-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VjEvZK1W15IwmEZGQYZEox+eoJkRcM8SuKAMqZTmkxEbnK22UGTix5dtyqCWAlGN WpglxNePdMQfsteLz8hCow== 0000950117-05-004557.txt : 20051202 0000950117-05-004557.hdr.sgml : 20051202 20051202172524 ACCESSION NUMBER: 0000950117-05-004557 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20051129 FILED AS OF DATE: 20051202 DATE AS OF CHANGE: 20051202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COOLBRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0001005531 STANDARD INDUSTRIAL CLASSIFICATION: ICE CREAM & FROZEN DESSERTS [2024] IRS NUMBER: 000000000 STATE OF INCORPORATION: A5 FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27476 FILM NUMBER: 051241963 BUSINESS ADDRESS: STREET 1: 8300 WOODBINE AVE 5TH FL STREET 2: MARKHAM ONTARIO CITY: CANADA L3R 9Y7 STATE: A6 BUSINESS PHONE: 5167379700 MAIL ADDRESS: STREET 1: 8300 WOODBINE AVENUE STREET 2: MARKHAM ONTARIO CITY: CANADA L3R 9Y7 STATE: A6 ZIP: L3R 9Y7 FORMER COMPANY: FORMER CONFORMED NAME: YOGEN FRUZ WORLD WIDE INC DATE OF NAME CHANGE: 19960103 6-K 1 a40907.txt COOLBRANDS INTERNATIONAL INC. FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of November, 2005 Commission File No. 000-27476 CoolBrands International Inc. (Translation of registrant's name into English) 8300 Woodbine Avenue, Markham, Ontario Canada L3R 9Y7 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1)________ Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7)________ Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [X] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-_________ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COOLBRANDS INTERNATIONAL INC. Date: December 2, 2005 By: /s/ Aaron Serruya --------------------------------- Name: Aaron Serruya Title: Executive Vice President INDEX TO EXHIBITS Exhibit 99.1 Board Representation Agreement dated October 13, 1997, as amended, by and among Integrated Brands, Inc., the Registrant, Richard E. Smith, David M. Smith, David Stein, Michael Serruya, 1082282 Ontario, Inc. and the Serruya Family Trust. Exhibit 99.2 Amendment No. 1 to the Board Representation Agreement dated January 12, 2001, by and among Integrated Brands, Inc., the Registrant, Richard E. Smith, David M. Smith, David Stein, Michael Serruya, 1082282 Ontario, Inc. and the Serruya Family Trust. Exhibit 99.3 Trust Agreement dated March 18, 1988 by and among Integrated Brands, Inc., the Registrant, Richard E. Smith, David M. Smith, David Stein, Michael Serruya, 1082282 Ontario, Inc., the Serruya Family Trust and the Chase Manhattan Bank. Exhibit 99.4 Memorandum of Association of Registrant. Exhibit 99.5 Certificate of Name Change of Registrant dated March 17, 2000. Exhibit 99.6 Code of Business Conduct of Registrant. Exhibit 99.7 Amended and Restated Limited Partnership Agreement of Americana Foods Limited Partnership dated as of January 10, 2003. Exhibit 99.8 Transition Services Agreement dated March 27, 2005 between Kraft Foods Global, Inc. and CoolBrands Dairy, Inc. Exhibit 99.9 Transition Services Agreement dated as of July 5, 2005 between Dreyer's Grand Ice Cream, Inc. and Integrated Brands, Inc. Exhibit 99.10 Grocery Carrier Agreement between Integrated Brands, Inc. and Dreyer's Grand Ice Cream, Inc. dated as of July 5, 2003. Exhibit 99.11 IB Products Distribution Agreement between Dreyer's Grand Ice Cream, Inc. and Integrated Brands, Inc. dated as of July 5, 2003. Exhibit 99.12 Non-Grocery Distribution Agreement between Integrated Brands, Inc. and Dreyer's Grand Ice Cream, Inc. dated as of July 5, 2003.
The Registrant has recently filed these documents in Canada in accordance with Canadian Securities Administrators' National Instrument 51-102 -- Continuous Disclosure Obligations, which rule required such filings within 90 days following the end of Registrant's 2005 fiscal year. STATEMENT OF DIFFERENCES The degree symbol shall be expressed as............................. [d] EX-99 2 ex99-1.txt EXHIBIT 99.1 BOARD REPRESENTATION AGREEMENT AGREEMENT made the 13th day of October, 1997 as amended and restated by agreement dated as of January 15, 1998 AMONG: INTEGRATED BRANDS INC., a company incorporated under the laws of the State of New Jersey ("Integrated Brands") - and - YOGEN FRUZ WORLD-WIDE INC., a corporation amalgamated under the laws of the Province of Ontario ("Yogen Fruz") - and - RICHARD E. SMITH, DAVID SMITH and DAVID STEIN, each of the State of New York (the "Integrated Brands Principal Shareholders") - and - MICHAEL SERRUYA AND AARON SERRUYA, each of the Province of Ontario - and - 1082272 ONTARIO INC., a corporation incorporated under the laws of the Province of Ontario ("1082272") - and - THE SERRUYA FAMILY TRUST, a trust organized under the laws of the Province of Ontario (the "Serruya Family Trust") (Michael Serruya, Aaron Serruya, 1082272 and the Serruya Family Trust are sometimes hereinafter collectively referred to as the "Yogen Fruz Principal Shareholders." The Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholders are sometimes hereinafter collectively referred to as the "Principal Shareholders".) C-1 RECITALS: 1. Yogen Fruz has agreed to complete a capital reorganization (the "Reorganization") after which (i) its outstanding share capital will consist of 200,000,000 multiple voting shares having 10 votes per share ("Multiple Voting Shares") and 200,000,000 subordinate voting shares having 1 vote per share ("Subordinate Voting Shares"), and (ii) Yogen Fruz has agreed to continue from Ontario to Nova Scotia. As part of the Reorganization, stockholders of Yogen Fruz will have the right to elect to receive either (i) one Multiple Voting Share or (ii) 1.05 Subordinate Voting Shares for each Common Share of Yogen Fruz outstanding immediately prior to the Merger. 2. 1082272 and The Serruya Family Trust own common shares of Yogen Fruz (i) for the benefit of Michael Serruya and Aaron Serruya, which in the Reorganization shall be changed into an aggregate of 4,733,332 Multiple Voting Shares, and (ii) for the benefit of Simon Serruya, which in the Reorganization shall be changed into an aggregate of 2,394,830 Subordinate Voting Shares (the "Simon Serruya Shares"). Notwithstanding anything to the contrary in this Agreement, after the Merger (as defined herein) the Simon Serruya Shares may be sold free of the restrictions on disposition set forth in Section 3.5 of this Agreement, provided however, that until the Simon Serruya Shares are sold they shall be voted in accordance with the terms of this Agreement. 3. Yogen Fruz and Integrated Brands have agreed to enter into a merger agreement of even date herewith (the "Merger Agreement"), pursuant to which a wholly-owned subsidiary of Yogen Fruz will merge with Integrated Brands and shareholders of Integrated Brands will have the right to receive either (i) 0.557266 Multiple Voting Shares for each share of Class A Common Stock of Integrated Brands or (ii) 0.585129 Subordinate Voting Shares for each share of Class A Common-Stock of Integrated Brands (the "Merger"). 4. Pursuant to the Merger, the Integrated Brands Principal Shareholders will receive an aggregate of 1,752,713 Multiple Voting Shares in exchange for their shares of Class A Common Stock of Integrated Brands. 5. As a result, after completion of the Merger, the Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholders will be significant shareholders of Yogen Fruz. 6. It is a condition of the execution of the Merger Agreement that this Agreement be entered into by the parties hereto. IN CONSIDERATION of the sum of $1.00 now paid by each party hereto to the other, the entering into of the Merger Agreement, the premises and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by each party hereto, the parties hereto covenant and agree as follows: C-2 ARTICLE 1 INTREPRETATION 1.1 Definitions In this Agreement, unless the subject matter or context is inconsistent therewith: "Affiliate" when used to indicate a relationship with a specified Person, means a Person that directly, or indirectly through one or more intermediaries,controls, or is controlled by, or is under common control with, such specified Person and a Person shall be deemed to be controlled by another Person if controlled in any manner whatsoever that results in control in fact by that other Person (or that other Person and any Person or Persons with whom that other Person is acting jointly or in concert) whether directly or indirectly and whether through share ownership, a trust, a contract or otherwise; "Agreement" means this Board Representation Agreement as the same may be supplemented, amended, restated or replaced from time to time; "Associate", when used to indicate a relationship with a specified Person means (a) any trust or other estate in which such specified Person has a 10% or greater beneficial interest; or (b) any relative of such specified Person who has the same home as such specified Person or any Person to whom such specified Person is married or with whom such specified Person is living in a conjugal relationship outside marriage or any relative of such spouse or other Person who has the same home as such specified Person; "Business Day" means any day of the week other than a Saturday, Sunday or statutory or civic holiday observed in Toronto, Ontario; "Convertible Security" means a security of Yogen Fruz or Integrated Brands, as the context requires, convertible or exercisable into or exchangeable for one or more Voting Securities of Yogen Fruz or Integrated Brands including options and purchase warrants; "Disposition" includes any sale, transfer, assignment, gift (if accepted) or other disposition of, or the creation or the coming into existence of any Encumbrance on an asset, and "dispose of" shall have a corresponding meaning; "Encumbrance" means any encumbrance of any kind whatever and includes a security interest, mortgage, lien, pledge, hypothecation, assignment, charge, trust or deemed trust (whether contractual, statutory or otherwise arising), adverse claim or any other right, option or claim of others of any kind whatever affecting an asset and any C-3 restrictive covenant or other agreement, restriction or limitation (registered or unregistered) on the disposition of an asset; "Person" shall be broadly interpreted and includes an individual, body corporate, partnership, joint venture, trust, unincorporated organization, the Crown or any agency or instrumentality thereof or any other entity recognized by law; "Related Person" means: (a) with respect to 1082272 or The Serruya Family Trust: (i) each 1082272 Principal; (ii) each Affiliate of a 1082272 Principal; (iii) each Associate of a 1082272 Principal; (iv) each trust in which a 1082272 Principal, his spouse or children has, either individually or collectively, a 10% or greater actual or contingent beneficial interest; and (v) each Affiliate of 1082272 and The Serruya Family Trust; and (b) with respect to each Integrated Brands Principal Shareholder: (i) each Affiliate of such shareholder; (ii) each Associate of such shareholder; (iii) each trust in which such shareholder, his spouse or his children has, either individually or collectively, a 10% or greater actual or contingent beneficial interest; and (iv) David Smith, Susan Smith, Richard Smith and/or David Stein. "Rights" means any options, rights, warrants or subscription privileges issued or granted by Yogen Fruz or Integrated Brands, as the context requires, (whether or not currently exercisable or exercisable on conditions) to purchase Voting Securities or Convertible Securities; "1082272 Principal" means each of Michael Serruya and Aaron Serruya; "Securities Act (Ontario)" means the Securities Act, R.S.O. 1990, c. S.5, as amended and the regulations thereunder, and unless otherwise specified, means such act as the same may be hereafter amended or restated and any successor legislation of comparable effect; "Voting Security" means the Multiple Voting Shares and the Subordinate Voting C-4 Shares of Yogen Fruz or the Class A Common Stock of Integrated Brands. 1.2 Beneficial Ownership A Person shall be deemed to have "Beneficial Ownership" of and to "Beneficially Own" any Voting Securities, Convertible Securities and Rights: (a) as to which such Person or any of its Affiliates or Associates (or Persons acting jointly or in concert with any of them) is or may be deemed to be the direct or indirect beneficial owner pursuant to any of the provisions of the Securities Act (Ontario) as it exists on the date hereof, regardless of whether such Person is subject to the jurisdiction of that statute; (b) as to which such Person or any of its Affiliates or Associates (or Persons acting jointly or in concert with any of them) has, directly or indirectly the right to vote such Voting Securities, Convertible Securities and Rights pursuant to any agreement, arrangement, pledge or understanding, written or oral; or (c) which are Beneficially Owned within the meaning of subparagraphs (a) or (b) above by any other Person with which such Person or any of its Affiliates or Associates has any agreement, arrangement or understanding, written or oral, with respect to the voting of any Voting Securities, Convertible Securities and Rights; provided however, that a Person shall not be deemed to have "Beneficial Ownership" of or to "Beneficially Own" any Voting Securities, Convertible Securities or Rights: (d) solely because such Person or any of such Person's Affiliates or Associates has or shares the right to vote or direct the voting of such securities pursuant to a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with, the then applicable rules and regulations under the Securities Act (Ontario). (e) solely because such Person or any of such Person's Affiliates or Associates has or shares the power to vote or direct the voting of such securities in connection with or in order to participate in a public proxy solicitation. 1.3 Acting Jointly or in Concert For purposes of this Agreement, a Person shall be deemed to be acting jointly or in concert with another Person if such Person would be presumed to be acting jointly or in concert with such other Person for purposes of Section 91 of the Securities Act (Ontario) as it exists on the date hereof. C-5 1.4 Number and Gender In this Agreement, words importing the singular include the plural and vice versa and words in one gender include all genders. 1.5 Headings and References The division of this Agreement into articles, sections, subsections, and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The article, section, subsection and schedule headings in this Agreement are not intended to be full or precise descriptions of the text to which they refer and are not to be considered part of this Agreement. All uses of the words "hereto", "herein", "hereof", "hereby", "hereunder" and similar expressions refer to this Agreement as a whole and not any particular portion of it. References to an Article, Section Subsection, paragraph or Schedule refer to the applicable article, section, subsection, paragraph or schedule of this Agreement. 1.6 Amendment This Agreement may be amended, modified or supplemented only by a written agreement signed by each party hereto. 1.7 Waiver of Rights Any waiver of, or consent to depart from, the requirements of any provision of this Agreement shall be effective only if it is in writing and signed by the party hereto giving it and only in the specific instance and for the specific purpose for which it has been given. No failure on the part of any party hereto to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver of such right. No single or partial exercise of any such right shall preclude any other or further exercise of such right or the exercise of any other right. 1.8 Time of Essence Time is of the essence of this Agreement and each of its provisions. 1.9 Recitals The Recitals to this Agreement are hereby incorporated and deemed to be part of this Agreement. 1.10 Action by Principal Shareholders Any act or election on the part of a group of Principal Shareholders shall be deemed C-6 taken upon receipt of a written direction signed by a member or members of such group owning at least 50% of the Voting Securities owned in the aggregate by such group of Principal Shareholders. 1.11 Reference to Amounts of Voting Securities All references to numbers of Voting Securities shall be adjusted appropriately in the event of a stock split, consolidation, merger, amalgamation or other similar transaction. ARTICLE 2 REPRESENTATIONS AND WARRANTIES 2.1 Integrated Brands and the Integrated Brands Principal Shareholders Representations The Integrated Brands Principal Shareholders each jointly and severally represents and warrants to Yogen Fruz and the Yogen Fruz Principal Shareholders that Richard E. Smith, David Smith and David Stein each is the registered and Beneficial Owner of the following shares of Class A Common Stock of Integrated Brands:
No. of Integrated Brands shares of common stock ------------------------ Richard E. Smith 2,547,300 David Smith 517,000 David Stein 81,000
and that such shares are all the shares of Class A Common Stock of Integrated Brands of which each is the registered or Beneficial Owner on the date hereof. On the date hereof, David Smith and David Stein are the Beneficial Owners of options which could result in them acquiring the following additional shares of Class A Common Stock of Integrated Brands:
No. of additional shares of Class A Common Stock of Integrated Brands which could be acquired -------------------------- David Smith 175,000 David Stein 222,500
In addition, it is anticipated that David Smith will be granted an option to purchase 138,225 shares, and David Stein will be granted an option to purchase 90,000 shares of Class A Common Stock of Integrated Brands subsequent to the date hereof. In addition, Richard E. Smith and David Smith collectively will be granted an additional option to purchase an aggregate of 836,921 Multiple Voting Shares of Yogen Fruz, subject to the consummation of the Merger contemplated herein. David Smith and C-7 David Stein will elect to convert their options into options to purchase Multiple Voting Shares. On the date hereof, except as contemplated above, none of the Integrated Brands Principal Shareholders is the Beneficial Owner of any Convertible Securities or Rights which could result in them acquiring additional Voting Securities or other capital stock of Integrated Brands. 2.2 Yogen Fruz and the Yogen Fruz Principal Shareholders Representations The Yogen Fruz Principal Shareholders and Simon Serruya each jointly and severally represents and warrants to Integrated Brands and the Integrated Brands Principal Shareholders that The Serruya Family Trust and 1082272 are the registered owner of the following common shares of Yogen Fruz:
No. of Yogen Fruz common shares ----------------- 108227 6,859,092 The Serruya Family Trust 155,031
and that such common shares are all the Voting Securities of Yogen Fruz of which the Yogen Fruz Principal Shareholders and Simon Serruya are the registered or Beneficial Owner on the date hereof (of which 2,280,791 shares constitute the Simon Serruya Shares, which will be changed into Subordinate Voting Shares and not into Multiple Voting Shares). The Yogen Fruz Principal Shareholders are the Beneficial Owners of 4,733,332 of such shares and Simon Serruya is the Beneficial Owner of 2,280,791 of such shares. On the date hereof, The Serruya Family Trust, 1082272 and Michael Serruya, Aaron Serruya and Simon Serruya are not the Beneficial Owners of any Convertible Securities or Rights which could result in them acquiring additional Voting Securities or other capital stock of Yogen Fruz. ARTICLE 3 BOARD REPRESENTATION 3.1 Proportionate Representation The parties hereto acknowledge that (i) the Integrated Brands Principal Shareholders have agreed to support the Merger on the understanding that they are to be entitled to nominate 50% of the members of the board of directors of Yogen Fruz and that the Yogen Fruz Principal Shareholders have agreed to vote their common shares of Yogen Fruz and their Voting Securities of Yogen Fruz to elect such nominees, and (ii) the Yogen Fruz Principal Shareholders have agreed to support the Merger on the understanding that they are entitled to nominate 50% of the members of the board of directors of Yogen Fruz, all of whom will be Canadian residents, and the Integrated Brands Principal Shareholders have agreed to vote their Voting Securities of Yogen C-8 Fruz to elect such nominees. The Yogen Fruz Principal Shareholders acknowledge that the Integrated Brands Principal Shareholders intend to nominate directors who are not residents of Canada. The Yogen Fruz Principal Shareholders agree that in the event that the laws of the jurisdiction of incorporation of Yogen Fruz are changed in a manner which prevents the Integrated Brands Principal Shareholders from nominating and electing non-residents of Canada as their respective nominees to the board of directors of Yogen Fruz, then the Yogen Fruz Prindpal Shareholders will cooperate with the Integrated Brands Principal Shareholders in causing Yogen Fruz to take all necessary action to ensure that the Integrated Brands Principal Shareholders are entitled to nominate and elect non-residents of Canada as their director nominees (including, without limitation, continuing Yogen Fruz from its current jurisdiction of incorporation to another jurisdiction within Canada which permits at least 50% of the directors to be non-Canadians). 3.2 Yogen Fruz Obligations Yogen Fruz shall cause to be nominated for election as directors of Yogen Fruz only legally qualified individuals, 50% of whom shall be recommended jointly by the Integrated Brands Principal Shareholders and 50% of whom shall be recommended jointly by the Yogen Fruz Principal Shareholders, as is contemplated in Section 3.1. Yogen Fruz agrees to solicit proxies from its shareholders for such nominees and to cause management proxies to be voted in favour of such nominees, except for such proxies as contain a specific contrary direction. Yogen Fruz's obligations under this Section 3.2 shall terminate (i) with respect to the nominees of Integrated Brands Principal Shareholders, if the Integrated Brands Principal Shareholders own, in the aggregate, less than 500,000 Voting Securities (including Voting Securities issuable upon exercise or conversion of Convertible Securities), or (ii) with respect to the nominees of the Yogen Fruz Principal Shareholders, if the Yogen Fruz Principal Shareholders own, in the aggregate, less than 1,000,000 Voting Securities (including Voting Securities issuable upon exercise or conversion of Convertible Securities). 3.3 Obligations of the Principal Shareholders If any director of Yogen Fruz nominated by either group of Principal Shareholders shall cease to be a director for any reason whatsoever, each Principal Shareholder shall use its best efforts, promptly upon the request of the group of Principal Shareholders whose director has ceased to be a director, to cause to be elected or appointed a legally qualified individual nominated jointly by that group of Principal Shareholders (whose director has ceased to be a director) to replace such director. Each of the Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholders shall cast or cause to be cast all votes attached to the Voting Securities Beneficially Owned by it from time to time at all meetings of shareholders of Yogen C-9 Fruz at which any director of Yogen Fruz is to be elected, to elect and maintain as directors of Yogen Fruz the number of nominees of the Integrated Brands Principal Shareholders and Yogen Fruz Principal Shareholders required by this Agreement. If any director ceases to be a director of Yogen Fruz for any reason at any time, each group of Principal Shareholders shall direct any nominees which it has on the board of directors of Yogen Fruz to vote to appoint a new or additional nominee to the board of the group of Principal Shareholders whose nominee ceased to be a director. If the board of directors of Yogen Fruz does not appoint any such required nominee to the board of directors of Yogen Fruz within 5 Business Days after receiving notice of such nomination, then Yogen Fruz shall, at the request of any Principal Shareholder, promptly call a meeting of its shareholders to fill such vacancy, which meeting shall be held within 75 days thereafter. At any such meeting, each Yogen Fruz Principal Shareholder and each integrated Brands Principal Shareholder shall cast or cause to be cast all votes attached to the Voting Securities of Yogen Fruz Beneficially Owned by it as contemplated by this Agreement. Each Principal Shareholder agrees to use its best efforts, and shall take all actions to ensure (i) that Michael Serruya and Richard E. Smith are elected as the Co-Chairman and Chief Executive Officer of Yogen Fruz and each subsidiary and (ii) that the Board of Directors of Yogen Fruz and the Board of Directors of each direct and indirect subsidiary of Yogen Fruz, and each Committee of the Board of Directors of Yogen Fruz and each Committee of the Board of Directors of each direct and indirect subsidiary of Yogen Fruz shall be comprised of members, 50% of whom shall be designated jointly by the Integrated Brands Principal Shareholders and 50% of whom shall be designated jointly by the Yogen Fruz Principal Shareholders. Each of the Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholders agrees that they shall vote against any of the following matters put to the shareholders of Yogen Fruz unless the Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholder agree in writing to vote for such matter: (a) the sale of all or substantially all of the assets of Yogen Fruz; (b) an amalgamation, arrangement, merger, consolidation or other similar transaction involving Yogen Fruz; (c) any amendment or reenactment of the Memorandum of Association and/or the Articles of Association of Yogen Fruz that would adversely affect the rights of the Yogen Fruz Principal Shareholders or the Integrated Brands Principal Shareholders. 3.4 Resignation of Nominees If either group of Principal Shareholders does not have the requisite number of nominees elected to the board of Yogen Fruz as provided for in this Agreement for a C-10 period of 90 consecutive days, then the other group of Principal Shareholders shall use their best efforts to have any of their nominees who are in excess of 50% of the board resign as a director of Yogen Fruz, until each group of Principal Shareholders' nominees constitute 50% of the Board of Directors. 3.5 Limitations on Sale No Integrated Brands Principal Shareholder or Yogen Fruz Principal Shareholder shall dispose of, or permit the disposition of, any Voting Securities, Convertible Securities or Rights Beneficially Owned by such shareholder to a Related Person unless such Related Person agrees in writing with the other parties to this Agreement to assume and be bound by the obligations of such shareholder under this Agreement with respect to the Voting Securities, Convertible Securities or Rights disposed of and not to further dispose of any such Voting Securities, Convertible Securities or Rights to a Related Person of the disposing Shareholder or to an Associate or Affiliate of such Related Person unless the disposee agrees in writing with the other parties to this Agreement to assume and be bound by the same obligations. Except as provided in this paragraph, until the first to occur of (i) theTermination of this Agreement or (ii) the 21st anniversary of the date hereof, no Principal Shareholder shall dispose of any Voting Securities to a non-Related Person without the prior written consent of the other Principal Shareholders which consent may be withheld or granted in the other Principal Shareholders' sole discretion. Notwithstanding the foregoing, (i) the consent of the Integrated Brands Principal Shareholders shall not be required with respect to the disposition of Voting Securities by the Yogen Fruz Principal Shareholders to a non-Related Person if, after giving effect to such disposition, the Yogen Fruz Principal Shareholders will own, in the aggregate, more than 3,733,332 Voting Securities and (ii) the consent of the Yogen Fruz Principal Shareholders shall not be required with respect to the disposition of Voting Securities by the Integrated Brands Principal Shareholders to a non-Related Person if, after giving effect to such disposition, the Integrated Brands Principal Shareholders will own, in the aggregate, more than 1,800,000 Voting Securities (including Convertible Securities). Whether or not requiring consent in accordance with the terms of this paragraph (and, if requiring consent, after such consent is given) a Principal Shareholder desiring to dispose of his Voting Securities to a non-Related Person shall first offer such Voting Securities to the other group of Principal Shareholders at the market price (as defined in Schedule A) for such Voting Securities as of the date of the offer, provided that if such Voting Securities are Multiple Voting Shares and such Multiple Voting Shares are not listed, they shall be offered at the market price for Subordinate Voting Shares. The offer shall be made by written notice (the "Notice") which Notice shall specify the number of Voting Shares to be sold (the "Offered Securities") and the market price. The other group of Principal Shareholders may elect to purchase all or a portion of such Offered Securities, provided that if the other group of Principal Shareholders do not elect to purchase all of such Offered Securities on or before 5:00 P.M. of the third Business Day after delivering of the Notice (which election may be transmitted by facsimile), then the Offered Securities which the other group of Principal Shareholders has not elected to purchase may be C-11 sold. The other group of Principal Shareholders must evidence the election to purchase all or such portion of the Offered Shares by a written acceptance, which acceptance shall specify the number of Offered Shares to be purchased, the identity(ies) of the purchaser and the concurrence in the calculation of the market price, provided, however, in the event of a disagreement in the calculation of the market price a certificate from Yogen Fruz's independent accountants shall conclusively establish the market price. Each group of Principal Shareholders shall allocate among themselves the amount of Offered Shares to be purchased, but in the event of an inability to agree, each member shall be allowed to purchase no less than such individual member's pro rata percentage of the Voting Securities owned by his or its Principal Shareholder Group. The acceptance shall specify the date of the closing of the purchase of the Offered Securities which shall be no later than thirty (30) days from the date of the acceptance offer. All shares sold pursuant hereto shall be sold free and clear of all Encumbrances and all payments shall be made in immediately available funds against delivery of the certificates evidencing the shares subject to the sale, duly endorsed in blank for transfer. Prior to any sale to a non-Principal Shareholder, any Multiple Voting Shares must be converted to Subordinate Voting Shares. The parties hereto recognize and agree that the foregoing restriction on sales are reasonable and necessary to effectuate the intent and purposes of this Agreement. No Principal Shareholders shall convert, or cause to be converted, any Multiple Voting Shares or common shares of Yogen Fruz, or Rights to receive Multiple Voting Shares or common shares of Yogen Fruz, into Subordinated Voting Shares, or Rights to receive Subordinate Voting Shares, without the prior written consent of the other Principal Shareholders, which consent may be withheld or granted in the other Principal Shareholders' sole discretion, except as required in connection with (i) a permitted sale to a non-Principal Shareholder as set forth above, and (ii) the 2,366,66 common shares of Yogen Fruz held for the benefit of Simon Serruya. The parties hereto agree that the Principal Shareholders shall not accept an offer to sell any Voting Securities at a price in excess of the market price of the Voting Securities on the date of such offer, except: 1) sales made on the Toronto Stock Exchange or other regional or national exchange, outside or inside Canada, on which such securities are regularly traded; 2) to another Principal Shareholder; or 3) pursuant to an offer made proportionately and at the same price to all other Yogen Fruz shareholders. 3.6 Shareholders and Yogen Fruz Each of the Integrated Brands Principal Shareholders and the Yogen Fruz Principal Shareholders, to the extent that it is permitted by law, shall act and vote to carry out the intent and provisions of this Agreement. Yogen Fruz agrees to carry out and be bound by the provisions of this Agreement to the full extent that it has the capacity and power at law to do so. Without limiting the generality of the foregoing, each of the parties hereto agrees to cause such meetings of the directors and/or shareholders of Yogen Fruz to be called and held, resolutions passed, Certificate or Articles of Incorporation and/or Memorandum of Association and Articles of Association C-12 amended, by-laws enacted, agreements and other documents executed and delivered and things done or performed as may be required to ensure that the affairs of Yogen Fruz are conducted in accordance with the provisions of this Agreement. ARTICLE 4 OTHER PROVISIONS 4.1 Support of Merger Each of the Integrated Brands Principal Shareholders agree to vote all of their Voting Securities of Integrated Brands in favour of the Merger at the meeting of Integrated Brands to be called to consider the Merger and to elect to receive Multiple Voting Shares in exchange for each of their Voting Securities under the Merger. Each of the Yogen Fruz Principal Shareholders agree to vote all of their common shares of Yogen Fruz for the Reorganization and other proposals at the meeting of Yogen Fruz and to change their common shares of Yogen Fruz into Multiple Voting Shares (except the shares held for the benefit of Simon Serruya which shall be changed into Subordinate Voting Shares). 4.2 Agreement by the Principal Shareholders not to Sell Until consummation or termination of the Merger, each of the Principal Shareholders agree not to dispose of any of their Voting Securities of Integrated Brands and of Yogen Fruz. 4.3 Termination This Agreement shall terminate in the event the Merger Agreement is terminated prior to the Effective Time (as the term "Effective Time" is defined in the Merger Agreement). In addition, this Agreement may be terminated (i) by the Yogen Fruz Principal Shareholders, in the event the Integrated Brands Principal Shareholders are the Beneficial Owners, in the aggregate, of fewer than 750,000 Voting Securities (including Voting Securities issuable upon conversion or exercise of Convertible Securities); and (ii) by the Integrated Brands Principal Shareholders, in the event the Yogen Fruz Principal Shareholders are the Beneficial Owners of fewer than 1,500,000 Voting Securities (including Voting Securities issuable upon conversion or exercise of Convertible Securities). Any such termination of this Agreement shall be without prejudice to the rights of the parties hereto accrued under this Agreement to the date of termination. 4.4 Default C-13 (a) In the event that either the Integrated Brands Principal Shareholders or Yogen Fruz Principal Shareholders do not comply with their obligations and agreements set forth in this Agreement (which failure to comply, if capable of being cured, is not cured within ten (10) days after receiving notice thereof from the other Principal Shareholders) then the other Principal Shareholders shall have the right to require the defaulting Principal Shareholders to sell (free and clear of all liens and Encumbrances to such other Principal Shareholders, all or such portion thereof as elected by the other group of Principal Shareholders, of the Yogen Fruz Multiple Voting Shares beneficially owned by the defaulting Principal Shareholders, at the market price (as defined in Schedule A), for such Multiple Voting Shares, less 30%, or if the Multiple Voting Shares are not listed, at the market price (as defined in Schedule A) for Subordinate Voting Shares, less 30%. In each case, the exercise price of Convertible Securities shall be deducted from the purchase price. Such purchase shall be consummated on the date set forth in the notice of the failure (the "Breach Notice") of a group of Principal Shareholders to comply with their obligations and agreements set forth in this Agreement, but in no event more than sixty (60) days after such notice. All shares sold pursuant hereto shall be sold free and clear of all Encumbrances and all payments shall be made in immediately available funds against delivery of the certificates evidencing the shares subject to the sale, duly endorsed in blank for transfer. The Integrated Brands Principal Shareholders and the Yogen Fruz Principal Shareholders have agreed upon the above formula as as a realistic estimate at the time of this Agreement of the fair market value of their respective holdings based upon the then current market price as reduced by numerous factors, including, without limitation, the number of Voting Securities held by each party in relation to the trading volume of Yogen Fruz's securities, the restriction on the purchaser of such securities ability to resell such securities under applicable securities laws and the related market risks, and the absence of brokerage commissions and other costs of sale. (b) At the effective time of the merger the Yogen Fruz Principal Shareholders and the Integrated Brands Principal Shareholders shall deposit with an Escrow Agent to be mutually determined by them all of the multiple voting Yogen Fruz shares held by them. The Escrow Agent shall hold such shares in accordance with the provisions of this section and Section 3.5 of this Agreement. (c) Each of the Principal Shareholders acknowledges and agrees that: (i) this Agreement and, in particular, the provisions of this Section 4.4, have been specifically negotiated by sophisticated commercial parties of equal bargaining power with the benefit of independent legal advice; (ii) the provisions of this Section 4.4. are reasonable in the circumstances of the transactions contemplated by this Agreement and are given as an integral and essential part of such transactions; and C-14 (iii) each of the Principal Shareholders waives, to the fullest extent permitted by law, any right to contest the validity or enforceability of this Section 4.4 and all defenses to the strict enforcement thereof. 4.5 Legend All certificates representing Voting Securities owned by Principal Shareholders shall bear the following legend: "The Shares represented by this certificate and the right to dispose and vote said shares is subject to a Board Representation Agreement by and among certain principal shareholders of the Company, a copy of which is available at the offices of the Company." 4.6 Tax Waiver Yogen Fruz agrees that, in the event that any Treaty Country Holder of Multiple Voting Shares elects to convert any Multiple Voting Shares into Subordinate Voting Shares, then Yogen Fruz will not withhold any amount on account of any failure by such Treaty Country Holder to obtain and deliver a Yogen Fruz clearance certificate under Section 116 of the Income Tax Act, if, and only if, Yogen Fruz has received, prior to a conversion, a "comfort letter" from Revenue Canada, which in the opinion of counsel, states that a clearance certificate under Section of the Income Tax Act is not required where a Treaty Country Holder converts any Multiple Voting Shares into Subordinate Voting Shares, and such Treaty Country Holder provides a representation to Yogen Fruz that it is a Treaty Country Holder. For these purposes, "Treaty Country Holder" means any holder of Multiple Voting Shares which is a non-resident of Canada but a resident of a country with which Canada has an income tax convention which exempts a resident from the requirement to pay Canadian tax on any gains with respect to a disposition of shares of Yogen Fruz unless the value of such shares is derived principally from real property situated in Canada (and, for greater certainty, the United States of America is such a country having such an income tax convention). ARTICLE 5 GENERAL 5.1 Notices Any notice or other communication (hereinafter a "Notice") required or Permitted to be given or made hereunder shall be in writing and shall be well and sufficiently given or C-15 made if sent by prepaid first class registered mail, in the case of a Notice to Integrated Brands, addressed to it at: Integrated Brands Inc. 4175 Veterans Highway Ronkonkoma, New York, 11779 Attention: Richard E. Smith in the case of a Notice to Yogen Fruz, addressed to it at: Yogen Fruz World-Wide Inc. 8300 Woodbine Avenue 5th Floor Markham, Ontario L3R 9Y7 Attention: Michael Serruya, President in the case of a Notice to 1082272 or The Serruya Family Trust, addressed to it at: c/o Yogen Fruz World-Wide Inc. 8300 Woodbine Avenue 5th Floor Markham, Ontario L3R 9Y7 Attention: Michael Serruya, President In the case of a Notice to Richard E. Smith, David Smith and David Stein, addressed to them at: c/o Integrated Brands Inc. 4175 Veterans Highway Ronkonkoma, New York, 11779 Attention: Richard E. Smith Any Notice given or made in accordance with this Section 4.1 shall be deemed to have been given or made and to have been received: (a) on the day it was delivered, if delivered in person as aforesaid; or C-16 (b) on the third Business Day (excluding each day during which there exists any general interruption of postal services due to strike, lockout or other cause) after it was mailed, if mailed as aforesaid; and Any party hereto may from time to time change its address for notice by giving Notice to the other parties hereto in accordance with the provisions of this Section 5.1. 5.2 Further Assurances Each party hereto shall do such acts and shall execute and deliver such further agreements, documents and other writings, and shall cause the doing of such acts and the execution and delivery of such further agreements, documents and other writings, as are within its power and as any other party hereto may in writing at any time and from time to time reasonably request, in order to give full effect to the provisions of this Agreement. 5.3 Invalidity In the event that any term or provision of this Agreement shall be invalid or unenforceable such provision shall only be affected to the extent of such invalidity and unenforceabilty and shall be enforced to the fullest permitted extent and the remaining terms and provisions of this Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. 5.4 Successors and Assigns Neither this Agreement nor any right or obligation hereunder is assignable in whole or in part. Subject thereto, this Agreement shall, enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, legal personal representatives, administrators, successors (including any successor by reason of amalgamation or statutory arrangement of any party hereto) and permitted assigns. 5.5 Counterparts This Agreement may be executed in any number of counterparts. Each counterpart shall be deemed to be an original and all counterparts taken together shall constitute one agreement. 5.6 Facsimile Execution An executed copy of this Agreement may be delivered by any party hereto by facsimile. In such event, such party shall forthwith deliver to the other parties hereto, the copy of this Agreement executed by such party. C-17 5.7 Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its rule of conflicts of law. 5.8 Enforcement of Agreement The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed-in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to injunctive and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof exclusively in any court (federal or state) located in New York County ("New York Courts"), this being in addition to any other remedy to which the parties may be entitled at law or in equity. Each of the parties hereto (i) irrevocably submits to the exclusive jurisdiction of the New York Courts for the purpose of any suit, action or other proceeding arising out of this Agreement, the subject matter hereof or any of the transactions contemplated hereby brought by any party or their successor or assigns, and (ii) hereby waives, and agrees not to assert, by way of motion, as a defense or otherwise, in any such suit, action or proceedings, to the fullest extent permitted by applicable law, that the suit, action or proceeding is brought in an inconvenient forum, that the venue or the suit, action or proceeding is improper, or that this Agreement, or the subject matter hereof or any of the transactions contemplated hereby may not be enforced in or by such courts. Yogen Fruz hereby irrevocably appoints, and generally consents to service of process on Corporation Service Company at 500 Central Avenue, Albany, New York 12206, it being agreed that service upon such entity shall be valid service on Yogen Fruz. Final judgment against any party in any suit shall be conclusive, and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and of the amount of any indebtedness or liability of such party therein described. C-18 IN WITNESS WHEREOF the parties hereto have duly executed this Agreement under seal. SIGNED, SEALED AND DELIVERED ) in the presence of ) "Richard E. Smith" l/s ------------------------ ) Richard E. Smith ) ) "David Smith" l/s ------------------------ ) David Smith ) ) "David Stein" l/s ------------------------ ) David Stein ) ) INTEGRATED BRANDS INC. ) ) By "Richard E. Smith" --------------------- ) ) By "David Stein" c/s --------------------- ) ) YOGEN FRUZ WORLD-WIDE INC. ) ) By "Michael Serruya" --------------------- ) ) By "Aaron Serruya" c/s --------------------- ) ) 1082272 ONTARIO INC. ) ) By "Michael Serruya" --------------------- ) ) By "Aaron Serruya" c/s --------------------- ) ) THE SERRUYA FAMILY TRUST ) ) By "Michael Serruya" --------------------- ) ) By "Aaron Serruya" c/s --------------------- ) ) "Michael Serruya" l/s ------------------------ ) Michael Serruya ) ) "Aaron Serruya" l/s ------------------------ ) Aaron Serruya By signing below, Simon Serruya agrees until consummation or termination of the Merger not to dispose of any of his Beneficially Owned Voting Securities of Yogen Fruz and at the Effective Time to convert such shares into Subordinate Voting Shares: ) ) "Simon Serruya" l/s ------------------------ ) Simon Serruya Schedule A For the purposes of this Agreement "market price" of a class of securities, as to which there is a published market, at any date, is an amount equal to the simple average of the closing price of securities of that class for each of the business days on which there was a closing price falling not more than twenty business days before that date. Where a published market does not provide a closing price, but provides only the highest and lowest prices of securities traded on a particular day, the market price of the securities, at any date, is an amount equal to the average of the simple averages of the highest and lowest prices for each of the business days on which there were highest and lowest price falling not more than twenty business days before that date. Where there is more than one published market for a security, the market price shall be determined as follows: 1. If only one of the published markets is in Canada, the market price shall be determined solely by reference to that market. 2. If there is more than one published market in Canada, the market price shall be determined solely by reference to the published market in Canada on which the greatest volume of trading in the particular class of securities occurred during the twenty business days preceding the date as of which the market price is being determined. 3. If there is no published market in Canada, the market price shall be determined solely by reference to the published market on which the greatest volume of trading in the particular class of securities occurred during the twenty business days preceding the date as of which the market price is being determined. Where there has been trading of securities in a published market for fewer than ten of the twenty business days preceding the date as of which the market price of the securities is being determined, the market price shall be the average of the following prices established for each of the twenty business days preceding that date, (a) the average of the bid and ask prices for each day on which there was no trading; and (b) the closing price of securities of the class for each day that there hasbeen trading, if the published market provides a closing price; or (c) the average of the highest and lowest prices of securities of that class for each day that there has been trading, if the published market provides only the highest and lowest prices of securities traded on a particular day. EX-99 3 ex99-2.txt EXHIBIT 99.2 AMENDMENT NO. 1 TO THE BOARD REPRESENTATION AGREEMENT Amendment No. 1 dated as of January 12, 2001, by and among Integrated Brands Inc., Coolbrands International Inc. (formerly Yogen Fruz Worldwide, Inc.), Richard E. Smith, David M. Smith, David J. Stein, Michael Serruya, Aaron Serruya, 1082272 Ontario Inc. and the Serruya Family Trust to the Board Representation Agreement dated October 13, 1997 (the "Agreement"). WHEREAS, the parties hereto desire to amend and modify the Agreement as set forth herein; NOW, THEREFORE, each of the parties agrees that the Agreement is hereby amended as follows: 1. The fourth paragraph of section 3.3 is hereby amended and replaced in its entirety as follows: Each Principal Shareholder agrees to use its best efforts, and shall take all actions to ensure (i) that Michael Serruya and Richard E. Smith are elected as the Co-Chairman of Coolbrands and each subsidiary (ii) that Richard E. Smith and David J. Stein are elected as Co-Chief Executive Officers of Coolbrands and each subsidiary and (iii) that the Board of Directors of Coolbrands and the Board of Directors of each direct and indirect subsidiary of Coolbrands, and each Committee of the Board of Directors of Coolbrands and each Committee of the Board of Directors of each direct and indirect subsidiary of Coolbrands shall be comprised of members, 50% of whom shall be designated jointly by the Integrated Brands Principal Shareholders and 50% of whom shall be designated jointly by the Yogen Fruz Principal Shareholders. 2. Except as modified and amended by this amendment, all of the terms of this agreement will remain unchanged and in full force and effect; 3. This amendment may be executed in two or more counterparts, each of which will constitute for one of the same instrument; IN WITNESS WHEREOF, each of the parties have caused this amendment to be executed as of the date first written above. /s/ Richard E. Smith ---------------------------------------- Richard E. Smith /s/ David M. Smith ---------------------------------------- David M. Smith /s/ David J. Stein ---------------------------------------- David J. Stein INTEGRATED BRANDS INC. By /s/ Richard E. Smith ------------------------------------- By /s/ David J. Stein ------------------------------------- COOLBRANDS INTERNATIONAL INC. By /s/ Richard E. Smith ------------------------------------- By /s/ David J. Stein ------------------------------------- 1082272 ONTARIO INC. By /s/ Michael Serruya ------------------------------------- By /s/ Aaron Serruya ------------------------------------- THE SERRUYA FAMILY TRUST By /s/ Steven Troster, Trustee ------------------------------------- By /s/ Sam Serruya, Trustee ------------------------------------- /s/ Michael Serruya ---------------------------------------- Michael Serruya /s/ Aaron Serruya ---------------------------------------- Aaron Serruya EX-99 4 ex99-3.txt EXHIBIT 99.3 TRUST AGREEMENT THIS AGREEMENT made as of the 18th day of March, 1998 by and among Richard E. Smith, David Smith, David Stein, each of the State of New York (Smith, Smith and Stein are hereinafter collectively referred to as the "Integrated Brands Principal Shareholders"), Michael Serruya and Aaron Serruya, each of the Province of Ontario, 1082272 Ontario Inc., a corporation incorporated under the laws of the Province of Ontario ("1082272"), The Serruya Family Trust, a trust organized under the laws of the Province of Ontario (the "Trust") (Michael and Aaron Serruya, 1082272 and the Trust are hereinafter collectively referred to as the "Yogen Fruz Principal Shareholders" and, together with the Integrated Brands Principal Shareholders, the "Principal Shareholders"), Yogen Fruz World-Wide Incorporated, a corporation organized under the laws of the Province of Nova Scotia (the "Company") and The Chase Manhattan Bank, a bank chartered under the laws of the State of New York (hereinafter called the "Trustee"). WHEREAS there are 7,464,949 multiple voting shares of the Company (the "Multiple Voting Shares") outstanding; AND WHEREAS the Principal Shareholders collectively own 6,486,042 Multiple Voting Shares and options to purchase 348,692 Multiple Voting Shares; AND WHEREAS the Principal Shareholders and the Company are desirous of entering into this Agreement to secure the listing of the subordinate voting shares of the Company (the "Subordinate Voting Shares") on The Toronto Stock Exchange and to derive the benefits of such listing, and for the purpose of ensuring that the holders from time to time of the Subordinate Voting Shares will not be deprived of any rights under applicable take-over bid legislation to which they would have been entitled in the event of a take-over bid if the Multiple Voting Shares and the Subordinate Voting Shares were of a single class of shares; AND WHEREAS the Principal Shareholders are all a party to a Board Representation Agreement amended and restated as of January 15, 1998 (the "Board Representation Agreement"); AND WHEREAS the Principal Shareholders and the Company desire to constitute the Trustee as an escrow agent in connection with the deposit of the Multiple Voting Shares owned by the Principal Shareholders and as a trustee for the holders from time to time of the Subordinate Voting Shares to the intent that such holders, through the Trustee, will receive the benefits of the covenants of the Principal Shareholders and the Company contained in this Agreement; AND WHEREAS, unless otherwise specifically defined herein, all capitalized terms shall have the same meanings ascribed to them in the Board Representation Agreement; NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises and agreements herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. On the effective date of the Merger (the "Effective Date"), the Principal Shareholders shall deliver to the Trustee all of the Multiple Voting Shares held by each of the -2- Principal Shareholders, with stock powers, signatures guaranteed, and the Trustee shall accept delivery of such shares and shall deposit such shares into the Trust Account (the shares held in the Trust Account are sometimes hereinafter referred to as the "Escrowed Shares"). In addition, so long as the Board Representation Agreement is in effect, the Principal Shareholders shall deliver all Multiple Voting Shares acquired by them after the date hereof, with stock powers, signatures guaranteed, promptly to the Trustee. Promptly after the date hereof, each of the Principal Shareholders shall notify the Company of the obligation hereunder to deliver Multiple Voting Shares to the Trustee received after the date of this Agreement. 2. The Trustee shall hold the Escrowed Shares for the period commencing as of the Effective Date and ending on the date on which the Principal Shareholders cease to have any obligations under the terms of the Board Representation Agreement (as evidenced by a certificate of the Company to the Trustee), unless the Escrowed Shares are released earlier pursuant to the terms of this Agreement. The Board Representation Agreement shall not be amended, to the extent that such amendment would affect the role of the Trustee under this Agreement, without the prior written consent of the Trustee. 3. Subject to Section 4, the Principal Shareholders shall not sell any Multiple Voting Shares, directly or indirectly, pursuant to a take-over bid, as defined by applicable securities legislation, under circumstances in which securities legislation would have required the same offer or a follow-up offer to be made to holders of Subordinate Voting Shares if the sale had been of Subordinate Voting Shares rather than Multiple Voting Shares, but otherwise on the same terms. For this purpose, it shall be assumed that the offer that would have resulted in such sale of Subordinate Voting Shares would have constituted a take-over bid under applicable securities legislation, regardless of whether this actually would have been the case. 4. Section 3 shall not apply to prevent a sale by the undersigned of Multiple Voting Shares pursuant to a take-over bid if: (a) such sale is made pursuant to an offer to purchase Multiple Voting Shares made to all holders of Multiple Voting Shares, and an identical offer (in terms of price per share, percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the offer by the offeror, or associates or affiliates of the offeror, and in all other material respects) concurrently is made to purchase Subordinate Voting Shares, which identical offer has no condition attached other than the right not to take up and pay for shares tendered if no shares are purchased pursuant to the offer for Multiple Voting Shares; or (b) there is a concurrent unconditional offer to purchase all of the Subordinate Voting Shares at a price per share at least as high as the highest price per share paid pursuant to the take-over bid for the Multiple Voting Shares, -3- and for the purpose of this Section 4 the varying of any term of an offer shall be deemed to constitute the making of a new offer. 5. If the conditions attaching to the shares of the Company include a provision that would have the effect of changing the voting rights attaching to shares of the Company under certain circumstances, through an automatic conversion of shares of one class into shares of another class or otherwise, and if there is an offer that would have been a take-over bid if not for the existence of such provision, such offer shall be deemed to be a "take-over bid" for the purposes of this Agreement. 6. For greater certainty, any sale which would result in the direct or indirect acquisition of ownership of Multiple Voting Shares or Subordinate Voting Shares, or in the direct or indirect acquisition of control or direction over such shares, shall be construed to be a sale of such Multiple Voting Shares or Subordinate Voting Shares, as the case may be, for the purposes of Section 3. 7. The Principal Shareholders shall use their best efforts to prevent any person or company from carrying out a sale (including an indirect sale) described in Section 3 in respect of any Multiple Voting Shares owned from time to time by the Principal Shareholders, regardless of whether such person or company is a party to this Agreement, unless Clause 4(a) or 4(b) applies in respect of such sale. 8. If any person or company, other than the Principal Shareholders, carries out a sale (including an indirect sale) described in Section 3 in respect of any Multiple Voting Shares owned from time to time by the Principal Shareholders, and if neither Clause 4(a) or 4(b) applies in respect of such sale, the Principal Shareholders shall not at the time such sale becomes effective or thereafter do any of the following with respect to any of the Multiple Voting Shares so sold: (a) dispose of them without the prior written consent of the Trustee; (b) convert them into Subordinate Voting Shares without the prior written consent of the Trustee; or (c) exercise any voting rights attaching to them except in accordance with the written instructions of the Trustee, and the Principal Shareholders shall comply with such instructions. The Trustee may attach conditions to any consent the Trustee gives in exercising its rights hereunder. The Trustee shall exercise such rights in a manner that the Trustee considers to be: (i) in the best interests of the holders of the Subordinate Voting Shares, other than the Principal Shareholders and holders who, in the opinion of the Trustee, participated directly or indirectly in the transaction that triggered the operation of this Section 8; and (ii) consistent with the intentions of the Principal Shareholders and the Company in entering into this Agreement as such intentions are set out in the preamble to this Agreement. 9. (a) Sale to Related Person; Multiple Voting Shares to Remain with Escrow Agent. The Principal Shareholders shall ensure that any Multiple Voting Shares disposed of to a Related Person shall be deposited with the Trustee and that prior to such disposition such Related Person shall have agreed in writing to be bound by the terms of this Trust Agreement. -4- (b) Sale to Non-Related Person; Trustee to Disburse Multiple Voting Shares. Subject to Sections 3 through 8, upon (i) written request by either an Integrated Brands Principal Shareholder or a Yogen Fruz Principal Shareholder, (ii) proof that the Principal Shareholder who seeks to sell his or her Multiple Voting Shares has received the prior written consent to such sale of the remaining Principal Shareholders and (iii) affirmation that the remaining Principal Shareholders have elected not to purchase all of the Voting Securities the Principal Shareholder seeks to sell to the non-Related Person, the Trustee shall release such Multiple Voting Shares that the remaining Principal Shareholders have elected not to purchase to the non-Related Person; provided, however, that such Multiple Voting Shares are first converted to Subordinate Voting Shares which Subordinate Voting Shares may then be delivered by the Trustee. Notwithstanding the foregoing sentence, (i) the consent of the Integrated Brands Principal Shareholders shall not be required with respect to the disposition of Voting Securities by the Yogen Fruz Principal Shareholders to a non-Related Person if, after giving effect to such disposition, the Yogen Fruz Principal Shareholders will own, in the aggregate, more than 3,733,332 Voting Securities and (ii) the consent of the Yogen Fruz Principal Shareholders shall not be required with respect to the disposition of Voting Securities by the Integrated Brands Principal Shareholders to a non-Related Person if, after giving effect to such disposition, the Integrated Brands Principal Shareholders will own, in the aggregate, more than 1,800,000 Voting Securities (including Convertible Securities). Nonetheless, the remaining Principal Shareholders shall maintain their right of first refusal set forth in the Board Representation Agreement with respect to the dispositions described in the foregoing sentence and provided that if the Multiple Voting Shares are sold to a non-Related Person, such shares shall first be converted to Subordinate Voting Shares which Subordinate Voting Shares may then be delivered by the Trustee. (c) Enforcement Provisions. Upon receipt by the Trustee of a Breach Notice (as defined in the Board Representation Agreement), the Trustee shall transmit a copy of the Breach Notice to the breaching group of Principal Shareholders. In the event that the breaching group of Principal Shareholders does not contest the Breach Notice within five (5) Business Days, then the Trustee shall sell the Voting Securities identified in the Breach Notice in accordance with the terms of the Board Representation Agreement and in accordance with applicable securities laws. In the event the breaching group of Principal Shareholders disputes the Breach Notice, the Trustee shall continue to hold the shares identified in the Breach Notice until the Trustee receives a joint written instruction from each group of Principal Shareholders or until it receives an order from a court of competent jurisdiction specifying the manner of disposition of such shares. 10. In the event of any dispute or conflict between the Integrated Brands Principal Shareholders and the Yogen Fruz Principal Shareholders as to the release and transfer of the Escrowed Shares to either a Related or non-Related Person; such dispute or conflict shall be determined as set forth in the Board Representation Agreement. During the pendency of any dispute and until final adjudication of such dispute, the Trustee shall retain such disputed shares in its Trust Account. -5- 11. If and whenever the Trustee has reasonable cause to believe that the Principal Shareholders or the Company may have breached, or may intend to breach, any provision of sections 3 through 8, the Trustee shall make reasonable enquiry to determine whether such a breach has occurred or is intended, and if the Trustee thereupon determines that such is the case the Trustee shall forthwith deliver to the Company a certificate stating that the Trustee has made such determination. The Trustee shall thereupon be entitled to take and, subject to Section 13, shall take such action as the Trustee considers necessary to enforce its rights under this Agreement on behalf of the holders of the Subordinate Voting Shares. 12. Subject to Section 13, if and whenever holders of not less than 10% of the then outstanding Subordinate Voting Shares determine that the Principal Shareholders or the Company has breached, or intends to breach, any provision of sections 3 through 8, such holders may require the Trustee to take any action set out in this Agreement in connection therewith by delivering to the Trustee a requisition in writing signed in one or more counterparts by such holders and setting forth the action to be taken by the Trustee, and upon receipt by the Trustee of such a requisition the Trustee shall forthwith take such action set out in this Agreement as is specified in the requisition and any other action that the Trustee considers necessary to enforce its rights under this Agreement on behalf of the holders of the Subordinate Voting Shares. 13. The obligation of the Trustee to take any action on behalf of the holders of the Subordinate Voting Shares shall be conditional upon the Trustee receiving from the Company or from one or more holders of Subordinate Voting Shares such funds and indemnity as the Trustee may reasonably require in respect of any costs or expenses which it may incur in connection with any such action. The Company shall provide such funds and indemnity to the Trustee if the Trustee has delivered to the Company the certificate referred to in Section 11. 14. No holder of Subordinate Voting Shares shall have the right, other than through the Trustee, to institute any action or proceeding or to exercise any other remedy for the purpose of enforcing any rights arising from this Agreement unless holders of Subordinate Voting Shares shall have requested in the manner specified in Section 12 that the Trustee act and shall have provided reasonable funds and indemnity to the Trustee and the Trustee shall have failed to so act within 30 days after the provision of such funds and indemnity. In such case any holder of Subordinate Voting Shares acting on behalf of such holder and all other holders of Subordinate Voting Shares shall be entitled to take proceedings in any court of competent jurisdiction such as the Trustee might have taken. 15. The Company shall do all things necessary to facilitate the due performance of this Agreement including the fulfilment by the Principal Shareholders of their obligations hereunder. 16. The Trustee may resign and be discharged from all further duties and liabilities hereunder, subject to this Section 16, after giving 30 days' written notice to the Company or such shorter notice as the Company may accept as sufficient. In the event that the office of trustee becomes vacant, the Company shall forthwith appoint a new trustee which shall be a corporation -6- authorized to carry on business of a trust company in Ontario; failing such appointment, the Principal Shareholders, the Trustee or any holder of Subordinate Voting Shares may apply to a judge of the Ontario Court of Justice (General Division) for the appointment of a new trustee. Upon any new appointment the new trustee shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as the trustee, but there shall be immediately executed, at the expense of the Company, all such instruments and may be, in the opinion of counsel to the Company, necessary or desirable to assure such vesting. Any resignation of the Trustee shall not become effective until the successor party shall have executed an appropriate instrument accepting the appointment as the new trustee. 17. The Trustee shall incur no liability in respect of any permitted action taken or suffered by it in reliance upon any notice, direction, instruction, consent, statement or other paper or document believed by it to be genuine and duly authorized nor for anything except its own wilful misconduct or gross negligence. The Trustee shall not be responsible for the validity or sufficiency of this Trust Agreement. The Trustee shall be under no duty to inquire into or investigate the validity, accuracy or content of this Agreement. The Trustee shall have no duty to solicit any payments which may be due it hereunder. In all questions arising under this Trust Agreement and in the administration thereof, the Trustee may rely on the advice of counsel and may execute any of its powers and perform its duties hereunder directly or through agents or attorneys and may consult with counsel, accountants and other skilled persons to be selected and retained by it. The Trustee shall not be liable for anything done, omitted or suffered in good faith by it in accordance with the advice or opinion of such counsel, accountants or other skilled persons. The Trustee shall not be required to take any action hereunder involving any expense unless the payment of such expense shall be made or provided for in a manner satisfactory to it. The Trustee shall have no responsibility for the performance or interpretation of the Board Representation Agreement. The Company, the Integrated Brands Principal Shareholders and the Yogen Fruz Principal Shareholders, in equal proportions, agree to hold harmless and indemnify the Trustee from and against any liability, damage, claim, cause of action or costs or expenses of any kind, including reasonable fees incurred to employ outside counsel or attorneys at their regular billing rates, as to any person, Integrated Brands Principal Shareholders or Yogen Fruz Principal Shareholders, arising out of or in connection with the Trustee's actions performed in accordance with this Trust Agreement, except the Trustee's own wilful misconduct or gross negligence. Without limiting the generality of the foregoing, each party hereto warrants its authority in executing this Trust Agreement. Anything in this Agreement to the contrary notwithstanding, in no event shall the Trustee be liable for a special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 18. The Company shall pay the reasonable fees and expenses of the Trustee in connection with the performance of the Trustee's obligations hereunder, including the reasonable fees and disbursements of counsel, but this Section 18 shall not require the Company to pay any fees or expenses in connection with any action taken by the Trustee pursuant to Section 12 if the -7- Trustee has not delivered to the Company the certificate referred to in Section 11 in respect of such action. 19. The Trustee hereby accepts the appointment as trustee for the holders from time to time of the Subordinate Voting Shares upon the terms and conditions herein set forth. 20. This Agreement shall not be amended, and no provision thereof shall be waived, except with the approval of the parties hereto and at least two-thirds of the votes cast by the holders of Subordinate Voting Shares present or represented at a meeting duly called for the purpose of considering such amendment or waiver. 21. The duties and responsibilities of the Trustee hereunder shall be determined solely by the express provisions of this Agreement and no other or further duties or responsibilities shall be implied. The Trustee shall not have any liability under, nor duty to inquire into, the terms and provisions of any agreement or instructions, other than outlined in this Agreement. 22. Neither this Agreement nor any right or interest hereunder may be assigned in whole or in part by any party without the prior written consent of the other parties. 23. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 24. In the event that the Trustee shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other parties hereto or by a final order or judgment of a court of competent jurisdiction. 25. Any notice or other communication made pursuant to or in connection with this Agreement shall be sufficiently given if it is in writing and delivered or sent by registered mail, or by facsimile or other form of recorded communication with return receipt requested: if to any of the Yogen Fruz Principal Shareholders: Mr. Michael Serruya c/o Yogen Fruz World-Wide Inc. 8300 Woodbine Avenue Markham, Ontario L3R 9Y7 Facsimile: (905) 479-3275 if to any of the Integrated Brands Principal Shareholders: Richard E. Smith -8- c/o Integrated Brands 4175 Veterans Highway Ronkonkoma, New York 11779 Facsimile: (516) 283-0593 if to the Company: Yogen Fruz World-Wide Inc. 8300 Woodbine Avenue Markham, Ontario L3R 9Y7 Facsimile: (905) 479-3275 Attention: Michael Serruya, President if to the Trustee: The Chase Manhattan Bank Corporate Trust Group 450 West 33rd Street New York, New York 10001 Facsimile: (212) 946-8156 Attention: Escrow Administration, 15th Floor or to such other address as the party to whom such notice or communication is to be given shall have last designated to the party giving the same in the manner specified in this Section. 26. Any such notice or communication shall be deemed to have been given and received on the day it is so delivered or sent. 27. This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario. 28. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, legal representatives, successors and assigns, as applicable. IN WITNESS WHEREOF, the parties have duly executed this Trust Agreement as of the date first above written. "Richard Smith" ---------------------------------------- Richard E. Smith "David Smith" ---------------------------------------- David Smith -9- "David Stein" ---------------------------------------- David Stein "Michael Serruya" ---------------------------------------- Michael Serruya "Aaron Serruya" ---------------------------------------- Aaron Serruya 1082272 ONTARIO INC. By: "Michael Serruya" ------------------------------------ Name: Title: THE SERRUYA FAMILY TRUST By: "Sam Serruya" ------------------------------------ Name: S. Serruya By: "Steven Troster" ------------------------------------ Name: Steven F. Troster YOGEN FRUZ WORLD-WIDE INCORPORATED By: "Michael Serruya" ------------------------------------ Name: Title: THE CHASE MANHATTAN BANK By: "John Sciacchitano" ------------------------------------ Name: John Sciacchitano Title: Vice President EX-99 5 ex99-4.txt EXHIBIT 99.4 MEMORANDUM OF ASSOCIATION OF YOGEN FRUZ WORLD-WIDE INCORPORATED 1. The name of the Company is Yogen Fruz World-Wide Incorporated. 2. There are no restrictions on the objects and powers of the Company and the Company shall expressly have the following powers: (1) to sell or dispose of its undertaking, or a substantial part thereof; (2) to distribute any of its property in specie among its members; and (3) to amalgamate with any company or other body of persons. 3. The liability of the members is limited. 4. The capital of the company shall consist of 200,000,000 Subordinate Voting Shares and 200,000,000 Multiple Voting Shares, each having the rights, conditions, restrictions and limitations described in Annex I hereto and all without nominal or par value, with the power to divide the shares in the capital for the time being into classes or series and to attach thereto respectively any preferred, deferred or qualified rights, privileges or conditions, including restrictions on voting rights and including redemption, purchase and other acquisition of such shares, subject, however, to the provisions of the Companies Act (Nova Scotia). ANNEX 1 A. The Multiple Voting Shares and the Subordinate Voting Shares shall have attached thereto the following rights, privileges, restrictions and conditions: (a) Dividends The Subordinate Voting Shares shall rank in priority to the Multiple Voting Shares as to the payment of cash dividends. No dividends shall be declared or paid on the Multiple Voting Shares in any fiscal year of the Company unless in such fiscal year dividends shall have been declared or paid on the Subordinate Voting Shares in an amount per share at least equal to or equivalent to the amount of the dividend per share proposed to be declared or paid on the Multiple Voting Shares. (b) Subdivisions, Consolidations and Other Changes In no event shall: (i) any subdivision, consolidation, reclassification or other change in the Multiple Voting Shares or the Subordinate Voting Shares; or (ii) any reorganization of the share capital of the Company affecting in any manner the Multiple Voting Shares or the Subordinate Voting Shares; or (iii) an amalgamation or merger of the Company with any other company or companies; be effected unless appropriate adjustments shall be made to the dividend rights provided for in section (a), the voting rights provided for in section (c), the dissolution rights provided for in section (e) and the conversion rights provided for in sections (f) and (g) so as to preserve the rights of the Multiple Voting Shares and the Subordinate Voting Shares, inter se, in all respects. (c) Voting Rights (i) The holders of the Multiple Voting Shares shall be entitled to receive notice of, attend (in person or by proxy) and speak at all meetings of the shareholders of the Company (other than separate meetings of the holders of shares of any other class of shares of the Company or of any series of shares of any such other class of shares) and at all such meetings the holders of the Multiple Voting Shares shall be entitled to ten (10) votes in respect of each Multiple Voting Share held by them. (ii) The holders of the Subordinate Voting Shares shall be entitled to receive notice of, attend (in person or by proxy) and speak at all meetings of the shareholders of the Company (other than separate meetings of the holders of shares of any -2- other class of shares of the Company or of any series of shares of any such other class of shares) and at all such meetings the holders of the Subordinate Voting Shares shall be entitled to one (1) vote in respect of each Subordinate Voting Share held by them. (d) Restrictions The holders of the Multiple Voting Shares and the holders of the Subordinate Voting Shares shall not as such be entitled to dissent in respect of any amendment referred to in clauses 2(2)(a), (b) or (e) of the Third Schedule to the Companies Act (Nova Scotia). (e) Dissolutions Subject to the prior rights of the shares of any other class ranking in priority to the Multiple Voting Shares and the Subordinate Voting Shares, and subject to the payment of all dividends which have been declared on the Multiple Voting Shares or the Subordinate Voting Shares but remain unpaid, in the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of assets of the Company among its shareholders for the purpose of winding-up its affairs, the holders of the Multiple Voting Shares and the holders of Subordinate Voting Shares shall be entitled to receive the remaining assets of the Company in equal amounts per share, without preference or distinction. (f) Conversion of Subordinate Voting Shares into Multiple Voting Shares (1) In this section (f), the following terms shall have the following respective meanings: "affiliate" has the meaning ascribed thereto in the Securities Act (Ontario) as amended from time to time; "associate" has the meaning ascribed thereto in the Securities Act (Ontario) as amended from time to time; "Conversion Period" means the period of time commencing on the eighth day after the Offer Date and terminating on the Expiry Date; "Converted Shares" means the Multiple Voting Shares resulting from the conversion of Subordinate Voting Shares into Multiple Voting Shares pursuant to subsection (f)(2) hereof; "Exclusionary Offer" means a General Offer unless, concurrently with such General Offer, an offer is made to purchase Subordinate Voting Shares that is identical to the General Offer in terms of price per share and percentage of outstanding shares to be taken up exclusive of shares owned immediately prior to the General Offer by the Offeror, and in all other material respects except with respect to the conditions that may be attached to the General Offer, with no condition attached thereto other than the right not to take up and pay for shares tendered if no shares are purchased pursuant to the General Offer (for the purposes hereof, the varying of any term of a General Offer shall be deemed to constitute the making of a new General Offer unless an identical variation is made to the corresponding offer to purchase -3- Subordinate Voting Shares); "Expiry Date" means the last date upon which holders of Multiple Voting Shares may accept an Exclusionary Offer; "General Offer" means an offer to purchase Multiple Voting Shares that must, by reason of applicable securities legislation or the requirements of a stock exchange on which the Multiple Voting Shares are listed, be made to all or substantially all holders of Multiple Voting Shares who are in a province of Canada to which the requirements apply; "Offer Date" means the date on which an Exclusionary Offer is made; "Offeror" means the person, company or other entity making an Exclusionary Offer (the "bidder") and shall include all associates and affiliates of the bidder and any person or company that is disclosed in the offering document to be acting jointly or in concert with the bidder, and "transfer agent" means the transfer agent for the time being for the Multiple Voting Shares. (2) Subject to subsection (f)(5), if an Exclusionary Offer is made, each outstanding Subordinate Voting Share shall be convertible into one (1) fully paid and non-assessable Multiple Voting Share at the option of the holder thereof exercisable during the Conversion Period. The conversion right provided for in this subsection (f)(2) shall be exercised by notice in writing given to the transfer agent accompanied by the certificate or certificates representing the Subordinate Voting Shares which the holder desires to convert, and such notice shall be executed by the person registered on the books of the Company as the holder of the Subordinate Voting Shares, or by his or her attorney duly authorized in writing, and shall specify the number of Subordinate Voting Shares which the holder desires to have converted. The holder shall pay any governmental or other tax imposed on or in respect of such conversion. Upon receipt by the transfer agent of such notice and share certificate or certificates, the Company shall issue or cause to be issued a share certificate representing fully paid Multiple Voting Shares and the transfer agent shall deposit such share certificates in accordance with subsection (f)(4). If less than all of the Subordinate Voting Shares represented by any share certificate are to be converted, the holder shall be entitled to receive a new share certificate representing in the aggregate the number of Subordinate Voting Shares represented by the original share certificate which are not to be converted. (3) An election by a holder of Subordinate Voting Shares to exercise the conversion right provided for in subsection (f)(2) shall be deemed to also constitute irrevocable elections by such holder to: -4- (a) deposit the Converted Shares pursuant to the Exclusionary Offer (subject to such holder's right to subsequently withdraw the shares from the offer in accordance with the terms thereof and applicable law); and (b) exercise pursuant to section (g) hereof the right to convert into Subordinate Voting Shares all Converted Shares in respect of which such holder exercises his or her right of withdrawal from the Exclusionary Offer or which are not otherwise ultimately taken up and paid for under the Exclusionary Offer. Any conversion of Converted Shares into Subordinate Voting Shares pursuant to such deemed election in respect of which the holder exercises his or her right of withdrawal from the Exclusionary Offer shall be effective at the time such right of withdrawal is exercised. If the right of withdrawal is not exercised, any conversion into Subordinate Voting Shares pursuant to such deemed election shall be effective (i) in respect of an Exclusionary Offer which is completed, immediately following the time by which the Offeror is required under applicable securities legislation or otherwise to take up and pay for all shares to be acquired by the Offeror under the Exclusionary Offer; and (ii) in respect of an Exclusionary Offer which is abandoned or withdrawn or is not completed in accordance with its terms, at the time at which the Exclusionary Offer is abandoned or withdrawn or expires without being completed. (4) No share certificates representing Converted Shares shall be delivered to or to the order of the holders thereof before such shares have been deposited pursuant to the Exclusionary Offer and the transfer agent, on behalf of the holders of the Converted Shares, shall deposit, and the holders of such shares shall be deemed to have irrevocably directed the transfer agent to deposit, pursuant to the Exclusionary Offer, the certificate or certificates representing the Converted Shares. Upon completion of the offer, the transfer agent shall deliver or cause to be delivered to the holders entitled thereto all consideration paid by the Offeror pursuant to the offer in respect of Converted Shares. If Converted Shares are converted into Subordinate Voting Shares pursuant to the deemed election under subsection (f)(3), the transfer agent shall deliver to the holders entitled thereto a share certificate representing the Subordinate Voting Shares resulting from the conversion. The Company shall make all arrangements with the transfer agent necessary or desirable to give effect to this subsection (f)(4). (5) Subject to subsection (f)(6), the conversion right provided for in subsection (f)(2) shall not come into effect if, within seven days after the Offer Date, there has been delivered to the transfer agent and to the Secretary of the Company a certificate or certificates signed by or on behalf of one or more -5- shareholders of the Company owning in the aggregate more than 50% of the then outstanding Multiple Voting Shares, exclusive of shares owned immediately prior to the Offer Date by the Offeror, which certificate or certificates shall, in the case of each such shareholder, confirm: (a) the number of Multiple Voting Shares owned by the shareholder; (b) that such shareholder is not making the offer and is not an associate or affiliate of, or acting jointly or in concert with, the person or company making the offer; (c) that such shareholder will not tender any shares in acceptance of the offer, including any varied form of the offer, without giving the transfer agent and the Secretary of the Company written notice of such acceptance or intended acceptance at least seven days prior to the Expiry Date; and (d) that such shareholder shall not transfer any Multiple Voting Shares, directly or indirectly, prior to the Expiry Date without giving the transfer agent and the Secretary of the Company written notice of such transfer or intended transfer at least seven days prior to the Expiry Date, which notice shall state, if known to the transferor, the names of the transferees and the number of Multiple Voting Shares transferred or to be transferred to each transferee. (6) If a notice referred to in clause (f)(5) is given and the conversion right provided for in subsection (f)(2) has not come into effect, the transfer agent shall either forthwith upon receipt of the notice or forthwith after the seventh day following the Offer Date, whichever is later, determine the number of Multiple Voting Shares in respect of which there are subsisting certificates that comply with section (f)(5). For the purpose of this determination, certificates in respect of which such a notice has been filed shall not be regarded as outstanding insofar as the Multiple Voting Shares to which the notice relates are concerned; the transfer that is the subject of any notice referred to in clause (f)(5)(d) shall be deemed to have already taken place at the time of the determination, and the transferee in the case of any notice referred to in clause (f)(5)(d) shall be deemed to be a person or company from whom the transfer agent does not have a subsisting certificate unless the transfer agent is advised of the identity of the transferee, either by such notice or by the transferee in writing and such transferee is a person or company from whom the transfer agent has a subsisting certificate. If the number of Multiple Voting Shares so determined does not exceed 50% of the number of then outstanding Multiple Voting Shares, exclusive of shares owned immediately prior to the -6- offer by the Offeror, subsection (f)(5) shall cease to apply and the conversion right provided for in subsection (f)(2) shall be in effect for the remainder of the Conversion Period. (7) In the event of: (a) any subdivision, consolidation, conversion (other than in accordance with sections (f) and (g)), exchange or reclassification of the Multiple Voting Shares or Subordinate Voting Shares; or (b) any reorganization of the share capital of the Company affecting the Multiple Voting Shares or Subordinate Voting Shares; or (c) the amalgamation of the Company with any other company or companies, the appropriate adjustment shall be made to the conversion right provided in this section (f) so as to preserve the right in all respects. (8) As soon as is reasonably practicable after the seventh day after the Offer Date, the Company shall send to each holder of Subordinate Voting Shares a notice advising such holders as to whether they are entitled to convert their Subordinate Voting Shares into Multiple Voting Shares pursuant to subsection (f)(2) and the reasons therefor. If such notice discloses that the holders of Subordinate Voting Shares are not so entitled but it is subsequently determined that they are so entitled by virtue of subsection (f)(5), or otherwise, the Company shall forthwith send another notice to such holders advising them of that fact and the reasons therefor. (9) If a notice referred to in subsection (f)(8) discloses that the conversion right provided for in subsection (f)(2) has come into effect, the notice shall: (i) include a description of the procedure to be followed to effect the conversion and to have the Converted Shares tendered under the offer; (ii) include the information set out in subsection (f)(3) hereof; and (iii) be accompanied by a copy of the offer and all other material sent to holders of Multiple Voting Shares in respect of the offer, and as soon as is reasonably practicable after any additional material, including a notice of variation, is sent to the holders of Multiple Voting Shares in respect of the offer, the Company shall send a copy of such additional material to each holder of Subordinate Voting -7- Shares. (10) Prior to or forthwith after sending any notice referred to in subsection (f)(8), the Company shall cause a press release to be issued to a Canadian national news wire service, describing the contents of the notice. (g) Conversion of Multiple Voting Shares into Subordinate Voting Shares Each holder of Multiple Voting Shares shall be entitled at any time and from time to time to have all or any part of the Multiple Voting Shares held converted into fully-paid and non-assessable Subordinate Voting Shares upon the basis of one (1) Subordinate Voting Share for each Multiple Voting Share in respect of which the conversion right is exercised. The conversion right provided for in this section (g) shall be exercised by notice in writing given to the transfer agent at its principal office in Toronto accompanied by the certificate or certificates representing the Multiple Voting Shares in respect of which the holder desires to exercise such right of conversion. Such notice shall be executed by the person registered on the books of the Company as the holder of the Multiple Voting Shares or by his or her duly authorized attorney and shall specify the number of Multiple Voting Shares which the holder desires to have converted into Subordinate Voting Shares. After the giving of a notice in writing, the notice of the holder of Multiple Voting Shares shall be irrevocable. The holder shall pay any governmental or other tax imposed on or in respect of any such conversion. Upon receipt by the transfer agent of such notice and a certificate or certificates in respect thereof, the Company shall issue, or cause to be issued to the holder so exercising the conversion right in respect of Multiple Voting Shares, a certificate representing the number of Subordinate Voting Shares to which such holder is entitled upon the basis prescribed in accordance with the provisions hereof. If less than all of the Multiple Voting Shares represented by any certificate are to be converted, the holder shall be entitled to receive a new certificate representing the number of Multiple Voting Shares represented by the original certificate which are not to be converted. The right of a holder of Multiple Voting Shares to convert the same into Subordinate Voting Shares shall be deemed to have been exercised, and the registered holder of Multiple Voting Shares shall be deemed to have become a holder of Subordinate Voting Shares of record of the Company for all purposes on the date of surrender of certificates representing the Multiple Voting Shares to be converted accompanied by the notice in writing as provided in this section (g), notwithstanding any delay in the delivery of certificates representing the Subordinate Voting Shares into which such Multiple Voting Shares have been converted. (h) Equality Save as aforesaid, each Multiple Voting Share and each Subordinate Voting Share shall have the same rights, privileges, restrictions, conditions and attributes and be the same in all respects. ARTICLES OF ASSOCIATION OF YOGEN FRUZ WORLD-WIDE INCORPORATED INTERPRETATION 1. In these Articles, unless there be something in the subject or context inconsistent therewith: (1) "Act" means the Companies Act (Nova Scotia); (2) "Articles" means these Articles of Association of the Company and all amendments hereto; (3) "Company" means the company named above; (4) "director" means a director of the Company; (5) "Memorandum" means the Memorandum of Association of the Company and all amendments thereto; (6) "month" means calendar month; (7) "Office" means the registered office of the Company; (8) "person" includes a body corporate; (9) "proxyholder" includes an alternate proxyholder; (10) "Register" means the register of members kept pursuant to the Act, and where the context permits includes a branch register of members; (11) "Registrar" means the Registrar as defined in the Act; (12) "Secretary" includes any person appointed to perform the duties of the Secretary temporarily; (13) "shareholder" means member as that term is used in the Act in connection with a company limited by shares; (14) "special resolution" has the meaning assigned by the Act; -2- (15) "in writing" and "written" includes printing, lithography and other modes of representing or reproducing words in visible form; (16) words importing number or gender include all numbers and genders unless the context otherwise requires; 2. The regulations in Table A in the First Schedule to the Act shall not apply to the Company. 3. The directors may, out of the funds of the Company, pay all expenses incurred for the continuance and reorganization of the Company. SHARES 4. The directors shall control the shares and, subject to the provisions of these Articles, may allot or otherwise dispose of them to such person at such times, on such terms and conditions and, if the shares have a par value, either at a premium or at par, as they think fit. 5. The directors may pay on behalf of the Company a reasonable commission to any person in consideration of subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the Company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares in the Company. Subject to the Act, the commission may be paid or satisfied in shares of the Company. 6. If the whole or part of the allotment price of any shares is, by the conditions of their allotment, payable in instalments, every such instalment shall, when due, be payable to the Company by the person who is at such time the registered holder of the shares. 7. Shares may be registered in the names of joint holders not exceeding three in number. On the death of one or more joint holders of shares the survivor or survivors of them shall alone be recognized by the Company as the registered holder or holders of the shares. 8. Save as herein otherwise provided, the Company may treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or required by statute, be bound to recognize any equitable or other claim to or interest in such share on the part of any other person. -3- CERTIFICATES 9. Certificates of title to shares shall comply with the Act and may otherwise be in such form as the directors may from time to time determine. Unless the directors otherwise determine, every certificate of title to shares shall be signed manually by at least one of the Co-Chairmen, the President, the Secretary, the Treasurer, a vice-president, an assistant secretary, any other officer of the Company or any director of the Company or by or on behalf of a share registrar transfer agent or branch transfer agent appointed by the Company or by any other person whom the directors may designate. When signatures of more than one person appear on a certificate all but one may be printed or otherwise mechanically reproduced. All such certificates when signed as provided in this Article shall be valid and binding upon the Company. If a certificate contains a printed or mechanically reproduced signature of a person, the Company may issue the certificate, notwithstanding that the person has ceased to be a director or an officer of the Company and the certificate is as valid as if such person were a director or an officer at the date of its issue. Any certificate representing shares of a class publicly traded on any stock exchange shall be valid and binding on the Company if it complies with the rules of such exchange whether or not it otherwise complies with this Article. 10. Except as the directors may determine, each shareholder's shares may be evidenced by any number of certificates so long as the aggregate of the shares stipulated in such certificates equals the aggregate registered in the name of the shareholder. 11. Where shares are registered in the names of two or more persons, the Company shall not be bound to issue more than one certificate or set of certificates, and such certificate or set of certificates shall be delivered to the person first named on the Register. 12. Any certificate that has become worn, damaged or defaced may, upon its surrender to the directors, be cancelled and replaced by a new certificate. Any certificate that has become lost or destroyed may be replaced by a new certificate upon proof of such loss or destruction to the satisfaction of the directors and the furnishing to the Company of such undertakings of indemnity as the directors deem adequate. 13. Such sum as the directors may from time to time determine shall be paid to the Company for every certificate other than the first certificate issued to any holder in respect of any share or shares. 14. The directors may cause one or more branch Registers of shareholders to be kept in any place or places, whether inside or outside of Nova Scotia. TRANSFER OF SHARES 15. The instrument of transfer of any share in the Company shall be signed by the transferor. -4- The transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect thereof and shall be entitled to receive any dividend declared thereon before the registration of the transfer. 16. The instrument of transfer of any share shall be in writing in substantially the following form or to substantially the following effect: For value received, ____ hereby sell, assign, and transfer unto _______, shares in the capital of the Company represented by the within certificate, and do hereby irrevocably constitute and appoint _______ attorney to transfer such shares on the books of the Company with full power of substitution in the premises. Dated the __ day of Witness: 17. Every instrument of transfer shall be left for registration at the Office of the Company, or at any office of its transfer agent where a Register is maintained, together with the certificate of the shares to be transferred and such other evidence as the Company may require to prove title to or the right to transfer the shares. 18. The directors may require that a fee determined by them be paid before or after registration of any transfer. 19. Every instrument of transfer shall, after its registration, remain in the custody of the Company. Any instrument of transfer that the directors decline to register shall, except in case of fraud, be returned to the person who deposited it. TRANSMISSION OF SHARES 20. The executors or administrators of a deceased shareholder (not being one of several joint holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such shareholder. When a share is registered in the names of two or more joint holders, the survivor or survivors or the executors or administrators of the deceased survivor, shall be the only persons recognized by the Company as having any title to, or interest in, such share. 21. Notwithstanding anything in these Articles, if the Company has only one shareholder (not being one of several joint holders) and that shareholder dies, the executors or administrators of the deceased shareholder shall be entitled to register themselves in the Register as the holders of the shares registered in the name of the deceased shareholder whereupon they shall have all the rights given by these Articles and by law to shareholders. -5- 22. Any person entitled to shares upon the death or bankruptcy of any shareholder or in any way other than by allotment or transfer, upon producing such evidence of entitlement as the directors require, may be registered as a shareholder in respect of such shares, or may, without being registered, transfer such shares subject to the provisions of these Articles respecting the transfer of shares. SURRENDER OF SHARES 23. The directors may accept the surrender of any share by way of compromise of any question as to the holder being properly registered in respect thereof. INCREASE AND REDUCTION OF CAPITAL 24. Subject to the Act, the Company may by resolution of its shareholders increase its share capital by the creation of new shares of such amount as it thinks expedient. 25. Subject to the Act, the new shares may be issued upon such terms and conditions and with such rights, privileges, limitations, restrictions and conditions attached thereto as the Company by resolution of its shareholders determines or, if no direction is given, as the directors determine. 26. Except as otherwise provided by the conditions of issue, or by these Articles, any capital raised by the creation of new shares shall be considered part of the original capital and shall be subject to the provisions herein contained with reference to transfer, transmission and otherwise. 27. The Company may, by special resolution where required, reduce its share capital in any way and with and subject to any incident authorized and consent required by law. ALTERATION OF CAPITAL 28. Subject to the Act, the Company may by special resolution of its shareholders: (1) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares; (2) convert all or any of its paid-up shares into stock and reconvert that stock into paid-up shares of any denomination; (3) exchange shares of one denomination for another; (4) cancel shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its -6- share capital by the amount of the shares so cancelled; (5) subdivide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum, so, however, that in the subdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived and the special resolution whereby any share is subdivided may determine that as between the holders of the shares resulting from such subdivision, one or more of such shares shall have some preference or special advantage as regards dividend, capital, voting or otherwise, over, or as compared with, the others or other; (6) convert any part of its issued or unissued share capital into preference shares redeemable or purchasable by the Company; (7) provide for the issue of shares without any nominal or par value provided that, upon any such issue, a declaration executed by the Secretary must be filed with the Registrar stating the number of shares issued and the amount received therefor; (8) convert all or any of its previously authorized, unissued or issued, fully paid-up shares, other than preferred shares, with nominal or par value into the same number of shares without any nominal or par value, and reduce, maintain or increase accordingly its liability on any of its shares so converted; provided that the power to reduce its liability on any of its shares so converted may, where it results in a reduction of capital, only be exercised subject to confirmation by the court as provided by the Act; or (9) convert all or any of its previously authorized, unissued or issued, fully paid-up shares without nominal or par value into the same or a different number of shares with nominal or par value, and for such purpose the shares issued without nominal or par value and replaced by shares with a nominal or par value shall be considered as fully paid, but their aggregate par value shall not exceed the value of the net assets of the Company as represented by the shares without par value issued before the conversion. 29. Subject to the Act and any provisions attached to such shares, the Company may redeem, purchase or acquire any of its shares and the directors may determine the manner and the terms for redeeming, purchasing or acquiring such shares and may provide a sinking fund on such terms as they think fit for the redemption, purchase or acquisition of shares of any class or series. -7- CLASSES AND SERIES OF SHARES 30. Subject to the Act and the Memorandum, and without prejudice to any special rights previously conferred on the holders of existing shares, any share may be issued with such preferred, deferred or other special rights, or with such restrictions, whether in regard to dividends, voting, return of share capital or otherwise, as the Company may from time to time determine by special resolution. MEETINGS AND VOTING BY CLASS OR SERIES 31. Where the holders of shares of a class or series have, under the Act, the Memorandum, the terms or conditions attaching to such shares or otherwise, the right to vote separately as a class in respect of any matter then, except as provided in the Act, the Memorandum, these Articles or such terms or conditions, all the provisions in these Articles concerning general meetings (including, without limitation, provisions respecting notice, quorum and procedure) shall, mutatis mutandis, apply to every meeting of holders of such class or series of shares convened for the purpose of such vote. BORROWING POWERS 32. The directors on behalf of the Company may: (1) raise or borrow money for the purposes of the Company or any of them; (2) secure, subject to the sanction of a special resolution where required by the Act, the repayment of funds so raised or borrowed in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the execution and delivery of mortgages of the Company's real or personal property, or by the issue of bonds, debentures or other securities of the Company secured by mortgage or other charge upon all or any part of the property of the Company, both present and future; (3) sign or endorse bills, notes, acceptances, cheques, contracts, and other evidence of or securities for funds borrowed or to be borrowed for the purposes aforesaid; (4) pledge debentures as security for loans; (5) guarantee obligations of any person. 33. Bonds, debentures and other securities may be made assignable, free from any equities between the Company and the person to whom such securities were issued. 34. Any bonds, debentures and other securities may be issued at a discount, premium or -8- otherwise and with special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of directors and other matters. GENERAL MEETINGS 35. Ordinary general meetings of the Company shall be held at least once in every calendar year at such time and place as may be determined by the directors and not later than 15 months after the preceding ordinary general meeting. All other meetings of the Company shall be called special general meetings. Ordinary or special general meetings may be held either within or outside the Province of Nova Scotia. 36. Either of the Co-Chairmen or any two of the directors may at any time convene a special general meeting, and the directors, upon the requisition of shareholders in accordance with the Act shall forthwith proceed to convene such meeting or meetings to be held at such time and place or times and places as the directors determine. 37. The requisition shall state the objects of the meeting requested, be signed by the requisitionists and deposited at the Office of the Company. It may consist of several documents in like form each signed by one or more of the requisitionists. 38. At least seven clear days' notice, or such longer period of notice as may be required by the Act, of every general meeting, specifying the place, day and hour of the meeting and, when special business is to be considered, the general nature of such business, shall be given to the shareholders entitled to be present at such meeting by notice given as permitted by these Articles. With the consent in writing of all the shareholders entitled to vote at such meeting, a meeting may be convened by a shorter notice and in any manner they think fit, or notice of the time, place and purpose of the meeting may be waived by all of the shareholders. 39. When it is proposed to pass a special resolution, the two meetings may be convened by the same notice, and it shall be no objection to such notice that it only convenes the second meeting contingently upon the resolution being passed by the requisite majority at the first meeting. 40. The accidental omission to give notice to a shareholder, or non-receipt of notice by a shareholder, shall not invalidate any resolution passed at any general meeting. RECORD DATES 41. (1) The directors may fix in advance a date as the record date for the determination of shareholders (a) entitled to receive payment of a dividend or entitled to receive any -9- distribution; (b) entitled to receive notice of a meeting; or (c) for any other purpose. (2) If no record date is fixed, the record date for the determination of shareholders (a) entitled to receive notice of a meeting shall be the day immediately preceding the day on which the notice is given, or, if no notice is given, the day on which the meeting is held; and (b) for any other purpose shall be the day on which the directors pass the resolution relating to the particular purpose. PROCEEDINGS AT GENERAL MEETINGS 42. The business of an ordinary general meeting shall be to receive and consider the financial statements of the Company and the report of the directors and the report, if any, of the auditors, to elect directors in the place of those retiring and to transact any other business which under these Articles ought to be transacted at an ordinary general meeting. 43. No business shall be transacted at any general meeting unless the requisite quorum is present at the commencement of the business. A corporate shareholder of the Company that has a duly authorized agent or representative present at any such meeting shall for the purpose of this Article be deemed to be personally present at such meeting. 44. Holders of shares representing 10% of the votes which could be cast at the meeting, present in person or by proxyholder or authorized representative and entitled to vote shall constitute a quorum for a general meeting, and may hold a meeting. 45. Either of the Co-Chairmen shall be entitled to take the chair at every general meeting or if neither Co-Chairman is present within fifteen 15 minutes after the time appointed for holding the meeting, the President or, failing the President, a vice-president shall be entitled to take the chair. If no Co-Chairman, President or vice-president is present within 15 minutes after the time appointed for holding the meeting or if all such persons present decline to take the chair, the shareholders present entitled to vote at the meeting shall choose another director as chairman and if no director is present or if all the directors present decline to take the chair, then such shareholders shall choose one of their number to be chairman. 46. If within half an hour from the time appointed for a general meeting a quorum is not present, the meeting, if it was convened pursuant to a requisition of shareholders, shall be dissolved; -10- if it was convened in any other way, it shall stand adjourned to the same day, in the next week, at the same time and place. If at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the shareholders present shall be a quorum and may hold the meeting. 47. Subject to the Act, at any general meeting a resolution put to the meeting shall be decided by a show of hands unless, either before or on the declaration of the result of the show of hands, a poll is demanded by the chairman, a shareholder or a proxyholder; and unless a poll is so demanded, a declaration by the chairman that the resolution has been carried, carried by a particular majority, lost or not carried by a particular majority and an entry to that effect in the Company's book of proceedings shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution. 48. When a poll is demanded, it shall be taken in such manner and at such time and place as the chairman directs, and either at once or after an interval or adjournment or otherwise. The result of the poll shall be the resolution of the meeting at which the poll was demanded. The demand of a poll may be withdrawn. When any dispute occurs over the admission or rejection of a vote, it shall be resolved by the chairman and such determination made in good faith shall be final and conclusive. 49. The chairman shall not have a casting vote in addition to any vote or votes that the chairman has as a shareholder. 50. The chairman of a general meeting may with the consent of the meeting adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting that was adjourned. 51. Any poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith without adjournment. 52. The demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded. VOTES OF SHAREHOLDERS 53. Subject to the Act and to any provisions attached to any class or series of shares concerning voting rights (1) on a show of hands every shareholder present in person, every duly authorized representative of a corporate shareholder, and, if not prevented from voting by the Act, every proxyholder, shall have one vote; and (2) on a poll every shareholder present in person, every duly authorized representative of -11- a corporate shareholder, and every proxyholder, shall have one vote for every share held; whether or not such representative or proxyholder is a shareholder. 54. Any person entitled to transfer shares upon the death or bankruptcy of any shareholder or in any way other than by allotment or transfer may vote at any general meeting in respect thereof in the same manner as if such person were the registered holder of such shares so long as the directors are satisfied at least 48 hours before the time of holding the meeting of such person's right to transfer such shares. 55. Where there are joint registered holders of any share, any of such holders may vote such share at any meeting, either personally or by proxy, as if solely entitled to it. If more than one joint holder is present at any meeting, personally or by proxy, the one whose name stands first on the Register in respect of such share shall alone be entitled to vote it. Several executors or administrators of a deceased shareholder in whose name any share stands shall for the purpose of this Article be deemed joint holders thereof. 56. Votes may be cast either personally or by proxy or, in the case of a corporate shareholder by a representative duly authorized under the Act. 57. A proxy shall be in writing and executed in the manner provided in the Act. A proxy or other authority of a corporate shareholder does not require its seal. Holders of Share Warrants shall not be entitled to vote by proxy in respect of the shares included in such warrants unless otherwise expressed in such warrants. 58. A shareholder of unsound mind in respect of whom an order has been made by any court of competent jurisdiction may vote by guardian or other person in the nature of a guardian appointed by that court, and any such guardian or other person may vote by proxy. 59. A proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the Office of the Company or at such other place as the directors may direct. The directors may, by resolution, fix a time not exceeding 48 hours excluding Saturdays and holidays preceding any meeting or adjourned meeting before which time proxies to be used at that meeting must be deposited with the Company at its Office or with an agent of the Company. Notice of the requirement for depositing proxies shall be given in the notice calling the meeting. The chairman of the meeting shall determine all questions as to validity of proxies and other instruments of authority. 60. A vote given in accordance with the terms of a proxy shall be valid notwithstanding the previous death of the principal, the revocation of the proxy, or the transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, revocation -12- or transfer is received at the Office of the Company before the meeting or by the chairman of the meeting before the vote is given. 61. Every form of proxy shall comply with the Act and its regulations and subject thereto may be in the following form: I, ____________ Of _________ being a shareholder of hereby appoint __________ of ________ (or failing him/her ____________ of _________) as my proxyholder to attend and to vote for me and on my behalf at the ordinary/special general meeting of the company, to be held on the day of and at any adjournment thereof, or at any meeting of the company which may be held prior to [insert specified date or event]. [If The Proxy Is Solicited By Or Behalf Of The Management Of The Company, Insert A Statement To That Effect.] Dated this __ day of _____ __. Shareholder 62. A resolution, including a special resolution, in writing and signed by every shareholder who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such shareholders at a meeting and satisfies all of the requirements of the Act respecting meetings of shareholders. DIRECTORS 63. The number of directors shall be six. Notwithstanding anything herein contained, Michael Serruya, Richard E. Smith, Aaron Serruya, David Prussky, David Smith and David J. Stein shall be the directors of the Company from the date of continuance of the Company under the Act until their successors are appointed or they otherwise cease to be directors in accordance with these Articles. 64. The directors may be paid out of the funds of the Company as remuneration for their service such sums, if any, as the Company may by resolution of its shareholders determine, and such remuneration shall be divided among them in such proportions and manner as the directors determine. The directors may also be paid their reasonable travelling, hotel and other expenses incurred in attending meetings of directors and otherwise in the execution of their duties as directors. 65. The continuing directors may act notwithstanding any vacancy in their body, but if their number falls below six, the directors shall not act other than by unanimous resolution. -13- 66. A director may, in conjunction with the office of director, and on such terms as to remuneration and otherwise as the directors arrange or determine, hold any other office or place of profit under the Company or under any company in which the Company is a shareholder or is otherwise interested. 67. The office of a director shall ipso facto be vacated, if the director: (1) becomes bankrupt or makes an assignment for the benefit of creditors; (2) is, or is found by a court of competent jurisdiction to be, of unsound mind; (3) by notice in writing to the Company, resigns the office of director; or (4) is removed in the manner provided by these Articles. 68. No director shall be disqualified by holding the office of director from contracting with the Company, either as vendor, purchaser, or otherwise, nor shall any such contract, or any contract or arrangement entered into or proposed to be entered into by or on behalf of the Company in which any director is in any way interested, either directly or indirectly, be avoided, nor shall any director so contracting or being so interested be liable to account to the Company for any profit realized by any such contract or arrangement by reason only of such director holding that office or of the fiduciary relations thereby established, provided the director makes a declaration or gives a general notice in accordance with the Act. No director shall, as a director, vote in respect of any contract or arrangement in which the director is so interested, and if the director does so vote, such vote shall not be counted. This prohibition may at any time or times be suspended or relaxed to any extent by a resolution of the shareholders and shall not apply to any contract by or on behalf of the Company to give to the directors or any of them any security for advances or by way of indemnity. ELECTION OF DIRECTORS 69. Directors shall be elected by motion carried by at least 662/3% of the votes entitled to be cast on such motion. Any motion to elect a director which is not carried by such majority shall be considered not to have been carried. 70. At the dissolution of every ordinary general meeting at which their successors are elected, all the directors shall retire from office and be succeeded by the directors elected at such meeting. Retiring directors shall be eligible for re-election. 71. If at any ordinary general meeting at which an election of directors ought to take place no such election takes place, or if no ordinary general meeting is held in any year or period of -14- years, the retiring directors shall continue in office until their successors are elected. 72. The Company may by special resolution of its shareholders determine or alter the requirements for qualification of directors. 73. The Company may, by special resolution ,remove any director before the expiration of such director's period of office and may, if desired, appoint a replacement to hold office during such time only as the director so removed would have held office. 74. The directors may appoint any other person as a director so long as the total number of directors does not at any time exceed the number permitted. No such appointment, except to fill a casual vacancy, shall be effective unless all of the directors concur in it. Any casual vacancy occurring among the directors may be filled by the directors, but any person so chosen shall retain office only so long as the vacating director would have retained it if the vacating director had continued as director. CO-CHAIRMEN OF THE BOARD 75. The directors may elect two of their number to be Co-Chairmen and may determine the period during which the Co-Chairmen hold office. The Co-Chairmen shall perform such duties and receive such special remuneration as the directors may provide and shall perform such duties as are provided for herein. PRESIDENT AND VICE-PRESIDENTS 76. The directors shall elect the President of the Company, who need not be a director, and may determine the period for which the President is to hold office. The President shall have general supervision of the business of the Company and shall perform such duties as may be assigned from time to time by the directors. 77. The directors may also elect vice-presidents, who need not be directors, and may determine the periods for which they are to hold office. A vice-president shall, at the request of the President or the directors and subject to the directions of the directors, perform the duties of the President during the absence, illness or incapacity of the President, and shall also perform such duties as may be assigned by the President or the directors. SECRETARY AND TREASURER 78. The directors shall appoint a Secretary of the Company to keep minutes of shareholders' and directors' meetings and perform such other duties as may be assigned by the directors. The directors may also appoint a temporary substitute for the Secretary who shall, for the purposes of these Articles, be deemed to be the Secretary. -15- 79. The directors may appoint a treasurer of the Company to carry out such duties as the directors may assign. OFFICERS 80. The directors may elect or appoint such other officers of the Company, having such powers and duties, as they think fit. 81. If the directors so decide the same person may hold more than one of the offices provided for in these Articles. 82. Notwithstanding anything herein contained the officers of the Company on the date of its continuance shall continue to hold office until their successors are appointed or they otherwise cease to hold office in accordance with these Articles. PROCEEDINGS OF DIRECTORS 83. The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings and proceedings, as they think fit, and may determine the quorum necessary for the transaction of business. Until otherwise unanimously determined, four directors shall constitute a quorum and may hold a meeting. 84. If all directors of the Company entitled to attend a meeting either generally or specifically consent, a director may participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in such a meeting by such means is deemed to be present at that meeting for purposes of these Articles. 85. Meetings of directors may be held either within or without the Province of Nova Scotia and the directors may from time to time make arrangements relating to the time and place of holding directors' meetings, the notices to be given for such meetings and what meetings may be held without notice. Unless otherwise provided by such arrangements: (1) A meeting of directors may be held at the close of every ordinary general meeting of the Company without notice. (2) Notice of every other directors' meeting may be given as permitted by these Articles to each director at least 48 hours before the time fixed for the meeting. (3) A meeting of directors may be held without formal notice if all the directors are present or if those absent have signified their assent to such meeting or their consent to the business transacted at such meeting. -16- 86. The President or any director may at any time, and the Secretary, upon the request of the President or any director, shall summon a meeting of the directors to be held at Toronto, Ontario. Either Co-Chairman or any two other directors may at any time, and the Secretary, upon the request of a Co-Chairman or two other directors, shall summon a meeting to be held elsewhere. 87. (1) Except for circumstances where questions are required by these Articles to be determined unanimously, questions arising at any meeting of directors shall be decided by a majority of votes. The chairman of the meeting may vote as a director but shall not have a second or casting vote. (2) At any meeting of directors the chairman shall receive and count the vote of any director not present in person at such meeting on any question or matter arising at such meeting whenever such absent director has indicated by telegram, letter or other writing lodged with the chairman of such meeting the manner in which the absent director desires to vote on such question or matter and such question or matter has been specifically mentioned in the notice calling the meeting as a question or matter to be discussed or decided thereat. In respect of any such question or matter so mentioned in such notice any director may give to any other director a proxy authorizing such other director to vote for such first named director at such meeting, and the chairman of such meeting, after such proxy has been so lodged, shall receive and count any vote given in pursuance thereof notwithstanding the absence of the director giving such proxy. 88. If no Co-Chairman is elected, or if at any meeting of directors no Co-Chairman is present within five minutes after the time appointed for holding the meeting, or is willing to take the chair, the President, if a director, shall preside. If the President is not a director, is not present at such time or declines to take the chair, a vice-president who is also a director shall preside. If no person described above is present at such time and willing to take the chair, the directors present shall choose some one of their number to be chairman of the meeting. 89. A meeting of the directors at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions for the time being vested in or exercisable by the directors generally. 90. The directors may delegate any of their powers to committees consisting of such number of directors as they think fit. Any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on them by the directors. 91. The meetings and proceedings of any committee of directors shall be governed by the provisions contained in these Articles for regulating the meetings and proceedings of the directors insofar as they are applicable and are not superseded by any regulations made by the directors. -17- 92. All acts done at any meeting of the directors or of a committee of directors or by any person acting as a director shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of the director or person so acting, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a director. 93. A resolution in writing and signed by every director who would be entitled to vote on the resolution at a meeting is as valid as if it were passed by such directors at a meeting. 94. If any one or more of the directors is called upon to perform extra services or to make any special exertions in going or residing abroad or otherwise for any of the purposes of the Company or the business thereof, the Company may remunerate the director or directors so doing, either by a fixed sum or by a percentage of profits or otherwise. Such remuneration shall be determined by the directors and may be either in addition to or in substitution for remuneration otherwise authorized by these Articles. REGISTERS 95. The directors shall cause to be kept at the Company's Office in accordance with the provisions of the Act a Register of the shareholders of the Company, a register of the holders of bonds, debentures and other securities of the Company and a register of its directors. Branch registers of the shareholders and of the holders of bonds, debentures and other securities may be kept elsewhere, either within or without the Province of Nova Scotia, in accordance with the Act. MINUTES 96. The directors shall cause minutes to be entered in books designated for the purpose: (1) of all appointments of officers; (2) of the names of directors present at each meeting of directors and of any committees of directors; (3) of all orders made by the directors and committees of directors; and (4) of all resolutions and proceedings of meetings of shareholders and of directors. Any such minutes of any meeting of directors or of any committee of directors or of shareholders, if purporting to be signed by the chairman of such meeting or by the chairman of the next succeeding meeting, shall be receivable as prima facie evidence of the matters stated in such minutes. -18- POWERS OF DIRECTORS 97. The management of the business of the Company is vested in the directors who, in addition to the powers and authorities by these Articles or otherwise expressly conferred upon them, may exercise all such powers and do all such acts and things as may be exercised or done by the Company and are not hereby or by statute expressly directed or required to be exercised or done by the shareholders, but subject nevertheless to the provisions of any statute, the Memorandum or these Articles. No modification of the Memorandum or these Articles shall invalidate any prior act of the directors that would have been valid if such modification had not been made. 98. Without restricting the generality of the terms of any of these Articles and without prejudice to the powers conferred thereby, the directors may: (1) take such steps as they think fit to carry out any agreement or contract made by or on behalf of the Company; (2) pay costs, charges and expenses preliminary and incidental to the promotion, formation, establishment, and registration of the Company; (3) purchase or otherwise acquire for the Company any property, rights or privileges that the Company is authorized to acquire, at such price and generally on such terms and conditions as they think fit; (4) pay for any property, rights or privileges acquired by, or services rendered to the Company either wholly or partially in cash or in shares (fully paid-up or otherwise), bonds, debentures or other securities of the Company; (5) subject to the Act, secure the fulfilment of any contracts or engagements entered into by the Company by mortgaging or charging all or any of the property of the Company and its unpaid capital for the time being, or in such other manner as they think fit; (6) appoint, remove or suspend at their discretion such experts, managers, secretaries, treasurers, officers, clerks, agents and servants for permanent, temporary or special services, as they from time to time think fit, and determine their powers and duties and fix their salaries or emoluments and require security in such instances and to such amounts as they think fit; (7) accept a surrender of shares from any shareholder insofar as the law permits and on such terms and conditions as may be agreed; -19- (8) appoint any person or persons to accept and hold in trust for the Company any property belonging to the Company, or in which it is interested, execute and do all such deeds and things as may be required in relation to such trust, and provide for the remuneration of such trustee or trustees; (9) institute, conduct, defend, compound or abandon any legal proceedings by and against the Company, its directors or its officers or otherwise concerning the affairs of the Company, and also compound and allow time for payment or satisfaction of any debts due and of any claims or demands by or against the Company; (10) refer any claims or demands by or against the Company to arbitration and observe and perform the awards; (11) make and give receipts, releases and other discharges for amounts payable to the Company and for claims and demands of the Company; (12) determine who may exercise the borrowing powers of the Company and sign on the Company's behalf bonds, debentures or other securities, bills, notes, receipts, acceptances, assignments, transfers, hypothecations, pledges, endorsements, cheques, drafts, releases, contracts, agreements and all other instruments and documents; (13) provide for the management of the affairs of the Company abroad in such manner as they think fit, and in particular appoint any person to be the attorney or agent of the Company with such powers (including power to sub-delegate) and upon such terms as may be thought fit; (14) invest and deal with any funds of the Company in such securities and in such manner as they think fit; and vary or realize such investments; (15) subject to the Act, execute in the name and on behalf of the Company in favour of any director or other person who may incur or be about to incur any personal liability for the benefit of the Company such mortgages of the Company's property, present and future, as they think fit; (16) give any officer or employee of the Company a commission on the profits of any particular business or transaction or a share in the general profits of the Company; (17) set aside out of the profits of the Company before declaring any dividend such amounts as they think proper as a reserve fund to meet contingencies or provide for dividends, depreciation, repairing, improving and maintaining any of the property of the Company and such other purposes as the directors may in their absolute discretion think in the interests of the Company; and invest such amounts in such investments as they think fit, and deal with and vary such investments, and dispose of all or any part of them for the benefit of the Company, and divide the reserve fund -20- into such special funds as they think fit, with full power to employ the assets constituting the reserve fund in the business of the Company without being bound to keep them separate from the other assets; (18) make, vary and repeal rules respecting the business of the Company, its officers and employees, the shareholders of the Company or any section or class of them; (19) enter into all such negotiations and contracts, rescind and vary all such contracts, and execute and do all such acts, deeds and things in the name and on behalf of the Company as they consider expedient for or in relation to any of the matters aforesaid or otherwise for the purposes of the Company; (20) provide for the management of the affairs of the Company in such manner as they think fit. SOLICITORS 99. The Company may employ or retain solicitors any of whom may, at the request or on the instruction of the directors or a Co-Chairman, attend meetings of the directors or shareholders, whether or not the solicitor is a shareholder or a director of the Company. A solicitor who is also a director may nevertheless charge for services rendered to the Company as a solicitor. THE SEAL 100. The directors shall arrange for the safe custody of the common seal of the Company (the "Seal"). The Seal may be affixed to any instrument in the presence of and contemporaneously with the attesting signature of (i) any director or officer acting within such person's authority or (ii) any person under the authority of a resolution of the directors or a committee thereof. For the purpose of certifying documents or proceedings the Seal may be affixed by any director or the President, a vice-president, the Secretary, an assistant secretary or any other officer of the Company without the authorization of a resolution of the directors. The Company may have facsimiles of the Seal which may be used interchangeably with the Seal. DIVIDENDS 101. The directors may from time to time declare such dividend as they deem proper upon shares of the Company according to the rights and restrictions attached to any class or series of shares, and may determine the date upon which such dividend will be payable and that it will be payable to the persons registered as the holders of the shares on which it is declared at the close of business upon a record date. No transfer of such shares registered after the record date shall pass any right to the dividend so declared. -21- 102. No dividends shall be payable except out of the profits, retained earnings or contributed surplus of the Company and no interest shall be payable on any dividend except insofar as the rights attached to any class or series of shares provide otherwise. 103. The declaration of the directors as to the amount of the profits, retained earnings or contributed surplus of the Company shall be conclusive. 104. The directors may from time to time pay to the shareholders such interim dividends as in their judgment the position of the Company justifies. 105. Subject to the Memorandum, these Articles and the rights and restrictions attached to any class or series of shares, dividends may be declared and paid to the shareholders in proportion to the amount of capital paid-up on the shares (not including any capital paid-up bearing interest) held by them respectively. 106. The directors may deduct from the dividends payable to any shareholder amounts due and payable by the shareholder to the Company and may apply the same in or towards satisfaction of such amounts so due and payable. 107. The directors may retain any dividends on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists. 108. The directors may retain the dividends payable upon shares to which a person is entitled or entitled to transfer upon the death or bankruptcy of a shareholder or in any way other than by allotment or transfer, until such person has become registered as the holder of such shares or has duly transferred such shares. 109. The directors may declare that a dividend be paid by the distribution of cash, paid-up shares (at par or at a premium), debentures, bonds or other securities of the Company or of any other company or any other specific assets held or to be acquired by the Company or in any one or more of such ways. 110. The directors may settle any difficulty that may arise in regard to the distribution of a dividend as they think expedient, and in particular without restricting the generality of the foregoing may issue fractional certificates, may fix the value for distribution of any specific assets, may determine that cash payments will be made to any shareholders upon the footing of the value so fixed or that fractions may be disregarded in order to adjust the rights of all parties, and may vest cash or specific assets in trustees upon such trusts for the persons entitled to the dividend as may seem expedient to the directors. 111. Any person registered as a joint holder of any share may give effectual receipts for all -22- dividends and payments on account of dividends in respect of such share. 112. Unless otherwise determined by the directors, any dividend may be paid by a cheque or warrant delivered to or sent through the post to the registered address of the shareholder entitled, or, when there are joint holders, to the registered address of that one whose name stands first on the register for the shares jointly held. Every cheque or warrant so delivered or sent shall be made payable to the order of the person to whom it is delivered or sent. The mailing or other transmission to a shareholder at the shareholder's registered address (or, in the case of joint shareholders at the address of the holder whose name stands first on the register) of a cheque payable to the order of the person to whom it is addressed for the amount of any dividend payable in cash after the deduction of any tax which the Company has properly withheld, shall discharge the Company's liability for the dividend unless the cheque is not paid on due presentation. If any cheque for a dividend payable in cash is not received, the Company shall issue to the shareholder a replacement cheque for the same amount on such terms as to indemnity and evidence of non-receipt as the directors may impose. No shareholder may recover by action or other legal process against the Company any dividend represented by a cheque that has not been duly presented to a banker of the Company for payment or that otherwise remains unclaimed for 6 years from the date on which it was payable. ACCOUNTS 113. The directors shall cause proper books of account to be kept of the amounts received and expended by the Company, the matters in respect of which such receipts and expenditures take place, all sales and purchases of goods by the Company, and the assets, credits and liabilities of the Company. 114. The books of account shall be kept at the head office of the Company or at such other place or places as the directors may direct. 115. The directors shall from time to time determine whether and to what extent and at what times and places and under what conditions the accounts and books of the Company or any of them shall be open to inspection of the shareholders, and no shareholder shall have any right to inspect any account or book or document of the Company except as conferred by statute or authorized by the directors or a resolution of the shareholders. 116. At the ordinary general meeting in every year the directors shall lay before the Company such financial statements and reports in connection therewith as may be required by the Act or other applicable statute or regulation thereunder and shall distribute copies thereof at such times and to such persons as may be required by statute or regulation. -23- AUDITORS AND AUDIT 117. Except in respect of a financial year for which the Company is exempt from audit requirements in the Act, the Company shall at each ordinary general meeting appoint an auditor or auditors to hold office until the next ordinary general meeting. If at any general meeting at which the appointment of an auditor or auditors is to take place and no such appointment takes place, or if no ordinary general meeting is held in any year or period of years, the directors shall appoint an auditor or auditors to hold office until the next ordinary general meeting. 118. The first auditors of the Company may be appointed by the directors at any time before the first ordinary general meeting and the auditors so appointed shall hold office until such meeting unless previously removed by a resolution of the shareholders, in which event the shareholders may appoint auditors. 119. The directors may fill any casual vacancy in the office of the auditor but while any such vacancy continues the surviving or continuing auditor or auditors, if any, may act. 120. The Company may appoint as auditor any person, including a shareholder, not disqualified by statute. 121. An auditor may be removed or replaced in the circumstances and in the manner specified in the Act. 122. The remuneration of the auditors shall be fixed by the shareholders, or by the directors pursuant to authorization given by the shareholders, except that the remuneration of an auditor appointed to fill a casual vacancy may be fixed by the directors. 123. The auditors shall conduct such audit as may be required by the Act and their report, if any, shall be dealt with by the Company as required by the Act. NOTICES 124. A notice (including any communication or document) shall be sufficiently given, delivered or served by the Company upon a shareholder, director, officer or auditor by personal delivery at such person's registered address (or, in the case of a director, officer or auditor, last known address) or by prepaid mail, telegraph, telex, facsimile machine or other electronic means of communication addressed to such person at such address. 125. Shareholders having no registered address shall not be entitled to receive notice. 126. The holder of a share warrant shall not, unless otherwise expressed therein, be entitled in respect thereof to notice of any general meeting of the Company. -24- 127. All notices with respect to registered shares to which persons are jointly entitled may be sufficiently given to all joint holders thereof by notice given to whichever of such persons is named first in the Register for such shares. 128. Any notice sent by mail shall be deemed to be given, delivered or served on the earlier of actual receipt and the third business day following that upon which it is mailed, and in proving such service it shall be sufficient to prove that the notice was properly addressed and mailed with the postage prepaid thereon. Any notice given by electronic means of communication shall be deemed to be given when entered into the appropriate transmitting device for transmission. A certificate in writing signed on behalf of the Company that the notice was so addressed and mailed or transmitted shall be conclusive evidence thereof. 129. Every person who by operation of law, transfer or other means whatsoever becomes entitled to any share shall be bound by every notice in respect of such share that prior to such person's name and address being entered on the Register was duly served in the manner hereinbefore provided upon the person from whom such person derived title to such share. 130. Any notice delivered, sent or transmitted to the registered address of any shareholder pursuant to these Articles, shall, notwithstanding that such shareholder is then deceased and that the Company has notice thereof, be deemed to have been served in respect of any registered shares, whether held by such deceased shareholder solely or jointly with other persons, until some other person is registered as the holder or joint holder thereof, and such service shall for all purposes of these Articles be deemed a sufficient service of such notice on the heirs, executors or administrators of the deceased shareholder and all joint holders of such shares. 131. Any notice may bear the name or signature, manual or reproduced, of the person giving the notice written or printed. 132. When a given number of days' notice or notice extending over any other period is required to be given, the day of service and the day upon which such notice expires shall not, unless it is otherwise provided, be counted in such number of days or other period. -25- INDEMNITY 133. Every director or officer, former director or officer, or person who acts or acted at the Company's request, as a director or officer of the Company, a body corporate, partnership or other association of which the Company is or was a shareholder, partner, member or creditor, and the heirs and legal representatives of such person, in the absence of any dishonesty on the part of such person, shall be indemnified by the Company against, and it shall be the duty of the directors out of the funds of the Company to pay to the fullest extent permitted by law, all costs, losses and expenses, including legal fees and disbursements and including an amount paid to settle an action or claim or satisfy a judgment, that such director, officer or person may incur or become liable to pay in respect of any claim made against such person or civil, criminal or administrative action or proceeding to which such person is made a party by reason of being or having been a director or officer of the Company or such body corporate, partnership or other association, whether the Company is a claimant or party to such action or proceeding or otherwise; and the amount for which such indemnity is proved shall immediately attach as a lien on the property of the Company and have priority as against the shareholders over all other claims. 134. No director or officer, former director or officer, or person who acts or acted at the Company's request, as a director or officer of the Company, a body corporate, partnership or other association of which the Company is or was a shareholder, partner, member or creditor, in the absence of any dishonesty on such person's part, shall be liable for the acts, receipts, neglects or defaults of any other director, officer or such person, or for joining in any receipt or other act for conformity, or for any loss, damage or expense happening to the Company through the insufficiency or deficiency of title to any property acquired for or on behalf of the Company, or through the insufficiency or deficiency of any security in or upon which any of the funds of the Company are invested, or for any loss or damage arising from the bankruptcy, insolvency or tortious acts of any person with whom any funds, securities or effects are deposited, or for any loss occasioned by error of judgment or oversight on the part of such person, or for any other loss, damage or misfortune whatsoever which happens in the execution of the duties of such person or in relation thereto. REMINDERS 135. The directors shall comply with the following provisions of the Act or the Corporations Registration Act (Nova Scotia) where indicated: (1) Keep a current register of shareholders (Section 42). (2) Keep a current register of directors, officers and managers, send to the Registrar a copy thereof and notice of all changes therein (Section 98). (3) Keep a current register of holders of bonds, debentures and other securities (Section -26- 111 and Third Schedule). (4) Send notice to the Registrar of any redemption or purchase of preference shares (Section 50). (5) Send notice to the Registrar of any consolidation, division, conversion or reconversion of the share capital or stock of the Company (Section 53). (6) Send notice to the Registrar of any increase of capital (Section 55). (7) Call a general meeting every year within the proper time (Section 83). Meetings must be held not later than 15 months after the preceding general meeting. (8) Send to the Registrar copies of all special resolutions (Section 88). (9) When shares are issued for a consideration other than cash, file a copy of the contract with the Registrar on or before the date on which the shares are issued (Section 109). (10) Send to the Registrar notice of the address of the Company's registered Office and of all changes in such address (Section 79). (11) Keep proper minutes of all shareholders' meetings and directors' meetings in the Company's minute book kept at the Company's registered Office (Sections 89 and 90). (12) Obtain a certificate under the Corporations Registration Act (Nova Scotia) as soon as business is commenced. (13) Send notice of recognized agent to the Registrar under the Corporations Registration Act (Nova Scotia). EX-99 6 ex99-5.txt EXHIBIT 99.5 [NOVA SCOTIA GRAPHIC] CERTIFICATE OF NAME CHANGE Companies Act I HEREBY CERTIFY that this is a true copy of a document filed in the office of the Registrar of Joint Stock Companies on the Registry Number 17th day of March, 2000 - --------------- [SIGNATURE ILLEGIBLE] 3017246 ----------------------------------------- for Registrar of Joint Stock Companies Name of Company Dated 22nd day of Nov, 2005 - --------------- YOGEN FRUZ WORLD-WIDE INCORPORATED I hereby certify that the above-mentioned company has with approval of the Registrar of Joint Stock Companies changed its name to: COOLBRANDS INTERNATIONAL INC. Original Signed By: March 17, 2000 - --------------------------------------- ------------------- Registrar of Joint Stock Companies Date of Name Change ------------------------- RECEIVED MARCH 17, 2000 OFFICE OF REGISTRAR of Joint Stock Companies NOVA SCOTIA ------------------------- YOGEN FRUZ WORLD-WIDE INCORPORATED SPECIAL RESOLUTION OF THE SHAREHOLDERS "BE IT RESOLVED AS A SPECIAL RESOLUTION THAT the name of the Corporation be, with the approval of the Registrar of Joint Stock Companies, changed from Yogen Fruz World-Wide Incorporated to CoolBrands International Inc. effective immediately following approval thereof by the Registrar of Joint Stock Companies and that application be made to the Registrar of Joint Stock Companies to enter that new name on the register of companies in the place of the present name of the Corporation." ------------------- The undersigned, Michael Serruya of Yogen Fruz World-Wide Incorporated (the "Corporation"), hereby certifies that the foregoing resolution was approved at the Annual and Special Meeting of Shareholders held by the Corporation on February 29, 2000 and that such resolution was also confirmed at a confirmatory meeting of Shareholders held by the Corporation on March 15, 2000. The foregoing resolution is currently in place and unamended as of the date thereof. DATED this 15th day of March, 2000 Michael Serruya -------------------------- Name: Michael Serruya Title: Co-Chairman I HEREBY CERTIFY that this is a true copy of a document filed in the office of the Registrar of Joint Stock Companies on the 17th day of March 2000 [SIGNATURE ILLEGIBLE] ----------------------------------------- for Registrar of Joint Stock Companies Dated 22nd day of Nov, 2005 EX-99 7 ex99-6.txt EXHIBIT 99.6 COOLBRANDS INTERNATIONAL INC. CODE OF BUSINESS CONDUCT Section 1 Application and Purpose of the Code This Code of Business Conduct (the "Code") applies to all employees (full time, part time and casual), officers and directors of the CoolBrands International Inc. and its subsidiaries from time to time (collectively, the "Company"). The Company is committed to maintaining high standards of integrity and accountability in conducting its business. This Code provides a framework of guidelines and principles to encourage ethical and professional behaviour among our employees, officers and directors. These guidelines and principles are intended to: o establish a minimum standard of conduct by which all of us are expected to abide; o protect the business interests of the Company, its customers, employees, officers and directors; o maintain the Company's reputation for honesty and integrity; and o ensure that the Company, through each of us, complies with applicable legal obligations. As with all guidelines or principles, we are each expected to use our own judgement and discretion, having regard to these standards, to determine the best course of action for any specific situation. Many situations are not explicitly addressed in this Code - if you are unsure about a particular situation or course of action speak to your immediate supervisor or the Chair of the Corporate Governance Committee if you are not comfortable speaking with your immediate supervisor. Reasons such as "everyone is doing it" or "it is not illegal" are not acceptable as excuses for violating this Code. In addition to this Code, the Company has adopted policies and procedures on specific topics (such as trading in securities of the Company) that also apply to each of us. We are expected to familiarize ourselves with these specific policies and procedures. Section 2 Conflicts of Interest It is our policy to seek to ensure that the Company's best interests are paramount in all of our dealings with customers, suppliers, contractors, competitors and potential business partners, and are conducted in a manner that avoids actual or potential conflicts of interest. In general, a conflict of interest exists where an individual's personal interests interfere with (or even appear to interfere with) his or her ability to act in the best interests of the Company. Conflicts of interests may exist in any situation where our ability to act objectively, or in the best interests of the Company, are influenced. These include the receipt of improper and material personal benefits by you or your family and friends, as a result of your position with the Company. -2- We should be scrupulous in avoiding any actual or potential conflict of interest with regard to the Company's interest. Conflicts of interest may take various forms, only some of which are mentioned in this Code. All employees should seek the advice of their supervisor with any questions or concerns, and should immediately disclose to their supervisor any material transaction or relationship that reasonably could be expected to give rise to an apparent or actual conflict. Officers or directors should seek advice from or provide disclosure to a member of the Corporate Governance Committee. Proper disclosure provides an opportunity to obtain advice from the appropriate level of management and to resolve actual or potential conflicts of interests in a timely and effective manner. Section 3 Gifts and Entertainment Accepting gifts, entertainment, services, favours, personal discounts, and similar gratuities, other than of nominal value ($100 or less), from customers or suppliers of the Company or prospective customers or suppliers of the Company, is a conflict of interest. Additionally, frequent gifts from one source of any value should not be accepted. Employees, officers and directors may not engage in conduct that could be interpreted as directly or indirectly seeking, receiving or providing a bribe or kickback. A conflict of interest may also arise in the giving of gifts or entertainment. Employees, officers and directors may only offer gifts or entertainment of nominal value. Section 4 Political Activities Employees, officers and directors may participate in the political process as private citizens. It is a separate personal political activity and, in order to comply with appropriate laws and regulations relating to lobbying or attempting to influence government, the Company will not reimburse employees for money or personal time contributed to political campaigns. Employees may not work on a political campaign while at work or at any time use Company facilities for that purpose. No employee, officer or director may offer improper political contributions when acting on behalf of the Company. Section 5 Protection and use of the Company's Assets Company property is for Company business. We are each responsible for protecting the Company's assets from improper use including fraud, theft and misappropriation and from waste through carelessness or neglect. Section 6 Records and Document Retention The Company requires honest and accurate recording and reporting of information in order to make informed and responsible business decisions. The Company's books and records should accurately reflect all business transactions. Undisclosed or unrecorded revenues, expenses, assets or liabilities are prohibited. The Company further prohibits the unauthorized destruction of or tampering of records, whether written or in electronic form, where the Company is required by law to maintain such records or where it has reason to know of a threatened or pending litigation relating to such records. -3- Section 7 Information Security The Company encourages the use of information technologies and electronic communications resources and makes them available to certain employees. However, the use of Company electronic communications resources is limited to Company business. It is the Company's policy to secure and protect all information, whether print or electronic. The Company's information technologies and electronic communications resources may not be used to access material that contains defamatory, libellous, slanderous or disruptive statements, sexual comments or images. This also applies to comments or images that are discriminatory on the basis of race, religion, sex, national or ethnic origin, marital status, family status, sexual orientation, colour, age, disability, pardoned conviction or other characteristic protected by law. Confidential, sensitive or valuable information should not be sent over the Internet unless properly protected or encrypted. The Company reserves the right to inspect, monitor, or disclose electronic communications in all circumstances. Section 8 Corporate Opportunities We must ensure that the activities in which we engage outside of our working hours do not conflict, or appear to conflict, with the Company's business or with our ability to fulfill your duties as employees, officers or directors. Therefore: o we may not simultaneously work for an organization that is one of the Company's competitors, suppliers or customers o we may not sell or promote a third party's line of products if these products compete for business with those offered by the Company o we may not accept outside employment or engage in any activity if that employment or activity will prevent us from performing our job at the Company fully and competently o we may not take advantage for our personal account of an opportunity that presents itself to as a result of our position with the Company Section 9 Confidentiality of Corporate Information Information is a key asset of the Company. We should maintain the confidentiality of confidential information entrusted to us by the Company or any of its customers, suppliers or business partners, except where disclosure is authorized or legally mandated. Confidential information includes all non-public information that might be of use to competitors of the Company or disclosure of which might be harmful to the Company. If you have access to confidential information as a result of your job, you must use every precaution to keep it confidential. It is important to use discretion when discussing Company business in public places such as restaurants and airplanes. Each of us also has a duty to protect any confidential information regarding the Company after we leave our employment with the Company. -4- The Company has also adopted a Disclosure Policy and an Insider Trading Policy, each of which relates to the use and disclosure of confidential information. Employees, officers and directors should also ensure that they are familiar with the requirements of these policies. Section 10 Fair Dealing with Other People and Organizations All business dealings undertaken on behalf of the Company should be conducted in a manner that preserves our integrity and reputation. Our competitive advantages are sought through superior performances, and never through unethical or illegal business practices. We should endeavour to deal fairly with the Company's customers, suppliers, competitors and employees. None should be taken advantage through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice. Section 11 Diversity and Harassment-Free Environment The Company will not tolerate harassment of its employees, customers or suppliers in any form. Employees are required to treat each other fairly, openly and with respect. There are no Company policies, procedures or practices which would create an environment that prevents an employee from progressing in his or her career. It is prohibited to initiate or establish Company activities or programs that unfairly discriminate against an individual. Harassment is defined as unwelcome conduct, comments, gestures or contact that causes offense or humiliation to any employee, employment candidate, customer or member of the general public. This type of behaviour denies people their dignity and respect and is unacceptable. Harassment can occur at or away from the workplace and during or outside working hours if individuals are in a work-related situation. It can be verbal, physical, written (by use of computer, print, poster, handwriting), intentional or unintentional. It includes unwanted behaviours based on the following prohibited grounds of discrimination: race, religion, sex, national or ethnic origin, marital status, family status, sexual orientation, colour, age, disability, pardoned conviction or other characteristic protected by law. Harassment is considered employee misconduct by the Company and is not tolerated. It is each employee's responsibility to ensure that harassment or any other offensive or inappropriate behaviour does not happen. The Company will respond promptly to all complaints and ensure they are resolved quickly, confidentially and fairly. The Company will impose sanctions on any employee who violates this Section 11 of the Code regardless of position. However, different positions (such as supervisory or managerial positions) will be subject to more serious consequences due to the impact these positions have on employment conditions. Section 12 Complying with the Law The Company strives to ensure that its business is conducted in all respects in accordance with all applicable laws, stock exchange rules and securities regulations. This includes compliance with all applicable anti-trust/competition, privacy, labour, human rights, environmental and securities laws. -5- Specifically, it is also our policy to comply with all applicable securities laws and regulations to ensure that material information which is not generally available to the public ("inside information") is disclosed in accordance with the applicable legal requirements. This includes implementation of policies and procedures, as set out in the Company's Insider Trading Policy, to protect against the improper use or disclosure of inside information, including improper trading of securities while in possession of inside information. Section 13 Reporting of Illegal or Unethical Behaviour The Company strives to foster a business environment that promotes integrity and deters unethical or illegal behaviour. It is our responsibility to seek to monitor and ensure compliance with the guidelines set out in this Code, including compliance with accounting, internal accounting controls or auditing requirements applicable to the Company. Any concerns or complaints in this regard shall be communicated to a member of the Corporate Governance Committee. Any complaints or concerns regarding accounting, internal accounting controls or auditing matters may be communicated in confidence, and anonymously, to the Audit Committee. It is the Company's policy to ensure that we can each communicate freely in respect of matters covered by this Code. No one may retaliate against any employee, officer of director for expressing a concern or complaint in good faith regarding a perceived violation of this Code. Retaliation includes any form of penalty, adverse employment consequence, including discharge, suspension, demotion or transfer, harassment or discrimination. Section 14 Compliance Standards and Procedures Abiding by the standards of this Code and underlying policies is a serious matter for the Company. After all, high standards of business conduct are critical to maintaining public confidence. Violations can jeopardize the Company's relationships with customers, suppliers and investors and can even result in our loss of the privilege to do business in the countries in which we operate. The Company will take all reasonable steps to respond appropriately, promptly and consistently to violations of this Code and prevent further situations. This may include disciplinary action up to and including termination of employment, contract termination or other legal action such as seeking damages. Section 15 Compliance and Waivers It is the role of the Corporate Governance Committee to seek to monitor compliance with the Code. Waivers from the Code will generally only be granted in appropriate circumstances upon full review and consideration of a request for a waiver, on a case-by-case basis. Waivers granted for the benefit of officers or directors require approval from the Corporate Governance Committee, which should ascertain whether a waiver is appropriate and seek to ensure that the waiver is accompanied by appropriate controls designed to protect the Company's interests. Any conduct that constitutes a material change must be reported through a material change report. -6- All matters of concern, including requests for waivers, shall be a communicated to the Chair of the Corporate Governance Committee. The Board of Directors may, from time to time, permit departures from the terms of this Code, either prospectively or retrospectively. The terms of this Code are not intended to give rise to civil liability on the part of the Company or its directors or officers to shareholders, security holders, customers, suppliers, competitors, employees or other persons, or to any other liability whatsoever on their part. Section 16 Annual Review All officers and employees in supervisory roles are expected to review the Code once a year and certify that they have done so by signing the form attached as Schedule A. This form is kept in each such employee's personnel file. Schedule A Annual Certification by Officers and Employees Who Have Supervisory Roles I have reviewed and fully understand the CoolBrands International Inc. Code of Business Ethics. I accept that my continued employment or engagement with the Company may be dependent upon my compliance with the rules and policies described in the Code of Business Ethics. I have reported to my supervisor or to the Chair of the Corporate Governance Committee any relationship or other circumstances that do or could place me in conflict with the interests of the Company. Any new situations will be reported as they occur. I hereby certify that I have no real or potential conflict of interest, except as disclosed to the Company. - ---------------------------------------- Name - ---------------------------------------- Signature - ------------------------------ Date EX-99 8 ex99-7.txt EXHIBIT 99.7 - -------------------------------------------------------------------------------- AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF AMERICANA FOODS LIMITED PARTNERSHIP (A TEXAS LIMITED PARTNERSHIP) DATED AS OF JANUARY 10, 2003 - -------------------------------------------------------------------------------- TABLE OF CONTENTS
Page ---- Section 1. Definitions................................................... 2 Section 2. Organization of the Partnership............................... 10 2.1. Name......................................................... 10 2.2. [Intentionally Omitted]...................................... 10 2.3. Principal Office............................................. 10 2.4. Filings...................................................... 10 2.5. Limitations on Partnership Powers............................ 11 2.6. Affiliate Agreements......................................... 11 2.7. Term......................................................... 11 Section 3. Purpose....................................................... 11 Section 4. Capital Contributions, Percentage Interests and Capital Accounts................................................... 11 4.1. Initial Capital Contributions................................ 11 4.2. Additional Capital Contributions............................. 12 4.3. Percentage Ownership Interest................................ 15 4.4. Return of Capital Contribution............................... 15 4.5. Capital Accounts............................................. 16 4.6. New Partners................................................. 16 4.7. Preemptive Rights............................................ 16 Section 5. Distributions................................................. 17 5.1. Distribution of Cash Flow.................................... 17 5.2. Withholding.................................................. 18 Section 6. Allocations................................................... 18 6.1. General Rule................................................. 18 6.2. Special Allocations.......................................... 18 6.3. Tax Allocations.............................................. 20 6.4. Allocation with Respect to Transferred Interests............. 20 6.5. Other Allocation Rules....................................... 21 Section 7. Books, Records, Tax Matters and Bank Accounts................. 21 7.1. Books and Records............................................ 21 7.2. Tax Matters Partner.......................................... 21 7.3. Bank Accounts................................................ 21 7.4. Tax Returns.................................................. 21 7.5. Reports and Financial Statements............................. 22
i 7.6. Accountant Work Papers....................................... 23 Section 8. Management and Operations..................................... 23 8.1. Management................................................... 23 8.2. Meetings of the Partners..................................... 23 8.3. Matters Requiring Limited Partner Approval................... 24 8.4. Other Activities............................................. 26 8.5. Limitation on Actions of Partners; Binding Authority......... 26 Section 9. Confidentiality............................................... 27 Section 10. Representations and Warranties............................... 28 10.1. In General................................................... 28 10.2. Representations and Warranties............................... 28 Section 11. Transfers of Interests....................................... 29 11.1. Confirmation of Ownership.................................... 29 11.2. Prohibited Transfers......................................... 30 11.3. Permitted Transfers.......................................... 30 11.4. Admission of Transferee...................................... 31 Section 12. Sale, Assignment or Other Disposition of Interests........... 32 12.1. Call Right................................................... 32 12.2. Right of First Offer......................................... 33 12.3. Right of First Refusal; Right to Compel Sale................. 34 12.4. Right of First Refusal of Americana Partners; Right of Integrated to Compel Sale of Interest........................ 36 12.5. Americana Tag Along.......................................... 37 12.6. Change of Control of CoolBrands.............................. 38 12.7. Americana Call Right......................................... 39 12.8. Withdrawals.................................................. 39 12.9. Interests Held by a Partner.................................. 39 Section 13. Dissolution.................................................. 39 13.1. Limitations.................................................. 39 13.2. Exclusive Events Requiring Dissolution....................... 40 13.3. Liquidation.................................................. 40 13.4. Continuation of the Partnership.............................. 41 Section 14. Indemnification.............................................. 41 14.1. Exculpation of Partners...................................... 41 14.2. Indemnification by Partnership............................... 41
ii Section 15. Miscellaneous................................................ 42 15.1. Notices...................................................... 42 15.2. Governing Law................................................ 42 15.3. Consent to Jurisdiction...................................... 42 15.4. Successors................................................... 42 15.5. Pronouns..................................................... 42 15.6. Table of Contents and Captions Not Part of Agreement......... 43 15.7. Severability................................................. 43 15.8. Counterparts................................................. 43 15.9. Entire Agreement and Amendment............................... 43 15.10. Further Assurances........................................... 43 15.11. No Third Party Rights........................................ 43 15.12. Incorporation by Reference................................... 43 15.13. Limitation on Liability...................................... 43 15.14. Specific Performance; Remedies............................... 44 15.15. No Waiver.................................................... 44
iii AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF AMERICANA FOODS LIMITED PARTNERSHIP THIS AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT of Americana Foods Limited Partnership (this "Agreement") is made and entered into, and is effective, as of January 10, 2003 (the "Effective Date"), by and among Americana Foods Limited Partnership, a limited partnership organized under the laws of the State of Texas (the "Partnership"), CBA Foods LLC, a Delaware limited liability company ("Integrated"), Americana Foods Corp., a Delaware corporation ("AFC"), and AF Sub. Corp., a Delaware corporation ("AFSC," and together with AFC, the "Americana Partners"). All capitalized terms used herein shall have the meaning ascribed to such terms in Section 1 hereto. WITNESSETH: WHEREAS, the Partnership is engaged in the business of manufacturing, marketing and selling ice cream, frozen yogurt, yogurt mix and frozen novelty items, including, without limitation acting as the exclusive supplier of [ORIGINAL TEXT REDACTED] to [ORIGINAL TEXT REDACTED] and its distributors and franchisees and as of the Effective Date, as a supplier of products to IBI in accordance with the Integrated Manufacturing Agreement (as defined below); WHEREAS, the Americana Partners are currently the sole partners of the Partnership; WHEREAS, Integrated Brands, Inc., a New Jersey corporation ("IBI") and the Americana Partners have executed a securities purchase agreement, dated as of January 10, 2003 (the "Purchase Agreement"), whereby, subject to certain conditions set forth therein, IBI (or one or more Affiliates designated by IBI) shall acquire from the Americana Partners, and the Americana Partners shall sell, transfer and assign to IBI (or one or more Affiliates designated by IBI), Interests in the Partnership representing up to 50.1% of the Percentage Interest (as defined below) in the Partnership; WHEREAS, IBI has designated its Affiliate, Integrated, as the entity which will acquire its limited partnership interest in the Partnership; WHEREAS, on the date hereof, the Partnership desires to admit Integrated as a limited partner; and WHEREAS, the Partners intend that this Agreement supercede the limited partnership agreement of the Partnership dated as of December 2, 1991, as amended. 1 NOW, THEREFORE, in consideration of the agreements and covenants set forth above and herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. As used in this Agreement: "Act" shall mean the Texas Revised Limited Partnership Act, as amended from time to time. "Additional Capital Equipment And Improvements" shall mean any equipment and improvements funded by any additional Capital Contributions made by the Partners pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii). "Adjusted Capital Account Deficit" shall mean, with respect to any Partner, the deficit balance, if any, in such Partner's Capital Account as of the end of the applicable Fiscal Year after (i) crediting such Capital Account with any amounts which such Partner is deemed to be obligated to restore pursuant to Regulations Sections 1.704-1(b)(2)(ii)(C), 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debiting such Capital Account by the amount of the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. "Advisor" shall mean any accountant, attorney or other advisor retained by a Partner. "Affiliate" of any Person shall mean any other Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition "control" (including its correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). In addition, "Affiliate" shall include as to any Person any employee, officer, member, partner or director of such Person or other Person related to such Person within the meaning of Code Sections 267(b) or 707(b)(1). "Agreement" shall mean this Amended and Restated Limited Partnership Agreement of Americana Foods Limited Partnership, as amended from time to time pursuant to the provisions hereof. "Americana Call Option Price" shall mean a price equal to the amount obtained by (i) multiplying [ORIGINAL TEXT REDACTED] by one of the following, as applicable: (A) if the Date of Determination is before the date which is [ORIGINAL TEXT REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] for the number of full months between the Date of Determination and the Cap Ex Date (based on the [ORIGINAL TEXT REDACTED] for such period divided by the number of full months in such period multiplied by twelve), or (B) if the Date of Determination is on or after the date which is [ORIGINAL TEXT 2 REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] of the Partnership for the preceding [ORIGINAL TEXT REDACTED], (ii) subtracting from the amount determined in clause (i) any Indebtedness of the Partnership net of cash (to be determined at the time of the applicable Transfer), and (iii) multiplying the amount determined in clauses (i) and (ii) by the Percentage Interest being Transferred. "Appraised Value" shall have the meaning provided in Section 4.2. "Authorized Person" shall have the meaning provided in Section 2.4(a). "Book Value" means with respect to any Partnership property, the Partnership's adjusted basis in the property for federal income tax purposes, except that (i) the initial Book Value of any property contributed to the Partnership shall be equal to the agreed fair market value of such property, (ii) the Book Value of Partnership property may be adjusted from time to time to reflect the adjustments required or permitted by Regulation Section 1.704-1(b)(2)(iv)(d), (e), (f) or (g) and (iii) if the Book Value of an item of Partnership property differs from its adjusted basis as computed for tax purposes at the beginning of any period, the amount of depreciation, amortization or other cost recovery deduction computed with respect the property for the period for book purposes shall be computed as described in the definition of "Profits." "Call Notice" shall have the meaning provided in Section 12.1. "Call Option" shall have the meaning provided in Section 12.1. "Call Option Date" shall mean the date on which the Call Period begins. "Call Option Price" shall mean a price equal to the amount obtained by (i) multiplying [ORIGINAL TEXT REDACTED] by one of the following, as applicable: (A) if the Date of Determination is before the date which is [ORIGINAL TEXT REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] for the number of full months between the Date of Determination and the Cap Ex Date (based on the [ORIGINAL TEXT REDACTED] for such period divided by the number of full months in such period multiplied by twelve), or (B) if the Date of Determination is on or after the date which is [ORIGINAL TEXT REDACTED] after the Call Option Date, [ORIGINAL TEXT REDACTED] of the Partnership for the preceding [ORIGINAL TEXT REDACTED], (ii) subtracting from the amount determined in clause (i) any Indebtedness of the Partnership net of cash (to be determined at the time of the applicable Transfer), and (iii) multiplying the amount determined in clauses (i) and (ii) by the Percentage Interest being Transferred. The Call Option Price shall, at the election of Integrated, be payable in cash or shares of capital stock of CoolBrands International Inc. ("CoolBrands"); provided that such shares must be freely transferable without restriction and will be valued for purposes hereof at the opening sale price on the Toronto Stock Exchange (or such other exchange on which such shares are primarily traded) on the date of such payment; provided further that if the Call Option Price is paid in shares, CoolBrands must implement arrangements 3 where such shares may be sold on the date of receipt for net cash proceeds to the Americana Partners of not less than the amount of cash otherwise payable. "Call Period" means the four year period beginning on the date that is [ORIGINAL TEXT REDACTED] after the CapEx Date. "Called Interest" shall have the meaning provided in Section 12.1. "Capital Account" shall have the meaning provided in Section 4.5. "CapEx Amount" shall mean the first [ORIGINAL TEXT REDACTED] in the aggregate of capital expenditures made by the Partnership and Capital Contributions made in accordance with Section 4.2(b) (iii) during the period beginning on the Effective Date; provided, however, that if prior to the date that would otherwise be (but for this proviso) the CapEx Date, the Americana Partners have made additional Capital Contributions pursuant to Section 4.2(b)(i) in an amount in excess of [ORIGINAL TEXT REDACTED] (excluding the Severance Obligations but including any Credited Amounts as of the date of determination), then the CapEx Amount shall be equal to [ORIGINAL TEXT REDACTED] times the additional Capital Contributions made by the Americana Partners pursuant to Section 4.2(b)(i) (excluding the Severance Obligations but including any Credited Amounts). "CapEx Date" shall mean the first day of the month following the date on which, in the General Partners' reasonable determination, normal saleable production has commenced (after a customary start-up period) on all production lines related to capital expenditure projects related to the CapEx Amount. "Capital Contribution" shall mean, with respect to any Partner, the aggregate amount of cash and the fair market value (valued at cost, if new, or, if used, by appraisal but not less than cost if purchased within the prior 12 months) of any assets contributed or deemed contributed by such Partner to the capital of the Partnership; provided, however, that with respect to the Equipment and any Additional Equipment, such fair market value shall also include all costs and expenses incurred in connection with the installation thereof and shall be reduced by the value of the depreciation on such Equipment or Additional Equipment on the date of such contribution, amortized ratably over a useful life of seven years. "Cash Flow" shall mean, for any period, Gross Receipts less (i) all expenses of the Partnership, (ii) any and all Taxes required to be paid by the Partnership or any Subsidiary (not paid by such Subsidiary), and (iii) reserves for reasonably anticipated obligations and reasonable contingencies of the Partnership (as determined by the General Partner). "Certificate of Limited Partnership" shall mean the Certificate of Limited Partnership of Americana Foods Limited Partnership, as amended. 4 "Change of Control" means the occurrence of any of the following events: (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the capital stock of CoolBrands International Inc. outstanding immediately prior to such transaction; (ii) a merger or consolidation or similar transaction involving CoolBrands International Inc. after which the holders of CoolBrands International Inc.'s capital stock do not own at least 50% of the total voting power represented by the capital stock of the surviving entity of such merger or consolidation; or (iii) the adoption of a plan of complete liquidation or the sale or disposition by CoolBrands International Inc. of all or substantially all of its assets. "Change of Control Call" shall have the meaning provided in Section 12.6(a). "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, including the corresponding provisions of any successor law. "Company" shall have the meaning provided in the first paragraph of this Agreement. "Confidential Information" shall have the meaning provided in Section 9(a). "Credited Amounts" shall have the meaning provided in Section 4.2(b)(i). "Date of Determination" shall mean the date that the applicable Call Notice, ROFO Notice or ROFR Notice, as the case may be, is deemed to have been received by the Americana Partners in accordance with the provisions of Section 15.1. "Dissolution Event" shall have the meaning provided in Section 13.2. "Distributions" shall mean the distributions payable (or deemed payable) to a Partner. "EBITDA" means for any period, the sum on a consolidated basis of (i) Net Income, plus (ii) interest expense, plus (iii) income tax expense, plus (iv) depreciation expense, plus (v) amortization expense, of the Partnership. For purposes of the definition of EBITDA, the terms used in clauses (ii) through (v) in the preceding sentence shall be determined in accordance with GAAP. "Effective Date" shall have the meaning given to such term in the preamble. "Equipment" shall have the meaning given to such term in the Integrated Equipment Rental Agreement. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. 5 "Fiscal Year" shall mean each calendar year ending December 31, as may be changed from time to time in the sole discretion of the General Partner. "GAAP" shall mean generally accepted accounting principles as adopted in the United States as in effect from time to time. "GAAP Income" shall mean the gross income from operations of the Partnership for any month, Fiscal Year or other period, as applicable, as determined in accordance with GAAP. "GAAP Loss" shall mean the aggregate of losses, deductions and expenses of the Partnership for any month, Fiscal Year or other period, as applicable, as determined in accordance with GAAP. "General Partner" shall mean the Partner who holds a General Partner Interest, as specified on Exhibit A. "General Partner Interest" means an Interest held by the General Partner, in its capacity as general partner of the Partnership, as set forth on Exhibit A. "GP Interest Closing Date" shall have the meaning given to such term in the Purchase Agreement. "Gross Receipts" shall mean, for any period, gross cash receipts received by the Partnership. "IBI Available Requirements" shall mean with respect to any Product (as defined in the Manufacturing Agreement), and during any relevant period, the portion of the total requirements for such Product of IBI (or any Affiliate thereof) that IBI (or any Affiliate thereof) is not committed to order from another Person pursuant to a written agreement entered into prior to the date hereof. "Indebtedness" shall mean, without duplication, (i) indebtedness arising from the lending of money by any Person to the Partnership or any of its Subsidiaries; (ii) indebtedness, whether or not in any such case arising from the lending by any Person of money to the Partnership or any of its Subsidiaries, (A) which is represented by notes payable or drafts accepted that evidence extensions of credit, (B) which constitutes obligations evidenced by bonds, debentures, notes or similar instruments, or (C) upon which interest charges are customarily paid (other than accounts payable) or that was issued or assumed as full or partial payment for property; (iii) reimbursement obligations with respect to letters of credit or guaranties of letters of credit; and (iv) all indebtedness secured by any mortgage, pledge, security, Lien or conditional sale or other title retention agreement to which any property or asset owned or held by such Person is subject, whether or not the indebtedness secured thereby shall have been assumed. 6 "Integrated Equipment Rental Agreement" shall have the meaning given to such term in the Purchase Agreement. "Integrated Manufacturing Agreement" shall have the meaning given to such term in the Purchase Agreement. "Interest" of any Partner shall mean the entire partnership interest of such Partner in the Partnership (whether a General Partner Interest or a Limited Partner Interest), and any and all rights, powers and benefits accorded a Partner under this Agreement and the duties and obligations of such Partner hereunder. "Invested Capital" shall mean the amount of a Partner's Capital Contribution less (i) Distributions and (ii) in the case of the Americana Partners, any amounts paid to the Americana Partners with respect to their Limited Partner Interests, including, without limitation, amounts paid upon exercise of the Option. The parties agree that as of November 18, 2002 the Invested Capital of the Americana Partners was [ORIGINAL TEXT REDACTED], and that the Americana Partners made no Capital Contributions and received no Distributions between such date and the date hereof. "IRR" means an annualized internal rate of return for the Americana Partners on their Invested Capital from November 18, 2002 through and including the date of determination of such rate of return. "Issuance Items" shall have the meaning provided in Section 6.2(h). "Limited Partner" means any holder of a Limited Partner Interest of the Partnership. "Limited Partner Interest" means an Interest of a Limited Partner in the Partnership representing a fractional part of the Interests of all Partners and includes any and all benefits to which the holder of such Limited Partner Interest may be entitled, as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. "Management Agreement" shall mean the Management Agreement entered into between the Partnership, IBI and the Americana Partners, as of the date hereof pursuant to which IBI will provide certain management services to the Partnership. "Management Fee" shall have the meaning given to such term in the Management Agreement. "MUS Receivables" shall mean the MUS Receivables described and defined in Schedule 2.9(a) of the Purchase Agreement. 7 "Net Income" shall mean the amount, if any, by which GAAP Income for any period exceeds GAAP Loss for such period. "Net Loss" shall mean the amount, if any, by which Loss for any period exceeds Income for such period. "New Interest Notice" shall have the meaning provided in Section 4.7(b). "New Interests" shall mean the issuance of additional Interests to either existing Partners or to a new Partner or Partners. "Nonpurchasing Partner" shall have the meaning provided in Section 4.7(b). "Option" shall have the meaning given to such term in the Purchase Agreement. "Option Closing Date" shall have the meaning given to such term in the Purchase Agreement. "Original Agreements" shall mean each of the Integrated Equipment Rental Agreement, the Integrated Manufacturing Agreement and the Original [ORIGINAL TEXT REDACTED] Agreement. "Original [ORIGINAL TEXT REDACTED] Agreement" shall have the meaning given to such term in the Purchase Agreement. "Participating Partner" shall have the meaning provided in Section 4.7(b). "Partner" and "Partners" shall mean Integrated, AFSC, AFC and any other Person admitted to the Partnership as a Partner pursuant to this Agreement. "Percentage Interest" shall have the meaning provided in Section 4.3. "Person" shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof, or any other legal entity. "Pro Rata Share" shall have the meaning provided in Section 4.7(a). "Profits" and "Losses", as those terms are used in Section 6, shall mean for any period the taxable income or losses, respectively, of the Partnership as determined for federal income tax purposes in accordance with the accounting method followed by the Partnership for such purposes, adjusted as follows: (a) Any income that is exempt from federal income tax shall be added to such taxable income and/or reduce such losses. 8 (b) Any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable income and/or reduce such losses. (c) If property is reflected on the books of the Partnership at a Book Value that differs from the adjusted tax basis of such property, depreciation, amortization and gain or loss with respect to such property shall be determined by reference to such Book Value in accordance with Regulations Section 1.704-1(b)(2)(iv)(g). (d) Any items specially allocated pursuant to Section 6.2 of this Agreement shall be excluded from Profits and Losses. "Put Price" shall mean an amount that will provide an IRR on the Invested Capital of the Americana Partners equal to [ORIGINAL TEXT REDACTED]. "Regions Bank Loan" shall mean the Indebtedness pursuant to the Loan Agreement, dated as of November 19, 2002, between the Partnership and Regions Bank, and all other Loan Documents (as defined therein). "Regulations" shall mean the Treasury Regulations promulgated pursuant to the Code, as amended from time to time, including the corresponding provisions of any successor regulations. "Required Sale Notice" shall have the meaning provided in Section 12.3(b). "Response Notice" shall have the meaning provided in Section 12.2(a). "Restated [ORIGINAL TEXT REDACTED] Agreement" shall have the meaning given to such term in the Purchase Agreement. "ROFO Interest" shall have the meaning provided in Section 12.2(a). "ROFO Notice" shall have the meaning provided in Section 12.2(a). "ROFR Notice" shall have the meaning provided in Section 12.3. "Securities Act" shall mean the Securities Act of 1933, as amended. "Subsidiary" or "Subsidiaries" shall mean any Person of which fifty percent (50%) or more is owned, directly or indirectly, by the Partnership. "Tag Along Notice" shall have the meaning provided in Section 12.5. "Tax Matters Partner" shall have the meaning provided in Section 7.2. 9 "Taxes" shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, export, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added or VAT, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any tax due under any tax sharing or tax indemnity agreement, and including any interest, penalty, or addition thereto, whether disputed or not. "Termination" shall have the meaning provided in Section 12.6(b). "Termination Fee" shall have the meaning provided in Section 12.6(b). "Transfer" shall mean, as a noun, any transfer, sale, assignment, exchange, charge, pledge, gift, hypothecation, conveyance, encumbrance or other disposition, voluntary or involuntary, by operation of law or otherwise and, as a verb, voluntarily or involuntarily, by operation of law or otherwise, to transfer, sell, assign, exchange, charge, pledge, give, hypothecate, convey, encumber or otherwise dispose of. Section 2. Organization of the Partnership. 2.1. Name. The name of the Partnership shall be "Americana Foods Limited Partnership". The business and affairs of the Partnership shall be conducted under such name or such other name as the General Partner deems necessary or appropriate to comply with the requirements of law in any jurisdiction in which the Partnership may elect to do business. 2.2. [Intentionally Omitted]. 2.3. Principal Office. The principal address of the Partnership shall be 3333 Dan Morton Drive, Dallas, Texas 75236, or at such other place or places as may be determined by the General Partner from time to time. 2.4. Filings. (a) The Certificate of Limited Partnership of the Partnership was filed on December 13, 1991 with the office of the Secretary of State of Texas, as provided in Section 2.01 of the Act, and on February 28, 1992, December 20, 1993 and November 19, 2002, the General Partner of the Partnership caused to be duly filed with the office of the Secretary of State of Texas Certificates of Amendment to the Certificate of Partnership in accordance with Section 2.02 of the Act. A certified copy of the Certificate of Limited Partnership as of the date hereof has been delivered to each of the Partners. (b) The General Partner shall use its reasonable efforts to take such other actions as may be reasonably necessary to perfect and maintain the status of the Partnership as a limited partnership under the laws of the State of Texas. 10 (c) Subject to Section 2.5, an Authorized Person shall cause the Partnership to be qualified, formed or registered under assumed or fictitious name statutes or similar laws in any jurisdiction in which the Partnership transacts business in which such qualification, formation or registration is required or desirable. Subject to Section 2.5, an Authorized Person shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Partnership to qualify to do business in a jurisdiction in which the Partnership may wish to conduct business. 2.5. Limitations on Partnership Powers. Notwithstanding anything contained herein to the contrary, the Partnership shall not do business in any jurisdiction that would jeopardize the limitation on liability afforded to the Limited Partners under the Act or this Agreement. 2.6. Affiliate Agreements. Subject to Section 8.3, the Partners agree that services may be provided to the Partnership by a Partner or an Affiliate of a Partner. 2.7. Term. The Partnership shall continue in existence until the Partnership is dissolved as provided in Section 13. Section 3. Purpose. The purpose of the Partnership, subject in each case to the terms hereof, shall be to engage in the business of manufacturing, marketing and selling ice cream, frozen yogurt, yogurt mix and frozen novelty items, including, without limitation acting as a supplier of [ORIGINAL TEXT REDACTED] products to [ORIGINAL TEXT REDACTED] and as a supplier of products to IBI, and any business related thereto or useful in connection therewith. However, the business and the purposes of the Partnership shall not be limited to its initial principal business activity and the Partnership shall have the authority to engage in any other lawful business, purpose or activity permitted by the Act or which may be exercised by any person, together with any powers incidental thereto, so far as such powers or privileges are necessary or convenient to the conduct, promotion or attainment of the business purposes or activities of the Partnership. Section 4. Capital Contributions, Percentage Interests and Capital Accounts. 4.1. Initial Capital Contributions. The Persons listed on Exhibit A made Capital Contributions to the Partnership as set forth therein and their Capital Account balances as of the date hereof are as set forth in Exhibit A. Exhibit A shall also specify the nature of the Interests held by such Persons (i.e., whether the Interest held by such Person is a General Partner Interest or Limited Partner Interest). The information on Exhibit A may be modified from time to time by the General Partner, without any further action by the other Partners, to reflect any additional Capital Contributions actually made, Transfers of Interests and any other changes to the information from time to time set forth in Exhibit A. The Partnership may borrow from its Partners as well as from banks or other lending institutions to finance its working capital or the acquisition of assets upon such terms and conditions as shall be approved by the General Partner and to the extent required pursuant to Section 8.3, the Limited Partners, and any borrowing from 11 Partners shall not be considered Capital Contributions or reflected in their Capital Accounts. The value of all non-cash Capital Contributions made by Partners as of the Effective Date shall be set forth on Exhibit A. No Partner shall be entitled to any interest or compensation with respect to his Capital Contribution or any services rendered on behalf of the Partnership except as specifically provided in this Agreement or in the Management Agreement, or as otherwise approved by the General Partner or, if applicable, the Limited Partners pursuant to Section 8.3. No Partner shall have any liability for the repayment of the Capital Contribution of any other Partner and each Partner shall look only to the assets of the Partnership for return of his Capital Contribution. 4.2. Additional Capital Contributions. (a) Except as specifically required in Section 4.2(b) below, no Partner shall be required to make any additional Capital Contributions. (b) Mandatory Capital Contributions. Subject to the other provisions of this Agreement, (i) At all times from and after the GP Interest Closing Date but before April 30, 2003, upon the determination by the General Partner, in its good faith business judgment, that additional funds are necessary to meet the working capital requirements of the Partnership, the General Partner may, from time to time, require that the Americana Partners make additional Capital Contributions pursuant to this Section 4.2(b)(i), provided that all such Capital Contributions made by the Americana Partners pursuant to this Section 4(b)(i) shall not exceed [ORIGINAL TEXT REDACTED]. Upon such determination by the General Partner, the General Partner shall give written notice to the Americana Partners of the required additional Capital Contributions (which notice shall be accompanied by a [ORIGINAL TEXT REDACTED] cash flow projection giving effect to the projected use of such additional Capital Contribution prepared by the General Partner using its good faith business judgment), and each of the Americana Partners shall contribute the required additional Capital Contribution to the capital of the Partnership pursuant to this Section 4.2(b)(i); provided, however, that the written notice with respect to any amounts in excess of the first [ORIGINAL TEXT REDACTED] required to be contributed by the Americana Partners pursuant to the provisions of this Section 4.2(b)(i) shall be provided at least 30 days prior to the date such additional Capital Contribution is required to be so contributed. When the General Partner, in its good faith business judgment (taking into account all relevant factors, including without limitation, the future cash needs of the Partnership, the expected availability of funds under the Regions Bank Loan and the relative costs of commercially reasonable alternative sources of capital), determines that all or any portion of any additional Capital Contributions made by the Americana Partners pursuant to this Section 4.2(b)(i) is no longer necessary to meet the working capital requirements of the Partnership, based on the General Partner's reasonable projections of working capital 12 requirements of the Partnership (such amount which is determined to no longer be necessary is referred to as the "Excess Working Capital Contribution"), then the Partnership shall be entitled to retain such Excess Working Capital Contribution provided that it reduces the Americana Partners' obligations to make any additional Capital Contributions that the Americana Partners are otherwise required to make pursuant to Section 4.2(b)(ii) by an amount equal to the Excess Working Capital Contribution (the "Credited Amounts"). The Partners hereby acknowledge that pursuant to the provisions of the Purchase Agreement, the Americana Partners have assumed the Partnership's severance obligation with respect to Severance Obligations (as defined in the Purchase Agreement), and that this obligation, when assumed, shall be deemed to be an additional Capital Contribution of up to [ORIGINAL TEXT REDACTED] made in accordance with this Section 4.2(b)(i). Notwithstanding anything contained herein to the contrary, the assumption of such Severance Obligations shall not result in an increase in the Americana Partners' Capital Account or Invested Capital. (ii) At all times from and after the GP Interest Closing Date, upon the determination by the General Partner, in its good faith business judgment that additional funds are necessary to meet the capital expenditure requirements of the Partnership or in order to fund the future operations of the Partnership after the date of such additional Capital Contributions, the General Partner may, from time to time, require the Partners to make additional Capital Contributions, and such additional Capital Contributions shall be made in the following proportions: (A) Integrated (together with any Affiliate thereof that is also a Partner) shall make [ORIGINAL TEXT REDACTED] of such additional Capital Contributions, and (B) the Americana Partners shall make [ORIGINAL TEXT REDACTED] of such additional Capital Contributions; provided, however, that the aggregate amount of all such Capital Contributions required by all Partners pursuant to this Sections 4.2(b)(ii) and 4.2(b)(iii) prior to January 1, 2006 shall not exceed [ORIGINAL TEXT REDACTED], and the aggregate amount of all such Capital Contributions required pursuant to this Sections 4.2(b)(ii) and 4.2(b)(iii) after January 1, 2006 shall not exceed [ORIGINAL TEXT REDACTED] (including, for purposes hereof, any additional Capital Contributions made pursuant to this Sections 4.2(b)(ii) and 4.2(b)(iii) prior to January 1, 2006). Upon such determination by the General Partner, the General Partner shall give written notice to the Partners of the required additional Capital Contributions and each Partner so required shall contribute to the capital of the Partnership pursuant to this Section 4.2(b)(ii). If the General Partner furnishes the Partners with a written notice to make additional Capital Contributions pursuant to this Section 4.2(b)(ii), and it is the first such notice pursuant to which the amount of all additional Capital Contributions made pursuant to this Section 4.2(b)(ii) would, after giving effect to the amounts to be contributed pursuant to such notice, exceed [ORIGINAL TEXT REDACTED] in the aggregate, then the Partners shall not be obligated to make such additional Capital Contributions unless (A) the General Partner provides a business plan setting forth the intended use of the additional Capital Contributions and projections related thereto (prepared using assumptions considered by 13 the General Partner to be reasonable), and (B) IBI (or any Affiliate thereof), together with any other Person or Persons that IBI (or any Affiliate thereof) solicited on behalf of the Partnership, has entered into a binding commitment (or commitments) for the remaining term of the then-current term of the Manufacturing Agreement to have the aggregate amount of any products manufactured by the Partnership utilizing Additional Capital Equipment And Improvements for IBI (or any Affiliate thereof) and for any other Persons the purchase orders for whom were solicited by IBI (or any Affiliate thereof), to be equal to or greater than the IBI Available Requirements for such products. (iii) Immediately after the Option Closing Date, IBI shall on behalf of its Affiliates who then hold Interests in the Partnership, contribute to the capital of the Partnership the Equipment, plus any additional Equipment that may be leased to the Partnership by IBI or any of its Affiliates after the Effective Date and prior to the Option Closing Date if required by the terms of the lease or rental agreement with respect thereto (the "Additional Equipment"). No Partner shall be required to make an additional Capital Contribution pursuant to this Section 4.2(b)(iii) as a result of the Capital Contribution of the Equipment (including any Additional Equipment) by IBI on behalf of its Affiliates pursuant to this Section 4.2(b)(iii), which contribution shall be deemed a Capital Contribution by such Affiliates of IBI and shall satisfy to the extent of such amount any additional Capital Contributions required from such Partners under Section 4.2(b)(ii); provided, however, that the Americana Partners shall pay to IBI on the Option Closing Date [ORIGINAL TEXT REDACTED] of the value of such contributed Equipment (and any Additional Equipment) as determined in accordance with this Agreement for purposes of valuing Capital Contributions which amounts shall be deemed a Capital Contribution under Section 4.2(b) (ii) by Americana Partners; and provided further that with respect to any such Additional Equipment, the terms upon which it shall be contributed to the Partnership shall be as set forth in the lease or rental agreement with respect thereto or if not set forth therein, then on the same terms as the contribution of the Equipment. (c) Optional Capital Contributions. Subject to the provisions in Section 4.2(b) to the contrary, at all times after the GP Interest Closing Date, upon the unanimous approval of the Partners that additional funds are necessary to meet the working capital or capital expenditure requirements of the Partnership, or any other reasonable business needs of the Partnership, the Partners shall, from time to time, make additional Capital Contributions on the terms and subject to the conditions as agreed to from time to time. (d) Upon the failure of a Partner (a "Defaulting Partner" to make any additional Capital Contribution required by Section 4.2(b), (the portion thereof not contributed by such Defaulting Partner being referred to herein as the "Deficiency"), the General Partner shall give written notice of such failure, including the name of the Defaulting Partner and the amount of such Deficiency, to the other Partners (each, a "Non-Defaulting Partner"). Each Non-Defaulting Partner may (in addition to, and not in lieu of, any other rights or remedies such 14 Non-Defaulting Partner may have under this Agreement, at law or in equity), in its sole and absolute discretion, within ten [ORIGINAL TEXT REDACTED] after the receipt of such written notice, contribute all or any portion of such Deficiency to the capital of the Partnership (a "Deficiency Contribution"); provided, however, that if the proposed aggregate Deficiency Contributions of two or more Non-Defaulting Partners are greater than the amount of the Deficiency, then, unless such Non-Defaulting Partners agree on the amount of the Deficiency Contributions to be made by each of them, such Deficiency Contributions shall be made in proportion to such Non-Defaulting Partners' Percentage Interests. In the event that no other Partner is, or Partners are, willing to contribute all of the Deficiency Contribution, the General Partner has the right, in its absolute discretion, to arrange for a loan to cover such amount without the consent of the Limited Partners. 4.3. Percentage Ownership Interest. The Partners shall have the initial percentage ownership interests in the Partnership set forth on Exhibit A (such percentage interests as adjusted pursuant to this Agreement are referred to as a Partner's "Percentage Interest"). The Percentage Interests of the Partners in the Partnership shall be adjusted so that the respective Percentage Interests of the Partners at any time shall be as set forth in Exhibit A on the effective date hereof, as adjusted in proportion to their respective additional Capital Contributions made (or deemed to be made) pursuant to Section 4.2(b), any adjustment required pursuant to Section 6.4(d)(ii) of the Purchase Agreement and to reflect the Transfers of the GP Interest and the Additional LP Interests (as such terms are defined in the Purchase Agreement); provided, however, that no adjustment shall be made to the Percentage Interest of the Americana Partners with respect to any mandatory additional Capital Contribution that is made in accordance with Section 4.2(b)(i), no adjustment shall be made with respect to the additional Capital Contribution made by Integrated pursuant to Section 4.2(b)(iii) or the payment by the Americana Partners made in connection therewith, and no adjustment shall be made with respect to any indemnification payments treated as contributions to the Partnership pursuant to Section 6.2(c) of the Purchase Agreement; provided further, however, that upon the failure of any Partner to make any such mandatory additional Capital Contribution required by any provision of Section 4.2(b), then the Non-Defaulting Partners shall engage an investment banker or other financial expert of national reputation who has no prior affiliation with the Non-Defaulting Partners, who shall determine the fair market value of each Partner's respective Interest in the Partnership (without any control premiums or minority discounts), and after taking into account (a) such value of the Partners' respective Interest in the Partnership, and (b) the amount of the Deficiency, such expert shall determine the appropriate manner in which to equitably reduce the Defaulting Partner's Percentage Interest and increase any Non-Defaulting Partner's Percentage Interest. 4.4. Return of Capital Contribution. No Partner shall have any right to withdraw or make a demand for withdrawal of the balance reflected in such Partner's Capital Account (as determined under Section 4.5) until the full and complete winding up and liquidation of the business of the Partnership. 15 4.5. Capital Accounts. A separate capital account (the "Capital Account") shall be established and maintained for each Partner in accordance with Section 1.704-1(b)(2)(iv) of the Regulations. The Capital Account of each Partner shall be increased by (i) the amount of any Capital Contributions made by such Partner, (ii) any items of income or gain allocated to the Partner, and (iii) any other adjustments required by the Regulations. The Capital Account of each Partner shall be reduced by (i) the amount of any cash and the fair market value (as agreed to by the Partners) of any property distributed to the Partner by the Partnership (net of liabilities secured by such distributed property that the Partner is considered to assume or take subject to), (ii) any items of loss or deduction allocated to the Partner, and (iii) any other adjustments required by the Regulations. The Partnership may or shall, as applicable, adjust the Capital Accounts of the Partners to reflect the adjustments required or permitted by Regulations Section 1.704-1(b)(2)(iv)(d), (e), (f) or (g) to reflect a revaluation of the Partnership's assets on the Partnership's books in connection with any contribution of money or other property to the Partnership, any distribution of money or other property by the Partnership or any issuance or redemption of Interests in the Partnership. No Partner shall be obligated to restore any negative balance in its Capital Account. No Partner shall be compensated for any positive balance in its Capital Account except as otherwise expressly provided herein. 4.6. New Partners. Subject to the provisions of Section 4.7, the Partnership may issue New Interests to a new Partner or Partners, as the case may be, only if such new Partner (i) has delivered to the Partnership its Capital Contribution, (ii) has agreed in writing to be bound by the terms of this Agreement as a Partner by becoming a party hereto, and (iii) has delivered such additional documentation as the General Partner shall reasonably require to so admit such new Partner to the Partnership, and further only if the issuance of such New Interests is at the fair market value with respect thereto, as determined by the Partners in good faith; provided, however, that if the purchase price at which any New Interests are proposed to be sold is greater than [ORIGINAL TEXT REDACTED] in any one transaction or greater than [ORIGINAL TEXT REDACTED] in any series of related transactions and the Partners cannot agree upon whether such purchase price represents fair market value, then the Partnership shall obtain a fairness opinion (addressed to the Partnership) from an investment banker of national reputation reasonably acceptable to the Partners as to the fairness of such proposed consideration to the Partnership and its partners. The costs of such fairness opinion shall be borne by the Partnership. Notwithstanding the foregoing, it is expressly acknowledged and agreed that upon the GP Interest Closing Date an Affiliate of IBI shall be admitted as the General Partner, AFSC shall resign and withdraw as general partner and a Certificate of Amendment to the Certificate of Limited Partnership shall be filed with the office of the Secretary of State of Texas evidencing such change. 4.7. Preemptive Rights. (a) Each Partner shall have the preemptive right to purchase up to such Partner's pro rata share, based upon its Percentage Interest (the "Pro Rata Share"), of any New 16 Interests, that the Partnership may from time to time, after the date of this Agreement, issue to third parties. (b) The Partnership will give the Partners at least thirty (30) days' prior written notice of the Partnership's intention to issue New Interests (the "New Interest Notice"), describing the type and amount of New Interests to be issued and the price and the general terms and conditions upon which the Partnership proposes to issue such New Interests. Each Partner may purchase up to such Partner's Pro Rata Share of such New Interests, by delivering to the Partnership, within [ORIGINAL TEXT REDACTED] after the date of mailing of any such New Interest Notice by the Partnership, a written notice specifying the amount of the New Interests which such Partner desires to purchase (which may be all or any of its Pro Rata Share), for the price and upon the general terms and conditions specified in the New Interest Notice; provided, however, that each Partner may transfer any or all of its rights under this Section 4.7 to any of its Affiliates. If any Partner fails to notify the Partnership in writing within such [ORIGINAL TEXT REDACTED] period of its election to purchase any portion of such Partner's full Pro Rata Share of an offering of New Interests (a "Nonpurchasing Partner"), then such Nonpurchasing Partner will forfeit the right hereunder to purchase any portion of such Partner's Pro Rata Share of such New Interests. If a Partner fails to elect to purchase the full amount of such Partner's Pro Rata Share of the New Interests, the Partnership shall give notice of such failure to the Partners who did so elect (a "Participating Partner"). Such notice may be made by telephone if confirmed in writing within two (2) days. The Participating Partners shall have [ORIGINAL TEXT REDACTED] from the date such notice was given to notify the Partnership in writing of its election to purchase that portion of the New Interest not subscribed for by the Nonpurchasing Partner. (c) In the event that the Partners fail to exercise in full the preemptive rights within such [ORIGINAL TEXT REDACTED] period, then the Partnership will have [ORIGINAL TEXT REDACTED] thereafter to sell the New Interests with respect to which the Partner's preemptive rights hereunder were not exercised, at a price and upon terms and conditions not more favorable to the purchaser(s) thereof than specified in the Partnership's New Interest Notice. In the event that the Partnership has not issued and sold the New Interests within such [ORIGINAL TEXT REDACTED] period, then the Partnership shall not thereafter issue or sell any New Interests without again first offering such New Interests to the Partners in accordance with this Section 4.7. Section 5. Distributions. 5.1. Distribution of Cash Flow. (a) Subject to the provisions of Section 6.07(a) of the Act and the reasonably anticipated business needs and opportunities of the Partnership, taking into account all debts, liabilities and obligations of the Partnership then due, working capital and other amounts which the General Partner deems necessary for the Partnership's business or to place into reserves for customary and usual claims with respect to such business, specifically including 17 the Partnership's obligation to pay the Management Fee, and subject also to any restrictions under applicable law (including, without limitation, any obligation to withhold and remit any amounts to any governmental authority), the General Partner may resolve to distribute the Cash Flow of the Partnership to the Partners, at such intervals as the General Partner shall determine from time to time, pro rata to the Partners based upon their respective Percentage Interests in the Partnership. Notwithstanding anything contained herein to the contrary, no Distribution shall be made unless and until the Management Fee as of the date thereof has been paid in full. (b) No Partner shall be entitled to any Distributions except as specifically provided in this Agreement. No Partner shall be entitled to payment of the value of its interest upon withdrawal under Sections 6.02(b)(2) or 6.04 of the Act. (c) Notwithstanding anything contained herein to the contrary, for so long as the Regions Bank Loan remains outstanding, the General Partner shall not make any Distributions in violation of the agreements relating to the Regions Bank Loan. 5.2. Withholding. The Partnership is authorized to withhold from distributions or with respect to allocations and pay over to any federal, state, local or foreign government any amounts required to be withheld pursuant to any provisions of federal, state, local or foreign law. Any amount so paid over shall be treated as a distribution to the relevant Partner. Section 6. Allocations. 6.1. General Rule. After taking into account any special allocations pursuant to Section 6.2, and subject to any limitations contained therein, Profits or Losses (and items of either) for any Fiscal Year or portion thereof shall be allocated among the Partners to effectuate the intended economic sharing arrangement of the Partners as reflected in Section 5.1. 6.2. Special Allocations. The allocation of Profits and Losses and items of income, gain, loss or deduction shall be subject to the following limitations and adjustments: (a) No Losses or items of loss, deduction or expense may be allocated to a Partner if such allocation would create or increase a Adjusted Capital Account Deficit for such Partner. Any loss or deduction that cannot be allocated to a Partner because of the limitation of this Section 6.2(a) shall be allocated among the other Partners in accordance with their Percentage Interests. If at the end of any Fiscal Year a Partner has an Adjusted Capital Account Deficit (after taking into account all allocations provided for in this Section 6 other than this sentence and Section 6.2(c)), the Partner shall be allocated items of gross income and gain to the extent necessary to eliminate such deficit balance as quickly as possible. (b) "Nonrecourse deductions" (as defined in Regulations Section 1.704-2(b)(1)) shall be allocated among the Partners in proportion to their Percentage Interests. Beginning in the first Fiscal Year in which the Partnership has nonrecourse deductions, or makes 18 a distribution of proceeds of a "nonrecourse liability" (as defined in Regulations Section 1.752-1(a)(2)), that is allocable to an increase in "partnership minimum gain" (as defined in Regulations Section 1.704-2(d)(1)), and in each Fiscal Year thereafter, if there is a net decrease in partnership minimum gain during a Fiscal Year, then each Partner shall be allocated items of income and gain for such year (and, if necessary, subsequent years) in accordance with the "minimum gain chargeback" provisions of Regulations Section 1.704-2(f). (c) Any Partner who unexpectedly receives, with respect to the Partnership, an adjustment, allocation, or distribution described in Regulation Section 1.704-1(b)(2)(ii)(d)(3) shall be allocated items of income and gain in accordance with the "qualified income offset" provisions of Regulations Section 1.704-1(b)(2)(ii)(d); provided, however, that an allocation pursuant to this Section 6.2(c) shall be made only if and to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 6 have been tentatively made as if this Section 6.2(c) were not in this Agreement. (d) "Partner nonrecourse deductions" (as defined in Regulations Section 1.704-2(i)(2)) shall be allocated to the Partner who bears the economic risk of loss with respect to such deductions, as determined under Regulations Section 1.704-2(i). If there is a net decrease in "partner nonrecourse debt minimum gain" (as defined in Regulations Section 1.704-2(i)(2)) in any Fiscal Year, the Partner shall be allocated items of income and gain for such year (and subsequent years if necessary) in accordance with the chargeback requirement of Regulations Section 1.704-2(i)(4). 19 6.3. Tax Allocations. (a) Except as otherwise provided herein, items of income, gain, loss, deduction and expense shall be allocated for tax purposes in a manner consistent with the allocations set forth in this Section 6; provided, however, in accordance with Code Section 704(c) and the Regulations thereunder, income and loss with respect to any property contributed to the capital of the Partnership (including, if the property so contributed constitutes a partnership interest, the applicable distributive share of each item of income, gain, loss, expense and other items attributable to such partnership interest whether expressly so allocated or reflected in partnership allocations) shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership for federal income tax purposes and its initial Book Value at the time of contribution. Such allocations shall be made (i) with respect to the Equipment and any Additional Equipment, in accordance with the traditional method set forth in Regulations Section 1.704-3(b), (ii) with respect to assets contributed (or deemed contributed) by the Americana Partners, in accordance with any method(s) permitted under Regulations Section 1.704-3, as determined by the Americana Partners in their sole discretion, and (iii) with respect to any other Capital Contributions consisting of property, using any method(s) permitted under Regulations 1.704-3, as agreed by the Partners. (b) In the event of a revaluation of the Book Value of Partnership property, allocations to the Partners of items of depreciation, amortization and gain or loss as computed for tax purposes with respect to Partnership property shall be made in a manner that takes into account the variation between the adjusted tax basis of such property and its Book Value as determined under Section 1.704-1(b)(2)(iv)(g) of the Regulations. (c) Any portion of gain with respect to an asset that is treated as ordinary income for federal income tax purposes pursuant to Section 1245 or 1250 of the Code (a "Recapture Amount") shall be allocated to the Partner to which the depreciation deductions giving rise to such Recapture Amount (including depreciation deductions for periods prior to the date the applicable property was contributed to the Partnership) were allocated. (d) Any elections or other decisions relating to such allocations shall be made by the General Partner in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 6.3 are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Partner's Capital Account or share of profits, losses, other items or distributions pursuant to any provisions of this Agreement. 6.4. Allocation with Respect to Transferred Interests. The General Partner is authorized to adopt any convention or combination of conventions likely to be upheld for federal income tax purposes regarding the allocation and/or special allocation of items of Partnership income, gain, loss, deduction and expense with respect to a New Interest, a transferred Interest and a redeemed Interest. Upon admission as Partner, a transferee of an 20 Interest shall succeed to the Capital Account of the transferor Partner to the extent it relates to the transferred Interest. 6.5. Other Allocation Rules. (a) The Partners are aware of the income tax consequences of the allocations made by this Section 6 and hereby agree to be bound by the provisions of this Section 6 in reporting their shares of Partnership Income and Loss for income tax purposes. Section 7. Books, Records, Tax Matters and Bank Accounts. 7.1. Books and Records. The books and records of account of the Partnership shall be maintained in accordance with GAAP. The books and records shall be maintained at the Partnership's principal office or at a location designated by the General Partner, and all such books and records shall be available to any Partner at such location for review and copying, at such Partner's sole cost and expense, during normal business hours on at least twenty-four (24) hours' prior notice. 7.2. Tax Matters Partner. The General Partner is hereby designated as the "tax matters partner" of the Partnership, as defined in Section 6231(a)(7) of the Code (the "Tax Matters Partner"). Except as otherwise provided in this Agreement, all elections required or permitted to be made by the Partnership under the Code or state tax law shall be timely determined and made by the General Partner. The Partners intend that the Partnership be treated as a partnership for U.S. federal, state and local tax purposes, and the Partners will not elect or authorize any person to elect to change the status of the Partnership from that of a partnership for U.S. federal, state and local income tax purposes. The General Partner agrees to consult with Limited Partners in good faith with respect to any written notice of any inquiries, claims, assessments, audits, controversies or similar events received from any taxing authority. In addition, if and only if Integrated or any of its Affiliates so requests, the Partnership shall make an election pursuant to Code Section 754 to adjust the basis of the Partnership's property in the manner provided in Code Sections 734(b) and 743(b) for taxable years beginning in 2003. The Partnership hereby indemnifies and holds harmless the General Partner from and against any claim, loss, expense, liability, action or damage resulting from its acting or its failure to take any action as the "tax matters partner" of the Partnership, provided that any such action or failure to act does not constitute gross negligence or willful misconduct. 7.3. Bank Accounts. All funds of the Partnership are to be deposited in the Partnership's name in such bank account or accounts as may be designated by the General Partner and shall be withdrawn subject to the terms of this Agreement on the signature of such Person or Persons as the General Partner may authorize. 7.4. Tax Returns. The Tax Matters Partner shall use all commercially reasonable efforts to prepare or cause to be prepared all income and other tax returns of the Partnership required by applicable law and to cause the same to be filed in a timely manner (including extensions). Not more than [ORIGINAL TEXT REDACTED] after the end of each 21 Fiscal Year, the Partnership's tax advisors, as selected by the General Partner, shall deliver or cause to be delivered to each Partner a copy of the tax returns and Schedule K-1 for the Partnership and its Subsidiaries, if any, with respect to such Fiscal Year, together with such information with respect to the Partnership and such Subsidiaries as shall be necessary for the preparation by such Partner of its U.S. federal and state income or other tax and information returns. The Partnership shall pay for all costs of preparing tax returns and all costs related thereto. 7.5. Reports and Financial Statements. (a) Within [ORIGINAL TEXT REDACTED] of the end of each month, the Partnership shall furnish the Partners with copies of (i) the balance sheet of the Partnership as at the end of such month and the prior month, together with the balance sheet as at the end of the preceding Fiscal Year of the Partnership, (ii) a statement of GAAP Income or GAAP Loss for the month then ended and for the portion of the Fiscal Year of the Partnership then elapsed, and setting forth in comparative form the budgeted figures for the month then ended and the portion of the Fiscal Year of the Partnership then elapsed and the actual figures for the same month of the previous Fiscal Year and the same portion of the previous Fiscal Year of the Partnership, and (iii) a statement of cash flows for the month then ended and the portion of the Fiscal Year of the Partnership then elapsed and setting forth in comparative form the budgeted figures for the month then ended and the portion of the Fiscal Year of the Partnership then elapsed and the actual figures for the same month of the previous Fiscal Year and the same portion of the previous Fiscal Year of the Partnership, all in reasonable detail and prepared in accordance with GAAP (except for the absence of footnotes thereto), and subject to normal and recurring year end adjustments. (b) Within [ORIGINAL TEXT REDACTED] of the end of each Fiscal Year, the Partnership shall furnish the Partners with copies of the balance sheet of the Partnership as at the end of such Fiscal Year, and a statement of GAAP Income or GAAP Loss and a statement of cash flows, in each case for the Fiscal Year of the Partnership then ended, all in reasonable detail, prepared in accordance with GAAP and setting forth in each case in comparative form the figures for the previous two Fiscal Years, audited by the Partnership's independent accounting firm. (c) Prior to the beginning of each Fiscal Year of the Partnership, the General Partner shall develop a statement of monthly cash flow projections for the Partnership for the upcoming Fiscal Year, prepared in good faith and based upon what the Partnership believes in good faith at such time to be reasonable assumptions. (d) The Partnership shall deliver to each Partner copies of any management reports, documentation of material financial transactions, projections, operating reports, acquisition analyses, presentations to banks, financial institutions or potential investors, consultants' reports and such other similar financial information as the Partners may reasonably 22 request, as soon as practicable after such reports and other financial information becomes available. 7.6. Accountant Work Papers. The Partners and any of their respective auditors shall be entitled, upon reasonable notice, and at their own expense, to make such reasonable investigation of the work papers of the Partnership's accountant in connection with any audit. Section 8. Management and Operations. 8.1. Management. Except as expressly set forth herein, the Partnership shall be managed by the General Partner, which shall have the authority to exercise all of the powers and privileges granted by the Act, any other law and this Agreement, together with any powers incidental thereto, and to take any other action not prohibited under the Act or other applicable law, so far as such powers or actions are necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Partnership. No Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The General Partner may consult with the Limited Partners, but shall have absolute authority in accordance with this Agreement and the Management Agreement, to manage the day-to-day business operations and affairs of the Business. 8.2. Meetings of the Partners. (a) The General Partner shall meet with the Limited Partners once every month at such times and places in New York City, New York as are mutually agreed to by the Partners (unless the requirement for any such monthly meeting is waived by mutual agreement of the Partners) (the "Monthly Meetings") and at such other times as may be necessary (the "Special Meetings") on at least [ORIGINAL TEXT REDACTED] prior written notice of the time and place of such Special Meeting given by any Partner. (b) Any meeting of the Partners may be held by conference telephone call, video conference or through similar communications equipment by means of which all persons participating in the meeting can communicate with each other. Participation in a meeting by telephone, video conference or other similar communications equipment held pursuant to this Section shall constitute presence in person at such meeting. Partners may vote in person or by proxy at such meeting. (c) Any action required or permitted to be taken at a meeting of the Limited Partners may be taken without a meeting if the approval of Partners required to approve such action at a meeting at which all Partners are in attendance consent thereto in writing. (d) Except as otherwise expressly provided in this Agreement, none of the Limited Partners shall have any duties or liabilities to the Partnership or any other Partner (including any fiduciary duties), whether or not such duties or liabilities otherwise arise or exist 23 in law or in equity, and each Partner hereby expressly waives any such duties or liabilities; provided, however, that this section shall not eliminate or limit the liability of any Partner (A) for acts or omissions that involve fraud, gross negligence, willful or wanton misconduct or a knowing and culpable violation of law, or (B) for any transaction not permitted or authorized under or pursuant to this Agreement from which a Partner derived a personal benefit unless such transaction is permissible under, or otherwise approved in accordance with, this Agreement; provided, further, however, that the duty of care of each of the Partners is to not act with fraud, gross negligence, willful or wanton misconduct or a knowing and culpable violation of law. Except as provided in this Agreement, whenever in this Agreement a Limited Partner is permitted or required to make a decision affecting or involving the Partnership, any Limited Partner or any other Person, such Limited Partner shall be entitled to consider only such interests and factors as he, she or it desires, including a particular Limited Partner's interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest of or factors affecting the Partnership or any Partner. 8.3. Matters Requiring Limited Partner Approval. Except as expressly provided in this Section 8.3, or as otherwise required by the Act or other applicable law, no Limited Partner approval shall be required for any purpose and no Limited Partner vote shall have any authority to bind the Partnership or any Partner. (a) Prior to the GP Interest Closing Date. From the date hereof until the GP Interest Closing Date, the Partnership shall not, and shall not permit or cause any Subsidiary to, take any of the following acts, without first obtaining the approval of Integrated: (i) Creating, incurring or suffering to exist any Indebtedness (including, without limitation, letters of credit, if any, used to secure supply arrangements) or any capitalized lease obligation or entering into any agreement, commitment, assumption or guarantee with respect to any of the foregoing; (ii) the making of any capital expenditures; (iii) hiring or terminating any employee, or increasing the compensation (including benefits) payable to or to become payable to any employee; (iv) the sale of New Interests pursuant to Section 4.7; (v) making any Distribution; (vi) the dissolution, liquidation, or winding up of the Partnership, including any sale of all or substantially all of the assets of the Partnership, in any single transaction or series of related transactions; (vii) entering into any merger, consolidation, reorganization, acquisition (in which the Partnership would be the acquired entity) or other similar 24 transaction involving the Partnership, or entering into any agreement or other transaction other than in the ordinary course of business; and (viii) agreeing to any amendment to, or modification or waiver of any material right under, any of the Original Agreements or any Material Contract (as defined in the Purchase Agreement). (b) After the GP Interest Closing Date. After the GP Interest Closing Date, the Partnership shall not, and shall not permit or cause any Subsidiary to, take any of the following acts, without first obtaining the approval of AFC: (i) Creating, incurring or suffering to exist any Indebtedness (including, without limitation, letters of credit, if any, used to secure supply arrangements) or any capitalized lease obligation (other than Indebtedness and capitalized lease obligations as of the Effective Date (including any additional drawdowns under the Regions Bank Loan)) or entering into any agreement, commitment, assumption or guarantee with respect to any of the foregoing, in an amount in excess of [ORIGINAL TEXT REDACTED] ("Indebtedness Cap"); provided, however, that the Partnership may, and may permit or cause any Subsidiary to, create, incur or suffer to exist any of the foregoing obligations in an amount in excess of the Indebtedness Cap by an amount equal to the amount of additional Capital Contributions that the General Partner could, at such time, require pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii) minus any additional Capital Contributions made by the Partners pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii) (the "Available Debt Basket"); provided further, for as long as any of the foregoing obligations that are in excess of the Indebtedness Cap remain outstanding, the amount of additional Capital Contributions required pursuant to Sections 4.2(b)(ii) and 4.2(b)(ii) shall be reduced to the extent such obligations exceed the Indebtedness Cap and as such obligations are repaid or otherwise satisfied, the amount of additional Capital Contributions required pursuant to Sections 4.2(b)(ii) and 4.2(b)(iii) shall be increased by the amount of such repayment or satisfaction; (ii) creating, incurring or suffering to exist any Indebtedness to Integrated (or any Affiliate thereof), except as contemplated by the Integrated Equipment Rental Agreement; (iii) the sale of New Interests pursuant to Section 4.7; (iv) the dissolution, liquidation, or winding up of the Partnership, including any sale of all or substantially all of the assets of the Partnership, in any single transaction or series of related transactions; (v) engaging in any type of business activity that is of a material nature and is not related to the frozen dessert industry; 25 (vi) entering into any merger, consolidation, reorganization, acquisition (in which the Partnership would be the acquired entity) or other similar transaction involving the Partnership; and (vii) agreeing to any amendment to, or modification or waiver of any material right under, the Original Agreements. (c) Affiliated Transactions. The Partners agree that in the event at any time the General Partner of the Partnership is not enforcing any material rights which the Partnership may have pursuant to the terms of the Original Agreements or the Management Agreement (other than termination of the Management Agreement pursuant to Section 7.3(b)), including, without limitation, the right to any price increase required thereunder, then any Partner may notify the General Partner of specific actions that it believes must be taken to enforce the relevant agreement, and the Partners will for a period of [ORIGINAL TEXT REDACTED] negotiate in good faith to determine appropriate action to be taken. If the Partners cannot reach agreement as to the appropriate action to be taken after such [ORIGINAL TEXT REDACTED] period, then any holder of at least [ORIGINAL TEXT REDACTED] Percentage Interest may bring an action to enforce such agreement on behalf of the Partnership. In connection with any such litigation, the Partners hereby agree that the prevailing party shall be entitled to payment from the other party for all reasonable out of pocket costs and expenses incurred in connection with such litigation (including, without limitation, reasonable attorneys fees). 8.4. Other Activities. Neither the Partnership nor any Partner (or any Affiliate of any Partner) shall have any right by virtue of this Agreement either to participate in or to share in any other ventures, activities or opportunities of any of the other Partners or their Affiliates, or in the income or proceeds derived from such ventures, activities or opportunities. 8.5. Limitation on Actions of Partners; Binding Authority. No Partner shall, without the prior written consent of the General Partner, take any action on behalf of, or in the name of, the Partnership, or enter into any contract, agreement, commitment or obligation binding upon the Partnership, or, in its capacity as a Partner of the Partnership, perform any act in any way relating to the Partnership or the Partnership's assets, except in a manner and to the extent consistent with the provisions of this Agreement. Any action taken by the General Partner pursuant to this Agreement shall constitute the act of and serve to bind the Partnership and each Partner thereof. Notwithstanding any provision in this Agreement to the contrary and without the need for any additional consent from any Person, the Partnership is hereby authorized to execute, deliver and perform that certain Management Agreement and the Original Agreements, and at such times specified in the Purchase Agreement, the Restated [ORIGINAL TEXT REDACTED] Agreement. Persons dealing with the Partnership are entitled to rely conclusively upon the respective power and authority of each of the Officers and the General Partner as set forth herein. 26 Section 9. Confidentiality. (a) Any information relating to the Partnership or any Subsidiary or a Partner's business, operation or finances which are proprietary to the Partnership or any Subsidiary or a Partner, including, without limitation, any proprietary information relating to [ORIGINAL TEXT REDACTED], are hereinafter referred to as "Confidential Information". All Confidential Information in tangible form (plans, writings, drawings, computer software and programs, etc.) or provided to or conveyed orally or visually to a receiving Partner, shall be presumed to be proprietary at the time of delivery to the receiving Partner. All Confidential Information shall be protected by the receiving Partner from disclosure with the same degree of care with which the receiving Partner protects its own Confidential Information from disclosure. Each Partner agrees: (a) not to disclose such Confidential Information to any Person except to those of its employees or representatives who need to know such Confidential Information in connection with the conduct of the business of the Partnership or any Subsidiary and who have agreed to maintain the confidentiality of such Confidential Information, or (b) neither it nor any of its employees or representatives will use the Confidential Information for any purpose other than in connection with the conduct of the business of the Partnership or any Subsidiary; provided that such restrictions shall not apply if such Confidential Information: (i) is or hereafter becomes public, other than by breach of this Agreement or the Management Agreement; (ii) was already in the receiving Person's possession prior to any disclosure of the Confidential Information to the receiving Person by the divulging Person; (iii) has been or is hereafter obtained by the receiving Person from a third party that, to the knowledge of the receiving Person, is not bound by any confidentiality obligation with respect to the Confidential Information; or (iv) was obtained or developed without reference to the Confidential Information, provided that the Partner who disclosed or used the Confidential Information can demonstrate by documentary evidence that such information was obtained or developed without reference to the Confidential Information; provided, further, that nothing herein shall prevent any Partner from disclosing any portion of such Confidential Information (1) to the Partnership or any Subsidiary and allowing the Partnership or any Subsidiary to use such Confidential Information in connection with the Partnership's or any Subsidiary's business, (2) pursuant to judicial or administrative order or in response to a governmental inquiry, by subpoena or other legal process, or as required by applicable law, rule or regulation of any governmental body or stock exchange rule, but only to the extent required by such order, inquiry, subpoena, process, law, rule or regulation, and only after reasonable notice to the original divulging Partner, (3) in order to initiate, defend or otherwise pursue legal proceedings between the parties regarding this Agreement, (4) necessary 27 in connection with a possible or actual Transfer of an Interest permitted hereunder, provided that the Person to whom the Confidential Information is disclosed in connection therewith agrees in writing to keep such information confidential under terms substantially similar to this Section 9(a), (5) to a Partner's respective Advisors, or (6) to any Person in the course of due diligence in connection with the possible sale of all or a portion of either Partner's business, provided that such Person is subject to a confidentiality agreement that is no less restrictive than the provisions of this Section 9. (b) The Partners and their Affiliates shall each act to safeguard the secrecy and confidentiality of, and any proprietary rights to, any non-public information relating to the Partnership and its business or any Subsidiary and its business, except to the extent such information is required to be disclosed by law or reasonably necessary to be disclosed in order to carry out the business of the Partnership or such Subsidiary or in order to initiate, defend or otherwise pursue legal proceedings between or involving the parties regarding this Agreement. Each Partner may, from time to time, provide the other Partners written notice of its nonpublic information which is subject to this Section 9(b). (c) Each Partner acknowledges that (a) it was generally familiar with each other Partner's and its Affiliates' business and operations and the industries in which they operate, prior to commencing any due diligence or negotiations with respect to the transactions contemplated herein and in the Investment Agreement, and (b) it has existing business relationships with certain of the Partnership's customers and suppliers and it is generally familiar with the Partnership's customers and suppliers. In addition, each Partner acknowledges and agrees that each of the other Partners and/or one or more of its Affiliates are engaged in a business which is competitive with the business of the other Partner and/or its Affiliates and customers, and, although each Partner and its Affiliates agree to comply with the provisions set forth in this Section 9, each Partner acknowledges that the provisions of this Section 9 do not constitute a non-competition agreement and that each Partner and its Affiliates will continue to compete with the other Partners and their Affiliates notwithstanding the execution and delivery of this Agreement. Section 10. Representations and Warranties. 10.1. In General. As of the date hereof, each of the Partners hereby makes each of the representations and warranties applicable to such Partner as set forth in Section 10.2. Such representations and warranties shall survive the execution of this Agreement. 10.2. Representations and Warranties. Each Partner hereby represents and warrants (as to itself) that: (a) Due Incorporation or Formation; Authorization of Agreement. Such Partner is a corporation duly organized or a partnership or limited liability company duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership or company power and authority to 28 own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Partner is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Partner has the corporate, partnership or company power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate, partnership or company action. This Agreement constitutes the legal, valid and binding obligation of such Partner, enforceable against such Partner in accordance with its terms. (b) Governmental Authorizations. Any registration, declaration or filing with, or consent, approval, license, permit or other authorization or order by, or exemption or other action of, any governmental, administrative or regulatory authority, domestic or foreign, that was or is required in connection with the valid execution, delivery, acceptance and performance by such Partner under this Agreement or consummation by such Partner (or any of its Affiliates) of any transactions contemplated hereby has been completed, made or obtained on or before the date hereof. (c) Litigation. There are no actions, suits, proceedings or investigations pending, or, to the knowledge of such Partner or any of its Affiliates, threatened against or affecting such Partner or any of its Affiliates or any of their properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit or proceeding which if adversely determined could) reasonably be expected to materially impair such Partner's ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner; such Partner and its Affiliates have not received any currently effective notice of any default, and such Partner and its Affiliates are not in default, under any applicable order, writ, injunction, decree, permit, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Partner's (or any of its Affiliate's) ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Partner. (d) Investment Company Act. Neither such Partner nor any of its Affiliates is, nor will the Partnership as a result of such Partner holding an interest therein be, an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended. Section 11. Transfers of Interests. 11.1. Confirmation of Ownership. The General Partner hereby confirms that the initial percentage ownership interests in the Company set forth on Exhibit A accurately represent the partnership Interest of each Partner as of the date of this Agreement. Each Partner 29 hereby confirms and agrees that as of the date of this Agreement the Percentage Interest and Capital Contributions set forth opposite such Partner's name on Exhibit A hereto is such Partner's entire equity interest in the Company and that any and all agreements (other than the Purchase Agreement) heretofore entered into by such Partner with the Company contemplating the issuance of partnership interests or other equity interest in the Company to such Partner are no longer in effect. 11.2. Prohibited Transfers. Notwithstanding anything to the contrary contained herein, except as provided in Section 11.3, each Partner agrees that such Partner will not, directly or indirectly, Transfer all or any part of its Interest, whether legal or beneficial, in the Partnership, and any attempt to so Transfer such Interest (and such Transfer) shall be null and void and of no effect. Without limiting the foregoing, and for purposes of clarification, (i) a Transfer by CoolBrands of any ownership interest in Integrated or IBI would be deemed to be an indirect Transfer of Integrated's Interests, and (ii) a Transfer by Capricorn of any ownership interest in AFC or AFSC would be deemed to be an indirect Transfer of the Americana Partners' Interests. 11.3. Permitted Transfers. The provisions of Section 11.2 shall not apply to the following Transfers: (a) Any Transfer of Interests contemplated by the Purchase Agreement; (b) Any Transfer of partnership interests by a Partner to an Affiliate of such Partner, provided that such Affiliate shall remain an Affiliate of such Partner at all times that such Affiliate holds such partnership interests; (c) any transfer of partnership interests permitted in accordance with Section 12; and (d) After the expiration of the Call Period, any Transfer of partnership interests by a Partner to any third party, which transfer is approved by the other Partners not Affiliated with such transferring Partner (which approval shall not be unreasonably withheld, it being understood that the Limited Partners must provide reasons in writing to the proposed transferor in the event that they withhold such consent). The exceptions in clauses (b) - (d) above are subject to the condition that each such Affiliate or other transferee referred to therein (each a "Permitted Transferee") shall comply with the requirements of Section 11.4. Except for Transfers of Interests contemplated by the Purchase Agreement, the provisions of this Agreement shall be applied to the partnership interests acquired by any Permitted Transferee of a Partner in the same manner and to the same extent as such provisions were applicable to such partnership interests in the hands of such transferring Partner. In furtherance of the preceding sentence, (i) the Partners acknowledge that but for the exception for Transfers of Interests contemplated by the Purchase Agreement as set forth in the preceding sentence, Integrated would be considered a Permitted Transferee of the Americana 30 Partners with respect to the Interests obtained pursuant to the Purchase Agreement, and therefore would otherwise be subject to the restrictions and entitled to the rights specifically granted to the Americana Partners, and (ii) that the preceding requirement shall not apply to Transfers of any Interest made pursuant to the Purchase Agreement, such that after giving effect to any such Transfer contemplated by the Purchase Agreement, the provisions of this Agreement shall be applied to Integrated (and any other Affiliate of IBI receiving Interests pursuant to the Purchase Agreement) without regard to the applicability of such provisions to the Americana Partners, and such Interests shall, for all intents and purposes of this Agreement, be subject to the restrictions and entitled to the rights specifically granted hereunder to Integrated or its Affiliates. Subject to the foregoing, any reference in this Agreement to the Americana Partners shall be deemed to include the Americana Partners and their Permitted Transferees and any reference in this Agreement to Integrated shall be deemed to include Integrated and its Permitted Transferees. 11.4. Admission of Transferee. Notwithstanding anything in this Agreement to the contrary, no Transfer of Interests in the Partnership shall be permitted unless the Permitted Transferee is admitted as a Partner under this Section 11.4. If a Partner Transfers all or any portion of its Interest in the Partnership, such transferee may become a Partner if (i) such transferee executes and agrees to be bound by this Agreement as if such transferee were a Partner as of the date hereof, (ii) the transferor and/or transferee pays all reasonable legal and other fees and expenses incurred by the Partnership in connection with such Transfer and substitution (except that IBI and its Affiliates shall not be responsible for any fees or expenses of the Partnership in connection with the Transfers of Interests contemplated by the Purchase Agreement), and (iii) the transferor and transferee execute such documents and deliver such certificates to the Partnership and the remaining Partners as may be required by applicable law or otherwise advisable. Notwithstanding the foregoing, any Transfer or purported Transfer of any Interest, whether to another Partner or to a third party, shall be of no effect, and such transferee shall not become a Partner, if the General Partner determines in its sole discretion that: (a) the Transfer would require registration of any Interest under, or result in a violation of, any federal or state or other jurisdiction securities laws; (b) as a result of such Transfer the Partnership would be required to register as an investment company under the Investment Company Act of 1940, as amended, or any rules or regulations promulgated thereunder; (c) as a result of such Transfer the aggregate value of Interests held by "benefit plan investors" including at least one benefit plan investor that is subject to ERISA, would be "significant" (as such terms are defined in U.S. Department of Labor Regulation 29 C.F.R. 2510.3-101(f)(2)) with the result that the assets of the Partnership will be deemed to be "plan assets" for purposes of ERISA; or (d) as a result of such Transfer, the Partnership would or may have in the aggregate more than [ORIGINAL TEXT REDACTED] Partners and as a result, in the opinion of counsel to the Partnership, the Partnership would constitute a "publicly traded 31 partnership" within the meaning of Section 7704 of the Code. For purposes of determining the number of Partners under this Section 4.6(e), a Person (the "beneficial owner") indirectly owning an interest in the Partnership through a partnership, grantor trust or S corporation (as such terms are used in the Code) (the "flow-through entity") shall be considered a Partner, but only if (i) substantially all of the value of the beneficial owner's interest in the flow-through entity is attributable to the flow-through entity's interest (direct or indirect) in the Partnership and (ii) in the sole discretion of the General Partner, a principal purpose of the use of the flow-through entity is to permit the Partnership to satisfy the [ORIGINAL TEXT REDACTED] Partner limitation. The General Partner may require the provision of a certificate as to the legal nature and composition of a proposed transferee of an Interest of a Partner and from any Partner as to its legal nature and composition and shall be entitled to rely on any such certificate in making such determinations under this Section 11.4. Section 12. Sale, Assignment or Other Disposition of Interests 12.1. Call Right. (a) Any time during the Call Period, Integrated shall have the right, at its option (the "Call Option"), to acquire all, but not less than all, of the Americana Partners' Interest (the "Called Interest") at a price equal to the Call Option Price; provided, however, that if Integrated receives an ROFO Notice, an ROFR Notice or a Required Sale Notice (as such terms are defined below) prior to delivering a Call Notice (as defined below), then the Call Option shall be suspended until (i) with respect to an ROFO Notice, [ORIGINAL TEXT REDACTED] after the expiration of the ROFO Option Period (as defined below), (ii) with respect to an ROFR Notice, [ORIGINAL TEXT REDACTED] following the expiration of the ROFR Option Period (as defined below), and (iii) with respect to a Required Sale Notice, [ORIGINAL TEXT REDACTED] following the expiration of the ROFR Option Period, at which time the Call Option shall be reinstated. (b) Integrated may exercise the Call Option by providing written notice of its intention to exercise the Call Option with respect to the Called Interest to the Partnership and the Americana Partners (a "Call Notice"), at which time Integrated shall be obligated to purchase from the Americana Partners, and the Americana Partners shall become obligated to sell to Integrated, the Called Interest at the Call Option Price, on the date that is [ORIGINAL TEXT REDACTED] after the delivery of such Call Notice, subject to and in accordance with the provisions of this Section 12.1. During such [ORIGINAL TEXT REDACTED] period, any Person who has executed and delivered to the Americana Partners (copies of which shall be provided to Integrated) (i) a non-binding indication of interest with respect to a possible acquisition of the Called Interest and (ii) a confidentiality agreement in form and substance substantially similar to the provisions of Section 9(a) hereof, and any of its Advisors, shall be entitled, upon reasonable notice, and at their own expense (or the expense of 32 the Americana Partners), to make such reasonable investigation of the business and operations of the Partnership, and such reasonable examination of the books, records and financial condition of the AF Business as they reasonably request in connection with their evaluation of a possible acquisition of the Called Interest. Any such investigation and examination shall be conducted during regular business hours and under reasonable circumstances without material interference with Integrated's or the Partnership's normal business operations, and Integrated shall, and shall cause the Partnership and its executives and management to reasonably cooperate with respect thereto. If, within ninety [ORIGINAL TEXT REDACTED] of the delivery of the Call Notice, the Americana Partners deliver a ROFR Notice pursuant to Section 12.3 for which the price to be paid for the ROFO Interest is greater than the Call Option Price, then the Call Notice shall be terminated and of no further effect, and the Transfer of any Interest by the Americana Partners shall be subject to the provisions of Section 12.3. (c) If the Americana Partners have not delivered a ROFR Notice for which the price to be paid for the ROFO Interest is greater than the Call Option Price within the [ORIGINAL TEXT REDACTED] period set forth in Section 12.1(b) above, then at the closing of the Call Option, the Americana Partners shall deliver to Integrated, against payment of the Call Option Price, the Called Interest, to be sold to Integrated free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for transfer, any and all documentation evidencing the Called Interest and such other documentation as reasonably requested by Integrated. The closing of a sale of the Called Interest pursuant to this Section 12.1 shall be consummated no later than [ORIGINAL TEXT REDACTED] after the receipt of the Call Notice; unless prior to such date the Americana Partners have delivered a ROFR Notice pursuant to Section 12.3. Upon the delivery of a Call Notice, the Americana Partners may not Transfer the Called Interest unless (i) (A) the sale of the Called Interest to Integrated is not consummated within [ORIGINAL TEXT REDACTED] of its receipt of the Call Notice and the Americana Partners did not deliver a ROFR Notice during such time, and (B) the failure to consummate the sale is not attributable to any act or failure to act on the part of the Americana Partners, or (ii) the Americana Partners deliver a ROFR Notice for which the price to be paid for the ROFO Interest is greater than the Call Option Price within the [ORIGINAL TEXT REDACTED] period set forth in Section 12.1(b) above (in which case the Transfer of any such Interest shall be pursuant to Section 12.3); provided, that any Transfer by the Americana Partners must comply with the other provisions of this Section 12 (including, without limitation, Sections 12.2, 12.3 and 12.4). 12.2. Right of First Offer. Notwithstanding the provisions of Section 12.1 to the contrary, but subject to the provisions of Section 12.3, the Americana Partners may Transfer all, but not less than all, of their Interest, pursuant to the provisions of this Section 12.2. (a) If at any time during the Call Period, the Americana Partners have not received a bona fide written offer from a Person not Affiliated with the Americana Partners to acquire all (and not less than all) of their Interest (for all purposes of Section 12, such Interests of the Americana Partners shall be determined on a collective basis) at a price greater than the 33 Call Option Price, Integrated has not furnished a Call Notice pursuant to Section 12.1, and the Americana Partners desire to Transfer all, but not less than all, of their Interest (the "ROFO Interest"), the Americana Partners shall provide written notice of such desire to Integrated ("ROFO Notice"), which notice shall state that the Americana Partners desire to Transfer all of their Interest in accordance with this Section 12.2, and such ROFO Notice shall constitute an irrevocable offer to sell the entire ROFO Interest to Integrated at a price equal to the Call Option Price. Integrated shall have the irrevocable and exclusive option to acquire the ROFO Interest on the terms and conditions set forth in this Section 12.2(a). The option of Integrated to purchase the ROFO Interest shall be exercised by delivery of a written notice (the "Response Notice") to the Americana Partners and the Partnership within [ORIGINAL TEXT REDACTED] following receipt of the ROFO Notice (the "ROFO Option Period"). Integrated shall have the right to purchase the ROFO Interest for a price equal to the Call Option Price. If Integrated elects to acquire the ROFO Interest pursuant to this Section 12.2(a), then at the closing of such Transfer, Integrated shall deliver by a certified or bank's cashier's check, cash or wire transfer, an amount equal to the Call Option Price to the Americana Partners against the simultaneous delivery of the ROFO Interest, free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for transfer, any and all documentation evidencing such ROFO Interest and such other documentation as reasonably requested by Integrated. If Integrated did not deliver a Response Notice prior to the expiration of the ROFO Option Period and within [ORIGINAL TEXT REDACTED] of the expiration of the ROFO Option Period the Americana Partners obtain a bona fide written offer from a Person not Affiliated with the Americana Partners to acquire all of its Interest and notifies Integrated in writing of such proposed Transfer (a "Third Party Offer"), then the Americana Partners may Transfer the ROFO Interest subject to the provisions of Section 12.3. If ninety (90) days after the expiration of the ROFO Option Period the Americana Partners have not received a bona fide written offer from a Person not Affiliated with the Americana Partners and have not notified Integrated of the same, then any such Transfer will again be subject to the provisions of this Section 12.2 and the Americana Partners shall be required to deliver a new ROFO Notice in connection therewith. (b) If prior to sending a ROFO Notice to Integrated pursuant to Section 12.2(a) or after the expiration of ninety (90) days after a ROFO Option Period, Integrated has not furnished a Call Notice pursuant to Section 12.1 and the Americana Partners have obtained a Third Party Offer to purchase the ROFO Interest at a price greater than the Call Option Price, then any Transfer of the ROFO Interest by the Americana Partners shall be subject to the provisions of Section 12.3, without first having to comply with the provisions of Section 12.2(a). 12.3. Right of First Refusal; Right to Compel Sale 34 (a) Subject to the application of the provisions of Section 12.1 and 12.2, if at any time during the Call Period, the Americana Partners obtain a Third Party Offer, they shall provide written notice to Integrated and the Partnership setting forth the name and address of the proposed purchaser, the purchase price and type of consideration which the prospective purchaser has offered to pay, and any other material terms and conditions of the Third Party Offer (the "ROFR Notice"). The ROFR Notice shall constitute an irrevocable offer to sell the ROFO Interest to Integrated, and thereafter Integrated shall have the irrevocable and exclusive option to acquire the ROFO Interest on the terms and conditions set forth in the ROFR Notice pursuant to this Section 12.3(a). The option of Integrated to purchase the ROFO Interest pursuant to this Section 12.3(a) shall be exercised by delivery of a Response Notice to the Americana Partners and the Partnership within [ORIGINAL TEXT REDACTED] following receipt of the ROFR Notice (the "ROFR Option Period"). Integrated shall have the right to purchase the ROFO Interest for cash consideration or in shares of capital stock of CoolBrands; provided that such shares must be freely transferable without restriction and will be valued for purposes hereof at the opening sale price on the Toronto Stock Exchange (or such other exchange on which such shares are primarily traded) on the date of such payment; provided, further that if such payment is made in shares, CoolBrands must implement arrangements where such shares may be sold on the date of receipt for net cash proceeds to the Americana Partners of not less than the amount of cash otherwise payable. If part or all of the consideration to be paid for the ROFO Interest as stated in the ROFR Notice is other than cash, the price stated in such ROFR Notice shall be deemed to be the sum of the cash consideration, if any, specified in such ROFR Notice, plus the fair market value of the non-cash consideration. The fair market value of the non-cash consideration shall be determined in good faith by the Partners or if the Partners cannot agree then the Partners shall engage an investment banker or other financial expert of national reputation and reasonably acceptable to the Partners to make such determination, and the judgment of such expert as to the fair market value of such non-cash consideration shall be binding upon the Partners. The costs of any such third party determination shall be shared in proportion to the relative Percentage Interests of the Americana Partners and Integrated. If Integrated did not deliver a Response Notice prior to the expiration of the ROFR Option Period, then the Americana Partners may Transfer the ROFO Interest to the proposed purchaser pursuant to the ROFR Notice within [ORIGINAL TEXT REDACTED] of the expiration of the ROFR Option Period. If after [ORIGINAL TEXT REDACTED] following the expiration of the ROFR Option Period the Americana Partners have not Transferred the ROFO Interest pursuant to the ROFR Notice, then any subsequent Transfer will again be subject to the provisions of Section 12.2 and 12.3. (b) If, and only if, the Third Party Offer is for a price greater than the Call Option Price and Integrated does not elect to acquire the ROFO Interest pursuant to Section 12.3(a), the Americana Partners shall have the right to cause Integrated to sell in the proposed sale all, but not less than all, of its Interest; provided, however, that the Americana Partners shall only have such right to cause Integrated to sell its Interest during the Call Period. If the Americana Partners shall so elect, they must first give notice in writing to such effect (a "Required Sale Notice") to the Partnership and Integrated. The Required Sale Notice shall set 35 forth the name and address of the proposed purchaser, the purchase price of the Interests, and any other material terms and conditions of the third party offer. Upon the receipt of the Required Sale Notice, Integrated shall participate in the proposed sale and the closing of such proposed sale shall be held at the time and place designated by the proposed purchaser, but in any event within [ORIGINAL TEXT REDACTED] after the date of the Required Sale Notice. At the closing of such sale, Integrated shall deliver to the purchaser, against payment of the purchase price, its Interest, to be sold to the purchaser free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for transfer, any and all documentation evidencing its Interest and such other documentation as reasonably requested by the Americana Partners or the purchaser. Such sale shall be made on the same terms and conditions specified in the Required Sale Notice. The Americana Partners shall pay all expenses incurred by Integrated in connection with the Transfer. (c) If after [ORIGINAL TEXT REDACTED] following the expiration of the ROFR Option Period (if pursuant to Section 12.3(a) or the delivery of the Required Sale Notice (if pursuant to Section 12.3(b), as applicable, the Americana Partners have not Transferred the ROFO Interest pursuant to the ROFR Notice or the Required Sale Notice, as applicable, then any subsequent Transfer will again be subject to the provisions of Section 12.2 and 12.3. 12.4. Right of First Refusal of Americana Partners; Right of Integrated to Compel Sale of Interest. (a) If at any time during the Call Period, Integrated receives a Third Party Offer to Transfer all, but not less than all of its Interests (the "Integrated Interest"), it shall provide the Americana Partners with an ROFR Notice. The ROFR Notice shall constitute an irrevocable offer to sell the Integrated Interest to the Americana Partners, and thereafter the Americana Partners shall have the irrevocable and exclusive option to acquire the Integrated Interest on the terms and conditions set forth in the ROFR Notice pursuant to this Section 12.4(a). The option of the Americana Partners to purchase the Integrated Interest pursuant to this Section 12.4(a) shall be exercised by delivery of a Response Notice to Integrated and the Partnership within [ORIGINAL TEXT REDACTED] following receipt of the ROFR Notice. The Americana Partners shall have the irrevocable and exclusive option to acquire the Integrated Interest on the terms and conditions set forth in the ROFR Notice. The option of the Americana Partners to purchase the Integrated Interest shall be exercised by delivery of a Response Notice within [ORIGINAL TEXT REDACTED] following receipt of the ROFR Notice (the "Integrated ROFR Option Period"). The Americana Partners shall have the right to purchase the Integrated Interest for cash consideration whether or not part or all of the consideration specified in the ROFR Notice is other than cash. If part or all of the consideration to be paid for the Integrated Interest as stated in the ROFR Notice is other than cash, the price stated in such ROFR Notice shall be deemed to be the sum of the cash consideration, if any, specified in such ROFR Notice, plus the fair market value of the non-cash consideration. The fair market value of the non-cash consideration shall be determined in good faith by the Partners, or in the event that 36 the Partners are unable to agree upon the fair market value thereof, the Partners shall engage an investment banker or financial expert of national reputation and reasonably acceptable to the Partners, and the judgment of such expert as to the fair market value of such non-cash consideration shall be binding upon the Partners. The costs of any such third party determination shall be shared in proportion to the relative Percentage Interests of the Americana Partners and Integrated. If the Americana Partners did not deliver a Response Notice prior to the expiration of the Integrated ROFR Option Period, then Integrated may Transfer the Integrated Interest to the proposed purchaser pursuant to the ROFR Notice within [ORIGINAL TEXT REDACTED] of the expiration of the Integrated ROFR Option Period and if the purchase price is greater than or equal to the Call Option Price then Integrated shall have the right to cause the Americana Partners to sell their Interest in the proposed sale (a "Compelled Sale"). Subject to the provisions of Section 12.4(b) with respect to a Compelled Sale, if after [ORIGINAL TEXT REDACTED] following the expiration of the Integrated ROFR Option Period the Americana Partners have not Transferred the Integrated Interest pursuant to the ROFO Notice, then any subsequent Transfer will again be subject to the provisions of Section 12.4. (b) If Integrated elects to cause a Compelled Sale, it must give notice in writing to such effect (a "Compelled Sale Notice") to the Partnership and the Americana Partners. Upon the receipt of the Compelled Sale Notice, the Americana Partners shall participate in the proposed sale, the Americana Partners (or any successor or transferee thereof) shall approve such transaction pursuant to Section 8.3, and the closing of such proposed sale shall be held at the time and place designated by the proposed purchaser, but in any event within [ORIGINAL TEXT REDACTED] after the date of the Compelled Sale Notice. At the closing of such sale, the Americana Partners shall deliver to the purchaser, against payment of the purchase price, its Interest, to be sold to the purchaser free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for transfer, any and all documentation evidencing its Interest and such other documentation as reasonably requested by Integrated or the purchaser. Such sale shall be made on the same terms and conditions specified in the Compelled Sale Notice. 12.5. Americana Tag Along. In the event that (i) Integrated is selling the Interest of Integrated in the Partnership to a Person not Affiliated with Integrated at a price equal to or greater than the Call Option Price, (ii) the Americana Partners have not exercised its option to acquire the Interest of Integrated in the Partnership on the terms and conditions set forth in the ROFR Notice and (iii) the Americana Partners have not received a Compelled Sale Notice, then the Americana Partners shall have the right to give notice in writing to Integrated that they wish to sell their respective Interests in such sale (a "Tag Along Notice"). Upon receipt of a Tag Along Notice, Integrated shall not be permitted to consummate a sale of the Interests of Integrated in the Partnership unless the Person or group purchasing such Interest (the "Proposed Purchaser") also purchases the Interests of the Americana Partners, which purchase shall be made on the same terms and conditions, including, without limitation, the purchase price (the "Tag Along Price"), as the Proposed Purchaser shall have offered to purchase the Integrated Interest. At the closing of such purchase, the Proposed Purchaser shall deliver a certified or bank 37 cashier's check, cash or shall wire transfer the Tag Along Price (to the extent the Tag Along Price is to be paid in cash) to the Americana Partners against the simultaneous delivery of the Integrated Interest and all of the Americana Partners' Interests, free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for transfer, any and all documentation evidencing the Integrated Interest and all of the Americana Partners' Interests and such other documentation as reasonably requested by the Proposed Purchaser. Such Tag Along right shall not apply to any indirect transfer as a result of a Change in Control of CoolBrands International, Inc. In addition to the foregoing right, in the event that the price at which Integrated proposes to sell its Interests is less than the Call Option Price, then the Americana Partners shall have, at their option, the right to a tag along right in accordance with the foregoing, or the right to purchase all, but not less than all, of the Integrated Interest at a price equal to the Americana Call Option Price; provided, however, that if the Americana Partners exercise such call right and then directly or indirectly Transfer the Interests, in whole or in part, in one or a series of related transactions within one year after purchasing such Interests from Integrated for a price greater than the Americana Call Option Price, the Americana Partners shall, upon the consummation of such Transfer, pay to Integrated [ORIGINAL TEXT REDACTED] of the difference between the Americana Call Option Price and the price received in such sale with respect to the Interests (determined on a proportionate basis if the Interests were not Transferred in whole). For purposes of this provision, the Americana Partners agree that they will not take any action with respect to the Interests which is intended to deprive Integrated of the benefit of this provision. All payments made by the Americana Partners pursuant to this Section 12.5 shall be paid by delivery of a certified or bank's cashier's check, cash or wire transfer. 12.6. Change of Control of CoolBrands. If a Change of Control occurs prior to the Call Period, then, Integrated, at its option, shall be required to exercise either the Change of Control Call or the Termination, as follows: (a) If Integrated shall so elect, then Integrated shall have the right to acquire all, but not less than all, of the Americana Partners' Interest in connection with such Change of Control (the "Change of Control Call"). If Integrated so elects, it must first give notice in writing to such effect to the Partnership and the Americana Partners. Upon receipt of such notice, the Americana Partners shall be obligated to sell, and Integrated shall be obligated to purchase, all but not less than all of the Americana Partners' Interests within [ORIGINAL TEXT REDACTED] for the Put Price. At the closing of such purchase, Integrated shall deliver a certified or bank cashier's check, cash or shall wire transfer the Put Price to the Americana Partners against the simultaneous delivery of the all of the Americana Partners' Interests, free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for Transfer, any and all documentation evidencing all of the Americana Partners' Interests and such other documentation as reasonably requested by Integrated. (b) If Integrated shall so elect, then Integrated shall have the right to terminate (the "Termination") all of the rights and obligations of Integrated pursuant to this 38 Agreement, the Original Agreements, the Management Agreement and any other agreement related thereto and to withdraw in all capacities as a Partner, to be effective immediately after the payment of the Termination Fee. If Integrated so elects, it must first give notice in writing to such effect to the Partnership and the Americana Partners. Within [ORIGINAL TEXT REDACTED] of such notice, and as full and complete consideration for the Termination, Integrated shall (i) Transfer all of its Interests to the Americana Partners, free and clear of all liens, charges, pledges and other encumbrances and accompanied by transfer powers duly endorsed for Transfer, (ii) pay the sum of [ORIGINAL TEXT REDACTED] to the Americana Partners, payable by delivery of a certified or bank cashier's check, cash or wire transfer, and (iii) if not previously contributed, Transfer title to the Equipment to the Partnership, free and clear of all liens, charges, pledges and other encumbrances, except those which attach by virtue of such Transfer to the Partnership (collectively, such items (i) through (iii), the "Termination Fee"). 12.7. Americana Call Right. In the event that IBI has failed to exercise the Option on or before January 1, 2005, then the Americana Partners shall have the right to purchase all but not less than all of the Integrated Interests for cash, at a price equal to the fair market value as determined in good faith by the Partners or in the event the Partners shall not agree upon the fair market value thereof, the Partners shall engage an investment banker or financial expert of national reputation and reasonably acceptable to the Partners, who shall determine the fair market value of each Partner's respective Interest in the Partnership (without any control premiums or minority discounts), and the judgment of such expert as to the fair market value of such Interests shall be binding upon the Partners. The costs of any such third party determination shall be shared in proportion to the relative Percentage Interests of the Americana Partners and Integrated. 12.8. Withdrawals. Each of the Partners does hereby covenant and agree that it will not withdraw, resign, retire or disassociate from the Partnership, except as a result of a Transfer of its entire Interest in the Partnership permitted under the terms of this Agreement and that it will carry out its duties and responsibilities hereunder until the Partnership is terminated, liquidated and dissolved under Section 12. No Partner shall be entitled to receive any distribution or otherwise receive the fair market value of its Interest in compensation for any purported resignation or withdrawal not in accordance with the terms of this Agreement. 12.9. Interests Held by a Partner. For purposes of the provisions of Section 12, the Interest held by a Partner shall be deemed to include any Interest held by an Affiliate of such Partner, and any Interests held by such Affiliate shall be subject to the same rights, restrictions and obligations set forth in Section 12 as if held by such Partner and all references to Integrated shall mean the Affiliates of IBI that are Partners. Section 13. Dissolution. 13.1. Limitations. The Partnership may be dissolved, liquidated and terminated only pursuant to the provisions of this Section 13, and, to the fullest extent permitted by law but 39 subject to the terms of this Agreement, the parties hereto do hereby irrevocably waive any and all other rights they may have to cause a dissolution of the Partnership or a sale or partition of any or all of the Partnership's assets. 13.2. Exclusive Events Requiring Dissolution. The Partnership shall be dissolved only upon the earliest to occur of the following events (a "Dissolution Event"): (a) at any time at the election of the General Partner, subject to the consent of the Limited Partners if required pursuant to Section 8.3; (b) at any time there are no Partners (unless otherwise continued in accordance with the Act); or (c) the entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act. 13.3. Liquidation. Upon the occurrence of a Dissolution Event, the business of the Partnership shall be continued to the extent necessary to allow an orderly winding up of its affairs, including the liquidation of the assets of the Partnership pursuant to the provisions of this Section 13.3, as promptly as practicable thereafter, and each of the following shall be accomplished: (a) The General Partner shall cause to be prepared a statement setting forth the assets and liabilities of the Partnership as of the date of dissolution, a copy of which statement shall be furnished to all of the Partners. (b) The property and assets of the Partnership shall be liquidated or distributed in kind under the supervision of the General Partner as promptly as possible, but in an orderly, businesslike and commercially reasonable manner. (c) To the extent that an asset is to be distributed in kind, the amount of the distribution shall be considered to be such fair market value of the asset. (d) The proceeds of sale and all other assets of the Partnership shall be applied and distributed as follows and in the following order of priority: (i) to the satisfaction of the debts and liabilities of the Partnership (contingent or otherwise) and the expenses of liquidation or distribution (whether by payment or reasonable provision for payment), other than liabilities to Partners or former Partners for distributions; and (ii) the balance, if any, to the Partners in accordance with the provisions of Section 5, as if such balance were Cash Flow. 40 13.4. Continuation of the Partnership. Notwithstanding anything to the contrary contained herein, the death, retirement, resignation, expulsion, bankruptcy, dissolution or removal of a Partner shall not in and of itself cause the dissolution of the Partnership, and the Partners are expressly authorized to continue the business of the Partnership in such event, without any further action on the part of the Partners. Section 14. Indemnification. 14.1. Exculpation of Partners. No Partner or officer of the Partnership shall be liable to the Partnership or to the other Partners for damages or otherwise with respect to any actions, or failure to take an action, in good faith and reasonably believed by such Partner or officer to be in or not opposed to the best interests of the Partnership except to the extent any related loss results from fraud, gross negligence, willful or wanton misconduct or a knowing and culpable violation of law on the part of such Partner or officer or the willful breach of any obligation under this Agreement or of the fiduciary duties owed to the Partnership or the other Partners by such Partner or officer. 14.2. Indemnification by Partnership. The Partnership hereby indemnifies, holds harmless and defends the Partners, the officers and each of their respective agents, officers, directors, members, managers, partners, shareholders and employees from and against any loss, cost, expense, damage, punitive damage, claim, liability or injury suffered or sustained by them (including but not limited to any judgment, award, settlement, reasonable attorneys' fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim) by reason of or arising out of (i) their activities on behalf of the Partnership or in furtherance of the interests of the Partnership, (ii) their status as a Partner, General Partner or officer of the Partnership, or (iii) the Partnership's assets, property, business or affairs (including, without limitation, the actions of any officer, director, member or employee of the Partnership or any of its Subsidiaries), if the acts or omissions were not performed or omitted fraudulently or as a result of gross negligence, willful or wanton misconduct or a knowing and culpable violation of law by the indemnified party or as a result of the willful breach of any obligation under this Agreement by the indemnified party or of the fiduciary duties owed to the Partnership or the other Partners by such Partner or Person. Reasonable expenses incurred by the indemnified party in connection with any such proceeding relating to the foregoing matters shall be paid or reimbursed by the Partnership in advance of the final disposition of such proceeding upon receipt by the Partnership of (i) written affirmation by the Person requesting indemnification of its good faith belief that it has met the standard of conduct necessary for indemnification by the Partnership and (ii) a written undertaking by or on behalf of such Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that such Person has not met such standard of conduct, which undertaking shall be an unlimited general obligation of the indemnified party but need not be secured. Notwithstanding the foregoing provisions of this Section 14.2, the Partnership will have no duty to indemnify, hold harmless or defend any of the Partners with respect to claims brought among or between them to enforce the terms of this Agreement. 41 Section 15. Miscellaneous. 15.1. Notices. Any notice or demand which is required or provided to be given under this Agreement shall be deemed to have been sufficiently given and received for all purposes when delivered in writing by certified or registered mail, postage and charges prepaid, return receipt requested, or overnight delivery providing receipt of delivery, to the following addresses: if to the Americana Partners, [ORIGINAL TEXT REDACTED] or at any other address designated by the Americana Partners to the Partnership and Integrated in writing; if to Integrated, c/o Integrated Brands, Inc., 4175 Veterans Highway, Ronkonkoma, New York 11779, Attention: David J. Stein, with a copy to Goodwin Procter LLP, 599 Lexington Avenue, New York, New York 10022, Attention: Daniel R. Kaplan, Esq., or at any other address designated by the Integrated to the Partnership and the Americana Partners in writing. 15.2. Governing Law. This Agreement and the rights of the Partners hereunder shall be governed by, and interpreted in accordance with, the laws of the State of New York. 15.3. Consent to Jurisdiction. (a) Any legal action or proceeding with respect to this Agreement or any document related hereto shall be brought solely in the courts of the State of New York, New York County or of the United States of America for the Southern District of New York, and, by execution and delivery of this Agreement, each party hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably waive any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which any of them may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions. (b) Each party irrevocably consents to the service of process of any of the aforesaid courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address provided herein. (c) Nothing contained in this Section 15.3 shall affect the right of any party hereto to serve process in any other manner permitted by law. 15.4. Successors. This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. Except as otherwise provided herein, any Partner who Transfers its Interest as permitted by the terms of this Agreement shall have no further liability or obligation hereunder, except with respect to claims arising prior to such Transfer. 15.5. Pronouns. Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns 42 stated in either the masculine, the feminine or the neuter gender shall include the masculine, feminine and neuter. 15.6. Table of Contents and Captions Not Part of Agreement. The table of contents and captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provisions hereof. 15.7. Severability. If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction or in any respect, then the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired, and the Partners shall use their best efforts to amend or substitute such invalid, illegal or unenforceable provision with enforceable and valid provisions which would produce as nearly as possible the rights and obligations previously intended by the Partners without renegotiation of any material terms and conditions stipulated herein. 15.8. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument. 15.9. Entire Agreement and Amendment. This Agreement and the other written agreements described herein between the parties hereto entered into as of the date hereof, constitute the entire agreement between the Partners relating to the subject matter hereof. In the event of any conflict between this Agreement or such other written agreements, the terms and provisions of this Agreement shall govern and control. This Agreement may only be amended by written instrument executed by each Partner. No amendment or waiver by any Partner shall be enforceable against such Partner unless it is in writing and duly executed by such Partner. 15.10. Further Assurances. Each Partner agrees to execute and deliver any and all additional instruments and documents and do any and all acts and things as may be necessary or expedient to effectuate more fully this Agreement or any provisions hereof or to carry on the business contemplated hereunder. 15.11. No Third Party Rights. The provisions of this Agreement are for the exclusive benefit of the Partners and the Partnership, and no other party (including, without limitation, any creditor of the Partnership) shall have any right or claim against any Partner by reason of those provisions or be entitled to enforce any of those provisions against any Partner. 15.12. Incorporation by Reference. Every Exhibit and Annex attached to this Agreement is incorporated in this Agreement by reference unless this Agreement otherwise expressly provides. 15.13. Limitation on Liability. Except as set forth in Section 14, the Partners shall not be bound by, or be personally liable for, by reason of being a Partner, a judgment, 43 decree or order of a court or in any other manner, for the expenses, liabilities or obligations of the Partnership, and the liability of each Partner shall be limited solely to the amount of its Capital Contributions as provided under Section 4. 15.14. Specific Performance; Remedies. It is specifically understood and agreed that any breach of the provisions of this Agreement by any person subject hereto will result in irreparable injury to the other parties hereto, that the remedy at law alone will be an inadequate remedy for such breach, and that, in addition to any other remedies which they may have, such other parties may enforce their respective rights by actions for, and shall be entitled to, specific performance and injunctive relief, and each Person party hereto agrees to waive, and use its best efforts to cause any Affiliates to waive, any requirement for the securing or posting of any bond in connection with such remedy. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be deemed prohibited or invalid under such applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, and such prohibition or invalidity shall not invalidate the remainder of such provision or the other provisions of this Agreement. 15.15. No Waiver. One or more waivers of the breach of any provision of this Agreement by any Partner shall not be construed as a waiver of a subsequent breach of the same or any other provision, nor shall any delay or omission by a Partner to seek a remedy for any breach of this Agreement or to exercise the rights accruing to a Partner by reason of such breach be deemed a waiver by a Partner of its remedies and rights with respect to such breach. [Signatures on Next Page] 44 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above. AMERICANA FOODS LIMITED PARTNERSHIP By: AF Sub Corp., its general partner By: "signed" ------------------------------------ Name: [ORIGINAL TEXT REDACTED] Title: [ORIGINAL TEXT REDACTED] CBA FOODS LLC By: Integrated Brands, Inc., its managing member By: "David J. Stein" ------------------------------------ Name: David J. Stein Title: Co-CEO and Secretary AMERICANA FOODS CORP. By: "signed" ------------------------------------ Name: [ORIGINAL TEXT REDACTED] Title: [ORIGINAL TEXT REDACTED] AF SUB CORP. By "signed" ------------------------------------- Name: [ORIGINAL TEXT] REDAC[ORIGINAL TEXT REDACTED] EXHIBIT A Initial Capital Accounts and Percentage Interests [ORIGINAL TEXT REDACTED] EX-99 9 ex99-8.txt EXHIBIT 99.8 TRANSITION SERVICES AGREEMENT This TRANSITION SERVICES AGREEMENT dated as of March 27, 2005 (the "Effective Date"), is made by and between KRAFT FOODS GLOBAL, INC., a Delaware corporation ("Seller"), and COOLBRANDS DAIRY, INC., a Delaware corporation ("Purchaser"). RECITALS WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of December 22, 2004 (the "Asset Purchase Agreement") between Seller and Integrated Brands, Inc., a New Jersey corporation ("Integrated"), Seller has agreed to sell to Integrated the Acquired Assets, and Integrated has agreed to purchase the Acquired Assets and to assume the Assumed Liabilities; WHEREAS, Purchaser is a wholly owned subsidiary of Integrated; WHEREAS, Integrated assigned and transferred all of its right, title and interest in, to and under the Asset Purchase Agreement to Purchaser, and Purchaser assumed such assignment, pursuant to that certain assignment and assumption agreement, dated March 25, 2005, by and between Integrated and Purchaser; WHEREAS, in connection with the transactions contemplated by the Asset Purchase Agreement, Purchaser and Seller desire that Seller provide Purchaser with certain transition services as set forth in this Agreement; and WHEREAS, capitalized terms used herein and not otherwise defined in this Agreement have the meanings given to such terms in the Asset Purchase Agreement; NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows: 1. Transition Services. (a) During the term of this Agreement as set forth in Section 10 below (the "Transition Period") and on the terms and subject to the conditions of this Agreement, Seller will provide, or cause one or more of its Affiliates or third-party service providers to provide, to Purchaser (with respect to the Business) each of the services (the "Services") described on Annex A hereto from the Effective Date and for the specific period of time described in Annex A with respect to each of the Services, in the manner and at a level of quality, care and service consistent in all material respects with that provided by Seller or one or more of its Affiliates or third-party service providers to the Business prior to the Effective Date. Purchaser will purchase and pay for such Services as provided for herein. The quantity of each Service to be provided will be that which Purchaser may reasonably require for the operation of the Business in the Ordinary Course of Business consistent in all material respects with the operation of the Business prior to the Closing and such additional quantity of Services as may be reasonably necessary to accommodate growth in the Business during the respective time periods; provided, that Seller will not be required to provide a quantity of the Services (individually or in the aggregate) set forth under the heading "Distribution" in excess of 150% of the quantity of such Services (individually or in the aggregate) required for the conduct of the Business in the Ordinary Course of Business prior to the Closing. A-1 (b) The monthly fees payable by Purchaser to Seller for each of the Services are set forth in Annex A; provided, that if, after the Effective Date, Seller upgrades or otherwise changes any Services provided to its Affiliates, Seller will offer such upgraded or changed Service to Purchaser for a fee at a rate equal to the fee rate Seller charges its Affiliates for such upgraded or changed Service (excluding any allocation of corporate overhead in excess of the actual corporate cross-charges attributable to the Services provided under this Agreement), and Annex A will be amended to reflect such fees. Seller will consider, in good faith, any reasonable request from Purchaser for additional Services to be provided to Purchaser for a fee equal to Seller's costs for such Services. (c) The fees set forth on Annex A are based upon Vendor Cost. For purposes of this Agreement, "Vendor Cost" means the sum of (i) the fully-loaded cost of Seller and its Affiliates in providing the services hereunder, including the total cost of the individual(s) or department(s) of Seller or any of its Affiliates providing the relevant Services, pro-rated on an equitable basis for time spent on providing such Services, and the costs of modifying its systems to permit the provision of Services hereunder and (ii) any other direct out-of-pocket costs incurred by Seller and any of its Affiliates in providing or procuring the Services. As used in the previous sentence, "fully-loaded cost" will not include any profit for Seller and its Affiliates in providing the Services hereunder and will not include any allocation of corporate overhead in excess of the actual corporate cross-charges attributable to the Services provided under this Agreement). Purchaser will also pay any incremental amounts that are required to be paid to any licensors of software or any third-party service providers as a result of the use of such software or third party providers in connection with the provision of any Services to Purchaser hereunder. If (x) Seller uses any software listed on Annex B in connection with its provision of a Service (or Services), and (y) the licensor of such software notifies Seller that its consent (or another license) is required to permit Seller to use such software to provide such Service (or Services), then Seller will notify Purchaser of such requirement, and Purchaser will be responsible for paying all amounts relating to such consent (or license). Purchaser acknowledges that some Services to be provided hereunder require instructions and information from Purchaser, which Purchaser will provide to Seller in sufficient time for Seller or its Affiliates to provide or procure such Services. Purchaser will pay any reasonable additional costs or expenses to the extent resulting from any delay by Purchaser in providing such instructions or information. (d) At the end of the Transition Period, Purchaser either shall assume, if permissible, the leases or licenses related to the personal computers and personal computer software that are located at the Real Property or bear any costs or other fees incurred as a result of the early termination of such leases or licenses. Seller agrees to cooperate reasonably with Purchaser with any permitted assumption of such leases or licenses. 2. Certain Raw Material Contracts. Seller will permit Purchaser to purchase material ingredients and packaging materials (other than milk) pursuant to Seller's master supply agreements in effect at the time of such order and pursuant to the terms and for the periods set forth under the heading "Supply Contracts - Other than Milk" in Annex A. Notwithstanding the foregoing, Seller will have no obligation under this Section 2 with respect to any such order that does not reasonably satisfy the minimum quantities or other requirements of Annex A or the applicable master supply contract. Payments with respect to each order will be made in accordance with Annex A. 3. Limitation on Services. Seller will have no obligation to upgrade, enhance or otherwise modify any computer hardware, software or network environment currently used or located at the Real Property or to provide any support or maintenance services for any computer hardware, software or network environment that has been upgraded, enhanced or otherwise modified from the computer hardware, software or network environments that is currently used or located at the Real Property without -2- Seller's prior written consent. Seller will use reasonable commercial efforts to accommodate any requests from Purchaser to support any modifications necessary for such computer hardware, software or network environment currently used by Purchaser in its existing business operations. 4. Subcontractors. Seller will have the right, directly or through one or more Affiliates, to hire or engage one or more subcontractors or other third parties (each, a "Subcontractor"), to perform all or any of its obligations under this Agreement; provided, that (a) Seller will remain ultimately responsible for ensuring that the obligations with respect to the nature, quality and standards of care set forth in Section 1 are satisfied with respect to any Services provided by any Subcontractor, (b) the use of any Subcontractor will not increase any fees payable by Purchaser hereunder and (c) the use of any Subcontractor will not adversely affect the quality of any Services provided to Purchaser. 5. Title to Equipment; Management and Control. (a) All procedures, methods, systems, strategies, tools, equipment, facilities and other resources used by Seller and any of its Affiliates in connection with the provision of Services hereunder (collectively, the "Equipment") will remain the property of Seller and its Affiliates and, except as otherwise provided herein, will at all times be under the sole direction and control of Seller and its Affiliates. (b) Except as otherwise provided herein, management of, and control over, the provision of the Services (including the determination or designation at any time of the Equipment, employees and other resources of Seller and its Affiliates to be used in connection with the provision of the Services) will reside solely with Seller. Without limiting the generality of the foregoing, all labor matters relating to any employees of Seller and its Affiliates will be within the exclusive control of Seller and its Affiliates, and Purchaser will take no action affecting such matters. Seller will be solely responsible for the payment of all salary and benefits and all income tax, social security taxes, unemployment compensation, tax, workers' compensation tax, other employment taxes or withholdings and premiums and remittances with respect to employees of Seller and its Affiliates used to provide Services. 6. Billing and Payment. (a) Purchaser will promptly pay any bills and invoices that it receives from Seller or its Affiliates for Services provided under this Agreement, subject to receiving, if requested, any appropriate support documentation for such bills and invoices. Such charges may at Seller's option be billed as incurred if the amount involved equals or exceeds [ORIGINAL TEXT REDACTED], or, if such charges do not exceed [ORIGINAL TEXT REDACTED], at the end of each calendar month during the Transition Period. Unless otherwise provided herein or in Annex A, all invoices will be paid by wire transfer in accordance with the instructions provided by Seller (in writing to Purchaser) not later than [ORIGINAL TEXT REDACTED] following receipt by Purchaser of Seller's invoice. Purchaser will not offset any amounts owing to it by Seller or any of Seller's Affiliates against amounts payable by Purchaser hereunder or under the Asset Purchase Agreement (except for any invoiced amounts disputed by Purchaser in good faith). Should Purchaser dispute any portion of any invoice, Purchaser will promptly notify Seller in writing of the nature and basis of the dispute. (b) In connection with the performance of certain Services ("Account Services"), Seller and its Affiliates will be making cash payments and collecting cash receipts and receivables on behalf of and for the benefit of Purchaser. During the Transition Period, Seller will, within five Business Days after the end of each accounting month of Seller, commencing with the end of the first full accounting month after the Effective Date, deliver to Purchaser a statement setting forth the cash -3- payments and collections made in connection with the Account Services during the preceding month. If the net amount of cash payments and collections resulted in Seller collecting more cash than it paid during such month (only with respect to Account Services), Seller will pay to Purchaser the amount of such excess within five Business Days after the cash statement for that month has been delivered to Purchaser. Seller will have no obligation to pay more than it collects with respect to such Account Services. Notwithstanding Section 7, Seller and its Affiliates will pay no interest on any of such cash payments. 7. Interest Payable on Amounts Past Due. All payments required to be made pursuant to this Agreement will bear interest from and including the date [ORIGINAL TEXT REDACTED] after such payment is due to but excluding the date of payment at the Prime Rate in effect from time to time during the period from the date such interest begins to accrue to the date of payment. Such interest will be payable at the same time as the payment to which it relates and will be calculated on the basis of a year of 365 days and the actual number of days elapsed, compounded quarterly. 8. General Intent. Seller will use commercially reasonable efforts to provide the Services and such other transition assistance as the parties may otherwise agree (at a cost to be mutually agreed) during the Transition Period. Purchaser will use commercially reasonable efforts to end its need to use such assistance as soon as reasonably possible and (unless the parties otherwise agree) in all events to end such need with respect to each Service not later than the relevant time period as may be specified in Annex A for the provision of each such Service. 9. Validity of Documents. The parties will be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented in connection with this Agreement unless such document, instrument or other writing appears on its face to be fraudulent, false or forged. 10. Term of Agreement; Termination. (a) The term of this Agreement will commence on the Effective Date and will continue (unless sooner terminated pursuant to the terms hereof) until the expiration of the longest time period as may be provided in Annex A with respect to particular Services. (b) Purchaser may terminate this Agreement at any time, upon written notice to Seller, in the event of a material breach of this Agreement by Seller. Such termination will become effective [ORIGINAL TEXT REDACTED] from the date of receipt of such notice unless the breach is cured or if not able to be cured within said [ORIGINAL TEXT REDACTED] period, significant steps to cure have been taken by Seller within that period. (c) Seller may terminate this Agreement at any time, upon written notice to Purchaser, in the event of a material breach of this Agreement by Purchaser. Such termination will become effective [ORIGINAL TEXT REDACTED] from the date of receipt of such notice unless the breach is cured or if not able to be cured within said [ORIGINAL TEXT REDACTED] period, significant steps to cure have been taken by Purchaser within that period; provided, that if such breach relates to the non-payment by Purchaser of any fees or expenses under Section 6(a), then termination under this Section 10(c) will be effective [ORIGINAL TEXT REDACTED] from the date of receipt of such notice unless all unpaid fees or expenses have been paid in full within such [ORIGINAL TEXT REDACTED] period. (d) Notwithstanding any other provision in this Agreement stating or implying the contrary, whether this Agreement is terminated by Seller or Purchaser, Purchaser will remain liable for -4- the payment of fees and expenses accruing for the period prior to termination even though such fees may not become due until after termination. Further, in the event of termination of this Agreement pursuant to this Section 10 and Sections 4, 12, 13, 15, 16, 18-27 will continue in full force and effect. 11. Partial Termination. Purchaser may terminate any and all of the Services, effective as of the last day of an accounting month of Seller, at any time prior to the expiration of the period specified in Annex A upon at least [ORIGINAL TEXT REDACTED] prior written notice to Seller. As soon as reasonably practicable following receipt of any such notice, Seller will advise Purchaser as to whether termination of such Services will require the termination or partial termination of, or otherwise affect the provision of, any other Services. If such is the case, Purchaser may withdraw its termination notice. Otherwise, such termination will be final. 12. Taxes. All charges and fees to be paid to Seller under this Agreement are exclusive of any applicable taxes required by law to be collected from Purchaser (including withholding, sales, use, excise or services tax, which may be assessed on the provision of the Services hereunder). If a withholding, sales, use, excise or services tax is assessed on the provision of any of the Services under this Agreement, Purchaser will pay directly, reimburse or indemnify Seller for such tax. The parties will cooperate with each other in determining the extent to which any tax is due and owing under the circumstances, and will provide and make available to each other any resale certificate, information regarding out-of-state use of materials, services or sale, and other exemption certificates or information reasonably requested by either party. 13. Confidentiality. Each party will cause each of its Affiliates and each of its and their officers, directors and employees to hold all information relating to the business of the other party disclosed to it by reason of this Agreement (the "Confidential Information") confidential for a period of [ORIGINAL TEXT REDACTED] from the termination or expiration of this Agreement, and will not use or disclose any such Confidential Information to any third party unless legally compelled to disclose such information; provided, however, that to the extent that a person receiving Confidential Information hereunder may become legally compelled to disclose any Confidential Information, such person (a) may only disclose such information if it will first have used commercially reasonable efforts to, and, if practicable, will have afforded the other party the opportunity to obtain an appropriate protective order or other satisfactory assurance of confidential treatment for the information required to be so disclosed, and (b) if such protective order or other remedy is not obtained, or the other party waives such person's compliance with the provisions of this Section 13, they will only furnish that portion of the Confidential Information which is legally required to be so disclosed. As used herein, "Confidential Information" does not include any information (x) which is or becomes generally available to the public other than as a result of a disclosure by the party receiving the Confidential Information in violation of this Agreement, (y) that was available to the receiving party on a non-confidential basis prior to its disclosure by the disclosing party or (z) becomes available to the receiving party from a person other than the disclosing party or its Affiliates who is not, to the best of the receiving party's knowledge, subject to any legally binding obligation to keep such information confidential. 14. Third-Party Non-Disclosure Agreements. To the extent that any third-party proprietor of information or software to be disclosed or made available to Purchaser in connection with performance of the Services hereunder requires a specific form of non-disclosure agreement as a condition of its consent to use of the same for the benefit of Purchaser or to permit Purchaser access to such information or software, Purchaser will, as a condition to such disclosure, execute (and will cause Purchaser's employees to execute, if required) any such form. 15. Limitation of Liability, Indemnity. (a) Neither party nor any of its respective Affiliates will be liable to the other party or any third party for any special, punitive, consequential, -5- incidental or exemplary damages (including lost or anticipated revenues or profits relating to the same and attorneys' fees) arising from any claim relating to this Agreement or any of the Services to be provided hereunder or the performance of or failure to perform such party's obligations under this Agreement, whether such claim is based on warranty, contract, tort (including negligence or strict liability) or otherwise, and regardless of whether such damages are foreseeable or an authorized representative of such party is advised of the possibility or likelihood of such damages. In addition, neither party nor any of its respective Affiliates will be liable to the other party or any third party for any direct damages arising from any claim relating to this Agreement or any of the Services to be provided hereunder or the performance of or failure to perform such party's obligations under this Agreement, except to the extent that such direct damages are caused by the gross negligence or willful misconduct of such party or its respective Affiliates. Seller specifically disclaims all warranties of any kind, express or implied, arising out of or related to this Agreement except as expressly set forth in Section 1(a) hereof. (b) Purchaser will indemnify Seller and each of its Affiliates against all Damages attributable to any third-party claims arising from or relating to the provision of Services under this Agreement to the extent that such Damages arise from the gross negligence or willful misconduct of Purchaser, any of its Affiliates or any of its or their respective employees, officers or directors. (c) Seller will indemnify Purchaser and each of its Affiliates against all Damages attributable to any third-party claims arising from or relating to the provision of Services under this Agreement to the extent that such Damages arise from the gross negligence or willful misconduct of Seller, any of its Affiliates or any of its or their respective employees, officers or directors. (d) All claims for indemnification pursuant to this Section 15 will be made in accordance with the procedures set forth in Section 9.4 of the Asset Purchase Agreement. 16. Relationship of Parties. Except as specifically provided herein (a) neither party will act or represent or hold itself out as having authority to act as an agent or partner of the other party, or (b) in any way bind or commit the other party to any obligations or agreement. Nothing contained in this Agreement will be construed as creating a partnership, joint venture, agency, trust, fiduciary relationship or other association of any kind, each party being individually responsible only for its obligations as set forth in this Agreement. The parties' respective rights and obligations hereunder will be limited to the contractual rights and obligations expressly set forth herein on the terms and conditions set forth herein. 17. Force Majeure. If Seller is prevented from or delayed in complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers, shortages of fuel or power, shortages of supply of raw materials or components supplied by unaffiliated third party suppliers that are beyond the reasonable control of Seller, any law, order, proclamation, regulation, ordinance, demand, seizure or requirement of any governmental authority, riot, civil commotion, war, rebellion, acts of terrorism, nuclear accident or other similar causes beyond the reasonable control of Seller or other acts of God, or acts, omissions, or delays in acting by any governmental or military authority or Purchaser, then upon written notice to Purchaser, the affected provisions and/or other requirements of this Agreement will be suspended during the period of such disability and Seller will have no liability to Purchaser or any other party in connection therewith; provided, however, that in the event of any shortages of raw materials or components, Seller will allocate available supply in good faith among its own requirements, Purchaser's requirements and the requirements of any third party to whom it has an existing contractual obligation so as not to favor any one party over another. Seller and Purchaser will make commercially reasonable efforts to remove such disability within [ORIGINAL TEXT REDACTED] of giving notice of such disability. -6- 18. Notices. Any notice or other communications required or permitted under this Agreement will be sufficiently given if delivered in person, transmitted via facsimile (but only if followed by transmittal by recognized overnight courier or hand delivery), or sent by registered or certified mail, postage prepaid, or recognized overnight courier service addressed as follows: If to Purchaser: Coolbrands Dairy, Inc. 4175 Veteran's Memorial Highway 3rd Floor Ronkonkoma, New York 11779 Attn: David J. Stein Fax: (631) 737-9792 with a copy to: Goodwin Procter LLP 599 Lexington Avenue New York, NY 10022 Attn: Lori S. Smith Fax: (212) 355-3333 (a) If to Seller: Kraft Foods Global, Inc. 3 Lakes Drive Northfield, IL 60093-2753 Attn: General Counsel Fax: (847) 646-2950 with a copy to: Schiff Hardin LLP 6600 Sears Tower Chicago, Illinois 60606 Attn: Paul A. Rahe Fax: (312) 258-5600 or such other addresses or numbers and/or addressee as are furnished in writing by either party, and such notice or communication will be deemed to have been given (a) as of the date so personally delivered or transmitted via facsimile, (b) on the third Business Day after the mailing thereof or (c) on the first Business Day after delivery by recognized overnight courier service. 19. Governing Law; Consent to Jurisdiction. (a) The construction of this Agreement, and all matters relating hereto, will be governed by the laws of the State of Illinois applicable to contracts made and to be performed entirely within the State of Illinois without giving effect to any conflict of law provisions. (b) Any legal action or proceeding with respect to this Agreement may be brought in the federal and state courts located in Cook County, Illinois, and, by execution and delivery of this Agreement, each party irrevocably submits itself in respect of its property, generally and unconditionally, to the exclusive jurisdiction of those courts in any such legal action or proceeding. Each of the parties irrevocably waives any objection which it may now or hereafter have to venue and jurisdiction in such courts. Each party consents to process being served in any such action or proceeding by the mailing of a copy thereof to the address set forth in Section 19 below its name and agrees that such service upon receipt will constitute good and sufficient service of process or notice thereof. Nothing in this paragraph will affect or eliminate any right to serve process in any other manner permitted by law. -7- 20. Waiver of Jury Trial. THE PARTIES IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION OR OTHER PROCEEDING BROUGHT BY EITHER PARTY AGAINST THE OTHER PARTY OR PARTIES WITH RESPECT TO ANY MATTER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH OR RELATED TO, THIS AGREEMENT OR ANY PORTION THEREOF, WHETHER BASED UPON CONTRACTUAL, STATUTORY, TORTIOUS OR OTHER THEORIES OF LIABILITY. EACH PARTY REPRESENTS THAT IT HAS CONSULTED WITH COUNSEL REGARDING THE MEANING AND EFFECT OF THE FOREGOING WAIVER OF ITS RIGHT TO A JURY TRIAL. 21. Entire Agreement; Amendment. This Agreement, including Annex A, and the Asset Purchase Agreement contain the entire understanding of the parties with respect to the subject matter contained herein and therein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. This Agreement may not be amended except by a written instrument executed by the parties. 22. Parties in Interest. This Agreement may not be transferred, assigned, pledged or hypothecated by either party (whether by operation of law or otherwise) without the prior written consent of the other party. This Agreement will be binding upon and will inure to the benefit of the parties and their respective successors and permitted assigns. 23. Interpretation. The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include," "includes," "including" or similar expressions are used in this Agreement, they will be understood be followed by the words "without limitation". The parties have participated jointly in the negotiation and drafting of this Agreement. In the event of an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 24. Third Party Beneficiaries. Each party intends that this Agreement will not benefit or create any right or cause of action in or on behalf of any Person other than the parties to this Agreement; provided, however, that notwithstanding this Section 24, the provisions of Sections 15(b) and 15(c) will inure to the benefit of the Persons identified therein, and may be enforced by such Persons and their respective heirs and personal representatives. 25. Annex A. Annex A is incorporated in, and made a part of, this Agreement. 26. Waiver. Except as otherwise provided in this Agreement, any failure of either of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition will not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. 27. Severability. If any provision of this Agreement or the application of any such provision to any Person or circumstance is held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or the application of such provision to any other Persons or circumstances. -8- 28. Counterparts; Delivery by Facsimile. This Agreement may be executed in two or more counterparts, all of which taken together will constitute one instrument, and will become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Executed signature pages delivered by facsimile will be treated in all respects as original signatures. * * * -9- IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly executed, all as of the date first above written. KRAFT FOODS GLOBAL, INC. By: "William Eicher" ------------------------------------ Name: William Eicher Title: Vice-President, Mergers and Acquisitions COOLBRANDS DAIRY, INC. By: "David Stein" ------------------------------------ Name: David Stein Title: President -10- Annex A to Transition Services Agreement [ORIGINAL TEXT REDACTED] B-1 Annex B to Transition Services Agreement [ORIGINAL TEXT REDACTED] -2- EX-99 10 ex99-9.txt EXHIBIT 99.9 EXECUTION COPY TRANSITION SERVICES AGREEMENT BETWEEN DREYER'S GRAND ICE CREAM, INC. AND INTEGRATED BRANDS, INC. DATED AS OF JULY 5, 2003 This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of July 5, 2003, is by and between Dreyer's Grand Ice Cream, Inc., a Delaware corporation ("Dreyer's"), and Integrated Brands, Inc., a New Jersey corporation ("Integrated Brands"). WHEREAS, Dreyer's, New December, Inc., a Delaware corporation, Nestle Ice Cream Company, LLC, a Delaware limited liability company ("NICC"), and Integrated Brands have entered into an Amended and Restated Asset Purchase and Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale Agreement"), pursuant to which, among other things, Integrated Brands shall purchase from Dreyer's and NICC, and Dreyer's and NICC shall sell, or cause to be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as defined in the Asset Sale Agreement) and the Distribution Assets (as defined in the Asset Sale Agreement); and WHEREAS, in connection with the Asset Sale Agreement, Integrated Brands desires that Dreyer's provide, or cause to be provided, to Integrated Brands, and Dreyer's is willing to provide, or cause to be provided, to Integrated Brands, certain transition services following the closing of the transactions contemplated by the Asset Sale Agreement, on the terms and conditions set forth herein; and WHEREAS, as an essential part of the transactions contemplated by the Asset Sale Agreement, Dreyer's has agreed to provide, or cause to be provided, such transition services to Integrated Brands to facilitate Integrated Brands' acquisition of the Ice Cream Assets and the Distribution Assets; and NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. Agreement to Provide Services. 1.1 Agreement. Upon the terms and subject to the conditions contained herein and in Exhibit A attached hereto, Dreyer's hereby agrees to provide, or cause its Affiliates (as defined in the Asset Sale Agreement) to provide, to Integrated Brands the Transition Services (as defined herein), and Integrated Brands agrees to pay Dreyer's the Service Costs (as defined herein) for such Transition Services. 1.2 Transition Services. In this Agreement, the term "Transition Services" shall mean and refer to the services relating to the Ice Cream Assets and the Distribution Assets and as more fully described on Exhibit A and Exhibit B (as such Exhibits may be amended or modified from time to time as provided herein). If Integrated Brands desires Dreyer's to provide a service not described on Exhibit A or Exhibit B, Integrated Brands shall provide Dreyer's written notice thereof at least ten (10) days prior to the date that Integrated Brands desires such service to begin, and Dreyer's and Integrated Brands shall cooperate and use reasonable best efforts to reach a mutual written agreement with respect to the provision of such service and the terms and conditions related thereto within such 10-day period. -1- 1.3 Transition Period. Dreyer's shall provide the Transition Services to Integrated Brands during the periods (each, a "Transition Period") that shall commence on the Closing Date (as defined in the Asset Sale Agreement) and shall, with respect to each Transition Service, continue for the period of time shown on Exhibit A or Exhibit B or otherwise agreed to in writing by the parties for such Transition Service, unless earlier terminated in accordance with Section 1.4. In the event that Integrated Brands reasonably requires any particular Transition Service beyond the Transition Period specified in Exhibit A or Exhibit B, Dreyer's shall, if requested by Integrated Brands, continue to provide such Transition Service for a reasonable period of time after the applicable Transition Period specified therein so long as Integrated Brands is using its reasonable best efforts to end its need for such Transition Service as promptly as practicable after expiration of such Transition Period. 1.4 Phase-Out or Termination of Transition Services. (a) Integrated Brands shall have the unconditional right, in its sole and absolute discretion, to direct that any or all of the Transition Services be terminated effective on a date established by Integrated Brands ("Early Termination") that is prior to the termination date for such Transition Services set forth on Exhibit A or Exhibit B. Any such Early Termination shall be final, and the amounts payable by Integrated Brands hereunder with respect to such terminated Transition Services will be appropriately prorated on a daily basis for any partial month based on the actual number of days in such month. Integrated Brands may request that the level of any specific item of the Transition Services be reduced or phased out, subject to mutual written agreement of the parties. (b) This Agreement may be terminated as follows: (i) by either party hereto immediately in the event the other party has been adjudicated bankrupt, has failed to vacate an involuntary bankruptcy or reorganization petition within thirty (30) days of the date of such filing, files such a petition on a voluntary basis, fails to vacate the appointment of a receiver or trustee for the other party or for a substantial portion of its assets, makes an assignment for the benefit of such other party's creditors or ceases to do business as a going concern, or (ii) by Integrated Brands upon written notice to Dreyer's in the event that Dreyer's breaches any material term of this Agreement if Dreyer's fails to remedy such breach within the cure period set forth in Section 7.1 hereof. 2. Payment for Transition Services. 2.1 Service Costs. In consideration for Dreyer's provision of the Transition Services, Integrated Brands will reimburse Dreyer's for Dreyer's "Service Costs", which shall be determined in accordance with Exhibit A and shall consist of the following, to the extent identified on Exhibit A: (a) Dreyer's cost for [ORIGINAL TEXT REDACTED] providing the Transition Services at a rate equal to the [ORIGINAL TEXT REDACTED] in providing such services at [ORIGINAL TEXT REDACTED] rate based on each such [ORIGINAL TEXT REDACTED], and (b) Dreyer's [ORIGINAL TEXT REDACTED] incurred by Dreyer's in connection with providing, or in order to provide or cause to be provided to Integrated Brands, Transition Services (the "Reimbursable Expenses"); provided that in no event shall Service Costs include any cost, expense, fee, charge or other amount (i) with respect to any item, service, property or other matter for which Integrated Brands is otherwise obligated to pay under the -2- Asset Sale Agreement or the Collateral Agreements (other than this Agreement, as defined in the Asset Sale Agreement), or (ii) relating to any obligation, covenant or agreement of Dreyer's or any of its Affiliates pursuant to the Asset Sale Agreement or the Collateral Agreements (other than this Agreement) for which Dreyer's or its Affiliates is obligated to pay under such agreement. Dreyer's shall use reasonable best efforts to provide Integrated Brands at least thirty (30) days' written notice in the event that any Reimbursable Expenses shall increase materially above the amounts paid by Dreyer's in connection with the Ice Cream Assets immediately prior to the Closing (as defined in the Asset Sale Agreement). 2.2 Reimbursement of Service Costs. Dreyer's shall invoice Integrated Brands for Service Costs promptly after the end of each calendar quarter during the Transition Period. Such invoices shall set forth in reasonable detail the Transition Services provided during such quarter and the Service Costs payable by Integrated Brands therefor. All invoices shall be paid not later than thirty (30) calendar days following receipt by Integrated Brands of Dreyer's invoice in accordance with the written instructions provided by Dreyer's to Integrated Brands; provided that no such payment by Integrated Brands shall be deemed to be a waiver by Integrated Brands of its rights under Section 2.3. This Section 2.2 shall survive any termination of this Agreement with respect to Transition Services performed pursuant to this Agreement for which Dreyer's has not yet been reimbursed by Integrated Brands. 2.3 Audits; Objections. Integrated Brands shall have the right, upon reasonable written notice and at Integrated Brands' expense, to review the applicable books and records of Dreyer's and its Affiliates with respect to Dreyer's obligations under this Agreement and to confer with employees of Dreyer's and such Affiliates to review the accuracy of any of the invoices provided to Integrated Brands hereunder (during business hours and without unreasonably disrupting Dreyer's or such Affiliates' normal operations). In the event that Integrated Brands disputes any such invoice or the amount of any such remittances, Integrated Brands shall notify Dreyer's in writing of its objections, and Integrated Brands and Dreyer's shall negotiate in good faith to attempt to resolve such dispute. 3. Service Standards; Disclaimer of Warranties; Scope of Services. (a) As a general principle, Dreyer's shall, and shall cause its Affiliates to, perform the Transition Services with substantially the same degree of care, skill, diligence and compliance with applicable law and in substantially the same manner as corresponding services were provided to or on behalf of Dreyer's with respect to the Ice Cream Assets immediately prior to the Closing. Subject to the foregoing, Dreyer's and its Affiliates shall not be in breach of this Agreement or have any liability of any nature whatsoever to Integrated Brands in connection with the performance of this Agreement, and Integrated Brands shall be solely responsible for all losses, damages, costs and expenses of whatever nature incurred by Integrated Brands in connection with the performance of this Agreement by Dreyer's and its Affiliates, except to the extent that such losses, damages, costs and expenses are attributable to negligence or willful misconduct on the part of Dreyer's, its Affiliates or any of their respective employees, directors, contractors or other representatives. (b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THERE ARE NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR -3- IMPLIED, MADE OR GIVEN BY EITHER PARTY HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY TRANSITION SERVICES PROVIDED HEREUNDER. (c) The Transition Services shall be provided only in connection with the Ice Cream Assets and the Distribution Assets and not to any other business of Integrated Brands or its Affiliates. 4. Force Majeure. Neither party shall be liable for any failure of performance attributable to acts, events or causes (including, but not limited to, war, terrorism, riot, rebellion, civil disturbances, power failures, failure of telephone lines and equipment, flood, storm, fire and earthquake or other acts, conditions or events of nature, or any law, order, proclamation, regulation, ordinance, demand or requirement of any Governmental Entity (as defined in the Asset Sale Agreement), or any strike, lockout, work stoppage or other labor action) beyond its control that prevent, in whole or in part, performance by such party hereunder. The party so unable to perform shall promptly notify the other party of its inability to perform. The affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and Dreyer's shall have no liability to Integrated Brands or any other party in connection therewith other than by reason of breach or nonfulfillment of its covenants in this Section 4. Dreyer's shall make all reasonable best efforts to remove such disability as soon as and to the extent reasonably possible and to assist Integrated Brands in finding third parties to provide affected Transition Services. 5. Access to Coordinator. At Integrated Brands' request, Dreyer's shall make reasonable best efforts to provide Integrated Brands, shortly after such request, with access to the employees of Dreyer's with responsibility for coordinating the Transition Services hereunder. 6. Indemnification. Dreyer's shall indemnify, defend and hold harmless Integrated Brands, CoolBrands International. its Affiliates, their officers, directors, employees, agents and representatives from and against any and all losses, liabilities, claims, damages, actions, fines, penalties, expenses or costs (including court costs and reasonable attorneys' fees) ("Losses") arising out of (i) the negligence or willful misconduct of Dreyer's, its Affiliates or their respective employees, directors, contractors or other representatives in providing the Transition Services, or (ii) a breach of the terms or conditions of this Agreement (other than a breach in respect of providing the Transition Services). Integrated Brands shall indemnify, defend and hold harmless Dreyer's, Nestle USA, Inc., and their Affiliates, their officers, directors, employees, agents and representatives from and against any and all Losses arising out of (x) the negligence or willful misconduct of Integrated Brands, its Affiliates or their respective employees, directors, contractors or other representatives in connection with the Transition Services or (y) any breach by Integrated Brands of any term or condition of this Agreement. Notwithstanding any other provision of this Agreement, neither party shall be liable for lost profit, lost revenue or any other form of indirect, incidental, special, consequential or punitive damages, even if that party has been informed of the possibility of such damages. The indemnities under this Section 6 shall be the sole and exclusive remedy available to each party hereunder, except in case of willful misconduct by a party or its Affiliates. -4- 7. General Provisions. 7.1 Notice of Breach. In the event of a material breach of this Agreement by a party, the party claiming the breach shall give notice of such breach (in accordance with Section 7.2 hereof) to the other party, which party shall have forty-five (45) calendar days to cure such breach. In the event that the party claiming the breach is Integrated Brands, Integrated Brands shall also give notice of such breach to Nestle Holdings, Inc., a Delaware corporation, in accordance with Section 7.2 hereof. In the event of such cure within such 45-day period, such notice of breach shall be deemed rescinded. Either party's failure to send a notice of breach or to pursue legal remedies available to it shall not constitute or be construed as a waiver or acquiescence, and each party expressly reserves the right to subsequently pursue such remedies for the same or any other breach, either of the same or different character. 7.2 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by postage prepaid, registered, certified or express mail or by reputable overnight courier service and shall be deemed given when delivered by hand, three days after mailing (one (1) Business Day (as defined in the Asset Sale Agreement) in the case of guaranteed overnight express mail or guaranteed overnight courier service), as follows (or at such other address for a party as shall be specified by like notice): (i) If to Dreyer's or New Dreyer's: Dreyer's Grand Ice Cream, Inc. 5929 College Avenue Oakland, California 94618 Attn: General Counsel (ii) If to Integrated Brands: Integrated Brands, Inc. 4175 Veterans Highway Ronkonkoma, New York 11779 Attn: David J. Stein, Co-Chief Executive Officer with a copy to: Goodwin Procter LLP 599 Lexington Avenue New York, New York 10022 Attn: Daniel Kaplan, Esq. -5- (iii) If to Nestle Holdings, Inc.: Nestle Holdings, Inc. c/o Nestle USA, Inc. 800 North Brand Boulevard. Glendale, California 91203 Attn: General Counsel with a copy to: Howrey, Simon, Arnold & White LLP 1299 Pennsylvania Avenue, N.W. Washington, DC 20004 Attn: Roxann E. Henry, Esq. In the event that Integrated Brands gives notice regarding any breach or violation of this Agreement by Dreyer's, Integrated Brands should also concurrently provide a copy of such notice to Nestle Holdings, Inc. 7.3 Assignment; Successors and Assigns. Except as set forth below, this Agreement and the rights and obligations hereunder shall not be assigned or transferred in whole or in part by Integrated Brands or Dreyer's without the prior written consent of the other party hereto. Integrated Brands may assign or delegate its rights, obligations or liabilities under this Agreement in whole or in part to one or more Affiliates of Integrated Brands or to the lender or lenders providing to it the financing to consummate the transactions contemplated by the Asset Sale Agreement, in each case without Dreyer's consent (provided that a pledge of Integrated Brands' rights, obligations or liabilities under this Agreement to such lender or lenders shall not constitute an assignment hereunder until such time as any such lender exercises its rights under the pledge agreement or other applicable agreement or document); provided, however, that in any such event, Integrated Brands shall remain fully liable for the fulfillment of all its obligations hereunder. Dreyer's may not assign but may delegate its rights, obligations or liabilities under this Agreement in whole or in part to one or more Affiliates of Dreyer's; provided that, in any such event, Dreyer's shall remain fully liable for the fulfillment of all of its obligations hereunder. Any attempted assignment or delegation in contravention hereof shall be null and void. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. 7.4 No Third-Party Beneficiaries. Except for persons entitled to indemnification under Section 6 hereof, this Agreement is for the sole benefit of the parties hereto, and nothing herein express or implied shall give or be construed to give to any person or entity, other than the parties hereto, any legal or equitable rights hereunder. 7.5 Remedies. Nothing contained herein shall be deemed to be a limitation on any remedies that may be available to any party under the Asset Sale Agreement or any other Collateral Agreement. -6- 7.6 Interpretation; Definitions. The headings contained in this Agreement or in any Schedule hereto are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting or causing any instrument to be drafted. When a reference is made in this Agreement to Articles, Sections or Exhibits, such reference shall be to an Article or Section of or Exhibit to this Agreement unless otherwise indicated. All references in this Agreement to Dreyer's shall include Dreyer's Affiliates, as and to the extent applicable. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The phrases "the date of this Agreement," "the date hereof" and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the first paragraph of this Agreement. The words "hereof," "hereby," "herein," "hereunder" and similar terms in this Agreement shall refer to this Agreement as a whole (including the Exhibits) and not to any particular Section in which such words appear. All references herein to dollar amounts shall be deemed to be references to U.S. Dollars. 7.7 Amendments. No amendment to this Agreement shall be effective unless it shall be in writing and signed by each party hereto. 7.8 Counterparts. This Agreement and any amendments hereto may be executed by facsimile and in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. 7.9 Severability. If any provision of this Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof. 7.10 Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, without regard to the choice-of-law principles of such state. Each party hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under, or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. 7.11 Actions and Proceedings. Dreyer's and its Affiliates and Integrated Brands hereby irrevocably consent to the exclusive jurisdiction and venue of the courts of the State of New York and the United States District Court for the Southern District of New York in connection with any action or proceeding arising out of this Agreement or any related transaction. Integrated Brands irrevocably appoints Integrated Brands' Co-Chief Executive Officer as its authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waives any objections to personal jurisdiction with respect thereto. Dreyer's and its Affiliates hereby appoint Dreyer's General Counsel as their -7- authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waive any objections to personal jurisdiction with respect thereto. 7.12 Waiver. Except as otherwise provided in this Agreement, any failure of either of the parties hereto to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Any consent given by any party pursuant to this Agreement shall be valid only if contained in a written consent signed by such party. 7.13 Mutual Confidentiality Covenants. 7.13.1 Obligation. Both parties shall keep confidential and shall not cause or permit the disclosure to any third party of any confidential information disclosed by either party pursuant to this Agreement. Dreyer's shall disclose Integrated Brands' confidential information only to those Persons who require such information for the purpose of performing the Collateral Agreements and shall use such information solely for the purpose of performing its obligations under the Collateral Agreements. Confidential information may include, but is not limited to, formulas, production processes, research, marketing and sales information. Said confidentiality requirement shall not apply to any information which (i) has entered into the public domain through no wrongful act or breach of any obligation of confidentiality on the receiving party's or any third party's part; (ii) was in the lawful knowledge and possession of, or was independently developed by, the receiving party prior to the time it was disclosed to, or learned by, the receiving party as evidenced by written records kept in the ordinary course of business by the receiving party, except this Section 7.13.1 will not apply to Dreyer's with respect to information relating to the Ice Cream Assets and the Distribution Assets all of which shall remain subject to the restrictions notwithstanding Sellers' Knowledge (as defined in the Asset Sale Agreement); (iii) was rightfully received from a third party not in violation of any contractual, legal or fiduciary obligation of such third party; or (iv) was approved for release by written authorization by the party having rights in such information. 7.13.2 Compelled Disclosure. In the event that a party is required by law or court order or stock exchange to disclose any confidential information of the other party, that party shall (i) notify the other party in writing as soon as possible, but in no event less than ten (10) calendar days prior to any such disclosure; (ii) cooperate with the other party to preserve the confidentiality of such confidential information consistent with applicable law; and (iii) use its best efforts to limit any such disclosure to the minimum disclosure necessary to comply with such law or court order. 7.14 Authority. Neither of the parties hereto shall act or represent or hold itself out as having authority to act as an agent or partner of the other party, or in any way bind or commit the other party to any obligations. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible only for its obligations as set forth in this Agreement. -8- 7.15 Term of Agreement. Unless terminated earlier pursuant to Section 1.4 hereof, this Agreement will terminate and be of no further force or effect immediately as of the time and date that the last remaining Transition Period (as such Transition Period may have been extended pursuant hereto) shall have either expired or been terminated; provided that upon termination or expiration of this Agreement, (i) neither party hereto shall be relieved of any liability for any breach or nonfulfillment of any provision of this Agreement and (ii) Section 6 and Sections 7.2 and 7.13 will survive any termination or expiration of this Agreement. The amounts that Integrated Brands is obligated to pay on a quarterly basis pursuant to Section 2 will be prorated on a daily basis for any partial month of the term of this Agreement. 7.16 Exhibits. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. 7.17 Entire Agreement. This Agreement (including the Exhibits hereto), the Asset Sale Agreement and the other Collateral Agreements contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter. -9- IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above. DREYER'S GRAND ICE CREAM, INC. By: /s/ T. Gary Rogers -------------------------------------- T. Gary Rogers Chairman of the Board of Directors and Chief Executive Officer INTEGRATED BRANDS, INC. By: /s/ David J. Stein -------------------------------------- David J. Stein Co-Chief Executive Officer [Signature Page to Transition Services Agreement] Exhibit A Transition Services ORIGINAL TEXT REDACTED Exhibit A to Transition Services Agreement Exhibit B Computer and Accounting Services ORIGINAL TEXT REDACTED Exhibit B to Transition Services Agreement -1- EX-99 11 ex99-10.txt EXHIBIT 99.10 EXECUTION COPY GROCERY CARRIER AGREEMENT BETWEEN INTEGRATED BRANDS, INC. AND DREYER'S GRAND ICE CREAM, INC. DATED AS JULY 5, 2003 This GROCERY CARRIER AGREEMENT (this "Agreement"), dated as of July 5, 2003, 2003, is by and between Integrated Brands, Inc., a New Jersey corporation ("Integrated Brands"), and Dreyer's Grand Ice Cream, Inc., a Delaware corporation ("Dreyer's"). WHEREAS, Dreyer's, Nestle Ice Cream Company, LLC, a Delaware limited liability company ("NICC"), New December, Inc., a Delaware corporation, and Integrated Brands have entered into an Amended and Restated Asset Purchase and Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale Agreement"), pursuant to which, among other things, Integrated Brands shall purchase and Dreyer's and NICC shall sell, or cause to be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as defined in the Asset Sale Agreement) and the Distribution Assets (as defined in the Asset Sale Agreement); and WHEREAS, in connection with the Asset Sale Agreement, Dreyer's desires that Integrated Brands provide to Dreyer's, and Integrated Brands is willing to provide, or cause to be provided, to Dreyer's, certain distribution services following the closing of the transactions contemplated by the Asset Sale Agreement, on the terms and conditions set forth herein; and WHEREAS, as an essential part of the transactions contemplated by the Asset Sale Agreement, Integrated Brands has agreed to provide such distribution services to Dreyer's to facilitate Integrated Brands' acquisition of the Ice Cream Assets and the Distribution Assets; and NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Definitions. For all purposes of this Agreement, except as expressly provided or unless the context otherwise requires, the following definitions shall apply: "Business" shall mean Integrated Brands' frozen dessert distribution business in the Territories. "Customer" shall mean any Person that purchases the Products in the Grocery Channel from Dreyer's and to whom Dreyer's from time to time hereunder directs Integrated Brands to deliver the Products. "Grocery Channel" shall mean [ORIGINAL TEXT REDACTED]. "Maximum Annual Volume" with respect to any Territory shall mean the difference between (X) the sum of (A) the designated dollar volume (calculated as the number of units multiplied by the applicable Delivery Charges) that is set forth on Exhibit B for that Territory during that Year and (B) any remaining Supplemental Annual Volume that has not been applied to any other Territory under this Agreement or the Non-Grocery Distribution Agreement during that Year and (Y) the number of units delivered under the Non-Grocery Distribution Agreement in such Territory multiplied by the applicable Service and Delivery Charges (as defined in the Non-Grocery Distribution Agreement). -1- "Non-Grocery Distribution Agreement" shall mean the Non-Grocery Distribution Agreement, dated the date hereof, by and between Dreyer's and Integrated Brands. "Person" shall mean any natural person or legal entity. "Products" shall be set forth on Exhibit A. "Supplemental Annual Volume" for each Year shall mean the maximum dollar volume (calculated as the number of units multiplied by the applicable Delivery Charges) that is set forth on Exhibit B as "Supplemental Annual Volume" for that Year, and which is a supplemental amount that can be included in the calculation of the Maximum Annual Volume of any Territory or Territories (under this Agreement or the Non-Grocery Distribution Agreement) during that Year (subject to available demand for the Products in that Territory). "Territories" shall mean the territories set forth on Exhibit B [ORIGINAL TEXT REDACTED], including, without limitation, the counties in such Territories that are set forth on Exhibit C, and "Territory" shall have a correlative meaning. "Year" shall mean any year, beginning as of the Closing Date, during the Term. 2. Scope of Agreement. Dreyer's hereby grants to Integrated Brands a non-transferable right pursuant to the terms of this Agreement, to deliver the Products to Customers in the Territories on a non-exclusive basis. 3. Title to the Products and Risk of Loss. (a) Title to the Products shall not transfer to Integrated Brands at any point. Dreyer's is solely responsible for arranging for the terms of the transfer of title from itself to its Customers. (b) Integrated Brands assumes all risk of loss for the Products from receipt by Integrated Brands until delivered to a Customer. 4. Term. The "Initial Term" of this Agreement shall be three (3) years, beginning as of the Closing Date (as defined in the Asset Sale Agreement). After the expiration of the Initial Term, Integrated Brands shall have the option to extend this Agreement for up to two (2) years (the "Extended Term") (the Initial Term and the Extended Term, shall be referred to as the "Term"). 5. Delivery of the Products to Customers. (a) Integrated Brands will deliver the Products to Customers as directed by Dreyer's. (b) On the Closing Date, and on each anniversary date thereafter during the Term, Dreyer's shall provide Integrated Brands with a report containing annualized volumes of each of the Products by Customer for all Customers within the Territories (the "Volume Report"). Integrated Brands shall have the right to elect to deliver Products from time to time in -2- accordance with this Section 5. If Integrated Brands elects to deliver any Products hereunder, it shall provide to Dreyer's a list of (i) the Customers (or any locations at which any such Customers receive deliveries of Products to which Integrated Brands elects to deliver), (ii) the applicable Products (or portion of Products (e.g., select flavors, container sizes or novelty types within a class of Products as Integrated Brands may select), and (iii) the volume (or portion of volume) of Products (or portion of Products) which Integrated Brands elects to deliver, in each case for each such Customer (or select Customer locations) to which Integrated Brands shall make deliveries; provided, however, that such election must be in writing and provided to Dreyer's at least 14 days prior to the commencement of Integrated Brands' deliveries of Product hereunder. During the Term, Integrated Brands shall deliver such Products to such Customers in the Territories in accordance with its election; provided, however, that during each Year, the maximum volume of Products that may be delivered by Integrated Brands in each Territory is that number of units which, when multiplied by the applicable Service and Delivery Charges, shall result in the Maximum Annual Volume for that Territory. Integrated Brands shall have the right to modify, at any time upon 14 days' written notice to Dreyer's, the selected Customers (or Customer locations) to which the Products are delivered by Integrated Brands, the selected Products (or portions of Products) for such Customers (or locations), and the volume (or portion of volume) of Products for such Customers which are delivered by Integrated Brands. Dreyer's shall have the obligation to provide such volumes of Customer orders (or portions thereof) for delivery of the Products to Integrated Brands at a location designated by Integrated Brands as Integrated Brands shall request in writing on a weekly basis with seven (7) days' written notice; provided that, to facilitate day-to-day route planning, daily ordering information from Dreyer's "pre-seller" Customers shall be sent to Integrated Brands facilities electronically or via facsimile. 6. Fees and Payments. In consideration for the services provided by Integrated Brands to Dreyer's under this Agreement during the Initial Term, Dreyer's will pay to Integrated Brands a per unit charge as set forth in Exhibit A (the "Delivery Charges") within thirty (30) days of receipt of an invoice. During the Extended Term, the Delivery Charges for the Products shall be the per unit charge in effect at the expiration of the Initial Term, plus an annual increase equal to the PPI for the preceding Year. 7. Performance Criteria. Integrated Brands agrees to treat all of the Products in substantially the same manner as Integrated Brands treats its own products with respect to warehousing, storage and delivery. Without limiting the generality of the foregoing and in addition to the duties and obligations set forth in Sections 8 and 9, Integrated Brands agrees that: (a) all of the Products must be held in storage which is maintained at a constant temperature of -15[d]F or colder at all times; (b) all delivery vehicles must operate at temperatures of -5[d]F or colder at all times; and (c) the Products stored in a warehouse, on trucks, in back-up storage and in cabinets is rotated regularly on a first-in, first-out basis. -3- 8. Integrated Brands Duties. Integrated Brands covenants and agrees that during the Term it will use commercially reasonable efforts, as such efforts relate to the delivery of the Products, to: (a) promptly perform all services necessary to execute a Product recall or recovery of Product when requested by Dreyer's and at Dreyer's expense; (b) comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality; (c) meet periodically with Dreyer's to review Integrated Brands performance; (d) advise Dreyer's promptly of any defects in the Products which come to Integrated Brands' attention; (e) notify Dreyer's immediately of Integrated Brands' inability to fully perform any of its duties or obligations hereunder; (f) permit Dreyer's personnel to make periodic audits upon reasonable notice of Integrated Brands' facilities and vehicles used for distribution of the Products in accordance with Section 12 of this Agreement; (g) in a manner consistent with that provided by Integrated Brands for its own products, at all times act so as to preserve and enhance the high quality image, reputation and goodwill of Dreyer's and the Products; (h) submit complete and accurate notices, reports, claims and requests for payment. 9. Quality Control. Integrated Brands shall, in a manner consistent with that provided by Integrated Brands for its own products, take all necessary actions to ensure the quality control of the Products. These actions shall include, but not be limited to: (a) observance of the Products' code-date requirements; (b) proper stock rotation in Integrated Brands' warehouses and vehicles; (c) proper handling and protection from damage of all of the Products and their containers; (d) delivery of the Products solely in their original containers; (e) maintenance of clean operations, controlled-temperature warehouse(s) and delivery vehicles of sufficient capacity to meet the inventory, storage and quality-control requirements hereunder; and (f) maintenance of temperature control program showing storage temperature at each point-of-control of the Products by Integrated Brands. -4- 10. Sales to Customer. Dreyer's shall be solely responsible for establishing the price at which Dreyer's Products are sold to Customers. Dreyer's is also solely responsible for suggesting resale shelf prices of the Products to Customers. Integrated Brands shall receive no information from Dreyer's, and shall not solicit any such information from Customers of Dreyer's, regarding suggested resale shelf prices of the Products. Dreyer's shall be solely responsible for invoicing its Customers for the Products delivered by Integrated Brands under this Agreement. 11. Inspections. (a) Without limiting any rights that may exist in any other Collateral Agreement (as defined in the Asset Sale Agreement), Dreyer's shall have the following inspection rights. Integrated Brands agrees to permit Dreyer's or Dreyer's independent inspection service during the term of this Agreement, upon twenty-four (24) hours' written notice to Integrated Brands, during Integrated Brands' business hours, to inspect the trucks and warehouses (or any other Integrated Brands facility where the Products are stored with Dreyer's approval) at each Integrated Brands' distribution center to the extent they relate to Integrated Brands' performance of its obligations hereunder and for a bona fide business purpose; provided, however, that such inspection shall not unreasonably interfere with the operation of such trucks or facilities and shall otherwise comply with Integrated Brands' policies with respect to such trucks or facilities, and that Integrated Brands may reasonably restrict access such that Dreyer's is not permitted to enter those portions of the facilities where only Integrated Brands' own products are being stored to the extent necessary to protect Integrated Brands' trade secrets and other confidential information; provided, however, that Integrated Brands may not restrict Dreyer's access to those portions of the facilities where the Products are being stored. Integrated Brands acknowledges and agrees that the inspection rights contained in this Agreement are solely for Dreyer's benefit, and that neither the fact of whether or not any inspection occurred, nor the quality of any such inspection, nor any determination made by Dreyer's as a result of any such inspection, shall be deemed to relieve Integrated Brands of any of its obligations under this Agreement. (b) Dreyer's shall have the right to audit the delivery records of Integrated Brands that relate solely to Integrated Brands' performance of this Agreement. Integrated Brands must provide, only to the extent that they exist, the requested documents within seventy-two (72) hours of a written request. If any such audit reveals that Dreyer's has overpaid amounts due to Integrated Brands hereunder, Integrated Brands shall promptly remit such overpayment to Dreyer's. In the event that any such overpayment individually, or in the aggregate, as of the date of audit overstates the amount due by more than five percent (5%), then Integrated Brands shall bear any costs incurred by Dreyer's in connection with such audit and shall remit to Dreyer's the amount of such overpayment together with interest thereon from the originally due date through the date of payment at a rate equal to the Citibank prime interest rate per annum. In the event that any such underpayment individually, or in the aggregate, as of the date of audit understates the amount due by more than five percent (5%), then Dreyer's shall bear any costs incurred by Integrated Brands in connection with such audit and, Dreyer's shall pay to Integrated Brands the amount of such underpayment within ten (10) business days. -5- 12. Representations of Integrated Brands. Integrated Brands represents and covenants to Dreyer's that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. 13. Representations of Dreyer's. Dreyer's represents and covenants to Integrated Brands that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. 14. Termination. (a) Integrated Brands may terminate, in its sole discretion, this Agreement upon ninety (90) days' written notice to Dreyer's. (b) Either party may terminate this Agreement, without notice, if the other party: (i) files a voluntary petition under any bankruptcy or insolvency law, or files a voluntary petition under the reorganization or arrangement provisions of any law of any jurisdiction, or have proceedings under any such laws instituted against it which are not terminated within ninety (90) days of such commencement; (ii) becomes insolvent, bankrupt, or admits in writing its inability to pay all debts as they mature or makes a general assignment for the benefit of or enters into any composition or arrangement with creditors; (iii) authorizes, applies for, or consents to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets, or has proceedings seeking such appointment commenced against it which are not terminated within ninety (90) days of such commencement. (c) Integrated Brands may terminate, in its sole discretion, this Agreement immediately if Dreyer's ceases business operations with respect to all of the Products. (d) Integrated Brands understands that Dreyer's is under no obligation to extend the Term or to enter into subsequent agreements with Integrated Brands. Acceptance of one or more orders after notice of termination hereof shall not be construed as a renewal or extension hereof or as a waiver of termination. (e) Termination of this Agreement for any reason provided herein shall not relieve either party from its obligation to perform up to the effective date of such termination or to perform such obligations as may be capable of performance after termination. (f) Neither party will be liable for delays in performance or a failure to perform hereunder (except where such performance relates to the payment of money) due to causes beyond its reasonable control, including acts of nature, acts of any government, wars, terrorism, riots, fires, floods, accidents, strikes, communication failures, state or local power failures or blackouts, or embargoes; provided, however, in the event Integrated Brands' performance of its distribution duties hereunder is impaired by any such cause, it will continue in -6- all respects to treat Dreyer's Products in substantially the same manner that Integrated Brands treats its own products as provided in Section 10 hereof. (g) Upon the expiration or termination of this Agreement: (i) neither party will be liable to the other because of such expiration or termination for damages on account of the loss of prospective profits, goodwill, or on account of, leases or commitments in connection with the business of Integrated Brands or of Dreyer's, or for any other reason whatsoever arising from such expiration or termination; (ii) Integrated Brands will not be deemed to be an authorized distributor of the Products; (iii) Dreyer's will promptly pay all amounts owing Integrated Brands including any such amounts that might have previously become due at some future date because of deferred payment or credit agreements; and (iv) all unshipped orders will be canceled without liability of either party to the other. 15. Insurance. Integrated Brands is responsible for maintaining insurance, at its sole cost and expense, to protect itself from the following: (i) claims under workers' compensation and/or state disability acts; (ii) claims for damages because of bodily injury, sickness or death of any of its employees or any other person that arise out of any negligent act or omission of Integrated Brands, its employees or agents, if any; (iii) claims for damages because of injury to or destruction of tangible personal property, including loss of use resulting therefrom, that arise from any negligent act or omission of Integrated Brands, its employees or agents, if any; and (iv) claims for damages because of bodily injury, sickness or death that arise out of the Products due to Integrated Brands' acts or omissions and shall cause Dreyer's to be named as an additional insured on such insurance. The amount of coverage for each of the above must be reasonable based on the volume of the Products delivered by Integrated Brands, but in no event will the coverage for general liability insurance be less than [ORIGINAL TEXT REDACTED] per occurrence and [ORIGINAL TEXT REDACTED] in aggregate general commercial liability coverage. 16. Warranty and Indemnification. (a) Dreyer's will indemnify Integrated Brands from any claim or damages, including reasonable attorneys' fees and costs, arising out of a non-compliant Product not manufactured by Integrated Brands or its Affiliates; provided, however, that Integrated Brands gives Dreyer's immediate written notice of any loss or claim and cooperates fully with Dreyer's in the handling of such claims. (b) Integrated Brands, at its own expense, will at all times indemnify and hold harmless Dreyer's and its Affiliates and their respective directors, officers, employees and agents, and its Customers and upon request will defend the same against all actions, proceedings, claims, demands, losses, suits, outlays, damages, judgments, penalties or expenses and liabilities of any kind or nature, including reasonable legal fees and other costs, that may be assessed against Dreyer's or its Customers or which Dreyer's or its Customers may incur directly or indirectly in connection with or arising out of defects in the storage and delivery to Customers of the Products. (c) Integrated Brands shall give Dreyer's prompt notice of any claim or suit coming within the scope of the indemnity under Section 16(b). Upon the written request of an -7- indemnitee, the indemnitor will assume the defense of a claim, demand or action against such indemnitee and will upon the request of the indemnitee, allow the indemnitee to participate in the defense thereof, such participation to be at the expense of the indemnitee. Settlement by the indemnitee without the indemnitor's prior written consent shall release the indemnitor from the indemnity as to the claim, demand, or action so settled. Termination of this Agreement shall not affect the continuing obligations of each of the parties as indemnitors hereunder. (d) THE EXPRESS WARRANTIES IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. (e) Nothing contained herein shall preclude a party hereto from seeking injunctive relief or specific performance. 17. Management of Business. Except to the extent that the specific provisions of this Agreement expressly provide otherwise, Dreyer's reserves to itself the unqualified right to manage its business in all respects, including without limitation, the right to maintain or alter the flavors, formula, ingredients, labeling, packaging and advertising, marketing and sales of the Products. In the event that Integrated Brands is restricted in the delivery of the Products by capacity limitations or due to any of the several acts described in Section 14(f) herein or otherwise, Integrated Brands shall not be compelled to honor Customer orders without due regard to availability, demand by other Customers, and inventory on hand, but shall deliver available Products among all customers and Integrated Brands' own products, in a fair and equitable manner and in accordance with Section 9 hereof. 18. Confidential Information. Except such disclosure as is required by law or court order or stock exchange, each party shall use its best efforts, which shall be the same efforts which that party used to protect its own confidential information, to keep strictly confidential and to prevent the unauthorized use of all information received from the other party which is that party's confidential information and which is clearly identified in writing by that party as confidential prior to its disclosure to the party receiving it; provided, however, that Integrated Brands may use and disclose to others that information which may be furnished by Dreyer's to it specifically for use in connection with the marketing and distribution of the Products to the extent that such disclosure is approved in writing by Dreyer's. Integrated Brands shall disclose Dreyer's confidential information only to those Persons who require such information for the purpose of performing the Collateral Agreements and shall use such information solely for the purpose of performing its obligations under the Collateral Agreements. Neither party shall be bound by any confidentiality restrictions with respect to any information to the extent that such information: (a) came into the lawful possession of the receiving party through sources other than the other party and those sources were under no direct or indirect confidentiality obligation to that other party with respect to such information; or (b) became publicly available through no act or failure to act on the part of the receiving party. -8- 19. Independent Contractor. Both parties agree that Integrated Brands is an independent contractor and, as such, neither Integrated Brands nor its personnel will be considered agents, joint venturers, partners, franchisees, franchisors, or employee(s) of Dreyer's nor will they be entitled to any benefits or privileges provided by Dreyer's to its employees. As a consequence, Dreyer's is neither liable nor responsible for withholding or deducting any sums for federal or state income taxes, social security, health, workers compensation and disability insurance coverage, pension or retirement plan, or other employment benefits. 20. Compliance with Applicable Law. Integrated Brands and Dreyer's agree to comply with all applicable federal, state and local laws, rules and regulations in connection with the performance of this Agreement, including, but not limited to, equal employment opportunity laws, Food and Drug Administration and the Occupational Safety and Health Administration. 21. Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by postage prepaid, registered, certified or express mail or by reputable overnight courier service and shall be deemed given when delivered by hand, three (3) days after mailing (one (1) Business Day (as defined in the Asset Sale Agreement) in the case of guaranteed overnight express mail or guaranteed overnight courier service), as follows (or at such other address for a party as shall be specified by like notice): (i) If to Dreyer's: Dreyer's Grand Ice Cream, Inc. 5929 College Avenue Oakland, California 94618 Attn: General Counsel (ii) If to Nestle Holdings, Inc.: Nestle Holdings, Inc. c/o Nestle USA, Inc. 800 North Brand Boulevard Glendale, California 91203 Attn: General Counsel with a copy to: Howrey, Simon, Arnold & White LLP 1299 Pennsylvania Avenue, N.W. Washington, DC 20004 Attn: Roxann E. Henry, Esq. -9- (iii) If to Integrated Brands: Integrated Brands, Inc. 4175 Veterans Highway Ronkonkoma, New York 11779 Attn: David J. Stein, Co-Chief Executive Officer with a copy to: Goodwin Procter LLP 599 Lexington Avenue New York, New York 10022 Attn: Daniel Kaplan, Esq. In the event that Integrated Brands gives notice regarding any breach or violation of this Agreement by Dreyer's, Integrated Brands shall also concurrently provide a copy of such notice to Nestle Holdings, Inc. 22. Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, without regard to the choice-of-law principles of such state. Each party hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under, or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. 23. Actions and Proceedings. Integrated Brands and its Affiliates and Dreyer's hereby irrevocably consent to the exclusive jurisdiction and venue of the courts of the State of New York and the United States District Court for the Southern District of New York in connection with any action or proceeding arising out of this Agreement or any related transaction. Dreyer's irrevocably appoints Dreyer's General Counsel as its authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waives any objections to personal jurisdiction with respect thereto. Integrated Brands and its Affiliates hereby appoint Integrated Brands Co-Chief Executive Officer as their authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waive any objections to personal jurisdiction with respect thereto. 24. Attorneys' Fees and Costs. The prevailing party in any legal action relating to this Agreement will be entitled to recover its attorneys' fees and litigation costs and expenses incurred in connection with such action or arbitration as part of the same proceeding. 25. Severability. The illegality, invalidity or unenforceability of any part of this Agreement shall not affect the legality, validity or enforceability of the remainder of this Agreement. If any part of this Agreement shall be found to be illegal, invalid or unenforceable, -10- this Agreement shall be given such meaning as would make this Agreement legal, valid and enforceable in order to give effect to the intent of the parties. 26. Entire Agreement; Amendments. This Agreement (including all exhibits attached hereto), the Asset Sale Agreement and the other Collateral Agreements constitutes the complete agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous agreements (even if written notice of termination was required to be given by a party), discussions, representation and proposals, written or oral, with respect to the subject matter discussed herein. No modification of this Agreement will be effective unless contained in writing and signed by an authorized representative of each party. 27. Assignment. Neither party shall be permitted to assign this Agreement (including through operation of law or through a change of control) or delegate its obligations to any Person under this Agreement without the other party's prior written consent. 28. Waiver. The failure of a party to prosecute its rights with respect to a breach hereunder will not constitute a waiver of the right to enforce its rights with respect to the same or any other breach. 29. Duplicate Originals; Faxed Signatures. This Agreement may be executed in any number of counterparts, each of which will be an original and all of which will constitute together one and the same document. -11- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. INTEGRATED BRANDS, INC. By: /s/ David J. Stein -------------------------------------- David J. Stein Co-Chief Executive Officer DREYER'S GRAND ICE CREAM, INC. By: /s/ T. Gary Rogers -------------------------------------- T. Gary Rogers Chairman of the Board of Directors and Chief Executive Officer [Signature Page to Grocery Carrier Agreement] Exhibit A Products ORIGINAL TEXT REDACTED Exhibit A to the Grocery Carrier Agreement Exhibit B Maximum Annual Volumes ORIGINAL TEXT REDACTED Exhibit B to the Grocery Carrier Agreement Exhibit C Counties ORIGINAL TEXT REDACTED Exhibit C to the Grocery Carrier Agreement EX-99 12 ex99-11.txt EXHIBIT 99.11 EXECUTION COPY IB PRODUCTS DISTRIBUTION AGREEMENT BETWEEN DREYER'S GRAND ICE CREAM, INC. AND INTEGRATED BRANDS, INC. DATED AS OF JULY 5, 2003 This IB PRODUCTS DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 5, 2003, is by and between Dreyer's Grand Ice Cream, Inc., a Delaware corporation ("Dreyer's"), and Integrated Brands, Inc., a New Jersey corporation ("Integrated Brands"). WHEREAS, Dreyer's, Nestle Ice Cream Company, LLC, a Delaware limited liability company ("NICC"), New December, Inc., a Delaware corporation, and Integrated Brands have entered into an Amended and Restated Asset Purchase and Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale Agreement"), pursuant to which, among other things, Integrated Brands shall purchase and Dreyer's and NICC shall sell, or cause to be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as defined in the Asset Sale Agreement) and the Distribution Assets (as defined in the Asset Sale Agreement); and WHEREAS, in connection with the Asset Sale Agreement, Integrated Brands desires that Dreyer's provide, or cause to be provided, to Integrated Brands, and Dreyer's is willing to provide, or cause to be provided, to Integrated Brands, certain distribution services following the closing of the transactions contemplated by the Asset Sale Agreement, on the terms and conditions set forth herein; and WHEREAS, as an essential part of the transactions contemplated by the Asset Sale Agreement, Dreyer's has agreed to provide, or cause to be provided, such distribution services to Integrated Brands to facilitate Integrated Brands' acquisition of the Ice Cream Assets and the Distribution Assets; and NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Definitions. For all purposes of this Agreement, except as expressly provided or unless the context otherwise requires, the following definitions shall apply: "Customer" shall mean any Person that purchases the Products (as defined in the Asset Sale Agreement) in the Grocery Channel in the Territories from Integrated Brands and to whom Integrated Brands from time to time hereunder directs Dreyer's to deliver the Products. "Grocery Channel" shall mean [ORIGINAL TEXT REDACTED]. "Person" shall mean any natural person or legal entity. "Territories" shall mean the geographical locations specified on Exhibit A, as amended from time to time by Integrated Brands pursuant to this Agreement; provided, however, Integrated Brands may only exercise its option to require Dreyer's to distribute the Products in a Territory, if, at the time of such exercise, Dreyer's is currently distributing its own products via Dreyer's owned (as opposed to a distributor of Dreyer's) distribution system in such Territory. The parties agree to amend Exhibit A upon ninety (90) days' written notice from Integrated Brands to add or delete any Territory. -1- "Unit" shall mean [ORIGINAL TEXT REDACTED] gallon of Product that is delivered to a Customer. 2. Scope of Agreement. Integrated Brands hereby grants to Dreyer's a non-transferable right (except as expressly provided for in Section 13 hereof) pursuant to the terms of this Agreement, to warehouse, store, deliver and merchandise the Products in the Territories on a non-exclusive basis as designated by Integrated Brands from time to time. Integrated Brands may, in its sole discretion, add or remove a Territory or Customer from this Agreement upon ninety (90) days' written notice to Dreyer's. 3. Title to the Products and Risk of Loss. (a) Title to the Products shall not transfer to Dreyer's at any point. Integrated Brands is solely responsible for arranging for the terms of the transfer of title from itself to its Customers. (b) Dreyer's assumes all risk of loss for the Products until delivered to a Customer or Integrated Brands. 4. Term. The initial term of this Agreement shall be five (5) years, beginning as of the date hereof; provided, however, that Integrated Brands has one (1) option to renew this Agreement for an additional five (5) year term (each five (5) year period defined as the "Term"). Notice to renew the initial term must be given in writing at least six (6) months before the end of the initial term. 5. The Products. During the Term, Dreyer's will have the obligation to distribute the Products in accordance with this Agreement. 6. Promotion and Marketing Support. Dreyer's agrees to execute Integrated Brand's promotional and marketing support for the Products. Such support shall include, but not be limited to, placing and maintaining point-of-sale and/or display materials as well as distributing marketing or promotion materials to Customers of Dreyer's. Notwithstanding anything to the contrary in this Agreement, Dreyer's shall not pay for, in whole or in part, any trade, promotional or marketing programs of Integrated Brands. 7. Delivery of the Products to Customers. Dreyer's will deliver the Products to Customers as directed by Integrated Brands. Deliveries will be made either on Dreyer's owned or leased vehicles or by Authorized Sub-Distributors (as defined herein). 8. Customer Billing and Collection. Dreyer's will be responsible for all billing and collection matters for amounts owed to Integrated Brands by Customers; provided, however, the credit risk that any Customer fails to pay any amounts so billed shall be borne by Integrated Brands. Dreyer's will maintain the accounts and records for Customers in the same manner and with the same degree of care that it maintains its own customer records. Integrated Brands will give Dreyer's the necessary information required for purposes of Dreyer's billing the customers and reconciling Customer accounts. Any changes to pricing or promotion information must be given to Dreyer's at least thirty (30) days prior to the effective date of such change pricing and/or promotion information. -2- 9. Fees and Payments. (a) In consideration for the services provided by Dreyer's to Integrated Brands under this Agreement, Integrated Brands will pay to Dreyer's [ORIGINAL TEXT REDACTED] per Unit (the "Service and Delivery Charges") within thirty (30) days of receipt of invoice; provided, however, that for each year of the Term, the Service and Delivery Charges will be increased by an amount equal to the annual increase of the PPI for the preceding year. (b) Each [ORIGINAL TEXT REDACTED] during the Term, Dreyer's will deliver to Integrated Brands a written report (where written report includes e-mail) in reasonable detail as to all deliveries of the Products to Customers during the [ORIGINAL TEXT REDACTED] and Dreyer's will remit to Integrated Brands, on a [ORIGINAL TEXT REDACTED] basis within [ORIGINAL TEXT REDACTED] days of delivery of such report all amounts collected by Dreyer's from Customers for the sale of the Products to such Customers detailed in such report less: (i) the Service and Delivery Charges. For purposes of clarity, Dreyer's will be liable for [ORIGINAL TEXT REDACTED] (other than as set forth above) and any other [ORIGINAL TEXT REDACTED] related to a Customer invoice for the Products, but will not be liable for any [ORIGINAL TEXT REDACTED] per the terms of Section 8. 10. Performance Criteria. Dreyer's agrees to treat all of the Products in substantially the same manner as Dreyer's treats its own products with respect to warehousing, storage, delivery and merchandising. Not limiting the generality of the foregoing and in addition to the duties and obligations set forth in Sections 11 and 12, Dreyer's agrees that: (a) all of the Products must be held in storage which is maintained at a constant temperature of -15[d]F or colder at all times; (b) all delivery vehicles must operate at temperatures of -5[d]F or colder at all times; and (c) the Products stored in a warehouse, on trucks, in back-up storage and in cabinets is rotated regularly on a first-in, first-out basis. 11. Dreyer's Duties. Dreyer's covenants and agrees that during the Term it will use commercially reasonable efforts, as such efforts relate to the distribution of the Products, to: (a) distribute the Products so that all Customers regularly receive frequent deliveries of the Products, and so that each Customer maintains a sufficient inventory of the Products, in the sizes, varieties and flavors to meet the demand of the Products at each store; (b) provide service levels, and service frequencies for the Products, in a manner consistent with that provided by Dreyer's, or its Affiliates (as defined in the Asset Sale Agreement), for Dreyer's own products, including (except for institutional accounts) proper rotation of the Products, adequate assortment of sizes, varieties and flavors, proper merchandising and display, removal of damaged or unsaleable Products and issuance of store credits as required, assurance of adequate back stock where allowed and display of merchandising materials in and around the freezer case where allowed; -3- (c) (i) construct all of its regular and promotional commission and bonus programs for salesmen and route salesmen and independent contractor route drivers relating to the Products, in a manner consistent with Dreyer's own products, and (ii) provide to Integrated Brands all historical information relating to Dreyer's own proprietary brands as Integrated Brands shall reasonably request not more frequently than quarterly and upon reasonable notice, to demonstrate compliance by Dreyer's with this Section 11(c); provided, however, that nothing herein shall require Dreyer's to provide proprietary information unrelated to this provision; (d) maintain relationships with Customers for the Products in a manner consistent with that maintained by Dreyer's for its own customers; (e) promptly perform all services necessary to execute a Product recall or recovery of Product when requested by Integrated Brands and at Integrated Brands' expense; (f) comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality; (g) meet periodically with Integrated Brands to review Dreyer's performance; (h) properly handle and present the Products in a manner appropriate to the type of Customer being serviced; (i) advise Integrated Brands promptly of any defects in the Products or of any Customer complaints with respect to the Products which come to Dreyer's attention; (j) notify Integrated Brands immediately of Dreyer's inability to fully perform any of its duties or obligations hereunder; (k) permit Integrated Brands' personnel to make periodic audits upon reasonable notice of Dreyer's facilities and vehicles used for distribution of the Products in accordance with Section 15 of this Agreement; (l) in a manner consistent with that provided by Dreyer's for its own products, at all times act so as to preserve and enhance the high quality image, reputation and goodwill of Integrated Brands and the Products; (m) cooperate with Integrated Brands in the placement and installation of Integrated Brands' point-of-sale materials, and display such materials in a conspicuous place wherever permitted by Customers' accounts at each retail location; (n) upon receipt of timely advance written notice from Integrated Brands to Dreyer's, discontinue any advertising or promotional practices on behalf of the Products; (o) upon Integrated Brands' reasonable request and with reasonable notice, provide delivery data with respect to the Products in the manner maintained by Dreyer's in the ordinary course of business; and -4- (p) submit complete and accurate notices, reports, claims and requests for payment. 12. Quality Control. Dreyer's shall, in a manner consistent with that provided by Dreyer's for its own products, take all necessary actions to ensure the quality control of the Products. These actions shall include, but not be limited to: (a) observance of the Products' code-date requirements; (b) proper stock rotation in Dreyer's warehouses, vehicles and at Customer locations; (c) proper handling and protection from damage of all of the Products and their containers; (d) delivery of the Products solely in their original containers; (e) maintenance of clean operations, controlled-temperature warehouse(s) and delivery vehicles of sufficient capacity to meet the inventory, storage and quality-control requirements hereunder; (f) maintenance of temperature control program showing storage temperature at each point-of-control of the Products by Dreyer's; and (g) where Dreyer's provides such services for its own products, provision of pack-out and full retail case services including stocking and stock rotation at the store level so as to ensure that the Products reaching consumers have been exposed only to properly maintained temperatures and bear current code dates. 13. Authorized Sub-Distributors. Integrated Brands agrees that the Persons listed on Exhibit B ("Authorized Sub-Distributors") or hereafter approved by Integrated Brands in writing may deliver the Products on behalf of Dreyer's; provided, however, that such entities also deliver Dreyer's own products to the same Customers and that Dreyer's shall remain liable under this Agreement. Any payment owed to Authorized Sub-Distributors shall be the responsibility of Dreyer's. 14. Sales to Customer. Integrated Brands shall be solely responsible for establishing the price at which Integrated Brands' Products are sold to Customers. Integrated Brands is also solely responsible for suggesting resale shelf prices of the Products to Customers. Dreyer's shall receive no information from Integrated Brands, and shall not solicit any such information from Customers of Integrated Brands, regarding suggested resale shelf prices of the Products. 15. Inspections. (a) Without limiting any rights that may exist in any other Collateral Agreement (as defined in the Asset Sale Agreement), Integrated Brands shall have the following inspection rights. Dreyer's agrees to permit Integrated Brands or Integrated Brands' independent inspection service during the term of this Agreement, upon twenty-four (24) hours' written -5- notice to Dreyer's, during Dreyer's business hours, to inspect the trucks and warehouses (or any other Dreyer's facility where the Products are stored with Integrated Brands' approval) at each Dreyer's distribution center to the extent they relate to Dreyer's performance of its obligations hereunder and for a bona fide business purpose; provided, however, that such inspection shall not unreasonably interfere with the operation of such trucks or facilities and shall otherwise comply with Dreyer's policies with respect to such trucks or facilities, and that Dreyer's may reasonably restrict access such that Integrated Brands is not permitted to enter those portions of the facilities where only Dreyer's own products are being stored to the extent necessary to protect Dreyer's trade secrets and other confidential information; provided, however, that Dreyer's may not restrict Integrated Brands' access to those portions of the facilities where the Products are being stored. Dreyer's acknowledges and agrees that the inspection rights contained in this Agreement are solely for Integrated Brands' benefit, and that neither the fact of whether or not any inspection occurred, nor the quality of any such inspection, nor any determination made by Integrated Brands as a result of any such inspection, shall be deemed to relieve Dreyer's of any of its obligations under this Agreement. (b) Integrated Brands shall have the right to audit the delivery records of Dreyer's that relate solely to Dreyer's performance of this Agreement. Dreyer's must provide, only to the extent that they exist, the requested documents within seventy-two (72) hours of a written request. If any such audit reveals that Integrated Brands has overpaid amounts due to Dreyer's hereunder, Dreyer's shall promptly remit such overpayment to Integrated Brands. In the event that any such overpayment individually, or in the aggregate, as of the date of audit overstates the amount paid by more than five percent (5%), then Dreyer's shall bear any costs incurred by Integrated Brands in connection with such audit and shall pay to Integrated Brands the amount of such overpayment together with interest thereon from the originally due date through the date of payment at a rate equal to the Citibank prime interest rate per annum. In the event that any such underpayment individually, or in the aggregate, as of the date of audit understates the amount due by more than five percent (5%), then Integrated Brands shall bear any costs incurred by Dreyer's in connection with such audit and, Integrated Brands shall pay to Dreyer's the amount of such underpayment within ten (10) business days. 16. Representations of Dreyer's. Dreyer's represents and covenants to Integrated Brands that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. 17. Representations of Integrated Brands. Integrated Brands represents and covenants to Dreyer's that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. -6- 18. Termination. (a) Integrated Brands may terminate, in its sole discretion, this Agreement upon ninety (90) days' written notice to Dreyer's. (b) Dreyer's may, at its option, terminate any services in or within a Territory if Dreyer's discontinues its distribution via Dreyer's owned (as opposed to a distributor of Dreyer's) distribution system in such Territory; provided, however, that Dreyer's gives Integrated Brands thirty (30) days' written notice. (c) Either party may terminate this Agreement, without notice, if the other party: (i) files a voluntary petition under any bankruptcy or insolvency law, or files a voluntary petition under the reorganization or arrangement provisions of any law of any jurisdiction, or have proceedings under any such laws instituted against it which are not terminated within ninety (90) days of such commencement; (ii) becomes insolvent, bankrupt, or admits in writing its inability to pay all debts as they mature or makes a general assignment for the benefit of or enters into any composition or arrangement with creditors; (iii) authorizes, applies for, or consents to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets, or has proceedings seeking such appointment commenced against it which are not terminated within ninety (90) days of such commencement. (d) Dreyer's may terminate, in its sole discretion, this Agreement immediately if Integrated Brands ceases business operations with respect to all of the Products. (e) Dreyer's understands that Integrated Brands is under no obligation to extend the initial term or to enter into subsequent agreements with Dreyer's. Acceptance of one or more orders after notice of termination hereof shall not be construed as a renewal or extension hereof or as a waiver of termination. (f) Termination of this Agreement for any reason provided herein shall not relieve either party from its obligation to perform up to the effective date of such termination or to perform such obligations as may be capable of performance after termination. (g) Neither party will be liable for delays in performance or a failure to perform hereunder (except where such performance relates to the payment of money) due to causes beyond its reasonable control, including acts of nature, acts of any government, wars, terrorism, riots, fires, floods, accidents, strikes, communication failures, state or local power failures or blackouts, or embargoes; provided, however, in the event Dreyer's performance of its distribution duties hereunder is impaired by any such cause, it will continue in all respects to treat Integrated Brands' Products in substantially the same manner that Dreyer's treats its own products as provided in Section 10 hereof. (h) Upon the expiration or termination of this Agreement: (i) neither party will be liable to the other because of such expiration or termination for damages on account of the loss of prospective profits, goodwill, or on account of, leases or commitments in connection with the business of Dreyer's or of Integrated Brands, or for any other reason whatsoever arising from such expiration or termination; (ii) Dreyer's will no longer be an authorized distributor of the Products; (iii) Integrated Brands will promptly pay all amounts owing Dreyer's including any -7- such amounts that might have previously become due at some future date because of deferred payment or credit agreements; and (iv) all unshipped orders will be canceled without liability of either party to the other. 19. Insurance. Dreyer's is responsible for maintaining insurance, at its sole cost and expense, to protect itself from the following: (i) claims under workers' compensation and/or state disability acts; (ii) claims for damages because of bodily injury, sickness or death of any of its employees or any other person that arise out of any negligent act or omission of Dreyer's, its employees or agents, if any; (iii) claims for damages because of injury to or destruction of tangible personal property, including loss of use resulting therefrom, that arise from any negligent act or omission of Dreyer's, its employees or agents, if any; and (iv) claims for damages because of bodily injury, sickness or death that arise out of the Products due to Dreyer's acts or omissions and shall cause Integrated Brands to be named as an additional insured on such insurance. The amount of coverage for each of the above must be reasonable based on the volume of the Products distributed by Dreyer's, but in no event will the coverage for general liability insurance be less than [ORIGINAL TEXT REDACTED] per occurrence and [ORIGINAL TEXT REDACTED] in aggregate general commercial liability coverage. 20. Warranty and Indemnification. (a) Integrated Brands will indemnify Dreyer's from any claim or damages, including reasonable attorneys' fees and costs, arising out of a non-compliant Product not manufactured by Dreyer's or its Affiliates; provided, however, that Dreyer's gives Integrated Brands immediate written notice of any loss or claim and cooperates fully with Integrated Brands in the handling of such claims. (b) Dreyer's, at its own expense, will at all times indemnify and hold harmless Integrated Brands and its Affiliates and their respective directors, officers, employees and agents, and its Customers and upon request will defend the same against all actions, proceedings, claims, demands, losses, suits, outlays, damages, judgments, penalties or expenses and liabilities of any kind or nature, including reasonable legal fees and other costs, that may be assessed against Integrated Brands or its Customers or which Integrated Brands or its Customers may incur directly or indirectly in connection with or arising out of defects in the storage and delivery to Customers of the Products. (c) Integrated Brands shall give Dreyer's prompt notice of any claim or suit coming within the scope of the indemnity under Section 20(b). Upon the written request of an indemnitee, the indemnitor will assume the defense of a claim, demand or action against such indemnitee and will upon the request of the indemnitee, allow the indemnitee to participate in the defense thereof, such participation to be at the expense of the indemnitee. Settlement by the indemnitee without the indemnitor's prior written consent shall release the indemnitor from the indemnity as to the claim, demand, or action so settled. Termination of this Agreement shall not affect the continuing obligations of each of the parties as indemnitors hereunder. (d) THE EXPRESS WARRANTIES IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT -8- LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. (e) Nothing contained herein shall preclude a party hereto from seeking injunctive relief or specific performance. 21. Management of Business. Except to the extent that the specific provisions of this Agreement expressly provide otherwise, Integrated Brands reserves to itself the unqualified right to manage its business in all respects, including without limitation, the right to maintain or alter the flavors, formula, ingredients, labeling, packaging and advertising, marketing and sales of the Products. In the event that Dreyer's is restricted in the delivery of the Products by capacity limitations or due to any of the several acts described in Section 18(g), herein or otherwise, Dreyer's shall not be compelled to honor Customer orders without due regard to availability, demand by other Customers, and inventory on hand, but shall distribute available Products, among all customers and Dreyer's own products, in a fair and equitable manner and in accordance with Section 11 hereof. 22. Confidential Information. Except such disclosure as is required by law or court order or stock exchange, each party shall use its best efforts, which shall be the same efforts which that party used to protect its own confidential information, to keep strictly confidential and to prevent the unauthorized use of all information received from the other party which is that party's confidential information and which is clearly identified in writing by that party as confidential prior to its disclosure to the party receiving it; provided, however, that Dreyer's may use and disclose to others that information which may be furnished by Integrated Brands to it specifically for use in connection with the marketing and distribution of the Products to the extent that such disclosure is approved in writing by Integrated Brands. Dreyer's shall disclose Integrated Brands' confidential information only to those Persons who require such information for the purpose of performing the Collateral Agreements and shall use such information solely for the purpose of performing its obligations under the Collateral Agreements. Neither party shall be bound by any confidentiality restrictions with respect to any information to the extent that such information: (a) came into the lawful possession of the receiving party through sources other than the other party and those sources were under no direct or indirect confidentiality obligation to that other party with respect to such information; or (b) became publicly available through no act or failure to act on the part of the receiving party. 23. Independent Contractor. Both parties agree that Dreyer's is an independent contractor and, as such, neither Dreyer's nor its personnel will be considered agents, joint venturers, partners, franchisees, franchisors, or employee(s) of Integrated Brands nor will they be entitled to any benefits or privileges provided by Integrated Brands to its employees. As a consequence, Integrated Brands is neither liable nor responsible for withholding or deducting any sums for federal or state income taxes, social security, health, workers compensation and disability insurance coverage, pension or retirement plan, or other employment benefits. -9- 24. Compliance with Applicable Law. Dreyer's and Integrated Brands agree to comply with all applicable federal, state and local laws, rules and regulations in connection with the performance of this Agreement, including, but not limited to, equal employment opportunity laws, Food and Drug Administration and the Occupational Safety and Health Administration. 25. Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by postage prepaid, registered, certified or express mail or by reputable overnight courier service and shall be deemed given when delivered by hand, three (3) days after mailing (one (1) Business Day (as defined in the Asset Sale Agreement) in the case of guaranteed overnight express mail or guaranteed overnight courier service), as follows (or at such other address for a party as shall be specified by like notice): (i) If to Dreyer's: Dreyer's Grand Ice Cream, Inc. 5929 College Avenue Oakland, California 94618 Attn: General Counsel (ii) If to Nestle Holdings, Inc.: Nestle Holdings, Inc. c/o Nestle USA, Inc. 800 North Brand Boulevard Glendale, California 91203 Attn: General Counsel with a copy to: Howrey, Simon, Arnold & White LLP 1299 Pennsylvania Avenue, N.W. Washington, DC 20004 Attn: Roxann E. Henry, Esq. (iii) If to Integrated Brands: Integrated Brands, Inc. 4175 Veterans Highway Ronkonkoma, New York 11779 Attn: David J. Stein, Co-Chief Executive Officer with a copy to: Goodwin Procter LLP 599 Lexington Avenue New York, New York 10022 -10- Attn: Daniel Kaplan, Esq. In the event that Integrated Brands gives notice regarding any breach or violation of this Agreement by Dreyer's, Integrated Brands shall also concurrently provide a copy of such notice to Nestle Holdings, Inc. 26. Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, without regard to the choice-of-law principles of such state. Each party hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under, or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. 27. Actions and Proceedings. Dreyer's and its Affiliates and Integrated Brands hereby irrevocably consent to the exclusive jurisdiction and venue of the courts of the State of New York and the United States District Court for the Southern District of New York in connection with any action or proceeding arising out of this Agreement or any related transaction. Integrated Brands irrevocably appoints Integrated Brands' Co-Chief Executive Officer as its authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waives any objections to personal jurisdiction with respect thereto. Dreyer's and its Affiliates hereby appoint Dreyer's General Counsel as their authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waive any objections to personal jurisdiction with respect thereto. 28. Attorneys' Fees and Costs. The prevailing party in any legal action relating to this Agreement will be entitled to recover its attorneys' fees and litigation costs and expenses incurred in connection with such action or arbitration as part of the same proceeding. 29. Severability. The illegality, invalidity or unenforceability of any part of this Agreement shall not affect the legality, validity or enforceability of the remainder of this Agreement. If any part of this Agreement shall be found to be illegal, invalid or unenforceable, this Agreement shall be given such meaning as would make this Agreement legal, valid and enforceable in order to give effect to the intent of the parties. 30. Entire Agreement; Amendments. This Agreement (including all exhibits attached hereto), the Asset Sale Agreement and the other Collateral Agreements constitutes the complete agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous agreements (even if written notice of termination was required to be given by a party), discussions, representation and proposals, written or oral, with respect to the subject matter discussed herein. No modification of this Agreement will be effective unless contained in writing and signed by an authorized representative of each party. 31. Assignment. Neither party shall be permitted to assign this Agreement or delegate its obligation to any Person under this Agreement (including through operation of law or through a change of control) without the other party's prior written consent; provided, however, that Dreyer's shall be permitted to assign this Agreement to any of its Affiliates. -11- 32. Waiver. The failure of a party to prosecute its rights with respect to a breach hereunder will not constitute a waiver of the right to enforce its rights with respect to the same or any other breach. 33. Duplicate Originals; Faxed Signatures. This Agreement may be executed in any number of counterparts, each of which will be an original and all of which will constitute together one and the same document. -12- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. DREYER'S GRAND ICE CREAM, INC. By: /s/ T. Gary Rogers ------------------------------------ T. Gary Rogers Chairman of the Board of Directors and Chief Executive Officer INTEGRATED BRANDS, INC. By: /s/ David J. Stein ------------------------------------ David J. Stein Co-Chief Executive Officer [Signature Page to IB Products Distribution Agreement] Exhibit A Territories Exhibit A to IB Products Distribution Agreement Exhibit B Authorized Sub-Distributors ORIGINAL TEXT REDACTED Exhibit B to IB Products Distribution Agreement EX-99 13 ex99-12.txt EXHIBIT 99.12 EXECUTION COPY NON-GROCERY DISTRIBUTION AGREEMENT BETWEEN INTEGRATED BRANDS, INC. AND DREYER'S GRAND ICE CREAM, INC. DATED AS OF JULY 5, 2003 This NON-GROCERY DISTRIBUTION AGREEMENT (this "Agreement"), dated as of July 5, 2003, is by and between Integrated Brands, Inc., a New Jersey corporation ("Integrated Brands"), and Dreyer's Grand Ice Cream, Inc., a Delaware corporation ("Dreyer's"). WHEREAS, Dreyer's, Nestle Ice Cream Company, LLC, a Delaware limited liability company ("NICC"), New December, Inc., a Delaware corporation, and Integrated Brands have entered into an Amended and Restated Asset Purchase and Sale Agreement, as amended and restated on June 4, 2003 (the "Asset Sale Agreement"), pursuant to which, among other things, Integrated Brands shall purchase and Dreyer's and NICC shall sell, or cause to be sold, subject to the terms and conditions thereof, the Ice Cream Assets (as defined in the Asset Sale Agreement) and the Distribution Assets (as defined in the Asset Sale Agreement); and WHEREAS, in connection with the Asset Sale Agreement, Dreyer's desires that Integrated Brands provide to Dreyer's, and Integrated Brands is willing to provide, or cause to be provided, to Dreyer's, certain distribution services following the closing of the transactions contemplated by the Asset Sale Agreement, on the terms and conditions set forth herein; and WHEREAS, as an essential part of the transactions contemplated by the Asset Sale Agreement, Integrated Brands has agreed to provide such distribution services to Dreyer's to facilitate Integrated Brands' acquisition of the Ice Cream Assets and the Distribution Assets; and NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Definitions. For all purposes of this Agreement, except as expressly provided or unless the context otherwise requires, the following definitions shall apply: "Business" shall mean Integrated Brands' frozen dessert distribution business in the Territories. "Customer" shall mean any Person that purchases the Products in the Non-Grocery Channel from Dreyer's and to whom Dreyer's from time to time hereunder directs Integrated Brands to deliver the Products. "Grocery Carrier Agreement" shall mean the Grocery Carrier Agreement, dated the date hereof, by and between Dreyer's and Integrated Brands. "Non-Grocery Channel" shall mean [ORIGINAL TEXT REDACTED]. "Maximum Annual Volume" with respect to any Territory shall mean the difference between (X) the sum of (A) the designated dollar volume (calculated as the number of units multiplied by the applicable Service and Delivery Charges) that is set forth on Exhibit B for that Territory, during that Year and (B) any remaining Supplemental Annual Volume for such Year that has not been applied to any other Territory under this Agreement or the Grocery Carrier Agreement during that Year and (Y) the number of units delivered under the Grocery -1- Carrier Agreement in such Territory multiplied by the applicable Delivery Charges (as defined in the Grocery Carrier Agreement). "Person" shall mean any natural person or legal entity. "Products" shall be set forth on Exhibit A. "Supplemental Annual Volume" for each Year shall mean the maximum dollar volume (calculated as the number of units multiplied by the applicable Service and Delivery Charges) that is set forth on Exhibit B as "Supplemental Annual Volume" for that Year, and which is a supplemental amount that can be included in the calculation of the Maximum Annual Volume of any Territory or Territories (under this Agreement or the Grocery Carrier Agreement) during that Year (subject to available demand for the Products in that Territory). "Territories" shall mean the territories set forth on Exhibit B [ORIGINAL TEXT REDACTED], including, without limitation, the counties in such Territories that are set forth on Exhibit C, and "Territory" shall have a correlative meaning. "Year" shall mean any year, beginning as of the Closing Date, during the Term. 2. Scope of Agreement. Dreyer's hereby grants to Integrated Brands a non-transferable right pursuant to the terms of this Agreement, to warehouse, store, deliver and merchandise the Products to Customers in the Territories on a non-exclusive basis. 3. Title to the Products and Risk of Loss. (a) Title to the Products shall not transfer to Integrated Brands at any point. Dreyer's is solely responsible for arranging for the terms of the transfer of title from itself to its Customers. (b) Integrated Brands assumes all risk of loss for the Products from receipt by Integrated Brands until delivered to a Customer. 4. Term. The "Initial Term" of this Agreement shall be three (3) years, beginning as of the Closing Date (as defined in the Asset Sale Agreement). After the expiration of the Initial Term, Integrated Brands shall have the option to extend this Agreement for up to two (2) years (the "Extended Term") (the Initial Term and the Extended Term shall be referred to as the "Term"). 5. Delivery of the Products to Customers. (a) Integrated Brands will deliver the Products to Customers as directed by Dreyer's. (b) On the Closing Date, and on each anniversary date thereafter during the Term, Dreyer's shall provide Integrated Brands with a report containing annualized volumes of each of the Products by Customer for all Customers within the Territories (the "Volume Report"). Integrated Brands shall have the right to elect to deliver Products from time to time in -2- accordance with this Section 5. If Integrated Brands elects to deliver any Products hereunder, it shall provide to Dreyer's a list of (i) the Customers (or any locations at which any such Customers receive deliveries of Products to which Integrated Brands elects to deliver), (ii) the applicable Products (or portion of Products (e.g., select flavors, container sizes or novelty types within a class of Products as Integrated Brands may select), and (iii) the volume (or portion of volume) of Products (or portion of Products) which Integrated Brands elects to deliver, in each case for each such Customer (or select Customer locations) to which Integrated Brands shall make deliveries; provided, however, that such election must be in writing and provided to Dreyer's at least 14 days prior to the commencement of Integrated Brands' deliveries of Product hereunder. During the Term, Integrated Brands shall deliver such Products to such Customers in the Territories in accordance with its election; provided, however, that during each Year, the maximum volume of Products that may be delivered by Integrated Brands in each Territory is that number of units which, when multiplied by the applicable Service and Delivery Charges, shall result in the Maximum Annual Volume for that Territory. Integrated Brands shall have the right to modify, at any time upon 14 days' written notice to Dreyer's, the selected Customers (or Customer locations) to which the Products are delivered by Integrated Brands, the selected Products (or portions of Products) for such Customers (or locations), and the volume (or portion of volume) of Products for such Customers which are delivered by Integrated Brands. Dreyer's shall have the obligation to provide such volumes of Customer orders (or portions thereof) for delivery of the Products to Integrated Brands at a location designated by Integrated Brands as Integrated Brands shall request in writing on a weekly basis with seven (7) days' written notice; provided that, to facilitate day-to-day route planning, daily ordering information from Dreyer's "pre-seller" Customers shall be sent to Integrated Brands facilities electronically or via facsimile. 6. Fees and Payments. In consideration for the services provided by Integrated Brands to Dreyer's under this Agreement, during the Initial Term Dreyer's will pay to Integrated Brands a per unit charge as set forth in Exhibit A (the "Service and Delivery Charges") within thirty (30) days of receipt of an invoice. During the Extended Term, the Service and Delivery Charges for the Products shall be the per unit charge in effect at the expiration of the Initial Term, plus an annual increase equal to the PPI for the preceding Year. 7. Promotion and Marketing Support. Integrated Brands agrees to execute Dreyer's promotional and marketing support for the Products. Such support shall include, but not be limited to, placing and maintaining point-of-sale and/or display materials as well as distributing marketing or promotion materials to Customers of Dreyer's. Notwithstanding anything to the contrary in this Agreement, Integrated Brands shall not pay for, in whole or in part, any trade, promotional, or marketing programs of Dreyer's. 8. Performance Criteria. Integrated Brands agrees to treat all of the Products in substantially the same manner as Integrated Brands treats its own products with respect to warehousing, storage, delivery and merchandising. Without limiting the generality of the foregoing and in addition to the duties and obligations set forth in Sections 9 and 10, Integrated Brands agrees that: (a) all of the Products must be held in storage which is maintained at a constant temperature of -15[d]F or colder at all times; -3- (b) all delivery vehicles must operate at temperatures of -5[d]F or colder at all times; and (c) the Products stored in a warehouse, on trucks, in back-up storage and in cabinets is rotated regularly on a first-in, first-out basis. 9. Integrated Brands Duties. Integrated Brands covenants and agrees that during the Term it will use commercially reasonable efforts, as such efforts relate to the distribution of the Products, to: (a) deliver the Products so that all Customers regularly receive frequent deliveries of the Products, and so that each Customer maintains a sufficient inventory of the Products, in the sizes, varieties and flavors to meet the demand of the Products at each store; (b) maintain relationships with Customers for the Products in a manner consistent with that maintained by Integrated Brands for its own customers; (c) upon Dreyer's reasonable request and with reasonable notice, provide delivery data with respect to the Products in the manner maintained by Integrated Brands in the ordinary course of business; (d) promptly perform all services necessary to execute a Product recall or recovery of Product when requested by Dreyer's and at Dreyer's expense; (e) comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality; (f) meet periodically with Dreyer's to review Integrated Brands performance; (g) properly handle and present the Products in a manner appropriate to the type of Customer being serviced; (h) advise Dreyer's promptly of any defects in the Products or of any Customer complaints with respect to the Products which come to Integrated Brands attention; (i) notify Dreyer's immediately of Integrated Brands inability to fully perform any of its duties or obligations hereunder; (j) permit Dreyer's personnel to make periodic audits upon reasonable notice of Integrated Brands facilities and vehicles used for distribution of the Products in accordance with Section 12 of this Agreement; (k) in a manner consistent with that provided by Integrated Brands for its own products, at all times act so as to preserve and enhance the high quality image, reputation and goodwill of Dreyer's and the Products; (l) upon receipt of timely advance written notice from Dreyer's to Integrated Brands, discontinue any advertising or promotional practices on behalf of the Products; and -4- (m) submit complete and accurate notices, reports, claims and requests for payment. 10. Quality Control. Integrated Brands shall, in a manner consistent with that provided by Integrated Brands for its own products, take all necessary actions to ensure the quality control of the Products. These actions shall include, but not be limited to: (a) observance of the Products' code-date requirements; (b) proper stock rotation in Integrated Brands warehouses, vehicles and at Customer locations; (c) proper handling and protection from damage of all of the Products and their containers; (d) delivery of the Products solely in their original containers; (e) maintenance of clean operations, controlled-temperature warehouse(s) and delivery vehicles of sufficient capacity to meet the inventory, storage and quality-control requirements hereunder; (f) maintenance of temperature control program showing storage temperature at each point-of-control of the Products by Integrated Brands; and (g) where Integrated Brands provides such services for its own products, provision of pack-out and full retail case services including stocking and stock rotation at the store level so as to ensure that the Products reaching consumers have been exposed only to properly maintained temperatures and bear current code dates. 11. Sales to Customer. Dreyer's shall be solely responsible for establishing the price at which Dreyer's Products are sold to Customers. Dreyer's is also solely responsible for suggesting resale shelf prices of the Products to Customers. Integrated Brands shall receive no information from Dreyer's, and shall not solicit any such information from Customers of Dreyer's, regarding suggested resale shelf prices of the Products. [ORIGINAL TEXT REDACTED] 12. Inspections. (a) Without limiting any rights that may exist in any other Collateral Agreement (as defined in the Asset Sale Agreement), Dreyer's shall have the following inspection rights. Integrated Brands agrees to permit Dreyer's or Dreyer's independent inspection service during the term of this Agreement, upon twenty-four (24) hours' written notice to Integrated Brands, during Integrated Brands business hours, to inspect the trucks and warehouses (or any other Integrated Brands facility where the Products are stored with Dreyer's approval) at each Integrated Brands distribution center to the extent they relate to Integrated Brands performance of its obligations hereunder and for a bona fide business purpose; provided, however, that such inspection shall not unreasonably interfere with the operation of such trucks or facilities and shall otherwise comply with Integrated Brands policies with respect to such -5- trucks or facilities, and that Integrated Brands may reasonably restrict access such that Dreyer's is not permitted to enter those portions of the facilities where only Integrated Brands own products are being stored to the extent necessary to protect Integrated Brands trade secrets and other confidential information; provided, however, that Integrated Brands may not restrict Dreyer's access to those portions of the facilities where the Products are being stored. Integrated Brands acknowledges and agrees that the inspection rights contained in this Agreement are solely for Dreyer's benefit, and that neither the fact of whether or not any inspection occurred, nor the quality of any such inspection, nor any determination made by Dreyer's as a result of any such inspection, shall be deemed to relieve Integrated Brands of any of its obligations under this Agreement. (b) Dreyer's shall have the right to audit the financial and delivery records of Integrated Brands that relate solely to Integrated Brands performance of this Agreement. Integrated Brands must provide, only to the extent that they exist, the requested documents within seventy-two (72) hours of a written request. If any such audit reveals that Dreyer's has overpaid amounts due to Integrated Brands hereunder, Integrated Brands shall promptly remit such overpayment to Dreyer's. In the event that any such overpayment individually, or in the aggregate, as of the date of audit overstates the amount due by more than five percent (5%), then Integrated Brands shall bear any costs incurred by Dreyer's in connection with such audit and shall remit to Dreyer's the amount of such overpayment together with interest thereon from the originally due date through the date of payment at a rate equal to the Citibank prime interest rate per annum. In the event that any such underpayment individually, or in the aggregate, as of the date of audit understates the amount due by more than five percent (5%), then Dreyer's shall bear any costs incurred by Integrated Brands in connection with such audit and, Dreyer's shall pay to Integrated Brands the amount of such underpayment within ten (10) business days. 13. Representations of Integrated Brands. Integrated Brands represents and covenants to Dreyer's that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. 14. Representations of Dreyer's. Dreyer's represents and covenants to Integrated Brands that: (a) it has the legal power and authority to enter into this Agreement; (b) it has not previously entered into any agreement or understanding which conflicts with any rights or obligations set forth in this Agreement; and (c) it will fully comply with all applicable laws, ordinances, regulations, licenses and permits of or issued by any federal, state or local governmental entity, agency or instrumentality. 15. Termination. (a) Integrated Brands may terminate, in its sole discretion, this Agreement upon ninety (90) days' written notice to Dreyer's. (b) Either party may terminate this Agreement, without notice, if the other party: (i) files a voluntary petition under any bankruptcy or insolvency law, or files a voluntary -6- petition under the reorganization or arrangement provisions of any law of any jurisdiction, or have proceedings under any such laws instituted against it which are not terminated within ninety (90) days of such commencement; (ii) becomes insolvent, bankrupt, or admits in writing its inability to pay all debts as they mature or makes a general assignment for the benefit of or enters into any composition or arrangement with creditors; (iii) authorizes, applies for, or consents to the appointment of a receiver, trustee or liquidator of all or a substantial part of its assets, or has proceedings seeking such appointment commenced against it which are not terminated within ninety (90) days of such commencement. (c) Integrated Brands may terminate, in its sole discretion, this Agreement immediately if Dreyer's ceases business operations with respect to all of the Products. (d) Integrated Brands understands that Dreyer's is under no obligation to extend the Term or to enter into subsequent agreements with Integrated Brands. Acceptance of one or more orders after notice of termination hereof shall not be construed as a renewal or extension hereof or as a waiver of termination. (e) Termination of this Agreement for any reason provided herein shall not relieve either party from its obligation to perform up to the effective date of such termination or to perform such obligations as may be capable of performance after termination. (f) Neither party will be liable for delays in performance or a failure to perform hereunder (except where such performance relates to the payment of money) due to causes beyond its reasonable control, including acts of nature, acts of any government, wars, terrorism, riots, fires, floods, accidents, strikes, communication failures, state or local power failures or blackouts, or embargoes; provided, however, in the event Integrated Brands performance of its distribution duties hereunder is impaired by any such cause, it will continue in all respects to treat Dreyer's Products in substantially the same manner that Integrated Brands treats its own products as provided in Section 10 hereof. (g) Upon the expiration or termination of this Agreement: (i) neither party will be liable to the other because of such expiration or termination for damages on account of the loss of prospective profits, goodwill, or on account of, leases or commitments in connection with the business of Integrated Brands or of Dreyer's, or for any other reason whatsoever arising from such expiration or termination; (ii) Integrated Brands will not be deemed to be an authorized distributor of the Products; (iii) Dreyer's will promptly pay all amounts owing Integrated Brands including any such amounts that might have previously become due at some future date because of deferred payment or credit agreements; and (iv) all unshipped orders will be canceled without liability of either party to the other. 16. Insurance. Integrated Brands is responsible for maintaining insurance, at its sole cost and expense, to protect itself from the following: (i) claims under workers' compensation and/or state disability acts; (ii) claims for damages because of bodily injury, sickness or death of any of its employees or any other person that arise out of any negligent act or omission of Integrated Brands, its employees or agents, if any; (iii) claims for damages because of injury to or destruction of tangible personal property, including loss of use resulting therefrom, that arise from any negligent act or omission of Integrated Brands, its employees or agents, if any; and (iv) -7- claims for damages because of bodily injury, sickness or death that arise out of the Products due to Integrated Brands acts or omissions and shall cause Dreyer's to be named as an additional insured on such insurance. The amount of coverage for each of the above must be reasonable based on the volume of the Products delivered by Integrated Brands, but in no event will the coverage for general liability insurance be less than [ORIGINAL TEXT REDACTED] per occurrence and [ORIGINAL TEXT REDACTED] in aggregate general commercial liability coverage. 17. Warranty and Indemnification. (a) Dreyer's will indemnify Integrated Brands from any claim or damages, including reasonable attorneys' fees and costs, arising out of a non-compliant Product not manufactured by Integrated Brands or its Affiliates; provided, however, that Integrated Brands gives Dreyer's immediate written notice of any loss or claim and cooperates fully with Dreyer's in the handling of such claims. (b) Integrated Brands, at its own expense, will at all times indemnify and hold harmless Dreyer's and its Affiliates and their respective directors, officers, employees and agents, and its Customers and upon request will defend the same against all actions, proceedings, claims, demands, losses, suits, outlays, damages, judgments, penalties or expenses and liabilities of any kind or nature, including reasonable legal fees and other costs, that may be assessed against Dreyer's or its Customers or which Dreyer's or its Customers may incur directly or indirectly in connection with or arising out of defects in the storage and delivery to Customers of the Products. (c) Dreyer's shall give Integrated Brands prompt notice of any claim or suit coming within the scope of the indemnity under Section 17(b). Upon the written request of an indemnitee, the indemnitor will assume the defense of a claim, demand or action against such indemnitee and will upon the request of the indemnitee, allow the indemnitee to participate in the defense thereof, such participation to be at the expense of the indemnitee. Settlement by the indemnitee without the indemnitor's prior written consent shall release the indemnitor from the indemnity as to the claim, demand, or action so settled. Termination of this Agreement shall not affect the continuing obligations of each of the parties as indemnitors hereunder. (d) THE EXPRESS WARRANTIES IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. (e) Either party shall be entitled to seek injunctive relief or specific performance. 18. Management of Business. Except to the extent that the specific provisions of this Agreement expressly provide otherwise, Dreyer's reserves to itself the unqualified right to manage its business in all respects, including without limitation, the right to maintain or alter the flavors, formula, ingredients, labeling, packaging and advertising, marketing and sales of the Products. In the event that Integrated Brands is restricted in the delivery of the Products by -8- capacity limitations or due to any of the several acts described in Section 15(f) herein or otherwise, Integrated Brands shall not be compelled to honor Customer orders without due regard to availability, demand by other Customers, and inventory on hand, but shall deliver available Products, among all customers and Integrated Brands own products, in a fair and equitable manner and in accordance with Section 11 hereof. 19. Confidential Information. Except such disclosure as is required by law or court order or stock exchange, each party shall use its best efforts, which shall be the same efforts which that party used to protect its own confidential information, to keep strictly confidential and to prevent the unauthorized use of all information received from the other party which is that party's confidential information and which is clearly identified in writing by that party as confidential prior to its disclosure to the party receiving it; provided, however, that Integrated Brands may use and disclose to others that information which may be furnished by Dreyer's to it specifically for use in connection with the marketing and distribution of the Products to the extent that such disclosure is approved in writing by Dreyer's. Integrated Brands shall disclose Dreyer's confidential information only to those Persons who require such information for the purpose of performing the Collateral Agreements and shall use such information solely for the purpose of performing its obligations under the Collateral Agreements. Neither party shall be bound by any confidentiality restrictions with respect to any information to the extent that such information: (a) came into the lawful possession of the receiving party through sources other than the other party and those sources were under no direct or indirect confidentiality obligation to that other party with respect to such information; or (b) became publicly available through no act or failure to act on the part of the receiving party. 20. Independent Contractor. Both parties agree that Integrated Brands is an independent contractor and, as such, neither Integrated Brands nor its personnel will be considered agents, joint venturers, partners, franchisees, franchisors, or employee(s) of Dreyer's nor will they be entitled to any benefits or privileges provided by Dreyer's to its employees. As a consequence, Dreyer's is neither liable nor responsible for withholding or deducting any sums for federal or state income taxes, social security, health, workers compensation and disability insurance coverage, pension or retirement plan, or other employment benefits. 21. Compliance with Applicable Law. Integrated Brands and Dreyer's agree to comply with all applicable federal, state and local laws, rules and regulations in connection with the performance of this Agreement, including, but not limited to, equal employment opportunity laws, Food and Drug Administration and the Occupational Safety and Health Administration. 22. Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by postage prepaid, registered, certified or express mail or by reputable overnight courier service and shall be deemed given when delivered by hand, three (3) days after mailing (one (1) Business Day (as defined in the Asset Sale Agreement) in the case of guaranteed overnight express mail or -9- guaranteed overnight courier service), as follows (or at such other address for a party as shall be specified by like notice): (i) If to Dreyer's: Dreyer's Grand Ice Cream, Inc. 5929 College Avenue Oakland, California 94618 Attn: General Counsel (ii) If to Nestle Holdings, Inc.: Nestle Holdings, Inc. c/o Nestle USA, Inc. 800 North Brand Boulevard Glendale, California 91203 Attn: General Counsel With a copy to: Howrey, Simon, Arnold & White LLP 1299 Pennsylvania Avenue, N.W. Washington, DC 20004 Attn: Roxann E. Henry, Esq. (iii) If to Integrated Brands: Integrated Brands, Inc. 4175 Veterans Highway Ronkonkoma, New York 11779 Attn: David J. Stein, Co-Chief Executive Officer With a copy to: Goodwin Procter LLP 599 Lexington Avenue New York, New York 10022 Attn: Daniel Kaplan, Esq. In the event that Integrated Brands gives notice regarding any breach or violation of this Agreement by Dreyer's, Integrated Brands shall also concurrently provide a copy of such notice to Nestle Holdings, Inc. 23. Governing Law; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, without regard to the choice-of-law principles of such state. Each party hereby waives to the fullest extent permitted by applicable law, any right it -10- may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under, or in connection with this Agreement or the transactions contemplated hereby or disputes relating hereto. 24. Actions and Proceedings. Integrated Brands and its Affiliates and Dreyer's hereby irrevocably consent to the exclusive jurisdiction and venue of the courts of the State of New York and the United States District Court for the Southern District of New York in connection with any action or proceeding arising out of this Agreement or any related transaction. Dreyer's irrevocably appoints Dreyer's General Counsel as its authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waives any objections to personal jurisdiction with respect thereto. Integrated Brands and its Affiliates hereby appoint Integrated Brands' Co-Chief Executive Officer as their authorized agent upon whom process may be served in any such action or proceeding instituted in any such court and waive any objections to personal jurisdiction with respect thereto. 25. Attorneys' Fees and Costs. The prevailing party in any legal action relating to this Agreement will be entitled to recover its attorneys' fees and litigation costs and expenses incurred in connection with such action or arbitration as part of the same proceeding. 26. Severability. The illegality, invalidity or unenforceability of any part of this Agreement shall not affect the legality, validity or enforceability of the remainder of this Agreement. If any part of this Agreement shall be found to be illegal, invalid or unenforceable, this Agreement shall be given such meaning as would make this Agreement legal, valid and enforceable in order to give effect to the intent of the parties. 27. Entire Agreement; Amendments. This Agreement (including all exhibits attached hereto), the Asset Sale Agreement and the other Collateral Agreements constitutes the complete agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous agreements (even if written notice of termination was required to be given by a party), discussions, representation and proposals, written or oral, with respect to the subject matter discussed herein. No modification of this Agreement will be effective unless contained in writing and signed by an authorized representative of each party. 28. Assignment. Neither party shall be permitted to assign this Agreement (including through operation of law or through a change of control) or delegate its obligations to any Person under this Agreement without the other party's prior written consent. 29. Waiver. The failure of a party to prosecute its rights with respect to a breach hereunder will not constitute a waiver of the right to enforce its rights with respect to the same or any other breach. 30. Duplicate Originals; Faxed Signatures. This Agreement may be executed in any number of counterparts, each of which will be an original and all of which will constitute together one and the same document. -11- IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. INTEGRATED BRANDS, INC. By: /s/ David J. Stein ------------------------------------ David J. Stein Co-Chief Executive Officer DREYER'S GRAND ICE CREAM, INC. By: /s/ T. Gary Rogers ------------------------------------ T. Gary Rogers Chairman of the Board of Directors and Chief Executive Officer [Signature Page to Non-Grocery Distribution Agreement] Exhibit A Products ORIGINAL TEXT REDACTED Exhibit A to Non-Grocery Distribution Agreement Exhibit B Maximum Annual Volumes [ORIGINAL TEXT REDACTED] ORIGINAL TEXT REDACTED Exhibit B to the Non-Grocery Distribution Agreement Exhibit C Counties ORIGINAL TEXT REDACTED Exhibit C to the Non-Grocery Distribution Agreement -1- -----END PRIVACY-ENHANCED MESSAGE-----