Document:

exv10w1

 

Exhibit 10.1

Form of
PANERA, L.L.C.

CONFIDENTIAL AND PROPRIETARY INFORMATION AND NON-COMPETITION AGREEMENT

     I,          , in consideration of the offer of employment to
me by Panera, L.L.C. (“Panera” and/or “Company”) or to continue employment with
Panera, as the case may be, and the compensation and other consideration that
may hereafter be paid to me, agree to the following:

	 	1.	 	EMPLOYEE WARRANTIES

          I warrant that I am free to enter into the terms of this Panera, L.L.C.
Confidential And Proprietary Information And Non-Competition Agreement
(“Agreement”) and that I have no obligations inconsistent with unrestrained
employment by Panera and I further represent and warrant that my performance of
all the terms of this Agreement and as an employee of the Panera does not and
will not breach any agreement to keep in confidence information acquired by me
in confidence or in trust prior to my employment by the Panera. Moreover, I
have not entered into, and I agree I will not enter into, any agreement either
written or oral in conflict herewith.

	 	2.	 	NO ASSURANCES OF CONTINUED EMPLOYMENT

          I understand and agree that nothing in this Agreement or any discussions I
have had with Panera or any of its representatives shall be construed to give
me any right or assurance of continued employment by Panera; and that my
employment relationship with Panera is terminable at will, with or without
notice, with or without reason, by either Panera or me.

	 	3.	 	CONFLICTING EMPLOYMENT

          I agree that during the term of my employment with Panera I will not
engage in any other employment, occupation, consulting or other business
activity related to the business in which Panera is now involved or becomes
involved during the term of my employment, nor will I engage in any other
activities that conflict with my obligations to Panera, including, but not
limited to, soliciting franchisees or potential franchisees for personal gain
and/or benefit.

	 	4.	 	CONFIDENTIAL NATURE; PUBLIC STATEMENTS

          4.1      I shall keep confidential the terms of this Agreement. A breach of
this confidentiality undertaking shall relieve the Company of any of its
undertakings and obligations set forth herein.

          4.2      The provisions of subsection 4.1 notwithstanding, it shall not be
deemed a violation of my duty to keep the terms hereof confidential should:

               (i)     disclosure be compelled by applicable law or by order of either a
court of competent jurisdiction or governmental or administrative authority.

               (ii)     disclosure of this Agreement be made by me to members of my immediate
family, or to professionals consulted by me for advise regarding this
Agreement, including, without limitation, lawyers and certified public
accountants; provided that any person to whom such disclosure is authorized
shall agree to be bound by the terms of paragraph 4.

	 	5.	 	CONFIDENTIAL AND PROPRIETARY INFORMATION

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          5.1      I understand and acknowledge that in the course of my employment, I
have received and/or will receive and/or may receive and/or have access to
certain “Confidential Information” (as defined below) of Panera. I hereby
acknowledges that such Confidential Information constitutes a valuable and
proprietary asset of Panera which Panera desires to protect.

          5.2      For purposes of this Agreement, “Confidential Information” shall
include, but not be limited to, the following: this Agreement; trade secrets;
operating techniques, procedures and methods; product specifications; customer
lists; account information; price lists; discount schedules; budgets,
correspondence with customers, vendors, competitors, employees, partners,
franchisees or any other entity or person; drawings; software; samples; leads
from any source; marketing techniques; procedures and methods; employee lists;
internal financial reports (including, but not limited to, internal sales
and/or profit and loss reports) of the Company and its affiliates and/or
franchisees; sourcing lists; and recruiting lists; and any other such
proprietary information, but shall not include any such information which has
become generally known to or available for use by the public other than by my
act(s) or omission(s).

          5.3      I agree that during the term of this Agreement and at any time
thereafter, I will not, without the authorization of Panera: (i) disclose any
Confidential Information to any person or entity for any purpose whatsoever; or
(ii) make use of any Confidential Information for my own purposes or for the
benefit of any other person or entity, other than Panera, and it is expressly
understood and agreed that this prohibition shall include not using any such
Confidential Information in competing with Panera at any time.

	 	6.	 	COVENANTS NOT TO COMPETE

          6.1      I covenant and agree that I will not engage in any “Competitive
Activity” (as defined below) at any time during my employment with the Company
and/or within the fifty-two (52) week period following the date of my
termination from the Company for any reason or no reason.

          6.2      “Competitive Activity” shall include the following:

               (i)     being employed by, advising, consulting in, or acting in any way as an
agent for Atlanta Bread Company, Au Bon Pain, ABP Corporation, Bruegger’s,
Cosi’s, Corner Bakery, Einstein, Great Harvest, Krispy Kreme, La Madeline,
Montana Mills, Schlotzky’s, Starbucks; or directly or indirectly engaging in,
being employed by, advising, consulting in, or acting in any way as an agent
for any entity engaged, in whole or in part, in any retail food establishment
(including any restaurant or bakery, but excluding any exclusively based pizza
concept) in which any of the following categories constitutes more than twenty
percent (20%) of its revenues: (i) bakery goods and breads; (ii) sandwiches,
soups and/or salads, other than those ordered through a wait person taking
orders at a table (the term “sandwiches” shall not include hamburgers); or
(iii) coffee and coffee-based drinks; as well as any business (without regard
to revenue) that manufactures, wholesales and/or distributes fresh or frozen
dough or bakery products which is or may be competitive with or adverse to the
Company’s business and which is within a 100 mile radius of where the Company
is engaged in business or where the Company is attempting to engage in business
or where the Company may reasonably be expected to engage in business within
the 12 months immediately following my termination; or

               (ii)     having, or acquiring any interest in (whether as proprietor, partner,
stockholder, consultant, officer, director, or any type of principal
whatsoever) Atlanta Bread Company, Au Bon Pain, ABP Corporation, Bruegger’s,
Cosi’s, Corner Bakery, Einstein, Great Harvest, Krispy Kreme, La Madeline,
Montana Mills, Schlotzky’s, Starbucks or any entity engaged, in whole or in
part, in any retail food establishment (including any restaurant or bakery, but
excluding any exclusively based pizza concept) in which any of the following
categories constitutes more than twenty percent (20%) of its revenues: (i)
bakery goods and breads; (ii) sandwiches purchased in a service manner and/or
method similar to that used by the Company (the term “sandwiches” shall not
include hamburgers); or (iii) coffee and coffee-based drinks; as well as any
business (without regard to revenue) that manufactures, wholesales and/or
distributes fresh or frozen dough or bakery products which is or may be
competitive with or adverse to the Company’s business and which is within a 100
mile radius of where the Company is engaged in business or where the Company is
attempting to engage in business or where the Company may reasonably be
expected

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to engage in business within the 12 months immediately following my
termination, except that the direct or indirect ownership of five percent (5%)
or less of the stock of a company whose shares are listed on a national
securities exchange or are quoted on the National Association of Securities
Dealers Automated Quotation System shall not be deemed having or acquiring any
such interest; or

               (iii)     directly or indirectly being employed by, advising,
consulting in, or acting in any way as an agent for any entity: (a) which is a
franchisee of the Company, or (b) which was a franchisee of the Company at
any time within the 12 months immediately prior to my termination from the
Company, or (c) which the Company is and/or was attempting to secure as a
franchisee at any time within the 12 months immediately prior to my termination
from the Company, or (d) which the Company may reasonably be expected to secure
as a franchisee at any time within the 12 months immediately following my
termination; or

               (iv)     having, or acquiring any interest in (whether as proprietor, partner,
stockholder, consultant, officer, director, or any type of principal
whatsoever) any entity: a) which is a franchisee of the Company, or (b) which
was a franchisee of the Company at any time within the 12 months immediately
prior to my termination from the Company, or (c) which the Company is and/or
was attempting to secure as a franchisee at any time within the 12 months
immediately prior to my termination from the Company, or (d) which the Company
may reasonably be expected to secure as a franchisee at any time within the 12
months immediately following my termination, except that the direct or indirect
ownership of five percent (5%) or less of the stock of a company whose shares
are listed on a national securities exchange or are quoted on the National
Association of Securities Dealers Automated Quotation System shall not be
deemed having or acquiring any such interest.

          6.3     Both during the term of my employment with the Company and at any time
within the 24 month period following my termination from the Company for any
reason or no reason, I hereby agree not to directly or indirectly solicit or
otherwise attempt to induce, influence, or encourage any employee and/or
independent contractor and/or consultant and/or supplier and/or franchisee of
the Company to terminate and/or modify in any way his/her and/or its employment
or other such business relationship with the Company.

          6.4      For purposes of Section 6, references to “the Company’s business”
and/or “where the Company is engaged in business” and/or “where the Company is
attempting to engage in business” and/or “where the Company may reasonably be
expected to engage in business”, shall mean any and/or all current and/or
future franchisee operation(s) as well as any current and/or future Company
operation(s).

          6.5     At any time I may request a waiver, in whole or in part, of Section 6
by notifying the Company in writing of my request. Within 15 days of my
providing the Company with relevant information pertaining to such a waiver
request and my providing such written information as the Company may request
regarding the potential violation of these Covenants Not To Compete), the
Company, through the Chief Executive Officer and/or his/her designee, will
consider such a request and communicate with me.

	 	7.	 	SEPARATION PAY

          7.1      Upon the occurrence of a “Separation Event”, as defined below, and
provided I comply with all of the obligations contained in this Agreement
(including, but not limited to Section 6), Panera agrees to: (i) pay me
Fifty-two (52) weeks of my “Base Pay” as defined in Section 7.2 below; (ii) at
my option, continue my health and dental insurance for this same fifty-two (52)
week period, with then existing employee premium payments (if any) to be
deducted from my Separation Pay, with COBRA notification to follow; (iii) at my
option, allow me to make my lawful contribution(s) to Panera’s then existing
401K plan for this same fifty-two (52) week period.

          7.2      “Base Pay” shall mean my annualized base salary at the time of the
“Separation Event” as pre-established by the Company, plus my annual car
allowance, if applicable. Unless specifically mentioned in the preceding

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sentence, Base Pay shall not include any bonus, incentive compensation
(including, but not limited to, stock options) or other benefits or allowances
I may otherwise be entitled to receive as of the effective date of the
Separation Event.

                         If no base salary has been pre-established by the Company, then Base Pay
shall mean my previous year’s annualized base salary as reflected in my most
recent Form W-2 from Panera, plus my annual car allowance, if applicable.
Unless specifically mentioned in the preceding sentence, excluded from this
calculation of my base salary (and, accordingly, to be subtracted from my prior
year’s Form W-2) are any bonuses, incentive compensation (including, but not
limited to, stock options) or other benefits or allowances he received in the
prior year.

          7.3      Panera agrees that the above described Separation Pay shall be made in
substantially equal installments following my termination and disbursement
shall be on the dates on which I would have received his regular salary
payments.

          7.4      The above described Separation Pay will be reduced (dollar for dollar,
or the equivalent thereof) solely by any business compensation and/or benefits
I receive and/or earn during the severance period from any business source
other than from Panera and/or from the sale of Panera equity, including,
without limitation, salary, bonus(es), benefits, consulting fees, income from
self-employment, stocks, stock options, equity rights, or otherwise (for
purposes of this Section 7.4 hereinafter “compensation and/or benefits”). For
purposes of this Section 7.4, “compensation and/or benefits” as above defined
shall not include inheritances, income received at any time from passive
investments and/or income received from active investments provided such active
investments are in existence prior to my termination and are otherwise in
compliance with this Agreement. I shall promptly notify Panera of any and all
such compensation and/or benefits. In the event the severance benefits then
payable are less than the dollar for dollar compensation and/or benefits (or
the equivalent thereof) I receive and/or earn during fifty-two (52) week period
following the Separation Event, I shall immediately pay the Company the
difference up to the total value of the severance benefits.

          7.5      Panera shall have no obligation to pay the above described Separation
Pay or any other compensation to me if:

                     (i) no Separation Event occurs, or

                     (ii) I fail to comply with the all of my obligations contained in this
Agreement.

          7.6      For purposes of this Agreement, a “Separation Event” shall mean and be
limited to the termination of my employment with Panera other than (i) by
Panera for cause (as defined below), (ii) as a result of my death or permanent
disability (unless termination for a disability is pursuant to Section 7.8
below), or (iii) by my voluntary separation of services and employment with, or
resignation from, Panera.

          7.7      For purposes of this Agreement, “cause” shall include, for example,
but is not limited to, dishonesty; conviction of a felony or other crime
involving moral turpitude; wilful misconduct; gross dereliction and/or gross
neglect of duties; a material breach of the terms of this Agreement which
continues uncured for fifteen (15) days after Panera has given written notice
to me specifying in reasonable detail the material breach; or conflict of
interest; in each case determined in good faith by Panera consistent with the
examples set forth herein.

          7.8      Panera may terminate my employment if, at any time during my
employment, I become disabled so that I am unable to perform the essential
functions of my employment, with reasonable accommodation, for a period of
ninety (90) days in the aggregate during any 180-day period. The determination
of my disability for purposes of this Section 7.8 shall be made by a qualified
physician acceptable to both parties. In the event that Panera and I are
unable to agree upon a qualified physician, each party shall select a qualified
physician, and in the event those two physicians are unable to agree upon a
determination as to my disability, a third neutral physician (“Neutral
Physician”) acceptable to the parties shall be selected. The determination of
disability by the Neutral Physician shall be final and binding for purposes of
this Agreement. In the event my employment is terminated pursuant to this
Section 7.8, said termination shall be

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deemed a “Separation Event” pursuant to Section 7.6 entitling me to “Separation
Pay”, provided I comply with the obligations contained in this Agreement,
including Section 7 and its subparts. In addition to any reductions in
Severance Pay provided for in Section 7.4, any Severance Pay made pursuant to
this Section 7.8 shall also be offset dollar for dollar by any payments made
in the aggregate to me under Panera’s then existing Salary Continuation and/or
Long-Term Disability Plan(s).

          7.9        If I shall voluntarily terminate my employment with, or resign from,
the Company I shall provide the Company at least sixty (60) calendar days’
prior written notice thereof and I will be expected to continue to perform my
duties consistent with the Company’s good faith expectations up to the date of
my voluntary termination or resignation.

          7.10      All severance payments required to be made by Panera pursuant to this
Agreement to me shall be subject to the withholding of such amounts, if any,
relating to tax (including federal and state withholding, social security and
other applicable taxes) and other payroll deductions Panera may reasonably
determine it should withhold pursuant to applicable law or regulation or
agreement.

          7.11     In addition to my other obligations contained in this agreement, in
order to receive any severance benefits as provided above, I shall voluntarily
agree to and sign at or about the time of my termination a full and complete
release in the form appended hereto as Attachment A. It is agreed and
understood that prior to the execution by me of Attachment A, the Company may
modified Attachment A for the sole purpose of complying with any changes in the
law.

	 	8.	 	RETURN OF PANERA DOCUMENTS

          When I leave the employ of Panera, I will deliver to Panera any and all
drawings, notes, memoranda, specifications, devices, formulas, and any other
documents pertaining to Panera and/or Panera’s business, including, but not
limited to, computer files, together with all copies thereof, and any other
material containing or disclosing any Confidential Information as defined in
Section 5 above (collectively “such Documents”). The above shall include any
and all such Documents contained on, for example, a home computer system. I
further agree not to retain in any way any such Documents, and I will, for
example, first return such Documents and then delete such Documents from any
home computer system. I further agree that any property situated on Panera’s
premises and/or owned by Panera, including disks and other storage media,
filing cabinets or other work areas, is subject to inspection by Panera
personnel at any time with or without notice.

	 	9.	 	BENEFITS

          Except as herein otherwise provided, any benefits arising out of or
connected with my employment shall cease as of the effective date of a
Separation Event or other termination of active employment, as applicable. The
foregoing shall not relieve Panera of its obligations under the law pertaining
to my benefits following the effective date of a Separation Event or other
termination of employment.

	 	10.	 	INJUNCTIVE RELIEF

          I acknowledge that Panera’s remedy at law for a breach of Sections 4, 5, 6
and 8 this Agreement would be inadequate and I hereby expressly agree that
Panera shall be entitled to apply to any court, having jurisdiction, for an
injunction restraining me in the event of a breach, actual or threatened, of
the covenants contained in this Agreement without the necessity of proof of
actual damages. Such right shall be in addition to any other remedies provided
for herein or otherwise available at law or equity. I further waive any
requirement that a bond be posted or that irreparable damage be demonstrated as
a condition to any injunctive relief.

	 	11.	 	ARBITRATION

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          Any controversy or claim arising out of or relating to my employment with
Panera (including, but not limited to, applicable state and/or federal law),
this Agreement, or the breach hereof (“claims”), except for claims which may be
enforced pursuant to Section 10, shall be settled exclusively by arbitration
before a single arbitrator which shall be held in the City of Boston, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The provisions hereof shall be a complete bar and defense to any
suit, action or proceeding instituted in any federal, state or local court or
before any administrative tribunal with respect to any matter which is
arbitrable as herein set forth. The provision of this section with respect to
arbitration shall survive the termination or expiration of this Agreement.
Nothing herein contained shall be deemed to give any arbitrator any authority,
power, or right to alter, change, amend, modify, add to, or subtract from any
provisions of this Agreement the arbitrator shall have no authority to award
punitive damages or attorney’s fees to any party. The decision of the
arbitrator shall be final and conclusive. Judgment on an award rendered by the
arbitrator may be entered in any court of competent jurisdiction.

	 	12.	 	NOTICES

          Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as
the party shall specify in writing. Such notice shall be deemed given upon
personal delivery to the appropriate address or if sent by certified or
registered mail, three (3) days after the date of mailing.

	 	(i)	 	All notices to me shall be
addressed
to                                                                                    at:

	 
	 	 	 	

or to such other place(s) as I may designate by written notice to Panera.

	 	(ii)	 	All notices to Panera shall be addressed to Panera at:
	 
	 	 	 	

	 
	 	 	 	

	 
	 	 	 	Attention: C.E.O.

or to such other place(s) as the Company may designate by written notice to me.

	 	13.	 	NOTIFICATION OF NEW EMPLOYER

          I agree that I will advise any prospective employer of the covenants and
restrictions of this Agreement before accepting any offer from another employer
and such notification shall not be a breach of Section 4.1.

	 	14.	 	DEATH

          This Agreement and all obligations of Panera hereunder including, but not
limited to, any Severance obligation, shall terminate upon my death. In the
event of a termination upon my death, monies or compensation owed by Panera to
me up to the date of termination shall be paid to my estate or designee.

	 	15.	 	MISCELLANEOUS

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          15.1      Except as limited by Section 11 above, I agree and consent that this
Agreement and any dispute arising hereunder shall be governed by the laws of
the Commonwealth of Massachusetts and its applicable courts shall have
jurisdiction over such matters; and I agree and consent to waive trial by jury
in any action or proceeding between the parties.

          15.2      No waiver by Panera of any breach of this Agreement shall be a waiver
of any preceding or succeeding breach. No waiver by Panera of any right under
this Agreement shall be construed as a waiver of any other right. Panera shall
not be required to give notice to enforce strict adherence to all terms of this
Agreement.

          15.3      In case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and each provision of this Agreement shall, if necessary, be deemed to
be independent of each other and each supported by valid consideration. If
moreover, any one or more of the provisions contained in this Agreement shall
for any reason be held to be excessively broad as to duration, geographical
scope, activity or subject, it shall be construed by limiting and reducing it,
so as to be enforceable to the extent compatible with the applicable law as it
shall then appear.

          15.4      To the extent necessary to provide Panera with the full and complete
benefit of this Agreement, the provisions in this Agreement and my obligations
hereunder shall survive the termination of this Agreement and shall not be
affected by such termination. The provisions of this Agreement shall also
survive the assignment of this Agreement by Panera to any successor in interest
or other assignee.

          15.5      This Agreement will be binding upon my heirs, executors,
administrators and other legal representatives and will be for the benefit of
the Panera, its successors, and its assigns.

          15.6     The captions and headings throughout this Agreement are for
convenience and reference only, and they shall in no way be held or deemed to
define, modify or add to the meaning, scope or intent of any provision of this
Agreement.

          15.7      This Agreement is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior discussions between us. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will be effective
unless in writing and signed by the party to be charged. Any subsequent change
or changes in my duties, salary or compensation will not affect the validity or
scope of this Agreement.

          15.8      This Agreement may be executed simultaneously in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original but all of which counterparts shall together constitute but one
agreement.

          15.9      By signing below, I acknowledge receiving a copy of this Agreement; I
acknowledge and agree that I am entering into this Agreement voluntarily and of
my own free will; and I acknowledge and agree that I have not been coerced or
suffered any duress in order to induce me to enter into this Agreement.

          15.10      This Agreement shall be effective as of the first date signed below.

	 	16.	 	ATTORNEY REVIEW

     I acknowledge that I have been expressly advised by Panera to review this
Agreement with an attorney prior to executing it.

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     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND THE MEANING OF ITS
VARIOUS TERMS AND THE CONSEQUENCES OF SIGNING THIS AGREEMENT.

     I HAVE BEEN GIVEN MORE THAN REASONABLE TIME TO CONSIDER AND ACCEPT THE
CONDITIONS OF THIS AGREEMENT.

	 	 	 
	 	 	
EXECUTED UNDER SEAL
	 	 	 
	 	 	

	 	 	
Signature
	 	 	 
	 	 	

	 	 	
Date
	 	 	 
	 	 	

	 	 	
Name  (typed or printed)
	 	 	 
	 	 	
SUBSCRIBED AND SWORN TO

before me this     day of     , 20   
	
	 	
 
	 	 	
Notary Public

	 	 
	ACCEPTED AND AGREED TO:
	 	 
	PANERA, L.L.C
	 	 
	By:	

	Title:	

	 	 
	Dated:	

28

 

ATTACHMENT A

GENERAL RELEASE

     I,            , of            ,            , for good and
adequate consideration (including the consideration described in the attached
Agreement), do hereby release and absolutely and forever discharge Panera,
L.L.C., its owners, predecessors, successors, affiliates, assigns, officers,
employees, franchisees, insurers, attorneys, investors and agents (hereinafter
“Panera”), from any and all suits, claims, demands, debts, sums of money,
damages, interest, attorneys’ fees, expenses, actions, causes of action,
judgments, accounts, promises, contracts, agreements, and any and all claims in
law or in equity, whether now known or unknown, which I ever had, now have, or
which I, my heirs, executors, administrators or assigns, hereafter can, shall
or may have against Panera arising from any events occurring from the beginning
of time to this date, including, without limitation of the foregoing
generality, all of same arising directly or indirectly out of, in connection
with and/or in any manner relating to my employment with and/or separation from
Panera, including, but expressly not limited to, any claims which I may have to
recover damages of any kind, including back pay, front pay, damages asserted
for physical and emotional injuries, or any claim to reinstatement and/or
employment, or any claims, actions, complaints or charges brought by me or on
my behalf or which could have been brought by me or on my behalf under the
Employment Retirement Income Security Act of 1974 (“ERISA”), the Americans with
Disabilities Act (“ADA”), Title VII of the Civil Rights Act, 42 U.S.C.
§§2000(e) et seq., the Age Discrimination in Employment Act (“ADEA”) or under
any other federal, state, municipal, city, town or common law.

     I further waive my right to any monetary recovery should any federal,
state, or local administrative agency pursue any claim(s) on my behalf arising
out of or related in any way to my employment with Panera and/or separation
from employment with Panera.

     1.     This General Release is a part of an Agreement between me and Panera
that is written in a manner which I understand and which entitles me to receive
money and other things of value to which under my employment arrangement I
would not have received apart from that Agreement.

     2.     By this General Release, Panera has given me written notice to consult
an attorney and I have been given the opportunity to consult with counsel of my
own choosing.

     3.     I have been given adequate time (including in excess of 21 days) to
consider the agreement before signing it, including this General Release.

     4.     I have the right to revoke this General Release within eight (8) days
of signing it by notifying Scott G. Blair, Esq., 42 Charles Street, Hingham,
Massachusetts 02043 in writing of my intention to do so.

     5.     By signing this General Release, I understand that I am waiving any
rights or claims arising under ERISA, ADA, ADEA, TITLE VII or under any other
federal, state, municipal, city, town or common law.

     I acknowledge that the execution of this General Release is my own free,
voluntary and knowing act and deed.

                  
                     
       (SEAL)

Subscribed to and sworn before me, this
             day
of            , 2      

Notary Public

My commission expires:

29exv10w2

 

Exhibit 10.2

FORM OF

OPERATING AGREEMENT

FOR

                    , LLC

A DELAWARE LIMITED LIABILITY COMPANY

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES
LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
OR TRANSFERRED, UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND
FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER
OF THE SECURITIES REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER
RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I - DEFINITIONS	 	 	1	 
		1.1	
“Act”
	 	 	1	 
		1.2	
“Affiliate”
	 	 	1	 
		1.3.	
“Agreement”
	 	 	1	 
		1.4.	
“Asiago”
	 	 	1	 
		1.5.	
“Assignee”
	 	 	1	 
		1.6	
“Bakery-Cafe”
	 	 	2	 
		1.7	
“Bankruptcy”
	 	 	2	 
		1.8	
“Capital Account”
	 	 	2	 
		1.9	
“Capital Contribution”
	 	 	2	 
		1.10	
“Certificate”
	 	 	2	 
		1.11	
“Class A Member”
	 	 	2	 
		1.12	
“Class B Member”
	 	 	2	 
		1.13	
“Class B Member Employment Agreement”
	 	 	2	 
		1.14	
“Class C Member”
	 	 	2	 
		1.15	
“Class C Member Employment Agreement”
	 	 	2	 
		1.16	
“Company”
	 	 	2	 
		1.17	
“Company Minimum Gain”
	 	 	2	 
		1.18.	
“Code”
	 	 	3	 
		1.19	
“Competitive Activity”
	 	 	3	 
		1.20	
“Designated Bakery-Cafe”
	 	 	3	 
		1.21	
“Economic Interest”
	 	 	3	 
		1.22	
“Fiscal Year”
	 	 	3	 
		1.23	
“Gross Sales”
	 	 	3	 
		1.24	
“Management Fee
	 	 	3	 
		1.25	
“Manager”
	 	 	3	 
		1.26.	
“Marks”
	 	 	3	 
		1.27	
“Member”
	 	 	4	 
		1.28	
“Member Nonrecourse Debt”
	 	 	4	 
		1.29	
“Member Nonrecourse Deductions”
	 	 	4	 
		1.30	
“Membership Interest”
	 	 	4	 
		1.31	
“Net Profits” and “Net Losses”
	 	 	4	 
		1.32	
“Nonrecourse Liability”
	 	 	4	 
		1.33	
“Panera”
	 	 	4	 
		1.34	
“Period”
	 	 	4	 
		1.35	
“Person”
	 	 	4	 
		1.36	
“Proprietary Information”
	 	 	4	 
		1.37	
“Regulations”
	 	 	4	 
		1.38	
“Sharing Percentage”
	 	 	4	 
		1.39	
“System”
	 	 	5	 
		1.40	
“Tax Matters Partner”
	 	 	5	 
	 
	ARTICLE II - ORGANIZATIONAL MATTERS	 	 	5	 
		2.1	
Formation
	 	 	5	 
		2.2	
Name
	 	 	5	 
		2.3	
Term
	 	 	5	 

i

 

	 	 	 	 	 	 	 
		2.4	
Office and Agent
	 	 	5	 
		2.5	
Addresses of the Members and the Manager
	 	 	5	 
		2.6	
Purpose and Business of the Company
	 	 	6	 
	 
	ARTICLE III - CAPITAL CONTRIBUTIONS	 	 	6	 
		3.1	
Initial Capital Contributions
	 	 	6	 
	 	 	
A. Class A Member
	 	 	6	 
	 	 	
B. Class B Member
	 	 	6	 
	 	 	
C. Class C Members
	 	 	6	 
		3.2	
Additional Capital Contributions
	 	 	6	 
	 	 	
A. Class A Member
	 	 	6	 
	 	 	
B. Class B Member
	 	 	6	 
	 	 	
C. Class C Members
	 	 	7	 
	 	 	
D. No Further Capital Contributions Required
	 	 	7	 
		3.3	
Capital Accounts
	 	 	7	 
		3.4	
No Interest on Capital Contributions
	 	 	7	 
	ARTICLE IV - MEMBERS	 	 	7	 
		4.1	
Limited Liability
	 	 	7	 
		4.2	
Admission of Members
	 	 	7	 
		4.3	
Withdrawals or Resignations
	 	 	8	 
		4.4	
Termination of Membership Interest
	 	 	8	 
		4.5	
Transaction With The Company
	 	 	8	 
		4.6	
Remuneration to Members
	 	 	8	 
		4.7	
Members Are Not Agents
	 	 	8	 
		4.8	
Voting Rights
	 	 	8	 
		4.9	
Meeting of Members
	 	 	8	 
	 
	ARTICLE V - MANAGEMENT AND CONTROL OF THE COMPANY	 	 	 
		5.1	
Management of the Company by Manager
	 	 	9	 
		5.2	
Powers of Manager
	 	 	10	 
	 	 	
A. Powers of Manager
	 	 	10	 
	 	 	
B. Limitations on Power of Manager
	 	 	10	 
		5.3	
Performance of Duties; Liability of Manager
	 	 	11	 
		5.4	
Devotion of Time
	 	 	11	 
		5.5	
Competing Activities
	 	 	11	 
		5.6	
Transactions between the Company and the Manager
	 	 	12	 
		5.7	
Payments to Manager or its Affiliates
	 	 	12	 
		5.8	
Officers
	 	 	12	 
		5.9	
Limited Liability
	 	 	12	 
	 
	ARTICLE VI - ALLOCATIONS OF NET PROFITS AND	 	 	 
	NET LOSSES AND DISTRIBUTION	 	 	13	 
		6.1	
Allocations of Net Profit and Net Loss
	 	 	13	 
	 	 	
A. Net Loss
	 	 	13	 
	 	 	
B. Net Profit
	 	 	13	 
		6.2	
Special Allocations
	 	 	13	 
	 	 	
A. Minimum Gain Chargeback
	 	 	13	 
	 	 	
B. Chargeback of Minimum Gain Attributable to
Member Nonrecourse Debt
	 	 	14	 
	 	 	
C. Nonrecourse Deductions
	 	 	14	 

ii

 

	 	 	 	 	 	 	 
	 	 	
D. Member Nonrecourse Deductions
	 	 	14	 
	 	 	
E. Qualified Income Offset
	 	 	14	 
		6.3	
Code Section 704(c) Allocations
	 	 	14	 
		6.4	
Allocation of Net Profits and Losses and
Distribution in Respect of a Transferred Interest
	 	 	15	 
		6.5	
Distributions
	 	 	15	 
	 	 	
A. Operations
	 	 	15	 
	 	 	
B. Dispositions
	 	 	15	 
	 	 	
C. Holder of Record
	 	 	15	 
		6.6	
Form of Distribution
	 	 	15	 
		6.7	
Restriction on Distributions
	 	 	16	 
		6.8	
Return on Distributions
	 	 	16	 
		6.9	
Obligations of Members to Report Allocations
	 	 	16	 
	 
	ARTICLE VII - TRANSFER AND ASSIGNMENT OF INTERESTS	 	 	16	 
		7.1	
Transfer and Assignment of Interests
	 	 	16	 
		7.2	
Substitution of Members
	 	 	17	 
		7.3	
Effective Date of Transfers
	 	 	17	 
		7.4	
Rights of Legal Representatives
	 	 	17	 
	 
	ARTICLE VIII - ACCOUNTING, RECORDS, REPORTING BY MEMBERS	 	17	 
		8.1	
Books and Records
	 	 	17	 
		8.2	
Delivery to Members
	 	 	18	 
		8.3	
Annual Statements
	 	 	18	 
		8.4	
Filings
	 	 	18	 
		8.5	
Bank Accounts
	 	 	18	 
		8.6	
Accounting Decisions and Reliance on Others
	 	 	19	 
		8.7	
Tax Matters for the Company Handled by Manager and
Tax Matters Partner
	 	 	19	 
	 
	ARTICLE IX DISSOLUTION AND WINDING UP	 	 	19	 
		9.1	
Dissolution
	 	 	19	 
		9.2	
Winding-Up
	 	 	19	 
		9.3	
Distributions in Kind
	 	 	19	 
		9.4	
Order of Payment Upon Dissolution
	 	 	20	 
		9.5	
Limitations on Payments Made in Dissolution
	 	 	20	 
	 
	ARTICLE X - INDEMNIFICATION AND INSURANCE	 	 	20	 
		10.1	
Indemnification of Agents
	 	 	20	 
		10.2	
Insurance
	 	 	20	 
	 
	ARTICLE XI - CONFIDENTIALITY AND NON-COMPETITION	 	 	20	 
		11.1	
Noncompetition
	 	 	20	 
		11.2	
Confidentiality
	 	 	21	 
	 	 	
A. Definition
	 	 	21	 
	 	 	
B. No Disclosure, Use, or Circumvention
	 	 	21	 
	 	 	
C. Maintenance of Confidentiality
	 	 	21	 
		11.3	
Non-Solicitation
	 	 	21	 
		11.4	
Reasonableness of Restrictions; reformation;
Enforcement
	 	 	21	 
		11.5	
Specific Performance
	 	 	22	 

iii

 

	 	 	 	 	 	 	 
	ARTICLE XII - INVESTMENT REPRESENTATIONS	 	 	22	 
		12.1	
Pre-existing Relationship or Experience
	 	 	22	 
		12.2	
No Advertising
	 	 	23	 
		12.3	
Investment Intent
	 	 	23	 
		12.4	
Consultation with Attorney
	 	 	23	 
		12.5	
Tax Consequences
	 	 	23	 
		12.6	
No Assurance of Tax Benefits
	 	 	23	 
	 
	ARTICLE XIII - MISCELLANEOUS	 	 	23	 
		13.1	
Complete Agreement
	 	 	23	 
		13.2	
Binding Effect
	 	 	23	 
		13.3	
Parties in Interest
	 	 	23	 
		13.4	
Pronouns; Statutory References
	 	 	24	 
		13.5	
Headings
	 	 	24	 
		13.6	
Interpretation
	 	 	24	 
		13.7	
References to this Agreement
	 	 	24	 
		13.8	
Jurisdiction
	 	 	24	 
		13.9	
Limitations on Legal Actions
	 	 	24	 
		13.10	
Mediation
	 	 	24	 
		13.11	
Exhibits
	 	 	24	 
		13.12	
Severability
	 	 	25	 
		13.13	
Additional Document and Acts
	 	 	25	 
		13.14	
Notices
	 	 	25	 
		13.15	
Amendments
	 	 	25	 
		13.16	
Reliance on Authority of Person Signing Agreement
	 	 	25	 
		13.17	
No Interest in Company Property; Waiver of Action
for Partition
	 	 	25	 
		13.18	
Multiple Counterparts
	 	 	25	 
		13.19	
Attorney Fees
	 	 	25	 
		13.20	
Time is of the Essence
	 	 	26	 
		13.21	
Remedies Cumulative
	 	 	26	 
		13.22	
Special Power of Attorney
	 	 	26	 
	 	 	
A. Attorney in Fact
	 	 	26	 
	 	 	
B. Irrevocable Power	 	 	 	 
	 	 	
C. Signatures
	 	 	26	 
	 
	EXHIBIT A	
Capital Contributions of Members and	 	 	 	 
	 	 	
Addresses of Members and Managers	 	 	 	 
	 
	EXHIBIT B	
Designated Bakery-Cafes	 	 	 	 
	 	 	
Exhibit A	 	 	 	 

iv

 

OPERATING AGREEMENT

FOR

                    , LLC

A DELAWARE LIMITED LIABILITY COMPANY

     This Operating Agreement, is made as of             , 20   , by and among
the parties listed on the signature pages hereof, with reference to the
following facts:

     A.     On             , 20   , a Certificate of Formation for
           , LLC (the “Company”), a limited liability company organized
under the laws of the State of Delaware, was filed with the Delaware Secretary
of State.

     B.     The parties desire to adopt and approve a limited liability company
operating agreement for the Company.

     NOW, THEREFORE, the parties by this Agreement set forth the operating
agreement for the Company under the laws of the State of Delaware upon the
terms and subject to the conditions of this Agreement.

ARTICLE I

DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings
set forth below (all terms used in this Agreement that are not defined in this
Article I shall have the meanings set forth elsewhere in this Agreement):

     1.1 “Act” shall mean the Delaware Limited Liability Company Act as the
same may be amended from time to time.

     1.2 “Adjusted Bakery-Cafe Net Profit” shall mean, with respect to a
Bakery-Cafe, in which the Class B Member has a Sharing Percentage of more than
zero percent (0%), the total profit (or loss) of such Bakery-Cafe for any
period after taking into account (i) the expenses for such period which are
incurred solely with respect to such Bakery-Cafe (including, but not limited to
the Class C Member’s annual salary and benefits) which are of the types
reflected on the form of store operating statement generally used by Panera for
its individual bakery-cafes as such form may be modified by Panera from
time-to-time, (ii) for any period, all costs incurred by Panera, Asiago or
their affiliates relating to district (including, but not limited to the Class
B Member’s annual salary and benefits), regional and area supervision above the
individual bakery-cafe level, bakery supervision, field training, training
functions, neighborhood marketing and recruiting and relocation, donation
credit or as other shared costs, as such costs may be allocated by Panera to
Asiago or Company from time-to-time to reflect such Bakery-Cafe’s proportionate
share of such costs among all bakery-cafes owned or managed by Panera, Asiago
or their affiliates; and (iii) a management fee of      percent (   %) of the
Gross Sales for such Bakery-Cafe during such period.

1

 

     1.3 “Affiliate” of a Member or Manager shall mean any Person, directly or
indirectly, through one or more intermediaries, controlling, controlled by, or
under common control with a Member or Manager, as applicable. The term
“control”, as used in the immediately preceding sentence, shall mean with
respect to a corporation or limited liability company the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the controlled corporation or limited liability company, and,
with respect to any individual, partnership, trust, other entity or
association, the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the controlled entity.

     1.4 “Applicable
Net Profit Allocation Percentage” shall mean
(i)     percent
(   %) during the Period in which the cumulative number of open
Bakery-Cafes in which the Class B Member has a Sharing Percentage of more than
zero percent (0%) is at least      (   ) up to      (); (ii)      
percent (   %) during the Period in which such cumulative number of open
Bakery-Cafes is at least      (   ) up to      (   ); (iii)      percent
(   %) during the Period in which such cumulative number of open Bakery-Cafes
is at least       (     ); and (iv) notwithstanding that the Applicable Net Profit
Allocation Percentage may change as additional Bakery-Cafes are opened, at any
given time, the Applicable Net Profit Allocation Percentage shall be the same
amount for each Bakery-Cafe (by way of example, if the cumulative number of
such Bakery-Cafes increases to five (5), the Applicable Net Profit Allocation
Percentage for each of the five (5) Bakery-Cafes shall thereupon be      
percent (     %) instead of the       percent (     %) which had been in effect
when only four (4) Bakery-Cafes had been open).

     1.5 “Agreement” shall mean this Operating Agreement, as originally
executed and as amended from time to time.

     1.6 “Asiago” shall mean ASIAGO BREAD, LLC, a Delaware limited liability
company.

     1.7 “Assignee” shall mean the owner of an Economic Interest who has not
been admitted as a substitute Member in accordance with Article VII.

     1.8 “Bakery-Cafe” shall mean any bakery, restaurant and/or cafe which uses
the Marks (or the Mark “Saint Louis Bread” or “Saint Louis Bread Company”) and
System.

     1.9 “Bakery-Cafe Net Profit” shall mean, with respect to a Bakery-Cafe, in
which a Class C Member has a Sharing Percentage of more than zero percent (0%),
the total profit (or loss) of such Bakery-Cafe for any period after taking into
account (i) the expenses for such period which are incurred solely with respect
to such Bakery-Cafe (including, but not limited to the Class C Member’s annual
salary and benefits) which are of the types reflected on the form of store
operating statement generally used by Panera for its individual bakery-cafes as
such form may be modified by Panera from time-to-time, and (ii) a management
fee of       percent (     %) of the Gross Sales for such Bakery-Cafe during such
period.

     1.10 “Bankruptcy” of a Member shall mean: (a) the filing of a voluntary
petition in bankruptcy by such Member; (b) such Member is adjudged a bankrupt
or insolvent, or the entry of an order for relief with respect to such Member
in any bankruptcy or insolvency proceedings; (c) the making by such Member of a
general assignment for the benefit of creditors; (d) such Member seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of such Member or of all or any substantial part of such Member’s
properties; (e) such Member files a petition or answer seeking for such Member
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation; or (f) such
Member files an answer or other pleading

2

 

admitting or failing to contest the material allegations of a petition
filed against the member in any proceeding of such nature.

     1.11 “Capital Account” shall mean with respect to any Member the capital
account which the Company establishes and maintains for such Member pursuant to
Section 3.3.

     1.12 “Capital Contribution” shall mean the total amount of cash
contributed to the Company by the Members.

     1.13 “Certificate” shall mean the Certificate of Formation for the Company
originally filed with the Delaware Secretary of State as amended from time to
time.

     1.14 “Class A Member” shall mean Asiago, or any transferee of Asiago.

     1.15 “Class B Member” shall mean the individual who has been admitted to
the Company as a Class B Member and has not ceased to be a Member for any
reason.

     1.16 “Class B Member Employment Agreement” shall mean an employment
agreement between Asiago and the Class B Member which references this Agreement
and services to be rendered by the Class B Member with respect to one or more
Designated Bakery-Cafes.

     1.17 “Class C Member” shall mean any individual who has been admitted to
the Company as a Class C Member and has not ceased to be a Member for any
reason.

     1.18 “Class C Member Employment Agreement” shall mean an employment
agreement between Asiago and a Class C Member which references this Agreement
and services to be rendered by such Class C Member with respect to a Designated
Bakery-Cafe.

     1.19 “Company” shall mean      , LLC a Delaware limited
liability company.

     1.20 “Company Minimum Gain” shall have the meaning ascribed to the term
“Partnership Minimum Gain” in the Regulations Section 1.704-2(d).

     1.21 “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, the provisions of succeeding law, and to the extent applicable,
the Regulations.

     1.22 Competitive Activity” shall include the following:

          (a) being employed by, advising, consulting in, or acting in any way as an
agent for Atlanta Bread Company, Au Bon Pain, ABP Corporation, Bruegger’s,
Cosi’s, Corner Bakery, Einstein, Great Harvest, Krispy Kreme, La Madeline,
Montana Mills, Schlotzky’s, Starbucks; or directly or indirectly engaging in,
being employed by, advising, consulting in, or acting in any way as an agent
for any entity engaged, in whole or in part, in any retail food establishment
(including any restaurant or bakery, but excluding any exclusively based pizza
concept) in which any of the following categories constitutes more than twenty
percent (20%) of its revenues: (a) bakery goods and breads; (b) sandwiches,
soups and/or salads, other than those ordered through a wait person taking
orders at a table (the term “sandwiches” shall not include hamburgers); or (c)
coffee and coffee-based drinks; as well as any business (without regard to
revenue) that manufactures, wholesales and/or distributes fresh or frozen dough
or bakery products which is or may be competitive with or adverse to the
Company’s or its Affiliates (including, without limitation, Asiago and Panera)
business and which is within a one

3

 

hundred (100) mile radius of where the Company or its Affiliates
(including, without limitation, Asiago and Panera) is engaged in business or
where the Company or its Affiliates (including, without limitation, Asiago and
Panera) is attempting to engage in business or where the Company or its
Affiliates (including, without limitation, Asiago and Panera) may reasonably be
expected to engage in business within the twelve (12) months immediately
following the end of the Term of Employment under a Class B Member Employment
Agreement or under a Class C Member Employment Agreement; or

          (b) having, or acquiring any interest in (whether as proprietor, partner,
stockholder, consultant, officer, director, or any type of principal
whatsoever) Atlanta Bread Company, Au Bon Pain, ABP Corporation, Bruegger’s,
Cosi’s, Corner Bakery, Einstein, Great Harvest, Krispy Kreme, La Madeline,
Montana Mills, Schlotzky’s, Starbucks or any entity engaged, in whole or in
part, in any retail food establishment (including any restaurant or bakery, but
excluding any exclusively based pizza concept) in which any of the following
categories constitutes more than twenty percent (20%) of its revenues: (a)
bakery goods and breads; (b) sandwiches purchased in a service manner and/or
method similar to that used by the Company or its Affiliates (including,
without limitation, Asiago and Panera) (the term “sandwiches” shall not include
hamburgers); or (c) coffee and coffee-based drinks; as well as any business
(without regard to revenue) that manufactures, wholesales and/or distributes
fresh or frozen dough or bakery products which is or may be competitive with or
adverse to the Company’s or its Affiliates (including, without limitation,
Asiago and Panera) business and which is within a one hundred (100) mile radius
of where the Company or its Affiliates (including, without limitation, Asiago
and Panera) is engaged in business or where the Company or its Affiliates
(including, without limitation, Asiago and Panera) is attempting to engage in
business or where the Company or its Affiliates (including, without limitation,
Asiago and Panera) may reasonably be expected to engage in business within the
twelve (12) months immediately following the end of the Term of Employment
under a Class B Member Employment Agreement or under a Class C Member
Employment Agreement, except that the direct or indirect ownership of five
percent (5%) or less of the stock of a company whose shares are listed on a
national securities exchange or are quoted on the National Association of
Securities Dealers Automated Quotation System shall not be deemed having or
acquiring any such interest; or

          (c) directly or indirectly being employed by, advising, consulting in, or
acting in any way as an agent for any entity: (a) which is a franchisee of the
Company or its Affiliates (including, without limitation, Asiago and Panera),
or (b) which was a franchisee of the Company or its Affiliates (including,
without limitation, Asiago and Panera) at any time within the twelve (12)
months immediately prior to the end of the Term of Employment under a Class B
Member Employment Agreement or under a Class C Member Employment Agreement with
the Company or its Affiliates (including, without limitation, Asiago and
Panera), or (c) which the Company or its Affiliates (including, without
limitation, Asiago and Panera) is and/or was attempting to secure as a
franchisee at any time within the twelve (12) months immediately prior to the
end of the Term of Employment under a Class B Member Employment Agreement or
under a Class C Member Employment Agreement with the Company or its Affiliates
(including, without limitation, Asiago and Panera), or (d) which the Company or
its Affiliates (including, without limitation, Asiago and Panera) may
reasonably be expected to secure as a franchisee at any time within the twelve
(12) months immediately following the end of the Term of Employment under a
Class B Member Employment Agreement or under a Class C Member Employment
Agreement; or

          (d) having, or acquiring any interest in (whether as proprietor, partner,
stockholder, consultant, officer, director, or any type of principal
whatsoever) any entity: (a) which is a franchisee of the Company or its
Affiliates (including, without limitation, Asiago and Panera), or (b) which was
a franchisee of the Company or its Affiliates (including, without limitation,
Asiago and Panera) at any time within the twelve (12) months immediately prior
to the end of the Term of Employment under a Class B Member Employment
Agreement or under a Class C Member Employment Agreement with the

4

 

Company or its Affiliates (including, without limitation, Asiago and
Panera), or (c) which the Company or its Affiliates (including, without
limitation, Asiago and Panera) is and/or was attempting to secure as a
franchisee at any time within the twelve (12) months immediately prior to the
end of the Term of Employment under a Class B Member Employment Agreement or
under a Class C Member Employment Agreement with the Company or its Affiliates
(including, without limitation, Asiago and Panera), or (d) which the Company or
its Affiliates (including, without limitation, Asiago and Panera) may
reasonably be expected to secure as a franchisee at any time within the twelve
(12) months immediately following the end of the Term of Employment under a
Class B Member Employment Agreement or under a Class C Member Employment
Agreement, except that the direct or indirect ownership of five percent (5%) or
less of the stock of a company whose shares are listed on a national securities
exchange or are quoted on the National Association of Securities Dealers
Automated Quotation System shall not be deemed having or acquiring any such
interest.

          References to “the Company’s or its Affiliates (including, without
limitation, Asiago and Panera) business” and/or “where the Company or its
Affiliates (including, without limitation, Asiago and Panera) is engaged in
business” and/or “where the Company or its Affiliates (including, without
limitation, Asiago and Panera) is attempting to engage in business” and/or
“where the Company or its Affiliates (including, without limitation, Asiago and
Panera) may reasonably be expected to engage in business”, shall mean any
and/or all current and/or future franchisee operation(s) as well as any current
and/or future Company or its Affiliates (including, without limitation, Asiago
and Panera) operation(s).

     1.23 “Designated Bakery-Cafe” shall mean, a Bakery-Cafe owned and operated
by the Company and in which the Class B Member or a Class C Member is allocated
a Sharing Percentage in accordance with Section 3.1 or Section 3.2.

     1.24 “Economic Interest” shall mean the right to receive distributions of
the Company’s assets and allocations of income, gain, loss, deduction, credit
and similar items from the Company pursuant to this Agreement and the Act, but
shall not include any other rights of a Member, including, without limitation,
the right to vote or participate in the management of the Company.

     1.25 “Fiscal Year” shall mean the Company’s fiscal year, which shall end
on the last Saturday in December of each year, which fiscal year may be changed
at the discretion of the Manager.

     1.26 “Gross Sales” for any Bakery-Cafe shall mean, for any period, the
aggregate gross amount of all sales of food, beverages and other products and
merchandise sold and services rendered in connection with such Bakery-Cafe,
including monies derived from sales at or away from such Bakery-Cafe whether
for cash or credit, but excluding (i) all federal, state or municipal sales or
service taxes collected from customers and paid to the appropriate taxing
authorities; and (ii) all Company approved customer refunds and adjustments and
promotional discounts made by such Bakery-Cafe.

     1.27 “Management Fee” shall have the meaning set forth in Section 5.7.

     1.28 “Manager” shall mean Asiago, or such other Person as may be appointed
by the Class A Member.

     1.29 “Marks” shall mean the current and future tradenames, trademarks,
service marks, and trade dress used to identify the services and/or products
offered by Bakery-Cafes, including the marks “PANERA BREAD”, and the
distinctive building design and color scheme.

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     1.30 “Member” shall mean each Person who (a) is an initial signatory to
this Agreement, has been admitted to the Company as a Member in accordance with
the Certificate or this Agreement or is an Assignee who has become a Member in
accordance with Article VII, and (b) has not ceased to be a Member for any
reason.

     1.31 “Member Nonrecourse Debt” shall have the meaning ascribed to the term
“Partner Nonrecourse Debt” in Regulations Section 1.704-2 (b) (4).

     1.32 “Member Nonrecourse Deductions” shall mean items of Company loss,
deduction, or Code Section 705 (a) (2) (B) expenditures which are attributable
to Member Nonrecourse Debt.

     1.33 “Membership Interest” shall mean a Member’s entire interest in the
Company including the Member’s Economic Interest, the right to vote on or
participate in the management, and the right to receive information concerning
the business and affairs, of the Company.

     1.34 “Net Profits” and “Net Losses” shall mean the income, gain, loss and
deductions of the Company in the aggregate or separately stated, as
appropriate, determined in accordance with the method of accounting at the
close of each Fiscal Year on the Company’s information tax return filed for
federal income tax purposes, after taking into account, among other things, the
Management Fee.

     1.35 “Nonrecourse Liability” shall have the meaning set forth in
Regulations Section 1.752-1 (a) (2).

     1.36 “Panera” shall mean PANERA, LLC, a Delaware limited liability
company.

     1.37 “Period” shall mean any of the thirteen (13) four-week periods which
constitute the Company’s Fiscal Year.

     1.38 “Person” shall mean an individual, partnership, limited partnership,
limited liability company, corporation, trust, estate, association or any other
entity.

     1.39 “Proprietary Information” shall have the meaning set forth in Section
11.2.

     1.40 “Regulations” shall, unless the context clearly indicates otherwise,
mean the regulations in force as final or temporary that have been issued by
the U.S. Department of Treasury pursuant to its authority under the Code, and
any successor regulations.

     1.41 “Sharing Percentage” shall mean, with respect to a Designated
Bakery-Cafe, the following:

          (a) Except as provided in clause (d) below,       percent (     %) for the
Class B Member who is allocated a Sharing Percentage by the Manager in such
Designated Bakery-Cafe;

          (b) Except as provided in clause (d) below,       percent (     %) for a
Class C Member who is allocated a Sharing Percentage by the Manager in such
Designated Bakery-Cafe;

          (c) for the Class A Member, a percentage equal to one hundred percent
(100%) less the sum of the allocated Sharing Percentages for the Class B Member
and a Class C Member, if any, for such Designated Bakery-Cafe; and

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          (d) zero percent (0%) for any Class C Member who is not allocated a
Sharing Percentage by the Manager in such Designated Bakery-Cafe, or for the
Class B Member if either Asiago or the Class B Member exercises a right under
Article VII to purchase or sell the Class B Member’s interest in such
Designated Bakery-Cafe.

     1.42 “System” shall mean the business methods, designs and arrangements
for developing and operating Bakery-Cafes, which include the Marks, building
design and layouts, equipment, ingredients, recipes, methods of preparation and
specifications for authorized food products, methods of inventory control and
certain operating and business standards and policies, all of which may be
improved, further developed, or otherwise modified from time to time.

     1.43 “Tax Matters Partner” (as defined in Code Section 6231) shall be
Asiago or its successor as designated pursuant to Section 8.8.

ARTICLE II

ORGANIZATIONAL MATTERS

     2.1 Formation. The Members have formed a Delaware limited liability
company under the laws of the State of Delaware by filing the Certificate with
the Delaware Secretary of State and entering into this Agreement. The rights
and liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent that the rights or obligations of any Member are
different by reason of any provision of this Agreement than they would be in
the absence of such provision, this Agreement shall, to the extent permitted by
the Act, control.

     2.2 Name. The name of the Company shall be “     , LLC”.
The business of the Company may be conducted under that name or, upon
compliance with applicable laws, any other name that the Manager deems
appropriate or advisable. The Manager shall file any fictitious name
certificates and similar filings, and any amendments thereto, that the Manager
considers appropriate or advisable.

     2.3 Term. The term of this Agreement commenced on the filing of the
Certificate and shall continue indefinitely, unless extended or sooner
terminated as hereinafter provided.

     2.4 Office and Agent. The Company shall continuously maintain a
registered office and agent in the State of Delaware. The principal office of
the Company shall be at 6710 Clayton Road, Richmond Heights, Missouri 63117, or
at such other place as the Manager may determine. The Company may also have
such offices, anywhere within and without the State of Delaware, as the Manager
may determine from time to time, or the business of the Company may require.
The registered agent shall be as stated in the Certificate or as otherwise
determined by the Manager.

     2.5 Addresses of the Members and the Manager. The respective addresses of
the Members and the Manager are set forth on Exhibit A. A Member may change
its address upon notice thereof to the Manager.

     2.6 Purpose and Business of the Company. The purpose of the Company is to
engage in any lawful activity for which a limited liability company may be
organized under the Act.

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     Notwithstanding the foregoing, without the consent of all of the Members,
the Company shall not engage in any business other than the following:

          A. The acquisition, development, ownership, management, operation and sale
of such number of Bakery-Cafe locations as shall be determined by the Class A
Member in its sole discretion; and

          B. Such other activities directly related to and in furtherance of the
foregoing business as may be necessary, advisable, or appropriate, in the
reasonable opinion of the Manager.

ARTICLE III

CAPITAL CONTRIBUTIONS

     3.1 Initial Capital Contributions.

          A. Class A Member. As its initial Capital Contribution, the Class A
Member shall, concurrent with the execution of this Agreement by the Class A
Member, contribute       Dollars ($     ), and shall receive a
corresponding credit to its Capital Account.

          B. Class B Member. The Class B Member shall, concurrent with the
admission of such Person as a Class B Member and his execution of this
Agreement, contribute       Dollars ($     ), and shall receive a
corresponding credit to his Capital Account. At the time the Class B Member
executes this Agreement, the Manager shall allocate to the Class B Member a
Sharing Percentage in a Designated Bakery-Cafe and shall modify Exhibit B
hereto to reflect the Sharing Percentages of the Members with respect to such
Designated Bakery-Cafe.

          C. Class C Members. Each Class C Member shall, concurrent with the
admission of such Person as a Class C Member and his execution of this
Agreement, contribute       Dollars ($     ), and shall receive a
corresponding credit to his Capital Account. At the time each Class C Member
executes this Agreement, the Manager shall allocate to such Class C Member a
Sharing Percentage in a Designated Bakery-Cafe and shall modify Exhibit C
hereto to reflect the Sharing Percentages of the Members with respect to such
Designated Bakery-Cafe.

     3.2 Additional Capital Contributions.

          A. Class A Member. The Class A Member shall make additional Capital
Contributions to the Company, as the Class A Member deems appropriate. The
Class A Member shall receive a credit to its Capital Account in the amount of
any additional capital so contributed to the Company.

          B. Class B Member. From time to time, the Manager shall notify the Class
B Member of the Company’s intention to develop a Bakery-Cafe at a specified
location (which shall constitute a Designated Bakery-Cafe). Within thirty
(30) days of the delivery of such notice, the Class B Member shall make an
additional Capital Contribution of       Dollars ($     ) to the
Company. If such Capital Contribution is so made within such thirty (30) days,
the Class B Member shall receive a credit to his Capital Account in the amount
of the additional capital so contributed, and the Manager shall allocate to
such Class B Member a Sharing Percentage in such Designated

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Bakery-Cafe and shall modify Exhibit B hereto to reflect such allocation. The
Class B Member acknowledges that (i) no representation, warranty, guarantee or
assurance has been made with respect to the number of Designated Bakery-Cafes
in which the Class B Member may be allocated a Sharing Percentage and (ii) the
failure by the Class B Member to timely make any Capital Contributions
hereunder constitutes “Cause” for termination under the Class B Member
Employment Agreement and adversely affects the purchase price payable for the
Class B Member’s Membership Interest under the purchase rights and obligations
set forth in the Class B Member Employment Agreement.

          C. Class C Members. The Class C Members shall have no right to make any
additional Capital Contributions.

          D. No Further Capital Contributions Required. Except as provided in
Section 3.1, Section 3.2 A and Section 3.2 B, no Member shall be required to
make any additional Capital Contributions. To the extent approved by the
Manager, from time to time, the Class A Member may be permitted to make loans
to Company (but is under no obligation to do so), if the Manager determines
that such loans to the Company are necessary or appropriate for the conduct of
the Company’s business. In that event, the Class B Member and the Class C
Members shall have no right to participate in such loans.

     3.3 Capital Accounts. The Company shall establish and maintain an
individual Capital Account for each Member in accordance with Regulations
Section 1.704-1 (b) (2) (iv). If a Member transfers all or a part of its
Membership Interest in accordance with this Agreement, such Member’s Capital
Account attributable to the transferred Membership Interest shall carry over to
the new owner of such Membership Interest pursuant to Regulations Section
1.704-1 (b) (2) (iv) (1).

     3.4 No Interest on Capital Contributions. No Member shall be entitled to
receive any interest on its Capital Contributions.

ARTICLE IV

MEMBERS

     4.1 Limited Liability. Except as expressly set forth in this Agreement or
required by law, no Member shall be personally liable, or shall be obligated to
provide a guaranty or indemnity, for any debt, obligation, or liability of the
Company, whether that liability or obligation arises in contract, tort, or
otherwise.

     4.2 Admission of Members. The Manager may admit to the Company the Class
B Member and such number of Class C Members (if not admitted as of the initial
execution of this Agreement by the Class A Member) as the Manager deems
appropriate in its sole discretion. Each Person admitted as the Class B Member
or a Class C Member shall sign a counterpart of this Agreement as a Member and
the names and addresses of the Members shall be set forth on Exhibit A, and the
Sharing Percentages for Designated Bakery-Cafes shall be set forth on Exhibit
B, and such Exhibits shall be updated or modified as the Class B Member and
Class C Members are admitted. The Manager also may admit additional Members on
such terms as are determined by the Manager so long as such terms shall not
adversely affect the Net Profits, Net Losses and distribution rights of the
Class B Member and the Class C Members without their prior consent.
Notwithstanding the foregoing, Assignees may only be admitted as substitute
Members in accordance with Article VII.

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     4.3 Withdrawals or Resignations. No Member may withdraw or resign from
the Company. The Bankruptcy of a Member shall not result in a Member ceasing
to be a Member of the Company.

     4.4 Termination of Membership Interest. Upon the transfer of the
Membership Interest of the Class B Member or any Class C Member in violation of
Article VII, the Membership Interest of such Member shall be terminated by the
Manager and thereafter that Member shall be an Assignee only. Each Member
acknowledges and agrees that such termination of a Membership Interest upon the
occurrence of the foregoing event is not unreasonable under the circumstances
existing as of the date hereof.

     4.5 Transactions With The Company. A Member or Affiliate of a Member may
lend money to and transact other business with the Company (including, without
limitation, the purchase, sale, lease, or exchange of any property or the
rendering of any service, or the establishment of any salary, other
compensation, or other terms of employment) on such terms as the Manager
determines are reasonable. Subject to other applicable law, such Member has
the same rights and obligations with respect thereto as a Person who is not a
Member.

     4.6 Remuneration To Members. Except as otherwise specifically provided in
this Agreement or approved by the Manager, no Member is entitled to
remuneration for acting in the Company business.

     4.7 Members Are Not Agents. Pursuant to Section 5.1 and the Certificate,
the management of the Company is vested in the Manager. The Members shall have
no power to participate in the management of the Company except as expressly
authorized to do so by this Agreement, or by the Manager, or except as
expressly required by the Act. No Member, acting solely in the capacity of a
Member, is an agent of the Company nor does any Member, unless expressly and
duly authorized in writing to do so by the Manager, have any power or authority
to bind or act on behalf of the Company in any way, to pledge its credit, to
execute any instrument on its behalf or to render it liable for any purpose.

     4.8 Voting Rights. Except as expressly provided in Section 5.2 B, the
Class B Member and the Class C Members shall have no voting, approval or
consent rights. Except as otherwise set forth in this Agreement, in all matters
in which a vote, approval or consent of the Members is required, a vote,
consent or approval of the Class A Member shall be sufficient to authorize or
approve such act. All votes, approvals or consents of a Member may be given or
withheld, conditioned or delayed as the Members may determine in their sole and
absolute discretion and each Member may vote, approve or consent to any matter
without regard to whether such matter furthers the Member’s self-interest or
may present a conflict of interest for such Member.

     4.9 Meetings of Members. No annual or regular meetings of Members are
required. Meetings of the Members may be requested only by the Class A Member
holding more than twenty percent (20%) of the Percentage Interests for the
purpose of addressing any matters on which all of the Members may vote by
delivery of a request to hold a meeting to the Manager. Within fourteen (14)
days of receiving such request, the Manager shall call for a meeting to be held
not less than seven (7) nor more than sixty (60) days after such receipt and
shall deliver written notice of the meeting to each Member. The notice shall
specify the place, date and hour of the meeting and the general nature of the
business to be transacted.

     The actions taken at any meeting of Members however called and noticed,
and wherever held, have the same validity as if taken at a meeting duly held
after regular call and notice, if a quorum is

10

 

present either in person or by proxy, and if, either before or after the
meeting, each of the Members entitled to vote, who was not present in person or
by proxy, signs a written waiver of notice or consents to the holding of the
meeting or approves the minutes of the meeting. All such waivers, consents or
approvals shall be filed with the Company records or made a part of the minutes
of the meeting.

     Any action that may be taken at a meeting of Members may be taken without
a meeting, if a consent in writing setting forth the action so taken, is signed
and delivered to the Company within sixty (60) days of the record date for that
action by Members having not less than the minimum number of votes that would
be necessary to authorize or take that action at a meeting at which all Members
entitled to vote on that action at a meeting were present and voted. All such
consents shall be filed with the Manager or the secretary, if any, of the
Company and shall be maintained in the Company records. Any Member giving a
written consent, or the Member’s proxy holders, may revoke the consent by a
writing received by the Manager or secretary, if any, of the Company before
written consents of the number of votes required to authorize the proposed
action have been filed.

     Notwithstanding anything to the contrary contained herein, a meeting does
not need to be held regarding, and the Class B Member and Class C Members do
not need to be notified of, any action that is subject to the vote, approval or
consent of only the Class A Member.

ARTICLE V

MANAGEMENT AND CONTROL OF THE COMPANY

     5.1 Management of the Company by Manager. The Company shall have one (1)
manager (as such term as defined in the Act), who shall initially be Asiago and
shall be referred to herein as the “Manager”. The Class A Member may remove or
replace the Manager at any time or from time-to-time.

     The business, property and affairs of the Company shall be managed
exclusively by the Manager. Except for situations in which the approval of the
Class A Member, or all of the Members, is expressly required by this Agreement,
the Manager shall have full, complete and exclusive authority, power, and
discretion to manage and control the business, property and affairs of the
Company, to make all decisions regarding those matters, and to perform any and
all other acts or activities customary or incident to the management of the
Company’s business, property and affairs. The Manager is authorized to endorse
checks, drafts, and other evidence of indebtedness made payable to the order of
the Company, sign all checks, drafts, and other instruments obligating the
Company to pay money, sign contracts and obligations on behalf of the Company,
and may authorize other Persons with the right to do the foregoing.

     5.2 Powers of Manager.

          A. Powers of Manager. Without limiting the generality of Section 5.1, but
subject to Section 5.2 B and to the express limitations set forth elsewhere in
this Agreement, the Manager shall have all necessary powers to manage and carry
out the purposes, business, property, and affairs of the Company, including,
without limitation, the power to:

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               (i) develop, acquire, purchase, lease, operate, renovate, improve, alter,
rebuild, demolish, replace, and own the Bakery-Cafes and any other real
property and any other personal property or assets that the Manager determines
is necessary or appropriate or in the interest of the business of the Company;

               (ii) admit Persons as the Class B Member and the Class C Members, request
additional Capital Contributions from the Class B Member as described in
Section 3.2 B, determine the Designated Bakery-Cafe in which the Class B Member
or a Class C Member may be allocated a Sharing Percentage, and allocate Sharing
Percentages to the Class B Member and the Class C Members.

               (iii) sell, exchange, lease, or otherwise dispose of the Bakery-Cafe and
other property and assets owned by the Company, or any part thereof, or any
interest therein;

               (iv) borrow money from any party, issue evidences of indebtedness in
connection therewith, refinance, increase the amount of, modify, amend, or
change the terms of, or extend the time for the payment of any indebtedness or
obligation of the Company, and secure such indebtedness by mortgage, deed of
trust, pledge, security interest, or other lien on Company assets;

               (v) sue on, defend, or compromise any and all claims or liabilities in
favor of or against the Company; submit any or all such claims or liabilities
to arbitration; and confess a judgment against the Company in connection with
any litigation in which the Company is involved (other than relating to the
Members or its Affiliates);

               (vi) retain legal counsel, auditors, and other professionals in connection
with the Company business and to pay therefor such remuneration as the Manager
may determine; and

               (vii) delegate the right to exercise any of the foregoing powers to any of
its employees or any other Person.

          B. Limitations on Power of Manager. Notwithstanding any other provisions
of this Agreement, the Manager shall not have authority hereunder to cause the
Company to engage in the following transactions without first obtaining the
affirmative vote or written consent of each of the Members;

               (i) The merger of the Company with another Person if the Class B Member or
any Class C Member would be required to become a general partner in a merger
with a general or limited partnership without his express written consent; and

               (ii) An alteration of the primary purpose or business of the Company as
set forth in Section 2.6.

     5.3 Performance of Duties; Liability of Manager. Notwithstanding any
other provision of this Agreement, whether express or implied, neither the
Manager, an Affiliate of the Manager or any officer, employee or agent of the
Manager shall be liable to the Company or any Member or any agent or Affiliate
of any Member for any act or omission taken or omitted in good faith by the
Manager or other Person, unless and then only to the extent that such act or
omission constituted fraud, willful violation of applicable law, or willful
violation of this Agreement. To the extent permitted by applicable law, the
Company and the Members waive any and all rights any of them may have to
recover punitive damages from the Company or the Manager, any Affiliate of the
Manager or any officer, employee or agent of the Manager.

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     Under no circumstances will any member, Manager, officer, employee, agent,
or other Affiliate of the Manager have any personal liability for any liability
or obligation of the Company (whether on a theory of alter ego, piercing the
company veil, or otherwise) and any recourse permitted under this Agreement or
otherwise of the Members, any former Member, and the Company against the
Manager shall be limited to the assets of the Manager.

     To the extent that, at law or in equity, the Manager or its Affiliates
have duties (including fiduciary duties) and liabilities relating thereto to
the Company or to a Member, the Manager acting under this Agreement and any
other Affiliates of the Manager acting in connection with the Company’s
business or affairs shall not be liable to the Company or to any such Member
for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict, reduce or
eliminate the duties and liabilities of the Manager or its Affiliates otherwise
existing at law or in equity, are agreed by the Members to replace such other
duties and liabilities of the Manager and its Affiliates. The Manager and its
Affiliates shall be fully protected in relying in good faith upon information,
opinions, reports, or statements presented to the Company by any Person as to
matters the Manager or such Affiliates reasonably believe 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. The Manager and its
Affiliates, officers, employees and agents do not violate any duty or
obligation hereunder merely because approving or disapproving a matter, taking
an action or engaging in any conduct furthers the interest of the Manager, its
Affiliates, officers, employees and agents, or may be detrimental to the
interest of the Class B Member or the Class C Members.

     5.4 Devotion of Time. The Manager is not obligated to devote all of its
time or business efforts to the affairs of the Company. The Manager shall
devote whatever time, effort, and skill as it deems appropriate for the
operation of the Company.

     5.5 Competing Activities. Asiago, both as the Class A Member and as the
Manager, and its members, managers, shareholders, directors, officers, agents,
employees and Affiliates may engage or invest in, independently or with others,
any Competitive Activities. Without limiting the foregoing, Asiago and such
parties may develop, own, operate, manage, franchise, license or invest in
other Bakery-Cafes, even if such Bakery-Cafes may be in a location near the
Company’s Bakery-Cafe, or which otherwise competes with or has an adverse
impact upon, the Company’s Bakery-Cafe. Neither the Company nor any other
Member shall have any right in or to such other ventures or activities or to
the income or proceeds derived therefrom. Asiago, both as the Class A Member
and the Manager, and its Affiliates shall not be obligated to present any
investment opportunity or prospective economic advantage to the Company, even
if the opportunity is of the character that, if presented to the Company, could
be taken by the Company and such party shall have the right to hold any
investment opportunity or prospective economic advantage for its own account or
to recommend such opportunity to Persons other than the Company. The Members
acknowledge that Asiago and its Affiliates own and/or manage other businesses,
including businesses that compete with the Company and for the Manager’s time.
The Members hereby waive any and all rights and claims which they may otherwise
have against Asiago and its members, managers, shareholders, directors,
officers, agents, employees and Affiliates as a result of any of such
activities.

     5.6 Transactions between the Company and the Manager. Notwithstanding
that it may constitute a conflict of interest, the Manager may, and may cause
its Affiliates to, engage in any transaction (including, without limitation,
the purchase, sale, lease, or exchange of any property or the rendering of any
service, or the establishment of any salary, other compensation, or other terms
of employment) with the Company on such terms as the Manager deems reasonable.

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     5.7 Payments to Manager or its Affiliates. As the Manager, Asiago shall
utilize its personnel (or personnel of its Affiliates) to provide the following
services (among others): accounting; contract administration and employment
administration; benefit and payroll administration; information technology
administration; research and development; development services; purchasing
administration and tax preparation. In consideration of such services, the
Company shall pay to Asiago a management fee equal to      percent (     %) of
Gross Sales for each Bakery-Cafe owned by the Company. The Company also shall
pay or reimburse the Manager, for all direct or indirect costs that it or its
Affiliates may incur with respect to the Bakery-Cafes or the operation of the
Company. In addition, the Company shall pay the Manager or Affiliates of the
Manager for products sold to the Company and shall reimburse the Manager and
its Affiliates for non-routine or extraordinary costs incurred or those
services which the Manager determines should instead be rendered by third
parties, including without limitation, costs for outside legal counsel,
accountants and consultants for each Bakery-Cafe owned by the Company. The
Company shall also pay or reimburse the Manager or its Affiliates for
organizational expenses (including, without limitation, legal and accounting
fees and costs) incurred to form the Company and prepare and file the
Certificate and this Agreement.

     5.8 Officers. The Manager may appoint, remove and replace officers at any
time. The officers shall exercise such powers and perform such duties as shall
be determined from time-to-time by the Manager. The salaries of all officers
shall be determined from time-to-time by the Manager.

     5.9 Limited Liability. No Person who is a Manager or officer or both a
Manager and officer of the Company shall be personally liable under any
judgment of a court, or in any other manner, for any debt, obligation, or
liability of the Company, whether that liability or obligation arises in
contract, tort, or otherwise, solely by reason of being a Manager or officer or
both a Manager and officer of the Company.

ARTICLE VI

ALLOCATIONS OF NET PROFITS AND

NET LOSSES AND DISTRIBUTIONS

     6.1 Allocations of Net Profit and Net Loss.

          A. Net Loss.

               (1) Operations. Net Loss (other than Net Loss with respect to a closing,
sale or other disposition of a Designated Bakery-Cafe) shall be allocated to
the Class A Member. If the Net Profit allocated to the Class B Member and the
Class C Members pursuant to Section 6.1 B (1) exceeds the Net Profit, the
amount of such excess (or if there was no Net Profit, the entire amount so
allocated to the Class B Member and the Class C Members) shall be allocated to
the Class A Member as Net Loss.

               (2) Disposition. Net Loss with respect to a closing, sale or other
disposition of a Designated Bakery-Cafe shall first be allocated to the Class A
Member until its Capital Account balance is zero and then any remaining Net
Loss to the Class B Member and the Class C Member, if any, who have been
allocated a Sharing Percentage of more than zero percent (0%) in such
Designated Bakery-Cafe, in proportion to their Sharing Percentages.

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               (3) Deficit Capital Accounts. Notwithstanding the previous subsections,
loss allocations to a Member shall be made only to the extent that such loss
allocations will not create a deficit Capital Account balance for that Member
in excess of an amount, if any, equal to such Member’s share of Company Minimum
Gain. Any loss not allocated to a Member because of the foregoing provision
shall be allocated to the other Members (to the extent the other Members are
not limited in respect of the allocation of losses under this Section 6.1 A).
Any loss reallocated under this Section 6.1 A shall be taken into account in
computing subsequent allocations of income and losses allocated to each Member
pursuant to this Article VI, to the extent possible, shall be equal to the net
amount that would have been allocated to each such Member pursuant to this
Article VI if no reallocation of losses had occurred under this Section 6.1 A.

          B. Net Profit.

               (1) Operations. Net Profit (other than Net Profit with respect to a
closing, sale or other disposition of a Designated Bakery-Cafe) shall be
allocated to Members as follows:

               (a) first, to the Class B Member, with respect to each Bakery-Cafe in
which the Class B Member has a Sharing Percentage of more than zero percent
(0%), an amount equal to: (a) the Adjusted Bakery-Cafe Net Profit for such
Bakery-Cafe during such period multiplied by the Applicable Net Profit
Allocation Percentage in effect from time to time during such period, minus (b)
the product of $      and the number of calendar days in such period;

               (b) then, to each Class C Member, with respect to the Bakery-Cafe in which
such Class C Member has a Sharing Percentage of more than zero percent (0%), an
amount equal to: (a) the Bakery-Cafe Net Profit for such Bakery-Cafe during
such period multiplied by       percent (     %), minus (b) the product of
$      and the number of calendar days in such period; and

               (c) any remaining Net Profit to the Class A Member.

     Notwithstanding the previous subsections: (i) the Class B Member shall
receive no further allocations of Net Profit for any period commencing after
the occurrence of any event giving rise to a purchase right under Article VII,
and (ii) a Class C Member shall receive no further allocations of Net Profit
for any period commencing after the occurrence of any event giving rise to a
purchase right under Article VII with respect to such Class C Member’s
Membership Interest.

               (2) Disposition. Net Profit with respect to a closing, sale or other
disposition of a Designated Bakery-Cafe shall be allocated to the Class A
Member and, if any, the Class B Member and the Class C Member who have been
allocated Sharing Percentages of more than zero percent (0%), in such
Designated Bakery-Cafe, in proportion to their Sharing Percentages with respect
to such Designated Bakery-Cafe provided, however, that if such closing, sale or
other disposition of a Designated Bakery-Cafe occurs within five (5) years of
the opening of such Designated Bakery-Cafe, such Class B Member and such Class
C Member shall instead be allocated Net Profits in an amount equal to simple
interest on       Dollars ($     ) at the rate of five percent (5%) per
annum from the date such Member made his capital contribution to the Company
with respect to such Designated Bakery-Cafe until the date of such closing,
sale or other disposition.

          C. Acknowledgment of Special Allocation. The allocations set forth in
Sections 6.1A and 6.1B are to be made without reference to the aggregate Net
Profit or Net Loss. The Members acknowledge that, as a result of such
allocations:

15

 

               (i) the amount allocated pursuant to Section 6.1 B shall reduce the Net
Profit or increase the Net Loss otherwise allocable to the Class A Member, and
could result in Net Loss being allocated to the Class A Member even though the
Company otherwise would have a Net Profit; and

               (ii) the Class A Member may receive an allocation of Net Loss pursuant to
Section 6.1 A during a period in which Net Profit is allocated to the Class B
Member and the Class C Members pursuant to Section 6.1 B.

     6.2 Special Allocations. Notwithstanding Section 6.1:

          A. Minimum Gain Chargeback. If there is a net decrease in Company Minimum
Gain during any Fiscal Year, each Member shall be specially allocated items of
Company income and gain for such Fiscal Year (and, if necessary, in subsequent
fiscal years) in an amount equal to the portion of such Member’s share of the
net decrease in Company Minimum Gain that is allocable to the disposition of
Company property subject to a Nonrecourse Liability, which share of such net
decrease shall be determined in accordance with Regulations Section 1.704-2 (g)
(2). Allocations pursuant to this Section 6.2 A shall be made in proportion to
the amounts required to be allocated to each Member under this Section 6.2 A.
The items to be so allocated shall be determined in accordance with Regulations
Section 1.704-2 (f). This Section 6.2 A is intended to comply with the minimum
gain chargeback requirement contained in Regulations Section 1.704-2 (f) and
shall be interpreted consistently therewith.

          B. Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt. If
there is a net decrease in Company Minimum Gain attributable to a Member
Nonrecourse Debt, during any Fiscal Year, each member who has a share of the
Company Minimum Gain attributable to such Member Nonrecourse Debt (which share
shall be determined in accordance with Regulations Section 1.704-2 (i) (5))
shall be specially allocated items of Company income and gain for such Fiscal
Year (and, if necessary, in subsequent Fiscal Years) in an amount equal to that
portion of such Member’s share of the net decrease in Company Minimum Gain
attributable to such Member Nonrecourse Debt that is allocable to the
disposition of Company property subject to such Member Nonrecourse Debt (which
share of such net decrease shall be determined in accordance with Regulations
Section 1.704-2 (i) (5)). Allocations pursuant to this Section 6.2 B shall be
made in proportion to the amounts required to be allocated to each Member under
this Section 6.2 B. The items to be so allocated shall be determined in
accordance with Regulations Section 1.704-2 (i) (4). This Section 6.2 B is
intended to comply with the minimum gain chargeback requirement contained in
Regulations Section 1.704-2 (i) (4) and shall be interpreted consistently
therewith.

          C. Nonrecourse Deductions. Any nonrecourse deductions (as defined in
Regulations Section 1.704-2 (b) (1)) for any Fiscal Year or other period shall
be specially allocated to the Members in proportion to their Percentage
Interests.

          D. Member Nonrecourse Deductions. Those items of Company loss, deduction,
or Code Section 705 (a) (2) (B) expenditures which are attributable to Member
Nonrecourse Debt for any Fiscal Year or other period shall be specially
allocated to the Member who bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which such items are attributable in accordance with
Regulations Section 1.704-2 (i).

          E. Qualified Income Offset. If a Member unexpectedly receives any
adjustments, allocations, or distributions described in Regulations Section
1.704-1 (b) (2) (ii) (d) (4), Regulations Section 1.704-1 (b) (2) (ii) (d) (5)
or Regulations Section 1.704-1 (b) (2) (ii) (d) (6), or any other event

16

 

creates a deficit balance in such Member’s Capital Account in excess of
such Member’s share of Company Minimum Gain, items of Company income and gain
shall be specially allocated to such Member in an amount and manner sufficient
to eliminate such excess deficit balance as quickly as possible. Any special
allocations of items of income and gain pursuant to this Section 6.2 E shall be
taken into account in computing subsequent allocations of income and gain
pursuant to this Article VI so that the net amount of any item so allocated and
the income, gain, and losses allocated to each Member pursuant to this Article
VI to the extent possible, shall be equal to the net amount that would have
been allocated to each such Member pursuant to the provisions of this Article
VI if such unexpected adjustments, allocations, or distributions had not
occurred.

     6.3 Code Section 704 (c) Allocations. Notwithstanding any other provision
in this Article VI, in accordance with Code Section 704 (c) and the Regulations
promulgated thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members 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 fair market value on the date of contribution.
Allocations pursuant to this Section 6.3 are solely for purposes of federal,
state and local taxes. As such, they shall not affect or in any way be taken
into account in computing a Member’s Capital Account or share of profits,
losses, or other items of distributions pursuant to any provision of this
Agreement.

     6.4 Allocation of Net Profits and Losses and Distributions in Respect of a
Transferred Interest. If any Economic Interest is transferred, or is increased
or decreased by reason of the admission of a new Member or otherwise, during
any Fiscal Year of the Company, Net Profit or Net Loss for such Fiscal Year
shall be assigned pro rata to each day in the particular period of such Fiscal
Year to which such item is attributable (i.e., the day on or during which it is
accrued or otherwise incurred) and the amount of each such item so assigned to
any such day shall be allocated to the Member or Assignee based upon its
respective Economic Interest at the close of such day.

     However, for the purpose of accounting convenience and simplicity, the
Company shall treat a transfer of, or an increase or decrease in, an Economic
Interest which occurs at any time during a semi-monthly period (commencing with
the semi-monthly period including the date hereof) as having been consummated
on the last day of such semi-monthly period, regardless of when during such
semi-monthly period such transfer, increase, of decrease actually occurs (i.e.,
sales and dispositions made during the first fifteen (15) days of any month
will be deemed to have been made on the 15th day of the month).

     Notwithstanding any provision above to the contrary, gain or loss of the
Company realized in connection with a sale or other disposition of any of the
assets of the Company shall be allocated solely to the parties owning Economic
Interests as of the date such sale or other disposition occurs.

17

 

     6.5 Distributions.

          A. Operations. Subject to applicable law and any limitations contained
elsewhere in this Agreement, the Manager shall make distributions as follows:

               i. as to the Class B Member:

                    a. prior to the occurrence of an event giving rise to a purchase right
under Article VII, with respect to each Bakery-Cafe in which the Class B Member
has a Sharing Percentage of more than zero percent (0%), an amount equal to:
(a) the Adjusted Bakery-Cafe Net Profit of such Bakery-Cafe during such period
multiplied by the Applicable Net Profit Allocation Percentage in effect from
time to time during such period, minus (b) the product of $       and the
number of calendar days in such period;

                    b. the share of the Adjusted Bakery-Cafe Net Profits with respect to each
Period (each a “Distribution Period”), shall be distributed to the Class B
Member at the end of the immediately succeeding Distribution Period, except
that the share of the Adjusted Bakery-Cafe Net Profits distributable with
respect to the last Distribution Period prior to the occurrence of an event
giving rise to a purchase right under Article VII, shall be distributed at the
end of the first full payroll period immediately succeeding the date of such
event. The share of Adjusted Bakery-Cafe Net Profits shall be calculated on an
aggregate basis prior to the occurrence of an event giving rise to a purchase
right under Article VII, and on any distribution date (whether during or after
the occurrence of such event), the Class B Member shall only be entitled to
receive the difference between the aggregate share of Adjusted Bakery-Cafe Net
Profits distributable prior to the occurrence of an event giving rise to a
purchase right under Article VII through the end of the applicable Distribution
Period and the aggregate share of Adjusted Bakery-Cafe Net Profits distributed
by Company to the Class B Member through the end of the applicable Distribution
Period. Any change in the Applicable Net Profit Allocation Percentage shall
not affect the calculation of the share of Adjusted Bakery-Cafe Net Profits for
any Distribution Period prior to the date of such change. If following the
occurrence of an event giving rise to a purchase right under Article VII, the
aggregate share of Adjusted Bakery-Cafe Net Profits distributed hereunder
exceeds the aggregate share of Adjusted Bakery-Cafe Net Profits distributable
under this Section (other than as a result of a distribution or calculation
error by the Company or the Manager), the Class B Member shall have no
obligation to refund such excess to Asiago;

                    c. notwithstanding anything to the contrary contained herein, the Class B
Member shall have no right to receive any share of Adjusted Bakery-Cafe Net
Profits under this Section 6.5 A with respect to a Bakery-Cafe during any
period in which the Class B Member does not have a Sharing Percentage of more
than zero percent (0%) in such Bakery-Cafe.

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                         d. except as herein provided and provided in Section 6.5 B or Section 9.4,
the Class B Member shall not have any right to receive distributions from the
Company; and

                    ii. as to any Class C Member:

                         a. prior to the occurrence of an event giving rise to a purchase right
under Article VII, with respect to the Bakery-Cafe in which a Class C Member
has a Sharing Percentage of more than zero percent (0%), an amount equal to:
(a) the Bakery-Cafe Net Profit of the Bakery-Cafe during such period multiplied
by       percent (     %), minus (b) the product of      
$      and the number of calendar days in such period;

                         b. the share of the Bakery-Cafe Net Profits for a Class C Member with
respect to any Distribution Period shall be distributed to such Class C Member
at the end of the immediately succeeding Distribution Period, except that the
share of the Bakery-Cafe Net Profits distributable with respect to the last
Distribution Period prior to the occurrence of an event giving rise to a
purchase right under Article VII with respect to such Class C Member’s
Membership Interest, shall be distributed at the end of the first full payroll
period immediately succeeding the date of such event. The share of Bakery-Cafe
Net Profits for each Class C Member shall be calculated on an aggregate basis
prior to the occurrence of an event giving rise to a purchase right under
Article VII with respect to such Class C Member’s Membership Interest, and on
any distribution date (whether during or after the occurrence of such event),
such Class C Member shall only be entitled to receive the difference between
the aggregate share of Bakery-Cafe Net Profits distributable prior to the
occurrence of an event giving rise to a purchase right under Article VII
through the end of the applicable Distribution Period and the aggregate share
of Bakery-Cafe Net Profits distributed by Company to such Class C Member
through the end of the applicable Distribution Period. If following the
occurrence of an event giving rise to a purchase right under Article VII with
respect to such Class C Member’s Membership Interest, the aggregate share of
Bakery-Cafe Net Profits distributed hereunder to such Class C Member exceeds
the aggregate share of Bakery-Cafe Net Profits distributable under this Section
to such Class C Member (other than as a result of a distribution or calculation
error by the Company or the Manager), such Class C Member shall have no
obligation to refund such excess to Asiago;

                         c. notwithstanding anything to the contrary contained herein, a Class C
Member shall have no right to receive any share of Bakery-Cafe Net Profits
under this Section 6.5 A with respect to a Bakery-Cafe during any period in
which such Class C Member does not have a Sharing Percentage of more than zero
percent (0%) in such Bakery-Cafe;

                         d. except as herein provided and provided in Section 6.5 B or Section 9.4,
a Class C Member shall not have any right to receive distributions from the
Company; and

                    iii. to the Class A Member as the Manager deems appropriate in its sole
discretion.

                    Except as herein provided and provided in Section 6.5 B or Section 9.4,
the Class B Member and the Class C Members shall not have any right to receive
distributions from the Company.

19

 

          B. Dispositions. Within thirty (30) days following the closing of a
Designated Bakery-Cafe or the closing of a sale or other disposition of a
Designated Bakery-Cafe, the Manager shall distribute the net proceeds from such
disposition to the Class A Member and, if any, the Class B Member and the Class
C Member who have been allocated Net Profit with respect to the disposition of
such Designated Bakery-Cafe, in proportion to their Sharing Percentages with
respect to such Designated Bakery-Cafe; provided however, that the distribution
hereunder to such Class B Member or such Class C Member shall not exceed the
sum of       Dollars ($     ) and the Net Profit allocated to such
Member with respect to such disposition, and any excess amount shall instead be
distributed to the Class A Member.

          C. Holders of Record. All such distributions shall be made only to the
Persons who, according to the books and records of the Company, are the holders
of record of the Economic Interests in respect of which such distributions are
made on the actual date of distribution. Subject to Section 6.7, neither the
Company nor the Manager shall incur any liability for making distributions in
accordance with this Section 6.5.

     6.6 Form of Distribution. A Member, regardless of the nature of the
Member’s Capital Contribution, has no right to demand and receive any
distribution from the Company in any form other than money. Except as provided
in Section 9.3, no Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of
money being made to other Members and no Member may be compelled to accept a
distribution of any asset in kind.

     6.7 Restriction on Distributions. No distribution shall be made if, after
giving effect to the distribution, all liabilities of the Company, other than
liabilities to Members on account of their Membership Interests and liabilities
for which the recourse of creditors is limited to specified property of the
Company, exceed the fair value of the assets of the Company, except that the
fair value of property that is subject to a liability for which the recourse of
creditors is limited shall be included in the assets of the Company only to the
extent that the fair value of that property exceeds that liability.

     6.8 Return of Distributions. Members and Assignees who receive
distributions made in violation of the Act or this Agreement shall return such
distributions to the Company. Except for those distributions made in violation
of the Act or this Agreement, no Member or Assignee shall be obligated to
return any distribution to the Company or pay the amount of any distribution
for the account of the Company or to any creditor of the Company. The amount
of any distribution returned to the Company by a Member or Assignee or paid by
a Member or Assignee for the account of the Company or to a creditor of the
Company shall be added to the account or accounts from which it was subtracted
when it was distributed to the Member or Assignee.

     6.9 Obligations of Members to Report Allocations. The Members are aware
of the income tax consequences of the allocations made by this Article VI and
hereby agree to be bound by the provisions of this Article VI in reporting
their shares of Company income and loss for income tax purposes.

20

 

ARTICLE VII

TRANSFER AND ASSIGNMENT OF INTERESTS

     7.1 Transfer and Assignment of Interests. The Class B Member and the
Class C Members shall not be entitled to transfer, assign, convey, sell,
pledge, encumber or in any way alienate (whether arising out of an attempted
charge upon the interest of the Class B Member or a Class C Member by judicial
process, a foreclosure by a creditor of the Class B Member or a Class C Member
or otherwise) all or any part of their Membership Interest (collectively,
“transfer”) except with (i) the prior written consent of the Class A Member,
which consent may be given or withheld, conditioned or delayed, as such Member
may determine in its sole and absolute discretion; and (ii) compliance with
all applicable federal and state securities laws. Each Class B Member and
Class C Member acknowledges and agrees that the intent of the parties in
entering into this Agreement is that the Membership Interest of the Class B
Member and the Class C Members not be transferred to any person other than the
Class A Member pursuant to the purchase rights contained in this Article VII.
The Class A Member may freely transfer any or all of its Membership Interests
without obtaining the consent of any other Member and such transferee shall,
upon agreeing to be bound by the terms of this Agreement, automatically become
admitted as a substitute Class A Member and shall have all of the rights and
obligations of a Class A Member. Transfers in violation of this Article VII
shall be void ab initio If there is a transfer of the Membership Interest of
the Class B Member or a Class C Member in violation of this Article VII, the
transferee shall have no right to vote or participate in the management of the
business, property and affairs of the Company or to exercise any rights of a
Member. After the consummation of any transfer of any part of a Membership
Interest of the Class B Member or any Class C Member in accordance with this
Agreement, the Membership Interest so transferred shall continue to be subject
to the terms and provisions of this Agreement and any further transfers shall
be required to comply with all the terms and provisions of this Agreement.

     7.2 Substitution of Members. An Assignee of the Class B Member or a Class
C Member shall have the right to become a substitute Member only if the
requirements of Section 7.1 are met, the Assignee executes an instrument
satisfactory to the Manager accepting and adopting the terms and provisions of
this Agreement, and the Assignee pays any reasonable expenses in connection
with its admission as a new Member. The admission of an Assignee as a
substitute Member shall not result in the release of the Member who assigned
the Membership Interest from any liability that such Member may have to the
Company.

     7.3 Effective Date of Transfers. Any transfer of all or any portion of a
Membership Interest or an Economic Interest shall be effective as of the date
provided in Section 6.4 following the date upon which the requirements of
Section 7.1 and Section 7.2 have been met. The Manager shall provide the
Members with written notice of such transfer as promptly as possible after the
requirements of Sections 7.1 and 7.2 have been met. Any transferee of a
Membership Interest shall take subject to the restrictions on transfer imposed
by this Agreement.

     7.4 Rights of Legal Representatives. If a Member who is an individual
dies or is adjudged by a court of competent jurisdiction to be incompetent to
manage the Member’s person or property, the Member’s executor, administrator,
guardian, conservator, or other legal representative may exercise all of the
Member’s rights for the purpose of settling the Member’s estate or
administering the Member’s property. If a Member is a corporation, trust,
partnership, limited liability company or other entity and is dissolved or
terminated, the powers of that Member may be exercised by its legal
representative or successor.

     7.5 Mandatory Purchase upon Termination of Term of the Class B Member’s or
a Class C Member Employment Agreement or the Class B Member’s or a Class C
Member’s Bankruptcy. Asiago shall purchase, and the Class B Member or a Class
C Member, as the case may be, shall sell, all of the Class B Member’s
Membership Interest or such Class C Member’s Membership Interest, as the case
may be, subject to Section 7.10 herein, upon (a) the termination of the term of
the Class B Member

21

 

Employment Agreement or such Class C Member Employment Agreement, as the
case may be, or (b) the Bankruptcy of the Class B Member or such Class C
Member. The purchase price for the Membership Interest of the Class B Member
shall be equal to the sum of the purchase prices for the Sharing Percentage of
more than zero percent (0%) associated with each Bakery-Cafe then managed by
the Class B Member, as determined separately with respect to each Sharing
Percentage of more than zero percent (0%) associated with a Bakery-Cafe
pursuant to Section 7.8, as of the date of the termination of the term of the
Class B Member Employment Agreement or the Bankruptcy of the Class B Member.
The purchase price for the Membership Interest of a Class C Member shall be as
set forth in Section 7.9 as of the date of the termination of the term of such
Class C Member Employment Agreement or the Bankruptcy of such Class C Member.

     7.6 Asiago Purchase Right. In the event that at any time which is at
least five (5) years from the opening of a Bakery-Cafe, Asiago notifies the
Class B Member or a Class C Member in writing of its election to exercise its
purchase right under this Section with respect to such Bakery-Cafe; then,
Asiago shall, subject to Section 7.10 herein, purchase from the Class B Member
or such Class C Member, and the Class B Member or such Class C Member shall
sell to Asiago, the Class B Member’s Sharing Percentage of more than zero
percent (0%) with respect to such Bakery-Cafe or such Class C Member’s
Membership Interest, as the case may be, for a purchase price determined in
accordance with Section 7.8 for the Class B Member and Section 7.9 for such
Class C Member herein. In the event of a purchase of the Class B Member’s
Sharing Percentage of more than zero percent (0%) with respect to such
Bakery-Cafe, the portion of the Membership Interest to be purchased shall be a
Capital Account balance of       Dollars ($     ) and the Class B
Member’s Sharing Percentage of more than zero percent (0%) with respect to such
Bakery-Cafe together with all distribution, allocation and other rights
relating thereto; the Class B Member shall retain any remaining Capital Account
balance and Sharing Percentages with respect to any Bakery-Cafes for which the
purchase right has not been exercised; and Asiago shall continue to have the
right to exercise the purchase right under this Section 7.6 with respect to the
remaining Sharing Percentages.

     7.7 The Class B Member or a Class C Member Put Right. In the event that
the Class B Member or a Class C Member, at any time which is at least five (5)
years from the opening of a Bakery-Cafe, notifies Asiago of his election to
exercise his sale rights under this Section with respect to such Bakery-Cafe;
then, the Class B Member or such Class C Member, as the case may be, shall,
subject to the remaining terms of this Agreement, sell to Asiago, and Asiago
shall purchase from the Class B Member or such Class C Member, as the case may
be, the Class B Member’s Sharing Percentage of more than zero percent (0%) with
respect to such Bakery-Cafe or such Class C Member’s Membership Interest, as
the case may be, for a purchase price determined in accordance with Section 7.8
for the Class B Member and Section 7.9 for such Class C Member herein. In the
event of a purchase of the Class B Member’s Sharing Percentage of more than
zero percent (0%) with respect to such Bakery-Cafe, the portion of the
Membership Interest to be purchased shall be a Capital Account balance of
      Dollars ($     ) and the Class B Member’s Sharing Percentage of
more than zero percent (0%) with respect to such Bakery-Cafe together with all
distribution, allocation and other rights relating thereto; the Class B Member
shall retain any remaining Capital Account balance and Sharing Percentages with
respect to any Bakery-Cafes for which the purchase right has not been
exercised; and Asiago shall continue to have the right to exercise the purchase
right under this Section 7.7 with respect to the remaining Sharing Percentages.

     Notwithstanding the foregoing, if any of the other purchase rights under
this Agreement have been exercised, the right under this Section 7.7 shall not
be exercisable unless and until Asiago defaults in the performance of its
purchase obligations thereunder other than as a result of a default by the
Class B Member or such Class C Member.

22

 

     7.8 Class B Member Purchase Price. The Class B Member acknowledges and
agrees that the method for determining the purchase price applicable to the
Sharing Percentage associated with Bakery-Cafes will vary from Bakery-Cafe to
Bakery-Cafe depending upon the amount of time that a Bakery-Cafe has been open
for operations and the event giving rise to the purchase or sale right under
this Agreement. The Class B Member further acknowledges and agrees that the
methods are reasonable and fair under the circumstances existing as of the date
hereof. The purchase price with respect to the Sharing Percentage associated
with each Bakery-Cafe shall be determined as follows:

     (a)  If the term of employment under the Class B Member Employment
Agreement terminates for Cause (for the purposes of this Section 7.8, as such
term is defined in the Class B Member Employment Agreement) at any time, the
purchase price shall be       Dollars ($     ) for the Sharing
Percentage of more than zero percent (0%) associated with each such
Bakery-Cafe.

     (b)  If within five (5) years of the opening of a Bakery-Cafe, the term of
employment under the Class B Member Employment Agreement terminates for any
reason other than Cause, death or Disability (for the purposes of this Section
7.8, as such term is defined in the Class B Member Employment Agreement), or
if, prior to the opening of a Bakery-Cafe, the Term of Employment terminates as
a result of death or Disability, or the Bankruptcy of the Class B Member
occurs, then the purchase price for the Sharing Percentage of more than zero
percent (0%) associated with such Bakery-Cafe shall be       Dollars
($     ) plus simple interest thereon at the rate of five percent (5%) per
annum from the date that the Class B Member made his capital contribution to
the Company with respect to the Sharing Percentage of more than zero percent
(0%) associated with such Bakery-Cafe until the date of the event giving rise
to the purchase right.

     (c)  If, within five (5) years of the opening of a Bakery-Cafe, the term of
employment under the Class B Member Employment Agreement terminates as a result
of death or Disability or the Bankruptcy of the Class B Member occurs, the
purchase price for the Sharing Percentage of more than zero percent (0%)
associated with such Bakery-Cafe shall be the fair market value (the “Sharing
Percentage Fair Market Value”) of such Sharing Percentage determined in the
following manner:

               (i) The Class B Member and Asiago shall attempt to agree upon the Sharing
Percentage Fair Market Value within thirty (30) days after the date of the
event resulting in the exercise of a purchase right. Such Sharing Percentage
Fair Market Value shall be determined solely by reference to such Bakery-Cafe
in which the Class B Member has a Sharing Percentage on the assumptions that
such Bakery-Cafe shall continue to be operated as a Bakery-Cafe, and without
discounting for lack of control or marketability. Accordingly, in determining
the Sharing Percentage Fair Market Value, the parties (and if appraisers are
appointed, the appraisers) shall not consider, take into account or attribute
any value to (and any appraisers shall be so instructed in writing by the
parties) any goodwill or other value attributable to Panera’s system or
trademarks (other than the right to utilize the system and trademarks in the
operation of such Bakery-Cafe, no value shall be attributed to any other
Bakery-Cafe or restaurant or asset of Asiago, no value shall be attributed to
development rights, and no alternative use for such assets shall be considered.

               (ii) If the Class B Member and Asiago cannot agree upon the Sharing
Percentage Fair Market Value within such thirty (30) day period, they shall
jointly agree upon a mutually acceptable appraiser within fifteen (15) days
thereafter, or, in the event the parties fail to so agree, each party shall
appoint an appraiser with the qualifications described in subsection (v) within
twenty (20) days following the end of such thirty (30) day period. If either
party fails to appoint an appraiser within the twenty (20) day period specified
herein, the sole appraiser appointed within such twenty (20) day period shall
be the sole appraiser for the purposes of determining the Sharing Percentage
Fair Market

23

 

Value as described in subsection (i) the Class B Member and Asiago shall
promptly provide notice of the name of the appraiser so appointed by such party
to the other. A third appraiser, if the initial two appraisers are appointed,
shall be appointed by the mutual agreement of the first two appraisers so
appointed, or, if such first two appraisers fail to agree upon a third
appraiser within thirty (30) days following their appointment, either the Class
B Member or Asiago may demand the appointment of an appraiser be made by the
then director of the Regional Office of the American Arbitration Association
located nearest to the Company’s then current principal office, in which event
the appraiser appointed thereby shall be the third appraiser. Each of the
appraisers shall submit to the Class B Member and Asiago, within thirty (30)
days after the final appraiser has been appointed, a written appraisal of the
Sharing Percentage Fair Market Value prepared in accordance with subsection
(i).

               (iii) If three appraisers are appointed, the Sharing Percentage Fair
Market Value shall be equal to the numerical average of three appraised
determinations; provided, however, that if the difference between any two
appraisals is not more than ten percent (10%) of the lower of the two, and the
third appraisal differs by more than twenty-five percent (25%) of the lower of
the other two appraisals, the numerical average of such two appraisals shall be
determinative. The amount so determined shall be the Sharing Percentage Fair
Market Value.

               (iv) In connection with any appraisal conducted pursuant to this
Agreement, the parties hereto agree that any appraiser appointed hereunder
shall be given full access during normal business hours to all information
required and relevant to a valuation of the applicable Bakery-Cafe.

               (v) Any appraiser, to be qualified to conduct an appraisal hereunder,
shall be an independent appraiser (i.e., not affiliated with the Company,
Asiago, Panera or the Class B Member), an M.A.I. appraiser or its equivalent,
and shall be reasonably competent as an expert to appraise the value of the
applicable Bakery-Cafe. If any appraiser initially appointed under this
Agreement shall, for any reason, be unable to serve, a successor appraiser
shall be promptly appointed in accordance with the procedures pursuant to which
the predecessor appraiser was appointed.

               (vi) The cost of the appraiser appointed by each party shall be borne by
each such party. The cost of the third appraiser, if any, or the sole
appraiser, in the event that the Class B Member and Asiago agree upon a single
appraiser, shall be borne by Asiago.

     (d)  If, at least five (5) years after the opening of a Bakery-Cafe, Asiago
exercises its purchase right under Section 7.6 with respect to the Sharing
Percentage of more than zero percent (0%) associated with such Bakery-Cafe or
terminates the Class B Member for any reason other than Cause, the purchase
price for the Sharing Percentage of more than zero percent (0%) associated with
such Bakery-Cafe shall be (i) the aggregate Adjusted Bakery-Cafe Net Profit of
such Bakery-Cafe for the twenty-six (26) Periods immediately preceding the
Period in which Asiago notifies the Class B Member of the exercise of such
purchase right or termination, divided by 2, (ii) multiplied by 6.0, and (iii)
multiplied by       percent (     %). By way of example, if all Bakery-Cafes have
been open for at least five (5) years, and the Adjusted Bakery-Cafe Net Profit
for the twenty-six (26) Periods immediately preceding the Period in which
Asiago notifies the Class B Member of the exercise of the purchase right
hereunder is $2,000,000, the purchase price would be equal to $2,000,000
divided by 2 multiplied by 6.0 multiplied by       percent (     %), or
$     .

     (e)  If at least five (5) years after the opening of a Bakery-Cafe, the
Class B Member voluntarily ceases, resigns or terminates his employment with
Asiago, or his death, Disability or Bankruptcy occurs, or the Class B Member
notifies Asiago of his election to exercise his sale rights under Section 7.7
with respect to his Sharing Percentage of more than zero percent (0%) in a

24

 

Bakery-Cafe, the purchase price for the Sharing Percentage of more than zero
percent (0%) associated with such Bakery-Cafe, shall be equal to the following:
(i) the aggregate Adjusted Bakery-Cafe Net Profit of such Bakery-Cafe for the
twenty-six (26) Periods immediately preceding the Period in which such
termination or notice occurs, divided by 2, (ii) multiplied by 5.0, and (iii)
multiplied by       percent (     %).

     7.9 Class C Member Purchase Price. The purchase price for the Membership
Interest of a Class C Member shall be determined as follows:

     (a)  If such Class C Member’s term of employment under his Class C Member
Employment Agreement terminates for Cause (for purposes of this Section 7.9, as
such term is defined in such Class C Member Employment Agreement) at any time,
the purchase price shall be       Dollars ($     ).

     (b)  If within five (5) years of the opening of the Bakery-Cafe in which
such Class C Member has a Sharing Percentage of more than zero percent (0%),
such Class C Member’s term of employment under his Class C Member Employment
Agreement terminates for any reason other than Cause, death or Disability (for
purposes of this Section 7.9, as such term is defined in such Class C Member
Employment Agreement), or if, prior to the opening of the Bakery-Cafe, such
term of employment terminates as a result of death or Disability, or the
Bankruptcy of such Class C Member occurs, then the purchase price shall be
      Dollars ($     ) plus simple interest thereon at the rate of
five percent (5%) per annum from the date that such Class C Member made his
capital contribution to the Company until the date of the event giving rise to
the purchase right.

     (c)  If, within five (5) years of the opening of the Bakery-Cafe in which
such Class C Member has a Sharing Percentage of more than zero percent (0%),
such term of employment terminates as a result of death or Disability or the
Bankruptcy of such Class C Member occurs, the purchase price shall be the fair
market value (the “Class C Interest Fair Market Value”) of the Membership
Interest determined in the following manner:

          (i) Such Class C Member and Asiago shall attempt to agree upon the Class C
Interest Fair Market Value within thirty (30) days after the date of the event
resulting in the exercise of a purchase right. Such Class C Interest Fair
Market Value shall be determined solely by reference to the Bakery-Cafe on the
assumptions that the Bakery-Cafe shall continue to be operated as a
Bakery-Cafe, and without discounting for lack of control or marketability.
Accordingly, in determining the Class C Interest Fair Market Value, the parties
(and if appraisers are appointed, the appraisers) shall not consider, take into
account or attribute any value to (and any appraisers shall be so instructed in
writing by the parties) any goodwill or other value attributable to Panera’s
system or trademarks (other than the right to utilize the system and trademarks
in the operation of the Bakery-Cafe), no value shall be attributed to any other
bakery-cafe or restaurant or asset of Asiago or the Company, no value shall be
attributed to development rights, and no alternative use for such assets shall
be considered.

          (ii) If such Class C Member and Asiago cannot agree upon the Class C
Interest Fair Market Value within such thirty (30) day period, they shall
jointly agree upon a mutually acceptable appraiser within fifteen (15) days
thereafter, or, in the event the parties fail to so agree, each party shall
appoint an appraiser with the qualifications described in subsection (v) within
twenty (20) days following the end of such thirty (30) day period. If either
party fails to appoint an appraiser within the twenty (20) day period specified
herein, the sole appraiser appointed within such twenty (20) day period shall
be the sole appraiser for the purposes of determining the Class C Interest Fair
Market Value as described in subsection (i). Such Class C Member and Asiago
shall promptly provide notice of

25

 

the name of the appraiser so appointed by such party to the other. A
third appraiser, if the initial two appraisers are appointed, shall be
appointed by the mutual agreement of the first two appraisers so appointed, or,
if such first two appraisers fail to agree upon a third appraiser within thirty
(30) days following their appointment, either such Class C Member or Asiago may
demand the appointment of an appraiser be made by the then director of the
Regional Office of the American Arbitration Association located nearest to the
Company’s then current principal office, in which event the appraiser appointed
thereby shall be the third appraiser. Each of the appraisers shall submit to
such Class C Member and Asiago, within thirty (30) days after the final
appraiser has been appointed, a written appraisal of the Class C Interest Fair
Market Value prepared in accordance with subsection (i).

          (iii) If three appraisers are appointed, the Class C Interest Fair Market
Value shall be equal to the numerical average of three appraised
determinations; provided, however, that if the difference between any two
appraisals is not more than ten percent (10%) of the lower of the two, and the
third appraisal differs by more than twenty-five percent (25%) of the lower of
the other two appraisals, the numerical average of such two appraisals shall be
determinative. The amount so determined shall be the Class C Interest Fair
Market Value.

          (iv) In connection with any appraisal conducted pursuant to this
Agreement, the parties hereto agree that any appraiser appointed hereunder
shall be given full access during normal business hours to all information
required and relevant to a valuation of the Bakery-Cafe.

          (v) Any appraiser, to be qualified to conduct an appraisal hereunder,
shall be an independent appraiser (i.e., not affiliated with the Company,
Asiago, Panera or such Class C Member), an M.A.I. appraiser or its equivalent,
and shall be reasonably competent as an expert to appraise the value of the
Bakery-Cafe. If any appraiser initially appointed under this Agreement shall,
for any reason, be unable to serve, a successor appraiser shall be promptly
appointed in accordance with the procedures pursuant to which the predecessor
appraiser was appointed.

          (vi) The cost of the appraiser appointed by each party shall be borne by
each such party. The cost of the third appraiser, if any, or the sole
appraiser, in the event that such Class C Member and Asiago agree upon a single
appraiser, shall be borne by Asiago.

     (d)  If, at least five (5) years after the opening of the Bakery-Cafe in
which a Class C Member has a Sharing Percentage of more than zero percent (0%),
Asiago exercises its purchase right under Section 7.6 or terminates such Class
C Member for any reason other than Cause, the purchase price shall be (i) the
aggregate Bakery-Cafe Net Profit of the Bakery-Cafe for the twenty-six (26)
Periods immediately preceding the Period in which Asiago notifies such Class C
Member of the exercise of such purchase right or termination, divided by 2,
(ii) multiplied by 6.0, and (iii) multiplied by       percent (     %). By way
of example, if the Bakery-Cafe has been open for at least five (5) years, the
Membership Interest of such Class C Member is being purchased and the
Bakery-Cafe Net Profit for the twenty-six (26) Periods immediately preceding
the Period in which Asiago notifies such Class C Member of the exercise of the
purchase right hereunder is $1,000,000, the purchase price would be equal to
$1,000,000 divided by 2 multiplied by 6.0 multiplied by       percent (     %),
or $     .

     (e)  If at least five (5) years from the opening of the Bakery-Cafe in
which a Class C Member has a Sharing Percentage of more than zero percent (0%),
such Class C Member voluntarily ceases, resigns or terminates his employment
with Asiago, or his death or Disability or Bankruptcy occurs, or such Class C
Member notifies Asiago of his election to exercise his sale rights under
Section 7.7, the purchase price shall be equal to the following: (i) the
aggregate Bakery-Cafe Net Profit of the Bakery-Cafe for the twenty-six (26)
Periods immediately preceding the Period in which such termination

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or notice occurs, divided by 2, (ii) multiplied by 5.0, and (iii) multiplied by
      percent (     %).

     7.10 Closing of Purchase. The closing for the purchase and sale described
in Section 7.5, Section 7.6 or Section 7.7 shall be held at 10:00 a.m. at the
principal office of Asiago no later than thirty (30) days after the
determination of the purchase price, except that if the closing date falls on a
Saturday, Sunday, or legal holiday, then the closing shall be held on the next
succeeding business day. At the closing, the Class B Member or such Class C
Member shall execute and deliver to Asiago such documents, affidavits, general
releases and instruments of conveyance as are necessary, in the opinion of
legal counsel for the purchasing party, to release Asiago, Panera, the Company
and their affiliates from any claim of the Class B Member or such Class C
Member and to transfer, convey and validly vest in Asiago good, marketable and
absolute title to all of the Membership Interest (or Sharing Percentage and
portion of the Capital Account balance) being conveyed free and clear of any
lien, claim, pledge, security interest, equities or other encumbrance or
interest of any kind or character whatsoever, and Asiago shall pay the
applicable purchase price to the Class B Member or such Class C Member.

ARTICLE VIII

ACCOUNTING, RECORDS, REPORTING BY MEMBERS

     8.1 Books and Records. The books and records of the Company shall be
kept, and the financial position and the results of its operations recorded, in
accordance with generally accepted accounting principles consistently applied.
The books and records of the Company shall reflect all the Company transactions
and shall be appropriate and adequate for the Company’s business. The Company
shall maintain at its principal office all of the following:

          A. A current list of the full name and last known business or residence
address of each Member and Assignee, together with the current Capital
Contributions, Capital Account and Sharing Percentages of each Member;

          B. A current list of the full name and business or residence address of
the Manager;

          C. A copy of the Certificate and any and all amendments thereto together
with executed copies of any powers of attorney pursuant to which the
Certificate or any amendments thereto have been executed;

          D. Copies of the Company’s federal, state, and local income tax or
information returns and reports, if any, for the six (6) most recent taxable
years;

          E. A copy of this Agreement and any and all amendment thereto together
with executed copies of any powers of attorney pursuant to which this Agreement
or any amendments hereto have been executed; and

          F. The Company’s books and records as they relate to the internal affairs
of the Company for at least the current and past four (4) Fiscal Years.

     8.2 Delivery to Members.

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          Each Member has the right, upon reasonable request for purposes reasonably
related to the interest of the Person as Member, to:

               (i) obtain from the Manager a copy of the records described in Sections
8.1A through E and such other information as may be required by law; and

               (ii) obtain from the Manager, promptly after their becoming available, a
copy of the Company’s federal, state, and local income tax or information
returns for each Fiscal Year.

     Any request by a Member under this Section 8.2 may be made by that Person
or that Person’s agent or attorney. Notwithstanding anything to the contrary
continued in this Agreement, the Manager shall have the right to keep
confidential from the Members, for such period of time as the Manager deems
reasonable, any information which the Manager reasonably believes to be in the
nature of trade secrets or other information the disclosure of which the
Manager in good faith believes is not in the best interest of the Company or
could damage the Company or its business or which the Company is required by
law or by agreement with a third party to keep confidential.

     8.3 Annual Statements. The Manager shall cause to be prepared at least
annually, at Company expense, information necessary for the preparation of the
Members’ and Assignees’ federal and state income tax returns. The Manager
shall send or cause to be sent to each Member or Assignee within ninety (90)
days after the end of each taxable year such information as is necessary to
complete federal and state income tax or information returns.

     8.4 Filings. The Manager, at Company expense, shall cause the income tax
returns for the Company to be prepared and timely filed with the appropriate
authorities. The Manager, at Company expense, shall also cause to be prepared
and timely filed, with appropriate federal and state regulatory and
administrative bodies, amendments to, or restatements of, the Certificate and
all reports required to be filed by the Company with those entities under the
Act or other then current applicable laws, rules, and regulations.

     8.5 Bank Accounts. The Manager shall maintain the funds of the Company in
one or more separate bank accounts in the name of the Company.

     8.6 Accounting Decisions and Reliance on Others. All decisions as to
accounting matters, except as otherwise specifically set forth herein, shall be
made by the Manager. The Manager may rely upon the advice of its accountants
as to whether such decisions are in accordance with accounting methods followed
for federal income tax purposes.

     8.7 Tax Matters for the Company Handled by Manager and Tax Matters
Partner. The Manager shall from time to time cause the Company to make such
tax elections as it deems to be in the best interests of the Company and the
Members. The Tax Matters Partner shall represent the Company (at the Company’s
expense) in connection with all examinations of the Company’s affairs by tax
authorities, including resulting judicial and administrative proceedings, and
shall expend the Company funds for professional services and costs associated
therewith. The Tax Matters Partner shall oversee the Company’s tax affairs in
the overall best interests of the Company. If for any reason the Tax Matters
Partner can no longer serve in that capacity or ceases to be a Member or
Manager, as the case may be, the Class A Member may designate another Person to
be Tax Matters Partner.

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ARTICLE IX

DISSOLUTION AND WINDING UP

     9.1 Dissolution. The Company shall be dissolved, its assets shall be
disposed of, and its affairs wound up on the first to occur of the following:

          A. The entry of a decree of judicial dissolution; or

          B. The sale of all or substantially all of the assets of Company.

     Dissolution shall not occur upon the occurrence of any other event.

     9.2 Winding-Up. Upon the occurrence of any event specified in Section
9.1, the Company shall continue solely for the purpose of winding up its
affairs in an orderly manner, liquidating its assets, and satisfying the claims
of its creditors. The Manager shall be responsible for overseeing the winding
up and liquidation of Company, shall take full account of the liabilities of
Company and assets, shall either cause its assets to be sold or distributed,
and if sold shall cause the proceeds therefrom, to the extent sufficient
therefor, to be applied and distributed as provided in Section 9.4. The
Persons winding up the affairs of the Company shall give written notice of the
commencement of winding up by mail to all known creditors and claimants whose
addresses appear on the records of the Company.

     9.3 Distributions in Kind. Upon dissolution, Asiago shall have the right
to elect to receive a distribution of the Bakery-Cafe owned by the Company.
The Class B Member and the Class C Members shall have no right to receive any
Bakery-Cafe as a result of the Company’s dissolution. Any non-cash asset
distributed to one or more Members shall first be valued at its fair market
value to determine the Net Profit or Net Loss that would have resulted if such
asset were sold for such value, such Net Profit or Net Loss shall then be
allocated pursuant to Article VI, and the Members’ Capital Accounts shall be
adjusted to reflect such allocations. The amount distributed and charged to
the Capital Account of each Member receiving an interest in such distributed
asset shall be the fair market value of such asset (net of any liability
secured by such asset that such Member assumes or takes subject to) taking into
account the use of the Company’s assets as franchises of Panera. The fair
market value of such asset shall be determined by the Manager.

     9.4 Order of Payment Upon Dissolution. After determining that all known
debts and liabilities of the Company, including, without limitation, debts and
liabilities to Members who are creditors of the Company, have been paid or
adequately provided for, the remaining assets shall be distributed to the
Members in accordance with their positive Capital Account balances, after
taking into account income and loss allocations for the Company’s taxable year
during which liquidation occurs. Such liquidating distributions shall be made
by the end of the Company’s taxable year in which the Company is liquidated,
or, if later, within ninety (90) days after the date of such liquidation.

     9.5 Limitations on Payments Made in Dissolution. Each Member shall only
be entitled to look solely at the assets of the Company for the return of its
positive Capital Account balance and shall have no recourse for its Capital
Contribution and/or share of Net Profits (upon dissolution or otherwise)
against the Manager or any other Member.

29

 

ARTICLE X

INDEMNIFICATION AND INSURANCE

     10.1 Indemnification of Agents. The Company shall defend and indemnify
any Member or Manager and may indemnify any other Person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that he or she is or was a
Member, Manager, officer, employee or other agent of the Company or that, being
or having been such a Member, Manager, officer, employee or agent, he or she is
or was serving at the request of the Company as a Manager, director, officer,
employee or other agent of another limited liability company, corporation,
partnership, joint venture, trust or other enterprise (all such persons being
referred to hereinafter as an “agent”), to the fullest extent permitted by
applicable law in effect on the date hereof and to such greater extent as
applicable law may hereafter from time to time permit. The Manager shall be
authorized, on behalf of the Company, to enter into indemnity agreements from
time to time with any Person entitled to be indemnified by the Company
hereunder, upon such terms and conditions as the Manager deems appropriate in
their business judgment.

     10.2 Insurance. The Company shall have the power to purchase and maintain
insurance on behalf of any Person who is or was an agent of the Company against
any liability asserted against such Person and incurred by such Person in any
such capacity, or arising out of such Person’s status as an agent, whether or
not the Company would have the power to indemnify such Person against such
liability under the provisions of Section 10.1 or under applicable law.

ARTICLE XI

CONFIDENTIALITY AND NON-COMPETITION

     11.1 Noncompetition. So long as the Class B Member or a Class C Member is
a Member or employee of Asiago or its Affiliates, and for the Class B Member,
for the fifty-two (52) weeks thereafter, the Class B Member and a Class C
Member shall not, anywhere in the world, individually or jointly with others,
directly or indirectly, whether for their own account or for that of any other
Person, operate, engage in, own or hold any ownership interest in, have any
interest in or lend any assistance to, any Competitive Activity.

     11.2 Confidentiality.

          A. Definition. For the purpose of this Agreement, “Proprietary
Information” shall include all information designated by the Company or the
Manager, either orally or in writing, as confidential or proprietary, or which
reasonably would be considered proprietary or confidential to the business of
the Company, including but not limited to suppliers, customers, trade or
industrial practices, marketing and technical plans, technology, personnel,
organization or internal affairs, plans for products and ideas, recipes, menus,
wine lists and proprietary techniques and other trade secrets. Notwithstanding
the foregoing, “Proprietary Information” shall not include information which
(i) has entered the public domain or became known other than due to a breach of
any obligation of confidentiality owed to the owner of such information; (ii)
was known prior to the disclosure of such information other than a result of
rendering services for Asiago, Panera or their Affiliates; (iii) became known
to the recipient from a source other than a Member or its Affiliate, provided
there was no breach of an obligation of confidentiality owed to said Member or
its Affiliate; or (iv) was independently

30

 

developed by the party receiving such information other than a result of
rendering services for Asiago, Panera or their Affiliates.

          B. No Disclosure, Use, or Circumvention. The Class B Member and each
Class C Member shall not disclose any Proprietary Information to any third
parties and will not use any Proprietary Information in that Member’s or
Affiliate’s business or any affiliated business without the prior written
consent of the Manager, and then only to the extent specified in that consent.
Consent may be granted or withheld at the sole discretion of the Manager. No
Member shall contact any suppliers, customers, employees, affiliates or
associates to circumvent the purposes of this provision.

          C. Maintenance of Confidentiality. The Class B Member and each Class C
Member shall take all steps reasonably necessary or appropriate to maintain the
strict confidentiality of the Proprietary Information and to assure compliance
with this Agreement.

     11.3 Non-Solicitation. During the term of this Agreement and, with
respect to the Class B Member and each Class C Member, for a period of twenty
four (24) months following such Member’s termination of employment with Asiago
for any reason or for no reason, neither the Class B Member nor such Class C
Member, as the case may be, shall offer employment to, or hire, any employee of
the Company, Asiago, Panera or their Affiliates, or of a franchisee of Panera’s
or its Affiliates, or otherwise solicit or induce any employee of any of them
to terminate their employment, nor shall any of such Members act as an officer,
director, employee, partner, independent contractor, consultant, principal,
agent, proprietor, owner or part owner, or in any other capacity, for any
person or entity which solicits or otherwise induces any employee of the
Company Asiago, or Panera or their Affiliates, to terminate their employment
with such entity.

     11.4 Reasonableness of Restrictions; Reformation; Enforcement. The
parties hereto recognize and acknowledge that the geographical and time
limitations contained in Section 11.1, Section 11.2 and Section 11.3 hereof are
reasonable and properly required for the adequate protection of the Company’s
and Members’ interests. It is agreed by the parties hereto that if any portion
of the restrictions contained in Section 11.1, Section 11.2 or Section 11.3 are
held to be unreasonable, arbitrary, or against public policy, then the
restrictions shall be considered divisible, both as to the time and to the
geographical area, with each month of the specified period being deemed a
separate period of time and each radius mile of the restricted territory being
deemed a separate geographical area, so that the lesser period of time or
geographical area shall remain effective so long as the same is not
unreasonable, arbitrary, or against public policy. The parties hereto agree
that in the event any court of competent jurisdiction determines the specified
period or the specified geographical area of the restricted territory to be
unreasonable, arbitrary, or against public policy, a lesser time period or
geographical area which is determined to be reasonable, nonarbitrary, and not
against public policy may be enforced. If any of the covenants contained
herein are violated and if any court action is instituted by the Company or a
Member to prevent or enjoin such violation, then the period of time during
which the business activities shall be restricted, as provided in this
Agreement, shall be lengthened by a period of time equal to the period between
the date of the breach of the terms or covenants contained in this Agreement
and the date on which the decree of the court disposing of the issues upon the
merits shall become final and not subject to further appeal.

     In the event it is necessary for the Company or the Class A Member to
initiate legal proceedings to enforce, interpret or construe any of the
covenants contained in Section 11.1, Section 11.2 or Section 11.3 hereof, the
prevailing party in such proceedings shall be entitled to receive from the
non-prevailing party, in addition to all other remedies, all costs, including
reasonable attorneys’ fees, of such proceedings including appellate
proceedings.

31

 

     11.5 Specific Performance. The parties agree that a breach of any of the
covenants contained Section 11.1, Section 11.2 and Section 11.3 hereof will
cause irreparable injury to the Company or a Member for which the remedy at law
will be inadequate and would be difficult to ascertain and therefore, in the
event of the breach or threatened breach of any such covenants, the Company or
injured Member shall be entitled, in addition to any other rights and remedies
it may have at law or in equity, to obtain an injunction to restrain any
threatened or actual activities in violation of any such covenants. The
parties hereby consent and agree that temporary and permanent injunctive relief
may be granted in any proceedings which might be brought to enforce any such
covenants without the necessity of proof of actual damages, and in the event
the Company or Member does apply for such an injunction, that the Company or
Member has an adequate remedy at law shall not be raised as a defense.

ARTICLE XII

INVESTMENT REPRESENTATIONS

     Each Member hereby represents and warrants to, and agrees with, the
Manager, the other Members, and the Company as follows:

     12.1 Preexisting Relationship or Experience. (i) It has a preexisting
personal or business relationship with the Company, the Manager or one or more
of its control persons or (ii) by reason of its business or financial
experience, or by reason of the business or financial experience of its
financial advisor who is unaffiliated with and who is not compensated, directly
or indirectly, by the Company or any affiliate or selling agent of the Company,
it is capable of evaluating the risks and merits of an investment in the
Membership Interest and of protecting its own interests in connection with this
investment.

     12.2 No Advertising. It has not seen, received, been presented with, or
been solicited by any leaflet, public promotional meeting, newspaper or
magazine article or advertisement, radio or television advertisement, or any
other form of advertising or general solicitation with respect to the sale of
the Membership Interest.

     12.3 Investment Intent. It is acquiring the Membership Interest for
investment purposes for its own account only and not with a view to or for sale
in connection with any distribution of all or any part of the Membership
Interest. No other person will have any direct or indirect beneficial interest
in or right to the Membership Interest except as described herein.

     12.4 Consultation with Attorney. Each Member has been advised to consult
with its own attorney regarding all legal matters concerning an investment in
the Company and the tax consequences of participating in the Company, and has
done so, to the extent it considers necessary.

     12.5 Tax Consequences. Each Member acknowledges that the tax consequences
to it of investing in the Company will depend on its particular circumstances,
and neither the Company, the Manager, the Members, nor the partners,
shareholders, members, agents, officers, directors, employees, Affiliates, or
consultants of any of them will be responsible or liable for the tax
consequences to him or her of an investment in the Company. Each Member will
look solely to, and rely upon, its own advisers with respect to the tax
consequences of this investment.

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     12.6 No Assurance of Tax Benefits. Each Member acknowledges that there
can be no assurance that the Code or the Regulations will not be amended or
interpreted in the future in such a manner so as to deprive the Company and the
Members of some or all of the tax benefits they might now receive, nor that
some of the deductions claimed by the Company or the allocations of items of
income, gain, loss, deduction, or credit among the Members may not be
challenged by the Internal Revenue Service.

ARTICLE XIII

MISCELLANEOUS

     13.1 Complete Agreement. This Agreement and the Certificate constitute
the complete and exclusive statement of agreement among the Members and Manager
with respect to the subject matter herein and therein and replace and supersede
all prior written and oral agreements or statements by and among the Members
and Manager or any of them. No representation, statement, condition or
warranty not contained in this Agreement or the Certificate will be binding on
the Members or Manager or have any force or effect whatsoever. To the extent
that any provision of the Certificate conflict with any provision of this
Agreement, the Certificate shall control.

     13.2 Binding Effect. Subject to the provisions of this Agreement relating
to transferability, this Agreement will be binding upon and inure to the
benefit of the Members, and their respective successors and assigns.

     13.3 Parties in Interest. Except as expressly provided in the Act,
nothing in this Agreement shall confer any rights or remedies under or by
reason of this Agreement on any Persons other than the Members and Manager and
their respective successors and assigns nor shall anything in this Agreement
relieve or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any
right of subrogation or action over or against any party to this Agreement.

     13.4 Pronouns; Statutory References. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter,
singular or plural, as the context in which they are used may require. Any
reference to the Code, the Regulations, the Act or other statutes or laws will
include all amendments, modifications, or replacements of the specific sections
and provisions concerned.

     13.5 Headings. All headings herein are inserted only for convenience and
ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.

     13.6 Interpretation. In the event any claim is made by any Member
relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Member or its counsel.

     13.7 References to this Agreement. Numbered or lettered articles,
sections, subsections and exhibits herein contained refer to articles,
sections, subsections and exhibits of this Agreement unless otherwise expressly
stated.

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     13.8 Jurisdiction. Each Member hereby consents to the exclusive
jurisdiction of the state and federal courts sitting in Missouri in any action
on a claim arising out of, under or in connection with this Agreement or the
transactions contemplated by this Agreement. Each Member further agrees that
personal jurisdiction over it may be effected by service of process by
registered or certified mail addressed as provided in Section 13.14 of this
Agreement, and that when so made shall be as if served upon it personally.

     13.9 Limitations on Legal Actions. Except with respect to the obligations
under Article XI, the Company and each Member waives, to the fullest extent
permitted by law, any right to or claim for any punitive or exemplary damages
against the other parties and the right to recover consequential damages for
any claim directly or indirectly arising from or relating to this Agreement.
Furthermore, the parties agree that any legal action in connection with this
Agreement shall be tried to the court sitting without a jury, and all parties
hereto waive any right to have any action tried by jury.

     13.10 Mediation. Except as otherwise provided in this Agreement or an
action seeking a restraining order or injunction, any controversy between the
parties arising out of this Agreement shall first be submitted to the American
Arbitration Association for non-binding mediation in the county in which the
Company’s principal office is then located. The costs of the mediation,
including any American Arbitration Association administration fee, the
mediator’s fee, and costs for the use of facilities during the hearings, shall
be borne equally by the parties to the mediation. The mediation shall be
administered by and held in accordance with the Commercial Mediation Rules of
the American Arbitration Association.

     13.11 Exhibits. All Exhibits attached to this Agreement are incorporated
and shall be treated as if set forth herein.

     13.12 Severability. Subject to Section 11.4, if any provision of this
Agreement or the application of such provision to any person or circumstance
shall be held invalid, the remainder of this Agreement or the application of
such provision to persons or circumstances other than those to which it is held
invalid shall not be affected thereby.

     13.13 Additional Documents and Acts. Each Member agrees to execute and
deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and the
transactions contemplated hereby.

     13.14 Notices. Any notice to be given or to be served upon the Company or
any party hereto in connection with this Agreement must be in writing (which
may include facsimile) and will be deemed to have been given and received when
delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member or Manager at the address specified in
Exhibit A. Any party may, at any time by giving five (5) days’ prior written
notice to the other parties, designate any other address in substitution of the
foregoing address to which such notice will be given.

     13.15 Amendments. The Manager may from time to time amend Exhibit A and B
as provided herein or amend this Agreement to admit new Members and set forth
their rights and obligations as described in Section 4.2. All other amendments
to this Agreement will be in writing and signed by all Members.

     13.16 Reliance on Authority of Person Signing Agreement. If a Member is
not a natural person, neither the Company nor any Member will be required to
determine the authority of the individual signing this Agreement to make any
commitment or undertaking on behalf of such entity or to

34

 

determine any fact or circumstance bearing upon the existence of the
authority of such individual or be responsible for the application or
distribution of proceeds paid or credited to individuals signing this Agreement
on behalf of such entity.

     13.17 No Interest in Company Property; Waiver of Action for Partition. No
Member or Assignee has any interest in specific property of the Company.
Without limiting the foregoing, each Member and Assignee irrevocably waives
during the term of the Company any right that it may have to maintain any
action for partition with respect to the property of the Company.

     13.18 Multiple Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.

     13.19 Attorney Fees. In the event that any dispute between the Company
and the Members or among the Members should result in litigation or
arbitration, the prevailing party in such dispute shall be entitled to recover
from the other party all reasonable fees, costs and expenses of enforcing any
right of the prevailing party, including without limitation, reasonable
attorneys’ fees and expenses, all of which shall be deemed to have accrued upon
the commencement of such action and shall be paid whether or not such action is
prosecuted to judgment. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorney fees and
costs incurred in enforcing such judgment and an award of prejudgment interest
from the date of the breach at the maximum rate of interest allowed by law.
For the purposes of this Section: attorney fees shall include, without
limitation, fees incurred in the following: (1) post-judgment motions; (2)
contempt proceedings; (3) garnishment, levy, and debtor and third party
examinations; (4) discovery; and (5) bankruptcy litigation and prevailing party
shall mean the party who is determined in the proceeding to have prevailed or
who prevails by dismissal, default or otherwise.

     13.20 Time is of the Essence. All dates and times in this Agreement are
of the essence.

     13.21 Remedies Cumulative. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any person may be
lawfully entitled.

     13.22 Special Power of Attorney.

          A. Attorney in Fact. Each Member grants the Manager a special power of
attorney irrevocably making, constituting, and appointing the Manager as the
Member’s attorney in fact, with all power and authority to act in the Member’s
name and on the Member’s behalf to execute, acknowledge and deliver and swear
to in the execution, acknowledgment, delivery and filing of the following
documents:

               (i) Assignments of Membership Interests or other documents of transfer to
be delivered in connection with the purchase of a Membership Interest pursuant
to any purchase right set forth in this Agreement; and

               (ii) Any other instrument or document that may be reasonably required by
the Manager in connection with any of the foregoing.

          B. Irrevocable Power. The special power granted in Section 13.22 A:

               (i) is irrevocable;

35

 

               (ii) is coupled with an interest; and

               (iii) shall survive a Member’s death, incapacity or dissolution.

          C. Signatures. The Manager may exercise the special power of attorney
granted in Section 13.22 A by a facsimile signature of the Manager or by
signature of the Manager.

36

 

     All of the Members of                               , LLC, a Delaware limited liability
company, have executed this Agreement, effective as of the date written above.

CLASS A MEMBER AND MANAGER:

ASIAGO BREAD, LLC

a Delaware limited liability company

By:

Name:    JOHN M. MAGUIRE

Title:      Senior Vice President, Chief Company and

               Joint
Venture Operations Officer

CLASS B MEMBER:

[District Manager]

37

 

CLASS C MEMBERS:

[General Manager]

[General Manager]

[General Manager]

38

 

EXHIBIT A

CAPITAL CONTRIBUTIONS OF MEMBERS

AND ADDRESSES OF MEMBERS AND MANAGER

AS OF                           , 20     

	 	 	 	 	 
	 	 	 	 	Member's
	 	 	 	 	Capital
	Member's Name and Date Added	 	Member's Address	 	Contributions
	
	 	
	 	

	ASIAGO BREAD, LLC	 	
6710 Clayton Road	 	 
	                     , 20     	 	
Richmond Heights, Missouri 63117
	 	$               
	[District Manager]	 	
                              	 	 
	                     , 20     	 	
                              
	 	$               
	[General Manager]	 	
                              	 	 
	                     , 20     	 	
                              
	 	$               
	 
	Total as of                      , 20     	 	 	 	$               

	 	 	 
	Manager's Name	 	Manager's Address
	
	 	

	ASIAGO BREAD, LLC	 	
6710 Clayton Road
	 	 	
Richmond Heights, Missouri 63117

39

 

EXHIBIT B

DESIGNATED BAKERY-CAFES

AS OF                           , 20     

	 	 	 
	Location and Date Added	 	Class B Member	 	 	Class C Member
	
	 	
	 	 	

40

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