Document:

[FORM
      OF UFOOD® FRANCHISE
      AGREEMENT]

    
____________________________________

    (LOCATION)

    

    FRANCHISEE:

    
      
         

        ____________________________________

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        
          TABLE
            OF CONTENTS

          

          
            	
                    Section

                  	
                    Page

                  
	 	 	 
	
                    1.

                  	
                    INTRODUCTION
                      AND CERTAIN DEFINITIONS

                  	
                    1

                  
	 	
                    1.A.

                  	
                    INTRODUCTION

                  	
                    1

                  
	 	
                    1.B.

                  	
                    DEFINITIONS

                  	
                    1

                  
	 	 	 
	
                    2.

                  	
                    GRANT
                      OF FRANCHISE

                  	
                    6

                  
	 	
                    2.A.

                  	
                    GRANT
                      OF FRANCHISE AND TERM

                  	
                    6

                  
	 	
                    2.B.

                  	
                    TERRITORIAL
                      RIGHTS

                  	
                    6

                  
	 	
                    2.C.

                  	
                    RIGHTS
                      RETAINED BY FRANCHISOR

                  	
                    6

                  
	 	
                    2.D.

                  	
                    OWNERS'
                      GUARANTY

                  	
                    8

                  
	 	 	 
	
                    3.

                  	
                    SITE
                      SELECTION, DEVELOPMENT AND OPENING OF THE OUTLET

                  	
                    8

                  
	 	
                    3.A.

                  	
                    SITE
                      SELECTION

                  	
                    8

                  
	 	
                    3.B.

                  	
                    FINANCING
                      PLAN

                  	
                    9

                  
	 	
                    3.C.

                  	
                    LEASE
                      OF APPROVED SITES

                  	
                    9

                  
	 	
                    3.D.

                  	
                    OUTLET
                      DEVELOPMENT SPECIFICATIONS AND CONSTRUCTION PLANS

                  	
                    10

                  
	 	
                    3.E.

                  	
                    DEVELOPMENT
                      OF THE OUTLET

                  	
                    11

                  
	 	
                    3.F.

                  	
                    GENERAL
                      MANAGER AND OTHER MANAGEMENT PERSONNEL

                  	
                    12

                  
	 	
                    3.G.

                  	
                    OPERATING
                      ASSETS

                  	
                    12

                  
	 	
                    3.H.

                  	
                    COMPUTER
                      SYSTEM

                  	
                    12

                  
	 	
                    3.I.

                  	
                    OUTLET
                      OPENING

                  	
                    13

                  
	 	
                    3.J.

                  	
                    GRAND
                      OPENING MARKETING PROGRAM

                  	
                    14

                  
	 	
                    3.K.

                  	
                    RELOCATION
                      OF THE OUTLET

                  	
                    14

                  
	 	 	 
	
                    4.

                  	
                    TRAINING
                      AND GUIDANCE

                  	
                    14

                  
	 	
                    4.A.

                  	
                    TRAINING

                  	
                    14

                  
	 	
                    4.B.

                  	
                    PRE-OPENING
                      TRAINING AT THE OUTLET

                  	
                    16

                  
	 	
                    4.C.

                  	
                    ONGOING
                      GUIDANCE AND ASSISTANCE

                  	
                    16

                  
	 	
                    4.D.

                  	
                    MANUALS

                  	
                    17

                  
	 	
                    4.E.

                  	
                    DELEGATION
                      BY FRANCHISOR

                  	
                    17

                  
	 	 	 
	
                    5.

                  	
                    MARKS

                  	
                    17

                  
	 	
                    5.A.

                  	
                    OWNERSHIP
                      AND GOODWILL OF MARKS

                  	
                    17

                  
	 	
                    5.B.

                  	
                    LIMITATIONS
                      ON FRANCHISEE'S USE OF MARKS

                  	
                    18

                  
	 	
                    5.C.

                  	
                    NOTIFICATION
                      OF INFRINGEMENTS AND CLAIMS

                  	
                    18

                  
	 	
                    5.D.

                  	
                    MODIFICATION
                      AND DISCONTINUANCE OF MARKS

                  	
                    18

                  
	 	
                    5.E.

                  	
                    INDEMNIFICATION
                      FOR USE OF MARKS

                  	
                    19

                  
	 	 	 
	
                    6.

                  	
                    CONFIDENTIAL
                      INFORMATION AND INNOVATIONS

                  	
                    19

                  
	 	
                    6.A.

                  	
                    CONFIDENTIAL
                      INFORMATION

                  	
                    19

                  
	 	
                    6.B.

                  	
                    INNOVATIONS

                  	
                    21

                  

          

           

          
            
               

            

            
              i

              
                

              

            

            
               

            

          

          TABLE
            OF CONTENTS

          (Continued)

          

          
            	
                    Section

                  	
                    Page

                  
	 	 	 
	
                    7.

                  	
                    EXCLUSIVE
                      RELATIONSHIP

                  	
                    22

                  
	 	
                    8.

                  	
                    FEES

                  	
                    23

                  
	 	
                    8.A.

                  	
                    INITIAL
                      FRANCHISE FEE

                  	
                    23

                  
	 	
                    8.B.

                  	
                    ROYALTY
                      FEE

                  	
                    23

                  
	 	
                    8.C.

                  	
                    DEFINITIONS

                  	
                    23

                  
	 	
                    8.D.

                  	
                    INTEREST
                      ON LATE PAYMENTS

                  	
                    24

                  
	 	
                    8.E.

                  	
                    APPLICATION
                      OF PAYMENTS

                  	
                    24

                  
	 	
                    8.F.

                  	
                    ELECTRONIC
                      FUNDS TRANSFER

                  	
                    25

                  
	 	 	 
	
                    9.

                  	
                    OUTLET
                      IMAGE AND OPERATION

                  	
                    25

                  
	 	
                    9.A.

                  	
                    CONDITION
                      AND APPEARANCE OF THE OUTLET

                  	
                    25

                  
	 	
                    9.B.

                  	
                    OUTLET
                      PRODUCTS AND SERVICES

                  	
                    26

                  
	 	
                    9.C.

                  	
                    CATERING
                      SERVICE AND DELIVERY SERVICE

                  	
                    26

                  
	 	
                    9.D.

                  	
                    APPROVED
                      PRODUCTS, DISTRIBUTORS AND SUPPLIERS

                  	
                    27

                  
	 	
                    9.E.

                  	
                    COMPLIANCE
                      WITH SYSTEM STANDARDS

                  	
                    29

                  
	 	
                    9.F.

                  	
                    COMPLIANCE
                      WITH LAWS AND GOOD BUSINESS PRACTICES

                  	
                    31

                  
	 	
                    9.G.

                  	
                    MANAGEMENT
                      AND PERSONNEL OF THE OUTLET

                  	
                    32

                  
	 	
                    9.H.

                  	
                    INSURANCE

                  	
                    32

                  
	 	
                    9.I.

                  	
                    CREDIT
                      CARDS AND OTHER METHODS OF PAYMENT

                  	
                    33

                  
	 	
                    9.J.

                  	
                    PRICING

                  	
                    33

                  
	 	 	 
	
                    10.

                  	
                    ADVERTISING,
                      MARKETING AND PROMOTION

                  	
                    33

                  
	 	
                    10.A.

                  	
                    SYSTEMWIDE
                      ADVERTISING FUND

                  	
                    33

                  
	 	
                    10.B.

                  	
                    ADVERTISING
                      BY FRANCHISEE

                  	
                    35

                  
	 	
                    10.C.

                  	
                    REGIONAL/LOCAL
                      ADVERTISING COOPERATIVE

                  	
                    36

                  
	 	
                    10.D.

                  	
                    CUSTOMER
                      LOYALTY PROGRAM

                  	
                    36

                  
	 	
                    10.E.

                  	
                    PROMOTION
                      OF UFOOD LIFESTYLE GRILLE FRANCHISE SALES

                  	
                    37

                  
	 	
                    10.F.

                  	
                    FRANCHISE
                      SYSTEM WEBSITE

                  	
                    37

                  
	 	 	 
	
                    11.

                  	
                    RECORDS,
                      REPORTS AND FINANCIAL STATEMENTS

                  	
                    38

                  
	 	 	 
	
                    12.

                  	
                    INSPECTIONS
                      AND AUDITS

                  	
                    39

                  
	 	
                    12.A.

                  	
                    FRANCHISOR'S
                      RIGHT TO INSPECT THE OUTLET

                  	
                    39

                  
	 	
                    12.B.

                  	
                    FRANCHISOR'S
                      RIGHT TO AUDIT

                  	
                    40

                  
	 	 	 
	
                    13.

                  	
                    TRANSFER

                  	
                    40

                  
	 	
                    13.A.

                  	
                    BY
                      FRANCHISOR

                  	
                    40

                  
	 	
                    13.B.

                  	
                    NONTRANSFERABILITY
                      OF CERTAIN RIGHTS

                  	
                    40

                  
	 	
                    13.C.

                  	
                    FRANCHISOR'S
                      RIGHT TO APPROVE TRANSFERS

                  	
                    41

                  
	 	
                    13.D.

                  	
                    CONDITIONS
                      FOR APPROVAL OF TRANSFERS

                  	
                    42

                  
	 	
                    13.E.

                  	
                    DEATH
                      OR INCAPACITY OF FRANCHISEE

                  	
                    44

                  
	 	
                    13.F.

                  	
                    PUBLIC
                      OR PRIVATE OFFERING

                  	
                    44

                  
	 	
                    13.G.

                  	
                    EFFECT
                      OF CONSENT TO TRANSFER

                  	
                    45

                  
	 	
                    13.H.

                  	
                    FRANCHISOR'S
                      RIGHT OF FIRST REFUSAL

                  	
                    46

                  
	 	
                    13.I.

                  	
                    OWNERSHIP
                      STRUCTURE

                  	
                    47

                  

          

           

          
            
               

            

            
              ii

              
                

              

            

            
               

            

          

          TABLE
            OF CONTENTS

          (Continued)

          

          
            	
                    Section 

                  	
                    Page

                  
	 	 	 
	
                    14.

                  	
                    GRANT
                      OF SUCCESSOR FRANCHISE

                  	
                    47

                  
	 	
                    14.A.

                  	
                    FRANCHISEE'S
                      RIGHT TO A SUCCESSOR FRANCHISE

                  	
                    47

                  
	 	
                    14.B.

                  	
                    NOTICES

                  	
                    48

                  
	 	
                    14.C.

                  	
                    SUCCESSOR
                      FRANCHISE AGREEMENT/RELEASES

                  	
                    48

                  
	 	 	 
	
                    15.

                  	
                    TERMINATION
                      OF AGREEMENT

                  	
                    49

                  
	 	
                    15.A.

                  	
                    BY
                      FRANCHISEE

                  	
                    49

                  
	 	
                    15.B.

                  	
                    BY
                      FRANCHISOR

                  	
                    49

                  
	 	
                    15.C.

                  	
                    TERMINATION
                      OF CERTAIN RIGHTS OF FRANCHISEE

                  	
                    51

                  
	 	
                    15.D.

                  	
                    ASSUMPTION
                      OF MANAGEMENT

                  	
                    52

                  
	 	
                    15.E.

                  	
                    EFFECT
                      OF TERMINATION

                  	
                    53

                  
	 	 	 
	
                    16.

                  	
                    RIGHTS
                      AND OBLIGATIONS OF FRANCHISOR AND FRANCHISEE UPON TERMINATION
                      OR
                      EXPIRATION OF THE AGREEMENT

                  	
                    53

                  
	 	
                    16.A.

                  	
                    PAYMENT
                      OF AMOUNTS OWED

                  	
                    53

                  
	 	
                    16.B.

                  	
                    MARKS
                      AND TRADE DRESS

                  	
                    53

                  
	 	
                    16.C.

                  	
                    CONFIDENTIAL INFORMATION

                  	
                    54

                  
	 	
                    16.D.

                  	
                    COVENANT
                      NOT TO COMPETE

                  	
                    55

                  
	 	
                    16.E.

                  	
                    CONTINUING
                      OBLIGATIONS

                  	
                    56

                  
	 	
                    16.F.

                  	
                    FRANCHISOR'S
                      RIGHT TO PURCHASE ASSETS OF THE OUTLET

                  	
                    56

                  
	 	 	 
	
                    17.

                  	
                    RELATIONSHIP
                      OF THE PARTIES/INDEMNIFICATION

                  	
                    58

                  
	 	
                    17.A.

                  	
                    INDEPENDENT
                      CONTRACTORS

                  	
                    58

                  
	 	
                    17.B.

                  	
                    NO
                      LIABILITY FOR ACTS OF OTHER PARTY

                  	
                    58

                  
	 	
                    17.C.

                  	
                    TAXES

                  	
                    58

                  
	 	
                    17.D.

                  	
                    INDEMNIFICATION
                      OF FRANCHISOR

                  	
                    59

                  
	 	 	 
	
                    18.

                  	
                    GENERAL
                      PROVISIONS

                  	
                    59

                  
	 	
                    18.A.

                  	
                    ARBITRATION

                  	
                    59

                  
	 	
                    18.B.

                  	
                    SPECIFIC
                      ENFORCEMENT

                  	
                    61

                  
	 	
                    18.C.

                  	
                    GOVERNING
                      LAW

                  	
                    61

                  
	 	
                    18.D.

                  	
                    INJUNCTIVE
                      RELIEF

                  	
                    62

                  
	 	
                    18.E.

                  	
                    CONSENT
                      TO JURISDICTION

                  	
                    62

                  
	 	
                    18.F.

                  	
                    COSTS
                      AND ATTORNEYS' FEES

                  	
                    62

                  
	 	
                    18.G.

                  	
                    WAIVER
                      OF PUNITIVE DAMAGES AND JURY TRIAL

                  	
                    62

                  
	 	
                    18.H.

                  	
                    LIMITATION
                      OF CLAIMS

                  	
                    62

                  
	 	
                    18.I.

                  	
                    ENTIRE
                      AGREEMENT

                  	
                    63

                  
	 	
                    18.J.

                  	
                    NOTICES

                  	
                    63

                  
	 	
                    18.K.

                  	
                    SEVERABILITY
                      AND SUBSTITUTION OF VALID PROVISIONS

                  	
                    64

                  
	 	
                    18.L.

                  	
                    THIRD
                      PARTY BENEFICIARIES

                  	
                    65

                  
	 	
                    18.M.

                  	
                    WAIVERS

                  	
                    65

                  
	 	
                    18.N.

                  	
                    NO
                      WARRANTIES OR GUARANTEES

                  	
                    65

                  
	 	
                    18.O.

                  	
                    FORCE
                      MAJEURE

                  	
                    65

                  
	 	
                    18.P.

                  	
                    ASSIGNMENT

                  	
                    66

                  
	 	
                    18.Q.

                  	
                    CONSTRUCTION

                  	
                    66

                  
	 	
                    18.R.

                  	
                    COUNTERPARTS

                  	
                    66

                  

          

           

          
            
               

            

            
              iii

              
                

              

            

            
               

            

          

          TABLE
            OF CONTENTS

          (Continued)

          

          
            	
                    Section

                  	
                    Page

                  
	 	 	 	 
	 	
                    18.S.

                  	
                    CUMULATIVE
                      REMEDIES

                  	
                    66

                  
	 	
                    18.T.

                  	
                    NO
                      WITHHOLDING OF PAYMENTS

                  	
                    66

                  
	 	
                    18.U.

                  	
                    EXERCISE
                      OF BUSINESS JUDGMENT

                  	
                    66

                  
	 	
                    18.V.

                  	
                    ELECTRONIC
                      MAIL

                  	
                    67

                  

          

          

          EXHIBITS
            AND ATTACHMENTS

          

          
            	
                    EXHIBIT A

                  	
                    -

                  	
                    FRANCHISEE
                      ACKNOWLEDGMENTS AND REPRESENTATIONS STATEMENT

                  
	
                    EXHIBIT B

                  	
                    -

                  	
                    IDENTITY
                      OF DEVELOPER AND DATE OF DEVELOPMENT AGREEMENT

                  
	
                    EXHIBIT C

                  	
                    -

                  	
                    OWNERS

                  
	
                    EXHIBIT D

                  	
                    -

                  	
                    SITE,
                      FEES, TERRITORY

                  
	
                    EXHIBIT E

                  	
                    -

                  	
                    GUARANTY
                      AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS

                  
	
                    EXHIBIT F

                  	
                    -

                  	
                    CONFIDENTIALITY
                      AND NON-COMPETE AGREEMENT

                  
	
                    EXHIBIT G

                  	
                    -

                  	
                    COLLATERAL
                      ASSIGNMENT OF TELEPHONE NUMBERS AND
                      LISTINGS

                  

          

           

          
            
               

            

            
              iv

              
                

              

            

            
               

            

          

          

            UFOOD®
              FRANCHISE AGREEMENT

            

            THIS
              AGREEMENT is made and entered into as of this ______ day of
              _______________, 200___ (the "Effective Date"), by and between
UFood Restaurant Group, Inc., a Nevada corporation
              ("Franchisor"), and "Franchisee":
              ________________________________        
              a              

            Principal
              Address:
              ____________________________________________________________________

             

            
              
                	
                        1.

                      	
                        INTRODUCTION
                          AND CERTAIN DEFINITIONS.

                      

              

               

              1.A. INTRODUCTION.

               

              Franchisor
                and certain related parties have designed and developed methods of
                developing
                and operating distinctive retail outlets offering food service featuring
                low-fat, low-carbohydrate and low-calorie food items, selected beverages
                and
                nutritional products to the general public. Each of these outlets,
                called a
                "UFood
                Outlet"
                in this
                Agreement (as defined more fully below), features the Marks (defined
                below) and
                utilizes distinctive business formats, specifications, employee selection
                and
                training programs, signs, equipment, layouts, systems, methods, procedures,
                software, designs and marketing and advertising standards and formats,
                all of
                which Franchisor may improve, further develop and otherwise modify
                from time to
                time (all of which are together called the "System").
                Franchisor has obtained the right to grant franchises and development
                rights to
                certain qualified parties to develop, own and operate UFood
                Outlets.

               

              Franchisee
                has requested that Franchisor grant it a franchise to develop, own
                and operate a
                UFood Outlet in the Territory (defined below). Franchisor has approved
                Franchisee's request subject to the terms and conditions of this
                Agreement and
                in reliance upon all of the representations made in Franchisee's
                application,
                other information provided by Franchisee and its Affiliates under
                the
                Development Agreement and during the application process, and the
                representations of Franchisee in the Acknowledgments and Representations
                Statement, a copy of which is attached hereto as Exhibit A,
                which
                shall be executed by Franchisee concurrently with this Agreement.

               

              1.B. DEFINITIONS.

               

              For
                purposes of this Agreement, the terms listed below have the meanings
                that follow
                them. Other terms used in this Agreement are defined in the context
                in which
                they occur.

               

              "Affiliate"
–
                With respect to
                any Person, a Person which, directly or indirectly, through one or
                more
                intermediaries, controls or is controlled by, or is under common
                control with,
                the Person specified. For all purposes hereof, the term "control"
                means
                the possession, directly or indirectly, of the power to direct or
                to cause the
                direction of the management and policies of any Person, or the power
                to veto
                major policy decisions of any Person, whether through the ownership
                of voting
                securities by contract, or otherwise.

               

              
                
                   

                

                
                   

                  
                    

                  

                

                
                   

                

              

              "Anti-Terrorism
                Law"
                - As
                defined in Section 9.F.

               

              "Catering
                Services"
–
The
                delivery of food and/or beverage products which are prepared or partially
                prepared at the Outlet and delivered to customers at locations other
                than the
                Site, where, in addition to the delivery of such products, Franchisee
                provides
                ancillary services (such as setting up for, serving or otherwise
                distributing
                such food and beverage products) at such locations.

               

              "Competitive
                Business"
                - A
                business or enterprise, other than a UFood Outlet operated by Franchisor,
                by an
                Affiliate of Franchisor or pursuant to a valid franchise agreement
                with
                Franchisor or one of its Affiliates, that:

               

              (1) derives
                twenty-five percent (25%) or more of its total revenue from the sale
                of food
                items and/or beverages that are marketed as low-fat, low-carbohydrate
                or
                low-calorie;

               

              (2) derives
                five percent (5%) or more of its total revenue from the sale of nutritional
                products; or

               

              (3) grants
                or
                has granted franchises or licenses, or establishes or has established
                joint
                ventures, for the development and/or operation of one or more businesses
                or
                enterprises of a type described in either clause (1) or (2),
                above.

               

              "Computer
                System"
                - Those
                brands, types, makes, and/or models of communications and computer
                systems,
                hardware and peripheral equipment specified or required by Franchisor
                for use
                by, between, or among UFood Outlets, including: (1) back office and point
                of sale systems, data, audio, video, and voice storage, retrieval,
                and
                transmission systems for use at the Outlet, between or among UFood
                Outlets, and
                between and among the Outlet and Franchisor and/or Franchisee; (2) security
                systems; (3) monitors, modems and printers; and (4) archival and
                back-up systems.

               

              "Confidential
                Information"
–
As
                defined in Section 6.

               

              "Construction
                Plans"
–
As
                defined in Section 3.D.

               

              "Controlling
                Interest"
–
If
                Franchisee is a:

               

              (1) corporation
                or limited liability company, "Controlling Interest" shall mean such
                number of
                the voting shares or membership interests, as applicable, of Franchisee
                or such
                other rights as (a) shall permit voting control of Franchisee on any issue
                and (b) shall prevent any other person, group, combination, or entity from
                blocking voting control on any issue or exercising any veto power;

               

              (2) general
                partnership, "Controlling Interest" shall mean a managing partnership
                interest,
                or such percentage of the general partnership interests in Franchisee
                or such
                other rights as (a) shall permit determination of the outcome on any issue
                and (b) shall prevent any other person, group, combination, or entity from
                blocking voting control on any issue or exercising any veto power;
                and

               

              
                
                   

                

                
                  2

                  
                    

                  

                

                
                   

                

              

              (3) limited
                partnership, "Controlling Interest" shall mean a general partnership
                interest,
                such percentage of limited partnership interests or such other rights
                as shall
                permit the replacement or removal of any general partner.

               

              "Delivery
                Services"
–
The
                delivery of food and beverage products that are fully prepared at
                the Outlet and
                ready for consumption to customers at locations other than the Site,
                where
                Franchisee provides no ancillary services (such as setting up for,
                serving or
                otherwise distributing such food and beverage products) at such
                locations.

               

              "Development
                Agreement"
–
If
                applicable, the UFood Area Development Agreement executed by Franchisor
                and
                "Developer" (as defined therein), dated as of the date stated in
Exhibit B
                attached
                hereto, pursuant to which Developer and its Controlled Affiliates
                (as defined in
                the Development Agreement) were granted the right to develop UFood
                Outlets in
                the geographic area specified in such agreement.

               

              "Development
                Specifications"
–
As
                defined in Section 3.D.

               

              "Effective
                Date"
–
As
                defined in the introductory paragraph of this Agreement.

               

              "F&B
                Gross Receipts"
–
As
                defined in Section 8.C.

               

              "Financing
                Plan"
–
As
                defined in Section 3.B.

               

              "Franchisee"
–
As
                defined in the introductory paragraph of this Agreement.

               

              "Franchisor"
–
As
                defined in the introductory paragraph of this Agreement.

               

              "Franchisor
                Indemnified Parties"
–
                Franchisor, its Affiliates, and its and their owners, officers, directors,
                agents, employees, representatives, successors and assigns.

               

              "General
                Manager"
–
As
                defined in Section 3.F.

               

              "UFood
                Outlet"
                - A
                combination restaurant/retail store that
                (1) operates using the System and the Marks; and (2) is either
                operated by Franchisor or its Affiliates or pursuant to a valid franchise
                from
                Franchisor.

               

              "Gross
                Receipts"
–
As
                defined in Section 8.C.

               

              "Guaranty"
–
As
                defined in Section 2.D.

               

              "Immediate
                Family"
                -
                (1) The spouse of an individual; and (2) the natural and adoptive
                parents and natural and adopted children and siblings of such individual
                and
                their spouses; and (3) the natural and adoptive parents and natural and
                adopted children and siblings of the spouse of such individual.

               

              
                
                   

                

                
                  3

                  
                    

                  

                

                
                   

                

              

              "Initial
                Franchise Fee"
–
As
                defined in Section 8.A.

               

              "Lease"–The
                lease, sublease or other occupancy arrangement pursuant to which
                Franchisee
                occupies or will occupy the Site and the Outlet
                in
                the circumstance that Franchisee does not own the Site.

               

              "Local
                Marketing Spending Requirement"
–
As
                defined in Section 10.B.

               

              "Management
                Personnel"
–
As
                defined in Section 3.F.

               

              "Managing
                Owner"
–
As
                defined in Section 9.G.

               

              "Manuals"
–
                Materials, which might include one or more handbooks, audio tapes,
                video tapes,
                computer diskettes, compact disks, and/or other written or intangible
                materials,
                and which may be made available to Franchisee by various means (including
                access
                through the Internet or through an intranet), all of which may be
                modified,
                added to, replaced and supplemented by Franchisor from time to time,
                whether by
                way of supplements, replacement pages, franchise bulletins, or other
                official
                pronouncements or means, that contain System Standards and other
                information
                concerning Franchisee's obligations under this Agreement.

               

              "Marks"
                - The
                trademarks, service marks, logos and other commercial symbols that
                Franchisor
                authorizes for use to identify UFood Outlets and the products and
                services they
                offer, together with the Trade Dress; provided that such trademarks,
                service
                marks, logos, other commercial symbols, and the Trade Dress are subject
                to
                modification and discontinuance by Franchisor and may include additional
                or
                substitute trademarks, service marks, logos, commercial symbols and
                trade dress
                as provided in this Agreement.

               

              "Nutritional
                Products"
                - Those
                nutritional products that Franchisor periodically authorizes Franchisee
                to offer
                and sell from the Outlet. Those products may include, without limitation,
                nutritional supplements, healthy snacks, energy drinks, vitamins,
                meal
                replacement bars, health-and nutrition-oriented books and magazines,
                protein
                powders and diet products.

               

              "Nutritional
                Products Gross Receipts"
–
As
                defined in Section 8.C.

               

              "Opening
                Date"
                - The
                date that Franchisee opens the Outlet for business under the terms
                of this
                Agreement.

               

              "Operating
                Assets"
–
The
                furniture, furnishings, and equipment (including Computer System
                equipment,
                kitchen equipment, Specified Software, decorations, signs, smallwares,
                china,
                uniforms, and similar supplies and items) used in connection with
                the operation
                of the Outlet pursuant to the terms and conditions of this
                Agreement.

               

              "Outlet"
–
The
                UFood Outlet that Franchisee develops and operates pursuant to this
                Agreement.

               

              "Owner"
                - Each
                Person holding a direct or indirect, record or beneficial Ownership
                Interest in
                Franchisee and each Person who has other direct or indirect property
                rights in
                Franchisee, this Agreement, the Outlet or the right to receive all
                or a portion
                of Franchisee's or the Outlet's profits or losses or any capital
                appreciation
                relating to the Outlet.

               

              
                
                   

                

                
                  4

                  
                    

                  

                

                
                   

                

              

              "Ownership
                Interests"
                - In
                relation to a: (1) corporation, the record or beneficial ownership of one
                or more shares (regardless of class, preferences or voting rights,
                if any) in,
                or the right to receive any portion of the profits and/or losses
                of, the
                corporation; (2) limited liability company, the record or beneficial
                ownership of a membership interest in, or the right to receive any
                portion of
                the profits and/or losses of, the limited liability company;
                (3) partnership, the record or beneficial ownership of a general or limited
                partnership interest; or (4) trust, the ownership of a beneficial interest
                of such trust.

               

              "Person"
–
An
                individual, corporation, partnership, joint venture, association,
                limited
                liability company, trust, unincorporated association, other business
                entity, or
                governmental entity (or subdivision thereof).

               

              “Proprietary
                Products”
–
Those
                food products, beverages and Nutritional Products that: (1) are prepared
                according to our proprietary recipes and/or formulations; or (2) that are
                marketed under the Marks or other brands that are proprietary to
                us or our
                Affiliates.

               

              "Royalty
                Fee"
–
As
                defined in Section 8.B.

               

              "Sample
                Designs"
–
As
                defined in Section 3.D.

               

              "Site"
                - The
                location identified in Exhibit D
                of this
                Agreement. As used herein, the term "Site"
                also
                refers to the interior and exterior of the structure housing the
                Outlet, the
                parking lot and all other areas around the Outlet used in the operation
                of
                Franchisee's business.

               

              "Site
                Package"
                –As
                defined in Section
                3.A.

               

              "Specified
                Software"
                - Such
                software programs, programming and services which Franchisor from
                time to time
                specifies or requires in connection with utilization of the Computer
                System,
                including any replacements, modifications, upgrades or updates thereto
                which
                Franchisor designates, and whether developed by, for, or on behalf
                of
                Franchisor, its Affiliate or an independent third party.

               

              "Successor
                Franchise"
–
As
                defined in Section 14.A.

               

              "System"
–
As
                defined in Section 1.A.

               

              "System
                Standards"
–
                Specifications, standards, policies and procedures that Franchisor
                periodically
                prescribes for UFood Outlets, including standards concerning brands,
                types
                and/or models of Operating Assets, Nutritional Products, food and
                beverage
                inventory, ingredients, supplies and other products and services
                used in the
                development and operation of a UFood Outlet, as they may be modified,
                added to,
                replaced and supplemented by Franchisor from time to time.

               

              "System
                Website"
–
As
                defined in Section 10.D.

               

              
                
                   

                

                
                  5

                  
                    

                  

                

                
                   

                

              

              "Systemwide
                Advertising Fund"
–
As
                defined in Section 10.A.

               

              "Territory"
                - The
                geographic area defined in Exhibit D
                of this
                Agreement.

               

              "Trade
                Dress"
                - The
                UFood Outlet design, decor, color scheme and image which Franchisor
                authorizes
                and requires for use in connection with the operation of the Outlet,
                as it may
                be revised and further developed by Franchisor or its Affiliates
                from time to
                time and as further described in the Manuals.

               

              
                	
                        2.

                      	
                        GRANT
                          OF FRANCHISE.

                      

              

               

              2.A. GRANT
                OF FRANCHISE AND TERM.

               

              Subject
                to the provisions of this Agreement, Franchisor hereby grants to
                Franchisee the
                right, and Franchisee hereby accepts the obligation, to operate the
                Outlet at
                the Site, and to use the Marks and System in the operation thereof,
                for a term
                of fifteen (15) years commencing on the Effective Date. Termination
                or
                expiration of this Agreement shall constitute a termination or expiration
                of the
                franchise and any and all licenses granted herein.

               

              Franchisee
                acknowledges and agrees that its rights under this Agreement are
                limited to the
                operation of the Outlet at the Site, pursuant to and in compliance
                with this
                Agreement, and that Franchisee has no right to use the Marks in any
                manner not
                contemplated by this Agreement or to offer or sell Nutritional Products
                or other
                items bearing the Marks through any channel of distribution other
                than the
                Outlet. Franchisee will conduct no business or other activities other
                than the
                operation of the Outlet. Franchisee agrees that it will at all times
                faithfully,
                honestly and diligently perform its obligations hereunder, and that
                it will
                continuously exert its best efforts to promote and enhance the business
                of the
                Outlet and the goodwill of the Marks and to procure the greatest
                sales volume
                for the Outlet consistent with good service to the public and in
                compliance with
                the terms of this Agreement. Except as set forth in this Agreement,
                Franchisee
                shall not conduct the business of the Outlet from any location other
                than the
                Site.

               

              2.B. TERRITORIAL
                RIGHTS.

               

              Except
                as
                otherwise provided in this Agreement, and provided that Franchisee
                is in full
                compliance with this Agreement, during the term of this Agreement
                neither
                Franchisor nor its Affiliates will operate, or grant a franchise
                for the
                operation of, a UFood Outlet, or any other retail establishment that
                derives
                twenty-five percent (25%) or more of its total revenue from the sale
                of food
                items and/or beverages that are marketed as low-fat and/or low-carbohydrate
                or
                low-calorie; or derives five percent (5%) or more of its total revenue
                from the
                sale of Nutritional Products and that is substantially associated
                with the Marks
                and is physically located within the Territory.

               

              2.C. RIGHTS
                RETAINED BY FRANCHISOR.

               

              Subject
                to the territorial rights expressly set forth in Section
                2.B.
                hereof,
                during and after the term of this Agreement, Franchisor (on behalf
                of itself,
                its Affiliates and its designees) retains all rights with respect
                to UFood
                Outlets, the System, the Marks, and the marketing and sale of any
                products and
                services, anywhere in the world, including:

               

              
                
                   

                

                
                  6

                  
                    

                  

                

                
                   

                

              

               

              (1) the
                right
                to develop and operate, and grant rights to others to develop and
                operate, UFood
                Outlets and any similar or dissimilar businesses at any location
                outside the
                Territory (including on the border of the Territory), whether under
                the Marks or
                other trademarks or service marks, and on any terms Franchisor deems
                appropriate;

               

              (2) the
                right
                to operate and to grant others (including any person or entity related
                in any
                manner whatsoever to Franchisor) the right to operate food service
                businesses
                and/or retail outlets using the Marks or any other marks and using
                the System or
                any other system at such locations within and/or outside the Territory,
                both
                during and upon expiration or termination of the term of this Agreement,
                and on
                such terms and conditions as Franchisor, in its sole discretion,
                deems
                appropriate, including, without limitation, the right to operate
                and grant
                others the right to operate UFood Outlets at "Non Traditional Sites"
                within and
                outside the Territory on any terms and conditions Franchisor deems
                appropriate.
                "Non
                Traditional Sites"
                are
                sites that generate customer traffic flow which is independent from
                the general
                customer traffic flow of the surrounding area, including, without
                limitation,
                military bases, shopping malls, airports, stadiums, industrial or
                office
                facilities, food courts, hotels, school campuses, train stations,
                travel plazas,
                toll roads, casinos, hospitals, and sports or entertainment venues.

               

              (3) the
                right
                to develop and operate, and grant rights to others to develop and
                operate, other
                establishments under the Marks (other than UFood Outlets as provided
                in
Section 2.B.
                above)
                or other trademarks or service marks, and on any terms and conditions
                that
                Franchisor deems appropriate, anywhere in the world (including within
                the
                Territory);

               

              (4) the
                right
                to provide, and grant rights to others to provide, on any terms Franchisor
                deems
                appropriate, goods and services which are similar to, competitive
                with or
                complementary to those provided at UFood Outlets (including the Nutritional
                Products), whether identified by the Marks or other trademarks or
                service marks
                and wherever located or operating (whether within or outside the
                Territory),
                through any distribution channels, including retail stores, a Website,
                and
                catalog/mail order sales;

               

              (5) the
                right
                to be acquired (in whole or in part and regardless of the form of
                transaction)
                by a business providing products and services similar or dissimilar
                to those
                provided at UFood Outlets, or by another business, even if such business
                operates, franchises and/or licenses Competitive Business within
                the Territory;
                and 

               

              (6) the
                right
                to acquire (in whole or in part and regardless of the form of transaction)
                one
                or more businesses providing products and services similar or dissimilar
                to
                those provided at UFood Outlets, and to franchise, license and create
                other
                arrangements of any type with respect to those businesses once acquired,
                wherever these businesses (or the franchisees or licensees of those
                businesses)
                are located or operating.

               

              
                
                   

                

                
                  7

                  
                    

                  

                

                
                   

                

              

              2.D. OWNERS'
                GUARANTY.

               

              Franchisee
                shall cause all Persons who are Owners as of the Effective Date and
                who own
                fifteen percent (15%) or more of the Ownership Interests in Franchisee
                as of the
                Effective Date, and each of their spouses, to execute and deliver
                to Franchisor
                concurrently with this Agreement, and all Persons who become Owners
                thereafter,
                and their spouses, to execute and deliver to Franchisor promptly
                thereafter, the
                form of Guaranty and Assumption of Franchisee's Obligations ("Guaranty")
                attached hereto as Exhibit E
                and the
                Joinder of Owners at the end of this Agreement.

               

              
                	
                        3.

                      	
                        SITE
                          SELECTION, DEVELOPMENT AND OPENING OF THE OUTLET.

                      

              

               

              3.A. SITE
                SELECTION.

               

              If
                the
                Site is not specified in Exhibit D
                as of
                the Effective Date, then within seventy (70) days after signing this
                Agreement,
                Franchisee shall submit to Franchisor a complete site approval request
                package
                and location feasibility analysis (a "Site
                Package")
                on
                Franchisor's specified forms, containing such demographic, commercial,
                economic,
                and other information, photographs and collateral material as Franchisor
                may
                require, for the site at which Franchisee proposes and intends in
                good faith to
                establish and operate the Outlet and which Franchisee reasonably
                believes to
                conform to certain minimum site selection criteria established by
                Franchisor
                from time to time. In approving or disapproving any proposed site,
                Franchisor
                may consider such matters as it deems material from time to time,
                which factors
                may (but are not required to) include demographic characteristics,
                traffic
                patterns, parking, visibility, allowed signage, the predominant character
                of the
                neighborhood, competition from other businesses providing similar
                products and
                services within the area, the nature of other businesses in proximity
                to the
                site, and other commercial characteristics (including the purchase
                price or
                rental obligations and other lease terms for the proposed site) and
                the size,
                appearance, and other physical characteristics of the proposed
                site.

               

              Franchisor
                will approve or disapprove sites by delivery of written notice to
                Franchisee.
                Franchisee will use commercially reasonable efforts to deliver such
                notification
                within twenty (20) days after receipt by Franchisor of a complete
                Site Package
                and other materials requested by Franchisor, but Franchisor's failure
                to deliver
                such notification within such twenty (20) day period shall not be
                deemed an
                approval of the proposed site. Franchisor shall have the sole right
                to approve
                or disapprove a site, and Franchisee acknowledges and agrees that
                Franchisor
                shall have no liability therefor.

               

              Franchisee
                acknowledges that Franchisor's approval of the Site and any information
                communicated to Franchisee regarding proposed sites are not a representation
                or
                warranty of any kind, express or implied, of the suitability of the
                Site for a
                UFood Outlet or any other purpose. Franchisor's approval indicates
                only that
                Franchisor believes that the particular site meets, or that Franchisor
                has
                waived, the general site criteria which Franchisor has established
                as of that
                time. Applying criteria that have appeared effective for other sites
                might not
                accurately reflect the potential for all sites, and, after Franchisor
                approves a
                site, demographic and/or other factors included in or excluded from
                Franchisor's
                site criteria could change, thereby altering a site's potential.
                The changeable
                nature of these criteria is beyond Franchisor's control, and Franchisor
                is not
                responsible for the failure of a site which it has approved to meet
                Franchisor's
                or Franchisee's expectations.

               

              
                
                   

                

                
                  8

                  
                    

                  

                

                
                   

                

              

              3.B. FINANCING
                PLAN.

               

              Within
                twenty (20) days after the execution of this Agreement, Franchisee
                must submit a
                written plan for Franchisee's funding of the development and operation
                of the
                Outlet, which plan shall be reasonably acceptable to Franchisor and
                which shall
                include details of the sources and terms of such funding and such
                other
                information or documents required by Franchisor from time to time
                (the
                "Financing
                Plan").
                Franchisee may not begin development of the Outlet until Franchisor
                has given
                its approval of such Financing Plan. Among other factors, Franchisor
                may
                consider Franchisee's debt/equity ratio and amount of indebtedness
                in reviewing
                such Financing Plan. Once a plan is approved by Franchisor, Franchisee
                must
                adopt it and adhere to it. Any proposed material deviation from or
                modifications
                to the originally-approved plan must be submitted to Franchisor for
                prior
                approval.

               

              3.C. LEASE
                OF APPROVED SITES.

               

              Franchisee
                shall obtain Franchisor's prior written approval of the Lease before
                Franchisee
                signs it (if Franchisee is not the fee simple owner of the Site and
                Outlet
                premises). After negotiating the Lease terms with the Site owner
                or lessor, and
                in any event within one hundred twenty (120)) days after the Effective
                Date,
                Franchisee shall present the ready-to-be-signed Lease to Franchisor
                for its
                review and approval. Franchisee shall ensure that such Lease includes
                such lease
                terms as Franchisor may require, including but not limited to:

               

              (1) a
                provision reserving to Franchisor the right to receive an assignment
                of the
                Lease upon termination or expiration of this Agreement;

               

              (2) a
                provision requiring the lessor to give to Franchisor all information
                Franchisor
                requests relating to the Outlet’s operation;

               

              (3) a
                provision requiring the lessor concurrently to send to Franchisor
                a copy of any
                written notice of a Lease default sent to Franchisee and granting
                to Franchisor
                the right (but without any obligation) to cure any Lease default
                within fifteen
                (15) business days after the expiration of any applicable cure period
                (if
                Franchisee fails to do so);

               

              (4) a
                provision evidencing Franchisee’s right to display the Marks in the manner that
                Franchisor requires (subject only to applicable law);

               

              (5) a
                provision stating that the premises may be used only for the operation
                of the
                Outlet; and

               

              (6) a
                provision stating that the Lease may not be materially amended without
                Franchisor’s prior written consent and that the lessor will deliver copies of
                such modifications to Franchisor both when any modifications are
                proposed and
                when any amendments are signed.

               

              
                
                   

                

                
                  9

                  
                    

                  

                

                
                   

                

              

              After
                receiving a copy of a proposed Lease in form for execution, Franchisor
                shall
                have the sole right to approve, approve with modifications or disapprove
                such
                proposed Lease, and Franchisee acknowledges and agrees that Franchisor
                shall
                have no liability therefor. Franchisor agrees to use commercially
                reasonable
                efforts to deliver such notification to Franchisee within ten (10)
                business days
                after receipt by Franchisor of the proposed Lease. Franchisee agrees
                that it
                will not execute a Lease without the prior written approval of Franchisor,
                and
                any such Lease shall contain the express condition precedent of Franchisor's
                prior written approval thereof.

               

              Franchisee
                acknowledges that Franchisor's approval of the Lease is not a representation
                or
                warranty of any kind, express or implied, of the suitability of the
                Lease.
                Franchisor's approval indicates only that Franchisor believes that
                the Lease
                meets, or Franchisor has waived, the general criteria of acceptability
                that
                Franchisor has established as of that time.

               

              Franchisee
                shall deliver to Franchisor a copy of the fully signed Lease as previously
                approved within fifteen (15) days after its full execution. Franchisee
                further
                agrees that it will not execute or agree to any modification of the
                Lease which
                would affect Franchisor's rights without the prior written approval
                of
                Franchisor. If Franchisee fails to obtain lawful possession of an
                approved site
                (through a signed and approved Lease) within sixty (60) days after
                delivery of
                Franchisor's approval of the site, Franchisor may withdraw approval
                of such site
                at any time thereafter.

               

              
                	 	
                        3.D.

                      	
                        OUTLET
                          DEVELOPMENT SPECIFICATIONS AND CONSTRUCTION PLANS.

                      

              

               

              Following
                Franchisor's approval of the Site and Lease Franchisor will furnish
                to
                Franchisee one or more sets of design plans for UFood Outlets developed
                by
                Franchisor or its Affiliates ("Sample
                Designs").
                The
                Sample Designs are provided merely to provide guidance on the design
                and layout
                of other UFood Outlets. Franchisor makes no representation or warranty
                concerning the suitability of the Sample Designs for the Site.

               

              Franchisor
                also will furnish to Franchisee specifications of Franchisor's requirements
                for
                decoration, layout, color scheme, image, Operating Assets, and the
                Trade Dress
                relating to the development of the Outlet (the "Development
                Specifications").
                Franchisee acknowledges and agrees that the Development Specifications,
                which
                include Trade Dress, are an integral part of the System and that
                Franchisee will
                design and construct the Outlet in accordance with the Development
                Specifications. Franchisee will, at its sole expense, cause to be
                prepared and
                submit to Franchisor for approval the preliminary layout for the
                Outlet and
                detailed construction plans, specifications and space plans for the
                Outlet (the
                "Construction
                Plans")
                that
                comply with the Development Specifications and all applicable ordinances,
                building codes, permit requirements, and Lease requirements and restrictions.
                Franchisee shall make such changes to the Construction Plans that
                Franchisor
                specifies. Franchisee shall make no changes to the approved Construction
                Plans
                unless such changes are presented to and approved by Franchisor.

               

              
                
                   

                

                
                  10

                  
                    

                  

                

                
                   

                

              

              Despite
                Franchisor's providing the Sample Plans and Development Specifications,
                any
                changes and approval that Franchisor might provide for the Construction
                Plans,
                as between Franchisor (and its Affiliates) and Franchisee, Franchisee
                is solely
                responsible for complying with all laws, ordinances, rules and regulations
                relating directly or indirectly to the construction and development
                of the
                Outlet, including the Americans with Disabilities Act and other laws
                regarding
                public accommodations for persons with disabilities. Franchisee is
                solely
                responsible, as between Franchisor (and its Affiliates) and Franchisee,
                for any
                and all claims, liabilities, costs and damages relating to noncompliance
                or
                alleged noncompliance with any such laws, ordinances, rules and regulations,
                and
                Franchisee must promptly remedy, at its expense, any such noncompliance
                or
                alleged noncompliance.

               

              3.E. DEVELOPMENT
                OF THE OUTLET.

               

              Within
                two hundred forty (240) days after the Effective Date, Franchisee
                agrees at its
                expense to do or cause to be done (to the extent not already done)
                the
                following:

               

              (1) secure
                all financing required to fully develop the Outlet in accordance
                with this
                Agreement; 

               

              (2) submit
                the Construction Plans (and any revisions thereto) and preliminary
                layout to
                Franchisor for approval; 

               

              (3) obtain
                all required zoning changes, planning consents, building, utility,
                sign, health,
                sanitation and business permits, licenses and approvals and any other
                required
                permits and licenses; 

               

              (4) construct
                all required improvements in compliance with the Development Specifications
                and
                Construction Plans approved by Franchisor; 

               

              (5) decorate
                and lay out the Outlet in compliance with the Development Specifications
                and
                other plans and specifications approved by Franchisor; 

               

              (6) (a) acquire
                the Computer System for the Outlet and acquire the right to use,
                for the entire
                term of this Agreement, the Specified Software in the manner specified
                by
                Franchisor; (b) arrange for any and all support services that may be
                necessary to enable the Computer System and Specified Software to
                operate as
                specified by Franchisor, whether from Franchisor, its Affiliate or
                a third
                party; and (c) take all other actions (including installation of electrical
                wiring and cabling, and temperature and humidity controls) that may
                be necessary
                to prepare the Outlet to enable the Computer System and Specified
                Software to
                operate as specified by Franchisor; 

               

              (7) purchase
                or lease and install (or have installed) all Operating Assets;

               

              (8) purchase
                an adequate opening inventory of Proprietary Products, food and beverage
                inventory, ingredients, Nutritional Products and other products and
                supplies
                that Franchisor specifies for the development and operation of the
                Outlet;

               

              (9) obtain
                all customary contractors' sworn statements and partial and final
                waivers of
                lien for construction, remodeling, decorating and installation services;
                and

               

              
                
                   

                

                
                  11

                  
                    

                  

                

                
                   

                

              

              (10) open
                the
                Outlet for business and thereafter operate the Outlet on a regular
                and
                continuing basis for the term of this Agreement.

               

              Franchisee
                shall provide Franchisor periodic updates on the schedule and progress
                for
                constructing, developing and opening the Outlet.

               

              3.F. GENERAL
                MANAGER AND OTHER MANAGEMENT PERSONNEL.

               

              At
                least
                sixty (60) days before the Outlet's anticipated Opening Date, Franchisee
                shall
                submit to Franchisor the identity and qualifications of the proposed
                general
                manager for the Outlet (the "General
                Manager")
                and
                the identity and qualifications of the proposed assistant general
                manager and
                kitchen manager, (the General Manager and the assistant manager are
                referred to
                collectively as the "Management
                Personnel"),
                including curriculum vitae, work history, experience, references,
                background
                verifications and other information that Franchisor reasonably requests
                on all
                Management Personnel. Franchisee shall be solely responsible for
                the hiring,
                firing and personnel decisions, and the terms and conditions of employment,
                relating to the Management Personnel and all other Outlet
                personnel.

               

              3.G. OPERATING
                ASSETS.

               

              Franchisee
                agrees to use in the development and operation of the Outlet only
                those brands,
                types, makes and/or models of Operating Assets which meet Franchisor's
                standards
                and specifications. If Franchisor requires, Franchisee must purchase
                approved
                brands, types, makes and/or models of Operating Assets only from
                suppliers
                designated or approved by Franchisor, which may include or be limited
                to
                Franchisor and/or its Affiliates.

               

              3.H. COMPUTER
                SYSTEM.

               

              Franchisee
                agrees to use in the development and operation of the Outlet only
                those brands,
                types, makes and/or models of communications systems, hardware and
                peripheral
                equipment for the Computer System, and Specified Software which Franchisor
                has
                from time to time specified or required. Franchisor may periodically
                modify
                specifications for and components of the Computer System and Specified
                Software
                during the term of this Agreement. These requirements and modifications,
                and/or
                other technological developments or events, may require Franchisee
                to purchase,
                lease and/or license new or modified equipment, hardware and/or software
                and to
                obtain service and support for the Computer System and Specified
                Software.
                Although Franchisor cannot estimate the future costs of the Computer
                System and
                Specified Software, Franchisee agrees to incur the costs of obtaining
                the
                equipment, hardware and software (or additions or modifications)
                and required
                service or support. Franchisor has no obligation to reimburse Franchisee
                for any
                costs relating thereto. Within sixty (60) days after receiving notice
                from
                Franchisor, Franchisee agrees to obtain the new or modified components
                of the
                Computer System or Specified Software, as applicable, that Franchisor
                designates
                and ensure that it, as modified, is functioning properly.

               

              
                
                   

                

                
                  12

                  
                    

                  

                

                
                   

                

              

              Franchisor
                may charge Franchisee reasonable fees if Franchisor develops or has
                developed
                (and, once developed, for supporting, modifying and enhancing) proprietary
                software or other technology that Franchisor licenses to Franchisee,
                products,
                services and support relating to the Computer System maintenance
                and support
                services that Franchisor or its Affiliates provide to Franchisee.
                Franchisee
                agrees to sign any software license agreement or similar document
                that
                Franchisor or its Affiliates prescribe to regulate Franchisee's use
                of, and
                Franchisor's and Franchisee's respective rights and responsibilities
                with
                respect to, any software, other technology or maintenance or support
                services
                that Franchisor or its Affiliates periodically provide.

               

              Notwithstanding
                the fact that Franchisee must buy, use and maintain the Computer
                System and
                Specified Software under Franchisor's standards and specifications,
                and
                notwithstanding any software, other technology or maintenance or
                support
                services that Franchisor or its Affiliates might periodically provide
                to
                Franchisee, Franchisee will have sole and complete responsibility
                for:
                (1) the acquisition, operation, maintenance and upgrading of the Computer
                System and Specified Software; (2) the manner in which Franchisee's
                Computer System interfaces with Franchisor's equipment and that of
                third
                parties; and (3) any and all consequences that may arise if the Computer
                System is not properly operated, maintained and upgraded or if the
                Computer
                System fails to operate on a continuous basis or as expected by Franchisor
                or
                Franchisee.

               

              3.I. OUTLET
                OPENING.

               

              Franchisee
                agrees not to open the Outlet for business until:

               

              (1) Franchisor
                notifies Franchisee in writing that all of Franchisee's pre-opening
                obligations
                under this Agreement have been fulfilled; 

               

              (2) pre-opening
                training of the General Manager and the assistant manager (and, if
                applicable,
                the Managing Owner) has been completed to Franchisor's satisfaction;
                

               

              (3) all
                amounts then due to Franchisor and its Affiliates have been paid
                and all
                required Guaranties and other agreements are executed and delivered
                to
                Franchisor; and

               

              (4) Franchisor
                has been furnished with copies of all insurance policies required
                pursuant to
                this Agreement, or such other evidence of insurance coverage and
                payment of
                premiums as Franchisor requests.

               

              Franchisee
                agrees to comply with these conditions and to be prepared to open
                the Outlet for
                business within the appropriate time period specified in Section 3.E.
                above.
                Franchisor's determination that Franchisee has met all of Franchisor's
                pre-opening requirements shall not constitute a waiver of non-compliance
                by
                Franchisee or of Franchisor's right to demand full compliance with
                such
                requirements. Franchisee further agrees to open the Outlet for business
                and
                commence conduct of business at the Outlet pursuant to this Agreement
                within
                five (5) days after Franchisor gives notice to Franchisee stating
                that the
                Outlet is ready for opening.

               

              
                
                   

                

                
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              3.J. GRAND
                OPENING MARKETING PROGRAM.

               

              Unless
                there is an operating UFood Outlet at the Site being purchased by
                Franchisee,
                Franchisee shall conduct a grand opening advertising, marketing and
                promotional
                program for the Outlet to commence approximately 30 days after the
                opening of
                the Outlet during the period commencing no less than seven (7) days
                prior to,
                and ending seven (7) days after, to last for approximately two weeks,
                and to
                expend no less than Fifteen Thousand Dollars ($15,000) on such advertising,
                marketing and promotion during such period. Such program shall:

               

              (1) be
                in
                addition to advertising, marketing and promotion conducted pursuant
                to
Section 10
                of this
                Agreement and shall not count towards the Local Marketing Spending
                Requirement;

               

              (2) utilize
                only those advertising, marketing and public relations programs,
                firms, media
                and materials approved by Franchisor; and

               

              (3) be
                conducted in accordance with Franchisor's specifications and standards
                and
                pursuant to a grand opening plan which Franchisee shall prepare and
                submit to
                Franchisor for approval at least twenty-one (21) days prior to the
                Outlet's
                Opening Date. If Franchisee does not prepare a grand opening program
                and obtain
                Franchisor's approval of such plan, Franchisor may (but need not)
                prepare and
                execute the grand opening plan for the Outlet at Franchisee's
                expense.

               

              3.K. RELOCATION
                OF THE OUTLET.

               

              If
                the
                Lease expires or terminates without fault of Franchisee, if the Site
                is
                destroyed, condemned or otherwise rendered unusable as a UFood Outlet
                in
                accordance with this Agreement, or if, in the judgment of Franchisor
                and
                Franchisee, there is a change in the character of the location of
                the Site
                sufficiently detrimental to its business potential to warrant the
                Outlet's
                relocation, Franchisor will not unreasonably withhold permission
                for relocation
                of the Outlet to a site within the Territory which meets Franchisor's
                then
                current site criteria. Any such relocation shall be at Franchisee's
                sole
                expense. Franchisee shall seek and obtain Franchisor's approval of
                the
                replacement site and lease pursuant to Franchisor's then current
                site approval
                process, and the Outlet shall re-open at the replacement site as
                soon as
                reasonably practicable but in no event more than one hundred eighty
                (180) days
                after the closing of the original location. Franchisee shall not
                relocate the
                Outlet except pursuant to this Subsection.

               

              
                	
                        4.

                      	
                        TRAINING
                          AND GUIDANCE.

                      

              

               

              4.A. TRAINING.

               

              Prior
                to
                the commencement of the operation of the Outlet, the Management Personnel
                must
                attend and complete to Franchisor's satisfaction Franchisor's initial
                management
                training program in the operation of a UFood Outlet. Each Outlet
                must have a
                minimum of one General Manager, one assistant manager and one kitchen
                manager,
                all of whom must be certified by Franchisor as having successfully
                completed
                initial management training. If the Outlet is the first UFood Outlet
                operated by
                Franchisee, the Managing Owner must also complete the initial management
                training program to Franchisor’s satisfaction.

               

              
                
                   

                

                
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              If
                Franchisee wishes to have additional personnel attend initial training,
                Franchisee shall require Franchisor's consent and Franchisor may
                impose a charge
                for each additional person. Such initial training program may include
                classroom
                training, instruction at designated facilities and/or hands-on training
                in an
                operating UFood Outlet. The Management Personnel (and, if applicable,
                the
                Managing Owner) must complete all required initial training to Franchisor's
                satisfaction at least three (3) weeks before the Opening Date.

               

              Franchisor
                may, as it deems necessary, require any or all of the Management
                Personnel or
                other supervisory employees at the Outlet to attend or participate
                in updated,
                additional or refresher training programs or conferences during the
                term of this
                Agreement, which might be administered via the Computer System. Franchisee
                shall
                pay Franchisor's reasonable fees for these programs. Franchisor also
                may charge
                for updated, additional or refresher training materials supplied
                to Franchisee
                or its personnel.

               

              In
                the
                event that the General Manager ceases to hold such position at the
                Outlet,
                Franchisee shall have thirty (30) days in which to appoint a replacement
                General
                Manager, who is subject to Franchisor's approval pursuant to Section 3.F.
                above
                and must attend and complete to Franchisor's satisfaction the initial
                management
                training program that Franchisor designates promptly after appointment.
                Franchisee must pay Franchisor's reasonable fees for training substitute
                or
                replacement managers. If Franchisor determines that the General Manager
                has
                failed to satisfactorily complete the initial management training
                program or any
                additional or refresher training program, Franchisee shall immediately
                hire a
                replacement General Manager and promptly arrange for such person
                to complete the
                initial management training program that Franchisor designates to
                the
                satisfaction of Franchisor.

               

              Franchisee
                shall be responsible for the travel, living and other expenses (including
                local
                transportation expenses) and compensation of the Management Personnel
                and any
                other agents or employees of Franchisee incurred in connection with
                attendance
                at training programs or conferences or work at UFood Outlets that
                is part of
                their training.

               

              Franchisee
                will cooperate with other franchisees of Franchisor and Franchisor's
                Affiliates
                by making available to such other franchisees, at the request of
                Franchisor,
                such facilities at the Outlet for the staff of such other franchisees
                to gain
                experience in the operation and management of UFood Outlets, all
                as Franchisor
                may reasonably require, provided that any out-of-pocket expense incurred
                by
                Franchisee as a result of so doing shall be borne by such other franchisee,
                and
                provided that such cooperation does not unreasonably interfere with
                the proper
                operation of the Outlet.

               

              
                
                   

                

                
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              4.B. PRE-OPENING
                TRAINING AT THE OUTLET.

               

              Franchisor
                will place (as Franchisor shall consider necessary or desirable)
                staff of
                Franchisor or its Affiliate in the Outlet for a period of five days
                before and
                five days after the Opening Date as Franchisor shall, in its sole
                discretion,
                consider necessary to help establish the proper operation of the
                Outlet in
                accordance with this Agreement and the Manuals, provided that if
                Franchisor
                determines that Franchisee needs such opening assistance for more
                than ten (10)
                days, Franchisee shall pay Franchisor for such assistance at Franchisor's
                then
                current per diem rates. Franchisor will pay salaries, taxes, benefits
                and per
                diem for Franchisor’s opening trainers for up to 10 days. Franchisee shall pay
                for Franchisor’s trainers’ travel, hotel accommodations, and ground
                transportation.

               

              Franchisee
                will cooperate fully, and require that its staff cooperate fully,
                with the
                personnel of Franchisor or its Affiliate in providing such
                assistance.

               

              4.C. ONGOING
                GUIDANCE AND ASSISTANCE.

               

              Franchisor
                shall from time to time furnish reasonable guidance to Franchisee
                with respect
                to:

               

              (1) methods,
                specifications, standards and operating procedures utilized by UFood
                Outlets and
                any modifications thereof; 

               

              (2) purchasing
                and leasing required or recommended Operating Assets, Nutritional
                Products,
                Proprietary Products, food and beverage inventory, ingredients, supplies
                and
                other materials; 

               

              (3) development
                and implementation of local advertising, marketing and promotional
                programs;

               

              (4) general
                operating and management procedures of UFood Outlets; 

               

              (5) establishing
                and conducting employee training programs at the Outlet; and 

               

              (6) administrative,
                bookkeeping and accounting procedures for UFood Outlets.

               

              Such
                guidance shall, in the discretion of Franchisor, be furnished in
                the form of the
                Manuals, bulletins, Franchisor's intranet, written materials, reports
                and
                recommendations, other materials and intangibles, refresher training
                programs
                and/or telephonic consultations or consultations at the offices of
                Franchisor or
                at the Outlet. If Franchisee requests that Franchisor provide special
                or
                additional guidance or training of Franchisee or Outlet personnel
                or other
                assistance in operating the Outlet, and Franchisor agrees, then Franchisee
                shall
                pay Franchisor's then applicable charges, including Franchisor's
                per diem
                charges and travel and living expenses for Franchisor personnel.

               

              If
                Franchisor determines that Franchisee’s operations at the Outlet are not in
                compliance with System Standards, Franchisor may require that Franchisee’s
                personnel obtain additional guidance, re-training or other assistance
                from
                Franchisor at the expense of Franchisee, to include but not be limited
                to
                Franchisor’s then current per diem charges and travel and living expenses for
                Franchisor’s personnel.

               

              
                
                   

                

                
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              4.D. MANUALS.

               

              Franchisor
                shall loan to Franchisee, for its sole use, one (1) set of the Manuals, as
                they may be modified, added to, replaced or supplemented by Franchisor
                from time
                to time, whether by way of supplements, replacement pages, franchise
                bulletins,
                or other official pronouncements or means. Franchisor may modify
                the Manuals
                from time to time to reflect changes in the System Standards Franchisee
                shall
                keep its copy of the Manuals current by immediately inserting all
                modified pages
                or materials furnished by Franchisor. If Franchisee's copy of the
                Manuals is
                lost or stolen, Franchisee shall obtain a replacement copy at Franchisor's
                then
                applicable charge. Franchisee must promptly communicate all changes
                to the
                Manuals to its employees. In the event of a dispute about the contents
                of the
                Manuals, the master copies maintained by Franchisor at its principal
                office
                shall control. Franchisee acknowledges that the Manuals are part
                of the
                Confidential Information and will be used and protected
                accordingly.

               

              At
                Franchisor's option, Franchisor may post the Manuals on an intranet
                or a
                restricted Website to which Franchisee and certain employees of Franchisee
                designated by Franchisor will have access. If Franchisor does so,
                Franchisee and
                such employees must sign the agreement(s) that Franchisor periodically
                specifies
                pertaining to the use of such intranet or Website and must monitor
                the Website
                for any updates to the Manuals or System Standards. Any passwords
                or other
                digital identifications necessary to access the Manuals on such an
                intranet or
                Website are part of Confidential Information and will be used and
                protected
                accordingly.

               

              4.E. DELEGATION
                BY FRANCHISOR.

               

              Franchisee
                agrees that Franchisor shall have the right, from time to time, to
                delegate the
                performance of any portion or all of its obligations and duties under
                this
                Agreement to designees, whether they are Affiliates of Franchisor,
                agents of
                Franchisor or independent contractors with which Franchisor has contracted
                to
                provide such services.

               

              
                	
                        5.

                      	
                        MARKS. 

                      

              

               

              5.A. OWNERSHIP
                AND GOODWILL OF MARKS.

               

              Franchisee's
                right to use the Marks is derived only from this Agreement and is
                limited to
                Franchisee's operating the Outlet according to this Agreement and
                all System
                Standards Franchisor prescribes during its term. Franchisee's unauthorized
                use
                of the Marks is a breach of this Agreement and infringes Franchisor's
                rights in
                the Marks. Franchisee acknowledges and agrees that its use of the
                Marks and any
                goodwill established by that use are exclusively for Franchisor's
                benefit and
                that this Agreement does not confer any goodwill or other interest
                in the Marks
                upon Franchisee (other than the right to operate the Outlet under
                this
                Agreement). All provisions of this Agreement relating to the Marks
                apply to any
                additional proprietary trade and service marks Franchisor authorizes
                Franchisee
                to use. Franchisee may not at any time during or after this Agreement's
                term
                contest or assist any other Person in contesting the validity, or
                Franchisor's
                ownership, of the Marks.

               

              
                
                   

                

                
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              5.B. LIMITATIONS
                ON FRANCHISEE'S USE OF MARKS.

               

              Franchisee
                agrees to use the Marks as the Outlet's sole identification, except
                that
                Franchisee agrees to identify itself as the Outlet's independent
                owner in the
                manner Franchisor prescribes. Franchisee may not use any Mark (1) as part
                of any corporate or legal business name, (2) with any prefix, suffix, or
                other modifying words, terms, designs, or symbols (other than logos
                Franchisor
                has licensed to Franchisee pursuant to this Agreement), (3) in selling any
                unauthorized services or products, (4) as part of any domain name,
                homepage, electronic address, or otherwise in connection with a Website,
                or
                (5) in any other manner that Franchisor has not expressly authorized
                in
                writing.

               

              Franchisee
                agrees not to use any Mark in advertising the transfer, sale, or
                other
                disposition of the Outlet or an ownership interest in Franchisee
                without
                Franchisor's prior written consent, which will not be unreasonably
                withheld.
                Franchisee agrees to display the Marks prominently as Franchisor
                prescribes at
                the Outlet and on forms, advertising, supplies, and other materials
                Franchisor
                designates. Franchisee agrees to give the notices of trade and service
                mark
                registrations that Franchisor specifies and to obtain any fictitious
                or assumed
                name registrations required under applicable law.

               

              5.C. NOTIFICATION
                OF INFRINGEMENTS AND CLAIMS.

               

              Franchisee
                agrees to notify Franchisor immediately of any apparent infringement
                or
                challenge to Franchisee's use of any Mark, or of any Person's claim
                of any
                rights in any Mark, and not to communicate with any Person other
                than
                Franchisor, its attorneys, and Franchisee's attorneys, regarding
                any
                infringement, challenge, or claim. Franchisor may take the action
                deemed
                appropriate (including no action) and control exclusively any litigation,
                U.S.
                Patent and Trademark Office proceeding, or other administrative proceeding
                arising from any infringement, challenge, or claim or otherwise concerning
                any
                Mark. Franchisee agrees to sign any documents and take any other
                reasonable
                action that, in Franchisor's judgment or in the opinion of its attorneys,
                are
                necessary or advisable to protect and maintain its interests in any
                litigation
                or Patent and Trademark Office or other proceeding or otherwise to
                protect and
                maintain its interests in the Marks. Franchisor will reimburse Franchisee
                for
                the costs of taking any action that Franchisor has asked Franchisee
                to
                take.

               

              5.D. MODIFICATION
                AND DISCONTINUANCE OF MARKS.

               

              Franchisor
                shall have the right to determine, in its sole discretion, whether
                at any time
                it is advisable to modify or discontinue using any Mark and/or to
                use one or
                more additional or substitute trade or service marks. Franchisee
                agrees to
                comply with Franchisor's directions within a reasonable time after
                receiving
                notice. Franchisor need not reimburse Franchisee for its direct expenses
                of
                changing the Outlet's signs, for any loss of revenue due to any modified
                or
                discontinued Mark, or for the expenses of promoting a modified or
                substitute
                trademark or service mark.

               

              
                
                   

                

                
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              Franchisor's
                rights in this Section 5.D.
                apply to
                any and all of the Marks (and any portion of any Mark) that it authorizes
                Franchisee to use in this Agreement. Franchisor may exercise these
                rights at any
                time and for any reason, business or otherwise, that it thinks best.
                Franchisee
                acknowledges both Franchisor's right to take this action and its
                obligation to
                comply with its directions.

               

              5.E. INDEMNIFICATION
                FOR USE OF MARKS.

               

              Franchisor
                agrees to reimburse Franchisee for all damages and expenses that
                Franchisee
                incurs in any trademark infringement proceeding disputing Franchisee's
                authorized use of any Mark under this Agreement if Franchisee has
                timely
                notified Franchisor of, and complies with Franchisor's directions
                in responding
                to, the proceeding. At Franchisor's option, it may defend and control
                the
                defense of any proceeding arising from Franchisee's use of any Mark
                under this
                Agreement.

               

              
                	
                        6.

                      	
                        CONFIDENTIAL
                          INFORMATION AND INNOVATIONS.

                      

              

               

              6.A. CONFIDENTIAL
                INFORMATION.

               

              Franchisor
                and its Affiliates, as applicable, possess and may further develop
                and acquire
                certain confidential and proprietary information and trade secrets
                relating to
                the System or the development or operation of UFood Outlets, including
                the
                following categories of information, methods, techniques, procedures
                and
                knowledge developed or to be developed by Franchisor, its consultants
                or
                contractors, its Affiliates or its designees, and/or franchisees
                and developers
                (the "Confidential
                Information"):

               

              (1) site
                selection criteria;

               

              (2) recipes
                and related information concerning Proprietary Products and other
                items offered
                for sale by UFood Outlets;

               

              (3) System
                Standards and other methods, techniques, requirements, equipment,
                recipes,
                specifications (including Development Specifications), standards,
                policies,
                procedures, information, concepts and systems relating to, and knowledge
                of and
                experience in, the development, operation and franchising of UFood
                Outlets;

               

              (4) marketing
                research and advertising, marketing and promotional programs for
                UFood Outlets;

               

              (5) knowledge
                concerning the logic, structure and operation of Computer System
                components and
                Specified Software, and all additions, modifications and enhancements
                thereof,
                all data generated from use of the Computer System and Specified
                Software, and
                the logic, structure and operation of the database file structures
                containing
                such data and all additions, modifications and enhancements
                thereof;

               

              (6) specifications
                for and knowledge of suppliers of Proprietary Products, Nutritional
                Products,
                certain Operating Assets, and other products and supplies used at
                or sold from
                UFood Outlets; 

               

              
                
                   

                

                
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              (7) information
                concerning customers, customer lists, operating results, financial
                performance
                and other financial data of UFood Outlets (other than operating results,
                financial performance and other financial data of the Outlet); 

               

              (8) the
                Manuals; 

               

              (9) employee
                selection procedures, training and staffing levels; and

               

              (10) the
                terms
                and conditions of this Agreement and the Development Agreement.

               

              Franchisor
                will disclose to Franchisee such parts of the Confidential Information
                as
                Franchisor deems necessary or advisable from time to time for the
                development
                and operation of the Outlet, both during training and in guidance
                and assistance
                furnished to Franchisee during the term of this Agreement, and Franchisee
                may
                learn or otherwise obtain additional Confidential Information from
                Franchisor,
                its Affiliates, its franchisees, its developers and others during
                the term of
                this Agreement. Franchisee acknowledges and agrees that neither Franchisee
                nor
                any agent, representative or contractor of Franchisee will acquire
                any interest
                in or right to use the Confidential Information, other than Franchisee's
                right
                to utilize certain Confidential Information in the development and
                operation of
                the Outlet pursuant to this Agreement, and that the use or duplication
                of the
                Confidential Information in any other business would constitute an
                unfair method
                of competition with Franchisor and other UFood Outlet developers
                and
                franchisees. Franchisee agrees to disclose the Confidential Information
                to its
                Owners and to employees of the Outlet only to the extent reasonably
                necessary
                for the operation of the Outlet and only if such individuals have
                agreed to
                maintain such information in confidence in an agreement enforceable
                by
                Franchisor.

               

              Franchisee
                acknowledges and agrees that the Confidential Information is confidential
                to and
                a valuable asset of Franchisor, is proprietary, includes trade secrets
                of
                Franchisor, and is disclosed to Franchisee solely on the condition
                that
                Franchisee, its Owners and its employees who have access to the Confidential
                Information agree, and Franchisee (on its and their behalf) does
                hereby agree,
                that, during and after the term of this Agreement, Franchisee, its
                Owners and
                such employees:

               

              (a) will
                not
                use the Confidential Information in any other business or capacity;
                

               

              (b) will
                maintain the absolute secrecy and confidentiality of the Confidential
                Information; 

               

              (c) will
                not
                make unauthorized copies of any portion of the Confidential Information
                disclosed via electronic medium or in written or other tangible form;
                and

               

              (d) will
                adopt and implement all reasonable procedures prescribed from time
                to time by
                Franchisor to prevent unauthorized use or disclosure of or access
                to the
                Confidential Information, including requiring its employees who will
                have access
                to such information to execute a non-competition and confidentiality
                agreement
                in the form attached hereto as Exhibit F
                (the
“Confidentiality
                and Non-Competition Agreement”).
                Franchisee shall provide Franchisor, at its request, executed originals
                of each
                such Confidentiality and Non-Competition Agreement.

               

              
                
                   

                

                
                  20

                  
                    

                  

                

                
                   

                

              

               

              Notwithstanding
                anything to the contrary contained in this Agreement and provided
                Franchisee
                shall have obtained Franchisor's prior written consent, the restrictions
                on
                Franchisee's, its Owners' and its employees' disclosure and use of
                the
                Confidential Information shall not apply to the following:

               

              (i) information,
                methods, procedures, techniques and knowledge which are or become
                generally
                known throughout the restaurant industry or the nutritional supplement
                industry,
                other than through disclosure (whether deliberate or inadvertent)
                by Franchisee
                or any other party having an obligation of confidentiality to Franchisor;
                and

               

              (ii) the
                disclosure of the Confidential Information in judicial or administrative
                proceedings to the extent that Franchisee is legally compelled to
                disclose such information, provided Franchisee has notified Franchisor
                prior to disclosure and shall have used its best efforts to obtain,
                and shall
                have afforded Franchisor the opportunity to obtain, an appropriate
                protective
                order or other assurance satisfactory to Franchisor of confidential
                treatment
                for the information required to be so disclosed.

               

              6.B. INNOVATIONS.

               

              Franchisee
                agrees to disclose to Franchisor all ideas, concepts, methods,
                techniques and products conceived or developed by Franchisee and/or its
                Affiliates, Owners, agents, representatives, contractors and employees
                during
                the term of this Agreement relating to the development or operation
                of UFood
                Outlets. Franchisee hereby grants to Franchisor, and agrees to procure
                from such
                other Persons, a perpetual, non-exclusive, and worldwide right to
                use,
                sublicense the use of, and commercialize in any way any such ideas,
                concepts,
                methods, techniques and products in all businesses operated by Franchisor
                or its
                Affiliates, developers, franchisees and designees. Franchisor shall
                have no
                obligation to make any lump sum or other payments to Franchisee or
                any other
                Person with respect to any such ideas, concepts, methods, techniques
                or
                products. Franchisee will not use, nor will it allow any other Person
                to use,
                any such idea, concept, method, technique or product, whether in
                connection with
                the Outlet or otherwise, without obtaining Franchisor's prior written
                approval.
                Franchisee agrees to sign and deliver such instruments and documents,
                provide
                such assistance and perform such other acts as Franchisor shall designate
                in
                order for Franchisor or its designee to obtain intellectual property
                rights or
                to obtain exclusive ownership rights in such ideas, concepts, methods,
                techniques and products.

               

              
                
                   

                

                
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                        7.

                      	
                        EXCLUSIVE
                          RELATIONSHIP.

                      

              

               

              Franchisee
                acknowledges and agrees that Franchisor would be unable to protect
                the
                Confidential Information against unauthorized use or disclosure,
                and would be
                unable to encourage a free exchange of ideas and information among
                franchisees
                and developers of UFood Outlets, if franchisees, developers and their
                Owners
                (and members of their respective Immediate Families) were permitted
                to engage
                in, hold interests in or perform services for Competitive Businesses.
                Franchisee
                further acknowledges and agrees that the restrictions contained in
                this
Section 7
                will not
                hinder its activities or the activities of its Owners (or members
                of their
                respective Immediate Families) under this Agreement or in general.
                Franchisor
                has entered into this Agreement with Franchisee on the express condition
                that,
                with respect to restaurants featuring food items and/or beverages
                that are
                marketed as low-fat, low-carbohydrate or low-calorie food and retail
                businesses
                featuring the sale of nutritional products or similar businesses,
                Franchisee and
                its Owners and members of their respective Immediate Families will
                deal
                exclusively with Franchisor. Franchisee therefore agrees that, during
                the term
                of this Agreement, neither Franchisee nor any Owner of Franchisee,
                nor any
                member of the Immediate Family of Franchisee or of any Owner, shall
                directly or
                indirectly:

               

              (a) have
                any
                controlling or non-controlling interest as a record or beneficial
                owner in any
                Competitive Business, wherever located or operating, provided that
                this
                restriction shall not be applicable to the ownership of shares of
                a class of
                securities listed on a stock exchange or traded on the over-the-counter
                market
                and quoted on a national inter-dealer quotation system that represent
                less than
                one-half percent (0.5%) of the number of shares of that class of
                securities
                issued and outstanding; 

               

              (b) perform
                services as a director, officer, manager, employee, consultant, representative,
                agent, or otherwise for any Competitive Business, wherever located
                or operating;

               

              (c) directly
                or indirectly loan any money or other thing of value to, guarantee
                any loan to,
                lease any personal or real property to, or permit the use of its
                name in
                connection with, any Competitive Business or any owner, director,
                officer,
                manager, employee or agent of any Competitive Business, wherever
                located or
                operating;

               

              (d) divert
                or
                attempt to divert any actual or potential business or customers of
                the Outlet or
                any other UFood Outlet to any Competitive Business; or 

               

              (e) employ
                or
                seek to employ any individual who is employed by Franchisor, an Affiliate
                of
                Franchisor or any other developer or franchisee of a UFood Outlet,
                or otherwise
                directly or indirectly induce any such individual to leave said employment,
                without the prior written consent of such individual's employer.

               

              Furthermore,
                if Franchisee is a corporation, limited liability company, partnership
                or other
                business entity, it will not engage in any business or other activity,
                directly
                or indirectly, other than the development and operation of the Outlet
                and other
                UFood Outlets developed and operated pursuant to other agreements
                with
                Franchisor.

               

              
                
                   

                

                
                  22

                  
                    

                  

                

                
                   

                

              

              Franchisee
                acknowledges and agrees that the failure of any Person restricted
                pursuant to
                this Section to comply with the restrictions of this Section (regardless
                of
                whether that Person actually has executed this Agreement, a Guarantee
                or a
                confidentiality or non-competition agreement) shall constitute a
                breach of this
                Agreement by Franchisee. Without limiting the foregoing, and in addition
                to any
                remedies Franchisor may have under this Agreement, if Franchisee
                or any
                Affiliate of Franchisee should hire an individual who, at the time
                of such
                hiring, is employed by Franchisor or one of its Affiliates and whose
                duties
                include training, Franchisee shall promptly pay to Franchisor as
                liquidated
                damages an amount equal to the then current annual salary of the
                individual as
                reflected in the personnel records of Franchisor or its Affiliate,
                as
                applicable. Franchisee acknowledges and agrees that Franchisor makes
                a
                substantial investment in its training personnel and that the aforementioned
                liquidated damages are a reasonable estimate of the actual damages
                which would
                be incurred by Franchisor or its Affiliate.

               

              
                	
                        8.

                      	
                        FEES.

                      

              

               

              8.A. INITIAL
                FRANCHISE FEE.

               

              Franchisee
                agrees to pay to Franchisor upon execution of this Agreement an initial
                franchise fee set forth in Exhibit D
                hereto
                (the "Initial
                Franchise Fee").
                The
                Initial Franchise Fee shall be fully earned by Franchisor upon the
                earlier of
                payment thereof or execution of this Agreement. The Initial Franchise
                Fee is
                non-refundable in whole or in part and is paid to compensate Franchisor
                for
                various services provided to Franchisee prior to the opening of the
                Outlet,
                including providing initial training and inspecting the Outlet prior
                to opening.
                The Initial Franchise Fee is not compensation for the use of the
                Marks or the
                Copyrighted Works.

               

              8.B. ROYALTY
                FEE.

               

              Franchisee
                shall pay to Franchisor a continuing royalty fee (the "Royalty
                Fee")
                in an
                amount equal to: (1) five percent (5%) of the Outlet's F&B Gross
                Receipts; plus (2) five percent (5%) of the Outlet's Nutritional Products
                Gross Receipts. The Royalty Fee shall be payable to Franchisor on
                or before
                Tuesday of each week based on the Outlet's F&B
                Gross Receipts and
                Nutritional Products Gross Receipts for the weeks ending on the immediately
                preceding Sunday. Franchisor, upon written notice to Franchisee,
                shall have the
                right to change the timing of Franchisee's payments of Royalty Fees
                and
                Systemwide Advertising Fund contributions (as defined below) due
                under this
                Agreement. Franchisee shall not subordinate to any other obligation
                its
                obligation to pay the Royalty Fee or any other fee or charge
                hereunder.

               

              8.C. DEFINITIONS.

               

              As
                used
                in this Agreement, the term "Gross
                Receipts"
                shall
                mean and include all receipts generated directly or indirectly as
                a result of
                the operation of the Outlet, or otherwise resulting from or attributable
                to the
                rights granted herein to Franchisee, whether arising from sales of
                food and
                beverage items, Nutritional Products, Catering Service, Delivery
                Service or
                other goods or services sold on or from the Outlet, or otherwise,
                and shall
                include the following:

               

              (1) the
                retail price of all food, beverage, Nutritional Products and approved
                gift
                certificates, gift cards and stored value cards sold by Franchisee.
                For all
                purposes of this Agreement, items sold at a discount implemented
                by Franchisee
                in good faith and consistent with sound business practices shall
                be valued at
                the discounted retail value thereof.

               

              
                
                   

                

                
                  23

                  
                    

                  

                

                
                   

                

              

              (2) All
                charges for services rendered in connection with the operation of
                the Outlet
                (e.g.,
                cover
                charges, service charges, customer gratuities, etc.).

               

              (3) All
                credit transactions of whatever nature carried out during the week
                in question
                shall be recorded as a closed transaction when the transaction is
                effected
                (i.e.,
                at
                point of sale).

               

              Notwithstanding
                the foregoing, the following, and only the following, receipts shall
                be excluded
                from the term "Gross
                Receipts":

               

              (a) sales
                taxes imposed by governmental authorities upon operations of the
                Outlet, charged
                to Outlet patrons, and actually paid to such governmental authorities
                by
                Franchisee; and

               

              (b) the
                retail price of food, beverage and Nutritional Products sold which
                are paid for
                using approved gift certificates, gift cards or stored value cards.

               

              "F&B
                Gross Receipts"
                shall
                mean only those Gross Receipts generated from the sale of food and
                beverage
                items to Outlet patrons for consumption. "Nutritional
                Products Gross Receipts"
                shall
                mean and include all Gross Receipts that are not specifically designated
                as
                F&B Gross Receipts.

               

              8.D. INTEREST
                ON LATE PAYMENTS.

               

              All
                fees
                and other amounts which Franchisee owes to Franchisor or its Affiliates
                shall
                bear interest after due date for the number of days which such payment
                is
                overdue at a rate equal to the lesser of: (1) eighteen percent (18%) per
                annum; or (2) the highest legal rate permitted by applicable law.
                Franchisee acknowledges that this Subsection shall not constitute
                Franchisor's
                agreement to accept such payments after they are due or a commitment
                by
                Franchisor to extend credit to, or otherwise finance, Franchisee's
                operation of
                the Outlet. Further, Franchisee acknowledges that failure to pay
                all such
                amounts when due shall, notwithstanding the provisions of this Subsection,
                constitute grounds for termination of this Agreement, as provided
                in this
                Agreement.

               

              8.E. APPLICATION
                OF PAYMENTS.

               

              Notwithstanding
                any designation by Franchisee, Franchisor may apply any payments
                received from
                Franchisee, or any indebtedness of Franchisor or any of its Affiliates
                to
                Franchisee, to any past due indebtedness, of whatever nature, of
                Franchisee to
                Franchisor or its Affiliates.

               

              
                
                   

                

                
                  24

                  
                    

                  

                

                
                   

                

              

              8.F. ELECTRONIC
                FUNDS TRANSFER.

               

              Franchisee
                agrees to remit fees and other amounts due to Franchisor hereunder
                via
                electronic funds transfer or other means as Franchisor may specify
                from time to
                time. If Franchisor notifies Franchisee to use such payment method,
                Franchisee
                agrees to comply with procedures specified by Franchisor and to perform
                such
                acts and deliver and execute such documents, including authorization
                for direct
                debits from Franchisee's business bank operating account, as may
                be necessary to
                assist in or accomplish payment by such method. Under this procedure
                Franchisee
                shall authorize Franchisor to initiate debit entries and/or credit
                correction
                entries to a designated checking or savings account for payments
                of fees and
                other amounts payable to Franchisor and its Affiliates and any interest
                charges
                due thereon. Franchisee shall make the funds available to Franchisor
                for
                withdrawal by electronic transfer no later than the due date for
                payment
                therefor. If Franchisee has not timely reported the Outlet's Gross
                Receipts to
                Franchisor for any reporting period, then Franchisor shall be authorized,
                at
                Franchisor's option, to debit Franchisee's account in an amount equal
                to
                (a) the fees transferred from Franchisee's account for the last reporting
                period for which a report of the Outlet's Gross Receipts was provided
                to
                Franchisor as required hereunder or (b) the amount due based on information
                retrieved from the Computer System.

               

              
                	
                        9.

                      	
                        OUTLET
                          IMAGE AND OPERATION.

                      

              

               

              9.A. CONDITION
                AND APPEARANCE OF THE OUTLET.

               

              Franchisee
                agrees that, during the term of this Agreement:

               

              (1) neither
                the Outlet nor the Site will be used for any purpose other than the
                operation of
                a UFood Outlet in full compliance with this Agreement and all System
                Standards;

               

              (2) Franchisee
                will maintain the condition and appearance of the Site, the Outlet
                and its
                Operating Assets in accordance with the specifications and standards
                of
                Franchisor and consistent with the image of a UFood Outlet as a first-class
                business;

               

              (3) Franchisee
                will perform such maintenance (including maintenance procedures and
                routines
                which Franchisor prescribes from time to time) with respect to the
                Operating
                Assets, the Outlet and the Site as may be required or directed by
                Franchisor
                from time to time to maintain such condition, appearance, and efficient
                operation, including: (a) continuous and thorough cleaning and sanitation
                of the interior and exterior of the Outlet; (b) thorough repainting and
                redecorating of the interior and exterior of the Outlet and/or the
                Site at
                reasonable intervals; (c) interior and exterior repair of the Outlet and/or
                the Site; and (d) repair or replacement of damaged, worn out or obsolete
                Operating Assets.

               

              (4) Franchisee
                will not make any material alterations to the Site, or to the appearance
                of the
                Outlet as originally developed, without the prior approval of Franchisor;
                

               

              (5) Franchisee
                will place or display at the Outlet (interior and exterior) only
                such signs,
                emblems, lettering, logos, and display and advertising materials
                that are from
                time to time approved by Franchisor; and

               

              
                
                   

                

                
                  25

                  
                    

                  

                

                
                   

                

              

               

              (6) Subject
                to approval by Franchisor of the plans, layouts, designs and contractor,
                upon
                Franchisor's request made not more than once during the initial term
                of this
                Agreement, Franchisee will substantially remodel, expand, redecorate,
                re-equip
                and refurnish the Site, the Outlet and/or those Operating Assets
                specified by
                Franchisor to reflect changes in the appearance and operation of
                UFood Outlets
                prescribed by Franchisor and required of new franchisees. Franchisor
                shall not
                make such a request of Franchisee during the first five (5) years
                of the term of
                this Agreement. Franchisee acknowledges that its obligations under
                this
Subparagraph 9.A.(6)
                could
                result in its making extensive structural changes to, and significantly
                remodeling and renovating, the Site and the Outlet, and/or in Franchisee's
                spending substantial amounts for new Operating Assets, and Franchisee
                agrees to
                incur any capital and other expenditures required in order to comply
                with such
                obligations, even if such expenditures cannot be amortized over the
                remaining
                term of this Agreement. The limitations set forth in this Subparagraph 9.A.(6)
                shall
                not apply to changes in the Computer System and Specified Software
                (which are
                addressed in Section 3.H.)

               

              In
                addition to any other remedies available to Franchisor, if Franchisee
                does not
                maintain the condition and appearance of the Operating Assets, Site
                and Outlet
                as herein required, Franchisor may, upon not less than ten (10) days'
                written
                notice (or, in cases of health or sanitation hazards or other public
                endangerment, as determined by Franchisor, immediately on oral or
                written
                notice) to Franchisee: (i) arrange for the necessary cleaning or
                sanitation, repair, remodeling, upgrading, painting or decorating;
                or
                (ii) replace, as necessary, Operating Assets and/or other equipment.
                Franchisee shall pay the entire cost thereof on or before the fifth
                (5th) day
                following the receipt of a bill for such work from Franchisor.

               

              9.B. OUTLET
                PRODUCTS AND SERVICES.

               

              Franchisee
                agrees that it shall:

               

              (1) offer
                for
                sale and sell at and from the Outlet all products (including Nutritional
                Products and food and beverage items prepared in accordance with
                Franchisor's
                specifications) and services that Franchisor specifies from time
                to time;

               

              (2) not
                offer
                for sale, sell, give away or otherwise distribute, whether at the
                Outlet, the
                Site or any other location, any products or services that Franchisor
                has not
                authorized; 

               

              (3) discontinue
                offering for sale, selling, giving away or otherwise distributing
                any products
                or services that Franchisor at any time disapproves in writing; and
                

               

              (4) not
                permit any vending equipment or gaming machinery of any kind or nature
                in the
                Outlet or on the Site, except with the prior written approval of
                Franchisor in
                each instance.

            

             

          

          
            Franchisee
              acknowledges and agrees that its provision of high quality products
              and services
              is essential to the proper functioning and goodwill of the System and,
              therefore, that Franchisee shall provide all products and services
              that
              Franchisor periodically authorizes in accordance with the System Standards.
              Franchisee also acknowledges and agrees that if Franchisor requires
              the Outlet
              to offer new or substitute products or services not currently offered
              at UFood
              Outlets, Franchisee agrees to offer such services and/or products in
              compliance
              with the System Standards and to diligently pursue obtaining any permits
              and
              taking such actions (including acquiring Operating Assets, supplies
              and
              materials) required to offer such products and/or services.

             

            9.C. CATERING
              SERVICE AND DELIVERY SERVICE.

             

            Franchisee
              shall have the right to
              provide Catering Service and/or Delivery Service from the Outlet, provided
              that
              Franchisee complies with the terms and conditions of this Agreement
              and all
              System Standards applicable thereto, and provided that Franchisee shall
              pay the
              Royalty Fee on all Gross Receipts generated from offering Catering
              Service or
              Delivery Service. Furthermore, Franchisor shall have the right to require
              Franchisee to offer Catering Service, but not Delivery Service. Franchisee
              shall
              provide Franchisor at least ninety (90) days' written notice of its
              election to
              provide Catering Service and/or Delivery Service. Franchisee shall
              not establish
              another outlet or property (other than the Site) for use in connection
              with
              Catering Service or Delivery Service.

             

            Franchisee
              may determine the geographic area within which it will offer Catering
              Service or
              Delivery Service, provided that (1) Franchisee must ensure that its
              customers receive at all times high quality food and beverage products
              prepared
              and maintained in accordance with Franchisor's specifications, and
              (2) Franchisee shall not provide Catering Service or Delivery Service to
              any location within the contract territory of another franchisee of
              UFood
              Outlets.

             

            Franchisee
              shall:

             

            (a) require
              all catering and delivery drivers to strictly comply with all regulations,
              laws
              and ordinances applicable to the operation of motor vehicles and use
              due care,
              taking into consideration road conditions, when performing Catering
              Services and
              Delivery Services; 

             

            (b) require
              all catering and delivery drivers to maintain adequate motor vehicle
              liability
              insurance in the amounts specified by Franchisor from time to time
              that complies
              with all applicable laws and regulations and that extends to the operation
              of a
              motor vehicle for use for commercial delivery; 

             

            (c) maintain
              or cause drivers to maintain all catering and delivery vehicles in
              good and safe
              operating condition in full compliance with all applicable laws and
              regulations
              and containing the signs or other markings that Franchisor periodically
              specifies; 

             

            (d) conduct
              initial and periodic (at least once every six (6) months) driving record
              checks on all catering and delivery drivers; 

             

            (e) require
              all catering and delivery drivers to possess and maintain valid drivers
              licenses
              and driving records free of disqualifying violations;

             

            
              
                 

              

              
                26

                
                  

                

              

              
                 

              

            

            (f) where
              appropriate under Franchisor's specifications and standards as in effect
              from
              time to time, prohibit any catering or delivery driver who does not
              conform to
              Franchisee's standards and specifications for Catering Service or Delivery
              Service (as applicable) from providing or assisting in the provision
              of such
              services; and 

             

            (g) obtain
              and maintain all licenses, permits and other governmental approvals
              necessary or
              advisable for the provision of Catering Services and/or Delivery Services,
              and
              conduct such Catering Services and/or Delivery Services in a manner
              which
              complies with all sanitary, safety and food preparation and holding
              period
              standards.

             

            Franchisee
              shall maintain the condition and appearance of, and perform maintenance
              with
              respect to, vehicles, furniture, fixtures and equipment used in connection
              with
              the provision of Catering Services and/or Delivery Services in accordance
              with
              Franchisor's standards, specifications and procedures, and consistent
              with the
              image of UFood Outlets as first class, clean, sanitary, attractive
              and
              efficiently-operated food service businesses.

             

            If
              Franchisee fails to comply with any provision of this Agreement, including
              any
              System Standard, pertaining to Catering Service or Delivery Service,
              then in
              addition to any other rights and remedies that Franchisor might have
              (including
              the right to terminate this Agreement pursuant to Section 15,
              if
              applicable), Franchisor may temporarily suspend or permanently terminate
              Franchisee's right to provide Catering Service and/or Delivery
              Service.

             

            9.D. APPROVED
              PRODUCTS, DISTRIBUTORS AND SUPPLIERS.

             

            The
              reputation and goodwill of all UFood Outlets are based upon, and can
              only be
              maintained by, the offer and sale of distinctive, high-quality products
              and
              services and the presentation, packaging and service of products in
              an efficient
              and appealing manner. Therefore, during the term of this Agreement,
              Franchisee
              must purchase or lease all Operating Assets, Proprietary Products,
              food and
              beverage ingredients and inventory, Nutritional Products, and other
              equipment,
              materials, supplies and services offered or used by or in connection
              with the
              Outlet only according to Franchisor's System Standards (including with
              respect
              to brands, types and models) and, if Franchisor requires, only from
              suppliers or
              distributors that Franchisor designates or approves (which might include
              or be
              limited to Franchisor or its Affiliates). Franchisor and its affiliates
              have
              developed and may further develop Proprietary Products for use in the
              operation
              of UFood Outlets. Franchisee must use only the Proprietary Products
              in the
              preparation and sale by the Outlet of those products that Franchisor
              specifies
              from time to time.

             

            Franchisor
              may from time to time modify the list of designated or approved suppliers
              and
              distributors. Franchisee shall not, after receipt in writing of such
              modification, reorder any product from any supplier or distributor
              or purchase
              services from a provider that is no longer approved. Franchisor may
              designate or
              approve a single distributor, supplier or provider for any products
              or services
              and may designate or approve a distributor, supplier or provider only
              as to
              certain products, materials, supplies or services, and such approval
              may be
              temporary pending a further evaluation of such distributor, supplier
              or provider
              by Franchisor. Franchisor may concentrate purchases with one or more
              distributors, suppliers or providers to obtain lower prices, advertising
              support
              and/or services for the benefit of the UFood Outlet network, and establish
              Franchisor or Affiliate-owned manufacturing or distribution facilities
              or
              servicing capabilities which Franchisor may designate as an approved
              or required
              distributor, supplier or provider. Franchisor may designate itself
              or an
              Affiliate as a designated or approved manufacturer, supplier, distributor
              and/or
              provider of certain products and/or services. If Franchisor is a designated
              or
              approved manufacturer, supplier or distributor, Franchisee acknowledges
              and
              agrees that Franchisor may earn a profit on goods and services it supplies
              to
              Franchisee.

             

            
              
                 

              

              
                27

                
                  

                

              

              
                 

              

            

            Upon
              Franchisor's request, or if Franchisee wants to use or sell (as applicable)
              any
              Operating Assets, food and beverage ingredients and inventory, Nutritional
              Products, or other equipment, materials, supplies or services that
              Franchisor
              has not yet evaluated or purchase or lease any item or service from
              a supplier
              that Franchisor has not yet approved (for items and services that require
              supplier approval), Franchisee shall notify Franchisor and submit to
              Franchisor
              such information, specifications and samples as Franchisor requests.
              Franchisor
              shall use commercially reasonable efforts to notify Franchisee within
              one
              hundred twenty (120) days after receipt of all requested information
              and
              materials whether Franchisee is authorized to purchase or lease such
              item or
              service or to purchase or lease such item or service from such distributor,
              supplier or provider. Franchisor may condition its approval based on
              standards
              and requirements relating to quality, quantity, warranties, prices,
              volume
              capability, frequency of delivery, distribution methods and locations,
              standards
              of service (including prompt attention to complaints), consistency,
              reliability,
              financial capability, labor and customer relations and other criteria.
              Franchisee shall ensure that all vendors and suppliers for the Outlet
              comply
              with the corporate compliance guidelines that Franchisor specifies
              (as
              Franchisor may periodically modify them), including guidelines relating
              to
              quality and compliance with environmental, child labor and other laws.
              If
              Franchisee fails to receive a notice of approval or disapproval within
              such one
              hundred twenty (120) day period, then the request is deemed approved.
              Franchisee
              must reimburse Franchisor for its reasonable costs incurred in connection
              with
              the evaluation of a proposed item or supplier. Franchisor reserves
              the right
              periodically to re-inspect the facilities and products of any approved
              supplier,
              distributor or provider and to revoke its approval of any supplier,
              distributor,
              provider, item or service that does not continue to meet Franchisor's
              criteria.
              Franchisor may require Franchisee to reimburse Franchisor for its reasonable
              costs incurred in connection with the evaluation, inspection and supervision
              of
              any distributor, supplier, provider, item or service that does not
              continue to
              meet Franchisor's criteria. Without limiting Franchisor's other rights
              and
              remedies under this Agreement, including the right to terminate this
              Agreement
              under Section 15
              hereof,
              Franchisor shall have the right, without liability to Franchisee or
              any other
              Person, to enter the Outlet or other part of the Site and remove any
              material or
              item that does not comply with Franchisor's standards.

             

            Franchisee
              acknowledges and agrees that Franchisor and/or its Affiliates may receive
              promotional allowances, rebates, and other payments from suppliers
              on account of
              purchases by some or all of Franchisor's franchisees and developers.
              Franchisor
              and its Affiliates shall contribute such allowances and rebates to
              the
              Systemwide Advertising Fund.

             

            
              
                 

              

              
                28

                
                  

                

              

              
                 

              

            

            9.E. COMPLIANCE
              WITH SYSTEM STANDARDS.

             

            Franchisee
              acknowledges that the operation of the Outlet in strict compliance
              with
              Franchisor's System Standards is important to Franchisor and other
              UFood
              Outlets. Franchisee agrees strictly to comply with and maintain such
              System
              Standards in the operation of the Outlet at all times during the term
              of this
              Agreement. System Standards may regulate any aspect of the Site's and
              Outlet's
              condition, operation, business and maintenance, including:

             

            (1) all
              aspects of the offer, sale and display of Nutritional Products and
              the
              preparation, offer, presentation and sale of Proprietary Products,
              food and
              beverage items, including proper use of ingredients and recipes and
              standards
              concerning portions, appearance, display, quality, coloring and
              flavoring;

             

            (2) purchase
              and use of packaging material and other supplies for use in connection
              with the
              display and/or sales of Proprietary Products, food and beverage items
              and
              Nutritional Products;

             

            (3) terms
              and
              conditions for the sale and delivery of, and terms and methods of payment
              for,
              Proprietary Products, other products, and services that Franchisee
              obtains from
              Franchisor and its affiliated and unaffiliated suppliers; and Franchisor’s and
              its Affiliates’ right not to sell to Franchisee any Proprietary Products, or
              other products, or to provide Franchisee with services, or to do so
              only on a
“cash-on-delivery” or other basis, if Franchisee is in default under any
              agreement with Franchisor or its Affiliates;

             

            (4) sales
              and
              marketing procedures and marketing, advertising, promotional and customer
              service programs, and cooperation with Franchisor, its Affiliates and
              its and
              their franchisees and licensees in the manner that Franchisor prescribes
              to
              provide for and promote the best interests of the Marks and the UFood
              Outlet
              network throughout the world;

             

            (5) days
              and
              hours of operation (which may vary among UFood Outlets), including
              standards,
              procedures and limitations on closing the Outlet to the public during
              private
              parties;

             

            (6) requirements
              for vehicles, training, qualifications, conduct and appearance of personnel,
              product packaging, format and use of materials and supplies (including
              display
              of the Marks thereon), and other aspects of providing Catering Services
              or
              Delivery Services; 

             

            (7) compliance,
              and ensuring compliance by Franchisee's vendors and suppliers, with
              anti-counterfeiting programs periodically implemented by Franchisor,
              including
              by purchasing labels, tags and similar items only from suppliers that
              Franchisor
              designates or approves (which might include or be limited to Franchisor
              or its
              Affiliates); 

             

            (8) layout,
              decor and color scheme of the Outlet and the Site; 

             

            
              
                 

              

              
                29

                
                  

                

              

              
                 

              

            

            (9) recruitment,
              selection, training, qualifications, appearance, demeanor and dress
              of
              employees, general staffing levels for the Outlet and number, type
              and
              qualifications of Outlet personnel;

             

            (10) safety,
              maintenance, appearance, quality, cleanliness, sanitation, standards
              of service
              and operation of the Outlet and the Site; 

             

            (11) use
              and
              illumination of signs, posters, displays, standard formats and similar
              items;

             

            (12) identification
              of Franchisee as the owner of the Outlet; 

             

            (13) participating
              in customer loyalty programs and periodic promotion of Franchisor’s franchise
              opportunities;

             

            (14) issuing
              and honoring gift certificates, gift cards, coupons, stored value cards
              and
              similar items and participating in other promotions; and 

             

            (15) participation
              in market research and test programs required or approved by Franchisor
              concerning various aspects of the System, including procedures, systems,
              techniques, furnishings, fixtures, equipment, signs, labels, trade
              dress, logos,
              packaging, supplies, marketing materials and strategies, merchandising
              and
              products and services. Franchisee agrees, if requested by Franchisor,
              to
              participate in Franchisor's customer surveys and market research
              programs.

             

            Franchisee
              acknowledges and agrees that all mandatory System Standards prescribed
              from time
              to time by Franchisor in the Manuals or otherwise communicated to Franchisee
              in
              writing or other form are part of this Agreement as if fully set forth
              within
              its text and shall constitute binding obligations on the part of Franchisee
              as
              if fully set forth herein. All references to this Agreement shall include
              all
              System Standards, as periodically modified. Any failure by Franchisee
              to adhere
              to such System Standards or to pass Franchisor's periodic quality control
              inspections shall constitute grounds for termination of this Agreement
              by
              Franchisor, as provided in Section 15.B.

             

            Franchisee
              acknowledges that Franchisor's periodic modification of System Standards
              (including changes to the components of the Computer System and Specified
              Software), which may accommodate local or regional variations, may
              obligate
              Franchisee to invest additional capital in the Outlet and/or incur
              higher
              operating costs, and Franchisee agrees to do so within the time period
              that
              Franchisor specifies.

             

            
              
                 

              

              
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            9.F. COMPLIANCE
              WITH LAWS AND GOOD BUSINESS PRACTICES.

             

            Franchisee
              shall secure and maintain in force in its name all required licenses,
              permits,
              and certificates relating to the conduct of its business pursuant to
              this
              Agreement. Franchisee shall comply with all applicable laws, ordinances
              and
              regulations, including laws relating to occupational hazards, hazardous
              materials and other environmental matters, health, safety and sanitation,
              worker's compensation insurance, unemployment insurance, and withholding
              and
              payment of all taxes. All advertising by Franchisee shall be subject
              to approval
              by Franchisor under Section 10.B.
              hereof
              and be completely factual, in good taste in the judgment of Franchisor,
              and
              shall conform to high standards of ethical advertising. Franchisee
              shall in all
              dealings with its customers, suppliers, Franchisor, and public officials
              adhere
              to high standards of honesty, integrity, fair dealing and ethical conduct.
              Franchisee shall pay all amounts owed to its vendors and suppliers
              (including
              Franchisor and its Affiliates) on time and in the ordinary course of
              business.
              Franchisee agrees to refrain from any business or advertising practice
              which may
              be injurious to the business of Franchisor and the goodwill associated
              with the
              Marks and other UFood Outlets. Franchisee shall notify Franchisor in
              writing:

             

            (1) within
              three (3) days after the commencement of any action, suit, proceeding
              or
              issuance of any order, writ, injunction, award, or decree of any court,
              agency,
              or other governmental instrumentality, which might adversely affect
              the
              operation or financial condition of Franchisee or the Outlet; or

             

            (2) immediately
              upon the receipt of any notice of violation of any law, ordinance or
              regulation
              relating to health, sanitation or the operation of the Outlet.

             

            Franchisee
              agrees to comply with, and to assist Franchisor to the fullest extent
              possible
              in its efforts to comply with, Anti-Terrorism Laws (as defined below).
              In
              connection with such compliance, Franchisee certifies, represents,
              and warrants
              that none of its property or interests is subject to being "blocked"
              under any
              of the Anti-Terrorism Laws and that neither Franchisee nor any Owner
              is
              otherwise in violation of any of the Anti-Terrorism Laws. For the purposes
              of
              this Paragraph, "Anti-Terrorism
              Law"
              means
              Executive Order 13224 issued by the President of the United States,
              the
              Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S. Code
              of Federal
              Regulations), the Foreign Terrorist Organizations Sanctions Regulations
              (Title
              31, Part 597 of the U.S. Code of Federal Regulations), the Cuban Assets
              Control
              Regulations (Title 31, Part 515 of the U.S. Code of Federal Regulations),
              the
              USA PATRIOT Act, and all other present and future federal, state and
              local laws,
              ordinances, regulations, policies, lists and other requirements of
              any
              governmental authority (including the United States Department of Treasury
              Office of Foreign Assets Control) addressing or in any way relating
              to terrorist
              acts and acts of war.

             

            Franchisee
              certifies that none of Franchisee, its Owners, its employees, or anyone
              associated with it is listed in the Annex to Executive Order 13224.
              (The Annex
              is available at
              http://www.treasury.gov/offices/enforcement/ofac/sanctions/terrorism.html.)
              Franchisee agrees not to hire or contract with any individual who is
              listed in
              the Annex. Franchisee also certifies that it has no knowledge or information
              that, if generally known, would cause Franchisee, any of Franchisee's
              Owners or
              employees, or anyone associated with Franchisee to be listed in the
              Annex to
              Executive Order 13224, and, if any of the foregoing becomes listed
              on such
              Annex, Franchisee will immediately notify Franchisor in writing. Franchisee
              is
              solely responsible for ascertaining what actions it must take to comply
              with the
              Anti-Terrorism Laws, and Franchisee specifically acknowledges and agrees
              that
              its indemnification responsibilities set forth in Section 17.D.
              of this
              Agreement extend to its obligations under this Subsection F.
              Any
              misrepresentation by Franchisee under this Subsection, or any violation
              of the
              Anti-Terrorism Laws by Franchisee or its Owners or employees, shall
              constitute
              grounds for immediate termination of this Agreement and any other agreement
              between Franchisor (or one of its Affiliates) and Franchisee (and one
              of its
              Affiliates) pursuant to Section 15.B
              below.

             

            
              
                 

              

              
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            9.G. MANAGEMENT
              AND PERSONNEL OF THE OUTLET.

             

            An
              approved and qualified General Manager must devote all of his or her
              business
              time and attention to the supervision of the Outlet's day-to-day operations.
              Except as provided below, a "Managing
              Owner"
              must
              act as the General Manager of the Outlet. A Managing Owner is an Owner
              who owns
              at least ten percent (10%) of the Ownership Interests in Franchisee
              and who has
              been approved by Franchisor.

             

            If
              Franchisee owns more than one UFood Outlet, each of those must be under
              the
              direct on-premises supervision of a General Manager Franchisor has
              approved and
              who has completed Franchisor's training programs. In that case, the
              Managing
              Owner need not act as the General Manager of the Outlet, so long as
              the Managing
              Owner retains overall management responsibility for the Outlet.

             

            Except
              for temporary periods of no more than thirty (30) days during which
              Management
              Personnel are being replaced as a result of employment separations,
              Franchisee
              shall ensure that an individual whom Franchisor has approved shall
              function in
              each Management Personnel position. Franchisee also shall employ the
              number of
              assistant managers and other personnel required for adequate staffing
              of the
              Outlet and shall ensure that all personnel are trained in accordance
              with the
              System Standards. Franchisor shall have the right to deal with the
              General
              Manager and assistant managers on matters pertaining to day-to-day
              operations
              of, and reporting requirements for, the Outlet. The Outlet at all times
              shall be
              under the direct, on-site supervision of the General Manager or assistant
              general manager who has completed satisfactorily a training program
              certified by
              Franchisor. Franchisee shall hire all employees of the Outlet and shall
              be
              exclusively responsible for the terms of their employment and compensation
              and
              for their proper training.

             

            9.H. INSURANCE.

             

            During
              the term of this Agreement, Franchisee must maintain in force at its
              sole
              expense comprehensive public liability, general liability, product
              liability and
              motor vehicle liability insurance against claims for bodily and personal
              injury,
              death and property damage caused by or occurring in connection with
              the Outlet's
              operation, all containing the minimum liability coverage Franchisor
              prescribes
              from time to time. Franchisor may periodically increase the amounts
              of coverage
              required under these insurance policies and/or require different or
              additional
              insurance coverages (including reasonable excess liability insurance)
              at any
              time to reflect inflation, identification of new risks, changes in
              law or
              standards of liability, higher damage awards or other relevant changes
              in
              circumstances. These insurance policies must be purchased from licensed
              insurers
              having an A.M. Best rating of “A” or higher and must name Franchisor and any
              affiliates Franchisor designates as additional named insureds and provide
              for
              thirty (30) days' prior written notice to Franchisor of a policy's
              material
              modification, cancellation or expiration. Each insurance policy must
              contain a
              waiver of all subrogation rights against Franchisor, its Affiliates
              and their
              successors and assigns. Franchisee routinely must furnish to Franchisor
              copies
              of Certificates of Insurance or other evidence of Franchisee's maintaining
              this
              insurance coverage and paying premiums. If Franchisee fails or refuses
              to obtain
              and maintain the insurance Franchisor specifies, in addition to Franchisee's
              other remedies, Franchisor may (but need not) obtain such insurance
              for
              Franchisee and the Outlet on Franchisee's behalf, in which event it
              shall
              cooperate with Franchisor and reimburse Franchisor for all premiums,
              costs and
              expenses incurred in obtaining and maintaining the insurance, plus
              a reasonable
              fee for the time incurred in obtaining such insurance.

             

            
              
                 

              

              
                32

                
                  

                

              

              
                 

              

            

            9.I. CREDIT
              CARDS AND OTHER METHODS OF PAYMENT.

             

            Franchisee
              shall at all times have arrangements in existence with a full range
              of credit
              and debit card issuers or sponsors, check verification services and
              electronic
              fund transfer systems as Franchisor designates from time to time in
              order that
              the Outlet may accept customers' credit and debit cards, checks and
              other
              methods of payment. Franchisee shall use only such methods of payment
              which
              Franchisor authorizes or approves. Franchisor may at its option institute
              a
              credit program or centralized billing system for UFood Outlet customers,
              in
              which event Franchisee shall comply with Franchisor's System Standards
              relating
              thereto.

             

            9.J. PRICING.

             

            Franchisor
              reserves the right to establish maximum, minimum or other pricing requirements
              to the fullest extent allowed by law.

            

              
                	
                        10.

                      	
                        ADVERTISING,
                          MARKETING AND PROMOTION.

                      

              

               

              10.A. SYSTEMWIDE
                ADVERTISING FUND.

               

              Recognizing
                the value of advertising and marketing to the goodwill and public
                image of UFood
                Outlets, Franchisor may institute and maintain and administer an
                advertising
                fund (the "Systemwide
                Advertising Fund")
                for
                such advertising, media placement, marketing and public relations
                and
                promotional programs, market research and related activities as Franchisor
                may
                deem necessary or appropriate to generally promote UFood Outlets
                in the United
                States.  Franchisee
                shall contribute to the Systemwide Advertising Fund the amounts that
                Franchisor
                periodically prescribes, payable to Franchisor by separate check
                or electronic
                transfer at the same time and in the same manner as the Royalty Fees
                due
                hereunder. As of the date of this Agreement, the required contribution
                is one
                and one-half percent (11⁄2%) of Gross Receipts, provided that the required
                contribution shall in no event exceed two and one-half percent (21⁄2%) of Gross
                Receipts. UFood Outlets in the United States which are owned by Franchisor
                (or
                its Affiliates, to the extent Franchisor has the right to require
                such
                Affiliates to do so) shall contribute to the Systemwide Advertising
                Fund on the
                same basis as Franchisee.

               

              
                
                   

                

                
                  33

                  
                    

                  

                

                
                   

                

              

               

              Franchisor
                shall direct all programs and activities financed by the Systemwide
                Advertising
                Fund, with sole control over the strategic direction, creative concepts,
                materials and endorsements used and the geographic, market, and media
                placement
                and allocation thereof. Franchisee agrees that the Systemwide Advertising
                Fund
                may be used to pay various costs and expenses, including: creating
                and producing
                video, audio and written advertising materials and electronic media;
                interest on
                borrowed funds; costs to prepare and place coupons and inserts in
                newspapers and
                other publications; sponsorship of sporting, charitable, entertainment
                or other
                events; establishment and maintenance of the System Website (defined
                below);
                reasonable salaries and expenses of employees of Franchisor or its
                Affiliates
                working for or on behalf of the Systemwide Advertising Fund or on
                advertising,
                marketing, public relations materials, programs, activities or promotions
                for
                the benefit of the Systemwide Advertising Fund; and administrative
                costs and
                overhead of Franchisor or its Affiliates incurred in activities reasonably
                related to the administration of the Systemwide Advertising Fund,
                (including
                collecting and accounting for Systemwide Advertising Fund contributions;
                purchasing direct mail, radio, television and other media advertising
                and
                employing advertising agencies and other professionals to assist
                therewith; and
                supporting public relations, market and consumer research and other
                advertising,
                promotional and marketing activities, including testing and test
                marketing
                programs, fulfillment charges, and development, implementation and
                testing of
                Trade Dress and design prototypes). Franchisee agrees to participate
                in all
                advertising, marketing, promotions, research and public relations
                programs
                instituted by the Systemwide Advertising Fund. The Systemwide Advertising
                Fund
                shall furnish Franchisee with reasonable quantities of marketing,
                advertising
                and promotional formats and sample materials at cost plus any related
                shipping,
                handling and storage charges.

               

              The
                Systemwide Advertising Fund shall be accounted for separately, but
                shall not be
                required to be segregated, from the other funds of Franchisor and
                shall not be
                used to defray any of Franchisor's general operating expenses, except
                as
                descried above. If at any time Franchisor incurs expenses for the
                types of goods
                and services that would otherwise be paid for out of the Systemwide
                Advertising
                Fund, Franchisor may reimburse itself for those items using monies
                from the
                Systemwide Advertising Fund. The Systemwide Advertising Fund is not
                Franchisor's
                asset nor a trust, and Franchisor does not have a fiduciary duty
                to Franchisee
                for maintaining, directing or administering the Systemwide Advertising
                Fund or
                for any other reason. Franchisor may spend in a fiscal year an amount
                greater or
                less than the aggregate contributions of all UFood Outlets to the
                Systemwide
                Advertising Fund in that year. The Systemwide Advertising Fund may
                borrow from
                Franchisor or other lenders at standard commercial interest rates
                to cover
                deficits or cause the Systemwide Advertising Fund to invest any surplus
                for
                future use by the Systemwide Advertising Fund. An annual, unaudited
                statement of
                monies collected and costs incurred by the Systemwide Advertising
                Fund for
                Franchisor's immediately preceding fiscal year shall be made available
                to
                Franchisee upon Franchisee's written request. Franchisor will have
                the right, at
                its option, to cause the Systemwide Advertising Fund to be incorporated
                or
                operated through an entity separate from Franchisor at such time
                as Franchisor
                deems appropriate, and such successor entity shall have all rights
                and duties of
                Franchisor pursuant to this Section 10.A.

               

              
                
                   

                

                
                  34

                  
                    

                  

                

                
                   

                

              

              Franchisee
                understands and acknowledges that the Systemwide Advertising Fund
                is intended to
                promote recognition of the Marks, the System and UFood Outlets in
                the United
                States generally. Although Franchisor will endeavor to utilize the
                Systemwide
                Advertising Fund to develop advertising and marketing materials and
                programs,
                and to place advertising, in order to benefit all UFood Outlets that
                contribute
                to the Systemwide Advertising Fund, Franchisor undertakes no obligation
                to
                ensure that expenditures by the Systemwide Advertising Fund in or
                affecting any
                geographic area are proportionate or equivalent to the contributions
                by UFood
                Outlets operating in that geographic area or that any UFood Outlet
                will benefit
                directly or in proportion to its contribution from the development
                of
                advertising and marketing materials or the placement of advertising.
                Franchisee
                acknowledges that its failure to derive any such benefit will not
                serve as a
                basis for a reduction or elimination of its obligation to contribute
                to the
                Systemwide Advertising Fund. Franchisor has the right, but no obligation,
                to use
                collection agents and institute legal proceedings to collect Systemwide
                Advertising Fund contributions at the Systemwide Advertising Fund's
                expense.
                Franchisor also may forgive, waive, settle and compromise all claims
                by or
                against the Systemwide Advertising Fund without affecting the obligations
                of any
                other contributor to the Systemwide Advertising Fund. Except as expressly
                provided in this Section 10.A.,
                Franchisor assumes no direct or indirect liability or obligation
                to Franchisee
                with respect to the maintenance, direction, or administration of
                the Systemwide
                Advertising Fund.

               

              Franchisor
                reserves the right, at any time and from time to time, to suspend
                contributions
                of one or more franchisees to, and operations of, the Systemwide
                Advertising
                Fund for such periods that it determines to be appropriate and to
                terminate the
                Systemwide Advertising Fund upon written notice to Franchisee. All
                unspent
                monies on the date of termination shall be distributed to Franchisor,
                its
                Affiliates and franchisees in proportion to their respective contributions
                to
                the Systemwide Advertising Fund during the preceding twelve (12) month
                period. Franchisor has the right to reinstate the Systemwide Advertising
                Fund
                upon the same terms and conditions set forth herein upon thirty (30) days'
                prior written notice to Franchisee.

               

              10.B. ADVERTISING
                BY FRANCHISEE.

               

              Franchisee
                must spend at least one and one-half percent (11⁄2%) of the Outlet's Gross
                Receipts each month on advertising, marketing and promoting the Outlet
                on the
                local level in accordance with the terms of this Agreement (the "Local
                Marketing Spending Requirement").
                 The
                following shall not count toward the Local Marketing Spending Requirement:
                (1) monies spent on classified telephone directory listings,
                advertisements, advertising and promotional expenses required under
                the Lease,
                and costs associated with customer discounts, coupons and similar
                items;
                (2) the cost of goods or services supplied by Franchisee without charge;
                (3) amounts spent on Franchisee's behalf or reimbursed to Franchisee
                by
                distributors or suppliers; (4) amounts spent on grand opening marketing
                pursuant to this Agreement; and (5) Systemwide Advertising Fund
                contributions. Franchisor may periodically review Franchisee's books
                and records
                and/or require proof of compliance with this Subsection, and may
                require
                Franchisee to pay unspent portions to the Systemwide Advertising
                Fund.

               

              Prior
                to
                their use by Franchisee, samples of all advertising, marketing and
                promotional
                materials not prepared or previously approved by Franchisor shall
                be submitted
                to Franchisor for approval, in the form and manner prescribed by
                Franchisor from
                time to time. If approval is not granted by Franchisor within fifteen
                (15) days
                from the date Franchisor receives such materials, they shall be deemed
                disapproved. Franchisee shall not use any advertising, marketing
                or promotional
                materials that Franchisor has not approved, has disapproved or that
                do not
                include the copyright registration notices and trademark registration
                notices
                designated by Franchisor. Franchisor may disapprove on a prospective
                basis
                materials that it had previously approved.

               

              
                
                   

                

                
                  35

                  
                    

                  

                

                
                   

                

              

              Franchisor
                assumes no liability to Franchisee or any other Person due to its
                approval or
                disapproval of any advertising, marketing or promotional materials
                or programs,
                and Franchisee is responsible for ensuring that all such materials
                and programs
                that it uses and implements comply with all applicable laws, ordinances
                and
                regulations.

               

              Franchisee
                agrees to list and advertise the Outlet in each major classified
                telephone
                directory covering the Site in the business classifications Franchisor
                periodically prescribes and, if Franchisor requires, using Franchisor's
                standard
                form of advertisement. Franchisee will, at its expense, cooperate
                with
                Franchisor, Franchisor's Affiliates, and other franchisees of Franchisor
                and
                Franchisor's Affiliates in any advertising campaign, sales or promotion
                program,
                or other special advertising or marketing activity in which Franchisor
                may
                engage or specify from time to time, including competitions, the
                display of
                point-of-service advertising, and the distribution of special novelties,
                promotional literature, and the like.

               

              10.C. REGIONAL/LOCAL
                ADVERTISING COOPERATIVE.

               

              Franchisor
                reserves the right to require that Franchisee participate in a local
                or regional
                advertising cooperative for UFood Outlets in Franchisee's area. Franchisee
                agrees to pay any contributions that Franchisor requires Franchisee
                to make for
                expenditures by such a local or regional cooperative or that may
                be otherwise
                approved by the cooperative, but such contributions will in no event
                exceed one
                and one-half percent (11⁄2%) of the Gross Receipts of the Outlet. Franchisee's
                contributions to any local or regional advertising cooperative shall
                be due and
                payable on the same terms as Franchisee's contributions to the Systemwide
                Advertising Fund

               

              Any
                local
                or regional advertising cooperative must be established, governed
                and operated
                in a manner that Franchisor approves. Franchisee agrees to sign any
                documents
                that Franchisor requires for Franchisee to become a participant in
                the
                cooperative and Franchisee agrees to participate in the cooperative
                in
                compliance with the rules, policies and procedures that Franchisor
                has approved.
                A cooperative and its members may not use any advertising or promotional
                plans
                without Franchisor's prior written consent. Franchisee's contributions
                to such a
                cooperative shall be counted toward Franchisee's Local Marketing
                Spending
                Requirement.

               

              10.D. CUSTOMER
                LOYALTY PROGRAM.

               

              Franchisor’s
                customer loyalty program is the cornerstone of Franchisor’s guest marketing
                platform. Franchisor’s current loyalty program is the “In-the-Know” guest
                rewards program. Franchisee acknowledges and agrees that the success
                of
                Franchisor’s loyalty program depends on active participation by Franchisee.
                Therefore, Franchisee agrees to actively promote Franchisor’s loyalty program by
                offering guests program applications at the Outlet in the restaurant
                and
                nutrition centers, in the expediting area and periodically during
                guests’ dining
                experience, in compliance with Franchisor’s policies and procedures as
                Franchisor may modify and update them during the term of this Agreement.
                Franchisee will also be required to inquire with each guest if he/she
                has a
                customer loyalty card at the point-of-sale at the Outlet. Furthermore,
                Franchisee will participate in Franchisor’s guest communications (such as e-mail
                offerings and direct mail offerings) in compliance with Franchisor’s policies
                and procedures. As of the date of this Agreement, Franchisor requires
                a minimum
                of 12 such guest communications per calendar year. Franchisee will
                also be
                required to distribute and accept coupons mailed to the public periodically
                during the term of this Agreement.

               

              
                
                   

                

                
                  36

                  
                    

                  

                

                
                   

                

              

              
                	 	
                        10.E.

                      	
                        PROMOTION
                          OF UFOOD LIFESTYLE GRILLE FRANCHISE SALES.

                      

              

               

              Franchisee
                acknowledges and agrees that Franchisor may require Franchisee to
                include
                communications at the Outlet to promote the opportunity to become
                a Franchisee
                of a UFood Outlet.

               

              10.F. FRANCHISE
                SYSTEM WEBSITE.

               

              At
                Franchisor's option, Franchisor may establish one or more Websites
                to advertise,
                market, and promote UFood Outlets and the products and services that
                they offer
                and sell (each a "System
                Website").
                If
                Franchisor establishes a System Website, Franchisor will reference
                the Outlet in
                the manner that Franchisor determines from time to time. Franchisee
                must give
                Franchisor the information that Franchisor requests from time to
                time concerning
                the Outlet to include on the System Website. By providing the information
                to
                Franchisor, Franchisee will be representing to Franchisor that it
                is accurate
                and not misleading and does not infringe any third party's rights.
                Franchisor
                will own all intellectual property and other rights in the System
                Website, all
                information contained on it and all information generated from it
                (including the
                domain name or URL, the log of "hits" by visitors, and any personal
                or business
                data that visitors supply).

               

              If
                Franchisor establishes a System Website, Franchisor shall have the
                right to use
                the Systemwide Advertising Fund's assets to develop, maintain and
                update the
                System Website. Franchisor periodically may update and modify the
                System
                Website. Franchisee must notify Franchisor whenever any information
                on
                Franchisee's listing changes or is not accurate. Franchisee acknowledges
                that
                Franchisor has final approval rights over all information on the
                System Website.
                Franchisor may implement and periodically modify System Standards
                relating to
                the System Website.

               

              Franchisor
                will reference the Outlet on the System Website only while Franchisee
                is in full
                compliance with this Agreement and all System Standards (including
                those
                relating to the System Website). If Franchisee is in default of any
                obligation
                under this Agreement or the System Standards, then Franchisor may,
                in addition
                to its other remedies, temporarily remove references to the Outlet
                from the
                System Website until Franchisee fully cures the default. Franchisor
                may, at its
                option, discontinue any or all System Websites at any time.

               

              All
                advertising, marketing and promotional materials that Franchisee
                develops for
                the Outlet must contain notices of the System Website's domain name
                in the
                manner Franchisor designates. Franchisee may not develop, maintain
                or authorize
                any other Website that mentions or describes Franchisee or the Outlet
                or
                displays any of the Marks. Franchisee may not conduct electronic
                commerce or
                directly or indirectly offer or sell any products or services using
                any Website
                or otherwise over the Internet.

               

              
                
                   

                

                
                  37

                  
                    

                  

                

                
                   

                

              

              Nothing
                in this Section shall limit Franchisor's right to maintain websites
                other than
                the System Website.

               

              
                	
                        11.

                      	
                        RECORDS,
                          REPORTS AND FINANCIAL STATEMENTS.

                      

              

               

              Franchisee
                agrees to establish and maintain at its own expense a bookkeeping,
                accounting,
                and recordkeeping system conforming to the requirements and formats
                Franchisor
                prescribes from time to time. Franchisee shall adopt the calendar
                year as its
                fiscal year. Franchisor may require Franchisee to use a Computer
                System and
                Specified Software to maintain certain sales data and other information.
                Franchisee agrees that Franchisor shall have access to the Computer
                System and
                Specified Software of the Outlet at all times and that Franchisor
                shall have the
                right to collect and retain from the Computer System and Specified
                Software any
                and all data concerning the Outlet at any time. Franchisee agrees
                to give
                Franchisor in the manner and format that it prescribes from time
                to
                time:

               

              (a) on
                or
                before Tuesday of each week, a report on the Outlet's Gross Receipts,
                F&B
                Gross Receipts and Nutritional Products Gross Receipts during the
                week ending on
                the preceding Sunday;

               

              (b) within
                fifteen (15) days after the end of each calendar month, monthly profit
                and loss
                statements for the Outlet for the immediately preceding month and
                a balance
                sheet as of the end of the immediately preceding month;

               

              (c) within
                fifteen (15) days after the end of each calendar quarter, the operating
                statements, financial statements, statistical reports, purchase records,
                and
                other information Franchisor requests regarding Franchisee and the
                Outlet
                covering the previous calendar quarter and the fiscal year to date;

               

              (d) by
                April
                15th
                of each
                year, annual profit and loss and source and use of funds statements
                and a
                balance sheet for the Outlet as of the end of the prior calendar
                year;
                and

               

              (e) within
                ten (10) days after Franchisor's request, exact copies of federal
                and state
                income tax returns, sales tax returns, and any other forms, records,
                books, and
                other information Franchisor periodically requires relating to the
                Outlet and
                Franchisee.

               

              Franchisee
                agrees to verify and sign each report and financial statement in
                the manner
                Franchisor prescribes. Franchisor may disclose data derived from
                these reports,
                although Franchisor will not without Franchisee's consent (unless
                required by
                law) disclose Franchisee's identity in any materials that Franchisor
                circulates
                publicly.

               

              Franchisee
                agrees to preserve and maintain all records in a secure location
                at the Outlet
                for at least three (3) years (including, but not limited to, sales
                checks,
                purchase orders, invoices, payroll records, customer lists, check
                stubs, sales
                tax records and returns, cash receipts and disbursement journals,
                and general
                ledgers). Franchisor may require Franchisee to have audited financial
                statements
                prepared annually during the term of this Agreement.

               

              
                
                   

                

                
                  38

                  
                    

                  

                

                
                   

                

              

              
                	
                        12.

                      	
                        INSPECTIONS
                          AND AUDITS.

                      

              

               

              12.A. FRANCHISOR'S
                RIGHT TO INSPECT THE OUTLET.

               

              To
                determine whether Franchisee and the Outlet are complying with this
                Agreement
                and all System Standards, Franchisor and/or its agents or representatives
                shall
                have the right, at any reasonable time and without prior notice to
                Franchisee,
                to: (1) inspect, monitor and test the Site, the Outlet, the Computer
                System, Specified Software, and other Operating Assets of the Outlet,
                whether at
                the Outlet, remotely via the Computer System or by other means;
                (2) inspect, observe, photograph and videotape the operations of the
                Outlet
                (including "mystery-shopping" and any Catering Service and Delivery
                Service
                provided by Franchisee) for such consecutive or intermittent periods
                as
                Franchisor deems necessary; (3) remove from the Outlet at no cost and/or
                test samples of any food and beverage items, ingredients, Nutritional
                Products
                or other products; (4) interview personnel and customers of the Outlet; and
                (5) inspect and copy any books, records, reports, computer databases
                and
                documents relating to the operation of the Outlet. Franchisee agrees
                to
                cooperate fully with Franchisor and/or its agents or representatives
                in
                connection with any such activities. Franchisee agrees that Franchisor
                may
                inspect and monitor electronically information concerning Franchisee's
                sales and
                Gross Receipts, and such other information as may be contained or
                stored in the
                Computer System and Specified Software.

               

              Franchisee
                acknowledges that Franchisor may conduct quality, service, cleanliness,
                and
                other inspections of the Outlet and Franchisee's operations from
                time to time
                without notice to Franchisee to determine compliance with this Agreement
                and the
                System Standards, and that performance meeting Franchisor's standards
                in such
                inspections is required hereunder. Franchisee shall present to its
                customers
                such evaluation forms as are periodically prescribed by Franchisor
                and shall
                participate and/or request its customers to participate in any surveys
                performed
                by or on behalf of Franchisor. Franchisor also may designate an independent
                evaluation service to conduct a "mystery shopper" quality control
                and evaluation
                program or similar program with respect to any group or all UFood
                Outlets.
                Franchisee agrees that the Outlet will participate in any such programs,
                as
                prescribed and required by Franchisor. Franchisee agrees to timely
                pay the then
                current charges imposed by Franchisor or such evaluation service
                for the
                Outlet's participation in such program.

               

              
                
                   

                

                
                  39

                  
                    

                  

                

                
                   

                

              

              12.B. FRANCHISOR'S
                RIGHT TO AUDIT.

               

              Franchisor
                and/or its agents or representatives shall have the right at any
                time during
                business hours, and without
                prior notice to Franchisee, to inspect and audit, or cause to be
                inspected and
                audited, the business records, bookkeeping and accounting records,
                computer
                databases, tax records and returns, and other records of the Outlet
                and of
                Franchisee and the books and records of Franchisee if it is a corporation,
                limited liability company or other business entity. Franchisee shall
                fully
                cooperate in connection with any such inspection or audit. In the
                event any
                inspection or audit shall disclose an understatement of the Outlet's
                Gross
                Receipts, Nutritional Products Gross Receipts or F&B Gross Receipts or an
                underpayment of any fees or other amounts due under this Agreement
                or any
                related agreement, Franchisor shall be authorized to initiate immediately
                a
                debit to Franchisee's account for the amount due plus interest, via
                electronic
                funds transfer. Alternatively, at Franchisor's option, Franchisee
                shall pay to
                Franchisor, within fifteen (15) days after receipt of the inspection
                or audit
                report, the fees due on the amount of such understatement, plus interest
                (at the
                rate and on the terms provided for herein) from the date originally
                due until
                the date of payment. Further, in the event such inspection or audit
                is made
                necessary by the failure of Franchisee to furnish reports, supporting
                records,
                other information or financial statements as herein required, or
                to furnish such
                reports, records, information or financial statements on a timely
                basis, or if
                an understatement of Gross Receipts, Nutritional Products Gross Receipts
                or
                F&B Gross Receipts for the period of any audit is determined by any
                such
                audit or inspection to be greater than two percent (2%), Franchisee
                shall
                reimburse Franchisor for the cost of such inspection or audit, including
                legal
                fees and accountants' fees, and the travel expenses, room and board
                and
                applicable per diem charges for employees of Franchisor. The foregoing
                remedies
                shall be in addition to all other remedies and rights of Franchisor
                hereunder or
                under applicable law.

               

              
                	
                        13.

                      	
                        TRANSFER.

                      

              

               

              13.A. BY
                FRANCHISOR.

               

              This
                Agreement and any or all of Franchisor's rights and obligations hereunder
                are
                fully transferable by Franchisor and shall inure to the benefit of
                any
                transferee or other legal successor to the interests of Franchisor
                herein.
                Franchisor is free to transfer and assign all of its rights and obligations
                under this Agreement to any Person, and upon such assignment, Franchisor
                shall
                have no further liability or obligation to Franchisee.

               

              13.B. NONTRANSFERABILITY
                OF CERTAIN RIGHTS.

               

              Franchisee
                understands, acknowledges and agrees (and hereby represents and warrants
                to
                Franchisor that its Owners understand and agree) that the rights
                and duties
                created by this Agreement are personal to Franchisee and its Owners
                and that a
                material cause for Franchisor's willingness to enter into this Agreement
                is its
                reliance upon the individual or collective character, skill, aptitude,
                business
                ability and financial capacity of Franchisee, its Owners and Persons
                that
                directly or indirectly have a Controlling Interest in Franchisee.
                Therefore,
                Franchisee agrees that:

               

              (1) no
                Controlling Interest in Franchisee or in any Person that directly
                or indirectly
                holds a Controlling Interest in Franchisee;

               

              (2) no
                obligations, rights or interest of Franchisee in (a) this Agreement,
                (b) the Lease, (c) the Outlet or (d) all or substantially all of
                the Operating Assets; and

               

              (3) no
                right
                to receive all or a portion of Franchisee's or the Outlet's profits
                or losses or
                any capital appreciation relating to Franchisee of the Outlet

               

              may
                be
                transferred without the prior written consent of Franchisor. This
                restriction
                shall not apply to the sale of inventory in the ordinary course of
                business. A
                transfer of all or substantially all of the Operating Assets may
                be made
                (subject to Franchisor's rights below) only with a transfer of this
                Agreement
                and the Lease. Any purported transfer in violation of this Section
                shall
                constitute a breach of this Agreement and shall convey to the transferee
                no
                rights or interests in the foregoing.

               

              
                
                   

                

                
                  40

                  
                    

                  

                

                
                   

                

              

              As
                used
                in this Agreement, the term "transfer"
                shall
                include the following, whether voluntary or involuntary, conditional,
                direct or
                indirect: (1) assignment, sale, gift or pledge; (2) the grant of a
                mortgage, charge, lien or security interest, including the grant
                of a collateral
                assignment; (3) a merger, consolidation, exchange of shares or other
                Ownership Interests, issuance of additional Ownership Interests or
                securities
                representing or potentially representing Ownership Interests, or
                redemption of
                Ownership Interests; (4) a sale or exchange of voting interests or
                securities convertible to voting interests, or an agreement granting
                the right
                to exercise or control the exercise of the voting rights of any holder
                of
                Ownership Interests or to control the operations or affairs of Franchisee
                or the
                Outlet; and (5) except where specifically approved by Franchisor, a
                management agreement whereby Franchisee delegates (i) any of its
                obligations under this Agreement or (ii) any or all of the management
                functions with respect to the Outlet or the business to be conducted
                by
                Franchisee pursuant to this Agreement. In addition to the foregoing,
                a transfer
                (as defined above) will include any transfer by virtue of (a) divorce;
                (b) insolvency; (c) dissolution of a corporation, limited liability
                company or other business entity; (d) will; (e) intestate succession;
                (f) declaration of or transfer in trust; or (g) foreclosure,
                attachment, seizure or otherwise by operation of law.

               

              13.C. FRANCHISOR'S
                RIGHT TO APPROVE TRANSFERS.

               

              If
                Franchisee or any Person intends to make a transfer of any interests
                which,
                under Section 13.B.,
                requires Franchisor's prior written consent, Franchisee shall deliver
                to
                Franchisor written notice of such proposed transfer at least ninety
                (90) days
                prior to its intended effective date. Such notice shall describe
                in detail the
                proposed transfer (including the nature of the transfer, the nature
                and amount
                of the interests being transferred, the reason for the transfer,
                the
                consideration to be paid and the terms of payment of such consideration
                and the
                effective date) and shall identify and provide all pertinent background
                information regarding the proposed purchaser. Franchisor shall have
                thirty (30)
                days from delivery of such notice within which to evaluate the proposed
                transaction and to notify Franchisee of its approval or disapproval
                (with
                reasons) of the proposed transfer. If approved, the transfer must
                take place in
                full compliance with all applicable laws, as described in the notice
                (as
                modified by any conditions imposed by Franchisor in granting its
                approval), and
                within thirty (30) days of the delivery of notice of Franchisor's
                approval. No
                transfer by Franchisee, its Owner or any Person that directly or
                indirectly
                holds a Controlling Interest in Franchisee shall relieve the transferor
                from any
                obligations or liabilities to Franchisor or its Affiliates under
                or relating to
                this Agreement, whether arising before or after the effective date
                of such
                transfer.

               

              Franchisee
                agrees that it would be reasonable for Franchisor to disapprove any
                proposed
                transfer based on any and all reasonable factors, including the fact
                that:

               

              (1) the
                proposed transfer is to a Competitive Business or to a direct or
                indirect owner
                of interests in a Competitive Business;

               

              (2) Franchisee
                and its Owners are not in full compliance with this Agreement;

               

              
                
                   

                

                
                  41

                  
                    

                  

                

                
                   

                

              

              (3) the
                proposed transferee and, if applicable, any of its owners (a) are not of
                good moral character, (b) do not have sufficient business experience,
                aptitude and financial resources to operate the Outlet in accordance
                with the
                requirements of this Agreement, (c) otherwise fail to meet Franchisor's
                then applicable standards for franchisees or owners of franchisees,
                or
                (d) are not in full compliance with an agreement between Franchisor and
                them; or

               

              (4) the
                price
                and terms of the proposed transfer are so burdensome as to adversely
                affect or
                have a potentially adverse affect on Franchisor's rights and interests
                or
                Franchisee's obligations under this Agreement.

               

              13.D. CONDITIONS
                FOR APPROVAL OF TRANSFERS.

               

              In
                granting its approval of a proposed transfer that requires Franchisor's
                consent,
                Franchisor may also impose certain reasonable conditions, including
                any one or
                more of the following:

               

              (1) that
                Franchisee, the transferring Owner or the proposed purchaser pay
                a transfer fee
                to Franchisor of Ten Thousand Dollars ($10,000), provided that this
                amount will
                be adjusted to an amount that is commensurate with such inflation
                as has
                occurred between the date hereof and the time of the proposed
                transfer;

               

              (2) that,
                if
                any part of the sale price is financed by the transferor, it agrees,
                in a manner
                satisfactory to Franchisor, that all obligations of the purchaser
                under or
                pursuant to any promissory notes, agreements or security interests
                reserved by
                the transferor be subordinate to any obligations of the purchaser
                to pay amounts
                then or thereafter due Franchisor and its Affiliates and all interests
                of
                Franchisor or its designee in connection with any right of first
                refusal or
                purchase option;

               

              (3) that
                the
                purchaser and its owners execute any guarantees and other undertakings
                then
                being required by Franchisor of other franchisees or owners of franchisees
                of
                UFood Outlets;

               

              (4) that
                Franchisee, the transferring Owner and the transferee (if the transferee
                is, or
                is the owner of interests in, another area developer or franchisee
                of Franchisor
                or otherwise has a contractual relationship with Franchisor or any
                of its
                Affiliates) execute a general release and consent agreement, in form
                satisfactory to Franchisor, of any and all claims against Franchisor
                and its
                Affiliates and their respective shareholders, officers, directors,
                employees and
                agents, for matters arising on or before the effective date of the
                transfer;

               

              (5) that
                Franchisee or, if applicable, the transferring Owner execute a noncompetition
                undertaking in favor of Franchisor and the transferee, which undertaking
                shall
                contain the restrictions in Section 16.D.
                below
                and apply for a period of eighteen (18) months commencing on the
                effective date
                of such transfer or the date upon which all Persons bound by such
                undertaking
                begin to comply fully with the terms of such undertaking, whichever
                is later;

               

              
                
                   

                

                
                  42

                  
                    

                  

                

                
                   

                

              

              (6) that
                Franchisee, the transferor and the transferee (if the transferee
                is, or is the
                owner of interests in, an area developer or franchisee of Franchisor
                or
                otherwise has a contractual relationship with Franchisor or any of
                its
                Affiliates) pay such Royalty Fees, Systemwide Advertising Fund contributions,
                amounts owed for purchases by Franchisee or such transferee from
                Franchisor and
                its Affiliates, and all other amounts owed to Franchisor or its Affiliates,
                which are then due and unpaid;

               

              (7) that
                any
                new General Manager and other Management Personnel complete to Franchisor's
                satisfaction Franchisor's initial management training program in
                the operation
                of a Outlet prior to the transfer at the time specified by Franchisor,
                and that
                the transferee pay Franchisor's then current standard training
                charges;

               

              (8) in
                the
                event of a transfer of this Agreement, that the transferee and its
                owners agree,
                in a manner satisfactory to Franchisor, at Franchisor's option, to
                (a) be
                bound by all terms and conditions of this Agreement for the remainder
                of its
                term or (b) execute Franchisor's then current form of standard franchise
                agreement and such ancillary documents (including guarantees) as
                are then
                customarily used by Franchisor in the grant of franchises for UFood
                Outlets,
                which may contain fees, terms and conditions that are materially
                different from
                those contained in this Agreement, provided that such agreement shall
                be for a
                term equal to the remaining term of this Agreement;

               

              (9) that
                the
                transferee and Franchisee acknowledge and agree that Franchisor's
                approval of
                the proposed transfer indicates only that the transferee meets, or
                that
                Franchisor has waived, the criteria established by Franchisor for
                franchisees as
                of the time of such transfer and does not constitute a warranty or
                guaranty by
                Franchisor, express or implied, of the suitability of the terms of
                sale or of
                the successful operation or profitability of the Outlet by the transferee;
                and

               

              (10) that
                the
                Franchisee, the transferor and the transferee execute an agreement,
                in form
                satisfactory to Franchisor, under which all parties agree to remain
                jointly and
                severally liable for all liabilities and obligations of the Franchisee
                hereunder, whether accruing before or after the effective date of
                the
                transfer.

               

              Subparagraph (1)
                above
                shall not apply to transfers by gift, bequest, or inheritance. Franchisee
                acknowledges and agrees that the failure of any Person restricted
                pursuant to
Subparagraph (5)
                to
                comply with this Section 13,
                including the restrictions described in Subparagraph (5),
                shall
                constitute a breach of this Agreement.

               

              
                
                   

                

                
                  43

                  
                    

                  

                

                
                   

                

              

              13.E. DEATH
                OR INCAPACITY OF FRANCHISEE.

               

              If
                Franchisee is an individual, upon the death of Franchisee or the
                permanent
                incapacity of Franchisee to conduct business affairs, or, if Franchisee
                is a
                corporation, limited liability company or other business entity,
                upon the death
                or permanent incapacity of the Managing Owner of Franchisee, all
                of such
                person's interest in this Agreement, or such interest in Franchisee,
                shall be
                transferred to a transferee approved by Franchisor. Such disposition
                of this
                Agreement or such interest in Franchisee (including transfer by bequest
                or
                inheritance) shall be completed within a reasonable time, not to
                exceed nine (9)
                months from the date of death or permanent disability, and shall
                be subject to
                all the terms and conditions applicable to transfers contained in
                this Section.
                Failure to so transfer the interest in this Agreement or such interest
                in
                Franchisee within said period of time shall constitute a breach of
                this
                Agreement.

               

              Until
                such disposition of this Agreement or such interest in Franchisee,
                Franchisor
                may, at its option, assume the management of the Outlet, for any
                period of time
                that Franchisor deems appropriate, on the terms and conditions set
                forth in the
                first paragraph of Section 15.D.
                of this
                Agreement.

               

              13.F. PUBLIC
                OR PRIVATE OFFERING.

               

              Franchisee
                acknowledges and agrees that it is the intent of both Franchisor
                and Franchisee
                that neither Franchisee nor any of its Affiliates, nor any Person
                holding a
                Controlling Interest in Franchisee, be or become, and Franchisee
                covenants that
                neither it nor any such Person shall be or become, a public company
                or
                "reporting company" (as defined in Sections 12(b), 12(g) or 15(d) of the
                Securities Exchange Act of 1934, as amended, or otherwise), including
                by way of
                an initial public offering or transfer to or merger with an existing
                public
                company. Accordingly, Franchisee agrees that no Ownership Interests
                in
                Franchisee or any such other Person may be offered pursuant to a
                public offering
                or transferred to a public company or “reporting company.” Franchisee further
                agrees that such Ownership Interests will not be offered pursuant
                to a private
                placement without the prior written consent of Franchisor. Franchisor
                may impose
                conditions on granting its consent to a private placement of Ownership
                Interests
                by Franchisee, including the conditions described in Sections 13.C
                and
13.D.
                and the
                conditions that:

               

              (1) such
                private placement complies with all applicable federal, state and
                local laws
                governing offerings of securities and all applicable agreements between
                Franchisee and Franchisor or its Affiliates, including each of the
                relevant
                transfer procedures, requirements, and limitations contained in this
                Agreement;

               

              (2) such
                private placement does not result in any change in operating control
                of
                Franchisee or the Outlet or in the parties owning a Controlling Interest
                in
                Franchisee or the Outlet, or in the individual or individuals controlling
                the
                management, policies or decision-making power of Franchisee;

               

              (3) each
                such
                entity or individual receiving Ownership Interests in such private
                placement be
                an accredited investor, as defined by applicable law, and shall have
                been
                identified and be reasonably acceptable to Franchisor; provided,
                however, that
                Franchisee may allow unaccredited investors to receive Ownership
                Interests if
                Franchisee has complied with applicable law with respect thereto;

               

              
                
                   

                

                
                  44

                  
                    

                  

                

                
                   

                

              

              (4) a
                draft
                of any offering memorandum or other information used in connection
                with any such
                private placement be submitted to Franchisor for review and comment
                a reasonable
                time prior to its use, that the reasonable comments and suggestions
                of
                Franchisor thereon are given due consideration and that a final version
                of such
                memorandum or information be provided to Franchisor at least five
                (5) days prior
                to its distribution to prospective investors;

               

              (5) any
                offering memorandum or information used in connection with any such
                private
                placement clearly identify that it is not an offering by Franchisor
                and that
                Franchisor has not participated in its preparation and has not supplied
                any
                financial information, projections, budgets, cost estimates, or similar
                information contained therein, all of which shall be the sole responsibility
                of
                Franchisee;

               

              (6) each
                recipient of information relating to such private placement shall
                agree to
                maintain it in confidence;

               

              (7) the
                structure, timing, allocation and nature of such private placement
                be reasonably
                acceptable to Franchisor;

               

              (8) Franchisee
                or such other issuer not become a "reporting company" by virtue of
                Sections
                12(b), 12(g) or 15(d) of the Securities Exchange Act of 1934, as
                amended;
                and

               

              (9) each
                person who or entity which becomes an Owner as a result of such private
                placement signs such guarantees and other undertakings that Franchisor
                then
                requires of owners of franchisees of UFood Outlets.

               

              Franchisee
                agrees to indemnify and hold harmless the Franchisor Indemnified
                Parties from
                and against any and all costs, damages, expenses, claims, actions,
                judgments and
                liabilities (including costs and expenses related to legal defense)
                arising from
                or relating to any private placement described in this Section 13.F.
                Franchisee also agrees to reimburse Franchisor for its reasonable
                expenses
                incurred in connection with any such private placement (including
                attorney's
                fees) and to comply with all requirements of Franchisor in connection
                with such
                offering, including adding appropriate disclaimers to the offering
                documents and
                execution of appropriate indemnification agreements.

               

              13.G. EFFECT
                OF CONSENT TO TRANSFER.

               

              Franchisor's
                consent to a transfer under this Section 13
                shall
                not constitute a waiver of any claims it may have against Franchisee
                (or its
                Owners), nor shall it be deemed a waiver of Franchisor's right to
                demand full
                compliance with any of the terms or conditions of this Agreement
                by Franchisee
                or the transferee. Franchisor's consent to any such transfer shall
                not, unless
                expressly provided in such consent, effect a release of Franchisee
                (or its
                Owners, as the case may be) following the transfer.

               

              
                
                   

                

                
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              13.H. FRANCHISOR'S
                RIGHT OF FIRST REFUSAL.

               

              If
                Franchisee or any of its Owners shall at any time determine to sell
                an interest
                in this Agreement, the Outlet, some or all of the Operating Assets
                (other than
                in the ordinary course of business) or an Ownership Interest in Franchisee,
                Franchisee or its Owner(s) shall obtain a bona fide, arm's-length,
                executed
                purchase agreement (and any ancillary agreements) in complete and
                definitive
                form, not subject to any financing contingency or other material,
                substantive
                contingency (other than Franchisor's consent and waiver of its right
                of first
                refusal as described herein), and an earnest money deposit (in the
                amount of
                five percent (5%) or more of the purchase price) from a qualified,
                responsible,
                bona fide and fully disclosed purchaser. A true and complete copy
                of such
                purchase agreement and any proposed ancillary agreements shall immediately
                be
                submitted to Franchisor by Franchisee, such Owner(s) or both. The
                purchase
                agreement (1) must apply only to an interest which is permitted to be
                transferred under this Agreement, (2) may not include the purchase of any
                other property or rights of Franchisee (or such Owner(s)), and (3) must not
                provide for any additional payments to be made, or any increase in
                the amounts
                payable, in the event Franchisor exercises its right of first refusal
                hereunder.
                The price and terms of purchase offered to Franchisee (or such Owner(s))
                in the
                purchase agreement for the aforementioned interests shall reflect
                the bona fide
                price offered therefor and shall not reflect any value for any other
                property or
                rights.

               

              Franchisor
                shall have the right, exercisable by written notice delivered to
                Franchisee or
                such Owner(s) within thirty (30) days from the date of receipt by
                Franchisor of
                an exact copy of such purchase agreement, together with payment of
                any
                applicable transfer fee and a completed and executed application
                for
                Franchisor's consent to transfer such interest, to purchase such
                interest for
                the price and on the terms and conditions contained in such purchase
                agreement,
                provided that: (i) Franchisor may substitute cash, a cash equivalent, or
                marketable securities of equivalent value for any form of payment
                proposed in
                such purchase agreement; (ii) Franchisor's credit shall be deemed equal to
                the credit of any proposed purchaser; and (iii) Franchisor shall have not
                less than ninety (90) days to prepare for closing, subject to extension
                at
                Franchisor's option to enable Franchisor, Franchisee or other Person
                to obtain
                any necessary consent of a third party, including obtaining any necessary
                permits and licenses. Regardless of whether included in the purchase
                agreement,
                Franchisor shall be entitled to all customary representations, warranties
                and
                indemnities given by the seller of a business, including indemnities
                for all
                actions, events and conditions that existed or occurred prior to
                the closing in
                connection with the Outlet, Franchisee's business or the assets or
                Ownership
                Interests being purchased and representations and warranties as to:
                (1) ownership, condition and title to the Ownership Interests and/or
                assets
                being purchased; (2) absence of liens and encumbrances relating to such
                Ownership Interests and/or assets; (3) validity of contracts; and
                (4) liabilities, contingent or otherwise, of any legal entity whose
                Ownership Interests or assets are purchased. At the closing, the
                seller shall
                provide to the purchaser good, valid, marketable, and indefeasible
                title (or
                equivalent rights) to all tangible and intangible property transferred,
                free and
                clear of any mortgage, claim, lien, or encumbrance, and local custom
                shall be
                followed as to formalities of any transfer documentation, closing
                costs, and
                closing logistics. If Franchisor exercises its right of first refusal,
                Franchisee and/or such selling Owner(s) (and members of their respective
                Immediate Families), as applicable, shall be bound by the restrictions
                in
Section 16.D.
                below
                for a period of eighteen (18) months commencing on the effective
                date of the
                transfer or the date upon which all Persons bound by such restrictions
                begin to
                comply fully with such restrictions, whichever is later.

               

              
                
                   

                

                
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              If
                Franchisor does not exercise its right of first refusal, Franchisee
                or such
                Owner(s) may complete the sale to such purchaser pursuant to and
                on the exact
                terms of such purchase agreement, subject to Franchisor's approval
                of the
                transfer, as provided for in this Agreement. However, if the sale
                to such
                purchaser is not completed within one hundred twenty (120) days after
                receipt of
                such purchase agreement by Franchisor, or if there is a change in
                the terms of
                the sale (of which Franchisee shall promptly notify Franchisor),
                Franchisor
                shall have an additional right of first refusal for thirty (30) days
                as set
                forth herein on the modified or initial terms and conditions of sale,
                at
                Franchisor's option.

               

              13.I. OWNERSHIP
                STRUCTURE.

               

              Franchisee
                represents and warrants that its Owners are as set forth on Exhibit C
                attached
                to this Agreement and covenants that it will not permit the identity
                of such
                Owners, or their respective interests in Franchisee, to change without
                complying
                with this Agreement. Franchisee covenants further that it will execute
                updated
                copies of Exhibit
                C to
                reflect any changes in the information contained therein.

               

              
                	
                        14.

                      	
                        GRANT
                          OF SUCCESSOR FRANCHISE.

                      

              

               

              14.A. FRANCHISEE'S
                RIGHT TO A SUCCESSOR FRANCHISE.

               

              Subject
                to the provisions of Subsections B
                and
C
                of this
                Section, upon expiration of the initial term of this Agreement, Franchisee
                shall
                have the right to obtain a successor franchise to continue to operate
                the Outlet
                under the System and the Marks (a "Successor
                Franchise")
                for up
                to two (2) successor terms of five (5) years, provided that Franchisee
                has met
                the following conditions as of the end of the initial term or the
                first
                successor term (as applicable):

               

              (1) Franchisee
                and its Owners have complied in all material respects with this Agreement
                during
                the preceding term(s);

               

              (2) Franchisee
                and its Owners are then in full compliance with this Agreement;

               

              (3) Franchisor
                continues to maintain a franchise program for UFood Outlets in the
                geographic
                area surrounding the Site; 

               

              (4) Franchisee’s
                general manager, assistant general manager and kitchen manager must
                have
                completed our then-current initial training program; and

               

              (5) Franchisee
                maintains possession of the Site and agrees (regardless of cost)
                to remodel
                and/or expand the Outlet, add or replace improvements and Operating
                Assets, and
                otherwise modify the Outlet and the Site to bring it into compliance
                with System
                Standards then applicable under new or successor franchises for UFood
                Outlets;
                or if Franchisee is unable to maintain possession of the Site, or
                if, in the
                judgment of Franchisor, the Outlet should be relocated within the
                Territory,
                Franchisee secures a substitute site within the Territory approved
                by Franchisor
                and agrees to develop expeditiously such substitute site in compliance
                with
                specifications and standards then applicable under new or successor
                franchises
                for UFood Outlets.

               

              
                
                   

                

                
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              In
                consideration of the grant of the Successor Franchise, Franchisee
                shall pay to
                Franchisor a successor franchise fee equal to twenty percent (20%)
                of
                Franchisor's then current standard initial franchise fee.

               

              14.B. NOTICES.

               

              Franchisee
                shall give Franchisor written notice of its election to obtain a
                Successor
                Franchise not more than twenty-four (24) months, and not less than
                twelve (12) months, prior to the expiration of this Agreement. Franchisor
                agrees to give Franchisee written notice, not more than ninety (90)
                days after
                receipt of Franchisee's notice and all other information Franchisor
                requests, of
                Franchisor's determination (1) to grant Franchisee a Successor Franchise
                pursuant to this Section; (2) to grant Franchisee a Successor Franchise on
                the condition that Franchisee corrects existing deficiencies of the
                Outlet or in
                Franchisee's operation of the Outlet; or (3) not to grant Franchisee a
                Successor Franchise based on Franchisor's determination that Franchisee
                has not
                qualified to obtain a Successor Franchise pursuant to Section 14.A
                above.
                If applicable, such notice shall (a) describe the remodeling, expansion,
                improvements and/or modifications required to bring the Outlet and
                the Operating
                Assets into compliance with the then applicable System Standards
                for new UFood
                Outlets; and (b) state what actions Franchisee must take to correct the
                deficiencies and time period in which such deficiencies must be corrected.
                If
                Franchisor elects not to grant Franchisee a Successor Franchise,
                Franchisor
                shall give Franchisee written notice of the decision not less than
                ninety (90) days prior to the expiration of the initial term of this
                Agreement; provided, however, that Franchisor need not give ninety
                (90) days'
                notice if its decision not to grant a Successor Franchise is due
                to Franchisee's
                breach of this Agreement during the ninety (90) day period before
                it expires.
                Such notice shall state the reasons for Franchisor's refusal to grant
                a
                Successor Franchise. In the event Franchisor fails timely to give
                Franchisee any
                notice required hereunder, Franchisor may extend the term of this
                Agreement for
                such period of time as is necessary in order to provide Franchisee
                adequate
                notice under the terms hereof. The grant of a Successor Franchise
                shall be
                conditioned upon Franchisee's continued compliance with all the terms
                and
                conditions of this Agreement and the conditions on obtaining a Successor
                Franchise specified by Franchisor up to the date of expiration.

               

              14.C. SUCCESSOR
                FRANCHISE AGREEMENT/RELEASES.

               

              To
                obtain
                a Successor Franchise, Franchisor, Franchisee and its Owners shall
                execute the
                form of franchise agreement and any ancillary agreements then customarily
                used
                by Franchisor in the grant of franchises for the operation of UFood
                Outlets
                (with appropriate modifications to the term and other appropriate
                provisions to
                reflect the fact that the agreement relates to a Successor Franchise),
                which may
                contain fees, terms and conditions that are materially different
                from those
                contained in this Agreement. Such agreement shall contain the successor
                franchise fee provided for above, but shall not require payment of
                an initial
                franchise fee. Franchisee and its Owners further agree to execute
                general
                releases, in form satisfactory to Franchisor, of any and all claims
                against
                Franchisor and its Affiliates and their respective shareholders,
                officers,
                directors, employees, agents, successors and assigns. The franchise
                agreement
                for a Successor Franchise will not include any right to any further
                renewal,
                extension, or successor franchise rights. Failure by Franchisee and
                its Owners
                to sign and deliver to Franchisor such agreements and releases within
                thirty
                (30) days after delivery thereof to Franchisee shall be deemed an
                election by
                Franchisee not to obtain a Successor Franchise.

               

              
                
                   

                

                
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                        15.

                      	
                        TERMINATION
                          OF AGREEMENT.

                      

              

               

              15.A. BY
                FRANCHISEE.

               

              If
                Franchisee and its Owners are in full compliance with this Agreement
                and
                Franchisor materially breaches this Agreement, and Franchisor does
                not:

               

              (1) correct
                such breach within thirty (30) days after Franchisor's receipt of
                written notice
                from Franchisee specifically identifying the material breach; or

               

              (2) undertake
                within thirty (30) days after Franchisor's receipt of written notice
                from
                Franchisee specifically identifying the material breach, and continue
                until
                completion, reasonable efforts to cure such breach if such breach
                cannot
                reasonably be cured within thirty (30) days,

               

              then
                Franchisee may terminate this Agreement, at its option and without
                waiving any
                other rights (including the right to damages), effective thirty (30)
                days after
                Franchisor's receipt of written notice of termination. Any attempt
                to terminate
                this Agreement by Franchisee other than as provided in this Section 15.A.
                shall be
                a breach of this Agreement.

               

              15.B. BY
                FRANCHISOR.

               

              Franchisor
                may terminate this Agreement, at its option and without waiving any
                other rights
                (including the right to damages), effective upon delivery of notice
                of
                termination to Franchisee, if:

               

              (1) Franchisee
                fails to develop the Outlet in accordance with this Agreement and
                commence
                operation of business within the time period provided in this
                Agreement;

               

              (2) Franchisee
                fails to operate, abandons, surrenders or transfers control of the
                operation of
                the Outlet for any period of twenty-four (24) hours or longer without
                prior
                written approval of Franchisor;

               

              (3) Franchisee
                or any of its Owners has made or makes any material misrepresentation
                or
                omission in the application for or acquisition of the rights under
                this
                Agreement, in materials submitted relating to a transfer, or in operating
                the
                Outlet or otherwise performing its obligations hereunder, including
                with respect
                to any Anti-Terrorism Laws, or has violated or violates any Anti-Terrorism
                Laws

               

              
                
                   

                

                
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              (4) Franchisee
                or any of its Owners, or any of the Management Personnel, is convicted
                by a
                trial court of, or pleads guilty or no contest to, a felony, or to
                another crime
                or offense, or engages in any misconduct or behavior, that might
                adversely
                affect the reputation of Franchisee, the Outlet, any UFood Outlet,
                or the
                goodwill associated with the Marks;

               

              (5) Franchisee
                or any of its Owners makes a purported assignment or transfer in
                violation of
                this Agreement;

               

              (6) Franchisee
                (or any of its Owners or employees) makes any unauthorized use or
                disclosure of
                or duplicates any Confidential Information or any part of the Manuals,
                makes any
                unauthorized use of the Marks or challenges or seeks to challenge
                the validity
                of Franchisor's or its Affiliates' rights in and to the Marks or
                the
                Confidential Information;

               

              (7) Franchisee
                (or any of its Owners) applies for or otherwise obtains a registration
                of any
                Mark anywhere in the world;

               

              (8) Franchisee's
                General Manager or any other employee of Franchisee fails to complete
                to
                Franchisor's reasonable satisfaction any of the training required
                pursuant to
                this Agreement within thirty (30) days of the date on which Franchisor
                gives
                written notice to Franchisee of such delinquency, and either (i) such
                failure results in a vacancy in a Management Personnel position or
                other
                position which, in the reasonable judgment of Franchisor, adversely
                affects
                Franchisee's ability to operate the Outlet in compliance with the
                System
                Standards and all other terms of this Agreement, or (ii) Franchisee fails
                promptly to replace such General Manager or other employee with another
                person
                who has the qualifications required by this Agreement and is able
                successfully
                to complete the required training;

               

              (9) Franchisee
                loses the right to possession of the Site and does not relocate the
                Outlet to
                another Site pursuant to the terms of this Agreement;

               

              (10) Franchisee
                makes an assignment for the benefit of creditors or admits in writing
                its
                insolvency or inability to pay its debts generally as they become
                due;
                Franchisee consents to the appointment of a receiver, trustee, or
                liquidator of
                all or the substantial part of its property; the Outlet is attached,
                seized,
                subjected to a writ or distress warrant, or levied upon, unless the
                attachment,
                seizure, writ, warrant, or levy is vacated within thirty (30) days;
                or any order
                appointing a receiver, trustee, or liquidator of Franchisee or the
                Outlet is not
                vacated within thirty (30) days following the order's entry;

               

              (11) Franchisee,
                any of its Owners or any member of their Immediate Families (whether
                or not
                bound by individual noncompetition undertakings), or other Persons
                who have
                executed such individual undertakings, violate the restrictions in
                this
                Agreement with respect to Competitive Businesses or Confidential
                Information;

               

              
                
                   

                

                
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              (12) Franchisee
                fails to: (a) report accurately the Outlet's Gross Receipts, Nutritional
                Products Gross Receipts or F&B Gross Receipts; (b) make payments of any
                amounts due Franchisor or its Affiliates for Royalty Fees, Systemwide
                Advertising Fund contributions, purchases from Franchisor or its
                Affiliates, or
                any other amounts due; or (c) adhere to the Financing Plan in the form
                approved by Franchisor, and in any such event does not correct such
                failure
                within ten (10) days after written notice of such failure is delivered
                to
                Franchisee;

               

              (13) Franchisee
                or any of its Owners fails on three (3) or more separate occasions
                within any
                period of twenty-four (24) consecutive months to comply with any
                one or more
                provisions of this Agreement (whether the same provision or different
                provisions), whether or not such failures to comply are corrected
                after notice
                of default is given, or fails on two (2) or more separate occasions
                within any
                period of twelve (12) consecutive months to comply with the same
                provision under
                this Agreement, whether or not such failures to comply are corrected
                after
                notice of default is given;

               

              (14) Franchisee
                or any of its Owners fails to comply with any other provision of
                this Agreement
                or any mandatory System Standard, or to pass Franchisor's quality
                control
                inspection, and does not correct such failure within thirty (30)
                days after
                Franchisee's receipt of Franchisor's written notice of such failure
                to
                comply;

               

              (15) any
                license or permit necessary for the Outlet's proper operation is
                suspended,
                revoked or not renewed;

               

              (16) Franchisee
                violates any health, safety, environmental or sanitation law, ordinance
                or
                regulation, or operates the Outlet in an unsafe manner, and does
                not immediately
                begin to cure the violation, and correct the violation to Franchisor's
                satisfaction within twenty-four (24) hours, after receiving written
                notice
                thereof;

               

              (17) any
                franchise agreement or other material agreement between Franchisor
                (or any of
                its Affiliates) and Franchisee (or any of its Affiliates), (but excluding
                the
                Development Agreement, if applicable) is terminated by any party,
                excluding the
                permanent closing of any UFood Outlets with the prior written approval
                of
                Franchisor; or 

               

              (18) Franchisee
                has attempted to terminate this Agreement or any other franchise
                agreement with
                Franchisor without complying with Section
                15.A.
                of this
                Agreement or the applicable section of such franchise agreement.

               

              15.C. TERMINATION
                OF CERTAIN RIGHTS OF FRANCHISEE.

               

              If
                Franchisor is entitled to terminate this Agreement in accordance
                with
Section
                15.B.,
                Franchisor shall have the option to terminate any one or more of
                the following
                instead of terminating this Agreement:

               

              (1) Franchisee's
                right to participate in any conventions offered by Franchisor from
                time to time;

               

              
                
                   

                

                
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              (2) Franchisee's
                right to provide Catering Services or Delivery Services; and

               

              (3) any
                exclusivity for the Territory granted under Section 2.B.
                of this
                Agreement, 

               

              effective
                ten (10) days after delivery of written notice thereof to Franchisee.
                If any of
                such rights, options or arrangements are terminated in accordance
                with this
                Subsection, such termination shall be without prejudice to Franchisor's
                right to
                terminate this Agreement in accordance with Section 15.B.
                or to
                terminate any other rights, options or arrangements under this Agreement
                at any
                time thereafter for the same default or as a result of any additional
                defaults
                of the terms of this Agreement.

               

              15.D. ASSUMPTION
                OF MANAGEMENT.

               

              Franchisor
                has the right (but not the obligation), under the circumstances described
                below
                or in Section
                13.E.,
                to
                enter the Site and assume the Outlet's management for any period
                of time that
                Franchisor deems appropriate. If Franchisor assumes the Outlet's
                management
                under Subparagraphs
                (1)
                and
(2)
                below or
                pursuant to Section 13.E.,
                Franchisee must pay Franchisor (in addition to the Royalty Fees,
                Systemwide
                Advertising Fund contributions and other amounts due Franchisor)
                One Thousand
                Dollars ($1,000) per day, plus all direct out-of-pocket costs and
                expenses
                incurred by Franchisor, during this time. If Franchisor assumes the
                Outlet's
                management, Franchisee acknowledges that Franchisor will have a duty
                to utilize
                only reasonable efforts and will not be liable to Franchisee or its
                Owners for
                any debts, losses, or obligations the Outlet incurs, or to any of
                Franchisee's
                creditors for any supplies or other assets or services purchased
                for the Outlet,
                while Franchisor manages it. Franchisor has the unrestricted right
                to assign its
                rights under this Section 15.D.

               

              Franchisor
                may assume the Outlet's management under the following circumstances
                or as
                provided in Section 13.E.:

               

              (1) if
                Franchisee abandons or fails actively to operate the Outlet;

               

              (2) if
                Franchisee fails to comply with any provision of this Agreement or
                any System
                Standard and does not correct the failure within the time period
                Franchisor
                specifies in its notice to Franchisee; or

               

              (3) if
                this
                Agreement expires or is terminated and Franchisor is deciding whether
                to
                exercise its option to purchase the Outlet's assets under Section
                16.F.
                below.

               

              Franchisor's
                exercise of its rights under Subparagraphs
                (1)
                or
(2)
                above
                will not affect its right to terminate this Agreement under Section
                15.B.
                above.

               

              
                
                   

                

                
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              15.E. EFFECT
                OF TERMINATION.

               

              Any
                provision of this Agreement to the contrary notwithstanding, the
                termination of
                this Agreement shall not affect the rights of the terminating party
                with respect
                to any damages it has suffered as a result of any breach of this
                Agreement, nor
                shall it affect the rights of either party with respect to liabilities
                or claims
                accrued, or arising out of events occurring prior to, the effective
                date of
                termination. Neither the right of termination, nor the right to sue
                for damages
                or any other remedy available to either party hereunder, shall be
                exclusive of
                any other remedy given hereunder or now or hereafter existing at
                law or in
                equity.

               

              
                	
                        16.

                      	
                        RIGHTS
                          AND OBLIGATIONS OF FRANCHISOR AND FRANCHISEE UPON TERMINATION
                          OR
                          EXPIRATION OF THE AGREEMENT.

                      

              

               

              16.A. PAYMENT
                OF AMOUNTS OWED.

               

              Franchisee
                shall immediately pay to Franchisor and its Affiliates upon termination
                or
                expiration of this Agreement for any reason such Royalty Fees, Systemwide
                Advertising Fund contributions, amounts owed for purchases by Franchisee,
                interest due on any of the foregoing, and all other amounts owed
                to Franchisor
                or its Affiliates which are then unpaid, whether or not attributable
                to the
                Outlet.

               

              16.B. MARKS
                AND TRADE DRESS.

               

              Upon
                the
                termination or expiration of this Agreement for any reason (without
                grant of a
                Successor Franchise), Franchisee and its Owners shall:

               

              (1) except
                in
                connection with other UFood Outlets operated pursuant to effective
                franchise
                agreements with Franchisor, immediately cease use of all the Marks
                and Trade
                Dress and not thereafter directly or indirectly at any time or in
                any manner
                identify itself or any business as a current or former UFood Outlet,
                or as a
                current or former franchisee of or as otherwise associated with Franchisor,
                or
                use any Mark or Trade Dress, any colorable imitation thereof or any
                mark or
                trade dress substantially identical to or deceptively similar to
                any Mark or
                Trade Dress in any manner or for any purpose, or utilize for any
                purpose any
                trade name, trademark or service mark, or other commercial symbol
                or trade dress
                that suggests or indicates a connection or association with
                Franchisor;

               

              (2) immediately
                remove from the Site all signs containing any Mark, remove the Marks
                from all
                vehicles, fixtures, furnishings, decor items and other objects displaying
                any
                Mark at the Site, and return to Franchisor or destroy all signs,
                packaging
                materials and forms, advertising and promotional materials, menus,
                paper goods,
                catalogs, invoices and other materials containing any Mark or otherwise
                identifying or relating to a UFood Outlet;

               

              (3) immediately
                take such action as may be required to cancel or, at Franchisor's
                option, to
                transfer to Franchisor or its designee, all fictitious or assumed
                name or
                equivalent registrations relating to its use of any Mark;

               

              
                
                   

                

                
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              (4) immediately
                take all such actions as may be necessary to transfer any telephone
                number and
                any telephone directory listings associated with the Marks to Franchisor
                or its
                designee. Franchisee acknowledges that, as between Franchisor and
                Franchisee,
                Franchisor has the sole right to and interest in all telephone numbers
                and
                directory listings associated with the Marks. Concurrently with the
                execution of
                this Agreement, Franchisee shall execute Franchisor's form of collateral
                assignment of telephone numbers and listings (the "Telephone
                Number Assignment")
                attached to this Agreement as Exhibit G.
                Franchisee acknowledges and agrees that the telephone company and
                all listing
                agencies may accept the Telephone Number Assignment as conclusive
                evidence of
                the exclusive right of the Franchisor in such telephone numbers and
                directory
                listings and its authority to direct their transfer; and

               

              (5) if
                Franchisor does not purchase the assets of the Outlet as provided
                in
Section 16.F.,
                at
                Franchisee's expense, immediately make such modifications and alterations,
                including removal of all distinctive physical and structural features
                associated
                with the Trade Dress or UFood Outlets, as may be necessary to distinguish
                the
                Site and the Outlet so clearly from its former appearance and from
                other UFood
                Outlets as to prevent any possibility that the public will associate
                the Site
                with UFood Outlets and to prevent confusion created by such association.
                At a
                minimum, such changes and modifications to the Outlet will include:
                (a) repainting, and, where applicable, recovering both the exterior and
                interior of the Outlet with different colors, including removing
                distinctive
                colors and designs from the walls; (b) removing all Trade Dress, fixtures
                and other decor items and replacing them with other items not of
                the general
                type and appearance customarily used in a UFood Outlet; and (c) removing
                all exterior and interior signage bearing any Mark. If Franchisee
                fails to
                initiate immediately or complete such modifications, alterations
                and/or removals
                within such time as Franchisor deems appropriate, Franchisee agrees
                that
                Franchisor or its designated agents may enter the Outlet and adjacent
                areas,
                without prior notice, to make such modifications, alterations and/or
                removals,
                at Franchisee's expense, without liability for trespass or damages.
                Franchisee
                expressly acknowledges that its failure to make such alterations
                will cause
                irreparable injury to Franchisor and consents to entry, at Franchisee's
                expense,
                of an ex-parte order by any court of competent jurisdiction authorizing
                Franchisor or its agents to take such action, if Franchisor seeks
                such an
                order.

               

              Franchisee
                shall furnish to Franchisor (i) within thirty (30) days after the effective
                date of termination or expiration, evidence satisfactory to Franchisor
                of
                Franchisee's compliance with Subparagraphs (1),
                (3)
                and
(4)
                of the
                foregoing obligations, and (ii) within thirty (30) days after the later of
                expiration of Franchisor's option to purchase the Outlet, as provided
                in this
                Section, or receipt of notice that Franchisor elects not to purchase
                the Outlet
                pursuant to this Section, evidence satisfactory to Franchisor of
                Franchisee's
                compliance with all of the foregoing obligations. If Franchisor exercises
                its
                option to purchase the Outlet under this Section, Franchisor shall
                direct
                Franchisee regarding which, if any, of the above requirements Franchisee
                shall
                observe.

               

              16.C. CONFIDENTIAL INFORMATION.

               

              Franchisee
                agrees that upon termination or expiration of this Agreement for
                any reason
                (without grant of a Successor Franchise):

               

              
                
                   

                

                
                  54

                  
                    

                  

                

                
                   

                

              

              (1) it,
                and
                all of its Affiliates, Owners, employees, agents and other representatives,
                will
                immediately cease to use, and will maintain the absolute confidentiality
                of, any
                Confidential Information and will refrain from using such Confidential
                Information in any business or otherwise; and

               

              (2) it
                will
                return to Franchisor all copies of the Manuals and any other confidential
                materials which have been loaned or made available to it by
                Franchisor.

               

              16.D. COVENANT
                NOT TO COMPETE.

               

              Upon
                expiration or termination of this Agreement for any reason (without
                grant of a
                Successor Franchise), other than pursuant to Section 15.A.,
                neither
                Franchisee nor any of its Owners shall directly or indirectly (through
                a member
                of the Immediate Family of Franchisee or a Owner or otherwise), for
                a period of
                eighteen (18) months commencing on the effective date of such termination
                or
                expiration, or the date on which all persons bound by this Subsection
                begin
                complying fully with this Subsection, whichever is later:

               

              (1) have
                any
                controlling or non-controlling interest as a record or beneficial
                owner in any
                Competitive Business located or operating: (a) at the Site; (b) within
                a five (5) mile radius of the Site; (c) within a five (5) mile radius of
                any other UFood Outlet in operation or under development on the effective
                date
                of termination or expiration of this Agreement; or (d) within the Territory
                or within five (5) miles of the boundary of the Territory, provided
                that the
                restrictions contained in this paragraph 16.D(1) shall not be applicable to
                the ownership of shares of a class of securities listed on a stock
                exchange or
                traded on the over-the-counter market and quoted on a national inter-dealer
                quotation system that represent less than one-half percent (0.5%)
                of the number
                of shares of that class of securities issued and outstanding; 

               

              (2) perform
                services as a director, officer, manager, employee, consultant, representative,
                agent or otherwise for any Competitive Business located or operating:
                (a) at the Site; (b) within a five (5) mile radius of the Site;
                (c) within a five (5) mile radius of any other UFood Outlet in operation
                or
                under development on the effective date of termination or expiration
                of this
                Agreement; or (d) within the Territory or within five (5) miles of the
                boundary of the Territory; 

               

              (3) directly
                or indirectly loan any money or other thing of value to, guaranty
                any loan to,
                lease any personal or real property to, or permit the use of its
                name in
                connection with, any Competitive Business located or operating: (a) at the
                Site; (b) within a five (5) mile radius of the Site; (c) within a five
                (5) mile radius of any other UFood Outlet in operation or under development
                on
                the effective date of termination or expiration of this Agreement;
                or
                (d) within the Territory or within five (5) miles of the boundary of
                the
                Territory;

               

              (4) divert
                or
                attempt to divert any actual or potential business or customers of
                any UFood
                Outlet to any Competitive Business, wherever located or operating;
                or

               

              
                
                   

                

                
                  55

                  
                    

                  

                

                
                   

                

              

              (5) employ
                or
                seek to employ any individual who is employed by Franchisor, its
                Affiliate or
                any developer or franchisee of a UFood Outlet, or otherwise directly
                or
                indirectly induce or attempt to induce any such individual to leave
                said
                employment, without the prior written consent of such individual's
                employer.

               

              Without
                limiting the foregoing, and in addition to any other remedies Franchisor
                may
                have under this Agreement, if Franchisee or any Affiliate of Franchisee
                should
                hire an individual who, at the time of such hiring, is employed by
                Franchisor or
                one of its Affiliates and whose duties include training, Franchisee
                shall
                promptly pay to Franchisor as liquidated damages an amount equal
                to the then
                current annual salary of the individual as reflected in the personnel
                records of
                Franchisor or its Affiliate, as applicable. Franchisee acknowledges
                and agrees
                that Franchisor makes a substantial investment in its training personnel
                and
                that the aforementioned liquidated damages are a reasonable estimate
                of the
                actual damages which would be incurred by Franchisor or its
                Affiliate.

               

              16.E. CONTINUING
                OBLIGATIONS.

               

              All
                obligations of Franchisor and Franchisee which expressly or by their
                nature
                survive or are intended to survive the expiration or termination
                of this
                Agreement shall continue in full force and effect subsequent to and
                notwithstanding its expiration or termination and until they are
                satisfied in
                full or by their nature expire.

               

              16.F. FRANCHISOR'S
                RIGHT TO PURCHASE ASSETS OF THE OUTLET.

               

              Upon
                expiration or termination of this Agreement for any reason (without
                the grant of
                a Successor Franchise), other than pursuant to Section 15.A.,
                Franchisor or its assignee shall have the option, exercisable by
                giving written
                notice thereof within sixty (60) days from the date of such expiration
                or
                termination, to purchase from Franchisee and/or any of its Affiliates,
                as
                applicable, any or all of the assets used in the Outlet. As used
                in this
                Paragraph, "assets"
                shall
                mean and include leasehold improvements, Operating Assets, Nutritional
                Products,
                inventory, ingredients, materials and supplies, and the Lease (or,
                if Franchisee
                or its Affiliate owns the Site, the assets shall include the Site);
                provided,
                however, that Franchisor may exclude from the assets so purchased
                any assets
                which do not meet Franchisor's then current System Standards for
                new UFood
                Outlets. Franchisor shall have the unrestricted right to assign this
                option to
                purchase.

               

              At
                its
                option, Franchisor may exercise its option to purchase the assets
                under this
                Subsection on a conditional basis, subject to completion to Franchisor's
                satisfaction of any due diligence, inspection or tests that Franchisor
                designates. Franchisee shall cooperate fully with Franchisor and
                its
                representatives in connection with any such due diligence, inspections
                and
                tests. Within sixty (60) days after delivering its written notice
                to
                conditionally exercise its option to purchase the assets under this
                Subsection,
                Franchisor shall notify Franchisee of its decision (1) to proceed with the
                purchase of the assets, or (2) to cancel its purchase of the assets for any
                reason that Franchisor deems appropriate. Franchisor or its assignee
                shall be
                entitled to all customary indemnities, warranties and representations
                given by
                the seller of a business in connection with its asset purchase, including
                indemnities for all actions, events and conditions that existed or
                occurred
                prior to the closing of the purchase in connection with the Outlet
                or
                Franchisee's business and representations and warranties as to:
                (1) ownership, condition and title to assets; (2) absence of liens and
                encumbrances relating to the assets; (3) validity of contracts; and
                (4) liabilities, contingent or otherwise, affecting the
                assets.

               

              
                
                   

                

                
                  56

                  
                    

                  

                

                
                   

                

              

              The
                purchase price for the assets shall be equal to their fair market
                value,
                provided that the purchase price shall take into account the termination
                or
                expiration of this Agreement and shall not contain any factor or
                increment for
                any trademark, service mark or other commercial symbol used in connection
                with
                the operation of the Outlet or any goodwill or "going concern" value
                for the
                Outlet.

               

              If
                Franchisor and Franchisee cannot agree on the fair market value of
                the assets to
                be purchased, fair market value will be determined by three (3) independent
                appraisers, each of whom will conduct a separate appraisal and, in
                doing so, be
                bound by the terms of this Subsection concerning the purchase price.
                Franchisor
                will appoint one appraiser, Franchisee will appoint one appraiser,
                and the two
                appraisers will appoint the third appraiser. Franchisor and Franchisee
                shall
                select their respective appraisers within fifteen (15) days after
                Franchisor
                notifies Franchisee that Franchisor wishes to exercise its purchase
                option (if
                Franchisor and Franchisee have not agreed on fair market value before
                then) and
                the two appraisers so chosen shall be obligated to appoint the third
                appraiser
                within fifteen (15) days after they have both been appointed. Franchisor
                and
                Franchisee will each bear the cost of its own appraiser and share
                equally the
                fees and expenses of the third appraiser. The appraisers must complete
                their
                appraisals within thirty (30) days after the third appraiser's appointment.
                The
                purchase price to be paid will be the median of the fair market values
                determined by the three (3) appraisers.

               

              The
                purchase price shall be paid in cash, a cash equivalent, or marketable
                securities of equivalent value at the closing of the purchase, which
                shall take
                place no later than ninety (90) days after receipt by Franchisee
                of notice of
                exercise of this option to purchase, at which time Franchisee shall
                deliver
                instruments transferring to Franchisor or its designee: (i) good, valid,
                marketable and indefeasible title (or equivalent rights) to the assets
                purchased, free and clear of any mortgage, claim, lien or encumbrance
                (other
                than liens and security interests acceptable to Franchisor or its
                designee),
                with all sales and other transfer taxes paid by Franchisee; (ii) all
                licenses and permits of the Outlet which may be assigned or transferred;
                and
                (iii) the Lease or fee interest in the Site. Local custom shall be followed
                as to formalities of any transfer documentation, closing costs and
                closing
                logistics. In the event that Franchisee cannot deliver clear title
                to all of the
                purchased assets as aforesaid, or in the event there shall be other
                unresolved
                issues, the closing of the sale shall be accomplished through an
                escrow.
                Further, Franchisee and Franchisor shall, prior to closing, comply
                with all
                applicable legal requirements, including the bulk sales provisions
                of the
                Uniform Commercial Code of the state in which the Outlet is located
                (if any) and
                the notification and other provisions of any applicable tax laws
                and regulations
                applying to bulk transfers outside of the ordinary course of business.
                Franchisee shall, prior to or simultaneously with the closing of
                the purchase,
                pay all tax liabilities incurred in connection with the operation
                of the Outlet.
                Franchisor shall have the right to set off against and reduce the
                purchase price
                by any and all amounts owed by Franchisee to Franchisor or its Affiliates,
                and
                the amount of any encumbrances or liens against the assets or any
                obligations
                assumed by Franchisor or its designee.

               

              
                
                   

                

                
                  57

                  
                    

                  

                

                
                   

                

              

              If
                Franchisor or its designee exercises this option to purchase, pending
                the
                closing of such purchase, Franchisor shall have the right to appoint
                a manager
                to maintain the operation of the Outlet pursuant to Section
                15.D.
                Alternatively, Franchisor may require Franchisee to close the Outlet
                during such
                time period without removing any assets from the Outlet. Franchisee
                shall
                maintain in force all insurance policies required pursuant to this
                Agreement
                through the date of closing. If the Site is leased, Franchisor will
                indemnify
                and hold harmless Franchisee from any ongoing liability under the
                Lease from the
                date Franchisor assumes possession of the Site.

               

              
                	
                        17.

                      	
                        RELATIONSHIP
                          OF THE PARTIES/INDEMNIFICATION.

                      

              

               

              17.A. INDEPENDENT
                CONTRACTORS.

               

              It
                is
                understood and agreed by the parties hereto that this Agreement does
                not create
                a fiduciary relationship between them, that Franchisor and Franchisee
                are and
                shall be independent contractors, and that nothing in this Agreement
                is intended
                to make either party a general or special agent, joint venturer,
                partner, or
                employee of the other for any purpose. Franchisee shall conspicuously
                identify
                itself in all dealings with customers, suppliers, vendors, public
                officials,
                Franchisee personnel, and others as the owner of the Outlet under
                a franchise
                granted by Franchisor and shall conspicuously and prominently place
                such other
                notices of independent ownership on the Site and on such forms, menus,
                guest
                checks, employment applications, business cards, stationery, advertising,
                and
                other materials as Franchisor may require from time to time.

               

              17.B. NO
                LIABILITY FOR ACTS OF OTHER PARTY.

               

              Franchisee
                shall not employ any of the Marks in signing any contract, application
                for any
                license or permit, or in a manner that may result in liability of
                Franchisor or
                its Affiliates for any indebtedness or obligation of Franchisee.
                Except as
                expressly authorized in writing, neither Franchisor nor Franchisee
                shall make
                any express or implied agreements, warranties, guarantees or representations,
                or
                incur any debt, in the name of or on behalf of the other, or represent
                that
                their relationship is other than franchisor and franchisee, and neither
                Franchisor nor Franchisee shall be obligated by or have any liability
                under any
                agreements or representations made by the other that are not expressly
                authorized in writing. Franchisor shall not be obligated for any
                damages to any
                person or property directly or indirectly arising out of the operation
                of the
                Outlet or Franchisee's business under this Agreement.

               

              17.C. TAXES.

               

              Franchisor
                shall have no liability for any sales, use, service, occupation,
                excise, gross
                receipts, income, property, payroll, employee withholding or other
                taxes,
                whether levied upon this Agreement, Franchisee, the Outlet or Franchisee's
                property, or upon Franchisor, in connection with the sales made or
                business
                conducted by Franchisee, except any taxes Franchisor is required
                by law to
                collect from Franchisee with respect to purchases from Franchisor
                and
                Franchisor's income taxes. Payment of all such taxes shall be the
                responsibility
                of Franchisee.

               

              
                
                   

                

                
                  58

                  
                    

                  

                

                
                   

                

              

              17.D. INDEMNIFICATION
                OF FRANCHISOR.

               

              Franchisee
                agrees to indemnify, defend and hold Franchisor and the other Franchisor
                Indemnified Parties harmless against, and to reimburse them for,
                any and all
                taxes described in Section 17.C.
                and any
                and all claims against, and losses, obligations, damages and expenses
                incurred
                by, any one or more of the Franchisor Indemnified Parties directly
                or indirectly
                arising out of:

               

              (1) this
                Agreement or the development or operation of the Outlet, including
                any breach or
                violation of any agreement, contract or commitment by Franchisee
                resulting from
                Franchisee's execution and delivery of this Agreement or performance
                of any of
                its obligations hereunder or liabilities asserted by Owners, employees,
                agents
                or other representatives of Franchisee arising in connection with
                training
                provided by Franchisor, its Affiliates or designees or otherwise;

               

              (2) unauthorized
                activities conducted in association with the Marks; 

               

              (3) any
                occurrence at the Site, whether associated with the operation of
                the Outlet or
                otherwise; or 

               

              (4) the
                transfer of any interest in this Agreement, the Outlet, some or all
                of the
                assets of the Outlet or Franchisee in any manner not in accordance
                with this
                Agreement.

               

              For
                purposes of this indemnification, "claims"
                shall
                mean and include all obligations, actual, incidental, consequential,
                special,
                and punitive damages, and costs incurred in the defense or settlement
                of any
                claim, including reasonable accountants', attorneys', attorney assistants',
                arbitrators' and expert witness fees, costs of investigation and
                proof of facts,
                court costs, travel and living expenses, and any other expenses of
                litigation,
                arbitration or alternative dispute resolution, regardless of whether
                litigation,
                arbitration or alternative dispute resolution is commenced. Franchisor
                and the
                other Franchisor Indemnified Parties shall have the right to defend
                any such
                indemnified claim against them in such manner as Franchisor deems
                appropriate or
                desirable, and Franchisee may not settle any claim or take any other
                remedial,
                corrective or similar actions relating to a claim without Franchisor's
                consent.
                This indemnity shall continue in full force and effect subsequent
                to and
                notwithstanding the expiration or termination of this Agreement.
                A Franchisor
                Indemnified Party need not seek recovery from an insurer or other
                third party,
                or otherwise mitigate its losses or expenses, in order to maintain
                and recover
                fully a claim against Franchisee.

               

              
                	
                        18.

                      	
                        GENERAL
                          PROVISIONS.

                      

              

               

              18.A. ARBITRATION.

               

              Franchisor
                and Franchisee agree that all controversies, disputes, or claims
                between
                Franchisor and its affiliates, and its and their respective owners,
                officers,
                managers, agents, and employees, as applicable, and Franchisee (and
                its owners,
                guarantors, affiliates, and employees, as applicable) arising out
                of or related
                to:

               

              
                
                   

                

                
                  59

                  
                    

                  

                

                
                   

                

              

              (1) this
                Agreement or any other agreement between Franchisee and Franchisor;

               

              (2) Franchisor's
                relationship with Franchisee;

               

              (3) the
                scope
                and validity of this Agreement or any other agreement between Franchisee
                and
                Franchisor or any provision of any such agreement, including the
                validity and
                scope of the arbitration obligation under this Section, which Franchisor
                and
                Franchisee acknowledge are to be determined by the arbitrator and
                not by a
                court; or 

               

              (4) any
                System Standard;

               

              must
                be
                submitted for binding arbitration, on demand of either party, to
                the American
                Arbitration Association. The arbitration proceedings will be conducted
                by one
                arbitrator and, except as this subsection otherwise provides, according
                to the
                then current commercial arbitration rules of the American Arbitration
                Association. All proceedings will be conducted at a suitable location
                chosen by
                the arbitrator which is within five (5) miles of Franchisor's then
                existing
                principal business address. All matters relating to arbitration will
                be governed
                by the Federal Arbitration Act (9 U.S.C. Sections 1 et seq.)
                and not
                by any state arbitration law. Judgment upon the arbitrator’s award may be
                entered in any court of competent jurisdiction.

               

              The
                arbitrator has the right to award or include in his or her award
                any relief
                which he or she deems proper in the circumstances, including, without
                limitation, money damages (with interest on unpaid amounts from the
                date due),
                specific performance, injunctive relief, and attorneys’ fees and costs, provided
                that the arbitrator may not declare any mark generic or otherwise
                invalid and,
                except as Section 18.G.
                otherwise provides, Franchisor and Franchisee (and the Owners) waive
                any right
                to or claim for any exemplary or punitive damages. The arbitrator’s award and
                decision shall be conclusive and binding upon all parties.

               

              Franchisor
                and Franchisee agree to be bound by the provisions of any limitation
                on the
                period of time in which claims must be brought under applicable law
                or this
                Agreement, whichever expires earlier. Franchisor and Franchisee further
                agree
                that, in any arbitration proceeding, each party must submit or file
                any claim
                which would constitute a compulsory counterclaim (as defined by the
                Federal
                Rules of Civil Procedure) within the same proceeding as the claim
                to which it
                relates. Any claim which is not submitted or filed as required is
                forever
                barred. The arbitrator may not consider any settlement discussions
                or offers
                that might have been made by either Franchisee or Franchisor. Franchisor
                reserves the right, but has no obligation, to advance any portion
                of your share
                of the costs of any arbitration proceeding in order for such arbitration
                proceeding to take place and by doing so shall not be deemed to have
                waived or
                relinquished its right to seek the recovery of those costs in accordance
                with
                Section 18.F above.

               

              
                
                   

                

                
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              Franchisor
                and Franchisee agree that arbitration will be conducted on an individual,
                not a
                class-wide, basis, and that an arbitration proceeding between Franchisor
                and its
                affiliates, and its and their respective owners, officers, managers,
                agents, and
                employees, as applicable, and Franchisee (and the Owners, and Franchisor's
                guarantors, affiliates, and employees, as applicable) may not be
                commenced,
                conducted, consolidated or combined in any way with any other arbitration
                proceeding or claim between us and any other Person. Notwithstanding
                the
                foregoing or anything to the contrary in this Section 18, if any
                court or
                arbitrator determines that all or any part of the preceding sentence
                is
                unenforceable with respect to a dispute that otherwise would be subject
                to
                arbitration under this Section 18.A., then all parties agree that
                this
                arbitration clause shall not apply to that dispute and that such
                dispute shall
                be resolved in a judicial proceeding in accordance with this Section
                18
                (excluding this Section 18.A.).

               

              Despite
                this agreement to arbitrate, Franchisor and Franchisee each have
                the right in a
                proper case to seek temporary restraining orders and temporary or
                preliminary
                injunctive relief from a court of competent jurisdiction; provided,
                however,
                that they must contemporaneously submit the dispute for arbitration
                on the
                merits as provided in this subsection.

               

              The
                provisions of this subsection are intended to benefit and bind certain
                third
                party non-signatories and will continue in full force and effect
                subsequent to
                and notwithstanding this Agreement’s expiration or termination.

               

              If
                either
                party commences any legal action or proceeding in any court in contravention
                of
                the terms of this Section 18.A.,
                that
                party shall pay all costs and expenses that the other party incurs
                in the action
                or proceeding, including, without limitation, reasonable attorneys’ and related
                fees.

               

              18.B. SPECIFIC
                ENFORCEMENT.

               

              Each
                party to this Agreement agrees that this Section 18
                shall be
                specifically enforceable against such party by the other parties.
                The provisions
                of this Section
                18
                are
                intended to benefit and bind third party non-signatories and shall
                continue in
                full force and effect subsequent to and notwithstanding the expiration
                and
                termination of this Agreement.

               

              18.C. GOVERNING
                LAW.

               

              Except
                to
                the extent governed by the Federal Arbitration Act (9 U.S.C. Sections 1
et seq.),
                the
                United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. Sections 1051
et seq.)
                or
                other federal law, this Agreement, the rights and obligations of
                the parties
                hereto and the relationship of the parties hereto shall, by this
                express
                agreement of the parties, be governed by, and construed and enforced
                in
                accordance with, the laws of the State of Nevada, without regard
                to its
                conflicts of law provisions, except that any Nevada law regulating
                the offer and
                sale of franchises, business opportunities or similar rights, or
                governing the
                relationship of the parties to a contract involving those rights,
                shall not
                apply unless its jurisdictional requirements are met independently
                without
                reference to this paragraph. 

               

              
                
                   

                

                
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              18.D. INJUNCTIVE
                RELIEF.

               

              Notwithstanding
                anything to the contrary contained in Section 18.A
                hereof,
                Franchisor and Franchisee each have the right in a proper case to
                seek temporary
                restraining orders and temporary or preliminary injunctive relief
                from a court
                of competent jurisdiction, provided that they must contemporaneously
                submit for
                arbitration on the merits any Dispute required to be arbitrated pursuant
                to
Section 18.A.
                Franchisee and its Affiliates, and their respective officers, directors,
                owners,
                employees, agents and representatives, agree to entry without bond
                of temporary
                and permanent injunctions and orders of specific performance enforcing
                any of
                the provisions of this Agreement. If Franchisor secures any such
                injunction or
                order of specific performance, Franchisee further agrees to pay Franchisor
                an
                amount equal to the aggregate of its costs of obtaining any such
                relief,
                including reasonable attorneys' fees, costs of investigation and
                proof of facts,
                court costs, other litigation expenses and travel and living expenses,
                and any
                damages incurred by Franchisor as a result of any breach.

               

              18.E. CONSENT
                TO JURISDICTION.

               

              Subject
                to the arbitration provisions of this Agreement and the provisions
                below,
                Franchisee and the Owners agree that all litigation proceedings arising
                under
                this Agreement or otherwise as a result of the relationship between
                Franchisee
                and Franchisor must be commenced in the state, and in the state or
                federal court
                of general jurisdiction closest to, where Franchisor's principal
                office then is
                located, and Franchisee (and the Owners) irrevocably submit to the
                jurisdiction
                of those courts and waive any objection Franchisee (or the Owners)
                might have to
                either the jurisdiction of or venue in those courts. Nonetheless,
                you and the
                Owners agree that Franchisor may enforce this Agreement and any arbitration
                orders and awards in the courts of the state or states in which Franchisee
                is
                domiciled or the Outlet is located.

               

              18.F. COSTS
                AND ATTORNEYS' FEES.

               

              If
                Franchisor incurs expenses due to Franchisee's failure to pay when
                due amounts
                owed to Franchisor, to submit when due any reports, information,
                or supporting
                records, or otherwise to comply with this Agreement, Franchisee agrees,
                whether
                or not Franchisor initiates a legal proceeding, to reimburse Franchisor
                for all
                of the costs and expenses incurred by Franchisor, including, without
                limitation,
                reasonable accounting, attorneys’, arbitrators’, and related fees.

               

              18.G. WAIVER
                OF PUNITIVE DAMAGES AND JURY TRIAL.

               

              Except
                in
                connection with claims by third parties for which a party is entitled
                to
                indemnification pursuant to this Agreement and claims Franchisor
                brings against
                Franchisee for unauthorized use of the Marks or unauthorized use
                or disclosure
                of any Confidential Information, Franchisor and Franchisee waive
                to the fullest
                extent permitted by law any right to or claim for any multiple, punitive
                or
                exemplary damages against the other and agree that, in the event
                of a dispute
                between them, the party making a claim will be limited to equitable
                relief and
                to recovery of any actual damages it sustains. Franchisor and Franchisee
                irrevocably waive trial by jury in any action, proceeding, or counterclaim,
                whether at law or in equity, brought by either of them.

               

              18.H. LIMITATION
                OF CLAIMS.

               

              Except
                for claims arising from Franchisee's nonpayment or underpayment of
                amounts owed
                to Franchisor or its Affiliates, any and all claims arising out of
                or relating
                to this Agreement or Franchisor's relationship with Franchisee will
                be barred
                unless a proceeding is commenced within one (1) year from the date
                on which the
                party asserting the claim knew or should have known of the facts
                giving rise to
                the claim.

               

              
                
                   

                

                
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              18.I. ENTIRE
                AGREEMENT.

               

              This
                Agreement, together with the Manuals and the documents referred to
                herein, and
                the Exhibits and other attachments hereto, constitute the entire,
                full and
                complete agreement between Franchisor and Franchisee concerning the
                subject
                matter hereof, and supersede all prior agreements, no other representations
                having induced Franchisee to execute this Agreement. No representations,
                inducements, promises, or agreements, oral or otherwise, not embodied
                or
                referenced in this Agreement or attached hereto (unless of subsequent
                date) were
                made by either party, and none shall be of any force or effect with
                reference to
                this Agreement or otherwise. However, nothing in this or any related
                agreement
                is intended to disclaim the representations Franchisor made in the
                Franchise
                Disclosure Document that Franchisor furnished to you. Except as otherwise
                provided in this Agreement (including Franchisor's right to periodically
                implement and modify System Standards and modify the Manual), no
                amendment,
                change or variance from this Agreement shall be binding on either
                party unless
                mutually agreed to by the parties and executed by their authorized
                officers in
                writing. Any policies that Franchisor adopts and implements from
                time to time to
                guide it in its decision-making are subject to change, are not a
                part of this
                Agreement and are not binding on Franchisor.

               

              18.J. NOTICES.

               

              Except
                as
                otherwise provided in this Agreement, all notices, demands, requests,
                consents,
                approvals and other formal communications, required or permitted
                to be given
                hereunder, or which are to be given with respect to this Agreement,
                shall be in
                writing and personally delivered, or sent by facsimile with proof
                of receipt
                (with a confirming copy mailed by registered mail as described herein),
                or sent
                by a recognized overnight courier service, or sent by registered
                mail, postage
                prepaid, return receipt requested, addressed to the party to be so
                notified as
                follows:

               

              
                	
                        If to Franchisee, to:

                      	
                        ________________________________

                        ________________________________

                        ________________________________

                        ________________________________

                        Attention:______________________________________

                                         
                          ______________________________________  

                        Telephone No.:__________________________________

                        Facsimile No.:___________________________________

                      

              

               

              
                
                   

                

                
                  63

                  
                    

                  

                

                
                   

                

              

              

              
                	
                        If to Franchisor, to:

                      	
                        UFood
                          Restaurant Group, Inc.

                        255
                          Washington Street

                        Suite
                          100

                        Newton,
                          Massachusetts 02458

                        Attention:
                          President

                        Telephone
                          No.: (617) 787-6000

                        Facsimile
                          No.: (617) 787-6010

                      

              

               

              Such
                notices and other communications shall be deemed received on the
                date of
                delivery if personally delivered, two (2) business days after sending
                if sent by
                facsimile or overnight courier service, or seven (7) business days
                after sending
                if sent by registered mail.

               

              18.K. SEVERABILITY
                AND SUBSTITUTION OF VALID PROVISIONS.

               

              Except
                as
                expressly provided to the contrary elsewhere herein, each section,
                part, term
                and/or provision of this Agreement shall be considered severable
                and shall be
                construed as independent of any other section, part, term and/or
                provision of
                this Agreement. If, for any reason, all or any part of any section,
                part, term
                and/or provision herein is held to be invalid, unenforceable, or
                in conflict
                with any applicable law by a court or properly convened arbitrators
                having valid
                jurisdiction in an unappealed final decision to which Franchisor
                is a party or
                by which Franchisor may be bound, such holding shall not impair the
                operation
                of, or have any other effect upon, any other section, part, term
                and/or
                provision of this Agreement as may remain otherwise valid and enforceable,
                and
                the latter shall continue to be given full force and effect and bind
                the parties
                hereto, and said invalid or unenforceable sections, parts, terms
                and/or
                provisions shall be deemed limited by construction in scope and effect
                to the
                minimum extent possible to render the same valid and enforceable.

               

              To
                the
                extent that any restrictive covenant contained in this Agreement
                is deemed
                unenforceable because of its scope in terms of area, activity prohibited
                and/or
                length of time, Franchisee and its Owners agree that the unenforceable
                provision
                will be deemed modified or limited to the extent and in the manner
                necessary to
                make that particular provision valid, and to make the obligations
                enforceable to
                the fullest extent possible, under the laws applicable to the covenant's
                validity. If any provision of this Agreement is inconsistent with
                any law
                applicable to this Agreement which requires a greater advance notice
                of
                termination or nonrenewal than is required under this Agreement,
                then both
                parties will comply with the requirements of that law as if they
                were
                substituted for the inconsistent provision(s) of or added to this
                Agreement. If
                any law applicable to this Agreement makes any provision of this
                Agreement
                (including any provision in the Manuals and any System standard)
                invalid or
                unenforceable, then Franchisor will have the right, in its sole discretion,
                to
                modify that provision to the extent necessary to make it valid and
                enforceable.
                Franchisee agrees to be bound by each provision of this Agreement
                to the
                greatest extent to which it may lawfully be bound.

               

              
                
                   

                

                
                  64

                  
                    

                  

                

                
                   

                

              

              18.L. THIRD
                PARTY BENEFICIARIES.

               

              Except
                as
                expressly provided herein, no provision of this Agreement is intended
                or shall
                be construed to provide or create any third party beneficiary right
                or any other
                right of any kind in any customer, Affiliate, insurer, lender, shareholder,
                partner, officer, director, employee or agent of any party hereto,
                or in any
                other Person, and all terms and provisions hereof shall be personal
                solely among
                the parties to this Agreement and their proper successors and
                assigns.

               

              18.M. WAIVERS.

               

              No
                failure by any party hereto to insist upon the strict performance
                of any
                covenant, agreement, term or condition of this Agreement, or to exercise
                any
                right or remedy consequent upon the breach thereof, shall constitute
                a waiver of
                any such breach or any subsequent breach of such covenant, agreement,
                term or
                condition. No covenant, agreement, term or condition of this Agreement,
                and no
                breach thereof, shall be waived, altered or modified except by written
                instrument signed by the party to be charged therewith. No waiver
                of any breach
                of any covenant, agreement, term or provision of this Agreement shall
                affect or
                alter this Agreement, but each and every covenant, agreement, term
                and condition
                of this Agreement shall continue in full force and effect. Any waiver
                granted by
                Franchisor will be without prejudice to any other rights of Franchisor,
                will be
                subject to Franchisor's continuing review, and may be revoked at
                any time and
                for any reason, effective upon delivery of ten (10) days' written
                notice to
                Franchisee.

               

              18.N. NO
                WARRANTIES OR GUARANTEES.

               

              Franchisor
                makes no warranties or guarantees upon which Franchisee may rely,
                and assumes no
                liability or obligation to Franchisee, by providing any waiver, approval,
                consent or suggestion to Franchisee in connection with this Agreement,
                or by
                reason of any delay, or denial of any request therefor.

               

              18.O. FORCE
                MAJEURE.

               

              Neither
                party will be liable for loss or damage or be in breach of this Agreement
                if its
                failure to perform its obligations results from:

               

              (1) compliance
                with the orders, requests, regulations, recommendations, or instructions
                of any
                federal, state, or municipal government or any of its departments
                or
                agencies;

               

              (2) acts
                of
                God;

               

              (3) fires,
                strikes, embargoes, war, or riot; or

               

              (4) any
                other
                similar event or cause.

               

              Any
                delay
                resulting from any of these causes will extend performance accordingly
                or excuse
                performance, in whole or in part, as may be reasonable, except that
                these causes
                will not excuse payments of amounts owed at the time of the occurrence
                or
                payment of Royalty Fees, Systemwide Advertising Fund contributions
                or other fees
                or contributions due afterward pursuant to this Agreement.

               

              
                
                   

                

                
                  65

                  
                    

                  

                

                
                   

                

              

              18.P. ASSIGNMENT.

               

              Subject
                to the restrictions on transfer herein, this Agreement shall be binding
                upon and
                inure to the benefit of, and be enforceable by, the respective heirs,
                legal
                representatives, successors and permitted assigns of the parties
                hereto.

               

              18.Q. CONSTRUCTION.

               

              The
                section and other headings contained herein are for convenience of
                reference
                only and are not intended to define, limit or describe the scope
                or intent of
                any provision of this Agreement. The words "including," "include"
                and other
                words of similar import shall be interpreted to mean "including,
                but not limited
                to."

               

              18.R. COUNTERPARTS.

               

              This
                Agreement may be executed in two or more counterparts, each of which
                shall be
                deemed an original, but all of which together shall constitute one
                and the same
                instrument.

               

              18.S. CUMULATIVE
                REMEDIES.

               

              All
                rights and remedies of the parties hereto are cumulative of each
                other and of
                every other right or remedy such parties may otherwise have at law
                or in equity,
                and the exercise of one or more rights or remedies shall not prejudice
                or impair
                the concurrent or subsequent exercise of other rights or remedies.

               

              18.T. NO
                WITHHOLDING OF PAYMENTS.

               

              Franchisee
                may not withhold payment of any amounts owed to Franchisor or its
                Affiliate on
                the grounds of alleged noncompliance by Franchisor or its Affiliate
                with any of
                its obligations under this Agreement, the Development Agreement or
                any other
                agreement between Franchisor or its Affiliate and Franchisee.

               

              18.U. EXERCISE
                OF BUSINESS JUDGMENT.

               

              Franchisor
                has the right to operate, develop and change the System and System
                Standards in
                any manner that is not specifically prohibited by this Agreement.
                Whenever
                Franchisor has reserved in this Agreement a right to take or withhold
                an action,
                or to grant or decline to grant Franchisee a right to take or omit
                an action,
                Franchisor may, except as otherwise specifically provided in this
                Agreement,
                make its decision or exercise its rights based on the information
                readily
                available to it and its judgment of what is in its or its Affiliates'
                best
                interests and/or the best interests of UFood Outlets as a whole at
                the time the
                decision is made, regardless of whether Franchisor could have made
                other
                reasonable or even arguably preferable alternative decisions or whether
                Franchisor's decision or the action it takes promotes its or its
                Affiliates'
                financial or other individual interest.

               

              
                
                   

                

                
                  66

                  
                    

                  

                

                
                   

                

              

              18.V. ELECTRONIC
                MAIL.

               

              Franchisee
                acknowledges and agrees that exchanging information with Franchisor
                by e-mail is
                efficient and desirable for day-to-day communications and that Franchisor
                and
                Franchisee may utilize e-mail for such communications. Franchisee
                authorizes the
                transmission of e-mail by Franchisor and Franchisor's employees,
                vendors, and
                affiliates ("Official Senders") to Franchisee during the term of
                this
                Agreement.

               

              Franchisee
                further agrees that: (a) Official Senders are authorized to send
                e-mails to
                those of Franchisee's employees as Franchisee may occasionally authorize
                for the
                purpose of communicating with Franchisor; (b) it will cause its officers,
                directors, and employees to give their consent to Official Senders'
                transmission
                of e-mails to them; (c) that it will require such persons not to opt out or
                otherwise ask to no longer receive e-mails from Official Senders
                during the time
                that such person works for or is affiliated with Franchisee; and
                (d) it will not
                opt out or otherwise ask to no longer receive e-mails from Official
                Senders
                during the term of this Agreement.

               

              The
                consent given in this Section 18.V.
                shall
                not apply to the provision of notices by either party under this
                Agreement
                pursuant to Section
                18.J.
                using
                e-mail unless the parties otherwise agree in a written document manually
                signed
                by both parties.

               

              IN
                WITNESS WHEREOF,
                the
                parties hereto have executed and delivered this Agreement in multiple
                originals
                on the day and year first above written. 

               

              
                	
                        UFood
                          Restaurant Group, Inc.,
                          a
                          Nevada corporation

                         

                         

                        By:___________________________________

                        Title:___________________________________

                      	 	
                        [Franchisee]

                        ___________________________________

                         

                        By:___________________________________

                        Title:___________________________________

                      

              

               

              
                
                   

                

                
                  67

                  
                    

                  

                

                
                   

                

              

              JOINDER
                OF OWNERS

              

              In
                consideration of the grant of the rights to Franchisee pursuant to
                the foregoing
                Franchise Agreement, and as an inducement to Franchisor's grant of
                such rights,
                the undersigned Owners hereby agree to be personally bound by all
                provisions of
                the foregoing Franchise Agreement applicable to Owners.

               

              
                	
                        ___________________________________

                        Name:

                        ___________________________________

                        Name:

                      	 	
                        ___________________________________

                        Name:

                        ___________________________________

                        Name:

                      

              

               

              
                
                   

                

                
                  68

                  
                    

                  

                

                
                   

                

              

              

              EXHIBIT A

               

              FRANCHISEE
                ACKNOWLEDGMENTS

              AND
                REPRESENTATIONS STATEMENT

               

              1. Franchisee
                acknowledges that it has read the Franchise Agreement (the "Agreement")
                between UFood Restaurant Group, Inc. ("Franchisor")
                and
                Franchisee dated as of the date hereof and Franchisor's Franchise
                Disclosure
                Document in their entirety and that it understands and accepts the
                terms,
                conditions, and covenants contained in the Agreement as being reasonably
                necessary to maintain Franchisor's high standards of quality and
                service at
                UFood Outlets and to protect and preserve the goodwill of the Marks.
                (Capitalized terms not defined herein shall have the respective meanings
                set
                forth in the Agreement.) Franchisee acknowledges that: (1) Franchisor
                delivered and Franchisee received a copy of Franchisor's Franchise
                Disclosure
                Document at the earlier of fourteen (14) calendar days prior to the
                execution of
                the Agreement or the payment of any consideration by Franchisee in
                connection
                with the transaction contemplated in the Agreement; and (2) Franchisor
                delivered and Franchisee received the Agreement in form for execution
                at least
                seven (7) calendar days prior to the execution of the Agreement.

               

              2. Franchisee
                acknowledges that the food service and nutritional supplement businesses
                are
                highly competitive, with often challenging market conditions. Franchisee
                acknowledges that it has conducted an independent investigation of
                the business
                venture contemplated by the Agreement and recognizes that, like any
                other
                business, the nature of the business conducted by UFood Outlets may
                change over
                time, that an investment in a UFood Outlet involves business risks
                and that the
                success of the venture is largely dependent upon the business abilities
                and
                efforts of Franchisee. Franchisee acknowledges and agrees that it
                is not
                entering into this Agreement as a result of any representations about
                Franchisor
                made by Franchisor’s shareholders, officers, directors, members, employees,
                agents, representatives, independent contractors, franchisees or
                area developers
                that are contrary to the terms set forth in this Agreement or in
                any disclosure
                document, prospectus or any similar document required or permitted
                to be given
                to you pursuant to applicable law.

               

              3. Franchisee
                acknowledges and agrees that Franchisor may (at its option) also
                allow
                variations between developers and franchisees in the areas of trademarks,
                trade
                dress, operation items or other aspects of UFood Outlets. Franchisee
                acknowledges and agrees that only Franchisor may determine what variations
                Franchisee may use and that Franchisee will in any event conform
                strictly to the
                standards, specifications, operating procedures and rules which Franchisor
                establishes for the Outlet.

               

              Franchisee
                understands and accepts that, over time during the term of the Agreement,
                Franchisor will continue to develop and refine various aspects of
                the System and
                that as products, services, operating procedures, trade dress and
                other
                refinements are introduced, Franchisor may, at its option, cease
                to allow some
                or all of the variations and may require uniformity among UFood Outlets
                as to
                aspects for which Franchisor had previously allowed variations. Franchisee
                acknowledges and agrees that this may mean that Franchisee may be
                required, for
                example, to change one or more of (a) the trademarks and/or service
                marks
                Franchisee uses; (b) the trade dress or operational procedures Franchisee
                uses;
                or (c) other aspects of the Outlet, whether already developed, under
                development
                or to be developed. Some or all of these changes may require Franchisee
                to make
                substantial additional capital expenditures. Franchisee acknowledges
                and agrees
                that Franchisor may discontinue any of the variations which it had
                previously
                allowed Franchisee to utilize and that Franchisee will conform to
                all required
                local, regional and/or national standards, specifications, operating
                procedures
                and requirements which Franchisor may establish from time to time
                even if it
                means substantial additional expense for Franchisee.

               

              
                
                   

                

                
                  A-1

                  
                    

                  

                

                
                   

                

              

              4. Franchisee
                acknowledges that other area developers and franchisees of Franchisor
                and its
                Affiliates have been and/or might be granted rights similar to those
                granted to
                Franchisee under the Agreement at different times and locations,
                under different
                market and economic conditions, and in different situations. Franchisee
                therefore acknowledges that the economic and other terms and conditions
                of such
                rights might vary substantially in form and substance from those
                granted under
                the Agreement.

               

              5. Franchisee
                acknowledges that, except as expressly set forth in Franchisor's
                Franchise
                Disclosure Document:

               

              (A) neither
                Franchisor nor any officer, director, employee, agent, representative
                or
                Affiliate thereof has made any representations or statements of actual,
                average,
                projected or forecasted sales, profits, earnings, cash flow or costs
                with
                respect to any UFood Outlets;

               

              (B) neither
                Franchisor's sales personnel nor any employee, officer, director,
                agent,
                representative or Affiliate thereof is authorized to make any claims
                or
                statements as to the sales, profits, earnings, cash flow, costs or
                prospects or
                chances of success that any developer or franchisee can expect or
                that present
                or past franchisees or developers have had; and

               

              (C) Franchisor
                specifically instructs its sales personnel, employees, officers,
                directors,
                agents, representatives and Affiliates that they are not permitted
                to make such
                claims or statements as to the sales, profits, earnings, cash flow,
                costs or the
                prospects or chances of success, nor are they authorized to represent
                or
                estimate amounts of sales, profits, earnings, cash flow, costs or
                other measures
                as to any aspect of the operation of UFood Outlets.

               

              Franchisor
                recommends that applicants for UFood Outlet franchises make their
                own
                investigations and determine whether or not a UFood Outlet is profitable.
                Franchisor will not be bound by any unauthorized representations
                as to
                Franchisee's sales, profits, earnings, cash flow, costs or prospects
                or chances
                of success. Franchisor recommends that each applicant for a UFood
                Outlet
                franchise consult with an attorney of its choosing and further be
                represented by
                legal counsel at the time of closing of the purchase of its franchise.
                Franchisee acknowledges that it has had ample opportunity to consult
                with legal
                counsel and other professional advisors. Franchisee acknowledges
                that it has not
                received or relied on any representations about the rights granted
                under the
                Agreement by Franchisor, or its sales personnel, employees, officers,
                directors,
                agents, representatives or Affiliates, that are contrary to the statements
                made
                in Franchisor's Franchise Disclosure Document or to the terms of
                the Agreement
                or this Statement.  

               

              
                
                   

                

                
                  A-2

                  
                    

                  

                

                
                   

                

              

              6. Franchisee
                acknowledges that in all of Franchisor's dealings with Franchisee,
                the officers,
                directors, employees, and agents of Franchisor act only in a representative
                capacity and not in an individual capacity. Franchisee further acknowledges
                that
                the Agreement, and all business dealings between Franchisee and such
                individuals
                as a result of the Agreement, are solely between Franchisee and
                Franchisor.

               

              7. Franchisee
                acknowledges that Franchisor has the right to restrict Franchisee’s sources of
                Proprietary Products to Franchisor or its affiliates and that Franchisor
                has the
                right to restrict Franchisee’s sources of other goods and services as well, as
                provided in the Agreement.

               

              8. Franchisee
                represents to Franchisor, as an inducement to its entry into the
                Agreement, that
                neither Franchisee nor its Owners have made any misrepresentations
                in obtaining
                the Franchise.

               

              9. If
                Franchisee is a legal entity, Franchisee:

               

              (A) represents
                that it is duly organized and validly existing in good standing under
                the laws
                of the jurisdiction of its organization, is qualified to do business
                in all
                jurisdictions in which its business activities or the nature of properties
                owned
                by Franchisee requires such qualification, and has the authority
                to execute and
                deliver the Agreement and perform all of Franchisee's obligations
                under the
                Agreement; and

               

              (B) agrees
                that all certificates representing Ownership Interests in Franchisee
                now
                outstanding or hereafter issued will be endorsed with a legend in
                form approved
                by Franchisor reciting that the transfer of Ownership Interests in
                Franchisee is
                subject to restrictions contained in the Agreement.

               

              10. Franchisee,
                whether or not a legal entity, represents and warrants that Franchisee
                is not
                subject to any restriction, agreement, contract, commitment, law,
                judgment or
                decree which would prohibit or be breached or violated by Franchisee's
                execution
                and delivery of the Agreement or performance of its obligations thereunder.
                At
                Franchisor's request, Franchisee shall furnish an opinion of counsel
                to
                Franchisor, in form and substance satisfactory to Franchisor, to
                the effect that
                the Agreement is a valid and binding agreement of Franchisee, enforceable
                against Franchisee in accordance with its terms, and that Franchisee
                is not
                subject to any restriction, agreement, law, judgment or decree which
                would
                prohibit or be violated by Franchisee's execution and delivery of
                the Agreement
                and performance of its obligations thereunder.

               

              11. Franchisee
                further represents and warrants that all Owners of Franchisee and
                their
                interests therein are completely and accurately listed in Exhibit C to
                the
                Agreement and covenants that Franchisee will make, execute and deliver
                to
                Franchisor such revisions thereto as may be necessary during the
                term of the
                Agreement to reflect any changes in the information contained
                therein.

               

              
                
                   

                

                
                  A-3

                  
                    

                  

                

                
                   

                

              

              12. Franchisee
                represents and warrants that its domicile is as set forth below:

              ___________________________________

              Address

              ___________________________________

              City
                and
                State

              

              
                	 	 	
                        [Franchisee]

                        ___________________________________

                         

                        By:_________________________________

                        Name:_______________________________

                        Title:___________________________________

                         

                        Date:___________________________________

                      

              

              
                
                   

                

                
                  A-4

                  
                    

                  

                

                
                   

                

              

              EXHIBIT
                B

               

              IDENTITY
                OF DEVELOPER AND

              DATE
                OF DEVELOPMENT AGREEMENT

               

              The
                date
                of the Development Agreement and the identity of the Developer under
                the
                Development Agreement are as follows:

               

              ___________________________________

              DEVELOPER

               

              ___________________________________

              DATE

               

              
                	
                        UFood
                          Restaurant Group, Inc.,
                          a
                          Nevada corporation

                         

                         

                        By:___________________________________

                        Title:__________________________________

                      	 	
                        [Franchisee]

                        ______________________________________

                         

                        By:____________________________________

                        Title:___________________________________

                      

              

               

              
                
                   

                

                
                  B-1

                  
                    

                  

                

                
                   

                

              

              

              EXHIBIT
                C

               

              OWNERS

               

              Listed
                below is the full name and mailing address of each Person who is
                an Owner of
                Franchisee and a description of the nature and amount of such Owner's
                direct or
                indirect equity or voting interest in Franchisee:

               

              ____________ (Initial
                here if the following statement is applicable and do not complete
                the rest of
                this exhibit.)
                The
                Owners of Franchisee and their respective equity and voting interests
                in
                Franchisee are the same as indicated in the Development Agreement
                with respect
                to the Owners and their interests in Developer.

               

              
                	
                        Name:________________________________________

                        Address:______________________________________

                        ______________________________________

                        
                          ______________________________________

                          
                            ______________________________________

                             

                          

                        

                      	 	
                        Number
                          of Ownership Interests Owned:______________

                        %
                          of Total Ownership Interests:____________________

                        Number
                          of Ownership Interests Owner is Entitled

                        to
                          Vote:________________________________________

                        Other
                          Interest (Describe):__________________________

                        _______________________________________

                      
	 	 	 
	
                        
                          Name:________________________________________

                          Address:______________________________________

                          ______________________________________

                          
                            ______________________________________

                            
                              ______________________________________

                               

                            

                          

                        

                      	 	
                        
                          Number
                            of Ownership Interests Owned:______________

                          %
                            of Total Ownership Interests:____________________

                          Number
                            of Ownership Interests Owner is Entitled

                          to
                            Vote:________________________________________

                          Other
                            Interest (Describe):__________________________

                          _______________________________________

                        

                      
	 	 	 
	
                        
                          Name:________________________________________

                          Address:______________________________________

                          ______________________________________

                          
                            ______________________________________

                            
                              ______________________________________

                               

                            

                          

                        

                      	 	
                        
                          Number
                            of Ownership Interests Owned:______________

                          %
                            of Total Ownership Interests:____________________

                          Number
                            of Ownership Interests Owner is Entitled

                          to
                            Vote:________________________________________

                          Other
                            Interest (Describe):__________________________

                          _______________________________________

                        

                      
	 	 	 
	
                        
                          Name:________________________________________

                          Address:______________________________________

                          ______________________________________

                          
                            ______________________________________

                            
                              ______________________________________

                               

                            

                          

                        

                      	 	
                        
                          Number
                            of Ownership Interests Owned:______________

                          %
                            of Total Ownership Interests:____________________

                          Number
                            of Ownership Interests Owner is Entitled

                          to
                            Vote:________________________________________

                          Other
                            Interest (Describe):__________________________

                          _______________________________________

                        

                      

              

               

              
                
                   

                

                
                  C-1

                  
                    

                  

                

                
                   

                

              

              

              
                	
                        UFood
                          Restaurant Group, Inc.,
                          a
                          Nevada corporation

                         

                         

                        
                          By:___________________________________

                          Title:__________________________________

                        

                      	 	
                        [Franchisee]

                        _____________________________________

                         

                        By:___________________________________

                        Title:__________________________________

                      

              

              
                
                   

                

                
                  C-2

                  
                    

                  

                

                
                   

                

              

              EXHIBIT
                D

               

              SITE,
                FEES AND TERRITORY

               

              1. Site.
                The
                Site of the Outlet is as follows:

               

              2. Territory.
                The
                Territory is as follows:

               

              3. Initial
                Franchise Fee.
                The
                Initial Franchise Fee is Thirty-Five Thousand Dollars ($35,000).

               

              
                	
                        UFood
                          Restaurant Group, Inc.,
                          a
                          Nevada corporation

                         

                        By:__________________________________

                        
                          Title:_________________________________

                        

                      	 	
                         

                         

                        ____________________________________

                        [Franchisee]

                         

                        By:__________________________________

                        Title:_________________________________

                      

              

              
                
                   

                

                
                  D-1

                  
                    

                  

                

                
                   

                

              

              EXHIBIT
                E

               

              GUARANTY
                AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS

               

              THIS
                GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS
                is given
                this               
                 day
                of                  
                ,
                200__,
                by the undersigned.

               

              
                	Franchisee:  	_____________________________________________
	
                         

                        Date
                          of Franchise Agreement: 

                      	_____________________________________________ 

              

               

              In
                consideration of, and as an inducement to, the execution of the UFood
                Franchise
                Agreement dated as indicated above (the "Franchise
                Agreement")
                by
                UFood Restaurant Group, Inc. ("Franchisor"),
                each
                of the undersigned and any other parties who sign counterparts of
                this guaranty
                (referred to herein individually as a "Guarantor"
                and
                collectively as "Guarantors")
                hereby
                personally and unconditionally: (a) guarantees to Franchisor, and its
                successors and assigns, for the term of the Franchise Agreement and
                thereafter
                as provided in the Franchise Agreement, that Franchisee shall punctually
                pay and
                perform each and every undertaking, agreement and covenant set forth
                in the
                Franchise Agreement; and (b) agrees to be personally bound by, and
                personally liable for the breach of, each and every provision in
                the Franchise
                Agreement as if the undersigned were a signatory to the Franchise
                Agreement,
                both monetary obligations and other obligations, including, without
                limitation,
                arbitration obligations, the obligation to pay costs and legal fees
                as provided
                in the Franchise Agreement, and the obligation to take or refrain
                from taking
                specific actions or to engage or refrain from engaging in specific
                activities
                (including, without limitation, the provisions of the Franchise Agreement
                relating to competitive activities).

               

              Each
                Guarantor waives:

               

              (1) acceptance
                and notice of acceptance by Franchisor of the foregoing undertakings;
                

               

              (2) notice
                of
                demand for payment of any indebtedness or nonperformance of any obligations
                hereby guaranteed; 

               

              (3) protest
                and notice of default to any party with respect to the indebtedness
                or
                nonperformance of any obligations hereby guaranteed; 

               

              (4) any
                right
                such Guarantor might have to require that an action be brought against
                Franchisee or any other Person as a condition of liability; and

               

              (5) any
                and
                all other notices and legal or equitable defenses to which such Guarantor
                might
                be entitled.

               

              
                
                   

                

                
                  E-1

                  
                    

                  

                

                
                   

                

              

              Each
                Guarantor consents and agrees that:

               

              (A) such
                Guarantor's direct and immediate liability under this Guaranty shall
                be joint
                and several not only with Franchisee, but also among the Guarantors
                and other
                guarantors of Franchisee's obligations; 

               

              (B) such
                Guarantor shall render any payment or performance required under
                the Franchise
                Agreement upon demand; 

               

              (C) such
                liability shall not be contingent or conditioned upon pursuit by
                Franchisor of
                any remedies against Franchisee or any other Person; 

               

              (D) such
                liability shall not be diminished, relieved or otherwise affected
                by any
                subsequent rider or amendment to the Franchise Agreement or by any
                extension of
                time, credit or other indulgence which Franchisor may from time to
                time grant to
                Franchisee or to any other person, including, without limitation,
                the acceptance
                of any partial payment or performance, or the compromise or release
                of any
                claims, none of which shall in any way modify or amend this Guaranty,
                which
                shall be continuing and irrevocable throughout the term of the Franchise
                Agreement and for so long thereafter as there are any monies or obligations
                owing to Franchisor under the Franchise Agreement; and

               

              (E) the
                written acknowledgment of Franchisee, accepted in writing by Franchisor,
                or the
                judgment of any court or arbitration panel of competent jurisdiction
                establishing the amount due from Franchisee shall be conclusive and
                binding on
                the undersigned as Guarantors.

               

              If
                Franchisor is required to enforce this Guaranty in a judicial or
                arbitration
                proceeding, and prevails in such proceeding, it shall be entitled
                to
                reimbursement of its costs and expenses, including, but not limited
                to,
                reasonable accountants', attorneys', attorneys' assistants', arbitrators'
                and
                expert witness fees, costs of investigation and proof of facts, court
                costs,
                other litigation expenses and travel and living expenses, whether
                incurred prior
                to, in preparation for or in contemplation of the filing of any such
                proceeding.
                If Franchisor is required to engage legal counsel in connection with
                any failure
                by the undersigned to comply with this Guaranty, the Guarantors shall
                reimburse
                Franchisor for any of the above-listed costs and expenses incurred
                by
                it.

               

              Each
                of
                the undersigned Guarantors represents and warrants that, if no signature
                appears
                below for such Guarantor's spouse, such Guarantor is either not married
                or, if
                married, is a resident of a state which does not require the consent
                of both
                spouses to encumber the assets of the Guarantor's marital estate.

               

              This
                Guaranty, the rights and obligations of the Guarantors and the Franchisor,
                and
                the relationship of the Guarantors and the Franchisor shall be governed
                by, and
                construed and enforced in accordance with, the laws of the State
                of Nevada,
                without regard to its conflicts of laws principles.

               

              
                
                   

                

                
                  E-2

                  
                    

                  

                

                
                   

                

              

              IN
                WITNESS WHEREOF,
                each
                Guarantor has hereunto affixed his signature on the same day and
                year as the
                Franchise Agreement was executed.

               

              
                	
                        Print
                          Name:_______________________

                      	 	
                        Print
                          Spouse's Name:__________________

                      
	
                        Signature:________________________

                      	 	
                        Signature:___________________________

                      
	 	 	 
	
                        Print
                          Name:______________________

                      	 	
                        Print
                          Spouse's Name:__________________

                      
	
                        Signature:________________________

                      	 	
                        Signature:___________________________

                      

              

               

              
                
                   

                

                
                  E-3

                  
                    

                  

                

                
                   

                

              

              

              EXHIBIT
                F

               

              CONFIDENTIALITY
                AND NON-COMPETITION AGREEMENT

              (Franchise
                Agreement Form)

               

              THIS
                AGREEMENT
                (the
                "Agreement") is made and entered into as of this _____ day of _____________,
                20___ (the “Effective Date”), by and among COVENANTOR (defined below), UFood
                Restaurant Group, Inc., a corporation organized under the laws of
                the State of
                Nevada, U.S.A. ("COMPANY") and ___________________________________________,
                a
                ______________________________ (“FRANCHISEE”).

               

              
                	"COVENANTOR": 	__________________________________________________________________________________________

              

               

              
                	Address: 	__________________________________________________________________________________________________  
	 	__________________________________________________________________________________________________ 
	 	__________________________________________________________________________________________________ 

              

               

              
                	
                        1.

                      	
                        
                          PREAMBLES.

                        

                      

              

               

              COMPANY
                has signed or intends to sign a franchise agreement with FRANCHISEE
                (the
                "Franchise Agreement"), under which COMPANY grants to FRANCHISEE
                certain rights
                with regard to the operation a retail outlet offering food service
                featuring
                low-fat, low-carbohydrate and low-calorie food items selected beverages
                and
                nutritional products under the trademark “UFoodÔ”
(“UFood
                Outlets”). Before allowing COVENANTOR to have access to the Confidential
                Information (defined below), and as a material requirement necessary
                to protect
                COMPANY's proprietary rights in and FRANCHISEE's right to use the
                Confidential
                Information, COMPANY and FRANCHISEE require that COVENANTOR enter
                into this
                Agreement.

               

              To
                induce
                COMPANY to enter into the Franchise Agreement and/or to avoid a material
                breach
                thereof, as the case may be, COMPANY, FRANCHISEE and COVENANTOR desire
                that
                COVENANTOR enter into this Agreement. Furthermore, due to the nature
                of
                COMPANY's and FRANCHISEE's business, any use or disclosure of the
                Confidential
                Information other than in accordance with this Agreement will cause
                COMPANY and
                FRANCHISEE substantial harm.

               

              
                	
                        2.

                      	
                        
                          DEFINITIONS.

                        

                      

              

               

              The
                following terms shall have the meanings set forth below:

               

              (a.) “Affiliate”:
                With
                respect to any Person, a Person which, directly or indirectly, through
                one or
                more intermediaries, controls or is controlled by, or is under common
                control
                with, the Person specified. For all purposes hereof, the term "control"
                means
                the possession, directly or indirectly, of the power to direct or
                to cause the
                direction of the management and policies of any Person, or the power
                to veto
                major policy decisions of any Person, whether through the ownership
                of voting
                securities by contract, or otherwise.

               

              
                
                   

                

                
                  F-1

                  
                    

                  

                

                
                   

                

              

              (b.) “Competitive
                Business”:
                A
                business or enterprise, other than a UFood Outlet operated by Franchisor,
                by an
                Affiliate of Franchisor or pursuant to a valid franchise agreement
                with
                Franchisor or one of its Affiliates, that:

               

              (1) derives
                twenty-five percent (25%) or more of its total revenue from the sale
                of food
                items and/or beverages that are marketed as low-fat and/or low-carbohydrate
                or
                low-calorie;

               

              (2) derives
                five percent (5%) or more of its total revenue from the sale of Nutritional
                Products; or

               

              (3) grants
                or
                has granted franchises or licenses, or establishes or has established
                joint
                ventures, for the development and/or operation of one or more businesses
                or
                enterprises of a type described in either clause (1) or (2),
                above.

               

              (c.) "Confidential
                Information":
                Certain confidential and proprietary information and trade secrets,
                including,
                but not limited to, the following categories of information, methods,
                techniques, procedures and knowledge developed or to be developed
                by COMPANY,
                its Affiliates, and/or developers and franchisees related to the
                development and
                operation of UFood Outlets: 

               

              (1) site
                selection criteria; 

               

              (2) standards,
                specifications, operating procedures and other methods, techniques,
                requirements, equipment, recipes, policies, information, concepts
                and systems
                relating to, and knowledge of and experience in, the development,
                operation and
                franchising of UFood Outlets; 

               

              (3) marketing
                research and advertising, marketing and promotional programs for
                UFood
                Outlets;

               

              (4) knowledge
                concerning the logic, structure and operation of the Computer System
                (as defined
                in the Franchise Agreement) components and the Specified Software
                (as defined in
                the Franchise Agreement), and all additions, modifications and enhancements
                thereof, all data generated from use of the Computer System and Specified
                Software, and the logic, structure and operation of the database
                file structures
                containing such data and all additions, modifications and enhancements
                thereof;

               

              (5) specifications
                for and knowledge of suppliers of Nutritional Products and other
                assets,
                products and supplies used at or sold from UFood Outlets; 

               

              
                
                   

                

                
                  F-2

                  
                    

                  

                

                
                   

                

              

              (6) information
                concerning customers, customer lists, operating results, financial
                performance
                and other data of UFood Outlets (other than operating results, financial
                performance and other financial data of the Outlet); 

               

              (7) the
                Manuals (as defined in the Franchise Agreement);

               

              (8) employee
                selection procedures, training and staffing levels; and 

               

              (9) the
                terms
                and conditions of the Franchise Agreement.

               

              (d.) “Immediate
                Family”:
                (1) The spouse of an individual; (2) the natural and adoptive parents
                and natural and adopted children and siblings of such individual
                and their
                spouses; and (3) the natural and adoptive parents and natural and adopted
                children and siblings of the spouse of such individual.

               

              (e.) “Person”:
                An
                individual, corporation, partnership, joint venture, association,
                limited
                liability company, trust, unincorporated association, other business
                entity, or
                governmental entity (or subdivision thereof).

               

              (f.) “Termination
                Event”:
                The
                first to occur of: (a) termination or expiration of the Franchise Agreement
                without extension or renewal; or (b) the date as of which COVENANTOR is
                neither an owner nor an employee of FRANCHISEE.

               

              (g.) "Transfer":
                The
                transfer by FRANCHISEE of the Franchise Agreement, provided that
                such transfer
                is made in compliance with the terms of the Franchise Agreement.

               

              
                	
                        3.

                      	
                        
                          PROTECTION
                            OF CONFIDENTIAL
                            INFORMATION.

                        

                      

              

               

              COVENANTOR
                agrees to use the Confidential Information only to the extent reasonably
                necessary to perform his or her duties on behalf of FRANCHISEE, taking
                into
                consideration the confidential nature of the Confidential Information.
                COVENANTOR may disclose the Confidential Information only as agent
                for
                FRANCHISEE. COVENANTOR acknowledges and agrees that neither COVENANTOR
                nor any
                other person or entity will acquire any interest in or right to use
                the
                Confidential Information under this Agreement or otherwise other
                than the right
                to utilize it as authorized in this Agreement, and that the unauthorized
                use or
                duplication of the Confidential Information would be detrimental
                to COMPANY and
                FRANCHISEE and would be a breach of COVENANTOR's obligations of confidentiality
                and an unfair method of competition with COMPANY and its Affiliates,
                FRANCHISEE
                and other UFood Outlets owned by COMPANY, its Affiliates, developers
                and
                franchisees.

               

              COVENANTOR
                acknowledges and agrees that the Confidential Information is confidential
                to and
                a valuable asset of COMPANY. The Confidential Information will be
                disclosed to
                COVENANTOR solely on the condition that COVENANTOR agrees to the
                terms and
                conditions of the Agreement. COVENANTOR therefore agrees that, during
                the term
                of the Franchise Agreement and thereafter, he or she: (a) will not use the
                Confidential Information in any other business or capacity; (b) will
                maintain the absolute confidentiality of the Confidential Information;
                (c) will not make unauthorized copies of any portion of the Confidential
                Information disclosed or recorded in written or other form; and (d) will
                adopt and implement all reasonable procedures prescribed from time
                to time by
                COMPANY and FRANCHISEE to prevent unauthorized use or disclosure
                of or access to
                the Confidential Information.

               

              
                
                   

                

                
                  F-3

                  
                    

                  

                

                
                   

                

              

              Notwithstanding
                anything to the contrary contained in this Agreement, the restrictions
                on
                COVENANTOR's disclosure and use of the Confidential Information shall
                not apply
                to the following: (a) information, methods, procedures, techniques and
                knowledge which are or become generally known or easily accessible
                other than by
                COVENANTOR's breach of an obligation of confidentiality; and (b) the
                disclosure of the Confidential Information pursuant to applicable
                law or in
                judicial or administrative proceedings to the extent that COVENANTOR
                is legally
                compelled or required by a regulatory body to disclose such information,
                provided COVENANTOR has notified COMPANY and FRANCHISEE prior to
                disclosure and
                shall have used its best efforts to obtain, and shall have given
                COMPANY and
                FRANCHISEE the opportunity to obtain, an appropriate assurance reasonably
                satisfactory to COMPANY of confidential treatment for the information
                required
                to be so disclosed.

               

              
                	
                        4.

                      	
                        
                          IN-TERM
                            RESTRICTIVE
                            COVENANTS.

                        

                      

              

               

              COVENANTOR
                acknowledges and agrees that COMPANY and FRANCHISEE would be unable
                to protect
                the Confidential Information against unauthorized use or disclosure
                if persons
                authorized to use the Confidential Information (or members of their
                Immediate
                Families) were permitted to engage in similar, competing businesses.
                COVENANTOR
                therefore agrees that from the Effective Date until the earlier of
                a Termination
                Event or a Transfer, neither COVENANTOR nor any member of the Immediate
                Family
                of COVENANTOR, shall directly or indirectly:

               

              (a.) have
                any
                controlling or non-controlling interest as a record or beneficial
                owner in any
                Competitive Business, wherever located or operating, provided that
                this
                restriction shall not apply to the ownership of shares of a class
                of securities
                listed on a stock exchange or traded on the over-the-counter market
                and quoted
                on a national inter-dealer quotation system that represent less than
                one-half
                percent (0.5%) of the number of shares of that class of securities
                issued and
                outstanding; 

               

              (b.) perform
                services as a director, officer, manager, employee, consultant, representative,
                agent, or otherwise for any Competitive Business, wherever located
                or operating;

               

              (c.) directly
                or indirectly loan any money or other thing of value to, guarantee
                any loan to,
                lease any personal or real property to, or permit the use of its
                name in
                connection with, any Competitive Business or any owner, director,
                officer,
                manager, employee or agent of any Competitive Business, wherever
                located or
                operating; 

               

              (d.) divert
                or
                attempt to divert any actual or potential business or customers of
                any Developer
                Outlet or any other UFood Outlets to any Competitive Business; or

               

              (e.) employ
                or
                seek to employ any individual who is employed by Franchisor, an Affiliate
                of
                Franchisor or any other developer or franchisee of a UFood Outlet,
                or otherwise
                directly or indirectly induce any such individual to leave said employment,
                without the prior written consent of such individual's employer.

               

              
                
                   

                

                
                  F-4

                  
                    

                  

                

                
                   

                

              

              
                	
                        5.

                      	
                        
                          RESTRICTIVE
                            COVENANT UPON TERMINATION OR EXPIRATION OF THE FRANCHISE
                            AGREEMENT OR OF
                            COVENANTOR'S ASSOCIATION WITH
                            FRANCHISEE.

                        

                      

              

               

              Upon
                the
                earlier of a Termination Event or a Transfer, COVENANTOR agrees that
                for a
                period of eighteen (18) months commencing on the effective date of
                a Termination
                Event or a Transfer, as applicable, neither COVENANTOR nor any member
                of the
                Immediate Family of COVENANTOR shall directly or indirectly:

               

              (1) have
                any
                controlling or non-controlling interest as a record or beneficial
                owner in any
                Competitive Business located or operating: (a) at the Site (as defined in
                the Franchise Agreement); (b) within a five (5) mile radius of the Site;
                (c) within a five (5) mile radius of any other UFood Outlet in operation
                or
                under development on the effective date of termination or expiration
                of this
                Agreement; or (d) within the Territory as defined in the Franchise
                Agreement or within five (5) miles of the boundary of the Territory;
                

               

              (2) perform
                services as a director, officer, manager, employee, consultant, representative,
                agent or otherwise for any Competitive Business located or operating:
                (a) at the Site; (b) within a five (5) mile radius of the Site;
                (c) within a five (5) mile radius of any other UFood Outlet in operation
                or
                under development on the effective date of termination or expiration
                of this
                Agreement; or (d) within the Territory or within five (5) miles of the
                boundary of the Territory; 

               

              (3) directly
                or indirectly loan any money or other thing of value to, guaranty
                any loan to,
                lease any personal or real property to, or permit the use of its
                name in
                connection with, any Competitive Business located or operating: (a) at the
                Site; (b) within a five (5) mile radius of the Site; (c) within a five
                (5) mile radius of any other UFood Outlet in operation or under development
                on
                the effective date of termination or expiration of this Agreement;
                or
                (d) within the Territory or within five (5) miles of the boundary of
                the
                Territory;

               

              (4) divert
                or
                attempt to divert any actual or potential business or customers of
                any UFood
                Outlet to any Competitive Business, wherever located or operating;
                or

               

              (5) employ
                or
                seek to employ any individual who is employed by Franchisor, its
                Affiliate or
                any developer or franchisee of a UFood Outlet, or otherwise directly
                or
                indirectly induce or attempt to induce any such individual to leave
                said
                employment, without the prior written consent of such individual's
                employer.

               

              
                
                   

                

                
                  F-5

                  
                    

                  

                

                
                   

                

              

              The
                restrictions of Subparagraph (1)
                of this
Paragraph 5
                will not
                be applicable to the ownership of shares of a class of securities
                listed on a
                stock exchange or traded on the over-the-counter market and quoted
                on a national
                inter-dealer quotation system that represent less than one-half percent
                (0.5%)
                of the number of shares of that class of securities issued and
                outstanding.

               

              COVENANTOR
                agrees that the restrictive covenants set forth in Paragraphs 4 and 5 of
                this Agreement are reasonable. If any court or tribunal of competent
                jurisdiction shall refuse to enforce any such covenant because it
                is more
                extensive than is enforceable, it is expressly understood and agreed
                that such
                covenants shall not be void, but that the restrictions contained
                therein shall
                be deemed reduced to the extent necessary to permit the enforcement
                of such
                covenants.

               

              COVENANTOR
                expressly acknowledges and agrees that COVENANTOR possesses skills
                and abilities
                of a general nature and has opportunities for exploiting such skills.
                Consequently, enforcement of the covenants made in Paragraphs 4 and 5 of
                this Agreement will not deprive COVENANTOR of the ability to earn
                a
                living.

               

              
                	
                        6.

                      	
                        
                          
                            SURRENDER
                              OF
                              DOCUMENTS.

                          

                        

                      

              

               

              COVENANTOR
                agrees that, as of the earlier of a Transfer or a Termination Event,
                as
                applicable, COVENANTOR shall immediately cease to use the Confidential
                Information disclosed to or otherwise learned or acquired by COVENANTOR
                and
                shall return to FRANCHISEE (or to COMPANY if directed by COMPANY)
                all copies of
                the Confidential Information loaned or made available to
                COVENANTOR.

               

              
                	
                        7.

                      	
                        
                          COSTS
                            AND ATTORNEYS'
                            FEES.

                        

                      

              

               

              If
                COMPANY or FRANCHISEE engages legal counsel in connection with any
                failure by
                COVENANTOR to comply with this Agreement, COVENANTOR shall reimburse
                COMPANY
                and/or DEVELOP, as applicable, their reasonable attorneys' fees whether
                incurred
                before, during or after any trial, arbitration or appeal.

               

              
                	
                        8.

                      	
                        
                          WAIVER.

                        

                      

              

               

              Failure
                to insist upon strict compliance with any of the terms, covenants
                or conditions
                hereof shall not be a waiver of such term, covenant or condition,
                nor shall any
                waiver or relinquishment of any right or remedy hereunder at any
                one or more
                times be a waiver of such right or remedy at any other time or
                times.

               

              
                	
                        9.

                      	
                        
                          SEVERABILITY.

                        

                      

              

               

              Each
                provision of this Agreement, and any portion thereof, shall be considered
                severable, and if, for any reason, any such provision is held to
                be invalid or
                contrary to or in conflict with any applicable law or regulation
                in a final,
                unappealable ruling issued by any court, agency or tribunal with
                competent
                jurisdiction in a proceeding which COMPANY is a party, that ruling
                shall not
                have any effect upon, such other portions of this Agreement as may
                remain
                otherwise intelligible, which shall continue to be given full force
                and effect
                and bind the parties hereto, although any portion held to be invalid
                shall be
                deemed not to be a part of this Agreement from the date the time
                for appeal
                expires, if COVENANTOR is a party thereto, otherwise upon COVENANTOR's
                receipt
                of a notice from COMPANY that it will not enforce the provision in
                question.

               

              
                
                   

                

                
                  F-6

                  
                    

                  

                

                
                   

                

              

              
                	
                        10.

                      	
                        
                          RIGHTS
                            OF PARTIES ARE
                            CUMULATIVE.

                        

                      

              

               

              The
                rights of the parties hereunder are cumulative and no exercise or
                enforcement by
                a party hereto of any right or remedy granted hereunder shall preclude
                the
                exercise or enforcement by them of any other right or remedy it may
                have.

               

              
                	
                        11.

                      	
                        
                          BENEFIT.

                        

                      

              

               

              This
                Agreement shall inure to the benefit of and be binding upon the parties
                hereto
                and their respective successors and assigns. In the event COMPANY
                does not sign
                this Agreement (regardless of the reason), COMPANY shall be deemed
                a third party
                beneficiary of this Agreement and shall have the right to enforce this Agreement
                directly.

               

              
                	
                        12.

                      	
                        
                          EFFECTIVENESS.

                        

                      

              

               

              This
                Agreement shall be enforceable and effective when signed by COVENANTOR,
                even if
                COMPANY and FRANCHISEE do not sign this Agreement.

               

              
                	
                        13.

                      	
                        
                          COUNTERPARTS;
                            GOVERNING
                            LANGUAGE.

                        

                      

              

               

              This
                Agreement shall be signed in at least two originals in the English
                language.

               

              
                	
                        14.

                      	
                        
                          GOVERNING
                            LAW.

                        

                      

              

               

              This
                Agreement and the rights and obligations of the parties under this
                Agreement
                shall, by express agreement of the parties, be governed by, and construed
                and
                enforced in accordance with, the laws of the State of Nevada.

               

              [Signature
                Page Follows]

               

              
                
                   

                

                
                  F-7

                  
                    

                  

                

                
                   

                

              

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

               

              
                	
                         

                         

                        ____________________________________________________

                        Print
                          name of COVENANTOR

                         

                        ____________________________________________________

                        Signature
                          of COVENANTOR

                      	 	
                        FRANCHISEE

                         

                        ____________________________________________________

                         

                        By:___________________________________________________

                             Name:_______________________________________________

                             Title:________________________________________________

                      
	 	 	
                         

                        COMPANY

                         

                        UFood
                          Restaurant Group, Inc.

                         

                        
                          By:___________________________________________________

                               Name:_______________________________________________

                               Title:________________________________________________  

                        

                      

              

               

              
                
                   

                

                
                  F-8

                  
                    

                  

                

                
                   

                

              

              

              EXHIBIT
                G

               

              COLLATERAL
                ASSIGNMENT OF TELEPHONE NUMBERS AND LISTINGS

               

              THIS
                ASSIGNMENT
                is
                entered into this ______ day of ________________, 200__, in accordance
                with the
                terms of that certain UFood Franchise Agreement (the "Franchise
                Agreement")
                between _________________________________________________ ("Franchisee")
                and
                UFood Restaurant Group, Inc. ("Franchisor"),
                executed concurrently with this Assignment, under which Franchisor
                granted
                Franchisee the right to own and operate a UFood Outlet located at
                ______________________________ (the "Outlet").

               

              FOR
                VALUE RECEIVED,
                Franchisee hereby assigns to Franchisor all of Franchisee's right,
                title and
                interest in and to those certain telephone numbers and regular, classified
                or
                other telephone directory listings (collectively, the "Telephone
                Numbers and Listings")
                associated with Franchisor's trademarks and service marks and used
                from time to
                time in connection with the operation of the Outlet. This Assignment
                is for
                collateral purposes only and, except as specified herein, Franchisor
                shall have
                no liability or obligation of any kind whatsoever arising from or
                in connection
                with this Assignment, unless Franchisor shall notify the telephone
                company
                and/or the listing agencies with which Franchisee has placed telephone
                directory
                listings (all such entities are collectively referred to herein as
                the
                "Telephone
                Company")
                to
                effectuate the assignment pursuant to the terms hereof.

               

              Upon
                termination or expiration of the Franchise Agreement (without renewal
                or
                extension), Franchisor shall have the right and is hereby empowered
                to
                effectuate the assignment of the Telephone Numbers and Listings,
                and, in such
                event, Franchisee shall have no further right, title or interest
                in the
                Telephone Numbers and Listings, but shall remain liable to the Telephone
                Company
                for all past due fees owing to the Telephone Company on or before
                the effective
                date of the assignment hereunder.

               

              Franchisee
                agrees and acknowledges that as between Franchisor and Franchisee,
                upon
                termination or expiration of the Franchise Agreement, Franchisor
                shall have the
                sole right to and interest in the Telephone Numbers and Listings,
                and Franchisee
                appoints Franchisor as Franchisee's true and lawful attorney-in-fact
                to direct
                the Telephone Company to assign same to Franchisor, and execute such
                documents
                and take such actions as may be necessary to effectuate the assignment.
                Upon
                such event, Franchisee shall immediately notify the Telephone Company
                to assign
                the Telephone Numbers and Listings to Franchisor or its designee.
                If Franchisee
                fails to promptly direct the Telephone Company to assign the Telephone
                Numbers
                and Listings to Franchisor or its designee, Franchisor shall direct
                the
                Telephone Company to effectuate the assignment contemplated hereunder.
                The
                parties agree that the Telephone Company may accept Franchisor's
                written
                direction, the Franchise Agreement or this Assignment as conclusive
                proof of
                Franchisor's exclusive rights in and to the Telephone Numbers and
                Listings upon
                such termination or expiration and that such assignment shall be
                made
                automatically and effective immediately upon Telephone Company's
                receipt of such
                notice from Franchisor or Franchisee. The parties further agree that
                if the
                Telephone Company requires that the parties execute the Telephone
                Company's
                assignment forms or other documentation at the time of termination
                or expiration
                of the Franchise Agreement, Franchisor's execution of such forms
                or
                documentation on behalf of Franchisee shall effectuate Franchisee's
                consent and
                agreement to the assignment. The parties agree that at any time after
                the date
                hereof, they will perform such acts and execute and deliver such
                documents as
                may be necessary to assist in or accomplish the assignment described
                herein upon
                termination or expiration of the Franchise Agreement.

               

              
                
                   

                

                
                  G-1

                  
                    

                  

                

                
                   

                

              

               

              
                	
                        ASSIGNEE:

                         

                        UFood
                          Restaurant Group, Inc.,
                          a
                          Nevada corporation

                         

                        By:_______________________________________

                        Its:_______________________________________

                      	 	
                        ASSIGNOR:

                         

                        [FRANCHISEE]

                         

                        By:_______________________________________

                        Its:_______________________________________

                      
	 	 	 
	
                        ACCEPTED
                          AND AGREED TO BY:

                        _______________________________________

                        (Telephone
                          Company Authorized 

                        Representative)

                         

                        _______________________________________

                        (Name
                          of Telephone Company)

                      	 	 

              

               

              
                
                   

                

                
                  G-2ex4-1.htm

    Exhibit 4.1

       

      ADVANCE
AUTO PARTS, INC.

      2004
LONG-TERM INCENTIVE PLAN

       

      (Amended
and Restated as of April 17, 2008)

       

      SECTION
1.  PURPOSE.  The purposes of the 2004 Long-Term
Incentive Plan (the “Plan”) are to encourage selected Employees and Directors of
Advance Auto Parts, Inc., a Delaware corporation (“Advance Auto” or the
“Company”), and its Affiliates to acquire a proprietary and vested interest in
the growth, development and financial success of the Company, to generate an
increased incentive to contribute to the Company’s future success and
prosperity, thus enhancing the value of the Company for the benefit of
stockholders, and to enhance the ability of the Company and its Affiliates to
attract and retain individuals of exceptional managerial talent upon whom, in
large measure, the sustained progress, growth and profitability of the Company
depends.

       

      The
Company has previously adopted the Advance Auto Parts, Inc. 2001 Executive Stock
Option Plan and the Advance Auto Parts, Inc. 2001 Senior Executive Stock Option
Plan (collectively, the “Predecessor Plans”), which were established to provide
similar equity-based compensation incentives through the grant of stock options.
Effective upon the adoption of the Plan by stockholders of the Company, the
Predecessor Plans will be merged into this Plan, thereby making available for
the grant of awards under this Plan any authorized but unused Shares (as herein
defined) not already used for such purpose under the Predecessor Plans. All
outstanding option grants under the Predecessor Plans shall continue in full
force and effect, subject to their original terms, after the Predecessor Plans
are merged into the Plan under the terms and conditions noted
above.

       

      SECTION 2.  DEFINITIONS.  As
used in the Plan, the following terms shall have the meanings as set forth
below:

       

      (a)                 “Affiliate”
shall mean (i) any Person that directly, or through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Company or
(ii) any entity in which the Company has a significant equity interest, as
determined by the Committee.

       

      (b)                 “Award”
shall mean any Option, SAR, Restricted Stock Award, Performance Share,
Performance Unit, Deferred Stock Unit, Dividend Equivalent, Other Stock Unit
Award or any other right, interest or option relating to Shares or other
property granted pursuant to the provisions of the Plan.

       

      (c)                 “Award
Agreement” shall mean any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder, which may, but
need not, be executed or acknowledged by both the Company and the
Participant.

       

      (d)                 “Board”
shall mean the Board of Directors of the Company.

       

      (e)                 “Change
in Control” shall mean the happening of any of the following
events:

       

      (i)           an
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (an “Entity”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of either (A) the then outstanding Shares (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); excluding, however, the
following:  (1) any acquisition directly from the Company, other than
an acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company, (2)
any acquisition by the Company, (3) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (4) any acquisition by any corporation pursuant to
a transaction that complies with clauses (A), (B) and (C) of Section
2(e)(iii);

       

      (ii)           a
change in the composition of the Board on the Plan’s effective date such that
the individuals who, as of the effective date, constitute the Board (such Board
shall be hereinafter referred to as the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board; provided, however, that for
purposes of this definition, any individual who becomes a member of the Board
subsequent to the effective date, whose election, or nomination for election, by
the 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Company’s
stockholders was approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; and provided further,
however, that any such individual whose initial assumption of office occurs as a
result of or in connection with either an actual or threatened solicitation with
respect to the election of directors (as such terms are used in Rule 14a-12(c)
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of an Entity
other than the Board shall not be so considered as a member of the Incumbent
Board;

       

      (iii)           the
consummation of a merger, reorganization or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (each, a
“Corporate Transaction”), excluding however, any Corporate Transaction pursuant
to which (A) all or substantially all of the individuals and entities who
are the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation or
other Person that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries (a “Parent Company”)) in substantially the same proportions as
their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (B) no Entity (other than the Company, any employee
benefit plan (or related trust) of the Company, such corporation resulting from
such Corporate Transaction or, if reference was made to equity ownership of any
Parent Company for purposes of determining whether clause (A) above is
satisfied in connection with the applicable Corporate Transaction, such Parent
Company) will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of the
outstanding voting securities of such corporation entitled to vote generally in
the election of directors unless such ownership resulted solely from ownership
of securities of the Company prior to the Corporate Transaction, and
(C) individuals who were members of the Incumbent Board will immediately
after the consummation of the Corporate Transaction constitute at least a
majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction (or, if reference was made to equity ownership
of any Parent Company for purposes of determining whether clause (A) above
is satisfied in connection with the applicable Corporate Transaction, of the
Parent Company); or

       

      (iv)           the
approval by the stockholders of the Company of the complete liquidation or
dissolution of the Company.

       

      (f)                 “Change
in Control Price” means, with respect to a Share, the higher of (A) the
highest reported sales price, regular way, of such Share in any transaction
reported on the New York Stock Exchange Composite Tape or other national
exchange on which such Shares are listed or on the NASDAQ National Market during
the 60-day period prior to and including the date of a Change in Control or
(B) if the Change in Control is the result of a tender or exchange offer or
a Corporate Transaction, the highest price per such Share paid in such tender or
exchange offer or Corporate Transaction.  To the extent the
consideration paid in any such transaction described above consists all or in
part of securities or other noncash consideration, the value of such securities
or other non-cash consideration shall be determined in the sole discretion of
the Board.

       

      (g)                 “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto.

       

      (h)                 “Committee”
shall mean the Compensation Committee of the Board, or any successor to such
committee, composed of no fewer than two directors, each of whom is a
non-employee Director within the meaning of Rule 16b-3(b)(3) of the
Exchange Act and an “outside director” within the meaning of Section 162(m)
of the Code, or any successor provision thereto.

       

      (i)                 “Company”
shall mean Advance Auto Parts, Inc. a Delaware corporation.

       

      (j)                 “Covered
Employee” shall mean a “covered employee” within the meaning of
Section 162(m)(3) of the Code, or any successor provision
thereto.

       

      (k)                 “Deferred
Stock Unit” or “DSU” shall mean a bookkeeping entry that represents the right to
receive one Share at a future date.  DSUs may be granted outright by
the Committee or may be granted in exchange for cash compensation deferred by a
Participant. To the extent the Company pays a dividend, DSUs will include the
right to receive Dividend Equivalents, 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      which are
credited in the form of additional DSUs.

       

      (l)                 “Director”
shall mean a member of the Board who is not an Employee.

       

      (m)                 “Dividend
Equivalent” shall mean an amount equal to the cash paid by the Company upon one
Share, either as a freestanding Award, or in connection with the grant of
Restricted Units, Performance Shares, Options, and/or SARs or Other Stock Unit
Awards.

       

      (n)                 “Employee”
shall mean any employee of the Company or any Affiliate.  Unless
otherwise determined by the Committee in its sole discretion, for purposes of
the Plan, an Employee shall be considered to have terminated employment or
services and to have ceased to be an Employee if his or her employer ceases to
be an Affiliate, even if he or she continues to be employed by such
employer.

       

      (o)                 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.

       

      (p)                 “Fair
Market Value” shall mean, with respect to any property other than Shares, the
market value of such property determined by such methods or procedures as shall
be established from time to time by the Committee.  Unless otherwise
determined by the Committee, the Fair Market Value of Shares as of any date
shall be closing price for the Shares as reported on the New York Stock Exchange
(or on any national securities exchange on which the Shares are then listed) for
that date or, if no such prices are reported for that date, the closing price on
the next preceding date for which such prices were reported.

       

      (q)                 “Option”
shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period or
periods as the Committee shall determine.

       

      (r)                 “Other
Stock Unit Award” shall mean any right granted to a Participant by the Committee
pursuant to Section 6(f).

       

      (s)                 “Participant”
shall mean an Employee or Director who is selected by the Committee to receive
an Award under the Plan.  Participant shall also mean a consultant
selected by the Committee who provides services to the Company or any Affiliate,
so long as such person (i) renders bona fide services that are not in
connection with the offer and sale of the Company’s securities in a
capital-raising transaction and (ii) does not directly or indirectly
promote or maintain a market for the Company’s securities.

       

      (t)                 “Performance
Award” shall mean any Award of Performance Shares or Performance Units granted
pursuant to Section 6(d).

       

      (u)                 “Performance
Period” shall mean that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any
performance goals specified by the Committee with respect to such Award are to
be measured.

       

      (v)                 “Performance
Share” shall mean any grant pursuant to Section 6(d) of a unit valued by
reference to a designated number of Shares, which value may be paid to the
Participant by delivery of such property as the Committee shall determine,
including, without limitation, cash, Shares, other property, or any combination
thereof, upon achievement of such performance goals during the Performance
Period as the Committee shall establish at the time of such grant or
thereafter.

       

      (w)                 “Performance
Unit” shall mean any grant pursuant to Section 6(d) of a unit valued by
reference to a designated amount of property other than Shares, which value may
be paid to the Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant or
thereafter.

       

      (x)                 “Person”
shall mean any individual, corporation, partnership, association, limited
liability company, joint-stock company, trust, unincorporated organization or
government or political subdivision thereof.

       

      (y)                 “Restricted
Stock” shall mean any Share issued with the restriction that the holder may not
sell, transfer, pledge or 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      assign
such Share and with such other restrictions as the Committee, in its sole
discretion, may impose (including, without limitation, any restriction on the
right to vote such Share, and the right to receive any cash dividends), which
restrictions may lapse separately or in combination at such time or times, in
installments or otherwise, as the Committee may deem appropriate.

       

      (z)                 “Restricted
Stock Award” shall mean an award of Restricted Stock under Section
6(c).

       

      (aa)                 “Restricted
Stock Unit” is a bookkeeping entry that represents the right to receive one
share of Common Stock at a future date, and which is subject to the restriction
that the holder may not sell, transfer, pledge or assign such unit and other
restrictions as the Committee, in its sole discretion, may impose (including,
without limitation, any restriction on the right to receive any Dividend
Equivalents, if dividends are paid by the Company), which restrictions may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

       

      (bb)                 “Shares”
shall mean the shares of common stock of the Company, par value $.0001 per
share.

       

      (cc)                 “Stock
Appreciation Right” or “SAR” shall mean any right granted to a Participant
pursuant to Section 6(b) to receive, upon exercise by the Participant, the
excess of (i) the Fair Market Value of one Share on the date of exercise or
at any time during a specified period before the date of exercise over
(ii) the grant price of the right on the date of grant, or if granted in
connection with an outstanding Option on the date of grant of the related
Option, as specified by the Committee in its sole discretion, which, except in
the case of Substitute Awards or in connection with an adjustment provided in
Section 4(c), shall not be less than the Fair Market Value of one Share on such
date of grant of the right or the related Option, as the case may
be.  Any payment by the Company in respect of such right may be made
in cash, Shares, other property, or any combination thereof, as the Committee,
in its sole discretion, shall determine.

       

      (dd)                 “Subsidiary”
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the
Award, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the chain.

       

      (ee)                 “Substitute
Awards” shall mean Awards granted or Shares issued by the Company in assumption
of, or in substitution or exchange for, awards previously granted, or the right
or obligation to make future awards, by a company acquired by the Company or
with which the Company combines.

       

      SECTION
3.  ADMINISTRATION.  The Committee shall have full
power, discretion, and authority, subject to such orders or resolutions not
inconsistent with the provisions of the Plan as may from time to time be adopted
by the Board, to

       

      (a)                 select
the Participants to whom Awards may from time to time be granted
hereunder;

       

      (b)                 determine
the type or types of Award to be granted to each Participant
hereunder;

       

      (c)                 determine
the number of Shares to be covered by each Award granted hereunder;

       

      (d)                 determine
the terms and conditions, not inconsistent with the provisions of the Plan, of
any Award granted hereunder;

       

      (e)                 determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property or canceled or suspended;

       

      (f)                 determine
whether, to what extent, and under what circumstances cash, Shares, other
property and other amounts payable with respect to an Award made under the Plan
shall be deferred either automatically or at the election of the
Participant;

       

      (g)                 interpret
and administer the Plan and any instrument or agreement entered into under the
Plan;

       

      (h)                 establish
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper 

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      administration
of the Plan; and

       

      (i)                 make
any other determination and take any other action that the Committee deems
necessary or desirable for administration of the Plan.

       

      Actions
of the Committee shall be final, conclusive and binding on all Persons,
including the Company, any Participant, any stockholder and any Employee of
the Company or any Affiliate.  A majority of the members of the
Committee may act on behalf of the Committee and may fix the time and place of
its meetings.  Notwithstanding the foregoing or anything else to the
contrary in the Plan, any action or determination by the Committee specifically
affecting or relating to an Award to a Director shall be approved and ratified
by the Board.  In addition, no member of the Board or any of its
Committees, as the case may be, shall be liable for any action or determination
made in good faith with respect to the Plan or any Award granted under
it.

       

      SECTION
4.  SHARES SUBJECT TO THE PLAN

       

      (a)                 Effective
as of May 19, 2004, and subject to adjustment as provided in Section 4(c), a
total of 4,500,000 Shares shall be
authorized for grant or issuance under the Plan plus any remaining Shares
available for awards under the Predecessor Plans as of the effective date of the
merger of the Predecessor Plans with this Plan.  Effective as of May
16, 2007, and subject to adjustment as provided in Section 4(c), an additional
3,000,000 Shares shall be authorized for grant or issuance under the
Plan.  Any Shares issued in connection with Awards other than Options
and SARs shall be counted against this limit as 1.7 Shares for every one
Share issued.

       

      (i)           If
any Shares subject to an Award or to an award under the Company’s Predecessor
Plans are forfeited or if any Award or award under the Predecessor Plans based
on Shares is settled for cash, or expires or otherwise is terminated without
issuance of such Shares, the Shares subject to such Award shall, to the extent
of such cash settlement, forfeiture or termination, again be available for
Awards under the Plan.

       

      (ii)           In
the event that any Option or other Award granted hereunder is exercised through
the tendering of Shares (either actually or by attestation), by cashless
exercise through the Company, or in the event that withholding tax liabilities
arising from such Option or other Award are satisfied by the tendering of Shares
or by the withholding of Shares by the Company, only the number of Shares issued
net of the Shares tendered or withheld shall be counted for purposes of
determining the maximum number of Shares available for issuance under the
Plan.

       

      (iii)           In
the event that any option or award granted under the Predecessor Plans is
exercised through the tendering of Shares (either actually or by attestation),
or in the event that withholding tax liabilities arising from such options or
awards are satisfied by the tendering of Shares or the withholding of Shares by
the Company, the Shares so tendered or withheld shall again be available for
Awards under the Plan.

       

      (iv)           Shares
reacquired by the Company on the open market using the cash proceeds received by
the Company from the exercise of Options granted under the Plan or options
granted under the Predecessor Plans that are exercised after the effective date
of the Plan shall be available for Awards under the Plan.

       

      (v)           Substitute
Awards shall not reduce the Shares authorized for issuance under the Plan or
authorized for grant to a Participant in any calendar year.

       

      (vi)           Deferred
Stock Units granted as a result of a voluntary election by a Participant to
defer cash or other compensation otherwise payable to the Participant shall not
reduce the Shares authorized for issuance under the Plan or authorized for grant
to a Participant in any calendar year.

       

      (vii)           In
the event that a company acquired by the Company or with which the Company
combines has shares available under a pre-existing plan not adopted in
contemplation of such acquisition or combination, the shares available for grant
pursuant to the terms of such pre-existing plan (as adjusted, to the extent
appropriate, using the exchange ratio or other adjustment or valuation ratio or
formula used in such acquisition or combination to determine the consideration
payable to the holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for issuance under the Plan; provided that Awards using such
available shares 

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      shall not
be made after the date awards or grants could have been made under the terms of
the pre-existing plan, absent the acquisition or combination, and shall only be
made to individuals who were not Employees or Directors of the Company or an
Affiliate prior to such acquisition or combination.

       

      (b)                 Any
Shares issued hereunder may consist, in whole or in part, of authorized and
unissued shares, treasury shares or shares purchased in the open market or
otherwise.

       

      (c)                 In
the event of any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, reverse stock split, spin-off or similar transaction or
other change in corporate structure affecting the Shares, such adjustments and
other substitutions shall be made to the Plan and to Awards as the Committee, in
its sole discretion, deems equitable or appropriate, including, without
limitation, such adjustments in the aggregate number, class and kind of
securities that may be delivered under the Plan, in the aggregate or to any one
Participant, in the number, class, kind and option or exercise price of
securities subject to outstanding Options, SARs or other Awards granted under
the Plan, and in the number, class and kind of securities subject to Awards
granted under the Plan (including, if the Committee deems appropriate, the
substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to
be appropriate in its sole discretion; provided, however, that the number of
Shares subject to any Award shall always be a whole number.

       

      SECTION
5.  ELIGIBILITY.  Any Employee, Director or
consultant who provides services to the Company or any Affiliate shall be
eligible to be selected as a Participant.

       

      SECTION
6.  AWARDS.  The Committee shall determine the type
of Awards to be granted or issued under the Plan and shall approve the terms and
conditions governing such Awards through the issuance of an Award
Agreement.  Awards may be granted singly, in combination, or in tandem
so that the settlement or payment of one automatically reduces or cancels the
other.

       

      (a)                 STOCK
OPTIONS.  Options may be granted hereunder to Participants either
alone or in addition to other Awards granted under the Plan.  Any
Option granted under the Plan shall be evidenced by an Award Agreement in such
form as the Committee may from time to time approve.  Any such Option
shall be subject to the following terms and conditions and to such additional
terms and conditions, not inconsistent with the provisions of the Plan, as the
Committee shall deem desirable:

       

      (i)           OPTION
PRICE.  The purchase price per Share purchasable under an Option shall
not be less than the Fair Market Value of the Share on the date of the grant,
except in the case of Substitute Awards or in connection with an adjustment
provided for in Section 4(c).

       

      (ii)           OPTION
PERIOD.  The term of each Option shall be fixed by the Committee in
its sole discretion; provided that no Option shall be exercisable after the
expiration of ten years from the date the Option is granted.

       

      (iii)           EXERCISABILITY.  Options
shall be exercisable at such time or times as determined by the Committee at or
subsequent to grant.  Except under certain circumstances in connection
with a Participant’s termination or in the event of a Change in Control, Options
will not be exercisable before the expiration of one year from the date the
Option is granted.

       

      (iv)           METHOD
OF EXERCISE.  Subject to the other provisions of the Plan, any Option
that is exercisable in accordance with the preceding paragraph may be exercised
by the Participant in whole or in part at such time or times, and the
Participant may make payment of the option price in such form or forms,
including, without limitation, payment by delivery of cash, delivery of Shares
(either actually or by attestation) already owned by the Participant for at
least six months (or any shorter period sufficient to avoid a charge to the
Company’s earnings for financial reporting purposes), via cashless exercise,
through a broker, or delivery of other consideration (including, where permitted
by law and the Committee, Awards) having a Fair Market Value on the exercise
date equal to the total option price, or by any combination of cash, such Shares
and other consideration as the Committee may specify in the applicable Award
Agreement.

       

      (v)           FORM
OF SETTLEMENT.  In its sole discretion, the Committee may provide, at
the time of grant, that the Shares to be issued upon an Option’s exercise shall
be in the form of Restricted Stock or other similar securities, or may reserve
the right so to provide after the time of grant.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (vi)           PROHIBITION
ON REPRICING.  The Company may not reprice Option grants, including
the cancellation of an existing grant followed by a regrant, without the express
approval of stockholders.

       

      (b)                 STOCK
APPRECIATION RIGHTS.  Stock Appreciation Rights (“SARs”) may be
granted hereunder to Participants either alone (“freestanding”) or in addition
to other Awards granted under the Plan (“tandem”) and may, but need not, relate
to a specific Option granted under Section 6(a).  The provisions of
SARs need not be the same with respect to each recipient.  Any tandem
SAR related to an Option may be granted at the same time such Option is granted
or at any time thereafter before exercise or expiration of such
Option.  In the case of any tandem SAR related to any Option, the SAR
or applicable portion thereof shall terminate and no longer be exercisable upon
the termination or exercise of the related Option, except that a SAR granted
with respect to less than the full number of Shares covered by a related Option
shall not be reduced until the exercise or termination of the related Option
exceeds the number of Shares not covered by the SAR.  Any Option
related to any tandem SAR shall no longer be exercisable to the extent the
related SAR has been exercised.  The Committee may impose such
conditions or restrictions on the exercise of any SAR, as it shall deem
appropriate; provided that a freestanding SAR shall not have a term of greater
than ten years or an exercise price less than 100% of Fair Market Value of the
Share on the date of grant.  The Company may not reprice SAR grants,
including the cancellation of an existing grant followed by a regrant, without
the express approval of stockholders of the Company.

       

      (c)                 RESTRICTED
STOCK.

       

      (i)           ISSUANCE.  A
Restricted Stock Award shall be subject to restrictions imposed by the Committee
during a period of time specified by the Committee (the “Restriction
Period”).  Restricted Stock Awards may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as may
be required by applicable law, either alone or in addition to other Awards
granted under the Plan.  Restricted Stock Awards may be real shares
(Restricted Stock) or phantom shares (Restricted Stock Units). The provisions of
Restricted Stock Awards need not be the same with respect to each
recipient.   Except for certain limited situations, Restricted
Stock Awards granted to Employees subject solely to continued employment
conditions shall have a vesting period of not less than three
years.

       

      (ii)           REGISTRATION.  Any
Restricted Stock issued hereunder may be evidenced in such manner, as the
Committee, in its sole discretion, shall deem appropriate, including, without
limitation, book entry registration or issuance of a stock certificate or
certificates.  In the event any stock certificates are issued in
respect of Shares of Restricted Stock awarded under the Plan, such certificates
shall be registered in the name of the Participant and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such
Award.

       

      (iii)           FORFEITURE.  Except
as otherwise determined by the Committee at the time of grant or thereafter,
upon termination of employment or services for any reason during the Restriction
Period, all Shares of Restricted Stock still subject to restriction shall be
forfeited by the Participant and reacquired by the
Company.  Unrestricted Shares, evidenced in such manner as the
Committee shall deem appropriate, shall be issued to the grantee promptly after
expiration of the Restriction Period, as determined or modified by the
Committee.

       

      (d)                 PERFORMANCE
AWARDS.  Performance Awards may be issued hereunder to Participants,
for no cash consideration or for such minimum consideration as may be required
by applicable law, either alone or in addition to other Awards granted under the
Plan.  The performance criteria to be achieved during any Performance
Period and the length of the Performance Period shall be determined by the
Committee upon the grant of each Performance Award, provided, however, that a
Performance Period shall not be shorter than 12 months or longer than five
years.  Except as provided in Section 7, Performance Awards will be
distributed only after the end of the relevant Performance
Period.  Performance Awards may be paid in cash, Shares, other
property, or any combination thereof, in the sole discretion of the Committee at
the time of payment.  The performance levels to be achieved for each
Performance Period and the amount of the Award to be distributed shall be
conclusively determined by the Committee.  Performance Awards may be
paid in a lump sum or in installments following the close of the Performance
Period or, in accordance with procedures established by the Committee, on a
deferred basis.

       

      (e)                 DIVIDEND
EQUIVALENTS.  Dividend Equivalents may be granted hereunder to
Participants either alone (“freestanding”) or in connection with other Awards
granted under the Plan.  The provisions of Dividend Equivalents need
not be the same with respect to each recipient.  Subject to the
provisions of the Plan and any Award Agreement, the recipient of an Award
(including, without limitation any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash
dividends, or Dividend Equivalents with respect to the number of Shares

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      covered
by the Award, as determined by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed to have been
reinvested in additional Shares or otherwise reinvested.

       

      (f)                 OTHER
STOCK UNIT AWARDS.

       

      (i)           STOCK
AND ADMINISTRATION.  Other Awards of Shares and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, Shares or
other property (“Other Stock Unit Awards”) may be granted hereunder to
Participants, either alone or in addition to other Awards granted under the
Plan, and such other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the
Plan.  Other Stock Unit Awards may be paid in Shares, cash or any
other form of property, as the Committee shall determine.  The
provisions of Other Stock Unit Awards need not be the same with respect to each
recipient. Except for certain limited situations, Other Stock Unit Awards
granted to Employees subject solely to continued employment conditions shall
have a vesting period of not less than three years.

       

      (ii)           TERMS
AND CONDITIONS.  Subject to the provisions of the Plan and any
applicable Award Agreement, Awards and Shares subject to Awards made under this
Section 6(f) may not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the Shares are issued, or, if later, the
date on which any applicable restriction, performance or deferral period
lapses.  Shares (including securities convertible into Shares) subject
to Awards granted under this Section 6(f) may be issued for no cash
consideration or for such minimum consideration as may be required by applicable
law.  Shares (including securities convertible into Shares) purchased
pursuant to a purchase right awarded under this Section 6(f) shall be purchased
for such consideration as the Committee shall determine in its sole discretion,
which, except in the case of Substitute Awards, shall not be less than the Fair
Market Value of such Shares or other securities as of the date such purchase
right is awarded.

       

      SECTION
7.  CHANGE IN CONTROL PROVISIONS.

       

      (a)                 IMPACT
OF EVENT.  Subject to Section 7(a)(v) and notwithstanding any other
provision of the Plan to the contrary, unless the Committee shall determine
otherwise at the time of grant with respect to a particular Award, in the event
of a Change in Control:

       

      (i)           any
Options and SARs outstanding as of the date such Change in Control is determined
to have occurred, and which are not then exercisable and vested, shall become
fully exercisable and vested to the full extent of the original
grant;

       

      (ii)           the
restrictions and deferral limitations applicable to any Restricted Stock shall
lapse, and such Restricted Stock shall become free of all restrictions and
limitations and become fully vested and transferable to the full extent of the
original grant;

       

      (iii)           all
Performance Awards shall be immediately accelerated and considered to be earned
and payable pro rata based on: (a) the portion of the Performance Period that
has been completed as of the date such Change in Control is determined to have
occurred and (b) the actual performance as of such date, or if actual
performance is not calculable, target performance; in addition, any deferral or
other restriction shall lapse and such Performance Awards shall be immediately
settled or distributed; and

       

      (iv)           the
restrictions and deferral limitations and other conditions applicable to any
Other Stock Unit Awards or any other Awards shall lapse, and such Other Stock
Unit Awards or such other Awards shall become free of all restrictions,
limitations or conditions and become fully vested and transferable to the full
extent of the original grant.

       

       (b)                 CHANGE
IN CONTROL CASH-OUT.  Notwithstanding any other provision of the Plan,
in the event of a Change in Control the Committee may, in its discretion,
provide that each Option or SAR shall, upon the occurrence of a Change in
Control, be cancelled in exchange for a payment in an amount equal to the amount
by which the Change in Control Price per Share exceeds the purchase price per
Share under the Option or SAR (the “spread”) multiplied by the number of Shares
granted under the Option or SAR.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      SECTION
8. CODE SECTION 162(m) PROVISIONS.

       

      (a)                 Notwithstanding
any other provision of the Plan, if the Committee determines at the time
Restricted Stock, a Performance Award, Dividend Equivalents or an Other Stock
Unit Award is granted to a Participant who is then an officer that such Participant
is, or is likely to be as of the end of the tax year in which the Company would
claim a tax deduction in connection with such Award, a Covered Employee, then
the Committee may provide that this Section 8 is applicable to such
Award.

       

      (b)                 If
Restricted Stock, a Performance Award, a Dividend Equivalent or an Other Stock
Unit Award is subject to this Section 8, then the lapsing of restrictions
thereon and the distribution of cash, Shares or other property pursuant thereto,
as applicable, shall be subject to the achievement of one or more objective
performance goals established by the Committee.  Such performance
goals shall be set by the Committee within the time period prescribed by, and
shall otherwise comply with the requirements of, Section 162(m) of the Code, or
any successor provision thereto, and regulations thereunder.

       

      (i)           Performance
goals shall be based on the attainment of specified of one or any combination of
the following: operating income, net cash provided by operating activities,
earnings per share from continuing operations, revenues, operating margins,
return on operating assets, return on equity, economic value added, stock price
appreciation, total stockholder return, cost control, strategic initiatives,
market share, net income, or return on invested capital of the Company or the
Affiliate or division of the Company for or within which the Participant is
primarily employed.

       

      (ii)           Such
performance goals also may be based on the achievement of specified levels of
Company performance (or performance of an applicable Affiliate or division of
the Company) under one or more of the measures described above relative to the
performance of other corporations.  Such performance goals shall be
set by the Committee within the time period prescribed by, and shall otherwise
comply with the requirements of, Section 162(m) of the Code, or any successor
provision thereto, and the regulations thereunder.

       

      (iii)           the
measurement of the Company’s performance against its goals shall exclude the
impact of charges for restructurings, discontinued operations, extraordinary
items, and any other unusual or non-recurring items, and the cumulative effects
of accounting changes, each as defined by generally accepted accounting
principles and as identified in the Company’s financial statements, notes to the
financial statements or management’s discussion and analysis

       

      (c)                 Notwithstanding
any provision of the Plan other than Section 7, with respect to any Restricted
Stock, Performance Award, Dividend Equivalent or Other Stock Unit Award that is
subject to this Section 8, the Committee may adjust downwards, but not upwards,
the amount payable pursuant to such Award, and the Committee may not waive the
achievement of the applicable performance goals except in the case of the death
or disability of the Participant.

       

      (d)                 The
Committee shall have the power to impose such other restrictions on Awards
subject to this Section 8 as it may deem necessary or appropriate to ensure that
such Awards satisfy all requirements for “performance-based compensation” within
the meaning of Section 162(m)(4)(C) of the Code, or any successor provision
thereto.

       

      (e)                 Notwithstanding
any provision of the Plan other than Section 4(c), no Participant may be granted
Options or “freestanding” SARs during any three-year period with respect to more
than 1,000,000 Shares or Restricted Stock, Performance Shares, Dividend
Equivalents and/or Other Stock Unit Awards subject to this Section 8 that are
denominated in Shares in any three-year period with respect to more than 500,000
Shares, and the maximum dollar value payable with respect to Performance Units
and/or Other Stock Unit Awards that are valued with reference to property other
than Shares and granted to any Participant for any three-year period is
$4,000,000, with proportionate adjustments for shorter or longer performance
periods, not to exceed 5 years.
“Tandem” SARs granted in connection with other Awards pursuant to Section
6(b) and Deferred Stock Units granted as a result of a Participant’s voluntary
election to defer cash or other compensation otherwise payable to the
Participant shall not count against such limits.

       

      SECTION 9.  AMENDMENTS AND
TERMINATION.  The Board may amend, alter, suspend, discontinue
or terminate the Plan or any portion thereof at any time; provided, however,
that stockholder approval is required if such amendment, alteration, suspension,
discontinuation or termination would be required under the rules or listing
standards of the New York Stock Exchange, any other securities exchange or the
National Association of Securities Dealers, Inc. on which the Company’s
securities are listed, or such approval is required to qualify for or comply
with any tax or other regulatory 

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      requirement
for which or with which the Board deems it necessary or desirable to qualify or
comply.  In addition, no such amendment, alteration, suspension,
discontinuation or termination shall be made without the consent of the affected
Participant, if such action would impair the rights of such Participant under
any outstanding Award.  Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform to local rules and regulations in any jurisdiction
outside the United States.

       

      The
Committee may amend the terms of any Award theretofore granted, prospectively or
retroactively, but no such amendment shall (a) impair the rights of any
Participant without his or her consent or (b) except for adjustments made
pursuant to Section 4(c) or in connection with Substitute Awards, reduce the
exercise price of outstanding Options or SARs or cancel or amend outstanding
Options or SARs for the purpose of repricing, replacing or regranting such
Options or SARs with an exercise price that is less than the exercise price of
the original Options or SARs without stockholder
approval.  Notwithstanding the foregoing, any adjustments made
pursuant to Section 4(c) shall not be subject to these
restrictions.

       

      SECTION
10.  GENERAL PROVISIONS.

       

      (a)                 No
Award, and no Shares subject to Awards described in Section 6(f) that have not
been issued or as to which any applicable restriction, performance or deferral
period has not lapsed, may be sold, assigned, transferred, pledged or otherwise
encumbered, except by will or by the laws of descent and distribution; provided,
however, that, if so determined by the Committee, a Participant may, in the
manner established by the Committee, designate a beneficiary to exercise the
rights of the Participant with respect to any Award upon the death of the
Participant.  Each Award shall be exercisable, during the
Participant’s lifetime, only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal
representative.  Notwithstanding the foregoing, the Committee, in its
sole discretion, may permit a Participant to assign or transfer an Award;
provided, however, that an Award so assigned or transferred shall be subject to
all the terms and conditions of the Plan and the instrument evidencing the
Award.

       

      (b)                 No
Employee or Participant shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of Employees or
Participants under the Plan.

       

      (c)                 If
required by the Committee, the prospective recipient of any Award under the Plan
shall not, with respect to such Award, be deemed to have become a Participant,
or to have any rights with respect to such Award, until and unless such
recipient shall have executed an agreement or other instrument evidencing the
Award and delivered a copy thereof to the Company, and otherwise complied with
the then applicable terms and conditions.

       

      (d)                 Nothing
in the Plan or any Award granted under the Plan shall be deemed to constitute an
employment or service contract or confer or be deemed to confer on any
Participant any right to continue in the employ or service of, or to continue
any other relationship with, the Company or any Affiliate or limit in any way
the right of the Company or any Affiliate to terminate a Participant’s
employment or service or other relationship at any time, with or without
cause.

       

      (e)                 Except
as provided in Section 8, the Committee shall be authorized to make adjustments
in performance award criteria or in the terms and conditions of other Awards in
recognition of unusual or nonrecurring events affecting the Company or its
financial statements or changes in applicable laws, regulations or accounting
principles.  The Committee may correct any defect, supply any omission
or reconcile any inconsistency in the Plan or any Award in the manner and to the
extent it shall deem desirable to carry it into effect.  In the event
that the Company shall assume outstanding employee benefit awards or the right
or obligation to make future such awards in connection with the acquisition of
or combination with another corporation or business entity, the Committee may,
in its discretion, make such adjustments in the terms of Awards under the Plan
as it shall deem appropriate.

       

      (f)                 The
Committee shall have full power and authority to determine whether, to what
extent and under what circumstances any Award shall be canceled or
suspended

       

      (g)                 All
certificates for Shares delivered under the Plan pursuant to any Award shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Shares are
then listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      (h)                 No
Award granted hereunder shall be construed as an offer to sell securities of the
Company, and no such offer shall be outstanding, unless and until the Committee
in its sole discretion has determined that any such offer, if made, would comply
with all applicable requirements of the U.S. federal securities laws and any
other laws to which such offer, if made, would be subject.

       

      (i)                 The
Committee shall be authorized to establish procedures pursuant to which the
payment of any Award may be deferred.  In addition, Subject to the
provisions of the Plan and any Award Agreement, the recipient of an Award
(including, without limitation any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash
dividends, or Dividend Equivalents with respect to the number of Shares covered
by the Award, as determined by the Committee, in its sole discretion, and the
Committee may provide that such amounts (if any) shall be deemed to have been
reinvested in additional Shares or otherwise reinvested.

       

      (j)                 Except
as otherwise required in any applicable Award Agreement or by the terms of the
Plan, recipients of Awards under the Plan shall not be required to make any
payment or provide consideration other than the rendering of
services.

       

      (k)                 The
Committee may delegate to a committee of one or more directors of the Company
or, to the extent permitted by Delaware law, to one or more officers or a
committee of officers the right to grant Awards to Employees who are not
officers or directors of the Company and to cancel or suspend Awards to
Employees who are not officers or Directors of the Company.

       

      (l)                 The
Company shall be authorized to withhold from any Award granted or payment due
under the Plan the amount of withholding taxes due in respect of an Award or
payment hereunder and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such
taxes.  The Committee shall be authorized to establish procedures for
election by Participants to satisfy such obligation for the payment of such
taxes by delivery of or transfer of Shares to the Company (up to the employee’s
minimum required tax withholding rate to the extent the Participant has owned
the surrendered shares for less than six months if such a limitation is
necessary to avoid a charge to the Company for financial reporting purposes), or
by directing the Company to retain Shares (up to the employee’s minimum required
tax withholding rate) otherwise deliverable in connection with the
Award.

       

      (m)                 Nothing
contained in the Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable
only in specific cases.

       

      (n)                 The
validity, construction and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware and applicable federal law.

       

      (o)                 If
any provision of the Plan is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Award
under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to applicable laws or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.

       

      (p)                 Awards
may be granted to Participants who are foreign nationals or employed outside the
United States, or both, on such terms and conditions different from those
applicable to Awards to Employees employed in the United States as may, in the
judgment of the Committee, be necessary or desirable in order to recognize
differences in local law or tax policy.  The Committee also may impose
conditions on the exercise or vesting of Awards in order to minimize the
Company’s obligation with respect to tax equalization for Employees on
assignments outside their home country.

       

      SECTION 11.  EFFECTIVE DATE
OF PLAN. The Plan shall be effective as of May 19, 2004.

       

      SECTION 12.  TERM OF
PLAN.  The Plan shall terminate on the tenth anniversary of the
effective date, unless sooner terminated by the Board pursuant to Section
9.

       

      SECTION
13.  INDEMNIFICATION.  In addition to such other
rights of indemnification as they may have as members of the Board of Directors,
the members of the Committee shall be indemnified by the Company to the fullest
extent permitted 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      by law
against the reasonable expenses, including attorney’s fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in satisfaction of a judgment in any such action, suit or
proceeding except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided, however, that within
sixty (60) days after institution of any such action, suit or proceeding
such Committee member shall in writing offer the Company the opportunity, at the
Company’s expense to handle and defend the same, and such Committee member shall
cooperate with and assist the Company in the defense of any such action, suit or
proceeding.  The Company shall not be obligated to indemnify any
Committee member with regard to any settlement of any action, suit or proceeding
of which the Company did not consent to in writing prior to such
settlement.

       

      SECTION 14.  GOVERNING LAW.
The Plan, any Award Agreement, any Award granted and any action taken
hereunder shall be governed by and construed in accordance with the laws of the
State of Delaware, without reference to principles of conflicts of laws
thereof.

      

      SECTION
15.  CODE SECTION 409A PROVISIONS.

      

      (a)                 Notwithstanding
any other provision of the Plan, effective as of January 1, 2007, this Section
15 shall be applicable to each Award that constitutes deferred compensation
within the meaning of Section 409A of the Code, as more fully addressed in
Section 15(b) below.

      

      (b)                 An
Award shall constitute deferred compensation, and thus shall be subject to this
Section 15, if the Award provides a Participant in one year with a legally
binding right to income or other taxable benefit that shall be paid in a future
year, unless:

       

      (i)           Payment
under the Award will be made no later than 21⁄2 months after the end of the first
year during which the amount is no longer subject to a substantial risk of
forfeiture (if applicable); or

       

       

      (ii)           The
Award is one described in Section 15(c) below.

       

      

      An Award
made under the Plan that is subject to the provisions of this Section 15 shall
hereafter be referred to as a “Section 409A Award.”

      

      (c)                 The
Awards described below are not deemed to be deferred compensation, and thus are
not subject to this Section 15.

       

      (i)           An
Option with respect to the purchase of Shares, provided that the exercise price
is never less than the Fair Market Value of the Shares at the date of the grant,
and the number of Shares subject to the Option is fixed on the original date of
the grant;

       

       

      (ii)           Restricted
Stock and any other restricted property; and

       

       

      (iii)           A
Stock Appreciation Right (“SAR”), provided that

       

       

      (A)                 The
amount payable under the SAR is not greater than the difference between the Fair
Market Value of the Shares on the date of the grant and the Fair Market Value of
the Shares on the date of exercise; and

       

       

      (B)                 The
exercise price of the SAR may never be less than the Fair Market Value of the
Shares on the date the right is granted.

       

      

      For
purposes of this subsection (c), the Fair Market Value of Shares shall be
determined without regard to any lapse restrictions within the meaning of IRS
Regulation §1.83-3(i).

      

      Notwithstanding
the foregoing, an Award described above shall constitute deferred compensation
for purposes of this Section 15 if it is granted as a Substitute Award in
substitution or exchange for an Award that constitutes deferred
compensation.

      

      (d)                 A
Section 409A Award must provide that payment to a Participant may be made only
upon an event described below:

       

      (i)           The
Participant’s separation from service with the Company (subject to the
restriction on distributions to key employees prescribed in Section 15(f)
below);

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (ii)           The
Participant becoming disabled;

       

       

      (iii)           The
death of the Participant;

       

       

      (iv)           A
specified time (or pursuant to a fixed schedule) established at the time of the
Award; or

       

       

      (v)           Such
other permitted event prescribed under Code Section 409A or the regulations
issued thereunder.

      

      (e)                 A
Section 409A Award must provide for a date of payment or payments that is
objectively determinable at the time the permitted payment event
occurs.  Payment can also be made in accordance with a fixed schedule
that is objectively determined based on the date of the allowed payment event if
the schedule is fixed at the time the permissible payment event is
specified.  The Award can provide for payment upon the later of (or
the latest of) two or more permissible payment events so long as each separate
payment event is a permitted payment event.  Alternatively, payment
may be made upon the earlier of (or the earliest of) two or more permissible
payment events if each payment event is a permitted payment event.

      

      (f)                 Notwithstanding
Sections 15(d) and (e) above, a Section 409A Award must provide that payment to
be made to a “key employee” (as determined under Code Section 416(i) without
considering Section 416(i)(5)) by reason of the key employee’s separation from
service cannot be made prior to the date which is six months after the date of
the key employee’s separation from service.  If payments are to be
made in installments, then the installments will be deemed to be a single
payment so that only the commencement of the installments, rather than each
scheduled payment, shall be subject to the six-month deferred payment
rule.

      

      (g)                 The
time or schedule of any payment to be made under a Section 409A Award may not be
accelerated, except as expressly permitted under Code Section
409A.  For this purpose, an acceleration of the time or the schedule
of payments shall not be deemed to have occurred if the Company or Committee
waives or accelerates the satisfaction of a condition constituting a substantial
risk of forfeiture applicable to the Award, but only if the requirements of this
Section 15 are otherwise satisfied with respect to that Award.  The
time or schedule of payments may also be accelerated, if the Award so permits,
as necessary for the Participant to pay the FICA taxes imposed under Code
Sections 3101, 3121(a) and 3121(v)(2) on the Award, or so that the income tax
withholding can be paid on the Award (if constituting wages included in the
Participant’s income) as imposed by Code Section 3401.

      

      (h)                 If
a Section 409A Award allows a Participant, or the Company or Committee, to elect
to change the form or time of a distribution under the Award, then the Award
must provide that the subsequent election may not take effect until at least
twelve months after the date on which the election is made.  If an
election is related to a payment for separation from service or at a specified
time or schedule, the Award must require that the payment with respect to which
the subsequent election is made shall be deferred for a period of not less than
five years from the date of payment.

       

       

       

       

      13

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