NCC231304_NOI Signed Certification (2)_20230504

The Operating Agreement
of
Ocean Ridge Storage Solutions Holdings LLC
A North Carolina Limited Liability Company
Employer Identification Number 92-1084695
DAVIS HARTMAN WRIGHT LLP
ATTORNEYS AT LAW
3819 PARK AVE
WILMINGTON, NORTH CAROLINA 28403

Ocean Ridge Storage Solutions Holdings LLC
Table of Contents
Article One Company Formation 1-1
Section 1.01 The Limited Liability Company 1-1
Section 1.02 The Company's Name 1-1
Section 1.03 Tax Classification as a Partnership 1-1
Section 1.04 Company's Purpose and Scope 1-1
Section 1.05 Purpose of Company Restrictions 1-2
Section 1.06 The Company's Principal Office and Location of Records 1-2
Section 1.07 Registered Agent and Registered Office 1-2
Section 1.08 The Company's Term 1-2
Section 1.09 Venue 1-2
Article Two Tax Matters 2-1
Section 2.01 Tax Classification 2-1
Section 2.02 Company Representative 2-1
Section 2.03 Election under Code Section 6221(b) 2-2
Section 2.04 Consistent Treatment 2-2
Section 2.05 Adjustment in Future Tax Years 2-2
Section 2.06 Tax Elections 2-3
Article Three Membership Interests 3-1
Section 3.01 Membership Interest in the Company 3-1
Section 3.02 Valuing Membership Interests in the Company 3-1
Article Four Capital Contributions and Capital Accounts 4-1
Section 4.01 Initial Capital Contributions 4-1
Section 4.02 Voluntary Additional Capital Contributions 4-1
Section 4.03 Mandatory Additional Capital Contributions 4-1
Section 4.04 Establishing and Maintaining Capital Accounts 4-2
Section 4.05 Revaluation Adjustment 4-2
Section 4.06 No Interest or Return of Capital 4-3
Section 4.07 Power to Modify Capital Account Provisions 4-3
Section 4.08 Certain Property Considered to Be Loans 4-3
Section 4.09 Negative Capital Accounts 4-3
Section 4.10 Assignment of Capital Account 4-4
Article Five Allocations and Distributions 5-1
Section 5.01 Allocating Profits and Losses 5-1
Section 5.02 Allocating to Avoid Capital Account Deficit 5-1
Section 5.03 Special and Regulatory Allocations 5-2
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Section 5.04 Determining Net Profits and Net Losses 5-4
Section 5.05 Distributions to Members 5-5
Article Six Company Management 6-1
Section 6.01 Management by Members 6-1
Section 6.02 Day-to-Day Management 6-1
Section 6.03 Appointing Officers 6-1
Section 6.04 Signing Documents 6-1
Section 6.05 Managing Member as Agent 6-1
Section 6.06 No Authority of Individual Members 6-1
Section 6.07 Non-Liability of Members for Acts, Omissions, or
Forbearances in Their Managerial Capacity 6-2
Section 6.08 Limitations on Rights and Powers 6-2
Section 6.09 Powers 6-2
Section 6.10 Authorization to Sign Certain Instruments 6-2
Section 6.11 Affidavit of Member or Member Principal Authority 6-3
Section 6.12 Creating an Advisory Committee 6-3
Section 6.13 Voting of Controlled Corporate Stock 6-4
Article Seven The Members 7-1
Section 7.01 Members' Names and Addresses 7-1
Section 7.02 Limited Liability of Members 7-1
Section 7.03 Restrictions on Members' Withdrawal Rights 7-1
Section 7.04 Restrictions on Assignees' Withdrawal Rights 7-1
Section 7.05 No Right to Cause Dissolution 7-2
Section 7.06 Partition Waiver 7-2
Section 7.07 Member Expulsion 7-2
Section 7.08 Voting 7-2
Section 7.09 Access to Information 7-3
Article Eight Meetings and Notice 8-1
Section 8.01 Special Meetings 8-1
Section 8.02 Meeting Notice 8-1
Section 8.03 Waiving Meeting Notice 8-1
Section 8.04 Voting by Proxy 8-1
Section 8.05 Action by Consent 8-1
Section 8.06 Quorum 8-1
Section 8.07 Presence 8-2
Section 8.08 Conduct of Meetings 8-2
Section 8.09 Approval or Consent of Members 8-2
Article Nine Books, Records, and Bank Accounts 9-1
Section 9.01 Books and Records 9-1
Section 9.02 Accounting and Taxable Year 9-1
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Section 9.03 Reports 9-1
Section 9.04 Bank Accounts and Company Funds 9-1
Article Ten Admitting Additional Members 10-1
Section 10.01 Admission by Unanimous Consent of Members; Prerequisites 10-1
Section 10.02 Capital Contributions and Fair Market Value 10-1
Section 10.03 Admissions Must Not Violate This Article 10-1
Article Eleven Transfer of Membership Interests by a Member... 11-1
Section 11.01 Transfer Restrictions 11-1
Section 11.02 Transfer of Interest 11-1
Section 11.03 Additional Transfer Restrictions 11-3
Section 11.04 Transferee Treated as an Assignee until Admitted as a
Substitute Member 11-3
Section 11.05 Conditions Required to Become a Substitute Member 11-3
Section 11.06 Assignee's Rights and Limitations 11-4
Section 11.07 Permitted Transfers 11-4
Section 11.08 Amending Operating Agreement and Articles of Organizationl l-4
Section 11.09 Member Disability 11-5
Section 11.10 Death of a Member 11-6
Section 11.11 Purchase Price 11-6
Section 11.12 Voting Rights of Transferred Interests 11-7
Section 11.13 Non-Recognition of an Unauthorized Transfer or Assignment;
Accumulation of Amounts to Be Distributed 11-8
Section 11.14 Creditor Rights; Charging Order Sole Exclusive Remedy 11-8
Section 11.15 Company's Unilateral Purchase Option for Interest Acquired
without Consent 11-8
Section 11.16 Assignee or Charging Order Holder Assumes Tax Liabilityl 1-11
Article Twelve Dissolution and Termination 12-1
Section 12.01 Dissolving the Company 12-1
Section 12.02 Liquidating the Company Property 12-1
Section 12.03 Company Property Sole Source 12-2
Section 12.04 Company Asset Sales during Term of the Company 12-2
Article Thirteen Dispute Resolution Provisions 13-1
Section 13.01 Resolving Disputes among Members and within the Company13-1
Section 13.02 Notice of Controversy and Designating Authorized
Representatives 13-1
Section 13.03 Beginning the Dispute Resolution Procedure 13-1
Section 13.04 Selecting a Mediator 13-1
Section 13.05 Time and Place for Mediation Conference 13-2
Section 13.06 Discovery and Exchange of Information 13-2
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Section 13.07 Delivery of Written Summaries; Authority to Obtain
Professional Assistance 13-2
Section 13.08 Conducting Mediation 13-2
Section 13.09 Final Determinations Bind All Parties 13-2
Section 13.10 Arbitration 13-2
Section 13.11 Settlement during Mediation or Arbitration 13-2
Section 13.12 Qualified Appraisals 13-3
Section 13.13 Right to Seek Equitable Relief 13-3
Section 13.14 Prevailing Party Is Entitled to Recover All Reasonable Costs13-3
Article Fourteen General Matters 14-1
Section 14.01 Successors and Assigns 14-1
Section 14.02 No Waiver 14-1
Section 14.03 Definitions 14-1
Section 14.04 Changing the Company's Situs 14-8
Section 14.05 No Duty to Mail Articles of Organization 14-8
Section 14.06 General Matters 14-8
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
iv

Securities Law Disclosure
The Membership Interests or percentages of ownership of Ocean Ridge Storage Solutions
Holdings LLC (Company) have not been and will not be registered under the Securities Act of
1933, as amended(Securities Act); under any other federal securities laws; or under the securities
laws of any state. The Membership Interests or percentages of ownership are offered and sold
without registration based on exemptions from the registration requirement of the Securities Act
and laws and regulations enacted by the Securities and Exchange Commission.
The Company will not be subject to the reporting requirements of the Securities Exchange Act of
1934, as amended, and will not file reports, proxy statements, or other information with the
Securities and Exchange Commission or with any state securities commission.
The Limited Liability Company Membership Interests of the Company may not be offered for
sale, sold, pledged, or otherwise transferred unless registered or qualified under applicable
securities laws, or unless exempted from registration or qualification. Counsel for the owner of
the Interest must appropriately register or qualify that Interest or establish any applicable
exemption from registration or qualification; this opinion of counsel must be reasonably
satisfactory to the Company.
No Member may register any Interest in the Company under any federal or state securities
law without the express written consent of all Members.
The Members understand that some of the restrictions inherent in this form of business, and
specifically set forth in this Agreement,may have an adverse impact on the fair market value
of the Membership Interests if a Member attempts to sell or borrow against the Membership
Interest in the Company.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
v

Member Acknowledgment
By signing this Agreement, each Member agrees to the following provisions.
Exempt from Registration
Investment in the Member's Interest (Interest) in the Company involves a high degree of risk and
is suitable only for sophisticated investors. Interests are being offered in reliance upon one or more
exemptions from registration under the Securities Act, and any Securities Act of North Carolina.
Member's Personal Investment
The Member is purchasing the Interest for the Member's own investment and with no intent to
distribute or resell to any other person.
Transferability Restrictions
By this Agreement, the Company has disclosed to the Members and each Member acknowledges
that the transferability of the Interest is severely limited. Each Member will bear the economic
risk of investment for an indefinite period, as the Membership Interests have not been registered
under the Securities Act or any state securities laws and cannot be offered or sold unless
subsequently registered or unless an exemption from registration is available.
Registration or Opinion of Counsel before Transfer
In addition to other prohibitions and restrictions on transfer under this Agreement,the Interest will
not be sold publicly without registration under the Securities Act and any applicable state securities
law. Before any public sale, the selling Member must first obtain opinion of counsel that
registration is not required in connection with any transaction; this opinion must be satisfactory to
the Company. In no event may any Interest be sold within 12 months of original issue to that
Member.
Member's Principal Address
This Agreement notes each Member's principal address. Each Member shall notify the Company
in writing within five days of any change to this address.
Access to Facts
Each Member has had and continues to have access to all material facts regarding the Interest and
is satisfied as to the advisability of making this investment.
No Commission or Remuneration
No commission or other payment may be paid to any person in connection with the offer or sale
of any Interest.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
vi

No Right to Registration
No Member may require the Company to register any Interest under federal or state securities laws
at any time, or to join in any future registration.
Hold Harmless
Each Member agrees to hold the Company and its Members, Member Principals, Organizers,
controlling Persons (as defined in the Securities Act), and any persons affiliated with any of them
or with the distribution of the Interest, harmless from all expenses, liabilities, and damages
(including reasonable attorneys' fees) arising from a disposition of the Interest in any manner that
violates the Securities Act, any applicable state securities law, or this Agreement.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
vii

Ocean Ridge Storage Solutions Holdings LLC
a North Carolina Limited Liability Company
Article One
Company Formation
Section 1.01 The Limited Liability Company
This Agreement, and Articles of Organization filed November 18, 2022, forms and establishes a
limited liability company under the laws of the State of North Carolina, and specifically under the
North Carolina Limited Liability Company Act. The Company becomes effective upon filing
Articles of Organization as required by the State of North Carolina. The Members and their
percentages of ownership are identified in the schedule attached to this Agreement as Schedule A.
This Agreement sets forth the rights, duties, obligations, and responsibilities of the Members
regarding the Company.
In consideration of the mutual promises, obligations, and agreements set forth in this Agreement,
the parties to this Agreement agree to be legally bound by its terms.
Section 1.02 The Company's Name
The Company's name is Ocean Ridge Storage Solutions Holdings LLC. The Members may
change the name of the Company or operate the Company under different names.
Section 1.03 Tax Classification as a Partnership
The Members intend to establish an entity that is subject to taxation as a partnership.
Section 1.04 Company's Purpose and Scope
The Company is organized to provide centralized management of investments and business
activities.
In order to accomplish these purposes, the Company may:
own, acquire, manage, develop, operate, buy, sell, exchange, finance, refinance,
and otherwise deal with real, personal, tangible, and intangible property, and any
type of business, as the Members determine from time to time to be in the best
interests of the Company; and
conduct any lawful business and investment activity permitted under the laws of
North Carolina and in any other jurisdiction in which the Company may have a
business or investment interest in order to accomplish these objectives.
The Company may engage in any other activities that are related or incidental to these purposes,
as the Members may determine with sole and absolute discretion.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Section 1.05 Purpose of Company Restrictions
This Company is formed by those who know and trust one another.
Capital is material to the business and investment objectives of the Company and its federal tax
status. An unauthorized transfer of a Member's Interest could create a substantial hardship to the
Company,jeopardize its capital base, and adversely affect its tax structure. As a result, certain
restrictions expressed in this Agreement attach to and affect the ownership and transfer of
Membership Interests. These restrictions are not intended to penalize, but are intended to protect
and preserve the existing trust-based relationships, the Company's capital, and the Company's
financial ability to continue to operate.
Section 1.06 The Company's Principal Office and Location of Records
The street address of the principal office in the United States where the Company maintains its
records is:
3819 Park Avenue
Wilmington,North Carolina 28403
or where the Members otherwise determine. The records maintained by the Company must include
all records that the law requires the Company to maintain. The Company must maintain a records
office in any jurisdiction that requires a records office and the Company must maintain all records
required by applicable law at each records office.
Section 1.07 Registered Agent and Registered Office
The Company's initial registered agent is GM Entity Services, Inc., and the Company's initial
registered office is located at:
3819 Park Avenue
Wilmington,North Carolina 28403
Section 1.08 The Company's Term
The Company's duration is perpetual. The Company begins on the date the Articles of
Organization are filed with the Secretary of State of North Carolina and continues until terminated
or dissolved by this Agreement.
Section 1.09 Venue
Venue for any dispute arising under this Operating Agreement or any disputes among any
Members or the Company will be in the county of the Company's Registered Office.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Article Two
Tax Matters
Section 2.01 Tax Classification
Unless the Members elect not to be treated as a partnership for federal income tax purposes, the
federal income tax basis of a Member's Membership Interest and all other matters relating to the
distributive share and taxation of items of income, gain, loss, deduction, depreciation, and credit
will be as established by Internal Revenue Code Subchapter K.
But if the Company has only one Member, or for any reason may not be taxed as a partnership,
the majority of the Members may classify the Company as a corporation, sole proprietorship,
disregarded entity, or any other type of entity that the Company Representative determines to be
most advantageous to the Company and its Members.
Section 2.02 Company Representative
The majority of the Members must designate a Member with a substantial presence in the United
States to serve as the Company representative within the meaning of Code Section 6223 (Company
Representative). The Company Representative must be a Member. The Company Representative
has the sole authority to act on behalf of the Company in connection with Internal Revenue Service
audits and adjustments.
(a) Legal and Accounting Costs for Tax Matters
The Company must pay all legal and accounting costs associated with any Internal
Revenue Service proceeding regarding the Company's tax returns.
(b) Obligations and Discretion as to Tax Matters
The Company Representative shall notify all of the Members upon receipt of any
notice regarding any examination by any federal, state, or local authority about the
Company's tax compliance. The Company Representative must obtain the
approval of a 85% in interest of the Members before taking any binding action in
connection with any Internal Revenue Service proceeding. Upon obtaining this
approval, the Company Representative may:
determine whether to contest any proceedings, how to pursue any
proceedings, and whether and on what terms to settle any dispute
with the Internal Revenue Service;
determine whether to elect out of partnership-level treatment under
Code Section 6221(b) and Section 2.03;
select the forum for any tax disputes involving the Company; and
extend the statute of limitations for assessing tax deficiencies
against the Members with respect to adjustments to the Company's
federal, state, local, or foreign tax returns.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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(c) Company Representative to Preserve Tax Classification
Unless the Members elect not to be treated as a partnership for federal income tax
purposes, the Company Representative shall take all reasonable steps necessary to
classify the Company as a partnership for tax purposes under the Code and Treasury
Regulations. The Company Representative shall prepare and file any forms
necessary or appropriate to classify the Company as a partnership for tax purposes
under the laws of any jurisdiction in which the Company transacts business.
Any time after the date of this Agreement, if the Company has only one Member
or for any other reason may not be taxed as a partnership, the Company
Representative may classify the Company as a corporation, sole proprietorship,
disregarded entity, or any other type of entity that the Company Representative
determines to be most advantageous to the Company and the Member.
Section 2.03 Election under Code Section 6221(b)
The Company may elect for Code Section 6221(b)to apply for any taxable year that the Company
meets the requirements to elect out of Company-level treatment under Code Section 6221(b). The
election must be made with a timely filed return for that taxable year. The election must include
the name and taxpayer identification number of each Member. The Company must notify each
Member of the election in the manner prescribed by the Secretary of Treasury.
Section 2.04 Consistent Treatment
Each Member shall, on the Member's income tax return, treat each item of income, gain, loss,
deduction, or credit attributable to the Company in a manner consistent with the treatment of the
income, gain, loss, deduction, or credit on the Company income tax return.
Section 2.05 Adjustment in Future Tax Years
If any tax proceeding results in adjustment in the amount of any item of income, gain, loss,
deduction, or credit of the Company—or any Member's distributive share thereof—for a prior
year,the Company may take corrective action. If the Company elects to apply Code Section 6226
within 45 days from the date of the notice of final partnership adjustment,the Company may issue
the statement described in Code Section 6226(a)(2) to the Internal Revenue Service and to each
Member that held an interest in the year in question. The statement must describe the Member's
share of any adjustment to income, gain, loss, deduction, or credit (as determined in the notice of
final partnership adjustment issued by the Internal Revenue Service). Upon receipt of the
statement, each Member must take the adjustments described on the statement into account as
provided in Code Section 6226(b).
Alternatively,the Company may require each Member that held an interest in the Company during
the prior year to file an amended tax return reporting the Member's distributive share of the tax
adjustments and to pay any taxes resulting from the adjustment in accordance with Code Section
6225(c). Each Member must submit the amended return and pay all related taxes not later than
270 days from the date on which the notice of a proposed partnership adjustment is mailed to the
Company.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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This Section and the Member's obligations under Section 2.04 survive the Company's termination,
dissolution, liquidation, and winding up and the Member's withdrawal from the Company or
transfer of its Membership Interest.
Section 2.06 Tax Elections
A majority of the Members may make any applicable or available tax elections on behalf of the
Company, but any decision to change the tax classification of the Company from partnership to
corporation, or from corporation to partnership, requires approval by the super majority vote of
the Members.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Article Three
Membership Interests
Section 3.01 Membership Interest in the Company
Each Member's Initial Membership Interest is the percentage interest in the attached Schedule A.
Membership Interests will be adjusted from time to time to account for non pro rata Additional
Capital Contributions and non pro rata distributions to Members. If non pro rata contributions or
distributions are made, each Member's Membership Interest will then be determined by dividing
the Capital Account of each Member by the aggregate of the then-existing Capital Accounts, after
adjusting the Members' Capital Accounts to reflect the fair market value of the contributed
property.
To determine the respective voting rights of the Members, adjustments to Membership Interests of
the Members resulting from Additional Contributions or Distributions will be effective the first
day of the month immediately following the contribution or distribution date.
The Company shall maintain a correct record of all Members and their Membership Interests
together with amended and revised schedules of ownership caused by changes in the Members and
changes in Membership Interests.
Section 3.02 Valuing Membership Interests in the Company
For all purposes, the value of the Company as an entity and of Membership Interests will be their
respective fair market values. Any dispute, contest, or issue of fair market value will be resolved
by a written Qualified Appraisal by a Qualified Appraiser selected by the Members.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Article Four
Capital Contributions and Capital Accounts
Section 4.01 Initial Capital Contributions
As their Initial Capital Contributions to the Company, the Members shall contribute all of their
right, title, and interest in and to the property described in Schedule A. The Members agree that
the property described in Schedule A has the fair market value (net of liabilities assumed or taken
subject to or by the Company) listed opposite the scheduled property.
Section 4.02 Voluntary Additional Capital Contributions
The Members may make Additional Capital Contributions to the Company. Any Additional
Capital Contribution must be made pro rata according to the Member's Membership Interest,
unless otherwise agreed by the unanimous consent of the Members. Consent does not need to be
in writing, and will be presumed to have been obtained unless there is clear and convincing
evidence to the contrary.
The fair market value of any property other than cash or publicly traded securities to be contributed
as an Additional Capital Contribution will be as agreed upon by the contributing Member and a
majority in interest of the Members at the time of contribution. Alternatively, a disinterested
appraiser selected by the Members may determine the fair market value of any contributed
property.
Section 4.03 Mandatory Additional Capital Contributions
The Company may require Additional Capital Contributions upon the vote of a majority in interest
of the Members if an Additional Capital Contribution is reasonably needed to pay:
existing or anticipated operation and administration expenses;
debt service for any amounts borrowed by the Company;
insurance and tax payments; or
the cost of acquiring, maintaining, and selling Company property.
Required Additional Capital Contributions may not be discriminatory. If there is a call for an
Additional Capital Contribution, all Members and any Assignees must contribute capital pro rata,
based upon their respective Interests. A required Additional Capital Contribution must be satisfied
within 60 days from the date the call is issued.
If a required Additional Capital Contribution is not satisfied in full, other Members may satisfy
the deficiency. The Membership Interests will be reallocated under Section 3.01. Or, except if
another loss or restriction of rights is otherwise specifically provided in this Agreement, the
Company may withhold the distributions otherwise allocated under Article Five or Article Twelve
from any Member who fails to satisfy the required Additional Capital Contribution and apply those
withheld distributions towards the Member's obligation.
In addition,the Company may charge interest at the highest lawful rate to the Member or Assignee
involved on part or all of any required Additional Capital Contribution that remains unsatisfied
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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after the 60-day period expires. The Company may institute legal action against a delinquent
Member or Assignee and the delinquent Member or Assignee will be responsible for paying all
costs and legal fees reasonably incurred by the Company for the action.
Section 4.04 Establishing and Maintaining Capital Accounts
A Capital Account will be established for each Member and will be maintained at all times during
the existence of the Company in compliance with the Internal Revenue Code and applicable
Treasury Regulations. Each Capital Account will be maintained according to the following
provisions.
(a) Credits to Member's Interest
Each Member's Interest will be credited with the fair market value of the Member's
contribution of cash or other property, the Member's distributive share of profits,
and the amount of any Company liabilities that are assumed by the Member.
(b) Debits to Member's Interest
Each Member's Capital Account will be debited the amount of cash and the fair
market value of any property distributed to the Member under this Agreement, the
Member's share of losses, and the amount of any liabilities of the Member that are
secured by any property contributed by the Member to the Company.
(c) Assumption of Liability
An assumption of unsecured liability by the Company will be treated as a
distribution of money to the Member, and the Company shall adjust the Member's
Capital Account accordingly. Assumption of an unsecured liability of the
Company by a Member will be treated as a cash contribution to the Company. The
amount of any liability assumed under this provision will be determined according
to Internal Revenue Code Section 752(c).
(d) Adjustments for Non-Cash Distributions
If assets of the Company other than cash are distributed to a Member,the Company
shall adjust the Capital Accounts of the Members to reflect the hypothetical book
gain or loss that would have been realized by the Company if the distributed assets
had been sold at fair market value in a cash sale in order to reflect unrealized gain
or loss.
(e) Adjusting the Fair Market Value on Transfer of Membership
Interest
If an existing or new Member acquires an Interest, the Company shall adjust the
Capital Accounts of the Members to reflect fair market value of all properties held
by the Company.
Section 4.05 Revaluation Adjustment
The Company shall adjust the Members' Capital Accounts to reflect any revaluation of Company
property(including intangible assets such as goodwill)under this Section.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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(a) Adjustment Based on Fair Market Value
Any revaluation adjustment to a Member's Capital Account will be based on the
fair market value of Company property on the date of the adjustment under Code
Section 7701(g).
(b) Adjustment for Unrealized Items
The Company shall adjust the Members' Capital Accounts to reflect the manner in
which any unrealized income, gain, loss, or deduction inherent in the Company's
property (to the extent that it has not been previously reflected in the Members'
Capital Accounts) would be allocated among all the Members if there were a
taxable disposition of this property for fair market value on the date of adjustment.
Section 4.06 No Interest or Return of Capital
Despite any other provision of this Agreement,no Member is entitled to any interest on its Capital
Account or Membership Interest or on the Member's Capital Contribution. No Member may
demand or receive the return of all or any portion of the Member's Capital Account, Membership
Interest, or Capital Contribution.
Section 4.07 Power to Modify Capital Account Provisions
If, in the Members' reasonable judgment, the modification is not likely to have a material effect
on the amounts distributable to any Member under this Agreement, the Members may modify the
manner in which the Capital Accounts are computed in order to comply with Treasury Regulation
Section 1.704-1(b). The Members shall make any necessary or appropriate adjustments to
maintain equality between the Members' Capital Accounts and the amount of Company Capital
reflected on the Company's balance sheet, as computed for book purposes under Treasury
Regulation Section 1.704-1(b)(2)(iv)(g), relating to adjustments to book value.
Section 4.08 Certain Property Considered to Be Loans
If for any reason the Company would otherwise be deemed an investment company within the
meaning of Internal Revenue Code Section 351, the Members intend to comply with the
requirements of Internal Revenue Code Section 721(b), so that contributions of property to the
Company will not cause recognition of any gain or loss to any Member. Accordingly, if any
contribution of property would cause the recognition of gain or loss to any Member under Internal
Revenue Code Section 721(b), then that property will be considered to have been loaned to the
Company. Any loan will bear interest at the minimum interest rate required under Internal
Revenue Code Section 7872. The Company shall return any property loaned to the Company
under this provision to its lender within 90 days of the lender's demand.
Section 4.09 Negative Capital Accounts
If the Company or a Member's Membership Interest is liquidated, no Member will be required to
restore a deficit in his or her Capital Account.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Section 4.10 Assignment of Capital Account
Except as otherwise required by the Internal Revenue Code or Treasury Regulations, if any
Membership Interest is assigned under this Agreement, the Assignee will succeed to the Capital
Account of the Assignor to the extent that it relates to the assigned Membership Interest.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Article Five
Allocations and Distributions
Section 5.01 Allocating Profits and Losses
Subject to the provisions of Section 5.02 and Section 5.03, all items of income, gain, loss,
deduction, and credit, whether resulting from the Company's operations or in connection with its
dissolution, must be allocated to the Members in proportion to their respective Membership
Interests.
If the special allocations have substantial economic effect as required by applicable federal tax
law, the Members, acting unanimously, may enter into agreements providing for the special
allocation of items of income, gain, loss, deduction, or credit.
The Members may agree to allocate net profits and net losses in a way that conforms to adjustments
made to the Percentage Interests because of:
any loans made to the Company that have been converted to Capital Contributions;
any distributions of cash; or
any liquidated distributions.
If the Percentage Interest of a Member is not the same throughout a given Taxable Year, the
Company shall determine the allocation of net profits and net losses to the Members, taking into
account the Members' varying Percentage Interests during the year. The Company shall make the
determination consistent with the requirements of Internal Revenue Code Section 706(d).
The Members have the authority to change the allocation provisions of this Section if the
Company's legal counsel advises the Company that this change is required under the Internal
Revenue Code based on the manner in which the Members have agreed to bear losses and to share
profits and distributions under this Agreement.
Section 5.02 Allocating to Avoid Capital Account Deficit
The Company must not allocate net losses in a way that causes a Member to have a Capital Account
deficit at the end of any Taxable Year. Any Company net losses that cannot be allocated to one
or more of the Members without creating a negative Capital Account will be allocated to the
remaining Members in proportion to their Capital Accounts until all Members have a Capital
Account of zero. When all Members have a Capital Account of zero, net losses will be allocated
proportionately among the Members according to their respective Membership Interests. If some
but not all of the Members would have a deficit in their Capital Accounts because of loss
allocations, the Company shall allocate the maximum permissible losses to each Member on a
Member-by-Member basis under Treasury Regulation Section 1.704(b)(2)(ii)(d). The Company
shall allocate any remaining net losses to the Members according to the Members' respective
Membership Interests.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
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Section 5.03 Special and Regulatory Allocations
The Company shall make the following special and regulatory allocations.
(a) Allocations Related to Contributed Property
For any property contributed to the capital of the Company, the Company shall
allocate income, gain, loss, and deductions among the Members under Internal
Revenue Code Section 704(c) to account for any variation between the adjusted
basis of the property to the Company for federal income tax purposes and its fair
market value on the contribution date. If the Company adjusts the fair market value
of any Company asset,then in making subsequent allocations of income, gain,loss,
and deductions regarding that asset, the Company shall account for any variation
between the adjusted basis of the asset for federal income tax purposes and the
asset's fair market value in the same manner provided under Internal Revenue Code
Section 704(c).
(b) Member Non-Recourse Deduction Allocations
The Company shall allocate all Member Non-Recourse Deductions for each
Taxable Year to the Member or Members who bear the economic risk of loss
regarding the Member Non-Recourse Debt to which any Member Non-Recourse
Deductions are attributable. The ratio reflects the Member's economic risk of loss
and complies with Treasury Regulation Section 1.704-2(i)(1).
(c) Company Minimum Gain Chargeback
If the Company Minimum Gain has a net decrease during any Company Taxable
Year, the Company shall allocate items of Company income and gain for the year
(and,if necessary,for any subsequent years)in proportion to the respective amounts
required to be allocated to each Member under Treasury Regulation Section 1.704-
2(f) and (g). This provision is intended to comply with the minimum gain
chargeback requirement of Treasury Regulation Section 1.704-2.
To the extent permitted by Treasury Regulation Section 1.704-2 and for purposes
of this provision only, the Company shall determine any deficit in each Member's
Capital Account before any other allocations under this Article with regard to the
Taxable Year and without regard to any net decrease in Member Minimum Gain
during the Taxable Year.
(d) Member Minimum Gain Chargeback
If the Member Minimum Gain has a net decrease attributable to Member Non-
Recourse Debt during a Taxable Year after the Company computes and accounts
for Company Minimum Gain Chargeback above, then Company shall allocate
items of income and gain for that year(and, if necessary, for any subsequent years)
to any Member who has a share of the Member Minimum Gain attributable to that
Member's Non-Recourse Debt at the beginning of the year in the amount and
proportions necessary to satisfy Treasury Regulation Section 1.704-2(i).
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(e) Qualified Income Offset
If any Member unexpectedly receives any adjustments, allocations, or distributions
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), the
Company shall allocate items of Company income and gain to the Member to
eliminate any deficit in the affected Members' Capital Accounts to the extent
required by Treasury Regulations as quickly as possible. But the Company shall
make an allocation under this provision only to the extent that an affected Member
would have a remaining Capital Account deficit after all other allocations under
this Article have been computed.
This provision is intended to comply with the qualified income offset requirement
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(3).
(f) Gross Income Allocation to Restore Capital Account Deficit
If any Member has a Capital Account deficit at the end of any Company Taxable
Year that exceeds the sum of the amount the Member is obligated to restore under
this Agreement and the amount the Member is obligated to restore under the
Regulations, then the Company shall allocate items of Company income and gain
in the amount of the excess as quickly as is practicable. But the Company shall
make an allocation under this provision only to the extent that an affected Member
would have a remaining Capital Account deficit after all other allocations under
this Article have been computed.
(g) Allocation from Disposition of Property Not Revalued
If properties of the Company are not revalued under Treasury Regulation Section
1.704-1(b)(2)(iv)(f) and the Capital Accounts of the Members are not adjusted
accordingly upon the admission of a Member or the liquidation of Membership
Interest,then Company shall allocate gain or loss recognized upon the sale or other
disposition of Company property among the Members. This allocation will take
into account the variation between the adjusted basis of the property and the
property's fair market value on the date the Member was admitted or the Interest
was liquidated, as the case may be,under Code Section 704(c).
(h) Allocation Related to Adjustments in Tax Basis
If Internal Revenue Code Section 734(b) or 743(b) requires an adjustment to the
adjusted tax basis of any Company asset, Treasury Regulation Section 1.704-
1(b)(2)(iv)(m)must be taken into account in determining the Capital Accounts. The
amount of the adjustment to the Capital Accounts will be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset). The Company shall allocate this gain or loss to
the Members consistent with Treasury Regulation Section 1.704-1.
(i) Allocation Related to Capital-Event Adjustments
If the gross book value of any asset of the Company is increased or decreased for
special events, the Company shall allocate gain or loss as required for Capital
Account purposes. The Company shall take into account any difference between
the adjusted basis of the asset for federal income tax purposes and the asset's gross
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book value for any later allocations of income, gain, loss, or deductions regarding
any adjusted asset.
(j) Allocation Consistent with Distributions
The Company shall allocate net profits and net losses in a manner consistent with:
the requirements for distributions of cash described elsewhere in this
Agreement;
the requirements for distribution of Company assets upon its
dissolution and winding up strictly in accordance with Capital
Account balances as specified in the procedures described below;
and
the requirements of applicable Regulations under Internal Revenue
Code Section 704(b).
(k) Allocations to Comply with Regulations and Intentions of
Members
The allocations of net income, gains, net losses, and deductions set forth in this
Agreement are intended to comply strictly with Treasury Regulation Section 1.704-
1(b), Treasury Regulation Section 1.704-1(b)(4)(iv), and Treasury Regulation
Section 1.704-2, and are intended to have substantial economic effect within the
meaning of those Regulations.
The allocations may not be consistent with the intentions of the Members to allocate
distributions. Accordingly, the Members are authorized to allocate net profits, net
losses, and other economic items among the Members to prevent the allocations
from distorting the manner in which distributions are intended to be divided among
the Members under this Article. In general, the Members anticipate that these
allocations will be accomplished by specially allocating other net profits,net losses,
and items of income, gain, loss, and deductions among the Members so that the net
amount of the allocations and any special allocations to the Member is zero. If, for
any reason,the Members determine that the allocation provisions of this Agreement
are unlikely to be recognized for federal income tax purposes, the Members may
amend this Agreement's allocation provisions to the minimum extent necessary to
effect the plan of allocations and distributions in this Agreement.
Section 5.04 Determining Net Profits and Net Losses
For purposes of this Article,the terms net profits and net losses mean the amount of the Company's
taxable income or loss for any year or period, determined under Internal Revenue Code Section
703(a). All items of income, gain, loss, or deduction required under Section 703(a)(1)to be stated
separately will be included in taxable income or loss. This determination of net profits and net
losses includes the following items:
any income of the Company that is exempt from federal income tax that is not
otherwise taken into account in computing taxable income or loss under this
Article;
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any expenditures of the Company described in Internal Revenue Code Section
705(a)(2)(B) relating to nondeductible expenses that are not otherwise taken into
account in computing taxable income or loss, and
if any Company asset's value is adjusted, the amount of the adjustment will be
taken into account as gain or loss from the disposition of the asset.
Any other items that are specially allocated under this Article will not be taken into account in
computing net profits and net losses.
Section 5.05 Distributions to Members
The Company's primary intent is to retain Company funds in amounts determined in the Members'
sole and absolute discretion to meet the reasonable needs of the business or investments of the
Company and other needs as provided in this Agreement. No Member may demand distributions
of any Company funds or assets.
Each year, the Company shall distribute enough cash to each Member to cover the amount of
income tax that each Member is required to pay on the distribution.
Without the unanimous consent of all Members, the Company may not distribute more than the
Company income for the previous tax year plus 5% of the value of the assets of the Company on
the last day of the previous calendar year in any single year.
When making any distributions of funds or other Company assets,the Company shall satisfy those
distributions as follows.
(a) Cash Distributions
The Company may make distributions of Company cash to the Members on a pro
rata or non pro rata basis as the Members, in their discretion, determine.
Distributions may only be made from the cash reserves that exceed the reasonable
working reserves of the Company as determined in the Members' sole discretion.
Subject to this Agreement and applicable law, cash distributions will first come
from operations cash as permitted under this Agreement, then from cash from the
liquidation of the Company under this Agreement.
(b) In-Kind Distributions
The Members, in their sole and absolute discretion,may make in-kind distributions
of Company property to the Members. Before any in-kind distribution is made,the
difference between the established fair market value and the book value of the
property to be distributed must be adjusted by a credit or charge, as appropriate, to
the Members' Interests. Upon the distribution of this property, the adjusted value
will be charged to the Interests of the Members receiving these distributions.
(c) No Interest
If a Member does not withdraw all or any portion of the Member's share of any
cash distribution made under Subsection (a), the Member may not receive any
interest on the unwithdrawn amount nor on any additional Membership Interest
unless all Members agree.
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(d) Cash from Capital Transactions
The proceeds of any capital transaction will be applied to payment of all expenses
incurred in connection with the transaction and, to the extent specified in the terms
of any capital transaction, to the payment of any indebtedness secured by the asset
involved in the capital transaction.
(e) Distribution Allocations
Except as otherwise provided in this Agreement, distributions will be allocated to
the Members in proportion to their Membership Interests.
(f) Return of Distribution
Any distribution made to the Members will be considered to comply with
applicable law if the distribution is made from available Company assets. If a court
of competent jurisdiction finds that a distribution violates applicable law and the
request for return of the distribution is approved by 85% of the Members, the
Members must return their respective share of that distribution.
(g) Deemed Notice to Creditors
The Company's creditors are deemed to have notice of the provisions of this Article
and of the fact that Members are not required to return a distribution unless the
request for return of the distribution has been approved by the 85%of the Members.
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Article Six
Company Management
Section 6.01 Management by Members
The Members will manage the Company. The Members may manage the Company by majority,
or may appoint one or more Managing Members from their number to represent the Members in
managing the Company. For purposes of this Agreement, the Members acting by majority to
manage the Company or the Managing Members will be referred to collectively as the Managing
Member, whether one or more.
The Managing Member must act in good faith,with the care that an ordinarily prudent person in a
similar position would exercise under similar circumstances, and in a manner each Managing
Member reasonably believes to be in the best interests of the Company.
Section 6.02 Day-to-Day Management
The Managing Member may take all actions necessary, useful, or appropriate for the ordinary
management and conduct of the Company's business. Subject to the restrictions in Section 6.08,
the Managing Member may exercise all powers of the Company and do anything that is not
reserved by the Members as specified in the Articles of Organization, in this Agreement, or in the
Act.
Section 6.03 Appointing Officers
If authorized by a majority of the Members,the Managing Member may appoint officers and define
their function and authority. An Officer may, but need not, be a Member or Managing Member.
Any appointment and assignment of function or authority must be in writing and kept with the
Company records.
Section 6.04 Signing Documents
The Managing Member may sign any instruments, contracts, agreements, or other documents for
the acquisition, encumbrance, or disposition of the Company's property.
Section 6.05 Managing Member as Agent
Unless specifically prohibited by the Articles of Organization, each Managing Member serves as
an agent of the Company to conduct business on behalf of the Company. As agent, the Managing
Member may bind the Company unless the Managing Member's action violates the terms of the
Articles of Organization, this Agreement, or the Act, or unless third parties dealing with the
Managing Member reasonably believe that the Managing Member does not have authority to act.
Section 6.06 No Authority of Individual Members
No individual Member is an agent of the Company, and no Member other than a Managing
Member may make any contracts, enter into any transactions, or make any commitments on the
Company's behalf
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Section 6.07 Non-Liability of Members for Acts, Omissions, or Forbearances in
Their Managerial Capacity
To the extent permitted by North Carolina law,all Members are released from liability for damages
and other monetary relief because of any act, omission, or forbearance in managing the Company.
This release does not protect any Member from being required by a court to purchase the
Membership Interest of another Member who successfully contends that the Member committed
actionable oppressive acts to the prejudice of the other Member. No amendment or repeal of this
provision affects any liability or alleged liability of any Member for acts, omissions, or
forbearances that occurred before the amendment or repeal.
Section 6.08 Limitations on Rights and Powers
Unless authorized by the unanimous written agreement of the Members, a Member, Managing
Member, or any other Officer of the Company may not:
enter into any agreement, contract, commitment, or obligation on behalf of the
Company obligating any Member to find additional capital,to make or guarantee a
loan, or to increase a Member's personal liability either to the Company or to third
parties;
receive or permit any Member to receive any fee or rebate, or to participate in any
reciprocal business arrangements that would conflict or compete with the
Company's business or otherwise contradict this Agreement;
materially alter the Company's business or deviate from any approved business
plan of the Company;
permit the Company's funds to be commingled with the funds of any other person;
act in any way that contradicts this Agreement;
act in any way that would make it impossible to carry on the business of the
Company;
confess a judgment against the Company;
possess property or assign rights in specific property for other than a Company
purpose; or
admit any person as a Member, except as otherwise provided in this Agreement.
Section 6.09 Powers
In pursuing its lawful purposes, the Company may do all things that limited liability companies
are permitted to do under the Act.
Section 6.10 Authorization to Sign Certain Instruments
Regarding all obligations, powers, and responsibilities under this Agreement, the Managing
Member may sign and deliver any notes and other evidence of indebtedness,contracts,agreements,
assignments, deeds, leases, loan agreements, mortgages, and other security instruments and
agreements in any form on behalf of the Company as the Managing Member determines to be
proper.
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Section 6.11 Affidavit of Member or Member Principal Authority
Any third party dealing with the Company may rely on a notarized writing signed by a Managing
Member stating the Managing Member's authority to act for the Company. The Managing
Member may use the following as an example of a valid writing:
Sample Written Statement of Authority
of
Ocean Ridge Storage Solutions Holdings LLC
On my oath and under penalty of perjury, I swear that I am
a Managing Member authorized to act on behalf of Ocean
Ridge Storage Solutions Holdings LLC, a North Carolina
Limited Liability Company. I certify that I have the
authority to act for and bind Ocean Ridge Storage Solutions
Holdings LLC in business transactions for which this
affidavit is given as affirmation of my authority.
Harold Dave Tripp, Member
Sworn and subscribed before me the undersigned authority, by
Harold Dave Tripp on , 20 .
Notary Public
This example may be modified to reflect the Managing Member's fiduciary duty.
Section 6.12 Creating an Advisory Committee
The Manager may establish a Company advisory committee (Advisory Committee) consisting of
two or more Members; beneficiaries of trusts that are Members; or legal, financial, or other
advisors to the Manager or any Member.
(a) Annual Meetings
If the Advisory Committee is established, the Manager shall call a meeting of the
Advisory Committee at least once per calendar year. The purpose of the meeting
is to generally inform the Advisory Committee of the business and operations of
the Company since the last Advisory Committee meeting. The Advisory
Committee may make a report of the meeting to the Members.
(b) Committee Is Advisory Only
The Advisory Committee may make recommendations to or otherwise advise and
consult with the Manager regarding the business and operation of the Company,
but the Advisory Committee may not take any action on behalf of the Company or
compel the Manager or any Member to take any action.
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(c) Payment of Expenses Authorized
Advisory Committee members are entitled to payment from the Company for their
reasonable expenses of attending Advisory Committee meetings.
Section 6.13 Voting of Controlled Corporate Stock
If the Company holds stock in any controlled corporation as defined by Internal Revenue Code
Section 2036(b)(2), the Company shall:
notify all Members of all shareholders' meetings of this controlled corporation;
notify all Members that they have the right to vote the stock of the corporation in
proportion to the percentage owned by each Member in the Company; and
submit the votes of each Member at this shareholders' meeting exactly as if each
Member had voted the same as a separate shareholder voting this stock.
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Article Seven
The Members
Section 7.01 Members' Names and Addresses
The Company shall maintain an updated list of all past and present Members of the Company, and
their last known mailing addresses. The list must be kept as part of the Company records.
Section 7.02 Limited Liability of Members
Except under Article Four, no Member will be required to contribute capital to the Company for
the payment of any losses or for any other purposes, and no Member will be responsible or
obligated to any third party for any debts or liabilities of the Company in excess of the amount of:
that Member's unpaid required contributions to the Company's capital;
unrecovered contributions to the Company's capital; and
that Member's share of any undistributed Company profits.
Section 7.03 Restrictions on Members' Withdrawal Rights
No Member may withdraw from the Company or receive a return of any contributions to the
Company until the Company is terminated and its affairs wound up according to the Securities Act
and this Agreement. Any Member who does any of the following has breached this Agreement:
attempt to withdraw from the Company;
interfere in the management of the Company affairs;
engage in conduct that results in the Company losing its tax status as a Company;
engage in conduct that discredits the Company;
own a Membership Interest that becomes subject to a charging order, attachment,
garnishment, or similar legal proceedings;
breach any confidentiality provisions of this Agreement;
bring any legal action against the Company to force the dissolution of the Company,
to force any distribution of Company assets, or to appoint a receiver; or
fail to discharge a legal duty to the Company.
Any Member who breaches this Agreement is liable to the Company for damages caused by the
breach, including attorney's fees and expenses of litigation. The Company may offset damages
against any distributions or return of capital to the Member who has breached this Agreement.
Section 7.04 Restrictions on Assignees' Withdrawal Rights
No Assignee has the right to receive a return of any contributions (whether the contributions were
made by the Assignee or by an Assignor) until the Company is terminated and its affairs wound
up according to the Act and this Agreement. Any Assignee who does any of the following will be
considered to have breached this Agreement:
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interfere in the management of the Company affairs;
engage in conduct that results in the Company losing its tax status as a Company;
engage in conduct that discredits the Company;
breach any confidentiality provisions of this Agreement;
bring any legal action against the Company to force the dissolution of the Company,
to force any distribution of Company assets, or to appoint a receiver; or
fail to discharge a legal duty to the Company.
Any Assignee who breaches this Agreement is liable to the Company for damages caused by the
breach. The Company may offset damages against any distributions or return of capital to the
Assignee who has breached this Agreement.
Section 7.05 No Right to Cause Dissolution
No Member may cause the dissolution and winding up of the Company by court decree or
otherwise.
Section 7.06 Partition Waiver
Each Member, individually and on behalf of the Member's successors and assigns, expressly
waives any right to have any Company property partitioned.
Section 7.07 Member Expulsion
The Company may only expel a Member for violating this Agreement or for failing to make the
Capital Contributions as required in Article Four. A Member may only be expelled on the
unanimous consent of all Members, excluding the Member to be expelled.
An expelled Member loses all rights as a Member of the Company, and the expelled Member's
Interests are converted to that of an Assignee.
Section 7.08 Voting
Members may only vote on the following matters:
removing a Managing Member;
electing a successor Managing Member;
terminating and dissolving the Company;
amending this Agreement; and
any matter requiring the vote of the Members as set out elsewhere in this Agreement
or in the Act.
Members may vote by written consent,with or without a formal meeting. Assignees may not vote.
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Section 7.09 Access to Information
Subject to the provisions of this Section, each Member is entitled to all information regarding the
Company under the circumstances and subject to the conditions stated in this Agreement and the
Act. Assignees have no right to information regarding the Company.
All Members and any Assignees who obtain any information are subject to the confidentiality
provisions of this Section.
(a) Confidential Information
The Members acknowledge that they may receive confidential information
regarding the Company, the release of which may be damaging to the Company or
to persons with whom it does business. Each Member shall hold in strict confidence
any information regarding the Company that is confidential, and may not disclose
it to any person other than another Member, except for disclosures:
compelled by law (but the Managing Member must notify the
Manager promptly of any request for that information before
disclosing it, if practicable);
to a Member's advisors or representatives, but only if they have
agreed to be bound by the provisions of this Section; or
that the Member also has received from a source independent of the
Company that the Member reasonably believes was obtained
without breach of any obligation of confidentiality.
(b) Enforcement through Specific Performance
The Members acknowledge that disclosure of confidential information may cause
irreparable injury to the Company for which monetary damages are inadequate,
difficult to compute, or both. Accordingly, the provisions of this Section may be
enforced by specific performance.
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Article Eight
Meetings and Notice
Section 8.01 Special Meetings
Special meetings of the Members may only be called by a majority in interest of the Members.
Special meetings of the Members may only be called upon delivery to the Members of notice of a
special meeting of the Members given according to this Agreement.
Section 8.02 Meeting Notice
The Company shall deliver notice to each Member of record entitled to vote at the meeting at the
address as appears in the Company records at least two but no more than 30 days before the
meeting date. The notice must state the date, time, and place of any meeting of the Members and
a description of the meeting's purpose.
Section 8.03 Waiving Meeting Notice
A Member may waive notice of any meeting, before or after the date and time of the meeting as
stated in the notice, by delivering a signed waiver to the Company to include in the minutes. If a
Member attends any meeting in person or by proxy,the Member waives objection to lack of notice
or to defective notice of the meeting, unless the Member objects to holding the meeting or
transacting business at the meeting. The Member waives objection to consideration of a particular
matter at the meeting that is not within the purposes described in the meeting notice, unless the
Member objects to considering the matter when it is presented.
Section 8.04 Voting by Proxy
The Members may appoint a proxy to vote or otherwise act for the Members under a written
appointment form signed by the Member, or the person's attorney in fact. A proxy appointment
is effective when received by the secretary or other Officer or agent of the Company authorized to
tabulate votes. A fiduciary's general proxy is given the same effect as the general proxy of any
other Member. A proxy appointment is valid for 11 months unless otherwise specifically stated
in the appointment form, or unless the authorization is revoked by the Member who issued the
proxy.
Section 8.05 Action by Consent
Any Action required or permitted to be taken at a meeting of the Members may be taken without
a meeting if the action is taken by all the Members entitled to vote on the action. The action must
be evidenced by one or more written consents describing the action taken. These consents, in the
aggregate,must be signed by all of the Members entitled to vote on the action and delivered to the
Company to be included in the minutes.
Section 8.06 Quorum
For any meeting of the Members,a quorum requires the presence of Members holding at least two-
thirds of the Membership Interests.
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Section 8.07 Presence
Any Member may participate in any meeting through the use of any means of communication by
which all Members participating may simultaneously hear each other during the meeting. Any
Member participating in this way will be considered present in person at the meeting.
Section 8.08 Conduct of Meetings
At any meeting of the Members, the Members appoint a person to act as secretary of the meeting.
The secretary of the meeting shall prepare minutes of the meeting, to be kept with the Company
records.
Section 8.09 Approval or Consent of Members
Unless provided otherwise by the Securities Act or this Agreement, any action of the Members
requires a vote or written consent of at least two-thirds of the Members in favor of the action.
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Article Nine
Books, Records, and Bank Accounts
Section 9.01 Books and Records
The Company shall keep books of account regarding the operation of the Company at the principal
office of the Company, or at any other place the Members determine. All Members and their duly
authorized representatives will have access to the books at all reasonable times. The Company
shall keep the following records:
a current list of the full name and last known address of each Member;
a copy of the Articles of Organization (together with any amendments) and copies
of any powers of attorney under which any certificate has been signed;
copies of the Company's federal, state, and local income tax returns and any reports
for the three most recent years;
copies of this Agreement(together with any amendments);
copies of any financial statements of the Company for the three most recent years;
and
any other documents required by law.
Section 9.02 Accounting and Taxable Year
The Company shall keep books of account consistent with any method authorized or required by
the Internal Revenue Code and as determined by the Members. The Company shall close and
balance the books at the end of each Company year. The Company's Taxable Year is the period
authorized or required by the Internal Revenue Code, and as determined by the Members.
Section 9.03 Reports
Within a reasonable time after the end of each Taxable Year, the Company shall provide all
Members with the information necessary to prepare and file their respective tax returns. The
Company shall prepare all financial statements at the Company's expense.
Section 9.04 Bank Accounts and Company Funds
The Company shall deposit all cash receipts in the Company's depository accounts. All accounts
used by or on behalf of the Company are property of the Company, and will be received,held, and
disbursed by the Manager for the purposes specified in this Agreement. The Members must not
commingle Company funds with any other funds.
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Article Ten
Admitting Additional Members
Section 10.01 Admission by Unanimous Consent of Members; Prerequisites
Additional Members may only be added after the unanimous consent of the Members. Before
being admitted as a Member, a prospective Member must first:
provide evidence satisfactory to the Company that admission of the prospective
Member will not violate any applicable securities law, cause a termination of the
Company under applicable provisions of the Code, or alter the status of any tax
election made by the Company;
pay all reasonable expenses connected with admission as a Member, including
professional fees incurred in obtaining opinions or valuations; and
agree to be bound by all of the terms of this Agreement by signing the Agreement.
Section 10.02 Capital Contributions and Fair Market Value
Other than contributions of cash or publicly traded securities,the fair market value of any property
to be contributed by an additional Member as the initial Capital Contribution will be determined
as agreed upon by the additional Member and the holders of a majority of the Membership Interests
before the contribution is made. In the alternative, the Managing Member will appoint a
disinterested appraiser to determine the value of the property to be contributed.
The Members may adopt and revise rules, conventions, and procedures as the Members determine
to be appropriate regarding the admission of Members to reflect the Membership Interest at the
end of the year in accordance with the intentions of the Members.
Section 10.03 Admissions Must Not Violate This Article
Any attempt to admit an additional Member that violates this Article will be null and void.
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Article Eleven
Transfer of Membership Interests by a Member
Section 11.01 Transfer Restrictions
Except as provided in this Article, no Member may transfer any Membership Interest either
voluntarily or involuntarily by any means without the unanimous written consent of all Members.
The Members are not required to consent to any attempted transfer and will not be subject to any
liability for withholding consent.
Any attempted transfer of a Membership Interest or the admission of a Substitute Member in
violation of this Article is null and void.
Section 11.02 Transfer of Interest
No Member may transfer any Membership Interest without first offering in writing to sell the
Interest to the Company and to all other Members as provided in this Section.
(a) Notice
A Member who intends to transfer a Membership Interest must first give notice of
the intent to transfer to the Company and to all other Members. Any notice of intent
to transfer must include the following information.
(1) Writing Explaining Terms of Offer
If the Member received a written offer, a copy of that written offer
must be attached to the notice. If the Member received only an oral
offer, a written explanation of the oral offer must be attached to the
notice.
The written explanation must completely detail the purchase price
and payment terms.
(2) Certification of Genuine Offer
The Managing Member shall certify in the written notice that the
offer is genuine to the best of the Managing Member's knowledge.
(b) Company's Priority Right to Purchase
The Company has the first right to purchase all or any portion of the Membership
Interest according to the terms of any written notice of an offer except as the
Company may elect to modify the terms under Section 11.02(d) below. The
Company may exercise this first right to purchase by giving written notice of the
Company's intent to purchase to the selling Member within 90 days of receiving
the written notice of the offer.
(c) Other Members' Priority Right to Purchase
If the Company does not provide written notice of an intent to purchase the
Membership Interest within 90 days of receiving the written notice of the offer or
if the Company provides written notice of an intent not to purchase the Membership
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Interest, any Member may purchase any portion of the Membership Interest
according to the terms of the offer except as the Member may elect to modify the
terms under Section 11.02(d)below. A Member may exercise this right to purchase
by giving notice of intent to purchase to the selling Member within 120 days of
receiving the written notice of the offer.
If more than one Member exercises the right to purchase the same Membership
Interest, each Member may purchase a pro rata share of the Membership Interest
in proportion to each Member's respective Membership Interest in the Company
before the offer of sale.
(d) Payment Terms under Company's or Members' Priority Right
to Purchase
If the Company or a Member exercises the priority right to purchase a Membership
Interest as provided above, then the Company or purchasing Member may, at the
buyer's discretion,pay the purchase price either:
according to the payment terms specified in the written notice of the
offer provided by the selling Member, or
by delivering an unsecured promissory note made by the buyer for
the purchase price.
If the buyer chooses to pay the purchase price according to a promissory note, the
note will bear a market rate of interest on the unpaid balance of principal. The
principal amount of the note will be payable in 10 equal annual payments of
principal and amortized interest. The first payment will be due on the first
anniversary of the note. Subsequent payments will be due on each anniversary date
until the note is paid in full. The note must provide for a 60-day right to cure after
notice of any default on any payment before acceleration of the unpaid balance of
principal and interest. The buyer may prepay the note in whole or in part at any
time without penalty.
(e) Closing on Purchase by the Company or a Member
The closing of any purchase of a Membership Interest under this Section will occur
at the Company's principal office within 150 days from the date of the notice of
intent to sell.
(f) Transfer to Third Party after Non-Exercise of Priority Right
If neither the Company nor any Member exercises their respective priority right to
purchase the Membership Interest, the selling Member may transfer its
Membership Interest to the party that made the original offer for the purchase price
and on the terms in the original offer.
The closing on any transfer to a third party under this Section must occur within 60
days from the earlier of:
the expiration of the Company's and the other Members' priority
rights to purchase; and
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the date on which the Company and all other Members have
provided written notice of their intent not to exercise their respective
priority rights to purchase.
If the Membership Interest is not sold to the prospective purchaser within the
specified time, the Company and the other Members will again be offered an
opportunity to exercise their respective priority rights to purchase the Membership
Interest under Section 11.02(b) and Section 11.02(c) above.
Section 11.03 Additional Transfer Restrictions
If any proposed transfer of Membership Interests or addition of a Substitute Member will terminate
the Company under the Act, then the transfer is prohibited unless the Members specifically
approve the transfer. If not approved by the Members, the attempted transfer will be disregarded
and void ab initio.
But the Members may not approve any transfer or addition of a Substitute Member that violates
any applicable federal or state securities law.
Section 11.04 Transferee Treated as an Assignee until Admitted as a Substitute
Member
The transferee of a Membership Interest will hold the interest only as an Assignee until the
transferee satisfies all the requirements of Section 11.05 to become a Substitute Member. As an
Assignee, the transferee will have only those rights in Section 11.06.
This Section does not apply to any Membership Interest purchased under Section 11.09 or Section
11.10.
Section 11.05 Conditions Required to Become a Substitute Member
An Assignee will not become a Substitute Member and will not have any rights as a Member until
all of the conditions, consents, and procedures in this Section have been fully satisfied.
(a) Members' Consent
All Members, other than the assigning Member, must consent in writing to the
admission of the Assignee as a Substitute Member.
(b) Executing All Other Agreements
The assigning Member and the Assignee shall sign, acknowledge, and deliver
instruments of transfer and assignments to the Company, in the form and substance
satisfactory to the Company. These instruments include the written acceptance and
adoption by the Assignee of this Agreement.
(c) Reasonable Transfer Fee
An Assignee shall pay a reasonable transfer fee to the Company. The Company
may establish the transfer fee amount on a case-by-case basis.
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(d) Effective Date of Admission as Substitute Member
The effective date of an admission as a Substitute Member is the date on which all
the remaining Members vote to accept the Assignee as a Substitute Member under
this Agreement.
Section 11.06 Assignee's Rights and Limitations
An Assignee is entitled to receive distributions from the Company to the same extent that the
transferring Member would receive distributions under this Agreement. Until the effective date
that an Assignee is admitted as a Substitute Member, both the Company and the Members will
treat the Assignor of the transferred Membership Interest as the absolute owner of the transferred
Membership Interest except regarding any Member distributions made that are attributable to the
transferred Membership Interest.
An Assignee has substantially fewer rights than a Member. Assignees only hold a right to receive
economic benefits when distributed from the Company in respect to the assigned Membership
Interest. Other limitations on Assignees' rights include:
access only to those Company records and information specifically authorized for
the Assignees under the Act;
no right to vote in any Company matters; and
no other legal or economic rights.
Section 11.07 Permitted Transfers
A Member may only transfer a Membership Interest without any other Member's consent to a trust
for his or her benefit, to his or her spouse, to a trust for the benefit of his or her spouse, to his or
her immediate family, or to a trust for the benefit of his or her immediate family, so long as the
proposed transfer does not:
result in any event of default as to any secured or unsecured obligation of the
Company;
cause a reassessment of any real property owned by the Company; or
cause other adverse material impact to the Company.
The transferee of a Membership Interest transfer permitted by this Section will be admitted as a
Substitute Member without the necessity of compliance with Section 11.05,but the Company may
require the transferee to accept this Agreement in writing.
Section 11.08 Amending Operating Agreement and Articles of Organization
If required by law,upon the admission of a new Member,the Company shall amend the Operating
Agreement or the Articles of Organization to reflect any substitution of Members.
(a) Substitute Member Acceptance upon Amendment
Until the Operating Agreement or Articles of Organization are amended under this
Section, an Assignee will not become a Substitute Member.
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(b) Assessing Fees
If a Substitute Member's entry into the Company requires an amendment, the
Company may assess any fees, costs,or other expenses of any required amendment
against that Substitute Member.
Section 11.09 Member Disability
If a Member becomes totally disabled and continues to be totally disabled for a period of four
months, the other Members must purchase, and the disabled Member must sell, all of the disabled
Member's Membership Interest in the Company upon the terms in this Section. This sale and
purchase must occur within 90 days after the expiration of the four-month period. Each of the
other Members must purchase that portion of the disabled Member's Membership Interest in
proportion to their percentage ownership of the total Membership Interests, unless they otherwise
agree in writing.
The terms total disability and disability mean a Member's inability to perform the material and
substantial duties of his or her regular occupation.
The purchase price for the disabled Member's Membership Interest will be determined under
Section 11.11; the date for determining the purchase price is the end of the four-month period
described above.
If the disabled Member's Membership Interest is purchased under this Section,the other Members
will pay the purchase price to the disabled Member either:
in cash or by certified check, within 90 days after four-month period expires; or
by delivering unsecured promissory notes made by the other Members with the
principal amounts of each note equaling the amount of the purchase price.
If the other Members choose to pay the purchase price according to promissory notes, the notes
will bear a 5.00% interest rate on the unpaid balance of principal, compounded annually. The
principal and interest will be payable annually in equal payments of principal and amortized
interest for 5 years, payable at the end of each year. The notes will provide for a 60-day right to
cure after notice of any default on any payment before acceleration of the unpaid balance of
principal and interest. Each of the Members may prepay his or her note in whole or in part at any
time without penalty or prepayment of interest.
Upon receipt of the purchase price or promissory note, as the case may be, the disabled Member
will deliver an assignment to each purchaser of his or her Membership Interest, together with any
other instruments required by the Company, so that full and complete title to the Membership
Interest can be transferred on the Company's books.
Until the sale is complete,the agent of a disabled Member acting under a durable power of attorney
or the Legal Representative of a disabled Member may exercise all of the Member's rights and
voting authority,and is entitled to receive distributions of cash or other property from the Company
on behalf of the Member, but only if the agent or Legal Representative is a person or entity
specifically listed as a permitted transferee in Section 11.07. An agent of a disabled Member acting
under a durable power of attorney or the Legal Representative of a disabled Member may
consummate the sale to the other Members under this Section, including signing all necessary
documents on the disabled Member's behalf and collecting any payment on behalf of the disabled
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Member. If more than one agent or Legal Representative is entitled to act for a disabled Member,
the Company will designate in writing which agent or Legal Representative may act on behalf of
the disabled Member.
Section 11.10 Death of a Member
If a Member dies, the surviving Members must purchase, and the deceased Member's Legal
Representative—or the deceased Member's heirs, distributes, or beneficiaries, as the case may
be—must sell the deceased Member's Membership Interest in the Company within 90 days after
the deceased Member's date of death, upon the terms in this Section. Each of the surviving
Members will purchase that portion of the deceased Member's Membership Interest in proportion
to their percentage ownership of the total Membership Interests, unless they otherwise agree in
writing.
The purchase price for the deceased Member's Membership Interest will be determined under
Section 11.11.
If the deceased Member's Membership Interest is purchased under the provisions of this Section,
the surviving Members will pay the purchase price to the deceased Member's estate either:
in cash or by certified check, within 90 days after the deceased Member's date of
death, or
by delivering of unsecured promissory notes made by the other Members with the
principal amounts of each note equaling the amount of the purchase price.
If the surviving Members choose to pay the purchase price according to promissory notes, the
notes will bear a 5.00% interest rate on the unpaid balance of principal, compounded annually.
The principal and interest will be payable annually in equal payments of principal and amortized
interest for 5 years, payable at the end of each year. The notes will provide for a 60-day right to
cure after notice of any default on any payment before acceleration of the unpaid balance of
principal and interest. Each surviving Member may prepay his or her note in whole or in part at
any time without penalty or prepayment of interest.
Upon receipt of the purchase price or promissory note, as the case may be,the deceased Member's
estate will deliver an assignment of the deceased Member's Membership Interest in the Company
to the surviving Members,together with any other instruments required by the Company,including
inheritance tax waivers, so that full and complete title to the deceased Member's Membership
Interest in the Company can be transferred on the Company's books.
If a sale to the surviving Members is not completed, and except for transfers to those persons or
entities specifically listed as permitted transferees in Section 11.07, any Membership Interest that
is transferred because of a Member's death will be an Assignee interest.
A transferee of any transfer under this Section will be bound by all of the terms of this Agreement.
Section 11.11 Purchase Price
For purposes of a purchase of a Membership Interest in the Company referring to this Section, the
purchase price for a Member's Membership Interest in the Company will be the fair market value
of the Member's Membership Interest determined under this Section.
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Within 60 days after the end of each Taxable Year, the Members will determine the fair market
value of each one percent Membership Interest in the Company for the then-current Taxable Year,
and will sign a valuation certificate setting forth the fair market value. At any time, the Members
may sign a new valuation certificate, revising the fair market value of each one percent
Membership Interest in the Company. The most recent valuation certificate, duly signed by the
Members, will replace all prior valuation certificates. The fair market value of each one percent
Membership Interest in the Company, as redetermined from time to time, will take into account
the tangible and intangible assets of the Company, other relevant factors, and liabilities of the
Company. Goodwill has no value unless actually paid for and carried on the books of the Company
as an asset.
If the Members fail to redetermine the fair market value of each one percent Membership Interest
in the Company within 60 days after any Taxable Year ends, the fair market value of each one
percent Membership Interest in the Company for the purpose of establishing the purchase price
will be determined by appraisal as follows.
Not less than 10 days before the date of the purchase, the seller of the Membership
Interest must appoint one Qualified Appraiser, and the purchaser or purchasers of
the Membership Interest must appoint one Qualified Appraiser.
If either the seller or the purchasers fail to appoint a Qualified Appraiser, the
Qualified Appraiser appointed by the other will determine the fair market value of
each one percent Membership Interest in the Company owned by the seller.
If the two Qualified Appraisers appointed by the seller and the purchasers fail to
agree upon the fair market value of each one percent Membership Interest in the
Company owned by the seller, the two Qualified Appraisers must appoint a third
Qualified Appraiser five days before the date of the purchase,and the determination
of the fair value of each one percent Membership Interest in the Company by the
majority of the Qualified Appraisers will bind all parties.
The seller and purchasers will bear the costs of any Qualified Appraisals.
Section 11.12 Voting Rights of Transferred Interests
A Member who transfers a Membership Interest to an Assignee will continue to hold all voting
rights associated with the assigned Interest until the Assignee of the transferred Interest satisfies
all of the requirements to become a Substitute Member under Section 11.05.
In the case of an Assignee who holds an Interest received because of the death of a Member, the
voting rights associated with the transferred Interest will be suspended and disregarded for
purposes of calculating votes until the Assignee of the transferred Interest satisfies all of the
requirements to become a Substitute Member under Section 11.05.
This Section does not apply to any Membership Interest purchased under Section 11.09 or Section
11.10.
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Section 11.13 Non-Recognition of an Unauthorized Transfer or Assignment;
Accumulation of Amounts to Be Distributed
The Company is not required to recognize the purported Interest of any transferee or Assignee who
alleges to have received any Interest other than by an authorized transfer or Assignment under this
Agreement. If the ownership of a Membership Interest is in doubt, or if there is reasonable doubt
as to who is entitled to a distribution attributable to an Interest, the Managing Member may
accumulate the amounts to be distributed until this issue is finally determined and resolved. The
Managing Member shall credit any accumulated amounts to the Capital Account associated with
the Interest.
Section 11.14 Creditor Rights; Charging Order Sole Exclusive Remedy
If a creditor obtains a judgment by a court of competent jurisdiction against any Member or
Assignee,the court may charge the Member or Assignee's Interest with payment of the unsatisfied
amount of the judgment from distributions attributable to the affected Interest, but only to the
extent permitted by the Securities Act. To the extent any interest is charged with satisfaction of a
judgment, the judgment creditor will receive no more than the rights of an Assignee; the creditor
will not be admitted as a Member of the Company.
The charging order is the exclusive remedy by which a judgment creditor of a Member or an
Assignee of a Membership Interest may obtain any satisfaction from the Company toward any
judgment against the Member or Assignee. This Section does not deprive any Member or Assignee
of rights under any exemption laws available to the Member or Assignee.
Section 11.15 Company's Unilateral Purchase Option for Interest Acquired
without Consent
The Company will have the unilateral option to purchase any Interest acquired by any transferee
under this Section. For purposes of establishing the value of the Interest under this provision, the
Interest will be considered the Interest of an Assignee.
(a) Circumstances Triggering Purchase Option
Any of the following circumstances will trigger the Company's unilateral right to
purchase a transferee's Interest. Collectively these events are referred to as
triggering events.
The Membership Interest of a deceased Member passes to an
individual or entity other than as permitted under Section 11.10.
Any individual, entity, organization, or agency obtains a Member's
Interest, whether inclusive or exclusive of voting rights,because of:
any valid court order that the Company is required
by law to recognize;
being subject to a lawful charging order by a court of
competent jurisdiction;
a levy, voluntary or involuntary bankruptcy
proceeding, or other transfer of a Membership
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Interest,with voting rights,that the Company has not
approved but that the Company is required by law to
recognize; or
any decree of divorce or equitable division of
property that transfers a Membership Interest in the
Company.
If the Company's unilateral purchase option is exercised, the Company will
purchase the affected Interest of the transferee for the fair market value of the
Interest, valued as the Interest of an Assignee.
If the Interest is transferred subject to a divorce decree or equitable division of
property, the Company's unilateral option as to the transferred Interest will be
suspended for a period of 90 days, and the divorcing Member will have all of the
rights of the Company in this Section. If the divorcing Member fails to initiate
exercise of the option within the 90-day period, the Company's unilateral option
right will be restored.
(b) Terms and Conditions of Exercisable Purchase Option
If the Company elects to exercise its unilateral purchase option,the following terms
and conditions will apply to the transaction.
(1) Written Notice of Intent to Purchase
The Company will provide written notice to the Assignee or
transferee within 90 days of the triggering event that the Company
intends to purchase the Interest. If the Company does not provide
written notice within 90 days of the triggering event,the Company's
unilateral purchase option will lapse.
(2) Exercise of Option and Date of Valuation
If the Company provides written notice of its intent to exercise its
purchase option, then the Company may exercise the option within
180 days from the first day of the month following the month in
which the Company provided the notice.
The valuation date for the Interest to be purchased will be the first
day of the month following the month in which notice is delivered.
(3) Written Appraisal Requirement
Unless the Company and the transferee or Assignee agree otherwise,
the fair market value of any Interest subject to the Company's
purchase option will be determined by Qualified Appraisal
performed by a Qualified Appraiser selected by the Company. The
Qualified Appraiser must be qualified to perform business
appraisals and to value limited liability company or partnership
interests.
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(4) Acceptance or Rejection of Valuation
If the transferee objects to the appraiser's valuation report, the
transferee must deliver written notice of the objection to the
Managing Member within 30 days from the date the transferee is
provided with written notice of the valuation report. If the transferee
does not object in writing within the required period, the report will
be considered accepted as written.
If the transferee objects to the valuation report, closing of the sale
will be postponed for a reasonable time until the valuation of the
Interest is resolved.
(5) No Voting Rights during Purchase-Option Period
Until the closing, the transferee will not be allowed to exercise any
vote attributable to the Interest that is subject to the purchase option.
The transferee will be entitled to all items of income, deduction,
gain, or loss from the Interest. The transferee of the Interest will be
an Assignee unless all conditions have been satisfied for the
transferee to become a Substitute Member as described in Section
11.05.
(6) Location and Date of Closing
Closing of any sale under this Section will occur at the principal
office of the Company within 45 days of the date on which the
valuation report is accepted by the transferee or the date on which
the valuation of the Interest is otherwise resolved.
(7) Payment of Terms upon Exercise of Option
In order to prevent unduly burdening the Company's resources, the
Company may unilaterally elect to pay any purchase-money
obligation in 30 equal annual installments. If the remaining term of
the Company is less than 30 years, the Company may make equal
annual installments over the remaining term of the Company.
Interest on any unpaid principal amount will be determined at
market rates determined as of the closing date and, at the option of
the Company, may be adjusted annually as of the first day of each
Taxable Year.
In determining whether the remaining term of the Company is less
than 30 years, the Company may assume that any option to extend
the Company term will be exercised by the Members. If the option
to continue is not exercised, then the balance will become due
immediately upon dissolution of the Company.
The first installment of principal and interest will be due on the first
day of the Taxable Year following the closing date. Subsequent
annual installments will be due on the first day of each subsequent
Taxable Year until the entire obligation is fully paid. The Company
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may prepay any part of any purchase-money obligation at any time
without premium or penalty.
Section 11.16 Assignee or Charging Order Holder Assumes Tax Liability
The Assignee of a Membership Interest and any person who acquires a charging order against a
Membership Interest shall report income, gains, losses, deductions, and credits regarding the
interest for the period in which the Assignee Interest is held or for the period the charging order is
outstanding.
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Article Twelve
Dissolution and Termination
Section 12.01 Dissolving the Company
The Company will be dissolved only if an event described in this Section occurs.
(a) Date Designated by the Members
The Company will be dissolved on a date designated by the Members.
(b) Judicial Dissolution
The Company will be dissolved upon the entry of a decree of judicial dissolution
by a court of competent jurisdiction.
After dissolution, the Company shall conduct only activities necessary to wind up its affairs.
Section 12.02 Liquidating the Company Property
After dissolving the Company, the Managing Member, shall liquidate the Company property;
apply and distribute the proceeds from the liquidation of the property under this Agreement; and
cause the cancellation of the Company's Articles of Organization.
(a) Creditor Payment and Provision for Reserves
First, the proceeds from the liquidated property will be applied toward or paid to
any non-Member creditor of the Company in the order of payment required by
applicable law. After paying liabilities owed to non-Member creditors, the
Managing Member shall set up a reserve of assets as the Managing Member
determines is reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Company.
(1) Creating an Escrow Account
The Managing Member may, but need not, pay over any reserves
for contingent liabilities to a bank to hold in escrow for later
payment.
(2) Distributing Reserves
The Managing Member shall distribute any remaining reserves after
the Managing Member is reasonably satisfied that any liabilities
have been adequately resolved. The remaining reserves will be
distributed to the Members or their assigns in the order of priority
for Member distributions set forth in this Agreement.
(b) Distributing Property after Paying Liabilities and Establishing
Reserves
After paying liabilities and establishing reserves, the Managing Member shall
satisfy any debts owed to Members with any remaining net assets of the Company,
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and then distribute any remaining assets to the Members in proportion to their
positive Capital Account balances.
(c) Non-Cash Assets
If any part of the net assets distributable to the Members consists of notes,accounts
receivable, or other non-cash assets, the Managing Member may take whatever
steps it considers to be appropriate to convert the assets into cash or any other form
to facilitate distribution. If any in-kind assets of the Company are to be distributed,
those assets will be distributed using their fair market value at the distribution date,
as determined by the Managing Member.
Section 12.03 Company Property Sole Source
Company property is the sole source for the payment of any debts or liabilities owed by the
Company. Any return of Capital Contributions or liquidation amounts to the Members or
Assignees(or both if the Company has Members and Assignees)will be satisfied only to the extent
that the Company has adequate assets. If the Company does not have adequate assets to return the
Capital Contributions, neither the Members nor Assignees will have any recourse against the
Company or any other Members or Assignees, except to the extent that other Members may have
outstanding debts or obligations owing to the Company.
Section 12.04 Company Asset Sales during Term of the Company
The sale of Company assets during the term of the Company does not constitute liquidation,
dissolution, or termination of the Company as defined under this Article. The Company may
reinvest the sale proceeds in other assets consistent with the business purposes for the Company.
Further, the Members may participate in any real property exchange as defined in Code Section
1031 if the exchange fulfills the business purposes of the Company.
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Article Thirteen
Dispute Resolution Provisions
The provisions of this Article supersede any rules governing mediation or arbitration under the
law of North Carolina or any other jurisdiction.
Section 13.01 Resolving Disputes among Members and within the Company
The Members shall use the procedure outlined in this Article to resolve any dispute, contest, or
claim that may result among any of the Members or between one or more of the Members and the
Company that may relate to this Agreement. The purpose of the alternative dispute resolution
procedures in this Article is to resolve all disputes, contests, and claims without litigation.
Section 13.02 Notice of Controversy and Designating Authorized
Representatives
Any person (claimant) who has any dispute relating to the Company shall provide written notice
to all Members and to any other person that has an interest in the controversy (respondents)
describing the general nature of the controversy. The notice must designate an Independent Person
as an authorized representative who is empowered to fully settle the controversy on behalf of the
claimant. Two or more claimants may designate a common authorized representative.
Each respondent shall also designate an Independent Person as an authorized representative who
is empowered to fully settle the controversy on behalf of the respondent. Two or more respondents
may designate a common authorized representative.
Written notice of the designation of the authorized representatives must be delivered to each party
within 10 business days from the date the respondents receive notice of the controversy.
Section 13.03 Beginning the Dispute Resolution Procedure
The authorized representatives shall conduct an initial meeting within 30 days from the date the
claimant's notice is delivered to the respondents. The authorized representatives are entitled to
collect and review all relevant evidence pertaining to the controversy and to negotiate and resolve
the controversy. Resolution of any controversy by the authorized representatives is conclusive
and binds all parties.
If the authorized representatives do not resolve the controversy within 30 days from the date of
their initial meeting, they shall discontinue direct negotiations and submit the controversy to
mediation.
Section 13.04 Selecting a Mediator
Within five days of discontinuing direct negotiations, the authorized representatives shall
exchange written lists of persons whom they consider to be qualified to serve as a mediator. Within
15 days after they exchange these lists, the authorized representatives shall agree upon one
mediator to mediate the controversy.
If the authorized representatives do not agree on a mediator, the controversy will be submitted to
binding arbitration under Section 13.10.
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Section 13.05 Time and Place for Mediation Conference
The authorized representatives shall promptly designate a mutually convenient time and place for
the mediation. If the authorized representatives fail to do so, the controversy will be submitted to
binding arbitration under Section 13.10.
Section 13.06 Discovery and Exchange of Information
The authorized representatives are entitled to fully discover, obtain, and review all information
relevant to resolving any controversy.
Section 13.07 Delivery of Written Summaries; Authority to Obtain Professional
Assistance
At least seven days before the first mediation conference, each authorized representative shall
deliver to the mediator a concise written summary of fact and law about the issues. The authorized
representatives and the mediator may retain legal counsel, accountants, appraisers, and other
experts whose opinions may assist the mediator in resolving the controversy.
Section 13.08 Conducting Mediation
The mediator determines the format for mediation conferences, ensuring the authorized
representatives have an equal opportunity to review the evidence and any relevant technical and
legal presentations. The mediator shall determine the time schedule for resolving the mediation
and shall attempt to facilitate the parties' efforts to achieve final resolution of all disputed issues.
If the mediator is unable to facilitate a final resolution of all issues, any unresolved issues will be
submitted to arbitration under Section 13.10.
Section 13.09 Final Determinations Bind All Parties
Any final determination made by the authorized representatives,mediator, or arbitrator binds each
party who receives notice of a controversy, even if the party does not respond or designate a
representative, or if the party's authorized representative fails or refuses to participate in the
designation of a mediator.
Section 13.10 Arbitration
If any controversy is not finally resolved according to the alternative dispute resolution procedures
in this Article, the parties to the controversy shall submit to mandatory and binding arbitration.
The controversy will be settled by arbitration according to the Commercial Arbitration Rules of
the American Arbitration Association. The arbitrator's judgment may be entered in any court
having competent jurisdiction. If the arbitrator determines that the evidence produced through the
arbitration process is insufficient to support a decision,the arbitrator may conclude the arbitration
proceedings without a decision.
Section 13.11 Settlement during Mediation or Arbitration
At any time before the conclusion of any mediation or arbitration, the authorized representatives
may enter an agreement to resolve the controversy. Any settlement agreement will be conclusive
and bind all parties.
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Section 13.12 Qualified Appraisals
If a Qualified Appraisal of the value of a Membership Interest is required in order to resolve a
dispute, each of the parties to the dispute may choose a Qualified Appraiser to provide a valuation.
In the alternative, the parties may agree to select one Qualified Appraiser. The mediator or
arbitrator will determine to what extent the Qualified Appraisal will be used in resolving any
dispute.
Section 13.13 Right to Seek Equitable Relief
If a party materially breaches this Agreement and if the other parties determine in good faith that
immediate relief is necessary, the parties alleging the material breach may seek temporary
restraining orders, preliminary injunctions, or similar temporary and equitable relief in a court of
competent jurisdiction.
Section 13.14 Prevailing Party Is Entitled to Recover All Reasonable Costs
The prevailing party in any dispute between any Member or Manager and the Company or between
the Members themselves is entitled to recover from the losing party all reasonable costs incurred,
including any attorney's fees and any costs of mediation, arbitration, court fees, appraisals, and
expert-witnesses.
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Article Fourteen
General Matters
Section 14.01 Successors and Assigns
Subject to the restrictions on transfer in this Agreement, this Agreement binds and inures to the
benefit of the Members, and to their respective successors, personal representatives, heirs, and
assigns.
Section 14.02 No Waiver
Any Member's failure to insist upon strict performance of any provision or obligation of this
Agreement, irrespective of the length of time for which the failure continues, is not a waiver of
that Member's right to demand strict compliance in the future. An express or implied consent to
or waiver of any breach or default in the performance of any obligations under this Agreement is
not a consent to or waiver of any other breach or default in the performance of the same or any
other obligation.
Section 14.03 Definitions
For purposes of this Agreement, the following terms have the following meanings.
(a) Act
Act means the North Carolina Limited Liability Company Act, as amended from
time to time.
(b) Additional Member
Additional Member means a Member who is admitted to the Company after this
Agreement is signed, but who is not a Substitute Member.
(c) Additional Capital Contribution
See Capital Contribution.
(d) Affiliated Person
Affiliated Person means a Member, a member of an individual Member's
Immediate Family, a Legal Representative, successor, Assignee, or trust for the
benefit of a Member and members of the Immediate Families of the individual
Member, and any corporation or other legal entity of which a majority of the voting
interest is owned by any one or more Affiliated Persons.
(e) Agreement
Agreement means this Operating Agreement, as amended from time to time.
(f) Articles of Organization
Articles of Organization means the Articles of Organization filed with the Secretary
of State of North Carolina as required by the Act, or any other similar instrument
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
1 4-1

required to be filed by the laws of any other state in which the Company intends to
conduct business.
(g) Assignee
Assignee means the recipient of a Membership Interest by Assignment.
(h) Assignment
Assignment means any method—direct or indirect, voluntary or involuntary—by
which the legal or beneficial ownership of any interest in the Company is
transferred or changed, including:
any sale, exchange, gift, or any other form of conveyance,
assignment, or transfer;
a change in the beneficial interests of any trust or estate that holds
any interest in the Company and a distribution from any trust or
estate;
a change in the ownership of any Member or Assignee that is a
corporation, partnership, limited liability company, or other legal
entity, including the dissolution of the entity;
a change in legal or beneficial ownership or other form of transfer
resulting from the death or divorce of any Member or Assignee or
the death of the spouse of any Member or Assignee;
any transfer or charge under a charging order issued by any court;
and
any levy, foreclosure, or similar seizure associated with the exercise
of a creditor's rights in connection with a mortgage, pledge,
encumbrance, or security interest.
Assignment does not include any mortgage, pledge, or similar voluntary
encumbrance or grant of a security interest in any Interest in the Company.
(i) Bankrupt
Bankrupt means filing a petition in voluntary bankruptcy, an assignment taken
voluntarily or involuntarily by a Member for the benefit of creditors,or other action
under any federal or state law for the benefit of an insolvent party. Bankrupt does
not include filing a petition of involuntary bankruptcy against a Member if the
petition is dismissed within 45 days from the filing date, nor does it include the
issuance of a charging order against a Member's Interest if the charging order is
removed within 10 days of being served.
Q) Capital Account
Capital Account means the account established and maintained for each Member
under Section 4.04 and under Treasury Regulation Section 1.704-1(b)(2)(iv), as
amended from time to time.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-2

(k) Capital Contribution
Capital Contribution means the total cash and other consideration contributed and
agreed to be contributed to the Company by each Member. Each Initial Capital
Contribution is shown in Schedule A, attached and incorporated into this
Agreement. Additional Capital Contribution means the total cash and other
consideration contributed to the Company by each Member other than the Initial
Capital Contribution. Any reference in this Agreement to the Capital Contribution
of a current Member includes any Capital Contribution previously made by any
prior Member regarding that Member's Interest. The value of a Member's Capital
Contribution is the amount of cash plus the fair market value of other property
contributed to the Company.
(I) Cash-Flow Earnings
Cash-Flow Earnings means the net income, including capital gains income,
realized by the Company for the Taxable Year, reduced or increased according to
the following guidelines.
(1) Net Income Reductions
Net income will be reduced by the actual payment of items that are
not deductible by the Company for federal income tax purposes,
including nondeductible travel and entertainment expenses,
charitable contributions, nondeductible interest payments, the
payment of debt principal and interest,the acquisition of depreciable
property during the Taxable Year to the extent that the cost is not
fully deductible in the year of acquisition, and any other payment
that represents an actual decrease in the cash available to the
Company.
(2) Net Income Increases
Net income will be increased by the amount expended for intangible
expenses for federal income tax purposes. Intangible expenses
include depreciation, depletion, and amortization costs reported as
deductions for federal income tax purposes, but do not include
depreciation reported as an expense that is deductible under Internal
Revenue Code Section 179.
(3) Treatment of Gain on Asset Sale
The gain from the sale of a Company asset will be included in
determining the Company's net income for distribution purposes to
the extent of payments of the gain amount actually received by the
Company for the Taxable Year. Deferred payments of gain under
an installment sale or other deferred payment arrangement will be
considered income in the year a payment is actually received.
The computation of Cash-Flow Earnings does not include income from a
partnership, trust, limited liability company, or other organization classified by
federal tax law as a pass-through entity to the extent that distributions of income
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-3

from the pass-through entity are not actually received during the Taxable Year or
within 60 days after the close of the Taxable Year. Subsequent distributions to the
Company from a pass-through entity that are attributable to income realized and
reported for a prior year will increase the Cash-Flow Earnings for distribution
purposes.
Cash-Flow Earnings determined for distribution purposes do not include reasonable
reserves. Reserves are amounts needed for working capital, debt service, deferred
maintenance, and for anticipated capital improvements.
Cash-Flow Earnings take into account the obligation of the Company to the
payment obligations of interest to Members who have advanced funds to the
Company as loans and the payment of any guaranteed payment obligations of the
Company. The distribution of earnings may be deferred for a reasonable time to
the extent that the Company does not have available cash to satisfy the distribution
amount. The term available cash indicates the actual cash of the Company in
checking accounts, money market funds, and 90-day Treasury Bills.
(m) Charity
Charity includes any organization of a type described in Internal Revenue Code
Sections 170(c), 2055(a), and 2522(a).
(n) Charitable Trusts
Charitable Trust includes any charitable remainder trust created under Internal
Revenue Code Section 664 or any charitable income trust created under Treasury
Regulations Section 1.170A-6(c); Treasury Regulations Section 25.2522(c); or
Treasury Regulations Section 20.2055-2(e).
(0) Company
Company means Ocean Ridge Storage Solutions Holdings LLC, a North Carolina
Limited Liability Company.
(p) Company Minimum Gain
Company Minimum Gain means the minimum amount of gain that would be
realized by the Company if the Company disposed of all Company property subject
to the liabilities in full satisfaction of those liabilities, computed strictly under
Treasury Regulation Section 1.704-2(b) and(d).
(q) Delivery
Delivery means:
personal delivery to a party;
mailing by certified United States mail to the last known address of
the party to whom delivery is made, with return receipt requested to
the party making delivery;
facsimile transmission to a party when receipt is confirmed in
writing or by electronic transmission back to the sending party; or
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-4

electronic mail transmission to a party when receipt is confirmed in
writing or by electronic mail transmission back to the sending party.
The effective date of delivery is the date of personal delivery or the date of the
return receipt, if received by the sending party. If no return receipt is provided,
then the effective date will be the date the transmission would have normally been
received by certified mail if there is evidence of mailing.
(r) Disability
Disability of a Member means that any one of the following has occurred:
the Member has been declared incompetent, incapacitated, or
otherwise legally unable to effectively manage his or her property
or financial affairs by a court of competent jurisdiction;
the Member's incapacity has been certified in writing by two
licensed physicians, one of whom is the Member's personal
physician, after examining the Member;
the Member has disappeared or is absent for unexplained reasons,
causing the Member to be unable to manage his or her property or
financial affairs effectively; or
the Member is being detained under duress or under law, causing
the Member to be unable to manage his or her property or financial
affairs effectively.
A Member's disappearance, absence, or detention under duress may be established
by an affidavit of any other Member. The affidavit must describe the circumstances
of the individual's disappearance, absence, or detention. Any third party dealing in
good faith with the Company may rely upon the affidavit.
Upon regaining capacity, a formerly incapacitated Member will have all the rights,
power, and authority originally granted to the Member by this Agreement.
(s) Immediate Family
Immediate Family means any Member's spouse (but not a spouse who is legally
separated from the person under a decree of divorce or separate maintenance),
parents,parents-in-law,descendants(including descendants by adoption),brothers,
sisters,brothers-in-law, sisters-in-law, and grandchildren-in-law.
(t) Including and Includes
In this Agreement,the words include, includes,and including mean include without
limitation, includes without limitation, and including without limitation,
respectively. Include, includes, and including are words of illustration and
enlargement, not words of limitation or exclusivity.
(u) Independent Person
Independent Person means an individual who is not related to or subordinate to a
claimant or respondent of any controversy concerning the Company, is not a
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-5

Member of the Company, and has no financial stake in the resolution of the
controversy other than fair and reasonable compensation for services provided to
resolve the controversy.
(v) Initial Capital Contribution
See Capital Contribution.
(w) Internal Revenue Code
References to the Internal Revenue Code or to its provisions are to the Internal
Revenue Code of 1986, as amended from time to time, and any corresponding
Treasury Regulations. References to the Treasury Regulations are to the Treasury
Regulations under the Internal Revenue Code in effect. If a particular provision of
the Internal Revenue Code is renumbered or a subsequent federal tax law
supersedes the Internal Revenue Code,any reference is to the renumbered provision
or to the corresponding provision of the subsequent law, unless the result would be
clearly contrary to the Members' intent as expressed in this Agreement. The same
rule applies to Treasury Regulations references.
(x) Legal Representative or Personal Representative
The terms Legal Representative and Personal Representative mean a person's
guardian, conservator, executor, administrator, Trustee, or any other person or
entity personally representing a person or the person's estate.
(y) Majority in Interest; 85% in Interest of the Members
Majority in Interest means that 51 or more votes out of 100 votes that may be cast
will determine the matter subject to the vote.
85% in interest of the Members means that at least 85 votes out of the total 100
votes that may be cast will determine the matter subject to the vote.
(z) Managing Member
Managing Member means the Members who are responsible for managing the
business of the Company, or one or more Member Principals who have been
appointed by the Members to manage the Company.
(aa) Market Rate of Interest or Market Rate
The terms market rate of interest and market rate mean the rate of interest identified
as the prime rate by the Wall Street Journal in its "Money Rates" column; or, if
two or more rates are reported as the prime rate,the average of the two or more. If
Internal Revenue Code Sections 483 and 1274A apply to this transaction, the
minimum rate of interest of the purchase money obligation will be fixed at the rate
of interest then required by those Sections.
(bb) Member
Member means any person or legal entity designated in this Agreement as a
Member or any person or legal entity who becomes a Member under this
Agreement.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-6

(cc) Members
The term Members means all of the Members of the Company.
(dd) Member Minimum Gain
Regarding a Member Non-Recourse Debt,Member Minimum Gain means the least
amount of gain that the Company would realize if the Company disposed of the
encumbered Company property in full satisfaction of the encumbrance.
(ee) Member Non-Recourse Debt and Member Non-Recourse
Deductions
Member Non-Recourse Debt means nonrecourse Company debt for which one or
more Members bear economic risk of loss as defined in Treasury Regulation
Section 1.704-2(b)(4).
Member Non-Recourse Deductions means for each Taxable Year, the Company
deductions that are attributable to Member Non-Recourse Debt and are
characterized as Member Non-Recourse Deductions under Treasury Regulation
Section 1.704-2(b).
(ff) Member Principal
The term Member Principal refers to a Member who has been appointed by the
Members to represent the Company in operational management.
(gg) Membership Interest
Membership Interest means the ownership interest and rights of a Member in the
Company, including the Member's right to a distributive share of the profits and
losses, the distributions, and the property of the Company and the right to consent
or approve Company actions. All Membership Interests are subject to the
restrictions on transfer imposed by this Agreement. Each Member's Interest is
personal property and no Member will acquire any interest in any of the assets of
the Company.
Each holder of a Membership Interest will have the right to vote the holder's
proportionate interest in the Company regarding all matters that Members have a
right to vote on under this Agreement or by law.
Example: A Member with a Membership Interest of 35.5% will
have a 35.5%ownership interest in the Company,and will have 35.5
votes out of 100 votes that may be cast on matters that require the
consent or affirmative action of the Members.
Membership Interests may be adjusted from time to time under Article Three.
(hh) Person
Person has the same broad meaning as defined in Internal Revenue Code Section
7701(a)(1). The term specifically includes the Company; its successors and
assigns; each Member or Assignee, and their successors, assigns, heirs, and
personal representatives. The phrase each other person identifies any individual,
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-7

corporation, partnership, limited liability company, trust, or other party whose
interest may be affected, adversely or otherwise, by the resolution of any dispute,
contest, or claim.
(ii) Property
Property means all Company property and rights as described in Schedule A and
any property—real or personal, tangible or intangible—otherwise acquired by the
Company.
(jj) Qualified Appraiser and Qualified Appraisal
A Qualified Appraiser means an appraiser who is a Member of the American
Society of Appraisers, Business Valuations Division and accredited to perform
business appraisals or valuations by this organization; or, alternatively, a certified
public accountant accredited in business valuation by the American Institute of
Certified Public Accountants. A Qualified Appraisal means any appraisal
performed by a Qualified Appraiser.
(kk) Securities Act
Securities Act refers to the Securities Act of 1933, as amended.
(II) Substitute Member
Substitute Member means any person not previously a Member who acquires a
Membership Interest and is admitted as a Substitute Member according to the terms
of Section 11.05 of this Agreement.
(mm) Taxable Year
Taxable Year means the calendar year or any other accounting period selected by
the Manager. Taxable Year is synonymous with fiscal year for all purposes of this
Agreement.
Section 14.04 Changing the Company's Situs
The Company's situs may be changed only by the unanimous written consent of all of the
Members.
Section 14.05 No Duty to Mail Articles of Organization
The Company does not have an obligation to deliver or mail copies of the Articles of Organization
or any amendments to the Members unless required to do so by the Act.
Section 14.06 General Matters
The following general provisions and rules of construction apply to this Agreement:
(a) Multiple Originals; Validity of Copies
This Agreement may be signed in any number of counterparts, each of which will
be deemed an original.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-8

Any person may rely on a copy of this Agreement that the Managing Member
certifies to be a true copy to the same effect as if it were an original.
(b) Singular and Plural; Gender
Unless the context requires otherwise, words denoting the singular may be
construed as plural and words of the plural may be construed as denoting the
singular. Words of one gender may be construed as denoting another gender as is
appropriate within the context. The word or, when used in a list of more than two
items, may function as both a conjunction and a disjunction as the context requires
or permits.
(c) Headings of Articles, Sections, and Subsections
The headings of Articles, Sections,and Subsections used within this Agreement are
included solely for the reader's convenience and reference. They have no
significance in the interpretation or construction of this Agreement.
(d) Governing Law
This Agreement is governed, construed, and administered according to the laws of
North Carolina, as from time to time amended, except as to trust property required
by law to be governed by the laws of another jurisdiction, and unless the situs of
administration is changed under Section 14.04.
(e) Notices
Unless otherwise stated, whenever this Agreement calls for notice, the notice must
be in writing and must be personally delivered with proof of delivery, or mailed
postage prepaid by certified mail,return receipt requested,to the last known address
of the party requiring notice. Notice is effective on the date personally delivered
or on the date of the return receipt. If a party giving notice does not receive the
return receipt but has proof that he or she mailed the notice,notice will be effective
on the date it would normally have been received by certified mail. If notice is
required to be given to a minor or incapacitated individual, notice must be given to
the minor or incapacitated individual's parent or Legal Representative.
(f) Severability
The invalidity or unenforceability of any provision of this Agreement does not
affect the validity or enforceability of any other provision of this Agreement. If a
court of competent jurisdiction determines that any provision is invalid, the
remaining provisions of this Agreement are to be construed as if the invalid
provision had never been included in this Agreement.
(g) Acceptance
Each Manager and Member has reviewed this Agreement,accepts all its provisions,
and agrees to be bound by all the terms, conditions, and restrictions contained in
this Agreement.
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-9

Signed: This the 6th day of December, 2022, but adopted and effective upon the filing of the
Articles of Organization as required by law in the State of North Carolina.
MEMBERS:
Harold Dave Tripp(Dec 6,2022 13:19 EST)
Harold Dave Tripp
ALL Jow-1
Julia F tdF Tripp(Dec 2212:45 EST)
Julia Fort Tripp
Michael G.Kennedy(Dec 6,202212:16 EST)
Michael Kennedy
.4P/
Mark G Kennedy(Mc 6,2022 14:04 EST)
Mark Kennedy
MANAGERS:
Harold Dave Tripp(Dec 6,2022 13:19 EST)
Harold Dave Tripp
Julia Fdit Tri pp•(Dec 6,2022 45 EST)
Julia Fort Tripp
Michael G.Kennedy(Dec 6,202212:16 EST)
Michael Kennedy
P/45-1
Mark G Kennedy( ec 6,2022 14:04 EST)
Mark Kennedy
Operating Agreement of Ocean Ridge Storage Solutions Holdings LLC
14-10

Schedule A
The Initial Members and Their Contributions to
Ocean Ridge Storage Solutions Holdings LLC
Member's Name Initial Capital Contribution % Interest Voting or
Non-Voting
Harold Dave Tripp Cash, Property& Services 25.00% Voting
Julia Fort Tripp Cash, Property& Services 25.00% Voting
Michael Kennedy Cash, Property& Services 25.00% Voting
Mark Kennedy Cash, Property& Services 25.00% Voting
This the 6th day of December, 2022.
1J...�.b,
Harold Dave Tripp(Dec 6,202213:19 EST)
Harold Dave Tripp, Member
Julia F Tripp(Dec 6,2022 :45 EST)
Julia Fort Tripp, Member
14
Michael G.Kennedy(Dec 6,202212:16 EST)
Michael Kennedy, Member
14.4P/
Mark G Kennedy( ec 6,2022 14:04 EST)
Mark Kennedy, Member
[To keep Membership Interests up to date for voting and distribution purposes, this Schedule or a copy of
it must be prepared and signed by the Members each time an additional contribution is made to the LLC,
and each time a transfer of a Membership Interest is made between or among Members. Each revised
Schedule must be attached to this Agreement and available for inspection by each Member.]

Operating Agreement_Ocean Ridge Holdings
Final Audit Report 2022-12-06
Created: 2022-12-06
By: Kayla Jewel([e-mail])
Status: Signed
Transaction ID: CBJCHBCAABAAcxgmew9RxGJX5a-s4aNgfHyEh0QmJp0k
"Operating Agreement_Ocean Ridge Holdings" History
Document created by Kayla Jewel ([e-mail])
2022-12-06-5:09:08 PM GMT
E72. Document emailed to [e-mail] for signature
2022-12-06-5:11:34 PM GMT
2. Document emailed to Julia Tripp ([e-mail]) for signature
2022-12-06-5:11:35 PM GMT
`+ Document emailed to [e-mail] for signature
2022-12-06-5:11:35 PM GMT
Document emailed to [e-mail] for signature
2022-12-06-5:11:35 PM GMT
Email viewed by [e-mail]
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Signer [e-mail] entered name at signing as Michael G.Kennedy
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Document e-signed by Michael G.Kennedy ([e-mail])
Signature Date:2022-12-06-5:16:59 PM GMT-Time Source:server
Email viewed by [e-mail]
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[e-mail] entered name at signing as Julia Fort Tripp
2022-12-06-5:45:52 PM GMT
Document e-signed by Julia Fort Tripp ([e-mail])
Signature Date:2022-12-06-5:45:54 PM GMT-Time Source:server
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Email viewed by Julia Tripp ([e-mail])
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Signer Julia Tripp ([e-mail]) entered name at signing as Harold Dave Tripp
2022-12-06-6:19:32 PM GMT
Document e-signed by Harold Dave Tripp ([e-mail])
Signature Date:2022-12-06-6:19:34 PM GMT-Time Source:server
Email viewed by [e-mail]
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Signer [e-mail] entered name at signing as Mark G Kennedy
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Document e-signed by Mark G Kennedy ([e-mail])
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Agreement completed.
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