GAA Member Operating Agreement

GRAPHIC ARTS ALLIANCE, LLC

AMENDED AND RESTATED OPERATING AGREEMENT

THIS AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”) is made and entered into effective as of the ___ day of November, 2020, by and among GRAPHIC ARTS ALLIANCE, LLC, a Pennsylvania limited liability company (the “Company”), the Prime Members and the Advantage Members.

The Company was formed under the Pennsylvania Limited Liability Company Law of 1994, by the filing of the Company’s Certificate of Organization with the Department of State of the Commonwealth of Pennsylvania on or about September 11, 2002, and was organized and governed pursuant to that certain Limited Liability Company Operating Agreement of Graphic Arts Alliance, LLC Revision 1.10 dated March 16, 2020 (the “Last Revised Operating Agreement”) approved by the Prime Members. The Prime Members desire to amend and restate the Last Revised Operating Agreement in its entirety upon the terms and conditions set forth in this Agreement.

In consideration of the mutual promises made by the parties herein, each to the others, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by all parties hereto, and intending to be legally bound hereby, the Prime Members hereby restate the Last Revised Operating Agreement in its entirety and agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

Section 1.1 Formation. The Company was formed as a limited liability company under the laws of the Commonwealth of Pennsylvania on September 11, 2002 by the filing of the Company’s Certificate of Organization with the Department of State of the Commonwealth of Pennsylvania.

Section 1.2 Name. The name of the Company shall be Graphic Arts Alliance, LLC, and all business of the Company shall be conducted in such name.

Section 1.3 Purpose. The purpose of the Company will be to obtain for its Prime Members and Advantage Members, all of whom are engaged in the business of providing printed materials or graphic arts services (collectively, the “Business”), by negotiating agreements with group vendors on more advantageous terms than would be available to the Prime Members and/or the Advantage Members individually.

Section 1.4 Offices. The principal place of business of the Company shall be at 420 West Deer Pointe Road, West Chester, Pennsylvania 19382, or at such other principal place of business as the Managers may from time to time determine. The Company may have, in addition to such office, such other offices and places of business at such locations, both within and without the Commonwealth of Pennsylvania as the Managers may from time to time determine or the business and affairs of the Company may require.

ARTICLE II

CLASSES OF MEMBERSHIP INTERESTS, PROFIT, LOSS AND DISTRIBUTIONS

Section 2.1 Prime Members and Advantage Members, Contributions and Membership Interests. The Prime Members and the Advantage Members, their initial capital contributions, if any, and their respective Prime Membership Interest, if any, are set forth on Exhibit A attached hereto. The Managers shall, from time to time, make such amendments to Exhibit A as necessary to reflect transfers of Prime Membership Interest and the admission of additional Prime Members and Advantage Members.

Section 2.2 Classes. The Company shall be comprised of Prime Membership Interests and Advantage Membership Interests.

a. Prime Membership Interests. A Prime Membership Interest is the entire interest of a Prime Member in the Company, including, without limitation, interests in items of income, gain, loss, deduction and credit, and confers voting and other rights to participate in the management of the Company, the right to receive Distributions (in liquidation or otherwise) from the Company, the right to receive or inspect financial or other information of the Company, and the other rights of a Prime Member or Member specified herein. For purposes of this Agreement, a Prime Member may sometimes be referred to as a Prime Member or a Member.

b. Advantage Membership Interests. An Advantage Membership Interest is the entire interest of an Advantage Member in the Company, and confers no voting or other rights to participate in the management of the Company, no right to receive Distributions (in liquidation or otherwise) from the Company, no right to receive or inspect financial or other information of the Company, and no other rights in the Company except as otherwise specified herein. An Advantage Member is only entitled to benefit from such agreements the Company has negotiated with group vendors for the Advantage Members on more advantageous terms than would be available to Advantage Members individually. The Managers shall have the right to modify the benefits provided by the Company to Advantage Members.

Section 2.3 Admission of Additional Prime Members and Advantage Members.

a. Prime Members. Any individual or entity may be admitted as a Prime Member by the Managers provided that:

1. It has annual sales from its Business of no less than $7,000,000 and no more than $1,000,000,000;

2. In the judgment of the Managers, it is financially sound and has a reputation for ethical business dealings and is not subject to any judgment or order of any court or governmental body, nor to any contractual obligation, that would prevent it from participating effectively in the Company’s programs;

3. It has agreed that, if admitted as a Prime Member, it will execute an instrument reasonably satisfactory to the Managers accepting and adopting the provisions of this Agreement, and will forthwith make an initial capital contribution to the Company in the amount then required of all new Prime Members by the Managers;

4. The Prime Members have been requested to express any objection they may have to such Prime Membership, and no more than two Prime Members have expressed any objection. The request to the Prime Members to state any objection they may have shall be transmitted to them by a Ballot, as defined in Section 3.6.b, and the Prime Members’ responses must be made by valid votes as provided in Section 3.6.b. However, the return of three valid votes in opposition to the proposed membership shall be conclusive without regard to the total number of Prime Members voting; and

5. It is not a member of the following purchasing cooperatives: Graphic Source, Independent Printers Worldwide (IPW), PAGE Cooperative, and The Independent Carton Group or any other new or current group that the Managers determine is an equivalent purchasing cooperative. In order to maintain a Prime Membership Interest, a current Prime Member cannot be an active member in one or more of these groups.

b. Advantage Members. Any individual or entity may be admitted as an Advantage Member by the Managers provided that:

1. It has annual sales from its Business of no less than $3,000,000.

3. It has agreed that, if admitted to as an Advantage Member, it will execute an instrument reasonably satisfactory to the Managers accepting and adopting the provisions of this Agreement, and will forthwith pay annual membership fees to the Company in the amount then required of all Advantage Members by the Managers; and

4. It was not denied admission as a Prime Member.

Section 2.4 Additional Capital Contributions. No Prime Member and no Advantage Member may be required to make any additional contribution to the capital of the Company except as expressly provided herein.

Section 2.5 Allocation of Profit and Loss. Net profit, net loss, income, gain, credit, cost and deduction in each calendar year shall be allocated among the Prime Members in proportion to the amounts of their respective cash Distributions from the Company in such year.

Section 2.6 Distributions. Only Prime Members shall be entitled to receive Distributions. No Advantage Member shall be entitled to any Distributions. After repayment or provision for all debts and obligations of the Company, including the repayment of any loans from a Prime Member or its affiliate, unless otherwise determined by the Managers and only as permitted by the provisions of §8845 of the Act or other applicable law except that the prohibition stated in §8845(a) of the Act requires only that the Company’s total assets not be less than its total liabilities, the Managers shall make Distributions in the amount of all remaining funds less reasonable reserves of the Company to the Prime Members at such times as the Managers, in their sole discretion, determine to be appropriate, except that all such Distributions with respect to a calendar year must be paid no later than March 31 of the next calendar year. Unless prohibited by law, the amount available for Distribution with respect to each calendar year will equal the amount of patronage refunds received by the Company with respect to that year. All Distributions shall be made in accordance with the rules set out on Exhibit B attached hereto. The Company may offset against any amount payable as a Distribution to a Prime Member any amount owed by that Prime Member to the Company. For purposes of this Agreement, the term “Distribution” shall be given the meaning ascribed to that term in the Pennsylvania Uniform Limited Liability Company Act of 2016, 15 Pa. C.S.A. §8811 et seq., and any successor statute, as amended from time to time (the “Act”).

Section 2.7 Membership Fee; Limited Liability. Each Prime Member shall pay to the Company an annual membership fee, which shall be deemed to be a contribution to capital, in an amount determined from time to time by the Prime Members, and each Advantage Member shall pay to the Company an annual membership fee, which shall not be deemed to be a contribution to capital, in an amount determined from time to time by the Managers. No Prime Member and no Advantage Member shall be liable for the debts, liabilities, contracts or other obligations of the Company except to the extent of any unpaid capital contributions the Prime Member has agreed to make to the Company. No Prime Member and no Advantage Member shall be required to make any loans to the Company, except as may be agreed between a Prime Member or an Advantage Member and the Company, with approval of the Managers. The Company shall indemnify and hold harmless a Prime Member or an Advantage Member in the event such Prime Member or Advantage Member (a) becomes liable, notwithstanding the preceding sentence, for any debt liability, contract or other obligation of the Company except to the extent expressly provided in this Section 2.7 or (b) is directly or indirectly required to make any payments with respect thereto.

Section 2.8 Withdrawal.

a. Prime Members. A Prime Member may withdraw at any time by written notice to the Secretary-Treasurer. A Prime Member shall be deemed to have withdrawn when the Managers give such Prime Member notice that they request its withdrawal because its annual sales from the Business have fallen below $5,000,000. Within thirty (30) days after withdrawal, the Company shall pay to the withdrawn Prime Member a fraction of that Prime Member’s annual membership fee equal to the fraction of the year during which such withdrawn Prime Member is not a Prime Member, provided the withdrawn Prime Member has no undischarged obligation to the Company, except that if the withdrawal occurs at any time prior to the first anniversary of such withdrawn Prime Member’s admission as a Prime Member, the Company shall pay to such withdrawn Prime Member the entire amount of such withdrawn Prime Member’s initial annual membership fee within thirty (30) days after withdrawal, provided the withdrawn Prime Member has no undischarged obligation to the Company.

b. Advantage Members. An Advantage Member may withdraw at any time by written notice to the Secretary-Treasurer. An Advantage Member shall be deemed to have withdrawn when the Managers give such Advantage Member notice that they request its withdrawal because its annual sales from the Business have fallen below $1,500,000.00. Within thirty (30) days after withdrawal, the Company shall pay to the withdrawn Advantage Member a fraction of that Advantage Member’s annual membership fee equal to the fraction of the year during which such withdrawn Advantage Member is not an Advantage Member, provided the withdrawn Advantage Member has no undischarged obligation to the Company, except that if the withdrawal occurs at any time prior to the first anniversary of such withdrawn Advantage Member’s admission as an Advantage Member, the Company shall pay to such withdrawn Advantage Member the entire amount of such withdrawn Advantage Member’s initial annual membership fee within thirty (30) days after withdrawal, provided the withdrawn Advantage Member has no undischarged obligation to the Company.

Section 2.9 Expulsion.

a. Prime Members. A Prime Member may be expelled for cause by a majority vote of the Prime Members at an annual or special meeting held, provided that the notice of such meeting states that the question of the expulsion of such Prime Member will be considered at that meeting. Cause for expulsion may include failure to comply with the requirements of this Agreement or with any decision of the Prime Members or the Managers, dishonesty in the conduct of the Prime Member’s business affairs or any action, which materially interferes with the conduct of the Company’s business. An expelled Prime Member shall not be entitled to a refund of any portion of its annual membership fee.

b. Advantage Members. An Advantage Member may be expelled for cause by a majority vote of the Managers at any time. Cause for expulsion may include failure to comply with the requirements of this Agreement or with any decision of the Prime Members or the Managers, dishonesty in the conduct of the Advantage Member’s business affairs or any action, which materially interferes with the conduct of the Company’s business. An expelled Advantage Member shall not be entitled to a refund of any portion of its annual membership fee.

Section 2.10 Rights of Withdrawn and Expelled Prime Members to Patronage Refunds. A Prime Member who withdraws or is expelled during a year shall be entitled to receive patronage rebates with respect to its purchases during the year of withdrawal, based on the amount of its purchases in the portion of the year during which it was a Prime Member. The amount of the patronage refund to which it is entitled with respect to the year of withdrawal or expulsion shall be equal to the distribution to which it would have been entitled under Section 2.6 by reason of the purchases it made in that year prior to its withdrawal or expulsion. The withdrawn or expelled Prime Member shall have no right to a patronage refund with respect to purchases made by it in the portion of the year of withdrawal or expulsion during which it was not a Prime Member, even if the Company received payments from group vendors with respect to those purchases.

Section 2.11 Dissociation. Except as otherwise provided herein, no Prime Member shall have the right voluntarily to withdraw as a Member from the Company and no person who is Dissociated has the right to require the Company to pay or distribute to it the fair value of its Prime Membership Interest, unless the Company is wound up and liquidated pursuant to this Agreement, in which event, a person who is Dissociated shall have the same right as all other Prime Members to share in the proceeds of such liquidation. For purposes of this Agreement, “Dissociated” means the occurrence of an event causing the dissociation of a Member as set forth in the Act.

ARTICLE III

MEETINGS OF PRIME MEMBERS

Section 3.1 Annual Meetings; Special Meetings. An annual meeting of the Prime Members shall be held in each fiscal year on a date in September or October, as determined by the Managers. At such meeting, the Prime Members shall elect the Managers and officers who, under the provisions of Articles IV and V, are to be elected at that time by the Prime Members, and shall transact such other business as may properly be brought before the meeting. Special meetings of the Prime Members for any purpose or purposes, unless otherwise prescribed by statute, may be called by a majority of the Managers, or by the Managers upon the written request of at least ten percent (10%) of the Prime Members, describing the business to be taken up at such special meeting. A special meeting called at the request of at least ten percent (10%) of the Prime Members must be held within thirty (30) days after receipt of that request by the Managers. Only business within the purposes described in the notice of special meeting may be conducted at the meeting.

Section 3.2 Place of Meetings. Meetings of the Prime Members shall be held at such places, within or without the Commonwealth of Pennsylvania as may from time to time be fixed by the Managers or as shall be specified or fixed in the respective notices or waivers of notice thereof.

Section 3.3 Notice of Meetings. Written or printed notice stating the place, day and hour of each meeting of the Prime Members and, in case of a special meeting, the purpose or purposes for which the meeting is called, shall be given not less than fifteen (15) days before the date of the meeting, by the Managers, to each Prime Member entitled to vote at the meeting, in the manner provided in Section 14.1.

Section 3.4 Quorum of and Action by Members. Fifty percent (50%) of the Prime Members entitled to vote at the meeting, present in person or by proxy, shall be requisite to and shall constitute a quorum at each meeting of the Prime Members for the transaction of business, except as otherwise provided by statute or by this Agreement. Except as otherwise required by statue or by this Agreement, with respect to any matter, the vote of fifty percent (50%) of the Prime Members entitled to vote and present at a meeting at which there is a quorum shall constitute the act of the Prime Members. The Prime Members entitled to vote and represented in person or by proxy at a meeting of the Prime Members at which a quorum is not present may adjourn the meeting until such time and to such place as may be determined by a majority vote of the Prime Members entitled to vote and represented in person or by proxy at that meeting. At any such adjourned meeting at which a quorum shall be present or represented, any business may be transacted that might have been transacted at the meeting as originally convened.

Section 3.5 Voting by Members. All Prime Members shall be entitled to vote on all matters submitted to, or requiring a vote by, the Prime Members. No Advantage Member shall be entitled to vote. Each Prime Member shall have one vote on all matters on which the Prime Members may vote. At any meeting of the Prime Members, every Prime Member having the right to vote shall be entitled to vote either in person or by proxy. A telegram, telex, cablegram, e-mail message or similar transmission by the Prime Member or a photographic, photo static, facsimile or similar reproduction of a writing executed by it shall be treated as an execution in writing for purposes of this Section 3.5. No proxy shall be valid after eleven (11) months from the date of its execution unless otherwise provided in the proxy. Each proxy shall be revocable unless the proxy form conspicuously states that the proxy is irrevocable and the proxy is coupled with an interest. Each proxy shall be delivered to the Managers prior to or at the time of the meeting.

Section 3.6 Action Without a Meeting. Any action required by the Act to be taken at any annual or special meeting of the Prime Members, or any action which may be taken at any annual or special meeting of the Prime Members, may be taken without a meeting:

a. Without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by all of the Prime Members.

b. By a vote in accordance with this Section 3.6.b (a “Vote by Message”). A Vote by Message may be taken only on a question (the “Ballot”) submitted to the Prime Members by the Managers. Submission to the Prime Members must be by e-mail, fax, overnight courier service or any other medium (a “Permissible Medium”) that is reasonably calculated to deliver a written message (or a message capable of being printed on paper by means of equipment customarily found in business offices in the United States) to the recipient within one business day after transmission. In order to be valid, a Prime Member’s vote must be sent by the Prime Member by a Permissible Medium to the Secretary-Treasurer, and must be received within five (5) business days after the sending of the Ballot to the Prime Members. Subject to the provisions of Section 2.3.a.4, provided that a majority of the total number of Prime Members cast valid votes, any action that is approved by a majority of the valid votes is the action of the Prime Members.

Section 3.7 Telephone Meetings. Subject to the provisions of applicable law and this Agreement regarding notice of meetings, Prime Members may participate in and hold a meeting by using conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a telephone meeting pursuant to this Section 3.7 shall constitute presence in person at such meeting, except when a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened.

ARTICLE IV

MANAGEMENT

Section 4.1 Management of the Company. The powers of the Company shall be exercised by and under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Managers of the Company. There shall be seven (7) Managers, two (2) of which shall be the Prime Members then serving as President and Vice President; three (3) of which (the “Elected Managers”) shall be elected in accordance with Section 4.3; and two (2) of which (the “Non-elected Managers) selected as provided in Section 4.4. Only Prime Members are eligible to serve as Managers.

Section 4.2 Authority of Managers. Unless specifically authorized by a resolution duly adopted by the Managers, no Manager, solely in his capacity as a Manager, shall have the authority or power to act as agent for or on behalf of the Company or any other Manager, to do any act which would be binding on the Company or any other Manager, to incur any expenditures on behalf of or for the Company, or to execute, deliver and perform any agreements, acts, transactions or other matters on behalf of the Company. Managers have the authority to decide which group vendors the Company shall use for programs and the compensation amount for JB Solutions, LLC.

Section 4.3 Elected Managers. The Elected Managers shall be elected by the Prime Members, at their annual meeting. Each Elected Manager shall be elected for a term of three (3) years. Each Elected Manager shall be the Prime Member who received the largest number of votes cast for that managerial position, whether or not that Prime Member received a majority of all votes cast. In the event of a tied vote, there shall be a second ballot in which only those Prime Members who received the largest numbers of votes on the first ballot shall be candidates. If there shall be a tied vote on that second ballot, the Secretary-Treasurer shall select by lot, as the Elected Manager, one of the tied candidates.

Section 4.4 Non-Elected Managers. The Non-Elected Managers shall be the Prime Members (the “High-Volume Members”) who, in the three (3) years immediately ending on the August 31 just prior to the commencement of their term as Non-Elected Managers (the “Qualification Period”), purchased the largest dollar volume of goods and services that were subject to agreements between the Company and the group vendors of those goods and services (the “Eligible Purchases”). Only ten percent (10%) of capital equipment purchases made by a Prime Member through a group vendor will count towards the largest dollar volume purchase. The term of each Non-Elected Manager shall be for three (3) years, beginning immediately after the election of the President and/or Vice President at the annual meeting of the Prime Members just following the Qualification Period, and shall end upon the election of the President and/or Vice President at the annual meeting of the Prime Members in the third (3rd) year of that Non-Elected Manager’s tenure.

Section 4.5 Other Rules Applicable to Terms of Elected and Non-Elected Managers. For the purposes of any provision of this Article IV that specifies the duration of a Manager’s term, (i) that term shall continue until the Manager’s successor is selected and qualified and (ii) a “year” means the interval between two successive annual meetings of the Prime Members.

Section 4.6 Removal; Resignation; Filling of Vacancies.

a. Removal and Resignation. A Manager may resign or be removed, either for or without cause, at any meeting of the Prime Members called expressly for that purpose, by vote in accordance with Article III, but a President or Vice-President may be removed as a Manager only by removing such person as President or Vice-President, as the case may be.

b. Filling of Vacancies. Subject to the provisions of Section 4.6.c, the remaining portion of the term of an Elected Manager whose position has become vacant as a result of death, resignation, retirement, disqualification or removal from office or otherwise, shall be filled by vote of the Prime Members. Any such vacancy in the position of Non-Elected Manager shall be filled by the Prime Member who, during the Qualification Period relating to that position, had the highest volume of Eligible Purchases of any Prime Member who is not disqualified under Section 4.6.c from holding that position.

c. Prohibition Against Holding Two Managerial Positions Simultaneously.

1. General Rule. No Prime Member may simultaneously hold any two or more of the positions of President, Vice President, Non-Elected Manager or Elected Manager.

2. Relinquishment of Position as Elected Manager. Any Elected Manager that is elected as President or Vice President or that becomes eligible, under the provisions of Section 4.4, to serve as a Non-Elected Manager must relinquish, for the period of its tenure as Non-Elected Manager, Vice President or President, as the case may be, its position as Elected Manager. The Prime Members shall elect an Acting Elected Manager to serve in the place of such President, Vice President or Non-Elected Manager during that period. If the term as President, Vice President or Elected Manager of the Prime Member who has relinquished its position as Elected Manager ends before the expiration of the full term as Elected Manager to which that Prime Member had been elected, that Prime Member shall then resume its position as Elected Manager, whereupon the corresponding Acting Elected Manager shall cease to be such. For example, if a Prime Member becomes an Elected Manager for a three-year term beginning in 2004 and is elected in 2005 to fill the remaining one year of the unexpired term of a vice-president that resigned in 2004, that Prime Member’s term as Vice President will end in 2006, at which time one year will remain of the three-year term as Elected Manager to which it had been elected. Upon completing its term as Vice President, that Prime Member shall resume its position as Elected Manager until the expiration of its term in 2007.

3. Relinquishment of Position of Non-Elected Manager. No Prime Member may relinquish a position as Non-Elected Manager to become an Elected Manager. Any Non-Elected Manager that is elected as President or Vice President must relinquish, for the period of its tenure in either of those offices, its position as Non-Elected Manager. During that period, the position of Acting Non-Elected Manager shall be held by the Prime Member who had, during the applicable Qualifying Period, the highest volume of Eligible Purchases of all Prime Members who are not disqualified by the provisions of Section 4.6.c.1 from holding that position. If the term as President or Vice President of the Prime Member who has relinquished its position as Elected Manager ends before the expiration of the full term as Non-Elected Manager to which that Prime Member had been named, that Prime Member shall then resume its position as Non-Elected Manager, whereupon the Acting Elected Manager shall cease to be such.

4. Powers of Acting Managers. During its tenure in such position, an Acting Elected Manager or an Acting Non-Elected Manager shall have the same powers and duties as any other Manager.

Section 4.8 Place of Meetings. Meetings of the Managers, annual, regular or special, may be held either within or without the Commonwealth of Pennsylvania.

Section 4.9 Annual Meetings; Regular Meetings; Special Meetings. Annual meetings of the Managers, of which no notice shall be required, shall be held on such date, at such time and at such place as shall be determined by the Managers, for the transaction of any business that may properly be brought before the meeting. Regular meetings of the Managers, of which no notice shall be necessary, shall be held at such times and places as shall be determined by the Managers. Except as otherwise provided by statute, any and all business may be transacted at any regular meeting may be transacted at a special meeting. Special meetings of the Managers may be called by any Manager on not less than 72 hours’ notice to each Manager, either personally or by mail (overnight service), telegram, telephone, telefax or similar communication. Only business within the purpose or purposes described in the notice of special meeting of Managers may be conducted at the meeting, unless the Managers unanimously agree to the transaction of other business.

Section 4.10 Quorum of and Action by Managers. At all meetings of the Managers, the presence of a majority of the Managers shall be necessary to constitute a quorum for the transaction of business, except as otherwise provided by statute. The act of a majority of the Managers present at a meeting at which a quorum is present shall be the act of the Managers. If a quorum shall not be present at any meeting of the Managers, the Managers present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. At any such adjourned meeting any business may be transacted that might have been transacted at the meeting as originally convened.

Section 4.11 Action Without a Meeting; Telephone Meetings. Any action required or permitted to be taken at any meeting of the Managers may be taken without a meeting, if all Managers consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Managers. Subject to the provisions of applicable law and this Agreement regarding notice of meetings, the Managers may participate in and hold a meeting of Managers by using conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other (“Telephonic Equipment”), and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting, except when a person participates in the meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called or convened. Any Manager shall have the right to participate in any meeting of Managers by using Telephonic Equipment, and any notice of such a meeting shall specify a telephone number by the use of which a Manager may participate in that meeting using Telephonic Equipment.

Section 4.12 Interested Managers and Officers. No contract or transaction between the Company and one or more of its Managers, officers or Prime Members or between the Company and any other business entity in which one or more of its Managers, officers or Prime Members have an interest shall be void or voidable solely for this reason, or solely because the Manager, officer or Prime Member is present at or participates in the meeting of the Managers or Prime Members which authorizes the contract or transaction, or solely because such Manager’s or Prime Member’s votes are counted for such purpose, if (i) the material facts as to the relationship or interests and as to the transaction are disclosed or are known to the other Managers or the Prime Members entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the disinterested Managers or the disinterested Prime Members; or (ii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified by the Managers or the Prime Members.

Section 4.13 Managers’ Compensation and Reimbursement. The Managers shall receive no compensation for their services as Managers. The Company shall pay their transportation expense in connection with attendance at meetings of the Managers. The Company shall pay the cost of meeting rooms, meals during meetings and lodging. Other expenses incurred by the Managers shall be reimbursed by the Company only if approved by vote of the Prime Members.

Section 4.14 Time Devoted to Company. Subject to the provisions of Article IX below, the Managers shall devote such time to Company business as they deem necessary to manage and supervise Company business and affairs in an efficient manner, but, notwithstanding the provisions of Section 4.2, nothing in this Agreement shall preclude the employment of any agent, third party or affiliate to manage or provide other services with respect to the Company’s assets or business as the Managers shall determine.

Section 4.15 Liability of Managers. No Manager shall be liable for the debts, liabilities, contracts or other obligations of the Company; provided, however, that each Manager shall be liable for any debts, liabilities, contracts or other obligations of the Company incurred or agreed to by such Manager without authorization and in violation of Section 4.2 of this Agreement.

ARTICLE V

OFFICERS

Section 5.1 Officers; Selection. The Prime Members, at their annual meeting, shall elect the President and the Vice President of the Company, who must be Prime Members. The Secretary-Treasurer shall be selected by the Managers.

Section 5.2 Compensation. The compensation, if any, of all officers of the Company shall be fixed from time to time by the Managers.

Section 5.3 Term of Office; Removal; Filling of Vacancies.

a President and Vice President. The President and the Vice President of the Company shall each be elected for a one-year term ending at the close of the annual meeting of the Prime Members. If the office of the President or Vice President becomes vacant for any reason, a successor to fill the unexpired term shall be elected by the Prime Members at an annual or a special meeting called for that purpose.

b. Secretary-Treasurer. The Secretary-Treasurer and Assistant Secretary-Treasurer of the Company, if any, shall serve at the pleasure of the Managers.

Section 5.4 Duties of President. The President shall be the chief executive officer of the Company and shall have general supervision of the affairs of the Company, subject to the decisions of the Managers. He shall preside at meetings of the Prime Members and, in the absence of the Chairman, at meetings of the Managers.

Section 5.5 Duties of Vice President. The Vice President shall generally assist the President and shall have such powers and perform such duties and services as shall from time to time be prescribed or delegated to him by the President or the Managers.

Section 5.6 Duties of Secretary-Treasurer. The Secretary-Treasurer shall keep and account for the records of the Company, shall be the chief accounting and financial officer of the Company and shall have active control of and shall be responsible for all matters pertaining to the accounts and finances of the Company. In addition, subject to the authority of the Managers, he or she may enter into agreements with group vendors on behalf of the Company; he or she shall be responsible for receipt and proper allocation and distribution of rebates and for the organization and direction of a technical committee; and shall have authority to drive “Beta” testing as it relates to group vendors. If required by the Managers, the Secretary-Treasurer shall give bond for the faithful discharge of his or her duties, in such sum and with such surety or sureties as the Managers shall determine, and shall perform the other duties assigned to him or her under this Agreement.

Section 5.7 Duties of Assistant Secretary-Treasurer. The Assistant Secretary-Treasurer, if one is designated by the Managers, shall generally assist the Secretary-Treasurer.

Section 5.8 Additional Powers and Duties. In addition to the foregoing especially enumerated duties, services and powers, the several officers of the Company shall perform such other duties and services and exercise such further powers as may be provided by statute, the Certificate of Organization or this Agreement, or as the Managers may from time to time determine or as may be assigned to them by any competent superior officer. In addition to the designation of officers and the enumeration of their respective duties, services and powers, the Managers may grant powers of attorney to individuals to act as agent for or on behalf of the Company, to do any act which would be binding on the Company, to incur any expenditures on behalf of or for the Company, or to execute, deliver and perform any agreements, acts, transactions or other matters on behalf of the Company. Such powers of attorney may be revoked or modified as deemed necessary by the Managers.

ARTICLE VI

ACCOUNTING AND TAX MATTERS; REPORTS; BANKING

Section 6.1 Books and Records; Capital Accounts. The Managers shall keep or shall cause to be kept books of account for the Company in accordance with generally accepted accounting principles consistently applied in accordance with the terms of this Agreement and the Act. An individual capital account shall be established and maintained by the Company for each Prime Member in accordance with the applicable provisions of the Internal Revenue Code of 1986, and any successor statute, as amended from time to time and the Treasury Regulations promulgated thereunder, including §1.704-1(b)(2)(iv). The Managers, after notice to the Prime Members, are authorized to modify the manner in which the capital accounts are maintained if the Managers determine that such modification (i) is required or prudent to comply with the Treasury Regulations and (ii) is not likely to have a material effect on the amounts distributable to any Prime Member upon the dissolution of the Company.

Section 6.2 Tax Returns. The Managers shall prepare or cause to be prepared and timely file all federal, state and local income and other tax returns and reports as may be required as a result of the business of the Company.

Section 6.3 Tax Matters Person. The Tax Matters Person (“TMP”) shall be the Prime Member that is the employer of the then President of the Company. The TMP may be removed, and a successor TMP be selected, by the vote of the Managers. The TMP shall not take any actions (including without limitation extending the statute of limitations, filing a request for administrative adjustment, filing suit concerning any Company tax matter, or entering into a settlement agreement relating to any Company tax matter), or execute or file any statements or forms, on behalf of the Company unless and until the TMP is authorized to do so by vote of the Managers.

Section 6.4 Tax Elections. The Managers shall make or cause to be made such accounting and tax elections as directed by a majority in interest of the Prime Members.

Section 6.5 Bank Accounts; Investment of Company Funds. The Managers shall cause one or more accounts to be maintained in the name of the Company in one or more banks, which accounts shall be used for the payment of expenditures incurred in connection with the business of the Company and in which shall be deposited any and all receipts of the Company. All amounts, including accounts receivable, shall be and remain the property of the Company and shall be received, held and disbursed for the purposes specified in this Agreement. There shall not be deposited in any of such accounts any funds other than funds belonging to the Company, and no other funds shall in any way be commingled with such funds. The Managers may invest the Company funds in any manner which they deem appropriate, in their discretion.

Section 6.6 Reports. Within a reasonable time after the end of each fiscal quarter and each fiscal year, the Managers shall cause to be prepared financial statements for and as of the end of each such period, including a balance sheet and statements of income, the Prime Members’ equity and cash flows. Copies of the quarterly statements so prepared shall be distributed to all Managers, and copies of the annual statements to all Prime Members.

Section 6.7 Procedures Review. Each year the Company will hire an independent accounting firm to do a procedures review of the majority of the rebates issued in a calendar year. A report will be generated and distributed to all Prime Members.

ARTICLE VII

TERM, DISSOLUTION, LIQUIDATION AND TERMINATION

Section 7.1 Term. The term of existence of the Company shall continue indefinitely until the winding up and liquidation of the Company pursuant to the Act and this Agreement.

Section 7.2 Dissolution. The Company shall be dissolved upon the occurrence of any of the following:

(a) The unanimous consent in writing of the Prime Members; or

(b) The passage of one hundred eighty (180) consecutive days after the Company ceases to have any Prime Members unless before the end of the period written consent to admit at least one specified person as a Prime Member is given by transferees owning the rights to receive a majority of Distributions at the time of the written consent and at least one person becomes a Prime Member in accordance with the written consent; or

Section 7.3 Liquidation and Termination. Upon the dissolution of the Company, the Managers shall (i) file a certificate of dissolution with the Department of State of the Commonwealth of Pennsylvania and (ii) appoint one or more representatives or the Prime Members as liquidator (the “Liquidator”). The Liquidator shall proceed diligently to wind up the affairs of the Company and make final Distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. Until final Distribution, the Liquidator shall continue to operate the Company properties with all of the power and authority of the Managers. The steps to be accomplished by the Liquidator are as follows:

a. As promptly as possible after dissolution and again after final liquidation, the Liquidator shall cause a proper accounting to be made by a recognized firm of certified public accountants of the Company’s assets, liabilities, and operations through the last day of the calendar month in which the dissolution occurs or the final liquidation is completed, as applicable;

b. The Liquidator shall first pay, satisfy, or discharge from Company funds all of the debts, liabilities, and obligations of the Company to its creditors or otherwise make adequate provision for payment and discharge thereof (including the establishment of a cash escrow fund for contingent liabilities in such amount and for such term as the Liquidator may reasonably determine), all in accordance with the provisions of the Act as may be applicable;

c. After all of the payments required by Section 7.3.b have been made, any remaining assets of the Company shall be distributed to the Prime Members as follows:

1. The Liquidator may sell any or all Company property, including to Prime Members, and any resulting gain or loss from each sale shall be computed and allocated to the capital accounts of the Prime Members;

2. With respect to all Company property that has not been sold, the fair market value of that property shall be determined and the capital accounts of the Prime Members shall be adjusted to reflect the manner in which the unrealized income, gain, loss, and deduction inherent in property that has not been reflected in the capital accounts previously would be allocated among the Prime Members if there were a taxable disposition of that property for the fair market value of that property on the date of Distribution; and

3. After completion of the steps in Section 7.3.c.1 and Section 7.3.c.2, the remaining assets shall be distributed to the Prime Members in an amount equal to the credit balance in each of their capital accounts, after giving effect to all capital contributions, Distributions, and allocations for all periods.

d. All Distributions in kind to the Prime Members under this Section 7.3 shall be made subject to the liability of each distributee for costs, expenses, and liabilities relating to the assets distributed in kind theretofore incurred or for which the Company has committed prior to the date of termination and those costs, expenses, and liabilities shall be allocated to the distributees pursuant to this Section 7.3. The Distribution of cash and/or property to a Prime Member in accordance with the provisions of this Section 7.3 constitutes a complete return to the Prime Member of its capital contributions and a complete Distribution to the Prime Member of its Prime Membership Interest. To the extent that a Prime Member returns funds to the Company, it has no claim against any other Prime Member for those funds.

e. Notwithstanding anything to the contrary contained in this Agreement, and notwithstanding any custom or rule of law to the contrary, to the extent that the deficit, if any, in the capital account of any Prime Member results from or is attributable to deductions and losses of the Company (including non-cash items such as depreciation), or Distributions of money pursuant to this Agreement to all Prime Members in proportion to their respective Prime Membership Interests, upon dissolution of the Company such deficit shall not be an asset of the Company and such Prime Members shall not be obligated to contribute such amount to the Company to bring the balance of such Prime Member’s capital account to zero.

f. On completion of the liquidation of Company assets as provided herein, the Company is terminated, and the Managers (or such other person or persons as the Act may require or permit) shall file a certificate of termination with the Department of State of the Commonwealth of Pennsylvania and take such other actions as may be necessary to terminate the existence of the Company.

ARTICLE VIII

TRANSFERS

Section 8.1 Assignment. Prime Membership Interests and Advantage Membership Interests shall not be assignable, in whole or in part, except that a Prime Member’s right to Distributions with respect to that Prime Membership Interest may be assigned, with consent of the Prime Members, to a transferee of substantially all of the Prime Member’s assets. Such an assignment shall not constitute the admission of the assignee as a Prime Member. Such an assignee, if not already a Prime Member, may become a Prime Member only in accordance with the provisions of Section 2.3.a.

Section 8.2 Involuntary Transfer Deemed a Put. If there is a transfer of all or any part of a Prime Membership Interest or Advantage Membership Interest by operation of law, including, without limitation, a transfer to a judgment creditor, a trustee (including a debtor-in-possession), a receiver under federal or state law or a transfer pursuant to an order of court, the Prime Member or Advantage Member (who owned the Prime Membership Interest or Advantage Membership Interest, as applicable, which is transferred) shall be deemed to have withdrawn as of the date of such transfer, and such transfer shall be deemed to be an offer by the transferee to sell the transferred Prime Membership Interest or Advantage Membership Interest, as applicable, to the Company, as of the date of the involuntary transfer, at a price equal to (i) in the case of a Prime Membership Interests, the greater of the aggregate unpaid patronage refund that is or will become payable with respect to purchases made by the transferor prior to the involuntary transfer, calculated in accordance with the provisions of Section 2.10 or (ii) in the case of an Advantage Membership Interest, One Dollar ($1.00). The Company shall be deemed to have accepted the offer forthwith.

Section 8.3 Payment of Purchase Price to Involuntary Transferee. The purchase price of the interest of the involuntary transferee that is required under Section 8.2 shall be paid no later than the date on which Distributions are paid to the Prime Members with respect to the applicable time period. If payment of such patronage refund to the Prime Members is made in installments, payment to the involuntary transferee may be made in proportional installments.

ARTICLE IX

DUTIES AND COMPENSATION OF PRIME MEMBERS

Section 9.1 Duties and Compensation. The Prime Members shall have the duties provided under this Agreement. They shall receive no compensation for performing those duties.

ARTICLE X

NO OBLIGATION TO PURCHASE FROM PARTICULAR GROUP VENDORS

Section 10.1 No Purchase Obligation. No Prime Member nor Advantage Member shall be obliged to make any purchases from group vendors with which the Company has relationships. However, Prime Members and Advantage Members are encouraged, under a code of ethics, to solicit pricing or proposals from group vendors before they renew contracts or purchase new equipment.

ARTICLE XI

CONFIDENTIALITY AND RESTRICTIVE COVENANT

Section 11.1 Confidentiality. Each Prime Member and each Advantage Member hereby agrees that the terms of all agreements between the Company and the group vendors are confidential business information of the Company. Each Prime Member and each Advantage Member also agrees not to disclose such information either while he or she is a Prime Member or an Advantage Member or thereafter, to any person except as authorized by the Company. Each Prime Member and each Advantage Member further agrees to take all reasonable precautions to keep documents and computer files containing confidential information of the Company that come into its possession (including, without limitation, information relating to the terms of agreements between the Company and group vendors and any other information designated as confidential by the Prime Members) safe from examination or copying by unauthorized persons, and to return to the Company or destroy, at the termination of its Group A Membership or Advantage Membership all such documents and computer files in his or her possession or control.

ARTICLE XII

AMENDMENTS

Section 12 Amendments. The power to adopt, alter, amend or repeal this Agreement is vested solely in the Prime Members. This Agreement may be altered, amended or repealed, or a new limited liability company agreement may be adopted, by vote of the majority of the total number of the Prime Members, at a meeting the notice of which included the terms of the proposed amendment.

ARTICLE XIII

INDEMNIFICATION

Section 13.1 Indemnification of Managers and Officers. The Company shall indemnify and save harmless all persons against loss or liability arising out of any act or omission by the indemnitee in his or her capacity as a Manager or officer of the Company, except in cases where the act or omission giving rise to the claim for indemnification constituted recklessness, willful misconduct or a knowing violation of law.

Section 13.2 Advancement of Expenses. At the discretion of the Managers, the expenses incurred by a Manager, officer or other person in defending an action or proceeding with respect to which indemnification may be made under Section 13.1 may be paid by the Company in advance of a final disposition of such action or proceeding on receipt of an undertaking by or on behalf of such person to repay such advances if it shall ultimately be determined that he or she is not entitled to indemnification under Section 13.1.

ARTICLE XIV

MISCELLANEOUS

Section 14.1 Manner of Giving Notice. Except as otherwise expressly provided in this Agreement, all notices, demands, requests, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be given either (a) in person (if to the Company, upon a Manager or executive officer), (b) by mail, certified or registered, return receipt requested, postage prepaid, (c) by overnight delivery service (charges prepaid) with proof of delivery or (d) by telefax, e-mail or similar electronic medium, provided that the sender receives no confirmation page, return e-mail, or the like, indicating that the message was not successfully transmitted to the addressee. For purposes of the foregoing, any notice required or permitted to be given shall be deemed to be delivered and given: (i) for deliveries described in clause (a) above, on the date that the notice is actually delivered; (ii) for deliveries described in clauses (b) or (c) above, two (2) days after the notice is physically given to the United Post Office or the overnight delivery service, as applicable; or (iii) for deliveries described in clause (d), upon sending. Any delivery described in clause (b), (c) or (d) shall be addressed, if to the Company, at its principal place of business or principal fax number, e-mail address or the like, and, if to a Prime Member, Advantage Member, Manager or officer, at the recipient’s address, fax number, or e-mail address, as the case may be, as it appears in the records of the Company.

Section 14.2 Waiver of Notice. Whenever any notice is required to be given to any Prime Member or Manager of the Company under the provisions of the Act, the Certificate of Organization or this Agreement, a waiver thereof in writing signed by the person or persons entitled to such notice, whether before or after the time for the giving of such notice, shall be deemed equivalent to the giving of such notice. Attendance of a Manager at a meeting of the Manager shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.

Section 14.3 No Company Seal. The Company shall not have a Company seal, and no agreement, instrument or other document executed on behalf of the Company that would otherwise be valid and binding on the Company shall be invalid or not binding on the Company solely because no Company seal is affixed thereto.

Section 14.4 Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the substantive laws of the Commonwealth of Pennsylvania (including provisions concerning limitations of actions), without reference to the conflicts of laws rules of that or any other jurisdiction, except that federal laws shall also apply to the extent relevant.

This Amended and Restated Operating Agreement has been adopted by vote of a majority of the total number of the Prime Members present at a special meeting held on November ___, 2020.

EXHIBIT A

PRIME MEMBERS AND ADVANTAGE MEMBERS

PRIME MEMBERS

Prime Member Capital Contribution Prime Membership Percentage

ANRO Inc. $500.00 6.25%

Burton & Mayer, Inc. $500.00 6.25%

Colorlith Corporation, Inc. $500.00 6.25%

Dual Graphics, Inc. $500.00 6.25%

Dynacolor Graphics, Inc. $500.00 6.25%

General Litho Services, Inc. $500.00 6.25%

Independent, Inc. $500.00 6.25%

McClafferty Printing Co. $500.00 6.25%

Morrison Communication, Inc. $500.00 6.25%

Pearl Pressman Liberty Communication Group, Inc. $500.00 6.25%

Rose Printing Co. $500.00 6.25%

Service Litho-Print, Inc. $500.00 6.25%

Suttle-Strauss, Inc. $500.00 6.25%

The Harty Press, Inc. $500.00 6.25%

The R.L. Bryan Company, Inc. $500.00 6.25%

Westerman Print Company $500.00 6.25%

ADVANTAGE MEMBERS

Advantage Member Capital Contribution

N/A

EXHIBIT B

ALLOCATION OF DISTRIBUTIONS AMONG PRIME MEMBERS

1. Allocation of Distributions Among Prime Members for Rebates back to Dollar One

All amounts Distributable to Prime Members pursuant to Section 2.6 with respect to their purchases in a given period of time shall be allocated among the Prime Members based on their purchases of goods or services with respect to which the Company received payments pursuant to its contracts with group venders, in accordance with the following rules:

First, there shall be allocated to the Prime Members (as a group) who purchased goods or services of a given category from a given group vender within the time period with respect to which the Distribution is to be made a fraction of the total amount available for Distribution whose numerator is the amount of revenue received by the Company from that group vender with respect to that category of goods or services in that time period, and whose denominator is the total amount received by the Company from all group venders with respect to purchases by Prime Members in that time period.

Second, the amounts so allocated to each such group of Prime Members shall be allocated among the Prime Members of that group as follows:

80% to the Prime Members that purchased goods or services in that category from that group vender, in amounts proportional to the respective amounts of their purchases;

20% to just the Prime Members who are Major Purchasers of goods or services in that category from that group vender, in amounts proportional to the respective amounts of their purchases. The Major Purchasers of goods or services in a particular category from a particular group vender are to be identified as follows:

First, rank all Prime Members who purchased goods or services in that category, according to the dollar volume of those purchases in the relevant period, and note, for each such Prime Member, the percentage of total Prime Member purchases of goods or services in that category in that period from that group vender that were purchased by that Prime Member. Second, identify the smallest group of Prime Members, beginning with the largest single purchaser and continuing down the ranking by volume of purchases, who in the aggregate, purchased at least 50% of the total Prime Members’ purchases of goods or services in that category from that group vender. The Prime Members so identified are the Major Purchasers of goods or services in that category from that group vender in that time period. Third, any Prime Member’s rebate that is less than $50.00 will not be paid to that Prime Member. These rebate dollars will be allocated to the other Prime Members whose rebate is $50.00 or more.

The following example illustrates the calculation of amounts distributable to the Prime Members:

Example: a rebate of $10,000 was received from a certain group vendor with respect to purchases of a certain category of goods or services in a certain calendar quarter. Prime Members A through G made purchases of goods or services in that category in that quarter, in the proportions shown below:

Company A: 1%

Company B: 2%

Company C: 4%

Company D: 8%

Company E: 12%

Company F: 33%

Company G: 40%

Total: 100%

80% (or $8,000) of the total rebate with respect to those purchases will be allocated among Prime Members A through G in proportion to the respective amounts of their purchases in the rebate period, so each of them will receive the following share of that 80%:

Company A: 1% $ 80

Company B: 2% $ 160

Company C: 4% $ 320

Company D: 8% $ 640

Company E: 12% $ 960

Company F: 33% $2,640

Company G: 40% $3,200

Total: 100% $8,000

Prime Members F and G together purchased 73% of the total purchases in that category in that quarter. Neither company alone purchased as much as 50% of those total purchases. The remaining 20% of the rebate will therefore be divided between F and G, in proportion to the amounts of their purchases, as follows:

Company F: 33/73, or 45% of the remaining 20% of the rebate, or $900;

Company G: 40/73, or 55% of the remaining 20% of the rebate, or $1,100

2. Allocation of Distributions Among Prime Members for Growth Based Rebates not back to Dollar One (GBRNBD1)

All amounts distributable to Prime Members pursuant to Section 2.6 with respect to their purchases under a (GBRNBD1) in a given period of time shall be allocated among the Prime Members based on their total purchases of goods or services with respect to which the Company received payments pursuant to its contracts with group vendors, in accordance with the following rules:

First, there shall be allocated to the Prime Members (as a group) who purchased goods or services of a given category from a given group vendor within the time period with respect to which the Distribution is to be made a fraction of the total amount available for Distribution whose numerator is the amount of revenue received by the Company from that group vendor with respect to that category of goods or services in that time period, and whose denominator is the total amount received by the Company from all group vendors with respect to purchases by Prime Members in that time period.

Second, the amounts so allocated to each such group of Prime Members shall be allocated among the Prime Members of that group as follows:

80% to the Prime Members that purchased goods or services in that category from that group vender, in amounts proportional to the respective amounts of their total purchases;

20% to just the Prime Members who are Major Purchasers of goods or services in that category from that group vender, in amounts proportional to the respective total amounts of their purchases. The Major Purchasers of goods or services in a particular category from a particular group vender are to be identified as follows:

First, rank all Prime Members who purchased goods or services in that category, according to the total dollar volume of those purchases in the relevant period, and note, for each such Prime Member, the percentage of total Prime Member purchases of goods or services in that category in that period from that group vendor that were purchased by that Prime Member. Second, identify the smallest group of Prime Members, beginning with the largest single purchaser of total goods or services and continuing down the ranking by volume of purchases, who in the aggregate, purchased at least 50% of the total Prime Members’ purchases of goods or services in that category from that group vendor. The Prime Members so identified are the Major Purchasers of goods or services in that category from that group vendor in that time period. Third, any Prime Member’s rebate that is less than $50.00 will not be paid to that Prime Member. These rebate dollars will be allocated to the other Prime Members whose rebate is $50.00 or more.

The following example illustrates the calculation of amounts distributable to the Prime Members:

Baseline Volume $1,000,000

Group Volume $2,000,000

Growth Volume $1,000,000

Rebate Percentage 1% Rebate Distribution

80% 20%

Rebate Dollars $10,000 $8,000 $2,000

80% of rebate is split with all eligible companies and 20%

is split with companies that are 50% or more of the total volume

Company Volume

Baseline Volume Growth Volume Total Volume

Company A $200,000 $250,000 $450,000

Company B $450,000 $0 $450,000

Company C* $350,000 $250,000 $600,000

Company D* $0 $500,000 $500,000

Total $1,000,000 $1,000,000 $2,000,000

% of Rebate Rebate $ 80/20 Rebate Total Rebate

Company A 22.5% $1,800 $0 $1,800

Company B 22.5% $1,800 $0 $1,800

Company C* 30% $2,400 $1,091 $3,491

Company D* 25% $2,000 $909 $2,909

Total 100% $8,000 $2,000 $10,000

*Company C + D represents half of the total volume

Total Volume % of Total Comb Vol. Dollars

Company C $600,000 54.55% $1,090.91

Company D $500,000 45.45% $909.09

Total Combined Vol. $1,100,000 100.00% $2,000.00

3. Allocation of Rebates when Goods or Services are rebated at different percentages

When goods or services are rebated at different percentages, rebates will be calculated in each category with 80% of the rebate in each category.

The 80%/20% rebate will be calculated on combined sales in all categories. In this example, Direct Sales are rebated at .5% and Warehouse Sales are rebated at 1%. The following example illustrates how the rebate is calculated:

% of Total

Direct Sales Warehouse Sales Total Sales Sales

Company A $20,000 $50,000 $70,000 19.18%

Company B $0 $20,000 $20,000 5.48%

Company C $75,000 $75,000 $150,000 41.10%

Company D $50,000 $75,000 $125,000 34.25%

$145,000 $220,000 $365,000 100.00%

Rebate $725 $2,200 $2,925

80% $580 $1,760 $2,340

20% $145 $440 $585

Total $2,925

Direct

Direct Sales % of Sales Rebate

Company A $20,000 13.79% $80.00

Company B $0 0.00% $0.00

Company C $75,000 51.72% $300.00

Company D $50,000 34.48% $200.00

$145,000 100.00% $580.00

Warehouse

Warehouse % of Sales Rebate

Company A $50,000 22.73% $400.00

Company B $20,000 9.09% $160.00

Company C $75,000 34.09% $600.00

Company D $75,000 34.09% $600.00

$220,000 100.00% $1,760.00

% of Total % of Combined 20%

Direct Sales Warehouse Sales Total Sales Sales Sales Rebate

Company C $75,000 $75,000 $150,000 41.10% 54.55% $319.09

Company D $50,000 $75,000 $125,000 34.25% 45.45% $265.91

$275,000 100.00% $585.00

Direct Warehouse 20% Combined

Rebate Rebate Rebate Rebate

Company A $80.00 $400.00 $480.00

Company B $0.00 $160.00 $160.00

Company C $300.00 $600.00 $319.09 $1,219.09

Company D $200.00 $600.00 $265.91 $1,065.91

$580.00 $1,760.00 $585.00 $2,925.00

4. Veritiv Westrock and Veritiv Commodity Coated Rebate

No 80/20 split will be made on these rebates.

GAA Member Operating Agreement

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