LLC Operating Agreement-
LLC Operating Agreement-
of
Jamie Watton Inc
This Operating Agreement (the "Agreement") made and entered into this ________ day of
________________, ________ (the "Execution Date"),
BY:
(the "Member").
BACKGROUND:
B. The terms and conditions of this Agreement will govern the Member within the limited liability
company.
IN CONSIDERATION OF and as a condition of the Member entering into this Agreement and other
valuable consideration, the receipt and sufficiency of which is acknowledged, the Member agrees as
follows:
Formation
1. By this Agreement, the Member forms a Limited Liability Company (the "Company") in
accordance with the laws of the State of New York. The rights and obligations of the Member
will be as stated in the New York Limited Liability Company Act (the "Act") except as otherwise
provided in this agreement.
Name
Sole Member
3. While the Company consists only of one Member, any reference in this Agreement to two or
more Members and that requires the majority consent or unanimous consent of Members, or that
requires a certain percentage vote of Members, should be interpreted as only requiring the
consent or vote of the sole Member.
Page 1 of 14
LLC Operating Agreement Page 2 of 14
Purpose
Term
5. The Company will continue until terminated as provided in this Agreement or may dissolve under
conditions provided in the Act.
Place of Business
6. The Principal Office of the Company will be located at Jamie Watton St, Central, LA 70739,
USA or such other place as the Members may from time to time designate.
Capital Contributions
7. The following table shows the Initial Contributions of the Member. The Member agrees to make
the Initial Contributions to the Company in full, according to the following terms:
Value of
Member Contribution Description
Contribution
Allocation of Profits/Losses
8. Subject to the other provisions of this Agreement, the Net Profits or Losses, for accounting
purposes, will accrue to and be borne by the sole Member:
9. No Member will have priority over any other Member for the distribution of Net Profits or
Losses.
LLC Operating Agreement Page 3 of 14
Nature of Interest
Withdrawal of Contribution
11. No Member will withdraw any portion of their Capital Contribution without the unanimous
consent of the other Members.
12. A Member's obligation to make their required Capital Contribution can only be compromised or
released with the consent of all remaining Members or as otherwise provided in this Agreement.
If a Member does not make the Capital Contribution when it is due, he is obligated at the option
of any remaining Members to contribute cash equal to the agreed value of the Capital
Contribution. This option is in addition to and not in lieu of any others rights, including the right
to specific performance that the Company may have against the Member.
Additional Contributions
13. Capital Contributions may be amended from time to time, according to the business needs of the
Company. However, if additional capital is determined to be required and an individual Member
is unwilling or unable to meet the additional contribution requirement within a reasonable period,
the remaining Members may contribute in proportion to their existing Capital Contributions to
resolve the amount in default. In such case, the allocation of Net Profits or Losses and the
distribution of assets on dissociation or dissolution will be adjusted accordingly.
14. Any advance of money to the Company by any Member in excess of the amounts provided for in
this Agreement or subsequently agreed to, will be deemed a debt due from the Company rather
than an increase in the Capital Contribution of the Member. This liability will be repaid with
interest at such rates and times to be determined by a majority of the Members. This liability will
not entitle the lending Member to any increased share of the Company's profits nor to a greater
voting power. Repayment of such debts will have priority over any other payments to Members.
Capital Accounts
15. An individual capital account (the "Capital Account") will be maintained for each Member and
their Initial Contributions will be credited to this account. Any Additional Contributions made by
any Member will be credited to that Member's individual Capital Account.
LLC Operating Agreement Page 4 of 14
Interest on Capital
16. No borrowing charge or loan interest will be due or payable to any Member on their agreed
Capital Contribution inclusive of any agreed Additional Contributions.
Management
18. Any Member has the authority to bind the Company in contract.
Duty of Loyalty
19. While a person is a Member of the Company, that person will not carry on, or participate in, a
similar business to the business of the Company within any market regions that were established
or contemplated by the Company before or during that person’s tenure as Member.
20. Each Member will devote such time and attention to the business of the Company as the majority
of the Members will from time to time reasonably determine for the conduct of the Company's
business.
Member Meetings
21. A meeting may be called by any Member providing that reasonable notice has been given to the
other Members.
Voting
23. Each Member will be entitled to cast votes on any matter based upon the proportion of that
Member's Capital Contributions in the Company.
24. A new Member may only be admitted to the Company with a majority vote of the existing
Members, except in the case of a prospective member, the admission of which would render the
Company ineligible to elect out of the application of the Tax Rules, in which case a unanimous
vote of the existing Members will be required to admit that member.
25. The new Member agrees to be bound by all the covenants, terms, and conditions of this
Agreement, inclusive of all current and future amendments. Further, a new Member will execute
such documents as are needed to affect the admission of the new Member. Any new Member will
receive such business interest in the Company as determined by a unanimous decision of the
other Members.
26. No Member may voluntarily withdraw from the Company for a period of one year from the
execution date of this Agreement. Any such unauthorized withdrawal prior to the expiration of
this period will be considered a wrongful dissociation and a breach of this Agreement. In the
event of any such wrongful dissociation, the withdrawing Member will be liable to the remaining
Members for any damages incurred by the remaining Members including but not limited to the
loss of future earnings. After the expiration of this period, any Member will have the right to
voluntarily withdraw from the Company. Written notice of intention to withdraw must be served
upon the remaining Members at least one month prior to withdrawal.
27. The voluntary withdrawal of a Member will have no effect upon the continuance of the Company.
28. It remains incumbent on the withdrawing Member to exercise this dissociation in good faith and
to minimize any present or future harm done to the remaining Members as a result of the
withdrawal.
29. Events leading to the involuntary withdrawal of a Member from the Company will include but
not be limited to: death of a Member; Member mental incapacity; Member disability preventing
reasonable participation in the Company; Member incompetence; breach of fiduciary duties by a
Member; criminal conviction of a Member; Operation of Law against a Member or a legal
judgment against a Member that can reasonably be expected to bring the business or societal
reputation of the Company into disrepute. Expulsion of a Member can also occur on application
by the Company or another Member, where it has been judicially determined that the Member:
has engaged in wrongful conduct that adversely and materially affected the Company's business;
LLC Operating Agreement Page 6 of 14
has willfully or persistently committed a material breach of this Agreement or of a duty owed to
the Company or to the other Members; or has engaged in conduct relating to the Company's
business that makes it not reasonably practicable to carry on the business with the Member.
30. The involuntary withdrawal of a Member will have no effect upon the continuance of the
Company.
Dissociation of a Member
31. Where the Company consists of two or more Members, in the event of either a voluntary or
involuntary withdrawal of a Member, if the remaining Members elect to purchase the interest of
the withdrawing Member, the remaining Members will serve written notice of such election,
including the purchase price and method and schedule of payment for the withdrawing Member's
Interests, upon the withdrawing Member, their executor, administrator, trustee, committee or
analogous fiduciary within a reasonable period after acquiring knowledge of the change in
circumstance to the affected Member. The purchase amount of any buyout of a Member's
Interests will be determined as set out in the Valuation of Interest section of this Agreement.
32. The remaining Members retain the right to seek damages from a dissociated Member where the
dissociation resulted from a malicious or criminal act by the dissociated Member or where the
dissociated Member had breached their fiduciary duty to the Company or was in breach of this
Agreement or had acted in a way that could reasonably be foreseen to bring harm or damage to
the Company or to the reputation of the Company.
33. A dissociated Member will only have liability for Company obligations that were incurred during
their time as a Member. On dissociation of a Member, the Company will prepare, file, serve, and
publish all notices required by law to protect the dissociated Member from liability for future
Company obligations.
34. Where the remaining Members have purchased the interest of a dissociated Member, the purchase
amount will be paid in full, but without interest, within 90 days of the date of withdrawal. The
Company will retain exclusive rights to use of the trade name and firm name and all related
brand and model names of the Company.
35. Where the Company consists of two or more Members, in the event that a Member's Interest in
the Company is or will be sold, due to any reason, the remaining Members will have a right of
LLC Operating Agreement Page 7 of 14
first purchase of that Member's Interest. The value of that interest in the Company will be the
lower of the value set out in the Valuation of Interest section of this Agreement and any third
party offer that the Member wishes to accept.
Assignment of Interest
36. Where a Member's financial interest in the Company is assigned to another party who is not an
existing Member, that party will be treated as a new Member. An assignment of full membership
status inclusive of all duties, obligations, and rights held by the previous Member will be
governed by the conditions described under the Admission of New Members section of this
Agreement.
37. In the event that a Member’s interest in the company is transferred or assigned as the result of a
court order or Operation of Law, the trustee in bankruptcy or other person acquiring that
Member's Interests in the Company will only acquire that Member's economic rights and
interests and will not acquire any other rights of that Member or be admitted as a Member of the
Company or have the right to exercise any management or voting interests.
Valuation of Interest
38. A Member's financial interest in the Company will be in proportion to their Capital Contributions,
inclusive of any Additional Capital Contributions.
39. In the absence of a written agreement setting a value, the value of the Company will be based on
the fair market value appraisal of all Company assets (less liabilities) determined in accordance
with generally accepted accounting principles (GAAP). This appraisal will be conducted by an
independent accounting firm agreed to by all Members. An appraiser will be appointed within a
reasonable period of the date of withdrawal or dissolution. The results of the appraisal will be
binding on all Members. The intent of this section is to ensure the survival of the Company
despite the withdrawal of any individual Member.
40. No allowance will be made for goodwill, trade name, patents or other intangible assets, except
where those assets have been reflected on the Company books immediately prior to valuation.
Dissolution
41. The Company may be dissolved by a unanimous vote of the Members. The Company will also be
dissolved on the occurrence of events specified in the Act.
LLC Operating Agreement Page 8 of 14
42. Upon Dissolution of the Company and liquidation of Company property, and after payment of all
selling costs and expenses, the liquidator will distribute the Company assets to the following
groups according to the following order of priority:
c. to the Members based on Member financial interest, as set out in the Valuation of Interest
section of this Agreement.
Records
43. The Company will at all times maintain accurate records of the following:
a. Information regarding the status of the business and the financial condition of the
Company.
b. A copy of the Company federal, state, and local income taxes for each year, promptly
after becoming available.
c. Name and last known business, residential, or mailing address of each Member, as well as
the date that person became a Member.
d. A copy of this Agreement and any articles or certificate of formation, as well as all
amendments, together with any executed copies of any written powers of attorney
pursuant to which this Agreement, articles or certificate, and any amendments have been
executed.
e. The cash, property, and services contributed to the Company by each Member, along with
a description and value, and any contributions that have been agreed to be made in the
future.
44. Each Member has the right to demand, within a reasonable period of time, a copy of any of the
above documents for any purpose reasonably related to their interest as a Member of the
Company, at their expense.
Books of Account
LLC Operating Agreement Page 9 of 14
45. Accurate and complete books of account of the transactions of the Company will be kept in
accordance with generally accepted accounting principles (GAAP) and at all reasonable times
will be available and open to inspection and examination by any Member. The books and records
of the Company will reflect all the Company’s transactions and will be appropriate and adequate
for the business conducted by the Company.
46. The funds of the Company will be placed in such investments and banking accounts as will be
designated by the Members. All withdrawals from these accounts will be made by the duly
authorized agent or agents of the Company as appointed by unanimous consent of the Members.
Company funds will be held in the name of the Company and will not be commingled with those
of any other person or entity.
Audit
47. Any of the Members will have the right to request an audit of the Company books. The cost of the
audit will be borne by the Company. The audit will be performed by an accounting firm
acceptable to all the Members. Not more than one (1) audit will be required by any or all of the
Members for any fiscal year.
Tax Treatment
48. This Company is intended to be treated as a corporation, for the purposes of Federal and State
Income Tax.
Annual Report
49. As soon as practicable after the close of each fiscal year, the Company will furnish to each
Member an annual report showing a full and complete account of the condition of the Company
including all information as will be necessary for the preparation of each Member's income or
other tax returns. This report will consist of at least:
a. A copy of the Company's federal income tax returns for that fiscal year.
b. Income statement.
c. Balance sheet.
LLC Operating Agreement Page 10 of 14
Goodwill
50. The goodwill of the Company will be assessed at an amount to be determined by appraisal using
generally accepted accounting principles (GAAP).
Governing Law
51. The Members submit to the jurisdiction of the courts of the State of New York for the
enforcement of this Agreement or any arbitration award or decision arising from this Agreement.
Force Majeure
52. A Member will be free of liability to the Company where the Member is prevented from
executing their obligations under this Agreement in whole or in part due to force majeure, such
as earthquake, typhoon, flood, fire, and war or any other unforeseen and uncontrollable event
where the Member has communicated the circumstance of the event to any and all other
Members and where the Member has taken any and all appropriate action to satisfy his duties and
obligations to the Company and to mitigate the effects of the event.
Forbidden Acts
54. No Member may permit, intentionally or unintentionally, the assignment of express, implied or
apparent authority to a third party that is not a Member of the Company.
55. No Member may do any act that would make it impossible to carry on the ordinary business of
the Company.
56. No Member will have the right or authority to bind or obligate the Company to any extent with
regard to any matter outside the intended purpose of the Company.
58. Any violation of the above forbidden acts will be deemed an Involuntary Withdrawal and may be
treated accordingly by the remaining Members.
Indemnification
59. All Members will be indemnified and held harmless by the Company from and against any and
all claims of any nature, whatsoever, arising out of a Member's participation in Company affairs.
A Member will not be entitled to indemnification under this section for liability arising out of
gross negligence or willful misconduct of the Member or the breach by the Member of any
provisions of this Agreement.
Liability
60. A Member or any employee will not be liable to the Company or to any other Member for any
mistake or error in judgment or for any act or omission believed in good faith to be within the
scope of authority conferred or implied by this Agreement or the Company. The Member or
employee will be liable only for any and all acts and omissions involving intentional
wrongdoing.
Liability Insurance
61. The Company may acquire insurance on behalf of any Member, employee, agent or other person
engaged in the business interest of the Company against any liability asserted against them or
incurred by them while acting in good faith on behalf of the Company.
Life Insurance
62. The Company will have the right to acquire life insurance on the lives of any or all of the
Members, whenever it is deemed necessary by the Company. Each Member will cooperate fully
with the Company in obtaining any such policies of life insurance.
63. The following actions will require the unanimous consent of all Members:
64. No amendment or modification of this Agreement will be valid or effective unless in writing and
signed by all Members.
65. Title to all Company property will remain in the name of the Company. No Member or group of
Members will have any ownership interest in Company property in whole or in part.
Miscellaneous
68. Headings are inserted for the convenience of the Members only and are not to be considered
when interpreting this Agreement. Words in the singular mean and include the plural and vice
versa. Words in the masculine gender include the feminine gender and vice versa. Words in a
neutral gender include the masculine gender and the feminine gender and vice versa.
69. If any term, covenant, condition or provision of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, it is the Members' intent that such provision be
reduced in scope by the court only to the extent deemed necessary by that court to render the
provision reasonable and enforceable and the remainder of the provisions of this Agreement will
in no way be affected, impaired or invalidated as a result.
70. This Agreement contains the entire agreement between the Members. All negotiations and
understandings have been included in this Agreement. Statements or representations that may
have been made by any Member during the negotiation stages of this Agreement, may in some
way be inconsistent with this final written Agreement. All such statements have no force or effect
in respect to this Agreement. Only the written terms of this Agreement will bind the Members.
71. This Agreement and the terms and conditions contained in this Agreement apply to and are
binding upon each Member's successors, assigns, executors, administrators, beneficiaries, and
representatives.
LLC Operating Agreement Page 13 of 14
72. Any notices or delivery required here will be deemed completed when hand-delivered, delivered
by agent, or seven (7) days after being placed in the post, postage prepaid, to the Members at the
addresses contained in this Agreement or as the Members may later designate in writing.
73. All of the rights, remedies and benefits provided by this Agreement will be cumulative and will
not be exclusive of any other such rights, remedies and benefits allowed by law.
Definitions
74. For the purpose of this Agreement, the following terms are defined as follows:
b. "Capital Contribution" means the total amount of cash, property, or services contributed to
the Company by any one Member.
d. "Initial Contribution" means the initial Capital Contributions made by any Member to
acquire an interest in the Company.
e. "Member's Interests" means the Member's collective rights, including but not limited to,
the Member's right to share in profits, Member's right to a share of Company assets on
dissolution of the Company, Member's voting rights, and Member's rights to participate in
the management of the Company.
f. "Net Profits or Losses" means the net profits or losses of the Company as determined by
generally accepted accounting principles (GAAP).
g. "Operation of Law" means rights or duties that are cast upon a party by the law, without
any act or agreement on the part of the individual, including, but not limited to, an
assignment for the benefit of creditors, a divorce, or a bankruptcy.
h. "Principal Office" means the office whether inside or outside the State of New York
where the executive or management of the Company maintain their primary office.
LLC Operating Agreement Page 14 of 14
i. "Voting Members" means the Members who belong to a membership class that has voting
power. Where there is only one class of Members, then those Members constitute the
Voting Members.
IN WITNESS WHEREOF the Member has duly affixed their signature under hand and seal on this
________ day of ________________, ________.
_____________________________