EXHIBIT 10.3
MOJO HIGHWAY BREWING COMPANY, LLC
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OPERATING AGREEMENT
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JUNE 19, 1998
TABLE OF CONTENTS
Page
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RECITALS...................................................................
Section I - Defined Terms..................................................
Section II - Formation and Name; Office; Purpose; Term.....................
2.1 Organization...........................................
2.2 Name of the Company....................................
2.3 Purpose/Business.......................................
2.3.1 Purpose..........................................
2.3.2 Permitted Business...............................
2.4 Term...................................................
2.5 Principal Office.......................................
2.6 Resident Agent.........................................
Section III - Members; Capital Contribution; Capital Accounts..............
3.1 Members................................................
3.2 Additional Members.....................................
3.3 Initial Capital Contributions..........................
3.4 Additional Capital Contributions.......................
3.4.1 Limited Liability...............................
3.4.2 Unpaid Capital Contributions....................
3.5 No Interest on Capital Contributions...................
3.6 Return of Capital Contributions........................
3.7 Form of Return of Capital..............................
3.8 Capital Accounts.......................................
3.9 Loans..................................................
Section IV - Members and Interest Holders - Voting, Profit,
Loss, and Distributions.......................................
4.1 Percentages of Membership Interests....................
4.2 Meetings...............................................
4.2.1 Annual and Special Meetings.....................
4.2.2 Notice..........................................
4.2.3 Quorum..........................................
4.2.4 Record Date.....................................
4.2.5 Voting By Certain Members.......................
4.2.6 Conduct of Meetings.............................
4.2.7 Presumption of Asset............................
4.2.8 Telephone Meetings..............................
4.3 Voting.................................................
i
4.4 Distributions of Cash Flow.............................
4.5 Required Distributions to Interest Holders.............
4.6 Allocation of Profits or Loss..........................
4.7 Liquidation and Dissolution............................
4.8 Timing of Distributions................................
Section V - Rights and Duties of, Designation and Election of, Conduct of
Business by, and Meetings of Managers..........................
5.1 Management.............................................
5.1.1 Tax Matters Partners.............................
5.2 Member, Tenure and Qualification.......................
5.2.1 Managers........................................
5.2.2 Term............................................
5.3.3 Qualification...................................
5.3 Selection and Replacement of Managers..................
5.3.1 Selection of Managers; Vacancies................
5.3.2 Removal.........................................
5.3.3 Resignation.....................................
5.4 General Powers of Managers.............................
5.4.1 General Powers..................................
5.4.2 Member Authority................................
5.5 Duties of the Managers.................................
5.6 Third Party Reliance...................................
5.7 No Duty to Consult.....................................
5.8 Director...............................................
5.9 Rights of Members......................................
5.10 Reimbursement..........................................
5.11 Regular Meetings.......................................
5.12 Special Meetings.......................................
5.13 Telephonic Meetings Permitted..........................
5.14 Manager Voting.........................................
5.15 Actions of Managers and Committees Meetings............
5.16 Managers' Liability....................................
5.17 Member Indemnification.................................
Section VI - Transfer of Interests and Withdrawals of Members..............
6.1 Transfers..............................................
6.2 Involuntary Withdrawal.................................
6.3 Voluntary Withdrawal...................................
ii
Section VII - Dissolution, Liquidation and Termination of the Company......
7.1 Events of Dissolution..................................
7.2 Procedure for Winding Up and Dissolution...............
7.3 Filing of Articles of Cancellation.....................
Section VIII - Fiscal Matters..............................................
8.1 Fiscal Year............................................
8.2 Deposits...............................................
8.3 Checks, Drafts, etc....................................
8.4 Books and Records......................................
Section IX - General Provisions............................................
9.1 General................................................
9.1.1 Funding Indemnification.........................
9.2 Limited Power of Attorney..............................
9.3 Assurances.............................................
9.4 Notification...........................................
9.5 Anticipated Transactions...............................
9.6 Specific Performance...................................
9.7 Complete Agreement; Amendment..........................
9.8 Applicable Law.........................................
9.9 Section Titles.........................................
9.10 Binding Provisions.....................................
9.11 Jurisdiction and Venue.................................
9.12 Terms..................................................
9.13 Separability of Provisions.............................
9.14 Counterparts...........................................
SIGNATURES.................................................................
EXHIBIT A - Articles of Organization
EXHIBIT B - Percentage Interest in Mojo Highway Brewing Company, LLC
EXHIBIT C - Member Contributions
iii
MOJO HIGHWAY BREWING COMPANY, LLC
OPERATING AGREEMENT
The undersigned, as owners of Mojo Highway Brewing Company, LLC (the
"Company") do hereby enter into this Operating Agreement effective the ___ day
of _______, 1998.
RECITALS
WHEREAS, the parties hereto desire to establish Mojo Highway Brewing
Company, LLC as a Maryland limited liability company; and
WHEREAS, the parties desire to enter into a limited liability company
operating agreement pursuant to the terms of the Maryland Limited Liability
Company Act.
NOW, THEREFORE, for good and valuable consideration, the parties, intending
to be legally bound, agree as follows:
Section I
Defined Terms
The following capitalized terms shall have the meanings specified in this
Section I. Other terms are defined in the text of this Agreement, and,
throughout this Agreement, those terms shall have the meanings respectively
ascribed to them.
"Act" means the Maryland Limited Liability Company Act, as amended from
time to time.
"Agreement" means this Operating Agreement, as amended from time to time.
"Articles of Organization" means the Articles of Organization for Mojo
Highway Brewing Company, LLC, a copy of which is attached hereto as Exhibit A.
"C&L" means C&L Brewing Company, Inc., a Maryland corporation and a founder
of the Company.
"Capital Account" means the account maintained by the Company for each
Interest Holder. Such Capital Account shall be maintained throughout the full
term of the Company in accordance with applicable Treasury Regulations that must
be complied with in order for the allocations of taxable profits and losses
provided in this Agreement to have "economic effect" under applicable Treasury
regulations.
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Operating Agreement
Page 2
"Capital Contribution" means the total amount of cash and the fair market
value of any other assets contributed (or deemed contributed under Regulation
Section 1.704-1(b)(2)(iv)(d)) to the Company by a Member, net of liabilities
assumed or to which the assets are subject.
"Cash Flow" means all cash funds derived from operations of the Company
(including interest received on reserves), without reduction for any non-cash
charges, but less cash funds used to pay current operating expenses and to pay
or establish reasonable reserves for future expenses, debt payments, capital
improvements, and replacements, as determined by the Managers. Cash flow shall
be increased by the reduction of any reserve previously established.
"Certificate of Ownership" means the document delivered to an Interest
Holder which set forth the Interest held, subject to the terms of this Operating
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision of any succeeding law.
"Company" means the limited liability company organized in accordance with
this Agreement.
"Contribution Agreement" means the agreement between an Investor and the
Company that sets out an Investor's Capital Contribution.
"FBC" means Frederick Brewing Co., a Maryland corporation and a founder of
the Company.
"Interest" means a Person's share of the Profits and Losses of, and the
right to receive distributions from, the Company.
"Interest Holder" means any Person who holds an Interest, whether as a
Member or as a permitted unadmitted assignee of a Member.
"Investor(s)" means those Persons who become Members of the Company by
virtue of their contribution to the venture.
"Involuntary Withdrawal" means, with respect to any Member, the occurrence
of any events set forth in the Act as set forth in Section 4A-606(3) through
(9).
"Manager(s)" means those persons designated in Section V of this Agreement.
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Operating Agreement
Page 3
"Member(s)" means each Person signing this Agreement and any Person who is
subsequently admitted as a member of the Company.
"Membership Rights" means all the rights of a Member in the Company,
including a Member's: (i) Interest; (ii) right to inspect the Company's books
and records; (iii) right to elect the Company's Managers as provided in this
Agreement; and (iv) to the extent authorized by this Agreement, right to vote on
matters coming before the Members;
"Percentage" or Percentage Interest" means, as to a Member, the percentage
set forth after the Member's name in Section 4.1 as to the initial Members and
Exhibit B, as amended from time to time as to subsequent Members, and as to an
Interest Holder who is not a Member, the Percentage of the Member whose Interest
has been acquired by such Interest Holder, to the extent the Interest Holder has
succeeded to that Member's Interest.
"Person" means and includes an individual, corporation, partnership,
association, limited liability company, trust, estate, or other entity.
"Profit" and "Loss" means, for each taxable year of the Company (or other
period for which Profit or Loss must be computed) the Company's taxable income
or loss determined in accordance with Code Section 703(a) and the following:
(i) all items of income, gain, loss, deduction, or credit required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
computing taxable income or loss;
(ii) any tax-exempt income of the Company, not otherwise taken into account
in computing Profit or Loss, shall be included in computing taxable income or
loss;
(iii) any expenditures of the Company described in Code Section
705(a)(2)(B) (or treated as such pursuant to Regulation Section
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit
or Loss, shall be subtracted from taxable income or loss;
(iv) gain or loss resulting from any taxable disposition of Company
property shall be computed by reference to the adjusted book value of the
property disposed of, notwithstanding the fact that the adjusted book value
differs from the adjusted basis of the property for federal income tax purposes;
and
(v) in lieu of the depreciation, amortization or cost recovery deductions
allowable in computing taxable income or loss, there shall be taken into account
the depreciation computed based upon the adjusted book value of the asset.
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Operating Agreement
Page 4
"Regulation" means the regulations, including any temporary regulations,
from time to time promulgated under the Code.
"SDAT" means the State Department of Assessments and Taxation of Maryland.
"Transfer" means, when used as a noun, any voluntary sale, hypothecation,
pledge, assignment, attachment, gift or any other transfer, and, when used as a
verb, means voluntarily to sell, hypothecate, pledge, assign, gift or otherwise
transfer.
"Treasury" means the U.S. Department of the Treasury.
"Voluntary Withdrawal" means a Member's disassociation with the Company by
means other than a Transfer or an Involuntary Withdrawal.
Section II
Formation and Name; Office; Purpose; Term
2.1 Organization. The parties hereby organize a limited liability company
pursuant to the Act and the provisions of this Agreement and, for that purpose,
have caused the Articles of Organization to be prepared, executed and filed with
SDAT on the ___ day of ______________, 1998.
2.2 Name of the Company. The name of the Company is Mojo Highway Brewing
Company, LLC. The Company may do business under that name and under any other
name or names upon which the Members lawfully may agree. If the Company does
business under a name other than set forth in the Articles of Organization, then
the Company shall file a trade name certificate as may be required by applicable
law.
2.3 Purpose/Business. The purposes for which the Company is formed are:
2.3.1 Purpose. To create, produce, market and sell alcoholic and
non-alcoholic beverages and to conduct business in the State of Maryland for any
lawful purpose and at such other places as may be determined by the Managers of
this limited liability company, pursuant to the powers granted to limited
liability companies pursuant to Section 4A-203 of the Act or any successor
provision.
2.3.2 Permitted Businesses. The business of the Company shall be to
exercise all powers necessary to or reasonably connected with the Company's
business that may be legally exercised by limited liability companies under the
Act and to engage in all activities necessary, customary, convenient, incidental
or related to any of the foregoing.
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Operating Agreement
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2.4 Term. The term of the Company began upon the acceptance of the Articles
of Organization by the SDAT and shall continue in existence until December 31,
2023, unless its existence is sooner terminated pursuant to Section VII of this
Agreement.
2.5 Principal Office. The principal office of the Company in the State of
Maryland shall be located at 0000 Xxxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxx 00000.
The Company may have such other offices, either within or without the State of
Maryland, as the Managers may designate or as the business of the Company may
require. The registered office of the Company required by the Act to be
maintained in the State of Maryland may be, but need not be, identical with the
principal office, and may be changed from time to time by the Managers.
2.6 Resident Agent. The name and address of the Company's resident agent
shall be Frederick Brewing Co., at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxx
00000, or any successor resident agent and address to which the Managers may
agree and notice of which is filed with the SDAT.
Section III
Members; Capital Contributions; Capital Accounts
3.1 Members. The initial Members of the Company and their respective
business addresses are set forth on Exhibit C hereto.
3.2 Additional Members. Additional Members of the Company may be admitted
from time to time upon such terms and conditions as approved by the Members. No
additional Member may be admitted without the prior written consent of FBC and
C&L. The business address of each such Additional Member shall be set forth on
Exhibit C. The Percentages of Membership Interest of Additional Members shall be
as approved by the Members and shall dilute the Percentages of Membership
Interests of the other existing Members, pro rata in proportion to their
Percentages, except that the Percentage of Membership Interest of FBC shall not
be diluted without its prior written consent. Notwithstanding the foregoing, any
Investor who purchases an interest in the Company by virtue of his Capital
Contribution shall automatically be admitted to the Company upon the delivery of
a fully-executed Agreement and payment of the full purchase price therefor and
the Company's acceptance of any such Investor's subscription. All Interest
Holders shall be entitled to receive a Certificate of Ownership which must be
signed by all Managers of the
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Company and consecutively numbered and recorded in the Certificate Register
maintained by the Manager who is the Secretary of the Company.
3.3 Initial Capital Contributions. Upon the execution of this
Agreement, the Members shall contribute to the Company capital in the amounts
respectively set forth on Exhibit C.
3.4 Additional Capital Contributions.
3.4.1 Limited Liability. Upon the delivery and complete payment of the
initial capital contribution by any Member, no Member shall be required to
contribute any additional capital to the Company, and no Member shall have any
personal liability for any obligation of the Company, and Member's Interests
shall be fully paid and non-assessable.
3.4.2 Unpaid Capital Contribution. If a Member fails to pay when due
all or any portion of any Capital Contribution, the Managers shall request the
nondefaulting Members to pay the unpaid amount of the defaulting Member's
Capital Contribution (the "Unpaid Contribution"). To the extent the Unpaid
Contribution is contributed by any other Member, the defaulting Member's
Percentage shall be reduced and the Percentage of each Member who makes up the
Unpaid Contribution shall be increased, so that each Member's Percentage is
equal to a fraction, the numerator of which is that Member's total Capital
Contribution and the denominator of which is the total Capital Contributions of
all Interest Holders. The Managers shall amend Exhibit B accordingly. This
remedy is in addition to any other remedies allowed by law or by this Agreement.
3.5 No Interest on Capital Contributions. Except as otherwise provided
in this Agreement, no Interest Holders shall not be paid interest on their
Capital Contributions.
3.6 Return of Capital Contributions. Except as otherwise provided in
this Agreement, no Interest Holder shall have the right to receive the return of
any Capital Contributions.
3.7 Form of Return of Capital. If an Interest Holder is entitled to
receive a return of a Capital Contribution, the Company may distribute cash,
notes, property, or a combination thereof to the Interest Holder in return of
the Capital Contribution at the discretion of the Managers of the Company.
3.8 Capital Accounts. A separate Capital Account shall be maintained
for each Interest Holder. No Member shall make any withdrawals from his Capital
Account without prior approval of all of the Managers. If the Capital Account of
any Member becomes
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Operating Agreement
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impaired, his share of subsequent Company Profits shall be first credited to his
Capital Account until that account has been restored.
3.9 Loans. Any Member may, at any time, make or cause a loan or advance to
be made to the Company in any amount and on those terms upon which the Company
and the Member agree. Loans or advances by any Member to the Company shall not
be considered Capital Contributions and shall not increase the Capital Account
balance of the lending or advancing Member.
Section IV
Members and Interest Holders -- Voting, Profit, Loss, and Distributions
4.1 Percentages of Membership Interests. The initial Membership Interests
of the Company's founders shall be as follows:
Xxxxxxxx Brewing Co. 25%
C & L Brewing Company, Inc. 75%
4.2 Meetings.
4.2.1 Annual and Special Meetings. There shall be an annual meeting of
the Members which shall be held at such time and such place as determined by the
Managers, commencing with the year 1999 to elect Managers and to transact such
business as may come before the meeting. Special meetings of Members, for any
purpose or purposes, may be called by the Manager who is the chief executive
officer of the Company or by any Member or Members having 20% or greater
Membership Interest.
4.2.2 Notice. Written or telephonic notice stating the place, day and
hour of the meeting and, in case of a special meeting, the purposes for which
the meeting is called, must be delivered not less than three (3) ddays before
the date of the meeting, pursuant to Section 9.4 hereof, by or at the direction
of the Manager who is the chief executive officer of the Company are present at
any meeting, or if those not present sign in writing a waiver of notice of the
meeting are as valid as if a meeting were formally called and notice had been
given.
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4.2.3 Quorum. At any meeting of the Members, eighty percent (80%) of
the Membership Percentage Interests represented in person or by proxy, will
constitute a quorum at a meeting of Members. If less than eighty percent (80%)
of the Membership Percentage Interests are represented at a meeting, a majority
of the Interests so represented may adjourn the meeting from time to time
without further notice. At an adjourned meeting at which a quorum is present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. The Members present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Members to leave less than a quorum.
4.2.4 Record Date. For the purpose of determining Members entitled to
notice of or to vote at any meeting of Members, or any adjournment thereof, or
entitled to receive payment of any distribution by the Company or in order to
make a determination of Members for any other proper purpose, the Manager who is
the chief executive officer of the Company shall fix in advance a record date
for any determination of Members, such date to be not more than forty-five (45)
days, and in case of a meeting of members, not less than ten (10) days, prior to
the date which the particular action requiring such determination of Members is
to be taken.
4.2.5 Voting by Certain Members. Certificates of Ownership standing in
the name of a Member that is a corporation, partnership or company may be voted
by the officer, partner, agent or proxy as the bylaws, partnership agreement or
operating agreement of the entity may prescribe or, in the absence of such
provision, as the board of directors, general partners or managers of the entity
may determine. Certificates held by a trustee, personal representative,
administrator, executor, guardian or conservator may be voted by him, either in
person or by proxy, without a transfer of the certificates into his name.
4.2.6 Conduct of Meetings. The Manager who is the chief executive
officer of the Company will preside at meetings of the Members, may move or
second any item of business, but may not vote on any matter unless he is also a
Member. A written record must be maintained of the meetings of the Members.
4.2.7 Presumption of Assent. A Member of the Company who is present at
a meeting of the Members at which action on any matter is taken will be presumed
to have assented to the action taken, unless his dissent is entered in the
minutes of the meeting or unless he files his written dissent to the action with
the Manager who is the Secretary of the Company before the adjournment of the
meeting or forwards his dissent by certified mail to the Secretary of the
Company immediately after the adjournment of the meeting. The right to dissent
will not apply to a Member who voted in favor of the action.
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4.2.8 Telephone Meetings. Members of the Company may participate in
any meeting of the Members by means of conference telephone or similar
communication if all persons participating in the meeting can hear one another
for the entire discussion of the matter(s) to be voted on. Participating in a
meeting pursuant to this Section 4.2.8 will constitute presence in person at the
meeting.
4.3 Voting. Members shall vote on any matter that may come before the
Members, in person or proxy, in proportion to their respective Membership
Percentage Interests as set forth in Exhibit B. Decisions concerning the
affairs of the Company shall be determined by the affirmative vote of Members
holding at least a majority of the Membership Percentage Interests as set forth
in Exhibit B, unless otherwise set forth in this Agreement. At all meetings of
Members, a Member may vote by proxy executed in writing by the Member or by his
duly authorized attorney-in-fact. The proxy must be filed with the Manager who
is the Secretary of the Company before or at the time of the meeting. No proxy
may be valid after three (3) months from date of execution, unless otherwise
provided in the proxy. Actions of Members may be taken without a meeting if
100% of the Membership Percentage Interests consent in writing to such action
and such consent is filed with the minutes of the proceeding of the Members.
4.4 Distributions of Cash Flow. At the end of each taxable year of the
Company, the Managers shall determine whether any Cash Flow of the Company will
be available for distribution to Members. In such event, the amount of such
distribution shall be determined by the Managers, in their discretion, and shall
be distributed to all Interest Holders in proportion to their Percentages no
later than ninety (90) days after the end of the taxable year.
4.5 Required Distributions to Interest Holders. To the extent that Cash
Flow is available to cover such distributions, there shall be a required
distribution to be made by the Company to each of the Interest Holders in an
amount equal to the tax liability associated with such Interest Holder's
respective shares of income of the Company. For purposes of calculating this
distribution an assumed tax rate of forty percent (40%) shall be used in
determining the amount of such distribution. Any additional distributions shall
be in the sole discretion of the Managers.
4.6 Allocation of Profits or Loss. All Profits or Loss of the Company
shall be shared by each of the Interest Holders according to their respective
Percentages of Interest owned.
4.7 Liquidation and Dissolution. If the Company is dissolved and
liquidated for Cause by FBC pursuant to Section 7.1, the assets of the Company
shall be distributed to the
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Interest Holders in accordance with their respective Percentages of Interest
owned, after taking into account the allocations of Profit or Loss pursuant to
Section 4.6, if any, and distributions, if any of cash or property, pursuant to
Section 4.4, but only after FBC first receives, in cash or property at the
option of FBC, an amount equal to $40,000 with simple interest at the rate of 8%
per annum from the date hereof. "Cause" shall be defined, for purposes of this
Section 4.7, as: (i) a change in control of C&L Brewing Company, Inc. ("C&L") as
determined by FBC, in good faith; (ii) any material breach of this Operating
Agreement by C&L or of any other agreement between C&L and FBC, including, but
not limited to, the Contract Brewing Agreement; (iii) any material violation of
the law or regulations governing the marketing and sale of alcoholic beverages
by C&L in the judgment of FBC; (iv) upon the insolvency of C&L or the assignment
by C&L for the benefit of creditors of if C&L files a voluntary bankruptcy
petition, or if an involuntary petition in bankruptcy or reorganization is filed
against C&L: or (v) if C&L liquidates, dissolves or ceases to do business as a
going concern. If the Company is dissolved and liquidated other than for Cause,
the assets of the Company shall be distributed to the Interest Holders in
accordance with their respective Percentages of Interest owned, after taking
into account the allocations of Profit or Loss pursuant to Section 4.6, if any,
and distributions, if any, of cash or property, pursuant to Section 4.4. No
Interest Holder shall be obligated to restore a negative Capital Account upon
liquidation or dissolution.
4.8 Timing of Distributions. Except as otherwise provided in this
Agreement, the timing and amount of all distributions shall be determined by the
Managers.
Section V
Rights and Duties of, Designation and Election of,
Conduct of Business by, and Meetings of Managers
5.1 Management. The business and affairs of the Company shall be managed
by its Managers. The Managers shall in all cases act collectively as provided
in Section 5.14, and not individually. Without limiting the generality of the
foregoing, no Manager acting individually shall be the agent of the Company or
shall have authority to bind the Company, and no debt shall be contracted or
liability incurred by or on behalf of the Company except by the Managers acting
pursuant to a majority vote of the Managers or by one of the Managers of the
Company acting pursuant to the express authority granted to him by a majority of
the Managers. The Managers shall direct, manage, and control the business of
the Company to the best of their ability and in accordance with the provisions
of this Agreement. Except as otherwise provided in this Agreement or by
nonwaivable provisions of applicable law, the Managers acting collectively shall
have full and complete authority, power, and discretion to manage and control
the business, affairs, and properties of the
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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.
5.1.1 Tax Matters Partner. The Managers will designate a Member to
act on behalf of the Company as the "tax matters partner" within the meaning of
Section 6231(a)(7) of the Code. The initial tax matters partner shall be FBC.
5.2 Number, Tenure and Qualification.
5.2.1 Managers. The Company shall have two (2) Managers. A Member
may be a Manager. The initial Managers and their initial terms are:
Manager Term
------- ----
Xxxxxx X. Xxxxx, XX One (1) year or until his successor is elected
and qualified pursuant to Section 5.3 hereof.
Xxx X. Xxxxxxx, III One (1) year or until his successor is elected
and qualified pursuant to Section 5.3 hereof.
Managers shall be selected as provided in Section 5.3. The Members may increase
or decrease the number of Managers by vote at any annual meeting or by unanimous
written consent. No decrease in the number of Managers shall prejudice the
contractual rights of such Manager, if any. Managers may be paid a salary,
fringe benefits and expenses as approved by the Members.
5.2.2 Term. The initial Managers shall serve for terms set forth
opposite their names in Section 5.2.1. At each annual meeting of Members,
successors to the Manager whose term expires at that meeting shall be selected
or elected, as the case may be, as set forth in Section 5.3 to hold office for a
term expiring at the annual meeting of Members held in the next year following
the year of their election, subject, however, to their prior death, resignation
or removal as provided by Section 5.3.
5.2.3 Qualification. Managers need not be Interest Holders or
residents of the State of Maryland.
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5.3 Selection and Replacement of Managers.
5.3.1 Selection of Managers: Vacancies. At each annual meeting, the
Members shall elect a Manager to fill the seat of any Manager whose term has
expired. An affirmative vote of eighty percent (80%) of the Percentage Interests
then held by Members shall be required to elect any Manager. In the event of any
vacancies resulting from the increase, removal, resignation or death of a
Manager, the remaining Managers shall elect a Manager to replace the Manager who
has been removed, resigned or died until the next annual meeting of Members.
5.3.2 Removal. A Manager may be removed at any time, with or without
cause, by an affirmative vote of Members holding eighty percent (80%) or more
of the Percentage Interest then held by Members, by means of a writing delivered
by the Members to the Managers of the Company and to the other Members in
accordance with this Agreement stating, if applicable, the cause for such
removal. The removal of any Manager shall take effect upon the receipt of that
notice by the Managers of the Company, or at such later time as may be specified
in the notice. Except as provided in this Section 5.3.2, the Managers may not
be removed, either with or without cause, by the Members or the Managers.
5.3.3 Resignation. Any Manager of the Company may resign at any time
by giving written notice to the other Managers of the Company and to the Members
of the Company in accordance with this Agreement. The resignation of any Manager
shall take effect upon receipt of that notice by the other Managers of the
Company or at such later time as shall be specified in the notice, with the
consent of the other Managers of the Company. Unless otherwise specified in the
notice, acceptance of the resignation shall not be necessary to make it
effective.
5.4 General Powers of Managers.
5.4.1 General Powers. Without limiting the generality of Section 5.1
and except for admitting new Members to the Company, entering into contracts
(for employment, professional services or other purposes), purchases or
expenditures or commitments to purchase goods or services with a total value in
excess of $5,000 for each transaction or contract, entering into wholesale
distribution arrangements, and the sale, licensing or other transfer of any of
the intellectual property or other property, tangible or intangible, used by the
Company for any purpose whatsoever, the Managers shall have complete and
exclusive control of the management of the Company's business and affairs, and
the Members shall have no right to participate in the management or the conduct
of the Company's business and affairs, nor any power or authority to act for or
on behalf of
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 13
the Company in any respect whatsoever, except as expressly provided in Sections
5.2 and 5.3. Except as otherwise specifically provided in this Agreement, the
Managers shall have the right, power and authority on behalf of the Company, and
in its name, to exercise all of the rights, powers and authority of the Company
under the Act; ans shall have the full and entire right, power, and authority in
the management and control of the Company's business to do any and all acts and
things necessary, proper, convenient or advisable to effectuate the purposes of
the Company, including, but not limited to the following:
(i) to acquire property from any Person as the Managers may determine. The
fact that any Manager, or Member is directly or indirectly affiliated or
connected with any such Person shall not prohibit the Managers from dealing with
that Person;
(ii) to borrow money for the Company (in amounts not to exceed $5,000 in
the aggregate) from banks, other lending institutions, the Members, or
Affiliates of the Members, on such terms as the Managers deem appropriate, and,
in connection therewith, to hypothecate, encumber, and grant security interests
in the assets of the Company to secure repayment of the borrowed sums. No debt
shall be contracted or liability incurred by or on behalf of the Company except
by the Managers, or, to the extent permitted under the Act, by agents or
employees of the Company expressly authorized by the Managers to contract such
debt or incur such liability;
(iii) to purchase liability and other insurance to protect the Company's
property and business;
(iv) to hold, and own, and Company real and/or personal properties in the
name of the Company;
(v) to invest any Company funds temporarily (by way of example, but not
limitation) in time deposits, short term governmental obligations, commercial
paper, or other investments;
(vi) to recommend approval by the Members of any matters that may come
before the Company; to name individuals, who may or may not be Members of the
Company to serve on advisory Committees with respect to the Company's affairs;
(vii) to execute on behalf of the Company all instruments and documents,
including, without limitation: checks; drafts; notes and other negotiable
instruments; mortgages or deeds of trust; security agreements; financing
statements; documents providing for the acquisition, mortgage or disposition of
the Company's property; assignments; bills of sale; leases; partnership
agreements; operating agreements of other limited liability companies;
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 14
and any other instruments or documents necessary, in the opinion of the
Managers, to the business the Company;
(viii) to designate from time to time the Company's independent
accountants, and the location of the Company's principal executive office;
(ix) to employ legal counsel, agents, consultants or other experts to
perform services for the Company or to employ any individual to provide services
in connection with the Company's affairs including any current Manager or Member
and to compensate them from Company funds; and
(x) to do and perform all other acts as may be necessary or appropriate to
the conduct of the Company's business.
5.4.2 Member Authority. Unless authorized to do so by this Agreement
or by the Managers of the Company, no attorney-in-fact, officer, employee, or
other agent of the Company shall have any power or authority to bind the Company
in any way, to pledge its assets, request credit or to render it liable
pecuniarily for any purpose. No Member shall be an agent of or shall have any
power or authority to bind the Company unless the Member has been authorized by
the Managers to act as an agent of the Company in accordance with the previous
sentence.
5.5 Duties of the Managers. The Managers shall devote such time,
effort, and skill to the Company's business affairs as they deem necessary and
proper for the Company's welfare and success. The Members expressly recognize
that the Managers have other business activities and agree that the Managers and
their affiliates, employees, and agents, as the case may be, shall not be bound
to devote all of their business time to the affairs of the Company, and the
Managers or their affiliates may engage for their own account and for the
accounts of others in other businesses or activities.
5.6 Third Party Reliance. Third parties dealing with the Company shall
be entitled to rely conclusively upon the power and authority of the Managers as
set forth herein.
5.7 No Duty to Consult. Except as otherwise provided herein, the
Managers shall have no duty or obligation to consult with or seek the advice of
the Members. A duty to consult with FBC exists for admitting new Members to the
Company, entering into contracts (for employment, professional services or other
purposes), borrowing in excess of $5,000, purchases or expenditures or
commitments to purchase goods or services with a total value in excess of $5,000
for each transaction or contract, entering into wholesale distribution
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 15
arrangements, and the sale, licensing or other transfer of any of the
intellectual property or other property, tangible or intangible, used by the
Company for any purpose whatsoever.
5.8 Director. The Managers shall, in their discretion, have the right
and authority to employ on behalf of the Company a full time Director to manage
the affairs and day-to-day operations of the Company. In such event, the
Director shall accede to such rights, duties and obligations of the Managers
under this Agreement to the extent designated by the Managers.
5.9 Rights of Members. The Members shall not take part in the
management of the business nor transact any business for the company in their
capacity as Members, nor shall they have power to sign for or to bind the
Company. This Section 5.9. supersedes any authority granted to the Members
pursuant to Section 4A-401 of the Act. Any Member who takes any action or binds
the Company in violation of this Section 5.9 shall be solely responsible for any
loss and expense incurred by the Company as a result of the unauthorized action
and shall indemnify and hold the Company harmless with respect the loss or
expense.
5.10 Reimbursement. All expenses incurred with respect to the
organization, operation, and management of the Company shall be borne by the
Company. The Managers shall be entitled to reimbursement from the Company for
direct reasonable business expenses incurred in the regular course of business
and allocable to the organization, operation, and/or management of the Company.
5.11 Regular Meetings. Regular meetings of the Managers for the
transaction of any business may be held without notice of the time, place or
purposes thereof and shall be held at such times and places as may be determined
in advance by the Managers.
5.12 Special Meetings. Special meetings of the Managers may be held at
any time and place agreed upon by any two Managers. Reasonable oral (including
by telephone) or written notice (including by facsimile transmission) thereof
shall be given by the individual or individuals calling the meetings, not later
than 24 hours before the special meeting.
5.13 Telephonic Meetings Permitted. The Managers, or any committee
designated by the Managers, may participate in a meeting of the Managers or such
committee by means of conference telephone or similar communications equipment
by means of which all individuals participating in the meeting can hear each
other, and such participation shall constitute presence in person at such
meeting.
Mojo Highway Brewing Company, LLC
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5.14 Manager Voting. Except as otherwise set forth herein, all
decisions of the Managers shall be made either at a meeting or by a written
consent and a majority vote of all the Managers shall constitute and be the act
of the Managers.
5.15. Action of Managers and Committees Meeting. Unless otherwise
restricted by this Agreement, any action required or permitted to be taken at
any meeting of the Managers or of any committee thereof may be taken without a
meeting if the vote of the Managers as provided in Section 5.14, or the members
of the committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Managers or the
committee.
5.16 Managers' Liability. The Managers shall not be liable,
responsible, or accountable, in damages or otherwise, to any Member or to the
Company for any act performed, or failure to act, by the Managers within the
scope of the authority conferred on the Managers by this Agreement, except for
acts which constitute fraud, gross negligence, breach of a fiduciary duty to the
Company or an intentional breach of this Agreement.
5.17 Member Indemnification. Any Member who shall violate any of the
terms, conditions, and provisions of this Agreement shall keep and save harmless
the Company and shall also indemnify the other Members from any and all claims,
demands and actions of every kind and nature whatsoever which may arise out of
or by reason of such violation of any terms and conditions of this Agreement.
The Members shall not be liable, responsible, or accountable, in damages or
otherwise, to any other Member or to the Company for any authorized act
performed by a Member with respect to Company matters.
Section VI
Transfer of Interests and Withdrawals of Members
6.1 Transfers. No Member may Transfer all, or any portion of, or any
interest or rights in, the Membership Rights owned by the Member, and no
Interest Holder may transfer all, or any portion of, or any interest or rights
in any Interest, except by will and the laws of descent and distribution, in
which case the recipient thereof shall succeed to the Interest and not to the
Membership unless such Person is admitted as a Member pursuant to Section 3.2
hereof. Each Member hereby acknowledges the reasonableness of this prohibition
in view of the purposes of the Company and the relationship of the Members. The
Transfer of any Membership Rights or Interests in violation of the prohibition
contained in this Section 6.1 shall be deemed invalid, null and void, and of no
force or effect unless, on the approval of the Managers, the Company agrees to
recognize such a Transfer and admit the transferee to become a Member.
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 17
6.2 Involuntary Withdrawal. Immediately upon the occurrence of an
Involuntary Withdrawal pursuant to the Act, if the Company is continued as
provided in this Agreement, the Person ceasing to be the Member and his
successor to the interest shall not be entitled to receive in liquidation of the
Interest, pursuant to Section 4A-905(l)(ii) of the Act, the fair market value of
the Member's Interest as of the date the Member involuntarily withdrew from the
Company.
6.3 Voluntary Withdrawal. Any Member may withdraw from the Company at
any time upon thirty (30) days' prior written notice to the Manager who serves
as the Secretary of the Company at the principal executive office of the
Company. No voluntary withdrawal shall operate to cause the dissolution of the
Company. Members who voluntarily withdraw shall be entitled to receive a return
of their Capital Contribution which shall be returned only at the time
determined in writing by the Managers of the Company that such return of the
Capital Contribution would be in the best interests of the Company. The Capital
Contribution of a Member who voluntarily withdraws shall continue to be
considered as an equity interest in the Company until such time as the Managers
make such determination. No interest shall be paid to a Member who voluntarily
withdraws on his Capital Contribution.
Section VII
Dissolution, Liquidation and Termination of the Company
7.1 Events of Dissolution. The Company shall be dissolved upon the
happening of the following events:
(i) when the period fixed for its duration as set forth in
Section 2.4 has expired; or
(ii) upon the written consent of the Members holding eighty
(80%) or more of the Percentages of Membership Interests then held by Members;
or
(iii) upon a dissolution by FBC for Cause (as defined in
Section 4.7 hereof); or
(iv) upon a dissolution by C&L, at the option of C&L, if: (a)
there shall be a change in control of FBC as determined by C&L in good faith;
(b) there shall be a material breach of this Operating Agreement by FBC or of
any other agreement between C&L and FBC, including, but not limited to, the
Contract Brewing Agreement; (c) FBC, for any reason, fails to obtain, fails to
retain or loses any license or permit necessary to the performance of its duties
under the Contract Brewing Agreement; (d) upon the insolvency
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 18
of FBC or the assignment by FBC for the benefit of creditors or if FBC files a
voluntary petition in bankruptcy of if an involuntary petition in bankruptcy or
reorganization is filed against FBC; or (e) if FBC liquidates, dissolves or
ceases to do business as a going concern.
(v) upon the occurrence of an Involuntary Withdrawal, unless
twenty five (25%) or more of the Percentages of Membership Interests, within
ninety (90) days after the occurrence of the Involuntary Withdrawal, elect to
continue the business of the Company pursuant to the terms of this Agreement;
(vi) upon the termination of the Contract Brewing Agreement by
and between FBC and the Comapny; or
(vii) upon the entry of a decree of judicial dissolution under
Section 4A-903 of the Act.
7.2 Procedure for Winding Up and Dissolution. If the Company is
dissolved, the Managers and remaining Members shall wind up its affairs. On
winding up of the Company, the assets of the Company shall be distributed in the
following order:
(i) to pay or provide for the payment of all Company
liabilities to creditors, including Members who are creditors; and liquidating
expenses and obligations in satisfaction of the liabilities of the Company; and
(ii) if the Company is dissolved for Cause by FBC, as set
forth in Section 4.7, to make the payment therein specified to FBC; and
(iii) if the Company is dissolved for other than Cause, to
repay capital owing to Members in proportion to their respective Percentage
Interests, after the Percentage Interests are adjusted by adding to the Members'
Interests their respective share of the Company's Profits and deducting from the
Members' Interests their respective share of the Company's Losses and all
distributions previously received by the Members.
7.3 Filing of Articles of Cancellation. If the Company is dissolved,
the Members through the Managers shall promptly file Articles of Cancellation
with SDAT. If there are no remaining Members, the Articles shall be filed by the
last Person to be a Member; if there are no remaining members, or a Person who
last was a Member, the Articles shall be filed by the legal or personal
representatives of the Person who last was a Member.
Mojo Highway Brewing Company, LLC
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Section VIII
Fiscal Matters
8.1 Fiscal Year. The fiscal year of the Company will begin on the first
day of January and the end on the last day of December each year unless
otherwise determined by resolution of the Members.
8.2 Deposits. All funds of the Company will be deposited from time to
time to the credit of the Company in the banks, trust companies or other
depositories as the Managers may select.
8.3 Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, and all notes or other evidences of indebtedness issued in the
name of the company will be signed by the Manager who is the chief executive
officer of the Company or by the Manager who is the chief financial officer of
the Company.
8.4 Books and Records. The books and records of the Company must be
kept at the principal executive office of the Company or at other places, within
or without the State of Maryland, as the Managers from time to time determine
and each Member shall have access thereto upon reasonable notice to the
Managers. The books shall be kept on a calendar year basis and shall be closed
and balanced at the end of each fiscal year. Each of the parties to this
Agreement hereby covenants and agrees to cause all known business transactions
pertaining to the purpose of the Company to be entered properly and completely
into said books. The Company will furnish annual statements prepared on the
basis of generally accepted accounting principles to the Members, and prepare
tax returns in a timely manner, furnishing copies to all Members at least ten
(10) days before they are filed by the Company.
Section IX
General Provisions
9.1 General Indemnification By Company. The Company may indemnify any
person who was or is a party defendant or is threatened to be made a party
defendant to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative, or investigative (other than an action
by or in the right of the Company) by reason of the fact that he is or was an
Interest Holder of the Company, Manager, employee or agent of the Company, or is
or was otherwise serving at the request of the Company, against expenses
(including attorney's fees), (which expenses may be advanced to him upon receipt
by the Company of a written promise to repay such expenses if it is ultimately
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 20
determined that he is not entitled thereto hereunder), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with the action, suit or proceeding if the Members determine at a meeting of
Members called for such purpose or by unanimous written consent, that he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Company, and with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction, or on a plea of nolo contendere or its equivalent, will not in
itself create a presumption that the person did or did not act in good faith and
in a manner which he reasonably believed to be in the best interest of the
Company, and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
9.1.1 Funding Indemnification. The Company will fund the
indemnification obligations provided by Section 9.1 in the manner and to the
extent the Members may from time to time deem proper and may purchase insurance
therefor.
9.2 Limited Power of Attorney. Each Member constitutes and appoints the
Managers, acting under this Agreement, as the Member's true and lawful
attorney-in-fact ("Attorney-in-Fact"), and in the Member's name, place and
stead, to make, execute, sign, acknowledge, and file:
(i) one or more Articles of Organization;
(ii) any and all other certificates or other instruments
required to be filed by the Company under the laws of the State of Maryland or
of any other state or jurisdiction, including, without limitation, any
certificate or other instruments necessary in order for the Company to continue
to qualify as a limited liability company under the laws of the State of
Maryland or any other state;
(iii) one or more fictitious or trade name certificates; and
(iv) all documents which may be required to dissolve and
terminate the Company and to cancel its Articles of Organization.
9.3 Assurances. Each Member shall execute all such certificates and
other docuements and shall do all such filing, recording, publishing, and other
acts as the Managers and Members deem appropriate to comply with the
requirements of laws, rules, and regulations relating to the acquisition,
operation, or holding of the property of the Company.
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 21
9.4 Notifications. Any notice, demand, consent, election, offer,
approval, request, or other communication (collectively, a "notice") required or
permitted under this Agreement must be in writing and either delivered
personally or sent by recognized overnight courier (such as Federal Express) or
by certified or registered mail, postage prepaid, return receipt requested. A
notice must be addressed to an Interest Holder at the Interest Holder's last
known address on the records of the Company. A notice to the Managers or to the
Company must be addressed to the Managers at the Company's principal executive
office. A notice that is sent by mail or overnight courier is deemed to be given
three (3) business days after it is mailed. Any party may designate, by notice
to the Company his new address for notices and, thereafter notices are to be
directed to that substitute address.
9.5 Anticipated Transactions. Notwithstanding the duties of undivided
loyalty of the Members and Managers to the Company, it is anticipated that the
Members and Managers will have other legal and financial relationships. Members
and Managers of this Company, along with representatives of other entities, from
time to time may participate in the joint development of contracts and
transactions designed to be fair and reasonable to each participant and to
afford an aggregate benefit to all participants. Therefore, it is anticipated
that this Company will desire to participate in these contracts and tranactions
and, after ordinary review for reasonableness, that the participation of the
Company in these contracts and transactions may be authorized by the Members.
9.6 Specific Performance. The parties recognize that irreparable injury
will result from a breach of any provision of this Agreement and that money
damages will be inadequate to fully rememdy the injury. Accordingly, in the
event of a breach or threatened breach of one or more of the provisions of this
Agreement, any party who may be injured (in addition to any other remedies which
may be available to that party) shall be entitled to one or more preliminary or
permanent orders (i) restraining and enjoining any act which would constitute a
breach or (ii) compelling the performance of any obligation which, if not
performed, would constitute a breach.
9.7 Complete Agreement; Amendment. This Agreement constitutes the
complete and exclusive agreement among the Interest Holders with respect to the
subject matter herein. It supersedes all prior written and oral statements,
including any prior representation, statement, condition, or warranty. Except as
expressly provided otherwise herein, this Agreement may not be amended without
the written consent of the Managers and by the Members holding eighty percent
(80%) or more of the Percentages of Membership Interests.
9.8 Applicable Law. All questions concerning the construction,
validity, and interpretation of this Agreement and the performance of the
obligations imposed
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 22
by this Agreement shall be governed by the internal law, not the law of
conflicts, of the State of Maryland.
9.9 Section Titles. The headings herein are inserted as a matter of
convenience only, and do not define, limit, or describe the scope of this
Agreement or the intent of the provisions hereof.
9.10 Binding Provisions. This Ageement is binding upon, and inures to
the benefit of, the parties hereto and their respective heirs, executors,
administrators, personal and legal representatives, successors, and permitted
assigns pursuant to the terms hereof.
9.11 Jurisdiction and Venue. Any suit involving and dispute or other
matter arising under this Agreement may only be brought in the United States
District Court for the District of Maryland state court having jurisdiction over
the subject matter of the dispute or matter. All Members hereby consent to the
exercise of personal jurisdiction by any such court with respect to any such
proceeding.
9.12 Terms. Common nouns and pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular and plural, as the identity of the Person
may in the context require.
9.13 Separability of Provisions. Each provision of this Agreement shall
be considered separable; and if, for any reason, any provision or provisions
herein are determined to be invalid and contrary to any existing or future law,
such invalidity shall not impair the operation of or affect those portions of
this Agreement which are valid.
9.14 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts each of which shall be deemed an original and all of which,
when taken together, constitute one and the same document. The signature of any
party to any counterpart shall be deemed a signature to, and may be appended to,
any other counterpart.
Mojo Highway Brewing Company, LLC
Operating Agreement
Page 23
IN WITNESS WHEREOF, the Members have hereunto set their hands effective
the day and first above written.
XXXXXXXXX BREWING CO.
Witness: /s/ Xxxxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------ ----------------------
Xxxxx X. Xxxxxxx
Chairman
Address: 0000 Xxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Date: June 16, 1998
C & L BREWING COMPANY, INC.
Witness: /s/ Xxx [Illegible] By: /s/ Xxx X. Xxxxxxx
------------------------ ----------------------
Xxx X. Xxxxxxx, III
Chairman
Address: 00 Xxxx Xxxxxx, #000
Xxx Xxxx, Xxx Xxxx, 00000
Date: June 18, 1998
Witness: /s/ [Illegible] By: /s/ Xxxxxx X. Xxxxx
------------------------ ----------------------
Xxxxxx X. Xxxxx, XX
President
Address: 00 Xxxx Xxxxxx, #000
Xxx Xxxx, Xxx Xxxx 00000
Date: June 17, 1998
EXHIBIT A
ARTICLES OF ORGANIZATION
ARTICLES OF ORGANIZATION
OF
MOJO HIGHWAY BREWING COMPANY, LLC
Pursuant to Section 4A-204 of the Limited Liability Company Act of
Maryland, the Member set forth below does hereby file with the Maryland State
Department of Assessments and Taxation the following Articles of Organization:
I.
The name of the limited liability company is "Mojo Highway Brewing Company,
LLC."
II.
The purpose of the limited liability company is to engage in any lawful act or
activity for which a limited liability company may be organized under the
Limited Liability Company Act of Maryland other than the business of acting as
an insurer.
III.
The principal office of the limited liability company in the State of Maryland
is 0000 Xxxxxxxxx Xxxx., Xxxxxxxxx, Xxxxxxxx 00000. The name of the
corporation's initial registered agent is Frederick Brewing Co., at 0000
Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Organization this 30 day of June, 1998.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Xxxxxxxxx Brewing Co.
Member
By Xxxxx X. Xxxxxxx
Chief Executive Officer
Xxxxxxxxx Brewing Co.
EXHIBIT B
PERCENTAGE INTEREST IN MOJO HIGHWAY
BREWING COMPANY, LLC
EXHIBIT B
PERCENTAGE
INTEREST
IN
MOJO HIGHWAY BREWING COMPANY, LLC
Member Non-Member Interest Holder
------ -------------------------- Percentage of
Name Yes No Yes No Interest
---- ------ --- -- --------
C&L Brewing Company, Inc. X X 75%
Xxxxxxxxx Brewing Co. X X 25%
EXHIBIT C
MEMBER CONTRIBUTIONS
EXHIBIT C
MEMBER CONTRIBUTIONS
Member Member
Name Business Address
---- ----------------
Xxxxxxxxx Brewing Co. 0000 Xxxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxxxxx 00000
Contributions
-------------
1. Formulations and specifications for the first
Mojo Highway Brewing Company, LLC product;
2. Adaptations of the Company logos and designs
for use in packaging materials including
labels, six-pack carriers, case cartons
and, when volume warrants, crown closures;
3. Purchase of first production runs of
packaging materials adequate for the
production of up to 2700 cases (200 barrels)
of Company product;
4. Brewing, packaging, warehousing and shipping
of first two 100-barrel batches of Company
product;
5. All necessary licenses, permits, approvals
and security bonds required by the Bureau of
Alcohol, Tobacco and Firearms and the state
and local governments of Maryland and the
District of Columbia; and
6. FBC's best efforts to obtain wholesale
distribution of the Company's products
through National Distributing Company, Mid-
Atlantic (the Kronheim Companies). If and
when the Company's products attain adequate
customer acceptance and sales in this initial
market territory, FBC will use its best
efforts to obtain additional wholesale
distribution through FBC's existing
wholesaler network.
FBC's contribution would be valued, for
liquidation purposes, at $40,000.
Exhibit C
Page 2
C&L Brewing Company, Inc. 00 Xxxx Xxxxxx, #000
Xxx Xxxx, Xxx Xxxx 00000
Contributions
-------------
1. $35,000 in cash for the use of the venture
to purchase mutually agreed-upon goods and
services necessary for the marketing and
sale of the Company's products;
2. All trademarks, copyrights, designs, logo-
types, business plans, marketing plans,
projections, market research and other
intellectual property pertaining to the
Company's brand and to malt beverage
marketing now in the possession of or later
developed by C&L, its officers, principals,
agents, employees or contractors. C&L shall
take all reasonable steps to register and
other- wise obtain legal protection of its
exclusive rights to use its intellectual
property and will grant to the Comapany, on
terms acceptable to FBC, an exlcusive license
to exercise those rights; and
3. A minimum of 30 hours per week of direct
sales activity in the Washington/Baltimore
market area, to be performed by one or more
of C&L's current officers or such other
persons as may later be proposed by C&L and
approved by FBC. FBC would require that C&L
enter into employment contracts with Xxxxxx
X. Xxxxx, XX, Xxxxxxx _____________ and Xxx
X. Xxxxxxx, III which ensures that such
persons would devote all of their work
efforts, outside of specified current
employment, to the management of C&L and the
Company and the promotion of the Company and
its products and would include a
non-competition agreement with respect to the
alcoholic beverage industry. The
non-competition agreement will be of a form
acceptable to the parties and will have a
term equal to the life of the Company plus
two years.
