Page 542 - Onboarding May 2017

inventory management to maintain an adequate supply of Approved Products while
minimizing the risk of Approved Product obsolescence. CSCS will use commercially
reasonable efforts to communicate with Distributor at least 45 days in advance of any menu
changes, Approved Product changes or Promotions to help Distributor manage its
inventory. The parties will use commercially reasonable efforts to resolve excess or
insufficient inventory issues resulting from such changes or Promotions. Operator will not
be obligated to purchase any Approved Product purchased by Distributor after CSCS has
given Distributor written notice that it has been discontinued.

7.3 Inventory Management Report.
Distributor will provide CSCS and Operator a quarterly status report of Slow-Moving
Products, Obsolete Products, and Short Shelf Life Products. At CSCS’ request, Distributor
will provide these reports monthly. Distributor will also provide weekly reports for any
Approved Products with a shelf life of four weeks or less. Within two weeks of receipt of
this status report, Distributor and CSCS will jointly review it and discuss strategies to
reduce obsolete inventory exposure. Distributors are required to reply to CSCS inventory
management reports within 3 business day of receipt of report.

7.4 Inventory Management of Obsolete Product.
If Distributor has purchased Approved Product based on reasonable projected or historical
usage and such Approved Product is at risk of becoming Slow-Moving Product or Obsolete
Product because Distributor has been unable to sell it to the Restaurants, then Distributor
will promptly notify Operator and CSCS if Operator has failed to purchase that Approved
Product consistent with its projected or historical usage. Operator and Distributor will
jointly reach a resolution to reduce Distributor’s inventory of the Approved Product. If the
parties determine that Distributor purchased Approved Product consistent with projected or
historical usage, Operator will purchase a proportionate share of inventory based on their
projected or historical usage. CSCS will assist Operator and Distributor in reaching a
resolution. Operator will not be required to purchase any Approved Product that
Distributor has ordered after Distributor has been notified by CSCS that Approved Product
has been discontinued.

8.0 PROMOTIONS

8.1 Promotions.
Distributor acknowledges that Applebee’s and IHOP offer Promotions in the Restaurants
throughout the year. Distributor will follow the specific individual Promotion guidelines
and inventory requirements that CSCS will provide to Distributor approximately 6 weeks
in advance of each Promotion. General Promotion Guidelines are attached as Exhibit D.

9.0 ORDERS

9.1 Order Guide.
Distributor will provide CSCS and Operator an Order Guide once a month that sets forth
the current Supplier Cost and Invoice Cost for all Approved Products. Distributor will
provide CSCS and Operator a report each week that lists updates to the Invoice Cost for
Approved Products.

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