Ace Dealer Franchise Agreement Dated Apr. 29, 1981

ACE DEALER FRANCHISE AGREEMENT


This Franchise Agreement made and entered into by and between ACE HARDWARE CORPORATION, a Delaware corporation, having its general offices at 2200 Kensington Court, Oak Brook, Illinois 60521, hereinafter referred to as the "Company" and Utah Service, Inc., an independent merchant operating a retail business at 35 East 400 South, Springville, Utah 84663, hereinafter referred to as the "Dealer";


WITNESSETH:


In consideration of the premises and the mutual covenants herein contained, the Company and the Dealer hereby agree as follows:


ARTICLE I


DUTIES AND OBLIGATIONS OF THE COMPANY


The Company agrees to:


1. permit, authorize and allow the Dealer to use the name "ACE Hardware" in
connection with the business operated by the Dealer at the above
location, and to use the ACE Hardware trademark and other trademarks and
service marks belonging to or registered by the Company and to
prominently display the ACE Hardware group identification sign and
emblem in connection with said business;


2. sell to the Dealer for resale by the Dealer at the business operated by
the Dealer at the above location such merchandise as the Company
regularly carries for sale, including all items carried under the ACE
Brand Name;


3. prepare and make available to the Dealer at the lowest possible cost for
use in connection with the business operated by the Dealer at the above
location advertising circulars, newspaper mats, ACE identification signs
and other promotional materials, provided that the Dealer, at the
Dealer's option, agrees to purchase or subscribe for said materials and
to pay a reasonable charge therefore;


4. hold ACE Hardware Corporation Conventions and Meetings from time to time
and to display at such Conventions and Meetings merchandise offered for
sale by the Company;


5. provide the Dealer with Bulletins for special purchases from time to
time and prepare and make available to the Dealer at a reasonable charge
either catalogue checklist service or microfiche film service in order
that the Dealer may have available at all time updated information to
enable the Dealer to order a wide range of merchandise for the conduct
of his business (it being understood that all such checklists and
microfiche films are the


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property of the Company and that they can be removed from the Dealer's
place of business immediately upon termination of this Agreement);


6. distribute to the Dealer as patronage dividends within 8 -1/2 months
following the close of each year, in accordance with the applicable
provisions of Article XXIV of the Company's By-laws and the then
effective patronage dividend distribution plan of the Company, the
proportionate share allocable to the Dealer's place of business
described above of the net savings and earnings effected by or resulting
from operations carried on by the Company in connection with each
category of sales of merchandise made by it to all Dealers to whom the
Company is obligated to pay patronage dividends.


ARTICLE II
DUTIES AND OBLIGATIONS OF THE DEALER


The Dealer agrees to:


1. subscribe and pay for the appropriate number of shares of capital stock
of the Company in accordance with the accompanying Subscription for
Capital Stock Agreement which shall be deemed to be a part of this
Agreement; (except that where any such capital stock has been
transferred, with the Company's consent, to the Dealer by a former
Dealer, the Dealer shall assume all obligations under the Subscription
for Capital Stock Agreement executed or assumed by such former Dealer
for which the former Dealer was liable at the time of such transfer of
said capital stock to the Dealer);


2. give first and careful consideration to all merchandise lines and items
offered for sale by the Company and to purchase an adequate volume of
merchandise (including items carried under the ACE private label) from
the Company's distribution centers, from its special Bulletin Program
and from its Supplier-Direct Shipment Program in order to maintain the
quality image of the ACE franchise and to ensure that the Dealer's
allocation under the Company's Patronage Dividend Program will not
inequitably favor the Dealer in relation to the Company's costs of
serving the Dealer;


3. make payment of all amounts shown as currently due on all billing
statements rendered by the Company to the Dealer for purchases of
merchandise, supplies and services from the Company with sufficient
promptness for the checks of the Dealer in payment of such amounts to be
received by the Company no later than the tenth day following the date
of the statement and to pay a service charge equal to 1% per bi-weekly
billing statement period on any past due balance (it being understood
that any invoices for purchases of merchandise on which extended terms
have been granted shall automatically become due when other items billed
are not paid by the due date and it being further understood that the
percentage for determining the service charge on past due balances may
be changed from time to time by the Company);


4. return no merchandise purchased by the Dealer from the Company without
the written consent of the Company first being obtained;


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5. pay to the Company a handling charge in the amount of Three Hundred
Dollars ($300.00) upon acceptance by the Company of the retail business
operated by the Dealer at the location described in this Agreement as an
authorized ACE retail outlet in order to partially defray the costs
incurred by the Company in processing this Agreement and the
accompanying Subscription for Capital Stock Agreement, or Agreement
assuming the obligations of a former Dealer under a previously executed
Subscription for Capital Stock Agreement;


6. pay such reasonable charge as the Company regularly assesses against all
ACE dealers as a percent of their volume of purchases from the Company
in order to fund the Company's national and regional advertising
programs;


7. keep in strict confidence all ACE Checklists, Microfiche Films,
Bulletins, Catalogs, Order Forms, equipment, correspondence, and other
Company documents and information ...