Document:

Exhibit
10.73

TCBY
SYSTEMS, LLC

Distribution
Service Agreement

with Pate
Dawson Company

August 1,
2006

 1
 

 

DISTRIBUTION
AGREEMENT

THIS
AGREEMENT is made
and entered into as of the 1st day of August, 2006, by and between TCBY SYSTEMS, LLC, a Delaware limited liability
company (“COMPANY”) and PATE DAWSON COMPANY, a
North Carolina Corporation (“DISTRIBUTOR”). DISTRIBUTOR will commence
distribution services under this Agreement on September 25, 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 Goldsboro, North Carolina (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 immediately cease the sale and distribution of Products to any
Operator (a) who is in default of its obligations to DISTRIBUTOR, , 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 twenty-one (21) 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 must place orders electronically (“Electronic Orders”) or if
placed by telephone or fax to DISTRIBUTOR’s customer service center in
accordance with the guidelines detailed below, such order will be subject to a [CONFIDENTIAL](1) surcharge pursuant to the provisions of
this section 2.01. 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 

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

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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, only if requested by the individual location, 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 by 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.  Notwithstanding the foregoing,
Stores scheduled to receive deliveries on a Monday must have their order placed
by 10:00 a.m. the preceding Friday. 
Operator will be notified of any Product shortages at the time of order
placement or, in the case of an Electronic Order, at order placement.  If an item is out, the Operator may choose
another at that time. If a shortage occurs after the order is placed, the
location will be notified prior to the loading of the delivery truck with
sufficient time so that an alternative may be ordered, subject to the
provisions of Section 3.02.

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.

Commencing [CONFIDENTIAL](2)
days after the Effective Date, DISTRIBUTOR will be permitted to charge an Operator
who places their order via fax or phone a surcharge of [CONFIDENTIAL](3)
which will be shown as a separate line item on the invoice.

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 

(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.

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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.

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.  COMPANY acknowledges that Stores scheduled to
receive fewer than twenty (20) deliveries annually pursuant to Section 2.05,
may have their delivery date modified from the originally scheduled day of the
week (but still within that same calender week) to permit DISTRIBUTOR to
maximize the efficiency of its routes. 
In the event this occurs, DISTRIBUTOR will notify the Store immediately
upon the placement of the affected order with the new delivery date and time.

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. 
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](4)
to DISTRIBUTOR for subsequent occurrences. 
If DISTRIBUTOR must redeliver the order to the Operator, the Operator
will also be responsible for any Product that is rendered undeliverable due to
the delay.  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.

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

 6
 

 

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 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

  

 

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](5).  Where possible, a store may order up to [CONFIDENTIAL](6) 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 

(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.

 7
 

 

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.

2.06        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.  In addition, during the term of this
Agreement, DISTRIBUTOR will 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.

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 

 8
 

 

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](7) 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 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 

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

 9
 

 

supplier price is not a delivered price, plus [CONFIDENTIAL](8),
if any, attributable to the Product, 
shall be the “Cost” of the Product. 
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, except in those cases where the Contracted Products are not
delivered on pallets or if the pallet ti-hi is larger than the standard established
by DISTRIBUTOR and must be broken down for proper storage

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(9). 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](10)
days historical usage for all Proprietary Products and will also have an
additional [CONFIDENTIAL](11) 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](12)
at any time, excluding beverage Products and LTO items. COMPANY will provide a
list of Kill Items and other Proprietary Products 

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

(9)         Provided that any items
on schedule 5 currently from Distributor non-stocking vendors that will require
Distributor to purchase greater than [CONFIDENTIAL] on hand inventory per order
will be reviewed with Company for alternate items/vendors or will be purchased
through DOT or other redistributors utilized by Distributors.

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

(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.

 10
 

 

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](13), and at least [CONFIDENTIAL](14) 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 

(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.

 11
 

 

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.

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](15) days after notice from DISTRIBUTOR or by
the expiration date of the Proprietary Products, whichever is earlier, and all
nonperishable Proprietary Products within [CONFIDENTIAL](16)
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](17) 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.

(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.

 12
 

 

3.03        Aged Inventory
Notification-DISTRIBUTOR will immediately notify COMPANY in writing via
email 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 Greensboro, North Carolina and in quantities not to
exceed a [CONFIDENTIAL](18) 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
distributor for Products purchased from it, within ten (10) 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](19) days of the date of the invoice.  In the case of a rebate to COMPANY,
DISTRIBUTOR shall pay the rebated amount within [CONFIDENTIAL](20)
days of its determination of the amount to be rebated.

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

(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.

 13
 

 

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](21)
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 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, applicable taxes, the date of the ACH debit and
other summary line items as detailed elsewhere in this Agreement.

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

 14

 

Partial case shipments (also known as “splits”) shall
be permitted for the malt, maraschino cherries, chocolate sprinkles and
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.

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 weekly basis.  The method for determining the fuel surcharge
or adjustment will be made weekly beginning the first Tuesday after the
Effective 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:

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 weekly published price for the U.S. fuel price
bracket, and will take effect on the first day following the applicable
publication date (typically on Monday of each week).  For example, the fuel cost adjustment
beginning Tuesday, September 19, 2006, if any, will be determined based on the
weekly price published on Monday, September 18, 2006 as follows:

	
  Price Per Gallon Including
  Taxes

  	
   

  	
  Per Delivery Surcharge

  
	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL](23)

  	
   

  	
   

  

 

(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.

 15
 

 

If the price per gallon, including taxes, exceeds [CONFIDENTIAL](24),
the surcharge will equal [CONFIDENTIAL](25)
per delivery plus an additional [CONFIDENTIAL](26)
per delivery for each [CONFIDENTIAL](27)
cent increment (or portion thereof) that the price per gallon exceeds [CONFIDENTIAL](28). 
If the price per gallon, including taxes, falls below [CONFIDENTIAL](29), the surcharge will be reduced in the
amount of [CONFIDENTIAL](30) per delivery plus an
additional [CONFIDENTIAL](31) per delivery
for each [CONFIDENTIAL](32) cent increment (or portion
thereof) that the price is less than [CONFIDENTIAL](33).  Any such surcharge will be shown as a
separate line item on the Operator’s invoice.

4.03        Markup Adjustments due
to Variances from Projections.

The [CONFIDENTIAL](34) Markup during the first [CONFIDENTIAL](35) months after the Effective Date is
premised upon an average annual delivery size of [CONFIDENTIAL](36)
cases to the Stores serviced by DISTRIBUTOR. 
COMPANY and DISTRIBUTOR agree to review the service levels provided by
DISTRIBUTOR as well as the average delivery sizes [CONFIDENTIAL](37)
days after the Effective Date.  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](38)
days is less than [CONFIDENTIAL](39)
cases, excluding any additional deliveries made by DISTRIBUTOR during the
initial transition period pursuant to Section 2.06.  If the average delivery size has been between
[CONFIDENTIAL](40) cases during this
period, the Markup will be increased to [CONFIDENTIAL](41)
per case.  If the average delivery size
has been less than 

(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.

(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.

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

 16
 

 

[CONFIDENTIAL](42)
cases, the Markup will be increased to [CONFIDENTIAL](43)
per case.  In the event such a Markup
adjustment is required, the COMPANY and DISTRIBUTOR agree such Markup will be
implemented as soon as practical after the review and will remain in effect for
the balance of the [CONFIDENTIAL](44)
of the Agreement.

After the first [CONFIDENTIAL](45) months of service and after each [CONFIDENTIAL](46) month period thereafter the Markup for
the Stores for the next [CONFIDENTIAL](47)
months will be based on the actual average delivery size for the previous [CONFIDENTIAL](48) months as calculated below and according
to the following schedule:

Average Delivery
Size for    

Preceding [CONFIDENTIAL](49)   Months Markup for Next [CONFIDENTIAL](50)  Month

  [CONFIDENTIAL](51)

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](52) 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](53) special delivery fee
in accordance with Section 2.05.

In the event the
average delivery size for the previous [CONFIDENTIAL](54)
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 

(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.

 17
 

 

right to terminate
this Agreement with 180 days written notice to the other party in accordance
with Section 6.02 (b)(ii). 
Notwithstanding the schedule above, in the event the average delivery
size for the previous [CONFIDENTIAL](55)
months exceeds [CONFIDENTIAL](56) cases and
DISTRIBUTOR is unwilling to reduce its Markup for the next [CONFIDENTIAL](57)
months to [CONFIDENTIAL](58) per case or less,
COMPANY 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).

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 no sooner than [CONFIDENTIAL](59)
days after the date of receipt of the delivery by Operator.  Thus, Stores which receive deliveries on
Saturday or Sunday, would have their account debited on the second Monday after
receipt of their order.  All new
Operators will initially receive credit terms of [CONFIDENTIAL](60)
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 at least [CONFIDENTIAL](61)
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](62)
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 

(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.

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

 18
 

 

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, delivery of acceptable letters of credit or third party
guaranties, or additional collateral, or, after [CONFIDENTIAL](63)
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](64)
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](65) to the sell
price.  This [CONFIDENTIAL](66)
varies by Product and a schedule of the current [CONFIDENTIAL](67)
for its frozen yogurt Products is attached as Schedule
6.  

(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.

 19
 

 

COMPANY reserves the right to alter [CONFIDENTIAL](68)
on its frozen yogurt Products in its discretion but no more frequently than [CONFIDENTIAL](69). 
COMPANY will invoice DISTRIBUTOR for these products as shipped from the
manufacturer and will designate the [CONFIDENTIAL](70)
as separate line items for each Product. 
DISTRIBUTOR agrees to pay these invoices within [CONFIDENTIAL](71)
days of receipt.

COMPANY will also invoice DISTRIBUTOR for [CONFIDENTIAL](72)
on its frozen cake and pie Products as shown on Schedule 7.  Company
reserves the right to alter [CONFIDENTIAL](73)
on its frozen cake and pie Products in its discretion but no more frequently
than [CONFIDENTIAL](74).  Distributor shall pay all invoices for [CONFIDENTIAL](75) on its frozen cake and pie Products when
invoiced by the COMPANY within [CONFIDENTIAL](76)
days of invoice date, which date will be no earlier than the date of receipt of
the applicable Products by the DISTRIBUTOR.

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. 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.

4.06        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](77)
in the aggregate during the audited period (not to exceed a twelve (12) 

(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.

(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.

 20
 

 

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](78) for the applicable
audit period.  For any audit conducted
pursuant to this Section 4.06 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](79)
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](80)
payable on [CONFIDENTIAL](81) of each year.

(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

  

 

(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.

 21
 

 

(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.

4.09Special
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 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.

 22
 

 

5.     Minimum Deliveries - The
Operators will be required to order Products in minimum quantities of [CONFIDENTIAL](82) cases of Products per delivery unless due
to DISTRIBUTOR or supplier error.  In
addition, Operator will be required to pay DISTRIBUTOR a [CONFIDENTIAL](83)
handling fee per order for orders of less than [CONFIDENTIAL](84)
cases and [CONFIDENTIAL](85) handling fee per
order for orders of less than [CONFIDENTIAL](86)
cases but equal to or greater than [CONFIDENTIAL](87)
cases unless due to DISTRIBUTOR or supplier including failure to fulfill the
order in its entirety. Products with a Markup of [CONFIDENTIAL](88)
pursuant to Section 4.01 will be counted as cases for determining the
applicability and amount of these handling fees.

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.

(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.

(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.

 23
 

 

(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
4.04.

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 [CONFIDENTIAL](89) 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](90)
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](91)
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 

(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.

 24
 

 

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
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

 25
 

 

(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.

(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 

 26
 

 

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.

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 

 27
 

 

single limit bodily injury/property damage liability
of not less than [CONFIDENTIAL](92) Dollars; and

(b)           commercial
automobile liability insurance coverage providing for combined single limit
bodily injury/property damage liability of not less than [CONFIDENTIAL](93)
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](94) 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:

(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.

 28
 

 

(a)           DISTRIBUTOR is a
corporation duly organized, validly existing and in good standing under the
laws of the State of North Carolina. 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.

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 Utah. 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.

 29
 

 

(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:

  	
  Pate Dawson Company

  
	
   

  	
   

  	
  402 Commerce Court

  
	
   

  	
   

  	
  Goldsboro, North Carolina  27532

  
	
   

  	
   

  	
  Attention: Mac Sullivan

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
  FAX: (919) 778-0604

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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.

 30
 

 

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.

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 

 31
 

 

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 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 

 32
 

 

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.

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.]

 33
 

 

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

  
	
   

  
	
   

  
	
  PATE DAWSON
  COMPANY

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Malcolm R.
  Sullivan, Jr.

  	
   

  
	
  Its: President

  
				

 

 34Exhibit 10.74

 

TCBY
SYSTEMS, LLC

Distribution
Service Agreement

with The
Merchants Company

September 7, 2006

 1
 

DISTRIBUTION
AGREEMENT

THIS
AGREEMENT is made
and entered into as of the 7th day of September, 2006, by and between TCBY SYSTEMS, LLC, a Delaware limited
liability company (“COMPANY”) and THE
MERCHANTS COMPANY, a Mississippi Corporation (“DISTRIBUTOR”).
DISTRIBUTOR will commence distribution services under this Agreement on October
16, 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 Jackson, Mississippi and Clanton, Alabama (the “Territory”)
as reflected in the map depicted in Schedule
2 and DISTRIBUTOR hereby accepts such appointment. This Territory
includes the entire states of Alabama, Mississippi and Louisiana as well as the
cities of Jonesboro, Arkansas, 
Hopkinsville and Bowling Green, Kentucky, and the portion of the State
of Tennessee west of Interstate 65, but excluding the metropolitan area of
Nashville and the cities of Clarksville, Franklin and Brentwood.  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

 3
 

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, 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

 4
 

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 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 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 internet using DISTRIBUTOR’s web-site.  All Electronic Orders are subject to the
standard order cut-off time of 4:00 p.m. local time, two (2) days prior to
their scheduled delivery day for Stores located in the states of Alabama,
Mississippi and Louisiana and 4:00 p.m. local time, three (3) days prior to
their scheduled delivery day for stores located in the states of Tennessee and
Kentucky.  Orders not placed
electronically may be subject to earlier cut-off times than those established
above as mutually agreed upon between COMPANY and DISTRIBUTOR.  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 12:00 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 have a scheduled delivery day of Monday, must have their orders
placed by 12:00 p.m. local time, on the preceding Friday and will have until
12:00 p.m. on Sunday to modify or add-on to their order.

DISTRIBUTOR may schedule deliveries at any time and
day of the week. However, 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 in the case
of an Electronic Order and, if not an Electronic Order, no later than the
morning of their order cut-off day.

 5
 

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.

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 4.09, 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 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:

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

 6
 

 

	
  

  	
   

  	
  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

  	
   

  

 

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.

(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
 

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.

2.06        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.

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

 8
 

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](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

(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
 

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.  DISTRIBUTOR further agrees that
any Products transported between its Jackson, Mississippi and Clanton, Alabama distribution
centers will be done without increasing the Cost of the Product to the
Operator.  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 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.

(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
 

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 [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

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

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

 11
 

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.

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 

(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 located in Atlanta, Georgia in quantities not to exceed a [CONFIDENTIAL](15) 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 distributor for Products
purchased from it, within ten (10) 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 within [CONFIDENTIAL](16) of the date of
the invoice.  In the case of a rebate to
COMPANY, DISTRIBUTOR shall pay the rebated amount within [CONFIDENTIAL](17)
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 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

(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
 

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 and, if applicable, the inter-branch freight
cost detailed in Section 3.02, plus (c) the Sourcing Fees (as later defined in
Section 4.06), 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, 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.  Notwithstanding
anything else contained in this agreement to the contrary, the Markup for the
following items will be limited to [CONFIDENTIAL](19):
maraschino cherries, medium spoons, taster spoons, straws, water, chocolate
sprinkles and assorted sprinkles.

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

 14
 

In addition, DISTRIBUTOR agrees to reduce the Markup
to each Operator any time they place an order greater than [CONFIDENTIAL](20)
cases at the rate of [CONFIDENTIAL](21)
/case for each case ordered.  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](22)
Markup 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](23)
per case, as adjusted from time to time pursuant to this Agreement.

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

(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.

 15
 

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) 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 4.11. 
The method for determining the fuel surcharge or adjustment will be made
monthly 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 prior four (4) 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 four (4) week average ending
immediately prior to or on October 30th. 

	
  Price Per Gallon Including Taxes

  	
   

  	
  Per Case Surcharge/ Credit

  	
   

  
	
  [CONFIDENTIAL](24)

  	
   

  	
   

  	
   

  

 

If the price per gallon, including taxes, exceeds [CONFIDENTIAL](25),
the surcharge will equal [CONFIDENTIAL](26)
per case plus an additional [CONFIDENTIAL](27)
per case for each [CONFIDENTIAL](28)
increment (or portion thereof) that the price per gallon exceeds 

(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.

(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.

 16
 

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

4.04        Markup Adjustments due
to Variances from Projections.

The [CONFIDENTIAL](35) Markup during the first[CONFIDENTIAL](36) months after the Effective Date is
premised upon an average annual delivery size of [CONFIDENTIAL](37)
cases to the Stores serviced by DISTRIBUTOR and an average case Cost of the
Products, including [CONFIDENTIAL](38),
of [CONFIDENTIAL](39).

After the first [CONFIDENTIAL](40) months of service and after each [CONFIDENTIAL](41) month period thereafter, the Markup for
the Stores for the next [CONFIDENTIAL](42)  months will be based on the actual average
delivery size and average case Cost for the previous [CONFIDENTIAL](43)
months as calculated below and according to the following schedule:

	
  Average Delivery Size for

  	
   

  	
  Markup

  	
   

  
	
  Preceding
  [CONFIDENTIAL](44) Months

  	
   

  	
  for
  Next [CONFIDENTIAL](45) Months

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL](46)

  	
   

  	
   

  	
   

  

 

(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.

(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.

 17
 

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](47) 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](48) special delivery fee
in accordance with Section 2.05.

In the event the
average delivery size for the previous [CONFIDENTIAL](49)
months falls outside of the ranges described above, COMPANY and DISTRIBUTOR
will negotiate a new Markup adjustment 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 4.04, then both COMPANY and
DISTRIBUTOR will have the right to terminate this Agreement with one
hundred-eighty (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 as described above,
after the first [CONFIDENTIAL](50) months of
service and every [CONFIDENTIAL](51)
months thereafter, COMPANY and DISTRIBUTOR will also review the average case
Cost for the previous [CONFIDENTIAL](52)
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, as follows:

	
  Average Case Cost for

  	
   

  	
   

  	
   

  
	
  Preceding
  [CONFIDENTIAL](53) Months

  	
   

  	
  Modification to Markup

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [CONFIDENTIAL](54)

  	
   

  	
   

  	
   

  

 

In the event the
average case cost for the previous [CONFIDENTIAL](55)
months falls outside of the ranges described above, COMPANY and DISTRIBUTOR
will negotiate a new Markup adjustment in good faith.  In the event COMPANY and DISTRIBUTOR fail to
agree on such a

(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.

 18
 

Markup adjustment
within thirty (30) 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 one hundred-eighty (180) days written notice to
the other party in accordance with Section 6.02 (b)(ii).

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 deliveries made during the
preceding [CONFIDENTIAL](56). Thus, stores which
receive deliveries on Saturday or Sunday, would have their account debited [CONFIDENTIAL](57) and [CONFIDENTIAL](58)
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](59) 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](60) 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.
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

(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.

 19
 

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](61)
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.   COMPANY will invoice
DISTRIBUTOR directly for [CONFIDENTIAL](62)
for its frozen yogurt Products as shipped from the manufacturer and will
designate the [CONFIDENTIAL](63) as separate
line items for each Product. This [CONFIDENTIAL](64)
varies by Product and a schedule of the current [CONFIDENTIAL](65)
for its frozen yogurt Products is attached as Schedule
6.  COMPANY reserves the right
to alter [CONFIDENTIAL](66) on its frozen yogurt

(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.

 20
 

Products in its discretion but no more frequently than
quarterly.  DISTRIBUTOR agrees to pay
COMPANY for these invoices within [CONFIDENTIAL](67)
days of receipt.

COMPANY will also invoice DISTRIBUTOR for [CONFIDENTIAL](68)
on its frozen cake and pie Products for each Product as shown on Schedule 7. 
Company reserves the right to alter [CONFIDENTIAL](69)
on its frozen cake and pie Products in its discretion but no more frequently
than [CONFIDENTIAL](70).  Distributor shall pay all invoices for [CONFIDENTIAL](71) on its frozen cake and pie Products when
invoiced by the COMPANY within [CONFIDENTIAL](72)
days of invoice date, which date will be no earlier than the date of receipt of
the applicable Products by the DISTRIBUTOR.

[CONFIDENTIAL](73)

4.06   Sourcing Fees.  COMPANY may, from time to time, collect
compensation from the Operators for services that it provides to such
Operators, either by increasing the Cost of a product supplied by COMPANY, 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](74).  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) I 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.

(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.

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

 21

 

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 audited balance sheets and income
statements 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 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](75)
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 at DISTRIBUTOR’S reasonable expense, until the aggregate net pricing
errors disclosed by an such additional audits are less than [CONFIDENTIAL](76) 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](77)
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 

(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.

 

 22
 

 

[CONFIDENTIAL](78) payable
within [CONFIDENTIAL](79) days of written
request by COMPANY.  COMPANY may submit
such requests only once during each calendar year and a total of [CONFIDENTIAL](80) 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

  

 

(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

(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.

 

 23
 

 

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 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.  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](81) cases of Products per delivery unless due
to DISTRIBUTOR or supplier error.  In
addition, Operator will be required to pay DISTRIBUTOR a [CONFIDENTIAL](82)
handling fee per order for orders of less than [CONFIDENTIAL](83)
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 

(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.

 24
 

 

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

(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 

 25
 

 

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 [CONFIDENTIAL](84) 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](85) 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](86)
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, 

(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.

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

 

 26
 

 

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

 27
 

 

(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 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 

 28
 

 

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 coverage:

(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 coverage providing for
combined single limit bodily injury/property damage liability of not less than [CONFIDENTIAL](87) Dollars; and

(b)           commercial
automobile liability insurance coverage providing for combined single limit
bodily injury/property damage liability of not less than [CONFIDENTIAL](88)
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 coverage 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, 

(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.

 

 29
 

 

to the extent afforded by normal ISO policy forms and definitions, with
all such insurance coverage providing for combined single limit bodily
injury/property damage liability of not less than [CONFIDENTIAL](89)
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 coverage 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 Mississippi. 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.

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

 

 30
 

 

(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.

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:

 31
 

 

 

	
  If to DISTRIBUTOR:

  	
   

  	
  The Merchants Company

  
	
   

  	
   

  	
  P O Box 1351

  
	
   

  	
   

  	
  Hattiesburg, MS 39403-1351

  
	
   

  	
   

  	
  Attention:

  	
  Andy Mercier, President

  
	
   

  	
   

  	
   

  	
  Jarrod Gray, Controller

  
	
   

  	
   

  	
  FAX: (601) 582-5333

  
	
   

  	
   

  	
   

  
	
  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 

 32
 

 

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.

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 

 33
 

 

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.

 34
 

 

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.

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

  
	
   

  
	
   

  
	
  THE MERCHANTS
  COMPANY

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Andy Mercier

  	
   

  
	
  Its: President

  
				

 

 36

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