Document:

Exhibit
      10.19

     

    
      
        	
                Page
                  one

              	
                COPY

              	
                NZ
                  386/2008

              
	 	 	
                N
                  419/2008

              

      

      

       

     

    NOTARIAL
      DEED

    

    Made
      out
      on 17/07/2008 (July the seventeenth, two thousand and eight) by JUDr. Roman
      Hochman, notary public in Prague, in the notary’s office in Prague 1, Hybernská
1032/9. 

    

    Present
      in the notary’s office was the below mentioned party, claiming to be of full
      legal capacity, whose identity had been verified by a valid official ID:

    

    JUDr.
      Richard Čičko, birth certificate No. 730504/3328, attorney with registered
      office in Prague 7, Milady Horákové 533/28, postal code 170 00, ČAK certificate
      No. 9679, representing on behalf of written powers of attorney issued on 11
      June
      2008 and 1 July 2008 both founders of the following limited liability
      companies:
      

    

    
      	·  	
              TOT
                Energy, Inc., Registration No. 3762193, with registered office in
                the
                United States of America, 201 S. Biscayne Blvd., Suite 2804, Miami,
                Fl
                33131; 

            

    

    
      	·  	
              Korlea
                Invest Holding AG, Registration No. CH-320.4.056.902-0, with registered
                office in Switzerland, Vordergasse 3, 8200 Schaffhausen.
                

            

    

    

    On
      behalf
      of the aforementioned founders, Richard Čičko has requested the establishment of
      a limited liability company and the execution of the Memorandum of Association:
      

    

    Memorandum
      of Association

    of
      a Limited Liability Company

    

    I.
      Fundamental Provisions

    

    Article
      1

    Business
      Firm, Registered Office and Legal Form of the Company

    

    1.
      Business firm: 

    Korlea
      - TOT Energy s.r.o. 

    

    2.
      Registered office of the Company: 

    Prague.

    

    3.
      Legal
      form: 

    Limited
      liability company. 

    

    Article
      2

    Line
      of Activity and Business

    

    The
      Company’s line of activity
      is:

    lease
      of
      property, apartments and commercial premises.

    

    The
      Company’s line of business
      is:

    
      	·  	
              trading
                in gas;

            

    

    
      	·  	
              gas
                distribution;

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      two

    

    
      	·  	
              gas
                storage;

            

    

    
      	·  	
              gas
                production;

            

    

    
      	·  	
              trade
                in electricity;

            

    

    
      	·  	
              distribution
                of electricity;

            

    

    
      	·  	
              production
                of electricity;

            

    

    
      	·  	
              production
                of heat energy;

            

    

    
      	·  	
              delivery
                of heat energy;

            

    

    
      	·  	
              distribution
                of heat energy;

            

    

    
      	·  	
              production
                and delivery of heat energy not subject no license, produced from
                heat
                energy sources with an installed output of one source above 50
                kW;

            

    

    
      	·  	
              production
                and processing of fuels and
                lubricants;

            

    

    
      	·  	
              business
                in the field of hazardous waste
                disposal;

            

    

    
      	·  	
              production,
                trading and services not listed in Annexes 1 to 3 of the Trade
                Law:

            

    

    
      	 	lines of activity:

    

    
      	-  	
              production
                of food and starch industry
                products;

            

    

    
      	-  	
              mediation
                of business and services;

            

    

    
      	-  	
              wholesale
                and retail trade;

            

    

    
      	-  	
              advisory
                and consulting activities, completion of expert studies and
                assessments;

            

    

    
      	-  	
              lease
                and rental of movable property;

            

    

    
      	-  	
              advertising
                activities, marketing, media
                agency;

            

    

    
      	-  	
              services
                in administration and services of organizational and economic
                nature;

            

    

    
      	-  	
              provision
                of technical services;

            

    

    
      	-  	
              real
                estate brokerage, property administration and
                maintenance;

            

    

    
      	-  	
              waste
                disposal, with the exception of hazardous
                waste;

            

    

    
      	-  	
              production,
                business and services not included in any other
                category.

            

    

    

    Article
      3

    Partners
      and Registered Capital

    

    1.
      The
      partners in the Company are:

    
      	·  	
              The
                company TOT Energy, Inc., Registration No. 3762193, with registered
                office
                in the United States of America, 201 S. Biscayne Blvd., Suite 2804,
                Miami,
                Fl 33131;

            

    

    
      	·  	
              The
                company Korlea Invest Holding AG, Registration No. CH-320.4.056.902-0,
                with registered office in Switzerland, Vordergasse 3, 8200
                Schaffhausen.

            

    

    

    Each
      partner may only participate in the Company’s registered capital by one deposit.
      The total deposit amount must correspond to the amount of the Company’s
      registered capital.

    

    2.
      Amount
      of deposit made by each partner and the scope of its repayment:

    
      	·  	
              TOT
                Energy, Inc., Registration No. 3762193, with registered office in
                the
                United States of America, 201 S. Biscayne Blvd., Suite 2804, Miami,
                Fl
                33131 - financial deposit of CZK
                816,000;

            

    

    
      	·  	
              Korlea
                Invest Holding AG, Registration No. CH-320.4.056.902-0, with registered
                office in Switzerland, Vordergasse 3, 8200 Schaffhausen - financial
                deposit of CZK 784,000.

            

    

    

    The
      financial deposits must be paid up to a special bank account within 90 days
      from
      the date of execution of this Notarial Deed, but no later than by the day of
      submission of application for the registration of the Company in the Commercial
      Register. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      three

    

    Prior
      to
      the Company’s registration, the paid-up capital deposits or parts thereof shall
      be administered by the capital administrator.

    

    The
      founding company Korlea Invest Holding AG, Registration No. CH-320.4.056.902-0,
      with registered office in Switzerland, Vordergasse 3, 8200 Schaffhausen, has
      been appointed capital administrator. The title to the deposits or parts thereof
      paid up prior to the Company’s registration, or other possible rights to such
      deposits, shall pass to the Company on the day of its registration.

    

    The
      capital administrator shall issue a written confirmation of payment of the
      deposit or a part thereof by each partner, which shall then be attached to
      the
      application for the Company’s registration in the Commercial
      Register.

    

    The
      Company’s registered capital is CZK 1,600,000 (that is one million and six
      hundred thousand Czech crowns).

    

    Article
      4

    Rights
      and Obligations of the Partners

    

    Partners
      must repay their deposit no later than within five years since accepting the
      obligation to increase the deposit or make a new deposit. A partner who has
      failed to repay the prescribed amount of financial deposit within the above
      deadline shall pay interest on overdue payment in the amount of 20 percent
      of
      the sum due.

    

    A
      partner
      who fails to fulfill their obligation even within an extended deadline may
      be
      excluded from the Company by the General Meeting. The excluded partner’s
      business share shall pass to the Company, who may then transfer it to another
      partner or a third party. Such a transfer shall be decided upon by the General
      Meeting. If the excluded partner’s business share is not transferred, the
      General Meeting shall decide, within six months from the day of the partner’s
      exclusion, either to reduce the registered capital by the excluded partner’s
      deposit, or to have the excluded partner’s business share taken over by other
      partners, in the proportion corresponding to their own business shares, for
      a
      consideration corresponding to the settlement amount. Otherwise the court may
      dissolve the Company and order its liquidation even without a motion. Upon
      the
      decision of the General Meeting to divide such a business share among the
      remaining partners, the divided business share shall pass to the partners under
      the conditions specified by the General Meeting.

    

    The
      partners shall exercise their rights regarding the management of the Company
      and
      supervision of its activities at the General Meeting.

    

    II.
      Corporate Structure

    

    Article
      5

    General
      Meeting

    

    The
      General Meeting is the supreme body of the Company.

    

    Pursuant
      to the provisions of Section 25, subsections 1 and 2 of the Commercial Code,
      the
      General Meeting has the competence to decide in the following
      matters:

    
      	a)  	
              approval
                of acts taken on behalf of the Company prior to its registration
                pursuant
                to Section 64;

            

    

    
      	b)  	
              approval
                of the ordinary, extraordinary, consolidated, and in legally defined
                instances the interim financial statement; distribution of profit
                and
                settlement of losses;

            

    

    
      	c)  	
              approval
                of the Statutes and amendments
                thereto;

            

    

    
      	d)  	
              decision
                concerning amendments to the contents of the Memorandum of Association,
                if
                not made based on other legal facts (Section
                141);

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      four

    

    
      	e)  	
              decision
                to increase or reduce the registered capital, or to accept a non-monetary
                deposit, or to set off a monetary receivable against the Company
                against a
                claim for capital deposit
                repayment;

            

    

    
      	f)  	
              appointment,
                dismissal and remuneration of managing
                directors;

            

    

    
      	g)  	
              appointment,
                dismissal and remuneration of members of the Supervisory
                Board;

            

    

    
      	h)  	
              exclusion
                of a partner pursuant to Sections 113 and
                121;

            

    

    
      	i)  	
              appointment,
                dismissal and remuneration of a liquidator, and decision on the
                dissolution of the Company with a
                liquidation;

            

    

    
      	j)  	
              approval
                of contracts specified in Section
                67a;

            

    

    
      	k)  	
              decision
                on a merger, transfer of capital to a partner, division and change
                in the
                Company’s legal form;

            

    

    
      	l)  	
              approval
                of a controlling contract (Section 190b), profit transfer agreement
                (Section 190a) and a contract on silent partnership, and amendments
                thereto;

            

    

    
      	m)  	
              approval
                of the contract on appointment for a position (Section 66, subsection
                2);

            

    

    
      	n)  	
              other
                issues entrusted in the competence of the General Meeting by the
                law or
                the Memorandum of Association;

            

    

    
      	o)  	
              appointment
                and dismissal of proxies.

            

    

    

    The
      General Meeting may reserve the right to decide in matters that are otherwise
      in
      the competence of other bodies of the company.

    

    The
      General Meeting shall elect its chairman and minutes clerk. Until a chairman
      is
      elected, the General Meeting will be chaired by the Executive Director or an
      authorized partner. Vote count shall be performed by the chairman. The Executive
      Director shall ensure that minutes are taken of the General Meeting, which
      will
      then be sent to all partners without unreasonable delay at the Company’s cost.
      The minutes shall be signed by the chairman and minutes clerk.

    

    The
      General Meeting will have a quorum
      if
      partners with at least 2/3 of all votes are present.

    

    Each
      partner shall have one vote per each CZK 1,000 of their capital
      deposit.

    

    The
      General Meeting shall decide
      by a
      two-third majority of the votes of all partners.

    

    The
      Executive Director shall convene a General Meeting at least once a year. A
      General Meeting approving the ordinary financial statement must be convened
      no
      later than within six months from the last day of the accounting period
      concerned.

    

    Partners
      shall be notified of the date and agenda of a General Meeting at least 15 days
      prior to its date, by means of a written invitation. Items of the agenda not
      mentioned in the invitation may only be discussed at the General Meeting if
      all
      partners are present. A partner may waive the right to a timely invitation
      for a
      General Meeting or its convocation, in a manner prescribed by law or the
      Memorandum of Association, by means of a statement which must be included in
      the
      minutes of the General Meeting, or in the notarial deed recording the General
      Meeting’s decision; otherwise it must be made in the form of a notarial
      deed.

    

    Article
      6

    Executive
      Director

    

    The
      Company’s authorized representatives shall be two Executive
      Directors.

    

    The
      Executive Director is in charge of the Company’s business management. Both
      Executive Directors are jointly authorized to decide in matters of the Company’s
      business management.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      five

    

    The
      Executive Directors act jointly on behalf of the Company.

    

    The
      following persons have been appointed the first Executive Directors of the
      Company:

    
      	·  	
              Marianna
                Zelemová, birth certificate No. 805519/8580, born 19 May 1980, permanent
                residence in the Slovak Republic, Pod Papiernou 46, Bardejov, postal
                code
                085 01;

            

    

    
      	·  	
              Mike
                Zoi, born 4 February 1966, permanent residence in the United States
                of
                America, 700 Island Blvd. 406, Aventura, Florida
                33160.

            

    

    

    III.
      Corporate Finance

    

    Article
      7

    Reserve
      Fund

    

    The
      Company shall create a Reserve Fund from the net profit reported in an ordinary
      financial statement for the year in which it has first managed to create net
      profit, in the amount of at least 10 percent of the net profit, but no more
      than
      5 percent of the value of registered capital. The Fund shall annually be
      replenished by at least 5 percent of the net profit, until it reaches the value
      of 10 percent of registered capital.

    

    The
      Reserve Fund in the amount of 10 percent of registered capital may only be
      used
      to cover the Company’s losses.

    

    Article
      8

    Distribution
      of Profit

    

    The
      partners shall participate in the profit assigned by the General Meeting for
      distribution, in the proportion corresponding to their business
      shares.

    

    It
      is not
      permitted to use the registered capital, the Reserve Fund, or other capital
      funds, or money which is supposed to be used to replenish these funds pursuant
      to the Commercial Code or the Memorandum of Association, for the payment of
      profit.

    

    IV.
      Changes in the Amount of Registered Capital

    

    Article
      9

    Increase
      of Registered Capital

    

    It
      is
      only allowed to increase the registered capital by monetary deposits if the
      existing monetary deposits have already been paid up. An increase by
      non-monetary deposits is possible even prior to such repayment.

    

    The
      partners have a priority right to participate in the increase of registered
      capital, if increased by monetary deposits, by accepting the obligation to
      increase the deposit. The partners are entitled to accept an obligation to
      increase the deposit in the proportion corresponding to their business
      shares.

    

    Article
      10

    Reduction
      of Registered Capital

    

    The
      Company’s registered capital and the partners’ deposits may not decrease below
      the amount specified in Section 108, subsection 1, and Section 109, subsection
      1
      of the Commercial Code.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      six

    

    The
      Executive Director shall announce the decision to reduce the registered capital
      and its amount within 15 days after it has been made (twice with an interval
      of
      30 days). In the announcement, the Executive Director shall call upon the
      Company’s creditors to claim their debt within 90 days after the last
      announcement, unless the registered capital is being reduced in order to cover
      a
      loss or to create the Reserve Fund.

    

    V.
      Business Share

    

    Article
      11

    Common
      Provisions

    

    The
      business share represents the partners’ participation in the Company and the
      ensuing rights and obligations. The size of a business share shall be determined
      by the proportion of the partner’s deposit in the Company’s registered
      capital.

    

    Each
      partner may only own one business share. If a partner participates by another
      deposit, their deposit and/or their business share shall be raised
      accordingly.

    

    The
      business share may be pledged as security interest, albeit only with the General
      Meeting’s consent. Security interest cannot be established without the General
      Meeting’s consent. A security interest in the business share shall be
      established by registering the security interest in the Commercial
      Register.

    

    The
      partners’ business shares are as follows:

    
      	·  	
              TOT
                Energy, Inc., Registration No. 3762193, with registered office in
                the
                United States of America, 201 S. Biscayne Blvd., Suite 2804, Miami,
                Fl
                33131 - 51 percent; 

            

    

    
      	·  	
              Korlea
                Invest Holding AG, Registration No. CH-320.4.056.902-0, with registered
                office in Switzerland, Vordergasse 3, 8200 Schaffhausen - 49
                percent.

            

    

    

    Article
      12

    Transfer
      of Business Share

    

    A
      partner
      may transfer their business share to another partner or person. The transfer
      of
      a business share to another partner or person requires the General Meeting’s
      consent. A notarial deed must be made regarding such a decision.

    

    The
      contract on the transfer of a business share must be made in writing, and the
      transferee who is not a partner must declare their intent to accede to the
      Memorandum of Association. Signatures on the contract must be officially
      authenticated. The transfer of a business share shall take effect in relation
      to
      the Company on the day of delivery of an effective transfer
      contract.

    

    Article
      13

    Division
      of Business Share

    

    A
      business share may only be divided with the consent of the General Meeting.
      A
      notarial deed must be made regarding such a decision. The business share may
      only be divided on its transfer, passing to an heir or the partner’s legal
      successor.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Page
      seven

    

    If
      a
      separate business share is to be established when dividing a business share,
      the
      minimum amount of a partners deposit of CZK 20,000 must be
      maintained.

    

    Article
      14

    Settlement
      Amount

    

    Upon
      the
      termination of a partner’s interest in the Company during the Company’s
      existence in a manner other than a transfer of their business share, such a
      partner shall be entitled to a settlement (settlement amount). The settlement
      amount shall be determined as of the date of the termination of the partner’s
      interest in the company, based on the company’s equity capital ascertained by an
      interim, ordinary or extraordinary financial statement, completed on the day
      of
      the termination of the partner’s interest in the company. The settlement amount
      shall be paid in money.

    

    VI.
      Dissolution of the Company

    

    Article
      15

    Dissolution
      of the Company

    

    Apart
      from the methods of dissolving the Company specified in Section 68 of the
      Commercial Code, the Company may also be dissolved by liquidation based on
      a
      court decision. Upon dissolution by liquidation, each partner shall be entitled
      to a share in the liquidation balance. The size of the share shall be based
      on
      the proportion of the partners’ business shares.

    

    VII.
      Final Provisions

    

    The
      costs
      related to the Company’s establishment shall be borne by the company ..................
..

    

    Of
      the
      above the present Notarial Deed has been drawn up, read by the founders’
attorney, approved and signed. Subsequently I, the notary public, have also
      signed this Deed and have attached an imprint of my official seal.

     

     

    
      	signed, JUDr. Roman Hochman	
              L.S.

            	signed, JUDr. Richard
              Čičko

    

          

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                TRANSCRIPT

              	
                 

              	
                Annex
                  1

              
	 	 	
                NZ
                  386/2008

              

      

      

       

    

    

    State
      of Florida

     

    Department
      of State

    

    APOSTILLE
      

    

    (Convention
      de La Haye du 5 Octobre 1961)

    

    
      	1.	
              Country:United
                States of America

            

    

    

    This
      public document 

    

    
      	2.	
              has
                been signed byElizabeth
                Hagedorn-Vila

            

    

    

    
      	3.	
              acting
                in the capacity ofNotary
                Public of Florida

            

    

    

    
      	4.	
              bears
                the seal/stamp ofNotary
                Public, State of
                Florida

            

    

    

    
      	5.	
              atTallahassee,
                Florida

            

    

    

    
      	6.	
              theSeventeenth
                day of June, A.D.,
                2008

            

    

    

    
      	7.	
              bySecretary
                of State, State of
                Florida

            

    

    

    
      	8.	
              No.
                2008-50308

            

    

    

    
      	9.	
              Seal/stamp:

            

    

    

    GREAT
      SEAL OF THE 

    STATE
      OF FLORIDA

    *
      IN
      GOD WE TRUST *

     

    
      	 	This apostille
              is NULL and
              VOID of the date in Item 6 occurs before the execution date on the
              attached document

    

     

    
      	 	10.	Signature:
	 	 	
               

              illegible signature

               

              Secretary of
                State

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    POWER
      OF
      ATTORNEY

    

    By
      this
      power of attorney, the company TOT Energy, Inc., Registration No. 3762193,
      registered address in the United States of America, 201 S. Biscayne Blvd.,
      Suite
      2804, Miami, Fl 33131, acting by Mr. Mike Zoi (hereafter called “the Grantor”),
      hereby appoints
      JUDr.
      Richard Čičko, reg. No. 09679, born: 04.05. 1973, attorney at law having its
      seat in the Czech Republic, Prague 7, Milady Horákové 533/28, postal code 170 00
      (hereafter referred to as “the Attorney”), to represent and act on behalf of the
      Grantor
      as from
      the date hereof as follows:

    

    to
      perform all legal acts on behalf of the name of TOT Energy, Inc. as from the
      date hereof as follows:

    
      	-  	
              to
                incorporate a new company named Korlea-TOT Energy s.r.o. in the Czech
                Republic, Prague, with Grantor’s share in this company in total amount of
                51% on the company’s capital which will be formed in total amount of
                1,600,000 CZK. The second shareholder of Korlea-TOT Energy s.r.o.
                will be
                Korlea Invest Holding AG with its share in this company in total
                amount of
                49%

            

    

    
      	-  	
              to
                sign on behalf of the Grantor the Memorandum of Association of Korlea-TOT
                Energy s.r.o. in a form of notarial
                deed

            

    

    
      	-  	
              to
                nominate the first company’s executive director(-s)
                (jednatel)

            

    

    
      	-  	
              to
                organize all necessary licenses and receive obtained licenses of
                Korlea-TOT Energy s.r.o.

            

    

    
      	-  	
              to
                sign application form for the registration of Korlea & TOT s.r.o. at
                Commercial Register in the Czech
                Republic

            

    

    
      	-  	
              to
                sign statement of the contribution of the Korlea-TOT Energy s.r.o.
                capital

            

    

    
      	-  	
              to
                make other legal acts necessary for successful registration of Korlea-TOT
                Energy s.r.o. into the Commercial Register in the Czech
                Republic.

            

    

    

    The
      Attorney is authorized to make all necessary decisions to perform all above
      mentioned acts. The Attorney shall be further authorized to represent the
      Grantor to sign and receive on behalf of the Grantor all respective documents
      herewith connected.

    

    The
      Attorney shall be authorized to delegate the powers resulting from this Power
      of
      Attorney to a third person to act independently.

    

    In
      Miami,
      Florida USA on June 11, 2008

    

    
      	 	 	
              TOT
                ENERGY, INC.

              

              By:
                signature

              Name:
                 Mike
                Zoi

              Title: Chairman
                and CEO

            
	 	 	 
	 	 	 

    

    
      signature
        and stamp:

      ELIZABETH
        HAGEDORN-VILA

      Notary
        Public - State of Florida

      My
        Commission Expires Mar 30, 2009

      Commission
        # DD 680738

      Bonded
        Through National Notary Assn.

      

      I
        accept
        this power of attorney in Prague on 15/07/2008

    

     

    
      	 	 	
              signature

              JUDr.
                Richard Čičko

              attorney
                at law

            
	 	 	 

    

    
    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Translation
      from the English language

    

     

    
      State
        of Florida

       

      Department
        of State

    

    

    APOSTILLE
      

    

    (Convention
      de La Haye du 5 Octobre 1961)

    

    
      	1.	
              Country:United
                States of America

            

    

    

    This
      public document

    

    
      	2.	
              has
                been signed byElizabeth
                Hagedorn-Vila

            

    

    

    
      	3.	
              acting
                in the capacity ofNotary
                Public of Florida

            

    

    

    
      	4.	
              bears
                the seal/stamp ofNotary
                Public, State of
                Florida

            

    

    

    
      	5.	
              atTallahassee,
                Florida

            

    

    

    
      	6.	
              theSeventeenth
                day of June, A.D.,
                2008

            

    

    

    
      	7.	
              bySecretary
                of State, State of
                Florida

            

    

    

    
      	8.	
              No.
                2008-50308

            

    

    

    
      	9.	
              Seal/stamp:

            

    

    

    GREAT
      SEAL OF THE 

    STATE
      OF FLORIDA

    *
      IN
      GOD WE TRUST *

     

    
      
        	 	This apostille
                is NULL and
                VOID of the date in Item 6 occurs before the execution date on the
                attached document

      

       

      
        	 	10.	Signature:
	 	 	
                 

                illegible signature

                 

                Secretary of
                  State

              

      

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    Translation
      from the English language

    

    

    [translation
      of a rectangular stamp]

    [illegible
      signature]

    ELIZABETH
      HAGEDORN-VILA

    Notary
      Public - State of Florida

    My
      Commission Expires Mar 30, 2009

    Commission
      # DD 680738

    Bonded
      Through National Notary Assn.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Translation
      executed on this 16/07/2008 

    

    As
      a
      sworn translator to English, appointed by the Regional Court in Ostrava, Czech
      Republic, on June 23, 2000, file No. Spr 2263/2000,registered with the Regional
      Court in Prague, file No. Spr 4139/2000, I hereby confirm this a true
      translation of the attached document.

    

    Interpreter’s
      Register No.  5217  

    

    Mgr.
      Lucie Ektilahová

    Sworn
      Translator  signature

    

    stamp

    MGR.
      LUCIE EKTILAHOVÁ

    interpreter
      of the English language

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Confirmation
      of authenticity - Vidimus clause

    

    I
      hereby
      certify that this transcript, consisting of  6 
      pages,
      corresponds verbatim to the document of which it has been made, consisting
      of
 6 
      pages.

    

    In
      Prague, the  17
      /
      07 / 2008 

    

    

    stamp:

    JUDr.
      ROMAN HOCHMAN

    1

    Notary
      Public in Prague

    

    signature

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Annex
      2

    NZ
      386/2008

    POWER
      OF
      ATTORNEY

    

    By
      this
      power of attorney, the company Korlea Invest Holding AG, Registration No.
      CH-320.4.056.902-0, registered address Switzerland, Vordergasse 3, 8200
      Schaffhausen, acting by Mr. Vasyl Bechvarzh (hereafter called “the Grantor”),
      hereby
      appoints JUDr. Richard Čičko, reg. No. 09679, born: 04.05. 1973, attorney at law
      having its seat in the Czech Republic, Prague 7, Milady Horákové 533/28, postal
      code 170 00 (hereafter referred to as “the Attorney”), to represent and act on
      behalf of the Grantor
      as from the date hereof as follows:

    

    to
      perform all legal acts on behalf of the name of Korlea Invest Holding AG as
      from
      the date hereof as follows:

    
      	-  	
              to
                incorporate a new company named Korlea-TOT Energy s.r.o. in the Czech
                Republic, Prague, with Grantor’s share in this company in total amount of
                49% on the company’s capital which will be formed in total amount of
                1,600,000 CZK. The second shareholder of Korlea-TOT Energy s.r.o.
                will be
                TOT Energy, Inc. with its share in this company in total amount of
                51%

            

    

    
      	-  	
              to
                sign on behalf of the Grantor the Memorandum of Association of Korlea-TOT
                Energy s.r.o. in a form of notarial
                deed

            

    

    
      	-  	
              to
                nominate the first company’s executive director(-s)
                (jednatel)

            

    

    
      	-  	
              to
                organize all necessary licenses and receive obtained licenses of
                Korlea-TOT Energy s.r.o.

            

    

    
      	-  	
              to
                sign application form for the registration of Korlea-TOT Energy s.r.o.
                at
                Commercial Register in the Czech
                Republic

            

    

    
      	-  	
              to
                sign statement of the contribution of the Korlea-TOT Energy s.r.o.
                capital

            

    

    
      	-  	
              to
                make other legal acts necessary for successful registration of Korlea-TOT
                Energy s.r.o. into the Commercial Register in the Czech
                Republic.

            

    

    

    The
      Attorney is authorized to make all necessary decisions to perform all above
      mentioned acts. The Attorney shall be further authorized to represent the
      Grantor to sign and receive on behalf of the Grantor all respective documents
      herewith connected.

    

    The
      Attorney shall be authorized to delegate the powers resulting from this Power
      of
      Attorney to a third person to act independently.

    

    In
      Prague
      on 01.07.2008

    

    
      	 	 	
              signature

              Korlea
                Invest Holding AG

              Vasyl
                Bechvarzh, president

              

              stamp:

              Korlea
                Invest Holding AG

            

    

     

    I accept this power of attorney in Prague on
      01.07.2008

     

    
      	 	 	
              
                signature

              

              JUDr.
                Richard Čičko

              attorney
                at law

            
	 	 	 

    

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    Authentication
      - Legalization

    

    Current
      number in the Register of Authenticated Documents: 0 II 869/2008

    

    I
      hereby
      verify that Mr. Vasyl
      Bechvarzh,
      born 11
      June 1969, permanent residence in Prague 7, Trojská 725/181b, whose identity has
      been proved by a valid official ID, has signed this document before me in his
      own hand.

    

    In
      Prague, the 1st
      of July
      2008

    

    stamp:

    JUDr.
      ROMAN HOCHMAN

    1

    Notary
      Public in Prague

    

    signature

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Confirmation
      of authenticity - Vidimus clause

    

    I
      hereby
      certify that this transcript, consisting of  3 
      pages,
      corresponds verbatim to the document of which it has been made, consisting
      of
 3 
      pages.

    

    In
      Prague, the  17
      /
      07 / 2008 

    

    

    stamp:

    JUDr.
      ROMAN HOCHMAN

    1

    Notary
      Public in Prague

    

    signature

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    I
      hereby
      confirm that the first to third transcripts of the Notarial Deed, executed
      on
      17/07/2008 (the seventeenth of July, two thousand and eight), including also
      the
      transcript of Annex 1 and 2, which corresponds verbatim to the Annexes, intended
      to be given to the party, correspond verbatim to the Notarial Deed.

    

    stamp:

    JUDr.
      ROMAN HOCHMAN

    1

    Notary
      Public in Prague

    

    signature

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3
      stamps:

    JUDr.
      ROMAN HOCHMAN

    1

    Notary
      Public in Prague

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Affirmation
      and Specimen Signature
      

    

    

    I,
      the undersigned ................................., birth certificate No. ........................., permanent resident
      at ............................................................................., hereby affirm that I agree with being appointed
      Executive Director of the business company ...................................., with registered office
      at .................................................................., and with assuming my duties in the scope specified by
      the relevant provisions of the Commercial Code.

    

    I
      further
      affirm, with reference to the provisions of Section 135, subsection 2 of the
      Act
      No. 513/1991 Sb., as amended, that:

    
      	1)	
              I
                have reached 18 years of age, and I
                have full legal capacity;

            

    

    
      	2)	
              I
                am of unimpeachable character,
                i.e. I have never been effectively
                sentenced:

            

    

    
      	
            	·	
              for
                a willful crime, for an unconditional imprisonment for at least one
                year;

            

    

    
      	
            	·	
              for
                a willful crime the nature of which is related to the line of business,
                and to which the provisions of letter a) do not apply;
                or

            

    

    
      	
            	·	
              for
                a crime of negligence, the body of which is related to the line of
                business and to which the provisions of letter a) do not
                apply.

            

    

    
      	3)	
              I
                have met the conditions for carrying on a trade
                pursuant to the provisions of Section 6 of the Trade Act No. 455/1991
                Sb.,
                as amended, and no circumstances have arisen preventing me from carrying
                on a trade pursuant to the provisions of Section 8 of the Trade Act
                No.
                455/1991 Sb., as amended;

            

    

    
      	4)	
              I
                have met the conditions specified in Section 381 of the Commercial
                Code,
                i.e.

            

    

    
      	
            	·	
              within
                the last three years, no bankruptcy was declared or completed regarding
                my
                property, and no enforced settlement has been repeatedly
                confirmed;

            

    

    
      	
            	·	
              within
                the last three years, bankruptcy has neither been proposed regarding
                my
                property nor had it been refused for lack of
                property;

            

    

    
      	
            	·	
              neither
                a court nor a public authority has imposed on me a ban on trade in
                the
                Company’s line of business or any other related area which would be still
                in force;

            

    

    
      	
            	·	
              I
                have not violated the no competition
                clause;

            

    

    
      	
            	·	
              I
                am not an authorized representative or a member of an authorized
                representative body of a legal entity to which the provisions of
                Section
                381 of the Commercial Code apply.

            

    

    I
      am
      fully aware that giving false information puts me in the risk of criminal
      prosecution (Section 125 of the Criminal Code).

    

    I
      further
expressly
      declare that I agree with the registration of my person as the Executive
      Director of the Company into the Commercial Register.

    

    The
      signature on this Affirmation is also my specimen
      signature.

    

    In
      Prague, the ................... [date]

    

     

    
      	 	 	  

	 	 	
              Authenticated
                signature[FORM
      OF UFOOD® AREA DEVELOPMENT AGREEMENT]

     

    _______________________________________

     

    (DEVELOPMENT
      AREA)

     

    AREA
      DEVELOPER

     

    _____________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	 	 	 	
              Page

            
	 	 	 	 	 
	
              1.

            	 	INTRODUCTION
              AND CERTAIN DEFINITIONS	 	
              1

            
	 	 	
              1.A.

            	
              INTRODUCTION

            	 	
              1

            
	 	 	
              1.B.

            	
              CERTAIN
                DEFINITIONS

            	 	
              1

            
	 	 	 	 	 
	
              2.

            	 	DEVELOPMENT
              RIGHTS AND OBLIGATIONS	 	
              6

            
	 	 	
              2.A.

            	
              GRANT
                OF DEVELOPMENT RIGHTS

            	 	
              6

            
	 	 	
              2.B.

            	
              TERRITORIAL
                RIGHTS

            	 	
              6

            
	 	 	
              2.C.

            	
              RIGHTS
                RETAINED BY FRANCHISOR

            	 	
              6

            
	 	 	
              2.D.

            	
              DEVELOPMENT
                OBLIGATIONS

            	 	
              8

            
	 	 	
              2.E.

            	
              OWNERS'
                GUARANTY AND JOINDER

            	 	
              8

            
	 	 	 	 	 
	
              3.

            	 	DEVELOPMENT
              PLAN AND GRANT OF FRANCHISES	 	
              8

            
	 	 	
              3.A.

            	
              DEVELOPMENT
                PLAN

            	 	
              8

            
	 	 	
              3.B.

            	
              EXECUTION
                OF FRANCHISE AGREEMENTS

            	 	
              9

            
	 	 	 	 	 	 
	
              4.

            	 	DEVELOPMENT
              FEE	 	
              10

            
	 	 	 	 	 	 
	
              5.

            	 	TRAINING	 	
              10

            
	 	 	
              5.A.

            	
              INITIAL
                TRAINING

            	 	
              10

            
	 	 	
              5.B.

            	
              ADDITIONAL
                TRAINING AND FEES

            	 	
              10

            
	 	 	 	 	 	 
	
              6.

            	 	MARKS	 	
              11

            
	 	 	
              6.A.

            	
              OWNERSHIP
                AND GOODWILL OF MARKS

            	 	
              11

            
	 	 	
              6.B.

            	
              LIMITATIONS
                ON DEVELOPER'S USE OF MARKS

            	 	
              11

            
	 	 	
              6.C.

            	
              NOTIFICATION
                OF INFRINGEMENTS AND CLAIMS

            	 	
              11

            
	 	 	
              6.D.

            	
              MODIFICATION
                AND DISCONTINUANCE OF MARKS

            	 	
              12

            
	 	 	
              6.E.

            	
              INDEMNIFICATION
                FOR USE OF MARKS

            	 	
              12

            
	 	 	 	 	 	 
	
              7.

            	 	CONFIDENTIAL
              INFORMATION AND INNOVATIONS	 	
              12

            
	 	 	
              7.A.

            	
              CONFIDENTIAL
                INFORMATION

            	 	
              12

            
	 	 	
              7.B.

            	
              INNOVATIONS

            	 	
              14

            
	 	 	 	 	 	 
	
              8.

            	 	EXCLUSIVE
              RELATIONSHIP	 	
              15

            
	 	 	 	 	 	 
	
              9.

            	 	OTHER
              OBLIGATIONS OF DEVELOPER	 	
              16

            
	 	 	
              9.A.

            	
              DEVELOPMENT
                MANAGER AND OTHER DEVELOPER PERSONNEL

            	 	
              16

            
	 	 	
              9.B.

            	
              OTHER
                MANAGEMENT PERSONNEL

            	 	
              16

            
	 	 	
              9.C.

            	
              RECORDS
                AND REPORTS

            	 	
              17

            
	 	 	
              9.D.

            	
              COMPLIANCE
                WITH LAWS AND GOOD BUSINESS PRACTICES

            	 	
              18

            
	 	 	 	 	 	 
	
              10.

            	 	TRANSFER	 	
              19

            
	 	 	
              10.A.

            	
              TRANSFER
                BY FRANCHISOR

            	 	
              19

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              10.B.

            	
              TRANSFER
                BY DEVELOPER

            	 	
              19

            
	 	 	
              10.C.

            	
              FRANCHISOR'S
                RIGHT TO APPROVE TRANSFERS

            	 	
              20

            
	 	 	
              10.D.

            	
              CONDITIONS
                FOR APPROVAL OF TRANSFERS

            	 	
              21

            
	 	 	
              10.E.

            	
              DEATH
                OR INCAPACITY OF DEVELOPER

            	 	
              22

            
	 	 	
              10.F.

            	
              PUBLIC
                OR PRIVATE OFFERING

            	 	
              23

            
	 	 	
              10.G.

            	
              EFFECT
                OF CONSENT TO TRANSFER

            	 	
              24

            
	 	 	
              10.H.

            	
              FRANCHISOR'S
                RIGHT OF FIRST REFUSAL

            	 	
              24

            
	 	 	
              10.I.

            	
              OWNERSHIP
                STRUCTURE

            	 	
              26

            
	 	 	 	 	 	 
	
              11.

            	 	TERMINATION
              OF AGREEMENT	 	
              26

            
	 	 	
              11.A.

            	
              BY
                DEVELOPER

            	 	
              26

            
	 	 	
              11.B.

            	
              BY
                FRANCHISOR

            	 	
              26

            
	 	 	
              11.C.

            	
              TERMINATION
                OF THE DEVELOPMENT TERM AND CERTAIN RIGHTS OF DEVELOPER

            	 	
              28

            
	 	 	
              11.D.

            	
              EFFECT
                OF TERMINATION

            	 	
              28

            
	 	 	 	 	 
	
              12.

            	 	RIGHTS
              AND OBLIGATIONS OF FRANCHISOR AND DEVELOPER UPON TERMINATION OR EXPIRATION
              OF THIS AGREEMENT	 	
              28

            
	 	 	
              12.A.

            	
              PAYMENT
                OF AMOUNTS OWED

            	 	
              28

            
	 	 	
              12.B.

            	
              DE
                IDENTIFICATION

            	 	
              28

            
	 	 	
              12.C.

            	
              CONFIDENTIAL
                INFORMATION

            	 	
              29

            
	 	 	
              12.D.

            	
              COVENANT
                NOT TO COMPETE

            	 	
              29

            
	 	 	
              12.E.

            	
              CONTINUING
                OBLIGATIONS

            	 	
              30

            
	 	 	 	 	 
	
              13.

            	 	RELATIONSHIP
              OF THE PARTIES/INDEMNIFICATION	 	
              30

            
	 	 	
              13.A.

            	
              INDEPENDENT
                CONTRACTORS

            	 	
              30

            
	 	 	
              13.B.

            	
              NO
                LIABILITY FOR ACTS OF OTHER PARTY

            	 	
              31

            
	 	 	
              13.C.

            	
              TAXES

            	 	
              31

            
	 	 	
              13.D.

            	
              INDEMNIFICATION
                OF FRANCHISOR

            	 	
              31

            
	 	 	 	 	 	 
	
              14.

            	 	GENERAL
              PROVISIONS	 	
              32

            
	 	 	
              14.A.

            	
              ARBITRATION

            	 	
              32

            
	 	 	
              14.B.

            	
              SPECIFIC
                ENFORCEMENT

            	 	
              33

            
	 	 	
              14.C.

            	
              GOVERNING
                LAW

            	 	
              34

            
	 	 	
              14.D.

            	
              INJUNCTIVE
                RELIEF

            	 	
              34

            
	 	 	
              14.E.

            	
              CONSENT
                TO JURISDICTION

            	 	
              34

            
	 	 	
              14.F.

            	
              COSTS
                AND ATTORNEYS' FEES

            	 	
              34

            
	 	 	
              14.G.

            	
              WAIVER
                OF PUNITIVE DAMAGES AND JURY TRIAL

            	 	
              35

            
	 	 	
              14.H.

            	
              LIMITATION
                OF CLAIMS

            	 	
              35

            
	 	 	
              14.I.

            	
              ENTIRE
                AGREEMENT

            	 	
              35

            
	 	 	
              14.J.

            	
              NOTICES

            	 	
              35

            
	 	 	
              14.K.

            	
              SEVERABILITY
                AND SUBSTITUTION OF VALID PROVISIONS

            	 	
              36

            
	 	 	
              14.L.

            	
              THIRD
                PARTY BENEFICIARIES

            	 	
              37

            
	 	 	
              14.M.

            	
              WAIVERS

            	 	
              37

            
	 	 	
              14.N.

            	
              NO
                WARRANTIES OR GUARANTEES

            	 	
              37

            
	 	 	
              14.O.

            	
              FORCE
                MAJEURE

            	 	
              38

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              14.P.

            	
              ASSIGNMENT

            	 	
              38

            
	 	 	
              14.Q.

            	
              CONSTRUCTION

            	 	
              38

            
	 	 	
              14.R.

            	
              COUNTERPARTS

            	 	
              38

            
	 	 	
              14.S.

            	
              CUMULATIVE
                REMEDIES

            	 	
              38

            
	 	 	
              14.T.

            	
              NO
                WITHHOLDING OF PAYMENTS

            	 	
              39

            
	 	 	
              14.U.

            	
              EXERCISE
                OF BUSINESS JUDGMENT

            	 	
              39

            
	 	 	
              14.V.

            	
              ELECTRONIC
                MAIL

            	 	
              39

            

    

     

    EXHIBITS
      AND ATTACHMENTS

     

    
      	
              EXHIBIT
                A

            	
              -

            	
              DEVELOPER
                ACKNOWLEDGMENTS AND REPRESENTATIONS
                STATEMENT

            

    

    

    
      	
              EXHIBIT
                B

            	
              -

            	
              DEVELOPMENT
                FEE, DEVELOPMENT AREA AND DEVELOPMENT
                SCHEDULE

            

    

    

    
      	
              EXHIBIT
                C

            	
              -

            	
              FORM
                OF FRANCHISE AGREEMENT

            

    

     

    
      	
              EXHIBIT
                D

            	
              -

            	
              OWNERS
                AND INITIAL CAPITALIZATION

            

    

     

    
      	
              EXHIBIT
                E

            	
              -

            	
              GUARANTY
                AND ASSUMPTION OF DEVELOPER'S
                OBLIGATIONS

            

    

     

    
      	
              EXHIBIT
                F

            	
              -

            	
              FORM
                OF CONFIDENTIALITY AND NON-COMPETE
                AGREEMENT

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    UFOOD®
      DEVELOPMENT 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
__________________,
      a(n)
      ______________ ("Developer").
      

     

    
      	
              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.

     

    Franchisor
      grants to certain qualified persons or entities who meet Franchisor's
      qualifications, and who are willing to undertake the investment and effort,
      the
      right to develop a specified number of UFood Outlets within a defined geographic
      area. Developer has requested that Franchisor grant it such rights. Franchisor
      has approved Developer's request subject to the terms and conditions of this
      Agreement and in reliance upon all of the representations made in Developer's
      application, other information provided by Developer and its Affiliates during
      the application process and the representations of Developer in the
      Acknowledgements and Representations Statement, a copy of which is attached
      hereto as Exhibit A,
      which
      shall be executed by Developer concurrently with this Agreement. 

     

    This
      Agreement governs the rights and obligations of Developer and its Controlled
      Affiliates (defined below) to enter into Franchise Agreements (defined below)
      which grant them the right to develop and operate UFood Outlets ("Developer
      Outlets,"
      as
      further defined below) within the Sub-Areas (defined below) in accordance with
      the Development Schedule (defined below). The operation of each Developer
      Outlet will be governed by a Franchise Agreement. 

     

    
      	 	
              1.B.

            	
              CERTAIN
                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”
–
      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. 

     

    “Competitive
      Business”
–
A
      business or enterprise, other than a UFood Outlet operated by Franchisor, 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.

     

    “Confidential
      Information”
–
As
      defined in Section 7.A.
      

     

    “Controlled
      Affiliate”
–
A
      corporation, limited liability company or partnership that Developer is
      authorized under this Agreement to form for the sole purpose of developing
      and
      operating one or more UFood Outlets pursuant to Franchise Agreement(s), provided
      that: 

     

    (1) Developer,
      together with its direct and indirect Owners, owns and controls at least seventy
      percent (70%) of that entity's Ownership Interests; 

     

    (2) Developer
      has the authority under the governing documents, and at least the percentage
      of
      voting power required under applicable law, to authorize a merger, liquidation,
      dissolution or transfer of substantially all of the assets of that entity;
      

     

    (3) if
      the
      Controlled Affiliate is a partnership, Developer is the managing partner, or
      if
      the Controlled Affiliate is a limited liability company, Developer is the
      manager or managing member; 

     

    (4) Developer
      establishes to Franchisor's satisfaction that Developer has, and will at all
      times continue to have, the right and power to control the operation and the
      sale or other disposition of the UFood Outlets owned by the Controlled
      Affiliate; 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (5) the
      entity conducts no business other than the operation of UFood Outlets;

     

    (6) Developer,
      its Owners, and all Owners of the Controlled Affiliate execute an agreement,
      in
      a form acceptable to Franchisor, under which they guarantee the Controlled
      Affiliate's performance of, and assume full and unconditional liability for
      and
      agree to perform, all of the Controlled Affiliate's obligations, covenants
      and
      agreements contained in the applicable Franchise Agreement; and 

     

    (7) all
      Owners of the Controlled Affiliate are of good character and otherwise meet
      Franchisor's then current standards for owners of UFood Outlets franchisees.
      

     

    “Controlling
      Interest”
–
If
      Developer is a:

     

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

     

    (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. 

     

    “Developer”
–
As
      defined in the introductory paragraph to this Agreement. 

     

    “Developer
      Outlets”
–
The
      UFood Outlets developed, owned and operated by Developer or Controlled
      Affiliates pursuant to this Agreement and Franchise Agreements. 

     

    “Development
      Area”
–
the
      area that is composed of all of the Sub-Areas described in Exhibit B
      to this
      Agreement.

     

    “Development
      Fee”
–
As
      defined in Section 4.
      

     

    “Development
      Manager”
–
As
      defined in Section 9.A.
      

     

    “Development
      Plan”
–
As
      defined in Section 3.A.
      

     

    “Development
      Schedule”
–
The
      schedule of the number of UFood Outlets required to be open and operational
      at
      specified dates in each Sub Area as set forth in Exhibit B
      to this
      Agreement. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Development
      Term”
–
The
      period during which Developer is authorized and required to develop UFood
      Outlets pursuant to this Agreement, which will commence on the Effective Date
      and will expire, unless terminated earlier in accordance with the terms of
      this
      Agreement, when the last Sub-Area Term expires. 

     

    “Effective
      Date”
–
As
      defined in the introductory paragraph to this Agreement. 

     

    “F&B
      Gross Receipts”
–
As
      defined in the Franchise Agreement.

     

    “Franchise”
–
The
      right to operate a UFood Outlet at a particular location under a Franchise
      Agreement. 

     

    “Franchise
      Agreement”
–
The
      form of franchise agreement to be used pursuant to this Agreement, together
      with
      all exhibits, riders, addenda, guarantees, ancillary agreements and attachments
      thereto, all substantially in the form attached hereto as Exhibit C.
      

     

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

     

    “Franchisor
      Indemnified Parties”
–
      Franchisor, its Affiliates, its and their owners, and all of their respective
      officers, directors, managers, agents, employees, representatives, successors
      and assigns. 

     

    “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.

     

    “Guaranty”
–
As
      defined in Section 2.E.
      

     

    “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. 

     

    “Marks”
–
The
      trademarks, service marks, logos and other commercial symbols that Franchisor
      authorizes for use from time to time to identify UFood Outlets and the products
      and services they offer, together with the Trade Dress (defined
      below).

     

    “Nutritional
      Products”
–
Those
      nutritional products that Franchisor periodically authorizes Developer to offer
      and sell from the Developer Outlets.

     

    “Nutritional
      Products Gross Receipts”
–
as
      defined in the Franchise Agreement.

     

    “Opening
      Date”
–
With
      respect to each Developer Outlet, the date that Developer or a Controlled
      Affiliate is required to have that Developer Outlet open for business under
      the
      terms of this Agreement and the applicable Franchise Agreement. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Owner”
–
With
      respect to Developer, “Owner”
shall
      mean each Person holding a direct or indirect, record or beneficial Ownership
      Interest in Developer and each Person who has other direct or indirect property
      rights in Developer, this Agreement, or the right to receive all or a portion
      of
      Developer's profits or losses or any capital appreciation right relating to
      Developer. With respect to a Controlled Affiliate, each Person holding a direct
      or indirect, record or beneficial Ownership Interest in such Controlled
      Affiliate, and each Person who has other direct or indirect property rights
      in
      such Controlled Affiliate, any Franchise Agreement signed by such Controlled
      Affiliate, a Developer Outlet operated by such Controlled Affiliate, or the
      right to receive all or a portion of such Controlled Affiliate's or such
      Developer Outlet's profits or losses or any capital appreciation relating to
      such Developer Outlet. 

     

    “Ownership
      Interests”
–
In
      relation to a: (1) corporation or limited liability company, the record or
      beneficial ownership of one or more shares or membership interests (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 or limited liability
      company; (2) partnership, the record or beneficial ownership of a general
      or limited partnership interest; or (3) 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). 

     

    “Sub
      Areas”
–
The
      geographic areas designated as Sub Areas in Exhibit B
      to this
      Agreement.

     

    “Sub
      Area Quota”
–
As
      defined on Exhibit B
      to this
      Agreement.

     

    “Sub
      Area Term”
–
The
      period during which Developer is authorized and required to develop Developer
      Outlets in a given Sub Area pursuant to this Agreement, which will commence
      on
      the Effective Date and will expire, unless terminated earlier in accordance
      with
      the terms of this Agreement, on the earlier to occur of: (a) the expiration
      of the last Sub-Area Development Period set forth in Exhibit B
      to this
      Agreement for that Sub Area; or (b) the date on which a Franchise Agreement
      has been executed and delivered for the final UFood Outlet to be developed
      by
      Developer in the Sub-Area under this Agreement. 

     

    “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.

     

    “Trade
      Dress”
–
The
      UFood Outlet design, decor, color scheme and image which Franchisor authorizes
      and requires under the Franchise Agreement for use in connection with the
      operation of a Developer Outlet, as it may be revised and further developed
      by
      Franchisor or its Affiliates from time to time. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              2.

            	
              DEVELOPMENT
                RIGHTS AND OBLIGATIONS.

            

    

     

    
      	 	
              2.A.

            	
              GRANT
                OF DEVELOPMENT RIGHTS.

            

    

     

    Provided
      that Developer is in full compliance with all of the terms and conditions of
      this Agreement, including the development obligations contained in Section 2.D.
      hereof,
      and Developer and all Controlled Affiliates are then in full compliance with
      all
      Franchise Agreements executed pursuant to this Agreement, Franchisor will grant
      to Developer and Controlled Affiliates, in accordance with Section 3.B.
      hereof,
      Franchises to develop and operate, in each Sub Area, the number of UFood Outlets
      specified for such Sub Area on Exhibit B
      to this
      Agreement. Developer acknowledges and agrees that Developer's rights under
      this
      Agreement are limited to the designated number of UFood Outlets for each Sub
      Area, and the schedule and timing of the opening of UFood Outlets in each Sub
      Area during the respective Sub Area Terms, as set forth on Exhibit B
      to this
      Agreement. Developer is not granted any rights under this Agreement to develop
      or operate, and Developer shall not develop or operate, UFood Outlets
      (1) outside the Sub-Areas; (2) inside any Sub-Area after the
      expiration of the applicable Sub-Area Term; (3) in excess of the number of
      UFood Outlets specified for the applicable Sub-Area on Exhibit B
      hereto.

     

    Developer's
      right to develop UFood Outlets shall expire upon expiration of the Development
      Term. Developer expressly acknowledges and agrees that it has no right to renew
      its rights under this Agreement upon the expiration or termination of this
      Agreement or the Development Term. Developer acknowledges and agrees that the
      execution and delivery of this Agreement shall constitute notice to Developer
      of
      non renewal for purposes of fulfilling the requirements of any applicable state
      or federal law governing the non renewal of franchise or development rights.
      

     

    
      	 	
              2.B.

            	
              TERRITORIAL
                RIGHTS.

            

    

     

    Except
      as
      otherwise provided in this Agreement, and provided that Developer is in full
      compliance with this Agreement, and Developer and all Controlled Affiliates
      are
      then in full compliance with all Franchise Agreements executed pursuant to
      this
      Agreement, during the Development Term, 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 physically located within the
      Development Area.

     

    
      	 	
              2.C.

            	
              RIGHTS
                RETAINED BY FRANCHISOR.

            

    

     

    Except
      as
      expressly set forth in Section 2.B.
      hereof,
      during and after the Development Term, 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
      Development Area (including on the border of the Development Area), 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 Development Area,
      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 Development Area 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 and other retail
      establishments specified 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
      Development Area);

     

    (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 Development
      Area), 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 Development
      Area; 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.

            	
              DEVELOPMENT
                OBLIGATIONS.

            

    

     

    During
      the Development Term, Developer will at all times faithfully, honestly and
      diligently perform its obligations under this Agreement, and continuously exert
      its best efforts to promote and enhance the development of UFood Outlets within
      the Sub-Areas. Without limiting the generality of the foregoing, Developer
      agrees to have open and in operation in each Sub Area the cumulative number
      of
      UFood Outlets set forth as the respective Sub Area Quota in Exhibit B
      attached
      hereto by the dates specified therein. If a Developer Outlet is closed due
      to
      casualty or condemnation in compliance with the applicable Franchise Agreement,
      or is otherwise closed with Franchisor's written approval, that Developer Outlet
      shall be deemed open and in operation for purposes of the applicable Sub-Area
      Quota for one hundred eighty (180) days after its closing but not afterward.
      Developer acknowledges that Franchisor makes no representations or warranties
      that the Sub Areas can support, or that there are sufficient sites for, the
      number of UFood Outlets specified in the Development Schedule. Developer
      acknowledges and agrees that its failure to open and operate UFood Outlets
      pursuant to this Agreement shall be a material breach of this Agreement
      entitling Franchisor to all remedies available to it pursuant to this Agreement
      and applicable law. 

     

    
      	 	
              2.E.

            	
              OWNERS'
                GUARANTY AND JOINDER.

            

    

     

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

     

    
      	
              3.

            	
              DEVELOPMENT
                PLAN AND GRANT OF
                FRANCHISES

            

    

     

    
      	 	
              3.A.

            	
              DEVELOPMENT
                PLAN.

            

    

     

    Within
      ten (10) days after the Effective Date, Developer shall prepare and submit
      to Franchisor for Franchisor's review, amendment and approval a written
      development plan for developing all of the Developer Outlets under this
      Agreement (the "Development
      Plan"),
      which
      shall include details on the sources and terms of funding for the development
      and operation of all Developer Outlets and such other information and documents
      as Franchisor may require. Among other factors, Franchisor may consider
      Developer's proposed debt/equity ratio and amount of indebtedness in reviewing
      such Development Plan. Once a Development Plan is approved by Franchisor,
      Developer must execute and adhere to it. Any proposed deviations from the
      approved Development Plan must be submitted to Franchisor in writing for its
      approval prior to implementation. The Development Plan shall be subject to
      periodic review by Franchisor which may required modifications to meet its
      then
      current minimum standards. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.B.

            	
              EXECUTION
                OF FRANCHISE AGREEMENTS.

            

    

     

    During
      the Sub-Area Term of a particular Sub-Area, when Developer locates a proposed
      site in that Sub-Area at which it intends in good faith to develop (or have
      a
      Controlled Affiliate develop) a UFood Outlet for such Sub-Area, and which
      Developer reasonably believes to conform to the minimum site selection criteria
      established by Franchisor from time to time, Developer shall submit to
      Franchisor a franchise application package containing the forms and information
      that Franchisor periodically specifies, including information, if applicable,
      about the Controlled Affiliate that Developer intends to own and operate the
      UFood Outlet (and its direct and indirect Owners).

     

    Developer
      acknowledges that, in order to preserve and enhance the reputation and goodwill
      of all UFood Outlets and the goodwill of the Marks, all UFood Outlets must
      be
      properly developed and operated. Developer therefore agrees that Franchisor
      may
      refuse to grant to Developer or a Controlled Affiliate a Franchise for a
      proposed Developer Outlet unless Developer and, if applicable, the Controlled
      Affiliate demonstrates: 

     

    (1) sufficient
      financial resources and management capabilities in Franchisor's judgment,
      applying standards consistent with criteria Franchisor uses in other comparable
      market areas, to develop and operate the proposed Developer Outlet properly;
      and

     

    (2) that
      its
      Owners (i)  do not own any interest in, or provide services to, any
      Competitive Business; (ii) have not been involved in any criminal activity
      or other activity which, in Franchisor's judgment, might adversely affect the
      reputation of Developer, any of its Controlled Affiliates, any Developer Outlet
      or other UFood Outlets or the goodwill associated with the Marks; and
      (iii) are of good moral character and otherwise meet Franchisor's then
      current criteria for UFood Outlets' franchisees. 

     

    Developer
      must give Franchisor from time to time, during and after the approval process,
      the financial statements and other information regarding Developer or its
      Controlled Affiliate and their Owners, and the development and operation of
      the
      proposed Developer Outlet, that Franchisor reasonably requires, including
      investment and financing plans for the proposed Developer Outlet. 

     

    If
      Franchisor approves the completed franchise application package delivered by
      Developer, and provided that Developer is then in full compliance with this
      Agreement, and Developer and all Controlled Affiliates are then in full
      compliance with all Franchise Agreements executed pursuant to this Agreement,
      but subject to any restrictions of applicable law, Franchisor agrees to offer
      to
      Developer or its specified Controlled Affiliate a Franchise to operate a UFood
      Outlet by delivering to Developer a Franchise Agreement in form for execution
      by
      Developer or its applicable Controlled Affiliate and each of their respective
      Owners. Such Franchise Agreement shall be executed and returned to Franchisor,
      together with all fees due upon execution thereof, within twenty (20) days
      after Franchisor's delivery thereof, but in no event sooner than the time period
      required under applicable law. Developer acknowledges that Franchisor will
      not
      commence its review of the proposed site until Developer or its Controlled
      Affiliate signs the Franchise Agreement and pays all fees due to Franchisor
      upon
      such signing, at which time the site review and approval process shall be
      governed by such Franchise Agreement. Neither Franchisor's offering a Franchise
      to Developer or its Controlled Affiliate, nor any other written or oral
      communication from Franchisor to Developer or a Controlled Affiliate prior
      to
      the signing of a Franchise Agreement, nor Franchisor's signing a Franchise
      Agreement shall be deemed an approval by Franchisor of any site proposed by
      Developer or a Controlled Affiliate. Such approval may be effected only in
      accordance with the terms and conditions of a signed Franchise
      Agreement.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    If
      Developer or the applicable Controlled Affiliate fails to return the Franchise
      Agreement (including the guarantees and all related documents), or to pay any
      fees due upon execution thereof, within the time period specified above,
      Franchisor may withdraw its offer to grant a Franchise for a UFood Outlet in
      such geographic area at any time thereafter. In no event may a Developer Outlet
      be opened for business prior to Developer's receipt of written notice from
      Franchisor authorizing the opening of such Developer Outlet. 

     

    
      	
              4.

            	
              DEVELOPMENT
                FEE.

            

    

     

    Concurrently
      with and in consideration of the execution of this Agreement, Developer shall
      pay to Franchisor the sum set forth on Exhibit B
      hereof
      as a development fee (the "Development
      Fee")
      which
      shall be deemed fully earned by Franchisor upon execution of this Agreement.
      Franchisor shall apply Seventeen Thousand, Five Hundred Dollars ($17,500) of
      the
      Development Fee toward the initial franchise fee payable under each Franchise
      Agreement. The Development Fee is not refundable under any circumstances, is
      not
      subject to offset, and is payable to Franchisor regardless of whether Developer
      develops any Developer Outlets. 

     

    
      	
              5.

            	
              TRAINING.
                

            

    

     

    
      	 	
              5.A.

            	
              INITIAL
                TRAINING.
                

            

    

     

    Within
      thirteen (13) weeks after the Effective Date, Developer's Development
      Manager and Chief Executive Officer (if different from the Development Manager)
      must attend and complete to Franchisor's satisfaction Franchisor's initial
      training program in the operation of a UFood Outlet. 

     

    
      	 	
              5.B.

            	
              ADDITIONAL
                TRAINING AND FEES.
                

            

    

     

    Franchisor
      may, as it deems necessary, require the Development Manager and/or other key
      employees of Developer to attend or participate in additional training programs
      during the Development Term. Developer shall pay Franchisor's reasonable fees
      for these programs. Franchisor also may charge for updated, additional or
      refresher training materials supplied to Developer or its personnel. Developer
      shall be responsible for the travel, living and other expenses (including local
      transportation expenses) and compensation of Developer's personnel incurred
      in
      connection with any training programs. 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    In
      the
      event the trained Development Manager ceases to hold such position with
      Developer, Developer shall have thirty (30) days in which to appoint a
      substitute or replacement officer who is subject to Franchisor's approval
      pursuant to Section 9.A.
      below
      and must attend and complete to Franchisor's satisfaction the initial training
      program that Franchisor designates promptly after appointment. Developer shall
      pay Franchisor's reasonable fees for training substitute or replacement
      officers. If Franchisor determines that any of Developer's personnel has failed
      to satisfactorily complete any training program, Developer shall immediately
      hire a substitute officer and promptly arrange for such person to complete
      the
      training program that Franchisor designates to Franchisor's satisfaction.

     

    
      	
              6.

            	
              MARKS.
                

            

    

     

    
      	 	
              6.A.

            	
              OWNERSHIP
                AND GOODWILL OF MARKS.
                

            

    

     

    Developer's
      right to use the Marks is derived only from this Agreement and is limited to
      Developer's developing and operating UFood Outlets according to this Agreement,
      Franchise Agreements and all System Standards that Franchisor prescribes.
      Developer's unauthorized use of the Marks is a breach of this Agreement and
      infringes Franchisor's rights in the Marks. Developer 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 Developer (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 Developer to use. Developer 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 any of the
      Marks.

     

    
      	 	
              6.B.

            	
              LIMITATIONS
                ON DEVELOPER'S USE OF MARKS.
                

            

    

     

    Developer
      agrees to identify itself as an independent licensee of the Marks in the manner
      Franchisor prescribes. Developer 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 Developer 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.

     

    Developer
      agrees to display the Marks prominently on forms, advertising, supplies, and
      other materials in the manner that Franchisor designates. Developer 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.

     

    
      	 	
              6.C.

            	
              NOTIFICATION
                OF INFRINGEMENTS AND CLAIMS.
                

            

    

     

    Developer
      agrees to notify Franchisor immediately of any apparent infringement or
      challenge to Developer'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 Developer'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. Developer agrees to sign
      any documents and take any other reasonable action that, in Franchisor's
      judgment or in the opinion of Franchisor's attorneys, are necessary or advisable
      to protect and maintain Franchisor's interests in any litigation or Patent
      and
      Trademark Office or other proceeding or otherwise to protect and maintain its
      interests in the Marks. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              6.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. Developer agrees to comply
      with Franchisor's directions within a reasonable time after receiving notice.
      Franchisor need not reimburse Developer for its expenses related to modifying
      or
      discontinuing any Marks, 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.

     

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

     

    
      	 	
              6.E.

            	
              INDEMNIFICATION
                FOR USE OF MARKS.
                

            

    

     

    Franchisor
      agrees to reimburse Developer for all damages and expenses that Developer incurs
      in any trademark infringement proceeding disputing Developer's authorized use
      of
      any Mark under this Agreement if Developer 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 Developer's use of any Mark under this Agreement.

     

    
      	
              7.

            	
              CONFIDENTIAL
                INFORMATION AND INNOVATIONS.

            

    

     

    
      	 	
              7.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) 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; 

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (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; 

     

    (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 Developer Outlets); 

     

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

     

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

     

    (9) the
      terms
      and conditions of this Agreement and the Franchise Agreements entered into
      pursuant to this Agreement. 

     

    Franchisor
      will disclose to Developer such parts of the Confidential Information as
      Franchisor deems necessary or advisable from time to time for the performance
      of
      Developer's obligations under this Agreement, and Developer may learn or
      otherwise obtain additional Confidential Information from Franchisor, its
      Affiliates, its franchisees, its developers and others during the term of this
      Agreement. Developer acknowledges and agrees that neither Developer nor any
      agent, representative or contractor of Developer will acquire any interest
      in or
      right to use the Confidential Information, other than Developer's right to
      utilize certain Confidential Information in the development of UFood Outlets
      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 Outlets developers and franchisees.
      Developer agrees to disclose the Confidential Information to its Owners and
      employees only to the extent reasonably necessary for the performance of
      Developer's obligations under this Agreement and only if such individuals have
      agreed to maintain such information in confidence in an agreement enforceable
      by
      Franchisor. 

     

    Developer
      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 Developer solely on the condition that
      Developer, its Owners and its employees who have access to the Confidential
      Information agree, and Developer (on its and their behalf) does hereby agree,
      that, during and after the term of this Agreement, Developer, its Owners and
      such employees:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (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 the Development Manager and such
      other employees of Developer that Franchisor designates who will have access
      to
      such information to execute the non-competition and confidentiality agreement
      in
      the form attached hereto as Exhibit F
      (the
      "Confidentiality and Non Competition Agreement"). Developer shall provide
      Franchisor, at its request, executed originals of each such Confidentiality
      and
      Non Competition Agreement. 

     

    Notwithstanding
      anything to the contrary contained in this Agreement and provided Developer
      shall have obtained Franchisor's prior written consent, the restrictions on
      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 Developer
      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 Developer is legally compelled to disclose such
      information, provided Developer 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. 

     

    
      	 	
              7.B.

            	
              INNOVATIONS.

            

    

     

    Developer
      agrees to disclose to Franchisor all ideas, concepts, methods, techniques and
      products conceived or developed by Developer 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. Developer
      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 Developer or any other Person with respect to any
      such
      ideas, concepts, methods, techniques and products. Developer will not use,
      nor
      will it allow any other Person to use, any such ideas, concepts, methods,
      techniques and products, whether in connection with any Developer Outlets or
      otherwise, without obtaining Franchisor's prior written approval. Developer
      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
      exclusive ownership rights in such ideas, concepts, methods, techniques and
      products. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              8.

            	
              EXCLUSIVE
                RELATIONSHIP.

            

    

     

    Developer
      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. Developer
      further acknowledges and agrees that the restrictions contained in this
Section 8
      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 Developer 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 and retail businesses
      featuring the sale of nutritional products or similar businesses, Developer
      and
      its owners and members of their respective Immediate Families will deal
      exclusively with Franchisor. Developer therefore agrees that, during the term
      of
      this Agreement, neither Developer nor any Owner of Developer, nor any member
      of
      the Immediate Family of Developer or of any Owner of Developer, 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 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (e) employ
      or
      seek to employ any individual who is employed by Franchisor, its Affiliate
      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 Developer 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 Developer Outlets
      developed and operated pursuant to Franchise Agreements with Franchisor.

     

    Developer
      acknowledges and agrees that the failure of any Person restricted pursuant
      to
      this Section 8
      to
      comply with the restrictions of this Section 8
      (regardless of whether that Person actually has executed this Agreement, a
      Guarantee or a Confidentiality and Non Competition Agreement) shall constitute
      a
      breach of this Agreement by Developer. 

     

    
      	
              9.

            	
              OTHER
                OBLIGATIONS OF DEVELOPER.

            

    

     

    
      	 	
              9.A.

            	
              DEVELOPMENT
                MANAGER AND OTHER DEVELOPER PERSONNEL.

            

    

     

    Within
      thirty (30) days after the Effective Date, Developer shall submit to Franchisor
      the identity and qualifications of the proposed development manager for the
      Developer's business under this Agreement (the "Development
      Manager"),
      including curriculum vitae, work history, experience, references, background
      verifications and other information that Franchisor reasonably requests.
      Franchisor shall have the right to conduct an in-person interview of the
      proposed Development Manager, with all travel and other expenses relating
      thereto being borne by Developer. Developer shall not employ any Development
      Manager unless such individual has been approved by Franchisor. Notwithstanding
      the foregoing or anything to the contrary in this Agreement, Developer shall
      be
      solely responsible for the hiring, firing and personnel decisions, and the
      terms
      and conditions of employment, relating to the Development Manager and all of
      its
      other personnel. 

     

    An
      approved and qualified Development Manager must devote all of his or her
      business time and attention to fulfilling the Developer's obligations under
      this
      Agreement and otherwise supervising the development and operation of the
      Developer Outlets. Franchisor shall have the right to deal with the Development
      Manager on matters relating to the day-to-day operations of Developer under
      this
      Agreement. 

     

    
      	 	
              9.B.

            	
              OTHER
                MANAGEMENT PERSONNEL.

            

    

     

    In
      addition to the Development Manager, Developer shall hire, train and maintain
      the number and level of management personnel required for the conduct of its
      business pursuant to this Agreement. Developer shall keep Franchisor advised
      of
      the identities of such personnel and shall be responsible for ensuring that
      such
      personnel are properly trained to perform their duties. 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	 	
              9.C.

            	
              RECORDS
                AND REPORTS.

            

    

     

    Developer,
      at its expense, shall establish and maintain and preserve at its principal
      office, full, complete and accurate records and reports, and, if required by
      Franchisor, compact disks and databases in the form specified by Franchisor
      from
      time to time pertaining to the development and operation of Developer Outlets
      and the performance by Developer of its obligations under this Agreement,
      including: site reports, market studies and analysis, supervisory reports
      relating to operation of Developer Outlets, records reflecting the financial
      condition and performance of Developer (utilizing Franchisor's bookkeeping,
      accounting, recordkeeping and records retention system, including a general
      ledger system which utilizes a standard chart of accounts prescribed by
      Franchisor from time to time) and information relating to employee turnover.
      Franchisor or its representatives shall have the right at any reasonable time
      to
      inspect, audit and copy any books, records, reports, computer data bases and
      documents pertaining to Developer's obligations hereunder. Developer agrees
      to
      cooperate fully with Franchisor in connection with any such inspection or audit.
      

     

    Developer
      shall adopt the calendar year as its fiscal year. In addition to the reports
      and
      information required under the Franchise Agreements and otherwise in connection
      with the development and operation of Developer Outlets, Developer shall furnish
      to Franchisor in the form and format from time to time prescribed by Franchisor,
      and/or restated in accordance with Franchisor's then current financial and
      accounting practices and procedures: 

     

    (1) on
      or
      before the tenth (10th) day of each month, consolidated reports of the Gross
      Receipts, F&B Gross Receipts and Nutritional Products Gross Receipts (each
      as defined in the Franchise Agreement) for all Developer Outlets for the
      preceding month; 

     

    (2) within
      fifteen (15) days following the end of each calendar quarter, reports in
      the format prescribed by Franchisor from time to time on Developer's progress
      on
      its Development Plan and Developer's activities during the immediately preceding
      quarter, including Developer's activities in locating and developing sites
      and
      monitoring the development and operation of Developer Outlets, training
      activities and employee statistics; 

     

    (3) upon
      request by Franchisor, such other data, reports, information and supporting
      records for such periods as Franchisor from time to time requires; and

     

    (4) by
      April 15 of each year, a consolidated year end balance sheet of Developer
      and all Controlled Affiliates, a consolidated profit and loss statement covering
      Developer's and its Controlled Affiliates' operations for such fiscal year
      reflecting all year end adjustments, and a consolidated statement of changes
      in
      cash flow of Developer and its Controlled Affiliates.

     

    Each
      report and financial statement submitted by Developer shall be signed and
      verified by Developer in the manner prescribed by Franchisor. Franchisor may
      disclose data derived form these reports and financial statements in any manner,
      but will not (without Developer's consent) disclose Developer's identity in
      connection therewith in any materials Franchisor circulates publicly, unless
      Franchisor is required by law to do so. 

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Developer
      agrees to maintain and to furnish to Franchisor upon request complete copies
      of
      all income, sales, use and service tax returns, and employee withholding,
      worker's compensation and similar reports filed by Developer reflecting
      Developer's activities and the activities of the Developer Outlets. Developer
      shall immediately report to Franchisor and/or its designee any events or
      developments which might have a materially adverse impact on the operation
      of
      any of the Developer Outlets, the performance of Developer under this Agreement,
      or the goodwill associated with the Marks and UFood Outlets. 

     

    
      	 	
              9.D.

            	
              COMPLIANCE
                WITH LAWS AND GOOD BUSINESS PRACTICES.
                

            

    

     

    Developer
      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. Developer shall comply with all applicable laws, ordinances and
      regulations, including laws relating to worker's compensation insurance,
      unemployment insurance, and withholding and payment of all taxes. Developer
      shall, in all dealings with its contractors, suppliers, Franchisor, and others
      adhere to high standards of honesty, integrity, fair dealing and ethical
      conduct. Developer shall pay all amounts owed to its vendors and suppliers
      (including Franchisor and its Affiliates) on time and in the ordinary course
      of
      business. Developer agrees to refrain from any business or practice which may
      be
      injurious to the business of Franchisor and the goodwill associated with the
      Marks and other UFood Outlets. Developer shall notify Franchisor in writing
      within three (3) days after the commencement of any action, suit or
      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 Developer. 

     

    Developer
      agrees to comply with, and to assist Franchisor to the fullest extent possible
      in its efforts to comply with, the Anti-Terrorism Laws. In connection with
      such
      compliance, Developer 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 Developer nor any Owner of Developer
      is
      otherwise in violation of any of the Anti-Terrorism Laws or listed in the Annex
      to Executive Order 13224. Developer certifies that none of Developer, 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)
      Developer agrees not to hire or contract with any individual who is listed
      in
      the Annex. Developer also certifies that it has no knowledge or information
      that, if generally known, would cause Developer, any of Developer's Owners
      or
      employees, or anyone associated with Developer to be listed in the Annex to
      Executive Order 13224, and, if any of the foregoing becomes listed on such
      Annex, Developer will immediately notify Franchisor in writing. Developer is
      solely responsible for ascertaining what actions it must take to comply with
      the
      Anti-Terrorism Laws, and Developer specifically acknowledges and agrees that
      its
      indemnification responsibilities set forth in Section 13.D.
      of this
      Agreement extend to its obligations under this Subsection. Any misrepresentation
      by Developer under this Subsection, or any violation of the Anti-Terrorism
      Laws
      by Developer 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 Developer (and one of its Affiliates) pursuant to
Section 11.B.
      below.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              TRANSFER.

            

    

     

    
      	 	
              10.A.

            	
              TRANSFER
                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.
      Upon
      Franchisor's assignment of all of its rights and obligations under this
      Agreement, Franchisor shall have no further liability or obligation to
      Developer. 

     

    
      	 	
              10.B.

            	
              TRANSFER
                BY DEVELOPER.

            

    

     

    Developer
      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 Developer 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 Developer, its Owners and Persons that
      directly or indirectly have a Controlling Interest in Developer. Therefore,
      Developer agrees that: 

     

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

     

    (2) no
      obligations, rights or interest of Developer in (a) this Agreement,
      (b) any Ownership Interest in any Controlled Affiliate, or (c) all or
      substantially all of the assets of Developer; and 

     

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

     

    may
      be
      transferred without the prior written consent of Franchisor. A transfer of
      this
      Agreement may be made (subject to Franchisor's rights below) only with a
      transfer of all of Developer's rights and obligations under all Franchise
      Agreements signed by Developer and all Ownership Interests in all Controlled
      Affiliates held by Developer or any Owner of Developer. 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.

     

    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 Developer; and
      (5) except where specifically approved by Franchisor, a management
      agreement whereby Developer delegates (i) any of its obligations under this
      Agreement or (ii) any or all of the management functions with respect to
      the business to be conducted by Developer 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, partnership 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. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.C.

            	
              FRANCHISOR'S
                RIGHT TO APPROVE TRANSFERS.

            

    

     

    If
      Developer or any Person intends to make a transfer of any interest which, under
      Paragraph B
      of this
      Section, requires Franchisor's prior written consent, Developer shall deliver
      to
      Franchisor written notice of such proposed transfer at least thirty (30) 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 and fee within which
      to
      evaluate the proposed transaction and to notify Developer 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 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.

     

    Developer
      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 Person who directly
      or
      indirectly owns any interest in or performs any services for a Competitive
      Business; 

     

    (2) Developer
      and its Owners are not in full compliance with this Agreement or Developer
      or
      any Controlled Affiliate is not in full compliance with any Franchise Agreement
      executed pursuant to this Agreement; 

     

    (3) the
      proposed transferee and, if applicable, any of its owners (a) are not of
      good moral character, (b) otherwise fail to meet Franchisor's then
      applicable standards for developers or owners of developers, or (c) are not
      in full compliance with any agreement between Franchisor or its Affiliate and
      any of them; or 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

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

     

    
      	 	
              10.D.

            	
              CONDITIONS
                FOR APPROVAL OF TRANSFERS.

            

    

     

    In
      granting its approval of a proposed transfer, Franchisor may also impose other
      reasonable conditions on its approval of the proposed transfer, including any
      one or more of the following: 

     

    (1) that
      the
      proposed transferee and its owners demonstrate that they have sufficient
      business experience, aptitude and financial recourses to develop UFood Outlets
      and operate Developer Outlets in accordance with the requirements of this
      Agreement and all Franchise Agreements executed pursuant to this Agreement;
      

     

    (2) that
      Developer, the transferring Owners or the proposed purchaser pay a transfer
      fee
      to Franchisor of Twenty-Five Thousand Dollars ($25,000), 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;
      

     

    (3) 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; 

     

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

     

    (5) that
      Developer, the transferring Owners and the transferee (if the transferee is,
      or
      is the holder of Ownership Interests in, a developer or franchisee of Franchisor
      or otherwise has, or is the holder of Ownership Interests in a Person that
      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; 

     

    (6) that
      Developer or, if applicable, the transferring Owners (and members of their
      Immediate Families) execute a noncompetition undertaking in favor of Franchisor
      and the transferee, which undertaking shall contain the restrictions in
Section 12.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; 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (7) that
      Developer, the transferor and the transferee (if the transferee is, or is the
      holder of Ownership Interests in, a developer or franchisee of Franchisor or
      otherwise has, or is the holder of Ownership Interests in a Person that has,
      a
      contractual relationship with Franchisor or any of its Affiliates) pay all
      amounts owed to Franchisor or its Affiliates which are then due and unpaid;
      

     

    (8) that
      any
      new Development Manager is reasonably acceptable to Franchisor and that the
      new
      Development Manager must attend and complete to Franchisor's satisfaction
      Franchisor's initial management training program in the operation of a UFood
      Outlet;

     

    (9) 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 the
      term of this Agreement or (b) execute Franchisor's then current form of
      standard development agreement and such ancillary documents (including
      guarantees) as are then customarily used by Franchisor in the grant of
      development rights for UFood Outlets, which may contain provisions materially
      different from those contained in this Agreement, provided that (i) such
      development agreement shall be for a term equal to the remaining Development
      Term of this Agreement and shall provide for the same Sub Areas and Sub Area
      Quotas as are reflected herein, and (ii) the Franchise Agreement to be
      executed for each UFood Outlets to be developed pursuant to such development
      agreement shall be the then current form of standard franchise agreement that
      is
      then customarily used by Franchisor in the grant of Franchises for UFood
      Outlets, which may contain provisions materially different from those contained
      in the Franchise Agreement attached hereto.

     

    (10) that
      Developer, 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 developer hereunder,
      or under the development agreement and documents referenced in Subparagraph
      9(b)
      above, as applicable, whether accruing before or after the effective date of
      the
      transfer. 

     

    Subparagraph (2)
      above
      shall not apply to transfers by gift, bequest, or inheritance. Developer
      acknowledges and agrees that the failure of any Person restricted pursuant
      to
Subparagraph (6)
      above to
      comply with this Section 10,
      including the restrictions described in Subparagraph (6),
      shall
      constitute a breach of this Agreement by Developer. 

     

    
      	 	
              10.E.

            	
              DEATH
                OR INCAPACITY OF DEVELOPER.

            

    

     

    If
      Developer is an individual, upon the death of Developer or the permanent
      incapacity of Developer to conduct business affairs, or, if Developer is a
      corporation, limited liability company, partnership or other business entity,
      upon the death or permanent incapacity of an Owner of Developer, all of such
      Person's interest in this Agreement, or such interest in Developer, shall be
      transferred to a transferee approved by Franchisor. Such disposition of this
      Agreement or such interest in Developer (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 10.
      Failure
      to so transfer the interest in this Agreement or such interest in Developer
      within said period of time shall constitute a breach of this Agreement.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.F.

            	
              PUBLIC
                OR PRIVATE OFFERING.

            

    

     

    Developer
      acknowledges and agrees that it is the intent of both Franchisor and Developer
      that none of Developer or any of its Affiliates, or Owners shall be or become,
      and Developer 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, any
      equivalent or successor law or regulation, or otherwise), including by way
      of an
      initial public offering or transfer to or merger with an existing public
      company. Accordingly, Developer agrees that no Ownership Interests in Developer
      or any such other Person may be offered pursuant to a public offering or
      transferred to a public company or "reporting company." Developer 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 Developer, including the conditions described in Sections 10.C.
      and
10.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
      Developer 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
      Developer or any Developer Outlet or in the parties owning a Controlling
      Interest in Developer or any Developer Outlet, or in the individual or
      individuals controlling the management, policies or decision making power of
      Developer; 

     

    (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;

     

    (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 clearly state 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 Developer; 

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

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

     

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

     

    (8) Developer
      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;

     

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

     

    Developer
      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 Subsection. Developer
      also agrees to reimburse Franchisor for its reasonable expenses incurred in
      connection with any such private placement (including attorneys' 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. 

     

    
      	 	
              10.G.

            	
              EFFECT
                OF CONSENT TO TRANSFER.

            

    

     

    Franchisor's
      consent to a transfer under this Section 10
      shall
      not constitute a waiver of any claims it might have against Developer (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 Developer
      or
      the transferee. Franchisor's consent to any such transfer shall not, unless
      expressly provided in such consent, effect a release of Developer (or its
      Owners, as the case may be) following the transfer. Franchisor's approval of
      any
      proposed transfer indicates only that the transferee meets, or that Franchisor
      has waived, the criteria established by Franchisor for developers 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 transferee. 

     

    
      	 	
              10.H.

            	
              FRANCHISOR'S
                RIGHT OF FIRST REFUSAL.

            

    

     

    If
      Developer or any of its Owners shall at any time determine to sell an interest
      in this Agreement, all or substantially all of the assets of Developer, or
      an
      Ownership Interest in Developer, Developer 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 Developer, 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 Developer (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 Developer
      (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. 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    Franchisor
      shall have the right, exercisable by written notice delivered to Developer
      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, Developer or any 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 Developer'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, with all sales and other transfer taxes paid by Developer.
      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, Developer and/or such selling Owner(s) (and members of their respective
      Immediate Families), as applicable, shall be bound by the restrictions in
Section 12.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. 

     

    If
      Franchisor does not exercise its right of first refusal, Developer 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 thirty (30) days after Franchisor's approval
      of the transfer, or if there is a change in the terms of the sale (of which
      Developer 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. 

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	 	
              10.I.

            	
              OWNERSHIP
                STRUCTURE.

            

    

     

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

     

    
      	
              11.

            	
              TERMINATION
                OF AGREEMENT.

            

    

     

    
      	 	
              11.A.

            	
              BY
                DEVELOPER.

            

    

     

    If
      Developer 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 Developer specifically identifying the material breach; or 

     

    (2) undertake
      within thirty (30) days after Franchisor's receipt of written notice from
      Developer 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
      Developer 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 Developer other than as provided in this Subsection A
      shall be a breach of this Agreement. 

     

    
      	 	
              11.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 Developer, if: 

     

    (1) Developer
      fails to satisfy the development obligations for any Sub-Area pursuant to this
      Agreement; 

     

    (2) Developer
      or any of its Owners has made or makes any material misrepresentation or
      omission in its application or acquisition of the rights under this Agreement,
      in materials submitted relating to a transfer, or in otherwise performing its
      obligations hereunder, including with respect to any Anti-Terrorism Laws;

     

    (3) Developer,
      any of its Owners or the Development Manager is convicted by a trial court
      of,
      or pleads guilty or no contest to a felony or any other crime or offense, or
      engages in any misconduct or behavior, that might adversely affect the
      reputation of UFood Outlets or Developer or the goodwill associated with the
      Marks; 

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    (4) Developer
      or any other Person makes a purported assignment or transfer in violation of
      this Agreement; 

     

    (5) Developer
      (or any of its Owners or employees) makes any unauthorized use, disclosure
      or
      duplication of any of the Confidential Information, 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;
      

     

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

     

    (7) Developer,
      any of its Owners, or any member of their Immediate Families (whether or not
      bound by individual noncompetition undertakings), or other Person who has
      executed such individual undertaking, violates the restrictions in this
      Agreement or such undertaking with respect to Competitive Businesses or
      Confidential Information; 

     

    (8) Developer
      fails to make payments of any amounts due Franchisor or its Affiliates and
      does
      not correct such failure within ten (10) days after written notice of such
      failure is delivered to Developer; 

     

    (9) Developer
      or any of its Owners fails to comply with any other provision of this Agreement
      and does not correct such failure within thirty (30) days after written notice
      of such failure is delivered to Developer; 

     

    (10) Franchisor
      has delivered a notice of termination of one (1) or more Franchise
      Agreements executed pursuant to this Agreement in accordance with its terms
      and
      conditions, or Developer (or a Controlled Affiliate) has attempted to terminate
      this Agreement or a Franchise Agreement with Franchisor without complying with
      the appropriate termination provisions of this Agreement or such Franchise
      Agreement;

     

    (11) Developer
      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; Developer
      consents to the appointment of a receiver, trustee, or liquidator of all or
      the
      substantial part of its property; any portion of Developer's assets 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 Developer or
      any
      portion of Developer's assets is not vacated within thirty (30) days following
      the order's entry; or

     

    (12) Developer
      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 of this Agreement, whether or not such failures to comply are
      corrected after notice of default is given.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	 	
              11.C.

            	
              TERMINATION
                OF THE DEVELOPMENT TERM AND CERTAIN RIGHTS OF
                DEVELOPER.

            

    

     

    If
      Franchisor is entitled to terminate this Agreement in accordance with
Section 11.B.,
      Franchisor shall, instead of terminating this Agreement, have the option to
      terminate Developer's right to develop additional UFood Outlets in Sub-Areas
      specified by Franchisor and Developer's territorial rights under Section 2.B.
      related
      to those Sub-Areas, effective ten (10) days after delivery of written
      notice thereof to Developer. 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 11.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. 

     

    
      	 	
              11.D.

            	
              EFFECT
                OF TERMINATION.

            

    

     

    The
      parties acknowledge and agree that the fact of the termination of this Agreement
      alone shall not be grounds for the termination of any Franchise Agreement
      executed prior to the effective date of the termination of this Agreement.
      However, nothing in this Agreement shall limit any party's right to terminate
      any such Franchise Agreement, including the right to terminate any such
      Franchise Agreement due to any event, cause or default which also forms the
      basis or grounds of the termination of this Agreement.

     

    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. 

     

    
      	
              12.

            	
              RIGHTS
                AND OBLIGATIONS OF FRANCHISOR AND DEVELOPER UPON TERMINATION OR EXPIRATION
                OF THIS AGREEMENT.

            

    

     

    
      	 	
              12.A.

            	
              PAYMENT
                OF AMOUNTS OWED.

            

    

     

    Developer
      shall immediately pay to Franchisor and its Affiliates, upon termination or
      expiration of this Agreement for any reason, all amounts owed to Franchisor
      or
      its Affiliates which are then unpaid, whether or not attributable to the
      operation of Developer's business under this Agreement. 

     

    
      	 	
              12.B.

            	
              DE
                IDENTIFICATION.

            

    

     

    Upon
      the
      termination or expiration of this Agreement for any reason, except with respect
      to Franchise Agreements then in effect between Franchisor and Developer or
      its
      Controlled Affiliates, Developer shall: 

     

    (1) have
      no
      further rights to develop or operate UFood Outlets; 

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    (2) immediately
      cease all use of the Marks and not thereafter directly or indirectly at any
      time
      or in any manner identify itself or any business as a current or former
      developer of Franchisor, or as otherwise associated with Franchisor, or use
      any
      Mark, any colorable imitation thereof or any mark or trade dress substantially
      identical to or deceptively similar to any Mark 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; 

     

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

     

    Developer
      shall furnish to Franchisor, within thirty (30) days after the effective date
      of
      termination or expiration, evidence satisfactory to Franchisor of Developer's
      compliance with all of the foregoing obligations in Subparagraphs (2) and
      (3) above. 

     

    
      	 	
              12.C.

            	
              CONFIDENTIAL
                INFORMATION.

            

    

     

    Upon
      termination or expiration of this Agreement for any reason, except with respect
      to Franchise Agreements then in effect between Franchisor and Developer or
      its
      Controlled Affiliates, Developer, 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.
      

     

    
      	 	
              12.D.

            	
              COVENANT
                NOT TO COMPETE.

            

    

     

    Upon
      the
      expiration or termination of this Agreement for any reason (other than pursuant
      to Section 11.A.),
      and
      except with respect to Franchise Agreements then in effect between Franchisor
      and Developer or its Controlled Affiliates, neither Developer nor any of its
      Owners shall directly or indirectly (through a member of the Immediate Family
      of
      Developer or any 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 within the Development Area, 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; 

     

    (2) perform
      services as a director, officer, manager, employee, consultant, representative,
      agent or otherwise for any Competitive Business located or operating within
      the
      Development Area; 

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    (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 within the
      Development Area; 

     

    (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.
      

     

    Developer
      agrees that the provisions of this Section are necessary to protect the
      legitimate business interests of Franchisor, its Affiliates and other
      franchisees of Franchisor and its Affiliates, including preventing the
      unauthorized dissemination of marketing, promotional, and other confidential
      information to competitors thereof, protecting the trade secrets and the
      integrity of the System, preventing duplication of the System by unauthorized
      third parties, and preventing damage to and/or loss of goodwill associated
      with
      the Marks and other intellectual property rights of Franchisor. 

     

    
      	 	
              12.E.

            	
              CONTINUING
                OBLIGATIONS.

            

    

     

    All
      obligations of Franchisor and Developer 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. 

     

    
      	
              13.

            	
              RELATIONSHIP
                OF THE PARTIES/INDEMNIFICATION.

            

    

     

    
      	 	
              13.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 Developer 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. Developer shall conspicuously identify
      itself in all dealings with customers, suppliers, vendors, public officials,
      Developer personnel, and others as the owner of the business under a license
      granted by Franchisor and shall conspicuously and prominently place such other
      notices of independent ownership in the form that Franchisor periodically
      designates at its principal office and on such forms, business cards,
      stationery, advertising, and such other materials as Franchisor may require
      from
      time to time. 

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	 	
              13.B.

            	
              NO
                LIABILITY FOR ACTS OF OTHER PARTY.

            

    

     

    Developer
      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 Developer. Except as
      expressly authorized in writing, neither Franchisor nor Developer 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 licensor and licensee. Neither Franchisor
      nor
      Developer 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 any Developer Outlet
      or
      Developer's business under this Agreement. 

     

    
      	 	
              13.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, Developer or Developer's property, or upon
      Franchisor, in connection with the business conducted by Developer, except
      any
      taxes Franchisor is required by law to collect from Developer with respect
      to
      purchases from Franchisor and Franchisor's income taxes. Payment of all such
      taxes shall be the responsibility of Developer. 

     

    
      	 	
              13.D.

            	
              INDEMNIFICATION
                OF FRANCHISOR.

            

    

     

    Developer
      agrees to indemnify, defend and hold Franchisor and other Franchisor Indemnified
      Parties harmless against, and to reimburse them for any and all taxes described
      in Paragraph C of this Section 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, the business conducted by Developer pursuant to this Agreement,
      or
      the development or operation of any UFood Outlets developed or to be developed
      by Developer, including any breach or violation of any agreement, contract
      or
      commitment by Developer resulting from Developer'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 Developer
      arising in connection with training provided by Franchisor or its Affiliates
      or
      designees or otherwise; 

     

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

     

    (3) the
      transfer of any interest in this Agreement, some or all of the assets of
      Developer or Developer in any manner. 

     

    For
      purposes of this indemnification, "claims" shall mean and include all
      obligations, actual, 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 Developer
      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 Developer.
      

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
              14.

            	
              GENERAL
                PROVISIONS.

            

    

     

    
      	 	
              14.A.

            	
              ARBITRATION.

            

    

     

    Franchisor
      and Developer agree that, except for controversies, disputes, or claims related
      to or based on unauthorized use or infringement of the Marks or unauthorized
      use
      or disclosure of Confidential Information, or enforcement of noncompetition
      provisions, all controversies, disputes, or claims between Franchisor and its
      Affiliates, and its and their respective owners, officers, managers, agents,
      and
      employees, as applicable, and Developer (and its Owners, guarantors, Affiliates,
      and employees, as applicable) arising out of or related to:

     

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

     

    (2) Franchisor's
      relationship with Developer;

     

    (3) the
      scope
      and validity of this Agreement or any other agreement between Developer and
      Franchisor or any provision of any such agreement, including the validity and
      scope of the arbitration obligation under this Section, which Franchisor and
      Developer acknowledge are to be determined by the arbitrator and not by a court;
      or; 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 ten (10) 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 14.G.
      otherwise provides, Franchisor and Developer (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.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    Franchisor
      and Developer 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 Developer 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 Developer 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
      14.F.

     

    Franchisor
      and Developer 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 Developer (and its Owners, 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 14, 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 14.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 14 (excluding this Section 14.A.).

     

    Despite
      this agreement to arbitrate, Franchisor and Developer 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 14.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.

     

    
      	 	
              14.B.

            	
              SPECIFIC
                ENFORCEMENT.

            

    

     

    Each
      party to this Agreement agrees that this Section 14
      shall be
      specifically enforceable against such party by the other parties. The provisions
      of this Section 14
      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. 

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.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. 

     

    
      	 	
              14.D.

            	
              INJUNCTIVE
                RELIEF.

            

    

     

    Notwithstanding
      anything to the contrary contained in Section 14.A.
      hereof,
      Franchisor and Developer 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 14.A.
      Developer 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, Developer 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. 

     

    
      	 	
              14.E.

            	
              CONSENT
                TO JURISDICTION.

            

    

     

    Subject
      to the arbitration provisions of this Agreement and the provisions below,
      Developer and the Owners agree that all litigation proceedings arising under
      this Agreement or otherwise as a result of the relationship between Developer
      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 Developer (and its Owners) irrevocably submit to the jurisdiction
      of those courts and waive any objection Developer (or its Owners) might have
      to
      either the jurisdiction of or venue in those courts. Nonetheless, Developer
      and
      its Owners agree that Franchisor may enforce this Agreement and any arbitration
      orders and awards in the courts of the state or states in which Developer is
      domiciled or any Developer Outlet is located.

     

    
      	 	
              14.F.

            	
              COSTS
                AND ATTORNEYS' FEES.

            

    

     

    If
      Franchisor incurs expenses due to Developer'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, Developer 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.

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.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
      Developer for unauthorized use of the Marks or unauthorized use or disclosure
      of
      any Confidential Information, Franchisor and Developer 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 Developer
      irrevocably waive trial by jury in any action, proceeding, or counterclaim,
      whether at law or in equity, brought by either of them. 

     

    
      	 	
              14.H.

            	
              LIMITATION
                OF CLAIMS.

            

    

     

    Except
      for claims arising from Developer'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 Developer 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.

     

    
      	 	
              14.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 Developer concerning the subject
      matter hereof, and supersede all prior agreements, no other representations
      having induced Developer 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. 

     

    
      	 	
              14.J.

            	
              NOTICES.

            

    

     

    Except
      as
      otherwise provided in this Agreement, all notices, demands, requests, consents,
      approvals and other 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: 

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	
              If
                to Developer, to:

            	
              _____________________________________

              _______________________________

              _______________________________

              _______________________________

              Attention:_____________________________

                             
                _____________________________

              Telephone
                No.:_________________________

              Facsimile
                No.:__________________________

            
	 	 
	
              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

            
	 	 
	
              With
                a copy to:

            	
              
                
                  _____________________________________

                  _______________________________

                  _______________________________

                  _______________________________

                  Attention:_____________________________

                                 
                    _____________________________

                  Telephone
                    No.:_________________________

                  Facsimile
                    No.:__________________________

                

              

            

    

     

    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 with proof of receipt or overnight courier service, or seven
      (7) business days after sending if sent by registered mail. 

     

    
      	 	
              14.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. 

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    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, Developer 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.
      Developer agrees to be bound by each provision of this Agreement to the greatest
      extent to which it may lawfully be bound. 

     

    
      	 	
              14.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.

     

    
      	 	
              14.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
      Developer. 

     

    
      	 	
              14.N.

            	
              NO
                WARRANTIES OR GUARANTEES.

            

    

     

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

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.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 other fees or contributions due afterward pursuant to this Agreement
      or any related agreement.

     

    
      	 	
              14.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.

     

    
      	 	
              14.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."
      

     

    
      	 	
              14.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. 

     

    
      	 	
              14.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. 

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	 	
              14.T.

            	
              NO
                WITHHOLDING OF PAYMENTS.

            

    

     

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

     

    
      	 	
              14.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 Developer 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.

     

    
      	 	
              14.V.

            	
              ELECTRONIC
                MAIL.

            

    

     

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

     

    Developer
      further agrees that: (a) Official Senders are authorized to send e-mails to
      those of Developer's employees as Developer 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 Developer; 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 14.W.
      shall
      not apply to the provision of notices by either party under this Agreement
      pursuant to Section 14.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. 

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    
      	
              UFood
                Restaurant Group, Inc.,
                a
Nevada corporation

            	
              [Developer]

            
	 	 
	
              By:_____________________________________

            	
              By:_____________________________________

            
	
              Title:___________________________________

            	
              Title:___________________________________

            

    

    

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    JOINDER
      OF OWNERS

     

    In
      consideration of the grant of the rights to Developer pursuant to the foregoing
      Development 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 Development Agreement applicable to
      Owners.

     

    
      	____________________________________	____________________________________
	
              Name:

            	
              Name:

            
	 	 
	____________________________________	____________________________________
	
              Name:

            	
              Name:

            

    

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    DEVELOPER
      ACKNOWLEDGMENTS AND REPRESENTATIONS STATEMENT

     

    1. Developer
      acknowledges that it has read the Development Agreement (the "Agreement")
      between UFood Restaurant Group, Inc. ("Franchisor") and Developer 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 and the uniformity of those
      standards at all UFood Outlets in order to protect and preserve the goodwill
      of
      the Marks. (Capitalized terms not defined herein shall have the respective
      meanings set forth in the Agreement.) Developer acknowledges that:
      (a) Franchisor delivered and Developer 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
      Developer in connection with the transactions contemplated in the Agreement;
      and
      (b) Franchisor delivered and Developer received the Agreement in form for
      execution at least seven (7) calendar days prior to the execution of the
      Agreement. 

     

    2. Attached
      to Franchisor's Franchise Disclosure Document are copies of the current forms
      of
      Area Development Agreement and Franchise Agreement. Developer acknowledges
      that
      these are the current forms and that Franchisor, at its option, may from time
      to
      time modify or amend in any respect the standard forms of Area Development
      Agreement and Franchise Agreement used by Franchisor in offering or granting
      area development and franchise rights (subject to Developer's rights set forth
      in the Agreement). Developer 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. Developer
      acknowledges that the food service and nutritional supplement businesses are
      highly competitive, with often challenging market conditions. Developer
      acknowledges that it has conducted an independent investigation of the business
      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
      Developer. Developer acknowledges that it and its Affiliates, and their
      respective Owners and officers, are sophisticated and have significant
      experience in the business of developing and operating restaurants and other
      businesses. 

     

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

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Developer
      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. Developer
      acknowledges and agrees that this may mean that Developer may be required,
      for
      example, to change one or more of (a) the trademarks and/or service marks
      Developer uses; (b) the trade dress or operational procedures Developer
      uses; or (c) other aspects of Developer Outlets, whether already developed,
      under development or to be developed. Some or all of these changes may require
      Developer to make substantial additional capital expenditures. Developer
      acknowledges and agrees that Franchisor may discontinue any of the variations
      which it had previously allowed Developer to utilize and that Developer 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
      Developer.

     

    5. Developer
      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
      Developer under the Agreement at different times and locations, under different
      market and economic conditions, and in different situations. Developer 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.

     

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

     

    (A) neither
      Franchisor nor any of its Affiliates, nor any of their respective officers,
      directors, employees, agents or representatives, 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 other employee, officer, director, agent
      or
      representative of Franchisor or any of its Affiliates 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 area developer or franchisee can expect
      or that present or past franchisees or area developers have had; and

     

    (C) Franchisor
      specifically instructs its and its Affiliates' sales personnel, employees,
      officers, directors, agents and representatives (as applicable) 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. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

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

     

    7. Developer
      acknowledges that Franchisor's approval of a Development Plan for Developer's
      development and operation of UFood Outlets under the Agreement does not
      constitute any assurance that such Development Plan is adequate, favorable
      or
      not unduly burdensome, or that such UFood Outlets will be successful if the
      Development Plan is implemented by Developer. Franchisor's approval of the
      Development Plan indicates only that such Development Plan is deemed acceptable
      by Franchisor solely for its own purposes at the time of approval thereof.
      

     

    8. Developer
      acknowledges that in all of Franchisor's and its Affiliates' dealings with
      Developer, the officers, directors, employees and agents of Franchisor or its
      Affiliate act only in a representative capacity and not in an individual
      capacity. Developer further acknowledges that the Agreement, and all business
      dealings between Developer and such individuals as a result of the Agreement,
      are solely between Developer and Franchisor or its applicable Affiliate.
      Developer further represents to Franchisor, as an inducement to its entry into
      this Agreement, that neither Developer nor its Owners have made any
      misrepresentations in obtaining the rights granted under the Agreement.

     

    9. If
      Developer is a legal entity, Developer: 

     

    (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
      it
      owns requires such qualification, and has the authority to execute and deliver
      the Agreement and perform all of Developer's obligations under the Agreement;
      and

     

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

     

    10. Developer,
      whether or not a legal entity, represents and warrants that Developer is not
      subject to any restriction, agreement, contract, commitment, law, judgment
      or
      decree which would prohibit or be breached or violated by Developer's execution
      and delivery of the Agreement or performance of its obligations thereunder.
      At
      Franchisor's request, Developer 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 Developer, enforceable against
      Developer in accordance with its terms, and that Developer is not subject to
      any
      restriction, agreement, law, judgment or decree which would prohibit or be
      violated by Developer's execution and delivery of the Agreement and performance
      of its obligations thereunder. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    11. Developer
      further represents and warrants that all Owners of Developer and their interests
      therein are completely and accurately listed in Exhibit D to the Agreement
      and covenants that Developer 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. 

     

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

     

    
      	__________________________________________________________________________
	
              Address

            
	 
	
              __________________________________________________________________________

            
	
              City
                and State

            

    

    

    
      	 	
              [DEVELOPER]

            
	 	 
	 	
              By:_____________________________________________

            
	 	
              Name:___________________________________________

            
	 	
              Title:____________________________________________

            
	 	 
	 	
              Date:____________________________________________

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    DEVELOPMENT
      FEE, DEVELOPMENT AREA AND DEVELOPMENT SCHEDULE

     

    1. Development
      Fee.
      The
      Development Fee shall be _______________________ Thousand Dollars ($_________).
      

     

    2. Development
      Area.
      The
      Development Area shall be ____________________________.

     

    3. Sub-Areas.
      The
      Sub-Areas shall be described as follows:

     

    Sub-Area
      No. 1

     

    Sub-Area
      No. 2

     

    Sub-Area
      No. 3

     

    4. Outlet
      Development.
      Developer agrees to develop exactly _________ UFood Outlets in accordance with
      the terms of this Agreement. 

     

    5. Development
      Schedule.
      Developer agrees to have each UFood Outlet specified below open on or before
      the
      specified "Opening
      Date"
      shown
      below and to have open and in operation in each Sub-Area indicated, on or before
      the Opening Dates specified below, the cumulative numbers of UFood Outlets
      shown
      below. For each Sub Area, the cumulative number of UFood Outlets listed below
      for the end of each Development Period shall be known as the "Sub
      Area Quota"
      for
      that Development Period: 

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    
      Sub Area No. 1

    

     

    
      	
              Development Period

            	 	
              Date Development
Period Commences

            	 	
              Date Development
Period Ends

            	 	
              Cumulative Number
of UFood Outlets to
be Opened and in
Operation (the
“Sub-Area Outlets”)

            
	 	 	 	 	 	 	 

    

     

    
      Sub Area No. 2 

    

     

    
      	
              Development Period

            	 	
              Date Development
Period Commences

            	 	
              Date Development
Period Ends

            	 	
              Cumulative Number
of UFood Outlets to
be Opened and in
Operation (the
“Sub-Area Outlets”)

            
	 	 	 	 	 	 	 

    

    

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    
      	
              Sub Area No. 3

            
	
              Development Period

            	 	
              Date Development
Period Commences

            	 	
              Date Development
Period Ends

            	 	
              Cumulative Number
of UFood Outlets to
be Opened and in
Operation (the
“Sub-Area Outlets”)

            
	 	 	 	 	 	 	 

    

    

    Total
      UFood Outlets To Be Developed:

     

    
      	
              UFood
                Restaurant Group, Inc.,
                a
Nevada corporation

            	
              [Developer]

            
	 	______________________________
	 	 
	
              By:______________________________________

            	
              By:______________________________________

            
	
              Title:_____________________________________

            	
              Title:_____________________________________

            

    

    

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

     

    FORM
      OF FRANCHISE AGREEMENT

     

    [Form
      of Franchise Agreement to be inserted at time of signing Area Development
      Agreement]

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    OWNERS
      AND INITIAL CAPITALIZATION

     

    1. Owners:
      Listed
      below is the full name and mailing address of each person or entity who is
      an
      Owner of Developer, and a description of the nature and amount of such Owner's
      direct or indirect equity or voting interest in Developer:

     

    
      	
              Name:___________________________________

              Address:_________________________________

              __________________________________

              __________________________________

              __________________________________

            	 	
              Number
                and Type of Interests Owned:__________________

              %
                of Total Interests:________________________________

              Number
                of Interests Owner is Entitled
                to
Vote:____________________________________________

              Other
                Interest (Describe):____________________________

              ________________________________________

            
	 	 	 
	
              
                Name:___________________________________

                Address:_________________________________

                __________________________________

                __________________________________

                __________________________________

              

            	 	
              Number
                and Type of Interests Owned:__________________

              %
                of Total Interests:________________________________

              Number
                of Interests Owner is Entitled
                to
Vote:____________________________________________

              Other
                Interest (Describe):__________________________________

              _______________________________________

            
	 	 	 
	
              
                Name:___________________________________

                Address:_________________________________

                __________________________________

                __________________________________

                __________________________________

              

            	 	
              
                Number
                  and Type of Interests Owned:__________________

                %
                  of Total Interests:________________________________

                Number
                  of Interests Owner is Entitled
                  to
Vote:____________________________________________

                Other
                  Interest (Describe):__________________________________

                _______________________________________

              

            

    

    

    2. Initial
      Capitalization.
      Developer: (a) represents and warrants that it has developed and previously
      provided to Franchisor a description of its initial capital structure (the
      "Initial
      Capital Structure")
      which
      is a true, correct, complete and detailed description of Developer's capital
      structure; (b) covenants that it will not deviate from the Initial Capital
      Structure without Franchisor's prior written consent; and (c) acknowledges
      that Franchisor has relied on the Initial Capital Structure in entering into
      this Agreement. 

     

    
      	
              UFood
                Restaurant Group, Inc.,
                a
Nevada corporation

            	
              [Developer]

            
	
            	____________________________________
	 	
            
	
              By:_____________________________________

            	
              By:________________________________________

            
	
              Title:___________________________________

            	
              Title:______________________________________

            

    

    

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

     

    GUARANTY
      AND ASSUMPTION OF DEVELOPER'S OBLIGATIONS

     

    THIS
      GUARANTY AND ASSUMPTION OF DEVELOPER'S OBLIGATIONS
      is given
      this ___________ day of 20______, by the undersigned.

     

    Developer:   
      _____________________________________________________________________________

    (NAME)

     

    Date
      of Development Agreement:________________________________________________________________________

     

    In
      consideration of, and as an inducement to, the execution of the UFood Area
      Development Agreement dated as indicated above (the "Area
      Development 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 Area Development Agreement and
      thereafter as provided in the Area Development Agreement, that Developer shall
      punctually pay and perform each and every undertaking, agreement and covenant
      set forth in the Area Development Agreement; and (b) agrees to be
      personally bound by, and personally liable for the breach of, each and every
      provision in the Area Development Agreement as if the undersigned were a
      signatory to the Area Development Agreement, both monetary obligations and
      other
      obligations, including, without limitation, arbitration obligations, the
      obligation to pay costs and legal fees as provided in the Area Development
      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 Area Development 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 Developer
      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 Developer, but also among the Guarantors and other
      guarantors of Developer's obligations; 

     

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

     

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

     

    (D) such
      liability shall not be diminished, relieved or otherwise affected by any
      subsequent rider or amendment to the Area Development Agreement or by any
      extension of time, credit or other indulgence which Franchisor may from time
      to
      time grant to Developer 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
      Area Development Agreement and for so long thereafter as there are any monies
      or
      obligations owing to Franchisor under the Area Development Agreement;
      and

     

    (E) the
      written acknowledgment of Developer, accepted in writing by Franchisor, or
      the
      judgement of any court or arbitration panel of competent jurisdiction
      establishing the amount due from Developer 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 with
      respect to this Guaranty 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
      Area Development Agreement was executed.

     

    
      	
              Print
                Name:___________________________________

            	 	
              Print
                Spouse’s Name:______________________________________

            
	 	 	 
	
              Signature:_____________________________________

            	 	
              Signature:_______________________________________________

            
	 	 	 
	
              Print
                Name:___________________________________

            	 	
              Print
                Spouse’s Name:_____________________________________

            
	 	 	 
	
              Signature:_____________________________________

            	 	
              Signature:________________________________________________

            

    

    

    
      
        
        

      

      
        E-3

        
          

        

      

      
        
        

      

    

    EXHIBIT
      F

     

    FORM
      OF CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

     

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

    

    CONFIDENTIALITY
      AND NON-COMPETITION AGREEMENT

    (Area
      Development Agreement)

    

    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
      ______________________________ ("DEVELOPER").

     

    "COVENANTOR":________________________________________________________________________________________________        

     

    Address:______________________________________________________________________________________________________________________         

               
      ______________________________________________________________________________

     

    
      	
              1.

            	
              PREAMBLES.

            

    

     

    COMPANY
      has signed or intends to sign an area development agreement with DEVELOPER
      (the
      "Area Development Agreement"), under which COMPANY grants to DEVELOPER certain
      rights with regard to the development and operation of retail outlets offering
      food service featuring low-fat, low-carbohydrate and low-calorie food items
      selected beverages and nutritional products under the trademark "UFOODo" ("UFood Outlets").
      DEVELOPER's UFood Outlets will be operated pursuant to a form of franchise
      agreement (the "Franchise Agreement") between DEVELOPER and COMPANY. COVENANTOR
      is or will be either an owner or an employee of DEVELOPER. 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 DEVELOPER's right to use the Confidential Information, COMPANY and DEVELOPER
      require that COVENANTOR enter into this Agreement.

     

    To
      induce
      COMPANY to enter into the Area Development Agreement and/or to avoid a material
      breach thereof, as the case may be, COMPANY, DEVELOPER and COVENANTOR desire
      that COVENANTOR enter into this Agreement. Furthermore, due to the nature of
      COMPANY's and DEVELOPER's business, any use or disclosure of the Confidential
      Information other than in accordance with this Agreement will cause COMPANY
      and
      DEVELOPER 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-2

        
          

        

      

      
        
        

      

    

     

    (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-3

        
          

        

      

      
        
        

      

    

     

    (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 Developer Outlets);

     

    (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 Area Development Agreement and the Franchise Agreements
      entered into pursuant to the Area Development 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 Area Development
      Agreement without extension or renewal; or (b) the date as of which
      COVENANTOR is neither an owner nor an employee of DEVELOPER.

     

    (g) "Transfer":
      The
      transfer by DEVELOPER of the Area Development Agreement, provided that such
      transfer is made in compliance with the terms of the Area Development
      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 DEVELOPER, taking into
      consideration the confidential nature of the Confidential Information.
      COVENANTOR may disclose the Confidential Information only as agent for
      DEVELOPER. 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
      DEVELOPER and would be a breach of COVENANTOR's obligations of confidentiality
      and an unfair method of competition with COMPANY and its Affiliates, DEVELOPER
      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 Area Development 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 DEVELOPER to prevent unauthorized use or disclosure
      of or
      access to the Confidential Information.

     

    
      
        
        

      

      
        F-4

        
          

        

      

      
        
        

      

    

     

    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 DEVELOPER prior to disclosure
      and
      shall have used its best efforts to obtain, and shall have given COMPANY and
      DEVELOPER 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 DEVELOPER 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; 

     

    
      
        
        

      

      
        F-5

        
          

        

      

      
        
        

      

    

     

    (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.

     

    
      	
              5.

            	
              RESTRICTIVE
                COVENANT UPON TERMINATION OR EXPIRATION OF THE AREA DEVELOPMENT AGREEMENT
                OR OF COVENANTOR'S ASSOCIATION WITH DEVELOPER.

            

    

     

    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 within the Development Area, 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; 

     

    (2) perform
      services as a director, officer, manager, employee, consultant, representative,
      agent or otherwise for any Competitive Business located or operating within
      the
      Development Area; 

     

    (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 within the
      Development Area; 

     

    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

     

    (4) 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.

     

    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.

     

    
      
        
        

      

      
        F-6

        
          

        

      

      
        
        

      

    

     

    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 DEVELOPER (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 DEVELOPER 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-7

        
          

        

      

      
        
        

      

    

     

    
      	
              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 DEVELOPER do not sign this Agreement.

     

    
      	
              13.

            	
              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, without regard
      to
      its conflicts of law provisions.

     

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

     

    
      	 	 	
              DEVELOPER

            
	 	 	 	 
	________________________________	 	_________________________________
	
              Print
                name of COVENANTOR

            	 	 	 
	 	 	 	 
	 	 	
              By:

            	_______________________________
	________________________________	 	 	
              Name:___________________________

            
	
              Signature
                of COVENANTOR

            	 	 	
              Title:____________________________

            
	 	 	 	 
	 	 	
              COMPANY

            
	 	 	 	 
	 	 	
              UFood
                Restaurant Group, Inc.,
                a
Nevada corporation

            
	 	 	 	 
	 	 	
              By:

            	________________________________
	 	 	 	
              Name:____________________________

            
	 	 	 	
              Title:_____________________________

            

    

    

    
      
        
        

      

      
        F-8

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