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HomeMy WebLinkAbout14-5728 Supreme Cour.—MUennsylvania COUr f ittc fl1I110„y�'PIBaS For Prothonotary Use Only C,W `cove Sheet - ti Docket No: Y}1m CountyUr The information collected on this form is used solely for court administration purposes. This form does not supplement or replace the filing and service of pleadings or other papers as required by law or rules of court. Co mencement of Action: _ T&Complaint 0 Writ of Summons Petition rl Transfer from Another Jurisdiction Declaration of Taking E Lead Plaintiffs Name: Lead Defendant's Name: � Adarm C. Abram Jdho pI �'T Dollar Amount Requested: Elwithin arbitration limits Are money damages requested? es No (check one) outside arbitration limits N: Is this a Class Action Suit? Yes .No Is this an MDJAppeal? 0 YesT0 .:A'. Name of Plaintiff/Appellant's Attorney: Pme-1 Check here if you have no attorney(area Self-Represented [Pro Se] Litigant) r Nature of the Case: Place an.."X"to the lefr.of the:ONE case category that most accurately describes your. r—.. . PRIMARY CASE If you are maktng more:than one type of claim;.check the one'"that:: you consider most,lmportant TORT(do not include Mass Tort) CONTRACT(do not include Judgments) CIVIL APPEALS Intentional Buyer Plaintiff Administrative Agencies Malicious Prosecution Debt Collection:Credit Card Board of Assessment Motor Vehicle Debt Collection:Other Board of Elections i'• EJ Nuisance 0 Dept.of Transportation Premises Liability Statutory Appeal:Other [[ Product Liability(does not include mass tort) Employment Dispute: Slander/Libel/Defamation Discrimination O r: f I Employment Dispute:Other Zoning Board t; rot U(iL__ I Other: n Other: MASS TORT Asbestos Tobacco Toxic Tort-DES Toxic Tort-Implant REAL PROPERTY Toxic Waste MISCELLANEOUS Other: Ejectment [2 Common Law/Statutory Arbitration Eminent Domain/Condemnation 0 Declaratory Judgment ;•.i: - 0 Ground Rent Mandamus Landlord/Tenant Dispute Non-Domestic Relations Mortgage Foreclosure:Residential Restraining Order PROFESSIONAL LIABLITY 0 Mortgage Foreclosure:Commercial Quo Warranto Il Dental 0 Partition Replevin Legal [3 Quiet Title Q Other: Medical Other: 0 Other Professional: Updated 1/1/2011 D f Cry r 15 r t fCUMB' RLA1tiD tC=U 4 T 1 I)ENNSYL rANIA ADAM C. ABRAM and SUSAN A. ) IN THE COURT OF COMMON ABRAM, ) PLEAS OF CUMBERLAND Plaintiffs ) COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. ) JURY TRIAL DEMANDED JOHN ROYAL, II, ) Defendant NOTICE TO DEFENDANT NAMED HEREIN: YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY (20) DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT YOU, AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. CUMBERLAND COUNTY BAR ASSOCIATION 32 SOUTH BEDFORD STREET CARLISLE, PA 17013 TELEPHONE: (717) 249-3166 4 /43-. �spd C;pL- L?�wa Y'F3//65 ADAM C. ABRAM and SUSAN A. ) IN THE COURT OF COMMON ABRAM, ) PLEAS OF CUMBERLAND Plaintiffs ) COUNTY, PENNSYLVANIA CIVIL ACTION - LAW vs. ) JURY TRIAL DEMANDED JOHN ROYAL, II, ) NO. Defendant COMPLAINT AND NOW come the above-named Plaintiff, by his attorney Sainuel L. Andes, and makes the following Complaint against the Defendant in this matter: 1. The Plaintiff is Adam C. Abram and Susan A. Abram, adult individuals who reside at 115 Bryce Road, Camp Hill, Cumberland County, Pennsylvania 17011. 2. The Defendant is John Royal, I1, an adult individual who resides at 1109 Oak Lane in New Cumberland, Pennsylvania 17070. 3. In 2007, Adam Abram (hereinafter"Adam") was addicted to alcohol and drugs. As a result of his addiction, he was being criminally prosecuted, had his license to practice medicine suspended, and was facing a high likelihood of imprisonment and the long term loss of his medical license. 4. In an effort to address his problems with addiction, Adam became heavily involved in programs operated by Narcotics Anonymous, and attended meetings on a regular and frequent basis. 5. As a result of his problems with alcohol and drugs, and the resulting problems in his career and with the criminal law, Plaintiff was terrified and distraught about his future and was dependent upon his involvement in those programs. 6. Through the Narcotics Anonymous programs, Adam met and became acquainted with Defendant. Defendant was active in the program, took an interest in Adam, and eventually was appointed as his sponsor within the program. 7. Because of his condition and the problems he was facing as a result of his drug programs, Adam became dependent upon Defendant as his sponsor. Adam's dependence upon the Defendant included the following: A. Adam came to rely upon Defendant in how to deal with his addictions and the emotional, physical and other problems which that addiction caused. B. In accordance with the policies of the program, Adam came to consult with Defendant before making any decision or taking any action in his life. C. Defendant came to exert extreme control over the details of Adam's life including the right to review and approve any of his actions and the right to full information about Adam's life, activities, and his drug or alcohol problems. D. Adam spent significant time in the company of Defendant and confided in Defendant extensively. E. In the view of both Adam and Susan Abram, Defendant was necessary to Adam for Adam to maintain his sobriety and avoid imprisonment or retain or recover his medical license. 8. As a result of his relationship with Defendant, Adam became dependent upon Defendant with regard to his personal and business decisions. As a result of that, he carne to repose a special confidence in Defendant to the extent that they did not deal on equal terms because of Adam's fear and anxiety regarding his condition and Adam's dependence upon Defendant. 9. As a result of the above, Adam came to reasonably believe that Defendant would look out for and protect Adam's best interest and not act in any way that would injure Adam financially or otherwise. 10. As a result, Adam developed a confidential relationship with Defendant, believing that Defendant would always act in good faith in Adam's best interest. 11. Susan Abram (hereinafter"Susan") was aware of Adam's addiction problems, the great fear and anxiety he was experiencing because of the criminal prosecution and the potential loss of his license, and welcomed Adam's involvement with Defendant. Susan believed that Defendant, because of his extensive experience with addictions, including his own, and his extensive work with recovering addicts, believed that Defendant would protect Adam's best interests. 12. As a result of the above, Susan herself carne to regard Defendant as a person who would protect the interests of Adam and would act in the best interest of both Adam and Susan. 13. As a result of the above, Defendant came to stand in a confidential relationship with both Adam and Susan because both Adam and Susan reasonably believed that Defendant would act in good faith for their interests. 14. In 2009, while the confidential relationship existed between Plaintiffs and Defendant, Defendant proposed to Adam that they engage in the acquisition and development of real estate for investment purposes. 15. To induce Adam to enter into these arrangements with him, Defendant made the following representations of fact: A. Defendant represented himself as a licensed real estate appraiser and an expert in the valuation of real estate. B. Defendant represented himself as an expert in the rehabilitation and marketing of real estate, including particular skills to identify real estate projects that could be developed and sold for substantial profit. C. Defendant represented himself as an expert in matters relating to construction, rehabilitation, and maintenance of real estate. D. Defendant represented himself as an expert in dealing with municipal authorities to effect compliance with all rules, regulations, statutes, and ordinances regarding the development and management of real estate for rental. E. Defendant represented himself to be an expert in the management of rental real estate and represented himself to be fully qualified, legally and otherwise, to serve in that capacity. 16. Defendant was apparently licensed as an assistant real estate appraiser, but not as a full scale real estate appraiser. Otherwise, the above representations which Defendant made to Plaintiffs were all false. 17. Defendant proposed that he and Adam form a limited liability company, that Adam and Susan provide the funds necessary to acquire, develop, rehabilitate and manage real estate for rent or for sale, and that Defendant provide services to identify, acquire, rehabilitate, and manage and sell the real estate so acquired. 18. In reliance upon the representations made to them by Defendant, Adam and Susan agreed to enter into the real estate investment project proposed by Defendant. 19. In reliance upon Defendant's representations, Adam joined Defendant in the formation of a limited liability company in which the two of them were equal owners with equal control: 20. Following the formation of the limited liability company, and again in reliance upon the false representations made to them by Defendant, Susan and Adam invested substantial sums of money to purchase, rehabilitate, repair, and manage real estate. 21. Pursuant to the arrangements agreed upon by the parties, Defendant identified real estate properties to be purchased by the limited liability company and Plaintiffs advanced the funds necessary to purchase those projects. Throughout this process, the parties purchased approximately nine (9) separate properties. 22. Defendant made repeated misrepresentations to Plaintiff regarding the real estate investment projects. His misrepresentations included: A. The value,of the properties which he proposed to purchase. B. The condition of the properties at the time of their purchase. C. The amount of work to be done to rehabilitate the properties for sale or rent. D. The likely profit from the sale of any of the properties after their rehabilitation. E. The realistic rental value and rental prospects of the property after they were rehabilitated. 23. Because of the confidential relationship they had with Defendant, Plaintiffs accepted the representations made by Defendant, as described above, without question. 24. In reliance upon these misrepresentations made by Defendant, Plaintiff, over a period of several years, advanced more than $700,000.00 to the limited liability company to acquire, repair, and rehabilitate the property. 25. Defendant controlled the process of rehabilitation of the properties, including the hiring or persons to do all the work. 26. Defendant, by his conduct, demonstrated that he was not an expert in valuation of real estate. He identified and had the limited liability company purchase real estate at prices significantly above their actual value. 27. By his conduct, Defendant demonstrated that he was not an expert in rehabilitation and repair of real estate. He hired incompetent persons, did not supervise them properly, and in fact did not see to it that the work for which he and others were paid was ever done or done competently. 28. By his conduct, Defendant demonstrated that he was not an expert in the marketing of real estate. Defendant never brought the properties to a level of improvement where they could be successfully sold. 29. By his conduct, Defendant demonstrated that he was not an expert in the rental and management of real estate. Specifically: A. Defendant failed to assure compliance of the properties with local building and zoning codes. B. He did not conduct background or credit checks on the tenants to whom he leased the properties. C. He did not collect rents on a timely and effective basis and made no effective effort to collect rents that were not paid. D. He did not communicate effectively with tenants or municipal officials and did not return their phone calls. E. He failed to keep accurate rental records, repair records, and other records regarding the properties. F. He did not collect security deposits from all tenants. G. He did not enforce the terms of the leases with tenants or the rules by which the tenants were to abide. H. He verbally abused and alienated tenants, neighbors, and other persons, making management of the properties very difficult. 30. Defendant failed to recognize or notify Plaintiffs that he was not licensed as a real estate broker and, therefore, under the law of the Commonwealth of Pennsylvania, could not serve as a property manager. 31. Defendant overcharged the limited liability company for work he claimed was done on the properties. He overpaid people for work which they either did not do or did not do competently, and he paid himself for services which he was required to provide at no charge under the arrangements between the parties. 32. Defendant subsequently represented to Plaintiffs that he was an experienced restaurant manager and suggested that the parties invest in a property in East Pennsboro Township and use that property to open a restaurant that Defendant would manage and operate. 33. Defendant's representations about his experience and qualifications to operate or manage a restaurant were false. Defendant had no competent experience and was not qualified or competent to open and operate such a business. 34. In reliance upon Defendant's false representations about his qualifications to open and operate a restaurant, Plaintiffs invested additional sums with Defendant to acquire the property in East Pennsboro Township, to acquire substantial quantities of restaurant equipment and materials, and advanced funds to finance staff, inventory, supplies, and other expenses incurred to open and operate the restaurant business. 35. Because Defendant was inexperienced and unqualified to operate a restaurant business, it never made money and, in fact, lost money on a regular and consistent basis. The money lost was that money which was contributed by Plaintiffs. 36. Defendant misrepresented his experience, expertise, knowledge, and qualifications regarding the real estate project which he induced Plaintiffs to fund and the limited liability company which he induced Adam to form and fund to carry on the real estate project. 37. Defendant communicated these false representations to Plaintiffs. 38. Defendant made the false representations and communicated them to Plaintiffs with the intention to induce Plaintiffs to invest money in the real estate ventures. 39. Based upon the confidential relationship between Plaintiffs and Defendant, particularly Plaintiff Adam Abram, and the confidence which they placed in him based upon that confidential relationship, Plaintiffs were justified in their reliance upon Defendant's misrepresentations. 40. As a direct result of Defendant's misrepresentations, Plaintiffs invested more than $700,000.00 in the real estate and restaurant ventures and the limited liability and have been damaged in an amount in excess of$700,000.00 as a result. 41. Defendant, by his conduct, has injured Plaintiffs in an amount in excess of $700,000.00, plus costs of suit, plus interest after 1 January 2014. The injuries and damages suffered by Plaintiffs will continue because they are obligated to continue to make payment on the debts incurred by the limited liability company, which debts they have guaranteed. COUNT I— COMPENSATORY DAMAGES The averments set forth in Paragraphs 1 through 41 are incorporated herein. 42. Defendant, by his conduct, has injured Plaintiffs in an unliquidated amount in excess of the jurisdictional limit for arbitration in this county. WHEREFORE, Plaintiffs demand judgment against the Defendant for compensatory damages in an amount in excess of the jurisdictional limit for arbitration in this county. COUNT II—PUNITIVE DAMAGES The averments set forth in Paragraphs 1 through 41 are incorporated herein. 43. Defendant's conduct in regard to Plaintiffs, as set forth in the foregoing paragraphs of this Complaint, was malicious, willful, and in bad faith. 44. Defendant's conduct as described in the foregoing paragraphs of this Complaint, was taken with reckless indifference and disregard to Plaintiffs' interests. 45. Defendant's conduct, as described in the foregoing paragraphs of this Complaint, was outrageous. WHEREFORE, Plaintiffs demand judgment against the Defendant for punitive damages in an amount in excess of the jurisdictional limit for arbitration in this county. amuel L. Andes Attorney for Plaintiff Supreme Court ID # 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to authorities). Date: "\ `� 0 \U ADA CA RAM I verify that the statements made in this document are true and correct. I understand that any false statements in this document are subject to the penalties of 18 Pa. C.S. 4904 (unsworn falsification to authorities). Date: t S SA A. ABRAM E ,OF F1,11;'E THE PRO THONO TAR y 2014 NOV 19. Ail 91 014 CUMBERL A -NO COUNTY PENNSYLVANIA ADAM C. ABRAM and SUSAN A. ABRAM, ) Plaintiffs ) ) ) vs. ) ) ) JOHN ROYAL, II, ) Defendant ) PRAECIPE TO THE PROTHONOTARY: Please reinstate the Complaint in the above matter. 11 November 2014 1 , Sa des Attorney for Plaintiffs Supreme Court ID # 17225 525 North 12th Street P.O. Box 168 Lemoyne, PA 17043 (717) 761-5361 IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW JURY TRIAL DEMANDED NO. 14-5728 Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY p OTHO O-Yi'•. \ ? !IWi DEC -4 fill 9. 57 OU PENNSYLVANIA 7Y cT I'-n%tib CIFFCE-; OF THE !J4ERIFF Adam C Abram vs. John Royal, II Case Number 2014-5728 SHERIFF'S RETURN OF SERVICE 10/29/2014 Ronny R Anderson, Sheriff, being duly sworn according to law, states he made diligent search and inquiry for the within named Defendant to wit: John Royal, II, but was unable to locate the Defendant in his bailiwick. The Sheriff therefore returns the within requested Complaint & Notice as "Not Found" at 1109 Oak Lane, New Cumberland Borough, New Cumberland, PA 17070. Eight attempts at service were made but deputies were unable to make contact with anyone at this address to effectuate service, deputies advise that the lights were on and the screen door was locked but no one would come to the door. SHERIFF COST: $91.12 SO ANSWERS, November 18, 2014 RON6 R ANDERSON, SHERIFF {c} CointySuite Sheriff, Te eosoft inc. Ronny R Anderson Sheriff Jody S Smith Chief Deputy Richard W Stewart Solicitor SHERIFF'S OFFICE OF CUMBERLAND COUNTY 2014 DEC _if AN 9: '' , ° St PEUNSS YL©A�DA NIA. r Adam C Abram vs. John Royal, II Case Number 2014-5728 SHERIFF'S RETURN OF SERVICE 11/20/2014 04:44 PM - Deputy Tim Black, being duly sworn according to law, served the requested Complaint & Notice by handing a true copy to a person representing themselves to be John Royal III, Son, who accepted as "Adult Person in Charge" for John Royal, II at 1109 Oak Lane, New Cumberland Borough, New Cumberland, PA 17070. TIM AC , DEPUTY SHERIFF COST: $65.78 SO ANSWERS, November 21, 2014 (c) CountySuite Sherif:. T&'ecsoff, ADAM C. ABRAM and IN THE COURT OF COMMON SUSAN A. ABRAM, PLEAS OF CUMBERLAND Plaintiffs COUNTY, PENNSYLVANIA vs. JOHN ROYAL, Defendant CIVIL ACTION - LAW NO. 14-5728 NOTICE TO PLEAD TO: Adam C. Abram and Susan A. Abram do Samuel L. Andes, Esq. 525 North 12th Street P. O. Box 18 Lemoyne, PA 17043-1213 t rr. 7.3 You are hereby notified to file a written response to the enclosed Preliminary Objections within twenty (20) days from service hereof or a judgment may be entered against you. Date: SAIDIS, SULLIVAN & ROGERS By DANIEL L. SULLIVAN Attorney I.D. #34548 26 West High Street Carlisle, PA 17013 Phone: (717) 243-6222 Email: dsullivan@ssr-attorneys.com Attorneys for John Royal, II ADAM C. ABRAM and IN THE COURT OF COMMON SUSAN A. ABRAM, PLEAS OF CUMBERLAND Plaintiffs COUNTY, PENNSYLVANIA vs. CIVIL ACTION - LAW JOHN ROYAL, II, Defendant NO. 14-5728 PRELIMINARY OBJECTIONS AND NOW comes Defendant, John Royal, II ("Royal"), by his attorneys, Saidis, Sullivan & Rogers, and files these Preliminary Objections to Plaintiffs' Complaint: I. MOTION TO COMPEL MEDIATION/ARBITRATION 1. Plaintiffs commenced this action by filing a Complaint against Royal in two counts, one labeled "Count I — Compensatory Damages" and the other labeled "Count II — Punitive Damages." 2. The first eighteen paragraphs of the Complaint allege general background facts alleging that Royal in some manner misrepresented himself and induced Plaintiffs to enter into a real estate investment project with him. 3. Paragraph 19 of the Complaint states, "In reliance upon Defendant's representations, Adam [Plaintiff, Adam C. Abram] joined Defendant in the formation of a limited liability company in which the two of them were equal owners with equal control." 4. Paragraphs 20 through 41 of the Complaint then allege various ways in which Royal allegedly failed to perform properly as a member/manager of the limited liability company. 5. Although Plaintiffs seek to minimize and gloss over the critical point of the existence and continuing business operations of the limited liability company in favor of focusing on the alleged individual role of Adam Abram, in point of fact, Royal and Plaintiff Adam Abram (but not Plaintiff Susan Abram) properly and legally caused the formation of a limited liability company known as John Adams Investments, LLC, effective November 1, 2009. A true and correct copy of the Limited Liability Company Agreement of John Adams Investments, LLC dated November 1, 2009 (the "Operating Agreement") is attached hereto as Exhibit "A." 6. The purpose of forming John Adams Investments, LLC was for Royal and Plaintiff Adam Abram to pursue the business of real estate acquisition, repair, rehabilitation and sale/rental which is the basis of the claims and damages alleged in the Complaint. 7. Under the Operating Agreement, Royal and Adam Abram are equal 50% owners of John Adams Investments, LLC. 8. John Adams Investments, LLC is a manager -managed LLC, and Royal and Adam Abram are the two (2) named Managers. 9. Susan Abram is neither a member nor a manager of John Adams Investments, LLC. 10. All of the matters that Plaintiffs complain of in the Complaint relate to the business activities of John Adams Investments, LLC. 11. Plaintiffs allege that they advanced "more than $700,000.00 to the limited liability company to acquire, repair and rehabilitate the property." (See paragraphs 24 and 40 of the Complaint.) (Royal disputes that Susan Abram advanced funds to John Adams Investments, LLC and that instead Adam Abram, the only other Member besides Royal, advanced funds.) 2 12. In the Complaint, Plaintiffs are seeking damages from Royal for this $700,000.00 allegedly advanced to John Adams Investments, LLC. 13. Plaintiff Adam Abram did not advance or pay monies directly to Royal; on the contrary, all funds advanced by Adam Abram were advanced to John Adams Investments, LLC, the limited liability company within which Adam Abram and Royal conducted business. 14. Section 8.4 of the Operating Agreement provides for resolution of disputes by mediation and arbitration, as follows: 8.4 Resolution of Disputes A. Mediation. The parties will endeavor in good faith to resolve all disputes arising under or related to this Agreement by mediation according to the then prevailing rules and procedures of the American Arbitration Association. B. Arbitration. If the parties fail in their attempt to resolve a dispute by mediation, they will submit the dispute to arbitration according to the then prevailing rules and procedures of the American Arbitration Association. Pennsylvania law will govern the rights and obligations of the parties with respect to the matters in controversy. The arbitrator will allocate all costs and fees attributable to the arbitration between the parties equally. The arbitrator's award will be final and binding and judgment may be entered in any court of competent jurisdiction. 15. The matters complained of in the Complaint involve disputes arising under or related to the Operating Agreement and are subject to the parties' commitment to first mediate and, if unsuccessful, then arbitrate the disputes. 16. By virtue of the foregoing, Plaintiff, Adam Abram, is required to submit these disputes to mediation and arbitration pursuant to the provisions of the Operating Agreement. To the extent that Susan Abram is also claiming obligations owed to her in conjunction with the 3 formation and operation of John Adams Investments, LLC, (which is denied, see Preliminary Objection II below), then she is likewise bound by the agreement to mediate and arbitrate disputes. 17. Plaintiffs have not demanded arbitration in accordance with paragraph 8.4 of the Operating Agreement, but instead have commenced this action in this Court. 18. Plaintiffs have breached the mediation and arbitration provision of the Operating Agreement by commencing this action instead of submitting the dispute which is the subject of this action to mediation and arbitration. 19. This Court has authority to compel mediation and arbitration and stay judicial proceedings pursuant to 42 Pa. C.S.A. §7304 (a) and (d). WHEREFORE, Defendant, John Royal, II, requests that the Court enter an Order pursuant to Pa. R.C.P. 1028 (a) (6) and 42 Pa. C.S.A. §7304 (a) and (d) compelling Plaintiffs to submit the disputes which are the subject of this action to mediation and arbitration in accordance with the provisions of the Operating Agreement and stay all proceedings in this court pending mediation and arbitration. II - DEMURRER TO CLAIMS OF SUSAN ABRAM 20. The averments of paragraphs 1-19 are hereby incorporated by reference. 21. Susan Abram is neither a member nor manager of John Adams Investments, LLC. 22. Royal owes no duties to Susan Abram under any set of law or facts. 23. Susan Abram has failed to state a claim against Royal upon which relief can be granted. 4 WHEREFORE, Royal demands that Susan Abram's claims against him be dismissed with prejudice, and that he be awarded costs and fees and such further and additional relief as just and appropriate. III — LACK OF STANDING (IN THE ALTERNATIVE) 24. The averments of paragraphs 1-23 are hereby incorporated by reference. 25. In the event the Court does not compel this case to proceed to mediation and arbitration (despite Royal's Preliminary Objection I) and/or does not dismiss Susan Abram's claims for failure to state a claim (despite Royal's Preliminary Objection II), then Plaintiffs' claims should be dismissed for lack of standing. 26. The claims and damages claimed by Plaintiffs, are in reality, claims and damages belonging to John Adams Investments, LLC, not to Plaintiffs individually. 27. If Royal violated any duty with respect to the acquisition, repair, rehabilitation and rental/sale of real property as alleged by Plaintiffs (which is expressly denied), the duties are owed to John Adams Investments, LLC, not to Plaintiffs, individually, and any resulting damages (which are expressly denied) are owed to John Adams Investments, LLC, not Plaintiffs individually. 28. Plaintiffs lack capacity to assert claims of John Adams Investments, LLC. WHEREFORE, in the alternative, Royal demands that Plaintiffs' claims against him be dismissed due to lack of standing, and that he be awarded costs and fees and such further and additional relief as just and appropriate. 5 IV — MOTION TO STRIKE PUNITIVE DAMAGES (IN THE ALTERNATIVE) 29. The averments of paragraphs 1-28 are hereby incorporated by reference. 30. If the Court does not compel mediation/arbitration pursuant to Preliminary Objection I and/or does not grant the relief requested in Preliminary Objections II and III, then in the alternative the Court should strike Plaintiffs' claim for punitive damages. 31. Plaintiffs have set forth as a wholly separate count a "Count II" seeking punitive damages. 32. A claim for punitive damages is not a separate cause of action under Pennsylvania law. 33. Plaintiffs' pleading of punitive damages in a separate Count II fails to conform to Pennsylvania law or rule of court. 34. Plaintiffs' Complaint fails to allege sufficient intentional, willful, wanton or reckless conduct to support an award of punitive damages. WHEREFORE, in the alternative, Royal demands that Count II of Plaintiffs' Complaint seeking punitive damages be dismissed, and that he be awarded costs and fees and such further and additional relief as just and appropriate. V. FAILURE TO CONFORM TO LAW OR RULE OF COURT/MOTION FOR MORE SPECIFIC PLEADING 35. The averments of paragraphs 1 — 34 are hereby incorporated by reference. 36. If the Court does not compel mediation/arbitration pursuant to Preliminary Objection I and/or does not grant the relief requested in Preliminary Objections II and III, then in 6 the alternative the Court should require Plaintiffs to file a more sufficient and specific pleading in accordance with the requirements of Pa. R.C.P. 1020 (a). 37. Pursuant to Pa. R.C.P. 1020 (a), each cause of action and each special damage stated in a complaint shall be stated in a separate count containing a demand for relief. 38. The format and structure of Plaintiffs' Complaint forces Royal to guess as to the cause of action or causes of action being alleged by Plaintiffs. 39. The only separate counts in the Complaint are labeled "Compensatory Damages" and "Punitive Damages." 40. Both Count I and Count II incorporate the averments of paragraphs 1 — 41 of the Complaint. 41. The averments of paragraphs 1 — 41 of the Complaint do not clearly articulate the cause or causes of action being alleged; Royal cannot determine the cause(s) of action Plaintiffs are asserting, whether based on theories of contract, fraud, misrepresentation, breach of fiduciary duties or otherwise. 42. Plaintiffs should be required to plead in a more sufficient and specific fashion the cause(s) of action they are asserting and assert each separate cause of action (if more than one) in a separate count. 43. Without a more sufficient and specific pleading properly set forth in separate counts, Royal is unable to adequately determine the cause(s) of action he is defending, and is unable to prepare a comprehensive and full defense to such cause(s) of action. WHEREFORE, in the alternative, Royal demands that Plaintiffs be required to set forth an Amended Complaint, a more sufficient pleading that sets forth in separate counts each cause 7 of action upon which their claims are based, and that he be awarded costs and fees and such further and additional relief as just and appropriate. Date .g2.._:—.—%..-4)1%014 Respectfully submitted, SAIDIS, SULLIVAN & ROGERS By �.. Daniel L. Sullivan, Esquire Attorney I.D. PA 34548 John A. Feichtel Attorney I.D. PA 77426 26 West High Street Carlisle, PA 17013 (717) 243-6222 Email: dsullivan@ssr-attorneys.com Attorneys for John Royal, II 8 VERIFICATION I, John Royal, hereby state that the facts set forth in the foregoing document are true and correct to the best of my personal knowledge or information and belief. I am aware that false statements herein are made subject to the penalties of 18 Pa. C.S. §4904, relating to unsworn falsification to authorities. LIMITED LIABILITY COMPANY AGREEMENT OF JOHN ADAMS INVESTMENTS, LLC DATED THE 1ST DAY OF NOVEMBER, 2009 EIN: 27-1357996 RECITALS TABLE OF CONTENTS ARTICLE I. DEFINITIONS 1.1 Scope...- cope 1.2 Defined Terms ARTICLE II. THE COMPANY 2.1 Status 2.2 Name 2.3 Term 2.4 Purpose 2.5 Principal Place of Business 2.6 Registered Agent and Registered Office ARTICLE III. MEMBERS 3.1 Identification 3.2 Changes and Verification of Membership Interests__ ............... .......... ....... 3.3 Manner of Acting 3.4 Fiduciary Duties 3.5 Indemnification of Members 3.6 Compensation 3.7 Resignation of a Member 3.8 Transfer of Membership Interest 3.9 Dissociation 3.10 Redemption of Dissociating Member's Interest ARTICLEIV. FlN•ANCE.... 4.1 Contributions 4.2 Allocation of Profits and Losses 4.3 Tax Allocations 4.4 Distributions 4.5 Capital Accounts ARTICLE V. RECORDS AND ACCOUNTING 5.1 Maintenance of Records 5.2 Financial Accounting 5.3 Reports 5.4 Tax Compliance ARTICLE VI, MANAGEMENT....................................................................................... 6.1 Representative Management 6.2 Time Devoted to Business 6.3 Powers and Authority 6.4 Manner of Acting 6.5 Agency Power and Authority 6.6 Fiduciary Duties 6.7 Indemnification of Managers 6.8 Compensation 6.9 Tenure ARTICLE VII. DISSOLUTION 7.1 Events of Dissolution 7.2 Effect of Dissolution ARTICLE VIII GENERAL PROVISIONS 8.1 Amendments.................................................................................................. 8.2 Nominee 8.3 Investment Representation 8.4 Resolution of Disputes 8.5 Notices 8.6 Resolution of Inconsistencies 8.7 Provisions Applicable to Transferees 8.8 Additional Instruments 8.9 Headings 8.10 Computation of Time 8.11 Entire Agreement 8.12 Waiver 8.13 General Construction Principles 8.14 Binding Effect 8.15 Governing Law 8.16 Counterparts LIMITED LIABILITY COMPANY AGREEMENT OF JOHN ADAMS INVESTMENTS, LLC THIS AGREEMENT is among John Adams Investments, LLC, a Pennsylvania limited liability company (the "Company"), and Adam C Abram and John Royal Jr (the "initial Members"). RECITALS The Company is a limited liability company formed under the Pennsylvania Limited Liability Company Act. The other parties to this Agreement are the Company's initial Members. The parties intend by this Agreement to define their rights and obligations with respect to the Company's governance and financial affairs and to adopt regulations and procedures for the conduct of the Company's activities. Accordingly, with the intention of being legally bound, they agree as follows: ARTICLE I. DEFINITIONS 1.1 Scope For purposes of this Agreement, unless the language or context clearly indicates that a different meaning is intended, capitalized terms have the meanings specified in this Article. 1.2 Defined Terms A. "Act" means the Pennsylvania Limited Liability Company Act. B. "Affiliate," with respect to a Person, means (1) a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the Person, (2) a Person who owns or controls at least ten percent of the outstanding voting interests of the Person, (3) a Person who is an officer, director, manager, or general partner of the Person, or (4) a Person who is an officer, director, manager, general partner, trustee, or owns at least ten percent of the outstanding voting interests of a Person described in clauses (1) through (3) of -this sentence. C. "Agreement" means this agreement, including any amendments. D. "Available Funds" means the Company's gross cash receipts from operations, less the sum of: (1) payments of principal, interest, charges, and fees pertaining to the Company's indebtedness; (2) expenditures incurred incident to the usual conduct of the Company's business; and (3) amounts reserved to meet the reasonable needs of the Company's business as determined in the sole judgment of the Manager. E. "Bankruptcy" means the filing of a petition seeking liquidation, reorganization, arrangement, readjustment, protection, relief, or composition in any state or federal bankruptcy, insolvency, reorganization, or receivership proceeding. F. "Capital Account" of a Member means the capital account maintained for the Member in accordance with Article IV. G. "Capital Investment" of a Member means an amount equal to the excess of the cumulative value of the Member's Contributions of cash and property over the cumulative value of the Member's Distributions of cash and property. For purposes of this definition, (1) Distributions out of Available Funds are not taken into account and (2) the value of any Contribution or Distribution of property in kind is as recorded on the Company's books at the time of the Contribution or Distribution. H. "Certificate" means the Certificate of Formation filed with the Secretary of State to organize the Company, including any amendments. I. "Code" means the Internal Revenue Code of 1986, as amended. J. "Company" means John Adams Investments, LLC and any successor limited liability company. K. "Contribution" means anything of value that a Member contributes to the Company as a prerequisite for or in connection with membership, including any combination of cash, property, services rendered, a promissory note, or any other obligation to contribute cash or property or render services. L. "Dissociation" means a complete termination of a Member's membership in the Company in consequence of an event described in Article III. M. "Distribution" means the Company's direct or indirect transfer of money or other property with respect to a Membership Interest. N. "Effective Date," with respect to this Agreement, means the date on which the Company's existence as a limited liability company begins, as prescribed by the Act. 0. "Entity" means an association, relationship, or artificial person through or by means of which an enterprise or activity may be lawfully conducted, including, without limitation, a partnership, trust, limited liability company, corporation, joint venture, cooperative, or association. P. "Family," with respect to a Member, means individuals who are related to the Member by blood, marriage, or adoption. For the purposes of this definition, an individual is related to the Member by marriage if the person is related by blood or adoption to the Member's current spouse. For purposes of the definition of "spouse," a Member shall be deemed to be married to another individual so long as such Member is cohabiting with an individual to whom the Member is legally married and the Member and the individual are not legally separated and living apart. Q. "Member" means an initial Member and any Person who subsequently is admitted as an additional or substitute Member after the Effective Date. R. "Membership Interest" means a Member's percentage interest in the Company, consisting of the Member's right to share in the Company's Profit, receive Distributions, participate in the Company's governance, approve the Company's acts and receive information pertaining to the Company's affairs. The Membership Interests of the initial Members are set forth in Article 3. Changes in Membership Interests after the Effective Date, including those necessitated by the admission and Dissociation of Members, will be reflected in the Company's records. The allocation of Membership Interests reflected in the Company's records from time to time is presumed to be correct for ail purposes of this Agreement and the Act. S. "Minimum Gain" means minimum gain as defined in Sections 1.704-2(b)(2) and 1.704-2(d) of the Regulations. T. "Person" means a natural person or an Entity. U. "Profit," as to a positive amount, and "Loss," as to a negative amount, mean, for a Taxable Year, the Company's income or loss for the Taxable Year, as determined in accordance with accounting principles appropriate to the Company's method of accounting and consistently applied. V. "Regulations" means proposed, temporary, or final regulations promulgated under the Code by the Department of the Treasury, as amended. W. "Taxable Year" means the Company's taxable year as determined in accordance with Article V. X. "Transfer," as a noun, means a transaction or event by which ownership of a Membership Interest is changed or encumbered, including, without limitation, a sale, exchange, abandonment, gift, pledge, or foreclosure. "Transfer," as a verb, means to effect a Transfer. Y. "Transferee" means a Person who acquires a Membership Interest by Trantfer from a Member or another Transferee and is not admitted as a Member in accordance with Article 3. ARTICLE 11. THE COMPANY 2.1 Status The Company is a Pennsylvania limited liability company organized under the Act. 2.2 Name The Company's name is John Adams Investments, LLC. 2.3 Term The Company's existence will commence on the Effective Date and continue until terminated under this Agreement. 2.4 Purpose The Company's purpose is to engage in any laMul act or activity for which a limited liability company may be organized under the Act. 2.5 Principal Place 01 Business The Company's -principal place of business is located at.115 Btyce Road, Camp Hill, PA 17011. 2.6 Registered Agent and Registered Office. The Company's registered office in -Pennsylvania is located at 115 Bryce. Road, Camp Hill, PA 17011, and its registered agent at that location is Adam C Abram. The Company may change its registered agent OT registered office at any time in accordance with the Act. ARTICLE 111. MEMBERS 3.1 Identification A. Initial Members. The names, addresses, and Membership Interests of the initial Members are as follows: Adam C Abram, 115 Bryce Road, Camp Hill, PA 17011 50 percent John Royal Jr, 1109 Oak Lane, New Cumberland, Pennsylvania 17070 50 percent 3.2 Changes and Verification of Membership Interests A. Changes in Membership Interests. The Members' Membership Interests may be changed only with the approval of all Members and Managers. B. Verification of Membership Interests. Within 10 days after receipt of a Member's written request, the Company will provide the Member with a statement of the Member's Membership Interest. The statement will serve the sole purpose of verifying the Member's Membership Interest, as reflected in the Company's records, and will not constitute for any purpose a certificated security, negotiable instrument, or other vehicle by which a Transfer of a Membership Interest may be effected. 3.3 Manner of Acting A. Meetings. Right to Call. Any Member or combination -of Members whose Membership interest exceeds 10 percent may call a meeting of Members by giving written notice to all Members not less than 10 nor more than 60 days -prior to the date of the meeting. The notice must specify the date of the meeting and the nature of any business to be transacted. A Member may waive notice of a meeting of Members orally, in writing or by attendance at the meeting. (ii) Proxy Voting. A Member may act at.a meeting of Members through a Person authorized by signed proxy. (iii) Quorum. Members whose aggregate Membership Interest exceeds 50 percent will constitute a quorum at a meeting of Members. No action may be taken in the absence of a quorum. (iv) Required Vote. Except with respect to matters for which a greater minimum vote is required by the Act or this Agreement, the vote of Members present whose aggregate Membership Interest exceeds 50 percent of the aggregate Membership Interest of all Members present will constitute the act of the Members at a meeting of Members. (v) Written Consent. The Members may act without a meeting by written consent describing the action and signed by Members whose aggregate Membership Interest is at least equal to the minimum that would be necessary to take the action at a meeting at which all Members were present. (vi)Action through Managers. The Company may act through one or more Managers, whose rights, obligations, and duties are described in Article 6. 3.4 Fiduciary Duties A. Liability for Wrongful Acts. A Member will be liable to and indemnify the Company for all costs, expenses, or damages attributable to an act or omission that constitutes a breach of this Agreement, negligence, misconduct, or a violation of law. B. Limitation on Individual Authority. A Member who is not also a Manager has no authority to bind the Company. A Member whose unauthorized act obligates the Company to a third party will indemnify the Company for any costs or damages the Company incurs as a result of the unauthorized act. C. Justifiable Reliance. A Member may rely on the Company's records maintained in good faith and on information, opinions, reports, or statements received from any Person pertaining to matters the Member reasonably believes to be within the Person's expertise or competence. 3.5 Indemnification of Members The Company will indemnify each Member for all expenses, losses, liabilities, and damages the Member actually and reasonably incurs in connection with the defense or settlement of any action arising out of or relating to the conduct of the Company's activities, except an action with respect to which the Member is adjudged to be liable for breach of a fiduciary duty owed to the Company or the other Members under the Act or this Agreement. 3.6 Compensation The Company may compensate a Member for services rendered to or on behalf of the Company. A Member's compensation may be determined with or without regard to Profit or other indicators of the results of operations. Compensation paid to Members will be treated as an expense for purposes of determining Profit. The Company will reimburse each Member for reasonable expenses properly incurred on the Company's behalf. 3.7 Resignation of a Member A Member at any time may resign from the Company by giving written notice to the Company and the other Members at least 60 days prior to the effective date of the resignation. 3.8 Transfer of Membership Interest A. Restrictions on Transfer. A Member may Transfer a Membership Interest only in compliance with this Article 3. A Member may transfer his, her, or its Membership Interest only with the prior written consent of all of the Members and Managers. An attempted Transfer of all or a portion of a Membership Interest that is not in compliance with this Article 3 is null and void. B. Transferor's Membership Status. If a Member Transfers less than all of the Membership Interest, the Member's rights with respect to the transferred portion, including the right to vote or otherwise participate in the Company's governance and the right to receive Distributions, will terminate as of the effective date of the Transfer. However, the Member will remain liable for any obligation with respect to the transferred portion that existed prior to the effective date of the Transfer, including any costs or damages resulting from the Member's breach of this Agreement. If the Member Transfers all of the Membership Interest, the Transfer will constitute an event of Dissociation for purposes of Article 3. C. Transferee's Status. (i) Admission as a Member. A Member who Transfers a Membership Interest has no power to confer on the Transferee the status of a Member. A Transferee may be admitted as a Member only in accordance with the provisions of Article 3. A Transferee who is not admitted as a Member has only the rights described in this Article 3. (ii) Rights of Non -Member Transferee. A Transferee who is not admitted as a Member in accordance with the provisions of Article 3, (i) has no right to vote or otherwise .participate in the Company's governance, (II) is not entitled to receive information concerning the Company's affairs or inspect the Company's books and records, (iii) with respect to the transferred Membership Interest, is entitled to receive the Distributions to which the Member would have been entitled had the Transfer not occurred, but only at such times and in such amounts as the Company in its sole discretion may determine, and (iv) 'is subject to the restrictions imposed by this Article 3 to the same extent as a Member. 3.9 Dissociation A. Events of Dissociation. A Member's Dissociation from the Company occurs upon: (1) the Member's resignation or expulsion from the Company; (2) the Member's Transfer of the Member's entire Membership Interest; (3) the Member's Bankruptcy; (4) as to a Member who is a natural person, the Member's death or adjudication of incompetency; (5) as to a Member who holds a Membership Interest as a fiduciary, distribution of the entire Membership Interestlo the beneficial owners; or (6) as to a Member that is an Entity, the Entity's dissolution. B. Rights of Member Following Dissociation. (1) •Upon Company's Continuance. If a Member's Dissociation does not result in the Company's dissolution under Article 7, as of the effective date of the Member's Dissociation: (i) the Member's right to participate in the Company's governance, receive information concerning the -Company's affairs and inspect the Company's books and records will terminate; and (ii) unless the Dissociation resulted from the Transfer of the Member's entire Membership Interest, the Member will be entitled to receive the Distributions to which the Member would have been entitled had the Dissociation not occurred, but only at such times and in such amounts as the Company in its sole discretion may determine. Except as provided in this Article 3, the Member will have no right to receive Distributions or otherwise participate in the Company's financial affairs. The Member will, however, remain liable for any obligation to the Company that existed prior to the effective date of the Dissociation, including any costs or damages resulting from the Member's breach of this Agreement. 3.10 Redemption of Dissociating Member's Interest A. Optional Redemption. If a Member's Dissociation is a result of Bankruptcy, dissolution, or Transfer of Membership Interest, and if the Dissociation does not cause the Company's dissolution under Article 6, at any time within 180 days after the effective date of the Dissociation, the Company may redeem not less than all of the Member's Membership Interest on the terms set forth in this Article 3. The Company must exercise its right to redeem the Membership Interest by giving written notice to the Member or the Member's successor in interest (the "seller") within the 180 -day exercise period. The notice must specify the redemption price and payment terms and indicate a closing date within 60 days after the date the notice is delivered. B. Redemption Price. The redemption price of the Membership Interest is an amount equal to the Company's value as of the effective date of the Dissociation, multiplied by the seller's Membership Interest. For the purpose of determining the redemption price, the Company's value is the value determined by unanimous agreement of the Members at five-year intervals. If the Members fail to redetermine the Company's value for any year, the Company's value will be an amount equal to the lesser of the last value determined by unanimous agreement of the Members, as set forth on the Schedule of Values attached to this Agreement or the Member's Capital Account. C. Payment Terms. The Company will pay the redemption price at the closing in the form of its promissory note in the principal amount of the purchase price payable in 15 equal annual installments, with interest compounded annually at an annual rate equal to the greater of six percent (6 %) or the minimum rate necessary to avoid the imputation of interest between the parties under Internal Revenue Code sections 483, 1274, and 7872, as of the date the Company gives the seller notice of the redemption. ARTICLE IV. FINANCE 4.1 Contri,butions A. Initial Members. The initial Members will make the Contributions described below: Adam C Abram will contribute cash in the amount of $ John Royal Jr will contribute cash in the amount of B. Additional Members. A Person admitted as a Member in connection with the acquisition of a Membership Interest .directly from the Company after the Effective Date Will make the Contributions specified in the agreement pursuant to which the Person is admitted as a Member. C. Additional Contributions. (i) Permitted. The Company may authorize additional Contributions at such times and on such terms and conditions as it determines to be in its best interest. D. Required. (i) If at any time the Company determines that its financial resources are insufficient to meet the reasonable needs of its business, it may require the Members to make additional Contributions sufficient to meet those needs. The Members will make the additional Contributions in proportion to their Membership Interests. (ii) The Company must give each Member written notice of the obligation to contribute additional capital. The notice must explain the need for additional capital, specify the amount the Member is required to contribute and establish a due date that is not less than 30 days after the date of the notice. The Member will make the Contribution in immediately available funds on or before the due date specified in the notice. E. Default Remedies. If a Member does not contribute the Member's share of a required additional Contribution on or before the due date, the Company may (i) take such action as it considers necessary or appropriate to enforce the Member's obligation or (ii) accept Contributions from the other Members in satisfaction of the defaulting Member's obligation, in proportion to their Membership Interests. If the Company accepts Contributions from other Members, the Membership Interest of each Member will be adjusted to correspond to the ratio that the Capital Investment of the Member bears to aggregate Capital Investment of all Members, adjusted to reflect the Contributions made by other Members in satisfaction of the defaulting Member's obligation. F. Creditors' Rights. A Member's obligation to make additional contributions extends only to the Company and may not be enforced by the Company's creditors without the Member's written consent. G. Contributions Not Interest Bearing. A Member is not entitled to interest or other compensation with respect to any cash or property the Member contributes to the Company. H. No Return of Contribution. A Member is not entitled to the return of any Contribution prior to the Company's dissolution and winding up. 4.2 Allocation of Profits and Losses A. Profits. After giving effect to any special allocation required by Article 4, the Company's Profit for a Taxable Year, including the Taxable Year in which the Company is dissolved, will be allocated among the Members in the following order of priority: (i) first, to the extent of any excess of cumulative Losses for all prior Taxable Years over cumulative Profits for all prior Taxable Years, in proportion to the allocation of such excess under Article 4; (ii) any balance, in proportion to the Members' Membership Interests. B. Losses. After giving effect to any special allocation required by Article 4, the Company's Loss for a Taxable Year, including the Taxable Year in which the Company is dissolved, will be allocated among the Members in the following order of priority: (i) first, in proportion to the Members' Membership Interests to the extent of any excess of cumulative Profits for all prior Taxable Years over cumulative Losses for all prior Taxable Years; (ii) second, in proportion to the Members' respective Capital Investments; and (iii) any balance, in proportion to the Members' Membership Interests. C. Special Allocations. (i) If a Member unexpectedly receives an adjustment, allocation, or distribution described in Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6) of the Regulations that creates or increases a deficit in the Member's Capital Account as of the end of a Taxable Year, a pro rata portion of each item of the Company's income, including gross income and gain for the Taxable Year and, if necessary, for subsequent years will be allocated to the Member in an amount and manner sufficient to eliminate the deficit in the Member's Capital Account as quickly as possible. (ii) If a Member would have a deficit in his or her Capital Account at the end of a Taxable Year that exceeds the sum of (i) the amount the Member is obligated to restore to the Company under Section 1.704- 1(b)(2)00(c) of the Regulations and (ii) the Member's share of Minimum Gain, a pro rata portion of each item of the Company's income, including gross income, and gain for the year will be allocated to the Member in an amount and mariner sufficient to eliminate the deficit in the Member's Capital Account as quickly as possible. (iii) If there is a net decrease in the Company's Minimum Gain during a Taxable Year, the items of the Company's income, including gross income and gain for the Taxable Year and, if necessary, for subsequent years will be allocated to the Members in proportion to their shares of the net decrease in Minimum Gain. If the allocation made by this paragraph would cause a distortion in the economic arrangement among the Members and it is expected that the Company will not have sufficient income to correct that distortion, the Company may seek to have the Internal Revenue Service waive the requirement for the allocation in accordance with Section 1.704-2(0(4) of the Regulations. (iv) [terns of the Company's loss, deductions, and expenditures described in Code Section 705(a)(2)(B) that are attributable to the Company's nonrecourse debt and are characterized as Member nonrecourse deductions under Section 1.704-2(i) of the Regulations will be allocated to the Members' Capital Accounts in accordance with Section 1.704-2(0 of the Regulations. (v) Items of income, gain, loss, and deduction with respect to property contributed to the Company's capital will be allocated between the Members so as to take into account any variation between book value and basis, to the extent and in the manner prescribed by section 704(c) of the Code and related Regulations. (vi)If the special allocations required by the foregoing provisions of this Article IV (the "special allocations") result in Capital Account balances that are different from the Capital Account balances the Members would have had if the special allocations were not required, the Company will allocate other items of income, gain, loss, and deduction in any manner it considers appropriate to offset the effects of the special allocations on the Members' Capital Account balances. Any offsetting allocation required by this paragraph is subject to and must be consistent with the special allocations. D. Effect of Transfers During Year. The Company will prorate items attributable to a Membership Interest that is the subject of a Transfer during a Taxable Year between the transferor and the Transferee based on the portion of the Taxable Year that elapsed prior to the Transfer. 4.3 Tax Allocations For federal income tax purposes, unless the Code otherwise requires, each item of the Company's income, gain, loss, or deduction will be allocated to the Members in proportion to their allocations of the Company's Profit or Loss. 4.4 Distributions A. Available Funds. The Company will distribute its Available Funds to .the Members in such amounts and at such times as are determined solely by the Managers. • 4.5 Capital Accounts A. General Mai•nte.nance. The Company will establish and maintain a Capital Account for each Member. A Member's Capital Account will be: (1) increased by (i) the amount of any money the Member contributes to the Company's capital; (ii) the fair market value of any property the Member contributes to the Company's capital, net of any liabilities the _Company assumes or to which the property is subject; and (iii) the Member's share of Profits and any separately stated items of income or gain; and (ii) decreased by: (i) the amount of any .money the Company distributes to the Member; (ii) the fair market value of any property the Company distributes to the Member, net of any liabilities the Member assumes or to which the property is subject; and (iii) the Member's share of Losses and any separately stated items of deduction or loss. • B. Adjustments for Distributions in Kind. If at any time the Company distributes property in kind, it will adjust the Members' Capital Accounts to account for their shares of any Profit or Loss the Company would have realized had it sold the property at fair market value and distributed the sale proceeds. C. Adjustments for Acquisitions and Redemptions. If at any time a Person acquires a Membership Interest from the Company or the Company redeems a Membership Interest, the Company may adjust the Members' Capital Accounts to reflect any PrON or Loss the Company would have realized had it sold all of its assets at fair market value on the date of the acquisition or redemption. D. Transfer of Capital Account. A Transferee of a Membership Interest succeeds to the portion of the transferor's Capital Account that corresponds to the portion of the Membership Interest that is the subject of the Transfer. E. Compliance with Code. The requirements of this Article IV are intended and will be construed to ensure that the allocations of the Company s_income,_gain.,tos.ses,—__ deductions, and credits have substantial economic effect under the Regulations promulgated under Section 704(b) of the Code. ARTICLE V. RECORDS AND ACCOUNTING 5.1 Maintenance of Records A. Required Records. The Company will maintain at its registered office in Pennsylvania: (i) a current list, in alphabetical order, of the full name and last known business, residence, or mailing address of each Member; (ii) copies of the Certificate and •Certificate of Organization, including articles and certificates of amendment; (iii) copies of the Company's federal, state, and local income tax returns and reports, if any, for the three most recent Taxable Years; (iv) a copy of this Agreement, including any amendments; (v) a schedule showing the amount of cash, if any, and a description and statement of the agreed value of the other property or services, if any, contributed or required to be contributed by each Member; (vi) a description of the times or events at or upon which any Member is required to make additional Contributions; (vii) a description of any right of a Member to receive, or of the Company to make, Distributions to the Member that include a return of all or any part of the Member's contribution; and (viii) a description of the events upon which the Company will be dissolved and its affairs wound up. B. Member Access. A Member and the Member's authorized representative have reasonable access to and may inspect and copy all records and other materials pertaining to the Company or its activities. The exercise of such rights will be at the requesting Member's expense. C. Confidentiality. No Member will disclose any information relating to the Company or its activities to any unauthorized person or use any such information for his or her or any other Person's personal gain. 5.2 Financial Accounting A. Accounting Method. The Company will account for its financial transactions using a method of accounting determined by the Members in compliance with Sections 446 and 448 of the Code. B. Taxable Year, The Company's Taxable Year is the Company's annual accounting period, as determined by the Members in compliance with Sections 441, 444, and 706 of the Code. 5.3 Reports A. Members. As soon as practicable after the close of each Taxable Year, the Company will prepare and send to the Members such reports and information as are reasonably necessary to (1) inform the Members of the results of the Company's operations for the Taxable Year and (2) enable the Members to completely and accurately reflect their distributive shares of the Company's income, gains, deductions, losses, and credits in their federal, state, and local income tax returns for the appropriate year. B. Periodic Reports. The Company will complete and file any periodic reports required by the Act or the law of any other jurisdiction in which the Company is qualified to do business. 5.4 Tax Compliance A. Withholding. if the Company is required by law or regulation to withhold and pay over to a governmental agency any part or all of a Distribution or allocation of Profit to a Member: (i) the amount withheld will be considered a Distribution to the Member; and Op if the withholding requirement pertains to a Distribution in kind or an allocation of Profit, the Company will pay the amount required to be withheld to the governmental agency and promptly take such action as it considers necessary or appropriate to recover a like amount from the Member, including offset against any Distributions to which the Member would otherwise be entitled. B. Tax Matters Partner. The Company designate a Member to act as the "Tax Matters Partner" pursuant to Section 6231(a)(7) of the Code. The initial Tax Matters Partner shall be Adam C Abram. The Company may remove any Tax Matters Partner, with or without cause, and designate a successor to any Tax Matters Partner who for any reason ceases to act. The Tax Matters Partner will inform the Members of all administrative and judicial proceedings pertaining to the determination of the Company's tax items and will provide the Members with copies of all notices received from the internal Revenue Service regarding the cornmencement of a Company -level audit or a proposed adjustment of any of the Company's tax items. The Tax Matters Partner may extend the statute of limitations for assessment of tax deficiencies against the Members attributable to any adjustment of any tax item. The Company will reimburse the Tax Matters Partner for reasonable expenses properly incurred while acting within the scope of the Tax Matters Partner's authority. ARTICLE VI. MANAGEMENT 6.1 Representative Management The Company will be managed by a Manager or Managers. The name and business address of the Company's initial Manager(s) are: Adam C Abram 115 Bryce Road, Camp Hill, PA 17011 John Royal Jr, 1109 Oak Lane, New Cumberland, Pennsylvania, 17070. 6.2 Time Devoted to Business Managers will devote only the amount of time to the Company's activities as is reasonably necessary to discharge the Managersresponsibilities. 6.3 Powers and Authority A. General Scope. Except for matters on which the Members' approval is required by the Act or this Agreement, the Managers have full power, authority, and discretion to manage and direct the Company's business, affairs, and properties, including, without limitation, the specific powers referred to in this Article 6.3. B. Specific Powers. (i) The Managers are authorized on the Company's behalf to make all decisions as to (i) the development, sale, lease, or other disposition of the Company's assets; (ii) the purchase or other acquisition of other assets of all kinds; (iii) the management of all or any part of the Company's assets and business; (iv) the borrowing of money and the granting of security interests in the Company's assets (including loans from Members); (v) the prepayment, refinancing, or extension of any mortgage affecting the Company's assets; (vi) the compromise or release of any of the Company's claims or debts; (vii) the employment of Persons for the operation and management of the Company's business; and (viii) all elections available to the Company under any federal or state tax law or regulation. (ii) Each Manager on the Company's behalf may execute and deliver (i) all contracts, conveyances, assignments, leases, subleases, franchise agreements, licensing agreements, management contracts, and maintenance contracts covering or affecting the Company's assets; (ii) all checks, drafts, and other orders for the payment of the Company's funds; (iii) all promissory notes, mortgages, deeds of trust, security agreements, and other similar documents; (iv) all articles, certificates, and reports pertaining to the Company's organization, qualification, and dissolution; (v) all tax returns and reports; and (vi) all other instruments of any kind or character relating to the Company's affairs. 6.4 Manner of Acting A. General. A Manager may act with respect to any matter within the scope of his or her authority if there is one Manager or if there is more than one Manager at a 'meeting of Managers or pursuant to formal or informal procedures adopted at a meeting of Managers. Procedures that may be adopted at a meeting of Managers include, without limitation, the establishment of dates and times for regular meetings, procedures pursuant to which the Managers may approve a matter without a meeting and the delegation of duties and responsibilities with respect to which the delegate may act without approval or ratification by the other Managers. B. Meetings. If there is more than one Manager: (i) Right to Call. Any Manager may call a meeting of Managers by giving written notice to all Managers not less than ten (10) nor more than sixty (60) days prior to the date of the meeting. The notice must specify the date of the meeting and the nature of any business to be transacted. A Manager may waive notice of a meeting of Managers orally, in writing or by attendance at the meeting. (ii) Proxy Voting. A Manager may act at a meeting of Managers through another Manager authorized by signed proxy. C. Written Consent. The Managers may act without a meeting by written consent describing the action and signed by Managers whose voting power is at least equal to the minimum that would be necessary to take the action at a meeting at which all Managers were present. D. Required Approval. The Managers' majority approval is required for any matter arising within the scope of their authority, subject to any procedures adopted at a meeting of Managers pursuant to Section 6.4(a). E. Participation by Non -Member Managers. The fact that a Manager is not also a Member in no way limits the Manager's right to vote on any matter properly within the scope of the Managers' authority under this Agreement. 6.5 Agency Power and Authority A Manager apparently acting for the Company in the usual course of its business has the power to bind the Company and no person has an obligation to inquire into the Manager's actual authority to act on the Company's behalf. However, if a Manager acts outside the scope of the Manager's actual authority, the Manager will indemnify the Company for any costs or damages it incurs as a result of the unauthorized act. 6.6 Fiduciary Duties A. Standard of Care. (i) Liability for Wrongful Acts. A Manager is liable to and will indernnify the Company for all costs, expenses, or damages attributable to an act or omission that constitutes a breach of this Agreement, negligence, misconduct, or a violation of law. (ii) Justifiable Reliance. A Manager may rely on the Company's records maintained in good faith and on information, opinions, reports, or statements received from any Person pertaining to matters the Manager reasonably believes to be within the Person's expertise or competence. B. Competing Activities. A Manager may participate in any business or activity without accounting to the Company or the Members. A Manager may not, however, accept a business opportunity for the Manager's own account that the Manager believes or has reason to believe the Company would accept if brought to its attention. A Manager must disclose to the Company any business opportunity of which the Manager becomes aware. If the Company declines to accept the opportunity, the Manager may pursue it for the Manager's own account. If the Manager fails to disclose the opportunity, the Manager will account to the Company for any income the Manager derives from the opportunity and will indemnify the Company for any loss the Company incurs as a result of the failure to disclose. C. Self -Dealing. A Manager may enter into a business transaction with the Company if the terms of the transaction are no less favorable to the Company than those of a similar transaction with an independent third party. Approval or ratification by Members having no interest in the transaction constitutes conclusive evidence that the terms satisfy the foregoing condition. 6.7 Indemnification of Managers The Company will indemnify each Manager for all expenses, losses, liabilities, and damages the Manager actually and reasonably incurs in connection with the defense or settlement of any action arising out of or relating to the conduct of the Company's activities, except an action with respect to which the Manager is adjudged to be liable for breach of a fiduciary duty owed to the Company or the Members under the Act or this Agreement. 6.8 Compensation The Company may, with the approval of the Members, compensate any Manager for services to or on behalf of the Company. The Company will reimburse each Manager for reasonable expenses properly incurred on the Company's behalf. 6.9 Tenure A. Term. A Manager will serve until the earlier of: (1) the Manager's resignation; (2) the Manager's Bankruptcy; (3) as to a Manager who is a natural person, the Manager's death or adjudication of incompetency; and (4) as to a Manager that is an Entity, the Manager's dissolution. B. Resignation. A Manager at any time may resign by written notice delivered to the Members at least thirty (30) days prior to the effective date of the resignation. C. Vacancy. If a Manager for any reason ceases to act, the Members will promptly elect a successor, to serve until a successor is elected and qualified. ARTICLE VII. DISSOLUTION 7.1 Events of Dissolution A. Enumeration. The Company will dissolve upon the first to occur of: (i) the unanimous vote of all of the Members and Managers to dissolve the Company; (ii) any event that makes the Company ineligible to conduct its activities as a limited liability company under the Act; (iii) any event or circumstance that makes it unlawful or impossible for the Company to carry on its business; or B. Exclusivity of Events. Unless specifically referred to in this Article 7, no event, including an event of dissolution prescribed by the Act, will result in the Company's dissolution. 7.2 Effect of Dissolution A. Appointment of Liquidator. Upon the Company's dissolution, the Members will appoint a liquidator, who may but need not be a Member. The liquidator will wind up and liquidate the Company in an orderly, prudent, and expeditious manner in accordance with the following provisions of this Article 7. B. Final Accounting. The liquidator will make proper accountings (1) to the end of the month in which the event of dissolution occurred and (2) to the date on which the Company is finally and completely liquidated. C. Duties and Authority of Liquidator. The liquidator will make adequate provision for the discharge of all of the Company's debts, obligations, and liabilities. The liquidator may sell, encumber, or retain for distribution in kind any of the Company's assets. Any gain or loss recognized on the sale of assets will be allocated to the Members' Capital Accounts in accordance with the provisions of Article 4. With respect to any asset the liquidator determines to retain for distribution in kind, the liquidator will allocate to the Members' Capital Accounts the amount of gain or loss that would have been recognized had the asset been sold at its fair market value. D. Final Distribution. The liquidator will distribute any assets remaining after the discharge or accommodation of the Company's debts, obligations, and liabilities to the Members in proportion to their Capital Accounts. The liquidator will distribute any assets distributable in kind to the Members in undivided interests as tenants in common. A Member whose Capital Account is negative will have no liability to the Company, the Company's creditors or any other Member with respect to the negative balance. E. Required Filings. The liquidator will file with the Secretary of State such statements, certificates, and other instruments, and take such other actions, as are reasonably necessary or appropriate to effectuate and confirm the cessation of the Company's existence. ARTICLE VIII. GENERAL PROVISIONS 8.1 Amendments A. Required- Amendments. The Company and the Members will execute and file any amendment to the Certificate, as required by the Act. If any such amendment results in inconsistencies between the Certificate and this Agreement, -this Agreement will be considered to have been amended in the specifics necessary to eliminate the inconsistencies. B. Other Amendments. Any -Member may propose for consideration and action an amendment to this Agreement or to the Certificate. A .proposed amendment will become effective at such time as it is approved by all Members and Managers. 8.2 Nominee Title to the Company's assets may be held in the name of the Company or any nominee (including any Member so acting), as the Company determines. The Company's agreement with any nominee may contain provisions indemnifying the nominee for costs or damages incurred as a result of the nominee's service to the Company. 8.3 Investment Representation • Each Member represents to the Company and the other Members that (a) the Member is acquiring a Membership Interest in the Company for investment and for the Member's own account and not with a view to its sale or distribution and (b) neither the Company nor any other Member has made any guaranty or representation upon which the Member has relied concerning the possibility or probability of profit or loss resulting from the Member's investment in the Company. 8.4 Resolution of Disputes A. Mediation. The parties will endeavor in good faith to resolve all disputes arising under or related to this Agreement by mediation according to the then prevailing rules and procedures of the American Arbitration Association. B. Arbitration. If the parties fail in their attempt to resolve a dispute by mediation, they will submit the dispute to arbitration according to the then prevailing rules and procedures of the American Arbitration Association. Pennsylvania law will govern the rights and obligations of the parties with respect to the matters in controversy. The arbitrator will allocate all costs and fees attributable to the arbitration between the parties equally. The arbitrator's award will be final and binding and judgment may be entered in any court of competent jurisdiction. 8.5 Notices Notices contemplated by this Agreement may be sent by any commercially reasonable means, including hand delivery, first class mail, fax, e-mail, or private courier. The notice must be prepaid and addressed as set forth in the Company's records. The notice will be effective on the date of receipt or, in the case of notice sent by first class mail, the fifth day after mailing. 8.6 Resolution of Inconsistencies If there are inconsistencies between this Agreement and the Certificate, the Certificate will control. If there are inconsistencies between this Agreement and the Act, this Agreement will control, except to the extent the inconsistencies relate to provisions of the Act that the Members cannot alter by agreement. Without limiting the generality of the foregoing, unless the language or context clearly indicates a different intent, the provisions of this Agreement pertaining to the Company's governance and financial affairs and the rights of the Members upon Dissociation and dissolution will supersede the provisions of the Act relating to the same matters. 8.7 Provisions Applicable to Transferees As the context requires and subject to the restrictions and limitations imposed by Article 3, the provisions of this Agreement pertaining to the rights and obligations of a Member also govern the rights and obligations of the Member's Transferee. 8.8 Additional Instruments Each Member will execute and deliver any document or statement necessary to give effect to the terms of this Agreement or to comply with any law, rule, or regulation governing the Company's formation and activities. 8.9 Headings Headings and paragraph titles are for convenience only and have no significance in the interpretation of this Agreement. 8.10 Computation of Time In computing any period of time under this Agreement, the day of the act or event from which the specified period begins to run is not to be included. The last day of the period is included, unless it is a Saturday, Sunday, or legal holiday, in which case the period will run until the end of the next day that is not a Saturday, Sunday, or legal holiday. 8.11 Entire Agreement This Agreement and the Certificate comprise the entire agreement among the parties with respect to the Company. This Agreement and the Certificate supersede any prior agreements or understandings with respect to the Company. No representation, statement, or condition not contained in this Agreement or the Certificate has any force or effect. 8.12 Waiver No right under this Agreement may be waived, except by an instrument in writing signed by the party sought to be charged with the waiver. 8.13 General Construction Principles Words in any gender are deemed to include the other genders. The singular is deemed to include the plural and vice versa. The headings and bold paragraph titles are for guidance only and have no significance in the interpretation of this Agreement. 8.14 Binding Effect Subject to the provisions of this Agreement relating to the transferability of Membership Interests and the rights of Transferees, this Agreement is binding on and will inure t� the benefit of the Company, the Members and their respective distributees, successors, and assigns. 8.15 Governing Law Pennsylvania law governs the construction and application of he terms of this Agreement. 8.16 Counterparts This Agreement may be executed in counterparts, each of which will be considered an original. [remainder of -this page intentionally left blank] Signed on the respective dates November 1 2009 DATE November 1 2009 DATE November 1 2009 DATE Adam C Abram e h below, to be effective as of the Effective Date. COMPANY: s Inves Adam C Abram, Manager INITIAL MEMBERS: November 1 2009 DATE COMMONWEALTH OF PENNSYLVANIA COUNTY OF Cumberland ) SS: ) • On this, the /st day of November, 2009, before me, a Notary Public, personally appeared Adam C Abram and John Royal Jr whose names are subscribed to the within instrument, and acknowledged that each executed the same for the purposes therein contained. IN WITNESS WHEREOF, I hereunto set my hand and official seal. Iic on expires: CERTIFICATE OF SERVICE AND NOW, h(, I, Daniel L. Sullivan, Esquire, hereby certify that I did serve a true and correct copy of the foregoing document upon all counsel of record and interested parties by depositing, or causing to be deposited, same in the U.S. mail, postage prepaid, at Carlisle, Pennsylvania, addressed as follows: Samuel L. Andes, Esq. 525 North 12`12 Street P. O. Box 168 Lemoyne, PA 17043-1213 SAIDIS, SULLIVAN & ROGERS By " `%l Daniel L. Sullivan Attorney I.D. #34548 John A. Feichtel Attorney I.D. #77426 26 West High Street Carlisle, PA 17013 Phone: (717) 243-6222 Email: dsullivan@ssr-attorneys.com Attorneys for John Royal,II