, in
light of the payments to be made by the Company to the Employee hereunder and
for other good and valid
<PAGE>
                                      -21-

reasons, the restrictions stated in Paragraphs 13(a) and 13(b) on the activities
in which he may engage upon termination of his employment with the Company are
reasonable, the locations designated above are reasonable because they are
limited to the locations in which the Company and its subsidiaries did business
during the Employment Term, and the period of time designated above is
reasonable because it extends only for 12 months following the termination of
his employment with the Company.

                           (d) The Employee acknowledges that the services to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, he will have access to confidential information
vital to the Company's and its subsidiary companies' businesses. By reason of
this, the Employee consents and agrees that if he violates any of the provisions
of Paragraphs 13(a) or 13(b) the Company and its subsidiary companies would
sustain irreparable harm and, therefore, in addition to any other remedies which
the Company may have under this Agreement or otherwise, the Company shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining the Employee from committing or continuing any such violation of
this Agreement, and the Employee shall not object to any such application.

                  14.      Deductions and Withholding. The Employee agrees that
the Company shall withhold from any and all payments required to be made to the
Employee pursuant to this Agreement, all federal, state, local and/or other
taxes which the Company determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.

                  15.      Attorneys' Fees. The Company shall pay to the
Employee all legal fees and expenses reasonably incurred by him in connection
with this Agreement (including all such
<PAGE>
                                      -22-

fees and expenses, if any, incurred in contesting or disputing in good faith the
nature of any such termination for purposes of this Agreement or in seeking to
obtain or enforce any right or benefit provided by this Agreement).

                  16.      Notices. All notices or other documents to be given
hereunder by either party hereto to the other shall be in writing and delivered
personally or sent postage prepaid by registered or certified mail, return
receipt requested. Notices shall be deemed to have been received on the date of
delivery, or if sent by certified or registered mail, return receipt requested,
shall be deemed to be delivered on the third business day after the date of
mailing. The postal receipt specifying a mailing date shall be sufficient proof
of the date of notice. Notices shall be sent to the following addresses until a
notice of change of address by like notice has been duly provided:

To the Employee:               Gregory G. Landry
                               1803 Forest Oaks Drive
                               Hudson, OH 44236

To the Company:                Dairy Mart Convenience Stores, Inc.
                               300 Executive Parkway West
                               Hudson, OH  44236
                               Attn:  Chairman of the Board

                  17.      Assignability, Binding Effect and Survival. This
Agreement shall inure to the benefit of and shall be binding upon the heirs,
executors, administrators, successors and legal representatives of the Employee,
and shall inure to the benefit of and be binding upon the Company and its
successors and assigns. Notwithstanding the foregoing, the obligations of the
Employee may not be delegated and, except as expressly provided in Paragraph 11
hereof relating to the designation of beneficiaries, the Employee may not
assign, pledge, encumber, hypothecate or otherwise dispose of this Agreement, or
any of his rights hereunder, and any such attempted delegation or disposition
shall be null and void and without effect. The provisions of
<PAGE>
                                      -23-

Paragraphs 10, 11, 12, 13 and 15 hereof shall survive termination of this
Agreement. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, within 10 days of becoming successor,
to expressly assume and agree to perform this Agreement in the same manner and
to the same extent that the Company is required to perform it if no such
succession had taken place.

                  18.      Complete Understanding; Amendment. This Agreement
constitutes the complete understanding between the parties with respect to the
employment of the Employee hereunder, and no statement, representation, warranty
or covenant has been made by either party with respect thereto except as
expressly set forth herein and this Agreement supersedes all prior oral and
written agreements with respect to the subject matter hereof (including the
Existing Employment Agreement, as well as, the earlier employment agreement
between the Employer and the Employee dated January 1, 2000). This Agreement
shall not be altered, modified, amended or terminated except by written
instrument signed by each of the parties hereto. Waiver by either party hereto
of any breach hereunder by the other party shall not operate as a waiver of any
other breach, whether similar to or different from the breach waived.

                  19.      Governing Law. This Agreement shall be governed by
the laws of the state of Ohio without reference to the conflicts of laws
principles thereof.

                  20.      Paragraph Headings. The paragraph headings contained
in this Agreement are for reference purposes only and shall not effect in any
way the meaning or interpretation of this Agreement.
<PAGE>
                                      -24-

                  21.      Severability. If any provision of this Agreement or
the application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid and
unenforceable, the remainder of this Agreement shall not be affected thereby,
and each remaining provision hereof shall be validated and shall be enforced to
the fullest extent permitted by law.
<PAGE>
                                      -25-

         IN WITNESS WHEREOF, the parties hereto set their hands as of the day
and year first above written.

                                    DAIRY MART CONVENIENCE STORES, INC.

                                    By:  /s/ Gregg Budoi
                                        -------------------------------------
                                        Gregg Budoi
                                        Vice President-Finance, Treasurer and
                                        Chief Financial Officer

                                    By:  /s/ J. Kermit Birchfield
                                        -------------------------------------
                                        J. Kermit Birchfield
                                        Chairman of the Board

Agreed to as of the 1st day
of November, 2001

/s/ Gregory G. Landry
-----------------------------------
Gregory G. Landry
<PAGE>
                                      -26-

                                    EXHIBIT A

               SUCCESS BONUS AS A PERCENTAGE OF TRANSACTION VALUE

<TABLE>
<CAPTION>
                                                                          VALUE OF TRANSACTION
    TIMING OF                     --------------------------------------------------------------------------------------------------
   TRANSACTION                    $100M OR LESS     $101M - $119M    $120M - $129M    $130M - $139M    $140M - $149M   $150M OR MORE
-----------------   ----------    -------------     -------------    -------------    -------------    -------------   -------------
<S>                 <C>           <C>               <C>              <C>              <C>              <C>             <C>
12/1/02 - 2/28/03   Percentage        0.50%             0.55%            0.60%            0.65%            0.70%           0.75%
                    Value           $500,000           $605,000        $720,000         $845,000          $980,000      $1,125,000

9/1/02 -11/31/02    Percentage        0.55%             0.60%            0.65%            0.70%            0.75%           0.80%
                    Value            550,000           660,000          780,000          910,000         1,050,000       1,200,000

6/1/02 - 8/31/02    Percentage        0.60%             0.65%            0.70%            0.75%            0.80%           0.85%
                    Value            600,000           715,000          840,000          975,000         1,120,000       1,275,000

3/1/02 - 5/31/02    Percentage        0.65%             0.70%            0.75%            0.80%            0.85%           0.90%
                    Value            650,000           770,000          900,000         1,040,000        1,190,000       1,350,000

1/1/02 - 2/28/02    Percentage        0.70%             0.75%            0.80%            0.85%            0.90%           0.95%
                    Value            700,000           825,000          960,000         1,105,000        1,260,000       1,425,000

PRIOR TO 12/31/01   Percentage        0.75%             0.80%            0.85%            0.90%            0.95%           1.0%
                    Value            750,000           880,000         1,020,000        1,170,000        1,330,000       1,500,000
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]