FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
BAGEL STORE DEVELOPMENT FUNDING, L.L.C.
(FORMERLY KNOWN AS
EINSTEIN BROS. EQUITY FUNDING, L.L.C.)
This Fifth Amended and Restated Limited Liability Company Agreement of
Bagel Store Development Funding, L.L.C. (formerly known as Einstein Bros. Equity
Funding, L.L.C.) (the "Company") is made as of April 14, 1997, among the Persons
whose names and signatures are set forth on the signature pages hereto.
Recitals
The Company was formed pursuant to the Delaware Limited Liability
Company Act, 6 Del.C. (S)18-101, et seq., as amended from time to time (the
"Delaware Act"), on December 7, 1995. Additional Members were admitted to the
Company on December 29, 1995 and March 8, 1996 pursuant to an Amended and
Restated Limited Liability Company Agreement dated as of December 29, 1995 and a
Second Amended and Restated Limited Liability Company Agreement dated as of
March 8, 1996. The Members entered into a Third Amended and Restated Limited
Liability Company Agreement dated as of March 29, 1996, a Fourth Amended and
Restated Limited Liability Company Agreement dated as of July 1, 1996 and an
Amendment (the "Amendment") dated as of April 1, 1997 to the Fourth Amended and
Restated Limited Liability Company Agreement. The Amendment, among other
things, authorized the Manager, without further consent of the Members, at any
time to prepare a restatement of the Company's Limited Liability Company
Agreement to reflect all prior amendments adopted by the Members. The Manager
has prepared this Fifth Restatement in order to reflect the changes to the
Limited Liability Company Agreement made by the Amendment.
The parties hereto desire to continue the Company as a limited
liability company under the Delaware Act and to provide for certain changes in
the governance and operations of the Company.
Covenants
In consideration of the agreements and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified.
"Additional Funding" has the meaning given it in Section 4.1.1.
"Additional Funding Obligation" has the meaning given it in
Section 4.1.1.
"Affiliate" means with respect to a specified Person, any Person that
directly or indirectly controls, is controlled by, or is under common control
with, the specified Person. As used in this definition, the term "control"
means the possession, directly or indirectly, of the Power to direct or cause
the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.
"Agreement" means this Limited Liability Company Agreement, as
amended, modified, supplemented or restated from time to time.
"Area Developer" means a Person who has entered into an area
development agreement with Bagel Corp. and in whom Bagel Corp. has made an
investment in the form of convertible debt.
"Assignee" means any Person who is an assignee of a Member's interest
in the Company, or part thereof, and who does not become a Member pursuant to
Section 13.1 hereof.
"Bagel Corp." means Einstein/Noah Bagel Corp., a Delaware corporation.
"Bankruptcy" has the meaning given it in Section 18-101 of the
Delaware Act.
"BCI" means Boston Chicken, Inc., a Delaware corporation.
"Capital Account" means, with respect to any Member or Assignee, the
account maintained for such Member or Assignee in accordance with the provisions
of Section 4.4 hereof.
"Capital Contribution" means, with respect to any Member, the
aggregate amount of money actually contributed to the Company pursuant to
Section 4.1 hereof with respect to the Units held by such Member. In the case
of a Member or Assignee who acquires an interest in the Company by virtue of an
assignment in accordance with the terms of this Agreement, "Capital
Contribution" has the meaning set forth in Section 4.4.1 hereof.
"Certificate" means the Certificate of Formation and any and all
amendments thereto and restatements thereof filed on behalf of the Company with
the office of the Secretary of State of the State of Delaware pursuant to the
Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any corresponding federal tax statute enacted after the date of this
Agreement. A reference to a specific section of the Code refers not only to
such specific section but also to any corresponding provision of any federal tax
statute enacted after the date of this Agreement, as such specific section or
corresponding provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
"Company" means Bagel Store Development Funding, L.L.C., the limited
liability company heretofore formed under the name Einstein Bros. Equity
Funding, L.L.C. and continued under and pursuant to the Delaware Act and this
Agreement.
"Covered Person" means a Member, any Manager, any Affiliate of a
Member or of any Manager, any officers, directors, shareholders, partners,
employees, representatives or agents of a Member, any Manager or their
respective Affiliates, any member of the Advisory Committee or designated
alternate to the Advisory Committee, or any officer, employee or agent of the
Company or its Affiliates, including without limitation Bagel Corp. and its
officers, directors, shareholders and employees at any time that Bagel Corp. is
providing services to the Company.
2
"Delaware Act" means the Delaware Limited Liability Company Act,
6 Del.C. (S) 18-101, et seq., as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Member" means a Member which is (i) an "Employee Benefit Plan"
within the meaning of and subject to the provisions of ERISA, (ii) a "Plan"
within the meaning of and subject to Section 4975 of the Code or (iii) an entity
the assets of which constitute assets of an Employee Benefit Plan or a Plan
under Department of Labor Regulations 29 C.F.R. Section 2510.3-101.
"Fiscal Year" means the accounting period selected by the Manager or
Managers or any portion of such period for which the Company is required to
allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Article VIII hereof.
"Gross Asset Value" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed by a Member
to the Company shall be the gross fair market value of such asset, as
agreed to by the contributing Member and the Manager or Managers;
(ii) the Gross Asset Value of all Company assets shall be adjusted to
equal their respective gross fair market values, as determined by the
Manager or Managers, as of the following times: (a) the acquisition of an
additional interest in the Company by any new or existing Member in
exchange for more than a de minimis Capital Contribution; (b) the
distribution by the Company to a Member or Assignee of more than a de
minimis amount of Company assets as consideration for an interest in the
Company; and (c) the liquidation of the Company within the meaning of
Treasury Regulation Section 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to clause (a) and clause (b) of this sentence shall be
made only if the Manager or Managers reasonably determine that such
adjustments are necessary or appropriate to reflect the relative economic
interests of the Members and Assignees in the Company; and
(iii) the Gross Asset Value of any Company asset distributed to any
Member or Assignee shall be the gross fair market value of such asset on
the date of distribution, as determined by the distributee Member or
Assignee and the Manager or Managers.
"Liquidating Trustee" has the meaning set forth in Section 14.3
hereof.
"Majority Vote" means, with respect to any group of Members as of any
particular time, the vote of Members in such group whose Units at such time
exceed one-half of the outstanding Units of all Members in such group at such
time and whose Capital Account balances at such time exceed one-half of the
outstanding Capital Account balances of all Members in such group at such time,
in each case ignoring any Units or Capital Account balances held by Assignees.
"Manager" or "Managers" means the Person or Persons designated by the
Members in Article VI hereof as the manager of the Company within the meaning of
the Delaware Act and shall include all successors appointed pursuant to the
provisions of this Agreement. References to the "Manager", the "Managers" or
the "Manager or Managers" shall all be construed to refer to the Person or
Persons then serving as Managers of the Company.
3
"Member" means any Person named as a member of the Company on Schedule
A hereto and includes any Person admitted as a Substitute Member pursuant to the
provisions of this Agreement, and "Members" means two or more of such Persons
when acting in their capacities as members of the Company. For purposes of the
Delaware Act, the Members shall constitute one class or group of members.
"Other Business Entity" has the meaning given it in Section 18-209 of
the Delaware Act.
"Permitted Temporary Investments" means Treasury securities, bank
certificates of deposit and time deposits, in each case having a maturity of one
year or less, commercial paper or money-market instruments.
"Person" includes any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Profits" and "Losses" means, for each Fiscal Year, an amount equal to
the Company's taxable income or loss for such Fiscal Year, determined in
accordance with Section 703(a) of the Code (but including in taxable income or
loss, for this purpose, all items of income, gain, loss or deduction required to
be stated separately pursuant to Section 703(a)(1) of the Code), with the
following adjustments:
(i) any income of the Company exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be added to such taxable income or loss;
(ii) any expenditures of the Company described in Section 705(a)(2)(B)
of the Code (or treated as expenditures described in Section 705(a)(2)(B)
of the Code pursuant to Treasury Regulation Section 1.704-1 (b)(2)(iv)(i))
and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be subtracted from such taxable income or
loss;
(iii) in the event the Gross Asset Value of any Company asset is
adjusted in accordance with paragraph (ii) or paragraph (iii) of the
definition of "Gross Asset Value" above, the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses; and
(iv) gain or loss resulting from any disposition of any asset of the
Company with respect to which gain or loss is recognized for federal income
tax purposes shall be computed by reference to the Gross Asset Value of the
asset disposed of, notwithstanding that the adjusted tax basis of such
asset differs from its Gross Asset Value.
"Substitute Member" means a Person who is admitted to the Company as a
Member pursuant to Section 13.1 hereof, and who is named as a Member on Schedule
A to this Agreement.
"Tax Matters Partner" has the meaning set forth in Section 11.1
hereof.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
4
"Unit" means an interest in the Company representing such fractional
part of the interest of all Members and Assignees pursuant to this Agreement as
is equal to one divided by the total number of Units.
ARTICLE II
CONTINUATION AND TERM
Section 2.1 Continuation.
2.1.1 The Members hereby agree to continue the Company as a
limited liability company under and pursuant to the provisions of the
Delaware Act and agree that the rights, duties and liabilities of the
Members and the Managers shall be as provided in the Delaware Act,
except as otherwise provided herein.
2.1.2 The name and mailing address of each Member and Assignee
shall be listed on Schedule A attached hereto. The Manager or
Managers shall update Schedule A from time to time as necessary to
accurately reflect the information therein. Any amendment or revision
to Schedule A made in accordance with this Agreement shall not be
deemed an amendment to this Agreement. Any reference in this
Agreement to Schedule A shall be deemed to be a reference to Schedule
A as amended and in effect from time to time.
Section 2.2 Name. The name of the Company continued hereby is Bagel
Store Development Funding, L.L.C. The business of the Company may be conducted
upon compliance with all applicable laws under any other name designated by the
Managers. The Managers may amend the Certificate to change the name of the
Company to any name designated by the Managers.
Section 2.3 Term. The term of the Company commenced on the date the
Certificate was filed in the office of the Secretary of State of the State of
Delaware and shall continue until December 31, 2005, unless dissolved before
such date in accordance with the provisions of this Agreement.
Section 2.4 Registered Agent and Office. The Company's registered
agent and office in Delaware shall be The Corporation Trust Company, Corporation
Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At any time, the
Managers may designate another registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal place of
business of the Company shall be at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇. Upon ten days notice to the Members, the Managers may change the
location of the Company's principal place of business.
Section 2.6 Qualification in Other Jurisdictions. The Managers may
cause the Company to be qualified, formed or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company transacts business. Any Manager, as an authorized person, within the
meaning of the Delaware Act, may execute, deliver and file any certificates (and
any amendments and/or restatements thereof) necessary for the Company to qualify
to do business in a jurisdiction in which the Company may wish to conduct
business.
5
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The Company is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Company is, (i) investing in equity securities of Area Developers, (ii)
investing in warrants to purchase shares of Bagel Corp. and (iii) engaging in
any and all activities necessary or incidental to the foregoing and any other
legal business.
Section 3.2 Powers of the Company. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose set
forth in Section 3.1, including, but not limited to, the power:
(a) to conduct its business, carry on its operations and have and
exercise the powers granted to a limited liability company by the
Delaware Act in any state, territory, district or possession of the
United States, or in any foreign country that may be necessary,
convenient or incidental to the accomplishment of the purposes of the
Company;
(b) subject to the provisions of Section 3.1, to purchase, take,
receive, subscribe for or otherwise acquire, own, hold, vote, use,
employ, sell, mortgage, lend, pledge or otherwise dispose of, and
otherwise use and deal in and with, shares or other interests in or
obligations of Area Developers and Bagel Corp., or rights to acquire
any of the foregoing;
(c) to purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or
otherwise dispose of, and otherwise use and deal in and with Permitted
Temporary Investments;
(d) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Manager or any
Member or any Affiliate of any of them, or any agent of the Company
necessary to, in connection with, convenient to, or incidental to the
accomplishment of the purpose of the Company;
(e) to lend money;
(f) to ▇▇▇ and be sued, complain and defend, and participate in
administrative or other proceedings, in its name;
(g) to elect and designate one or more managers of the Company in
accordance with Article VI hereof and to appoint officers, employees
and agents of the Company, and define their duties and fix their
compensation;
6
(h) to indemnify any Person in accordance with the Delaware Act;
(i) to cease its activities and cancel its Certificate;
(j) to negotiate, enter into, renegotiate, extend, renew,
terminate, modify, amend, waive, execute, acknowledge or take any
other action with respect to any contract or security agreement in
respect of any assets of the Company;
(k) to borrow money and issue evidences of indebtedness, and to
secure the same by a mortgage, pledge or other lien on the assets of
the Company;
(l) to take actions to protect and preserve the Company's assets,
including insuring the business and assets of the Company against
risks;
(m) to hold Company assets in the name of the Company or in the
name of one or more nominees;
(n) to open one or more bank accounts in the name of the Company
or in any other name in which the Company's funds are to be held, make
deposits therein, draw funds therefrom and deal in or with the
Company's funds;
(o) to make distributions of the Company's funds or assets to the
Members as provided for by this Agreement;
(p) to make such income tax elections as may be appropriate or
desirable, as contemplated by the Code and the Treasury Regulations;
prepare and file tax returns for the Company with federal, state and
local authorities; file amendments to such returns; participate in
audits of such returns; consent to extensions relating to such
returns; execute documents relating to the settlement of tax
proceedings involving the Company or its tax returns; participate in
administrative and judicial proceedings, including appeals, relating
to the Company's tax returns or its tax liabilities; and settle issues
relating to the Company's federal and, to the extent required, state
and local income tax returns even though the Members rather than the
Company shall be subject to tax as so determined;
(q) to pay, collect, compromise, litigate, arbitrate or otherwise
adjust or settle any and all other claims or demands of or against the
Company or to hold such proceeds against the payment of contingent
liabilities; and
(r) to make, execute, acknowledge and file any and all documents
or instruments necessary, convenient or incidental to the
accomplishment of the purposes of the Company.
7
ARTICLE IV
CAPITAL CONTRIBUTIONS,
UNITS, CAPITAL ACCOUNTS AND ADVANCES
Section 4.1 Capital Contributions.
4.1.1 Each Member has contributed to the capital of the Company
the amount set forth opposite the Member's name on Schedule A attached
hereto. In addition, each Member agrees to contribute to the Company
in the future the aggregate amount set forth opposite such Member's
name on Schedule A under the heading Additional Capital Subscription
at the time or times called for by the Manager or Managers on not less
than 30 days written notice (a "Capital Call"). The Manager or
Managers may not require that any portion of the Additional Capital
Subscription be paid on a date earlier than October 1, 1996 or later
than December 31, 1998 and may not require that the total amount of
the Additional Capital Subscription be paid in more than two
installments, each of which shall be for at least 20% of the Members'
aggregate Additional Capital Subscriptions. The making of each such
additional Capital Contribution is referred to herein as an
"Additional Funding" and the amount each Member is obligated to
contribute at an Additional Funding is referred to as such Member's
"Additional Funding Obligation."
4.1.2 Until March 31, 1996, the Manager may admit additional
Members or accept increased Capital Contributions from Members;
provided that all Capital Contributions shall be on the same terms.
No revaluation of the Company's assets shall be made in connection
with such admission or increase, it being the intention to treat all
such Members as if admitted on the date of this Agreement.
4.1.3 The Members agree that the prompt payment of each
Additional Funding Obligation is of the essence of this Agreement,
that failure of any Member to make such payments will cause injury to
the Company and the other Members and that the amount of damages
caused by such injury will be extremely difficult to calculate.
Accordingly, the Members agree that if a Member fails to pay any of
such Member's Additional Funding Obligations within three days of the
date it is due, or such longer period as the Manager or Managers may
in its or their sole discretion determine (but in no event longer than
45 days), the Company shall treat such defaulting Member's interest in
future Profits of the Company as terminated; and such defaulting
Member shall be entitled to receive from the Company only the amount
of such Member's Capital Account at the time of such default (reduced
by any future allocation of Losses to such Member), such amount to be
payable without interest at the expiration of the term of the Company.
Upon such default, the defaulting Member shall cease to have any
rights as a Member except as described in the preceding sentence.
8
4.1.4 Notwithstanding Section 4.1.3, if at any time before a
date on which any Additional Funding Obligation is payable any ERISA
Member shall obtain and deliver to the Managers an opinion of
independent legal counsel, which counsel and opinion are acceptable to
the Managers (which acceptance the Managers shall not unreasonably
withhold) to the effect that such Member is an ERISA Member and there
is a material likelihood that the payment of such Additional Funding
Obligation would either (i) cause or constitute a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) cause the assets of the Company to constitute plan assets for
purposes of ERISA, then such Member shall be released from any further
obligation to pay such Additional Funding Obligation.
4.1.5 Upon any default described in Section 4.1.3 or any release
described in Section 4.1.4, the Managers may designate any person to
assume the entire unpaid balance of the Additional Funding Obligation
(and the future Additional Funding Obligation, if any) of the
defaulting or released Member and become a Member entitled to share in
the profits and losses of the Company as determined pursuant to this
Agreement. The Managers agree to offer the opportunity to pay such
Additional Funding Obligation to the Members who are not in default or
released, pro rata to their Capital Contributions, prior to offering
such opportunity to third parties. Any Member who fails to accept
such offer in writing within fifteen (15) days after it is made shall
be deemed to have rejected the offer.
4.1.6 The remedies provided in this Section 4.1 are in addition
to and not in limitation of any other right or remedy of the Company
provided by law or under this Agreement. In the event of any legal
proceedings relating to default by a Member, if the Company shall
prevail, such Member shall pay (i) all costs and expenses incurred by
the Company, including attorneys' fees, and (ii) interest on the
unpaid Additional Funding Obligation at a per annum rate equal to the
lesser of the maximum interest rate permitted by law or the rate of
interest publicly announced from time to time by Bank of America
Illinois, Chicago, Illinois (or its successor in interest), as its
Prime Rate (or its equivalent) for United States Dollar loans, plus
4%.
Section 4.2 Units. A Member or Assignee's interest in the Company
shall be represented by the "Unit" or "Units" held by such Member or Assignee.
Each Member or Assignee's respective Units shall be set forth on Schedule A
attached hereto. Each Member hereby agrees that its interest in the Company and
in its Units shall for all purposes be personal property. A Member or Assignee
has no interest in specific Company property.
Section 4.3 Status of Capital Contributions.
4.3.1 No Member or Assignee shall have the right to withdraw its
Capital Contribution or Capital Account or to receive any interest,
salary or drawing with respect to its Capital Contributions or its
Capital Account or for services rendered on behalf of the Company or
otherwise in its capacity as a Member or Assignee, except as otherwise
specifically provided in this Agreement.
9
4.3.2 Except as otherwise provided herein and by applicable
state law, the Members shall be liable only to make their Capital
Contributions (including the Additional Funding Obligations) pursuant
to Section 4.1 hereof, and no Member or Assignee shall be required to
lend any funds to the Company or, after a Member's Capital
Contributions (including the Additional Funding Obligations) have been
fully paid pursuant to Section 4.1 hereof, to make any additional
Capital Contributions to the Company. No Member or Assignee shall
have any personal liability for the repayment of any Capital
Contribution of any other Member or Assignee.
Section 4.4 Capital Accounts.
4.4.1 An individual Capital Account shall be established and
maintained for each Member. The original Capital Account established
for any Member or Assignee who acquires an interest in the Company by
virtue of an assignment in accordance with the terms of this Agreement
shall be in the same amount as, and shall replace, the Capital Account
of the assignor of such interest, and, for purposes of this Agreement,
such Member or Assignee shall be deemed to have made the Capital
Contributions made by the assignor of such interest (or made by such
assignor's predecessor in interest) and to have assumed the
obligation, if any, to pay the Additional Funding Obligations of the
assignor of such interest (or the obligation of such assignor's
predecessor in interest); provided, however, that the assignor of such
interest shall not be relieved of the obligation to pay the Additional
Funding Obligations until such Additional Funding Obligations are in
fact paid by such Member or Assignee. To the extent such Member or
Assignee acquires less than the entire interest in the Company of the
assignor of the interest so acquired by such Member or Assignee, the
original Capital Account of such Member or Assignee and its Capital
Contributions and obligation to pay the Additional Funding Obligations
shall be in proportion to the interest it acquires, and the Capital
Account of the assignor who retains a partial interest in the Company,
and the amount of its Capital Contributions shall be reduced in
proportion to the interest it retains.
4.4.2 The Capital Account of each Member or Assignee shall be
maintained in accordance with the following provisions:
(a) to such Member or Assignee's Capital Account there shall
be credited such Member or Assignee's Capital Contributions, such
Member or Assignee's distributive share of Profits and the amount
of any Company liabilities that are assumed by such Member or
Assignee or that are secured by any Company assets distributed to
such Member or Assignee;
(b) to such Member or Assignee's Capital Account there shall
be debited the amount of cash and the Gross Asset Value of any
Company assets distributed to such Member or Assignee pursuant to
any provision of this Agreement, such Member or Assignee's
distributive share of Losses and the amount of any liabilities of
such Member or Assignee that are assumed by the Company or that
are secured by any property contributed by such Member or
Assignee to the Company; and
10
(c) in determining the amount of any liability for purposes
of this Section 4.4.2, there shall be taken into account Section
752(c) of the Code and any other applicable provisions of the
Code and the Treasury Regulations.
Section 4.5 Advances. If any Member or Assignee shall advance any
funds to the Company in excess of its Capital Contributions, the amount of such
advance shall neither increase its Capital Account nor entitle it to any
increase in its share of the distributions of the Company. The amount of any
such advance shall be a debt obligation of the Company to such Member or
Assignee and shall be repaid to it by the Company with interest at a per annum
rate equal to the lesser of (i) the rate of interest publicly announced from
time to time by Bank of America Illinois, Chicago, Illinois (or its successor in
interest), as its Prime Rate (or its equivalent) for United States Dollar Loans,
plus 1%, and (ii) the maximum rate permitted by applicable law, and upon such
other terms and conditions as shall be mutually determined by such Member or
Assignee and the Manager or Managers. Any such advance shall be payable and
collectible only out of Company assets, and the other Members and Assignees
shall not be personally obligated to repay any part thereof.
ARTICLE V
MEMBERS
Section 5.1 Powers of Members. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. The Members shall also have the power to
authorize the Manager or Managers, by Majority Vote of the Members, to possess
and exercise any right or power not already vested in the Managers pursuant to
Section 6.4 or any other provision of this Agreement. The Members shall not
have the power to bind the Company.
Section 5.2 Partition. Each Member waives, until termination of the
Company, any and all rights that it may have to maintain an action for partition
of the Company's property.
Section 5.3 Resignation of Members. A Member may not resign from the
Company without the written consent of the Manager or Managers.
Section 5.4 Advisory Committee.
5.4.1 The Company shall have an Advisory Committee consisting of
three persons, as determined by the Manager, none of whom shall be an
officer, director or employee of Bagel Corp. or BCI. The members of
the Advisory Committee shall be nominated by the Manager and approved
by a Majority Vote of Members. Replacement members of the Advisory
Committee shall be selected in the same manner. The Members hereby
agree that the members of the Advisory Committee on the date of this
Agreement shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇, J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇. The Advisory Committee shall (i) determine, at the time such
right becomes exercisable, whether the Company should exercise any
right held by it to cause an Area Developer to purchase from the
Company the Company's equity interest in such Area Developer, (ii)
determine, at the time such right becomes exercisable, whether the
Company should exercise any right held by it to require an Area
Developer to undertake an underwritten public offering, (iii)
determine, at the time such right becomes
11
exercisable, whether the Company should exercise any right held by it
to require an Area Developer to seek to terminate its area development
agreement and franchise agreements with Bagel Corp., (iv) determine
whether the Company should sell its equity interest in an Area
Developer to such Area Developer or Bagel Corp. at a price different
from the "Put Price" as defined in the governing documents of the Area
Developer at the time the Company acquired its equity interest, (v)
consult with the Manager with respect to any matters requested by the
Manager concerning the Company's investments, (vi) resolve any
questions with respect to potential conflicts of interest between the
Company, on the one hand, and the Manager, on the other hand, as may
be presented by the Manager to the Advisory Committee, (vii) whenever
the Company holds equity interests in an Area Developer which entitle
the Company to vote with respect to (a) the election of the Manager of
the Area Developer, (b) the approval or disapproval of any merger,
consolidation or sale of substantially all of the assets of such Area
Developer or (c) an amendment to the governing documents of the Area
Developer, determine the manner in which the Company should vote such
equity interests and (viii) perform such other functions and have such
other powers as are expressly provided for in this Agreement.
5.4.2 The Advisory Committee shall have the authority to adopt
rules and procedures, not inconsistent with this Agreement, relating
to the conduct of its affairs. All actions taken by the Advisory
Committee shall be authorized by a majority of the Advisory Committee
members then serving as members. Each member of the Advisory
Committee shall be entitled to designate from time to time an
alternate and such alternate may attend any and all meetings of the
Advisory Committee and otherwise may act in the place and stead of
such member with the same authority and effect as such member.
Effective with fiscal year 1996, each member of the Advisory Committee
shall be paid an annual fee of $10,000, or such lesser amount for any
member of the Advisory Committee as the Advisory Committee may
determine, payable not later than the last day of the first fiscal
quarter of each year. In addition, members of the Advisory Committee
shall be entitled to reimbursement from the Company for reasonable
travel, lodging and similar expenses incurred in connection with the
business of the Company.
5.4.3 The members of the Advisory Committee shall exercise their
best judgment in carrying out their functions for the Company. The
members of the Advisory Committee shall not be liable to the Company
or any Member for any mistakes of judgment or for losses due to such
mistakes or by reason of any act or omission performed or omitted in
good faith and in a manner reasonably believed to be within the scope
of authority conferred on such Advisory Committee by this Agreement.
5.4.4 From and after the time that Bagel Corp. ceases to be the
Manager pursuant to Article VI hereof, the Advisory Committee shall be
disbanded and shall have no further authority with respect to the
Company.
12
ARTICLE VI
MANAGERS
Section 6.1 Designation of Managers. The management of the Company's
business shall be vested in one or more Managers designated by the Members as
hereinafter provided. A Manager may be but need not be a Member. The Members
hereby agree to continue Bagel Corp. as the initial Manager, and Bagel Corp.
agrees to be bound by the terms and conditions of this Agreement.
Section 6.2 Designation of Successor Managers. The Members hereby
agree that at such time, if any, as Bagel Corp. ceases to be the Manager of the
Company as a result of its removal or resignation as provided in this Agreement,
the members of the Advisory Committee immediately prior to the time it is
disbanded pursuant to Section 5.4.4 hereof shall each become, without further
action by the Members, a Manager of the Company and a member of the Board of
Managers. The Board of Managers shall act as provided in Section 6.3 hereof.
Each of the members of the Advisory Committee named in Article V has executed a
copy of this Agreement accepting and agreeing to the terms and conditions of
this Agreement and to serve as a Manager and a member of the Board of Managers
as provided herein. In the event that any replacement members of the Advisory
Committee are selected as provided in Article V, each such member shall be
required as a condition of becoming a member of the Advisory Committee to
execute a copy of this Agreement accepting and agreeing to the terms and
conditions of this Agreement and to serve as a Manager and a member of the Board
of Managers as provided herein. On or about April 1 of each year commencing in
the year following the year in which Bagel Corp. ceases to be the Manager, the
Board of Managers will submit the names of its nominees for Managers to the
Members. Each nominee who is elected by a Majority Vote of the Members shall
serve as a Manager and a member of the Board of Managers until he dies, resigns,
is removed as provided herein or becomes unable to fulfill the duties of a
Manager and member of the Board of Managers or (if such Manager is not
renominated by the Board of Managers or fails to be elected by a Majority Vote
of the Members) until a successor is elected by a Majority Vote of the Members.
In the event of a vacancy as the result of the death, resignation, removal or
incapacity of a member of the Board of Managers, the remaining members of the
Board of Managers shall promptly submit the name of its nominee as a successor
Manager to the Members. Such nominee shall become a Manager and a member of the
Board of Managers if he receives a Majority Vote of the Members. If any nominee
at any time fails to receive a Majority Vote of the Members, the Board of
Managers shall submit the name of a different nominee to the Members. No
Manager may be an officer, director or employee of Bagel Corp. or of BCI.
Section 6.3 Action by the Board of Managers. After Bagel Corp.
ceases to be the Manager of the Company, the successor Managers shall act
collectively as the Board of Managers, which shall consist of three Managers.
The Board of Managers may act by a majority vote of its members at a meeting
(which may be conducted by conference telephone) or by a written consent signed
by a majority of its members. Notice of any action taken by a consent signed by
less than all of the members of the Board of Managers shall be given to any
member who did not sign such consent. Each member of the Board of Managers and
any officer of the Company shall be authorized to execute any document or take
any action on behalf of the Company if such document or action has been approved
by the Board of Managers. The Board of Managers may make additional rules to
facilitate its management of the Company.
Section 6.4 Power and Authority of the Managers. Subject to the
limitations expressly set forth in this Agreement, the business and affairs of
the Company shall be managed by the Managers, and, except as provided in Section
5.4 hereof, the Managers shall have full authority to act for and to bind the
Company in all matters in connection with or relating to the Company's business,
including, without limitation, directing the investment of the
13
Company's assets in Area Developers in the sole discretion of the Managers. No
Person dealing with the Company shall be required to inquire as to the authority
of any Manager or any officer of the Company to take any action on behalf of the
Company.
Section 6.5 Limitations on the Managers' Powers. Notwithstanding the
provisions of Section 6.4, the Managers shall not have the power to take any of
the following actions unless such actions have been approved by a Majority Vote
of the Members (and, in the case of an amendment to this Agreement, such
additional approvals as are required by Section 7.2 hereof):
(a) to make investments other than (i) Permitted Temporary
Investments, (ii) shares or other interests in or obligations of Area
Developers and Bagel Corp. or (iii) rights to acquire any of the
foregoing;
(b) to cause the Company to merge with, or consolidate into,
another Delaware limited liability company or Other Business Entity;
(c) to amend this Agreement; or
(d) to dissolve the Company except as provided in Section 14.2
hereof.
Section 6.6 Management Fees and Reimbursement.
6.6.1 While Bagel Corp. is the Manager it shall receive from the
Company a one-time fee in the amount of $500,000 payable in four equal
quarterly installments not later than the end of each 1996 fiscal
quarter of the Manager and a management fee of $10,000 for 1997 and
each year thereafter during which Bagel Corp. serves as the Manager,
payable not later than the end of the first fiscal quarter of the
Manager.
6.6.2 Beginning at such time, if any, as the members of the
Advisory Committee become the successor Managers, each member of the
Board of Managers shall receive an annual management fee equal to
$10,000 or such lesser amount for any Manager as the Board of Managers
may determine, less any amount received by such member pursuant to
Section 5.4.2 hereof for such fiscal year, payable not later than the
last day of the first fiscal quarter of each year.
6.6.3 The Company shall reimburse each Manager for all ordinary
and necessary out-of-pocket expenses incurred by the Manager on behalf
of the Company, including without limitation any fees and expenses (i)
incurred in connection with the organization of the Company, (ii)
incurred in connection with any investment made by the Company or
(iii) paid to Bagel Corp. for services rendered to the Company after
Bagel Corp. has ceased to be the Manager.
6.6.4 Management fees paid pursuant to Section 6.6.1 or Section
6.6.2 and amounts reimbursed pursuant to Section 6.6.3 shall be
treated as expenses of
14
the Company and shall not be deemed to constitute a distributive
share of Profits or a distribution to any Manager.
Section 6.7 Removal of Manager. Bagel Corp. may be removed as the
Manager with or without cause at any time by a Majority Vote of the Members. If
Bagel Corp. has ceased to be the Manager, any member of the Board of Managers
may be removed at any time, with or without cause, by a vote of Members holding
more than two-thirds of the outstanding Units.
Section 6.8 Resignation of Manager. Any Manager may resign at any
time upon notice to the Members.
Section 6.9 Officers. The Company shall have a president, one or
more vice presidents, a secretary and such assistant secretaries and other
officers as shall be determined by the Managers, and the authority and duties of
each officer shall be determined by the Managers. All officers shall be
appointed by the Managers and may be removed at any time by the Managers with or
without cause. Officers shall not be entitled to receive compensation from the
Company for serving as officers. The initial officers of the Company shall be:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President; ▇▇▇▇▇ ▇▇▇▇▇, Vice President; ▇▇▇▇ ▇▇▇▇▇▇, Vice
President; ▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and Assistant Secretary; and ▇▇▇▇ ▇▇▇▇,
Vice President and Secretary.
ARTICLE VII
MEETINGS; AMENDMENTS; MERGER
OR CONSOLIDATION
Section 7.1 Meetings of the Members.
7.1.1 Meetings of the Members may be called by the Managers and
shall state the location of the meeting and the nature of the business
to be transacted. Notice of any such meeting shall be given to all
Members not less than seven business days nor more than thirty days
prior to the date of such meeting. Members may vote in person or by
proxy at such meeting. Whenever a vote, consent or approval of
Members is permitted or required under this Agreement, such vote,
consent or approval may be given at a meeting of Members or may be
given in accordance with the procedure prescribed in Section 7.1.5.
Except as otherwise expressly provided in this Agreement, the Majority
Vote of the Members shall be required to constitute the act of the
Members.
7.1.2 For the purpose of determining the Members entitled to
vote on, or to vote at, any meeting of the Members or any adjournment
thereof, the Managers may fix, in advance, a date as the record date
for any such determination. Such date shall not be more than thirty
days nor less than ten business days before any such meeting.
7.1.3 Each Member may authorize any Person to act for it by
proxy on all matters in which a Member is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. Every proxy must be signed by the Member or its attorney-
in-fact. No proxy shall be valid after the expiration of eleven
months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Member executing
it.
15
7.1.4 Each meeting of Members shall be conducted by the Managers
or by such other Person that the Managers designate.
7.1.5 Any action which may be taken at a meeting of Members may
be taken without a meeting, without prior notice and without a vote,
if a consent or consents in writing, setting forth the action so
taken, shall be signed by Members having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting and shall be delivered to the Company by delivery
to its registered office, its principal place of business or to an
officer or agent of the Company having custody of the books in which
proceedings of Members are recorded. Delivery made to the Company's
registered office shall be by hand or by certified or registered mail,
return receipt requested.
Section 7.2 Amendments. Except as provided in Section 14.2, any
amendment to this Agreement shall be adopted and be effective as an amendment
hereto only if it receives the approval of the Manager or Managers and a
Majority Vote of the Members; provided, however, that no such amendment shall
(i) extend the term of the Company beyond that permitted by Section 2.3, (ii)
change the purpose of the Company from that set forth in Section 3.1, (iii)
alter the Capital Account of any Member, (iv) change the allocation provisions
of Article VIII hereof, (v) alter the respective interests of the Members in
distributions made by the Company, (vi) increase the liabilities of any Member
beyond those provided for in Section 12.1, (vii) cause the Company to cease to
qualify as a limited liability company under the Delaware Act or (viii) amend
this Section 7.2 to delete or alter any of clauses (i) through (viii), in each
case without the consent of any Member adversely affected thereby, and, in the
case of an amendment described in clause (i), (ii) or (vii), without the consent
of all of the Members and, in the case of an amendment affecting the provisions
of Sections 4.1, 6.7 or 9.1, without the consent of Members owning two-thirds of
the Units. The Manager or Managers may at any time, without further consent of
the Members, prepare a restatement of this Agreement integrating into a single
instrument all of the provisions of this Agreement which are then in effect as
the result of prior amendments adopted as provided in this Section 7.2.
Section 7.3 Merger or Consolidation. The Company may merge with, or
consolidate into, one or more other Delaware limited liability companies or
Other Business Entities only with the approval of the Managers and a Majority
Vote of the Members.
ARTICLE VIII
ALLOCATIONS
Section 8.1 Profits and Losses. Subject to the allocation rules of
Section 8.2 hereof, Profits and Losses for any Fiscal Year shall be allocated
among the Members and Assignees in proportion to the number of Units held by
each of them; provided, however, that if any Member's interest in Profits has
been terminated pursuant to Section 4.1.3, Profits shall be allocated among the
Members other than the defaulting Member in accordance with their respective
Units and Losses shall be allocated among all of the Members, including the
defaulting Member, in accordance with their respective Units.
Section 8.2. Allocation Rules.
8.2.1 In the event Members are admitted to the Company pursuant
to this Agreement after March 31, 1996, the Profits or Losses
allocated to the Members
16
and Assignees for each Fiscal Year during which Members are so
admitted shall be allocated among the Members and Assignees in
proportion to the number of Units each holds from time to time during
such Fiscal Year in accordance with Section 706 of the Code, using any
convention permitted by law and selected by the Managers.
8.2.2 For purposes of determining the Profits, Losses or any
other items allocable to any period, Profits, Losses and any such
other items shall be determined on a daily, monthly or other basis, as
determined by the Managers using any method that is permissible under
Section 706 of the Code and the Treasury Regulations thereunder.
8.2.3 Except as otherwise provided in this Agreement, all items
of Company income, gain, loss, deduction and any other allocations not
otherwise provided for shall be divided among the Members and
Assignees in the same proportions as they share Profits and Losses for
the Fiscal Year in question.
Section 8.3 Tax Allocations.
8.3.1 In accordance with Section 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the Company
shall, solely for income tax purposes, be allocated among the Members
and Assignees so as to take account of any variation between the
adjusted basis of such property to the Company for federal income tax
purposes and its initial Gross Asset Value (computed in accordance
with Section 1.1 hereof).
8.3.2 In the event the Gross Asset Value of any Company asset is
adjusted pursuant to paragraph (ii) of the definition of "Gross Asset
Value" contained in Section 1.1 hereof, subsequent allocations of
income, gain, loss and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same
manner as under Section 704(c) of the Code and the Treasury
Regulations thereunder.
8.3.3 Any elections or other decisions relating to allocations
under this Section 8.3, including the selection of any allocation
method permitted under proposed Treasury Regulation Section 1.704-
1(c), shall be made by the Managers in any manner that reasonably
reflects the purpose and intention of this Agreement. Allocations
pursuant to this Section 8.3 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 Member or Assignee's Capital Account or
share of Profits, Losses, other items or distributions pursuant to any
provision of this Agreement.
17
ARTICLE IX
DISTRIBUTIONS
Section 9.1 Distributions. Except as otherwise provided in Article
XIV (relating to the dissolution of the Company) or in this Section 9.1, all
distributions shall be made at such times and in such amounts as shall be
determined by the Managers. All distributions shall be made to the Members and
Assignees in proportion to the number of Units held by each of them. Any
distribution of Capital Contributions that have never been invested in any Area
Developer may be made only if the Managers have received written notice from
Bagel Corp. that no further opportunities to invest in any Area Developer will
be available for a period of at least six months. Except as provided in the
next sentence, any distributions of cash received by the Company with respect to
its equity interest in any Area Developer, whether or not denominated as tax
distributions, shall be promptly distributed by the Company to the Members. The
proceeds (whether in the form of cash or capital stock of Bagel Corp. or BCI) of
any redemption or sale (net of any expenses of such redemption or sale and after
payment of any expenses described in Section 6.6) of any equity interest in an
Area Developer owned by the Company shall be distributed promptly to the
Members; provided, however, that, to the extent that they do not exceed the
amount of capital invested by the Company in the redeeming Area Developer, the
net proceeds of any such redemption or sale occuring on or before June 30, 1997
may be re-invested in accordance with the provisions of Section 3.1 if the
Managers determine to do so. Any warrant or other right held by the Company to
acquire stock of Bagel Corp. shall be distributed to the Members and Assignees
on the later of the date that is (i) six months after the closing of the initial
underwritten public offering of shares of common stock of Bagel Corp. or any
successor to Bagel Corp. or (ii) four months after the payment of the last
Additional Funding Obligation, but in no event later than the date that is six
months prior to the expiration date of such warrant or other right.
Section 9.2 Withheld Taxes. All amounts withheld pursuant to the
Code or any provision of any state or local tax law with respect to any Member
or Assignee shall be treated as a Distribution to the respective Member or
Assignee pursuant to this Article IX for all purposes of this Agreement, except
to the extent such amount exceeds the amount distributed (or treated as
distributed) pro rata to the Members and Assignees in accordance with their
Units, which excess shall be treated as a loan to the respective Member or
Assignee and shall be repaid by the respective Member or Assignee receiving such
loan at the time that the Company is required to pay over such amount to any
federal, state or local government. The Managers are authorized to withhold
from distributions, or with respect to allocations, to the Members or Assignees
and to pay over to any federal, state or local government any amounts required
to be so withheld pursuant to the Code or any provision of any other federal,
state or local law and shall allocate such amounts to those Members or Assignees
with respect to which such amounts were withheld. If the Managers conclude that
the Company is required to withhold any amount as described in the preceding
sentence, it shall provide prompt written notice to the Members and Assignees of
the reasons it believes that the Company is required to so withhold and an
explanation of the calculation of the amounts withheld or to be withheld. For
purposes of this Section 9.2, the Company may assume that any Member or Assignee
who fails to provide to the Company satisfactory evidence of his tax status for
United States federal income tax purposes is a foreign person. Each Member
agrees to provide written notice to the Company within sixty days of any change
in such Member's tax status for United States federal income tax purposes.
Section 9.3 Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution to any Member or Assignee on account of its interest in the
Company if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
18
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books, Records and Financial Statements.
10.1.1 At all times during the continuance of the Company, the
Company shall maintain, at its principal place of business, separate
books of account for the Company that shall show a true and accurate
record of all costs and expenses incurred, all charges made, all
credits made and received and all income derived in connection with
the operation of the Company's business. Such books of account,
together with a copy of this Agreement and of the Certificate, shall
at all times be maintained at the principal place of business of the
Company and shall be open to inspection and examination at reasonable
times by each Member and its duly authorized representative for any
purpose reasonably related to such Member's interest in the Company.
The books of account and the records of the Company shall be examined
by and reported upon as of the end of each Fiscal Year by a firm of
independent certified public accountants selected by the Managers.
10.1.2 The Managers shall prepare and maintain, or cause to be
prepared and maintained, the books of account of the Company and shall
use their best efforts to cause the following documents to be
transmitted to each Member at the times hereinafter set forth:
(a) Within four months after the close of each Fiscal Year,
the following financial information:
(i) an audited balance sheet of the Company as of the
beginning and close of such Fiscal Year;
(ii) an audited statement of operations of the Company
for such Fiscal Year;
(iii) a statement of such Member's Capital Account as
of the close of such Fiscal Year, and changes therein during
such Fiscal Year; and
(iv) a statement showing the Store Level Cash Flow (as
defined in the confidential private placement memorandum of
the Company and Bagel Corp. dated December 13, 1995 and the
supplement thereto dated January 31, 1996) of each of the
Area Developers in which the Company has an equity
investment, based upon information received by the Company
from the Area Developers.
(b) Within three months after the close of each Fiscal Year,
a statement indicating such Member's share of each item of
Company income, gain, loss, deduction or credit for such Fiscal
Year for income tax purposes.
19
10.1.3 All information contained in any statement or other
document distributed to any Member pursuant to Section 10.1.2 shall be
deemed accurate, binding and conclusive with respect to such Member
unless written objection is made thereto by such Member to the Company
within 20 business days after the receipt of such statement or other
document by such Member.
Sections 10.2 Accounting Method. For both financial and tax
reporting purposes and for purposes of determining Profits and Losses, the books
and records of the Company shall be kept on the accrual method of accounting
applied in a consistent manner and shall reflect all Company transactions and be
appropriate and adequate for the Company's business.
Section 10.3 Confidentiality. Each Member and each Manager hereby
covenant and agree that so long as such Member holds Units, or so long as such
Manager serves as a Manager, and for a period of three years thereafter, such
Member or Manager will hold in confidence all financial and other information
concerning the Company, Bagel Corp. and the Area Developers in which the Company
is an investor and will not, without the prior consent of Bagel Corp., disclose
any of such information to any person. The preceding sentence shall not apply
to information which (i) is disclosed in a printed publication available to the
public, or is otherwise in the public domain through no act of such Member or
Manager or the employees or agents of such Member or Manager or other person or
entity which has received such information from or through such Member or
Manager or (ii) is required to be disclosed by proper order of a court of
applicable jurisdiction after adequate notice to Bagel Corp. sufficient to
permit Bagel Corp. to seek a protective order therefor, the imposition of which
protective order such Member or Manager agrees to approve and support. Each
Member or Manager acknowedges that Bagel Corp. and the Area Developers are
intended third party beneficiaries of the covenants in this Section 10.3 and can
enforce such covenants directly against such Member and Manager.
ARTICLE XI
TAX MATTERS
Section 11.1 Tax Matters Partner.
11.1.1 The Managers are hereby authorized to designate a Member
of the Company to serve as the tax matters partner of the Company for
purposes of Section 6231(a)(7) of the Code (the "Tax Matters
Partner"). The Tax Matters Partner shall have the power to manage and
control, on behalf of the Company, any administrative proceeding at
the Company level with the Internal Revenue Service relating to the
determination of any item of Company income, gain, loss, deduction or
credit for federal income tax purposes. The Tax Matters Partner may
be a Manager if the Manager is a Member.
11.1.2 The Tax Matters Partner shall, within ten days of the
receipt of any notice from the Internal Revenue Service in any
administrative proceeding at the Company level relating to the
determination of any Company item of income, gain, loss, deduction or
credit, mail a copy of such notice to each Member and Assignee.
20
11.1.3 The Managers may at any time hereafter designate a new
Tax Matters Partner; provided, however, that only a Member may be
designated as the Tax Matters Partner of the Company.
Section 11.2 Right to Make Tax Elections. The Managers may, in their
discretion, make or revoke, on behalf of the Company, any tax election under the
Code or the Treasury Regulations, or under state, local or foreign law.
ARTICLE XII
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 12.1 Liability.
12.1.1 Except as otherwise provided by the Delaware Act, the
debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Covered Person shall be
obligated personally for any such debt, obligation or liability of the
Company solely by reason of being a Covered Person.
12.1.2 Except as otherwise expressly required by law, a Member,
in its capacity as such, shall have no liability in excess of (i) the
amount of its Capital Contributions, (ii) its share of any assets and
undistributed profits of the Company, (iii) its obligation to make
other payments expressly provided for in this Agreement, and (iv) the
amount of any distributions wrongfully distributed to it.
Section 12.2 Exculpation.
12.2.1 No Covered Person shall be liable to the Company or any
other Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Covered Person in
good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such Covered
Person by this Agreement, except that a Covered Person shall be liable
for any such loss, damage or claim incurred by reason of such Covered
Person's gross negligence or willful misconduct.
12.2.2 A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such information,
opinions, reports or statements presented to the Company by any Person
(including any tax advisor) as to matters the Covered Person
reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or
on behalf of the Company, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities,
Profits or Losses or any other facts pertinent to the existence and
amount of assets from which distributions to Members might properly be
paid.
21
Section 12.3 Duties of Covered Persons.
12.3.1 In accordance with Section 18-1101(c)(2) of the Delaware
Act the duties and liabilities of the Managers and the Members, in
their capacities as such, shall be limited to those set forth in this
Agreement.
12.3.2 To the extent that a Covered Person has duties and
liabilities relating to the Company or its Members or to any other
Covered Person, a Covered Person acting under this Agreement shall not
be liable to the Company or its Members or to any other Covered Person
for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the
duties and liabilities of a Covered Person otherwise existing at law
or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Covered Person.
12.3.3 The Members expressly acknowledge that Bagel Corp. and
its Affiliates have or will have area development, franchise, lending,
real estate and other relationships with the Area Developers in which
the Company will invest and that Bagel Corp. will have a conflict of
interest in making determinations as Manager as to the Area Developers
in which the Company will invest, the amount of any such investment
and any negotiated terms of such investment. The Members hereby (i)
agree that Bagel Corp. may act in its own interest in making
determinations as Manager in any situation in which such a conflict is
present, (ii) ratify and approve all such determinations made by Bagel
Corp. as Manager, (iii) waive any rights they have or may receive by
reason of such conflicts of interest or such determinations made by
Bagel Corp. as Manager and any right to receive notice of or
disclosure concerning any such conflicts of interest or
determinations, and (iv) covenant not to ▇▇▇ Bagel Corp. in connection
with any such determinations or any matter or thing based upon or
arising out of any such determinations.
12.3.4 Whenever in this Agreement a Covered Person is permitted
or required to make a decision (i) in its "discretion" or under a
grant of similar authority or latitude, the Covered Person shall be
entitled to consider any such interests and factors as it desires,
including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the
Company or any other Person, or (ii) in its "good faith" or under
another express standard, the Covered Person shall act under such
express standard and shall not be subject to any other or different
standard imposed by this Agreement or other applicable law.
Section 12.4 Indemnification. To the fullest extent permitted by
applicable law, a Covered Person shall be entitled to indemnification from the
Company for any loss, damage or claim incurred by such Covered Person by reason
of any act or omission performed or omitted by such Covered Person in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of authority conferred on such Covered Person by this Agreement, except
that no Covered Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Covered Person by reason of gross
negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 12.4 shall be provided
out of and to the extent of Company assets only, and no Covered Person shall
have any personal liability on account thereof.
22
Section 12.5 Expenses. To the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by a Covered Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or
on behalf of the Covered Person to repay such amount if it shall be determined
that the Covered Person is not entitled to be indemnified as authorized in
Section 12.4 hereof.
Section 12.6 Outside Businesses. Any Member, Manager or Affiliate
thereof may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Company, and the Company, the Members and the Managers shall
have no rights by virtue of this Agreement in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Company, shall not be deemed
wrongful or improper. No Member, Manager or Affiliate thereof shall be
obligated to present any particular investment opportunity to the Company even
if such opportunity is of a character that, if presented to the Company, could
be taken by the Company, and any Member, Manager or Affiliate thereof shall have
the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment opportunity.
ARTICLE XIII
ASSIGNABILITY AND SUBSTITUTE MEMBERS
Section 13.1 Assignability of Units.
13.1.1 No Member may assign the whole or any part of its Units
or other interests in the Company without the approval of the Managers
and a Majority Vote of all Members other than the assigning Member,
which approval and favorable vote may be given or withheld in the sole
and absolute discretion of the Managers and each such other Member.
If the required approval and favorable vote is obtained for any such
assignment, such assignment shall, nevertheless, not entitle the
Assignee to become a Substitute Member or to be entitled to exercise
or receive any of the rights, powers or benefits of a Member other
than the right to receive distributions to which the assigning Member
would be entitled, unless the assigning Member designates, in a
written instrument delivered to the other Members, its Assignee to
become a Substitute Member and such designation is approved by the
Managers and a Majority Vote of all Members other than the Assignee,
which approval and favorable vote may be given or withheld in the sole
and absolute discretion of the Managers and each such other Member;
and provided further, that such Assignee shall not become a Substitute
Member without having first executed an instrument reasonably
satisfactory to the other Members accepting and agreeing to the terms
and conditions of this Agreement, including a counterpart signature
page to this Agreement, and without having paid to the Company a fee
sufficient to cover all reasonable expenses of the Company in
connection with such Assignee's admission as a Substitute Member. If
a Member assigns all of its interest in the Company and the Assignee
of such interest is entitled to become a Substitute Member pursuant to
this Section, such Assignee shall be admitted to the Company effective
immediately prior to the effective date of the assignment, and,
immediately following such admission, the assigning Member shall cease
to be a member of the Company. In such event, the Company shall not
dissolve if the business of the Company is continued without
dissolution in accordance with Section 14.2(iii) hereof.
23
13.1.2 Notwithstanding anything to the contrary herein, (i) the
Managers shall not cause or permit Units to become traded on an
established securities market and (ii) the Managers shall withhold
their consent to any Transfer that, to the Managers' knowledge after
reasonable inquiry, would otherwise be accomplished by a trade on a
secondary market (or the substantial equivalent thereof). For
purposes of this subsection the terms "traded on an established
securities market" and "secondary market (or the substantial
equivalent thereof)" shall have the meanings set forth in Sections
469(k)(2) and 7704 of the Code and any regulations promulgated
thereunder that are in effect at the time of the proposed Transfer.
Section 13.2 Recognition of Assignment by Company. No assignment, or
any part thereof, that is in violation of this Article XIII shall be valid or
effective, and neither the Company nor the Members shall recognize the same for
the purpose of making distributions pursuant to Section 9.1 hereof with respect
to such Company interest or part thereof. Neither the Company nor the
nonassigning Members shall incur any liability as a result of refusing to make
any such distributions to the assignee of any such invalid assignment.
Section 13.3 Indemnification. In the case of an assignment or
attempted assignment of an interest in the Company that has not received the
consents required by Section 13.1 hereof, the parties engaging or attempting to
engage in such assignment shall be liable to indemnify and hold harmless the
Company, the Managers, the other Members and the respective Covered Persons of
the Company, the Managers and the other Members from all costs, liabilities and
damages that any of such indemnified Persons may incur (including, without
limitation, incremental tax liability and lawyers' fees and expenses) as a
result of such assignment or attempted assignment and efforts to enforce the
indemnity granted hereby.
Section 13.4 Effective Date of Assignment. Any valid assignment of a
Member's interest in the Company, or part thereof, pursuant to the provisions of
Section 13.1 hereof shall be effective as of the close of business on the last
day of the calendar month in which the other Members give their written consent
to such assignment (or the last day of the calendar month in which such
assignment occurs, if later). The Company shall, from the effective date of such
assignment, thereafter pay all further distributions on account of the Company
interest (or part thereof) so assigned, to the Assignee of such interest, or
part thereof. As between any Member and its Assignee, Profits and Losses for
the Fiscal Year of the Company in which such assignment occurs shall be
apportioned for federal income tax purposes in accordance with any convention
permitted under Section 706(d) of the Code and selected by the Managers in their
discretion.
ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1 No Dissolution. The Company shall not be dissolved by
the admission of Substitute Members in accordance with the terms of this
Agreement.
Section 14.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up only upon the occurrence of any of
the following events:
(i) the expiration of the term of the Company, as provided in
Section 2.3 hereof;
24
(ii) the approval of the Managers and a Majority Vote of the
Members to dissolve the Company;
(iii) the Bankruptcy of a Member, unless, within 90 days after
the occurrence of such an event, there is given the approval of the
Managers and there is obtained a Majority Vote of the Members other
than such Member to continue the business of the Company;
(iv) the entry of a decree of judicial dissolution under Section
18-802 of the Delaware Act; or
(v) by the Managers at any time that the assets of the Company
consist only of cash, Permitted Temporary Investments, a warrant to
purchase stock of Bagel Corp., stock of Bagel Corp., stock of BCI or
any combination of the foregoing.
Each Member shall give to the Company prompt written notice of the Bankruptcy of
such Member. From and after the time that the Company receives an opinion of
counsel to the Managers to the effect that the provisions of clause (iii) above
are no longer necessary to cause the Company to be classified as a partnership
for federal income tax purposes, this Section 14.2 shall be amended without
further action of the Members to eliminate such clause (iii) and to renumber
clauses (iv) and (v) as clauses (iii) and (iv).
Section 14.3 Notice of Dissolution. Upon the dissolution of the
Company, the Person or Persons approved by a Majority Vote of the Members to
carry out the winding up of the Company (the "Liquidating Trustee") shall
promptly notify the Members of such dissolution.
Section 14.4 Liquidation. Upon dissolution of the Company, the
Liquidating Trustee shall immediately commence to wind up the Company's affairs;
provided, however, that a reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the satisfaction of liabilities to
creditors so as to enable the Members to minimize the normal losses attendant
upon a liquidation. The Members and Assignees shall continue to share Profits
and Losses during liquidation in the same proportions, as specified in Article
VIII hereof, as before liquidation. Each Member shall be furnished with a
statement prepared by the Company's certified public accountants that shall set
forth the assets and liabilities of the Company as of the date of dissolution.
The proceeds of liquidation shall be distributed, as realized, in the following
order and priority:
(i) to creditors of the Company, including the Managers or
Members or Assignees who are creditors, to the extent otherwise
permitted by law, in satisfaction of the liabilities of the Company
(whether by payment or the making of reasonable provision for payment
thereof), other than liabilities for distributions to Members or
Assignees; and
(ii) to distribute to the Members and Assignees the remaining
proceeds of liquidation in accordance with their Capital Account
balances, after giving effect to all Capital Contributions,
distributions and allocations for all periods. If any Member is owed
a Capital Account balance pursuant to Section 4.1.3, such Member shall
share in the remaining proceeds of liquidation in the proportion that
25
such Member's Capital Account balance determined in accordance with
Section 4.1.3 compares to the aggregate Capital Account balances of
all of the other Members, but such Member shall not be entitled to
receive more than the amount determined in accordance with Section
4.1.3.
Section 14.5 Termination. The Company shall terminate when all of
the assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Members and Assignees in the manner provided for in this Article XIV, and the
Certificate shall have been canceled in the manner required by the Delaware Act.
Section 14.6 Claims of the Members. The Members and Assignees shall
look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and Assignees
shall have no recourse against the Company or any other Member or the Manager.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices. All notices provided for in this Agreement
shall be in writing, duly signed by the party giving such notice, and shall be
sent by Federal Express or other reliable overnight courier, sent by fax or
mailed by registered or certified mail, return receipt requested, as follows:
(i) if given to the Company, in care of the Managers at the
address of the Company's principal place of business, with a copy to
Bagel Corp. at its mailing address set forth on Schedule A attached
hereto;
(ii) if given to the Managers, at their mailing addresses set
forth on Schedule A attached hereto, with a copy to Bagel Corp.; or
(iii) if given to any Member at the address set forth opposite
its name on Schedule A attached hereto, or at such other address as
such Member may hereafter designate by written notice to the Company.
Each such notice shall be deemed to have been given upon the earlier of the
receipt of such notice by the intended recipient thereof, two days after it is
sent by Federal Express or other reliable overnight courier or sent by fax, or
five days after it is mailed by registered or certified mail, return receipt
requested.
Section 15.2 Failure to Pursue Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would have
originally constituted a violation, from having the effect of an original
violation.
Section 15.3 Cumulative Remedies; Limitation on Damages. The rights
and remedies provided by this Agreement are cumulative and the use of any one
right or remedy by any party shall not preclude or waive its right to use any or
all other remedies. Said rights and remedies are given in addition to any other
rights the parties may have by law, statute, ordinance
26
or otherwise. Notwithstanding anything to the contrary herein, no party hereto
shall be liable for consequential, indirect, incidental, special, speculative,
exemplary or punitive damages (including, but not limited to, loss of revenue or
profit) whether such claim alleges breach of contract, tortious conduct
including, but not limited to, negligence, or any other theory.
Section 15.4 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of all of the parties and, to the extent permitted by
this Agreement, their successors, legal representatives and assigns.
Section 15.5 Captions. The captions herein are inserted for
convenience of reference only and shall not affect the construction of this
Agreement.
Section 15.6 Pronouns and Plurals. Whenever the context may require,
any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
Section 15.7 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.
Section 15.8 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had signed
the same document. All counterparts shall be construed together and shall
constitute one instrument.
Section 15.9 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
Section 15.10 Governing Law. This Agreement and the rights of the
parties hereunder shall be interpreted in accordance with the laws of the State
of Delaware, and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
MEMBERS:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
-----------------
▇▇▇▇▇▇▇▇ ▇▇▇▇
D&R, L.L.C.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
1993 TRUST
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
June, 1992 NONEXEMPT TRUST
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
June, 1992 NONEXEMPT TRUST
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------
▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ Peer ▇▇▇▇▇▇▇▇
-----------------
Peer ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ PARTNERS II
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ Buonnanno
---------------------
▇▇▇▇▇▇▇ Buonnanno
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ROLLOVER
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
REVOCABLE TRUST DATED
1/22/85 AS RESTATED 10/11/94
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
JMH ASSOCIATES, INC.
PROFIT SHARING FUND
By /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ M. ▇▇▇▇ ▇▇▇▇▇
-----------------
M. ▇▇▇▇ ▇▇▇▇▇
PSR INVESTMENTS, L.P.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ INVESTORS, L.P.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
/s/ ▇.▇. ▇▇▇▇
-------------
▇.▇. ▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇.▇. ▇▇▇▇▇▇ by Peer ▇▇▇▇▇▇▇▇
--------------------------------
▇.▇. ▇▇▇▇▇▇ by Peer ▇▇▇▇▇▇▇▇
WIJLER GUERNSEY, LTD.
By /s/ ▇▇▇▇' ▇▇▇▇▇▇▇▇
---------------------
▇▇▇▇' Burgauer
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Sebring
------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Sebring
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
YOUNGSTOWN PARTNERS
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
By /s/ ▇. ▇▇▇▇▇▇▇ Corydon
-----------------------
▇. ▇▇▇▇▇▇▇ Corydon
N.S. ASSOCIATES, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ W. ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
W. ▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
ALTGELD MANAGEMENT CORPORATION
By /s/ ▇▇▇▇ ▇▇▇▇
----------------
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇
------------
▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
HAY PROPERTY COMPANY, LTD.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
-------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
------------------
▇.▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ M. ▇▇▇▇▇ ▇▇▇▇▇
------------------
M. ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST,
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
TRUSTEE, U/A 4/21/93
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
JWC TRUST DATED 12/28/82
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EBB INVESTORS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇
--------------
▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇'▇▇▇▇▇
-----------------
▇▇▇▇▇ ▇'▇▇▇▇▇
BAGEL SOUTH, L.L.C.
By /s/ S. ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------
S. ▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇, ▇.▇.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇
---------------
▇▇▇▇▇▇▇ ▇▇▇
TRIUNE VENTURE PARTNERS, II, L.P.
By TRIUNE VENTURE HOLDINGS, L.P.
--------------------------------
as general partner
By TRIUNE, INC.
as general partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
EB&M HOLDINGS, LTD.
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MAVERICK INCOME FUND USA, LTD.
By /s/ ▇▇▇▇ ▇▇▇▇
-------------
▇▇▇▇ ▇▇▇▇
MAVERICK FUND USA, LTD.
By /s/ ▇▇▇▇ ▇▇▇▇
-------------
▇▇▇▇ ▇▇▇▇
BANKAMERICA INVESTMENT CORP.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
KMK & ASSOCIATES
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------
A. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ FUND, L.P.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
This Agreement is accepted and agreed to by:
MANAGER:
EINSTEIN/NOAH BAGEL CORP.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
MEMBERS OF THE ADVISORY COMMITTEE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
