Document:

Exhibit
10.71

TCBY
SYSTEMS, LLC

Distribution
Service Agreement

with
Kaleel Brothers, Inc.

March 1, 2006

 1
 

DISTRIBUTION
AGREEMENT

THIS
AGREEMENT is made
and entered into as of the 1st day of March, 2006, by and between TCBY Systems, LLC, a Delaware limited liability
company (“COMPANY”) and Kaleel Bros, INC., an
Ohio Corporation (“DISTRIBUTOR”). DISTRIBUTOR will commence distribution
services under this Agreement on March 6, 2006 (the “Effective Date”) unless
otherwise mutually agreed upon by the parties.

RECITALS

A.                                    The
COMPANY is engaged in the worldwide business of franchising or licensing retail
TCBY Stores and other related concepts (“Franchised Stores”).  COMPANY also has several COMPANY-owned stores
that it supports directly (“Company Stores”). 
The Franchised Stores and or individual franchisees (the “Franchisees”)
function as independent companies and are individually and solely responsible
for the activities at each location, including purchasing needed products and
supplies, which includes responsibility for purchasing from DISTRIBUTOR.  COMPANY is responsible for activities at its
Company Stores.  Company Stores and
Franchised Stores are jointly referred to herein as “Stores”, the Franchisees
and individuals responsible for Company Stores are jointly referred to as (“Operators”)
and the combined efforts of the COMPANY and its Franchisees is referred to as
the “System”.  COMPANY takes steps to
assist Stores to meet its purchasing needs and has the right to designate
distributors and suppliers for the System.

B.                                    The
DISTRIBUTOR is engaged in the business of purchasing, selling, distributing and
delivering food service products (including the Products, as defined
below).  In connection therewith, the
DISTRIBUTOR manages, controls, prepares and furnishes reports to its customers
concerning the inventories of products and supplies the DISTRIBUTOR purchases,
manages and controls for sale, distribution and delivery to its customers.

C.                                     COMPANY
wishes to appoint DISTRIBUTOR as a distributor of certain approved proprietary
food and related products to the Stores located within the Territory (as
defined below), and DISTRIBUTOR wishes to accept such appointment, all on the
terms and conditions hereinafter set forth.

 2
 

AGREEMENT

NOW, THEREFORE, in
consideration of the mutual covenants herein set forth and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

1.                                      Appointment
- Subject to all terms and conditions of this Agreement, COMPANY hereby appoints
DISTRIBUTOR as a distributor of the products within the product categories
listed in Schedule 1 (the “Products”),
to the Stores in the territory serviced by DISTRIBUTOR’s distribution center
located in Youngstown, Ohio (the “Territory” as reflected in the maps depicted
in Schedule 2) and DISTRIBUTOR hereby accepts such
appointment. To the extent that conflicts arise between the maps and the
Territory description in Schedule 2,
the maps shall prevail.  Subject to
Section 2.02, COMPANY may appoint DISTRIBUTOR as a distributor of Products to
Stores outside of the Territory and DISTRIBUTOR may agree to such designation.

2.             Distribution of
Products

2.01                        Products
- DISTRIBUTOR will maintain in its inventory of Products the following: (i)
Products designated by COMPANY that contain the proprietary trademarks, service
marks, logos or labels of COMPANY or any of its affiliates or that are made
pursuant to specifications provided by COMPANY, its affiliates, or licensors
for limited distribution to Operators (defined below) or other entities
licensed by COMPANY, its affiliates or licensors (“TCBY Branded Products”), and
(ii) other supplies or other national or regional branded Products designated
or contracted for by COMPANY to be maintained in inventory by DISTRIBUTOR for
distribution to COMPANY, its affiliates and the Operators.  (Collectively, Products described in clauses
(i) and (ii) are referred to as “Proprietary Products”).  DISTRIBUTOR will also maintain in its
inventory non-proprietary Products which DISTRIBUTOR stocks in its inventory
for sale to COMPANY, its affiliates and its Operators. DISTRIBUTOR shall not be
required to maintain more than two hundred (200) Proprietary Products in
inventory at any time.  All Coca Cola
Products carried for COMPANY shall be excluded from the calculation of the
number of Proprietary Products.

2.02                        Approved
Operators - DISTRIBUTOR shall sell and deliver to Franchisees and
Operators of Stores approved by COMPANY and located within the Territory such
quantities of the Products (subject to minimum Product order requirements) as
the Operators may order from time to time during the term of this Agreement.
DISTRIBUTOR shall cease selling TCBY Branded Products to any Operator not later
than three (3) days following receipt of written notice from COMPANY 

 3
 

advising DISTRIBUTOR that such Operator is no longer approved by
COMPANY and shall, within such timeframe, further cease selling, under the
terms of any supplier agreement negotiated by COMPANY, all Proprietary Products
to such Operators referenced in such notice. In addition, DISTRIBUTOR shall
have the right to cease the sale and distribution of Products to any Operator
(a) who is in default of its obligations to DISTRIBUTOR, provided that
DISTRIBUTOR has given COMPANY at least three (3) business days notice of such
default before ceasing deliveries to such Operator, or (b) who has filed a
voluntary petition in bankruptcy or under any other similar insolvency or
debtor relief law or who has had such a petition filed against it, or who has
made a general assignment for the benefit of its creditors. COMPANY shall also
have the right to reinstate delivery to any Operator that COMPANY previously
stopped selling by providing written notice to DISTRIBUTOR and DISTRIBUTOR
shall provide such delivery as soon as mutually agreed between the parties.

A list of the present Operators with Stores located
within the Territory and approved by COMPANY and their respective Stores
locations is attached hereto as Schedule 3.  During the term of this Agreement, COMPANY
shall maintain and provide to DISTRIBUTOR a current list of all Operators with
Stores within the Territory who have been approved by COMPANY for distribution
of the Products under this Agreement. DISTRIBUTOR shall have the right to rely
upon such list, as amended or modified by COMPANY in writing from time to time,
in performing its obligations under this Agreement. COMPANY shall notify
DISTRIBUTOR of new Stores within the Territory not less than seven (7) days
prior to the desired date of first shipment of Products to any such new Stores.
In addition, provided and to the extent that COMPANY and DISTRIBUTOR mutually
agree in writing, DISTRIBUTOR shall provide distribution services to Stores
located outside the Territory, as designated by COMPANY.

COMPANY represents and warrants that the terms of this
Agreement, as and if amended in the manner permitted under this Agreement, are
binding upon and shall govern DISTRIBUTOR and COMPANY’s obligations with
respect to distribution services performed by DISTRIBUTOR hereunder and that
each Franchisee that is an owner or operator of a Franchised Store within the
System shall be bound by the terms of this Agreement, as it may hereafter be
amended, upon such Operator’s purchase of Proprietary Products from
DISTRIBUTOR.

2.02                        Product
Orders - All Product orders shall be submitted by the Operators to
DISTRIBUTOR and shall specify the location of the Operator’s Stores, the type
of Product, and the quantity desired. 
Operators may place orders electronically (“Electronic Orders”) or by
telephoning or faxing DISTRIBUTOR’s customer service center in accordance with
the guidelines detailed below. All shipment expenses from DISTRIBUTOR’s
distribution center to the Operator’s location shall be 

 4
 

at DISTRIBUTOR’s expense unless otherwise noted
elsewhere in this Agreement. Product order guides will be provided by
DISTRIBUTOR to the Operators monthly via DISTRIBUTOR’s website and with a hard
copy delivered to each Store, with availability of such order guides to be made
prior to the beginning of the month, but only after review and approval of the
order guide by COMPANY. The order guides will be organized by Product
categories and will include, among other things, the Product Sell Price (as
defined herein), Product units and new Products. DISTRIBUTOR will assign one
product code number to each stock-keeping unit (“SKU”) of each Product, which
will be common throughout its entire distribution system and will be used on
all documents such as order guides, invoices, monthly reports, etc. SKU’s, and,
accordingly, the assigned product code number, must differ for equivalent
Products supplied by different suppliers. Only Products approved for sale to
its Operators by the COMPANY will be listed on this order guide. Electronic
Orders will be placed via telephone modem or internet using DISTRIBUTOR’s
automated order entry system.  All orders
are subject to the standard order cut-off time of 4:00 p.m. two (2) days prior
to their scheduled delivery day. 
Operators will be notified prior to the time of final order cut-off if a
product is expected to be out of stock so that an alternative may be ordered,
subject to the provisions of Section 3.02. 
Operators will have until 5:00 p.m, one (1) day before their order
shipping day to modify or add-on to their order (Friday at 5:00 p.m. for Stores
whose deliveries will leave DISTRIBUTOR’s facility on Monday).  Where reasonably possible, DISTRIBUTOR will
schedule ordering days and delivery days that are mutually agreed upon by and
between DISTRIBUTOR and each Operator and will provide notice to the affected
Operator of at least fourteen (14) days before routing changes. Wherever
reasonably possible, DISTRIBUTOR will include no more than three (3) “skip days”
between the date of order and date of delivery. For example, orders scheduled
for delivery on Friday will be placed no earlier than Monday. Orders scheduled
for delivery on Tuesday will be placed on Friday. In the event DISTRIBUTOR must
include more than four (4) “skip days” between the date of order and date of
delivery it will notify COMPANY in advance. 
In no event will there ever be more than four (4) “skip days” permitted
without the prior written approval of COMPANY. DISTRIBUTOR may schedule
deliveries on any day of the week.  On an
exception basis, DISTRIBUTOR will consider shortening the permissible time
frames for scheduled deliveries for those Operators that, given unique and
compelling business needs, require the same. 
Operator will be notified of any Product shortages at the time of order
placement or, in the case of an Electronic Order, one (1) day prior to the
loading of the delivery truck.

2.04                       Deliveries.    Delivery vehicles used by DISTRIBUTOR will
only display the marks of DISTRIBUTOR, except for locations that cannot
accommodate delivery by DISTRIBUTOR’S existing tractor trailers or in the
instances where recovery deliveries are made by outside services or DISTRIBUTOR
has the need for temporary short term rental equipment.

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Commencing ninety (90) days after the Effective Date, DISTRIBUTOR
agrees that at an overall average of 75% of all regularly scheduled deliveries
will be made within a four (4) hour window, meaning no earlier than two (2)
hours before and no later than two (2) hours after the scheduled delivery time.
If a delivery is anticipated to fall outside of this four (4) hour window,
DISTRIBUTOR will immediately notify the Operator. DISTRIBUTOR will provide an
inside delivery to each Operator in accordance with Company’s temperature store
requirements as detailed in Section 4.09, placing refrigerated and frozen
Products into their appropriate storage areas, but will not be responsible for
stocking shelves or rotating inventories.

All invoices for deliveries made during Store’s business hours will be
signed for by the Store’s store manager or other representative prior to
DISTRIBUTOR’s driver leaving the Store (provided that the driver is not
unreasonably delayed).  Copies of
invoices for deliveries made after the Store’s regular business hours will be
left at the Store.

The COMPANY agrees to use its commercially reasonable
efforts to cause Operators to provide keys and security codes for night
deliveries where necessary.  In the event
Operator refuses to provide keys and security codes, Operator will promptly
meet the delivery driver at the scheduled appointment time or at such other
time as Operator has been notified in the event of a late delivery.  If the Operator fails to meet the DISTRIBUTOR
delivery at the appropriate time on more than one occasion, the Operator shall be
responsible for payment of a penalty fee to DISTRIBUTOR for subsequent
occurrences.  The penalty fee will be
determined via mutual agreement between DISTRIBUTOR and COMPANY.  In the event of a Product shortage or
delivery problem that occurs during an unattended delivery, the authorized
representative of the Stores will contact the distribution center no later than
the first Notification Deadline following such unattended delivery.  The “Notification Deadline” is the earlier of
12:00 p.m. local time or one hour after the normal Store opening time each day
for the affected Stores.

2.05                        Delivery Frequency/Routing - DISTRIBUTOR will provide each
Operator with a minimum delivery frequency based on annual case volume as shown
below as long as the Operator meets the minimum order requirements set forth in
Section 5 hereof:

	
  

  	
   

  	
  Delivery Frequency

  
	
  Annual Case
  Volume

  	
   

  	
  Summer Routing

  	
   

  	
  Winter Routing

  
	
  Less than 1,000
  cases

  	
   

  	
  Every 4 weeks

  	
   

  	
  Every 4 weeks

  
	
  1,000-1,999
  cases

  	
   

  	
  Every 3 weeks

  	
   

  	
  Every 4 weeks

  
	
  2,000-3,499
  cases

  	
   

  	
  Every week

  	
   

  	
  Every 2 weeks

  
	
  Greater than
  3,499 cases

  	
   

  	
  Every week

  	
   

  	
  Every week

  

 

 6
 

This schedule is intended to serve as a guideline only and DISTRIBUTOR
agrees to provide additional regular deliveries as requested by Operator and approved
by COMPANY in writing.  COMPANY will
provide DISTRIBUTOR with the initial delivery frequency for each Store in
Schedule 3.  COMPANY and DISTRIBUTOR will
mutually agree on the exact date for routing changes from summer to winter and
winter to summer but each period will be approximately six (6) months with
summer routing from April through September and winter routing from October
through March.

In the event an emergency delivery is required based upon the Operator’s
needs and not due to a delivery error by DISTRIBUTOR nor during the time
periods specified in Section 2.08, DISTRIBUTOR will accommodate the Operator’s
request with the most efficient available delivery method. All additional
freight expense will be at the Operator’s expense and will be billed upon
DISTRIBUTOR’s receipt of the invoice from the shipping agent. If DISTRIBUTOR is
able to schedule such an emergency delivery in conjunction with a nearby route,
the additional freight expense will be [CONFIDENTIAL](1).  Where possible, a store may order up to [CONFIDENTIAL](2) cases to be delivered to a nearby store,
on that store’s delivery day (and with that store’s consent) without an
additional charge.  Products delivered to
a nearby store will be billed on a separate invoice.

Should the need arise for an emergency or special delivery due to
supplier error, DISTRIBUTOR and COMPANY will work with the supplier to remedy
the shortage at the supplier’s expense. If supplier fails to pay the additional
freight expense, COMPANY will be required to do so provided DISTRIBUTOR
notifies COMPANY immediately of supplier non-performance.  If an emergency delivery is necessary due to
DISTRIBUTOR error, DISTRIBUTOR will arrange a special delivery with any
additional freight to be paid by DISTRIBUTOR.

DISTRIBUTOR will arrange its routes to insure that its
delivery trucks will be in all markets (SMSA’s of at least 250,000 population)
within each Territory at least once a week where at least twenty-five (25)
Stores serviced by DISTRIBUTOR under this Agreement are located.

2.06                        Special Deliveries During Roll-Out and New
Operator Openings - DISTRIBUTOR
and COMPANY recognize that during the initial roll-out phase of the DISTRIBUTOR
distribution program, many new processes will be in place for each of COMPANY,
the Operators and 

(1)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(2)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 7
 

DISTRIBUTOR, including changes in the way the
Operators order, the distance from the DISTRIBUTOR distribution center to the
Operators, and lead times from order day to delivery day for the Operators.
Therefore, DISTRIBUTOR will work diligently with COMPANY and Operator to
process emergency orders for all Stores for the first thirty (30) days
following the commencement of distribution service at no additional charge from
DISTRIBUTOR, subject to the minimum order requirements and applicable handling
fees, if any, as set forth in Section 5 of this Agreement and any charges
incurred from a 3rd party which will be paid by Operator.  In addition, during the term of this
Agreement, DISTRIBUTOR will also work diligently with COMPANY and Operator to
process emergency orders for all Operators’ newly added Stores within the first
thirty (30) days following the opening of the new Stores, subject only to
minimum order requirements and applicable handling fees, if any, as set forth
in Section 5 of this Agreement and any charges incurred from a 3rd party which will be paid by Operator.

2.07                        Return
of Products/Credits —Any Products ordered by Operators which are
returned to DISTRIBUTOR for any reason must be returned no later than the next
regularly scheduled delivery (except that, in the case of Products to be
returned as a result of concealed damage, within the remaining shelf life of
such Products) and all claims for Products to be returned must be made either
to the driver upon check-in of the order, by telephone by the earlier of 12
p.m. or one hour after the normal Store opening on the day of delivery
following receipt of the Products if an unattended delivery or, in the case of
concealed damage, within twenty-four (24) hours of discovery of concealed
damage by the Operator.  For attended
deliveries, all cakes and pies must be inspected at the time of delivery by
Operator.  DISTRIBUTOR will not be
obligated to issue subsequent credits for cakes and pies for such attended
deliveries unless reimbursed by the supplier. 
All returned items must be in unmarked original packaging and must be in
suitable condition for resale (unless damaged or mis-marked Product was the
reason for the return). Subject to the foregoing, DISTRIBUTOR shall provide
credit to the affected Operator for defective, shorted or damaged Products
within twenty-four (24) hours of the driver’s return if brought to the driver’s
attention or noticed by the driver during delivery or, in any event, within forty-eight
(48) hours of DISTRIBUTOR’s receipt of the Operator’s claim of damaged, shorted
or defective Products (or receipt of product, if warranted) and will
immediately provide documentation on its website for Operator of such credit if
the original order was placed electronically or via fax or phone if the order
was placed in some other manner. 
Notwithstanding the foregoing, no returns will be permitted for cooler
or freezer items, or fresh produce due to misorder by the Operator.  Products refused by Operator at time of
delivery for reasons other than damage, DISTRIBUTOR error or remaining shelf
life below agreed upon parameters will be subject to a [CONFIDENTIAL](3)
restocking charge to be paid by Operator. 
In the event that the 

(3)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 8
 

shorted, defective or damaged Product is a Kill Item, then DISTRIBUTOR
will remedy the situation in accordance with Section 3.02.

2.08                        Limited
Time Offers (“LTO’s”) - In order to allow DISTRIBUTOR to maintain
service levels to the Operators, COMPANY will provide DISTRIBUTOR with at least
twenty-eight (28) days prior written notice of any and all LTO’s to be run by
COMPANY (subject to availability of LTO Products from the supplier within the
twenty-eight (28) day period). Such written notices shall include estimated
usage for the Products to be promoted if such usage is expected to deviate
materially from historical levels or if a new Product. Subject to the above,
DISTRIBUTOR agrees to stock sufficient inventory for any new Proprietary
Products to be used in national LTO promotions and other key items, as
reasonably requested by COMPANY.  Unless
retained on the Operator’s menu at the instruction of the COMPANY or mutually
agreed to between COMPANY and DISTRIBUTOR, all LTO Products must be removed
from the DISTRIBUTOR distribution centers no later than sixty (60) days after
the completion of the LTO and COMPANY shall purchase all remaining inventory of
such LTO as provided in Section 3.02. The sale of LTO Products by DISTRIBUTOR
is final and LTO Products may not be returned to DISTRIBUTOR, unless the return
is necessitated due to a DISTRIBUTOR error or due to Product damage not caused
by the Operator.

3.             Suppliers of
Products; Inventory of Products.

3.01                        Suppliers/Contracted
Products - The Proprietary Products to be distributed to the Operators
under the terms and conditions of this Agreement shall be purchased by
DISTRIBUTOR, on its own account, from the suppliers (including COMPANY)
selected by COMPANY, pursuant to terms and conditions as are agreed upon by and
between DISTRIBUTOR and such suppliers (including COMPANY). In the event
COMPANY enters into direct contracts with suppliers, the terms and conditions
of such contracts that obligate DISTRIBUTOR shall be provided to DISTRIBUTOR
for its business and legal review and, if the business and legal terms of the
proposed contract that apply to DISTRIBUTOR are reasonably acceptable to DISTRIBUTOR,
DISTRIBUTOR will approve the supplier contract. The guaranteed supplier price
provided under such supplier contract (net of billbacks by DISTRIBUTOR, if
any), plus applicable freight if the supplier price is not a delivered price,
plus [CONFIDENTIAL](4) if any, attributable
to the Product, plus [CONFIDENTIAL](5),
if any, attributable to the Product, plus any applicable Sourcing Fees (defined
below) shall be the “Cost” of the Product. 
Products governed by such 

(4)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(5)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 9
 

supplier contracts negotiated by COMPANY are referred to herein as “Contracted
Products.” The freight charges for Contracted Products will be an amount
negotiated with the supplier by COMPANY. 
DISTRIBUTOR agrees that Cost for any Contracted Products will not
include any unloading costs for palletized and slipsheet loads.

3.02                        Inventory
- During the term of this Agreement, DISTRIBUTOR shall maintain an inventory of
the Products in quantities necessary to provide the Operators with an adequate supply
of such Products based upon initial usage projections by COMPANY, future
historical usage of such Products by the Operators, and the fill rate
performance requirements detailed below. DISTRIBUTOR agrees to work with
COMPANY, to attempt to maximize the quantities of Products purchased to
efficiently reduce the cost of Products purchased, and to maximize Product
inventory turns. In addition, DISTRIBUTOR agrees to order Products in the
quantities indicated on the inbound quantity matrix attached hereto as Schedule 5, as amended by COMPANY to
reflect the growth in the number of Stores serviced by DISTRIBUTOR in the
Territory from time to time. To further insure DISTRIBUTOR’s ability to comply
with the performance requirements detailed later in this Section 3.02,
DISTRIBUTOR will also maintain at each distribution center servicing Operators “safety
stock” of not less than [CONFIDENTIAL](6)days
historical usage for all Proprietary Products and will also have an additional [CONFIDENTIAL](7) days historical usage of white chocolate
mousse, chocolate and vanilla frozen yogurt on the road at all times.
DISTRIBUTOR agrees that all Products delivered to Operators will have at least
one-third of their original shelf-life remaining as of the date of delivery.

COMPANY categorizes Products into three classes:

Proprietary Products that Operators must have (“Kill
Items”), which Kill Items will not number more than [CONFIDENTIAL](8)
at any time, excluding beverage Products and LTO items. COMPANY will provide a
list of Kill Items and other Proprietary Products to DISTRIBUTOR, which list
will be updated by COMPANY from time-to-time. 
The initial list of Kill Items is attached as Schedule 4.

Other Proprietary
Products that can be substituted in an emergency.

Non-proprietary Products, including, any produce items
that DISTRIBUTOR may agree to provide.

(6)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(7)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(8)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 10
 

DISTRIBUTOR will achieve a 100% fill rate on Kill Items with overnight
emergency delivery, if requested, an overall aggregate “fill rate” for all
Products of [CONFIDENTIAL](9), and at least [CONFIDENTIAL](10) of all invoices issued by DISTRIBUTOR to
the Operators will be completely accurate at the time of initial issuance, with
all of the above measured quarterly.  The
“fill rate” equals the percentage of Products or Kill Items, as the case may
be, obtained by dividing the total number of Products or Kill Items shipped by
DISTRIBUTOR and received by the Operators at the time of delivery for the
month, by the total number of Product or Kill Items ordered by the Operators
from the DISTRIBUTOR for that same month. 
All fill rate measurements (and invoice accuracy requirements) will be
net of supplier-related issues such as shortages and delayed deliveries to
DISTRIBUTOR, provided DISTRIBUTOR notifies COMPANY immediately in the event of
supplier non-performance. If emergency delivery is required due to supplier
(including COMPANY) error, costs of emergency delivery shall be at supplier
(including COMPANY) expense, provided that, if the supplier fails to absorb
such expense, such delivery costs shall be paid by the Operator provided
DISTRIBUTOR has notified COMPANY immediately in the event of such
non-performance and Operator has approved the additional expense in
advance.   If the emergency delivery is
due to DISTRIBUTOR error, then DISTRIBUTOR will remedy the situation in as
efficient manner as possible, which may include emergency deliveries and
special freight shipments, at DISTRIBUTOR’S sole expense. If the emergency
delivery is due to Operator error, the Operator shall pay delivery costs for
such emergency delivery.  From the moment
of receipt of the Products for storage by DISTRIBUTOR until the Products have
been accepted by Operator at the Store, DISTRIBUTOR assumes all risk of loss or
damage with respect thereto, shall be directly liable to COMPANY for any such
loss or damage to the Products and the related costs and expenses for replacing
the Products and agrees to obtain and maintain adequate insurance coverage to
insure against such loss or damage.

In the event of substitution of a Proprietary Product, the substituted
Product must have been previously approved by COMPANY in writing and, if the
need for substitution was caused due to DISTRIBUTOR error, the price of the
substituted Product will be determined based on the lower of the Cost (as
hereinafter defined) of the substituted Product or the Cost of the out-of-stock
Product that it replaces.  In addition,
DISTRIBUTOR will reimburse COMPANY to the extent that COMPANY would have
realized a difference between its selling price to DISTRIBUTOR and the amount
that COMPANY would have paid for the Proprietary Product from its supplier,
unless the substitution is due to COMPANY’s error.  Upon request, COMPANY shall provide to
DISTRIBUTOR copies of invoices and other documentation reasonably necessary to
verify the amount of the difference claimed by COMPANY.  If substitution is due to supplier (including

(9)                          Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(10)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 11
 

COMPANY) error, then COMPANY shall cause supplier to, or if COMPANY is
the supplier, COMPANY shall, reimburse DISTRIBUTOR for any reasonable losses sustained
due to such error.

To the extent that DISTRIBUTOR is unable to sell to the Operators
quantities of the Proprietary Products in DISTRIBUTOR’s inventory for any
reason whatsoever, including, but not limited to, Product discontinuation,
slow-moving inventory, unused LTO Products, promotional or seasonal Products or
exceeded shelf life due to sudden decline in Product movement and not due to
DISTRIBUTOR error, COMPANY will purchase, or cause a third party to purchase,
all remaining inventory of such Proprietary Products at DISTRIBUTOR’s cost,
F.O.B. the DISTRIBUTOR distribution centers plus DISTRIBUTOR’s handling and
carrying charges, if properly approved by COMPANY in advance as outlined
below.  In such event, COMPANY will
purchase or cause to be purchased all perishable Proprietary Products within [CONFIDENTIAL](11) days after notice from DISTRIBUTOR or by
the expiration date of the Proprietary Products, whichever is earlier, and all
nonperishable Proprietary Products within [CONFIDENTIAL](12)
days after notice from DISTRIBUTOR.  In
addition, if the inventory re-purchase is necessitated for any reason other
than DISTRIBUTOR error, COMPANY shall reimburse to DISTRIBUTOR all reasonable
out-of-pocket costs and expenses (not to exceed an amount equal to ten percent
(10%) of the Product’s Cost unless DISTRIBUTOR receives COMPANY’S prior written
consent) incurred by DISTRIBUTOR in selling, returning or otherwise disposing
of such Products.  DISTRIBUTOR shall
provide COMPANY with documentation or other proof that any such costs and
expenses were incurred by DISTRIBUTOR. 
In order to allow COMPANY to monitor the supply and usage of the
Proprietary Products, DISTRIBUTOR shall provide to COMPANY a monthly obsolete
and slow-moving inventory report.

3.03                        Aged
Inventory Notification-DISTRIBUTOR will immediately notify COMPANY in
writing in the event that any quantities of its Proprietary Products are within
[CONFIDENTIAL](13)days of expiration of
product life.  If DISTRIBUTOR fails to do
so, COMPANY shall not be required to comply with the requirements set forth in
Section 3.02.

3.04                        Present
DISTRIBUTOR’s Inventory - DISTRIBUTOR agrees to purchase the existing
merchantable and saleable inventory of Proprietary Products from COMPANY’S
present distributor located in Swedesboro, New Jersey and Columbus, Ohio and in
quantities not to 

(11)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(12)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(13)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 12
 

exceed a [CONFIDENTIAL](14) supply of such
Products, in the aggregate for each location listed above, provided that
DISTRIBUTOR and COMPANY have been given an opportunity by the present
distributor to inspect any such Product prior to purchase pursuant to this
Section 3.04.   DISTRIBUTOR will pay, via
check, the present distributor for Products purchased from it, within [CONFIDENTIAL](15) days of the later of DISTRIBUTOR’S
receipt of the Products or the receipt of the invoice approved by COMPANY for
the Products.   DISTRIBUTOR shall be
responsible for all freight and unloading costs associated with transporting
such inventory from the existing DISTRIBUTOR’s locations listed above.
DISTRIBUTOR will not be responsible for any handling or other fees charged by
the current distributor in connection with DISTRIBUTOR’s loading and
transferring of such inventory. COMPANY and the current distributor will be
required to provide all reasonable assistance and cooperation to DISTRIBUTOR in
connection with the purchase, loading and transportation of such inventory from
the current distributor to the DISTRIBUTOR distribution center, including the
scheduling of mutually agreeable inventory inspection and pick-up times.

In the event that the Cost of the Product, as purchased
from the existing distributor, exceeds or is less than the Cost that
DISTRIBUTOR would otherwise utilize in determining the Sell Price for such
Products obtained through suppliers, including COMPANY, DISTRIBUTOR shall
utilize the Cost designated by COMPANY in determining the Sell Price and shall
invoice, pay to COMPANY or charge the Operator, as directed by the COMPANY, in
the amount of the difference.  In the
event COMPANY directs DISTRIBUTOR to invoice the COMPANY, COMPANY shall pay
such invoiced amount, via check, so that it is received by DISTRIBUTOR within [CONFIDENTIAL](16) days of the date of the invoice.  In the case of a rebate to COMPANY,
DISTRIBUTOR shall pay the rebated amount within [CONFIDENTIAL](17)
days of its determination of the amount to be rebated.

4.             Sell Price/Payment
Terms/Financial Reporting

4.01                        Sell
Price - Beginning on the Effective Date and throughout the entire term
of this Agreement, the maximum purchase price at which DISTRIBUTOR shall sell
the Products, (the “Sell Price”), to the Operators shall be determined by
adding the “Cost” (as hereinafter defined) of the Product plus [CONFIDENTIAL](18) per case for all deliveries
(collectively, “Markup”), subject to the other provisions of this
Agreement.  For purposes of this Agreement,
the “Cost” of a Product 

(14)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(15)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(16)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(17)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(18)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 13
 

other than a Contracted Product shall be the sum of
(a) the cost of the Product as shown on the invoices to DISTRIBUTOR from the
respective supplier, including COMPANY, plus (b) if the invoiced cost of the
Product is not a delivered price, the applicable freight charges related to
shipping the Product from the supplier to DISTRIBUTOR’S distribution center,
plus (c) the Sourcing Fees, if any, attributable to the Product, less (d)
promotional allowances reflected on supplier invoices to DISTRIBUTOR.
Applicable freight, in those cases where the invoice cost to DISTRIBUTOR for
non-proprietary Products is not a delivered cost, means that DISTRIBUTOR has
added a reasonable freight charge, agreed to in advance and in writing by
COMPANY for delivering such non-proprietary Products from suppliers to
DISTRIBUTOR.  Applicable freight for any
non-proprietary Product will not exceed the rate charged by nationally
recognized carriers operating in the same market for the same type of freight
service. Cost for any non-proprietary Product will not be reduced by discounts
for cash or prompt payment available to DISTRIBUTOR, breakage allowances or by
backhaul revenue. Fuel or other transportation surcharges indicated on the
manufacturer’s or supplier’s invoice or on freight invoices will increase Cost.
The Cost of a Contracted Product shall be determined in accordance with Section
3.01.  In no event will the Cost of
Contracted Products include amounts to be rebated to DISTRIBUTOR and therefore,
DISTRIBUTOR will not negotiate off-invoice manufacturer rebates,
labels/promotional allowances or any other “soft money” received from supplier
or freight carriers of Contracted Products. 
In order to allow verification of the foregoing commitment, DISTRIBUTOR
agrees to provide documentation substantiating the Cost of items DISTRIBUTOR
purchases from suppliers and freight carriers. 
DISTRIBUTOR agrees to limit its collection of such “soft money” to the
manufacturers of non-proprietary Products. 
The Cost of Contracted Products will not be reduced by discounts for
cash or prompt payment available to DISTRIBUTOR, breakage allowances or by
backhaul revenue. Fuel or other transportation surcharges indicated on the
manufacturer’s or supplier’s invoice or on freight invoices will increase Cost.

The invoice format to be used by DISTRIBUTOR will be
approved by COMPANY and will contain separate lines showing subtotals for
various Product categories, the total amount of [CONFIDENTIAL](19)
invoiced to the Operator for that particular delivery, applicable taxes, the
date of the ACH debit and other summary line items as detailed elsewhere in
this Agreement.

DISTRIBUTOR may also charge a [CONFIDENTIAL](20)
delivery surcharge fee for each delivery made to an Operator in the states of
Connecticut, Rhode Island, Maine, Massachusetts, New Hampshire and Vermont as
well as to Operators located in the five (5) buroughs of New 

(19)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(20)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 14
 

York City and on Long Island, New York and the portion
of Indiana west of Highways US 231/431 and south of US Highway 50.  This [CONFIDENTIAL](21)
surcharge shall be shown as a separate line item on each applicable invoice.

Partial case shipments (also known as “splits”) shall
be permitted for the malt, maraschino cherries, chocolate sprinkles, assorted
sprinkles in which individual units of such Products are separately packaged
within each case. Notwithstanding anything else contained in this agreement to
the contrary, the Markup for the following items will be limited to [CONFIDENTIAL](22): malt, maraschino cherries, medium
spoons, taster spoons, straws, water, chocolate sprinkles and assorted
sprinkles.

In addition, DISTRIBUTOR agrees to reduce the Markup
to each Operator any time they place an order greater than [CONFIDENTIAL](23)
cases according to the following schedule (“Large Order Credit”):

	
  Order Size

  	
   

  	
  Large Order Credit

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL](24)

  	
   

  	
   

  

 

This Large Order Credit shall be shown as a separate
line item on the invoice.

4.02                        “Cost”
for Contracted Products/ True-Up Methodology – In the case of
Contracted Products, COMPANY agrees to notify DISTRIBUTOR as soon as practical
after a change in Cost has been agreed to with a supplier.  COMPANY shall have the right to adjust the
Markup for individual Products (not including the fuel surcharge or the [CONFIDENTIAL](25) mark-up on the items listed in Section
4.01 above) from time to time to an amount that is more or less than the agreed
upon Markup per case. If COMPANY exercises its right to lower DISTRIBUTOR’s
Markup on any Products, it will simultaneously and correspondingly increase the
Markup on other Products so as to provide DISTRIBUTOR continuously with an
average overall Markup of [CONFIDENTIAL](26)
per case, again subject to the other provisions of this Agreement. DISTRIBUTOR
will provide a report by Tuesday of each week for all delivery activity of the
preceding week showing the total number of cases delivered for that week,
DISTRIBUTOR’s total case fees charged, the average case fee charged and the
difference for the week and quarter-

(21)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(22)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(23)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(24)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(25)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(26)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 15
 

to-date between the total case fees charged and the product obtained by
multiplying the total number of cases delivered by the Markup.

Following each calendar quarter, DISTRIBUTOR shall
provide a cumulative report that reflects: (i) the total number of cases of
Products delivered to the Stores under this Agreement during the preceding
quarter (“x”); (ii) the total of the Sell Prices charged for all Products
delivered to the Stores under this Agreement during the preceding quarter,
excluding the effect of any Large Order Credits given Operators during the
quarter (“y”), (iii) the total of the Cost of each Product delivered to the
Stores during such quarter (“z”), and (iv) the “Average Putative Markup” for
Products delivered to the Stores, which shall be calculated as follows:
[(y-z)/x].   If the Average Putative
Markup is less than the Markup required pursuant to Section 4.01 (and as
modified pursuant to the other provisions of this Agreement), with such
deficiency being referred to herein as the “Markup Deficiency”, COMPANY shall
remit to DISTRIBUTOR, an amount equal to the number of cases delivered to the
Stores under this Agreement during the preceding quarter (“x”), multiplied by
the Markup Deficiency.  If the Average
Putative Markup exceeds the Markup required pursuant to Section 4.01 (and as
modified pursuant to the other provisions of this Agreement), with such excess
being referred to as the “Markup Excess”, DISTRIBUTOR shall remit to COMPANY an
amount equal to the number of cases delivered to the Stores under this
Agreement during that quarter (“x”), multiplied by the Markup Excess.  Payments owed by either party under this
Section 4.02 shall be made by such party to the other party, via check, within
ten (10) days of the determination of the amounts owed and, in any case, within
thirty (30) days following the end of the applicable calendar quarter for which
such payments are owed or by making adjustments to the Sell Price as mutually
agreed upon between COMPANY and DISTRIBUTOR.

4.03                        Fuel
Cost Adjustments - If the operating costs of DISTRIBUTOR are increased
or decreased as a result of fuel cost increases or decreases, DISTRIBUTOR may
adjust the Markup (as and if otherwise adjusted pursuant to the terms of this
Agreement) for all Stores not subject to the $15 delivery surcharge described
in Section 4.01 to compensate for such fluctuations in fuel costs, on a
quarterly basis. The amount of the adjustment computed in accordance with this
Section 4.03 shall also be added to or subtracted from, as applicable, the
specified price for Contracted Operator Sell Price Products described in
Section 4.11.  The method for determining
the fuel surcharge or adjustment will be made monthly beginning April 1, 2006
and will be based on the U.S. Weekly Retail On-Highway diesel fuel price which
is compiled by the Energy Information Administration. The Web site to access
this information electronically is as follows:

 16

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_on_highway_diesel_prices/current/html/diesel.html

If such publication is no longer published or available, then the
parties will mutually agree upon an acceptable alternative source.

As fuel prices increase or decrease, the fuel cost adjustments will
move according to changes in the four or five (4 or 5) week average, as
applicable, for the U.S. fuel price bracket, and will take effect on the first
day of the calendar month following the applicable publication date.  For example, the fuel cost adjustment
beginning the first day in July, if any, will be determined based on the four
or five (4 or 5) week average ending immediately prior to or on June 30th.

	
  Price Per Gallon Including
  Taxes

  	
   

  	
  Per Case Surcharge/ Credit

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL](27)

  	
   

  	
   

  

 

If the price per gallon, including taxes, exceeds [CONFIDENTIAL](28),
the surcharge will equal [CONFIDENTIAL](29)
per case plus an additional [CONFIDENTIAL](30)
per case for each [CONFIDENTIAL](31)
increment (or portion thereof) that the price per gallon exceeds [CONFIDENTIAL](32). 
If the price per gallon, including taxes, falls below [CONFIDENTIAL](33), a credit will be issued in the amount of
[CONFIDENTIAL](34) per case plus an
additional [CONFIDENTIAL](35) per case for
each [CONFIDENTIAL](36) increment (or
portion thereof) that the price is less than [CONFIDENTIAL](37).  Any such surcharge or credit will be shown as
a separate line item on the Operator’s invoice. 
The fuel surcharge will be 

(27)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(28)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(29)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(30)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(31)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(32)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(33)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(34)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(35)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(36)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(37)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 17
 

[CONFIDENTIAL](38)/case for all
deliveries made between the Effective Date through [CONFIDENTIAL](39).

For all Stores subject to the [CONFIDENTIAL](40)
delivery surcharge described in Section 4.01, DISTRIBUTOR will be entitled to
increase this surcharge to reflect increases in diesel fuel costs according to
the same methodology as described above, utilizing the published National fuel
bracket, adjusted quarterly, except that the adjustment will be made to the
delivery surcharge itself by adding or subtracting amounts from the basic [CONFIDENTIAL](41) delivery surcharge according to the
following schedule:

Price Per Gallon Including Taxes       Adjustment to [CONFIDENTIAL](42) Delivery Surcharge

[CONFIDENTIAL](43)

Adjustments based on fuel prices above and below the range outlined
above will be made at the rate of +/- [CONFIDENTIAL](44)
per delivery for each ten cent increment/decrement in costs.  The initial delivery surcharge for applicable
Stores as described in Section 4.01 will be [CONFIDENTIAL](45)
for all deliveries made between the Effective Date through [CONFIDENTIAL](46).

4.04                        Markup
Adjustments due to Variances from Projections.

The [CONFIDENTIAL](47) Markup during the first [CONFIDENTIAL](48) months after the Effective Date is
premised upon an average delivery size of [CONFIDENTIAL](49)
cases to the Stores serviced by DISTRIBUTOR.

After the first [CONFIDENTIAL](50) months of service and after each [CONFIDENTIAL](51)  

(38)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(39)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(40)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(41)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(42)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(43)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(44)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(45)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(46)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(47)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(48)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(49)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(50)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(51)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 18
 

month period
thereafter the Markup for the next [CONFIDENTIAL](52)
months will be based on the actual average delivery size for the previous [CONFIDENTIAL](53) months according to the following
schedule:

Average Delivery
Size for   

    Preceding [CONFIDENTIAL](54)
Months     Markup for
Next [CONFIDENTIAL](55) Months

  [CONFIDENTIAL](56)

The average
delivery size will be calculated by summing up all of the cases delivered to
the Stores serviced by DISTRIBUTOR in the Territory for the previous [CONFIDENTIAL](57) months (with each partial case or “split”
counting as a full case) and dividing the total number of cases delivered by
the total number of deliveries made by DISTRIBUTOR as modified below.  The number of deliveries made by DISTRIBUTOR
shall not include deliveries made by third parties arranged by DISTRIBUTOR, nor
deliveries to correct errors made by DISTRIBUTOR or suppliers, nor shall it
include deliveries for which DISTRIBUTOR has received the [CONFIDENTIAL](58)
special delivery fee in accordance with Section 2.05.

In the event the
average delivery size for the previous [CONFIDENTIAL](59)
months falls outside of the ranges described above, COMPANY and DISTRIBUTOR
will negotiate a new Markup for that DISTRIBUTOR facility in good faith.  In the event COMPANY and DISTRIBUTOR fail to
agree on such a Markup adjustment within [CONFIDENTIAL](60)
days after the commencement of negotiations under this Section 4.04, then both
COMPANY and DISTRIBUTOR will have the right to terminate this Agreement with [CONFIDENTIAL](61) days written notice to the other party in
accordance with Section 6.02 (b)(ii).

(52)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(53)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(54)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(55)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(56)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(57)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(58)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(59)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(60)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(61)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 19
 

4.05                        Payment
Terms/Markup Adjustments due to Payment Methodology

(a)          Standard Payment
Terms.  Except as noted below,
DISTRIBUTOR and COMPANY have agreed that payments to DISTRIBUTOR for Products
delivered to the Operators (including Contract Feeders as defined below) shall
be received by ACH debit entry initiated by DISTRIBUTOR, so that the amount is
credited to DISTRIBUTOR’s account on Friday of each week for all deliveries
made for the prior week and no Operator will be charged sooner than [CONFIDENTIAL](62) days after the date of delivery.  Operator’s who receive deliveries on Saturday
or Sunday will have their debit entry initiated by DISTRIBUTOR on the Friday [CONFIDENTIAL](63) and [CONFIDENTIAL](64)
days, respectively, following such delivery.  
DISTRIBUTOR may also accept payment by check if so requested by Operator
and approved by DISTRIBUTOR.  All new
Operators will initially receive credit terms of [CONFIDENTIAL](65)
days, provided that they satisfy DISTRIBUTOR’S credit criteria for such terms,
as such criteria is uniformly applied among all similarly situated Operators,
in light of all relevant facts and circumstances.  Payment terms will be extended only to those
Operators that are creditworthy as shall have been solely determined by
DISTRIBUTOR. DISTRIBUTOR may, in its sole discretion, provide alternate payment
terms to those Operators not meeting DISTRIBUTOR’s standards for
creditworthiness.  DISTRIBUTOR will
provide email or fax notice to each Operator on Monday of each week of the
amount of the ACH debit entry to take place that following Friday along with
the invoice number and any credits posted during the prior [CONFIDENTIAL](66)
days.

Notwithstanding the foregoing, DISTRIBUTOR agrees to provide extended
credit terms to Operators performing as Contract Feeders (as defined below) in
non-traditional locations provided that they satisfy DISTRIBUTOR’s credit
criteria for such terms, as such criteria is uniformly applied among all
similarly situated Operators in light of all relevant facts and circumstances.
Payment terms will be extended only to those Operators that are creditworthy as
shall have been solely determined by DISTRIBUTOR. DISTRIBUTOR may, in its sole
discretion, provide alternate payment terms to those Operators not meeting
DISTRIBUTOR’s standards for creditworthiness. To qualify for such credit terms,
each location operated by a Contract Feeder in the Territory must be approved
by COMPANY in writing and the Contract Feeder must comply with these extended
credit terms.  “Contract Feeders” are
Operators who operate non-traditional food 

(62)                    Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(63)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(64)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(65)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(66)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 20
 

service locations in facilities such as airports, sports facilities,
travel plazas, universities, tech centers, etc.

(b)                                 No
Set-Off/Late Fees/Collection Costs. 
No deductions or set offs from payments due to DISTRIBUTOR may be made
by Operators for any reason without the prior written authorization of
DISTRIBUTOR.  Failure of the Operator to
make any payment required when due shall result in DISTRIBUTOR having the right
to impose more stringent credit or payment terms, such as, without limitation, cash
in advance, cash on delivery, delivery of acceptable letters of credit or third
party guaranties, or additional collateral, or, after three (3) business days’
prior notice to COMPANY and the affected Operator, to suspend all deliveries,
and declare the entire unpaid balance of the Operator’s account immediately due
and payable. The COMPANY shall pay, and shall use its commercially reasonable
efforts to cause each Operator to pay, all reasonable costs of collection,
including reasonable attorneys fees incurred or paid by DISTRIBUTOR, but only
to the extent related to their respective accounts. DISTRIBUTOR will have the
right to charge interest at the maximum rate permitted by law but not exceeding
[CONFIDENTIAL](67) percent per month on
all unpaid amounts due or owing by Operators and/or COMPANY to DISTRIBUTOR.

(c)                                  COMPANY’S
Liability for Payments. COMPANY agrees that it shall be liable for all
liabilities of COMPANY expressly set forth in this Agreement.  COMPANY will not be liable for the debts or
obligations of Operators unless otherwise agreed to in writing by COMPANY.

(d)                                 Payments
to COMPANY as Supplier.  COMPANY
purchases its frozen yogurt Products and resells them to DISTRIBUTOR after
adding the [CONFIDENTIAL](68) to the sell
price.  This [CONFIDENTIAL](69)
varies by Product and a schedule of the current [CONFIDENTIAL](70)
for its frozen yogurt Products is attached as Schedule
6.  COMPANY reserves the right
to alter [CONFIDENTIAL](71) on its frozen yogurt
Products in its discretion but no more frequently than [CONFIDENTIAL](72).  COMPANY will invoice DISTRIBUTOR for these
products as shipped from the manufacturer and will designate the [CONFIDENTIAL](73) as separate line items for each 

(67)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(68)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(69)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(70)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(71)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(72)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(73)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 21
 

Product.  DISTRIBUTOR agrees to
pay these invoices within [CONFIDENTIAL](74)
days of receipt.

COMPANY will also invoice DISTRIBUTOR for [CONFIDENTIAL](75)
on its frozen cake and pie Products at the maximum rate of [CONFIDENTIAL](76)
for each Product as shown on Schedule 7.  Company reserves the right to alter [CONFIDENTIAL](77) on its frozen cake and pie Products in
its discretion but no more frequently than [CONFIDENTIAL](78).  Distributor shall pay all invoices for [CONFIDENTIAL](79)on its frozen cake and pie Products when
invoiced by the COMPANY within [CONFIDENTIAL](80)days
of invoice date, which date will be no earlier than the date of receipt of the
applicable Products by the DISTRIBUTOR.

Each month, DISTRIBUTOR will provide a report and invoice to COMPANY
showing the amount of [CONFIDENTIAL](81)
billed to each Store compared with the amount paid on these same Products by
DISTRIBUTOR in accordance with Schedule 7 and the amount owed to DISTRIBUTOR BY
COMPANY.  COMPANY agrees to pay this
invoice within [CONFIDENTIAL](82) days of
receipt.

Notwithstanding the foregoing, DISTRIBUTOR shall not be responsible to
reimburse COMPANY for [CONFIDENTIAL](83)
on any Products not billed and collected from the Operators (for example due to
Product damage or accounts receivable uncollectibility) provided such loss is
not due to DISTRIBUTOR negligence and, in the case of account uncollectibility,
DISTRIBUTOR has exhausted all reasonable collection efforts and has written the
entire accounts receivable off of his books. 
[CONFIDENTIAL](84)

[CONFIDENTIAL](85)

4.06                        Sourcing Fees.  COMPANY
may, from time to time, collect compensation from the Operators for services
that each of them provide to such Operators, either by increasing the Cost of a

(74)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(75)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(76)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(77)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(78)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(79)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(80)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(81)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(82)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(83)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(84)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(85)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 22
 

Product supplied by either of them to DISTRIBUTOR for distribution
under this Agreement, or through the assessment of an additional fee (a “Sourcing
Fee”) that COMPANY instructs DISTRIBUTOR to add in the calculation of the Sell
Price of Products not purchased from COMPANY. 
Any changes in the Sourcing Fees shall occur no more frequently than [CONFIDENTIAL](86). 
COMPANY specifically represents and warrants that such Sourcing Fees (or
increases in the invoiced Cost) have been and will continue to be disclosed to
all Operators, and that the charging and collection of such Sourcing Fees (or
increased Cost) is permitted under its or its affiliates’ agreements with the
Operators and does not violate any applicable laws.  COMPANY shall indemnify, defend and hold
harmless DISTRIBUTOR, its affiliates, and each of their respective officers, agents,
directors, shareholders, or employees for any claims, loss, liability or
expense (including reasonable attorney’s fees and disbursements) arising from a
breach of this representation and warranty.

DISTRIBUTOR shall pay all Sourcing Fees to COMPANY via initiation of an
ACH credit entry each Friday with respect to those Products delivered to the
Operators during the preceding week and on which a Sourcing Fee was
assessed.   The COMPANY shall repay to
DISTRIBUTOR any Sourcing Fees paid to the COMPANY by DISTRIBUTOR that the
Operators fail to pay DISTRIBUTOR. This repayment obligation shall only apply
to those Sourcing Fees incurred and unpaid by Operators during the first [CONFIDENTIAL](87) day period from the point in time that
Operator was last current with DISTRIBUTOR. 
For example, if Operator fails to pay DISTRIBUTOR for
invoices/indebtedness incurred and unpaid over a [CONFIDENTIAL](88)
day period ([CONFIDENTIAL](89) deliveries),
DISTRIBUTOR will be liable for paying COMPANY the Sourcing Fees for those
Products purchased for the [CONFIDENTIAL](90).

4.07                        Financial
Information  DISTRIBUTOR may
request balance sheets, income statements and such further financial
information from each Operator from time to time as will enable DISTRIBUTOR to
accurately assess the Operators’ financial condition. The COMPANY may require
DISTRIBUTOR to supply annual unaudited balance sheets and such further
financial information from time to time as will enable COMPANY to accurately
assess DISTRIBUTOR’S financial condition.

4.08                        Price
Verifications-Audit- COMPANY will be allowed to perform electronic
Purchase Price verifications for purchases made under this Agreement on a
weekly basis and 

(86)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(87)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(88)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(89)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(90)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 23
 

DISTRIBUTOR will supply the necessary files and information to COMPANY
for these audit purposes on a timely basis and in a form acceptable to COMPANY
and DISTRIBUTOR.  As part of this
electronic auditing procedure, COMPANY may also audit the payments made to it
for accuracy as well.  If any such audit
reveals net pricing, delivery surcharge or COMPANY payment errors (overcharges
set off by undercharges) in excess of [CONFIDENTIAL](91)
in the aggregate during the audited period (not to exceed a [CONFIDENTIAL](92)month period) COMPANY shall have the right
to conduct additional audits, at its option and at DISTRIBUTOR’S reasonable
expense, until the aggregate net pricing errors disclosed by an such additional
audits are less than [CONFIDENTIAL](93)for
the applicable audit period.  For any
audit conducted pursuant to this Section 4.08 that discloses that Operators
were either overcharged or undercharged for Products, or that COMPANY was
overpaid or overcharged during the audited period, DISTRIBUTOR and COMPANY
agree to correct the overcharge, undercharge, overpayment or underpayment, as
the case may be.  The form and method for
making these adjustments will be mutually agreed upon by DISTRIBUTOR and
COMPANY; provided, however, in any event the remittance of any such adjustments
shall be made by either party within [CONFIDENTIAL](94)
days from the final determination of the undercharge or overcharge, as
applicable.

4.09                        DISTRIBUTOR
Operator Support -DISTRIBUTOR agrees to provide the following Operator
support to COMPANY.

(a)                                  DISTRIBUTOR
will support the System by participating in the supplier show at its own expense.  In addition, DISTRIBUTOR will pay COMPANY an
annual support payment equal to [CONFIDENTIAL](95)
payable within [CONFIDENTIAL](96) days of written
request by COMPANY.  COMPANY may submit
such requests only once during each calendar year and a total of [CONFIDENTIAL](97) such requests during the term of this
Agreement.

(b)                                 DISTRIBUTOR
will support COMPANY in terms of activating product recalls in accordance with
DISTRIBUTOR’S standard product recall policies.

(91)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(92)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(93)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(94)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(95)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(96)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(97)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 24
 

(c)                                  DISTRIBUTOR
will adhere to the following HACCP requirements for monitoring of temperature
controls for perishable products both in the DISTRIBUTOR distribution center
and in DISTRIBUTOR’S transportation equipment.

	
  ITEM

  	
   

  	
  FORM

  	
   

  	
  TEMPERATURE

  REQUIREMENTS IN

  DISTRIBUTION

  CENTER

  	
   

  	
  UPPER TEMP.

  RANGE WHILE

  TRANSPORTED TO

  STORES

  
	
  Soft Serve
  Frozen Yogurt

  	
   

  	
  Frozen

  	
   

  	
  0o or lower

  	
   

  	
  0o

  
	
  Hand-Dipped
  Frozen Yogurt

  	
   

  	
  Frozen

  	
   

  	
  -10o or lower

  	
   

  	
  0o

  
	
  Yogurt Cakes and
  Pies

  	
   

  	
  Frozen

  	
   

  	
  -10o or lower

  	
   

  	
  0o

  
	
  Various Toppings

  	
   

  	
  Refrigerated

  	
   

  	
  34o to 36o

  	
   

  	
  38o

  
	
  Nuts and Liquid
  Toppings

  	
   

  	
  Frozen

  	
   

  	
  0 or lower

  	
   

  	
  0o

  
	
  Various Toppings

  	
   

  	
  Dry

  	
   

  	
  Above 38

  	
   

  	
  Above 38

  

 

(d)         DISTRIBUTOR will provide
COMPANY with periodic EDI file transfers to include the following:

Weekly invoice register by store outlining the SKU’s
and quantity purchased

Weekly inventory levels, age of inventory, sales and
pending orders and delivery dates by item

Weekly report of Current Stores

Weekly report of average drop sizes for each store

Monthly delivery performance report with on-time
performance, fill rates and clean invoice percentages

Daily out-of-stock report and stores so affected

Monthly costing detail on all Products used by the
SYSTEM

Such additional reports as may be reasonable requested
by the COMPANY

4.10                  Taxes – Franchisees
and COMPANY shall each be responsible for their applicable sales and use
taxes.  DISTRIBUTOR shall collect
applicable taxes from each responsible party and be responsible for remitting
all taxes to the proper state and local taxing authorities.  COMPANY shall only be responsible for paying
those taxes on the Stores under its control and operation.  DISTRIBUTOR agrees to indemnify and defend
COMPANY pursuant to Section 8.01 of this Agreement should Company receive a
claim for the 

 25
 

DISTRIBUTOR’s failure to pay taxes. 
Neither party will pay a claim which is allegedly the responsibility of
the other without first notifying the other and giving the other the
opportunity to contest the claim.

4.11            Special Pricing
Arrangements - Products that are governed by national billing agency or
other programs for which the price at which the DISTRIBUTOR must sell the
Product to the Operator is prescribed by agreements between COMPANY, or any
other franchisor or group purchasing organization, on the one hand, and the
supplier or manufacturer of such Products, on the other, are referred to in
this Agreement as “Contracted Operator Sell Price Products”.  Notwithstanding Section 4.01, the Sell Price
for Contracted Operator Sell Price Products shall be the amount prescribed (or
calculated in accordance with) the above-described programs or agreements and
COMPANY will receive full credit under the true-up calculation required in
Section 4.02 for all funds actually received or which could have been received
from the suppliers of such Contracted Operator Sell Price Products as if
DISTRIBUTOR maximized such funds, including credit for all payment discounts
whether or not actually taken by DISTRIBUTOR. 
Contracted Operator Sell Price Products include, but are not limited to,
soft drink syrup products including, without limitation, the following Coca
Cola Products:  Coke Bag in Box (“BiB”),
Diet Coke BiB, Sprite BiB and

Barq’s Root Beer BIB.

5.              Minimum
Deliveries - The Operators will be required to order Products in minimum
quantities of [CONFIDENTIAL](98) cases of
Products per delivery unless due to DISTRIBUTOR or supplier error.  In addition, Operator will be required to pay
DISTRIBUTOR a [CONFIDENTIAL](99) handling fee
per order for orders of less than [CONFIDENTIAL](100)  cases and [CONFIDENTIAL](101)  handling fee per order for orders of less
than [CONFIDENTIAL](102) cases but equal to
or greater than [CONFIDENTIAL](103)  cases unless due to DISTRIBUTOR or supplier
including failure to fulfill the order in its entirety. Products with a Markup
of [CONFIDENTIAL](104) pursuant to section
4.01 will be counted as cases for determining the applicability and amount of
these handling fees.  These handling fees
will be credited to COMPANY for purposes of the true-up calculation required in
Section 4.02.  However, the [CONFIDENTIAL](105) 
special delivery fees in Section 2.05 and the [CONFIDENTIAL](106)
delivery surcharge fee in Section 4.01 will not be credited to COMPANY for
purposes of the true-up calculation required in Section 4.02.

(98)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(99)                    Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(100)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(101)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(102)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(103)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(104)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(105)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(106)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 26
 

6.              Term and
Termination

6.01                        Term
- The initial term of this Agreement shall commence on the Effective Date
and shall continue until exactly three (3) years after the commencement of full
service to all Stores to be serviced in the Territory (“Initial Term”), unless
sooner terminated as provided in Section 6.02. 
This Agreement shall automatically renew for one (1) additional year
upon the completion of the Initial Term unless one party notifies the other in
writing at least one hundred eighty (180) days before the expiration of the
Initial Term of its desire to terminate the relationship.

6.02        Termination

(a)           Either
party shall have the right, upon prior written notice, to immediately terminate
this Agreement if the other party fails to make payment of any amounts due and
payable under this Agreement, and such failure shall have continued for a
period of ten (10) days from and after the date of written notice to the
defaulting party or in the event the other party files a voluntary petition or
consents to the filing of a petition against it in bankruptcy or any similar
insolvency or debtor relief action, or if the other party makes a general
assignment for the benefit of creditors, or in the event a receiver is
appointed or any proceeding is demanded or initiated by, for or against the
other party under any provision of the Federal Bankruptcy Act or any amendment
thereof.

(b)           Either
party shall have the right to terminate this Agreement upon 180 days written
notice under any of the following conditions:

(i)            Upon
the occurrence of any material breach or material default by the other party,
which remains uncured after expiration of the applicable Cure Period (as herein
defined), of any of the terms, obligations, covenants, representations and
warranties under this Agreement (except for a default specified in Section 6.02
(a) above) which is not waived in writing by the non-defaulting party.  In such case, the non-defaulting party shall
notify the other of such alleged beach or default and the other party shall
have a period of thirty (30) days to cure the same (the “Cure Period”). If the
defaulting party cures its breach or default within any applicable Cure Period
to the reasonable satisfaction of the non-defaulting party, the notice shall be
void and this Agreement shall continue; otherwise, it shall terminate in
accordance with the notice.

or

 27
 

(ii)           In
the event the parties fail to agree on a Markup adjustment pursuant to Section
4.04.

6.03                        Effect
of Expiration/Termination - Upon expiration or sooner termination of
this Agreement, for any reason, COMPANY shall promptly purchase or arrange for
the purchase from DISTRIBUTOR at DISTRIBUTOR’s cost (including freight costs),
F.O.B. DISTRIBUTOR’s distribution center, all of DISTRIBUTOR’s inventory of the
Proprietary Products and any labeling and packaging materials used in
connection with the Proprietary Products. 
COMPANY will purchase or cause to be purchased perishable Proprietary
Products within thirty (30) days after the effective date of termination of
this Agreement or by the expiration date of such Proprietary Product, whichever
is earlier, and all nonperishable Proprietary Products within thirty (30) days
after the effective date of termination of this Agreement. In addition, if this
agreement is terminated due to COMPANY’s breach or default, COMPANY shall
reimburse to DISTRIBUTOR all other reasonable out-of-pocket costs and expenses
(not to exceed an amount equal to 50% of the Markup on each Product unless
DISTRIBUTOR receives COMPANY’s prior written consent) incurred by DISTRIBUTOR
in selling, returning or otherwise disposing of such Proprietary Products.
DISTRIBUTOR shall provide COMPANY with documentation or other proof that any
such costs and expenses were incurred by DISTRIBUTOR. Termination of this
Agreement shall not relieve either party of any obligation or liability which
accrues prior to the effective date of termination (including, but not limited
to, obligations related to the payment of COMPANY’s accounts receivable or
accounts payable and the purchase of excess inventories). Notwithstanding the
foregoing provisions of this Section 6.03 to the contrary, if this Agreement is
terminated due to DISTRIBUTOR’s breach or default or expires in accordance with
the provisions of Section 6.01, COMPANY shall have the obligation to purchase,
or shall direct the replacing distributor or other suitable purchaser to
purchase, from DISTRIBUTOR only such inventory of the Proprietary Products
which is merchantable and saleable but COMPANY shall have no obligation to
reimburse DISTRIBUTOR for its out-of-pocket costs and expenses related to
selling, returning or otherwise disposing of such Proprietary Products.

7.                                      Trademarks and Trade Names - COMPANY
hereby represents and warrants that it is the owner of, or has the right to use
under license or sublicense, all trademarks, logos, trade names, and other
markings used on the Proprietary Product’s packaging and labels (the “Trademarks”).
COMPANY hereby grants to DISTRIBUTOR the right to use the Trademarks solely in
connection with the approved sale and distribution of the Proprietary Products
in accordance with the provisions of this Agreement and only for as long as
this Agreement remains in effect. COMPANY also grants to DISTRIBUTOR the right
and license to use the Trademarks in advertising and promotional materials when
the Trademarks are used 

 28
 

therein to identify the Proprietary Products, subject to COMPANY’s
prior written approval of form and content. Provided DISTRIBUTOR is using the
Trademarks in accordance with the terms and provisions of this Agreement,
COMPANY shall indemnify, defend and hold DISTRIBUTOR and its subsidiaries,
affiliates, officers, shareholders, directors, employees, members, managers,
agents, successors and assigns harmless from and against any and all claims,
demands, liabilities, causes of action, damages, costs (including reasonable
attorneys’ fees and disbursements) and judgments made or incurred by or found
against any of them resulting from or arising out of any claim or suit alleging
infringement by COMPANY or its affiliates, through any of the Trademarks or
otherwise.

8.             Indemnification

8.01                        Indemnification
by DISTRIBUTOR - DISTRIBUTOR agrees to indemnify, defend and hold
COMPANY, its subsidiaries, affiliates, officers, directors, members, managers,
stockholders, employees, agents, successors and assigns harmless from and
against any and all claims, demands, liabilities, causes of action, damages,
costs (including reasonable attorneys’ fees and disbursements) and judgments
made or incurred by or found against any of them, resulting from or arising out
of:

(a)                                  Any
breach or default by DISTRIBUTOR of any term or provision of this Agreement; or

(b)                                 Any
negligent act or negligent omission or willful misconduct of DISTRIBUTOR in
respect of DISTRIBUTOR’s performance of its obligations under this Agreement.

8.02                        Indemnification
by COMPANY – COMPANY agrees to indemnify, defend and hold DISTRIBUTOR,
it subsidiaries, affiliates, officers, directors, members, managers,
stockholders, employees, agents, successors and assigns harmless from and
against any and all claims, demands, liabilities, causes of action, damages,
costs (including reasonable attorney’s fees and disbursements) and judgments
made or incurred by or found against any of them resulting from or arising out
of:

(a)                                  Any
breach or default by COMPANY of any term or provision of this Agreement.

(b)                                 Any
breach or default by COMPANY of any term or provision of any agreement between
COMPANY, on the one part, and an Operator or a supplier of the Proprietary
Products, on the other part, or any negligent or willful act or omission of
COMPANY, or any of its employees or agents, in respect of the purchase, resale,
distribution, storage or 

 29
 

delivery of the Proprietary Products or the COMPANY’s
performance of its obligations under this Agreement; and

(c)                                  Claims
by any franchisee of COMPANY and/or Operator that may arise from DISTRIBUTOR
ceasing further sales to such franchisee or other Operator under this Agreement
at the direction of COMPANY.

(d)                                 Claims
by any franchisee of COMPANY and/or Operator that may arise from COMPANY’s role
in the distribution/product procurement process or the use or allocation of
funds collected by COMPANY from DISTRIBUTOR.

8.03                        Limitation
of Liability; Disclaimer of Warranties - NOTWITHSTANDING SECTIONS 8.01
AND 8.02 TO THE CONTRARY, NEITHER PARTY SHALL IN ANY EVENT BE LIABLE IN
CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, 
TO THE OTHER PARTY OR ITS RESPECTIVE SUBSIDIARIES, AFFILIATES,
FRANCHISEES OR OTHER OPERATORS FOR ANY TYPE OF INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES (SUCH AS, BUT NOT LIMITED TO, LOSS OF PROFITS OR BUSINESS
OPPORTUNITY) ARISING FROM A PARTY’S PERFORMANCE OR FAILURE TO PERFORM UNDER ANY
OF THE TERMS AND PROVISIONS OF THIS AGREEMENT OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, ANY SUCH DAMAGES ATTRIBUTABLE TO A BREACH OF ANY TERM OR PROVISION
OF THIS AGREEMENT.

COMPANY ACKNOWLEDGES AND AGREES THAT DISTRIBUTOR IS
NOT THE MANUFACTURER OR PRODUCER OF THE PRODUCTS SUPPLIED BY DISTRIBUTOR.  IN NO EVENT SHALL DISTRIBUTOR BE LIABLE WITH
RESPECT TO ANY CONDITIONS, DEFECTS, DEFICIENCIES, DANGERS, FAULTS OR FAILURES,
OF ANY KIND, IN OR RELATING TO ANY PRODUCTS SUPPLIED BY DISTRIBUTOR EXCEPT,
SUBJECT TO THE LIMITATIONS STATED IN THIS AGREEMENT, TO THE EXTENT OF
DISTRIBUTOR’S ACTUAL NEGLIGENCE IN ITS HANDLING OF SUCH PRODUCTS.  EXCEPT AS EXPLICITLY
PROVIDED IN THIS AGREEMENT,  DISTRIBUTOR MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

8.04                        Third
Party Claims - The indemnities in this Section 8 are contingent upon:
(i) the indemnified party promptly notifying the indemnifying party in writing
of any action or other proceeding 

 30
 

which may give rise to a claim for indemnification
hereunder; unless such failure to promptly notify does not materially prejudice
the claim; (ii) the indemnifying party being allowed to control the defense and
settlement of such claim; and (iii) the indemnified party reasonably
cooperating with the indemnifying party (at the indemnifying party’s expense)
in providing information relevant to the defense or settlement of a claim. The
indemnified party shall have the right, at its option and expense, to
participate in the defense of any action or proceeding through counsel of its
own choosing.

9.                                      Insurance

9.01                        DISTRIBUTOR’s
Insurance - During the term of this Agreement and for a period of one
(1) year thereafter, DISTRIBUTOR shall purchase and maintain, at its sole cost
and expense, the following insurance coverages:

(a)                                  commercial
general liability insurance and products liability coverage with broad form
vendor endorsement, which specifically insures all liabilities of DISTRIBUTOR
to COMPANY and Operator under this Agreement, to the extent afforded by normal
ISO policy forms and definitions, with all such insurance coverages providing
for combined single limit bodily injury/property damage liability of not less
than [CONFIDENTIAL](107) Dollars; and

(b)                                 commercial
automobile liability insurance coverage providing for combined single limit
bodily injury/property damage liability of not less than [CONFIDENTIAL](108)
Dollars.

All such insurance shall be provided by insurance companies
which are licensed and authorized to do business in the United States of
America, shall be occurrence based policies and which insurance companies are
reasonably satisfactory to COMPANY. 
DISTRIBUTOR agrees to deliver to COMPANY, on or prior to the Effective
Date, certificates of insurance evidencing the existence of all the above
insurance coverages and naming COMPANY as an additional insured under such
policies.  The certificates shall contain
an agreement by the insurance carrier to notify COMPANY, in writing, at least
thirty (30) days prior to the date of any cancellation or change in such
insurance coverage.

(107)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(108)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 31
 

9.02                        COMPANY’s
Insurance - During the term of this Agreement, and for a period of one
(1) year thereafter, COMPANY shall purchase and maintain, at its sole cost and
expense, commercial general liability insurance and products liability
coverage, and a contractual liability endorsement which specifically insures
all liabilities of COMPANY to DISTRIBUTOR under this Agreement, to the extent
afforded by normal ISO policy forms and definitions, with all such insurance
coverages providing for combined single limit bodily injury/property damage
liability of not less than [CONFIDENTIAL](109)
Dollars. All such insurance shall be provided by insurance companies which are
licensed and authorized to do business in the United States of America, and
which are reasonably satisfactory to DISTRIBUTOR. COMPANY agrees to deliver to
DISTRIBUTOR, on or prior to the Effective Date, a certificate of insurance
evidencing the existence of all the above insurance coverages and naming
DISTRIBUTOR as an additional insured under such policies. The certificate shall
contain an agreement by the insurance carrier to notify DISTRIBUTOR, in
writing, at least thirty (30) days prior to the date of any change in such
insurance coverage.

10.          Representations and
Warranties

10.01                 Representations
and Warranties of DISTRIBUTOR - DISTRIBUTOR hereby represents and
warrants to COMPANY as follows:

(a)                                  DISTRIBUTOR
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Ohio. DISTRIBUTOR has the requisite power to own
properties, to carry on its business as now being conducted by it, and to
execute, deliver and perform this Agreement.

(b)                                 This
Agreement is, when executed and delivered by DISTRIBUTOR and by the COMPANY,
the valid and binding obligation of DISTRIBUTOR enforceable against it in
accordance with its terms, except as may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting
creditors’ rights generally, and further subject to general equity principles.

(c)                                  The
execution, delivery and performance by DISTRIBUTOR of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
violate, conflict with, result in a breach or termination of, or constitute a
default under (or an event which with due notice or lapse of time, or both,
would constitute a breach of or default under), (i) the certificate of
incorporation, as amended to date, of 

(109)              Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 32
 

DISTRIBUTOR, (ii) any judgment, order, decree, ruling
or injunction applicable to DISTRIBUTOR, or (iii) any contract or agreement
between DISTRIBUTOR and any third party.

(d)                                 There
is no action, suit or proceeding pending or, to the knowledge of DISTRIBUTOR,
threatened against DISTRIBUTOR which, if decided adversely to DISTRIBUTOR, may
prevent the consummation of the transactions contemplated by this Agreement.

10.02                 Representations
and Warranties of COMPANY –COMPANY hereby represents and warrants to
DISTRIBUTOR as follows:

(a)                                  COMPANY
is a limited liability COMPANY duly organized, validly existing in good
standing under the laws of the State of Delaware. COMPANY has the corporate
power to own properties, to carry on its business as now being conducted by it,
and to execute, deliver and perform this Agreement.

(b)                                 This
Agreement is, when executed and delivered by COMPANY and DISTRIBUTOR, the valid
and binding obligation of COMPANY enforceable against it in accordance with its
terms, except as may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors’ rights
generally, and further subject to general equity principles.

(c)                                  The
execution, delivery and performance by COMPANY of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
violate, conflict with, result in a breach or termination of, or constitute a
default under (or an event which with due notice or lapse of time, or both,
would constitute a breach of or default under), (i) the certificate of
formation or operating agreement, as amended to date, of COMPANY, (ii) any
judgment, order, decree, ruling or injunction applicable to COMPANY, or (iii)
any contract or agreement between COMPANY and any third party.

(d)                                 There
is no action, suit or proceeding pending or, to the knowledge of COMPANY,
threatened against COMPANY which, if decided adversely to COMPANY, may prevent
the consummation of the transactions contemplated by this Agreement.

(e)                                  The
details of the purchasing arrangement, including the purchase and resale of
products by COMPANY, have been disclosed to its Operators as required by law.

 33
 

11.                               Notices
- Any notice or other communication to be given under this Agreement by one
party to the other shall be in writing and delivered by overnight messenger
service, or delivered by telecopy or facsimile transmission, or sent by United
States registered or certified mail, postage prepaid, addressed as follows:

	
   

  	
  If to DISTRIBUTOR:

  	
  Kaleel Bros., Inc.

  
	
   

  	
   

  	
  761 Bev Road

  
	
   

  	
   

  	
  Youngstown, Ohio 44512

  
	
   

  	
   

  	
  Attention: Ron Kaleel 

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
  FAX: (330) 758-1244

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  If to COMPANY:

  	
  TCBY Systems, LLC

  
	
   

  	
   

  	
  2855 E. Cottonwood Parkway, Suite 400

  
	
   

  	
   

  	
  Salt Lake City, UT 84121-7050

  
	
   

  	
   

  	
  Attention: Purchasing Director

  
	
   

  	
   

  	
  FAX:  (801) 736-5941

  
						

 

or to such other addresses as may be communicated in writing by either
party to the other as provided hereunder. 
Notices shall be deemed to have been given when received.

12.                               Force Majeure - Notwithstanding any
term or provision contained in this Agreement to the contrary, it is understood
and agreed that DISTRIBUTOR will not be responsible or liable in any manner
whatsoever for the failure by it to sell and/or deliver the Products or
otherwise perform any obligation under this Agreement or otherwise, and COMPANY
will not be responsible or liable in any manner whatsoever for the failure by
it to purchase and accept, the Products, if such failure is due to fire,
strike, accident, explosion, riot, rebellion, terrorist action or threat,
flood, embargo, war, interruption or delay in transportation, epidemic,
pandemic, shortage of raw materials, acts of God or government (including, but
not limited to, laws, regulations and restrictions of all kinds), or any other
causes or contingencies of any character (other than lack of funds) beyond the
reasonable control of DISTRIBUTOR or COMPANY. 
Nothing expressed or implied in this Section 12 shall excuse the
non-performance or delay in performance of any payment obligation of the
COMPANY or DISTRIBUTOR, any affiliate or any Operator.

13.                               Relationship of Parties - This
Agreement is not intended and shall not be construed to constitute either party
as the joint venturer, partner, agent or legal representative of the
other.  Neither party has any 

 34
 

authority, whether express, implied, or apparent, to assume or create
any obligations on behalf of the other.

14.                               Entire
Agreement; Modifications - This Agreement and the Schedules attached
hereto and made a part hereof, constitute the entire agreement and understanding
of the parties with respect to the subject matter hereof, and supersede all
prior proposals, negotiations, communications, representations, written or oral
agreements and understandings between the parties with respect to the subject
matter hereof. No modification of any term or provision of this Agreement shall
be enforceable unless embodied in a writing executed by all parties to this
Agreement.

15.                               Severability
- The provisions of this Agreement are severable, and the invalidity or
unenforceability of any term or provision hereof shall not operate to
invalidate or render unenforceable the remaining terms and provisions which are
valid and enforceable.

16.                               Waivers
- The waiver by either party hereto of any of its rights or breaches of the
other party under this Agreement in a particular instance shall not be
construed as a waiver of the same or different rights or breaches in subsequent
instances. All remedies, rights, undertakings and obligations, hereunder shall
be cumulative and none shall operate as a limitation of any other remedy,
right, undertaking or obligation hereof.

17.                               Assignment:
Successors and Assigns - Except as hereinafter set forth, neither of
the parties may assign this Agreement without the prior written consent of the
other, except that either party shall have the right to assign this Agreement
to a parent, subsidiary or affiliated COMPANY, or may assign this Agreement in
conjunction with the sale or transfer of all or substantially all of its stock
or assets by way of a sale of stock or assets, a merger or other business
reorganization, without the prior consent of the other party; provided,
however, that any such assignment shall not relieve the assigning party from
any liability or obligation under this Agreement that accrues prior to the
assignment and notice thereof to the other party and provided further, that in
the event of a transfer of all or substantially all of the stock or assets of a
party or merger or other business reorganization, the surviving entity or
transferee is at least as financially strong as the assigning or original
party.  The assigning party shall give
notice of such assignment to the other party. The provisions of this Agreement
will be binding upon and will inure to the benefit of the parties and their
respective successors and assigns. 
DISTRIBUTOR may assign its accounts receivables, and related contract
rights, in connection with its accounts receivable financing and
securitization.

 35
 

18.                               No
Offer - The submission by DISTRIBUTOR to COMPANY of this Agreement shall
have no binding force or effect, shall not constitute an offer to sell the
Products, nor confer any right or impose any obligation upon either party until
executed by both parties.

19.                               Confidentiality
- Any proprietary information supplied by either party to the other party
(whether set forth in writing, on any data base or in any other medium),
including, but not limited to information on customer and supplier identity or
any other customer or supplier information, purchasing volumes and history, pricing,
purchasing specifications, and product market results (the “Confidential
Information”), is and shall remain confidential and proprietary information of
the disclosing party, and valuable trade secrets owned solely by the disclosing
party. The recipient party of any Confidential Information shall not disclose
any such Confidential Information to any third person or entity without the
prior written consent of the disclosing party in every instance, and shall not
use any such Confidential Information, nor permit any such Confidential
Information to be used, for any reason other than to fulfill the terms of this
Agreement; provided, however, that either party and its respective successors
and assigns may (i) disclose any Confidential Information to the extent
compelled by law, regulation, rule, subpoena, or other process of law and (ii)
provide invoices, and any information relating to historical payments or
payments due or to become due from franchisees or Operators hereunder to its
auditors and legal counsel, and to present and potential financing sources and
rating agencies and their respective auditors and legal counsel). The parties’
obligations under this Section 19 shall not apply to any of the Confidential
Information delivered or made available to them by the other party which the
recipient of the Confidential Information can reasonably establish (a) was
known to the recipient party at the time the Confidential Information was
disclosed or made available to the recipient party; (b) was known to the public
at the time the Confidential Information was disclosed or made available to the
recipient party; (c) becomes known to the public after the date the
Confidential Information was disclosed or made available to the recipient party
through no fault or breach of this Section 19 by the recipient party; (d) is
given to or made available to the recipient party by a third party who has a
lawful right to disclose the Confidential Information to the recipient party;
or, (e) is independently developed by the Recipient party without reference to
the Confidential Information.

20.                               Arbitration -
All actions, disputes, claims or controversy with the exception of seeking an
injunction, now existing or hereafter arising between DISTRIBUTOR and COMPANY,
including, but not limited to any action, dispute, claim or controversy arising
out of this Agreement or the delivery by DISTRIBUTOR of any Products to COMPANY
(a “Dispute”) shall be resolved by binding arbitration in Salt Lake City, Utah,
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association and, to the maximum extent applicable, the Federal Arbitration
Act.  Arbitrations shall be conducted
before one arbitrator mutually agreeable to COMPANY and DISTRIBUTOR.  If the parties cannot agree on an arbitrator
within thirty (30) days after the request for an arbitration, then each
party will select an arbitrator 

 36
 

and the two arbitrators
will select a third who shall act as the sole arbitrator of the dispute.  Judgment on any award rendered by an
arbitrator may be entered in any court having jurisdiction.  All fees of the arbitrator and other costs
and expenses of the arbitration shall be paid by DISTRIBUTOR and COMPANY
equally unless otherwise awarded by the arbitrator.  Disputes between DISTRIBUTOR and any Operator
other than COMPANY shall not be subject to arbitration under this section 20.

21.                               Governing Law- This Agreement shall be
deemed executed in Salt Lake City, Utah and shall be governed by the construed
in accordance with the laws of the State of Utah as applicable therein.

22.                             Miscellaneous
- The section and paragraph headings contained in this Agreement are for
reference only and shall not be considered as substantial parts of this
Agreement. The use of the singular or plural from in this Agreement shall
include the other form and the use of the masculine, feminine or neuter gender
shall include the other gender.

23.                               Counterparts;
Facsimile- This agreement may be executed in one or more counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute but one agreement binding on all parties hereto,
notwithstanding that all of the parties are not signatory to an original or
same counterpart.  The parties may
execute and deliver this Agreement by facsimile transmission.

[Remainder
of page intentionally blank.  Signature
page and Schedules follow.]

 37
 

IN WITNESS WHEREOF, each
of the parties hereto has caused this Agreement to be executed and delivered by
its duly authorized officers on the day and year first above written.

	
  TCBY SYSTEMS, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Michael Ward

  	
   

  
	
  Its: Executive Vice President

  
	
   

  
	
   

  
	
  KALEEL BROS., INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Ron Kaleel

  	
   

  
	
  Its: President

  
				

 

 38Exhibit
10.72

TCBY
SYSTEMS, LLC

Distribution
Service Agreement

with
Cheney Brothers, Inc.

July 17, 2006

 1
 

 

DISTRIBUTION
AGREEMENT

THIS
AGREEMENT is made
and entered into as of the 17th day of July, 2006, by and between TCBY SYSTEMS, LLC, a Delaware limited liability
company (“COMPANY”) and CHENEY BROTHERS,
INC., a Florida Corporation (“DISTRIBUTOR”). DISTRIBUTOR will
commence distribution services under this Agreement on August 14, 2006 (the “Effective
Date”) unless otherwise mutually agreed upon by the parties.

RECITALS

A.            The COMPANY is engaged
in the worldwide business of franchising or licensing retail TCBY Stores and
other related concepts (“Franchised Stores”). 
COMPANY also has several COMPANY-owned stores that it supports directly
(“Company Stores”).  The Franchised
Stores and or individual franchisees (the “Franchisees”) function as
independent companies and are individually and solely responsible for the
activities at each location, including purchasing needed products and supplies,
which includes responsibility for purchasing from DISTRIBUTOR.  COMPANY is responsible for activities at its
Company Stores.  Company Stores and
Franchised Stores are jointly referred to herein as “Stores”, the Franchisees
and individuals responsible for Company Stores are jointly referred to as (“Operators”)
and the combined efforts of the COMPANY and its Franchisees is referred to as
the “System”.  COMPANY takes steps to
assist Stores to meet its purchasing needs and has the right to designate
distributors and suppliers for the System.

B.            The DISTRIBUTOR is
engaged in the business of purchasing, selling, distributing and delivering
food service products (including the Products, as defined below).  In connection therewith, the DISTRIBUTOR
manages, controls, prepares and furnishes reports to its customers concerning
the inventories of products and supplies the DISTRIBUTOR purchases, manages and
controls for sale, distribution and delivery to its customers.

C.            COMPANY
wishes to appoint DISTRIBUTOR as a distributor of certain approved proprietary
food and related products to the Stores located within the Territory (as
defined below), and DISTRIBUTOR wishes to accept such appointment, all on the
terms and conditions hereinafter set forth.

 2
 

 

AGREEMENT

NOW, THEREFORE, in
consideration of the mutual covenants herein set forth and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

1.             Appointment
- Subject to all terms and conditions of this Agreement, COMPANY hereby
appoints DISTRIBUTOR as a distributor of the products within the product
categories listed in Schedule 1 (the
“Products”), to the Stores in the territory serviced by DISTRIBUTOR’s
distribution centers located in Ocala, Florida and Riveria Beach, Florida (the “Territory”)
as reflected in the map depicted in Schedule
2 and DISTRIBUTOR hereby accepts such appointment. Subject to
Section 2.02, COMPANY may appoint DISTRIBUTOR as a distributor of Products to
Stores outside of the Territory and DISTRIBUTOR may agree to such designation.

2.             Distribution of
Products

2.01        Products - DISTRIBUTOR
will maintain in its inventory of Products the following: (i) Products
designated by COMPANY that contain the proprietary trademarks, service marks,
logos or labels of COMPANY or any of its affiliates or that are made pursuant
to specifications provided by COMPANY, its affiliates, or licensors for limited
distribution to Operators (defined below) or other entities licensed by
COMPANY, its affiliates or licensors (“TCBY Branded Products”), and (ii) other
supplies or other national or regional branded Products designated or
contracted for by COMPANY to be maintained in inventory by DISTRIBUTOR for
distribution to COMPANY, its affiliates and the Operators.  (Collectively, Products described in clauses
(i) and (ii) are referred to as “Proprietary Products”).  DISTRIBUTOR will also maintain in its
inventory non-proprietary Products which DISTRIBUTOR stocks in its inventory
for sale to COMPANY, its affiliates and its Operators. DISTRIBUTOR shall not be
required to maintain more than two hundred (200) Proprietary Products in
inventory at any time.  All Coca Cola
Products carried for COMPANY shall be excluded from the calculation of the
number of Proprietary Products.

2.02        Approved Operators
- DISTRIBUTOR shall sell and deliver to Franchisees and Operators of Stores
approved by COMPANY and located within the Territory such quantities of the
Products (subject to minimum Product order requirements) as the Operators may
order from time to time during the term of this Agreement. DISTRIBUTOR shall
cease selling TCBY Branded Products to any Operator not later than three (3)
days following receipt of written notice from COMPANY advising DISTRIBUTOR that
such Operator is no longer approved by COMPANY and shall,

 3
 

 

within such timeframe, further cease selling, under the terms of any
supplier agreement negotiated by COMPANY, all Proprietary Products to such
Operators referenced in such notice. In addition, DISTRIBUTOR shall have the
right to cease the sale and distribution of Products to any Operator (a) who is
in default of its obligations to DISTRIBUTOR, provided that DISTRIBUTOR has
given COMPANY at least three (3) business days notice of such default before
ceasing deliveries to such Operator, or (b) who has filed a voluntary petition
in bankruptcy or under any other similar insolvency or debtor relief law or who
has had such a petition filed against it, or who has made a general assignment
for the benefit of its creditors. COMPANY shall also have the right to
reinstate delivery to any Operator that COMPANY previously stopped selling by
providing written notice to DISTRIBUTOR and DISTRIBUTOR shall provide such
delivery as soon as mutually agreed between the parties.

A list of the present Operators with Stores located within the
Territory and approved by COMPANY and their respective Store locations is
attached hereto as Schedule 3.  During the term of this Agreement, COMPANY
shall maintain and provide to DISTRIBUTOR a current list of all Operators with
Stores within the Territory who have been approved by COMPANY for distribution
of the Products under this Agreement. DISTRIBUTOR shall have the right to rely
upon such list, as amended or modified by COMPANY in writing from time to time,
in performing its obligations under this Agreement. COMPANY shall notify
DISTRIBUTOR of new Stores within the Territory not less than fourteen (14) days
prior to the desired date of first shipment of Products to any such new Stores.
In addition, provided and to the extent that COMPANY and DISTRIBUTOR mutually
agree in writing, DISTRIBUTOR shall provide distribution services to Stores
located outside the Territory, as designated by COMPANY.

COMPANY represents and warrants that the terms of this Agreement, as
and if amended in the manner permitted under this Agreement, are binding upon
and shall govern DISTRIBUTOR and COMPANY’s obligations with respect to
distribution services performed by DISTRIBUTOR hereunder and that each
Franchisee that is an owner or operator of a Franchised Store within the System
shall be bound by the terms of this Agreement, as it may hereafter be amended,
upon such Operator’s purchase of Proprietary Products from DISTRIBUTOR.

2.03        Product
Orders - All Product orders shall be submitted by the Operators
to DISTRIBUTOR and shall specify the location of the Operator’s Stores, the
type of Product, and the quantity desired. 
Operators may place orders electronically (“Electronic Orders”) or by
telephoning or faxing DISTRIBUTOR’s customer service center in accordance with
the guidelines detailed below. All shipment expenses from DISTRIBUTOR’s
distribution center to the Operator’s location shall be at DISTRIBUTOR’s
expense unless otherwise noted elsewhere in this Agreement. Product order

 4
 

 

guides will be provided by DISTRIBUTOR to the Operators monthly via
DISTRIBUTOR’s website and with a hard copy delivered to each Store, with
availability of such order guides to be made prior to the beginning of the
month, but only after review and approval of the order guide by COMPANY. The
order guides will be organized by Product categories and will include, among
other things, the Product Sell Price (as defined herein), Product units and new
Products. DISTRIBUTOR will assign one product code number to each stock-keeping
unit (“SKU”) of each Product, which will be common throughout its entire
distribution system and will be used on all documents such as order guides,
invoices, monthly reports, etc. SKU’s, and, accordingly, the assigned product
code number, must differ for equivalent Products supplied by different
suppliers. DISTRIBUTOR            
will use its best efforts to utilize the existing TCBY product item
numbers.  Only Products approved for sale
to its Operators by the COMPANY will be listed on this order guide. Electronic
Orders will be placed via telephone modem or internet using DISTRIBUTOR’s
automated order entry system.  All orders
are subject to the standard order cut-off time of 4:00 p.m. local time, one (1)
day prior to their scheduled delivery day for Stores located in the states of
Florida and Georgia and 4:00 p.m. local time. 
In no event will Electronic Orders be required more than two (2) days
prior to the scheduled delivery day. 
Operators will be notified prior to the time of final order cut-off if a
product is expected to be out of stock so that an alternative may be ordered,
subject to the provisions of Section 3.02. 
Operators will have until 5:00 p.m. local time, one (1) day before their
order shipping day to modify or add-on to their order.  Notwithstanding the foregoing, Stores that do
not place Electronic Orders and have scheduled delivery days of Monday in
Florida and Georgia, must have their orders placed by 4 p.m. local time, on the
preceding Friday.

DISTRIBUTOR may schedule deliveries any day of the week.
Where reasonably possible, DISTRIBUTOR will schedule ordering days and delivery
days that are mutually agreed upon by and between DISTRIBUTOR and each Operator
and will provide notice to the affected Operator at least fourteen (14) days
before routing changes. On an exception basis, DISTRIBUTOR will consider
shortening the permissible time frames for scheduled deliveries for those
Operators that, given unique and compelling business needs, require the
same.  Operator will be notified of any
Product shortages at the time of order placement or, in the case of an
Electronic Order, one (1) day prior to the loading of the delivery truck.

2.04        Deliveries.    Delivery vehicles used by DISTRIBUTOR will
only display the marks of DISTRIBUTOR, except for locations that cannot
accommodate delivery by DISTRIBUTOR’S existing tractor trailers or in the
instances where recovery deliveries are made by outside services or DISTRIBUTOR
has the need for temporary short term rental equipment.

 5
 

 

DISTRIBUTOR agrees that, excluding key drops (deliveries scheduled to
be made during the period running from one (1) hour or more after the retail
closing time of the Store to deliveries one (1) hour or more before the retail
opening time of the Store), an overall average of 90% of all regularly
scheduled deliveries will be made within a two (2) hour window, meaning no
earlier than one (1) hour before and no later than one (1) hour after the
scheduled delivery time. If a delivery is anticipated to fall outside of this
two (2) hour window, DISTRIBUTOR will immediately notify the Operator.
DISTRIBUTOR will provide an inside delivery to each Operator in accordance with
Company’s temperature store requirements as detailed in Section 4.07, placing
refrigerated and frozen Products into their appropriate storage areas, but will
not be responsible for stocking shelves or rotating inventories.

All invoices for deliveries made during Store’s business hours will be
signed for by the Store’s store manager or other representative prior to
DISTRIBUTOR’s driver leaving the Store (provided that the driver is not
unreasonably delayed).  Copies of
invoices for deliveries made after the Store’s regular business hours will be
left at the Store.

The COMPANY agrees to use its commercially reasonable efforts to cause
Operators to provide keys and security codes for night deliveries where
necessary.  In the event Operator refuses
to provide keys and security codes, Operator will promptly meet the delivery
driver at the scheduled appointment time or at such other time as Operator has
been notified in the event of a late delivery. 
If the Operator fails to meet the DISTRIBUTOR delivery at the
appropriate time on more than one occasion, the Operator shall be responsible
for payment of a penalty fee of [CONFIDENTIAL](1)
to DISTRIBUTOR for subsequent occurrences. 
In the event of a Product shortage or delivery problem that occurs
during an unattended delivery, the authorized representative of the Stores will
contact the distribution center no later than the first Notification Deadline
following such unattended delivery.  The “Notification
Deadline” is 4:00 p.m. local time each day for the affected Stores.

2.05        Delivery Frequency/Routing - DISTRIBUTOR will provide each Operator with a minimum
delivery frequency based on annual case volume as shown below as long as the
Operator meets the minimum order requirements set forth in Section 5 hereof:

Delivery Frequency

	
  Annual Case Volume

  	
   

  	
  Summer Routing

  	
   

  	
  Winter Routing

  	
   

  
	
  Less than 200 cases

  	
   

  	
  4 deliveries during a 12 month period

  	
   

  
	
  200-349 cases

  	
   

  	
  6 deliveries during a 12 month period

  	
   

  
	
  350-499 cases

  	
   

  	
  8 deliveries during a 12 month period

  	
   

  
	
  500-999 cases

  	
   

  	
  Every 4 weeks

  	
   

  	
  Every 4 weeks

  	
   

  
	
  1,000-1,999 cases

  	
   

  	
  Every 3 weeks

  	
   

  	
  Every 4 weeks

  	
   

  
	
  2,000-3,499 cases

  	
   

  	
  Every week

  	
   

  	
  Every 2 weeks

  	
   

  
	
  Greater than 3,499
  cases

  	
   

  	
  Every week

  	
   

  	
  Every week

  	
   

  

 

(1)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 6
 

 

This schedule is intended to serve as a guideline only and DISTRIBUTOR
agrees to provide additional regular deliveries as requested by Operator and
approved by COMPANY in writing.  COMPANY
will provide DISTRIBUTOR with the initial delivery frequency for each Store in Schedule 3. 
COMPANY and DISTRIBUTOR will mutually agree on the exact date for
routing changes from summer to winter and winter to summer but each period will
be approximately six (6) months with summer routing from April through
September and winter routing from October through March.

In the event an emergency delivery is required based upon the Operator’s
needs and not due to a delivery error by DISTRIBUTOR nor during the time
periods specified in Section 2.06, DISTRIBUTOR will accommodate the Operator’s
request with the most efficient available delivery method.  All additional freight expense will be at the
Operator’s expense and will be billed upon DISTRIBUTOR’s receipt of the invoice
from the shipping agent.  If DISTRIBUTOR
is able to schedule such an emergency delivery in conjunction with a nearby
route, the additional freight expense will be [CONFIDENTIAL](2).  Where possible, a store may order up to [CONFIDENTIAL](3) cases to be delivered to a nearby store,
on that store’s delivery day (and with that store’s consent) without an
additional charge.  Products delivered to
a nearby store will be billed on a separate invoice.

Should the need arise for an emergency or special delivery due to
supplier error, DISTRIBUTOR and COMPANY will work with the supplier to remedy
the shortage at the supplier’s expense. If supplier fails to pay the additional
freight expense, COMPANY will be required to do so provided DISTRIBUTOR
notifies COMPANY immediately of supplier non-performance.  If an emergency delivery is necessary due to
DISTRIBUTOR error, DISTRIBUTOR will arrange a special delivery with any
additional freight to be paid by DISTRIBUTOR.

DISTRIBUTOR will arrange its routes to insure that its delivery trucks
will be in all markets (SMSA’s of at least 250,000 population) within each Territory
at least twice a week where at least twenty-five (25) Stores serviced by
DISTRIBUTOR under this Agreement are located.

(2)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(3)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 7
 

 

2.06        Special Deliveries During Roll-Out and New Operator Openings - DISTRIBUTOR and COMPANY
recognize that during the initial roll-out phase of the DISTRIBUTOR
distribution program, many new processes will be in place for each of COMPANY,
the Operators and DISTRIBUTOR, including changes in the way the Operators
order, the distance from the DISTRIBUTOR distribution center to the Operators,
and lead times from order day to delivery day for the Operators. Therefore,
DISTRIBUTOR will process emergency orders for all Operators for the first
thirty (30) days following the commencement of distribution service at no
additional charge, subject to the minimum order requirements and applicable
handling fees, if any, as set forth in Section 5 of this Agreement.

2.07        Return of Products/Credits –Any Products ordered by
Operators which are returned to DISTRIBUTOR for any reason must be returned no
later than the next regularly scheduled delivery (except that, in the case of
Products to be returned as a result of concealed damage, within the remaining
shelf life of such Products) and all claims for Products to be returned must be
made either to the driver upon check-in of the order, by telephone by 4 p.m. on
the day of delivery following receipt of the Products if an unattended delivery
or, in the case of concealed damage, within twenty-four (24) hours of discovery
of concealed damage by the Operator.  All
returned items must be in unmarked original packaging and must be in suitable
condition for resale (unless damaged or mis-marked Product was the reason for
the return). Subject to the foregoing, DISTRIBUTOR shall provide credit to the
affected Operator for defective, shorted or damaged Products within twenty-four
(24) hours of the driver’s return if brought to the driver’s attention or
noticed by the driver during delivery or, in any event, within forty-eight (48)
hours of DISTRIBUTOR’s receipt of the Operator’s claim of damaged, shorted or
defective Products (or receipt of product, if warranted) and will immediately
provide documentation on its website for Operator of such credit if the
original order was placed electronically or via fax or phone if the order was
placed in some other manner. 
Notwithstanding the foregoing, no returns will be permitted for cooler
or freezer items, or fresh produce due to misorder by the Operator.  Products refused by Operator at time of
delivery for reasons other than damage or remaining shelf life below agreed
upon parameters will be subject to a [CONFIDENTIAL](4)
restocking charge to be paid by Operator. 
In the event that the shorted, defective or damaged Product is a Kill
Item, then DISTRIBUTOR will remedy the situation in accordance with Section
3.02 if so requested by the Operator.

2.08        Limited Time Offers (“LTO’s”)
- In order to allow DISTRIBUTOR to maintain service levels to the
Operators, COMPANY will provide DISTRIBUTOR with at least twenty-eight (28)
days prior written notice of any and all LTO’s to be run by COMPANY (subject to
availability of LTO

(4)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 8
 

 

Products from the supplier within the twenty-eight (28) day period).
Such written notices shall include estimated usage for the Products to be
promoted if such usage is expected to deviate materially from historical levels
or if a new Product. Subject to the above, DISTRIBUTOR agrees to stock
sufficient inventory for any new Proprietary Products to be used in national
LTO promotions and other key items, as reasonably requested by COMPANY.  Unless retained on the Operator’s menu at the
instruction of the COMPANY or mutually agreed to between COMPANY and
DISTRIBUTOR, all LTO Products must be removed from the DISTRIBUTOR distribution
centers no later than sixty (60) days after the completion of the LTO and
COMPANY shall purchase all remaining inventory of such LTO as provided in
Section 3.02. The sale of LTO Products by DISTRIBUTOR is final and LTO Products
may not be returned to DISTRIBUTOR, unless the return is necessitated due to a
DISTRIBUTOR error or due to Product damage not caused by the Operator.

3.             Suppliers of
Products; Inventory of Products.

3.01        Suppliers/Contracted
Products - The Proprietary Products to be distributed to the Operators
under the terms and conditions of this Agreement shall be purchased by
DISTRIBUTOR, on its own account, from the suppliers (including COMPANY)
selected by COMPANY, pursuant to terms and conditions as are agreed upon by and
between DISTRIBUTOR and such suppliers (including COMPANY). In the event
COMPANY enters into direct contracts with suppliers, the terms and conditions
of such contracts that obligate DISTRIBUTOR shall be provided to DISTRIBUTOR
for its business and legal review and, if the business and legal terms of the
proposed contract that apply to DISTRIBUTOR are reasonably acceptable to
DISTRIBUTOR, DISTRIBUTOR will approve the supplier contract. The guaranteed
supplier price provided under such supplier contract (net of billbacks by
DISTRIBUTOR, if any), plus applicable freight if the supplier price is not a
delivered price, plus [CONFIDENTIAL](5),
if any, attributable to the Product shall be the “Cost” of the Product.  [CONFIDENTIAL](6).  Products governed by such supplier contracts
negotiated by COMPANY are referred to herein as “Contracted Products.” The
freight charges for Contracted Products will be an amount negotiated with the
supplier by COMPANY.  DISTRIBUTOR agrees
that Cost for any Contracted Products will not include any unloading costs for
palletized and slipsheet loads.

3.02        Inventory -
During the term of this Agreement, DISTRIBUTOR shall maintain an inventory of
the Products in quantities necessary to provide the Operators with an adequate
supply of such

(5)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(6)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 9
 

 

Products based upon initial usage projections by COMPANY, future historical
usage of such Products by the Operators, and the fill rate performance
requirements detailed below. DISTRIBUTOR agrees to work with COMPANY, to
attempt to maximize the quantities of Products purchased to efficiently reduce
the cost of Products purchased, and to maximize Product inventory turns. In
addition, DISTRIBUTOR agrees to order Products in the quantities indicated on
the inbound quantity matrix attached hereto as Schedule 5, as amended by COMPANY to reflect the growth in the
number of Stores serviced by DISTRIBUTOR in the Territory from time to
time.  DISTRIBUTOR further agrees that
any Products transported between its Ocala and Riveria Beach distribution
centers will be done so without increasing the initial landed Cost of the
Product.  To further insure DISTRIBUTOR’s
ability to comply with the performance requirements detailed later in this
Section 3.02, DISTRIBUTOR will also maintain at each distribution center
servicing Operators “safety stock” of not less than [CONFIDENTIAL](7)
days historical usage for all Proprietary Products and will also have an
additional [CONFIDENTIAL](8) days historical
usage of white chocolate mousse, chocolate and vanilla frozen yogurt on the
road at all times. DISTRIBUTOR agrees that all Products delivered to Operators
will have at least one-third of their original shelf-life remaining as of the
date of delivery.

COMPANY categorizes Products into three classes:

Proprietary Products that Operators must have (“Kill
Items”), which Kill Items will not number more than [CONFIDENTIAL](9)
at any time, excluding beverage Products and LTO items. COMPANY will provide a
list of Kill Items and other Proprietary Products to DISTRIBUTOR, which list
will be updated by COMPANY from time-to-time. 
The initial list of Kill Items is attached as Schedule 4.

Other Proprietary
Products that can be substituted in an emergency.

Non-proprietary Products, including, any produce items
that DISTRIBUTOR may agree to provide.

DISTRIBUTOR will achieve a 100% fill rate on Kill Items with overnight
emergency delivery, if requested, an overall aggregate “fill rate” for all
Products of [CONFIDENTIAL](10), and at least

(7)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(8)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(9)           Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(10)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 10
 

 

[CONFIDENTIAL](11) of all
invoices issued by DISTRIBUTOR to the Operators will be completely accurate at
the time of initial issuance, with all of the above measured quarterly.  The “fill rate” equals the percentage of
Products or Kill Items, as the case may be, obtained by dividing the total
number of Products or Kill Items shipped by DISTRIBUTOR and received by the
Operators at the time of delivery for the month, by the total number of Product
or Kill Items ordered by the Operators from the DISTRIBUTOR for that same
month.  All fill rate measurements (and
invoice accuracy requirements) will be net of supplier-related issues such as
shortages and delayed deliveries to DISTRIBUTOR, provided DISTRIBUTOR notifies
COMPANY immediately in the event of supplier non-performance. If emergency
delivery is required due to supplier (including COMPANY) error, costs of
emergency delivery shall be at supplier (including COMPANY) expense, provided
that, if the supplier fails to absorb such expense, such delivery costs shall
be paid by the Operator provided DISTRIBUTOR has notified COMPANY immediately
in the event of such non-performance and Operator has approved the additional
expense in advance.   If the emergency
delivery is due to DISTRIBUTOR error, then DISTRIBUTOR will remedy the
situation in as efficient manner as possible, which may include emergency
deliveries and special freight shipments, at DISTRIBUTOR’S sole expense. If the
emergency delivery is due to Operator error, the Operator shall pay delivery
costs for such emergency delivery.  From
the moment of receipt of the Products for storage by DISTRIBUTOR until the
Products have been accepted by Operator at the Store, DISTRIBUTOR assumes all
risk of loss or damage with respect thereto, shall be directly liable to
COMPANY for any such loss or damage to the Products and the related costs and
expenses for replacing the Products and agrees to obtain and maintain adequate
insurance coverage to insure against such loss or damage.

In the event of substitution of a Proprietary Product, the substituted
Product must have been previously approved by COMPANY in writing and, if the
need for substitution was caused due to DISTRIBUTOR error, the price of the
substituted Product will be determined based on the lower of the Cost (as
hereinafter defined) of the substituted Product or the Cost of the out-of-stock
Product that it replaces.  In addition,
DISTRIBUTOR will reimburse COMPANY to the extent that COMPANY would have
realized a difference between its selling price to DISTRIBUTOR and the amount
that COMPANY would have paid for the Proprietary Product from its supplier,
unless the substitution is due to COMPANY’s error.  Upon request, COMPANY shall provide to
DISTRIBUTOR copies of invoices and other documentation reasonably necessary to
verify the amount of the difference claimed by COMPANY.  If substitution is due to supplier (including
COMPANY) error, then COMPANY shall cause supplier to, or if COMPANY is the
supplier, COMPANY shall, reimburse DISTRIBUTOR for any reasonable losses
sustained due to such error.

(11)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 11
 

 

To the extent that DISTRIBUTOR is unable to sell to the Operators
quantities of the Proprietary Products in DISTRIBUTOR’s inventory for any
reason whatsoever, including, but not limited to, Product discontinuation,
slow-moving inventory, unused LTO Products, promotional or seasonal Products or
exceeded shelf life due to sudden decline in Product movement and not due to
DISTRIBUTOR error, COMPANY will purchase, or cause a third party to purchase,
all remaining inventory of such Proprietary Products at DISTRIBUTOR’s cost,
F.O.B. the DISTRIBUTOR distribution centers plus DISTRIBUTOR’s handling and
carrying charges, if properly approved by COMPANY in advance as outlined
below.  In such event, COMPANY will
purchase or cause to be purchased all perishable Proprietary Products within [CONFIDENTIAL](12) days after notice from DISTRIBUTOR or by
the expiration date of the Proprietary Products, whichever is earlier, and all
nonperishable Proprietary Products within [CONFIDENTIAL](13)
days after notice from DISTRIBUTOR.  In
addition, if the inventory re-purchase is necessitated for any reason other
than DISTRIBUTOR error, COMPANY shall reimburse to DISTRIBUTOR all reasonable
out-of-pocket costs and expenses (not to exceed an amount equal to [CONFIDENTIAL](14) of the Product’s Cost unless DISTRIBUTOR
receives COMPANY’S prior written consent) incurred by DISTRIBUTOR in selling,
returning or otherwise disposing of such Products.  DISTRIBUTOR shall provide COMPANY with
documentation or other proof that any such costs and expenses were incurred by
DISTRIBUTOR.  In order to allow COMPANY
to monitor the supply and usage of the Proprietary Products, DISTRIBUTOR shall
provide to COMPANY a monthly obsolete and slow-moving inventory report.

3.03        Aged Inventory
Notification-DISTRIBUTOR will immediately notify COMPANY in writing in
the event that any quantities of its Proprietary Products are within forty-five
(45) days of expiration of product life. 
If DISTRIBUTOR fails to do so, COMPANY shall not be required to comply
with the requirements set forth in Section 3.02.

3.04        Present DISTRIBUTOR’s
Inventory - DISTRIBUTOR agrees to purchase the existing merchantable
and saleable inventory of Proprietary Products from COMPANY’S present
distributor located in Orlando, Florida and Atlanta, Georgia in quantities not
to exceed a four-weeks’ supply of such Products, in the aggregate, provided
that DISTRIBUTOR and COMPANY have been given an opportunity by the present
distributor to inspect any such Product prior to purchase pursuant to this
Section 3.04.  DISTRIBUTOR will pay, via
check, the present

(12)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(13)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(14)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 12
 

 

distributor for Products purchased from it, within [CONFIDENTIAL](15)
days of the later of DISTRIBUTOR’S receipt of the Products or the receipt of
the invoice approved by COMPANY for the Products.  DISTRIBUTOR shall be responsible for all
freight and unloading costs associated with transporting such inventory from
the existing DISTRIBUTOR’s locations listed above.  DISTRIBUTOR will not be responsible for any
handling or other fees charged by the current distributor in connection with
DISTRIBUTOR’s loading and transferring of such inventory.  COMPANY and the current distributor will be
required to provide all reasonable assistance and cooperation to DISTRIBUTOR in
connection with the purchase, loading and transportation of such inventory from
the current distributor to the DISTRIBUTOR distribution center, including the
scheduling of mutually agreeable inventory inspection and pick-up times.

In the event that the Cost of the Product, as
purchased from the existing distributor, exceeds or is less than the Cost that
DISTRIBUTOR would otherwise utilize in determining the Sell Price for such
Products obtained through suppliers, including COMPANY, DISTRIBUTOR shall
utilize the Cost designated by COMPANY in determining the Sell Price and shall
invoice, pay to COMPANY or charge the Operator, as directed by the COMPANY, in
the amount of the difference.  In the
event COMPANY directs DISTRIBUTOR to invoice the COMPANY, COMPANY shall pay
such invoiced amount, via check, so that it is received by DISTRIBUTOR within [CONFIDENTIAL](16) days of the date of the invoice.  In the case of a rebate to COMPANY,
DISTRIBUTOR shall pay the rebated amount within [CONFIDENTIAL](17)
days of its determination of the amount to be rebated.

4.             Sell Price/Payment
Terms/Financial Reporting

4.01        Sell Price - Beginning
on the Effective Date and throughout the entire term of this Agreement, the
maximum purchase price at which DISTRIBUTOR shall sell the Products, (the “Sell
Price”), to the Operators shall be determined by adding the “Cost” (as
hereinafter defined) of the Product plus [CONFIDENTIAL](18)
of Cost per case for all deliveries (collectively, “Markup”), subject to the
other provisions of this Agreement.  For
purposes of this Agreement, the “Cost” of a Product other than a Contracted
Product shall be the sum of (a) the cost of the Product as shown on the
invoices to DISTRIBUTOR from the respective supplier, including COMPANY, plus
(b) if the invoiced cost of the Product is not a delivered price, the
applicable freight charges related to shipping the Product from the supplier to
DISTRIBUTOR’S distribution center, less (c) promotional allowances reflected on
supplier invoices to DISTRIBUTOR. Applicable freight, in

(15)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(16)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(17)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(18)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 13
 

 

those cases where the invoice cost to DISTRIBUTOR for non-proprietary
Products is not a delivered cost, means that DISTRIBUTOR has added a reasonable
freight charge, agreed to in advance and in writing by COMPANY for delivering
such non-proprietary Products from suppliers to DISTRIBUTOR.  Applicable freight for any non-proprietary
Product will not exceed the rate charged by nationally recognized carriers
operating in the same market for the same type of freight service. Cost for any
non-proprietary Product will not be reduced by discounts for cash or prompt
payment available to DISTRIBUTOR, breakage allowances or by backhaul revenue.
Fuel or other transportation surcharges indicated on the manufacturer’s or
supplier’s invoice or on freight invoices will increase Cost. The Cost of a
Contracted Product shall be determined in accordance with Section 3.01.  In no event will the Cost of Contracted
Products include amounts to be rebated to DISTRIBUTOR and therefore,
DISTRIBUTOR will not negotiate off-invoice manufacturer rebates,
labels/promotional allowances or any other “soft money” received from supplier
or freight carriers of Contracted Products. 
In order to allow verification of the foregoing commitment, DISTRIBUTOR
agrees to provide documentation substantiating the Cost of items DISTRIBUTOR
purchases from suppliers and freight carriers. 
DISTRIBUTOR agrees to limit its collection of such “soft money” to the
manufacturers of non-proprietary Products. 
The Cost of Contracted Products will not be reduced by discounts for
cash or prompt payment available to DISTRIBUTOR, breakage allowances or by
backhaul revenue. Fuel or other transportation surcharges indicated on the
manufacturer’s or supplier’s invoice or on freight invoices will increase
Cost.  In the case of Contracted
Products, COMPANY agrees to notify DISTRIBUTOR as soon as practical after a
change in Cost has been agreed to with a supplier.

The invoice format to be used by DISTRIBUTOR will be
approved by COMPANY and will contain separate lines showing subtotals for
various Product categories, applicable taxes, the date of the ACH debit and
other summary line items as detailed elsewhere in this Agreement.

Partial case shipments (also known as “splits”) shall
be permitted for the malt, maraschino cherries, chocolate sprinkles, assorted
sprinkles in which individual units of such Products are separately packaged
within each case.

DISTRIBUTOR and COMPANY agree that the Markup for
DISTRIBUTOR’S services in connection with deliveries to Stores located outside
of the United States shall be the same as all other Stores located in the
Territory when DISTRIBUTOR delivers product to the freight forwarder or
redistributor’s location and [CONFIDENTIAL](19)
of the Markup in the event the freight forwarder or redistributor picks up the
order at the DISTRIBUTOR’S location.

(19)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 14
 

 

4.02        Fuel Cost Adjustments
- If the operating costs of DISTRIBUTOR are increased or decreased as a result
of fuel cost increases or decreases, DISTRIBUTOR may adjust the Markup (as and
if otherwise adjusted pursuant to the terms of this Agreement) to compensate
for such fluctuations in fuel costs, on a monthly basis. The amount of the
adjustment computed in accordance with this Section 4.02 shall also be added to
or subtracted from, as applicable, the specified price for Contracted Operator
Sell Price Products described in Section 4.10. 
The method for determining the fuel surcharge or adjustment will be made
quarterly beginning November 1, 2006 and will be based on the Gulf Coast Weekly
Retail On-Highway diesel fuel price which is compiled by the Energy Information
Administration. The Web site to access this information electronically is as
follows:

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_on_highway_diesel_prices/current/html/diesel.html

If such publication is no longer published or available, then the
parties will mutually agree upon an acceptable alternative source.

As fuel prices increase or decrease, the fuel cost adjustments will
move according to changes in the thirteen (13) week average for the Gulf Coast
fuel price bracket, and will take effect on the first day of the calendar month
following the applicable publication date. 
For example, the fuel cost adjustment beginning the first day in
November, if any, will be determined based on the thirteen (13) week average
ending immediately prior to or on October 30th. 

	
  Price Per Gallon Including Taxes

  	
   

  	
  Per Case Surcharge/ Credit

  	
   

  
	
  [CONFIDENTIAL](20)

  	
   

  	
   

  	
   

  

 

If the price per gallon, including taxes, exceeds [CONFIDENTIAL](21),
the surcharge will equal [CONFIDENTIAL](22)
per case plus an additional [CONFIDENTIAL](23)
per case for each [CONFIDENTIAL](24)
increment (or portion thereof) that the price per gallon exceeds [CONFIDENTIAL](25). 
If the price per gallon, including taxes, falls below

(20)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(21)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(22)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(23)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(24)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(25)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 15
 

 

[CONFIDENTIAL](26), a credit
will be issued in the amount of [CONFIDENTIAL](27)
per case plus an additional [CONFIDENTIAL](28)
per case for each [CONFIDENTIAL](29)
increment (or portion thereof) that the price is less than [CONFIDENTIAL](30).  Any such surcharge or credit will be shown as
a separate line item on the Operator’s invoice.

4.03        Markup Adjustments due
to Variances from Projections.

The [CONFIDENTIAL](31) Markup during the first [CONFIDENTIAL](32) months after the Effective Date is
premised upon an average annual delivery size of [CONFIDENTIAL](33)
cases to the Stores serviced by DISTRIBUTOR and the average case Cost of the
Products, including [CONFIDENTIAL](34),
is [CONFIDENTIAL](35).  COMPANY and DISTRIBUTOR agree to review the
service levels provided by DISTRIBUTOR as well as the average delivery sizes [CONFIDENTIAL](36) days after the Effective Date, taking
into account seasonality of COMPANY’s business and additional deliveries made
by DISTRIBUTOR to support the transition and using the methodology detailed
later in this Section 4.03.   No adjustments
will be made to the Markup at that time due to a variance in average delivery
size from projections, unless the average delivery size experienced during the
first [CONFIDENTIAL](37) days is greater than
or equal to [CONFIDENTIAL](38) cases or less
than [CONFIDENTIAL](39) cases, adjusted for
seasonality and excluding deliveries to Cross-docked Stores and any additional
deliveries made by DISTRIBUTOR during the initial transition period pursuant to
Section 2.06.  In the event such a Markup
adjustment is required, the COMPANY and DISTRIBUTOR agree to use the schedule
that follows later in Section 4.03 as soon as practical after the review and
such Markup will remain in effect for the balance of the first year of the
Agreement.

In addition to
reviewing the average delivery size [CONFIDENTIAL](40)
days after the Effective Date, COMPANY and DISTRIBUTOR will also review the
average case Cost of the Products

(26)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(27)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(28)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(29)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(30)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(31)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(32)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(33)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(34)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(35)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(36)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(37)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(38)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(39)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(40)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 16
 

 

(inclusive of the [CONFIDENTIAL](41), but excluding any impact from the cost
of inventory purchased pursuant to Section 3.04) for this same timeframe (and
each [CONFIDENTIAL](42) months thereafter
from the Effective Date) and agree to further modify the Markup schedule in
this Section 4.03 as follows.  The actual
average case Cost experienced during the first [CONFIDENTIAL](43)
days will be compared to the projected level of [CONFIDENTIAL](44).  If the actual case Cost deviates by [CONFIDENTIAL](45) per cent or less from [CONFIDENTIAL](46), then no adjustment will be made to the
Markup at that time except as called for earlier in this Section 4.03 and in
Section 4.02.  However, if the actual
average case Cost does deviate by more than [CONFIDENTIAL](47)
per cent from [CONFIDENTIAL](48) then the Markup
will be adjusted in the opposite direction from the change in average case
Cost.  Thus, an increase in average case
Cost of [CONFIDENTIAL](49) per cent would
result in a reduction in the percentage Markup and a decrease in average case
Cost would result in an increase in the percentage Markup.  This adjustment to Markup will be [CONFIDENTIAL](50) full percentage point for each [CONFIDENTIAL](51) per cent change in average case Cost from
[CONFIDENTIAL](52).  For example, if the actual average case Cost
is [CONFIDENTIAL](53) (and there is no
adjustment called for due to a change in average delivery size), then the
Markup will be increased by [CONFIDENTIAL](54)
percentage point from [CONFIDENTIAL](55)
per cent to [CONFIDENTIAL](56) per cent.  If the actual average cast Cost is [CONFIDENTIAL](57) (and there is no adjustment called for
due to a change in average delivery size), then the Markup will be decreased by
[CONFIDENTIAL](58) percentage pints
from [CONFIDENTIAL](59) per cent to [CONFIDENTIAL](60) per cent. 
This Markup adjustment will be put into effect as soon as practical
after the reduction has been determined and it will remain in effect for the
balance of the first year of the Agreement.

(41)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(42)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(43)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(44)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(45)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(46)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(47)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(48)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(49)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(50)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(51)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(52)         Confidential treatment has
been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(53)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(54)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(55)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(56)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(57)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(58)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(59)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

(60)         Confidential treatment
has been requested for the redacted portion. 
The confidential, redacted portions have been filed separately with the
SEC.

 17

 
  

After the first [CONFIDENTIAL](61) months of service and after each [CONFIDENTIAL](62) month period thereafter, the Markup for
the Stores for the next [CONFIDENTIAL](63)
months will be based on the actual average delivery size and average case Cost
for the previous [CONFIDENTIAL](64) months as
calculated below and according to the following schedule:

	
  Average Delivery Size for

  	
   

  	
  Percentage Markup

  
	
  Preceding [CONFIDENTIAL](65) Months

  	
   

  	
  for Next [CONFIDENTIAL](66)
  Months

  

 

[CONFIDENTIAL](67)

The average
delivery size will be calculated by summing up all of the cases delivered to
the Stores serviced by DISTRIBUTOR in the Territory for the previous [CONFIDENTIAL](68) months (with each partial case or “split”
counting as a full case) and dividing the total number of cases delivered by
the total number of deliveries made by DISTRIBUTOR as modified below.  The number of deliveries made by DISTRIBUTOR
shall not include deliveries to correct errors made by DISTRIBUTOR or
suppliers, nor shall it include deliveries for which DISTRIBUTOR has received
the [CONFIDENTIAL](69) special delivery fee
in accordance with Section 2.05.

In the event the
average delivery size for the previous [CONFIDENTIAL](70)
months falls outside of the ranges described above, COMPANY and DISTRIBUTOR
will negotiate a new Markup for that DISTRIBUTOR facility in good faith.  In the event COMPANY and DISTRIBUTOR fail to
agree on such a Markup adjustment within thirty (30) days after the commencement
of negotiations under this Section 4.03, then both COMPANY and DISTRIBUTOR will
have the right to terminate this Agreement with 180 days written notice to the
other party in accordance with Section 6.02 (b)(ii).

In addition to the
adjustment for a change in average case drops per delivery, after the first [CONFIDENTIAL](71) months of service and every [CONFIDENTIAL](72) months thereafter, 

(61)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(62)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(63)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(64)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(65)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(66)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(67)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(68)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(69)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(70)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(71)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 18
 

 
  

 

COMPANY and DISTRIBUTOR
will also review the average case Cost for the previous [CONFIDENTIAL](73)
months and will further modify the Markup from that determined by considering
the average delivery size in accordance with the earlier provisions of this
section, i.e. [CONFIDENTIAL](74) full percentage
point adjustment in Markup for each [CONFIDENTIAL](75)
per cent change in the average cast Cost from [CONFIDENTIAL](76).

4.04                        Payment
Terms/Markup Adjustments due to Payment Methodology

(a)          Standard Payment
Terms.  Except as noted below,
DISTRIBUTOR and COMPANY have agreed that payments to DISTRIBUTOR for Products
delivered to the Operators (including Contract Feeders as defined below) shall
be received by ACH debit entry initiated by DISTRIBUTOR, so that the amount is
credited to DISTRIBUTOR’s account  on
Friday of each week for deliveries made during the preceding [CONFIDENTIAL](77) days. Thus, stores which receive
deliveries on Saturday or Sunday would have their account debited [CONFIDENTIAL](78) days, respectively, after receipt of
their order.  DISTRIBUTOR may also accept
payment by check if so requested by Operator and approved by DISTRIBUTOR.  All new Operators will initially receive
credit terms as outlined above, provided that they satisfy DISTRIBUTOR’S credit
criteria for such terms, as such criteria is uniformly applied among all
similarly situated Operators, in light of all relevant facts and
circumstances.  Payment terms will be
extended only to those Operators that are creditworthy as shall have been
solely determined by DISTRIBUTOR. DISTRIBUTOR may, in its sole discretion,
provide alternate payment terms to those Operators not meeting DISTRIBUTOR’s
standards for creditworthiness. 
DISTRIBUTOR will provide email or fax notice to each Operator at least [CONFIDENTIAL](79) days prior to the ACH debit entry
actually taking place, advising Operator of the amount of the ACH debit, along
with the invoice number and any credits posted during the prior [CONFIDENTIAL](80) days.

Notwithstanding the foregoing, DISTRIBUTOR agrees to
provide extended credit terms to Operators performing as Contract Feeders (as
defined below) in non-traditional locations provided that they satisfy
DISTRIBUTOR’s credit criteria for such terms, as 

(72)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(73)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(74)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(75)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(76)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(77)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(78)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(79)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(80)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 19
 

 
  

such criteria is uniformly applied among all similarly
situated Operators in light of all relevant facts and circumstances. To qualify
for such credit terms, each location operated by a Contract Feeder in the
Territory must be approved by COMPANY in writing and the Contract Feeder must
comply with these extended credit terms. 
“Contract Feeders” are Operators who operate non-traditional food
service locations in facilities such as airports, sports facilities, travel
plazas, universities, tech centers, etc.

(b)                                 No
Set-Off/Late Fees/Collection Costs. 
No deductions or set offs from payments due to DISTRIBUTOR may be made
by Operators for any reason without the prior written authorization of DISTRIBUTOR.  Failure of the Operator to make any payment
required when due shall result in DISTRIBUTOR having the right to impose more
stringent credit or payment terms, such as, without limitation, cash in
advance, cash on delivery, delivery of acceptable letters of credit or third
party guaranties, or additional collateral, or, after three (3) business days’
prior notice to COMPANY and the affected Operator, to suspend all deliveries,
and declare the entire unpaid balance of the Operator’s account immediately due
and payable. The COMPANY shall pay, and shall use its commercially reasonable
efforts to cause each Operator to pay, all reasonable costs of collection,
including reasonable attorneys fees incurred or paid by DISTRIBUTOR, but only
to the extent related to their respective accounts. DISTRIBUTOR will have the
right to charge interest at the maximum rate permitted by law but not exceeding
[CONFIDENTIAL](81) percent per annum on
all unpaid amounts due or owing by Operators and/or COMPANY to DISTRIBUTOR.

(c)                                  COMPANY’S
Liability for Payments. COMPANY agrees that it shall be liable for all
liabilities of COMPANY expressly set forth in this Agreement.  COMPANY will not be liable for the debts or
obligations of Operators unless otherwise agreed to in writing by COMPANY.

(d)                                 Payments
to COMPANY as Supplier.  COMPANY
purchases its frozen yogurt Products and resells them to DISTRIBUTOR after
adding the [CONFIDENTIAL](82) to the sell
price.  This [CONFIDENTIAL](83)
varies by Product and a schedule of the current [CONFIDENTIAL](84)
for its frozen yogurt Products is attached as Schedule
6.  COMPANY reserves the right
to alter [CONFIDENTIAL](85) on its frozen yogurt

(81)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(82)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(83)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(84)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(85)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 20
 

 
  

Products in its discretion but no more frequently than [CONFIDENTIAL](86). 
COMPANY will invoice DISTRIBUTOR for these products as shipped from the
manufacturer and will designate the [CONFIDENTIAL](87)
as separate line items for each Product. 
DISTRIBUTOR agrees to pay these invoices within [CONFIDENTIAL](88)
days of receipt.

COMPANY will also invoice DISTRIBUTOR for [CONFIDENTIAL](89) on its frozen cake and pie Products for
each Product as shown on Schedule 7.  Company reserves the right to alter [CONFIDENTIAL](90) on its frozen cake and pie Products in
its discretion but no more frequently than [CONFIDENTIAL](91).
 Distributor shall pay all invoices for [CONFIDENTIAL](92) on its frozen cake and pie Products when
invoiced by the COMPANY within [CONFIDENTIAL](93)
days of invoice date, which date will be no earlier than the date of receipt of
the applicable Products by the DISTRIBUTOR.

[CONFIDENTIAL](94)

4.05                        Financial Information.  DISTRIBUTOR
may request balance sheets, income statements and such further financial information from each
Operator from time to time as will enable DISTRIBUTOR to accurately assess the
Operators’ financial condition.

4.06                        Price
Verifications-Audit- COMPANY will be allowed to perform electronic
Purchase Price verifications for purchases made under this Agreement on a
weekly basis and DISTRIBUTOR will supply the necessary files and information to
COMPANY for these audit purposes on a timely basis and in a form acceptable to
COMPANY and DISTRIBUTOR.  As part of this
electronic auditing procedure, COMPANY may also audit the payments made to it
for accuracy as well.  If any such audit
reveals net pricing, delivery surcharge or COMPANY payment errors (overcharges
set off by undercharges) in excess of [CONFIDENTIAL](95)
in the aggregate during the audited period (not to exceed a twelve (12) month
period) COMPANY shall have the right to conduct additional audits, at its
option and 

(86)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(87)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(88)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(89)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(90)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(91)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(92)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(93)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(94)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(95)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 21
 

 
  

at DISTRIBUTOR’S reasonable expense, until the aggregate net pricing
errors disclosed by an such additional audits are less than [CONFIDENTIAL](96) for the applicable audit period.  For any audit conducted pursuant to this
Section 4.08 that discloses that Operators were either overcharged or
undercharged for Products, or that COMPANY was overpaid or overcharged during
the audited period, DISTRIBUTOR and COMPANY agree to correct the overcharge,
undercharge, overpayment or underpayment, as the case may be.  The form and method for making these
adjustments will be mutually agreed upon by DISTRIBUTOR and COMPANY; provided,
however, in any event the remittance of any such adjustments shall be made by
either party within [CONFIDENTIAL](97)
days from the final determination of the undercharge or overcharge, as
applicable.

4.07                        DISTRIBUTOR
Operator Support -DISTRIBUTOR agrees to provide the following Operator
support to COMPANY.

(a)                                  DISTRIBUTOR
will support the System by participating in the supplier show at its own
expense.  In addition, DISTRIBUTOR will
pay COMPANY an annual support payment equal to [CONFIDENTIAL](98)
payable within [CONFIDENTIAL](99) days of written
request by COMPANY.  COMPANY may submit
such requests only once during each calendar year and a total of [CONFIDENTIAL](100) such requests during the term of this
Agreement.

(b)                                 DISTRIBUTOR
will support COMPANY in terms of activating product recalls in accordance with
DISTRIBUTOR’S standard product recall policies.

(c)                                  DISTRIBUTOR
will adhere to the following HACCP requirements for monitoring of temperature
controls for perishable products both in the DISTRIBUTOR distribution center
and in DISTRIBUTOR’S transportation equipment.

	
  ITEM

  	
   

  	
  FORM

  	
   

  	
  TEMPERATURE

  REQUIREMENTS IN

  DISTRIBUTION

  CENTER

  	
   

  	
  UPPER TEMP.

  RANGE WHILE

  TRANSPORTED TO

  STORES

  
	
  Soft Serve Frozen Yogurt

  	
   

  	
  Frozen

  	
   

  	
  -10o or lower

  	
   

  	
  0o

  
	
  Hand-Dipped Frozen Yogurt

  	
   

  	
  Frozen

  	
   

  	
  -10o or lower

  	
   

  	
  0o

  
	
  Yogurt Cakes and Pies

  	
   

  	
  Frozen

  	
   

  	
  -10o or lower

  	
   

  	
  0o

  
	
  Various Toppings

  	
   

  	
  Refrigerated

  	
   

  	
  34o to 36o

  	
   

  	
  38o

  
	
  Nuts and Liquid Toppings

  	
   

  	
  Frozen

  	
   

  	
  0 or lower

  	
   

  	
  0o

  
	
  Various Toppings

  	
   

  	
  Dry

  	
   

  	
  Above 38

  	
   

  	
  Above 38

  

 

(96)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(97)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(98)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(99)                            Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(100)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 22
 

 
  

(d)                                 DISTRIBUTOR
will provide COMPANY with periodic EDI file transfers to include the following:

Weekly invoice register by store outlining the SKU’s
and quantity purchased

Weekly inventory levels, age of inventory, sales and
pending orders and delivery dates by item

Weekly report of Current Stores

Weekly report of average drop sizes for each store

Monthly delivery performance report with on-time
performance, fill rates and clean invoice percentages

Daily out-of-stock report and stores so affected

Monthly costing detail on all Products used by the
SYSTEM

Such additional reports as may be reasonable requested
by the COMPANY

4.08                        Taxes
– Franchisees and COMPANY shall each be responsible for their applicable
sales and use taxes.  DISTRIBUTOR shall
collect applicable taxes from each responsible party and be responsible for
remitting all taxes to the proper state and local taxing authorities.  COMPANY shall only be responsible for paying
those taxes on the Stores under its control and operation.  DISTRIBUTOR agrees to indemnify and defend
COMPANY pursuant to Section 8.01 of this Agreement should Company receive a
claim for the DISTRIBUTOR’s failure to pay taxes.  Neither party will pay a claim which is
allegedly the responsibility of the other without first notifying the other and
giving the other the opportunity to contest the claim.

4.09                        Special
Pricing Arrangements - Products that are governed by national billing
agency or other programs for which the price at which the DISTRIBUTOR must sell
the Product to the Operator is prescribed by agreements between COMPANY, or any
other franchisor or group purchasing organization, on the one hand, and the
supplier or manufacturer of such Products, on the other, are referred to in
this Agreement as “Contracted Operator Sell Price Products”.  Notwithstanding Section 4.01, the Sell Price
for Contracted Operator Sell Price Products shall be the amount prescribed (or
calculated in accordance with) the above-described programs or agreements.  Contracted Operator Sell Price Products
include, but are not 

 23
 

 
  

limited to, soft drink
syrup products including, without limitation, the following Coca Cola
Products:  Coke Bag in Box (“BiB”), Diet
Coke BiB, Sprite BiB and Barq’s Root Beer BIB.

4.10  Hess
Marts- As long as the agreements remain in place between
COMPANY and Hess and Hess and DISTRIBUTOR, Products will be sold to Hess under
whatever pricing arrangement exists between Hess and DISTRIBUTOR.  These deliveries will not be subject to the
minimums, surcharges or Markup outlined above, neither will they be included in
any compliance testing required of COMPANY for average drop sizes or average
cases costs and the impact of these metrics on the future Markup.  All other requirements of COMPANY with
respect to distributor obligations as outlined in this Agreement will apply to
the Hess Marts as well.  In the event that
the existing agreements between Hess and DISTRIBUTOR cease, Hess Marts may
continue to receive Products if subsequently approved by COMPANY and subject to
Hess Mart’s compliance with the economic terms of this Agreement.

5.                                      Minimum
Deliveries - The Operators will be required to order Products in
minimum quantities of [CONFIDENTIAL](101)
cases of Products per delivery unless due to DISTRIBUTOR or supplier
error.  In addition, Operator will be
required to pay DISTRIBUTOR a [CONFIDENTIAL](102)
handling fee per order for orders of less than [CONFIDENTIAL](103)
cases and [CONFIDENTIAL](104) handling fee per
order for orders of less than [CONFIDENTIAL](105)
cases but equal to or greater than [CONFIDENTIAL](106)
cases unless due to DISTRIBUTOR or supplier including failure to fulfill the
order in its entirety.

6.                                      Term
and Termination

6.01  Term
- The initial term of this Agreement shall commence on the
Effective Date and shall continue until exactly three (3) years after the
commencement of full service to all Stores to be serviced in the Territory (“Initial
Term”), unless sooner terminated as provided in Section 6.02.  This Agreement shall automatically renew for
one (1) additional year upon the completion of the Initial Term unless one
party notifies the other in writing at least one hundred eighty (180) days
before the expiration of the Initial Term of its desire to terminate the
relationship.

(101)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(102)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(103)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(104)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(105)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(106)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 24
 

 
  

6.02                             Termination

(a)                                  Either
party shall have the right, upon prior written notice, to immediately terminate
this Agreement if the other party fails to make payment of any amounts due and
payable under this Agreement, and such failure shall have continued for a
period of ten (10) days from and after the date of written notice to the
defaulting party or in the event the other party files a voluntary petition or
consents to the filing of a petition against it in bankruptcy or any similar
insolvency or debtor relief action, or if the other party makes a general
assignment for the benefit of creditors, or in the event a receiver is
appointed or any proceeding is demanded or initiated by, for or against the
other party under any provision of the Federal Bankruptcy Act or any amendment
thereof.

(b)                                 Either
party shall have the right to terminate this Agreement upon 180 days written
notice under any of the following conditions:

(i)                                     Upon
the occurrence of any material breach or material default by the other party,
which remains uncured after expiration of the applicable Cure Period (as herein
defined), of any of the terms, obligations, covenants, representations and
warranties under this Agreement (except for a default specified in Section 6.02
(a) above) which is not waived in writing by the non-defaulting party.  In such case, the non-defaulting party shall
notify the other of such alleged beach or default and the other party shall
have a period of thirty (30) days to cure the same (the “Cure Period”). If the
defaulting party cures its breach or default within any applicable Cure Period
to the reasonable satisfaction of the non-defaulting party, the notice shall be
void and this Agreement shall continue; otherwise, it shall terminate in accordance
with the notice.

or

(ii)                                  In
the event the parties fail to agree on a Markup adjustment pursuant to Section
4.03.

6.03                        Effect
of Expiration/Termination - Upon expiration or sooner termination of
this Agreement, for any reason, COMPANY shall promptly purchase or arrange for
the purchase from DISTRIBUTOR at DISTRIBUTOR’s cost (including freight costs),
F.O.B. DISTRIBUTOR’s distribution center, all of DISTRIBUTOR’s inventory of the
Proprietary Products and any labeling and packaging materials used in connection
with the Proprietary Products.  COMPANY
will purchase or cause to be purchased perishable Proprietary Products within 

 25
 

 
  

[CONFIDENTIAL](107) days after
the effective date of termination of this Agreement or by the expiration date
of such Proprietary Product, whichever is earlier, and all nonperishable
Proprietary Products within [CONFIDENTIAL](108)
days after the effective date of termination of this Agreement. In addition, if
this agreement is terminated due to COMPANY’s breach or default, COMPANY shall
reimburse to DISTRIBUTOR all other reasonable out-of-pocket costs and expenses
(not to exceed an amount equal to [CONFIDENTIAL](109)
of the Markup on each Product unless DISTRIBUTOR receives COMPANY’s prior
written consent) incurred by DISTRIBUTOR in selling, returning or otherwise
disposing of such Proprietary Products. DISTRIBUTOR shall provide COMPANY with
documentation or other proof that any such costs and expenses were incurred by
DISTRIBUTOR. Termination of this Agreement shall not relieve either party of
any obligation or liability which accrues prior to the effective date of
termination (including, but not limited to, obligations related to the payment
of COMPANY’s accounts receivable or accounts payable and the purchase of excess
inventories). Notwithstanding the foregoing provisions of this Section 6.03 to
the contrary, if this Agreement is terminated due to DISTRIBUTOR’s breach or
default or expires in accordance with the provisions of Section 6.01, COMPANY
shall have the obligation to purchase, or shall direct the replacing
distributor or other suitable purchaser to purchase, from DISTRIBUTOR only such
inventory of the Proprietary Products which is merchantable and saleable but
COMPANY shall have no obligation to reimburse DISTRIBUTOR for its out-of-pocket
costs and expenses related to selling, returning or otherwise disposing of such
Proprietary Products.

7.                                      Trademarks and Trade Names - COMPANY
hereby represents and warrants that it is the owner of, or has the right to use
under license or sublicense, all trademarks, logos, trade names, and other
markings used on the Proprietary Product’s packaging and labels (the “Trademarks”).
COMPANY hereby grants to DISTRIBUTOR the right to use the Trademarks solely in
connection with the approved sale and distribution of the Proprietary Products
in accordance with the provisions of this Agreement and only for as long as
this Agreement remains in effect. COMPANY also grants to DISTRIBUTOR the right
and license to use the Trademarks in advertising and promotional materials when
the Trademarks are used therein to identify the Proprietary Products, subject
to COMPANY’s prior written approval of form and content. Provided DISTRIBUTOR
is using the Trademarks in accordance with the terms and provisions of this Agreement,
COMPANY shall indemnify, defend and hold DISTRIBUTOR and its subsidiaries,
affiliates, officers, shareholders, directors, employees, members, managers,
agents, successors and assigns harmless from and against any and all claims,
demands, liabilities, causes of action, damages, costs (including reasonable
attorneys’ fees and disbursements) and judgments made or incurred by or found 

(107)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(108)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(109)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 

 26
 

 
  

against any of them resulting from or arising out of any claim or suit
alleging infringement by COMPANY or its affiliates, through any of the
Trademarks or otherwise.

8.                                      Indemnification

8.01                        Indemnification
by DISTRIBUTOR - DISTRIBUTOR agrees to indemnify, defend and hold
COMPANY, its subsidiaries, affiliates, officers, directors, members, managers,
stockholders, employees, agents, successors and assigns harmless from and against
any and all claims, demands, liabilities, causes of action, damages, costs
(including reasonable attorneys’ fees and disbursements) and judgments made or
incurred by or found against any of them, resulting from or arising out of:

(a)                                  Any
breach or default by DISTRIBUTOR of any term or provision of this Agreement; or

(b)                                 Any
negligent act or negligent omission or willful misconduct of DISTRIBUTOR in
respect of DISTRIBUTOR’s performance of its obligations under this Agreement.

8.02                        Indemnification
by COMPANY – COMPANY agrees to indemnify, defend and hold DISTRIBUTOR,
it subsidiaries, affiliates, officers, directors, members, managers,
stockholders, employees, agents, successors and assigns harmless from and
against any and all claims, demands, liabilities, causes of action, damages,
costs (including reasonable attorney’s fees and disbursements) and judgments
made or incurred by or found against any of them resulting from or arising out
of:

(a)                                  Any
breach or default by COMPANY of any term or provision of this Agreement.

(b)                                 Any
breach or default by COMPANY of any term or provision of any agreement between
COMPANY, on the one part, and an Operator or a supplier of the Proprietary
Products, on the other part, or any negligent or willful act or omission of COMPANY,
or any of its employees or agents, in respect of the purchase, resale,
distribution, storage or delivery of the Proprietary Products or the COMPANY’s
performance of its obligations under this Agreement; and

(c)                                  Claims
by any franchisee of COMPANY and/or Operator that may arise from DISTRIBUTOR
ceasing further sales to such franchisee or other Operator under this Agreement
at the direction of COMPANY.

 27
 

 
  

(d)                                 Claims
by any franchisee of COMPANY and/or Operator that may arise from COMPANY’s role
in the distribution/product procurement process or the use or allocation of
funds collected by COMPANY from DISTRIBUTOR.

8.03                        Limitation
of Liability; Disclaimer of Warranties - NOTWITHSTANDING SECTIONS 8.01
AND 8.02 TO THE CONTRARY, NEITHER PARTY SHALL IN ANY EVENT BE LIABLE IN
CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, 
TO THE OTHER PARTY OR ITS RESPECTIVE SUBSIDIARIES, AFFILIATES,
FRANCHISEES OR OTHER OPERATORS FOR ANY TYPE OF INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE DAMAGES (SUCH AS, BUT NOT LIMITED TO, LOSS OF PROFITS OR BUSINESS
OPPORTUNITY) ARISING FROM A PARTY’S PERFORMANCE OR FAILURE TO PERFORM UNDER ANY
OF THE TERMS AND PROVISIONS OF THIS AGREEMENT OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, ANY SUCH DAMAGES ATTRIBUTABLE TO A BREACH OF ANY TERM OR PROVISION
OF THIS AGREEMENT.

COMPANY ACKNOWLEDGES AND AGREES THAT DISTRIBUTOR IS
NOT THE MANUFACTURER OR PRODUCER OF THE PRODUCTS SUPPLIED BY DISTRIBUTOR.  IN NO EVENT SHALL DISTRIBUTOR BE LIABLE WITH
RESPECT TO ANY CONDITIONS, DEFECTS, DEFICIENCIES, DANGERS, FAULTS OR FAILURES,
OF ANY KIND, IN OR RELATING TO ANY PRODUCTS SUPPLIED BY DISTRIBUTOR EXCEPT,
SUBJECT TO THE LIMITATIONS STATED IN THIS AGREEMENT, TO THE EXTENT OF
DISTRIBUTOR’S ACTUAL NEGLIGENCE IN ITS HANDLING OF SUCH PRODUCTS.  EXCEPT AS EXPLICITLY PROVIDED
IN THIS AGREEMENT,  DISTRIBUTOR MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

8.04                        Third
Party Claims - The indemnities in this Section 8 are contingent upon:
(i) the indemnified party promptly notifying the indemnifying party in writing
of any action or other proceeding which may give rise to a claim for
indemnification hereunder; unless such failure to promptly notify does not
materially prejudice the claim; (ii) the indemnifying party being allowed to
control the defense and settlement of such claim; and (iii) the indemnified
party reasonably cooperating with the indemnifying party (at the indemnifying
party’s expense) in providing information relevant to the defense or settlement
of a claim. The indemnified party shall have the right, at its option and
expense, to participate in the defense of any action or proceeding through
counsel of its own choosing.

 28
 

 
  

9.                                      Insurance

9.01                        DISTRIBUTOR’s
Insurance - During the term of this Agreement and for a period of one
(1) year thereafter, DISTRIBUTOR shall purchase and maintain, at its sole cost
and expense, the following insurance coverages:

(a)                                  commercial
general liability insurance and products liability coverage with broad form
vendor endorsement, which specifically insures all liabilities of DISTRIBUTOR
to COMPANY and Operator under this Agreement, to the extent afforded by normal
ISO policy forms and definitions, with all such insurance coverages providing
for combined single limit bodily injury/property damage liability of not less
than [CONFIDENTIAL](110) Dollars; and

(b)                                 commercial
automobile liability insurance coverage providing for combined single limit
bodily injury/property damage liability of not less than [CONFIDENTIAL](111)
Dollars.

All such insurance shall be provided by insurance
companies which are licensed and authorized to do business in the United States
of America, shall be occurrence based policies and which insurance companies
are reasonably satisfactory to COMPANY. 
DISTRIBUTOR agrees to deliver to COMPANY, on or prior to the Effective
Date, certificates of insurance evidencing the existence of all the above
insurance coverages and naming COMPANY as an additional insured under such
policies.  The certificates shall contain
an agreement by the insurance carrier to notify COMPANY, in writing, at least
thirty (30) days prior to the date of any cancellation or change in such
insurance coverage.

9.02                        COMPANY’s
Insurance - During the term of this Agreement, and for a period of one
(1) year thereafter, COMPANY shall purchase and maintain, at its sole cost and
expense, commercial general liability insurance and products liability
coverage, and a contractual liability endorsement which specifically insures all
liabilities of COMPANY to DISTRIBUTOR under this Agreement, to the extent
afforded by normal ISO policy forms and definitions, with all such insurance
coverages providing for combined single limit bodily injury/property damage
liability of not less than [CONFIDENTIAL](112)
Dollars.  All such insurance shall be
provided by insurance companies which are licensed and authorized to do
business in the United States of America, and 

(110)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(111)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

(112)                      Confidential
treatment has been requested for the redacted portion.  The confidential, redacted portions have been
filed separately with the SEC.

 29
 

 
  

which are reasonably satisfactory to DISTRIBUTOR. COMPANY agrees to
deliver to DISTRIBUTOR, on or prior to the Effective Date, a certificate of
insurance evidencing the existence of all the above insurance coverages and
naming DISTRIBUTOR as an additional insured under such policies. The
certificate shall contain an agreement by the insurance carrier to notify
DISTRIBUTOR, in writing, at least thirty (30) days prior to the date of any
change in such insurance coverage.

10.                               Representations
and Warranties

10.01                 Representations
and Warranties of DISTRIBUTOR - DISTRIBUTOR hereby represents and
warrants to COMPANY as follows:

(a)                                  DISTRIBUTOR
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Florida. DISTRIBUTOR has the requisite power to own
properties, to carry on its business as now being conducted by it, and to
execute, deliver and perform this Agreement.

(b)                                 This
Agreement is, when executed and delivered by DISTRIBUTOR and by the COMPANY,
the valid and binding obligation of DISTRIBUTOR enforceable against it in
accordance with its terms, except as may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors’ rights
generally, and further subject to general equity principles.

(c)                                  The
execution, delivery and performance by DISTRIBUTOR of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
violate, conflict with, result in a breach or termination of, or constitute a
default under (or an event which with due notice or lapse of time, or both,
would constitute a breach of or default under), (i) the certificate of
incorporation, as amended to date, of DISTRIBUTOR, (ii) any judgment, order,
decree, ruling or injunction applicable to DISTRIBUTOR, or (iii) any contract
or agreement between DISTRIBUTOR and any third party.

(d)                                 There
is no action, suit or proceeding pending or, to the knowledge of DISTRIBUTOR,
threatened against DISTRIBUTOR which, if decided adversely to DISTRIBUTOR, may
prevent the consummation of the transactions contemplated by this Agreement.

 30
 

 
  

10.02                 Representations
and Warranties of COMPANY –COMPANY hereby represents and warrants to
DISTRIBUTOR as follows:

(a)                                  COMPANY
is a limited liability COMPANY duly organized, validly existing in good
standing under the laws of the State of Delaware. COMPANY has the corporate
power to own properties, to carry on its business as now being conducted by it,
and to execute, deliver and perform this Agreement.

(b)                                 This
Agreement is, when executed and delivered by COMPANY and DISTRIBUTOR, the valid
and binding obligation of COMPANY enforceable against it in accordance with its
terms, except as may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors’ rights
generally, and further subject to general equity principles.

(c)                                  The
execution, delivery and performance by COMPANY of this Agreement and the
consummation of the transactions contemplated hereby do not and will not
violate, conflict with, result in a breach or termination of, or constitute a
default under (or an event which with due notice or lapse of time, or both,
would constitute a breach of or default under), (i) the certificate of
formation or operating agreement, as amended to date, of COMPANY, (ii) any
judgment, order, decree, ruling or injunction applicable to COMPANY, or (iii) any
contract or agreement between COMPANY and any third party.

(d)                                 There
is no action, suit or proceeding pending or, to the knowledge of COMPANY,
threatened against COMPANY which, if decided adversely to COMPANY, may prevent
the consummation of the transactions contemplated by this Agreement.

(e)                                  The
details of the purchasing arrangement, including the purchase and resale of
products by COMPANY, have been disclosed to its Operators as required by law.

11.                               Notices
- Any notice or other communication to be given under this Agreement by one
party to the other shall be in writing and delivered by overnight messenger
service, or delivered by telecopy or facsimile transmission, or sent by United
States registered or certified mail, postage prepaid, addressed as follows:

 

	
  If to DISTRIBUTOR:

  	
   

  	
  Cheney Brothers, Inc.

  
	
   

  	
   

  	
  1 Cheney Way

  
	
   

  	
   

  	
  Riveria Beach, Florida 33404

  

 

 31
 

 
  

 

	
  

  	
   

  	
  Attention:

  	
  Mark Jayne

  
	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
  FAX: (561) 818-4533

  
	
   

  	
   

  	
   

  
	
  If to COMPANY:

  	
   

  	
  TCBY Systems, LLC

  
	
   

  	
   

  	
  2855 E.
  Cottonwood Parkway, Suite 400

  
	
   

  	
   

  	
  Salt Lake City,
  UT 84121-7050

  
	
   

  	
   

  	
  Attention:
  Purchasing Director

  
	
   

  	
   

  	
  FAX: (801)
  736-5941

  

 

or to such other
addresses as may be communicated in writing by either party to the other as
provided hereunder.  

Notices shall be deemed to have been given when received.

12.                               Force Majeure - Notwithstanding any
term or provision contained in this Agreement to the contrary, it is understood
and agreed that DISTRIBUTOR will not be responsible or liable in any manner
whatsoever for the failure by it to sell and/or deliver the Products or
otherwise perform any obligation under this Agreement or otherwise, and COMPANY
will not be responsible or liable in any manner whatsoever for the failure by
it to purchase and accept, the Products, if such failure is due to fire,
strike, accident, explosion, riot, rebellion, terrorist action or threat,
flood, embargo, war, interruption or delay in transportation, epidemic,
pandemic, shortage of raw materials, acts of God or government (including, but
not limited to, laws, regulations and restrictions of all kinds), or any other
causes or contingencies of any character (other than lack of funds) beyond the
reasonable control of DISTRIBUTOR or COMPANY. 
Nothing expressed or implied in this Section 12 shall excuse the
non-performance or delay in performance of any payment obligation of the
COMPANY or DISTRIBUTOR, any affiliate or any Operator.

13.                               Relationship of Parties - This
Agreement is not intended and shall not be construed to constitute either party
as the joint venturer, partner, agent or legal representative of the
other.  Neither party has any authority,
whether express, implied, or apparent, to assume or create any obligations on
behalf of the other.

14.                               Entire
Agreement; Modifications - This Agreement and the Schedules attached
hereto and made a part hereof, constitute the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersede all prior proposals, negotiations, communications, representations, written
or oral agreements and understandings between the parties with respect to the
subject matter hereof. No modification of any term or provision of this
Agreement shall be enforceable unless embodied in a writing executed by all
parties to this Agreement.

 32
 

 
  

15.                               Severability
- The provisions of this Agreement are severable, and the invalidity or
unenforceability of any term or provision hereof shall not operate to
invalidate or render unenforceable the remaining terms and provisions which are
valid and enforceable.

16.                               Waivers
- The waiver by either party hereto of any of its rights or breaches of the
other party under this Agreement in a particular instance shall not be
construed as a waiver of the same or different rights or breaches in subsequent
instances. All remedies, rights, undertakings and obligations, hereunder shall
be cumulative and none shall operate as a limitation of any other remedy,
right, undertaking or obligation hereof.

17.                               Assignment:
Successors and Assigns - Except as hereinafter set forth, neither of
the parties may assign this Agreement without the prior written consent of the
other, except that either party shall have the right to assign this Agreement
to a parent, subsidiary or affiliated COMPANY, or may assign this Agreement in conjunction
with the sale or transfer of all or substantially all of its stock or assets by
way of a sale of stock or assets, a merger or other business reorganization,
without the prior consent of the other party; provided, however, that any such
assignment shall not relieve the assigning party from any liability or
obligation under this Agreement that accrues prior to the assignment and notice
thereof to the other party and provided further, that in the event of a
transfer of all or substantially all of the stock or assets of a party or
merger or other business reorganization, the surviving entity or transferee is
at least as financially strong as the assigning or original party.  The assigning party shall give notice of such
assignment to the other party. The provisions of this Agreement will be binding
upon and will inure to the benefit of the parties and their respective
successors and assigns.  DISTRIBUTOR may
assign its accounts receivables, and related contract rights, in connection
with its accounts receivable financing and securitization.

18.                               No
Offer - The submission by DISTRIBUTOR to COMPANY of this Agreement
shall have no binding force or effect, shall not constitute an offer to sell
the Products, nor confer any right or impose any obligation upon either party
until executed by both parties.

19.                               Confidentiality
- Any proprietary information supplied by either party to the other party
(whether set forth in writing, on any data base or in any other medium),
including, but not limited to information on customer and supplier identity or
any other customer or supplier information, purchasing volumes and history,
pricing, purchasing specifications, and product market results (the “Confidential
Information”), is and shall remain confidential and proprietary information of
the disclosing party, and valuable trade secrets owned solely by the disclosing
party. The recipient party of any Confidential Information shall not disclose
any such Confidential Information to any third person or entity without the
prior written consent 

 33
 

 
  

of the disclosing party in every instance, and shall not use any such
Confidential Information, nor permit any such Confidential Information to be
used, for any reason other than to fulfill the terms of this Agreement;
provided, however, that either party and its respective successors and assigns
may (i) disclose any Confidential Information to the extent compelled by law,
regulation, rule, subpoena, or other process of law and (ii) provide invoices,
and any information relating to historical payments or payments due or to
become due from franchisees or Operators hereunder to its auditors and legal
counsel, and to present and potential financing sources and rating
agencies  and their respective auditors
and legal counsel). The parties’ obligations under this Section 19 shall not
apply to any of the Confidential Information delivered or made available to
them by the other party which the recipient of the Confidential Information can
reasonably establish (a) was known to the recipient party at the time the
Confidential Information was disclosed or made available to the recipient
party; (b) was known to the public at the time the Confidential Information was
disclosed or made available to the recipient party; (c) becomes known to the
public after the date the Confidential Information was disclosed or made
available to the recipient party through no fault or breach of this Section 19
by the recipient party; (d) is given to or made available to the recipient
party by a third party who has a lawful right to disclose the Confidential
Information to the recipient party; or, (e) is independently developed by the
Recipient party without reference to the Confidential Information.

20.                               Arbitration -
All actions, disputes, claims or controversy with the exception of seeking an
injunction, now existing or hereafter arising between DISTRIBUTOR and COMPANY,
including, but not limited to any action, dispute, claim or controversy arising
out of this Agreement or the delivery by DISTRIBUTOR of any Products to COMPANY  (a “Dispute”) shall be resolved by binding
arbitration in Salt Lake City, Utah, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association and, to the maximum
extent applicable, the Federal Arbitration Act. 
Arbitrations shall be conducted before one arbitrator mutually agreeable
to COMPANY and DISTRIBUTOR.  If the
parties cannot agree on an arbitrator within thirty (30) days after the
request for an arbitration, then each party will select an arbitrator and the
two arbitrators will select a third who shall act as the sole arbitrator of the
dispute.  Judgment on any award rendered
by an arbitrator may be entered in any court having jurisdiction.  All fees of the arbitrator and other costs
and expenses of the arbitration shall be paid by DISTRIBUTOR and COMPANY
equally unless otherwise awarded by the arbitrator.  Disputes between DISTRIBUTOR and any Operator
other than COMPANY shall not be subject to arbitration under this section 20.

21.                               Governing Law- This Agreement shall be
deemed executed in Salt Lake City, Utah and shall be governed by the construed
in accordance with the laws of the State of Utah as applicable therein.

22.                             Miscellaneous
- The section and paragraph headings contained in this Agreement are for
reference only and shall not be considered as substantial parts of this
Agreement. The use of the singular or plural from in this Agreement shall
include the other form and the use of the masculine, feminine or neuter gender
shall include the other gender.

 34
 

 
  

23.                               Counterparts;
Facsimile- This agreement may be executed in one or more counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute but one agreement binding on all parties hereto,
notwithstanding that all of the parties are not signatory to an original or
same counterpart.  The parties may
execute and deliver this Agreement by facsimile transmission.

[Remainder
of page intentionally blank.  Signature
page and Schedules follow.]

 35
 

 
  

IN
WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officers on the
day and year first above written.

	
  TCBY SYSTEMS, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Michael Ward

  	
   

  
	
  Its: Executive Vice President

  
	
   

  
	
   

  
	
  CHENEY BROTHERS, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Mark Jayne

  	
   

  
	
  Its: President

  
				

 

 36

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