sample corporate agreement

June 4, 2019

123 XXXXXXXX ASSOCIATES, LLC
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
OPERATING AGREEMENT
THIS AGREEMENT, made as of the ___ day of ________________, 20 _, by and among 123 XXXXXXX ASSOCIATES, LLC, a New York limited liability company (the “Company”), and Peter XXXXXX, and PAUL XXXXXX (collectively the “Members” and individually the “Member”).

 

BACKGROUND
The Members have formed the Company for the purpose of owning real estate where a business known as XXXXXXXX, owned by XXXXXXXX (“X”) is located. The Members are also the sole shareholders of X and their rights with respect thereto are the subject of a certain Shareholders Agreement of even date herewith (the “Shareholders Agreement”).

The Members have agreed to restrict transferability of their interests in the Company, require purchases and sales of their stock in certain circumstances, and provide for certain other matters relating to the Company, all as more fully set forth in this Agreement.

The Members desire to enter into an Amended and Restated Limited Liability Company Operating Agreement, and record their understanding with respect to the Company, its operation and governance, the transferability of their Interests and other relevant matters.
NOW THEREFORE, intending to be legally bound, the parties agree as follows:

ARTICLE 1. ORGANIZATION AND CAPITALIZATION.
1.1 Confirmation of Existence. The parties hereto agree to continue the operation of the Company.
1.2 Principal Office. The principal office of the Company shall be located at XXXXXXXX The Company may have such other offices as the Members may designate or as the business of the Company may from time to time require.
1.3 Registered Office. The registered office of the Company is XXXXXXXX The registered office and the registered agent may be changed from time to time by action of the Members and by filing the prescribed form in the Department of State.
1.4 Purpose and Scope. The purpose of the Company shall be to engage in the business of:
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(i) purchasing, owning, maintaining, improving, managing and selling or
otherwise disposing of certain assets, including but not necessarily limited
to real estate;
(ii) investing and reinvesting the proceeds of the sale or other disposition
of the assets of the Company;
(iii) carrying on any other activity necessary, appropriate, desirable or
incidental to the foregoing; and
(iv) carrying on any other lawful business, purpose or activity which a
Pennsylvania limited liability company is not prohibited from carrying on.
1.5 Term. The term of the Company shall commence with the execution of
this Agreement and shall continue in full force and effect until December 31, 2999,
unless sooner terminated or dissolved as provided in this Agreement.
1.6 Tax Status of the Company. It is the intention of the parties hereto that the
Company be treated as a partnership for federal and (where applicable) state and local
income tax purposes, and the provisions of this Agreement are to be construed consistent
with such intention. Paul XXXXXXX shall be the “tax matters” Member.
1.7 Ownership of Interest. The Company’s ownership is comprised by
interests (the “Interests”) owned by Members. The ownership interest of the Members in
the Company is as shown in Exhibit A.
1.8 Certain Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings set forth below, unless the
context may otherwise require:

“Bankruptcy” means, with respect to a Member (a) if such Member: (i) makes
an assignment for the benefit of creditors; (ii) files a voluntary petition in
bankruptcy; (iii) is adjudged a bankrupt or insolvent, or has entered against him or
it an order for relief, in any bankruptcy or insolvency proceeding; (iv) files a
petition or answer seeking for himself or itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation; (v) files an answer or other pleading admitting or failing
to contest the material allegations of a petition filed against him or it in any
proceeding of a nature described in clause (iv); (vi) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Member or
of all or any substantial part of his or its properties; or (b) 120 days after the
commencement of any proceeding against the Member seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief
under any statute, law or regulation, if the proceeding has not been dismissed, or
if within 90 days after the appointment without the Member’s consent or
acquiescence of a trustee, receiver or liquidator of the Member or of all or any
substantial part of his or its properties, the appointment is not vacated or stayed,
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or within 90 days after the expiration of any such stay, the appointment is not
vacated.
“Capital Contributions” means the contributions made by the Members to the
Company pursuant to Sections 8.1 and 8.2 hereof.
“Code” means the United States Internal Revenue Code of 1986, as amended, or
any corresponding provision or provisions of any succeeding law and, to the
extent applicable, the Income Tax Regulations.
“Event of Dissolution” means, with respect to any person, one or more of the
following: the death, insanity, withdrawal, resignation, retirement, expulsion,
Bankruptcy or dissolution of such person.
“GAAP” means generally accepted accounting principles in the United States,
applied on a consistent basis.
“Income Tax Regulations” or “Regulations” means, unless the context clearly
indicates otherwise, the regulations in force as final or temporary that have been
issued by the United States Department of the Treasury pursuant to its authority
under the Code, and any successor regulations.
“LLC Interest” or “Interest” means a Member’s right to receive distributions
from the Company and a Member’s shares of the Profits, Losses, tax credits, and
other tax items of the Company.
“Net Cash Flow” means, with respect to any fiscal period, the excess of operating
revenues, investment income and other receipts over operating expenses and other
expenditures for such fiscal period, decreased by (i) any amounts added to
Reserves during such fiscal period and increased by (ii) the amount (if any) of all
allowances for cost recovery, amortization or depreciation with respect to
property of the Company for such fiscal period, and (iii) any amounts withdrawn
from Reserves during such fiscal period.
“Person” means any individual, Company, general or limited partnership, limited
liability company, joint venture, estate, trust or other entity.
“Profits” or “Losses” shall mean, for each fiscal year, the Company’s taxable
income or loss determined under I.R.C. Section 703(a) and adjusted as follows:
(a) Taxable income shall increase and taxable loss shall decrease by
tax-exempt income of the Company.
(b) Taxable income shall decrease and taxable loss shall increase by
expenditures described in Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing taxable income and losses.
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(c) If the value of property of the Company reflected in the Members’
Capital Accounts is adjusted in accordance with Sections 9.4(c) or (d), the amount
of such adjustment shall be treated as a gain or loss in determining Profits or
Losses.
(d) If the value of property of the Company reflected in the Members’
Capital Accounts is adjusted pursuant to Section 9.4(c) or (d), the Company
disposes of such property, and such disposition results in a gain or loss that is
recognized for federal income tax purposes, then such gain or loss shall be
computed by using the value of such property as it is reflected in the Members’
Capital Accounts in lieu of the tax basis of such property.
(e) If the value of property of the Company as reflected in the
Members’ Capital Accounts is adjusted in accordance with Section 9.4(c), the
amount of depreciation, depletion, or amortization for such property shall be the
Revised Depreciation.
(f) None of the allocations set forth in Sections 9.5 through 9.8 shall
be taken into account in determining Profits and Losses.

“Revised Depreciation” shall mean, if the value of property of the Company as
reflected in the Capital Accounts of the Members differs from its adjusted basis
for federal income tax purposes because of an adjustment pursuant to Section
9.4(c) or (d), in lieu of the amount of depreciation, cost recovery deduction, or
amortization prescribed under the Code for any period, such depreciation, cost
recovery deduction, or amortization shall be the amount that bears the same
relationship to the adjusted value of such property as reflected in the Capital
Accounts of the Members as the depreciation, cost recovery deduction, or
amortization computed for federal income tax purposes with respect to such
property for such period bears to the adjusted tax basis of such property. If such
property has a zero adjusted tax basis, Revised Depreciation may be determined
under any reasonable method selected by the Company.

ARTICLE 2. MEETINGS AND VOTING PROCEDURE

2.1 Annual Meeting. The annual meeting of the Members shall be held in
June of each year, beginning with the year 2009 at the principal office of the Company,
or on such other date and/or at such other location as the Members shall determine, for
the transaction of such other business as may come before the meeting. If the election
shall not be held on the day designated herein for the annual meeting of the Members, or
at any adjournment thereof, the Members shall cause the election to be held at a special
meeting of the Members as soon thereafter as it may conveniently be held. The failure of
the Company to hold any annual meeting on the designated date shall not in any manner
render the acts of the Company invalid, or otherwise adversely affect such acts.
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2.2 Regular Meetings. The Members may, by resolution, prescribe the time
and place for the holding of regular meetings and may provide that the adoption of any
such resolution shall constitute notice of such regular meetings. If the Members do not
prescribe the time and place for the holding of regular meetings, such regular meetings
shall be held at the time and place specified by the Manager in the notice of each such
regular meeting. The Company may, but shall not be required to, conduct regular
meetings.
2.3 Special Meetings. Special meetings of the Members, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the Manager or by any
two Members. The Company may, but shall not be required to, conduct special meetings.
2.4 Notice of Meeting. Written or telephonic notice stating the place, day and
hour of any meeting and, in case of a special meeting, the purposes for which the meeting
is called shall be delivered not less than five days before the date of the meeting, either
personally or by mail, by or at the direction of the Manager, to each Member. If mailed,
such notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the Member at her address as it appears on the books of the Company, with
postage prepaid.
2.5 Quorum. At any meeting of the Members, a majority of the Members,
represented in person or by proxy, shall constitute a quorum.
2.6 Proxies. At all meetings of Members, a Member may vote by proxy
executed in writing by the Member or by her duly authorized attorney-in-fact. Such
proxy shall be filed with the Manager of the Company before or at the time of the
meeting. No proxy shall be valid after three months from date of execution, unless
otherwise provided in the proxy.
2.7 Voting by Certain Members. If a Member dies or a court of competent
jurisdiction adjudges her to be incompetent to manage her property, the Member’s
executor, administrator, guardian or personal representative may exercise all of that
Member’s rights for the purpose of settling her estate or administering her property.
2.8 Manner of Acting.
(a) Formal Action by Members. Unless otherwise set forth in this Agreement,
the vote of the Members holding a majority interest in the Company shall be the act of
the Members. The affirmative vote or consent of all of the Members shall be required to
authorize a Manager, Member, or other person to do any act on behalf of the Company
that contravenes the certificate of organization or a written provision of this Agreement,
including, without limitation, any provision that expressly limits the purpose, business or
affairs of the Company or the conduct thereof.
(b) Procedure. The Manager of the Company shall preside at meetings of the
Members. A record shall be maintained of the meetings of the Members. The Members
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may adopt their own rules of procedure, which shall not be inconsistent with this
Agreement.
(c) Informal Action of Members. Unless otherwise set forth in this
Agreement or otherwise provided by law, any action required to be taken at a meeting of
the Members, or any other action which may be taken at a meeting of the Members,
including, but not limited to an action in lieu of an annual meeting, may be taken without
a meeting if a consent in writing, setting forth the action so taken, shall be signed by
Members holding a majority Interest in the Company.
2.9 Order of Business. The order of business at all meetings of the Members,
shall be as follows:
a. Roll Call.
b. Proof of notice of meeting or waiver of notice.
c. Reading of minutes of preceding meeting (or waiver of same if so
voted by Members).
d. Report of the Manager.
e. Unfinished Business.
f. New Business.
2.10 Telephonic Meeting. Members of the Company may participate in any
meeting of the Members by means of conference telephone or similar communication if
all persons participating in such meeting can hear one another for the entire discussion of
the matter(s) to be voted upon. Participating in a meeting pursuant to this Section shall
constitute presence in person at such meeting.
2.11 Changes in Required Vote. Whenever the certificate of organization or
this Agreement requires for the taking of any action by the Members a specific number or
percentage of votes or consents, the provision of the certificate or Agreement setting forth
that requirement shall not be amended or repealed by any lesser number or percentage of
votes or consents of the Members.
2.12 Voting Requirement. Whenever the certificate of organization, this
Agreement or the Act requires for the taking of any action by the Members of the
Company by vote consents of the Members, the provision of the certificate , this
Agreement or the Act setting forth that requirement shall be interpreted as requiring the
vote or consents of the Members.
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ARTICLE 3. FISCAL MATTERS
3.1 Fiscal Year. The fiscal year of the Company shall begin on the first day of
January and end on the last day of December of each year, unless otherwise determined
by resolution of the Members.
3.2 Deposits. All funds of the Company shall be deposited from time to time
to the credit of the Company in such banks, trust companies or other depositories as the
Members may select.
3.3 Checks, Drafts, Etc. All checks, drafts or other orders for the payment of
money, and all notes or other evidences of indebtedness issued in the name of the
Company shall be signed by any one of the following: the Manager or any Member
specifically authorized by resolution of the Members.
3.4 Loans. No loans shall be contracted on behalf of the Company and no
evidences of indebtedness shall be issued in its name unless authorized by a resolution of
the Members. Such authority may be general or confined to specific instances.
3.5 Contracts. The Members may authorize any Member or agent of the
Company to enter into any contract or execute any instrument in the name of and on
behalf of the Company, and such authority may be general or confined to specific
instances.
3.6 Accountant. An accountant may be selected from time to time by the
Members to perform such tax and accounting services as may, from time to time, be
required. The accountant may be removed by the Members without assigning any cause.
3.7 Legal Counsel. One or more attorney(s) at law may be selected from time
to time by the Members to review the legal affairs of the Company and to perform such
other services as may be required and to report to the Members with respect thereto. The
legal counsel may be removed by the Members without assigning any cause.

 

ARTICLE 4. CAPITAL MATTERS, DETERMINATION OF PROFIT AND
LIQUIDATION PERCENTAGES

4.1 Initial Contributions. The Members and the Company acknowledge that
each Member has contributed to the Company an equal portion of the assets of the
Company (the “Capital Contribution”) and that each Member shall have an equal
percentage share in the profits of the Company (“Profit Percentage”).
4.2 Capital Accounts. A capital account (a “Capital Account”) shall be
established for each Member in the amount equal to the fair market value of such
Member’s initial Capital Contribution. A Member’s Capital Account shall be maintained
in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), and shall be increased
by:
(a) the amount of any subsequent capital contribution made by such
Member; and
(b) the amount of income or gain allocated to such Member pursuant to
this Agreement;
and shall be decreased by:
(c) the amount of loss or deduction or non-deductible expenditure
allocated to such Member pursuant to this Agreement; and
(d) the amount of any distribution to such Member.
4.3 Limit of Liability. Except as otherwise provided by law, the liability of
each Member shall be limited to the aggregate amount of the capital contributions which
such Member has made or is otherwise legally obligated to make in accordance with the
provisions of this Agreement and the Members shall have no further personal liability to
contribute money to, or in respect of, the debts, liabilities, contracts or any other
obligations of the Company, nor shall the Members be personally liable for any
obligations of the Company.
4.4 Capital Contributions. A Member shall not be required to lend any funds
to the Company or to make any further capital contribution to the Company after her
initial Capital Contribution is made. A Member shall not have any obligation to the
Company or to any other Member to restore any negative balance in her capital account.
No Member may withdraw capital or receive any distributions except as specifically
provided herein. No interest shall be paid by the Company on any capital contributions
to the Company.

 

ARTICLE 5. LIMITED LIABILITY COMPANY INTERESTS AND THEIR
TRANSFER
5.1 Limited Liability Company Interests. Limited Liability Company interest
(the “LLC Interest or “Interests”) are the personal property of each Member representing
an equity interest in the Company and may be evidenced by a Certificate of Limited
Liability Company Interest (“LLC Interest Certificate”) issued by the Company.
5.2 Admission of New Members. New Members shall be admitted only with
the unanimous consent of all Members, and the making of a capital contribution as is
determined by the Members. Each new Member shall execute a Joinder to the Operating
Agreement.
5.3 Restrictions on Transfers of LLC Interest. No Member shall, in any
manner, sell, transfer, donate, assign, encumber, pledge or otherwise dispose of (each
such transaction being referred to herein as a “Transfer”) any LLC Interest which she
now owns or hereafter acquires, except in the manner that is expressly set forth in Article
12 and 13 hereof.

 

ARTICLE 6. BOOKS AND RECORDS

6.1 Books and Records. The books and records of the Company shall be kept
at the principal office of the Company or at such other places as the Members shall from
time to time determine.
6.2 Right of Inspection. Any Member of the Company shall have the right to
examine at any reasonable time or times for any purpose, the books and records of
account, minutes and records of Members and to make copies thereof. Such inspection
may be made by any agent or attorney of the Member. Upon the written request of any
Member of the Company, it shall mail to such Member its most recent financial
statements, showing in reasonable detail its assets and liabilities and the results of its
operations.
6.3 Financial Records. All financial records shall be maintained and reported
based on generally accepted accounting principles.

 

ARTICLE 7. DISTRIBUTION OF PROFITS
7.1 Distributions. The Members may from time to time unanimously declare,
and the Company may distribute, accumulated profits which all such Members agree are
not necessary for the cash needs of the Company’s business. Such distributions shall be
made to the Members pro rata to their respective Profit Percentages.

 

ARTICLE 8. GOVERNANCE
8.1 Manager. The Manager shall be the chief executive officer of the
Company responsible for the general overall supervision of the business and affairs of the
Company. He shall, when present, preside at all meetings of the Members. The Manager
may sign, on behalf of the Company, such deeds, mortgages, bonds, contracts or other
instruments which have been appropriately authorized to be executed by the Members
except in cases where the signing or execution thereof shall be expressly delegated by the
Members or by this Agreement or by statute to some other officer or agent of the
Company; and, in general, he shall perform all duties as may be prescribed by the
Members from time to time. The specific authority and responsibility of the Manager
shall also include the following:
(a) The Manager shall effectuate this Agreement and the regulations and
decisions of the Members.
(b) The Manager shall direct and supervise the operations of the Company.
(c) The Manager shall keep the Members advised in all matters pertaining to
the operation of the Company, services rendered, operating income and expense,
financial position, and, to this end, shall prepare and submit a report to the Members at
each regular meeting and at other times as may be directed by the Members.
8.2 Actions Requiring Unanimous Consent. Without the unanimous consent
of all of the Members, the Company shall not, and the Manager shall not on behalf of the
Company:
(a) sell, assign, exchange, encumber, convey or otherwise dispose of any
asset of the Company;
(b) borrow money on the credit of the Company;
(c) purchase or otherwise acquire any asset except in the ordinary course
of the Company’s business, and except for the purchase of investment securities; or
(d) purchase domestic or foreign investment securities or otherwise invest
funds of the Company, other than in (i) obligations of the United States and agencies
thereof and obligations guaranteed by the United States that are due and payable within
one year from the date of acquisition; (ii) certificates of deposit, time deposits or
repurchase agreements which are fully insured or are issued by commercial banks
organized under the laws of the United States or any state thereof and having a combined
capital, surplus and profits of not less than $100,000,000; or (iii) commercial paper
maturing not more than nine (9) months from the date of issue, provided that, at the time
of purchase, such commercial paper is not rated lower than “P-1” by Moody’s Investors
Service, Inc., or “A-1” by Standard & Poor’s Company.
8.3 Actions Requiring Majority Consent. Without limiting the provisions of
Section 8.2 above, without the consent of the Members holding a majority Interest in the
Company, the Company shall not, and the Manager shall not on behalf of the Company:
(a) execute or deliver any contract, amendment, supplement or other
document;
(b) retain, engage or employ at the expense of, and for the benefit of, the
Company, persons, firms or companies as employees, consultants, accountants, attorneys,
brokers, agents;
(c) bring or defend, pay, collect, compromise, arbitrate, resort to legal
action or otherwise adjust claims or demand of or against the Company; or
(d) take all other actions that require a vote of the Members under this
Agreement or by law.
8.4 Executive Officer. Peter XXXXXXXX shall be the Manager. If Peter
XXXXXXX dies, resigns or is unable to perform her duties, the Manager shall be elected
at a special meeting of the Members by a vote of the Members holding a majority of the
Interests in the Company initially for a term ending at the next annual meeting of the
Company, and, thereafter, at the annual meeting for a term of one (1) year or until his or
her successor is elected.
8.5 Other Officers. The Company may, at the discretion of the Members,
have additional officers including, without limitation, one or more vice-managers, one or
more assistant secretaries and one or more assistant treasurers. Officers need not be
selected from among the Members. One person may hold two or more offices, except
one person may not hold both the office of Manager and the office of Secretary.
8.6 Election and Tenure. The officers of the Company shall be elected
annually by the Members at the annual meeting. Each officer shall hold office from the
date of her election until the next annual meeting and until her successor shall have been
elected, unless she shall sooner resign, be removed or be deceased.
8.7 Resignations and Removal. Any officer may resign at any time by giving
written notice to the Manager or to all of the Members, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it effective.
Any officer may be removed at any time by the Members with or without cause.
8.8 Vacancies. A vacancy in any office may be filled for the unexpired
portion of the term by the Members.
8.9 Salaries. The salaries of the officers shall be fixed from time to time by
unanimous consent of the Members and no officer shall be prevented from receiving such
salary by reason of the fact that she is also a Member of the Company.

 

ARTICLE 9. ALLOCATION OF PROFITS AND LOSSES; TAX AND
ACCOUNTING MATTERS

9.1 Allocation of Profits and Losses. Except as otherwise provided in
Sections 9.5 through 9.8 inclusive, all Profits, Losses, tax credits, and other tax items of
the Company shall be allocated between the Members in accordance with their LLC
Interests.
9.2 Accounting Matters. The Members shall cause to be maintained complete
books and records accurately reflecting the accounts, business and transactions of the
Company on a calendar-year basis and using such cash, accrual or hybrid method of
accounting as in the judgment of Members is appropriate.
9.3 Tax Status and Returns. The Members or any officer designated by the
Members shall prepare or cause to be prepared all tax returns and statements, if any, that
must be filed on behalf of the Company with any taxing authority, shall make timel
filing thereof and shall provide a copy thereof to each Member. The Company shall
prepare or cause to be prepared and delivered to the Members a report setting forth in
reasonable detail the information with respect to the Company during such calendar year
reasonably required to enable each Member to prepare its federal, state and local income
tax returns in accordance with applicable law then prevailing.
9.4 Capital Accounts. A single separate capital account (a “Capital Account”)
shall be maintained for each Member.
(a) Each Member’s Capital Account shall be increased by (i) the amount
of money contributed by such Member to the Company, (ii) the fair market value of
property contributed by such Member to the Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to under
I.R.C. Section 752), and (iii) the allocations to such Member of Profits and the amount of
any items of income and gain allocated to such Member under Sections 9.1 and 9.5
through 9.8.
(b) Each Member’s Capital Account shall be decreased by (i) the amount
of money distributed to such Member by the Company (which do not include payments
made to the Member for goods or services as described in Section 9.9), (ii) the fair
market value of property distributed to such Member by the Company (net of liabilities
secured by such distributed property that such a Member is considered to assume or take
subject to under I.R.C. Section 752), and (iii) such Member’s distributive share of Losses
and the amount of any items of deduction or loss allocated to such Member under
Sections 9.1 and 9.5 through 9.8.
(c) The value of all items of property reflected in the Capital Accounts of
the Members shall be adjusted to their fair market values and such adjustment shall be
reflected in the Capital Accounts of the Members as part of Profits or Losses or under
Section 9.8, as the case may be, as of the following times:
(i) In connection with a contribution of money or other property
(other than a de minimis amount) to the Company by a new or existing Member as
consideration for an Interest in the Company;
(ii) In connection with a liquidation of the Company within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g) or a distribution of money or other
property by the Company to a retiring or continuing Member as consideration for an
interest in the Company;
(iii) In connection with adjustments to the basis of property of the
Company pursuant to I.R.C. Sections 734(b) or 743(b), but only to the extent that the
Capital Accounts of the Members are adjusted as required in Regulations Section
1.704-1(b)(2)(iv)(m), provided, however, that the value of property reflected in the
Capital Accounts of the Members shall not be adjusted pursuant to this subparagraph (iii)
to the extent that an adjustment pursuant to subparagraph (ii) is required in connection
with a transaction that would otherwise result in an adjustment pursuant to this
subparagraph (iii).
(d) The value in the Capital Accounts of the Members of an item of
property of the Company that is distributed to a Member shall, immediately prior to such
distribution, be adjusted to its fair market value and such adjustment shall be reflected in
the Capital Accounts of the Members as part of Profits or Losses.
(e) Any Member who shall receive an LLC Interest (or whose LLC
Interest shall be increased) by means of a transfer to him or her of all or part of the LLC
Interest of another Member, shall have a Capital Account which reflects the Capital
Account of the transferred LLC Interest (or the applicable percentage thereof in the case
of a transfer of a part of an LLC Interest).
(f) Notwithstanding any provision of this Agreement to the contrary, the
Members intend that each Member’s Capital Account shall be maintained and adjusted in
accordance with the Code, including (without limitation) the adjustments permitted or
required by Code Section 704(b), the principles expressed in I.R.C. Section 704(c) (to the
extent applicable), and the adjustments required to maintain Capital Accounts in
accordance with the “substantial economic effect test” set forth in the Regulations
promulgated under I.R.C. Section 704(b).
9.5 Qualified Income Offset. If a Member unexpectedly receives an
adjustment, allocation, or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), such Member shall be allocated items of income and
gain (consisting of a pro rata portion of each item of the income, including gross income,
and gain of the Company for such fiscal year) in an amount and manner sufficient to
eliminate as quickly as possible and to the extent required by the Regulations, the deficit
Capital Account balance of such Member in excess of the amounts that such Member is
deemed obligated to restore pursuant to Regulations Section 1.704-2(g)(1) and -2(i)(5).
The allocations made pursuant to this Section 9.5 shall be made after all other allocations
pursuant to Sections 9.1, 9.7, and 9.8 have been made. This Section 9.5 is intended to
constitute a “qualified income offset” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be applied consistent therewith.
9.6 Gross Income Allocation. In the event that any Member has a deficit
Capital Account at the end of any fiscal year in excess of the amount that such Member is
deemed obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and -2(i)(5),
each such Member shall be allocated items of income and gain in the amount of such
excess. The allocations made pursuant to this Section 9.6 shall be made after all other
allocations pursuant to Sections 9.1, 9.5, and 9.7 have been made.
9.7 Allocation of Certain Adjustments. If an adjustment to the Capital
Accounts of the Members is required by Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
(4) because of a distribution in complete liquidation of a Member’s LLC Interest, the
amount of such adjustment shall be treated as an item of gain, if it increases the tax basis
of property of the Company, or as an item of loss, if it decreases the tax basis of property
of the Company. If Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies to the adjustment
to the Capital Accounts, such items of gain or loss shall be allocated to the Members in
accordance with their LLC Interests. If Regulations Section 1.704-1(b)(2)(iv)(m)(4)
applies to the adjustment to the Capital Accounts, such items of gain or loss shall be
allocated to the Member receiving the distribution.
9.8 Tax Allocations. Except as otherwise provided in this Agreement, all
items of income, gain, loss and deductions shall be allocated for tax purposes among the
Members in the same manner as the corresponding items of Profit and Loss are allocated
in Sections 9.1 and 9.5 through 9.7. Solely for tax purposes, and in accordance with
I.R.C. Section 704(c), income, gain, loss, and deductions with respect to property
contributed to the Company by a Member shall be shared among the Members so as to
take account of the variation between the basis of the property to the Company for federal
income tax purposes and its fair market value at the time of its contribution. If the value
of any property of the Company reflected in the Members’ Capital Accounts is adjusted
pursuant to Section 9.4(c)(1) or (2), thereafter, allocations of depreciation, depletion,
amortization, and gain or loss with respect to such property shall be determined so as to
take into account the variation between the adjusted tax basis and the adjusted value of
such property as reflected in the Members’ Capital Accounts in the same manner as under
I.R.C. Section 704(c). The Company will use the traditional method with curative
allocations as provided Regulations Section 1.704-3(c) to take into account income, gain,
loss and deduction with respect to property described in this Section 9.8.
9.9 Certain Payments to Members. Payments made by the Company to a
Member as consideration for services or products provided to the Company by the
Member, and interest due to a Member from the Company with respect to loans made by
the Member to the Company, shall be treated for income-tax purposes as provided in
I.R.C. Section 707(a)(1) (i.e., as payments by the Company to a non-Member, and not as
distributions by the Company to the Member).

 

ARTICLE 10. DISSOLUTION
10.1 Events Causing Dissolution. In accordance with the provisions of the
Pennsylvania Limited Liability Company Act, the Members agree that, unless the
business of the Company is continued by the unanimous consent of all Members within
90 days following the occurrence of any event listed in (b) or (c) below, the Company
shall be dissolved upon the following events: (a) written notification of dissolution given
by any Member in her sole discretion to all other Members, which notice is not
withdrawn in writing within sixty (60) days after delivery thereof; (b) upon a Member
becoming bankrupt or executing an assignment for the benefit of creditors, or the death or
determination by a court of competent jurisdiction of incompetence of a Member; (c) the
occurrence of any other event which terminates the continued membership of a Member
in the Company. The Company may also be dissolved upon the entry of a decree of
judicial dissolution.

 

ARTICLE 11. ENDORSEMENT ON CERTIFICATES. If the Members decide to issue

certificates for the Interest subject hereto, such certificates shall be surrendered to the
Company and endorsed as follows:
“This certificate is subject to, and is transferable only on compliance with, an
Amended and Restated Limited Liability Operating Agreement entered into
as________, 2009, by and among 123 XXXXXXXXXXXXXXXX, Peter
XXXXXXXX, and Paul XXXXXXXX, a copy of which is on file in the
Office of the Company.”
After endorsement, the certificates for the Interest shall be returned to the Member, who
shall be entitled to exercise all rights of ownership of such certificates under the Articles
of the Company. All certificates for Interest hereafter issued to or transferred by a
Member shall bear the same endorsement.

 

ARTICLE 12. NOTICES
Any notice required or permitted to be given, pursuant to the provisions of the New
Jersey Limited Liability Company Act or this Agreement, shall be effective as of the date
personally delivered, or if sent by mail, on the date deposited with the United States
Postal Service, prepaid and addressed to the intended receiver at the following addresses,
or at such other address as any party may, by notice, direct:
To the Corporation:
To Peter XXXXXXX:
To Paul XXXXXXX:
Except as otherwise expressly provided herein, all notices given by mail shall be
deemed as given three (3) days after deposited in the U.S. mail.

 

ARTICLE 13. RESTRICTIONS ON LIFETIME TRANSFERS OF INTEREST
13.1 Restrictions On Lifetime Transfers Of Interest. No Member shall, in any
manner, sell, transfer, donate, encumber, or otherwise dispose of (each such transaction
being referred to herein as a “Transfer”) the Interest or any part thereof, which he now
owns or hereafter acquires, except as expressly set forth in this Amendment.
(a) If a Selling Member (as hereinafter defined) proposes to make a Transfer of all
or any of his/her Interest, he shall obtain the prior written consent of the other Members
and of the Company to the proposed Transfer. In the absence of such consent, the Selling
Member shall, prior to making a Transfer, give the Company and the other Members (the
“Other Members”) written notice of his/her intention to make such a Transfer, setting
forth the proposed transferee and the price and other terms and conditions of the proposed
Transfer, which notice shall constitute an offer (the “Offer”) to sell such Interest to the
Company. The Company shall have the option, exercisable in writing within 30 days
after receipt of the Offer, to purchase all or any portion of such Interest upon the terms
and conditions set forth in the Offer. The Selling Member shall not participate in any
decision of the Company relating to the exercise of the option. If the Company elects not
to purchase all of the Selling Member’s Interest, the Other Members shall have the
option, exercisable in writing within 10 days after expiration receipt of the Second Offer
to notify the Selling Member whether they will sell their Interest or purchase his Interest
in accordance with the Second Offer. Closing will occur within 30 days after said notice
to the Selling Member. The option of the Other Members cannot be exercised without
unanimous agreement of the Other Members.
(b) If the Company and/or the Other Member do not purchase all the Selling
Member’s Interest in accordance with subparagraph (a) the Selling Member may transfer
the remaining Interest to the transferee identified in the Offer at the price and under the
terms and conditions of the Offer provided that the transferee (i) agrees in writing to be
bound by all the terms and conditions of this Agreement and executes a joinder to this
Agreement, and (ii) simultaneously with the purchase of the Interest of the Selling
Member, such transferee purchases the Interest of the Selling Member in X. If such
Transfer does not occur within three (3) months after the date of the Offer, the Selling
Member shall, prior to any Transfer, again offer to sell his or her Interest to the Company
and the Other Members in accordance with subparagraph (a) hereof.
(c) Anything in this Section 2 to the contrary notwithstanding, either Peter
XXXXXXXX or Paul XXXXXXXX (each a “Bequeathing Shareholder” when
applicable) may bequeath a portion of their respective interest in the Company, not to
exceed 25% of all Interests in the Company, either by a last will and testament or through
operation of the intestate laws to one or more of his children (the “Permitted Heirs”),
provided that all of the following conditions are satisfied:
(i) The Bequeathing Shareholder will have also bequeathed the same portion
of his or her interest in X;
(ii) A Permitted Heir claiming the bequest is at least 18 years of age;
(iii)The Permitted Heirs have been working at the business of X during the
summers while they are in school and on a full time basis thereafter (not
necessarily in a managerial position); and
(iv) The Permitted Heirs shall agree to sign a joinder to this Agreement and to
the Shareholders Agreement.
If any of the conditions (i) through (ii) above have not been met at the time
that the Company is asked to consent to the transfer of the Interest of the Bequeathing
Shareholder to a Permitted Heir, then, in such case, the Company shall repurchase the
Interest from the estate of the Bequeathing Shareholder pursuant to the terms of section
3(a) and the proceeds of the sale shall be paid directly to the Permitted Heir in lieu of
transferring the Interest. Any Interests in the Company owned by the Bequeathing
Shareholder and not transferred to the Permitted Heirs pursuant to this Section, shall be
subject to a mandatory repurchase pursuant to Section 13.2.
(d) A Member whose Interest are subject to purchase pursuant to this Section
13.1 and Section 13.2 shall be referred to as a “Selling Member.”
13.2 Mandatory Repurchases. Upon any of the following events, a Member, or a
Member’s estate, as the case may be, shall sell to the Company, which shall purchase, all
of such Member’s Interest at the price and on the terms set forth in this Section 12:
(a) subject to the provisions of subsection 13.1(c) above, the lapse of 45 days
from the death of a Member or 30 days after the appointment of a deceased Member’s
personal representative, whichever is earlier;
(b) omitted;
(c) the inability of a Member by reason of injury or illness to substantially
perform his usual duties as an employee of the Company for a period exceeding the
aggregate of 120 days within any one year period;
(d) the filing of a petition by or against any Member under any Federal or State
bankruptcy, liquidation or insolvency statute or other debtor relief legislation, provided
that in the case of a petition filed against a Member, such petition is not dismissed within
90 days after its filing;
(e) the assignment by a Member for the benefit of his creditors;
(f) the delivery of a notice by a Member to the Company of his intention to sell all
of his Interest to the Company;
(g) the delivery by a Member to the Company written notice of his intent to
pledge or encumber his Interest or a portion thereof, or the actual encumbering or
pledging of such Interest;
(h) a levy against or attachment or other process served for the purpose of having
any of the Interest of a Member levied, sold or transferred;
(i) the behavior of a Member is so inappropriate as to have an adverse effect in
the ability of the employees to perform their duties and/or providing service to the
patrons of the business;
(j) the transfer or disposition of a Member’s interest in the LLC;
(j) the transfer or disposition of any Interest by operation of law (except a transfer
or disposition by reason of death), or as a result of a property settlement agreement
relating to divorce or division of marital property or any other family law proceedings; or
(k) the occurrence of a Mandatory Repurchase under the Members’ Agreement.
13.3 Loans.
(a) In the event that, at the time of a sale of all or a portion of the Interest of a
Member hereunder to the Company, there are loans or other indebtedness of the
Company payable to such Member or his estate, such loans or indebtedness shall be
repaid to the Member or his estate at the same time and in the same manner as provided
in paragraph 13.5 hereof, subject to the application of insurance proceeds, if any, to
repayment of such loans under paragraph 13.6 hereof.
(b) In the event that at the time of sale of all or a portion of the Interest of a
Member to anyone there are loans or other indebtedness of such Member or his estate
payable to the Company, such loans or other indebtedness shall be repaid to the Company
out of the proceeds of such sale and each Member hereby assigns to the Company the
payments for such Interest first falling due to an amount sufficient to pay such
indebtedness and any interest that may be or become due thereon.
(c) In the event that at the time of sale of all or a portion of the Interest of a
Member to anyone there is a balance due to Helena Balis for the loan she advanced to the
Members for the purchase of the Business and Real Estate (the “Helena Balis Loan”),
such balance shall be repaid at the time of such sale and such repayment is a condition
precedent to the release of the Selling Member from any obligations under said loan.
13.4. Valuation of Interest. The value of the Interest and the price to be paid
therefor, in the event of a sale as a result of the occurrence of any of the events set forth
in Section 13.2 hereof, shall be as follows:
(a) The Member and the Company agree that, upon the execution of this
Agreement, and within 90 days after the end of each fiscal year of the Company during
the term hereof, the valuation of the Interest of the Company as of the end of the
immediately preceding fiscal year shall be determined, and each valuation shall be stated
in the Valuation Schedule, attached hereto as Exhibit “B”, which the Member and the
Company shall execute as evidence of agreement to the valuation. Each valuation of the
Interest shall be binding and conclusive on the Company and on each Member and their
respective heirs, executors, administrators, successors and assigns, for the purpose of this
Agreement. Upon a sale of Interest of the Company for which valuation under this
paragraph 5 is required, the purchase price shall be the valuation on the Valuation
Schedule for the fiscal year preceding the year in which such sale occurs.
(b) In the event that, for any reason, the Member and the Company shall have
failed to fix and enter the valuation per share of the Interest on the Valuation Schedule,
the value of such Interest, for the purposes of this Agreement, shall be the value set forth
in the immediately preceding entry in the Valuation Schedule.
(c) This section 13.4(c) shall apply to all sales for which a valuation is required,
except for sales of Stock upon death of a shareholder pursuant to section 13.2(a) hereof,
in which case subsection (b) above shall apply without application of the rights to an
appraisal conferred by this subsection (c). In the event that, for any reason, the Members
shall have failed to fix and enter the valuation of the Interest on the Valuation Schedule,
any Member or the Company may, within thirty (30) days after the occurrence of one of
the events set forth in Article 3 hereof giving rise to the mandatory purchase the Interest
of a Member, notify the other parties of his intent that the value of such Interest, for the
purposes of this purchase of the Interest of the Selling Member, be determined by
appraisal in accordance with the following process (the “Appraised Value”), and not in
accordance with subparagraph (b) above:
(i) The Members may agree on the Appraised Value within seven (7) days
from the delivery of the notice of request of a Member to establish the
Appraised Value.
(ii) If the Appraised Value is not agreed upon by the Members within seven
(7) days from the delivery of the notice, the Appraised Value shall be
determined by two appraisers, each to be selected by the Selling Member and
the Company respectively; each appraiser shall be certified by the American
Institute of Appraisers and shall have performed at least two appraisals for
commercial real estate with a single restaurant tenant located in the counties
of Bucks, Montgomery and Philadelphia, Commonwealth of Pennsylvania for
use in a state or federal court proceeding or for a financial institution, within
the last two years; both appraisers shall be disinterested, objective and without
any business dealings with any of the Members prior to their appointment.
The Appraised Value shall be the average of the valuations determined by
such appraisers; provided, however, that if the difference between the
valuations is more than 50% of the lower valuation, then the Appraised Value
shall equal the average of such valuations plus 10% of such average. If a
party fails to select an appraiser within fifteen (15) days from the date of
receipt of the written request from the other party for appointment of his
appraiser, or if an appraiser fails to submit his valuation to all Members and
the Company within 30 days from the date of his appointment, then the
Appraised Value shall be based solely on the valuation of the other party’s
appraiser.
13.5 Manner of Payment. The purchase price for Stock valued under Section 13.4
hereof (the “Purchase Price”) shall be paid in the following manner:
(a) The higher of 20% of the Purchase Price or the entire proceeds of any
insurance owned by the Company on the life of the Selling Member pursuant to Section
13.4 hereof (“Initial Payment”) will be paid at the closing on the purchase (the
“Mandatory Purchase Closing”) to occur on the same day as the Mandatory Purchase
Closing under the Shareholders Agreement for the Selling Member’s stock in X.
(b) The balance in 120 equal consecutive monthly installments with interest on
the unpaid balance from the due date of such Initial Payment at the rate of six (6%)
percent per annum (the “Mandatory Purchase Payout”), the first installment being
payable on the first day of the first calendar month following the month in which the
Initial Payment is made. Any installment may be prepaid at any time without premium or
penalty. The Mandatory Purchase Payout shall be evidenced by a promissory note (the
“Note”) executed and secured as follows:
(i) in the event of a sale to the Company, the Note shall be executed by
the Company;
(ii) in the event of a sale to one or more other Member, the Note or Notes
shall be executed by the respective purchasing Member, with respect to
the Interest which he/each purchases;
(iii) the Notes shall be secured by a pledge of the Interest sold, upon the
following terms and conditions: After the Interest sold is registered in the
name of the buyer, the buyer shall deliver the Interest to an escrow agent,
endorsed in blank for transfer, and the seller shall retain and hold the
Interest as security for the Note. Upon the occurrence of any of the events
referred to in subparagraph 6(c) hereof, the seller shall, in addition to the
exercise of any other available remedies, be entitled to request that the
escrow agent delivers the Interest to the Seller, and Seller may offer the
Interest at public or private sale. The seller shall be entitled to bid for and
purchase any or all of the Interest at any such public sale, and if the seller
is the successful bidder, the obligation of the buyer in default shall be
deemed to be fully satisfied by the proceeds of the sale, even if insufficient
to satisfy the obligations. Notice of foreclosure and all other statutory
requirements of such sale shall be deemed waived by the buyer, except
that the buyer whose Interest is to be offered for sale shall be given ten
days notice of the time and place of such sale. The proceeds of any such
sale shall be applied first to pay the expenses of conducting such sale,
including reasonable legal fees incurred in connection therewith, then to
pay any balance due the seller of such Interest by the buyer thereof, with
any surplus to be paid to the buyer in default. Upon payment in full by a
buyer of the purchase price to a seller, the seller shall immediately return
to the buyer the Interest pledged with him. Further, during such pledge,
but only so long as the buyer is not in default under his Note, the buyer
shall exercise and enjoy all of the rights accruing from the ownership of
said Interest.
(c) The Note shall provide for acceleration of the entire unpaid balance and
confession of judgment in the event of the following:
(i) failure to pay any installment payment within seven (7) days after
written notice of failure to pay on its due date; and
(ii) if the Company is the purchaser: levy or attachment upon any of the
assets of the Company, which is not removed within 60 days from the
making thereof, except that if the Company, in good faith, contests such
levy or attachment, no default shall exist or be declared as long as the
Company proceeds diligently and continually with such contest, or until
all rights and time to contest the same have expired; or
(iii) the buyer is adjudicated a bankrupt, makes an assignment for the
benefit of creditors, or a receiver is appointed for its assets and is not
removed within 30 days.
(d) If the Company is the purchaser, it will not, until the principal and interest of
the Note have been paid in full, without prior written consent of the holder of the Note:
(i) transfer any interest in the Company, or any options, warrants or other
rights which prior to payment in full of the Note are exercisable for, or
convertible into, Interest in the Company;
(ii) admit new Members in the Company;
(iii) amend its Articles of Formation;
(iv) sell, lease or mortgage all or substantially all of its assets; or
(v) liquidate, dissolve, or substantially reduce its usual and normal
operations.
(e) At the Mandatory Purchase Closing, the following shall occur:
(i) The Company or the purchasing Member(s) shall deliver to the Selling
Member the Initial Payment and the Note;
(ii) The Selling Member shall deliver the Interest certificates to the
escrow agent;
(iii) The Selling Member shall deliver to the Company his resignation as
officer, director and employee of the Company.
13.6 Insurance.
(a) In order to aid the funding of the purchase of an Interest after the death of a
Member, the Company shall purchase, own and become the beneficiary of insurance
policies on the lives of each of the Member in the minimum face value of $250,000
(reduced by the amount of life insurance carried by X for the same purpose). Upon the
sale by a Member during his lifetime of all his Interest, either to the Company or to the
other Member(s), the Selling Member may, within 30 days after the date of such sale,
purchase from the Company, for the cash value thereof, any policies of insurance on the
life of such Selling Member then owned by the Company.
(b) Upon the death of any Member, the proceeds of any insurance owned by the
Company on the life of the deceased Member shall be applied in the following order: (i)
to the repayment of any loans, outstanding at the time of the deceased Member’s death,
from the deceased Member to the Company, (ii) to the repayment of any loans,
outstanding at the time of the deceased Member’s death, from any other person or entity
to the Company, the payment of which is guaranteed by the deceased Member, (iii) the
repayment of the Peter XXXXXXX Loan, and (iv) to the payment of the purchase price
for the purchase by the Company of the deceased Member’s Interest.
(c) Upon the death of a Peter XXXXXXX, if his or her respective interests are
transferred to his or her Permitted Heirs, as applicable, pursuant to the terms of Section
2.1 hereof, the insurance proceeds of any insurance owned by the Company on the life of
Peter XXXXXXX shall be retained by the Company. Until a transfer of the applicable
Interest to the Permitted Heirs of the applicable Deceased Member has occurred the
proceeds shall be retained by the Company in a separate account and shall not be used for
any purpose other than the purchase of the Interest of the Peter XXXXXXX, if a transfer
to the Permitted Heirs cannot occur.
(d) As additional compensation to the Shareholders, the Corporation shall pay the
premiums for whole life insurance policies on the lives of each of the Shareholder in the
face value of $250,000 (reduced by the amount of life insurance carried by X for the
same purpose) (the “Additional Policies”). Each of the Additional Policies shall be
owned by the Shareholder that it insures and shall have as a beneficiary the spouse of
such Shareholder and as an alternate beneficiary(ies) the children of such Shareholder.
Upon the sale by a Shareholder during his lifetime of all his Stock, the obligation of the
Corporation to pay for the Additional Policy shall cease.

 

ARTICLE 14. MISCELLANEOUS
14.1 Waiver of Notice. Whenever any notice is required to be given pursuant
to the provisions of the statute or this Agreement, a waiver thereof, in writing, signed by
the persons entitled to such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
14.2 Indemnification By Company. The Company may indemnify any person
who was or is a party defendant or is threatened to be made a party defendant to any
threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigation (other than an action by or in the right of the Company)
by reason of the fact that she is or was a Member of the Company, officer, employee or
agent of the Company, or is or was serving at the request of the Company, against
expenses (including attorney’s fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by her in connection with such action, suit or proceeding
if the Members determine that he acted in good faith and in a manner she reasonably
believed to be in or not opposed to the best interest of the Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe her conduct was
unlawful. The termination of any action, suit, or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not in
itself create a presumption that the person did or did not act in good faith and in a manner
which she reasonably believed to be in the best interest of the Company, and, with
respect to any criminal action or proceeding, had reasonable cause to believe that her
conduct was unlawful. However, indemnification shall not be made where the act giving
rise to the claim for indemnification is determined by a court to have constituted willful
misconduct or recklessness.
14.3 Indemnification Funding. The Company shall fund the indemnification
obligations provided by Section 9.3 in such manner and to such extent as the Members
may from time to time deem proper.
14.4 Duality of Interest Transactions. Members of this Company have a duty
of undivided loyalty to this Company in all matters affecting this Company’s interests.
14.5 Anticipated Transactions. Notwithstanding the provision of Section 9.5, it
is anticipated that the Members and officers will have other legal and financial
relationships. It is expressly understood and agreed that no Member shall be required to
devote her entire time or attention to the business of the Company or shall be restricted in
any way from participating in other businesses or activities, despite the fact that such may
be competitive with the business of the Company.
14.6 Further Assurances. Each of the parties agrees to take such further actions
and execute and deliver such documents as may be reasonably necessary or appropriate
to effectuate the terms of this Agreement.
14.7 Applicable Law. New Jersey law shall govern the validity, construction,
interpretation, and effect of this Agreement and the parties submit to the jurisdiction of
the courts of said state for such purposes.
14.8 Construction. The paragraph headings of this Agreement are for
convenience of reference only and do not form a part of the terms, conditions, or
covenants of this Agreement or give full notice thereof. As used in the Agreement, the
masculine includes the feminine, and the single includes the plural.
14.9 Benefit. This Agreement shall be binding on, and inure to the benefit of,
the parties hereto and their respective heirs, executors, administrators, successors, and
assigns.
14.10 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof, no other representations or
covenants having induced any party to enter into this Agreement.
14.11 Severability. If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or any other document.
14.12 Amendments. This Agreement may be altered, amended, restated, or
repealed and a new Agreement may be adopted only with the written consent of all of the
Members, after notice and opportunity for discussion of the proposed alteration,
amendment, restatement, or repeal.
14.13. Other Interests of Members. During the time that he owns stock in the
Company and for a period of ten (10) years after the sale of his Interest in the Company,
a Member shall not engage directly or indirectly in any business which is in competition
with the business of X in a radius of ten (10) air miles from the location of the business of
the X.

IN WITNESS WHEREOF, being all the Members of 123 XXXXXXXXX,
L.L.C., a New Jersey Limited Liability Company, hereby evidence their adoption and
ratification of the foregoing Amended and Restated Limited Liability Company
Operating Agreement.
123 XXXXXXXXX, L.L.C.
By: _____________________________
Manager
Witnesses:
____________________ ___________________________
PETER XXXXXXXXX
____________________ ___________________________
PAUL XXXXXXXX

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