Common use of Organization of Franchisee Clause in Contracts

Organization of Franchisee. 18.1 If Franchisee is a corporation, Franchisee shall comply with the following requirements: 18.1.1 Franchisee's charter or organizational documents shall at all times provide that its activities are confined exclusively to developing and operating Bruegger's Fresh Bagel Bakeries and/or bagel dough manufacturing sites; provided, however that such restriction shall automatically terminate at the time Franchisee (or its parent or successor) files a registration statement with the Securities and Exchange Commission covering sales of its shares to the public. 18.1.2 Franchisee shall promptly furnish to Franchisor copies of its articles of incorporation, bylaws, and other governing documents, and any amendments thereto, including the resolution of Franchisee's board of directors authorizing entry into this Agreement. 18.1.3 Until or unless Franchisee or its parent or success corporation begins offering its shares for sale to the public pursuant to a registration statement filed with the Securities and Exchange Commission, Franchisee shall maintain stop-transfer instructions against the transfer on its records of any equity securities. Each stock certificate of Franchisee shall conspicuously display on its face the following printed legend: The transfer of ownership of shares represented by this certificate is subject to the terms and conditions of an Agreement with Bruegger's Franchise Corporation. Reference is made to the provisions of the Agreement and to the Articles and Bylaws of the Corporation. 18.1.4 Until such time as Franchisee issues securities pursuant to a Public Offering (as defined in Section 14.3.3) in accordance with the terms of this Agreement, Franchisee shall maintain a current list of all owners of record and all beneficial owners of any class of voting securities of Franchisee and shall furnish the list to Franchisor upon request. 18.1.5 If Franchisee began operating a Bakery at the Approved Location before the execution of this Agreement, then, notwithstanding the foregoing Sections 18.1.1 and 18.1.3, Franchisee shall not be in violation of this Agreement so long as Franchisee limits it activities exclusively to developing and operating Bakeries and restricts the transfer of its shares of stock to only those transfers authorized by this Agreement.