Document:

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                                                                   EXHIBIT 10.12

                         SOFTWARE DISTRIBUTION AGREEMENT

      THIS SOFTWARE DISTRIBUTION AGREEMENT ("Agreement") is made and entered
into effective August 25, 2003 ("Effective Date") by and between On2
Technologies, Inc., a Delaware corporation having a business address at 21
Corporate Dr., Suite 103, Clifton Park, NY 12065 ("On2") and Allied Telesis K.K
("ATKK"), an entity organized under the laws of Japan, with a principal place of
business at 4F TOC Building 7-22-17, Nishi-gotanda, Shinagawa-Ku Tokyo 141-8635,
Japan.

In consideration of the mutual covenants and promises recited below, the
parties, intending to be legally bound, agree as follows:

TERMS AND CONDITIONS

1. Definitions.

      1.1 "Development Agreement" means that Development License Agreement
between ATKK and On2 dated as of May 16, 2003.

      1.2 "TI DSP" means Texas Instruments' C64xx digital signal processing
chip.

      1.3 "Incorporated Technology" means any technology (including software and
source code) other than the Decoder incorporated into the ATKK STB, including
all Intellectual Property Rights in such technology.

      1.4 "Intellectual Property Rights" means all intellectual property rights
arising under statutory or common law or any other legal system in the world,
including that which is acquired or obtained under a contract with a third
party, and whether or not perfected, comprising any of the following: (i)
copyrights, copyright registrations, mask works and mask work registrations;
(ii) rights relating to the protection of trade secrets and confidential
information; (iii) patents, patent applications, reissue patents and reissue
applications, continuation and continuation in part applications, invention
registrations, petty patents; (iv) trademarks, service marks, trade names, trade
dress, domain names, and registrations for the foregoing, of all kinds and
types; (v) any right analogous to those set forth in this definition in foreign
jurisdictions; and (vi) any renewals or extensions of the foregoing (as and to
the extent applicable) now existing, or hereafter filed, issued or acquired.

      1.5 "ATKK STB" means the TI DSP based set-top box being developed,
integrated and manufactured by ATKK for the worldwide market.

      1.6 "Decoder" means On2's VP5 and/or VP6 decoder in binary or object form
that has been ported and optimized for use solely on the TI DSP pursuant to the
Development Agreement.

2. Grant of Licenses.

      2.1 Decoder Distribution License. Subject to the terms and conditions of
this Agreement (including, without limitation the restrictions contained in
Section 2.3 hereof and the timely payment of the Royalties), On2 grants to ATKK
a limited, worldwide, non-exclusive, non-transferable, non-assignable, perpetual
license to use, copy, and distribute the Decoder solely when integrated with the
ATKK STB.

      2.2 Deployment Notice. ATKK shall give On2 60 day's written notice prior
to commercial deployment of any ATKK STBs that contain the Decoder. During such
60-day period, ATKK will also give On2 the opportunity to test such ATKK STB.
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      2.3 End Users. ATKK agrees that all ATKK STBs containing the Decoder sold
or distributed to end users shall incorporate security features with intention
to prevent end users from porting, reverse engineering, reverse assembling,
reverse compiling or otherwise using the Decoder for anything other than it's
intended purpose.

3. Royalties.

      3.1 Royalties. In consideration of the license grants in Section 2.1, ATKK
shall pay to the Japanese Designee (as defined below) a Royalty of 450 Japanese
yen for each ATKK STB sold, licensed, leased or distributed that contains or
uses the Decoder (each a "Royalty" and collectively the "Royalties"). ATKK shall
record Royalties as they accrue and report them to On2 and On2's Japanese
Designee within 10 days of the end of each calendar quarter (the "Fee Report").
Each such Fee Report shall set forth the number of ATKK STBs sold, licensed,
leased or distributed for each applicable country and the amount of Royalties
accrued. Within 30 days of the end of each calendar quarter, ATKK shall pay to
the Japanese Designee the amount of Royalties accrued in the prior quarter. ATKK
agrees to provide On2 with such other royalty information and ATKK STB
distribution and sale information as On2 may reasonably request. In addition,
ATKK agrees to institute such measures and policies as On2 may reasonably
request to ensure adequate reporting of the applicable ATKK STBs distributed or
sold. On2's "Japanese Designee" shall be an entity designated by On2 that is
based in Japan or that has a Japanese office that is capable of providing
Japanese language support for the VP5 SDK (as defined in the Development
Agreement). On2 and ATKK agree that On2's Japanese Designee shall be Media
Cruise Solutions, K.K. On2 may at any time, upon written notice to ATKK, choose
to end the Japanese Designee arrangement. In such event, the Royalty per Decoder
shall be US $2.00 and such Royalty shall be payable directly to On2 by ATKK on
the same terms and conditions as set forth above.

      3.2 Audit Rights and Record Keeping. ATKK agrees that it shall maintain
complete, clear and accurate records sufficient to establish the Royalties
payable pursuant to Section 3.1. ATKK will maintain such books and records for a
two-year period following the expiration or termination of this Agreement. On2
shall have the right, on five days prior written notice, to have a certified
public accountant conduct an audit of ATKK's records, at On2's own expense, to
verify compliance with the terms of Section 3.1 of this Agreement. If an
underpayment or underreporting of fees is discovered, ATKK shall pay the amount
of the underpayment or correct and pay the underreported fees; provided,
however, that if any discovered discrepancy is equal to or greater than ten
percent (10%) of the total amount due On2, ATKK shall pay such amount, and the
cost of the audit. On2 agrees that all parts of ATKK's records On2 and/or its
certified public accountant may access according to the provisions of this
Subsection 3.2 shall be included in the Confidential Information defined in
Subsection 5.2 hereof and be treated as such.

4. Support. Other than the support described in the Development Agreement, the
Decoder comes with no technical or other support. Such support shall be
available Monday-Friday during On2's normal business hours at an hourly billable
rate of $250, with a minimum billing increment of 15 minutes ("Support Fees").
On2 will keep written records of the time spent giving any such support and send
ATKK a monthly invoice which invoice shall be payable net 30 days.

5. Confidential Information.

      5.1 Confidentiality. Either party ("Disclosing Party") may from time to
time disclose Confidential Information (as defined in Subsection 5.2) to the
other ("Recipient"). During the term of this Agreement and for a period of three
(3) years thereafter, Recipient will keep in confidence and trust and will not
use, disclose or disseminate, or permit any employee, agent or other person
working under Recipient's direction to use, disclose, or disseminate, the
existence, source content or substance of any Confidential Information to any
other person except as may be required to perform its obligations under this
Agreement or as may be required by law. Recipient will employ at least the same
methods and degree of care, but no less than a reasonable degree of care, to
prevent disclosure of the Confidential Information as Recipient employs with
respect to its own confidential user data, trade secrets, and proprietary
information. Recipient's employees and independent contractors will be given
access to the Confidential Information only on a need-to-know basis, and only if
they have received instruction with regard to their obligation to maintain the
confidentiality of Confidential Information. Recipient will not copy or load any
of the Confidential Information onto any computing device or store the
Confidential Information electronically, except in circumstances in which
Recipient has taken reasonable precautions to prevent unauthorized access. Upon
request, a Recipient will promptly deliver
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to the Disclosing Party all copies of documents containing the Disclosing
Party's Confidential Information and will promptly destroy all memoranda, notes
and other writings in its control containing such Confidential Information.

      5.2 Confidential Information Definition. "Confidential Information" is all
nonpublic information concerning the business, technology, internal structure
and strategies of the Disclosing Party that is conveyed to the Recipient orally
or in tangible form and is either marked as "confidential" or is identified as
confidential prior to disclosure. ATKK acknowledges that the contents of this
Agreement (including, without limitations the pricing terms contained herein),
Software, related documentation, listings, flow charts, data, bench mark tests,
specifications, underlying ideas, algorithms, concepts, procedures, processes,
principles, know-how, methods of operation, designs, programming techniques
(including all underlying Intellectual Property Rights), input data formats and
structures, trade secrets, and other proprietary information provided by On2 to
ATKK are Confidential Information. On2 acknowledges that Incorporated
Technology, concepts, procedures, processes, principles, know-how, methods of
operation, designs, programming techniques provided by ATKK to On2 are
Confidential Information. Confidential Information will not include the fact
that this Agreement exists. If any Confidential Information is required to be
disclosed by operation of law (including any Confidential Information required
to be disclosed as a result of On2's disclosure obligations under the U.S.
securities laws or ATKK's disclosure obligation under the Japanese laws) or by
an instrumentality of the government, then in such event the Recipient will
promptly notify the Disclosing Party of any such request so as to allow the
Disclosing Party full opportunity to seek protective orders or other relief
prior to disclosure. Confidential Information will not include information (i)
that at the time of disclosure was generally available to the public, through no
act or failure of Recipient; (ii) that is rightfully known to Recipient at the
time of receiving such information; (iii) that is furnished to Recipient by a
third party without restriction on disclosure and without Recipient having
actual notice or reason to know that the third party lacks authority to so
furnish the information; (iv) that is independently developed by Recipient (v)
the Disclosing Party consents in writing to being disclosed.

      5.3 Press Release On2 or its Japanese Designee shall not issue any press
release, make any public announcement or otherwise disclose any information
relating to the subject matter hereof or relationship between the parties
contemplated hereunder without ATKK's prior written consent, provided, however
that On2 may disclose the existence of this Agreement and/or the terms hereof to
the extent that such disclosure is required by the securities law or generally
accepted accounting rules. In case On2 is required to make such disclosure, On2
will provide ATKK with the prior written notice of the disclosure.

6 Warranties.

      6.1 On2 Warranties. On2 warrants that the Decoder does not infringe any
Intellectual Property Rights held by any third party, and that the Decoder will
substantially comply with the published specifications set forth in On2's user
documentation for the Decoder.

      6.2 ATKK Warranties. ATKK warrants that (i) neither porting or optimizing
the Decoder to or for any ATKK STB nor the Incorporated Technology, infringe any
Intellectual Property Rights held by any third party; and (ii) that it will not
use, copy or distribute the Decoder in a manner inconsistent with the terms of
this Agreement.

      6.3 No Warranty. EXCEPT AS PROVIDED IN SUBSECTIONS 6.1 AND 6.2 ABOVE AND
THE DEVELOPMENT AGREEMENT, THE SOFTWARE, THE DECODER (COLLECTIVELY THE "SUBJECT
TECHNOLOGIES") IS PROVIDED "AS-IS" WITHOUT WARRANTY OR SUPPORT OBLIGATION OF ANY
KIND AND BOTH PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE SUBJECT
TECHNOLOGIES ARE BEING PROVIDED WITHOUT ANY REPRESENTATIONS, WARRANTIES SUPPORT
OBLIGATIONS OR CONDITIONS WHETHER EXPRESS, IMPLIED, STATUTORY, ARISING OUT OF A
COURSE OF DEALING OR USAGE OF TRADE OR OTHERWISE INCLUDING, BUT NOT LIMITED TO,
ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, MERCHANTABLE QUALITY,
FITNESS OR ADEQUACY FOR ANY PARTICULAR PURPOSE OR USE, QUALITY, PRODUCTIVENESS,
CAPACITY, OR THAT THE OPERATION OF THE SUBJECT TECHNOLOGIES WILL BE ERROR-FREE.
NO ORAL OR WRITTEN INFORMATION OR ADVICE GIVEN BY A PARTY, ITS DIRECTORS,
OFFICERS, EMPLOYEES, LICENSORS, SUPPLIERS, AGENTS, OR TO ANYONE ELSE WHO HAS
BEEN INVOLVED IN THE CREATION, PRODUCTION, LICENSING, SUBLICENSING, SUPPLY OR
DELIVERY OF THE SUBJECT TECHNOLOGIES WILL CREATE A REPRESENTATION, CONDITION, OR
WARRANTY AND NEITHER PARTY MAY NOT RELY ON SUCH INFORMATION OR ADVICE.
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7 Indemnification.

      7.1 On2's Indemnification of ATKK. On2 agrees to defend ATKK from and
against liability, judgments, costs, demands and expenses (including attorneys'
fees) arising out of (A) any breach by On2 of Sections 5 or 6 hereof or (B) any
legal action or suit based on any claim based on any infringement of any third
party intellectual property rights as a result of the use of the Decoder in
accordance with the terms hereof, and On2 agrees to indemnify ATKK from any
costs and/or damages arising out of such infringement claim or action or
settlement thereof; provided that: (i) On2 is promptly notified in writing of
such claim, and (ii) ATKK does not enter into the settlement without On2's prior
written consent and ATKK reasonably cooperates with On2 in defense of such
claim. Notwithstanding the foregoing, On2 shall have no liability to ATKK if the
infringement results from: (a) use of the Decoder in combination with software
not provided by On2 unless such infringement results directly and solely from
use of the Decoder, (b) modifications to the Decoder not made by On2, or (c) use
of other than the latest update to the Decoder, if such infringement would have
been avoided by use of such update. The foregoing states the entire liability of
On2 with respect to infringement of any patents, copyrights, trade secrets or
other proprietary rights by the Decoder.

      7.2 ATKK's Indemnification of On2. ATKK agrees to defend On2 from and
against any liability, judgments, costs, demands and expenses (including
reasonable attorneys' fees): (A) based on any breach by ATKK of Sections 2, 5 or
6 (B) based on any use (directly or indirectly) of the ATKK STB by third parties
through ATKK, or (C) based on infringement of any third party intellectual
property right as a result of (a) the use by any person or entity of the Decoder
which has been modified by ATKK without obtaining On2's prior written consent,
or (b) a combination with software provided by ATKK without obtaining On2's
prior written consent unless such infringement relates solely and directly from
use of the Decoder, and ATKK agrees to indemnify On2 from any costs and/or
damages awarded against On2 in any such infringement claim or action or
settlement thereof; provided that: (i) ATKK is promptly notified in writing of
such claim, and (ii) On2 does not enter into the settlement without ATKK's prior
written consent and On2 reasonably cooperates with ATKK in defense of such
claim.

8. Exclusion of Damages and Limitation of Liability. EXCEPT IN RESPECT OF A
PARTY'S BREACH OF SECTION 2 (GRANT OF LICENSE), OR 5 (CONFIDENTIAL INFORMATION),
NEITHER PARTY WILL IN ANY CIRCUMSTANCE BE LIABLE TO THE OTHER, OR TO ANY OTHER
PERSON CLAIMING THROUGH SUCH PARTY, FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR OTHER DAMAGES OR EXPENSES OF ANY TYPE,
INCLUDING, BUT NOT LIMITED TO, ANY LOSS OF PROFITS, SAVINGS, BUSINESS, DATA,
REVENUE, EQUIPMENT, ANTICIPATED BENEFITS ARISING OUT OF THE USE OR INABILITY TO
USE SOFTWARE OR INCORPORATED TECHNOLOGY, COSTS OF OVERHEAD OR COSTS ASSOCIATED
WITH THE INABILITY TO USE THE SUBJECT TECHNOLOGIES, LOSS FROM ANY COMPLETE OR
PARTIAL COMPUTER OR WORK STOPPAGE OR OTHER SIMILAR DAMAGES, WHETHER SUCH DAMAGES
OR EXPENSES ARISE OUT OF CONTRACT (INCLUDING FUNDAMENTAL BREACH) OR TORT
(INCLUDING NEGLIGENCE) EVEN IF ANY OF THE PARTIES HAD BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

9. Termination.

      9.1 Termination. Either party may terminate this Agreement if the other
party is in material breach of this Agreement and fails to cure within fifteen
(15) days after written notice. Either party may terminate this Agreement if the
other party becomes bankrupt or a receiver is appointed for a substantial part
of its assets or business of the other party, or any order is made approving a
petition or answer seeking reorganization of the other party under any
applicable bankruptcy law.

      9.2 Events Upon Termination. Upon the termination of this Agreement by On2
on account of an uncured material breach by ATKK, without prejudice to any other
rights that On2 may have, the following will occur:

      9.2.1 ATKK will immediately cease all use and distribution of the
Decoder and any On2 Confidential Information;
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      9.2.2 ATKK will immediately return to On2, or destroy, all copies of the
Decoder, On2 Confidential Information, and all documentation created under this
agreement in its possession or control. Upon written request from On2, ATKK will
promptly provide On2 with a written certification of ATKK's compliance with the
foregoing.

      9.2.3 ATKK shall have no further right to market, sell or license ATKK
STBs that contain the Decoder.

      9.3 Term. This agreement commence on the Effective Date, and unless
earlier terminated as provided herein, continue in full force and effect
perpetually.

10. Additional Terms.

      10.1 Intellectual Property Notices. ATKK will not, nor will it permit
others to, remove, alter, cover or obscure any confidentiality, trade secret,
proprietary or copyright notices, trademarks, proprietary, Intellectual Property
Rights or other identifying marks or designs from any component of the Decoder
including associated documentation and delivery media, and will replicate such
notice within every copy or partial copy made.

      10.2 Force Majeure. Neither party will be liable for any delays or losses
resulting from events beyond its control, such as fire, earthquake, or casualty
arising out of earthquake, accidents, adverse weather conditions, war, civil
disorder, or government action; provided, however, that the affected party take
reasonable efforts to mitigate the effects of such events. The affected party
will promptly notify the other of any such event, and the parties will meet
promptly to determine appropriate resolution.

      10.3 Conflicts. In the event that any terms of this Agreement conflict
with the terms of any Exhibit, the terms of this Agreement will prevail.

      10.4 Survival. The rights and obligations contained in Sections 4, 5, 6,
7, 8, 9, and 10 will survive the termination of this Agreement for any reason.

      10.5 Non-Encumbrance. ATKK will not pledge, mortgage, encumber or offer as
security in any manner any part of this Agreement, any of the rights granted
hereunder or any part of the Decoder, accompanying documentation, or components.

      10.6 Seizure. In the event of a pending seizure of the Decoder by a ATKK
creditor, ATKK must immediately inform On2 and take all measures to have On2'
Intellectual Property Rights recognized and protected. ATKK will pay all costs
incurred recovering the seized materials.

      10.7 Assignment. Except as provided in this Section, neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement, without the prior written consent of the other party. Any
attempted assignment or delegation by either party without the other party's
prior written consent will be void and will give such other party the right to
terminate this Agreement. Subject to the foregoing, this Agreement will inure to
the benefit of and be binding on the respective successors and permitted assigns
of the parties

      10.8 Equitable Relief. Parties hereto agree that either party will be
entitled to equitable relief, including injunctive relief without the posting of
any security, to prevent any breach, infringement, or further breach or
infringement of any Intellectual Property Rights or unauthorized disclosure of
the Decoder or Incorporated Technology. Either Party may specifically enforce
such provisions or protect such rights by an action instituted in any court
having competent jurisdiction and both parties hereby submit to the jurisdiction
of the Federal Courts of New York in connection with any action seeking such
equitable relief. Both parties acknowledge that the Decoder and Incorporated
Technology has a special and unique character, giving them particular value, the
loss of which cannot be reasonably or adequately compensated for in damages.
Nothing will prevent ATKK from disputing the occurrence of such a breach or
infringement.

      10.9 Notices. All notices and demands under this Agreement must be in
writing and will be effective only if delivered by personal service, overnight
courier, or certified or registered, return receipt requested United States
mail, to the following addresses:
<PAGE>
        To On2:

        On2 Technologies, Inc.
        21 Corporate Drive, Suite 103
        Clifton Park, NY 12065
        Attn: General Counsel

        To ATKK:

        Allied Telesis
        6F TOC BUILDING 7-22-17
        NISHI-GOTANDA, SHINAGAWA-KU
        TOKYO 141-8635, JAPAN
        ATTN: Product Marketing CC: Legal and Intellectual Property

Either party may change the addresses set forth above by written notice to the
other party. Notice will be effective on receipt.

      10.10 Waiver. No waiver of any provision of this Agreement will be binding
unless it is in writing. No indulgence or forbearance by a party will constitute
a waiver of such party's right to insist on performance in full and in a timely
manner of all covenants in this Agreement. Waiver of any provision will not be
deemed to waive the same provision thereafter or any other provision of this
Agreement at any time.

      10.11 Entire Agreement. This Agreement constitutes the entire agreement
between On2 and ATKK pertaining to the specific subject matter herein and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, express or implied.

      10.12 Amendment. This Agreement may be amended only by written agreement
executed by the Parties.

      10.13 Severability. If any provision or part of any provision contained in
this Agreement is found by a court of competent jurisdiction to be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions or portions thereof, will not be in
any way affected or impaired thereby.

      10.14 Forum and Choice of Law. This Agreement shall be interpreted,
construed, and enforced in all respects in accordance with the laws of the state
of New York. The parties hereby irrevocably consent to the jurisdiction of the
courts of the State of New York and of any federal court located in such state
in connection with any action or proceeding arising out of or relating to this
Agreement

      10.15 Execution By Counterparts & Facsimile.  This Agreement, and any
amendment, supplement, restatement or termination of any provision, may be
executed and delivered in counterparts by facsimile.

      10.16 Independent Contractors.  The relationship between On2 and ATKK
is that of independent contractors.  Nothing in this Agreement may be
construed to make either party the agent or partner of the other.  Neither
party may legally bind the other in any manner.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives effective as of the Effective Date.

<TABLE>
<S>                                       <C>
On2 TECHNOLOGIES, INC.                    ALLIED TELESIS K.K.

By:    /s/ Doug McIntyre                  By:    /s/

       (Signature)                               (Signature)

Name:  Doug McIntyre                      Name:
                                                -------------------------------
Title: Chairman, President and CEO        Title: President
</TABLE><PAGE>
                                                                    Exhibit 10.1

                              SEPARATION AGREEMENT

      This is a Separation Agreement (hereinafter the "Agreement") between John
T. Dee (hereinafter the "Executive") and Volume Services America Holdings, Inc.
(hereinafter the "Company").

      WHEREAS, Executive is unable to attend the Company's August 2003 Board of
Directors Meeting due to his ill health; and

      WHEREAS, Executive is resigning from his employment with the Company and
from his position as Chairman of the Board of Directors for health reasons; and

      WHEREAS, Executive and the Company agree that Executive's last day of
employment with the Company (hereinafter the "Separation Date") shall be the
earlier of: (i) August 28, 2003 or (ii) the date on which the Company decides to
proceed with its currently intended initial public offering of stock; and

      WHEREAS, in the interests of compromise and certainty, Executive and the
Company have agreed to the terms of Executive's separation from the Company as
set forth herein.

      NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, Executive and the Company hereby covenant and agree as
follows:

      1.    CONSIDERATION. In consideration for Executive signing this Agreement
            and complying with the promises made herein, the Company agrees to
            provide Executive with the following payments and benefits:

            (a)   The Company shall provide separation payments to the Executive
                  at the rate of $465,000 per year from the Separation Date
                  through August 24, 2003 and at the rate of $232,500 per year
                  from August 25, 2003 through August 24, 2005. Such separation
                  payments shall be made in accordance with the Company's usual
                  policies and practices for salary payments and shall be
                  reduced by all applicable taxes and withholdings. In the event
                  of Executive's death prior to August 24, 2005, the remaining
                  separation payments shall be made payable to the Executive's
                  estate.

            (b)   Executive shall remain eligible to receive bonuses based on
                  the Company's Annual Bonus Plan until the earlier of August
                  24, 2005 or the date of his death. The amounts of such
                  bonuses, if any, shall be calculated in accordance with and,
                  if applicable, prorated in accordance with the written terms
                  of the Annual Bonus Plan. In the event that a bonus is
                  determined to be due Executive, but such payment is not made
                  prior to Executive's death, then such payment shall be made to
                  the Executive's estate.
<PAGE>
            (c)   Executive (and/or his estate) shall remain eligible to receive
                  his deferred bonus for 2002, in the amount of $266,250, if and
                  when such deferred bonuses are paid to other
                  similarly-situated senior executives.

            (d)   The Company will continue to pay the premiums on the base life
                  insurance policy on the Executive, in effect as of the
                  Separation Date, until the earlier of August 24, 2005 or the
                  date of Executive's death. The Company also hereby waives its
                  right and authority to recover its interest in the Executive's
                  "split-dollar" life insurance policy.

            (e)   For a period of eighteen (18) months after the Separation
                  Date, the Executive and his spouse shall continue to be
                  eligible to participate in the Company's health insurance plan
                  in accordance with the continuation coverage provisions of the
                  Consolidated Omnibus Budget Reconciliation Act (hereinafter
                  "COBRA"). If the Executive elects to receive such continuation
                  coverage under COBRA, the Company shall increase the monthly
                  payments payable to Executive under subsection (a) above by
                  the cost of such continued COBRA coverage and Executive's
                  payments for such continued COBRA coverage shall be deducted
                  automatically by the Company from those monthly payments.

            (f)   The Company shall allow Executive to continue to use the
                  leased automobile in his possession on the Separation Date
                  until the earlier of August 24, 2005 or the date of the
                  Executive's death. The Company shall make the lease payments
                  and pay for the maintenance of the leased automobile during
                  this time period.

            (g)   The Company shall continue to reimburse the Executive up to
                  $10,000 per year for fees and expenses related to membership
                  in two clubs designated by the Executive. Such reimbursement
                  shall continue until the earlier of August 24, 2005 or the
                  date of the Executive's death.

            (h)   Executive's rights under the Company's deferred compensation
                  plan, pension plan and/or 401(k) plan shall be governed by the
                  written terms of those plans. For the purposes of those plans,
                  Executive's last day of employment shall be considered the
                  same as his Separation Date.

      2.    NO CONSIDERATION ABSENT EXECUTION OF THIS AGREEMENT. Executive and
            the Company understand and agree that Executive would not receive
            the consideration specified in Section 1 above, except for
            Executive's execution of this Agreement and his fulfillment of the
            promises contained herein. Executive agrees and acknowledges that he
            is receiving the consideration set forth above in Section 1 in
            consideration for his execution of this Agreement and that he is not
            otherwise entitled to such consideration. Executive further agrees
            that the consideration set forth in Section 1 above is adequate and
            fair consideration for all of his promises and obligations herein.
            Executive agrees that other than the consideration set forth in this
            Agreement, he is not entitled to and will not receive

                                      -2-
<PAGE>
            any other monies, benefits or compensation from the Company,
            including but not limited to any other wages, salary, bonuses, stock
            options, restricted stock, vacation or sick pay, separation pay or
            any other benefits or compensation of any kind.

      3.    DUTY OF ONGOING COOPERATION. The parties jointly agree that
            Executive will continue to support and cooperate with the Company to
            aid with the management transition and will remain available for
            contact with clients, employees, and any additional persons as
            reasonably requested by the Company through August 24, 2005. In
            connection therewith, the Company shall make available to the
            Executive reasonable office space and secretarial assistance through
            at least February 28, 2004. All reasonable out-of-pocket expenses
            incurred by Executive while assisting the Company with the
            transition duties listed above shall be reimbursed in full, provided
            however, that written permission is obtained in advance of any
            expenditures.

      4.    GENERAL RELEASE OF CLAIMS. Executive knowingly and voluntarily for
            himself and his heirs, executors, and administrators, releases and
            forever discharges the Company and its respective parent companies,
            subsidiaries, predecessors, successors, affiliated companies and
            businesses, related companies and businesses, and each of their
            current, former and future owners, shareholders, managers, members,
            partners, directors, officers, employees, representatives and
            agents, and their heirs, executors or administrators (hereinafter
            collectively referred to as the "Released Entities") of and from all
            demands, complaints, appeals, causes of action, claims and charges
            whatsoever, in law or in equity, known or unknown, which Executive
            ever had, may have had, now has, or which his heirs, executors or
            administrators hereinafter can, shall or may have as a result of any
            act, incident, event or omission that has occurred on or before the
            date on which Executive signs this Agreement. Executive agrees to
            release and forever discharge the Released Entities from any and all
            claims which Executive did file or could have filed with any
            federal, state or local court or agency, including but not limited
            to all claims arising from or related to his employment or
            separation from employment at the Company. Executive understands and
            acknowledges that this General Release of Claims includes, but is
            not limited to, any and all claims of age discrimination or any
            other type of discrimination, whether such claims arise under the
            federal Age Discrimination in Employment Act ("ADEA"), the
            Connecticut Fair Employment Practices Act ("CFEPA"), or any other
            federal, state or local statute, law, regulation or ordinance.

      5.    COVENANT NOT TO SUE. Except to enforce this Agreement, the Executive
            hereby promises never to file or make, or permit to be filed or made
            on his behalf, a lawsuit, charge, complaint, or other claim
            asserting any claim or demand against any of the Released Entities
            which is within the scope of the claims released in Section 4 above.
            This Agreement may and shall be pleaded by any of the Released
            Entities as a full and complete defense to, and may be used as a
            basis for an injunction against any action, suit or other proceeding
            which may be instituted, prosecuted or maintained in breach thereof.
            If the Executive files or makes, or

                                      -3-
<PAGE>
            permits to be filed or made on his behalf, a lawsuit, charge,
            complaint, appeal or other claim asserting any claim or demand
            against any of the Released Entities which is within the scope of
            the claims released in Section 4 above, whether or not such claim is
            otherwise valid, that Released Entity shall be entitled to: (i) the
            full enforcement of the terms of this Agreement; (ii) the immediate
            dismissal of all claims released in Section 4 above; and (iii) the
            recovery of his/its attorneys' fees and legal costs incurred in
            defending such claim(s).

      6.    NO SOLICITATION OF CUSTOMERS OR CLIENTS FOR ONE YEAR. For a period
            of two (2) years from the Separation Date (the "Non-Solicitation
            Period"), Executive agrees not to request, suggest, solicit, entice
            or induce any client or customer of the Company, or of any
            subsidiary, affiliate, joint venturer, predecessor or successor of
            the Company (hereinafter collectively referred to as the
            "Centerplate Companies"), to modify or curtail its business with the
            Centerplate Companies in any way. Executive also agrees that during
            the Non-Solicitation Period, he shall not receive any payments or
            compensation, either directly or indirectly, either individually or
            as an employee, agent, partner, shareholder, consultant, director or
            in any other individual, corporate or representative capacity, from
            any current customer or client of the Centerplate Companies or from
            any former customer or client to which the Centerplate Companies
            provided services during Executive's employment with the Company.

      7.    NO SOLICITATION OF EMPLOYEES. During the Non-Solicitation Period,
            Executive agrees not to employ, retain, solicit, recruit, hire,
            induce or attempt to induce to leave the Centerplate Companies,
            either directly or indirectly, either individually or as an
            employee, agent, partner, shareholder, consultant, director or in
            any other individual, corporate or representative capacity, any
            person who was an employee of the Centerplate Companies as of the
            Separation Date. Executive further agrees that if an employee of the
            Centerplate Companies contacts Executive during the Non-Solicitation
            Period about prospective employment, Executive will inform such
            employee that he cannot discuss the matter further without informing
            the Company.

      8.    CONFIDENTIAL INFORMATION. Executive agrees not to use, not to
            disclose and to keep confidential any non-public, secret,
            confidential or proprietary information, knowledge or data relating
            to the Centerplate Companies, including but not limited to the
            Centerplate Companies' processes, products, client lists, client
            identities, customers, vendors, financial data, marketing
            strategies, business plans, pricing information, trade secrets, and
            all other non-public information relating to the Centerplate
            Companies (the "Confidential Information"). Executive agrees that
            Confidential Information shall also include, but not be limited to,
            all internal discussions among Company personnel and agents related
            to any bids, responses to requests for proposal, or other efforts to
            obtain business contemplated, proposed or made by the Centerplate
            Companies in the two (2) year prior to the Separation Date.

                                      -4-
<PAGE>
      9.    NO CLAIMS FILED BY EXECUTIVE. Executive confirms that he has not
            filed and will not file, or permit to be filed on his behalf, any
            charge, complaint, or action in any forum or form against the
            Released Entities. Nothing in this Section or elsewhere in this
            Agreement shall prevent any party from filing an action in order to
            enforce the terms and conditions of this Agreement.

      10.   REVOCATION. Executive may revoke this Agreement within a seven (7)
            day period following the day he executes this Agreement. Any
            revocation within this period must be submitted, in writing, and
            state, "I hereby revoke my acceptance of my Separation Agreement
            with Volume Services America Holdings, Inc." The revocation must be
            delivered within the seven (7) day revocation period to:

                        Janet L. Steinmayer, Esq.
                        Executive Vice President, General Counsel
                                and Secretary
                        Centerplate
                        300 First Stamford Place
                        Stamford, CT  06902

            This Agreement shall not become effective or enforceable until the
            revocation period has expired. If the last day of the revocation
            period is a Saturday, Sunday, or legal holiday in Connecticut, then
            the revocation period shall not expire until 5:00 p.m. on the next
            following day which is not a Saturday, Sunday, or legal holiday.

      11.   COMPANY'S OPTION TO ACQUIRE UNITS. Executive currently owns 360.65
            units of Class II partnership interests in VSI Management II L.P.
            and 1,179.71 units of partnership interests in VSI Management Direct
            L.P. (hereinafter collectively referred to as the "Units"), subject
            to applicable loans. Executive hereby grants to the Company an
            option, exercisable by the Company at any time up to and including
            the first anniversary of the Separation Date, to acquire all of the
            Units from Executive for cash at a purchase price for each such Unit
            equal to the fair market value of that Unit as of the date the
            Company exercises this option, as such fair market value is
            determined jointly in good faith by the General Partner of VSI
            Management II L.P. or VSI Management Direct L.P., as applicable, and
            the board of directors of the Company. Executive agrees that, if the
            Company exercises this option, the purchase price shall first be
            applied to repay all outstanding principal of and accrued interest
            on the loans he incurred to acquire the Units. If the Company
            exercises this option, the closing of the purchase and sale of the
            Units shall occur on such business day as the Company selects that
            is no earlier than 2 business days and no later than 20 business
            days after the date of such exercise. The Company's rights under
            this Section 11 are in addition to, and not in substitution for, the
            Company's rights under Section 4.6(c) of the partnership agreement
            of each of VSI Management II L.P. and VSI Management Direct L.P.

                                      -5-
<PAGE>
      12.   RESIGNATION OF POSITIONS. Executive agrees and acknowledges that he
            resigned as an employee, Officer, Director, and Chairman of the
            Board of Directors of the Company effective as of the Separation
            Date. Executive also agrees and acknowledges that he also resigned
            as an employee, Officer and Director of any and all of the
            Centerplate Companies effective as of the Separation Date.

      13.   NO ASSISTANCE IN ACTIONS AGAINST THE RELEASED ENTITIES. Executive
            agrees that he will not advise, counsel or otherwise cooperate with
            or assist current or former employees or independent contractors of
            the Released Entities to pursue any type of legal action or
            administrative proceeding against the Released Entities. Executive
            further agrees that he will not participate, directly or indirectly,
            as a witness, consultant, expert or otherwise, in any action at law,
            proceeding in equity or administrative proceeding against the
            Released Entities, unless requested to do so in writing by the
            Released Entities or unless compelled to do so by force of law. In
            the event that Executive believes he is compelled by force of law or
            for any other reason to testify or otherwise participate in any
            action or proceeding against any of the Released Entities, he agrees
            to provide the Released Entities with reasonable advance notice of
            the subpoena, judicial notice, or other reason which he believes
            compels his participation.

      14.   CONFIDENTIALITY. Executive agrees that all circumstances and
            discussions leading to or relating to the negotiation of this
            Agreement, as well as all terms and conditions of this Agreement,
            are confidential and he shall not, without the prior written consent
            of the Company, individually or jointly, in any manner, publish,
            publicize, disclose or otherwise make known or permit or cause to be
            made known to any third person such information.

            For purposes of this Section, "any third person" includes but is not
            limited to any individual, organization, labor union, association or
            group, and the news and communication media, including but not
            limited to television, radio, newspaper, magazine and the Internet,
            or any agents thereof. Nothing in this Section shall be construed to
            prohibit the disclosure by Executive of such information as may be
            required by law, or by judicial or administrative process or order,
            or as is necessary to enforce the provisions of this Agreement;
            provided that Executive agrees to provide the Company with
            reasonable advance notice of the subpoena, judicial notice, or other
            reason which he believes requires such disclosure. Nothing in this
            Section shall be construed to prohibit the disclosure of the terms
            and conditions of this Agreement by Executive to his spouse or to
            any legal or financial consultant retained by him; provided the
            persons to whom the disclosure is made agree to be bound by the
            confidentiality provisions of this Section and further provided that
            Executive agrees to be liable to the Company for any breaches of
            confidentiality by any such person. Nothing in this Section or
            elsewhere in this Agreement shall be construed to prohibit either
            party from stating or announcing that Executive resigned due to
            health reasons.

      15.   NON-DISPARAGEMENT. Executive hereby agrees that he will not in any
            way whatsoever or to any extent whatsoever disparage, demean,
            deprecate, rebuke,

                                      -6-
<PAGE>
            condemn, belittle, slander or libel, either orally or in writing,
            any of the Released Entities.

      16.   RETURN OF COMPANY PROPERTY. Executive represents and warrants that
            he has returned to appropriate officers of the Company all files
            (electronic, hard copy, or otherwise), documents, notes and records
            relating to the business of the Company. Executive also represents
            and warrants that he has returned all Company property, files
            (electronic, hard copy or otherwise), documents, notes and records
            and has not kept and is not keeping copies of any such materials.
            Nothing in this Section or elsewhere in this Agreement shall
            prohibit Executive from retaining the cellular telephone that he has
            received from the Company; provided, however, that the Company shall
            not be responsible for paying bills for cellular service occurring
            after the Separation Date.

      17.   ARBITRATION. In the event that any future dispute arises among or
            between Executive and any of the Released Entities, whether or not
            related to or arising from the obligations of the parties set forth
            in this Agreement, the complaining party agrees to provide the other
            party with written notice of the dispute and fifteen (15) days to
            cure it. In the event the dispute continues after fifteen (15) days,
            the parties agree to submit any and all such disputes to binding
            arbitration. Any such arbitration shall be conducted in accordance
            with the American Arbitration Association ("AAA") Rules for
            Employment Disputes then in effect, shall take place in Stamford,
            Connecticut, and shall be conducted before a single neutral
            arbitrator mutually agreed upon by the parties. In any such
            arbitration, each party shall be responsible for paying its own
            attorneys' fees and costs.

            The award rendered by the arbitrator shall be final and binding upon
            the parties, and judgment may be entered and enforced in accordance
            with the applicable law in any court in Connecticut. Nothing in this
            Section or elsewhere in this Agreement, however, shall preclude any
            party from seeking or obtaining through state or federal courts any
            injunctive relief that is necessary in order to ensure specific
            performance or to prevent a breach of this Agreement. Executive and
            the Company each expressly consent that the state and federal courts
            of Connecticut shall have personal jurisdiction over each of them
            for any such injunctive action and for any action to confirm or
            vacate an arbitration award.

      18.   NO ADMISSION OF WRONGDOING. The parties agree that this Agreement is
            not, and shall not be considered as, an admission of any wrongdoing
            or liability on the part of any of the Released Entities or on the
            part of Executive.

      19.   GOVERNING LAW AND INTERPRETATION. This Agreement shall be governed
            and conformed in accordance with the laws of the State of
            Connecticut without regard to its conflict of laws provision.

      20.   SEVERABILITY. Should any provision of this Agreement, excluding
            Sections 4 and 5, be declared illegal or unenforceable by any court
            of competent jurisdiction, and cannot be modified to be enforceable,
            such provision shall immediately become

                                      -7-
<PAGE>
            null and void, leaving the remainder of this Agreement in full force
            and effect. However, if any portion of Sections 4 and 5 are ruled to
            be unenforceable for any reason, Executive shall return to the
            Company all payments that he has received pursuant to Section 1 of
            this Agreement.

      21.   AMENDMENT. This Agreement may not be modified, altered or changed
            except upon express written consent of the Company and Executive
            wherein specific reference is made to this Agreement.

      22.   ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
            between the parties with respect to any and all matters described
            herein, and fully supersedes any prior agreements or understandings
            between the parties with respect to any such matters.
            Notwithstanding the foregoing, the parties expressly agree that the
            "Certain Restrictions" set forth in Section 6 of their Employment
            Agreement dated August 24, 1998 shall remain in full force and
            effect and Executive shall remain obligated to comply with all
            provisions set forth in that Section 6 and all of its subsections.
            Executive acknowledges that he has not relied on any
            representations, promises, or agreements of any kind made to him in
            connection with his decision to sign this Agreement, except for
            those set forth in writing in this Agreement.

      23.   INJUNCTIVE RELIEF AND TERMINATION OF PAYMENTS AND BENEFITS.
            Executive understands and acknowledges that any threatened or actual
            breach of Sections 4, 5, 6, 7, 8, 9, 11, 13, 14, 15, or 16 of this
            Agreement, or of Section 6 of the parties' Employment Agreement
            dated August 24, 1998, would cause irreparable injury to the Company
            and that the Company shall be authorized and entitled to obtain,
            from any court of competent jurisdiction, preliminary and permanent
            injunctive relief to prevent or redress such a threatened or actual
            breach. In the event that the Company believes that Executive has
            breached any of the Sections enumerated above, the Company shall
            have the right to cease providing any and all of the payments and
            benefits set forth in Sections 1(a)-(h) of this Agreement. In the
            event that such a breach occurs after the Company has provided such
            payments and benefits, the Company shall be entitled to recover them
            from Executive and/or his estate. In addition, if a court,
            arbitrator, or other finder of fact determines that Executive has
            breached any of the Sections enumerated above, Executive and/or his
            estate agrees to pay the attorneys' fees and costs incurred by the
            Company in any such action.

      24.   ABLE TO UNDERSTAND AGREEMENT. Executive represents and acknowledges
            that he is able to read the language, and understand the meaning and
            effect of this Agreement. Executive acknowledges that he has been
            advised in writing to consult with an attorney about the meaning and
            effect of this Agreement before signing it. Executive further
            acknowledges that he has received an adequate opportunity to consult
            with his attorney before signing this Agreement. Executive further
            represents and acknowledges that he is executing this Agreement
            voluntarily and knowingly.

                                      -8-
<PAGE>
      25.   TWENTY-ONE DAY CONSIDERATION PERIOD. Executive has been advised in
            writing that he has at least twenty-one (21) days to consider this
            Agreement and to consult with an attorney prior to execution of this
            Agreement. Executive agrees that any modifications, material or
            otherwise, made to this Agreement do not restart or affect in any
            manner the original twenty-one (21) day consideration period.
            Executive may elect to sign and enter into this Agreement, or to
            reject this Agreement, at anytime during the twenty-one (21) day
            consideration period.

                                      -9-
<PAGE>
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily execute this
Agreement as of the date set forth below:

      BY SIGNING THIS AGREEMENT, EXECUTIVE WAIVES ANY RIGHT THAT HE HAS, EVER
HAD OR EVER WILL HAVE TO BRING OR MAINTAIN A LAWSUIT OR MAKE ANY CLAIMS AGAINST
THE RELEASED ENTITIES INVOLVING ANY MATTER ARISING PRIOR TO EXECUTIVE'S SIGNING
OF THIS AGREEMENT. THIS ADDITIONAL NOTICE REGARDING THE EFFECT OF THIS AGREEMENT
IS PROVIDED SOLELY AS A REMINDER AND DOES NOT LESSEN, MODIFY OR ALTER IN ANY WAY
THE SCOPE, MEANING AND EFFECT OF THE GENERAL RELEASE OF CLAIMS AND COVENANT NOT
TO SUE SET FORTH ABOVE IN SECTIONS 4 AND 5.

JOHN T. DEE

/s/ John T. Dee
------------------------------
John T. Dee

August 4, 2003
-----------------------------
Date

                                      -10-
<PAGE>
VOLUME SERVICES AMERICA HOLDINGS, INC.

By:  /s/ Janet L. Steinmayer
     ---------------------------------

Title:  Executive Vice President
        ------------------------------

Date:   August 28, 2003
        ------------------------------

                                      -11-

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