Counter to partners' Oct 28 response

Prepared Oct 29, 2026. NOT SENT — needs Chris's approval before it goes to Mowery, Brooks, and McGrath.

To: Patrick Ray Mowery, John Clayton Brooks III, Phillip Mace McGrath III
Re: RAR Crabhouse, LLC — RaR's positions for the revised drafts

Thanks for the detailed response. We're close. To keep this moving while I'm traveling (in Japan Oct 29–Nov 6, email is best), here's exactly where RaR stands so your redraft lands in the right place.

Settled — no further discussion needed

The new lease terms are accepted: $5,000/month until opening, then $6,500/month with 2% annual increases, plus the $5,000 deposit at signing. Also accepted as stated in your response: Key Person hours deleted, MA amendment lock, $10k spending / $50k-36-month contract limits with the ordinary-course carve-out, beer purchases exempt from the Supermajority vote, RaR hires and fires the GM and all staff, regulatory fallback, name-offer right dropped, Exhibits A and B completed before signing with the pass-through cap, build-out budget in writing before signing, transfer loosening with tag-along once the right of first offer expires, and price parity on every partner's goods.

1. Non-compete — narrowed to crab houses, with a full Chessie carve-out

I accept a 25-mile / 24-month non-compete, but only against operating a crab house. The agreement must define "crab house" clearly — a restaurant whose primary concept is crabs/seafood boils — and must expressly preserve RaR's right to open Chessie-themed restaurants of any concept, anywhere, at any time. Whether RaR brings partners into those spots, and who they are, is up to me and RaR — not this group. This deal is just this deal: nothing in these documents promises these partners anything about RaR's future ventures, concepts, or partnerships.

2. Guaranty — restructured, capped, and limited

I accept RaR guaranteeing first with me as backup. For the revised Guaranty:

• The RaR-first ordering must be in the actual language — Guaranty 1.3 (guaranty of payment) and 3.1 (waiver of defenses) must be amended so the draft matches your response.
• The good-faith dispute hold must apply to government assessments too — Guaranty 2.1 must be amended so collection pauses while an assessment is contested in good faith. Pay-first-contest-later on a tax audit is a non-starter.
• Cap the personal guaranty at a fixed dollar amount, and release it on my death — my estate is not a backstop.
• Carve out no-fault tax and audit amounts from the personal guaranty entirely.
• Delete the annual personal financial statement (Guaranty 4.1), or limit it to triggered events.
• The supplier-credit account process goes in writing before signing, and opening those accounts requires no additional personal guaranty from me.

3. Indemnity — same protections, in writing

The indemnity gets the same three protections explicitly: RaR pays first, no collection while an amount is disputed in good faith, and coverage limited to the managing period. And it must be limited to fraud, theft, and willful misconduct — not "ordinary breaches" — and capped.

4. Removal — hold while contested, lock the section

Removal for Cause takes effect only after a final determination, not on notice while disputed. OA 7.7 gets an amendment lock: it cannot be amended to reintroduce removal without Cause without RaR's consent (OA 17.1 must say so explicitly). OA 13.1(d) is deleted or clarified — removal for Cause is not a buy-sell event of RaR's 25%; "removal never affects the equity" means the buy-out trigger is gone, not just dormant. The Cause grounds get tightened: the 14-day/30-day supervision ground (OA 7.7(c)(vi)) goes, the single-unapproved-payment ground gets a materiality and cure standard, and the real-time-access ground (OA 7.7(c)(xi)) gets a reasonable cure period with a carve-out for outages and system changes.

5. Performance regime — deleted, not just the hours

Deleting Key Person hours while keeping MA 2.4(b)–(g), MA 4.7 (fee cut to 2.5%), and MA 4.4 (no fee accrues during a Performance Failure, never recovered) leaves the whole regime in place. Delete the full MA 2.4 standards block and the 4.7/4.4 consequences, and delete MA 3.1(c) (a supplier account 30 days past due as an automatic Performance Failure). Performance issues get notice and a real cure period, not automatic fee forfeiture.

6. Death — the estate keeps a guaranteed exit

OA 13.3's estate put survives, or is replaced with equivalent mechanics: if I die, the Company or the remaining members must buy the 25% at Fair Value within a defined window, with a right of first offer, valuation method, and closing timeline spelled out. My wife does not become an involuntary minority holder with no exit.

7. Fee — a floor and a start date

The fee needs a minimum annual amount and a start date that is not hostage to the loan payoff — or a backstop date by which the fee begins regardless. No distributions of any kind before the $175,000 payoff is accepted, but our CPA must bless the tax timing in writing, and that sign-off is a condition to signing.

8. Money roles — fully split, access scoped

Bank signer and partnership representative are split across members (not both with Pat), with a backup approver as you proposed. Pat's real-time electronic access is read-only, during reasonable hours, with data segregation if RaR's systems are shared across locations — and denying access due to an outage or credential change is not a Cause event.

9. Renewal — terms agreed now

The renewal options carry agreed rent, term length, and conditions in the lease itself — not "worked out 180 days before expiration."

10. Exit economics — confirmed in the drafts

Confirm the buy-out timing, increase the cash portion above 20% or add default protections on the 5-year note, clarify the tag-along triggers on any sale of interests (not just a majority sale), delete OA 1.5(e) in full (new Chessie's brands are not default-blocked), and narrow OA 12.4 so a restructuring of RaR that I control is not a buy-sell event.

11. Governance and operations

• OA 8.4(a): the 5-business-day silence rule gets a travel carve-out or a longer window — I can't have a vote default to "no" because I'm on a plane.
• OA 1.4(d): as a non-cash member, RaR is exempt from the pre-license cash call.
• OA 1.4(c): if the license hasn't issued within nine months, RaR has a termination right — I don't wait indefinitely with no income.
• Build-out: the written budget includes an overrun funding mechanism (the OA allows no capital calls, so say now what happens if the war chest isn't enough). Improvements becoming the landlord's property under Lease 8.2/1.1/7.1 needs a rent credit or buy-out offset for RaR's supplier-credit-funded equipment.
• Price parity needs a verification mechanism — RaR can audit Clay's wholesale pricing to others, and vice versa.
• OA 4.4's 45-day claim waiver gets a reasonable submission process and an independent tiebreak, not Mowery as sole decider.
• MA 2.2's parity-effort standard becomes objective and measurable.
• MA 10.3 allows RaR to delegate day-to-day management with notice.
• OA 11.4's non-solicitation is limited to solicited senior employees, 12 months.
• OA 7.14's monitoring costs get a cap and an approval.
• OA 15.2: advance defense costs on equal terms for all members.
• Spousal consent (OA 18.8): confirm in the drafts whether my wife must sign, given I hold through RaR.

Once the revised drafts reflect all of the above, send them to me and to Sarah Baugh at McAllister, DeTar, Showalter & Walker before anyone signs. I'm available by email through Nov 6.

— Chris