EXHIBIT 10.33

JOINT VENTURE AGREEMENT

 

This Joint Venture Agreement is being entered into as of January 26, 2016,
between Southeast Florida Craft LLC (“SFC”) , Attitude Beer Holding Co. (“ABH”),
Glenn E. Straub (“Straub”) and James D. Cecil (“Cecil” and together with Straub
the “Current Members”)(each a “Party,” collectively the “Parties”).

 

WHEREAS, SFC has entered into an Area Development Agreement a copy of which is
annexed hereto as Exhibit A (the “ADA”) with World of Beer Franchising, Inc.
(“Franchisor”);

 

WHEREAS, Franchisor is in the business of entering into franchise agreement with
third parties for such third parties to own and operate World of Beer themed
bar/ restaurants (“WOB Franchises”).

 

WHERES, ABH has access to capital that would allow SFC to maximize the number of
WOB Franchises it could develop pursuant to the ADA.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Parties agree as follows:

 

ARTICLE I

JOINT VENTURE

 

1.1           ADA.

 

a.           SFC and the Current Members hereby grant ABH the right to
participate in any WOB Franchise that SFC proposes to develop whether pursuant
to the current ADA or any other agreement with Franchisor. ABH shall have the
option to become a 60% member of any new WOB Franchise for the contribution of
100% of the budgeted development costs of developing such new WOB Franchise.

 

b.           Upon SFC’s finalization of a location for a new WOB Franchise it
shall give ABH notice of such new location. Upon the execution of a letter of
intent with a budget and forecasts (LOI) for a new location, ABH will be given
notice of the LOI (the “LOI Notice”). Within 30 days after receipt of the LOI
Notice, ABH shall give SFC notice if it desires to exercise its option to
participate in such new WOB Franchise. ABH will have 14 days thereafter to sign
a new Operating Agreement for that location and must fund 100% of the costs of
the new location within 90 days after lease execution in equal installments of
twenty five percent (25%). These installments will commence upon execution of
the Operating Agreement & continue every 30 days until the capital is
contributed in full. There shall be a 7 day cure period after written notice is
received that a payment has not been made.

 

 

 

c.           If ABH elects to not proceed forward with more than 2 new locations
with SFC then SFC shall be allowed to operate such location with other investors
on the same terms as those offered to ABH. In the event SFC desires to continue
with such location on different terms than those previously rejected by ABH, SFC
must first offer such terms to ABH in accordance with the procedure in 1.1(b).

 

d.           For each new location that ABH participates in, SFC shall form a
new limited liability company to be the Franchisee. SFC, ABH and the new limited
liability company shall enter in an operating agreement substantially the same
as the operating agreement annexed hereto as Exhibit B (the “Operating
Agreement”).

 

e.           SFC shall be entitled to a management fee for each location under
the same terms as set forth in the Operating Agreement.

 

f.            ABH will not invest in any other WOB locations other than with
SFC.

 

1.2           Non-Circumvention – Non-Compete. SFC shall have its principal,
including those persons identified on Schedule 1.4, execute a non-circumvention
agreement in the form annexed hereto as Exhibit C.

 

1.3           Public Disclosure. Attitude shall have the right to make
disclosures and public announcements regarding this Agreement, and any agreement
or business entered into pursuant hereto, as it deems necessary to comply with
its Securities and Exchange Commission reporting obligations. Subject to the
reasonable prior approval of Franchisor, Attitude will be allowed to use the
World of Beer in its investor and public relations materials.

 

1.4           Audits. SFC and each WOB Franchise shall fully cooperate with ABH
and Attitude in supplying all information to Attitude and its auditor so
Attitude can timely comply with its Securities and Exchange Commission reporting
obligations.

 

1.5           Initial Funding. ABH shall provide SFC with $140,000 in initial
funding to be paid to WOB to acquire five (5) franchises. ABH shall receive a
$50,000 credit for it capital commitment first entity and a $22,500 for each of
the other four entities..

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

Each Party hereby makes the following representations and warranties for the
benefit of all the other Parties:

 

2.1           Such Party has full power and authority to enter into this
Agreement. This Agreement has been duly and validly executed and delivered by
Such Party and constitutes the legal, valid and binding obligation of such
Party, enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws from time to time in effect that affect creditors’ rights
generally, and by legal and equitable limitations on the availability of
specific remedies.

 

 

 

2.2           The execution, delivery and performance by such Party of this
Agreement will not: (i) violate the organizational documents of such Party, (ii)
violate any decree or judgment of any court or other governmental authority
applicable to or binding on such Party; (iii) violate any provision of any
federal or state statute, rule or regulation which is, to such Party’s
knowledge, applicable to such Party; or (iv) violate any contract to which such
Party or any of its assets or properties are bound, or conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of , any agreement, indenture or
instrument to which such Party is a party. No consent or approval of, or filing
with, any governmental authority or other person not a party hereto is required
for the execution, delivery and performance by such Party of this Agreement.

 

ARTICLE III

MISCELLANEOUS

 

3.1           Entire Agreement; Amendments. The Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 

3.2           Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Parties or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.

 

3.3           Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
Investor may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Holder.

 

3.4           No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

3.5           Notices. Any notice, demand or request required or permitted to be
given by the respective parties hereto pursuant to the terms of this Agreement
shall be in writing and shall be deemed delivered (i) when delivered personally
or by verifiable facsimile transmission, unless such delivery is made on a day
that is not a Business Day, in which case such delivery will be deemed to be
made on the next succeeding Business Day, (ii) on the next Business Day after
timely delivery to an overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid), addressed as follows:

 

 

 

If to SFC:

 

P.O. Box 810245

Boca Raton, Fl 33481

 

If to ABH:

 

712 US Highway 1, Suite 200

North Palm Beach, FL 33408

 

If to Straub:

 

P.O. Box 810245

Boca Raton, Fl 33481

 

If to Cecil:

 

P.O. Box 810245

Boca Raton, Fl 33481

 

Any Party may change the address(es) to which all notices, requests and other
communications are to be sent by giving written notice of such address change to
the other Parties in conformity with this Section 3.5, but such change shall not
be effective until notice of such change has been received by the other Party.

 

3.6            Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in New York County, New York for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery). Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of the documents contemplated herein, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

 

 

 

3.7           Survival. The representations, warranties, agreements and
covenants contained herein shall survive the termination of this Agreement.

 

3.8           Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

 

3.9           Severability. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.

 

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Joint Venture Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

SOUTHEAST FLORIDA CRAFT, LLC   ATTITUDE BEER HOLDING CO.       /s/ Glenn E.
Straub   /s/ Roy Warren By: Glenn E. Straub   By: Roy Warren Its: Manager   Its:
President       JAMES D. CECIL   GLENN E. STRAUB       /s/ James D. Cecil   /s/
Glenn E. Straub

 

CONSENTS

 

World of Beer Franchising, Inc., hereby consents to the above Joint Venture
Agreement between Southeast Florida Craft, LLC and Attitude Beer Holding Co.

 

WORLD OF BEER FRANCHISING, INC.       /s/ Benjamin P. Novello   By: Benjamin P.
Novello   Its: Chief Development Officer  

 

New England WOB, LLC (“NEWOB”) hereby consents to the above Joint Venture
Agreement between Southeast Florida Craft LLC and Attitude Beer Holding Co. and
waives any rights NEWOB has under the Joint Venture Agreement between NEWOB and
Attitude Beer Holding Co.

 

NEW ENGLAND WOB, LLC       /s/ Glenn E. Straub   By: Glenn E. Straub   Its:
Manager  

 

 

 

EXHIBIT A

 

 

 

WORLD OF BEER FRANCHISING, INC.

 

AREA DEVELOPMENT AGREEMENT

 

 

 

      February 9, 2016   SOUTHEAST FLORIDA CRAFT, LLC AGREEMENT DATE   NAME OF
DEVELOPER       SUMMARY DESCRIPTION OF   ADDRESS OF DEVELOPER: DEVELOPMENT AREA:
          The Counties of Broward & Miami-Dade in   P.O. Box 810245 The State of
Florida   Boca Raton, FL 33481      

 

THIS AGREEMENT REQUIRES CERTAIN DISPUTES TO BE SUBMITTED TO BINDING ARBITRATION.

 

 

 

TABLE OF CONTENTS

 

Section     Page         1. INTRODUCTION 1   1.1 The WORLD OF BEER® System 1  
1.2 Acknowledgments 1   1.3 Representations. 2   1.4 No Warranties 3   1.5
Business Organization 3         2. TERM 4       3. GRANT OF DEVELOPMENT RIGHTS 4
  3.1 Development Rights 4   3.2 Development Schedule 4   3.3 Effect of Failure
4         4. territorial protection and reservation of rights 5   4.1
Territorial Protection 5   4.2 Rights Retained 5         5. DEVELOPMENT FEE 6  
5.1 Amount and Consideration 6   5.2 Franchise Fees 6         6. GRANT OF
FRANCHISES. 7   6.1 Site Selection and Acceptance 7   6.2 Effect of Approval 7  
6.3 Franchise Agreement 7         7. no right to operate or use marks 8       8.
CONFIDENTIAL INFORMATION 8   8.1 Types of Confidential Information. 8   8.2
Disclosure and Limitations on Use. 9   8.3 Confidentiality Obligations. 9   8.4
Exceptions to Confidentiality. 9         9. EXCLUSIVE RELATIONSHIP 10       10.
MARKS 11   10.1 Ownership and Goodwill of Marks 11   10.2 Limitations on Your
Use of Marks 11   10.3 Notification of Infringements and Claims 11   10.4
Discontinuance of Use of Marks 11   10.5 Indemnification 12         11.
TRANSFERS 12   11.1 By Us 12   11.2 By You 12   11.3 Franchise Transfers 12  
11.4 Franchise Transfers; Conditions for Approval of Transfer. 12   11.5 Right
of First Refusal 13   11.6 Transfer to a Business Entity 14   11.7 Death or
Permanent Disability 15

 

 

 

Section     Page       12. TERMINATION 15   12.1 Termination by You 15   12.2
Termination by Us 15         13. RIGHTS AND OBLIGATIONS ON TERMINATION 16   13.1
Continuing Obligations 16   13.2 Payment of Amounts Owed to Us 16   13.3
Competitive Restrictions 16   13.4 Grant of Franchises 17   13.5 Marks and
Confidential Information 17         14. RELATIONSHIP OF THE
PARTIES/INDEMNIFICATION. 17   14.1 Independent Contractors 17   14.2 No
Liability for Acts of Other Party 18   14.3 Taxes 18   14.4 Indemnification 18  
      15. ENFORCEMENT 18   15.1 Conflicts with Other Agreements 18   15.2
Severability; Substitution of Valid Provisions 18   15.3 Waivers 19   15.4
Limitation of Liability 19   15.5 Approval and Consents 19   15.6 Waiver of
Punitive Damages 19   15.7 Limitations of Claims 19   15.8 Governing Law 20  
15.9 Jurisdiction 20   15.10 Waiver of Jury Trial 20   15.11 Cumulative Remedies
20   15.12 Costs and Attorneys' Fees 20   15.13 Binding Effect 20   15.14 Entire
Agreement 20   15.15 No Liability to Others; No Other Beneficiaries 20   15.16
Construction 20   15.17 Certain Definitions 21   15.18 Timing 21   15.19 Private
Disputes 21         16. DISPUTE RESOLUTION 21   16.1 Mediation 21   16.2
Agreement to Arbitrate 22   16.3 Place and Procedure 22   16.4 Awards and
Decisions 22   16.5 Specific Performance 23   16.6 Third Parties 23   16.7
Survival 23         17. NOTICES AND PAYMENTS. 23

 

EXHIBITS:

 

  Exhibit A Index         Exhibit B Development Area and Development Schedule

 

 

 

WORLD OF BEER FRANCHISING, INC.

AREA DEVELOPMENT AGREEMENT

 

THIS AREA DEVELOPMENT AGREEMENT (this “Agreement”) is effective as of February
9, 2016 (the “Agreement Date”). The parties to this Agreement are WORLD OF BEER
FRANCHISING, INC., a Florida corporation, with its principal office located at
10910 Sheldon Road, Tampa, Florida 33626 (referred to in this Agreement as “we,”
“us” or “our”) and SOUTHEAST FLORIDA CRAFT, LLC, a Florida limited liability
company, whose principal address is P.O. Box 810245, Boca Raton, FL
33481(referred to in this Agreement as “you,” “your” or “Developer”).

 

1INTRODUCTION

 

The WORLD OF BEER® System. We and our affiliates have expended considerable time
and effort in developing retail alcohol establishments that offer and sell
bottled and canned imported and domestic beers, wines, cigars and certain other
products we authorize from time to time for retail take out as well as serving
draft, bottled and canned domestic and imported beers, wines, cigars and certain
food products and other products we authorize from time to time for on-premises
consumption in a distinctive and innovative store and pub environment (“WOB
Taverns” or “Taverns”). WOB Taverns operate under the Marks (defined below) and
under distinctive business formats, methods, procedures, designs, layouts,
signs, equipment, menus, recipes, trade dress, standards and specifications, all
of which we may improve, further develop or otherwise modify from time to time
(collectively, the “System”).

 

We use, promote and license certain trademarks, service marks and other
commercial symbols in the operation of WOB Taverns, including the trade name,
trademark and service mark “WORLD OF BEER®” and other associated logos, designs,
artwork and trade dress, which have gained and continue to gain public
acceptance and goodwill, and may create, use and license additional trademarks,
service marks and commercial symbols in conjunction with the operation of WOB
Taverns (collectively, the “Marks”).

 

We grant to persons who meet our qualifications and are willing to undertake the
investment and effort (each an “Area Developer”), the right to acquire
franchises to develop and operate a certain number of WOB Taverns within a
specific geographic area, subject to the terms and conditions of an Area
Development Agreement with us. You have applied for the right to be an Area
Developer. You understand and acknowledge that your right to own and operate
each WOB Tavern is governed by a separate franchise agreement. This Agreement
does not confer franchise rights.

 

Acknowledgments. You acknowledge and agree that:

 

you have read this Agreement and our Franchise Disclosure Document;

 

you understand and accept the terms, conditions and covenants contained in this
Agreement as being reasonably necessary to maintain our high standards of
quality and service and the uniformity of those standards at each WOB Tavern and
to protect and preserve the goodwill of the Marks;

 

you have conducted an independent investigation of the business venture
contemplated by this Agreement and recognize that, like any other business, the
nature of the business conducted by a WOB Tavern developer may evolve and change
over time;

 

 1 

 

 

an investment in a WORLD OF BEER® development business involves business risks
and that your business abilities and efforts are vital to the success of the
venture;

 

any information you acquire from other WOB Tavern franchisees or developers
relating to their sales, profits or cash flows does not constitute information
obtained from us, nor do we make any representation as to the accuracy of any
such information;

 

in all of their dealings with you, our officers, directors, employees and agents
act only in a representative, and not in an individual, capacity. All business
dealings between you and such persons as a result of this Agreement are solely
between you and us;

 

we have advised you to have this Agreement reviewed and explained to you by an
attorney; and

 

you have received our Franchise Disclosure Document at least 14 days before
signing a binding agreement or before making any payment to us or our
affiliate(s) relating to this Agreement.

 

Representations. As an inducement to our entry into this Agreement, you
represent and warrant to us that:

 

all statements you have made and all materials you have submitted to us in
connection with your purchase of these development rights and the unit
franchises are accurate and complete and you have made no misrepresentations or
material omissions in obtaining these rights or the franchises;

 

you will at all times faithfully, honestly and diligently perform your
obligations, continuously exert your best efforts to promote and enhance the
business and not engage in any other business or activity that conflicts with
your obligations to operate the business in compliance with this Agreement;

 

you will comply with and/or assist us to the fullest extent possible in our
efforts to comply with Executive Order 13224 issued by the President of the
United States, the USA PATRIOT Act, and all other present and future federal,
state and local laws, ordinances, regulations, policies, lists and any other
requirements of any governmental authority addressing or in any way relating to
terrorist acts and acts of war (the “Anti-Terrorism Laws”); and

 

neither you nor any of your owners, employees, agents, or property or interests
are subject to being “blocked” under any of the Anti-Terrorism Laws and that
neither you nor they are otherwise in violation of any of the Anti-Terrorism
Laws.

 

Our approval of your request to purchase these development rights is made in
reliance on all of your representations and warranties. Any violation of these
representations and warranties, or any Anti-Terrorism Laws, by you or your
owners, or your or your owners’ agents or employees, or any “blocking” of your
or their assets under the Anti-Terrorism Laws, will constitute grounds for
immediate termination of this Agreement and any other agreements you have
entered into with us or any of our affiliates.

 

 2 

 

 

No Warranties. We expressly disclaim the making of, and you acknowledge that you
have not received or relied upon, any warranty or guaranty, express or implied,
as to the revenues, sales, profits or success of the business venture
contemplated by this Agreement or the extent to which we will continue to
develop and expand the network of WOB Taverns. You acknowledge and understand
the following:

 

any statement regarding the potential or probable revenues, sales or profits of
the business venture, or of any services, benefits or commitments we are to make
available to you, are made solely in the Franchise Disclosure Document delivered
to you prior to signing this Agreement;

 

any statement regarding the potential or probable revenues, sales or profits of
the business venture or statistical information regarding any existing WOB
Tavern owned by us or our affiliates that is not contained in our Franchise
Disclosure Document is unauthorized, unwarranted and unreliable and should be
reported to us immediately; and

 

you have not received or relied on any representations about us or our
franchising program or policies made by us, or our officers, directors,
employees or agents, that are contrary to the statements made in our Franchise
Disclosure Document or to the terms of this Agreement. If there are any
exceptions to any of the foregoing, you agree to: (i) immediately notify our
president; and (ii) note such exceptions by attaching a statement of exceptions
to this Agreement prior to signing it.

 

Business Organization. If you are, or at any time become, a business
corporation, partnership, limited liability company or other legal entity
(“Business Entity”), you agree and represent that:

 

you have the authority to execute, deliver and perform your obligations under
this Agreement and are duly organized or formed and validly existing in good
standing under the laws of the state of your incorporation or formation;

 

your organizational or governing documents will recite that the issuance and
transfer of any ownership interests in you are restricted by the terms of this
Agreement, and all certificates and other documents representing ownership
interests in you will bear a legend referring to the restrictions of this
Agreement;

 

you will complete a “Principal Owner’s Statement,” which will completely and
accurately describe all of your owners and their interests in you, and everyone
who has voting or management rights and obligations. A copy of our current form
of Principal Owner’s Statement is attached to the Franchise Disclosure Document;

 

you and your owners agree to revise the Principal Owner’s Statement as may be
necessary to reflect any ownership changes and to furnish such other information
about your organization or formation as we may request (no ownership changes may
be made without our approval);

 

each of your owners during the term of this Agreement will sign and deliver to
us our standard form of Principal Owner’s Guaranty undertaking to be bound
jointly and severally by all provisions of this Agreement and any other
agreements between you and us. A copy of our current form of Principal Owner’s
Guaranty is attached to the Franchise Disclosure Document; and

 

at our request, you will furnish true and correct copies of all documents and
contracts governing the rights, obligations and powers of your owners and agents
(like articles of incorporation or organization and partnership, operating or
shareholder agreements).

 

 3 

 

 

2TERM

 

This Agreement commences on the Agreement Date and expires on the earlier of:
(i) the last day of the Development Schedule (as defined in Section 3.1); or
(ii) the opening of the last WOB Tavern specified in the Development Schedule.
This Agreement may be terminated before it expires in accordance with the
termination provisions of this Agreement. Upon expiration or termination of this
Agreement, you will not have any further rights to acquire franchises to operate
WOB Taverns, but you may continue to develop, own and operate all WOB Taverns
then subject to fully-executed franchise agreements with us in accordance with
their terms. Upon termination or expiration of this Agreement, we may operate,
or grant other persons the right to operate, WOB Taverns within the Development
Area (as defined below).

 

3GRANT OF DEVELOPMENT RIGHTS

 

Development Rights. During the term of this Agreement, subject to the terms and
conditions of this Agreement, we grant you the exclusive right to establish and
operate WOB Taverns within the geographic area described in Exhibit B (the
“Development Area”). The Development Area does not include, even though such
areas may be within the geographic area described in Exhibit B, airport
facilities, arenas, stadiums, universities or any other facility that operates
on a concessionaire basis. You agree that you will construct, open and maintain
in operation a minimum number of WOB Taverns in the Development Area on or
before the dates and time periods set forth on the development schedule (the
“Development Schedule”) attached as Exhibit B. Each WOB Tavern to be established
under this Agreement must be located in the Development Area. Within our
discretion, we may consider sites proposed by you outside the Development Area,
which will count toward the Development Schedule if approved by us in writing.
The operation of any WOB Tavern established pursuant to this Agreement will be
governed by an individual franchise agreement to be entered into between you and
us in accordance with Section 6 below (each a “Franchise Agreement”).

 

The rights granted to you pursuant to this Agreement are sometimes collectively
referred to herein as the “Development Rights”.

 

Development Schedule. You must (i) establish and open the specified minimum
number of Taverns on or before each of the dates specified in the Development
Schedule and (ii) maintain the specified minimum number of Taverns in continuous
operation as specified in the Development Schedule. Your failure to comply with
the foregoing requirements will constitute a default under this Agreement. You
understand that time is of the essence with respect to your obligations to
comply with the Development Schedule. You acknowledge and understand that this
Agreement requires you to open Taverns in the future pursuant to the Development
Schedule. You further acknowledge and understand that the estimated investment
requirement and fees and expenses set forth in our Franchise Disclosure Document
are subject to increase and change over time, and that future Taverns developed
under this Agreement will most likely require a greater initial investment and
increased operating capital than those detailed in the Franchise Disclosure
Document we provided to you in connection with the execution of this Agreement.

 

Effect of Failure. Strict compliance with the Development Schedule is of the
essence of this Agreement. If you do not timely meet your development
obligations as of the end of any time period shown on the Development Schedule,
you will be in default of your obligations under this Agreement. If such a
default occurs, it will constitute a material breach of this Agreement and we
may then, in our sole discretion, elect to:

 

terminate this Agreement;

 

 4 

 

 

have the right to operate (directly or through affiliates) or grant franchises
for the operation of WOB Taverns within the Development Area;

 

grant you an extension under the Development Schedule for such period of time
and for a non-refundable extension fee equal to the balance of the Franchise
Fees for the number of WOB Taverns remaining to be opened under the Development
Schedule; or

 

reduce the Development Schedule to a size and magnitude that we reasonably
believe you are capable of operating otherwise in accordance with this
Agreement.

 

4territorial protection and reservation of rights

 

Territorial Protection. You may establish the Taverns required to be developed
under this Agreement at any location within the Development Area provided that
we, in our sole discretion, consent in writing to the location. If you are in
full compliance with all of the provisions of this Agreement and all of the
Franchise Agreements, then during the term of this Agreement, we will not
operate (directly or through an affiliate), or grant a franchise for the
operation of, a full-service WOB Tavern at a fixed or permanent location within
the Development Area, except for: (i) those franchises granted to you pursuant
to this Agreement; (ii) any WOB Taverns open and operating in the Development
Area as of the Agreement Date; and (iii) any WOB Taverns located at Special
Locations (as defined in Section 4.2 below).

 

Rights Retained. We reserve all rights that we have not expressly granted to you
under this Agreement. We (and our affiliates) retain the right, in our sole
discretion, to:

 

establish and operate, and grant to others the right to establish and operate,
businesses under the System and Marks at any location outside of the Development
Area (even immediately outside the border of the Development Area, but not
within the protected territory granted under a Franchise Agreement for a WOB
Tavern affiliated with you), on such terms and conditions as we deem
appropriate;

 

establish and operate, and grant to others the right to establish and operate,
businesses of any kind whatsoever under other systems and using other
proprietary marks, both within and outside the Development Area, as we deem
appropriate;

 

establish and operate, and grant to others the right to establish and operate,
businesses using the Marks at any location within or outside the Development
Area, on such terms and conditions as we deem appropriate; provided, however,
that such other businesses will not be substantially similar to WOB Taverns if
located within the Development Area;

 

market, sell and provide the products and/or services authorized for sale by WOB
Taverns under the Marks or other trade names, trademarks, service marks and
commercial symbols through alternative channels (like mail order, kiosk,
co-branded sites and sites located within other retail businesses, Intranet,
Internet, websites, or other forms of e-commerce), including the sale and
distribution of products in grocery and other retail stores, for distribution
within and outside of your Development Area and pursuant to such terms and
conditions as we consider appropriate;

 

 5 

 

 

establish and operate, and license others to establish and operate, WOB Taverns
identified in whole or in part by the name and mark WORLD OF BEER® and/or
utilizing the System anywhere including the Development Area that are located in
facilities like airports, train stations, bus stations, service plazas,
stadiums, arenas, convention centers, military and governmental facilities,
educational institutions and campuses, hospitals, recreational theme parks,
business or industrial food service venues, venues in which food service is or
may be provided by a master of concessioner or contract food service provider,
warehouse clubs, Indian reservations, casinos, gas stations, convenience stores,
hotels, parks and other seasonal facilities, or any similar institutional or
captive market location not reasonably available to you ("Special Locations");

 

acquire the assets or ownership interests of one or more businesses providing
products and services similar to those provided at WOB Taverns, and franchising,
licensing or creating similar arrangements with respect to these businesses once
acquired, wherever these businesses (or the franchisees or licensees of these
businesses) are located or operating (including in your Development Area);

 

be acquired (whether through acquisition of assets, ownership interests or
otherwise, regardless of the form of transaction), by a business providing
products and services similar to those provided at WOB Taverns, or by another
business, even if such business operates, franchises and/or licenses Competitive
Businesses in the Development Area; and

 

engage in any other activity, action or undertaking that we are not expressly
prohibited from taking under this Agreement.

 

5DEVELOPMENT FEE

 

Amount and Consideration. We currently charge an initial franchise fee (the
“Franchise Fee”) of $50,000 for each WOB Tavern. The Franchise Fee for the
second and each subsequent WOB Tavern to be opened under this Agreement is
reduced to $45,000. When you sign this Agreement, you agree to pay us a
development fee (the “Development Fee”) equal to 100% of the Franchise Fee for
the first WOB Tavern plus ½ of the Franchise Fee for each additional WOB Tavern
to be developed under this Agreement. For example, if you commit to develop 5
Taverns, you will pay a Development Fee of $140,000, which is the sum of (i)
$50,000 for your first Tavern and (ii) $22,500 for each additional Tavern. You
acknowledge and agree that the Development Fee constitutes payment only for the
exclusive rights we grant to you under this Agreement, and that the Development
Fee is fully earned by us at the time this Agreement is executed and is not
refundable for any reason. Provided that a Tavern is established in accordance
with the Development Schedule, that portion of the Development Fee applicable to
the initial franchise fee due under the Franchise Agreement for such Tavern will
be credited against the payment of such Franchise Fee. In the event a Tavern is
not established in accordance with the Development Schedule, that portion of the
Development Fee that would have otherwise been credited against the payment of
the Franchise Fee will be forfeited and retained by us. If, for any reason, this
Agreement terminates before all or a portion of the Development Fee has been
applied to the Franchise Fees, we will retain the unapplied portion of the
Development Fee to compensate ourselves for our time, effort and foregone
opportunities.

 

Franchise Fees. As long as you are in compliance with the Development Schedule,
the amount of the Franchise Fee for the second and each subsequent Tavern to be
established under this Agreement is $45,000. The Franchise Fee for each Tavern
you develop is to be paid in addition to the Development Fee; provided, however,
that the Development Fee may be credited against Franchise Fees as provided for
in Section 5.1 above. Each Franchise Fee associated with a WOB Tavern, to the
extent any is due and owing, will be paid upon execution of the lease covering
such Tavern, which shall be not less than 120 days prior to the date the Tavern
must be open and operating in accordance with the Development Schedule.

 

 6 

 

 

6GRANT OF FRANCHISES.

 

Site Selection and Acceptance. You are responsible for locating proposed sites
for the WOB Taverns to be established under this Agreement. We, in our sole
discretion, may counsel and offer advice to you with respect to such site
selection; provided, however, that in no event will we be liable to you in
connection with providing advice or any assistance. Upon your selection of a
proposed site for a Tavern, you must promptly submit to us such site,
demographic and other data and information about the proposed site as we may
reasonably request, using such forms as we may require, and a copy of any lease,
sublease or purchase agreement to be entered into in connection with the
acquisition of such site. We will either accept or reject the proposed site
utilizing our then-current site selection policies and procedures. You agree to
obtain our prior written consent to the proposed site before you sign any lease,
sublease or binding purchase agreement for the proposed site. We have the right
to reject any proposed site if you are in default of this Agreement, any
Franchise Agreement, or any other agreement between you and us. You acknowledge
that we may withhold our consent to a proposed site for reasons based on our
good faith business judgment. We will, by delivery of written notice to you,
approve or disapprove each site proposed by you for the operation of a Tavern.
We agree to exert commercially reasonable efforts to notify you within 30 days
after we have received the site, demographic and other data and information we
have requested.

 

Effect of Approval. Our approval of the proposed site (including its location,
appearance and size) indicates only that we believe it falls within the
acceptable criteria we have established at that time. You acknowledge and agree
that:

 

our approval of the proposed site does not imply, assure, guaranty, warrant or
predict profitability or success, express or implied.

 

application of criteria that have been effective with respect to other sites may
not be predictive of the potential for all sites and that, subsequent to our
approval of a site, demographic and/or economic factors included in, or
excluding from, our criteria could change, thereby altering the potential of a
site;

 

the uncertainty and instability of such criteria are beyond our control and we
are not responsible for the failure of a site approved by us to meet
expectations as to potential revenue or operational criteria; and

 

your acceptance of a franchise for the operation of a Tavern at a site you
propose is based upon your own independent investigation of the suitability of
that location and that site even though we may provide guidance and assistance
to you in selecting the site for your Tavern.

 

Franchise Agreement. If we have approved the site, we will offer you a franchise
to operate a WOB Tavern at the proposed site by delivering to you a Franchise
Agreement in a form ready for signing by you. The Franchise Agreement will be
the standard form of Franchise Agreement we are then using to grant franchises
for WOB Taverns, except that the Franchise Fee will be reduced to $45,000 if the
Tavern is your second or a subsequent Tavern being developed under this
Agreement. The Franchise Fee for each Tavern must be paid on the date of the
Franchise Agreement for that Tavern, but consistent with Section 5 above. Within
30 days after your receipt of the Franchise Agreement, you must: (a) sign and
deliver such Franchise Agreement, together with any ancillary agreements
required by the Franchise Agreement, to us and (b) pay us the applicable
then-current Franchise Fee required by the Franchise Agreement, but consistent
with Section 5 above. If you do not timely sign and return such Franchise
Agreement and tender payment of the Franchise Fee, we may revoke our offer to
grant you a franchise to operate a Tavern at such proposed site.
Contemporaneously with the signing of the Franchise Agreement, each of your
direct or indirect owners must sign and deliver to us a Principal Owner’s
Guaranty in the form attached to the Franchise Agreement.

 

 7 

 

 

You understand that any obligation or liability you incur with respect to the
proposed Tavern or location before we have approved it in writing and
countersigned the Franchise Agreement is at your sole risk and will be your sole
responsibility. We will be under no obligation to execute and deliver a
Franchise Agreement unless you have complied in a timely manner with all of the
terms and conditions of this Agreement and satisfied all requirements set forth
herein to the execution of the Franchise Agreement. In addition, we will be
under no obligation to execute a Franchise Agreement if you are in breach or
default of any other Franchise Agreement, Area Development Agreement, or any
other agreement between you and us. If any Franchise Agreement contemplated by
this Agreement is executed by us, it will supersede this Agreement in all
respects and govern the relationship between the parties with respect to the
Tavern that is the subject matter of such Franchise Agreement.

 

7no right to operate or use marks

 

You acknowledge and agree that (i) until a Franchise Agreement has been entered
into for a specific Tavern, you will not have, nor be entitled to exercise, any
of the rights, powers and privileges granted by the Franchise Agreement,
including, without limitation, the right to use the Marks or the System; (ii)
the execution of this Agreement will not be deemed to grant any such rights,
powers or privileges to you; and (iii) you may not, under any circumstances,
commence operations of any WOB Tavern prior to our execution of a Franchise
Agreement for that particular Tavern.

 

8CONFIDENTIAL INFORMATION

 

Types of Confidential Information. We possess (and will continue to develop and
acquire) certain confidential information (the “Confidential Information”)
relating to the development and operation of WOB Taverns and Area Developers,
which includes (without limitation):

 

the System and the know-how related to its use;

 

plans, specifications, size and physical characteristics of WOB Taverns;

 

site selection criteria, land use and zoning techniques and criteria;

 

methods in obtaining licensing and meeting regulatory requirements;

 

sources, design and methods of use of equipment, furniture, forms, materials,
supplies, Websites, Internet or Intranet, “business to business” or “business to
customer” networks or communities and other e-commerce methods of business;

 

marketing, advertising and promotional programs for WOB Taverns;

 

staffing and delivery methods and techniques for personal services;

 

the selection, testing and training of managers and other employees for WOB
Taverns;

 

methods concerning the recruitment, qualification, investigation, selection,
testing and training of personnel for Taverns and Area Developers;

 

any computer software and related passwords we make available or recommend for
WOB Taverns;

 

 8 

 

 

methods, techniques, formats, specifications, procedures, information and
systems related to and knowledge of and experience in the development,
operation, advertising, marketing and franchising of WOB Taverns;

 

knowledge of specifications for and identities of and suppliers of certain
products, materials, supplies, furniture, furnishings and equipment;

 

serving methods, presentation methods, merchandising techniques and customer
retention programs;

 

recipes, formulas, preparation methods and serving techniques for food products;
and

 

knowledge of operating results and financial performance of WOB Taverns (other
than those operated by you or your affiliates).

 

Disclosure and Limitations on Use. We will disclose much of the Confidential
Information to you and personnel of the WOB Tavern by (i) furnishing our manuals
to you, consisting of such materials (including, as applicable, audiotapes,
videotapes, magnetic media, computer software and written materials) that we
generally furnish to Franchisees and Area Developers (the “Manuals”); and (ii)
providing training, guidance and assistance to you. In addition, in the course
of the operation of your Taverns or the performance of your duties as an Area
Developer, you or your employees may develop ideas, concepts, methods,
techniques or improvements (“Improvements”) relating to your Taverns or your
business as an Area Developer, which you agree to disclose to us. We will be
deemed to own the Improvements and may use them and authorize you and others to
use them in the operation of WOB Taverns or as Area Developers. Improvements
will then also constitute Confidential Information.

 

Confidentiality Obligations. You agree that your relationship with us does not
vest in you any interest in the Confidential Information other than the right to
use it in the development and operation of your Taverns, and that the use or
duplication of the Confidential Information in any other business would
constitute an unfair method of competition. You acknowledge and agree that the
Confidential Information is proprietary, includes trade secrets belonging to us
and our affiliates, and is disclosed to you or authorized for your use solely on
the condition that you agree, and you therefore do agree, that you:

 

will not use the Confidential Information in any other business or capacity;

 

will maintain the absolute confidentiality of the Confidential Information
during and after the term of this Agreement;

 

will not make unauthorized copies of any portion of the Confidential Information
disclosed via electronic medium, in written form or in other tangible form,
including, for example, the Manuals; and

 

will adopt and implement all reasonable procedures we may prescribe from time to
time to prevent unauthorized use or disclosure of the Confidential Information,
including restrictions on disclosure to your employees and the use of
nondisclosure and noncompetition agreements we may prescribe for employees or
others who have access to the Confidential Information.

 

Exceptions to Confidentiality. The restrictions on your disclosure and use of
the Confidential Information will not apply to the following:

 

 9 

 

 

disclosure or use of information, processes, or techniques which are generally
known and used in the retail alcohol establishment business (as long as the
availability is not because of a disclosure by you), provided that you have
first given us written notice of your intended disclosure and/or use; and

 

disclosure of the Confidential Information in judicial or administrative
proceedings when and only to the extent you are legally compelled to disclose
it, provided that you have first given us the opportunity to obtain an
appropriate protective order or other assurance satisfactory to us that the
information required to be disclosed will be treated confidentially.

 

9EXCLUSIVE RELATIONSHIP

 

You acknowledge and agree that we would be unable to protect Confidential
Information against unauthorized use or disclosure or to encourage a free
exchange of ideas and information among WOB Taverns if Area Developers were
permitted to hold interests in or perform services for a Competitive Business
(as defined below). You also acknowledge that we have granted these Development
Rights to you in consideration of and reliance upon your agreement to deal
exclusively with us. You agree that, during the term of this Agreement, neither
you nor any of your owners will, directly or indirectly (e.g., through a spouse
or child):

 

have any direct or indirect interest as a disclosed or beneficial owner in a
Competitive Business (as defined below), wherever located;

 

perform services as a director, officer, manager, employee, consultant,
representative, agent or otherwise for a Competitive Business, wherever located;

 

recruit or hire any person who is our employee or the employee of any WOB Tavern
owned by us, our affiliates or our franchisees without obtaining the prior
written permission of that person's employer; or

 

divert or attempt to divert any business or customer of the Tavern to any
Competitive Business or otherwise take any action injurious or prejudicial to
the goodwill associated with the Marks and the System.

 

The term “Competitive Business,” as used in this Agreement, means any business
or facility owning, operating or managing, or granting franchises or licenses to
others to do so, any bar, pub, tavern, restaurant, food or alcoholic beverage
service facility, or any retail establishment (like a liquor store or
convenience store) that (a) features beer, wine, and related products as a
primary menu item; (b) serves craft beer; or (c) has more than 6 beers on tap,
other than a WOB Tavern operated under a franchise agreement with us. This
Section does not prohibit you or your owners from having a direct or indirect
interest as a disclosed or beneficial owner in a publicly held Competitive
Business, as long as such securities represent less than 5% of the number of
shares of that class of securities which are issued and outstanding.

 

 10 

 

 

10MARKS

 

Ownership and Goodwill of Marks. Your right to use the Marks is derived solely
from this Agreement and the Franchise Agreements and limited to your operation
of the WOB Taverns at the Sites pursuant to and in compliance with the Franchise
Agreements and all standards and specifications we prescribe from time to time
during term of the Franchise Agreements. Your unauthorized use of the Marks will
be a breach of this Agreement and an infringement of our rights in and to the
Marks. You acknowledge and agree that your use of the Marks and any goodwill
established by such use will be exclusively for our benefit and that neither
this Agreement nor the Franchise Agreements confer any goodwill or other
interests in the Marks upon you (other than the right to operate the WOB Taverns
in compliance with the Franchise Agreements). All provisions of this Agreement
and the Franchise Agreements applicable to the Marks apply to any additional
proprietary trade and service marks and commercial symbols we authorize you to
use.

 

Limitations on Your Use of Marks. You agree to use the Marks as the sole
identification of the WOB Taverns, except that you agree to identify yourself as
the independent owner in the manner we prescribe in the Manuals or otherwise. We
will place a conspicuous notice at a place we designate in each of your Taverns
identifying you as its independent owner and operator. You agree not to remove,
destroy, cover or alter that notice without our prior consent. If you do not do
so, we may accomplish the notice or identification as we see fit, and you agree
to reimburse us for doing so. You may not use any Mark as part of any corporate
or legal business name or with any prefix, suffix or other modifying words,
terms, designs or symbols (other than logos we license to you), or in any
modified form, nor may you use any Mark in connection with the performance or
sale of any unauthorized services or products or in any other manner we have not
expressly authorized in writing. No Mark may be used in any advertising
concerning the transfer, sale or other disposition of any Tavern or an ownership
interest in you. You agree to display the Marks prominently in the manner we
prescribe at the Taverns, on supplies or materials we designate and in
connection with forms and advertising and marketing materials. You agree to give
such notices of trade and service mark registrations as we specify and to obtain
any fictitious or assumed name registrations required under applicable law.

 

Notification of Infringements and Claims. You agree to notify us immediately of
any apparent infringement or challenge to your use of any Mark, or of any claim
by any person of any rights in any Mark, and you agree not to communicate with
any person other than us, our attorneys and your attorneys in connection with
any such infringement, challenge or claim. We have sole discretion to take such
action as we deem appropriate and the right to control exclusively any
litigation, U.S. Patent and Trademark Office, U.S. Copyright Office proceeding
or any other administrative proceeding arising out of any such infringement,
challenge or claim or otherwise relating to any Mark. You agree to sign any and
all instruments and documents, render such assistance and do such acts and
things as, in the opinion of our attorneys, may be necessary or advisable to
protect and maintain our interests in any litigation or U.S. Patent and
Trademark Office, U.S. Copyright Office, or other proceeding or otherwise to
protect and maintain our interests in the Marks.

 

Discontinuance of Use of Marks. If it becomes advisable at any time in our sole
discretion for us and/or you to modify or discontinue the use of any Mark and/or
use one or more additional or substitute trade or service marks, including the
complete replacement of any Mark and usage of other marks (due to merger,
acquisition or otherwise), you agree to comply with our directions within a
reasonable time after receiving notice. We will reimburse you for your
reasonable direct expenses of changing any of the WOB Taverns’ signs. However,
we will not be obligated to reimburse you for any direct or indirect loss,
including loss of revenue attributable to any modified or discontinued Mark or
for any expenditures you make to promote a modified or substitute trademark or
service mark.

 

 11 

 

 

Indemnification. We will indemnify you against and reimburse you for all damages
for which you are held liable in any proceeding arising out of your authorized
use of any of our Marks, pursuant to and in compliance with this Agreement,
resulting from claims by third parties that your use of any of the Marks
infringes their trademark rights, and for all costs you reasonably incur in the
defense of any such claim in which you are named as a party, so long as you have
timely notified us of the claim and have otherwise complied with the terms of
this Agreement. We will not indemnify you against the consequences of your use
of the Marks except in accordance with the requirements of this Agreement. You
must provide written notice to us of any such claim within 10 days of your
receipt of such notice and you must tender the defense of the claim to us. We
will have the right to defend any such claim and if we do so, we will have no
obligation to indemnify or reimburse you for any fees or disbursements of any
attorney retained by you. If we elect to defend the claim, we will have the
right to manage the defense of the claim including the right to compromise,
settle or otherwise resolve the claim, and to determine whether to appeal a
final determination of the claim.

 

11TRANSFERS

 

By Us. This Agreement is fully transferable by us, and inures to the benefit of
any assignee or other legal successor to our interest, as long as such assignee
or successor agrees to be bound by, and assumes all of our continuing
obligations under this Agreement.

 

By You. You understand and acknowledge that the rights and duties created by
this Agreement are personal to you (or your owners) and that we have granted our
approval of you as an Area Developer in reliance upon our perceptions of the
individual or collective character, skill, aptitude, attitude, business ability
and financial capacity of you (or your owners). Therefore, neither this
Agreement (nor any interest in it) nor any part or all of the ownership or other
interest in you, your Tavern(s) or your Development Rights may be transferred by
you or your owners without our prior written approval. Any such transfer without
our prior written approval constitutes a breach of this Agreement and is void
and of no effect. As used in this Agreement, the term “transfer” includes your
(or your owners') voluntary, involuntary, direct or indirect assignment, sale,
gift or other disposition of any interest in: (a) this Agreement; (b) you; (c)
your Tavern(s); or (d) your Development Rights.

 

Franchise Transfers. A transfer of any Tavern developed pursuant to this
Agreement may be made only in connection with the transfer of the Franchise
Agreement for such Tavern, and a transfer of the Franchise Agreement for any
such Tavern may be made only in connection with the transfer of all interests of
yours in such Tavern (or the affiliate that owns such Tavern).

 

Franchise Transfers; Conditions for Approval of Transfer.

 

Application: If you (or, if you are a Business Entity, your owners) are in full
compliance with this Agreement and all of the Franchise Agreements, we will not
unreasonably withhold our approval of a transfer that meets all the applicable
requirements of this Section. The proposed transferee and its owners must be
individuals of good moral character and otherwise meet our then applicable
standards for area developers.

 

Development Rights: If the transfer is of the Development Rights granted under
this Agreement or a controlling interest in the Developer, or is one of a series
of transfers which in the aggregate constitute the transfer of the Development
Rights granted under this Agreement or a controlling interest in the Developer,
all of the following conditions must be met prior to or concurrently with the
effective date of the transfer:

 

the transferee must have sufficient business experience, aptitude and financial
resources to operate your business and develop the Taverns and assume your
obligations as an Area Developer;

 

you must transfer all of the Taverns you have developed under this Agreement;

 

you have paid all amounts owed to us or our affiliates which are then due and
unpaid and submit all required reports and statements which have not yet been
submitted, under this Agreement, any Franchise Agreement or any other agreement
between you (or an affiliate) and us (or our affiliates);

 

 12 

 

 

the transferee (or its owners) and personnel have agreed to complete our initial
training program to our satisfaction;

 

the transferee must agree to be bound by and expressly assume all of the terms
and conditions of this Agreement for the remainder of its term;

 

you (and your transferring owners) have signed a general release, in form
satisfactory to us, of any and all claims against us, our affiliates and our and
their respective shareholders, officers, directors, employees and agents;

 

we must approve the material terms and conditions of such transfer and determine
that the price and terms of payment are not so burdensome as to affect adversely
the future development of the Development Area or the transferee’s operation of
its Taverns;

 

if the transferee finances any part of the sale price of the transferred
interest, you (and your transferring owners) must agree that all obligations of
the transferee under or pursuant to any promissory notes, agreements or security
interests reserved by you (or your owners) must be subordinate to transferee's
obligations to us and our affiliates to comply with this Agreement or Franchise
Agreements executed by the transferee;

 

you (and your transferring owners) have signed and delivered to us a
non-competition covenant in favor or us and the transferee, agreeing to be
bound, commencing on the effective date of the transfer, by the restrictions
contained in this Agreement;

 

you have paid us a transfer fee equal to $5,000 for each WOB Tavern for which a
Franchise Agreement has not been executed; and

 

you have paid us the transfer fees in accordance with the terms and conditions
of any and all executed Franchise Agreements being transferred in accordance
with the transfer of your Development Rights.

 

In connection with any transfer permitted under this Section, you agree to
provide us with all documents to be signed by you and the proposed assignee or
transferee at least 30 business days prior to signing.

 

Right of First Refusal. If you (or your owners) at any time determine to
transfer this Agreement (as defined above) you will obtain a bona fide, signed
written offer and earnest money deposit (in the amount of 5% or more of the
offering price) from a responsible and fully disclosed purchaser and submit an
exact copy of such offer to us. The offer must apply only to an interest in this
Agreement or you. It must not include the purchase of any other property or
rights of you (or your owners). The offer must completely describe the purchase
price, payment terms, terms of the assumption of liabilities and all other
material terms of the transfer (including all exhibits and other information so
that we may readily determine the foregoing). Within 30 days from the date we
receive the copy of such offer, we may purchase your rights under this Agreement
and the assets of your business on the terms and conditions contained in the
offer provided to us, except that:

 

 13 

 

 

we may substitute cash for any form of payment proposed in the offer (with a
discounted amount if an interest rate will be charged on any deferred payments);

 

our credit will be deemed equal to the credit of any proposed purchaser;

 

we will have no less than 90 days to prepare for a closing; and

 

we are entitled to receive, and you and your owners agree to make, all customary
representations and warranties given by the seller of the assets of a business
or with the capital stock of an incorporated business, as applicable, including,
without limitation, representations and warranties as to:

 

ownership and condition of and title to stock or other forms of ownership
interests and/or assets;

 

liens and encumbrances relating to the stock or other ownership interests and/or
assets; and

 

validity of contracts and the liabilities contingent or otherwise of the
corporation whose stock is being purchased.

 

The 30-day period will not commence until you have delivered to us full and
complete documentation to enable us to fully evaluate the offer. If we do not
exercise our right of first refusal, you or your owners may complete the
transfer on the terms contained in the offer, subject to our approval of the
transfer as described in this Section of this Agreement. If the transfer as
described in the offer is not completed within 120 days after delivery of the
offer to us, or if there is a material change in the terms of the transfer, we
will again have the right of first refusal as described in this Agreement.

 

Transfer to a Business Entity. If you are in full compliance with this
Agreement, you may transfer this Agreement to a Business Entity that conducts no
business other than as an Area Developer and in developing and operating Taverns
granted under this Agreement, and, if applicable, other Taverns or services as
an Area Developer, so long as you own, control and have the right to vote 51% or
more of the issued and outstanding ownership interests of the Business Entity
(like stock or partnership interests) and you guarantee its performance under
this Agreement. All other owners are subject to our approval. The organizational
or governing documents of the Business Entity must recite that the issuance and
transfer of any ownership interests in the Business Entity are restricted by the
terms of this Agreement, are subject to our approval, and all certificates or
other documents representing ownership interests in the Business Entity must
bear a legend referring to the restrictions of this Agreement. As a condition of
our approval of the issuance or transfer of ownership interests to any person
other than you, we may require (in addition to the other requirements we have
the right to impose) that the proposed owner sign an agreement, in a form
provided or approved by us, agreeing to be bound jointly and severally by, to
comply with, and to guarantee the performance of, all of your obligations under
this Agreement.

 

 14 

 

 

Death or Permanent Disability. Upon your death or permanent disability or, if
you are a Business Entity, the death or disability of the owner of a controlling
interest in you, your or such owner’s executor, administrator, conservator or
other personal representative must transfer your interest in this Agreement or
such owner’s interest in you to a third party. Such disposition of this
Agreement or the interest in you (including, without limitation, transfer by
bequest or inheritance) must be completed within a reasonable time, not to
exceed 6 months from the date of death or disability, and will be subject to all
of the terms and conditions applicable to transfers contained in this Section
11. A failure to transfer your or such owner’s interest within this time period
constitutes a breach of this Agreement. For purposes of this Agreement, the
terms “disability” means a mental or physical disability, impairment or
condition that is reasonably expected to prevent or actually does prevent you or
an owner of a controlling interest in you from performing your duties as an Area
Developer pursuant to this Agreement. Our consent to a transfer of any interest
subject to the restrictions of this Section does not constitute a waiver of any
claims we may have against the assignor; nor will it be deemed a waiver of our
right to demand the assignee’s exact compliance with any of the terms or
conditions of this Agreement or any Franchise Agreements.

 

12TERMINATION

 

Termination by You. You may terminate this Agreement if you (and your owners)
are in substantial compliance with this Agreement and we materially breach this
Agreement and do not correct or commence correction of such failure within 60
days after written notice of such material failure is delivered to us. You
termination of this Agreement for any other reason or without such notice will
be deemed a termination without cause.

 

Termination by Us. We may immediately terminate this Agreement effective upon
written notice to you, without opportunity to cure, if:

 

you (or any of your owners) have made any material misrepresentation or omission
in connection with your purchase of these Development Rights or any of the
Taverns;

 

you fail to establish and open Taverns in accordance with the Development
Schedule;

 

you fail to maintain in continuous operation the minimum cumulative number of
Taverns required by the Development Schedule to be in operation during the
applicable time period;

 

you fail to pay when due any amount owed to us or our affiliates, whether under
this Agreement or not, and do not correct such failure within 10 days after
written notice of such failure is delivered to you;

 

you fail to pay when due any amount owned to any creditor, supplier or lessor of
any Tavern developed hereunder or any taxing authority for any federal, state or
local taxes (other than amounts being bona fide disputed through appropriate
proceedings) and you do not correct such failure within 10 days after written
notice of such failure is delivered to you;

 

you surrender or transfer control of this Agreement, the Development Rights or
one or more of your Taverns without our prior written consent;

 

you (or any of your owners) are or have been convicted by a trial court of, or
plead or have pleaded no contest or guilty to, a felony or other serious crime
or offense that is likely to adversely affect the reputation of the System and
the goodwill associated with the Marks;

 

you (or any of your owners) engage in any dishonest or unethical conduct which
may adversely affect your reputation, our reputation, or the reputation of the
System and the goodwill associated with the Marks;

 

you (or any of your owners) make an unauthorized assignment of this Agreement,
your Development Rights, and ownership interest in you (if you are a Business
Entity), or an interest in one or more of your Tavern(s);

 

 15 

 

 

in the event of your death or disability (or the death or disability of the
owner of a controlling interest in you), this Agreement (or such owner’s
interest in you) is not assigned as required under this Agreement;

 

you (or any of your owners) make any unauthorized use of the Marks or any
unauthorized use or disclosure of any Confidential Information;

 

you (or any of your owners) make an assignment for the benefit of creditors or
admit in writing your insolvency or inability to pay your debts generally as
they become due; or you (or any of your owners) consent to the appointment of a
receiver, trustee or liquidator of all or the substantial part of your property;
or any order appointing a receiver, trustee or liquidator is not vacated within
30 days following the entry of such order;

 

we have delivered to you a notice of termination of a Franchise Agreement in
accordance with its terms and conditions or you have terminated a Franchise
Agreement without cause, as defined in such agreement;

 

you fail to comply with any other provision of this Agreement or any other
agreement with us or our affiliates and do not correct such failure within 30
days after written notice of such failure to comply is delivered to you; or

 

you fail on 2 or more separate occasions within any 12 consecutive month period
or on 3 occasions during the term of this Agreement to comply with this
Agreement or any Franchise Agreement, after we have notified you of the failure
(pursuant to the terms of this Agreement or such Franchise Agreement), whether
or not such failures to comply are corrected after notice of the failure is
delivered to you.

 

13RIGHTS AND OBLIGATIONS ON TERMINATION

 

Continuing Obligations. All of the obligations under this Agreement which
expressly or by their nature survive the expiration or termination of this
Agreement continue in full force and effect subsequent to and notwithstanding
the expiration or termination of this Agreement, until they are satisfied in
full or by their nature expire.

 

Payment of Amounts Owed to Us. You agree to pay us and our affiliates all
amounts owed to us and our affiliates within the later of: (i) 15 days after the
effective date of termination of expiration of this Agreement; or (ii) the date
such amounts are due.

 

Competitive Restrictions. Upon termination or expiration of this Agreement for
any reason whatsoever, you and your owners agree that, for a period of 2 years
commencing on the effective date of termination or expiration (and for such
longer period of time as may be provided in any applicable Franchise Agreement),
neither you nor any of your owners will, directly or indirectly (e.g., through a
spouse or child):

 

have any direct or indirect interest as a disclosed or beneficial owner in any
Competitive Business located or operating within the Development Area or within
10 miles of any WOB Tavern in operation or under construction on the effective
date of the termination or expiration of this Agreement;

 

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perform services as a director, officer, manager, employee, consultant,
representative, agent or otherwise for any Competitive Business located or
operating within the Development Area or within 10 miles of any WOB Tavern in
operation or under construction on the effective date of the termination or
expiration of this Agreement;

 

recruit or hire any person who is our employee or the employee of any WOB Tavern
owned by us, our affiliates or our franchisees without obtaining the prior
written permission of that person’s employer; or

 

divert or attempt to divert any business or customer of WOB Taverns to any
Competitive Business or otherwise take any action injurious or prejudicial to
the goodwill associated with the Marks and the System.

 

If any person restricted by this Section refuses voluntarily to comply with the
foregoing obligations, the 2 year period will be extended by the period of
noncompliance. You and your owners expressly acknowledge that you possess skills
and abilities of a general nature and have other opportunities for exploiting
such skills. Consequently, enforcement of the covenants made in this Section
will not deprive you of your personal goodwill or ability to earn a living.

 

Grant of Franchises. Upon termination or expiration of this Agreement for any
reason, your rights under this Agreement will terminate and you agree to
immediately and permanently cease your development activities. We will then have
no further obligation to grant you additional franchises for WOB Taverns and
will be free to operate, or grant other persons franchises to operate, WOB
Taverns within the Development Area.

 

Marks and Confidential Information. Except in connection with Taverns you are
then operating under Franchise Agreements, or with respect to which a Franchise
Agreement has been signed, you agree to immediately and permanently cease to
use, by advertising or in any manner whatsoever, the Marks and the Confidential
Information; slogan, trademarks, trade names, service marks, designs, trade
dress or logos which are similar in nature to the Marks; or any equipment,
materials, forms, confidential methods, procedures, recipes and techniques
associated with or similar to the WORLD OF BEER® System or which display the
Marks or any other distinctive forms, slogans, signs, symbols, trade dress or
devices associated with or belonging to us.

 

14RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.

 

Independent Contractors. You and we understand and agree that this Agreement
does not create a fiduciary relationship between the parties. We and you are
independent contractors. Nothing in this Agreement is intended to make either
party a general or special agent, joint venturer, partner or employee of the
other for any purpose. You agree to conspicuously identify yourself in all
dealings as the owner of development rights granted under an Area Development
Agreement with us in the ways we specify for doing so. If you do not, we may
place such notices to accomplish the foregoing and you must reimburse us for
doing so. You agree to place notices of independent ownership on such forms,
business cards, stationery, advertising and other materials as we may require
from time to time. If you do not do so, we may place the notices and accomplish
the foregoing as we see fit, and you must reimburse us for doing so.

 

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No Liability for Acts of Other Party. You agree not to employ any of the Marks
in signing any contract or applying for any license or permit, or in a manner
that may result in our liability for any of your indebtedness or obligations,
and you further agree not to use the Marks in any way we have not expressly
authorized. Neither we nor you will (i) make any express or implied agreements,
warranties, guarantees or representations, or incur any debt in the name, or on
behalf, of the other; (ii) represent that our respective relationship is other
than franchisor and area developer/franchisee; or (iii) be obligated by, or have
any liability under, any agreements or representations made by the other that
are not expressly authorized in writing. We will not be obligated for any
damages to any person or property directly or indirectly arising out of the
operation of the Center(s) you conduct pursuant to this Agreement.

 

Taxes. We will have no liability for any sales, use, service, occupation,
excise, gross receipts, income, payroll, property or other taxes, whether levied
upon you or your assets or upon us, arising in connection with the business
conducted by you pursuant to this Agreement or any Franchise Agreement (except
any taxes we are required by law to collect from you with respect to purchases
from us). Payment of all such taxes is solely your responsibility.

 

Indemnification. Subject to Section 16.1, you agree to indemnify, defend and
hold us and our affiliates and our respective shareholders, directors, officers,
employees, agents, successors and assignees (the “Indemnified Parties”) harmless
from and against, and to reimburse any one or more of the Indemnified Parties
for, all claims, obligations and damages described in this Section, any and all
taxes described in this Agreement and any and all claims and liabilities
directly or indirectly arising out of the operation of one or more of your WOB
Taverns (even if our negligence is alleged, but not proven), your operations as
an Area Developer, or your breach of this Agreement. For purposes of this
indemnification, “claims” means and includes all obligations, damages (actual,
consequential or otherwise) and costs reasonably incurred in the defense of any
claim against any of the Indemnified Parties, including, without limitation,
reasonable accountants', arbitrators', attorneys' and expert witness fees, costs
of investigation and proof of facts, court costs, other expenses of litigation,
arbitration or alternative dispute resolution and travel and living expenses.
The Indemnified Parties have the right to defend any such claim against them in
such manner as they deem appropriate or desirable in their sole discretion. This
indemnity will continue in full force and effect subsequent to and
notwithstanding the expiration or termination of this Agreement. Under no
circumstances will we or any other Indemnified Party be required to seek
recovery from any insurer or other third party, or otherwise to mitigate our,
their or your losses and expenses, in order to maintain and recover fully a
claim against you. You agree that a failure to pursue such recovery or mitigate
a loss will in no way reduce or alter the amounts we or another Indemnified
Party may recover from you.

 

15ENFORCEMENT

 

Conflicts with Other Agreements. In the event that one or more of the provisions
of this Agreement are inconsistent with one or more provisions governing the
same or similar subject matter in a separate agreement with us, the provisions
providing the greatest protection to us, or imposing the greatest burden on you,
will govern.

 

Severability; Substitution of Valid Provisions. Except as otherwise stated in
this Agreement, each provision of this Agreement, and any portion of any
provision, are severable. The remainder of this Agreement will continue in full
force and effect. To the extent that any provision restricting your competitive
activities is deemed unenforceable, you and we agree that such provisions will
be enforced to the fullest extent permissible under governing law. This
Agreement will be deemed automatically modified to comply with such governing
law if any applicable law requires: (a) a greater prior notice of the
termination of or refusal to renew this Agreement; or (b) the taking of some
other action not described in this Agreement. We may modify such invalid or
unenforceable provision to the extent required to be valid and enforceable. In
such event, you will be bound by the modified provisions.

 

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Waivers. We will not be deemed to have waived our right to demand exact
compliance with any of the terms of this Agreement, even if at any time: (a) we
do not exercise a right or power available to us under this Agreement; or (b) we
do not insist on your strict compliance with the terms of this Agreement; or
(c) if there develops a custom or practice which is at variance with the terms
of this Agreement; or (d) if we accept payments which are otherwise due to us
under this Agreement. Similarly, our waiver of any particular breach or series
of breaches under this Agreement or of any similar term in any other agreement
between you and us or between us and any other franchise owner, will not affect
our rights with respect to any later breach by you or anyone else.

 

Limitation of Liability. Neither of the parties will be liable for loss or
damage or deemed to be in breach of this Agreement if failure to perform
obligations results from:

 

compliance with any law, ruling, order, regulation, requirement or instruction
of any federal, state or municipal government or any department or agency
thereof;

 

acts of God, terror, war or similar events;

 

acts or omissions of a similar event or cause.

 

However, such events or delays do not excuse payments of amounts owed at any
time.

 

Approval and Consents. Whenever this Agreement requires our advance approval,
agreement or consent, you agree to make a timely written request for it. Our
approval or consent will not be valid unless it is in writing. Except where
expressly stated otherwise in this Agreement, we have the absolute right to
refuse any request by you or to withhold our approval of any action or omission
by you. If we provide to you any waiver, approval, consent, or suggestion, or if
we neglect or delay our response or deny any request for any of those, we will
not be deemed to have made any warranties or guarantees which you may rely on,
and will not assume any liability or obligation to you.

 

Waiver of Punitive Damages. EXCEPT FOR YOUR OBLIGATIONS TO INDEMNIFY US AND
CLAIMS FOR UNAUTHORIZED USE OF THE MARKS OR CONFIDENTIAL INFORMATION, YOU AND WE
EACH WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY RIGHT TO, OR CLAIM FOR, ANY
PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER. YOU AND WE ALSO AGREE THAT, IN
THE EVENT OF A DISPUTE BETWEEN YOU AND US, THE PARTY MAKING A CLAIM WILL BE
LIMITED TO EQUITABLE RELIEF AND RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS.

 

Limitations of Claims. ANY AND ALL CLAIMS ARISING OUT OF THIS AGREEMENT OR THE
RELATIONSHIP AMONG YOU AND US MUST BE MADE BY WRITTEN NOTICE TO THE OTHER PARTY
WITHIN 1 YEAR FROM THE OCCURRENCE OF THE FACTS GIVING RISE TO SUCH CLAIM
(REGARDLESS OF WHEN IT BECOMES KNOWN), EXCEPT FOR CLAIMS ARISING FROM:
(A) CLAIMS FOR INDEMNIFICATION; AND/OR (B) UNAUTHORIZED USE OF THE MARKS.
HOWEVER, THIS PROVISION DOES NOT LIMIT THE RIGHT TO TERMINATE THIS AGREEMENT IN
ANY WAY.

 

 19 

 

 

Governing Law. EXCEPT TO THE EXTENT THIS AGREEMENT OR ANY PARTICULAR DISPUTE IS
GOVERNED BY THE U.S. TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §1051 AND THE
SECTIONS FOLLOWING IT) OR OTHER FEDERAL LAW, THIS AGREEMENT AND THE FRANCHISE
ARE GOVERNED BY FLORIDA LAW WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
EXCLUDING ANY LAW REGULATING THE SALE OF FRANCHISES OR GOVERNING THE
RELATIONSHIP BETWEEN A FRANCHISOR AND FRANCHISEE, UNLESS THE JURISDICTIONAL
REQUIREMENTS OF SUCH LAWS ARE MET INDEPENDENTLY WITHOUT REFERENCE TO THIS
SECTION. ALL MATTERS RELATING TO ARBITRATION ARE GOVERNED BY THE FEDERAL
ARBITRATION ACT. References to any law or regulation also refers to any
successor laws or regulations and any implementing regulations for any statute,
as in effect at the relevant time. References to a governmental agency also
refer to any successor regulatory body that succeeds to the function of such
agency.

 

Jurisdiction. YOU AND WE CONSENT, AND IRREVOCABLY SUBMIT TO, THE EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS OF COMPETENT JURISDICTION
FOR HILLSBOROUGH COUNTY, FLORIDA, AND WAIVE ANY OBJECTION TO THE JURISDICTION
AND VENUE OF SUCH COURTS. THE EXCLUSIVE CHOICE OF JURISDICTION DOES NOT PRECLUDE
THE BRINGING OF ANY ACTION BY THE PARTIES FOR THE ENFORCEMENT OF ANY JUDGMENT
OBTAINED IN ANY SUCH JURISDICTION, IN ANY OTHER APPROPRIATE JURISDICTION OR THE
RIGHT OF THE PARTIES TO CONFIRM OR ENFORCE ANY ARBITRATION AWARD IN ANY
APPROPRIATE JURISDICTION.

 

Waiver of Jury Trial. YOU AND WE EACH IRREVOCABLY WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY
EITHER YOU OR US.

 

Cumulative Remedies. The rights and remedies provided in this Agreement are
cumulative and neither you nor we will be prohibited from exercising any other
right or remedy provided under this Agreement or permitted by law or equity.

 

Costs and Attorneys' Fees. If a claim for amounts owed by you to us or any of
our affiliates is asserted in any legal or arbitration proceeding or if either
you or we are required to enforce this Agreement in a judicial or arbitration
proceeding, the party prevailing in such proceeding will be entitled to
reimbursement of its costs and expenses, including reasonable accounting and
attorneys fees. Attorneys fees will include, without limitation, reasonable
legal fees charged by attorneys, paralegal fees, and costs and disbursements,
whether incurred prior to, or in preparation for, or contemplation of, the
filing of written demand or claim, action, hearing, or proceeding to enforce the
obligations of the parties under this Agreement.

 

Binding Effect. This Agreement is binding on and will inure to the benefit of
our successors and assigns. Except as otherwise provided in this Agreement, this
Agreement will also be binding on your successors and assigns, and your heirs,
executors and administrators.

 

Entire Agreement. This Agreement, all exhibits to this Agreement and all
ancillary agreements executed contemporaneously with this Agreement constitute
the entire agreement between the parties with reference to the subject matter of
this Agreement and supersede any and all prior negotiations, understandings,
representations and agreements. Notwithstanding the foregoing, nothing in this
Agreement shall disclaim or require Franchisee to waive reliance on any
representation that Franchisor made in the most recent disclosure document
(including its exhibits and amendments) that Franchisor delivered to Franchisee
or its representative, subject to any agreed-upon changes to the contract terms
and conditions described in that disclosure document and reflected in this
Agreement (including any riders or addenda signed at the same time as this
Agreement). Except as expressly provided otherwise in this Agreement, this
Agreement may be modified only by written agreement signed by both you and us.

 

No Liability to Others; No Other Beneficiaries. We will not, because of this
Agreement or by virtue of any approvals, advice or services provided to you, be
liable to any person or legal entity who is not a party to this Agreement.
Except as specifically described in this Agreement, no other party has any
rights because of this Agreement.

 

Construction. The headings of the sections are for convenience only. If two or
more persons are at any time developers hereunder, whether or not as partners or
joint venturers, their obligations and liabilities to us are joint and several,
and the term “you” refers to all of them. This Agreement may be executed in
multiple counterparts, each of which will be deemed an original and together
will constitute one and the same instrument. “A or B” means “A” or “B” or both.

 

 20 

 

 

Certain Definitions. The term “family member” refers to parents, spouses,
offspring and siblings, and the parents and siblings of spouses. The term
“affiliate” means any Business Entity directly or indirectly owned or controlled
by a person, under common control with a person or controlled by a person. The
terms “developer, franchisee, franchise owner, you and your” are applicable to
one or more persons or a Business Entity, as the case may be. The singular use
of any pronoun also includes the plural and the masculine and neuter usages
include the other and the feminine. The term “person” includes individuals,
corporations, partnerships (general or limited), limited liability companies,
and all artificial or legal entities. The term “section” refers to a section or
subsection of this Agreement. The word “control” means the power to direct or
cause the direction of management and policies. The word “owner” means any
person holding a direct or indirect, legal or beneficial ownership interest or
voting rights in another person (or a transferee of this Agreement or an
interest in you), including any person who has a direct or indirect interest in
you or this Agreement and any person who has any other legal or equitable
interest, or the power to vest in himself any legal or equitable interest, in
the revenue, profits, rights or assets.

 

Timing. Time is of the essence of this Agreement. It will be a material breach
of this Agreement to fail to perform any obligation within the time required or
permitted by this Agreement. In computing time periods from one date to a later
date, the words “from” and “commencing on” (and the like) mean “from and
including”; and the words “to,” “until” and “ending on” (and the like) mean “to
but excluding.” Indications of time of day mean Tampa, Florida time.

 

Private Disputes. ANY DISPUTE AND ANY LITIGATION WILL BE CONDUCTED AND RESOLVED
ON AN INDIVIDUAL BASIS ONLY AND NOT A CLASS-WIDE, MULTIPLE PLAINTIFF OR SIMILAR
BASIS. ANY SUCH PROCEEDING WILL NOT BE CONSOLIDATED, EXCEPT FOR DISPUTES
INVOLVING AFFILIATES OF THE PARTIES.

 

16DISPUTE RESOLUTION

 

Mediation. During the term of this Agreement, certain disputes may arise between
you and us that may be resolvable through mediation. To facilitate such
resolution, you and we agree each party must, before commencing any arbitration
proceeding, submit the dispute to non-binding mediation at a mutually agreeable
location (if you and we cannot agree on a location, the mediation will be
conducted at our headquarters) to 1 mediator, appointed under the American
Arbitration Association's Commercial Mediation Rules. The mediator will conduct
the mediation in accordance with those rules. You and we agree that any
statements made by either you or us in any such mediation proceedings will not
be admissible in any subsequent arbitration or legal proceeding. Each party will
bear its own costs and expenses of conducting the mediation and share equally
the cost of any third parties who are required to participate. Nevertheless,
both you and we have the right in a proper case to obtain temporary restraining
orders and temporary or preliminary injunctive relief from a court of competent
jurisdiction. However, the parties must immediately and contemporaneously submit
the dispute for non-binding mediation. If the dispute between you and us cannot
be resolved through mediation within 60 days following the appointment of the
mediator, the parties must submit the dispute to arbitration subject to the
following terms and conditions.

 

 21 

 

 

Agreement to Arbitrate. EXCEPT FOR DISPUTES (AS DEFINED BELOW) RELATED TO OR
BASED ON THE MARKS (WHICH AT OUR SOLE OPTION MAY BE SUBMITTED TO ANY COURT OF
COMPETENT JURISDICTION) AND EXCEPT AS OTHERWISE EXPRESSLY PROVIDED BY THIS
AGREEMENT, ANY LITIGATION, CLAIM, DISPUTE, SUIT, ACTION, CONTROVERSY, PROCEEDING
OR OTHERWISE (“DISPUTE”) BETWEEN OR INVOLVING YOU AND US (AND/OR INVOLVING YOU
AND/OR ANY CLAIM AGAINST OR INVOLVING ANY OF OUR OR OUR AFFILIATES'
SHAREHOLDERS, DIRECTORS, PARTNERS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS,
ACCOUNTANTS, AFFILIATES, GUARANTORS OR OTHERWISE), WHICH ARE NOT RESOLVED WITHIN
45 DAYS OF NOTICE FROM EITHER YOU OR WE TO THE OTHER, WILL BE SUBMITTED TO
ARBITRATION TO THE PLACE OF BUSINESS OF THE AMERICAN ARBITRATION ASSOCIATION
CLOSEST TO OUR HEADQUARTERS IN TAMPA, FLORIDA. THE ARBITRATION WILL BE CONDUCTED
BY THE AMERICAN ARBITRATION ASSOCIATION PURSUANT TO ITS COMMERCIAL ARBITRATION
RULES. ALL MATTERS RELATING TO ARBITRATION WILL BE GOVERNED BY THE FEDERAL
ARBITRATION ACT (9 U.S.C. §§1, ET SEQ.) AND NOT BY ANY STATE ARBITRATION LAW.
THE PARTIES TO ANY ARBITRATION WILL EXECUTE AN APPROPRIATE CONFIDENTIALITY
AGREEMENT, EXCEPTING ONLY SUCH DISCLOSURES AND FILINGS AS ARE REQUIRED BY LAW.

 

Place and Procedure. THE ARBITRATION PROCEEDINGS WILL BE CONDUCTED AT OUR
HEADQUARTERS IN TAMPA, FLORIDA. ANY DISPUTE AND ANY ARBITRATION WILL BE
CONDUCTED AND RESOLVED ON AN INDIVIDUAL BASIS ONLY AND NOT A CLASS-WIDE,
MULTIPLE PLAINTIFF OR SIMILAR BASIS. ANY SUCH ARBITRATION PROCEEDING WILL NOT BE
CONSOLIDATED WITH ANY OTHER ARBITRATION PROCEEDING INVOLVING ANY OTHER PERSON,
EXCEPT FOR DISPUTES INVOLVING AFFILIATES OF THE PARTIES TO SUCH ARBITRATION. THE
PARTIES AGREE THAT, IN CONNECTION WITH ANY SUCH ARBITRATION PROCEEDING, EACH
MUST SUBMIT OR FILE ANY CLAIM WHICH WOULD CONSTITUTE A COMPULSORY COUNTERCLAIM
(AS DEFINED BY RULE 13 OF THE FEDERAL RULES OF CIVIL PROCEDURE) WITHIN THE SAME
PROCEEDING AS THE DISPUTE TO WHICH IT RELATES. ANY SUCH DISPUTE WHICH IS NOT
SUBMITTED OR FILED IN SUCH PROCEEDING WILL BE BARRED.

 

Awards and Decisions. THE PROCEEDINGS WILL BE HEARD BY A PANEL OF 3 ARBITRATORS.
EACH PARTY WILL SELECT 1 ARBITRATOR, AND THE 2 ARBITRATORS WILL SELECT THE THIRD
ONE. THE ARBITRATORS WILL HAVE THE RIGHT TO AWARD ANY RELIEF WHICH THEY DEEM
PROPER IN THE CIRCUMSTANCES, INCLUDING, FOR EXAMPLE, MONEY DAMAGES (WITH
INTEREST ON UNPAID AMOUNTS FROM THEIR DUE DATE(S)), SPECIFIC PERFORMANCE,
TEMPORARY AND/OR PERMANENT INJUNCTIVE RELIEF, AND REIMBURSEMENT OF ATTORNEYS'
FEES AND RELATED COSTS TO THE PREVAILING PARTY. THE ARBITRATORS WILL NOT HAVE
THE AUTHORITY TO AWARD EXEMPLARY OR PUNITIVE DAMAGES EXCEPT AS OTHERWISE
PERMITTED BY THIS AGREEMENT, NOR THE RIGHT TO DECLARE ANY MARK GENERIC OR
OTHERWISE INVALID. YOU AND WE AGREE TO BE BOUND BY THE PROVISIONS OF ANY
LIMITATIONS OF THE TIME IN WHICH CLAIMS MUST BE BROUGHT UNDER APPLICABLE LAW OR
UNDER THIS AGREEMENT, WHICHEVER EXPIRES EARLIER. THE AWARD AND DECISION OF THE
ARBITRATORS WILL BE CONCLUSIVE AND BINDING AND JUDGMENT ON THE AWARD MAY BE
ENTERED IN ANY COURT OF COMPETENT JURISDICTION. THE PARTIES ACKNOWLEDGE AND
AGREE THAT ANY ARBITRATION AWARD MAY BE ENFORCED AGAINST EITHER OR BOTH OF THEM
IN A COURT OF COMPETENT JURISDICTION AND EACH WAIVES ANY RIGHT TO CONTEST THE
VALIDITY OR ENFORCEABILITY OF SUCH AWARD. WITHOUT LIMITING THE FOREGOING, THE
PARTIES WILL BE ENTITLED IN ANY SUCH ARBITRATION PROCEEDING TO THE ENTRY OF AN
ORDER BY A COURT OF COMPETENT JURISDICTION PURSUANT TO AN OPINION OF THE
ARBITRATORS FOR SPECIFIC PERFORMANCE OF ANY OF THE REQUIREMENTS OF THIS
AGREEMENT. JUDGMENT UPON AN ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION AND WILL BE BINDING, FINAL AND NON-APPEALABLE.

 

 22 

 

 

Specific Performance. NOTHING IN THIS AGREEMENT WILL PREVENT YOU OR WE FROM
OBTAINING TEMPORARY RESTRAINING ORDERS AND TEMPORARY OR PRELIMINARY INJUNCTIVE
RELIEF FROM A COURT OF COMPETENT JURISDICTION. HOWEVER, YOU AND WE MUST
CONTEMPORANEOUSLY SUBMIT A DISPUTE FOR ARBITRATION ON THE MERITS.

 

Third Parties. THE ARBITRATION PROVISIONS OF THIS AGREEMENT ARE INTENDED TO
BENEFIT AND BIND CERTAIN THIRD PARTY NON-SIGNATORIES, AND ALL OF YOUR AND OUR
PRINCIPAL OWNERS AND AFFILIATES.

 

Survival. THIS PROVISION CONTINUES IN FULL FORCE AND EFFECT SUBSEQUENT TO AND
NOTWITHSTANDING THE EXPIRATION OR TERMINATION OF THIS AGREEMENT FOR ANY REASON.

 

17NOTICES AND PAYMENTS.

 

All written notices and reports permitted or required under this Agreement or by
the Manuals will be deemed delivered:

 

2 business days after being placed in the hands of a commercial airborne courier
service for next business day delivery; or

 

3 business days after placement in the United States mail by certified mail,
return receipt requested, postage prepaid.

 

We may direct notices to your affiliates to you. All notices must be addressed
to the parties as follows:

 

  If to Us: WORLD OF BEER FRANCHISING, INC.   10910 Sheldon Road   Tampa,
Florida 33626   Attention: President         If to You: SOUTHEAST FLORIDA CRAFT,
LLC     P.O. Box 810245     Boca Raton, FL 33481     Attention:  Glenn E. Straub

 

Either you or we may change the address for delivery of all notices and reports
and any such notice will be effective within 10 business days of any change in
address. Any required payment or report not actually received by us during
regular business hours on the date due (or postmarked by postal authorities at
least 2 days prior to such date, or in which the receipt from the commercial
courier service is not dated prior to 2 days prior to such date) will be deemed
delinquent.

 

 23 

 

 

[Signature Page on Following Page]

 

 24 

 

 

Intending to be bound, you and we sign and deliver this Agreement effective as
of the Agreement Date, regardless of the actual date of signature.

 

“US”:   “YOU”:       WORLD OF BEER FRANCHISING, INC.,   SOUTHEAST FLORIDA CRAFT,
LLC a Florida corporation   a Florida limited liability company           By:
/s/ Benjamin P. Novello   By: /s/ James D. Cecil Print Name: Benjamin P. Novello
  Print Name: James D. Cecil Title: Chief Executive Officer   Title: Managing M
ember Date:  2/9/16   Date: 1/6/16

 

[Signature Page to World of Beer Franchising, Inc. Area Development Agreement]

 

 25 

 

 

EXHIBIT A

TO THE

AREA DEVELOPMENT AGREEMENT

 

INDEX

 

This Index is intended as a general guideline to assist you in reading the Area
Development Agreement. You must review the Area Development Agreement to get an
exact definition of a term.

 

  Page affiliate 21 Agreement 1 Agreement Date 1 Business Entity 3 claims 18
Competitive Business 10 Confidential Information 8 control 21 Developer 1
Development Area 4 Development Fee 6 Development Rights 4 Development Schedule 4
disability 15 DISPUTE 22 family member 21 Franchise Agreement 4 Franchise Fee 6
franchise owner 21 franchisee 21 Improvements 9 Indemnified Parties 18 Manuals 9
Marks 1 owner 21 person 21 section 21 System 1 Taverns 1 transfer 12 WOB Taverns
1

 

 

 

EXHIBIT B

TO THE

AREA DEVELOPMENT AGREEMENT

 

DEVELOPMENT AREA AND DEVELOPMENT SCHEDULE

 

Development Area (per Section 3.1):

 

The Counties of Broward and Miami-Dade in the State of Florida          

 

¨Check box if map is attached.

 

Development Schedule: You agree to have open and operating at least the
following minimum, cumulative number of Taverns by the date specified:

 

Cumulative Number of Stores to be Developed   Last Date to Establish and Open
the Store 1   12 months from Agreement Date 2   24 months from Agreement Date 3
  36 months from Agreement Date 4   48 months from Agreement Date 5   60 months
from Agreement Date

 

“US”:   “YOU”:       WORLD OF BEER FRANCHISING, INC.,   SOUTHEAST FLORIDA CRAFT,
LLC a Florida corporation   a Florida limited liability company           By:
/s/ Benjamin P. Novello   By: /s/ James D. Cecil Print Name: Benjamin P. Novello
  Print Name: James D. Cecil Title: Chief Executive Officer   Title: Manager
Date: 2/9/16   Date: 2/9/16

 

 

 

EXHIBIT B

 

FORM OF OPERATING AGREEMENT_

 

_____________, LLC

 

 

 

OPERATING AGREEMENT

 

 

 

As of ___________, 2016

 

 

 

OPERATING AGREEMENT

 

THIS OPERATING AGREEMENT (the “Agreement”) of ___________, LLC, a Florida
limited liability company (the “Company”), dated as of ___________, 2016, by and
among Southeast Florida Craft, LLC and Attitude Beer Holding Co. (each a “Member
and collectively the “Members”).

 

WHEREAS, the Company, was formed as a limited liability company pursuant to the
laws of the State of Florida by filing the Articles of Organization with the
Florida Secretary of State on __________, as the same may be amended,
supplemented or modified from time to time (the “Articles of Organization”); and

 

WHEREAS, the undersigned desire to provide for the regulation and establishment
of the affairs of the Company, the conduct of its business and the relations
among them as Members of the Company.

 

NOW THEREFORE, for and in consideration of the premises stated, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members hereby agree as follows:

 

DEFINITIONS

 

Definitions. As used herein, the following terms have the following respective
meanings:

 

“Act” shall mean the Limited Liability Company Law of the State of Florida and
any successor statute, as amended from time to time.

 

“Adjusted Capital Account” means the cash contributed by a Member, (i) reduced
from time to time by cash distributions from the Company to him in accordance
with Section 5.2(b)(ii) herein, and (ii) increased from time to time by any
additional cash contributions made by him in accordance with Section 3.2(a)
herein, and (iii) otherwise adjusted as required under Treasury Regulations
§ 1.704-1(b)(2)(iv).

 

“Affiliate” means any Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
another Person.

 

“Agreement” means this Operating Agreement, as amended from time to time.

 

“Available Cash” means all cash of the Company after paying its current
obligations and making the appropriate reservations for foreseeable future
expenses.

 

“Bankruptcy”, with respect to any Person, means (i) making an assignment for the
benefit of creditors, (ii) filing a voluntary petition in bankruptcy, (iii)
becoming the subject of an order for relief or being-declared insolvent in any
federal or state bankruptcy or insolvency proceeding (unless such order is
dismissed within ninety (90) days following entry), (iv) filing a petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law,
or regulation, (v) filing an answer or other pleading admitting or failing to
contest the material allegation of a petition filed against it in any proceeding
similar in nature to those described in the preceding clause, or otherwise
failing to obtain dismissal of such petition within one hundred- twenty (120)
days following its filing, or (vi) seeking, consenting to, or acquiescing in,
the appointment of a trustee, receiver, or liquidator of all or any substantial
part of its properties.

 

 

 

“Capital Contribution” means the aggregate capital contribution made from time
to time in cash by a Member to the Company.

 

“Capital Proceeds” means the proceeds of the sale of all or substantially all
the assets of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
statute.

 

“Company” means __________, a Florida limited liability company.

 

“Incompetency,” with respect to any member who is a natural person, shall mean
the entry by a court of competent jurisdiction of an order or decree
adjudicating such Member incompetent to manage his person or his estate.

 

“Interest(s)” means an interest as a Member of the Company.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest, conditional sale agreement or encumbrance of any kind, or any
other type of preferential arrangement that has the practical effect of creating
a security interest in respect of such asset.

 

“Liquidator” means the Manager, or if there are no Manager at the time in
question, such other Person who is appointed in accordance with applicable law
to take all actions related to the winding up of the Company’s business and the
distribution of the Company’s assets.

 

“Manager” means Southeast Florida Craft , LLC.

 

“Management Fee” shall mean 4% of Net Sales. Net Sales shall mean the total
revenue from sales generated by a company, less deduction of returns, allowances
for damaged or missing goods and any discounts allowed.

 

“Member” means any of those Persons identified above as Members and any
substitute or additional Member in such Person’s capacity as a member of the
Company.

 

“Member Majority” or “Majority of Members” means, at any time, any combination
of Members holding, in the aggregate, a majority of all of the Interests.

 

“Membership Interest” shall mean the same thing as Interest as defined in
Section 1.1(o) herein.

 

“Membership Percentage” means, with respect to each Member, the percentage set
forth in “Schedule A” attached hereto.

 

“Net Profits and Net Losses” means, for any period, the net profits and net
losses, respectively, derived from the operation of the Company for Federal
income tax purposes, including gains and losses on the sale of all or any
portion of the Company’s assets.

 

 2 

 

 

“Notice” means a written notice containing all information which is either
desirable, relevant or necessary to satisfy the purposes for which such notice
is being delivered.

 

“Operating Reserves” means cash reserves of the Company held by the Company to
ensure it can make future payments despite any drop in revenue. Operating
Reserves shall not exceed two (“2”) months expenses determined by taking the
average monthly expense for the previous 12 months.

 

“P&L Participant” means a person entitled to participate in the profits and
losses of the Company but shall not be a Member of the Company and shall not
have any voting rights, equity interest or stake in the Company. A P&L
Participant shall solely have a contractual agreement with the Company.

 

“Person” means any natural person, corporation (stock or nonstock), limited
liability company, limited partnership, general partnership, joint stock
company, joint venture, association (profit or nonprofit), company, estate,
trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any government agency or political
subdivision thereof.

 

“Securities Act” means the Securities Act of 1933, as amended, and any successor
statute, and the rules and regulations promulgated thereunder.

 

“Transfer” means the sale, transfer, assignment, pledge, mortgage,
hypothecation, encumbrance, distribution or other disposition of any Interests.

 

“Treasury Regulations” means regulations adopted by the Treasury Department of
the United States governing application and enforcement of the Code. Any
reference to a section or provision of the Treasury Regulations shall be deemed
to refer also to such section or provision as amended or superseded.

 

“Unreturned Capital Contribution” of any Member means, at any date, the Capital
Contributions of such Member reduced from time to time (but not below zero) by
any distribution to such Member pursuant to Section 5.2(b)(ii) hereof.

 

THE COMPANY; THE MEMBERS; VOTING RIGHTS

 

Registered Office and Registered Agent. The address of the registered office of
the Company is 505 S. Flagler Drive, Suite #1010, West Palm Beach, FL, 33401 and
the registered agent is _____________B, LLC.

 

Principal Office. The address of the principal office of the Company shall be
505 S. Flagler Drive, Suite #1010, West Palm Beach, FL, 33401 or such other
place as the Manager may from time to time determine.

 

Duration. The Company’s existence shall continue until dissolved in accordance
with the Act and this Agreement.

 

 3 

 

 

Maintenance. The Members shall promptly sign and file all certificates,
amendments or other instruments as required by law to maintain the Company in
good standing as a limited liability company in all jurisdictions in which it
conducts business, including without limitation, as required to comply with any
fictitious name statutes.

 

Changes in Registered Office, etc. The Manager may make such changes in the
registered office, registered agent and principal office as they may deem
necessary or advisable, and shall give Notice to all Members promptly following
any such change. The Company may maintain such other or additional business
offices at such other place or places as the Manager may from time to time deem
advisable.

 

Business Purpose. The Company is formed and organized to engage in the following
business:

 

To own, improve, develop, operate and manage a World of Beer Franchise in
______________; and

 

To engage in any business related or incidental to one or more of the foregoing
activities.

 

The Members have entered into a Joint Venture Agreement dated January _, 2016,
regarding the establishment of World of Beer franchises (the “JV Agreement”).

 

Authority and Powers. The Company is authorized and empowered to do any and all
acts and things necessary, appropriate, proper, advisable, incidental to, or
convenient for the furtherance and accomplishment of its purposes, and for the
protection and benefit of the Company, including without limitation, all acts
and things permitted under the Act and this Agreement.

 

Juridical Existence, Properties, Etc. The Company shall maintain, preserve, and
keep in full force and effect its limited liability company existence and all
rights, franchises, licenses and permits necessary to the proper conduct of its
business, and the ownership, lease, or operation of its properties which, if not
so maintained, could reasonably be expected to have a material adverse effect on
the Company, and to take all action which may be reasonably required to obtain,
preserve, renew and extend all material licenses, permits, authorizations, trade
names, trademarks, service names, service marks, copyrights and patents which
are necessary for the continuance of the operation of any such property by the
Company.

 

 4 

 

 

Members and Membership Percentages. The Members and their respective Membership
Percentages shall are set forth in “Schedule A” attached hereto.

 

Voting Rights. All Members shall have the right to vote their membership
interest in proportion to their respective Membership Percentages shall are set
forth in “Schedule A” attached hereto.

 

SECTION 2.11         P&L Participants. The Manger may grant solely to
significant employees of the Company the rights to be a P&L Participant of the
Company, up to five percent (5%) of the Company’s profits and losses. Such P&L
Participant shall participate in the profits and losses as if such person was a
Member. All P&L Participant shall be identified on Schedule C and their
participation with the Members in the profits and losses of the Company shall be
set forth on Schedule B. No Member or employee of a Member may be a P&L
Participant.

 

CAPITAL CONTRIBUTIONS

 

Initial Capital Contributions. The members have made an initial capital
contribution as set forth on Schedule A.

 

SECTION 3.2           Additional Capital Contributions.

 

Upon the consent of a Majority of Members, the Manager shall have the right to
require additional capital contributions (“Capital Calls”) from the Members to
be paid on a pro rata basis as to all Members in accordance with the percentages
set forth on Schedule A.

 

The Manager may obtain Company loans to cover any Company required Additional
Capital Contributions, with the consent of the Members holding a majority of the
Membership Interest in the Company.

 

In the event that a Member fails to, or refuses to contribute towards a Capital
Call (the “Defaulting Member”), then either:

 

The remaining Members may elect to purchase the Membership Interest from the
Defaulting Member, at a 15% discount to the Defaulting Member’s Initial Capital
Contribution; or

 

The remaining Members may elect to contribute the necessary funds (the “Lending
Members”) on behalf of the Defaulting Member which shall be considered a loan to
the Defaulting Member, to be secured by its Membership Interest in the Company.

 

Any loan given to the Company by the Lending Member on behalf of the Defaulting
Member, shall accrue interest at a rate of 300 basis points above LIBOR per
annum. In the event of a Distribution by the Manager under Article 5 herein or
under a dissolution of the Company under Article 10 herein, the Manager shall
use the funds attributable to the Defaulting Member, to first pay off any loans
to the Defaulting Member by the Lending Member.

 

 5 

 

 

In furtherance of any loan to any Defaulting Member by the Lending Members in
accordance with this Section, the Members hereby expressly agree to execute any
and all loan documents which the Company’s attorneys deem necessary, including
but not limited to; a Note, Guaranty, Loan Agreement, and Pledge Agreement.
Furthermore, the Defaulting Member shall be responsible to pay for all legal
fees that the Company shall incur in furtherance of such loan.

 

SECTION 3.3            Return of Capital Contributions. The contributions of the
Members to the capital of the Company shall be returned to them in cash, in
whole or in part, at any time in the discretion of the Manager in accordance
with Section 5.2(b) herein.

 

SECTION 3.4           Time when Capital is Returned. Upon the satisfaction of
all the Company’s financing obligations, or a liquidation of the assets of the
LLC, or the dissolution of the LLC, the Capital Contributions shall be returned
to the Members pro rata in accordance with each Member’s Capital Contributions.

 

SECTION 3.5            No Right to Priority. Except as otherwise expressly
provided in this Agreement, or as required to comply with the Code and Treasury
Regulations, no Member shall have priority over any other Member as to any
allocations, distributions, or return of all or any part of its Capital
Contributions.         

 

SECTION 3.6           Dilution. No dilution of the membership interest of any
member shall occur without the consent of World of Beer Franchising, Inc.

 

ALLOCATION OF PROFITS AND LOSSES TO MEMBERS

 

Allocation of Net Profits and Net Losses. Net profits and net losses shall be
allocated in the proportions set forth on Schedule B.

 

Required Special Allocations. Notwithstanding Section 4.1 hereof,

 

Appropriate adjustments shall be made to the allocations of Net Profits and Net
Losses to the extent required under Section 704(c) of the Code and the Treasury
Regulations thereunder and under Sections 1.704-1(b)(2)(iv)(d), (e), (f) and (g)
of the Treasury Regulations;

 

 6 

 

 

Appropriate adjustments shall be made to the allocations of Net Profits and Net
Losses to the extent required to comply with the “qualified income offset”
provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations; the
partnership “minimum gain chargeback” provisions of Section 1.704-2(f) of the
Treasury Regulations; and the “partner nonrecourse deduction” and “partner
nonrecourse debt minimum gain chargeback” provisions of Section 1.704-2(i) of
the Treasury Regulations, all issued pursuant to Section 704(b) of the Code. To
the extent permitted by such Treasury Regulations, the allocations in such year
and subsequent years shall be further adjusted so that the cumulative effect of
all the allocations shall be the same as if all such allocations were made
pursuant to Section 4.1 hereof (as adjusted by Section 4.3(a) hereof) without
regard to this Section 4.3(b).

 

Other Allocation Rules. For purposes of determining the Net Profits, Net Losses,
or any other items allocable to any period, Net Profits, Net Losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the Manager using any permissible method under Code § 706 and the
Treasury Regulations applicable thereto.

 

Recapture Income. “Recapture Income,” if any, realized by the Company pursuant
to Sections 1245 or 1250 of the Code shall be allocated to the Members to whom
the prior corresponding depreciation deductions were allocated, in proportion to
the amounts of such depreciation deductions previously allocated to them.

 

DISTRIBUTIONS

 

Distributions in Kind. No Member shall be entitled to demand and receive
distributions other than in cash form. Any non-cash Company assets distributed
in kind shall be distributed to the Members entitled thereto as
tenants-in-common owning undivided interests in the same proportion as would be
applicable to cash distributions, however, such distribution in kind may only be
made with consent of the Members holding a Member Majority.

 

Distribution of Available Cash and Capital Proceeds.

 

Available Cash. The Manager shall distribute Available Cash in the percentages
set forth on Schedule B. It is anticipated the Manager shall make distributions
on a monthly basis.

 

Capital Proceeds. Capital Proceeds remaining after the payment of any debts and
liabilities of the Company due and payable at such time and the establishment of
any Operating Reserves which the Manager determines, in his sole discretion
necessary for reasonable ongoing business requirements, and necessary to provide
for any contingent or unforeseen liabilities or obligations of the Company,
shall be distributed in accordance with the following order of priority:

 

First, to repay the Capital Contributions of the Members as set forth on
Schedule A; and

 

 7 

 

 

Second, in the percentages set forth on Schedule B.

 

RESIGNATION OR BANKRUPTCY OF A MEMBER
RESTRICTIONS ON THE TRANSFER OF INTERESTS;
ADMISSION OF SUBSTITUTE AND ADDITIONAL MEMBERS;

 

Resignation or Bankruptcy of a Member; Continuation of the Company.

 

A Member shall have the right to withdraw his Capital Contribution upon the
termination of the Company as provided in Section 10.2 hereof, provided,
however, that no part of the Capital Contribution of any Member shall be
withdrawn unless all liabilities of the Company, except obligations to Members
on account of their Capital Contributions, have been paid, or unless the Company
has assets sufficient to pay them.

 

Within ninety (90) days following the Resignation or the Bankruptcy (other than
by reason of death or incompetency) of a Member, the Company shall dissolve
unless, within such applicable period, a majority in interest of the Members
(excluding for such purpose the successor in interest to the terminated Member’s
Interest) elect in writing to continue the Company on such terms as they may
agree upon in writing. If an election to continue the Company is so made then
the Company shall continue in existence until the end of the term for which it
has been formed, or until a subsequent Resignation (other than by reason of
death or incompetency), Bankruptcy or other event of dissolution occurs.

 

The death or Incompetency of a Member shall neither dissolve nor terminate the
Company.

 

Restrictions on the Transfer of Interests.

 

Except as expressly provided herein, no Member shall have the right to Transfer
all or any part of its Interest without the prior written consent of the
Manager, which may be withheld in his sole discretion, according to reasonable
terms.

 

Upon the consent of the Manager, a Member may transfer his Membership Interest
in the Company to a permitted transferee (“Transferee”). Such Transferee shall
be required to pay the Company’s legal fees in connection with effectuating such
Transfer as a condition precedent to the consent. Such Transferee shall be bound
to the same extent as a Member hereunder in making a Transfer of his Interest.
Any purported Transfer in violation of the provisions of this Agreement shall be
null and void ab initio.

 

Notwithstanding subparagraph (a) above, any Member may Transfer all of his
Interest during his lifetime to;

 

an entity that is wholly controlled, and continues to be controlled by that
Member.

 

another Member of the Company, pursuant to Section 6.2 herein.

 

 8 

 

 

an immediate family member of the Member or a trust for the benefit of an
immediate family member.

 

For purposes of this subparagraph (b), the term “Entity” shall be limited to the
transfer of Member’s interest to a Corporation, LLC or Trust. If control of such
Entity is transferred to another individual or another entity, such change and
transfer shall constitute an unauthorized transfer pursuant to the terms of this
agreement.

 

Notwithstanding anything to the contrary contained herein, pursuant to Section
6.1(a) or the applicability of Section 6.1(b) or 6.2 hereof:

 

No Transfer of an Interest shall be made if the Interest which is the subject of
a proposed Transfer when added to the total of all other Interests Transferred
within the period of twelve (12) consecutive months prior thereto would result
in the termination of the Company under Section 708 of the Code or if the
Transfer would cause the Company to lose its status under the Code as a
partnership for Federal income tax purposes.

 

No Interest shall be transferred unless the registration provisions of the
Securities Act of 1933, as amended, and all applicable state “blue sky laws”
have been complied with or unless compliance with such provisions is not
required, each Member recognizing that no interest in the Company has been
registered under Federal or state securities laws. The Manager may request in
their sole discretion an opinion from the Company’s counsel or any other counsel
that such transfer will not violate applicable securities laws. The costs of
such opinion shall be paid for by the Transferee.

 

Although a permitted Transferee pursuant to Sections 6.1(b) or 6.2 shall be
treated as an assignee of, and be entitled to, all of the rights of the Selling
Member to receive profits, losses and distributions to the extent of the
Interest assigned to him, no Transferee whatsoever shall become substituted as a
Member in the Company (x) without the prior written consent of a Majority of
Members, which may be withheld in their sole discretion, for any or no reason,
and (y) unless and until such Transferee shall have evidenced his consent and
agreement to be bound by all of the terms and provisions of this Agreement, and
to assume, as a substituted Member, his pro rata share hereunder of the
obligations of his transferor as a Member, by executing and acknowledging a
counterpart of an amendment of this Agreement and/or such other agreement to
that effect as the Manager may request, each of which shall appropriately
reflect his admission as a member of the Company and his capital contribution
thereto, and such other documents, all as may reasonably be required by the
Managing Member. Such substitution shall then take effect when the Manager have
accepted such person as a Member and the books and records of the Company
reflect such Person as admitted to the Company as a Member. As a condition to
such Transferee becoming a substituted Member, such Transferee shall also be
required to pay the Company’s costs and expenses, including but not limited to
legal fees and disbursements, in connection with his becoming a Member.

 

If a Transfer or attempted Transfer of an Interest is made other than in
accordance with the terms of this Agreement, it shall be null and void and no
right, title or interest in the Company shall be transferred.

 

(e)          No assignment, transfer or other disposition of all or any part of
the interest of any Member permitted under this Agreement shall be binding upon
the Limited Liability Company unless and until a duly executed and acknowledged
counterpart of such assignment or instrument of transfer, in form and substance
satisfactory to the Company, has been delivered to the Company.

 

 9 

 

 

(f)          As between a Member and an assignee or transferee of such Member's
interest in accordance with this Agreement, allocations and distributions for
any fiscal year shall be apportioned as of the date of the assignment or
transfer, on the basis of the number of days before and after said date, without
regard to the results of the Company's operations before or after the assignment
or transfer.

 

(g)          No assignment or other disposition of any interest of any Member
may be made if such assignment or disposition, alone or when combined with other
transactions, would result in the termination of the Company within the meaning
of Section 708 of the Internal Revenue Code or under any other relevant section
of the Code or any successor statute. No assignment or other disposition of any
interest of any Member may be made without an opinion of counsel satisfactory to
the Company that such assignment or disposition is subject to an effective
registration under, or exempt from the registration requirements of, the
applicable State and Federal securities laws. No interest in the Company may be
assigned or given to any person below the age of 21 years or to a person who has
been adjudged to be insane or incompetent.

 

RIGHT OF FIRST REFUSAL

 

(a)          Anything herein contained to the contrary, the Company shall be
entitled to treat the record holder of the interest of a Member as the absolute
owner thereof, and shall incur no liability by reason of distributions made in
good faith to such record holder, unless and until there has been delivered to
the Company the assignment or other instrument of transfer and such other
evidence as may be reasonably required by the Company to establish to the
satisfaction of the Limited Liability Company that an interest has been assigned
or transferred in accordance with this Agreement.

 

(b)          Notwithstanding the forgoing terms, and subject to Section 6.1(b)
herein, if a Member desires to sell, or otherwise dispose of all or any part of
its interest in the Company, such Member (the “Selling Member”) shall first
offer to sell and convey such interest to any other Members before selling, or
otherwise disposing of such interest to any other person, corporation or other
entity. Such offer shall be in writing, shall be given to every other Member,
and shall set forth the interest to be sold, purchase price to be paid, the date
on which the closing is to take place, (which date shall be not less than thirty
nor more than sixty days after the delivery of the offer), the location within
the State of New York at which the closing is to take place, and all other
material terms and conditions of the sale, transfer or the disposition.

 

(c)          Within fifteen days after the delivery of said offer to the other
Members shall deliver to the Selling Member a written notice either accepting or
rejecting the offer. Failure to deliver said notice within said fifteen days
conclusively shall be deemed a rejection of the offer. Any or all of the other
Members may elect to accept the offer, and if more than one of the other Members
elects to accept the offer, the interest being sold and the purchase price
therefor shall be allocated among the Members so accepting the offer in
proportion to their Members’ Percentage Interest, unless they otherwise agree in
writing.

 

(d)          If any or all of the other Members elect to accept the offer, then
(a) upon such acceptance in writing, the Member(s) shall pay a non-refundable
ten percent (10%) down payment of the purchase price and (b) then the transfer
of the Membership Interest shall be held in accordance with the offer and the
Selling Member shall deliver to the other Members who have accepted the offer an
assignment of the interest being sold by the Selling Member, and said other
Member shall pay the remaining balance of the purchase price prescribed in the
offer.

 

 10 

 

 

(f)          If no other Member accepts the offer, or if the Members who have
accepted such offer default in the obligation to purchase the interest, than the
Selling Member within 120 days after the delivery of the offer may sell such
interest to any other person or entity at a purchase price which is not less
than the purchase price prescribed in the offer and upon terms and conditions
which are substantially the same as the terms and conditions set forth in the
offer, provided all other applicable requirements of the Agreement are complied
with. An assignment of such interest to a person or entity who is not a Member
of the Limited Liability Company shall cause such Person to become a member upon
the execution of the such documents required by Section 6.2(c)(iii).

 

(g)          If the Selling Member does not sell such interest within said 120
days, then the Selling Member may not thereafter sell such interest without
again offering such interest to the other Members in accordance with this
Article 6.

 

Admission of Persons as Additional Members. In regards to permitted Transferee’s
pursuant to Section 6.1 and 6.2 herein, the Manager shall have the right to
admit, and each of the Members hereby consents to the admission of, such
additional Members to the Company as the Manager shall unanimously determine in
his sole discretion; it being understood no Member shall have its Membership
Percentage reduced without his prior written consent. In the event that the
Manager shall determine to admit one or more Members to the Company, the Members
hereby agree to execute and deliver such documents as the Manager shall request
in order to effectuate the admission of such additional Member(s). Any
additional Member(s) admitted to the Company shall be required to execute a
counterpart signature page to this Agreement and, if required, an amendment to
the Articles of Organization of the Company and such other documents as the
Manager may request in order to effectuate admission to the Company.

 

SECTION 6.5           Attitude Beer Holding Co. The Company and Members
acknowledge that Attitude Beer Holding Co. is majority owned by Attitude Drinks,
Inc., a publicly traded company. No change in the direct or indirect ownership
of Attitude Beer Holding Co. shall be deemed a transfer of Attitude Beer Holding
Co.’s Membership Interest. The Company agrees to fully cooperate with Attitude
Beer Holding Co. and Attitude Drinks, Inc. in supplying all information to
Attitude Drinks, Inc. and its auditor so Attitude Drinks, Inc. can timely comply
with its Securities and Exchange Commission reporting obligations.

 

SECTION 6.6           WOB. The Members acknowledge that the business of the
Company is subject to a franchising agreement with WOB and pursuant to the
Franchise Agreement, the Members may be required to or prohibited from
transfering their membership interest or make other changes to this agreement in
accordance with the terms of the Franchise Agreement.

 

MANAGEMENT

 

Manager Southeast Florida Craft, LLC is hereby appointed the Manager of the
Company (the “Manager”). The business and affairs of the Company shall be
managed under the sole direction and control of the Manager, using reasonable
business practices, and all powers of the Company shall be exercised by or under
the authority of the Manager. No other Person shall have any right or authority
to act for or bind the Company except as permitted in this Agreement or as
required by law. The Manager may be removed by a Majority of Members only for
gross negligence or fraud.

 

 11 

 

 

SECTION 7.2           General Powers. The Manager shall have the full power to
execute and deliver, for and on behalf of the Company, any and all documents and
instruments which may be necessary or desirable to carry on the business of the
Company, including, without limitation, any and all deeds, contracts, leases,
mortgages, deeds of trust, promissory notes, security agreements, and financing
statements pertaining to the Company's assets or obligations, and to authorize
the confession of judgment against the Company. No person dealing with the
Manager need inquire into the validity or propriety of any document or
instrument executed in the name of the Company by the Manager, or as to the
authority of the Manager in executing the same.

 

SECTION 7.3.          Limitation on Authority of Members.

 

(a)          No Member is an agent of the Company solely by virtue of being a
Member, and no Member has authority to act for the Company solely by virtue of
being a Member.

 

(b)          This Article 7 supersedes any authority granted to the Members
pursuant to Section 412 of the Law. Any non-manager Member who takes any action
or binds the Company in violation of this Article 7 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 to the
loss or expense.

 

SECTION 7.4           Appointment of New Manager. A new Manager can be appointed
only by Members holding a Member Majority. Such new Manager need not be a Member
of the company.

 

SECTION 7.5           Liability and Indemnification.

 

(a)          The Manager shall not be liable, responsible, or accountable, in
damages or otherwise, to any Member or to the Company for any act performed by
the Manager within the scope of the authority conferred on the Manager by this
Agreement, except for fraud, bad faith, gross negligence, or an intentional
breach of this Agreement.

 

(b)          The Company shall indemnify the Manager for any act performed by
the Manager within the scope of the authority conferred on the Manager by this
Agreement, except for fraud, bad faith, gross negligence, or an intentional
breach of this Agreement.

 

SECTION 7.6           Major Decisions

 

Approval of Major Decisions. Notwithstanding anything to the contrary in this
Agreement, certain decisions or actions as set forth in this Section 7.6 (“Major
Decisions”) may not be taken solely in the Manager’s discretion and shall
require the affirmative vote of a Member Majority. Approval of Major Decisions
may be given at a Meeting called for that purpose or by written consent.

 

 12 

 

 

Designation of Major Decisions. The following shall constitute Major Decisions
subject to this Section:

 

Other than in the regular course of business, the sale of all or a substantial
portion of the assets owned by the Company. For this purpose, Twenty Percent
(20%) of the fair market value of the assets owned by the Company shall
constitute a “substantial portion.”

 

The dissolution, liquidation or other termination or cessation of the business
operations of the Company, including without limitation the filing of a
voluntary petition in Bankruptcy, the assignment of all or substantially all of
the assets of the Company for the benefit of the Company’s creditors or the
appointment of trustee, liquidator, administrator or like person or entity for
the purpose of winding up the business and affairs of the Company.

 

Any change in the principal purpose of the Company’s business, as set forth in
Section 2.6 above.

 

Any borrowing or pledge of assets owned by the Company in excess of $50,000 in
the aggregate or any loan to a Member or Manager.

 

The admission of new Member.

 

RELATED PARTY DEALINGS

 

Outside Business Interests; Business Opportunity. The Members may each engage in
or possess interests in other business ventures of every kind and description
for its own account, including without limitation, serving as a member, partner
or shareholder of other entities which own, either directly or through interests
in other entities, properties similar to the assets of the Company and neither
the Company nor any of the Members shall have any rights by virtue of this
Agreement in or to such other business ventures or to the income or profits
derived therefrom, or to any business opportunities as may become available to
the Manager or any Member, whether or not similar in nature to the Company’s
then existing business activities.

 

Member Dealing With the Company. The fact that a Member or an affiliate thereof
is employed by or is directly or indirectly interested in or connected with any
person, firm or corporation employed by the Company for real estate management
or otherwise to perform a service, or from or with which the Company may
purchase any property or have other business dealings, shall not prohibit the
Member from employing or otherwise dealing with such person, firm or
corporation, so long as such business dealing, contract, or agreement follows
and contains reasonable business terms. Neither the Company nor any of the
Members shall have any rights in or to any income or profits derived therefrom.
The said Member or his affiliated company shall not receive any benefit of any
kind, other that is specifically and contractually agreed upon, in writing,
between the respective companies and or parties.

 

 13 

 

 

MEMBER LIABILITY; INDEMNIFICATION AND LIABILITY LIMITATION

 

Liability of Members; Enforcement of Obligations. Except to the extent otherwise
expressly stated in this Agreement or prescribed under the Act, (a) the Members
shall have no fiduciary or partnership relationship between or among themselves
solely by reason of their status as Members, and (b) the rights of each of the
Members and the Company to sue for matters and claims arising out of or
pertaining to this Agreement shall not be dependent upon the dissolution,
winding-up or termination of the Company.

 

Indemnification of Members . Except as provided in Section 9.4, every Person who
was or is a party, or who is threatened to be made a party, to any pending,
completed or impending action, suit or proceeding of any kind, whether civil,
criminal, administrative, arbitrative or investigative (whether or not by or in
the right of the Company) by reason of (a) being or having been a Member of the
Company, (b) being or having been a Member, manager, partner, officer or
director of any other entity at the request of the Company, or (c) serving or
having served in a representative capacity for the Company in connection with
any partnership, joint venture, committee, trust, employee benefit plan or other
enterprise, shall be indemnified by the Company against all expenses (including
reasonable attorneys’ fees and expenses), judgments, fines, penalties, awards,
costs, amounts paid in settlement and liabilities of all kinds, actually
incurred by such Person incidental to or resulting from such action, suit or
proceeding to the fullest extent permitted under the Act, without limiting any
other indemnification rights to which such Person otherwise may be entitled. The
Company may, but shall not be required to, purchase insurance on behalf of such
Person against liability asserted against or incurred by such Person in its
capacity as a Manager or Member of the Company, or arising from such Person’s
status as a Manager or Member, whether or not the Company would have authority
to indemnify such Person against the same liability under the provisions of this
Section 9.2 or the Act.

 

 14 

 

 

Limitation of Liability. Except as otherwise expressly provided in this
Agreement, no Member or Manager shall have liability to the Company or other
Members for monetary damages resulting from errors made in the exercise of
good-faith judgment.

 

Qualification of Indemnification and Liability Limitation.

 

The indemnification rights and limitations on liabilities set forth in Sections
9.2 and 9.3 shall not apply to claims based upon any willful misconduct,
intentional breach or disregard of the terms of this Agreement or knowing
violation of criminal law or any federal or state securities law, including
without limitation, unlawful insider trading or market manipulation for any
security, nor shall such indemnification rights and limitations on liabilities
preclude the Company or any Member from recovery for any loss or damage
otherwise covered under any insurance policy or fidelity bonding. Nothing herein
shall be deemed to prohibit or limit the Company’s right to pay, or obtain
insurance covering, the costs (including reasonable attorneys’ fees and
expenses) to defend an indemnitee, Member or Manager against any such claims,
subject to a full reservation of rights to reimbursement in the event of a final
adjudication adverse to such indemnitee, Member or Manager.

 

An indemnitee shall be entitled to recover from an indemnitor all legal costs or
expenses, including reasonable attorney’s fees and expenses, incurred by such
indemnitee to enforce its rights hereunder, or to collect any sums due from the
indemnitor hereunder.

 

DISSOLUTION AND LIQUIDATION OF THE COMPANY

 

Dissolution of the Company. The Company shall be dissolved on the earlier of the
expiration of the term of the Company or upon:

 

The Resignation (other than by reason of death or incompetency) or Bankruptcy of
a Member unless a majority in interest of the Members (as defined in Section
6.1(b)) elect to continue the Company pursuant to Section 6.1(b);

 

The Resignation or Bankruptcy of a Member which leaves only one (1) Member
remaining, and no additional or substitute Member is admitted to the Company in
accordance with this Agreement within ninety (90) days thereafter;

 

The expiration of thirty (30) days following the sale or other disposition of
all or substantially all of the Company’s assets;

 

The election by a majority of the Members to liquidate the Company; or

 

The occurrence of any other event of dissolution under the provisions of this
Agreement or the Act.

 

 15 

 

 

Winding-up and Distribution of the Company.

 

Upon the dissolution of the Company pursuant to Section 10.1, the Company’s
business shall be wound up and its assets liquidated by the Liquidator as
provided in this Section 10.2, and the net proceeds of such liquidation shall be
distributed as follows:

 

First, to payment of all debts and liabilities of the Company, including,
without limitation, any loans from Members and the expenses of liquidation;

 

Second, to establishment of any reserves reasonably deemed necessary by the
Liquidator for contingent, unmatured or unforeseen liabilities or obligations of
the Company. Said reserves shall be paid over to an attorney-at-law of the State
of New York, as escrowee, to be held by him for the purpose of disbursing such
reserves in payment of any of the aforementioned contingencies, and, at the
expiration of such period as shall be deemed advisable, to distribute the
balance thereafter remaining in the manner hereinafter provided, together with
accrued interest thereon, if any;

 

Third, to those Members having positive Capital Account balances pro rata in the
proportion that each such Member’s positive Capital Account balance bears to the
aggregate of the positive Capital Account balances of all such Members, until
all Member’s Capital Account balances are equal to zero;

 

Fourth, any funds remaining shall be distributed in the percentages set forth on
Schedule B.

 

The Liquidator shall file all certificates and notices of the Company’s
dissolution required by law. The Liquidator shall sell and otherwise liquidate
the Company’s assets without unnecessary delay. Upon the complete liquidation of
the Company’s assets and distribution to the Members, they shall cease to be
Members of the Company, and the Liquidator shall execute, acknowledge and cause
to be filed all certificates and notices required by law to terminate the
existence of the Company.

 

AMENDMENTS

 

Adoption of Amendments Generally. Amendments to this Agreement to reflect the
substitution or addition of a Member shall be made by written instrument
executed by the substituted Member, the added Member, or the resigned Member (or
its authorized representative), as applicable. Any other amendments to this
Agreement may be made by a written instrument executed by Members holding, in
the aggregate, at least two-thirds of Membership Interests; provided, however,
that no amendment to this Agreement may:

 

substantially alter the purposes of the Company without the written consent of
all Members;

 

expand the obligations or liabilities of any Member under this Agreement, or
modify any Member’s limited liability, without the written consent of such
Member;

 

 16 

 

 

modify the computational method of determining, or priority applicable to,
allocations or distributions under Articles 4 and 5 and Section 10.2, without
the written consent of all Members; or

 

amend this Article 11 without the written consent of all Members.

 

MISCELANEOUS

 

Non-Recourse Company Loans. Any loans taken by the Company, shall be
non-recourse loans as to any and all individual Members or the Manger, and no
Member or Manager shall be required to sign a personal guaranty to in order to
secure such loan(s), unless unanimously consented to by the Members.

 

GENERAL PROVISIONS.

 

Books and Records. All records of the Company shall be kept at the principal
office of the Company and shall be available for examination by any Member, or
such Member’s duly authorized representatives, at all reasonable times at the
office of the Company and by way of internet access to Company bank accounts.
The method of accounting on which the books shall be maintained shall be
determined by the majority of the Members . The Manager may make on behalf of
the Company the election permitted by Section 754 of the Code. Southeast Florida
Craft, LLC shall be designated as the “tax matters partner” (the “TMP”) for
purposes of the Code and the “Designated Person” for purposes of maintaining an
Investor List to the extent required by the Code. The TMP is hereby authorized
to take such actions as may be required by the Code and the regulations
thereunder to continue such designations. The determination by the TMP with
respect to the treatment of any item or its allocation for Federal, state or
local tax purposes shall be binding upon all of the Members, so long as such
determination is reasonable and will not be inconsistent with any express terms
hereof. No cause of action shall accrue to any Member under this Section 13.1 if
the TMP acted in good faith to comply with his obligations hereunder. No charge
shall be made to the Company for his acting as tax matters partner. Upon the
Resignation or Bankruptcy of the TMP, a majority of the Members may select a
Member to become the new “tax matter partner” and “Designated Person”.

 

Fiscal Year. The fiscal year of the Company shall be the calendar year.

 

 17 

 

 

Custody of Company Funds; Bank Accounts.

 

The Manager shall have a fiduciary responsibility for the safekeeping and use of
all funds and assets of the Company, whether or not in their immediate
possession or control. The Company’s funds shall not be commingled with the
funds of any other Person and the Manager shall not use, or permit use of, the
Company’s funds in any manner except for the benefit of the Company.

 

All funds of the Company not otherwise invested shall be deposited in one or
more internet–accessible accounts maintained in such federally insured financial
institutions as the Manager may deem appropriate, and withdrawals shall be made
only in the regular course of Company business on such signature or signatures
as the Manager may deem appropriate. Usernames and passwords for access to all
accounts shall be made available to all members.

 

Notices. Except as otherwise provided herein, all Notices, requests, consents
and other communications hereunder to the Company or to any Member shall be
deemed to be sufficient if contained in a written instrument delivered in person
or sent by telecopier, nationally-recognized overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

if to the Company, to its principal office set forth in Section 2.4, as such
office may be changed in accordance with Section 2.7.

 

if to any Member, to its respective address set forth on Schedule A hereto.

 

Any Member may, at any time and from time to time, designate a substitute
address or addresses for itself by delivering a Notice to the Company and to
each other Member in the manner set forth in this Section. All such Notices,
requests, consents and other communications shall be deemed to have been
delivered (i) in the case of personal delivery or delivery by telecopier, on the
date of such delivery, (ii) in the case of delivery by nationally-recognized
overnight courier, on the date of such delivery, and (iii) in the case of
mailing in the manner set forth in this Section, on the third business day after
the posting thereof.

 

Burden and Benefit. This Agreement shall be binding upon, and shall inure to the
benefit of, the Members, and their respective heirs, executors, administrators,
successors and assigns. There shall be no third party beneficiaries of this
Agreement.

 

Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together shall
constitute one Agreement binding on all parties hereto, notwithstanding that not
all parties shall have signed the same counterpart.

 

 18 

 

 

Severability of Provisions. If any term or provision of this Agreement or the
application thereof to any Person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement and the application of
such term or provision to Persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforceable to the
fullest extent permitted by law.

 

Entire Agreement. This Agreement sets forth all (and is intended by the Members
to be an integration of all) of the promises, agreements and understandings
among the Members with respect to the Company, its business operations and
management, the Property and all other Company assets, and there are no
promises, agreements, or understandings, oral or written, express or implied,
among them other than as set forth or incorporated herein.

 

Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be a part of this
Agreement.

 

Pronouns and Plurals. Whenever the context may require, any pronouns used herein
shall be deemed to refer to the masculine, feminine, or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural, and vice
versa.

 

Governing Law. This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York.

 

 19 

 

 

Dispute Resolution.          Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in New York
County, New York for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery). Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each party irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of the documents
contemplated herein, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

 

Agreement in Counterparts. This Agreement may be executed in several
counterparts, and all such executed counterparts shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
are not signatory to the original or to the same counterpart.

 

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 20 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement as
of the date first above written.

 

COMPANY:

 

_______________, LLC

 

     

Name:

Title: Manager of its manager Southeast Florida Craft LLC

 

MEMBERS:

 

Southeast Florida Craft LLC   Attitude Beer Holding Co.             By:   By:
Roy Warren Its: Manager   Its: President

 

 21 

 

 

SCHEDULE A

 

Member  Percentage
Interest   Initial
Capital
Contribution  Southeast Florida Craft LLC
505 S. Flagler Drive, Suite 1010
West Palm Beach, FL 33401   40%  $1.00  Attitude Beer Holding Co.
712 US Highway 1, Suite 200
North Palm Beach, FL 33408   60%  $1* Total   100%  $ 1

 

* This amount shall be paid on the following schedule:

1. $ on or before ____________;

2. $ on or before ____________;

3. $ on or before ____________; and

4. $ on or before _________

 

 22 

 

 

EXHIBIT C

 

NON-CIRCUMVENTION – NO SHOP AGREEMENT

 

This Non-Circumvention – Commission Agreement (this “Agreement”) is entered into
as of this January 26, 2016, among Southeast Florida Craft, LLC (“SFC”),
Attitude Beer Holding Co. (“ABH”) and the person identified on the signature
page hereto as the principal (“Principal”).

 

RECITALS

 

WHEREAS, SFC and ABH have entered into a Joint Venture Agreement;

 

WHEREAS, the Principal is a principal of SFC;

 

NOW, THEREFORE, for good and adequate consideration, the receipt of which is
hereby acknowledged, the parties hereto, agree as follows:

 

1.          SFC and the Principals agree for themselves and all of their
shareholders, members, directors, managers, officers, affiliates and beneficial
owners and any entity owned directly or indirectly, managed or related to them,
along with any of their affiliates (collectively the “Affiliates”), not to enter
into any agreement that would impair ABH’s rights under the Joint Venture
Agreement.

 

2.          It is further understood and agreed that money damages would not be
a sufficient remedy for any breach or threatened breach of this agreement and
that ABH would suffer immediate and irreparable injury, loss and damage and
shall be entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach without posting a bond or other security
and SFC and Principal expressly waive any requirement for posting a bond. Such
remedy shall not be deemed to be the exclusive remedy for a breach of this
agreement, but shall be in addition to all other remedies available at law or
equity to ABH.

 

3.          This Agreement will be governed by the substantive laws of the State
of New York, without regards to the conflicts of laws provisions thereof that
would result in the application of the substantive law of any forum other than
the State of York. The parties each hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State and County of
New York for the adjudication of any dispute hereunder or in connection herewith
and waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper.

 

 23 

 

 

4.          Any notice, demand or request required or permitted to be given by
the respective parties hereto pursuant to the terms of this Agreement shall be
in writing and shall be deemed delivered (i) when delivered personally or by
verifiable facsimile transmission, unless such delivery is made on a day that is
not a Business Day, in which case such delivery will be deemed to be made on the
next succeeding Business Day, (ii) on the next Business Day after timely
delivery to an overnight courier and (iii) on the Business Day actually received
if deposited in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed to the address set forth on the signature
page hereto. Any party may change the address(es) to which all notices, requests
and other communications are to be sent by giving written notice of such address
change to the other Parties in conformity with this Section, but such change
shall not be effective until notice of such change has been received by the
other Party.

 

5.          This Agreement may be executed in two or more counter parts. A
facsimile signature will be deemed an original for all purposes. This Agreement
may be delivered by electronic means.

 

[REST OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

 24 

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first written above.

 

SFC

 

SOUTHEAST FLORIDA CRAFT, LLC       /s/ Glenn E. Straub   By: Glenn E. Straub  
Its: Manager   P.O. Box 810245   Boca Raton, Fl 33481  

 

ABH

 

ATTITUDE BEER HOLDING CO.       /s/ Roy Warren   By: Roy Warren   Its: President
  712 US Highway 1, Suite 200   North Palm Beach, FL 33408  

 

PRINCIPAL

 

/s/ Glenn E. Straub   Glenn E. Straub   P.O. Box 810245   Boca Raton, Fl 33481  
    /s/ James D. Cecil   James D. Cecil   P.O. Box 810245   Boca Raton, Fl 33481
 

 

 25 

 

 

WORLD OF BEER FRANCHISING, INC.

COMBINED ADDENDUM TO AREA DEVELOPMENT

AND FRANCHISE AGREEMENT

 

This ADDENDUM (this "Addendum") is effective as of February 9, 2016 (the
"Effective Date"), regardless of the actual date of signature, between WORLD OF
BEER FRANCHISING, INC., a Florida corporation, with its principal business
address at 10910 Sheldon Road, Tampa, Florida 33626 ("we," "us," "our" or
"Franchisor"), and SOUTHEAST FLORIDA CRAFT, LLC, a Florida limited liability
company, with its principal address is P.O. Box 810245, Boca Raton, FL 33481
("you," "your" or "Developer"), and amends the Area Development Agreement of
even date herewith (the "Development Agreement") and any Franchise Agreement
(each a "Franchise Agreement" and collectively the "Franchise Agreements")
executed pursuant thereto (the Development Agreement and Franchise Agreements
are collectively referred to as the "Agreements") between Franchisor and
Developer or its affiliates. You and we are sometimes referred to individually
as a "party" and collectively as the "parties."

 

OPERATIVE TERMS

 

Accordingly, the parties agree as follows:

 

1.          Incorporation and Precedence. This Addendum (a) is an integral part
of, and is incorporated into, the Agreements and (b) governs, controls and
supersedes any inconsistent or conflicting provisions of the Agreements.
Capitalized terms used but not defined in this Addendum have the meanings as
defined in the Agreements Any references to the Agreements will also include
this Addendum, unless the context expressly provides otherwise.

 

2.          Negotiated Changes. After negotiations, the parties have agreed to
certain modifications to the Agreements, at your request and for your benefit.
This Addendum contains the agreements between the parties based on those
negotiations.

 

3.          Competitive Business. The definition of Competitive Business as
defined in Section 9 of the Development Agreement and Section 10 of the
Franchise Agreement shall be deleted in its entirety and replaced with the
following:

 

“The term “Competitive Business,” as used in this Agreement, means any business
or facility owning, operating or managing, or granting franchises or licenses to
others to do so, any bar, pub, tavern, or other alcoholic beverage service
facility or any retail establishment (like a liquor store or convenience store)
featuring beer, wine and related products as a primary menu item (other than a
WOB Store operated under a franchise agreement with us). This Section does not
prohibit you or your owners from having a direct or indirect interest as a
disclosed or beneficial owner in a publicly held Competitive Business, as long
as such securities represent less than 5% of the number of shares of that class
of securities which are issued and outstanding.”

 

4.          Modification of System Standards. Section 11.3 of the Franchise
Agreement is hereby deleted and replaced with:

 

 26 

 

 

“We may periodically modify System Standards, which may accommodate regional or
local variations as we determine. Such modifications may obligate you to invest
additional capital in the WOB Store (“Capital Modifications”) and/or incur
higher operating costs; provided, however, that such modifications will not: (i)
occur within 12 months of signing this Agreement; (ii) alter your fundamental
status and rights under this Agreement; nor (iii) require you to spend more than
$150,000 on Capital Modifications during the term of this Agreement. You are
obligated to comply with all modifications to System Standards within the time
periods we specify. We agree to give you 90 days to comply with Capital
Modifications we require. However, if a Capital Modification requires an
expenditure of more than $20,000, we agree to give you 12 months from the date
such request is made to comply with such Capital Modification. Capital
Modifications are in addition to the costs you will incur to replace or
refurbish your WOB Store, equipment and fixtures from time to time. Capital
Modifications do not include any expenditures you must make, or choose to make,
in order to comply with applicable laws, governmental rules or regulations.”

 

5.          Remaining Terms Unaffected. The remaining terms of the Agreements
are unaffected by this Addendum and remaining binding on the parties.

 

6.          Background Information. The "Background" information set forth above
is true and correct, and is incorporated herein by this reference.

 

7.          Headings. The section and paragraph headings contained in this
Addendum are for convenience only and do not define, limit or construe the
contents of such sections or paragraphs.

 

8.          Counterparts. This Addendum may be signed in one or more
counterparts, each of which will be deemed an original and together will
constitute one and the same instrument. A signature affixed to a counterpart of
this Agreement and delivered by facsimile or other electronic transmission by
any party is intended to be its, his or her signature and shall be valid,
binding and enforceable against such party.

 

Intending to be legally bound, the parties sign and deliver this Addendum
effective on the Effective Date, regardless of the actual date of signature.

 

WORLD OF BEER FRANCHISING, INC.,   SOUTHEAST FLORIDA CRAFT, LLC, a Florida
corporation   a Florida limited liability company       By: /s/ Benjamin P.
Novello   By: /s/ James D. Cecil Print Name: Benjamin P. Novello   Print Name:
James D. Cecil Title: Chief Development Officer   Title: Managing Member Date
2/9/16     Date: 2/9/16  

 

World of Beer Franchising Inc. Franchise Agreement has not been included due to
confidential and sensitive information to prevent competitors from seeing such
information

 27