INSURANCE ALLOCATION AGREEMENT
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CONFORMED COPY
INSURANCE ALLOCATION AGREEMENT
This Insurance Allocation Agreement, dated as of March 16, 2004 (this "Agreement"), is made by and among ▇▇▇. ▇▇▇▇▇▇' Companies, Inc., a Delaware corporation ("Parent"), and all direct and indirect subsidiaries of Parent (whether now existing or hereafter formed or acquired), including, without limitation, ▇▇▇. ▇▇▇▇▇▇ Famous Brands, LLC, a Delaware limited liability company ("MFFB"), (each such direct or indirect subsidiary of Parent is referred to separately as a "Subsidiary" and, collectively, as the "Subsidiaries").
W I T N E S S E T H:
WHEREAS, Parent routinely obtains insurance policies that cover Parent and all of the Subsidiaries as a group; and
WHEREAS, Parent and the Subsidiaries wish to agree as to the methodology and schedule pursuant to which each of the Subsidiaries will be allocated their pro-rata share of the costs and benefits of such insurance policies and will remit payments in respect of such allocated amounts to Parent.
NOW, THEREFORE, in consideration of the mutual premises and agreements set forth herein, each of Parent and the Subsidiaries, intending to be legally bound hereby, agree as follows:
1. Provision of Insurance. Parent agrees that it shall be responsible for obtaining insurance coverage for itself and the Subsidiaries in such amounts and covering such items as Parent and the management of MFFB from time to time may determine in their sole and exclusive discretion. The resulting policies maintained and obtained from time to time by Parent in respect of such coverage, including the existing policies and types of coverage set forth on Schedule A attached hereto, are referred to herein as the "Policies."
2. Allocation of Insurance Cost. In consideration of the provision of insurance coverage by Parent, the parties agree that none of the costs of obtaining and maintaining the effectiveness of the Policies shall be allocated to or borne by Parent or any of the Subsidiaries identified on Schedule B attached hereto unless Parent determines otherwise in its sole and exclusive discretion. All costs related to obtaining and maintaining the Policies shall be allocated among the Subsidiaries (other than the Subsidiaries identified on Schedule B) based upon Parent's and the management of MFFB's commercially reasonable estimation of the entity from which loss is likely to occur. Such estimation will account for appropriate variables, such as which entities own the covered assets or employ the covered persons, or otherwise benefit from such coverage. Allocation of workers compensation insurance coverage also will be determined in Parent's and the management of MFFB's commercially reasonable judgment, and shall be based upon the respective employee headcount and employment category risk factor of each Subsidiary. Schedule C attached hereto sets forth the allocation determined in accordance with this Section 2 as of the date of this Agreement, which allocation shall continue in effect until the expiration of each Policy year (currently each September), at which time Parent and the management of MFFB shall determine the appropriate allocation and advise each of the Subsidiaries of such allocation.
3. Subsidiary Payments of Allocated Costs to Parent. In each Policy year, each Subsidiary to which costs are allocated under Section 2 above shall pay its respective allocated portion in respect of the Policies to Parent no later than the date that Parent pays any premiums or other costs arising from or in connection with the Policies. Notwithstanding the foregoing, ▇▇▇. ▇▇▇▇▇▇' Original Cookies, Inc., one of Parent's Subsidiaries, may elect to make any payment to Parent hereunder on behalf of any of its subsidiaries (with the exception of MFFB and its subsidiaries), and MFFB may elect to make any payment to Parent hereunder on behalf of any of its subsidiaries.
4. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of Utah (other than its rules of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby).
(b) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute a single instrument.
(c) Descriptive Headings. Descriptive headings of the Sections of this Agreement are inserted for convenience only and shall not affect the meaning of this Agreement.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.
| ▇▇▇. ▇▇▇▇▇▇' COMPANIES, INC. | ||||
By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
|||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President, General Counsel and Secretary | |||
▇▇▇. ▇▇▇▇▇▇ FAMOUS BRANDS, LLC |
||||
By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
|||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President, General Counsel and Secretary | |||
THE SUBSIDIARIES: |
||||
| TCBY ENTERPRISES, LLC, AMERICANA FOODS GENERAL PARTNER, INC., FSL, INC., ▇▇▇. ▇▇▇▇▇▇' HOLDING COMPANY, INC., ▇▇▇. ▇▇▇▇▇▇' ORIGINAL COOKIES, INC., LV-H&M, LLC, U-VEST, LLC, GREAT AMERICAN COOKIE COMPANY, LLC, PRETZEL TIME, LLC, PRETZELMAKER, LLC, PRETZELMAKER CANADA, INC., ▇▇▇. ▇▇▇▇▇▇ COOKIES (CANADA) LTD., GREAT AMERICAN COOKIE COMPANY FRANCHISING, LLC, ▇▇▇. ▇▇▇▇▇▇ FRANCHISING, LLC, PRETZEL TIME FRANCHISING, LLC, PRETZELMAKER FRANCHISING, LLC, TCBY SYSTEMS, LLC, ▇▇▇. ▇▇▇▇▇▇ GIFTS, INC., THE ▇▇▇. ▇▇▇▇▇▇' BRAND, INC., GREAT AMERICAN MANUFACTURING, LLC, ▇▇▇. ▇▇▇▇▇▇ COOKIES AUSTRALIA, TCBY INTERNATIONAL, INC., TCBY OF TEXAS, INC. RIVERPORT EQUIPMENT AND DISTRIBUTION COMPANY, CMI PROPERTY HOLDINGS, INC., JUICE WORKS DEVELOPMENT, INC., TCBY OF TURKEY, INC, TCBY OF COLOMBIA, INC., TCBY OF BOLIVIA, INC., TCBY OF IRELAND, INC., TCBY OF SAUDI ARABIA, INC., TCBY OF MEXICO, INC., TCBY OF ARUBA, INC., TCBY UNITED KINGDOM, INC., TCBY OF PHILIPPINES, INC., TCBY OF QATAR, INC., TCBY OF ISRAEL, INC., TCBY OF PORTUGAL, INC., TCBY OF NETHERLANDS, INC., TCBY OF AUSTRALIA, INC., TCBY OF JORDAN, INC., TCBY OF SOUTH AFRICA, INC., TCBY OF KUWAIT, INC. | ||||
By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ |
|||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | Senior Vice President, General Counsel and Secretary | |||
| Policy Type |
Insurance Co. or Intermediary |
|
|---|---|---|
| General Liability | C N A | |
Automobile |
C N A |
|
Umbrella |
St. ▇▇▇▇ Fire & Marine |
|
Excess Liability |
Executive Risk |
|
Property |
Steadfast Insurance Co. |
|
E&O |
Nutmeg Insurance Co. |
|
E&O Excess |
Illinois Union Indemnity |
|
Special Coverage |
Liberty Mutual (K&R) |
|
Crime |
Continental Casualty |
|
Ocean Cargo |
Lloyds |
|
Contaminated Products |
Lloyds |
|
Foreign Liability |
ACE |
|
Workers Compensation |
Ohio BWC, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Fund, WV Division of WC, State of Wyoming, State of Conn. W.C. Fund, Workers Comp Fund of Mass., Workers Comp Fund of Utah |
|
D&O and EPL |
Houston Casualty, Royal Insurance, XL Specialty, Federal Insurance |
|
D&O and EPL—Excess |
Executive Risk |
|
Fiduciary |
St. ▇▇▇▇ Mercury Ins., Federal Insurance |
In addition to Parent, the following Subsidiaries shall not be allocated any costs in connection with the Policies:
- •
- ▇▇▇. ▇▇▇▇▇▇'
Holding Company, Inc.;
- •
- TCBY
Enterprises, LLC;
- •
- Americana
Foods General Partner, Inc.; and
- •
- FSL, Inc.
▇▇▇
▇▇▇▇▇▇' Companies, Inc.
SCHEDULE C to INSURANCE ALLOCATION AGR
Insurance
Policy year: 9/18/03-9/17/04
| Policy type |
Total Premium |
Allocation Method |
MFOC & Subs |
MFFB & Subs |
Total |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
General liability |
147,557 |
Premium based on sales & number of stores. Allocation based on risk of loss by Accounting unit |
40 |
% |
60 |
% |
100 |
% |
|||
Auto |
15,992 |
Assignment of Automobiles |
0 |
% |
100 |
% |
100 |
% |
|||
Umbrella |
84,700 |
Allocation of GL, Auto and Foreign |
35 |
% |
65 |
% |
100 |
% |
|||
Excess Liability |
38,500 |
Allocation of GL, Auto and Foreign |
35 |
% |
65 |
% |
100 |
% |
|||
Property |
152,941 |
Property locations and values, Business Income |
48 |
% |
52 |
% |
100 |
% |
|||
E&O |
314,875 |
Franchising and Corporate (Unit from which loss is likely to occur) |
0 |
% |
100 |
% |
100 |
% |
|||
E&O Excess |
143,000 |
E&O allocation |
0 |
% |
100 |
% |
100 |
% |
|||
Special coverage |
10,000 |
Corporate |
0 |
% |
100 |
% |
100 |
% |
|||
Crime |
23,232 |
Asset Values |
33 |
% |
67 |
% |
100 |
% |
|||
Ocean Cargo |
5,500 |
Corporate |
0 |
% |
100 |
% |
100 |
% |
|||
Contaminated Products |
142,451 |
Stores, Mail Order, Batter (Unit from which loss is likely to occur) |
78 |
% |
22 |
% |
100 |
% |
|||
Foreign Liability |
4,739 |
Employees who work or travel on business abroad |
0 |
% |
100 |
% |
100 |
% |
|||
0 |
% |
0 |
% |
||||||||
Workers Compensation |
1,002,688 |
Employee Payroll and employment risk factor |
86 |
% |
14 |
% |
100 |
% |
|||
0 |
% |
0 |
% |
||||||||
D&O and EPL |
277,493 |
D&O—Corporate EPL—Head Count |
31 |
% |
69 |
% |
100 |
% |
|||
Excess D&O/EPL |
138,747 |
D&O and EPL allocation |
31 |
% |
69 |
% |
100 |
% |
|||
D&O—A side |
52,556 |
Corporate Only |
0 |
% |
0 |
% |
0 |
% |
|||
Fiduciary |
10,539 |
Stores & Corporate (Unit from which loss is likely to occur) |
28 |
% |
72 |
% |
100 |
% |
INSURANCE ALLOCATION AGREEMENT