BEFORE THE 

DEPARTMENT OF TRANSPORTATION, 

OFFICE OF THE SECRETARY ' ' ^ 

WASHINGTON, D.C. 

RTMENTOF 

)PORTATICM 

• OPERATIONS 

- Q P 3: 21 

Application of 

TWIN CITIES AIR SERVICE, LLC 

for authority to conduct scheduled passenger operations as a 

commuter air carrier under 49 U.S.C. 41738 

n»B 

DOCKET-OST-2011-0032 

SUPPLEMENT NO. 1 TO APPLICATION OF 

TWIN CITIES AIR SERVICE, LLC 

FOR A COMMUTER 

AIR CARRIER AUTHORIZATION 

Communications with respect to this document should be sent to: 

Nathan Humphrey 

President 

Twin Cities Air Service, LLC 

81 Airport Drive 

Auburn, ME 04210 

(Tel) 207-782-3882 

nate@flycharter.com 

Edward P. Faberman 

Katrina A. Skowron 

WILEY REIN LLP 

1776 K Street NW 

Washington, DC 20006 

Tel: (202) 719-7000 

Fax:(202)719-7049 

efaberman@wileyrein.com 

kskowron@wileyrein.com 

Counsel for 

Twin Cities Air Service, LLC 

May 9, 2011 
BEFORE THE 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF THE SECRETARY 

WASHINGTON, D.C. 

<nmmmmmmmmmmmimmmmm 

Application of 

TWIN CITIES AIR SERVICE, LLC 

for authority to conduct scheduled passenger operations as a 

commuter air carrier under 49 U.S.C. 41738 

mmmmmmmimmmmmmmmmmmmmmimmmmammmmmmmmmmmmmmHm 

DOCKET-OST-2011-0032 

SUPPLEMENT NO. 1 TO APPLICATION OF 

TWIN CITIES AIR SERVICE, LLC 

Twin Cities Air Service, LLC ("Twin Cities") submits this supplement no. 1 to the 

application for authority to operate scheduled passenger service as a commuter air carrier 

in response to the Department's Information Request dated April 7, 2011. The following 

numbered explanations correspond directly to the numbered questions in the Information 

Request. 

GENERAL INFORMATION 

1. The OST Form 4507 is attached as Exhibit S-1. 

2. The Department has requested a clarification as to which aircraft will be used in 

Tv^n Cities' future operations. Twin Cities will use the three Cessna 402C's and 

the Cessna 31 OR for all operations - scheduled and charter. The scheduled 

operations will have priority, and the aircraft v^ll thereafter be used as available 

for charters. 

3. No operational fimctions, training, or maintenance will be contracted out. 

4. With regard to Twin Cities' aircraft: 

a. Each aircraft is owned by Twin Cities. An updated Current List of 

Aircraft (previously Exhibit TC-2) is attached as Exhibit S-2 for the 

Department's reference. 

b. Machias Savings Bank is the creditor for all aircraft assets. 
c. Twin Cities does not anticipate the leasing of additional aircraft during the 

forecast period. 

CORPORATE STRUCTURE AND OWNERSHIP 

1. Twin Cities Air Service, LLC ("Twin Cities") is the only operating entity, and the 

relationship between Twin Cities, Nathanair, Inc. ("Nathanair"), and Bel-Air 

Services ("Bel-Air") is solely financial: Nathanair owns 51% of Twin Cities and 

100% of Bel-Air. Nathanair is not an operating entity and has no plans to become 

one in the ftiture. A letter from Twin Cities' accountants dated April 26, 2011 

that describes the relationship is attached as Exhibit S-3. 

2. All operations were consolidated into Twin Cities when the LLC was purchased 

from its previous owners on July 1, 2002. Prior to July 1, 2002, Bel-Air 

conducted the flight school and maintenance operations and Twin Cities managed 

the charter. There are no fiiture plans for Bel-Air. 

3. With regard to Liberty Aviation, LLC ("Liberty Aviation"): 

a. The members' shares of Liberty Aviation are as follows: 

Seal Bay, LLC 

Birddog, LLC 

The Loaf, LLC 

Joe Bedard' 

The Horse Rider Holdings, LLC 

The Ovar Holdings, LLC 

The Cowboy Holdings, LLC 

The Madness Holdings, LLC 

5% 

5% 

5% 

5% 

18.75% 

18.75% 

18.75% 

18.75%^ 

Each of the owners listed in Exhibit TC-8 own 100% of the corresponding 

LLC. With regard to blood/marriage relationships, Adriana, George, and 

Max Liberty are siblings, and Andrew and Joe Bedard are siblings. 

None of the owners of Liberty Aviation's member LLCs has been 

involved in any other aviation or aerospace business. 

John C. Turner is the Bankruptcy Trustee holding Andrew Bedard's 

ownership interest in Ovar Holdings, LLC. His contact information is as 

follows: 

' Exhibit TC-8 listed Mountain Valley Holdings, LLC as an owner of Liberty Aviation. Tliis was an error. 

Mountain Valley Holdings, LLC was never actually formed. Joe Bedard, the LLC owner listed in Exhibit 

TC-8, is the actual Liberty Aviation stock owner. 

^ Approximately two years ago, one of the original members (Tun W. Vamey) turned in his 5% stock share. 

That stock has not been reallocated. 
John C. Turner 

155 Center Street, Building G 

P.O. Box 1897 

Auburn, ME 04211 

Tel (207) 514-7371 

Fax (207) 514-0680 

j ohn@j ctumer.net 

Mr. Turner is a U.S. Citizen and does not have any known interest in 

another aviation or aerospace business. 

d. Liberty Aviation has a 49% passive ownership interest in Twin Cities, and 

does not exist for any other purpose. Liberty Aviation does not conduct 

any business or any other operations. 

4. Copies of the LLC agreements for Twin Cities, Liberty Aviation, and the seven 

member LLCs of Liberty Aviation are attached as Exhibit S-4. 

MANAGEMENT AND KEY TECHNICAL PERSONNEL 

1. Updated resumes for Nathan Humphrey, Dale Stewart, and Ben Mosher are 

attached as Exhibit S-5. 

2. Twin Cities is a small business. Mr. Humphrey divides his time between serving 

as a Director of Operations and as the President of Twin Cities on an "as needed" 

basis. The FAA has approved this arrangement. 

FINANCIAL POSITION AND OPERATING PLAN 

1. The draft balance sheets and income statements for the calendar year 2010 are 

attached as Exhibit S-6. We will file the final financial statements for 2010 and 

the financial statements for the first quarter of 2011 as soon as possible. 

2. An updated forecast is attached as Exhibit S-7.'* With regard to the explanatory 

notes requested in subsection (b): 

i. All forecast expenses come from historical expenses. Equipment rental is 

a flat monthly expense on the forecast. Worker's compensation insurance 

^ The LLC agreement for Mountain Valley Holdings, LLC is not included because Mountain Valley 

Holdings, LLC was never actually formed. See note 1, supra. 

" As per the 14 CFR Sec. § 204.3(t), Twin Cities has included an updated forecast "for the first normal year 

ending after the initially proposed operations have been incorporated." Twm Cities will file balance sheets 

and income statements for the first quarter of 2011 as soon as possible. 
is a yearly expense that is paid for by a 30% premium down payment in 

January, followed by seven additional payments of 10% of the premium. 

ii. Three fiill time pilots are employed as salaried employees, and one parttime employee is compensated on a daily basis for flights flown. 

Compensation will not differ during peak months. Bonuses may be 

awarded based on excellent performance. There are no separate pay rates 

for scheduled and charter operations. 

iii. There are no expenses associated with the FAA certification efforts. 

iv. The Construction LOC is secured by N404SX, a project airplane currently 

being rebuilt in the Twin Cities hangar. The hangar expenses draw on the 

$250,000 line of credit with Machias Savings Bank. See Exhibit S-9. 

v.-vi. The line item "Aircraft" represents the loan payments, secured by all listed 

aircraft. 

vii. This payment represents loan payments on a company vehicle. The loan 

will be paid off in fixll as of October, 2011. Twin Cities does not foresee 

replacing this vehicle within the next 24 months. 

3. There have been no fransactions to sell or exchange major assets (land, aircraft, 

buildings, etc.) during the six months prior to Twin Cities' application, and Tv^dn 

Cities has no plans for any such transactions during the six months following its 

application. 

4. There are no contingent liabilities that may affect Twin Cities, Liberty Aviation, 

Nathanair, or Bel-Air, nor are there any liabilities among the four firms. 

5. With regard to the proposed city-pair market between Portland, Maine (PWM) 

and Yarmouth, Nova Scotia, Canada (YQI): 

a. The expected load factor is 86% for the peak summer months, and 57% 

for the rest of the year. Likewise, the total number of passengers to be 

carried is approximately 1,008 for the peak summer months, and 912 for 

the rest of the year. 

b. Twin Cites will operate scheduled services between Portland, Maine, and 

Yarmouth, Nova Scotia - a distance of 212 statute miles. During the 

summer peak months, June through August, Twin Cities expects to 

operate six roundtrips weekly (84 roundtrip flights). For the remainder of 

the year. Twin Cities expects to operate 3 roundtrips weekly (114 

roundtrip flights). As most, if not all, of these scheduled services will be 

performed using 7-seat Cessna 402 equipment, flight planning calls for 

round-trip flight (wheels off to wheels on) times of 2.3 hours, with 
roundtrip revenue (block-to-block) times equaling 2.7 hours. On an 

aimual basis the total number of revenue miles flown in scheduled service 

are estimated to be 83,952 (198 roundfrip flights X 424 statute miles = 

83,952). 

c. Twin Cities does not anticipate any additional resources (aircraft, 

persoimel, other equipment, etc.) or expenses to meet its increased 

services. Twin Cities is applying for commuter air carrier authority 

simply to make better use of Twin Cities' current assets. 

6. Twin Cities' loan agreements with Machias Savings Bank are attached as follows: 

the loan agreements for the $150,000 line of credit dated January 12, 2007 are 

attached as Exhibit S-8; the loan agreements for the $250,000 line of credit dated 

February 2, 2007 are attached as Exhibit S-9; and the loan agreements for the 

$570,000 term loan dated July 1, 2010 are attached as Exhibit S-10. 

7-8. The executed Northeast Trading Corporation agreements are attached as Exhibit 

S-11. This $600,000 line of credit was established to ensure compliance with the 

Department's guidance on the financial position of the commuter applicant, i.e., 

sufficient cash resources to cover three months' expenses incurred in the first 

normalized year of operations. The $600,000 lines of credit easily covers that 

amount. However, because Twin Cities will only be operating a few additional 

flights per week during the peak summer months. Twin Cities does not anticipate 

a need to draw down on this line of credit. 

9. Third-party verification of Twin Cities' term loan of $570,000 is attached as 

Exhibit S-12. 

Title 18 Verification is attached as Exhibit S-13. 

As stated in Tv ^ Cities' application. Twin Cities is currently the only air carrier 

operating between Portland, Maine and Yarmouth, Nova Scotia. Because Twin Cities is 

applying for commuter air carrier authority solely for the purposes of operating additional 

round frip flights between Portland and Yarmouth, and is not otherwise changing its 

operations. Twin Cities respectfully requests that the Department expedite its review of 

Tv^n Cities' application in order that Twin Cities may commence its six-trip weekly 

summer service as early as Jime, 2010. 

WHEREFORE, Twin Cities requests that the Department issue a final order and 

commuter air carrier authorization authorizing Twin Cities to provide scheduled 

passenger operations as a commuter air carrier. 
May 9, 2011 Respectfiilly Submitted, 

Edward P. Faberman 

Katrina A. Skowron 

WILEY REIN LLP 

1776 K Street NW 

Washington, DC 20006 

Tel: (202) 719-7000 

Fax: (202) 719-7049 

efaberman@wileyrein.com 

ksko wron@ wileyrein. com 

Counsel for 

Twin Cities Air Service, LLC 
CERTIFICATE OF SERVICE 

I hereby certify that I have on this day served the foregoing application for commuter air 

carrier authority by first class mail, postage prepaid, upon the persons shown in the 

following service list. 

May 9, 2011 /CA^S^^^ ^ 

Katrina A. Skowron 

SERVICE LIST 

FAA Flight Standards District Office 

Portland International Jetport 

412 Yellowbird Road 

Portland, ME 04102 

Manager 

Portland International Jetport 

1001 Westbrook Street 

Portland, ME 04102 

Manager 

Yarmouth International Airport 

PO Box 386 

Yarmouth, Nova Scotia, Canada 

B5A 4B3 
INDEX TO EXHIBITS 

Title Exhibit 

OST Form 4507 S-1 

Updated Current List of Aircraft S-2 

Austin Associates' Letter Dated April 26, 2011 S-3 

LLC Agreements S-4 

Updated Resumes of Key Persormel S-5 

Draft Balance Sheets and Income Statements for 2010 S-6 

Updated Forecast S-7 

Twin Cities' Loan Agreements with Machias Savings 

Bank for the 

$ 150,000 line of credit dated January 12, 2007 S-8 

$250,000 line of credit dated February 2, 2007 S-9 

$570,000 term loan dated July 1, 2010 S-10 

Northeast Trading Corporation Agreements S-11 

Twin Cities' $570,000 Term Loan Balance S-12 

Title 18 Verification S-13 
Exhibit S-1 
THIS APPROVED REGISTRATION 

SUPERSEDLS ALL OTHER 

;FGISTRATI0N S PREVIOUSLY FILED. 

Edited by Foxit Reader 

Copyright(C) by Foxit Corporation,2005-2009 

For Evaluation Only. Approved by OM B 

^ OMB No. 2120-0633 

Expires: 2/28/09 

PAPER WORK REDUCTION ACT OF 1995 

This information is coDecled to determine whether air taxi operations meet the Department's criteria for an operating authorization under 14 CFR Part 

298. We estimate that It wiO tal<e approximately 30 minutes to comptata. The use of this form is mandatory. Under the Paperworl< Reduction Act of 

1995, no persons are required to respond to a collection of information unless it displays a valid OMB Control Numtier. The OMB Control Number for 

this collection is 2120-0633. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA 

at SOO Independence /We. SW, Washington, DC, 20591, Attn: Informafion Collection Oearance Officer, AIO-20 

(d 

U.S; OApartntftnt of 

TrattSf^itBtkm 

OfQca of tha Svovtuy 

ofTransportttlon 

AIR TAXI OPERATOR REGISTRATION 

AND AMENDMENTS UNDER 

PART 298 OF THE REGULATIONS OF 

THE DEPARTMENT OF TRANSPORTATION 

Where to file: Submit this fomi, In duplicate, along with a Certificate of Insurance (OST Form 6410) 

evidencing required liability Insurance coverage for ^e aircraft listed in Blocl< 6 of this registration, to the 

Federal Aviation Administration (FAA), Air Transportation DMsion, AFS-^200, Room 831,800 

Independence Avenue, S.W^ Washington, D.C. 20S91. Exception: For air taxis located in the State of 

Alaska, submit this form and the OST Forni 6410 to the Federal Aviation /Uministratlon (F/\A). Alaskan 

Region Headquarters, AAL-230, 222 West 7* Avenue, Box 14, Anchorage. /VlasKa 99513. 

Fees; The fee for the initial registration of an air taxi Is $8. There is no filing fee for amendments to 

registrations previously filed. 

FOR USE BY DOT ONLY 

Effe(^\M data of r^itotration/amen^TMrTts 

3a. Fedaral AvWon AdmMsInllaive«tllfteat« number 

IWVA128U 

1a. Name {an6 DBA, ifappHcablo) and Maying Address of ttie Registering Cattiel: 

Twin Cities Air Service, LLC 

81 Airport Drive 

Auburn, IVIE 04210 

311. Mdtass of local FAA olflu' 

1b. Telephone No. 

207-784-6318 207-784-5326 

Fax No. 

2a. Address of principal place of busings (ifdiffomnt from abovo): 

2b. Telephone No.. Fax No. 

Portland International Jetpor: 

412 Yellowbird Road 

Portland. ME 04102 

3c. FAA Te^j^ione No J 

207-780-3263 

3d.^AA Principal OparaSons Inspdctor 

Gary i Readio 

4. This filir^ is the canter's: 

n Initial Registration H Amendment to reflect changes since previous filing (CompletB itom 9} 

If Initial registration, give proposed date of coninwncement of operations: ; 

5. Checl< type or types of service tfie carrier intends to perform upon commencement of operations, or, for amendments, service tfie earner is cun-enliy: 

performing: I ^ 

CD 

[^ Scheduled passenger* J^ On-demand passenger • /Ur ambulance ., 

O Scheduled cargo B On-demand cargo D Seasonal 

D Mail under a U.S. Postal Service contract D Other (Plaase specify)" :£^ 

* Check only if service Is limited to less than five (S) round trips per week on at least one route between two or more l^^ts and Is 

operated pursuant to puiillshttd flight schedules which specify the times, days of the week, and places between which such flights are 

performed. Companies proposing or operating scheduled passenger servtees of five (5) or more round trips per week on at 1^ ^ one route 

between two or more points pursuant to published flight schedules which specify the times, days of the week, and places betwegn which such 

flights are perfbnmed may not conduct such operatbns under this registration. Instead, such companies must be found Tit, willing, and able" to 

provide such services as a commuter air carrier. See 14 CFR 298, Subpart E. 

** For example, If the carrier performs other services such as fire fighting operations for tlw U.S. Forest Service, it should be indicated here. 

OST Form 4507 (Rev. 2-06) 
6. Aircraft wWcii the carrier proposes to operate In air taxi service or, for amendments, 

aircraft currently operated: 

1. 

2. 

3. 

4. 

5. 

Aircran Maka and Model 

C402C 

C402C 

C402C 

FAA Registration Numt/er 

N401SX 

N402SX 

N18W 

Passenger Saats 

Installed' 

7 

7 

7 

(Add additional sfiaets if necessary) 

' This does not Include seats occupied by tho pilot or co-pilot unless tha latter Is available for 

passenger use. 

7. Is the registering carrier a U.S. citizen? 

SYES DNO 

Note: An air taxi or commuter registered under Part 298 must tie 

a citizen of ttie United States. 49 USC <<ai02(a)(15) defines e 

U.S. cittzsn as (a) an individual who ia a U.S. citizen: (b) a 

partnersiiip of wtiidi each member is a U.S. citizen; or (c) a 

corporation or associattonr organized under tiie laws of the United 

States or a state, ttw District of Cotumt^ta, or a territory or 

possession of (lie United States, of wtiidi the president and at 

least two-thirds of the board of directors and other managing 

officers are citizens of the United States, which Is under tha 

actual controi of citizens of the United States, and in which at 

least 75 percent of the voting interest is owned or conlmiled by 

persons that are citizens of the tJnIted States. 

8. If this is an amendment, has the carrier carded 

passengers in foreign air transportation, that is, 

between any point in the United States and any 

point outside thereof, during the past 12 

months: 

Q YES D NO 

9. REPORT CH/^NGES OR AMENDMENTS TO INFORMATION PREVIOULSLY FILED WITHIN 30 DAYS OF THE EFFECTIVE DATE: 

a. Change In Cam'ei's Name and/or /Address (Please specify): 

Former Name and Address: Current Name and Address: 

b. Description of Any Ottier Changes or Amendments (Including additions or deletions of aircraft, c/iange in type of operations, registration numbers, etc.): 

Update of aircraft currently being operated and change in scheduled service of 4 flights or less. 

10. Cortiflcallon 

I certify that the information contained in this application is complete and accurate to the best of my knowledge. The 

carrier subscribes to the lATA Intercarrier Agreement; the lATA Agreement on Measures to Implement the lATA 

Intercarrier Agreement, and the ATA Agreement on Provisions Implementing the lATA Intercamer Agreement to be 

Included In Conditions of Carriage and Tariffs (see OST Form 4523-A), and in accordance with those Agreements 

agrees under Article 22(1) of the Warsaw Convention or the Warsaw Convention as amended by the Hague Protocol 

that the liability limits for passenger injury or death in international transportation as defined in the Convention are 

waived in their entirety. 

signature: _ y^f-^ 

Date: 

22 February 2010 

Name: 

fSe« note) 

Nathan Humphrey 

(Please type) 

Place: Auburn, IVIaine President 

(dl y end Stale) 

Title: 

A/ote; ni s registration must be signed by a responsible officer, such as the President, Vice President, Secretary or Treasurer, or partner or owner 

of the carrier 

TO ENSURE PROPER PROCESSING OF THIS REGISTRATION, PLEASE COMPLETE THIS FORM IN ITS ENTIRETY. 
Exhibit S-2 
CURRENT LIST OF AIRCRAFT* 

Twin Cities Air Service, LLC ("Twin Cities") 

April 27, 2011 

N401SX 1981 Cessna 402C Serial # 402C0447 - owned by Twin Cities 

N402SX 1982 Cessna 402C Serial # 402C0606 - owned by Twin Cities 

N18VV 1982 Cessna 402C Serial # 402C0619 - owned by Twin Cities 

N196TC 1980 Cessna 3 lOR Serial # 1801 - owned by Twin Cities 

Twin Cities Air Service is authorized to conduct on demand operations under 14 CFR Part 119.21(a)5. 
Exhibit S-3 
Justi n I 

assocfafes, A a. 

Certified Public Accountants 

April 26,2011 

Nathan Humphrey 

Twin Cities Air Semce, LLC 

P0Box2 

Gray, Maine 04039 

Dear Nate: 

As requested, I am providing the information concerning the financial and business relationship 

between Bel-Air, Inc., Nathanair, Inc., and Twin Cities Air Service, LLC. 

On /uly 1,2002, you signed two notes payable to Mr. and Mrs. LeBlanc to purchase the common stock 

and other assets of Twin Cities Air Service, Inc. At about the same time. Twin Cities Air Service, LLC was 

formed; you changed the name of Twin Cities Air Service, Inc. to Nathanair, Inc. and had the later 

transfer all of the tangible assets to Twin Cities Air Service, LLC in a tax free exchange for an interest in 

the limited liability company. Bel-Air, a qualified subchapter S subsidiary of the original corporation. 

Twin Cities Air Service, Inc., remained as part of Nathanair, Inc. It was originally setup for special 

services of the original Twin Cities Air Service, Inc. . It was planning done before I became involved with 

any of the operations. 

Bel Air, Inc. remained a wholly owned subsidiary of Nathanair, Inc. Due to prior contractual agreements. 

It had the first right of refusal to purchase one hangar located in Auburn, Maine. As a result, it was held 

open, purchased the hangar, and now rents it to Twin Cities Air Service, LLC. So the resulting business 

relationship between Bel-Air and Twin Cities Air Service, LLC is that of a lessor and lessee. In addition, 

the LLC Is the guarantor of the debt of Bel Air, Inc. for the purchase of the hangar. As for the loan 

between Bel Air, Inc. and the limited liability company, the $24,000.00 represents two loans between 

2004 and 2005 for the deposit on the hangar. It is unsecured with no terms of repayment at this time. 

In 2006, Nathanair, Inc. assumed the balance of the original purchase price of the business and 

accounted for it as a distribution/dividend to you, the sole owner. The refinancing was originally done 

with Mechanics Bank in Auburn, Maine by the limited liability company. Since the limited liability 

company borrowed money to repay a personal loan, a loan receivable from you became an asset. As 

noted, Nathanair, Inc. assumed this debt, and accounted for it a distribution to you. The loan in the 

limited liability company does not have any terms of repayment at this time. 

Two Great Falls Plaza, PO Box 3400 • Auburn, Maine 04212-3400 • Telephone: 207.783-9111 * Fax:207-783-9130 • 800-605-9263 Maine Only 

E-mail: sba@austinpa.com • Website: www.austinpa.com 
If there is anything else, please let me know. 

AUSTIN ASSOCIATES, PA. 

CERTIFIED PUBLIC ACCOUNTANTS 
Exhibit S-4 
AMENDED AND RESTATED 

OPERATING AGREEMENT 

OF 

TWIN CITIES AIR SERVICE, LLC 

(Manager Run) 

THIS AMENDED AND RESTATED OPERATING AGREEMENT is made and entered 

into as of the 2?"' day of March, 2003, by and among Twin Cities Air Service, LLC (tlie 

"Company") and the persons executing this Agreement as Members and is to take effect as of 

May 22,2002. 

This Amended and Restated Operating Agreement is being executed in order to correct 

the membership interests as set forth in the original Operating Agreement dated as of May 22, 

2002 (the "Incorrect Agreement") to reflect the fact tliat Bel Air Services, Inc. made a capital 

contribution to the Company on or about July 1,2002, in the form of transfers of certain aircraft 

and, accordingly, should have been issued membersliip interest in the Company at that time in 

accordance with Schedule A attached hereto. The Incorrect Agreement inadvertently did not 

reflect the capital contribution made by Bel Air Services, Inc. 

WITNESSETH 

In consideration of the mutual covenants contained in this Agreement and for other good 

and valuable consideration, the receipt and sufficiency are hereby acknowledged, the par-ties 

agree as follows: 

1. Formation of Company. The Company shall be formed at the time of the filing of the 

initial Articles of Organization with the Secretary of State of the State of Maine. The sole and 

exclusive pmpose of the Company shall be to operate an air charter operation, flight school and 

fixed based operation and such otlier purposes as may be approved by the unanimous consent of 

the managers. 

2. Term. The teim of the Company shall be sixty (60) years from the date of filing of 

Articles of Organization, imless the Company is earlier dissolved. 

3. Identity of Members. The names and addresses of the Members are set forth on 

Schedule A attached, as the same may be amended from time to time. 

4. Identity. Riglits and Duties of Managers. The Managers of the Company are charged 

with the responsibility and vested with the exclusive authority to manage the Company's 

business except in those cases in which the approval of the Members is expressly required by this 

Agreement or by the Maine Limited Liability Company Act, 31 M.R.S.A. Section 601, et seq., 

and all amendments thereto (the "Act"). No Member who is not also a Manager shall have 

authority nor take any action to bind the Company. A Member who takes any unauthorized 

action purportedly on behalf of the Company shall indemnify and hold the Company harmless 

from any costs or damages incurred by the Company as a result thereof. In furtherance of tlieir 
authority, the Managers are authorized and empowered to perform any and all acts customary or 

incident to the management of the Company's business. At any time when there is more than one 

Manager, an affirmative vote of a majority in number of all Managers shall be required to 

approve any action. Notwithstanding such vote, the Company shad be bound by the act of a 

Manager for the purpose of apparently carrying on in the usual way the business or affairs of the 

Company, including die exercise of the authority indicated in this Section 4, except as to persons 

having knowledge that such act was in contravention of this Section 4, and no person dealing 

with the Company shall have any obligation to inquire into the power or authority of the 

Manager acting on behalf of the Company. 

4.1 The Company shall initially have one (1) Manager, who shall be Nathan 

Humpln-ey. The number of Managers of the Company may be increased or decreased fi'om time 

to tune in accordance with the Act by the affirmative vote of a majority of the then-cunent 

Managers, but in no instance shall there be fewer than one Manager. 

4.2 No Manager shall have a contractual right independent of this Operating 

Agi^eement to such position. Managers shall be elected by the affirmative vote of a majority of 

the Members. Managers need not be Members of the Company or natm'al persons. Each 

Manager shall hold office until his successor shall have been elected and qualified unless he 

resigns or is removed. 

4.3 Without limiting the generality of any other provisions of tills Agreement, the 

Manager shall have power and authority on behalf of the Company; 

(a) to acquire the operating assets of Twin Cities Air Service, Inc. n/k/a 

Nathanair, Inc. and Bel-Air Services, Inc. and, in consideration therefore, to assume certain debt 

in favor of Roger and Lillian LeBlanc; 

(b) to acquire other property from any person as the Manager may determine. The 

fact that a Manager or a Member is directly or indirectly affiliated or coimected with any such 

Person shall not prohibit the Manager from dealing with that Person; 

(c) to borrow money for the Company fi*om banks, other lending institutions, the 

Managers, Members, or Affiliates of the Managers or Members, and to guaranty the obligations 

of others to such parties, in amoxmts and on such terms as the Managers deem appropriate, and in 

connection therewith, to hypothecate, encumber and grant security interests in the assets of the 

Company to secure repayment of the borrowed/guarantied sums; 

and business; 

(d) to purchase liability and other insurance to protect the Company's property 

the Company; 

(e) to hold and own any Company real and/or personal properties in tlie name of 
(f) to invest any Company funds temporarily (by way of example but not 

limitation) in time deposits, short-term govermnental obligations, commercial paper or other 

investments; 

(g) to sell or otherwise dispose of the assets of the Company so long as such 

disposition is not in violation of or a cause of a default under any other agreement to which the 

Company may be bound; 

(h) to execute on behalf of the Company all instruments and documents, 

including, without limitation, checks; drafts; notes and other negotiable instruments; mortgages 

or deeds of ti'ust; security agieements; financing statements; documents providing for the 

acquisition, mortgage or disposition of tlie Company's property; assignments; bills of sale; leases; 

partnership agreements, operating agreements of other limited liability companies; and any other 

instruments or documents necessary, in the opinion of the Manager, to the business of the 

Company; 

(i) to employ accountants, legal counsel, managing agents or other experts to 

perform seivices for the Company and to compensate them fiom Company funds; 

(j) to enter into any and all other agreements on behalf of the Company with any 

other Person for any purpose, in such forms as the Manager may approve, provided, however, 

that the Manager shall not cause the Company to enter into any agreement with any Member (or 

with any entity that is owned and/or controlled by the Manager or any Member) without the 

consent of 90% of the Members; 

(k) to do and perform all other acts as may be necessary or appropriate to the 

conduct of the Company's business; and 

(1) to do or perform any other act, or execute and deliver any other document, that 

the Manager, in his sole and exclusive discretion, deems necessary and/or appropriate to further 

the business interests of tlie Company. 

Unless authorized to do so by this Operatuig Agi-eement or by a Manager or Managers of 

the Company, no attorney-in-fact, employee or other agent of the Company shall have any power 

or authority to bind the Company in any way, to pledge its credit or to render it liable pecuniarily 

for any purpose. No Member shall have any power or authority to bind the Company imless the 

Member has been authorized by the Manager to act as an agent of the Company in accordance 

viith the previous sentence. 

4.4 Each Manager shall exercise his powers and discharge his duties in good faidi 

with a view to the interests of the Company and its Members with that degree of diligence, care 

and skill that ordinarily prudent persons would exercise under similar circumstances in like 

positions. A Manager who so performs the duties as Manager shall not have any liability by 

reason of being or having been a Manager of the Company. The Manager does not, in any way, 

guarantee the return of the Members' Capital Contributions or a profit for the Members fi-om the 

operations of the Company. 
4.5 The Manager shall be required to manage the Company as liis sole and exclusive 

function. The compensation for the Manager shall be established amiually by the affirmative vote 

of all Members (not including any Member owned or controlled by the Manager). 

4.6 The Manager may from time to time open bank accounts in the name of the 

Company, and the Manager shall be the sole signatory thereon, unless the Manager determines 

otlierwise. 

4.7 The Company shall indemnify the Manager and make advances for expenses to 

the maximum extent permitted under the Act. The Company shall indemnify its employees and 

other agents who are not managers to the fullest extent permitted by law, provided that such 

indenmification in any given situation is first approved by the Manager. The right to 

indemnification under this Section shall be fully vested with respect to any matter occurring 

while tills Section was in effect. No amendment of this Section shall have any retroactive effect 

except as to enhance such right for the benefit of tlie indemnitee. 

4.8 Any Manager of the Company may resign at any time by giving written notice to 

the Members of the Company. The resignation of any Manager shall take effect upon receipt of 

notice thereof or at such later time as shall be specified in such notice; and, unless otherwise 

specified therein, the acceptance of such resignation shall not be necessaiy to make it effective. 

The resignation of a Manager who is also a Member shall not affect the Manager's rights as a 

Member and shall not constitute a withdrawal of a Member. 

4.9 At a meeting called expressly for that pmpose, the Manager may be removed at 

any time, with or without cause, by the affirmative vote of all of the Members not owned or 

controlled by the Manager. The removal of a Manager who is also a Member shall not affect the 

Manager's rights as a Member and shall not constitute a withdrawal of a Member. 

4.10 Any vacancy occurring for any reason in the number of Managers of the Company 

may be filled by the affirmative vote of a majority of the rcmaining Managers then in office, 

provided that if there are no remaining Managers, the vacancy(ies) shall be filled by consent of 

Members. Any Manager's position to be filled by reason of an increase in die number of 

Managers shall be filled by the affirmative vote of a majority of the Managers then in office. A 

Manager elected to fill a vacancy shall be elected for the unexpired term of his predecessor in 

office and shall hold office until the expiration of such term and until his successor shall be 

elected and shall qualify or until his earlier death, resignation or removal. A Manager chosen to 

fill a position resulting from an increase in the number of Managers shall hold office until the 

next armual meeting of Members and until liis successor shall be elected and shall qualify, or 

luitil his earlier death, resignation or removal. 

5. Rights of Members. Members shall have the rights accorded to Members by the Act, 

and as limited by this Agreement. 

5.1 A Member will not be personally liable for any debts or losses of the Company 

beyond his respective capital contributions or as otherwise required by law. 
5.2 Action required or permhted to be taken at a meeting of Members may be taken 

without a meeting if tiie action is evidenced by one or more written consents describing the action 

taken, signed by each Member entitled to vote and delivered to the Managers of the Company for 

inclusion in the minutes or for filing with the Company records. Action taken under this Section 

is effective when all Members entitled to vote have signed the consent, unless the consent 

specifies a different effective date. The record date for determining Members entitled to take 

action without a meeting shall be the date the first Member signs a written consent. 

6. Transferability of Membership Interest. Members may transfer all or any portion(s) of 

their interest in the Company only with the consent of a majority of Managers. 

7. Allocations of Profits and Losses from Operations: Dishibutions of Cash. 

7.1 The net profits and net losses of the Company for each fiscal yeai* shall be 

determined by the Manager, in connection with accountants retained by the Company, in 

accordance with generally accepted accounting principles. The net profits and net losses of the 

Company shall be allocated among the Members by the Manager in accordance with the capital 

account of each Member as set forth on Schedule A. At such time as the capital accounts of each 

of the Members is zero (0), net profits and net losses of the Company shall be allocated in 

accordance with the percentage of membership interests owned as set forth on Schedule A. 

7.2 All distributions of cash and property shall be made at such time or times, and 

allocated among the members, as determined by the Manager(s) in their sole and exclusive 

discretion. 

7.3 No Member shall be entitled to interest on its capital contribution or to return of 

its capital contribution, except as otherwise specifically provided for herein. 

7.4 The Company's accounting period shall be the calendar year, unless otherwise 

determined by the Manager. 

8. Additional Members. From the date ofthe formation ofthe Company, any person 

or entity acceptable to the Manager may become a Member in this Company either by the 

issuance by the Company of membership interests for such consideration as tiie Manager shall 

determine, or as a transferee of a member's membersliip interest or any portion thereof, subject to 

the terms and conditions of this Operating Agreement. No new Members shall be entitied to any 

retroactive allocation of losses, income or expense deductions incurred by the Company. The 

Manager may, at his option, at the time a Member is admitted, close the Company books (as 

though the Company's tax year had ended) or make pro rata allocations of loss, income and 

expense deductions to a new Member for that portion ofthe Company's tax year in which a 

Member was admitted in accordance with the provisions of Section 706(d) ofthe Internal 

Revenue Code and the Treasuiy Regulations promulgated thereunder, 

9. Certificates. The Company shall issue certificates, in substantially the same form 

as attached hereto as Exhibit A. evidencing the membership interest of each Member. 
03/28/2009 11:23 FAX 20T7733210 MARCILS CLEGG & MISTRETTA @007 

10. MisceUatteoua. 

10.1 This Agreement, and the appEcatlon and interpretation hereof, shall be governed 

exclusively by its tenns tod by tho laws ofthe State of Maine. 

10.2 This Agreement may be amended only by the written agreement of a majority of 

the Members. 

10.3 Notto of the jirovisions of this Operating Agi-eement shall be for the benefit of or 

enforceable by any oredito« of th« Company except as required by the Act. 

10.4 If any provision of thi$ Operating Agtaement or the application thereof to any 

person or circumstance ghalH be Invalid, illegal or unenfoioeable to any extent, the remainder of 

this Operatbg Agreemcrjt and tiie application there of shall not be affected and shall be 

enforceable to tiic fullest extent pe-iroittcd by law. 

IN WITNESS WHEREOF, the Members have signed and sealed this Operating 

Agreement as of tiie date fixst written above. 

MEMBERS: 

NATHANAIR, INC, fOc/a TWIN CITIES 

AIR SERVICE, INC. 

Nathan Humphrey 

President 

BEL AIR SERVICES, INC. 

Natnaimumphrey 

President 

LIBERTY AVIATION, LLC 

By: 

Micliael A. Liberty 

Manager 
03/28/2003 13:00 FAX 2077733210 MARCUS CLEGG & MISTRETTA 1^007 

FROM ; Twin Citie s 8,'Bel ftir Service s FfiX NO. : 207 784-5326 

06.-26/2003 11:23 FAl 2077703210 MARCOS CLEGS & MlSXREtTA 

Mar. 29 2003 12:31ftt1 P4 

0007 

10, JVliaeallft^ieonga 

i 

10,1 TMs Agreein&jit, and the applicatlou and intcxpratatlon hereof, shall be governed 

cxohwively W its tams tod by tttfi laws ofthe State of Msine. 

10j.Z This Agreemwit owiy be amended only by the written agreement of a majority of 

I 

I 

iOyS Nona ofthe provisions of this Operating Agteeraant shall be jfbr the benefit of or 

mforceablfi hy my oxedito« of th« coiiipaay «j£capt ag required by Has Affi, 

lOA If asy provjaLoa of this Opecating Agreement or thd applicatlcni tbwoof to any 

pwsott orbiioianstenift BhalH be Invalid, illegal or unenfoioeable to any extent, the ramsinder of 

this Opcnitiag Agiccinoat and the appUoHtion flieare of shall not be aSbotad and shall b« 

caifbrceablc to ihe ftillcst extent pe-jmittcd by kw. 

U^ WITNESS WHEREOF, tha Members tave eigned and sealed this Oparatiog 

Agteemejit as of the date flprt wriiteo above. 

MEMdERS: 

NAIHANAIR, INC. ffk/6. TWIN CITIBS 

Am SERVICE, INC. 

BEL Am SERVICES, INC. 

NfltAanfiHumphiey 

President 

LIBERTY AVIATTON, LLC 

By;_ /•<'y 

Michael A, Liberty 

Manager 
FROM : Twin Citie s & Bel fllr Service s 

i>J.'26/2003 11:23 FAX 2077T33210 

FRX NO. : 207 784-5326 

JlARCUS CLEGG & MI3TRETTA 

Mar. 29 2003 i2:31flM P5 

©008 

MILO ENTERPRISES. INC. 

By: /CJi ^ 

Randall E, Male, 

Jh:esident / 

MANAGER; 

Nathan Humphnsy 
03/28/2003 11:23 FAX 2077733210 MARCUS CLEGG & MISTRETTA a 008 

MILO ENTERPRISES, INC. 

By: 

Randall E, Male 

President 

MANAGER: 

Nathan Humphtey 
Name of Member 

Nathanair, Inc. 

and Bel Air Services, Inc. 

as tenants in common 

P.O. Box 2 

Gray, ME 04039 

Liberty Aviation, LLC 

443 Congress Street 

Portland, ME 04101 

Milo Enterprises, Inc. 

29 Blue Moon Drive 

North Yarmouth, ME 04097 

TOTAL 

SCHEDULE A 

Percentage of 

Membership Interest 

51% 

46% 

3% 

100% 

Initial Capital 

Contribution 

$145,000.00 

plus transfer 

of certain 

airplanes 

$250,000.00 

$ 15,000.00 * 

$410,000.00 

Plus value of 

airplanes 

Number of 

Units 

51 

46 

3 

100 

* In the form of services rendered 
03/28/2000 11:24 FAX 2077733210 MARCOS. CLEGG & MISTRETTA JOI O 

Exhibit A 

CERTIFICATE 

Number Units 

Twin Cities Air Service, LLC 

THIS CERTIFIES tliat is the holder of non-assessable 

Units of Twin Cities Air Sei-vice, LLC, a Maine limited liability compaiiy (tiie "Company"). The 

units represented by this ceitificats arc transferable orJy on the boolcs ofthe Company at its 

Home Ofiice In the City of .ALuburn, Maine, on surrender of this Certificate properly endorsed for 

cancellation, tiie consent ofthe otlier Members and such other conditions as may exist from time 

to time in the Operating Agireemeiit ofthe Company. This certificate can only be properly 

endorsed for cancellation by the romahung members of tiie Company, 

IN WITNESS WHEREOF, tiie said Company has caused this Certificate to be issued by 

its duly authorized Manager this day of , 2002, 

lumplorey, Manager 
03/28/2003 11:24 FAX 2077733210 )IARCU3. CLEGG & MISTRETTA ilOlO 

Exhibit A 

CERTIFICATE 

Number Units 

Twin Cities Air Service, LLC 

THIS CERTIFIES tijat is the holder of non-assessable 

Units of Twin Cities Air Semce, LLC, a Mamc limited liability company (the "Company"). The 

units represented by this ceitificats are trausferxable only on the books ofthe Company at its 

Home Office in the City of .f^ubwn, Maine, on surrender of tiiis Certificate properly endorsed for 

cancellation, tiie consent of die otlier Members and such other conditions as may exist firom time 

to time in the Operating Agreement ofthe Company. This certificate can only be properly 

endorsed for cancellation by the remahiing members of die Company, 

IN WITNESS WHEREOF, tiie said Company has caused this Certificate to be issued by 

its duly autiiorized Manager this day of ., , 2002. 

Nathan Humphrey, Manager 
04/03/2003 14:32 PAX 2077733210 MARCUS CLEGG & MISTRETTA ©002 

COftHECTED 

CERTIFICATE 

Number Units 

2 46 

Tvrin Cities Air Service, LLC 

THIS CERTIFIES tlaat Lilicrty Aviation, LLC is the holder of 46 non-assessable Units of 

Twin Cities Air Service, LLC, a >-lahie limited liability company (the "Company"). The units 

represented by this certificate are transferrable only on the books ofthe Company at its Home 

Office in the City of Aujjunn, Maine, on surrender of this Certificate properly endorsed for 

cancellation, tiia consent ofthe otber Membera and such otiier conditions as may exist firom time 

to tune in the Operating Agreement ofthe Company. This certificate can only be properly 

endorsed for caaoellation by tiie rsmamhig members ofthe Company. 

IN WTTKESS WHEiREOF, tiie said Company has caused tills Corrected Certificate to be 

issued by its duly aufliorize-d Manager tiiis 3'* day of April, 2003. 
LIBERTY AVIATION, LLC 

OPERATING AGREEMENT 

FOR A 

MANAGER-RUN LIMITED LIABILITY COMPANY 
AMENDED AND RESTATED OPERATING AGREEMENT OF MOOSE 

LIBERTY AVIATION, LLC 

TABLE OF CONTENTS 

Article I. Defmitions 

Article II. Purposes and Powers of Company 

Article III. Names and Addresses of Initial Members; Principal Office 

Article rV. Voting Powers, Meetings, Etc. of Members 

Article V. Manager 

Article VI. Contributions to the Company and Distributions 

Article Vn. Records, Reports, Etc. 

Article VIII. Assigrunent; Resignation 

Article IX. Dissolution and Termination 

Article X. Miscellaneous Provisions 

Article XI Special Provisions 

- > . 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED 

UNDER THE SECURITIES ACT OF 1933 (THE "ACT" OR ANY APPLICABLE 

STATE SECURITIES LAWS ("STATE ACTS")). THE SECURITIES MAY NOT BE 

OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT 

PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR 

QUALIFICATION UNDER THE ACT AND APPLICABLE STATE ACTS OR 

PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND 

APPLICABLE STATE ACTS, THE AVAILABILITY OF WHICH IS TO BE 

ESTABLISHED TO THE SATISFACTION OF THE COMPANY. TRANSFER OF 

THE MEMBERSHIP INTERESTS IS FURTHER RESTRICTED UNDER THE TERMS 

OF THIS OPERATING AGREEMENT. 

- 3 . 
THIS OPERATING AGREEMENT, dated as of February 1.2004, by and among the 

undersigned parties, who by their execution of Uiis Operating Agreement have become 

members of LIBERTY AVIATION, LLC, a Maine limited liability company (tiie 

"Company"), provides as follows: 

RECITALS: 

WHEREAS, the undersigned parties have caused the Company to be organized as 

a limited liability company under the laws ofthe State of Maine effective as ofthe dale 

hereof, and they wish to enter into this Operating Agreement to set forth the terms and 

conditions on which the management, business and financial affairs ofthe Company shall 

be conducted. 

AGREEMENT: 

NOW THEREFORE, in consideration ofthe foregoing recitals and the mutual 

promises, covenants and conditions herein contained, the receipt and sufficiency of which 

are hereby acknowledged, the parties do hereby covenant and agree as follows: 

ARTICLE I 

DEFINITIONS 

1.01 The following terms used in this Operating Agreement shall have the 

following meanings (unless otherwise expressly provided herein): 

(a) "Act" shall mean the Maine Limited Liability Company Act, 31 

M.R.S.A. § 601 et seq., as amended and in force fi-om time to time. 

(b) "Articles" shall mean the Articles of Organization of the Company, 

as amended and in force from time to time. 

(c) "Capital Account" shall mean as of any given date the amount 

calculated and maintained by the Company for each Member as provided in Section 6.04. 

(d) "Capital Contribution" shall mean any contribution to the capital 

ofthe Company by a Member in cash, property or services, or a binding obligation to 

contribute cash, property or services, whenever made. "Initial Capital Contribution" shall 

mean tiie initial contribution to the capital ofthe Company by a Member, as determined 

pursuant to Section 6.01 hereof. 

(e) "Code " shall mean tiie Internal Revenue Code of 1986 or 

corresponding provisions of subsequent superseding federal revenue laws. 

(0 "Company" shall refer to Liberty Aviation, LLC. 

- 4 -
(g) "Entity" shall mean any general partnership, limited partnership, 

limited liability company, corporation, joint venture, trust, business trust, cooperative or 

other association. 

(h) "Manager" shall mean the manager of the Company, whose rights, 

powers and duties are specified in Article V hereof 

(i) "Member" shall mean each Person that is identified as an initial 

Member in Article III hereof or is admitted as a Member (either as a transferee of a 

Membership Interest or as an additional Member) as provided in Article VIII hereof. A 

Person shall cease to be a Member at such time as such Person no longer owns any 

Membership Interest and is no longer authorized to exercise any membership rights under 

the Act. 

(k) "Membership Interest" shall mean the ownership interest of a 

Member in the Company, which may be expressed as a percentage equal to such 

Member's capital interest and/or profits and loss interest, as shown on Exhibit A, as the 

same may be amended firom time to time. 

(I) "Operating Agreement" shall mean this Operating Agreement, as 

originally executed and as amended fi-om time to time. 

(m) "Person" shall mean any natural person or Entity, and the heirs, 

executors, admirusti^tors, legal representatives, successors, and assigns of such Person 

where the context so admits. 

ARTICLE II 

PURPOSES AND POWERS OF COMPANY 

2.01 Purposes. The purposes ofthe Company shall be to: 

(a) Acquire, own, buy, sell, invest in, trade, manage, finance, 

refinance, exchange, or otherwise dispose of stocks, securities, partnership interests, 

limited liability company interests, CDs, mutual fiinds, commodities, and any and all 

investments and assets whatsoever, that the Manager may irom time to time deem to be in 

the best interests ofthe Company; 

(b) Engage in any business activities permitted by law which die 

Manager may choose and to engage in all activities necessarj', customary, convenient, or 

incident to the foregoing. 

2.02 Powers. TheCompany shall have all powers and rights of a limited 

liability company orgamzed under the Act, to die extent such powers and rights are not 

proscribed by the Articles. 

- 5 . 
ARTICLE III 

NAMES AND ADDRESSES OF INITIAL MEMBERS; PRINCIPAL OFFICE 

3.01 Names and Addresses of Initial Members. The names and addresses of die 

initial Members are as follows: 

Names and Addresses of Initial Members. 

SEAL BAY, LLC, c/o James G. Stanley, Jr., 11 Island Pond Road, Cumberiand 

Foreslde,ME04110 

BIRDDOG, LLC, c/o David Burton, 19 Rebecca Way, Falmoutii, ME 04105 

Tim W Vamey, 32 Oak Street, Bangor Maine 04401 

THE LOAF, LLC, c/o Fred Forsley, 86 Newberry Street, Portland, ME 04101 

MOUNTAIN VALLEY HOLDINGS, LLC, c/o Joseph Bedard, 443 Congress 

Street, Portland, ME 04101 

THE HORSE RIDER HOLDINGS, LLC, 443 Congress Stfeei, Portland ME 

04101 

THE OVAR HOLDINGS, LLC, 443 Congress Street, Portland ME 04101 

THE COWBOY HOLDINGS, LLC, 443 Congress Street, Portland ME 04101 

THE MADNESS HOLDINGS,LLC, 443 Congress Street, Portland ME 04101 

3.02 Registered Office and Registered Agent. The registered agent ofthe 

Company shall initially be Kevin J. McCarthy, c/o Marcus, Clegg & Misiretta P.A. and 

the registered office shall initially be at 100 Middle Street, Portland, Maine. The 

registered agent and/or registered office may be changed fi-om time to time by tiie 

Manager. 

ARTICLE IV 

VOTING POWERS, MEETINGS, ETC. OF MEMBERS 

4.01 In General. The Members shall not be entitled to participate in die day-today affairs and management ofthe Company, but instead, the Members' right to vote or 

otherwise participate with respect to matters relating to the Company shall be limited to 

those matters as to which the express terms ofthe Act, the Articles or this Operating 

Agreement vest in the Members the right to so vote or otherwise participate. 

4.02 Actions Requiring Approval of Members. 

(a) Notwithstanding any other provision of this Operating Agreement, 

the approval ofthe Members shall be required in order for any ofthe following actions to 

be taken on behalf of the Company: 
(i) Amending the Articles in any manner that materially alters 

the preferences, privileges or relative rights ofthe Members; 

(ii) Taking any action that would make it impossible to carry 

on the ordinary business ofthe Company; or 

(iii) Confessing a judgment against the Company in excess of 

$500,000. 

(b) Unless the express terms of this Operating Agreement specifically 

provide otherwise, the affirmative vote of Members holding at majority ofthe 

Membership Interests in the profits and losses ofthe Company as specified on Exhibit A 

shall be necessary and sufficient in order to approve or consent to any of the matters set 

forth in Section 4.02(a) above or any other matters that require the approval or consent of 

the Members. 

4.03 Action by Members. In exercising their rights as provided above, the 

Members shall act collectively through meetings and/or written consents. Except where 

the unariimous vote of Members is expressly required, the affirmative vote of Members 

owning a majority ofthe Membership Interests in the profits and losses ofthe Company 

as specified on Exhibit A shall be required to take Membership action. 

4.04 Participation by Telephone or Similar Communications. Members may 

participate in and hold a meeting by means of conference telephone or similar 

communications equipment by means of which all Members participating can hear and be 

heard, and such participation shall constitute attendance and presence in person at such 

meeting. 

4.05 Action by Written Consent. Any action required or permitted to be taken 

by Members may be taken without a meeting if a written consent is sent to each Member 

at his or her address set forth herein, one or more written consents to such action are 

signed by the Members who are entitled to vote on the matter set forth in the consents and 

who constitute the requisite number or percentage of such Members necessary for 

adoption or approval of such matter on behalf of the Company. 

ARTICLE V 

MANAGER 

5.01 Powers of Managers. Except as expressly provided otherwise in the Act, 

the Articles or this Operating Agreement, the powers ofthe Company shall be exercised 

by or under the authority of, and the business and affairs ofthe Company shall be 

managed by the Managers. The powers so exercised shall include but not be limited to 

the following: 

- ? • 
(a) Entering into, making and performing contracts, agreements and 

other undertakings binding the Company that may be necessary, appropriate or advisable 

in furtherance ofthe purposes ofthe Company; 

(b) Opening and maintaining bank accounts, investment accounts and 

other arrangements, drawing checks and other orders for the payment of money, and 

designating individuals with authority to sign or give instructions with respect to those 

accounts and arrangements. Company funds shall not be commingled with ftinds from 

other soinces and shall be used solely for the business ofthe Company; 

(c) Collecting fimds due to the Company; 

(d) Acquiring, utilizing for the Company's purposes, maintaining and 

disposing of any assets ofthe Company; 

(e) To the extent that fimds of the Company are available therefor, 

paying debts and obligations ofthe Company; 

(0 Borrowing money or otherwise committing the credit of the 

Company for Company activities, and voluntarily prepaying or extending any such 

borrowings, and mortgaging and granting security interests in the Company's assets; 

(g) Employing fi*om time to time persons, firms or corporations for the 

operation and management of various aspects ofthe Company's business, including, 

without limitation, managing agents, contractors, subcontitictors, architects, engineers, 

laborers, suppliers, accountants and attorneys on such terms and for such compensation as 

the Manager shall determine, notwithstanding the fact that the Manager or any Member 

may have a financial interest in such firms or corporations, provided that the Manager 

conforms to any applicable disclosure and consent requirements ofthe Act; 

(h) Making elections available to the Company under the Code and 

serving as Tax Matters Partoer for income tax purposes; 

(i) Obtaining general liability, property and other insurance for the 

Company, as the Manager deems proper; 

(j) Registering the Company as a tax shelter with the Secretary of the 

Treasury and furnishing to such Secretary lists of investors in the Company, if required 

pursuant to applicable provisions ofthe Code; 

(k) Taking such actions as may be directed by the Members in 

furtherance of their approval of any matter set forth in Section 4.02 hereof; and 

8-
(I) Doing and performing all such things and executing, 

acknowledging and delivering any and all such instruments as may be in furtherance of 

the Company's purposes and necessary and appropriate to the conduct of its business. 

5.02 Managers. Until such time as the Members agree otherwise, Michael A. 

Liberty and Andrew Bedard shall serve as Managers ofthe Company in all matters. 

5.03 Reliance by Other Persons. Any Person dealing with the Company, other 

than a Member, may rely on the authority of either ofthe Managers in taking any action 

in the name ofthe Company, if either Manager provides to such Person a copy ofthe 

applicable provision of this Operating Agreement and/or the resolution or written consent 

ofthe Managers or Members granting such authority, certified in writing by such 

Manager to be genuine and correct and not to have been revoked, superseded or otherwise 

amended. 

5.04 Managers' Expenses and Fees. The Managers shall be entitied, but not 

required, to receive a reasonable fee for services rendered on behalf of the Company or in 

their capacity as Managers. The Company shall reimburse the Managers for reasonable 

out-of-pocket expenses that were or are incurred by the Managers on behalf of the 

Company with respect to the start-up or operation ofthe Company, the on-going conduct 

ofthe Company's business, or the dissolution and winding up ofthe Company and its 

business. 

5.05 Competition. During the existence ofthe Company, the Managers shall 

devote such time to the business ofthe Company as may reasonably be required to 

conduct its business in an efficient and profitable maimer. The Managers, for their own 

account and for the account of others, may engage in business ventures which may 

compete in an insubstantial manner with the business ofthe Company, but under no 

circumstances shall the Managers create, invest in, manage or otherwise be involved witii 

another investment or securities firm. Each Member hereby expressly consents to the 

continued and future ownership and operation by the other Members or the Managers of 

such businesses and waives any claim for damages or otherwise, or rights to participate 

therein or with respect to the operation and profits or losses thereof 

5.06 Indemnification. The Company shall indemnify the Managers, whetiier 

serving the Company or, at its request, any other Entity, to the full extent permitted by die 

Act. The foregoing rights of indemnification shall not be exclusive of any other rights to 

which the Managers may be entitled. The Managers may, upon the approval of tiie 

Members, take such action as is necessary to carry out these indemnification provisions 

and may adopt, approve and amend from lime to lime such resolutions or contracts 

implementing such provisions or such further indemnification arrangements as may be 

permitted by law. 

5.07 Liability of Managers. Except as required by the Act, so long as the 

Managers act in good faith with respect to the conduct ofthe business and affairs ofthe 
Company, the Managers shall not be liable or accoimtable to the Company or to any of 

the Members, in damages or otherwise, for any error of judgment, for any mistake of fact 

or of law, or for any other act or thing that they may do or refrain from doing in 

connection with the business and affairs of tiie Company, except for willful misconduct 

or gross negligence or breach of fiduciary duty, and fiirther except for breaches of 

contractual obligations or agreements between a Manager and the Company. 

5.08 Exercise of Authority by Managers. Either one or both of the Managers 

are hereby authorized to act on behalf of the Company for all purposes hereunder. 

ARTICLE VI 

CONTRIBUTIONS TO THE COMPANY AND DISTRIBUTIONS 

6.01 Initial Capital Contributions. Each Member, upon the execution of this Operating 

Agreement, shall be obligated to make as an Initial Capital Contribution the cash and/or 

property shown on Exhibit A-1, which is attached hereto. The value of any property 

other than cash or widely traded securities to be contributed as an Initial or additional 

Capital Contribution shall be determined by a disinterested appraiser selected by the 

Manager(s) or by the written consent ofthe Members then owning at least seventy-five 

percent (75%) ofthe Membership Interests. 

6.02 Additional Capital Contributions. No Member shall be required to make 

any Capital Contribution in addition to his Initial Capital Contribution. There shall be no 

requirement that additional Capital Contributions be made pro rata by all the Members. 

The fair market value of any property other than cash or widely traded securities to be 

contributed as an additional Capital Contribution shall be determined by a disinterested 

appraiser selected by the Manager or by the written consent ofthe Members owning at 

least seventy-five percent (75%) ofthe Membership Interests 

6.03 Interest and Return of Capital Contribution. No Member shall receive 

any interest on his Capital Contribution. Except as otherwise specifically provided for 

herein, the Members shall not be allowed to withdraw or have refiinded any Capital 

Contribution. 

6.04 Capital Accounts. Separate Capital Accounts shall be maintained for each 

Member in accordance with the following provisions: 

(a) To each Member's Capital Account there shall be credited the fair 

market value of such Member's Initial Capital Contribution and any additional Capital 

Contributions, such Member's distributive shacc of profits, and the amount of any 

Company liabilities that are assumed by such Member. 

(b) To each Member's Capital Account there shall be debited the 

amount of cash and the fair market value of any Property distributed to such Member 

10-
pursuant to any provision of this Operating Agreement, such Member's distributive share 

of losses, and the amount of any liabilities of such Member that are assumed by the 

Company or that are secured by any property contributed by such Member to the 

Company. 

(c) The Capital Account shall also include a pro rata share ofthe fair 

market value of any property conU-ibuted by a person who is not a Member, such value to 

be the same value reported for federal giff tax purposes if a gift tax return is filed, and if 

not, the value in the case of real property shall be determined by an independent M.A.I, 

appraiser actively engaged in appraisal work in the area where such property is located 

and selected by the Manager, and otherwise by the certified public accountant or 

accountants then serving the Company. 

(d) If any Member makes a non-pro rata Capital Contribution to the 

Company or the Company makes a non-pro rata distribution to any Member, the Capital 

Account of each Member shall be adjusted to reflect the then fair market value ofthe 

assets held by the Company immediately before the Capital Contribution or distribution. 

6.05 Loans to the Company. IftheCompany has insufficient fimds to meet its 

obligations as they come due and to carry out its routine, day-to-day affairs, then, in lieu 

of obtaining required funds from third parties or selling its assets to provide required 

funds, the Company may, but shall not be required to, borrow necessary funds from the 

Manager or one or more of the Members as designated by the Manager; provided that the 

terms of such borrowing shall be commercially reasonable. 

6.06 Effect of Sale or Exchange. In the event ofa permitted sale or other 

U-ansfer ofa Membership Interest in the Company, the Capital Account ofthe transferor 

shall become the Capital Account ofthe transferee in proportion to the percentage ofthe 

transferor's interest transferred. 

6.07 Distributions. Cash and other property distributions whether from 

operating cash flow, capital transactions, refinancings or otherwise (except upon tiie 

Company's dissolution, which shall be governed by the applicable provisions ofthe Act 

and Article IX hereoQ shall be distributed to the Members in the manner, proportion, 

order of priority and extent herein provided. All distributions of cash or property shall be 

made at such time and in such amoimts as determined by the Managers. All amounts 

withheld pursuant to the Code or any provisions of state or local tax law with respect to 

any payment or distribution to the Members from the Company shall be treated as 

amounts distributed to the relevant Member or Members pursuant to this Section. 

6.08 Allocations. Except as otherwise provided in Section 6.09 hereof, all 

items of income, gain, loss, deduction and credit, whether resulting from the Company's 

operations or in connection with its dissolution, shall be allocated to the Members for 

federal, state and local income tax purposes in proportion to their respective Membership 

II 
Interests in the profits and losses ofthe Company as shown on Exhibit A., or as 

otherwise required by Section 704(b) ofthe Code. 

6.09 Allocation with Respect to Property. If, at any time during the Company's 

existence, any Member contributes to the Company property with an adjusted basis to the 

contributing Member which is more or less than the agreed fair market value and such 

property is accepted by the Company at the time of its contribution, the taxable income, 

gain, loss, deductions and credits with respect to such contributed property for tax 

purposes only (but not for purposes of calculating the Members' respective Capital 

Accounts) shall be shared among the Members so as to take account ofthe variation 

between the basis ofthe property to the Company and its agreed fair mari<:et value at the 

time of contribution, pursuant to Section 704(c) of the Code. 

ARTICLE VII 

RECORDS, REPORTS, ETC. 

7.01 Records. The Company shall maintain and make available to the 

Members its records to the extent provided in the Act 

7.02 Financial and Operating Statements and Tax Returns. Within seventyfive (75) days firom the close of each fiscal year ofthe Company, the Managers shall 

cause to be delivered to each Member a statement setting forth such Member's allocable 

share of all tax items ofthe Company for such year, and all such other information as may 

be required to enable each Member to prepare his federal, state and local income tax 

returns in accordance with all then applicable laws, rules and regulations. The Managers 

also shall cause to be prepared and filed all federal, state and local income tax retums 

required ofthe Company for each fiscal year. 

7.03 Banking. Thefundsof the Company shall be kept in one or more separate 

bank accounts in the name ofthe Company in such banks or other federally insured 

depositories as may be designated by the Managers, or shall otherwise be invested in the 

name ofthe Company in such manner and upon such terms and conditions as may be 

designated by the Managers. All withdrawals from any such bank accounts or 

investments established by the Managers hereunder shall be made on such signature or 

signatures as may be authorized firom time to time by the Managers. Any account opened 

by the Managers for the Company shall not be conruningled with other funds ofthe 

Managers or interested persons. 

7.04 Power of Attorney. 

(a) Each Member does hereby urevocably constitute and appoint any a 

Manager as such Member's true and lawful attorney, in his name, place and stead, to 

make, execute, consent to, swear to, acknowledge, record and file from time to time any 

and all ofthe following: 

12 
(i) Any certificate or other instrument that may be required to 

be filed by the Company or the Members under the laws ofthe State of Maine or under 

the applicable laws of any other jurisdiction in order to conduct business in any such 

jurisdiction, to the extent any Manager deems any such filing to be necessary or desirable. 

(ii) Any amendment to the Articles adopted as provided in this 

Operating Agreement. 

(iii) Any certificates or other instruments that may be required 

to effectuate the dissolution and termination ofthe Company pursuant to the provisions of 

this Operating Agreement. 

(b) It is expressly imderstood, intended and agreed by each Member 

for himself, his successors and assigns that the grant ofthe power of attorney to any 

Manager pursuant to subsection (a) is coupled with an interest, is irrevocable, and shall 

survive the death or legal incompetency ofthe Member or such assignment of its 

Membership Interest. 

(c) One of the ways that the aforementioned power of attorney may be 

exercised is by listing the names ofthe Members and having the signature of any 

Manager, as attorney-in-fact, appear with tiie notation that the signatory is signing as 

attorney-in-fact ofthe listed Members. 

ARTICLE VIII 

ASSIGNMENT; RESIGNATION 

8.01 Assignment Generally. Except as provided in Sections 8.02, 8.03, and 

8.04 of this Operating Agreement, each Member hereby covenants and agrees that the 

Member will not sell, assign, transfer, mortgage, pledge, encumber, hypothecate or 

otherwise dispose of all or any part of his or her interest in the Company to any person, 

firm, corporation, trust or other entity without first offering in writing to sell such interest 

to the Company. In the event ofa proposed transfer other than an outright sale (such as 

the pledge or assignment of an interest to seciu-e a loan), the sale price for the purposes of 

this provision shall be the lesser ofthe amount of such obligation being secured or 

seventy percent (70%) ofthe fair market value of such Interest as determined under 

section 8.04(e) below. The Company shall have the right to accept the offer at any time 

during the 30 days following the date on which the written offer is delivered to tiie 

Company. The consent ofthe Managers and a majority in interest ofthe Members shall 

be required to autiiorize the exercise of such option by the Company. The Company may 

elect to pay the sale price pursuant to this Section either in a lump sum within thirty (30) 

days after the Company has accepted the written offer, or to pay the sale price under this 

Section to the Member so selling in ten (10) equal annual installments, the first of which 

shall be made within thirty (30) days ofthe date ofthe Company's acceptance ofthe offer 

- 13 
under this Section, and with like payment to be made annually thereafter on the same date 

in each ofthe nine (9) years thereafter; provided further however, that notwithstanding 

such election by the Company to make distribution to such selling Member in ten (10) 

equal aimual installments, the Company may accelerate without penalty all of such 

installments at any time or any part of such installment at any time. If the Company 

elects to make distributions to the selling Member under this Section in ten (10) equal 

annual installments as provided herein, then the Company in addition to such annual 

installments shall pay interest to such selling Member computed in accordance with the 

provisions of Section 8.04(f) hereof. Such interest payments shall be payable annually on 

the instalhnent payment date and shall be computed upon the remaining unpaid principal 

balance ofthe purchase price as established in this Section. If the Company elects not to 

exercise such option, the Managers shall within said 30 day period notify the remaining 

Members, who shall have the right to accept the offer at any time during the 30 days 

following the date on which the written notice is delivered to the remaining Members. 

Those remaining Members who accept the offer shall purchase the interest pro rata in 

relative proportion to their interest in the Company, imless they agree to a different 

allocation ofthe purchase. If the Company and the Members shall fail to accept the offer 

within the 60 day period, such interest may during the following 60 days be disposed of 

free ofthe restrictions imposed by this Operating Agreement; provided, however, that the 

piu-chase price for such interest shall not be less and the terms of piu-chase for such 

interest shall not be more favorable than the purchase price and terms of purchase that 

would have been applicable to the Company and the Members had the Company or the 

Members purchased the interest. Any interest not so disposed of within the 120-day 

period shall thereafter remain subject to the terms of this Operating Agreement. 

Notwithstanding the preceding sentences, no assignee of a Membership Interest shall 

become a Member ofthe Company except upon the consent ofa majority ofthe nonassigning Managers; or, if there is no non-assigning Manager, upon the consent ofa 

majority in interest ofthe non-assignii^ Members. 

8.02 Gift to Family Member. Notwithstanding Section 8.01, a Member shall 

not be required to offer to sell his Membership Interest to the Company prior to 

U-ansferring his Membership Interest to another Member or any natural or adoptive lineal 

descendant of that Member, or to a trust or other entity the sole beneficiaries or owners of 

which are a Member or natural or adoptive lineal descendants of such Member, provided 

that such transfer is by way of inter vivos gift or testamentary or intestate succession. 

Notwithstanding the preceding sentence, no assignee of a Membership Interest by way of 

inter vivos gift shall become a Member ofthe Company except upon the consent ofa 

majority ofthe non-assigning Managers; or, if there is no non-assigning Manager, upon 

the consent ofa majority in interest ofthe non-assigning Members. 

8.03 Transfers from Custodianships. Notwithstanding Section 8.01, any 

Membership Interest that is held by a custodian for a minor under the laws ofthe State of 

Maine or any other state shall be fully transferable and assignable to the minor, without 

an offer being made to the Company, when the minor reaches the age of termination of 

such custodianship under the applicable statute. 

-14 
8.04 Purchase of Certain Membership Interests. 

(a) If an Option Event (as defined below) occurs with respect to any 

Member (an "Option Member"), the Company and the remaining Members shall have the 

option to purchase the Option Member's Membership Interest upon the terms and 

conditions set forth in this Section 8.04. For purposes ofthe foregoing, an "Option Event" 

shall mean (i) the death ofa Member, (ii) the inability ofa Member to pay his or her debts 

generally as they become due, (iii) any assignment by a Member for the benefit of his or 

her creditors, (iv) the filing by a Member ofa voluntary petition in bankruptcy or similar 

insolvency proceedings, (v) the filing against a Member of an involuntary petition in 

bankruptcy or similar insolvency proceeding that is not dismissed within ninety (90) days 

thereafter, (vi) the filing or entry of any order of attachment, seizure or lien of any kind, 

or an execution on a judgment is obtained with respect to, the Option Member's 

Membership Interest or (vii) the involvement ofa Member in a divorce proceeding In 

which the divorcing Member's spouse could, in the opinion of counsel to the Company, 

establish an interest in the Option Member's Membership Interest as a result ofthe 

divorce proceeding. The term "Option Member" shall include an Option Member's 

personal representative or tmstee in bankruptcy, to the extent applicable. 

(b) Upon any Option Event occurring to an Option Member, the 

Option Member shall deliver written notice ofthe occurrence of such Option Event to the 

Company. The Company shall have the option, but not the obligation, to purchase the 

Option Member's Membership Interest at any time during the ninety (90) day period 

immediately following the date on which it receives notice ofthe occurrence ofthe 

Option Event. Such option shall entitie the Company to purchase such Membership 

Interest for the fair market value of such Membership Interest. The fair market value of 

the interest shall be the amoimt that the Option Member would receive in exchange for 

his entire interest in the Company if the Company sold all of its assets, subject to their 

liabilities, at their fair market value as ofthe date on which the Option Event occurred 

and distributed the net proceeds fi-om such sale in complete liquidation ofthe Company. 

The consent ofthe Managers shall be required to authorize the exercise of such option by 

the Company. Such option must be exercised by delivery ofa written notice from the 

Company to the Option Member during the aforementioned period. Upon delivery of 

such notice the exercise of such option shall be final and binding on the Company and the 

Option Member. 

(c) If the Company elects not to exercise such option, the Managers 

shall within said 90 day period notif^' the remaining Members, who shall have the right to 

exercise the option to purchase such Membership Interest for the fair market value of 

such Membership Inieresi at any time during die 30 days following the date on which the 

written notice is delivered to the remaining Members. Such option must be exercised by 

delivery ofa written notice from the purchasing Members to the Option Member during 

the aforementioned 30-day period. Upon delivery of such notice the exercise of such 

option shall be final and binding on the purchasing Members and the Option Member. 

15 
Those remaining Members who accept the offer shall purchase the interest pro rata in 

relative proportion to their interest in the Company, unless they agree to a different 

allocation of the purchase. 

(d) If the foregoing option is not exercised, the business of the 

Company shall continue, and the Option Member shall retain his Membership Interest. 

(e) The fair market value ofthe Option Member's Membership Interest 

shall be determined as expeditiously as possible by a disinterested appraiser mutually 

selected by the Option Member and the Company (the Company's selection being made 

by the Manager). If the Option Member and the Company are unable to agree on a 

disinterested appraiser, then the Option Member and tiie Company shall each select a 

disinterested appraiser and if the disinterested appraisers as selected are not able to agree 

as to the fair market value ofthe interest, then the two disinterested appraisers shall select 

a third disinterested appraiser who shall determine the fair market value. The 

determination ofthe fair market value ofthe Option Member's Membership Interest by 

the appraiser or appraisers shall be conclusive and binding on all parties. All costs of an 

appraiser mumally selected by the Option Member and the Company or the two 

disinterested appraisers shall be shared equally by the Option Member and the Company. 

All costs of an individually selected appraiser shall be home by the parties selecting such 

appraiser. 

(f) If the option to purchase the Option Member's Membership Interest is 

exercised by the Company, then not later than sixty (60) days after the date on which the 

appraisal described above is complete (the "Appraisal Date"), the Company shall make a 

distribution of property (which may be cash or other assets ofthe Company) to the Option 

Member with a value equal in amount to the fair market value ofthe Option Member's 

Membership Interest; provided, however, that at the election ofthe Company such 

distribution to the Option Member may be made in ten (10) equal annual instalhnents, the 

first of which shall be made on the sixtieth (60th) day after the Appraisal Date and one of 

which shall be made on the same date in each ofthe nine years thereafter, provided, 

further however, that notwithstanding an election by the Company to make the 

distribution to the Option Member in ten equal annual installments, the Company may 

accelerate without penalty all of such installments at any time or any part of such 

installment at any time. If the Company elects to make distiibutions to the Option 

Member in ten equal annual installments as provided herein, the Company, in addition to 

such annual installments, shall pay the Option Member additional amounts computed as 

if the Option Member were entitled to interest on the undistributed amount ofthe total 

distribution to which the Option Member is entitled hereunder at an annual rate equal to 

the annual Federal Mid-Term Rate in effect under Section 1274(d) ofthe Code, as 

determined on the 60th day after the Appraisal Date, which additional amounts, computed 

like interest, shall be due and payable on the same dates as the annual installments ofthe 

distribution payable to the Option Member hereimder. Any unpaid capital contributions 

ofthe Option Member and any damages occurring to the Company as a result of die 

Option Event shall be taken into accoimt in determining the net amount due the Option 

- 16-
Member at the closing, and any excess of such unpaid capital contributions or damages 

over tiie amount due at closing shall be netted against subsequent installment payments as 

they become due. 

(g) If the option to purchase the Option Member's Membership Interest 

is exercised by some or all ofthe remaining Members, rather than by the Company, then 

not later than sixty (60) days after the Appraisal Date, the purchasing Members shall 

arrange a closing at which payment in cash or other immediately available funds in an 

aggregate amount equal to the fair market value ofthe Option Member's Membership 

Interest shall be made to the Option Member in exchange for the transfer of such interest 

to the purchasing Members. 

(h) If at a time when the Company has an option to piurchase an Option 

Member's Membership Interest, it is prohibited from purchasing all or any portion of such 

Membership Interest pmsuant to the Act or any loan agreement or similar restrictive 

agreement, the Option Member and the remaining Members shall, to the extent permitted 

by law, take appropriate action to adjust the value ofthe Company's assets from book 

value to a fan- valuation based on accoimting practices and principles that are reasonable 

under the circumstances in order to permit the Company to piu-chase such Membership 

Interest. If the Company becomes obligated to purchase an Option Member's 

Membership Interest under this Section and the above action cannot be taken or does not 

create sufficient value to permit the Company to do so, the Company shall be obligated to 

purchase the portion ofthe Membership Interest it is permitted to purchase. 

(i) In order to fimd any obligations under tiiis Operating Agreement, 

the Company or the Members may mamtain such life insurance policies on the lives of 

one or more Members as the Manager determines from time to time to be desirable. 

8.05 Absolute Prohibition. Notwithstanding any other provision in this Article 

Vni, tiie Membership Interest ofa Member, in whole or in part, or any rights to 

distributions therefi-om, shall not be sold, exchanged, conveyed, assigned, pledged, 

hypothecated, subjected to a security interest or otherwise transferred or encumbered, if, 

as a result thereof, the Company would be terminated for federal income tax purposes in 

the opinion of counsel for the Company or such action would result in a violation of 

federal or state securities laws in the opinion of counsel for the Company. 

8.06 Members Acquiring Membership Interest from Company. No Person, 

other than the initial Members, who acquires a Membership Interest from the Company 

shall be admitted as a Member ofthe Company, except upon the consent ofthe Manager 

and Members representing a majority in interest (exclusive ofthe Membership Interest 

being acquired) ofthe profits and losses ofthe Company as specified on Exhibit A. 

8.07 Resignation. Any Member may elect to resign from the Company and to 

sell his entire interest in the Company to the Company at any time by serving written 

notice of such election upon the Company. Such notice shall set forth the date upon 

- 17-
which such resignation shall become effective, which shall be not less than sixty (60) 

days and not more than ninety (90) days from the date of such notice. Unless otherwise 

agreed in tiie sole and absolute discretion ofthe ManagerSj the purchase price for a 

Resigning Member's interest in the Company shall be One Dollar ($1.00). 

8.08 Effect of Prohibited Action. Any transfer or other action in violation of 

this Article shall be void ab initio and of no force or effect whatsoever. 

8.09 Rights of an Assignee. Ifzn assignee ofa Membership Interest is not 

admitted as a Member because ofthe failure to satisfy the requirements of Section 8.01. 

8.02 or 8.06 hereof, such assignee shall nevertheless be entitled to receive such 

distributions from the Company as the assigning Member would have been entitled to 

receive under Sections 6.07 and 9.04(c) of this Operating Agreement with respect to such 

Membership Interest had the assigning Member retained such Membership Interest. 

ARTICLE IX 

DISSOLUTION AND TERMINATION 

9.01 Events of Dissolution. The Company shall be dissolved upon the first to 

occur of tiie following: 

(a) Any event that under the Act or the Articles requires dissolution ofthe 

Company, provided that the death, resignation, retirement, expulsion, bankmptcy, or 

dissolution ofa Member or occurrence of any other event that terminates the continued 

membership ofa Member in the Company shall not cause the dissolution ofthe 

Company; 

(b) The written consent of Members representing a majority in interest 

ofthe profits and losses ofthe Company as specified on Exhibit A to the dissolution of 

the Company; and 

(c) The entry ofa decree of judicial dissolution of the Company as 

provided in the Act. 

9.02 Liquidation. Upon the dissolution ofthe Company, it shall wind up its 

affairs and distribute its assets in accordance with the Act by either or a combination of 

both of the following methods as tiie Members shall determine: 

(a) Selling the Company's assets and, after the payment of Company 

liabilities, distributing the net proceeds therefrom to the Members in accordance with 

their relative Membership Interests in the profits and losses ofthe Company, and/or 

(b) Distributing the Company's assets to the Members in accordance 

with their relative Membership Interests in the profits and losses ofthe Company in kind 

- 18 
witii each Member accepting an undivided interest in the Company's assets, subject to its 

liabilities, in satisfaction of his Membership Interest 

9.03 Orderly Liquidation. A reasonable time as determined by the Manager not 

to exceed thirty-six (36) months shall be allowed for the orderly liquidation ofthe assets 

ofthe Company and the discharge of liabilities to the creditors so as to minimize any 

losses attendant upon dissolution. 

9.04 Distributions. Upon liquidation, the Company assets (including any cash 

on hand) shall be distributed in the following order and in accordance with the following 

priorities: 

(a) First, to the payment ofthe debts and liabilities of the Company 

and the expenses of liquidation, including a sales commission to tiie selling agent, if any: 

(b) Second, to the setting up of any reserves thai the Manager (or the 

person or persons carrying out the liquidation) deems reasonably necessary for any 

contingent or unforeseen liabilities or obligations ofthe Company. At the expiration of 

such period as the Manager (or the person or peraons carrying out the liquidation) shall 

deem advisable, but in no event to exceed 24 months, the Company shall distribute the 

balance thereof in the manner provided in the following subsection; and 

(c) Third, to the Members in accordance with their relative 

Membership Interests in the capital ofthe Company as specified on Exhibit A., or as 

otiierwise required by Section 704(b) ofthe Code. 

(d) In the event ofa distribution in liquidation of the Company's 

property in kind, the fair market value of such property shall be determined by a qualified 

and disinterested appraiser, selected by the Manager (or the person or persons carrying 

out the liquidation), and each Member shall receive an undivided inieresi in such property 

equal to the portion ofthe proceeds to which he would be entitied imder the immediately 

preceding subsection if such property were sold at such fair market value. 

9.05 Taxable Gain or Loss. Taxable income, gain and loss from the sale or 

distribution of Company properly incurred upon or during liquidation and termination of 

the Company shall be allocated to the Members as provided in Sections 6.07 and 6.08 

above. 

9.06 No Recourse Against Members. Except as provided by law, upon 

dissolution, each Member shall look solely to the assets ofthe Company for the return of 

his Capital Contribution. If the Company property remaining after the payment or 

discharge ofthe debts and liabilities ofthe Company is insufficient to return the Capital 

Contribution of each Member, such Member shall have no recourse against any other 

Member. 

19 
ARTICLE X 

MISCELLANEOUS PROVISIONS 

10.01 Arbitration. All disputes and controversies between the parties hereto 

arising out of or in connection with this Agreement shall be submitted to arbitration 

pursuant to the following procedure. Either party may, by written notice to the other 

within thirty (30) days after the controversy has arisen hereunder, appoint an arbitrator 

who shall be either an attorney or accountant. The other party shall, by written notice, 

within fifteen (15) days after receipt of such notice by the first party, appoint a second 

arbitrator who shall also be an attorney or accountant, and in default of such second 

appouitment the first arbitrator shall serve as the sole arbitrator. When two arbitrators 

have been appointed as hereinabove provided, they shall agree on a third arbitrator and 

shall appoint him by written notice signed by both of them and a copy mailed to each 

party hereto within fifteen (15) days after such appointment. On appointment of three 

arbitrators (or one arbitrator if there was no appointment ofa second arbitrator) as 

hereinabove provided, such arbitrators shall hold an arbitration hearing within thirty (30) 

da3^ after such appointment. At the hearing the three arbitrators shall allow each party to 

present his case, evidence, and wimesses, if any, in the presence ofthe other party, and 

shall render their award, including a provision for payment of costs and expenses of 

arbitration to be paid by one or both ofthe parties hereto, as the arbitrators deem just. 

The decision ofthe majority ofthe arbitrators shall be binding on the parties hereto 

(although each party shall retain his right to appeal any questions of law arising at the 

hearing), and judgment may be entered thereon in any court having jurisdiction. 

10.02 Attorney Fees. In the event any Member brings an action to enforce any 

provisions of this Operating Agreement against the Company or any other Member, 

whether such action is at law, in equity or otherwise, the prevailing party shall be entitled, 

in addition to any other rights or remedies available to it, to collect from the nonprevailing party or parties the reasonable costs and expenses incurred in the investigation 

preceding such action and the prosecution of such action, including but not limited to 

reasonable attorney fees and court costs. 

10.03 Notices. Whenever, imder the provisions ofthe Act or other law, the 

Articles or this Operating Agreement, notice is required to be given to any Person, it shall 

not be construed to mean exclusively personal notice unless otherwise specifically 

provided, but such notice may be given in writing, by mail, addressed to the Company at 

its principal office from time to time and to any other Person at his address as it appears 

on the records ofthe Company from time to time, with postage thereon prepaid. Any 

such notice shall be deemed to have been given at the time it is deposited in the United 

Slates mail. Notice to a Person may also be given personally or by telegram or telecopy 

sent to his address as it appears on the records ofthe Company. The addresses ofthe 

initial Members as shown on the records ofthe Company shall originally be those set 

forth in Article III hereof Any Person may change his address as shown on the records of 

-20 -
the Company by delivering written notice to the Company in accordance with this 

Section. 

10.04 Application of Maine Law. This Operating Agreement, and the 

interpretation hereof, shall be govemed exclusively by its terms and by the laws ofthe 

Slate of Maine, witiiout reference to its choice of law provisions, and specifically the Act. 

10.05 Amendments. No amendment or modification of this Operating 

Agreement shall be effective except upon the consent ofthe Managers and Members 

representing a majority in interest ofthe profits and losses ofthe Company as specified 

on Exhibit A. 

10.06 Construction. Whenever the singular number is used in this Operating 

Agreement and when required by the context, tiie same shall include the plural, and the 

masculine gender shall include the feminine and neuter genders, and vice-versa. 

10.07 Headings. The headings in this Operating Agreement are inserted for 

convenience only and are in no way intended to describe, interpret, define, or limit the 

scope, extent or intent of this Operating Agreement or any provision hereof 

10.08 Waivers. The failure of any party to seek redress for violation of or to 

insist upon the strict performance of any covenant or condition of this Operating 

Agreement shall not prevent a subsequent act, which would have originally constituted a 

violation, from having the effect of an original violation. 

10.09 Rights and Remedies Cumulative. The rights and remedies provided by 

this Operating Agreement are cumulative and the use of any one right or remedy by any 

party shall not preclude or waive the right to use any or all other remedies. Such rights 

and remedies are given in addition to any other rights the parties may have by law, statute, 

ordinance or otherwise. 

10.10 Severability. If any provision of tiiis Operating Agreement or the 

application thereof to any Person or circumstance shall be invalid, illegal or unenforceable 

to any extent, the remainder of this Operating Agreement and the application thereof shall 

not be affected and shall be enforceable to the fullest extent permitted by law. 

10.11 Heirs. Successors and Assigns. Each and all ofthe covenants, terms, 

provisions and agreements herein contained shall be binding upon and inure to the benefit 

of the parties hereto and, to the extent permitted by this Operating Agreement, their 

respective heirs, legal representatives, successors and assigns. 

10.12 Creditors. None of the provisions of this Operating Agreement shall be 

for the benefit of or enforceable by any creditor ofthe Company. 

21 -
MflR 0 7 200 5 ll:01fl M HP LRSERJET 320 0 

MAR-07-2005 13s27 LIBERTY COMPANIES 207 772 0491 P.002 

p . 2 

10.13 Counterparts. This Operating Agreement may be executed in 

counterparts, each of which shall be deemed an original, 

one and the same instrument. 

10.14 Entire Agreement. This Operating Agree ment sets forth all of the 

promises, agreements, conditions and understandings be tween the parties xespectmg the 

subject matter hereof and supersedes all prior negotiario ns. conversations, discussions, 

correspondence, memoranda and agreements between tl^c panics concerning such subject 

matter. 

but all of whidi shall constitute 

MEMBERS: 

SEAL BAY, LLC 

kBy: James G. Stanle^ Jr., its'Manager By^ David R. Bunpn, its Manager 

BIRDDOG, LLC 

Tim W. Vamey 

By; Tim W, Vaimcy 

TAIN VALLEY HOLDINGS, LLC 

Bedard, its Manager 

THE HORSE RIDER HOLDINGS. LLC 

By: A'VL^..i /-..x/i^ its Manager 

THE COWBOY HOLDINGS, LLC 

By: /^eiA^( L,\ry^ . its Manager 

TI" 

By: 

E LOAF. LLC 

Fred Forsley, its Manager 

THE OVAR HOLDINGS. LLC 

Bv: f^-flino ^ftn^/e>cV.its^'lanagc^ 

THE MADNESS HOLDINGS. LLC 

By: f^'6-"' ^V ^ • i's Manager 

22-

rOTAL F.002 
10.13 Counterparts. This Operating Agreement may be executed in 

counterparts, each of which shall be deemed an original, but all of which shall constitute 

one and the same instrument. 

10.14 Entire Agreement. This Operating Agreement sets forth all of the 

promises, agreements, conditions and understandings between the parties respecting the 

subject matter hereof and supersedes all prior negotiations, conversations, discussions, 

correspondence, memoranda and agreements between the parties concerning such subject 

matter. 

MEMBERS: 

SEAL BAY, LLC 

y: James G. Stanlc , Jr., its'Mi anager 

BIRDDOG, LLC 

By: David R. Burton, its Manager 

Tim W., Vamey 

1 

By: Ti'imiWm . Varnl^ 

THE LOAF, LLC 

By: Fred Forsley, its Manager 

MOUNTAIN VALLEY HOLDINGS, LLC 

U f^^ ^ 

: JosepH Bedard, its Manager 

THE HORSE RIDER HOLDINGS, LLC 

By: /^•'A^^\ L.MTU. its Managef/ 

THE OVAR HOLDINGS, LLC 

^ Kr A ' 

By: A. JAO..; !\.H^(/tvtV , its Manager 

THE COWBOY HOLDINGS. LLC 

By: /ArU^f L.v^Vy , its 

THE MADNESS HOLDINGS, LLC liu.mfe'c^ 

By: /n;ci>r-.M ^.W ^ '^its^^^ i r 

. T) . 
MANAGERS: 

"imjiQ: ^ 

Michael A. Liberty cT Andrew Bedard 

23 
Members 

SEAL BAY, LLC 

BIRDDOG, LLC 

Tim W. Vamey 

THE LOAF LLC 

MOUNTAIN 

VALLEY 

HOLDINGS, LLC 

THE HORSE RIDER 

HOLDINGS, LLC 

THE OVAR 

HOLDINGS, LLC 

THE COWBOY 

HOLDINGS LLC 

THE MADNESS 

HOLDINGS. LLC 

EXHIBIT A 

Interest in 

Profits/Losses 

5.00% 

5.00% 

5.00% 

5.00% 

5.00% 

18.75% 

18.75% 

18.75% 

18.75% 

Ca oital Interest 

5.00% 

5.00% 

5.00% 

5.00% 

5.00% 

18.75% 

18.75% 

18.75% 

18.75% 

-24 -
INITIAL CAPITAL CONTRIBUTIONS 

To be determined subsequent to execution of Agreement 

Members 

SEAL BAY, LLC 

BIRDDOG. LLC 

Tim W. Vamey 

THE LOAF LLC 

MOUNTAIN 

VALLEY 

HOLDINGS, LLC 

THE HORSE RIDER 

HOLDINGS, LLC 

THE OVAR 

HOLDINGS. LLC 

THE COWBOY 

HOLDINGS LLC 

THE MADNESS 

HOLDINGS, LLC 

Initial capital 

contribution 

$5 

$5 

$5 

$5 

$5 

$18.75 

$18.75 

$18.75 

$18.75 

25 
OPERATING AGREEMENT 

OF 

SEAL BAY, LLC 

(Manager Run) 

THIS OPERATING AGREEMENT is made and entered into as of tiie ^ day of 

November, 2006, by and among Seal Bay, LLC (the "Company") and the persons executing this 

Agreement as Members and is to take effect as of December 19,1997. 

WITNESSETH 

In consideration ofthe mutual covenants contained in this Agreement and for other good 

and valuable consideration, the receipt and sufficiency are hereby acknowledged, the parties 

agree as follows: 

1. Formation of Company; Company Purpose. The Company shall be formed at the time 

ofthe filing ofthe initial Articles of Organization with the Secretary of State ofthe State of 

Maine. The Company exists solely for the purpose of holding interests in other entities and for 

any other legal purpose. 

2. Term. The term ofthe Company shall be sixty (60) years from the date hereof, unless 

the Company is earlier dissolved. 

3. Identity of Members. The names and addresses of tiie Members are set forth on 

Schedule A attached. 

4. Identity. Rights and Duties of Managers. The Managers ofthe Company are charged 

with the responsibility and vested with the exclusive authority to manage the Company's 

business except in those cases in which the approval ofthe Members is expressly required by this 

Agreement or by the Maine Limited Liability Company Act, 31 M.R.S.A. Section 601, et seq., 

and all amendments thereto (the "Acf'). 

The Company shall initially have one (1) Manager, who shall be James G. Stanley, Jr., 

The number of Managers ofthe Company may be increased or decreased from time to time in 

accordance with the Act by the affirmative vote of (a) Members holding at least 80% of the 

capital interests ofthe Company; and (b) a majority ofthe then-current Managers, but in no 

instance shall there be fewer than one Manager. 

5. Rights of Members. Members shall have the rights accorded to Members by the Act, 

and as limited by this Agreement. 

6. Transferability of Membership Interest. Members may transfer all or any portion(s) of 

their interest in tiie Company only with the consent of a majority of Managers. 

7. Miscellaneous. 
A. This Agreement, and the application and interpretation hereof, shall be govemed 

exclusively by its terms and by the laws ofthe State of Maine. 

B. This Agreement may be amended only by the unanimous written agreement of all of 

the Members, and consent of a majority of Managers. 

C. None ofthe provisions of this Operatmg Agreement shall be for the benefit of or 

enforceable by any creditors ofthe Company except as required by the Act. 

IN WFFNESS WHEREOF, tiie Members have signed and sealed tiiis Operating 

Agreement as ofthe date first written above. 

MANAGER: 

/ 

Ja^ s G. Stanle^ Jr. 7* 

MEMBER: 

Jakies G. Stanley, Jr. / / ~r 
SCHEDULEA 

Member Capital Contribution Interest/Vote/Units 

James G. Stanley, Jr. $ 100 100 

Total 
OPERATING AGREEMENT 

OF 

BIRDDOG, LLC 

(Manager Run) 

THIS OPERATING AGREEMENT is made and entered into as ofthe 11th day of July, 

2003, by and among Birddog, LLC (tiie "Company") and the persons executing this Agreement 

as Members and is to take effect as of July 15, 2003. 

WITNESSETH 

In consideration ofthe mutual covenants contained in this Agreement and for other good 

and valuable consideration, the receipt and sufficiency are hereby acknowledged, the parties 

agree as follows: 

1. Formation of Company; Company Pumose. The Company shall be formed at the time 

of die filing ofthe initial Articles of Organization with the Secretary of State ofthe State of 

Maine. The Company exists solely for the purpose of holding interests in other entities and for 

any other legal purpose. 

2. Temi. The term ofthe Company shall be sixty (60) years from the date hereof, unless 

the Company is earlier dissolved. 

3. Identity of Members. The names and addresses ofthe Members are set forth on 

Schedule A attached. 

4. Identity. Rights and Duties of Managers. The Managers of the Company are charged 

with the responsibility and vested witii the exclusive authority to manage the Company's 

business except in those cases in which the approval ofthe Members is expressly required by this 

Agreement or by the Maine Limited Liability Company Act, 31 M.R.S.A. Section 601, et seq., 

and all amendments thereto (the "Act"). 

The Company shall initially have one (1) Manager, who shall be David R. Burton. The 

number of Managers ofthe Company may be increased or decreased from time to time in 

accordance with the Act by the affirmative vote of (a) Members holding at least 80% ofthe 

capital interests ofthe Company; and (b) a majority ofthe then-current Managers, but in no 

instance shall there be fewer than one Manager, 

5. Rights of Members. Members shall have the rights accorded to Members by the Act, 

and as limited by this Agreement. 

6. Transferability of Membership Interest. Members may transfer all or any portion(s) of 

their interest in the Company only with the consent ofa majority of Managers. 
7. Miscellaneous. 

A. This Agreement, and the application and interpretation hereof, shall be govemed 

exclusively by its terms and by the laws ofthe State of Maine. 

B. This Agreement may be amended only by the imanimous written agreement of all of 

the Members, and consent ofa majority of Managers. 

C. None ofthe provisions of this Operating Agreement shall be for the benefit of or 

enforceable by any creditors ofthe Company except as required by the Act. 

IN WriNESS WHEREOF, tiie Members have signed and sealed this Operating 

Agreement as ofthe date first written above. 

AlXSJ^^ y^-^i^^y^ 

MANAGER: 

David R. Burton 

MjUkMt.y^l^A^U^y^ 

MEMBER: 

David R. Burton 
SCHEDULE A 

Member Capital Contribution Interest/Vote/Units 

David R. Burton $100 100 

19 Rebecca Way 

Falmouth, ME 04105 
) 

OPERATING AGREEMENT 

of 

The Loaf, LLC 

(Manager Run) 

Dated: December 6, 2001 

The imdersigned Company and all ofthe members ofthe Company enter into this 

Operating Agreement to define their respective rights and obligations in the Maine Innited 

liability company known as "The Loaf, LLC" (the "Company"), formed as of December 3,2001, 

under the Maine Limited Liability Company Act, 31 M.R.S.A § 601 et seq. (the "Act"). 

ARTICLE 1 

Business 

The Company is formed for the purpose of acquiring, owning, managing, leasing, renting, 

operating, selling, and otherwise dealing with real property located at Sugarloaf USA and all 

other purposes permitted under Maine law and approved by the Managers (the "Business"). The 

Company, acting through its Managers, shall have all authority and powers necessary or 

convenient to carry out the Business and to take such further actions as may be permitted by the 

laws ofthe State of Maine. The Company's initial principal business location shall be in 

Portland, Maine. 

ARTICLE 2 

Membership Units; Capital Contributions 

2.1 Members. The Members shall have the units apportioned to them ("LLC Units") 

as set forth on Schedule A. Each LLC Unit represents a percentage ownership in the Company. 

Such percentage is sometimes herein referred to as a Member's "Membership Interest" and it is 

computed by dividing the number of LLC Units owned by a Member by the total number of 

issued and outstanding LLC Units. The Company may issue membership certificates to the 

Members reflecting their respective LLC Units. Schedule A shall be amended from time to time 

to reflect the withdrawal or admission of Members, and any changes in the LLC Units ofa 

Member arising from the transfer of a Membership Interest or any portion thereof 

2.2 Classes of Units. There shall be two classes of LLC Units: Class A LLC Units 

and Class B LLC Units. Holders of Class A LLC Units (tiie "Class A Members") shall have 

voting and economic rights in proportion to their respective ownership of LLC Units and holders 

of Class B LLC Units (the "Class B Members) shall economic rights in proportion to their 

respective ownership of LLC Units. Class B Members shall not have any voting rights. 
2.3 Consents; Votes. The affirmative consent or vote in person or by proxy of the 

Members who collectively own a majority of tiie Class A LLC Units shall be the act ofthe 

Members for all purposes, unless a greater or different vote is required under this Agreement, or 

if the Act mandates a greater or different vote that caimot be modified under this Agreement. 

2.4. Meetings. The Members may, but shall not be required to, hold annual, periodic 

or other formal meetings. However, meetings ofthe Members may be called by the Managers or 

by any Member or Members holding at least 10% ofthe LLC Units. 

ARTICLES 

Membership Interests; Capital Contributions 

A Membership Interest includes a Member's entire interest in the Company represented 

by the number of LLC Units apportioned to such Member, including voting rights and such other 

rights and privileges as may be enjoyed under this Agreement by being a Member. The 

Members shall make the capital contributions to the Company as set forth on Schedule A. No 

Member shall be obligated to make any additional contribution to the Company. The Company 

may, at its discretion, issue membership certificates to the Members reflecting their respective 

LLC Units. 

ARTICLE 4 

Liability; Interest on Capital; Loans 

No Member shall have any liability for the debts and obligations ofthe Company, nor 

any liability to repay to any other Member the amoimt of the Member's capital contribution. No 

Member shall have priority over any other Member for a return of capital and no interest shall be 

paid on any capital contribution of a Member. No Member is entitled to seek partition ofthe 

Company's assets. The Members may make loans to the Company and be repaid the loans with 

interest on such arms length and commercially reasonable terms as the Managers and the loaning 

Members shall determine. Each Member has the opportunity to make loans to the Company in 

proportion to the Member's percentage of LLC Units. If a Member cannot, or is not willing to 

make a loan to the Company, then any one or more ofthe other Members can loan additional 

fimds to the Company to cover such amounts. 

ARTICLE 5 

Profits, Losses and Distributions; Capital Accounts 

5.1 Allocations and Distributions. Except as may be required to comply vdth the 

special allocation provisions ofthe Company's Tax Rules attached as Schedule B and 

incorporated by reference, Net Profits, Net Losses and distributions with respect to each tax year 

ofthe Company shall be allocated or made as follows: 

(a) All Net Profits shall be allocated as follows: 

Page 2 
J (1) First, to the Members in an amount equal to cash distributed to the 

Members in the tax year, and 

(2) Second, any remainder, to the Members in accordance with their LLC 

Units. 

(b) All Net Losses shall be allocated to the Members in accordance with their LLC 

Units. 

(c) Each tax year, the Managers shall determine the amount of cash available to 

distribute to the Members after taking into account all ofthe Company's anticipated expenses 

and needed reserves. The available cash, if any, shall be distributed as follows: 

(1) First, for a period of five years from the date of the first issuance of 

Class B Units, each Class B Member will be entitied to a preferred 

cumulative aimual dividend equal to 5% ofthe Class B Member's 

Invested Capital (as defined below), until such Class B Member 

has been repaid fifty percent (50%) of his, her, or its Invested 

Capital; and 

) (2) Second, any remainder to the Members in accordance with their 

LLC Units. 

(d) To the extent not limited by law due to the Company's insolvency or its inability 

to pay its debts, distributions to the Members shall be made by the Managers at such time and in 

such manner as the Managers deem advisable. 

(e) Distributions to Members upon the dissolution ofthe Company shall be made to 

the Members in accordance with Article 7. Upon dissolution, each Member shall look solely to 

the assets ofthe Company for a retum of any capital contribution. 

(f) For these purposes, "Invested Capital" means the capital contribution(s) made by 

a Member to the Company less any distributions made to the Member under Section 5.1(c)(2). 

5.2 Capital Accounts. The Company shall maintain the Members' Capital Accounts 

in accordance with the Company's Tax Rules attached as Schedule B. 

Page 3 
ARTICLE 6 

J Management of Company 

6.1 Managers. The Class A Members shall elect, by majority vote ofthe Class A 

Members, Managers to manage the Business and affairs ofthe Company. At all times, the 

minimum and maximum number of Managers shall be consistent with the Company's Articles of 

Organization on file with the Maine Secretary of State. A Manager need not be a Member or a 

natural person. A Manager shall hold office until a new election is held or until the Manager's 

earlier resignation or removal. 

6.2 Authority; Decision Making; Third Parties. 

(a) Subject to the limitations in this Agreement and any non-waivable provisions of 

applicable law, the Managers shall have full and exclusive authority and power to manage 

the Business and affairs ofthe Company and act on the Company's behalf, including the 

authority and power to purchase, sell, mortgage, lease and dispose of real, personal and 

intangible property, hire employees, contract with third parties, including affiliates, 

borrow money and pledge the assets ofthe Company. At all times when there is more 

than one Manager, the Managers shall govem the Company's affairs through a Board of 

Managers and all management decisions shall be determined by a majority vote of 

Managers unless a greater vote is required under this Agreement or the Act. In the event 

/ of an impasse among the Managers, the Members who collectively own a majority ofthe 

Class A LLC Units may appoint a temporary additional Manager to break a deadlock. 

Any act ofthe Managers may be taken without a meeting if written consents, setting forth 

the action taken or to be taken, at any time before or after the intended effective date of 

such action, are signed by the Managers entitled to vote on such action, provided that the 

necessary number ofthe Managers to take such action have executed such consents. 

Consistent with the foregoing, a Manager may take no action in contravention of a vote of 

the Managers and a Manager violating this restriction is liable to the Company and its 

Members in accordance with Article 11. 

(b) No person dealing with a Manager need inquire regarding the Manager's authority 

to bind the Company, and any person dealing with the Company may rely (without duty 

of fiirther inquiry) upon a certificate signed by any Manager as to the identity and 

authority of any Manager or any Member and any other matter whatsoever involving the 

Company or any Member. The act ofa Manager, within the ordinary course ofthe 

Business, binds the Company unless the acting Manager has no authority to act for the 

Company in a particular matter and the person with whom the Manager is dealing has 

knowledge ofthe fact that the Manager has no such authority. 

6.3 Delegation of Authority of Managers; Officers. The Managers may designate 

) officers, with such titles as they determine appropriate, to whom they may delegate such rights. 

Page 4 
) 

duties and responsibilities as they shall from time to time determine. Such delegation shall not 

relieve the Managers of their responsibility for managing the Business and affairs ofthe 

Company, or affect their ability to bind the Company in dealing witii third parties. The officers 

may, but need not, be Managers ofthe Company. The Managers shall have the right to elect any 

successor or additional officer or remove any officer. An officer shall hold office until a new 

election is held, unless the officer resigns or is removed. The persons identified in Schedule C 

shall serve as the initial officers ofthe Company. 

6.4 Limitation on Authority of Managers and Officer . The Managers and Officers 

may not take the following actions without the prior consent of Members who collectively own a 

two thirds (66.6%) all LLC Units: 

(a) lend money to or guaranty or become surety for the obligations of any person; 

(b) cause or permit the Company to engage in any activity that is not consistent with 

the purposes ofthe Company as set forth in this Agreement; or 

(c) knowingly do any act in contravention of this Agreement. 

6.5 Duties; Compensation. Each Manager shall exercise powers and discharge duties 

in good faith with a view to the interests ofthe Company and its Members and with that degree 

of diligence, care and skill that ordinarily pmdent persons would exercise under similar 

circumstances in like positions. A Manager acting in violation of this Agreement shall be liable 

to the Company and its Members for all costs and damages resulting from actions taken. Each 

Manager shall devote so much time to the Business as the requirements ofthe Business dictate 

from time to time. The Managers shall be paid such reasonable compensation at then existing 

market rates for rendering services to the Company as shall be approved by consent ofthe Class 

A Members. Altematively, or in addition to the services ofthe Manager(s), the Company may, 

at the discretion ofthe Manager(s), engage third parties, including affiliates ofthe Manager(s) or 

any Member to provide management services to the Company and to pay reasonable 

compensation for such services. 

6.6 Limited Role of Members. Except as provided in this Agreement, the Members 

shall have no voting or management rights. No Member in his, her, or its capacity as a Member 

may participate in the management ofthe Business or affairs ofthe Company. No Member, 

except in his, her or its capacity as a Manager, may bind the Company. The Company will timely 

furnish Members with annual and semi-annual financial statements, an annual budget, and semiannual comparisons to the annual budget. 

ARTICLE 7 

Term; Dissolution 

7.1 Term; Dissolution. The Company shall exist perpetually until dissolved upon the 

happening of one or more ofthe following events: 

Page 5 
(a) the consent ofthe Members to terminate the Company; or 

(b) the entry ofa decree of judicial dissolution under the Act. 

The withdrawal of a Member or the transfer ofa Membership Interest shall not cause dissolution. 

7.2 Winding Up; Liquidation; Distribution of Assets. Upon tiie Company's 

dissolution, the Managers shall take all necessary actions to wind up the Company's affairs and 

the Company shall no longer actively conduct the Business. Upon completion ofthe winding up, 

the Managers shall make all appropriate filings with the Maine Secretary of State. The Managers 

shall, in accordance with applicable law, distribute or apply the Company's assets as follows: 

(a) sell or otherwise liquidate all ofthe Company's assets as promptiy as practicable 

(except to the extent the Managers may decide to distribute any assets in kind); 

(b) discharge or make reasonable provision for all liabilities ofthe Company, 

including liabilities to Members who are also creditors (other than liabilities to Members for 

distributions and the retum of capital) and establish such reserves as may be reasonably 

necessary to provide for contingent liabilities ofthe Company; and 

(c) after discharging or making reasonable provision for all liabilities ofthe 

Company, distribute the remaining assets ofthe Company as follows: 

(1) To the Class B Members in an amount equal to their Invested Capital in 

the Company, and 

(2) The remainder to the Members in accordance with the positive balances in 

their Capital Accounts after taking into account all Capital Account adjustments for the 

taxable year ofthe dissolution and the distributions described above. 

The Company's Articles of Organization shall be deemed cancelled upon the dissolution 

and completion ofthe winding up. 

ARTICLE 8 

Restrictions on Sales and Transfers of Membership Interests 

8.1 General Restrictions. No Membership Interest or portion thereof shall be 

Transferred (as defined herein), nor transferred upon the books ofthe Company, nor shall any 

purported transferee thereof have any right to demand and require Transfer of any Membership 

Interest, nor have or exercise any ofthe rights ofa Member, except in accordance with the 

following provisions: 

Page 6 
' ) 

(a) Membership Interests shall not be Transferred without the following: 

(1) the consent of the Members; 

(2) an opinion of counsel, satisfactory to the Company, that the Transfer of 

the Membership Interest does not violate the Securities Act of 1933 or any 

applicable state securities lavws; and 

(3) the fiill compliance with the provisions of this Article 8. 

(b) Any Transfer of a Membership Interest shall be effective only to give tiie 

transferee the right to receive the share of tax allocations and distributions to which the 

Transferring Member or Selling Member would otherwise be entitled. Except as otherwise 

provided herein, no transferee of a Membership Interest shall have the right to become a 

substitute Member unless the Members consent to such Transfer and the transferee agrees to be 

bound by all ofthe terms and conditions of this Agreement as then in effect. Unless and until a 

transferee is admitted as a substitute Member, the transferee shall have no right to exercise any of 

the powers, rights and privileges ofa Member hereunder. 

(c) Each Member agrees not to Transfer all or any part of its Membership Interest (or 

take or omit any action, filing election, or other action which could result in a deemed Transfer) if 

such Transfer (either considered alone or in the aggregate with prior Transfers by other Members) 

^ would result in the termination ofthe Company for federal income tax purposes. In order to enable 

the Members to identify Transfers which could result in such a termination, each Member 

covenants and agrees to immediately inform the other Members of any Transfers (or deemed 

Transfers for purposes ofthe Code). 

(d) Any Transfer not in accord with this Article 8 shall be void ab initio. 

(e) The Company, each Member, and any other person or persons having business with 

the Company need deal only with Members who are admitted as Members or as substituted 

Members ofthe Company, and they shall not be required to deal with any other person by reason of 

transfer or assignment of a Membership Interest by a Member or by reason of the death of a 

Member, except as otherwise provided in this Agreement. In the absence of the substitution (as 

provided herein) of a Member for a Selling or Transferring Member, any payment to a Member or 

any tmstee in bankruptcy in accordance with the terms of this Agreement shall acquit the Company 

and any other Member of all liability to any other persons or entities who may be interested in such 

payment by reason of assignment or transfer of such Member. 

8.2 The following terms used in this Article 8 shall have the following meanings: 

(a) "Bona Fide Offer" means an offer in writing made to a Member to purchase all or 

any part ofthe Member's Membership Interest which the Member desires to accept. 

Page? 
) 

(b) "Deferred Payment Terms" means the payment by the Optionee to the 

Transferring Member of an amount equal to ten percent (10%) ofthe purchase price and the 

delivery of a promissory note for the balance. The note shall provide for equal monthly 

payments, commencing one month after the initial payment, over a period of seven (7) years and 

shall bear interest at the Applicable Federal Rate in effect on the date of initial payment as 

determined by the Internal Revenue Service. The note shall not be assignable and shall allow for 

prepayment without penalty, 

(c) "Fair Value" means tiie fair value agreed to by the Optionee and the Transferring 

Member within thirty (30) days after receipt by the Managers ofthe Transferring Member's 

notice ofa desire to transfer his, her or its Membership Interest, except that if no agreement is 

made within thirty (30) days, the fair value shall be determined as follows: 

(1) The Transferring Member and the Managers shall jointly engage an 

independent appraiser; provided if they are unable to agree upon the person to be 

engaged, the Company's regular accountant shall engage a certified public accountant 

who is not affiliated, directly or indirectiy, with any of them. 

(2) Upon the engagement ofthe independent appraiser, each party shall 

submit to the appraiser a written opinion as to the fair value ofthe Membership Interest, 

with such supporting information and data as the party may wish to present. The 

appraiser shall determine which party's opinion is closest in amount (whether higher or 

lower) to the fair value ofthe Membership Interest and such party's opinion shall 

constitute the fair value ofthe Membership Interest for all purposes under this Article. 

(3) All costs ofthe appraisal shall be paid by the party whose opinion was 

rejected by the appraiser. A determination ofthe fair value of such Membership Interest, 

made in this manner, shall be final, binding, and conclusive upon all parties. 

(d) "Offered Interest" means all or any part of a Membership Interest proposed to be 

sold or transferred in accordance with Section 8.3 or Section 8.4. 

(e) "Optionee" means the Company, the Members in proportion to their Membership 

Interests, or any person(s) approved by the Managers, provided, however, that such 

determination shall be made by Managers who are not affiliated with any Selling Member or 

Transferring Member. In the event more than one Optionee exercises its option, the priority 

among them shall be determined as follows: the Company's exercise shall be accepted up to 

100% ofthe Offered Interest; next the remaining Members' exercise shall be accepted up to 

100% ofthe remaining Offered Interest, and, finally, any other persons approved by the 

Managers shall have their exercise accepted up to 100% of any fiirther remaining Offered 

Interest. 

(f) "Selling Member" means any Member, or the personal representative of a 

Member, or any person, firm or corporation claiming by, through or under a Member, including 

without limitation any assignee for the benefit of creditors or trustee in bankruptcy or receiver, 

however appointed, ofa Member, and including any creditor executing a judgment by an 

Pages 
involuntary sale through judicial process, who has received a Bona Fide Offer for the purchase of 

I all or any part of his, her or its Membership Interest. 

(g) "Transfer" means any sale, transfer, assignment, pledge or other disposal, by 

operation of law or otherwise. 

(h) "Transferring Member" means any Member or the personal representative of a 

Member, or any person, firm or corporation claiming by, through or under a Member, including 

without limitation any assignee for the benefit of creditors or tmstee in bankruptcy or receiver, 

however appointed, ofa Member, and including any creditor executing a judgment by an 

involuntary sale through judicial process, who desires to transfer all or any part of his, her or its 

Membership Interest, and who has not received a Bona Fide Offer for the Membership Interest. 

8.3 Restiictions Applicable to Selling Members. If any Selling Member desires to 

sell all or any part ofthe Membership Interest owned by the Selling Member, the Selling 

Member shall first notify the Managers ofthe nature ofthe Offered Interest to be sold, tiie name 

ofthe person to whom the Selling Member desires to sell the Offered Interest, and the terms of 

tiie Bona Fide Offer. For a period of forty-five (45) days following receipt of such notice by the 

Managers (tiie "Sales Option Period"), tiie Optionee shall have an option to purchase the Offered 

Interest at the same price and upon the same terms as set forth in the Bona Fide Offer. The 

Optionee must exercise the option by notice to the Selling Member prior to expiration ofthe 

Sales Option Period. If the Optionee (collectively) exercises the option to purchase the entire 

'"% Offered Interest prior to the expiration of tiie Sales Option Period, the notice of its exercise shall 

fix a closing date for the purchase which shall be not earlier than 10 days nor more than 90 days 

after the expiration ofthe Sales Option Period. 

If the Optionee (collectively) does not exercise the option to purchase the entire Offered 

Interest prior to expuration ofthe Sales Option Period, the Selling Member may sell the entire 

Offered Interest to the person named in the initial notice upon the terms ofthe Bona Fide Offer; 

provided however, that if the sale is not completed within thii-ty (30) days following the 

expiration ofthe Sales Option Period, the provisions of this Article 8 must again be complied 

with before the Selling Member may transfer the Offered Interest, 

8.4 Resfarictions Applicable to Transferring Members. If any Transferring Member, 

desires to transfer (including without limitation exchanges or dispositions by way of distribution 

pursuant to the terms of any will or trust) all or any part ofthe Membership Interest owned by the 

Transferring Member and such proposed transfer is not subject to the provisions set forth in 

Section 8.3 hereof, the Transferring Member shall first notify tiie Managers stating the nature of 

tiie Offered Interest to be transferred and the name ofthe person to whom the same is to be 

transferred and the manner of and reason for such transfer and the consideration (if any) to be 

received. For a period of forty five (45) days after determination of Fair Value in accordance 

with Section 8.2 above (the "Transfer Option Period"), the Optionee shall have the option to 

purchase the Offered Interest at its Fair Value upon the Deferred Payment Terms. The Optionee 

must exercise the option by notice to the Transferring Member prior to expiration ofthe Transfer 

) Option Period. If the Optionee (collectively) exercises the option to purchase the entire Offered 

Page 9 
Interest prior to the expiration ofthe Transfer Option Period, the notice of its exercise shall fix a 

1 closing date for the purchase which shall be not earlier than 10 days nor more than 90 days after 

the expiration ofthe Transfer Option Period. 

If the Optionee (collectively) does not exercise the option to purchase the entire Offered 

Interest, prior to the expiration ofthe Transfer Option Period, the Transferring Member may 

transfer the entire Offered Interest; provided the transfer occurs on the terms stated in the original 

notice received by the Managers to the person named therein and the transfer occurs within thirty 

(30) days following the expiration ofthe Transfer Option Period. If a transfer does not occur 

within the stated thirty (30) days, the provisions of this Article 8 must again be complied vidth 

before the Transferring Member may transfer the Offered Interest. 

8.5 Pledges. Nothing in this Article 8 shall in any way limit or restrict the right of a 

Member to pledge a Membership Interest as security; provided, however, that any pledgee ofa 

Membership Interest shall be subject to and shall comply with the provisions of Article 8 hereof 

prior to selling or transferring the pledged Membership Interest to any person other than the 

pledgee or the pledgee's legal representatives, as pledgee. 

8.6 Precedence of Members Agreement. In the event that all Members enter into a 

separate members agreement governing their respective rights and obligations with respect to the 

transfer of Membership Interests and such agreement conflicts with this Article 8, such 

agreement shall supersede this Article 8 to the extent necessary to eliminate any such conflict. 

f 8.7 Effect of Transfer. Upon compliance with Article 8, consent ofthe Members and 

execution of such documents and instmments as may reasonably be required by the Company to 

effect such transfer and to confirm the agreement ofthe transferee to be bound by the provisions 

of this Agreement, a Member's transferee, personal representative, assignee or other successor 

shall be entitied to the economic benefits of tiie former Member, and shall succeed to the former 

Member's Capital Account, and shall have all other rights of membership. 

ARTICLE 9 

Withdrawal Rights of Members; Redemption Option 

9.1 Events and Effect of Witiidrawal. Upon the occurrence of any of the events 

specified in Section 692 ofthe Act (including, without limitation, voluntary withdrawal, death, 

adjudication of incompetency, bankmptcy, insolvency, or dissolution) (hereinafter, each of such 

events is referred to as an "Event of Withdrawal"), the withdrawing Member shall be deemed a 

Transferring Member and the rights and obligations ofthe withdrawing Member shall be as 

specified in Article 8. In no event shall an Event of Withdrawal cause dissolution ofthe 

Company. 

9.2 No Voluntary Right to Withdraw. Except as set forth in Section 9.3 hereof, no 

Member may voluntarily withdraw from the Company without (a) obtaining the consent ofthe 

other Members, and (b) complying with the provisions of Article 8. A Member shall be liable to 

) the Company for damages for breach of this provision. 

Page 10 
ARTICLE 10 

I Additional Members/LLC Units 

Except upon the prior consent ofthe Class A Members, and upon due authorization ofthe 

Company's Managers, the Company shall not (a) admit any additional members, nor (b) reserve 

for issuance, authorize the issuance of, agree to issue or issue (i) any additional LLC Units, (ii) 

any security or debt convertible into or exchangeable for LLC Units or (iii) any options, warrants 

or rights to acquire LLC Units. In the event that the Company does, within the provisions of this 

Article, issue additional LLC Units or any such other security, option, warrant or right, the 

person so acquiring same shall agree in writing, as a condition precedent to the issuance to him, 

her, or it of such LLC Unit, to be bound by all provisions of this Agreement. 

ARTICLE 11 

Standard of Liability; Indemnity 

The doing of any act or the failure to do any act by a Manager or a Member, the effect 

which may cause or result in loss or damage to the Company or its property, shall not subject the 

Manager or the Member to any personal liability to the Company or to the other Members, unless 

the Manager or Member is found not to have acted honestly or in the reasonable belief that the 

action was in or not opposed to the company and its members. The Company shall indemnify the 

Managers and the Members and make advances for expenses incurred in defense of claims of 

I liability to the maximum extent permitted under the Act. The Company shall indenmify its 

employees, agents and officers who are not Managers or Members to the fullest extent permitted 

by law provided that such indenmification is first approved by the Managers. The right to 

indemnification under this Agreement shall be fully vested Avith respect to any matter. No 

amendment to this Agreement shall have any retroactive effect except to enhance such right for 

the benefit ofthe indemnitee. 

ARTICLE 12 

Miscellaneous 

12.1 Registered Agent and Office. The Company shall have the registered agent and 

office determined from time to time by the Managers and as reported on filings made with the 

Maine Secretary of State as required by the Act. 

12.2 Accounting Period and Methods. The Company's accounting period shall be the 

calendar year. The Company shall use such accounting methods as the Managers deem most 

advantageous. 

12.3 Records. The Company shall maintain for inspection by the Members at all 

reasonable times complete and accurate books and records ofthe Company's affairs. At a 

minimum, the Company shall maintain copies of its Articles of Organization and Operating 

\ Agreement with all amendments, current and past lists of all Members and their addresses, the 

- Company's tax returns and financial statements for six years, consents or minutes of all meetings 

Page 11 
ofthe Managers and the Members and all documents relative to any Member's obligation to 

contribute cash, property or services. 

12.4 Tax Matters. Fred M. Forsley shall serve as the "Tax Matters Member" pursuant 

to the Internal Revenue Code. If he is unable to serve, then the Managers shall appoint a 

successor. The Tax Matters Member shall cause the Company to file all necessary tax or 

information retums and shall provide copies to the Members on a timely basis. All elections 

permitted to be made for income tax purposes shall be made by the Tax Matters Member with 

the consent ofthe Members. 

12.5 No Exclusive Duty. Members and Managers need not devote their full time and 

attention to the Business, but, subject to their duty of loyalty to the Company, may engage in 

other business ventures. Neither the Company nor any Member shall have any right to the 

profits derived from such other ventures, except to the extent the Company or its Members may 

have an independent interest in such other ventures. 

12.6 Notice. Any notice required under this Agreement shall be in writing and shall be 

deemed given when delivered in person or by fax, the next day after being sent by overnight 

delivery, or three (3) days after being mailed, postage prepaid, by first class U.S. mail, registered 

or certified, with retum receipt requested, addressed to the Company at its principal office and to 

any Member as reflected in the record books ofthe Company. 

12.7 Applicable Law. This Agreement shall be govemed and construed in accordance 

with Maine law. 

12.8 Counterparts; Severability; Waiver; Binding Nature. This Agreement may be 

signed in several counterparts. The invalidity, unenforceability or waiver of any provision of this 

Agreement shall not effect the other provisions of this Agreement. This Agreement is binding on 

the parties, their heirs, successors and assigns. 

12.9 Disputes. Disputes arising among the Members relating to this Agreement or the 

Company's affairs shall be resolved through non binding mediation undertaken by the parties in 

good faith. If after 60 days, agreement has not been reached through mediation, either party may 

seek appropriate remedies at law and in equity. 

12.10 Amendments. This Agreement and the Company's Articles of Organization may 

only be amended by the prior consent ofthe Members, 

Page 12 
1 

EXECUTED BY: 

EXECUTED BY: 

EXECUTED BY: 

COMPANY 

The Loaf, 

Fred M. Forsley, Manager 

CLASS A MEMBERS: 

Fred M. Forsley 

) 

Page 13 
The Loaf, LLC 

Schedule A 

Members 

Class A Members 

Member Name and Address 

Fred Forsley 

P.O. Box 2808 

South Portland, Maine 04106 

Capital Contribution 

$1,000 

LLC Units (Class A) 

150 

Class B Members 

) 

Member Name and Address 

Fred Forsley 

P,0, Box 2808 

South Portland, Maine 04106 

Capital Contribution 

$28,000 

LLC Units (Class B) 

14 

Page 14 
The Loaf, LLC 

Schedule B 

Company's Tax Rules 

Definitions 

"Deficit Capital Account" means the deficit balance, if any, in a Member's Capital 

Account at the end ofthe taxable year, after giving effect to the following adjustments: 

(a) credit to such Capital Account any amount which such Member is 

obligated to restore under Section l,704-l(b)(2)(ii)(c) ofthe Treasury Regulations, as 

well as any addition thereto pursuant to the next to last sentence of Sections 1.704-2(g)(l) 

and (i)(5) ofthe Treasury Regulations, after taking into account thereunder any changes 

during such year in partnership minimum gain attributable to any partner nonrecourse 

debt (as determined under Section 1,704-2(i)(3) of tiie Treasury Regulations); and 

(b) debit to such Capital Account the items described in Sections 1.704-

l(b)(2)(ii)(d)(4), (5) and (6) of tiie Treasury Regulations. 

This definition of Deficit Capital Account is intended to comply with the provisions of Treasury 

Regulations Section 1.704-l(b)(2)(ii)(d) and 1.704-2, and will be interpreted consistently with 

those provisions. 

"Depreciation" means for each Fiscal Year, an amount equal to the depreciation, 

amortization, or other cost recovery deduction allowable with respect to an asset for such Fiscal 

Year, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal 

income tax purposes at the beginning of such Fiscal Year, Depreciation shall be an amount which 

bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, 

amortization, or other cost recovery deduction for such Fiscal Year bears to such beginning 

adjusted tax basis; provided, however, that if the adjusted basis for federal income tax purposes 

of an asset at the beginning of such Fiscal Year is zero. Depreciation shall be determined with 

reference to such beginning Gross Asset Value using any reasonable method selected by the Tax 

Matters Manager. 

"Gross Asset Value" means with respect to any asset, tiie asset's adjusted basis for federal 

income tax purposes, except as follows: 

(a) The initial Gross Asset Value of any asset contributed by a Member to the 

Company shall be the gross fair market value of such asset, as determined by the 

contributing Member and the other Members, provided that the initial Gross Asset Values 

ofthe assets contributed to the Company shall be as set forth on Schedule A. 

Page 15 
(b) The Gross Asset Values of all Company assets shall be adjusted to equal 

I their respective gross fair market values, as determined by the Members as ofthe 

following times: (a) the acquisition of an additional interest by any new or existing 

Member in exchange for more than a de minimis contribution of property (including 

cash); (b) the distribution by the Company to a Member of more than a de minimis 

amount of property as consideration for a LLC Unit; and (c) the liquidation ofthe 

Company within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g); provided, 

however, that adjustments pursuant to clauses (a) and (b) above shall be made only if the 

Members reasonably determine that such adjustments are necessary or appropriate to 

reflect the relative interests ofthe Members in the Company; 

(c) The Gross Asset Value of any Company asset distributed to any Member 

shall be adjusted to equal the gross fair market value of such asset on the date of 

distribution as determined by the distributee and the Members; and 

(d) The Gross Asset Values of Company assets shall be increased (or 

decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code 

Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are 

taken into account in determining Capital Accounts pursuant to Regulation Section 

1.704-l(b)(2)(iv)(m), the Capital Account rules hereunder and subparagraph (d) under the 

definition of Net Profits and Net Losses; provided, however, tiiat Gross Asset Values 

shall not be adjusted pursuant to this definition to the extent the Members determine that 

an adjustment pursuant to subparagraph (ii) of this definition is necessary or appropriate 

in connection with a transaction that would otherwise result in an adjustment pursuant to 

this subparagraph (iv). 

If the Gross Asset Value of an asset has been determined or adjusted pursuant to 

subparagraph (a), (b) or (d) of this definition, then such Gross Asset Value shall thereafter be 

adjusted by the Depreciation taken into account with respect to such asset for purposes of 

computing Net Profits and Net Losses. 

"Net Profits" and "Net Losses" mean for each taxable year ofthe Company an amount 

equal to the Company's net taxable income or loss for such year as determined for federal income 

tax purposes (including separately stated items) in accordance with the accounting method and 

mles used by the Company and in accordance with Section 703 ofthe Code with the following 

adjustments: 

(a) any items of income, gain, loss and deduction allocated to Members 

pursuant to the Special Allocation Provisions hereunder shall not be taken mto account in 

computing Net Profits or Net Losses for purposes of this Agreement; 

(b) any income of the Company that is exempt from federal income tax and 

not otherwise taken into account in computing Net Profits and Net Losses (pursuant to 

\ this definition) shall be added to such taxable income or loss; 

Page 16 
• 1 

) 

(c) any expenditure ofthe Company described in Section 705(a)(2)(B) ofthe 

Code and not otherwise taken into account in computing Net Profits and Net Losses 

(pursuant to this definition) shall be subtracted from such taxable income or loss; and 

(d) in the event the Gross Asset Value of any Company asset is adjusted 

pursuant to clause (b) or (c) ofthe definition of Gross Asset Value, the amount of such 

adjustment shall be taken into account as gain or loss from the disposition of such asset 

for purposes of computing Net Profits and Net Losses; 

(e) gain or loss resulting from any disposition of any Company asset with 

respect to which gain or loss is recognized for federal income tax purposes shall be 

computed with reference to the Gross Asset Value ofthe asset disposed of, 

notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset 

Value; 

(f) in lieu ofthe depreciation, amortization and other cost recovery deductions 

taken into account in computing such taxable income or loss, there shall be taken into 

account Depreciation for such Fiscal Year; and 

(g) to the extent an adjustment to the adjusted tax basis of any Company asset 

pursuant to Section 734(b) ofthe Code or Section 743(b) ofthe Code is required pursuant 

to Section 1.704-l(b)(2)(iv)(m)(4) ofthe Treasury Regulations to be taken into account in 

determining Capital Accounts as a result ofa distribution other than in liquidation ofa 

LLC Unit, the amount of such adjustment shall be treated as an item of gain (if the 

adjustment decreases the basis ofthe asset) from the disposition ofthe asset and shall be 

taken into account for purposes of computing Net Profits or Net Losses. 

Maintenance of Capital Accounts 

A separate Capital Account shall be maintained for each Member ofthe Company. Each 

Member's Capital Account will be increased by (1) the amount of money contributed by such 

Member to the Company; (2) the fair market value of property contributed by such Member to 

the Company (net of liabilities secured by such contributed property that the Company is 

considered to assume or take subject to under Section 752 ofthe Code); (3) allocations to such 

Member of Net Profits; (4) any items in the nature of income and gain which are specially 

allocated to the Member pursuant to the Special Allocation Rules hereunder; and (5) allocations 

to such Member of income described in Section 705(a)(1)(B) ofthe Code. Each Member's 

Capital Account will be decreased by (1) the amount of money distributed to such Member by 

the Company; (2) the fair market value of property distributed to such Member by the Company 

(net of liabilities secured by such distributed property that such Member is considered to assume 

or take subject to under Section 752 ofthe Code); (3) allocations to such Member of 

expenditures described in Section 705(a)(2)(B) ofthe Code; (4) any items in the nature of 

deduction and loss that are specially allocated to the Member pursuant to the Special Allocation 

Rules hereunder; and (5) allocations to the account of such Member of Net Losses. 

Page 17 
The manner in which Capital Accounts are to be maintained pursuant to this Agreement 

J is intended to comply with the requirements of Section 704(b) of the Code and the Treasury 

Regulations promulgated thereunder. If in the opinion ofthe Company's accountants the manner 

in which Capital Accounts are to be maintained pursuant to the preceding provisions of this 

Schedule B should be modified in order to comply with Section 704(b) ofthe Code and the 

Treasury Regulations thereunder, then notwithstanding anything to the contrary contained in this 

Agreement, the method in which Capital Accounts are maintained shall be so modified; 

provided, however, that any change in the manner of maintaining Capital Accounts shall not 

materially alter the economic agreement between or among the Members. 

Special Allocation Provisions 

If applicable, the following adjustments should be made to the allocation of Net Profits 

and Net Losses to the Members ofthe Company: 

(a) In the event any Member unexpectedly receives any adjustments, 

allocations, or distributions described in Sections 1.704-l(b)(2)(ii)(d)(4), (5), or (6) ofthe 

Treasury Regulations, which create or increase a Deficit Capital Account of such 

Member, then items of Company income and gain (consisting ofa pro rata portion of 

each item of Company income, including gross uicome, and gain for such year and, if 

necessary, for subsequent years) shall be specially allocated to such Member in an 

amount and manner sufficient to eliminate, to the extent required by the Treasury 

J Regulations, the Deficit Capital Account so created as quickly as possible. It is the intent 

that this subsection (a) be interpreted to comply with the altemate test for economic effect 

set forth in Section 1.704-l(b)(2)(ii)(d) of tiie Treasury Regulations. 

(b) In the event any Member would have a Deficit Capital Account at the end 

of any Company taxable year which is in excess ofthe sum of any amount that such 

Member is obligated to restore to the Company under Section 1.704-l(b)(2)(ii)(c) ofthe 

Treasury Regulations and such Member's share of minimum gain as defined in Section 

1.704-2(g)(l) ofthe Treasury Regulations (which is also treated as an obligation to 

restore in accordance with Section 1.704-l(b)(2)(ii)(d) ofthe Treasury Regulations), the 

Capital Account of such Member shall be specially allocated items of income (including 

gross income) and gain in the amount of such excess as quickly as possible. 

(c) Notwithstanding any other provision of these Special Allocation 

Provisions, if there is a net decrease in the Company's minimum gain as defined in 

Treasury Regulations Section 1.704-2(d) during a taxable year ofthe Company, then, the 

Capital Accounts of each Member shall be allocated items of income (including gross 

income) and gain for such year (and if necessary for subsequent years) equal to that 

Member's share ofthe net decrease in Company minimum gain. This subsection (c) is 

intended to comply with the minimum gain charge-back requirement of Section 1.704-2 

ofthe Treasury Regulations and shall be interpreted consistently therewith. If in any 

) taxable year that the Company has a net decrease in the Company's minimum gain, if the 

minimum gain charge-back requirement would cause a distortion in the economic 

Page 18 
arrangement among the Members and it is not expected that the Company will have 

sufficient other income to correct that distortion, the Members may in their discretion 

seek to have the Internal Revenue Service waive the minimum gain charge-back 

requirement in accordance with Treasury Regulation Section 1.704-2(f)(4). 

(d) Items of Company loss, deduction and expenditures described in Section 

705(a)(2)(B) which are attributable to any nom-ecourse debt ofthe Company and are 

characterized as partner (Member) nonrecourse deductions under Section 1.704-2(1) of 

the Treasury Regulations shall be allocated to the Members' Capital Accounts in 

accordance with said Section 1.704-2(1) of tiie Treasury Regulations. 

(e) Beginning in the first taxable year in which there are allocations of 

"nomecourse deductions" (as described in Section 1.704-2(b) ofthe Treasury 

Regulations) such deductions shall be allocated to the Members in the same manner as 

Net Profits or Net Losses are allocated for such period. 

(f) In accordance with Section 704(c)(1)(A) ofthe Code and Section 1.704-

l(b)(2)(iv) ofthe Treasury Regulations, if a Member contributes property with a fair 

market value that differs from its adjusted basis at the time of contribution, income, gain, 

loss and deductions with respect to the property shall, solely for federal income tax 

purposes (and not for Capital Account purposes), be allocated among the Members so as 

to take account of any variation between the adjusted basis of such property to the 

Company and its fair market value at the time of contribution. 

(g) Pursuant to Section 704(c)(1)(B) ofthe Code, if any contributed property 

is distributed by the Company other than to the contiributing Member within five years of 

being contributed, then, except as provided in Section 704(c)(2) ofthe Code, the 

contributing Member shall, solely for federal income tax purposes (and not for Capital 

Account purposes), be treated as recognizing gain or loss from the sale of such property 

in an amount equal to the gain or loss that would have been allocated to such Member 

under Section 704(c)(1)(A) ofthe Code if the property had been sold at its fair market 

value at the time ofthe distribution. 

(h) Inthecaseofeiny distribution by the Company to a Member, such 

Member shall, solely for federal income tax purposes (and not for Capital Account 

purposes), be treated as recognizing gain in an amount equal to the lesser of: 

(i) the excess (if any) of (A) the fair market value of the property 

(other than money) received in the distribution over (B) the adjusted basis of such 

Member's LLC Units in the Company immediately before the distribution reduced 

(but not below zero) by the amount of money received in the distribution; or 

(ii) the Net Pre-contribution Gain (as defined in Section 737(b) of the 

Code) ofthe Member. The Net Pre-contribution Gain means the net gain (if any) 

which would have been recognized by the distributee Member under Section 

Page 19 
) 

704(c)(1)(B) ofthe Code of all property which (1) had been contributed to the 

Company within five years ofthe distribution, (2) is held by the Company 

immediately before tiie distribution, and (3) had been distributed by the Company 

to another Member. If any portion ofthe property distributed consists of property 

which had been conti-ibuted by the distributee Member to the Company, then such 

property shall not be taken mto account under this Section (h) and shall not be 

taken into account in determining the amount ofthe Net Pre-contribution Gain. If 

the property distributed consists of an interest in another business entity, the 

preceding sentence shall not apply to the extent that the value of such interest is 

attributable to the property contributed to such business entity after such interest 

had been contributed to the Company. 

(i) All recapture of income tax deductions resulting from sale or disposition 

of Company property shall be allocated to the Member or Members to whom the 

deduction that gave rise to such recapture was allocated hereunder to the extent that such 

Member is allocated any gain from the sale or other disposition of such property. 

(j) Any credit or charge to the Capital Accounts ofthe Members pursuant to 

subsections (a), (b), (c), (d), and/or (e) hereof shall be taken into account in computing 

subsequent allocations of profits and losses, so that the net amount of any items charged 

or credited to Capital Accounts pursuant to the Operating Agreement and subsections (a), 

(b), (c), (d), and/or (e) shall to the extent possible, be equal to the net amount that would 

have been allocated to the Capital Account of each Member pursuant to the provisions of 

these Special Allocation Rules if the special allocations required by (a), (b), (c), (d), 

and/or (e) hereof had not occurred. 

(k) In tiie event of a transfer of a LLC Unit of a Member during a fiscal year 

or other change in the LLC Unit of a Member during the year due to the purchase or sale 

by the Company of a LLC Unit from or to such Member, Net Profits and Net Losses for 

such year shall be allocated to the Members in accordance with Section 706 ofthe Code 

and the Treasury Regulations promulgated thereunder so as to take into account their 

varying LLC Units during the year. In the event of a transfer ofa LLC Unit from a 

Member to another person who becomes a Member, upon the election ofthe transferor 

and the transferee and consent ofthe Members, such allocation may be based on the 

actual Net Profits and Net Losses determined by closing the Company's books as ofthe 

date of the transfer. 

Page 20 
J The Loaf, LLC 

Schedule C 

MANAGERS AND OFFICERS 

Managers: Fred M. Forsley 

Officers: Fred M. Forsley: President 

) 

Page 21 
OPERATING AGREEMENT 

THE HORSE RIDER HOLDINGS, LLC 

THIS OPERATING AGREEMENT is made effective as of tiie />rday of :?=y^ ^ , 2003 by 

.ANDREW BEDARD as custodian for ADRIAN.A, LIBERTY, under tiie Maine Uniform 

Transfers to Minors Act, as sole member of THE HORSE RIDER HOLDINGS, LLC, a Maine 

limited liability company (the "Company"). 

EXPLANATORY STATEMENT 

This Operatmg Agreement governs the relationship between the Company and its member, 

pursuant to the Maine Limited Liability Company Act (the "Act"). 

DEFINITIONS 

For purposes of this Operating Agreement, and unless the context clearly otherwise indicates, the 

following terms shall have the following meanings: 

"Act" - Maine Limited Liability Company Act, as amended from time to time. 

"Agreement" - This Operating Agreement. 

"Code" - The Intemal Revenue Code of 1986, as amended. 

"Company" - THE HORSE RIDER HOLDINGS, LLC, a Maine limited liability company. 

"Involuntary Withdrawal" - The occurrence of any ofthe following events, witii respect to the 

Member: 

(a) the making of an assignment for the benefit of creditors; 

(b) the filing of a voluntary petition of bankmptcy; 

(c) the adjudication as a bankrupt or insolvent or the entry against the Member of an 

order for relief in any bankmptcy or insolvency proceeding; 

(d) any proceeding against the Member seeking arrangement, composition, 

readjustment, liquidation, or similar relief under any statute, law, or regulation, continues for one 

hundred twenty (120) days after commencement thereof, or the appointment of a tmstee, 

receiver, or liquidator for the Member or all or any substantial part ofthe Member's properties 

without the Member's agreement or acquiescence, which appomtment is not vacated or stayed 
for one hundred twenty (120) days or, if the appointment is stayed, for one hundred twenty (120) 

days after the expiration ofthe stay during which period the appointment is not vacated. 

"Manager" - a manager ofthe Company, whose rights, powers and duties are specified in Article 

VI. 

"Member" - ANDREW BEDARD as custodian for ADRIANA LIBERTY, under the Maine 

Uniform Transfers to Minors Act, as the sole initial Member of tiie Company, and any otiier 

person or persons who may subsequentiy be designated as a Member of tiiis Company pursuant 

to the ftuther terms of tiiis Agreement. 

"Membership Interest" - The rights ofa Member in distributions and allocations of profits, 

losses, gains, deductions and credits. 

"Membership Rights" - The rights ofa Member, which are comprised of: (1) his or her 

Membership Interest, and (2) his or her right to vote and to otiierwise participate in the 

management and govemance ofthe Company. 

'Tersons" - Individuals, parmerships, corporations, limited liability companies, unincorporated 

associations, tmsts, estates and any other type of entity. 

"Profit" and "Loss" - The Company's taxable income or loss determined in accordance with the 

Code for each taxable year (or other period for which Profit or Loss must be computed). 

"Successor" - All Persons to whom all or any part ofa Membership Interest is transferred either 

because of (a) the sale or gift by the Member of all or any part of his or her Membership hiterest; 

(b) an assignment ofthe Member's Membership Interest; or (c) due to tiie Member's Involuntary 

Withdrawal. 

ARTICLE I 

FORMATION 

1.1 Organization. The Member acknowledges the formation of the Company as a Maine 

limited liability company pursuant to the provisions ofthe Act. 

1.2 Agreement For and in consideration ofthe mutual covenants herein contained and for 

other good and valuable consideration, the receipt and sufficiency of which is hereby 

acknowledged, the Member agrees to the terms and conditions of this Agreement, as it may from 

time to time be amended according to its terms. Except to the extent a provision ofthe 

Agreement expressly incorporates federal income tax mles by reference to sections ofthe Code 

or Regulations or is prohibited or ineffective under the Act, tiie Agreement shall govem, even 

when inconsistent with, or different from, the provisions ofthe Act or any other law or mle. To 

the extent any provision of this Agreement is prohibited or meffective under the Act, the 
.Agreement shall be considered amended to the smallest degree possible in order to make tiie 

Agreement effective under die Act. 

1.3 Name. ThenameoftiieCompany is THE HORSE RIDER HOLDINGS, LLC. The 

Company may do business under that name and under any other name or names upon which the 

Manager may determine. If the Company does business under a name other than that set forth ui 

its Articles of Organization, then the Company shall file a statement of intention to do business 

under an assumed name as required by law. 

1.4 Principal Place of Business. The Company may locate its principal place of business and 

registered office at any place or places as the Member may from time to time deem advisable. 

1.5 Registered Agent. The registered agent for the Company is Marcus Clegg & Mistretta, 

P.A. and the business address ofthe registered agent is 100 Middle Street, Portland, Maine 

04101. The Manager may, fix)m time to time, change the registered agent or the registered ofSce 

through appropriate filings with the Secretary of State. In the event the registered agent ceases to 

act as such for any reason or the registered office shall change, the Manager shall promptiy 

designate a replacement registered agent or file a notice of change of address as the case may be. 

1.6 Term. The Company shall continue until it is dissolved in accordance with eitiier tiie 

provisions of this Agreement or the Act. 

1.7 Permitted Business. The business of the Company shall be to make any investments and 

engage in any business activities permitted by law which the Manager may choose and to engage 

in all activities necessary, customary, convenient, or incident to the foregoing. 

ARTICLE n 

CONTRIBUTIONS 

2.1 Initial Contributions. The initial capital contributions to the Company ofthe Member 

shall be made concurrently with the Member's execution and delivery of this Agreement. The 

Member's initial coital contribution is set forth in Exhibit A, attached hereto and hereby made a 

part of this Agreement. The Member shall not be required to make additional capital 

conttibutions. 

2.2 Loans. In the event the capital needs ofthe Company exceed the capital contributions 

provided by section 2.1, the Member may, but shall not be required to, loan additional monies to 

the Company in amounts and on terms and conditions to be agreed upon by the Manager and the 

Member. The Company may also borrow money for its capital needs from any third parties in 

amounts and on terms and conditions determined by the Manager. 
2.3 hiterest on and Retum of Capital Contributions. The Member shall not be entitied to 

interest on any capital contribution, or to a retum of any capital contribution, except as 

specifically provided for herem. 

ARTICLE in 

PROFIT AND LOSS 

3.1 Percentages of Membership Interest. The percentages of Membership Interest of the 

Member shall be 100%. The custodian shall fransfer the Membership Interest to ADRIANA 

LIBERTY when he reaches the age of 21. 

3.2 Allocation of Profit and Loss. All Profit and Loss shall be allocated to the Member. 

3.3 Liquidation and Dissolution. If the Company is hquidated, the assets ofthe Company 

shall be distributed to the Member or to a Successor or Successors. 

ARTICLE W 

DISTRIBUTIONS 

4.1 Distributions. Cash distributions shall be made in such amounts and at such times as may 

be determined by the Manager in its discretion. 

4.2 Limitations on Distiriburions. No disdribution shall be declared or paid imless, after the 

distribution is made, the Company's assets exceed the Company's liabilities. Liabilities to the 

Member on account of his Membership Interest shall not be a Company liability for purposes of 

this section. 

ARTICLE V 

RIGHTS AND DUTIES OF MEMBERS 

5.1 Management Rights. The Member shall not be entitled to participate in the day-to-day 

affairs and management ofthe Company, but instead, the Member's right to participate with 

respect to matters relating to the Company shall be limited to those matters as to which the 

express terms ofthe Act, the Articles of Organization, or this Operating Agreement vest in the 

Member the right to so participate. 

5.2 Action Requiring Approval of Member. Notwithstanding any other provision of this 

Operating Agreement, the approval of die Member shall be required in order to amend the 

Articles of Organization in any manner that materially alters the preferences, privileges, or 

relative rights ofthe Member. 
5.3 Action bv Member. In exercismg his rights as provided above, the Member shall act 

through written consents as provided in this Article. 

5.4 Action bv Written Consent. Any action required or permitted to be taken by the Member 

shall be taken by a written consent, signed by the Member. Such consent or consents shall be 

filed in the record book ofthe Company. Action taken under this Section shall be effective when 

signed by the Member, unless the consent or consents specify a different effective date. 

5.5 Liabilitv of Member. The Member shall not be liable as such for the Company's 

liabilities, debts or obligations. The failure by tiie Company to observe any formalities or 

requirements relating to the exercise of its powers or the management of its business or affairs 

under this Agreement or the Act shall not be groimds for imposing personal liability on the 

Member. 

5.6 Indemnification. The Company shall indemnify the Member for all costs, losses, 

Habilities and damages paid by the Member in connection with the Company's business, to die 

fullest extent provided or allowed by Maine law. 

5.7 Fiduciary Duties and Obligations. The Member shall have no fiduciary duties of loyalty 

or otherwise with respect to the Company. 

ARTICLE VI 

MANAGERS 

6.01 Powers of Manager. Except as expressly provided otherwise in the Act, the Articles of 

Organization or this Operating Agreement, the powers ofthe Company shall be exercised by or 

under die authority of, and the business and affairs ofthe Company shall be managed by, one or 

more Managers. The powers so exercised shall include but not be limited to the following: 

(a) Entering mto, making and performing contracts, agreements and other undertakings 

bindmg the Company that may be necessary, appropriate or advisable in furtherance ofthe 

purposes ofthe Company; 

(b) Opening and maintaining bank accounts, investment accounts and other arrangements, 

drawing checks and other orders for the payment of money, and designating individuals with 

authority to sign or give insttuctions with respect to those accounts and arrangements. Company 

funds shall not be commingled with funds from other sources and shall be used solety for the 

business ofthe Company; 

(c) Collecting funds due to the Company; 
(d) Acquiring, utilizing for the Company's purposes, maintaining and disposing of any assets 

ofthe Company; 

(e) To the extent that funds ofthe Company are available therefor, paying debts and 

obUgations of the Company; 

(f) Borrowing money or othenvise committing the credit ofthe Company for Company 

activities, and voluntarily prepaying or extending any such borrowings; 

(g) Employing from time to time persons, firms or corporations for the operation and 

management of various aspects ofthe Company's busmess, includmg, without limitation, 

managing agents, contractors, subcontractors, architects, engineers, laborers, suppliers, 

accountants and attorneys on such terms and for such compensation as tiie Managers shall 

determine, notwitiistanding the fact that the Managers or any Member may have a financial 

interest in such firms or corporations, provided that the Managers conform to any applicable 

disclosure and consent requirements ofthe Act; 

(h) Making elections available to the Company under the Code; 

(i) Obtaining general liability, property and otiier insurance for the Company, as die 

Managers deem proper, 

(j) Taking such actions as may be directed by the Member in furtherance of his approval of 

any matter set forth in Section 5.02 hereof; and 

(k) Domg and performing all such thmgs and executing, acknowledging and delivering any 

and all such instruments as may be in fiirtherance ofthe Company's purposes and necessary and 

appropriate to the conduct of its business. 

6.02 Election. Etc. of Managers. 

(a) The Member hereby unanimously appoints MICHAEL A. LIBERTY as the Manager of the 

Company, to serve until the first annual meeting ofthe Members and until his successor shall be 

duly elected and qualified. 

(b) Unless and until MICHAEL A. LIBERTY otiierwise agrees in writing, MICHAEL A. 

LIBERTY, or such Person(s) whom he designates, shall be the only Manager ofthe Company. 

At such time as MICHAEL A. LIBERTY, or his successor, resigns m writing, and declines in 

writing to appoint a successor Manager, the Manager or Managers shall be elected by die 

Member according to the procedure set forth below. MICHAEL A. LIBERTY hereby appoints 

ANDREW BEDARD (the "Initial Successor Manager") to serve as Successor Manager unless 

and until designation is revoked in writing by MICHAEL A. LIBERTY. If the Initial Successor 

Manager is either unwilling or unable to serve, MICHAEL A. LIBERTY (or the personal 

representative ofthe estate of MICHAEL A, LIBERTY, if applicable) shall designate an 

alternative Initial Successor Manager. 
(c) If MICHAEL A. LIBERTY, or his successor, resigns m writing, and declines in writing to 

appoint a successor manager, the Member shall elect one Person as Manager each year to serve 

for an annual term and until the successor Manager is duly appointed and qualified. In addition, 

if any Person resigns or otherwise vacates the office of Manager, the Member shall appoint a 

replacement Manager to serve the remaining term of such office. Except as provided in subpart 

(b), a Person may be removed as a Manager by the Member with or witiiout cause at any time. 

Except as provided in subpart (b), the Member may, but shall not be required to, appoint himself 

Manager. A Manager may be a natural person or an Entity. 

6.03 Reliance bv Otiier Persons. Any Person dealing with the Company, otiier than tiie 

Member, may rely on the authority ofthe Manager in taking any action in the name ofthe 

Company, if the Manager provides to such Person a copy ofthe applicable provision of this 

Operating Agreement and/or the resolution or written consent of die Manager or Member 

granting such autiiority, certified in writing by the Manager to be genuine and correct and not to 

have been revoked, superseded or otherwise amended. 

6.04 Manager's Expenses and Fees. The Manager shall be entitled, but not required, to receive 

a reasonable fee for services rendered on behalf of the Company or in his capacity as a Manager. 

The amount of such fee shall be determined by the Managers. The Company shall reimburse the 

Manager for reasonable out-of-pocket expenses that were or are incurred by tiie Manager on 

behalf of the Company witii respect to the start-up or operation ofthe Company, the on-gomg 

conduct ofthe Company's business, or the dissolution and winding up of tiie Company and its 

business. 

6.05 Competition During the existence ofthe Company, the Manager shall devote such time 

to tiie business ofthe Company as may reasonably be required to conduct its busmess in an 

efficient and profitable manner. The Manager, for his own account and for the account of others, 

may engage in business ventures which may compete witii the business ofthe Company. The 

Member hereby expressly consents to the continued and future ownership and operation by the 

Manager of such businesses and waives any claim for damages or otherwise, or rights to 

participate therein or with respect to the operation and profits or losses thereof 

6.06 Indemnification The Company shall indannify the Manager, whether serving the 

Company or, at its request, any other Entity, to the full extent permitted by the Act. The 

foregoing rights of indenmification shall not be exclusive of any other ri^ts to which tiie 

Manager may be entitied. The Manager may take such action as is necessary to carry out these 

mdemnification provisions and may adopt, approve and amend fix>m time to time such 

resolutions or contiacts implementing such provisions or such further indemnification 

arrangements as may be permitted by law. 

6.07 Liabilitv of Manager. Except as required by the Act,' so long as the Manager acts in good 

faith with respect to the conduct ofthe business and affairs ofthe Company, tiie Manager shall 

not be liable or accountable to the Company or to the Member, in damages or otherwise, for any 

error of judgment, for any mistake of fact or of law, or for any other act or thing that he may do 
or refiain from doing in connection witii the business and affairs ofthe Company, except for 

willful misconduct or gross negligence or breach of fiduciary duty, and fiirther except for 

breaches of contractual obligations or agreements between the Manager and the Company. 

6.08 Resignation or Removal A person or entity may terminate his or its position as Manager 

at any time by providing written notice to the Member of his or its resignation. Upon the 

removal or resignation ofthe Manager, the Manager shall be required to sign a "Statement of 

Withdrawal" in accordance with the terms ofthe Act. Such statement shall be filed with the 

Maine Secretary of State. The Member and Manager agree that the Company shall have the right 

to enforce this provision by an injunction or other equitable remedy, if necessary. Any Manager 

refusing to execute said statement shall be liable to the Company for any applicable legal fees 

associated with enforcing this provision. 

ARTICLE v n 

BANKING 

All revenues ofthe Company shall be deposited regularly in the Company savings and checking 

accounts at such financial instimtions as shall be selected by the Manager. 

ARTICLE Vm 

ACCOUNTING AND RECORDS 

8.1 Records. The Company shall maintam at its principal place of business or such other 

place as tiie Manager may choose, tiie following: 

(a) a current Ust ofthe fiill name and last-known business, residence, or mailing address ofthe 

Member, both past and present; 

(b) a copy ofthe Articles of Organization and all amendments thereto, together with executed 

copies of any powers of attorney pursuant to which any amendment has been executed; 

(c) copies ofthe Company's federal, state, and local income tax retums and reports, if any, for 

the tiiree most recent years; 

(d) copies of any currently effective written operating agreements, copies of any writmgs 

permitted or required imder the Act, and copies of any financial statements ofthe Company for 

the Uiree most recent years; and 

(e) minutes of any member meetings. 
.ARTICLE DC 

MEMBERSHIP INTEREST AND MEMBERSHP RIGHTS OF A DECEASED, 

INCOMPETENT OR DISSOLVED MEMBER 

If a Member who is an mdividual dies or a court of competent jurisdiction adjudges him or her to 

be incompetent to manage his or her person or his or her property, the Member's executor, 

administrator, guardian, conservator or other legal representative shall be entitled to the benefits, 

and shall be subject to the burdens, of the Member's Membership Interest. 

ARTICLE X 

TRANSFER OF MEMBERSHIP INTEREST 

10.1 Transfer. The Member may sell, hypothecate, pledge, assign or otherwise voluntarily, 

during the Member's lifetime or upon his death, transfer any part or all of his Membership 

Interest or Membership Rights in the Company to any other person only with the advance written 

approval ofthe Manager, which approval may be granted or withheld in the sole and absolute 

discretion ofthe Manager. In the event the Member transfers his entire Membership Interest, the 

transferee(s) shall become a member without any fiirther action, unless the Manager and the 

transferee agree otherwise. 

ARTICLE XI 

WITHDRAWAL OF MEMBER 

11,1 Withdrawal of Member. The Member has the power to withdraw from the Company only 

with the written approval ofthe Manager. The Member shall be deemed to have withdrawn from 

the Company if any ofthe events of Involuntary Withdrawal occur. 

ARTICLE Xn 

DISSOLUTION AND TERMINATION 

12.1 Events of Dissolution. The Company shall dissolve upon the occurrence of any of the 

following events: 

(a) By the Member and Manager's unanimous written statement of dissolution; or 

(b) By the entry ofa decree of judicial dissolution pursuant to the Act. 
12.2 Effect of Filing of Dissolution Statement. As soon as possible following the occurrence 

of any ofthe events specified in this section which effect the dissolution ofthe Company, the 

Manager shall execute a statement of intent to dissolve. Upon executing a statement of intent to 

dissolve, the Company shall cease to carry on its business, except insofar as may be necessaty for 

the winding up of its business, but its separate existence shall continue until a certificate of 

cancellation has been filed with flie Secretary of State or until a decree dissolving tiie Company 

has been entered by a court of competent jiurisdiction. 

12.3 Winding Up. Liquidation and Distribution of Assets. 

(a) Upon dissolution, an accountmg shall be made by tiie Company's independent accountants of 

the accounts ofthe Company and ofthe Company's assets, liabiUties and operations, fiom tiie 

date ofthe last previous accounting until the date of dissolution. The Manager shall immediately 

proceed to wind up tiie affairs of tiie Company. 

(b) If the Company is dissolved and its affairs are to be wound up. the Member shall (1) sell or 

otherwise liquidate all ofthe Company's assets as promptly as practicable (except to the extent 

they may determine to receive any assets in kind), (2) discharge all liabilities ofthe Company 

(other than liabilities to the Member), includmg all costs relating to the dissolution, winding up, 

and liquidation and distribution of assets, (3) establish such reserves as reasonably may be 

necessary to provide for contingent liabilities of tiie Company, (4) discharge any liabilities of die 

Company to the Member other than on account of his interest in Company capital or profits, and 

(6) disdibute the remaining assets to the Member. 

(c) Upon completion ofthe winding up, liquidation and distribution ofthe assets, die Company 

shall be deemed terminated. 

(d) The Manager shall comply with any applicable requirements of applicable law pertaining to 

the windmg up of die affairs ofthe Company and the final disttibution of its assets. 

12.4 Certificate of Cancellation. When all debts, liabilities and obligations have been paid and 

discharged or adequate provision has been made therefor and all ofthe remaining property and 

assets have been distributed to the Member, a Certificate of Cancellation shall be executed by the 

Manager or his latest successor, which certificate shall set forth the information required by the 

Act. 

12.5 Filing of Certificate of Cancellation. 

(a) The original Certificate of Cancellation shall be delivered to the Maine Secretary of State. 

(b) Upon the filing the Certificate of Cancellation, the existence ofthe Company shall cease, 

except for the purpose of suits, other proceedings and appropriate action as provided in the Act. 

The Manager shall thereafter be a trustee for creditors ofthe Company and as such shall have 

authority to distribute any Company property discovered after dissolution, convey real estate, and 

take such other action as may be necessary on behalf of and in the name ofthe Company. 

10 
12.6 ResDonsibilitv. Upon dissolution, the Member shall look solely to the assets of tiie 

Company for tiie retum of his Capital Contribution. The winding up ofthe affafrs ofthe 

Company and the distribution of its assets shall be conducted by the Manager who is hereby 

authorized to take all actions necessary to accomplish such distribution, including, without 

limitation, selling any Company assets he deems necessary or appropriate to sell. 

ARTICLE Xra 

(30VERNING LAW 

13.1 Governing Law. It is the intent of the parties hereto that all questions with respect to the 

constmction of tiiis Agreement and the rights, duties, obligations and liabilities ofthe parties 

shall be determined in accordance with the applicable proWsions ofthe laws ofthe State of 

Maine. 

ARTICLE XIV 

MISCELLANEOUS PROVISIONS 

14.1 Inurement, This Agreement shall be bindmg upon, and inure to the benefit of, all parties 

hereto, their personal and legal representatives, guardians, successors, and assigns to the extent, 

but only to the extent, that assignment is provided for in accordance with, and permitted by, the 

provisions of this Agreement. 

14.2 No Limit on Personal Activities. Nothing herein contained shall be constmed to limit in 

any maimer the Member or Manager, or their respective agents, servants, and employees, in 

carrying out tiieir separate businesses or activities. 

14.3 Gender and Headings. Throughout this Agreement, where such meanings would be 

appropriate: (a) tiie masculine gender shall be deemed to include the feminine and the neuter and 

vice versa, and (b) the singular shall be deemed to include the plural and vice versa The 

headings herein are inserted only as a matter of convenience and reference, and in no way define 

or describe the scope ofthe -Agreement or the uitent of any proxasions thereof 

14.4 Severability. Nothing contained in this Agreement shall be constmed as requiring the 

commission of any act contrary to law. In the event there is any conflict between any provision 

of this Agreement and any statute, law, ordinance or regulation contrary to which the Member or 

the Company have no legal right to contract, the latter shall prevail, but in such event the 

provisions of this Agreement thus affected shall be curtailed and limited only to the extent 

necessary to conform with said requirement of law. In the event that any part, article, section, 

paragraph or clause of this Agreement shall be held to be indefinite, invalid, or otherwise 

11 
unenforceable, the entire Agreement shall not fail on account thereof, and the balance ofthe 

Agreement shall continue in full force and effect. 

14.6 Membership Interest. The Member hereby covenants, acknowledges and agrees that the 

Membership Interest in the Company shall for all purposes be deemed personalty and shall not be 

deemed realty or any interest in the assets or property owned by the Company. 

14.6 Not For Benefit of Creditors. The provisions of this Agreement are intended only for the 

regulation of relations between the Member and the Company. This Agreement is not intended 

for the benefit of creditors and does not grant any rights to or confer any benefits on creditors or 

any other person who is not a Member or Manager ofthe Company. 

IN WITNESS WHEREOF, tiie sole Member and Manager have executed this Agreement 

effective as of cOra^'r^Z. l . 2003. 

MEMBER: 

/ll... ILAi 

ANDREW BEDARD as custodian for ADRJANA LIBERTY, under tiie Maine Uniform 

Transfers to Minors Act 

MANAGER: 

1iaX^(?, 

MICHAEL A. LIBERTY, Its Mi 

12 
Exhibit A 

Name, Address and Taxpayer 

Identification Number of Member 

Percentage Interest Consideration Paid 

ANDREW BEDARD as custodian 

for ADRIANA LIBERTY, under the 

Maine Uniform Transfers to Minors 

Act 

100% 

The custodian shall transfer 

the Membership Interest to 

ADRL^NA LIBERTY , 

when he reaches the age of 

21. 

$100.00 

13 
• ^ ' 

^ OPERATING AGREEMENT 

THE OVAR HOLDINGS, LLC 

THIS OPERATING AGREEMENT is made effective as of tiie / ^ day of jjf^^ftV?^, 2003 by 

ANDREW BEDARD, as sole member of THE OVAR HOLDINGS, LLC, a Maine limited 

liability company (the "Company"). 

EXPLANATORY STATEMENT 

This Operating Agreement govems the relationship between the Company and its member, 

pursuant to the Maine Limited Liability Company Act (the "Act"). 

DEFINITIONS 

For purposes of this Operating Agreement, and unless the context clearly otiierwise indicates, the 

following terms shall have the following meanings: 

"Act" - Maine Limited Liability Company Act. as amended from time to time. 

^ ^ "Agreement" - This Operating Agreement. 

"Code" - The Intemal Revenue Code of 1986, as amended. 

"Company" - THE OVAR HOLDINGS, LLC, a Maine limited liability company. 

"Involuntary Withdrawal" - The occurrence of any ofthe following events, with respect to the 

Member: 

(a) the making of an assignment for the benefit of creditors; 

(b) the filing ofa voluntary petition of bankmptcy; 

(c) the adjudication as a bankmpt or insolvent or the entry against the Member of an 

order for relief in any bankmptcy or insolvency proceeding; 

(d) any proceeding against the Member seeking arrangement, composition, 

readjustment, liquidation, or similar relief under any statute, law, or regulation, continues for one 

hundred twenty (120) days after commencement thereof, or the appointment ofa tmstee, 

receiver, or liquidator for the Member or all or any substantial part ofthe Member's properties 

without tiie Member's agreement or acquiescence, which appointment is not vacated or stayed 

^0^ for one hundred twenty (120) days or, if the appointment is stayed, for one hundred twenty (120) 

days after the expiration ofthe stay during which period the appointment is not vacated. 
^ 1.3 Name. The name of tiie Company is THE OVAR HOLDINGS, LLC. The Company may 

do business under that name and imder any other name or names upon which the Manager may 

determine. If the Company does business under a name other than that set forth in its Articles of 

Organization, then the Company shall file a statement of intention to do business under an 

assumed name as required by law. 

1.4 Principal Place of Business. The Company may locate its principal place of business and 

registered office at any place or places as the Member may from time to time deem advisable. 

1.5 Registered Agent. The registered agent for the Company is Marcus Clegg & Mistretta, 

P.A. and the business address ofthe registered agent is 100 Middle Street, Portland, Maine 

04101. The Manager may, from time to time, change the registered agent or the registered office 

through appropriate filings with the Secretary of State. In the event the registered agent ceases to 

act as such for any reason or the registered office shall change, the Manager shall promptly 

designate a replacement registered agent or file a notice of change of address as the case may be. 

1.6 Term. The Company shall continue until it is dissolved in accordance with either the 

provisions of this Agreement or the Act. 

1.7 Permitted Business. The business ofthe Company shall be to make any investments and 

engage in any business activities permitted by law which the Manager may choose and to engage 

in all activities necessary, customary, convenient, or incident to the foregoing. 

ARTICLE n 

CONTRIBUTIONS 

2.1 hiitial Contributions. The initial capital contributions to the Company ofthe Member 

shall be made concurrently with the Member's execution and delivery of this Agreement. The 

Member's initial capital contribution is set forth in Exhibit A, attached hereto and hereby made a 

part of this Agreement. The Member shall not be required to make additional capital 

contributions. 

2.2 Loans. In the event the capital needs ofthe Company exceed the capital contributions 

provided by section 2.1, the Member may, but shall not be required to, loan additional monies to 

(he Company in amounts and on terms and conditions to be agreed upon by tiie Manager and the 

Member. The Company may also borrow money for its capital needs from any third parties in 

amounts and on terms and conditions determined by tiie Manager. 

2.3 Interest on and Retum of Capital Contributions. The Member shall not be entitled to 

interest on any capital contribution, or to a retum of any capital contribution, except as 

specifically provided for herein. 

ARTICLE m 

r 
PROFir AND LOSS 

3.1 Percentages of Membership Interest. The percentages of Membership Interest of the 

Member shall be 100%. 

3.2 Allocation of Profit and Loss. All Profit and Loss shall be allocated to tiie Member. 

3.3 Liquidation and Dissolution. IftheCompany is liquidated, the assets ofthe Company 

shall be distributed to the Member or to a Successor or Successors. 

ARTICLE W 

DISTRIBUTIONS 

4.1 Dish-ibutions. Cash distributions shall be made in such amounts and at such times as may 

be determined by the Manager in its discretion. 

4.2 Limitations on Distiributions. No distiribution shall be declared or paid unless, after tiie 

distiibution is made, tiie Company's assets exceed tiie Company's liabilities. Liabilities to the 

r Member on account of his Membership Interest shall not be a Company liability for purposes of 

this section. 

ARTICLE V 

RIGHTS AND DUTIES OF MEMBERS 

5.1 Management Rights. The Member shall not be entitled to participate in tiie day-to-day 

affairs and management of tiie Company, but instead, tiie Member's right to participate wiUi 

respect to matters relating to the Company shall be limited to tiiose matters as to which tiie 

express terms of tiie Act, ttie Articles of Organization, or tiiis Operating Agreement vest in tiie 

Member the right to so participate. 

5.2 Action Requiring Approval of Member. Notwitiistanding any other provision of this 

Operating Agreement, the approval ofthe Member shall be required in order to amend tiie 

Articles of Organization in any manner that materially alters the preferences, privileges, or 

relative rights ofthe Member. 

5.3 Action by Member. In exercising his rights as provided above, the Member shall act 

through written consents as provided in this Article. 

4>^ 5.4 Action bv Written Consent. Any action required or permitted to be taken by the Member 

shall be taken by a written consent, signed by the Member. Such consent or consents shall be 
filed in the record book ofthe Company. Action taken under this Section shall be effective when 

r signed by the Member, unless the consent or consents specify a different effective date. 

5.5 Liabilitv of Member. The Member shall not be liable as such for the Company's 

liabilities, debts or obligations. The failiu-e by the Company to observe any formalities or 

requirements relating to the exercise of its powers or the management of its business or affairs 

under this Agreement or tiie Act shall not be grounds for imposing personal liability on the 

Member. 

5.6 Indemnification. The Company shall indemnify the Member for all costs, losses, 

liabilities and damages paid by the Member in connection with the Company's business, to the 

fullest extent provided or allowed by Maine law. 

5.7 Fiduciary Duties and Obligations. The Member shall have no fiduciary duties of loyalty 

or otherwise with respect to the Company. 

ARTICLE VI 

MANAGERS 

6.01 Powers of Manager. Except as expressly provided otherwise in the Act, tiie Articles of 

Organization or this Operating Agreement, the powers of tiie Company shall be exercised by or 

under the authority of, and the business and affairs ofthe Company shall be managed by, one or 

more Managers. The powers so exercised shall include but not be limited to the following: 

(a) Entering into, making and performing contracts, agreements and other undertakings 

binding the Company that may be necessary, appropriate or advisable in furtherance of tiie 

purposes ofthe Company; 

(b) Opening and maintainmg bank accounts, investment accounts and otiier arrangements, 

drawing checks and other orders for the payment of money, and designating individuals witii 

autiiority to sign or give instmctions with respect to those accounts and arrangements. Company 

funds shall not be commingled with funds from other sources and shall be used solely for the 

business ofthe Company; 

(c) Collecting fimds due to the Company; 

(d) Acquiring, utilizing for the Company's purposes, maintaining and disposing of any assets 

of the Company; 

(e) To the extent that fiinds ofthe Company are available therefor, paying debts and 

obligations of tiie Company; 
f^ 

(0 Borrowing money or otherwise committing the credit of the Company for Company 

activities, and voluntarily prepaying or extending any such bortowings; 

(g) Employing from time to time persons, firms or corporations for the operation and 

management of various aspects ofthe Company's business, including, without limitation, 

managing agents, contractors, subcontiractors, architects, engineers, laborers, suppliers, 

accountants and attomeys on such terms and for such compensation as the Managers shall 

determine, notwithstanding the fact that tiie Managers or any Member may have a financial 

interest in such firms or corporations, provided that the Managers conform to any applicable 

disclosure and consent requirements ofthe Act; 

(h) Making elections available to the Company imder the Code; 

(i) Obtaining general liability, property and other insurance for the Company, as the 

Managers deem proper; 

(j) Taking such actions as may be directed by the Member in furtherance of his approval of 

any matter set forth in Section 5.02 hereof; and 

(k) Doing and performing all such things and executing, acknowledging and delivering any 

and all such instmments as may be in furtherance ofthe Company's purposes and necessary and 

appropriate to the conduct of its business. 

6.02 Election. Etc. of Managers. 

(a) The Member hereby unanimously appoints MICHAEL A. LIBERTY as the Manager ofthe 

Company, to serve until the first annual meeting ofthe Members and imtil his successor shall be 

duly elected and qualified. 

(b) Unless and until MICHAEL A. LIBERTY otherwise agrees in writing, MICHAEL A. 

LIBERTY, or such Person(s) whom he designates, shall be tiie only Manager ofthe Company. 

At such time as MICHAEL A. LIBERTY, or his successor, resigns in writing, and declines in 

writing to appoint a successor Manager, the Manager or Managers shall be elected by the 

Member according to the procedure set forth below. MICHAEL A. LIBERTY hereby appoints 

ANDREW BEDARD (the "Initial Successor Manager") to serve as Successor Manager unless 

and until designation is revoked in writing by MICHAEL A. LIBERTY. If the Initial Successor 

Manager is either unwilling or unable to serve, MICHAEL A. LIBERTY (or the personal 

representative ofthe estate of MICHAEL A. LIBERTY, if applicable) shall designate an 

altemative Initial Successor Manager. 

(c) If MICHAEL A. LIBERTY, or his successor, resigns in writing, and declines in writing to 

appoint a successor manager, the Member shall elect one Person as Manager each year to serve 

for an annual term and until the successor Manager is duly appointed and qualified. In addition, 

if any Person resigns or otherwise vacates the office of Manager, the Member shall appoint a 

replacement Manager to serve the remaining term of such office. Except as provided in subpart 
(b), a Person may be removed as a Manager by the Member with or without cause at any time. 

Except as provided in subpart (b), the Member may, but shall not be required to, appoint himself 

Manager. A Manager may be a natural person or an Entity. 

6.03 Reliance bv Other Persons. Any Person dealing with the Company, other tiian tiie 

Member, may rely on the authority ofthe Manager in taking any action in the name ofthe 

Company, if tiie Manager provides to such Person a copy ofthe applicable provision of this 

Operating Agreement and/or the resolution or written consent ofthe Manager or Member 

granting such authority, certified in writing by the Manager to be genuine and correct and not to 

have been revoked, superseded or otherwise amended. 

6.04 Manager's Expenses and Fees. The Manager shall be entitled, but not required, to receive 

a reasonable fee for services rendered on behalf of the Company or in his capacity as a Manager. 

The amount of such fee shall be determined by tiie Managers. The Company shall reimburse the 

Manager for reasonable out-of-pocket expenses that were or are incurred by the Manager on 

behalf of the Company with respect to the start-up or operation ofthe Company, the on-going 

conduct ofthe Company's business, or the dissolution and winding up ofthe Company and its 

business. 

6.05 Competition During the existence of tiie Company, tiie Manager shall devote such time 

to the business ofthe Company as may reasonably be required to conduct its business in an 

efficient and profitable manner. The Manager, for his own account and for the account of others, 

may engage in business ventures which may compete with the business ofthe Company. The 

Member hereby expressly consents to the continued and future ownership and operation by the 

Manager of such businesses and waives any claim for damages or otherwise, or rights to 

participate therein or with respect to the operation and profits or losses thereof 

6.06 Indemnification The Company shall indemnify the Manager, wheUier serving tiie 

Company or, at its request, any otiier Entity, to the fiill extent permitted by tiie Act. The 

foregoing rights of indemnification shall not be exclusive of any other ri^ts to which tiie 

Manager may be entitled. The Manager may take such action as is necessary to carry out these 

indemnification provisions and may adopt, approve and amend firom time to time such 

resolutions or contracts implementing such provisions or such fiuther indenmification 

arrangements as may be permitted by law. 

6.07 Liability of Manager. Except as required by tiie Act. so long as the Manager acts in good 

faith with respect to the conduct ofthe business and affairs ofthe Company, the Manager shall 

not be liable or accountable to the Company or to the Member, in damages or otherwise, for any 

error of judgment, for any mistake of fact or of law, or for any other act or thing that he may do 

or refi-ain from doing in connection with the business and affairs ofthe Company, except for 

willflil misconduct or gross negligence or breach of fiduciary duty, and further except for 

breaches of contractual obligations or agreements between the Manager and the Company. 

6.08 Resignation or Removal A person or entity may teiminate his or its position as Manager 

r at any time by providing written notice to the Member of his or its resignation. Upon the 
/ 0 ^ removal or resignation of tiie Manager, the Manager shall be required to sign a "Statement of 

Withdrawal" in accordance with the terms ofthe Act. Such statement shall be filed with the 

Maine Secretary of State. The Member and Manager agree tiiat the Company shall have tiie right 

to enforce this provision by an injunction or other equitable remedy, if necessary. Any Manager 

refiising to execute said statement shall be liable to the Company for any applicable legal fees 

associated with enforcing this provision. 

ARTICLE vn 

BANKING 

All revenues ofthe Company shall be deposited regularly in the Company savings and checking 

accounts at such financial institutions as shall be selected by the Manager. 

ARTICLE vm 

ACCOUNTING AND RECORDS 

8.1 Records. The Company shall maintain at its principal place of business or such other 

place as the Manager may choose, the following: 

(a) a current list ofthe full name and last-known business, residence, or mailing address ofthe 

Member, both past and present; 

(b) a copy of tiie Articles of Organization and all amendments thereto, together with executed 

copies of any powers of attomey pursuant to which any amendment has been executed; 

(c) copies ofthe Company's federal, state, and local income tax retums and reports, if any, for 

the three most recent years; 

(d) copies of any currently effective written operating agreements, copies of any writings 

permitted or required under the Act. and copies of any financial statements ofthe Company for 

the three most recent years; and 

(e) minutes of any member meetings. 

ARTICLE IX 

MEMBERSHIP INTEREST AND MEMBERSHIP RIGHTS OF A DECEASED, 

INCOMPETENT OR DISSOLVED MEMBER 

( f ^ 
/ ^ ^ 

If a Member who is an individual dies or a court of competent jurisdiction adjudges him or her to 

be incompetent to manage his or her person or his or her property, the Member's executor, 

administrator, guardian, conservator or other legal representative shall be entitled to the benefits, 

and shall be subject to tiie burdens, ofthe Member's Membership Interest. 

ARTICLE X 

TRANSFER OF MEMBERSHIP INTEREST 

10.1 Transfer. The Member may sell, hypotiiecate, pledge, assign or otherwise voluntarily, 

during the Member's lifetime or upon his death, transfer any part or all of his Membership 

Interest or Membership Rights in the Company to any other person only with the advance written 

approval ofthe Manager, which approval may be granted or withheld in the sole and absolute 

discretion ofthe Manager. In the event the Member ti-ansfers his entire Membership Interest, tiie 

transferee(s) shall become a member without any further action, unless the Manager and the 

transferee agree otherwise. 

ARTICLE XI 

WITHDRAWAL OF MEMBER 

11.1 Withdrawal of Member. The Member has the power to withdraw from tiie Company only 

with the written approval ofthe Manager. The Member shall be deemed to have withdrawn fiiom 

the Company if any ofthe events of Involuntary Withdrawal occur. 

ARTICLE XII 

DISSOLUTION AND TERMINATION 

12.1 Events of Dissolution. The Company shall dissolve upon the occurrence of any ofthe 

following events: 

(a) By the Member and Manager's unanimous written statement of dissolution; or 

(b) By tiie entry ofa decree of judicial dissolution pursuant to the Act. 

12.2 Effect of Filing of Dissolution Statement. As soon as possible following the occurrence 

of any ofthe events specified in this section which effect the dissolution ofthe Company, the 

Manager shall execute a statement of intent to dissolve. Upon executing a statement of intent to 

dissolve, the Company shall cease to carry on its business, except insofar as may be necessary for 

the winding up of its business, but its separate existence shall continue until a certificate of 
/s»> cancellation has been filed with the Secretary of State or until a decree dissolving tiie Company 

has been entered by a court of competent jurisdiction. 

12.3 Winding Up. Liquidation and Distiribution of Assets. 

(a) Upon dissolution, an accounting shall be made by the Company's independent accountants of 

the accounts ofthe Company and ofthe Company's assets, liabilities and operations, from the 

date ofthe last previous accounting until the date of dissolution. The Manager shall inunediately 

proceed to wind up the affairs ofthe Company. 

(b) If the Company is dissolved and its affairs are to be wound up. the Member shall (1) sell or 

otherwise liquidate all ofthe Company's assets as promptly as practicable (except to the extent 

they may determine to receive any assets in kind), (2) discharge all liabilities ofthe Company 

(other than liabilities to the Member), including all costs relating to the dissolution, winding up, 

and liquidation and distribution of assets, (3) establish such reserves as reasonably may be 

necessary to provide for contingent liabilities ofthe Company, (4) discharge any liabilities ofthe 

Company to the Member other than on account of his interest in Company capital or profits, and 

(6) distiibute the remaining assets to the Member. 

(c) Upon completion ofthe winding up, liquidation and distribution ofthe assets, the Company 

shall be deemed terminated. 

f (d) The Manager shall comply with any applicable requirements of applicable law pertaining to 

the winding up ofthe affairs ofthe Company and the final distribution of its assets. 

12.4 Certificate of Cancellation. When all debts, liabilities and obligations have been paid and 

discharged or adequate provision has been made tiierefor and all ofthe remaining property and 

assets have been distributed to the Member, a Certificate of Cancellation shall be executed by the 

Manager or his latest successor, which certificate shall set forth the information required by the 

Act. 

12.5 Filing of Certificate of Cancellation. 

(a) The original Certificate of Cancellation shall be delivered to the Maine Secretary of State. 

(b) Upon the filing the Certificate of Cancellation, the existence ofthe Company shall cease, 

except for the purpose of suits, other proceedings and appropriate action as provided in the Act, 

The Manager shall thereafter be a tmstee for creditors ofthe Company and as such shall have 

authority to distribute any Company property discovered after dissolution, convey real estate, and 

take such other action as may be necessary on behalf of and in the name ofthe Company. 

12.6 Responsibility. Upon dissolution, the Member shall look solely to the assets ofthe 

Company for the retum of his Capital Contribution. The winding up ofthe affairs ofthe 

Company and the distribution of its assets shall be conducted by the Manager who is hereby 

10 
^ ^ authorized to take all actions necessary to accomplish such distiibution, including, without 

^ limitation, selling any Company assets he deems necessary or appropriate to sell. 

ARTICLE Xm 

GOVERNING LAW 

13.1 Governing Law. It is the intent of the parties hereto that all questions with respect to the 

constmction of this Agreement and the rights, duties, obligations and liabilities ofthe parties 

shall be determined in accordance with the applicable provisions ofthe laws ofthe State of 

Maine. 

ARTICLE XIV 

MISCELLANEOUS PROVISIONS 

14.1 Inurement. This Agreement shall be binding upon, and inure to the benefit of, all parties 

hereto, Uieir personal and legal representatives, guardians, successors, and assigns to the extent, 

but only to the extent, that assignment is provided for in accordance with, and permitted by, the 

provisions of this Agreement. 

14.2 No Limit on Personal Activities. Nothing herein contained shall be constiiied to limit in 

any manner the Member or Manager, or tiieir respective agents, servants, and employees, in 

carrying out their separate businesses or activities. 

14.3 Gender and Headings. Throughout this Agreement, where such meanings would be 

appropriate: (a) the masculine gender shall be deemed to include the feminine and the neuter and 

vice versa, and (b) the singular shall be deemed to include the plural and vice versa. The 

headings herein are inserted only as a matter of convenience and reference, and in no way define 

or describe the scope ofthe Agreement or the intent of any provisions thereof 

14.4 Severability. Nothing contained in this Agreement shall be constmed as requiring the 

commission of any act contrary to law. In the event there is any conflict between any provision 

of this Agreement and any statute, law, ordinance or regulation contrary to which the Member or 

the Company have no legal right to contract, the latter shall prevail, but in such event the 

provisions of this Agreement thus affected shall be curtailed and limited only to the extent 

necessary to conform with said requirement of law. In the event that any part, article, section, 

paragraph or clause of this Agreement shall be held to be indefinite, invalid, or otherwise 

unenforceable, the entire Agreement shall not fail on account thereof, and the balance ofthe 

Agreement shall continue in full force and effect. 

jfl^ ^ 

11 
14.6 Membership Interest. The Member hereby covenants, acknowledges and agrees that the 

Membership Interest in the Company shall for all purposes be deemed personalty and shall not be 

deemed realty or any interest in the assets or property owned by the Company. 

14.6 Not For Benefit of Creditors. The provisions of this Agreement are intended only for the 

regulation of relations between the Member and the Company. This Agreement is not intended 

for the benefit of creditors and does not grant any rights to or confer any benefits on creditors or 

any other person who is not a Member or Manager ofthe Company. 

IN WITNESS WHEREOF, the sole Member and Manager have executed this Agreement 

effective as of acrpStIL L ' 2003. 

MEMBER: 

ANDREW BEbARD 

MANAGER: 

MICHAEL A. LIBERTY. It 

12 
Exhibit A 

Name, Address and Taxpayer 

Identification Number of Member 

Percentage Interest Consideration Paid 

ANDREW BEDARD 100% $100.00 

13 
f^ OPERATING AGREEMENT 

THE COWBOY HOLDINGS, LLC 

THIS OPERATING AGREEMENT is made effective as ofthe Arda y of Q^VP^ ^ . 2003 by 

ANDREW BEDARD as custodian for GEORGE LIBERTY, under tiie Maine Uniform Transfers 

to Minors Act, as sole member of THE COWBOY HOLDINGS, LLC. a Maine limited liability 

company (the "Company"). 

EXPLANATORY STATEMENT 

This Operating Agreement govems the relationship between the Company and its member, 

pursuant to the Maine Limited Liability Company Act (the "Act"). 

DEFINITIONS 

For purposes of this Operating Agreement, and unless the context clearly otherwise indicates, the 

following terms shall have the following meanings: 

"Act" - Maine Limited Liability Company Act, as amended from time to time. 

"Agreemenf' - This Operating Agreement. 

"Code" - The Intemal Revenue Code of 1986, as amended. 

"Company" - THE COWBOY HOLDINGS, LLC, a Maine limited liability company. 

"Involimtary Withdrawal" - The occurrence of any ofthe following events, with respect to the 

Member: 

(a) the making of an assignment for tiie benefit of creditors; 

(b) the filing of a voluntary petition of bankmptcy; 

(c) the adjudication as a bankmpt or insolvent or the entry against the Member of an 

order for relief in any bankmptcy or insolvency proceeding; 

(d) any proceeding against the Member seeking arrangement, composition, 

readjustment, liquidation, or similar relief under any statute, law, or regulation, continues for one 

hundred twenty (120) days after commencement thereof, or the appointment of a trustee, 

receiver, or liquidator for the Member or all or any substantial part ofthe Member's properties 

without the Member's agreement or acquiescence, which appointment is not vacated or stayed 
for one hundred twenty (120) days or, if tiie appointinent is stayed, for one hundred twenty (120) 

days after the expiration ofthe stay during which period the appointinent is not vacated. 

"Manager" - a manager ofthe Company, whose rights, powers and duties are specified in Article 

VI. 

"Member" - ANDREW BEDARD as custodian for GEORGE LIBERTY, under tiie Maine 

Uniform Transfers to Minors Act, as tiie sole initial Member ofthe Company, and any otiier 

person or persons who may subsequently be designated as a Member of tiiis Company pursuant 

to the further terms of this Agreement. 

"Membership Interest" - The rights ofa Member in distiibutions and allocations of profits, 

losses, gains, deductions and credits. 

"Membership Rights" - The rights ofa Member, which are comprised of: (1) his or her 

Membership Interest, and (2) his or her right to vote and to otherwise participate in the 

management and govemance ofthe Company. 

"Persons" - Individuals, partaerships, corporations, limited liability companies, unincorporated 

associations, tmsts, estates and any other type of entity. 

"Profit" and "Loss" - The Company's taxable income or loss determined in accordance with the 

Code for each taxable year (or other period for which Profit or Loss must be computed). 

"Successor" - All Persons to whom all or any part ofa Membership Interest is transferred either 

because of (a) the sale or gift by the Member of all or any part of his or her Membership Interest; 

(b) an assignment ofthe Member's Membership Interest; or (c) due to the Member's Involuntary 

Withdrawal. 

ARTICLE I 

FORMATION 

1.1 Organization. The Member acknowledges the formation of the Company as a Maine 

limited liability company pursuant to the provisions ofthe Act. 

1.2 Agreement. For and in consideration of the mutual covenants herein contained and for 

other good and valuable consideration, the receipt and sufficiency of which is hereby 

acknowledged, the Member agrees to the terms and conditions of this Agreement, as it may from 

time to time be amended according to its terms. Except to the extent a provision ofthe 

Agreement expressly incorporates federal income tax mles by reference to sections ofthe Code 

or Regulations or is prohibited or ineffective under the Act, the Agreement shall govem, even 

^^^^^ when inconsistent with, or different from, the provisions ofthe Act or any other law or mle. To 

f ^ the extent any provision of this Agreement is prohibited or ineffective under the Act, the 
r

Agreement shall be considered amended to tiie smallest degree possible in order to make tiie 

Agreement effective under the Act. 

1.3 Name. The name of tiie Company is THE COWBOY HOLDINGS, LLC. The Company 

may do business under that name and imder any other name or names upon which the Manager 

may determine. If the Company does business under a name other than that set forth in its 

Articles of Organization, then the Company shall file a statement of intention to do business 

under an assumed name as required by law. 

1.4 Principal Place of Business. The Company may locate its principal place of business and 

registered office at any place or places as the Member may from time to time deem advisable. 

1.5 Registered Agent. The registered agent for the Company is Marcus Clegg & Mistretta, 

P.A. and tiie business address of tiie registered agent is 100 Middle Street, Portland, Maine 

04101. The Manager may, firom time to time, change tiie registered agent or the registered office 

through appropriate filings with the Secretary of State. In the event the registered agent ceases to 

act as such for any reason or the registered office shall change, the Manager shall promptiy 

designate a replacement registered agent or file a notice of change of address as the case may be. 

1.6 Term. The Company shall continue until it is dissolved in accordance with either the 

provisions of this Agreement or the Act. 

4F^ 1.7 Permitted Business. The business ofthe Company shall be to make any investments and 

engage in any business activities permitted by law which the Manager may choose and to engage 

in all activities necessary, customary, convenient, or incident to the foregoing. 

ARTICLE n 

CONTRIBUTIONS 

2.1 Initial Contributions. The initial capital contributions to the Company ofthe Member 

shall be made concurrentiy with the Member's execution and delivery of this Agreement. The 

Member's initial capital contribution is set forth in Exhibit A, attached hereto and hereby made a 

part of this Agreement. The Member shall not be required to make additional capital 

conttibutions. 

2.2 Loans. In the event the capital needs ofthe Company exceed the capital contributions 

provided by section 2.1, the Member may, but shall not be required to, loan additional monies to 

tiie Company in amounts and on terms and conditions to be agreed upon by the Manager and the 

Member. The Company may also borrow money for its capital needs from any third parties in 

amounts and on terms and conditions determined by the Manager. 
2.3 hiterest on and Retum of Capital Conttibutions. The Member shall not be entitied to 

interest on any capital contribution, or to a retum of any capital contribution, except as 

specifically provided for herein. 

ARTICLE m 

PROFIT AND LOSS 

3.1 Percentages of Membership Interest. The percentages ofMembership hiterest ofthe 

Member shall be 100%. The custodian shall transfer the Membership Interest to GEORGE 

LIBERTY when he reaches tiie age of 21. 

3.2 Allocation of Profit and Loss. All Profit and Loss shall be allocated to the Member. 

3.3 Liquidation and Dissolution. IftheCompany is liquidated, the assets ofthe Company 

shall be distributed to the Member or to a Successor or Successors. 

ARTICLE IV 

DISTRIBUTIONS 

4.1 Distiibutions. Cash distiibutions shall be made in such amounts and at such times as may 

be determined by the Manager in its discretion. 

4.2 Limitations on Distributions. No distiibution shall be declared or paid unless, after tiie 

distribution is made, the Company's assets exceed the Company's liabilities. Liabilities to the 

Member on account of his Membership Interest shall not be a Company liability for purposes of 

this section. 

ARTICLE V 

RIGHTS AND DUTIES OF MEMBERS 

5.1 Management Rights. The Member shall not be entitled to participate in tiie day-to-day 

affairs and management ofthe Company, but instead, the Member's right to participate with 

respect to matters relating to the Company shall be limited to those matters as to which the 

express terms of tiie Act, tiie Articles of Organization, or tiiis Operating Agreement vest in tiie 

Member the right to so participate. 

5.2 Action Requking Approval of Member. Notwithstanding any other provision of this 

Operating Agreement, the approval ofthe Member shall be required in order to amend the 

Articles of Organization in any manner that materially alters the preferences, privileges, or 

f^ relative rights of the Member. 

r 
\ 5.3 Action bv Member, hi exercising his rights as provided above, the Member shall act 

through written consents as provided in this Article. 

5.4 Action bv Written Consent. Any action required or permitted to be taken by the Member 

shall be taken by a written consent, signed by the Member. Such consent or consents shall be 

filed in the record book ofthe Company. Action taken under this Section shall be effective when 

signed by the Member, unless the consent or consents specify a different effective date. 

5.5 Liability of Member. The Member shall not be liable as such for tiie Company's 

liabilities, debts or obligations. The failure by the Company to observe any formalities or 

requirements relating to the exercise of its powers or the management of its business or affairs 

under this Agreement or the Act shall not be grounds for imposing personal liability on the 

Member. 

5.6 Indemnification. The Company shall indemnify the Member for all costs, losses, 

liabilities and damages paid by the Member in connection with the Company's business, to the 

fullest extent provided or allowed by Maine law. 

5.7 Fiduciary Duties and Obligations. The Member shall have no fiduciary duties of loyalty 

or otherwise with respect to the Company. 

ARTICLE VI 

MANAGERS 

6.01 Powers of Manager. Except as expressly provided otherwise in the Act, the Articles of 

Organization or this Operating Agreement, the powers ofthe Company shall be exercised by or 

under the authority of, and the business and affairs ofthe Company shall be managed by, one or 

more Managers. The powers so exercised shall mclude but not be limited to the following: 

(a) Entering into, making and performing conb'acts, agreements and other undertakings 

binding the Company that may be necessary, appropriate or advisable in fiirtherance ofthe 

purposes ofthe Company; 

(b) Opening and maintaining bank accounts, investment accounts and other arrangements, 

drawing checks and other orders for the payment of money, and designating individuals with 

authority to sign or give instmctions with respect to those accounts and arrangements. Company 

ftinds shall not be commingled with funds from other sources and shall be used solely for the 

business ofthe Company; 

(c) Collecting funds due to the Company; 
r 

(d) Acquiring, utilizing for the Company's purposes, maintaining and disposing of any assets 

ofthe Company; 

(e) To tiie extent tiiat funds of the Company are available tiierefor, paying debts and 

obligations ofthe Company; 

(f) Borrowing money or otherwise committing the credit of the Company for Company 

activities, and voluntarily prepaying or extending any such borrowings; 

(g) Employing from time to time persons, firms or corporations for the operation and 

management of various aspects ofthe Company's business, including, without limitation, 

managing agents, contractors, subcontractors, architects, engineers, laborers, suppliers, 

accountants and attomeys on such terms and for such compensation as the Managers shall 

determine, notwithstanding the fact that tiie Managers or any Member may have a financial 

interest in such firms Or corporations, provided that the Managers conform to any applicable 

disclosure and consent requirements ofthe Act; 

(h) Making elections available to the Company under the Code; 

(i) Obtaining general liability, property and other insurance for the Company, as the 

Managers deem proper; 

(j) Taking such actions as may be directed by the Member in fiutherance of his approval of 

any matter set forth in Section 5.02 hereof; and 

(k) Doing and performing all such things and executing, acknowledging and delivering any 

and all such instruments as may be in fiurtiierance ofthe Company's purposes and necessary and 

appropriate to the conduct of its business. 

6.02 Election. Etc. of Managers. 

(a) The Member hereby unanimously appoints MICHAEL A. LIBERTY as the Manager of tfie 

Company, to serve until the first annual meeting ofthe Members and until his successor shall be 

duly elected and qualified. 

(b) Unless and until MICHAEL A. LIBERTY otiierwise agrees in writing, MICHAEL A. 

LIBERTY, or such Person(s) whom he designates, shall be the only Manager of tiie Company. 

At such time as MICHAEL A. LIBERTY, or his successor, resigns in writing, and declines in 

writing to appoint a successor Manager, the Manager or Managers shall be elected by the 

Member according to the procedure set forth below. MICHAEL A. LIBERTY hereby appoints 

ANDREW BEDARD (the "Initial Successor Manager") to serve as Successor Manager unless 

and until designation is revoked in writing by MICHAEL A. LIBERTY. If the Initial Successor 

Manager is eitiier unwilling or unable to serve, MICHAEL A. LIBERTY (or the personal 

representative ofthe estate of MICHAEL A. LIBERTY, if applicable) shall designate an 

altemative Initial Successor Manager. 
(c) If MICHAEL A. LIBERTY, or his successor, resigns in writing, and declines in writing to 

appoint a successor manager, the Member shall elect one Person as Manager each year to serve 

for an annual term and until the successor Manager is duly appointed and qualified. In addition, 

if any Person resigns or otherwise vacates the office of Manager, the Member shall appoint a 

replacement Manager to serve the remaining term of such office. Except as provided in subpart 

(b), a Person may be removed as a Manager by the Member with or witiiout cause at any time. 

Except as provided in subpart (b), the Member may, but shall not be required to, appoint himself 

Manager. A Manager may be a natural person or an Entity. 

6.03 Reliance bv Other Persons. Any Person dealing with the Company, other than the 

Member, may rely on the authority ofthe Manager in taking any action in the name ofthe 

Company, if the Manager provides to such Person a copy ofthe applicable provision of this 

Operating Agreement and/or the resolution or written consent ofthe Manager or Member 

granting such authority, certified in writing by tiie Manager to be genuine and correct and not to 

have been revoked, superseded or otherwise amended. 

6.04 Manager's Expenses and Fees. The Manager shall be entitled, but not required, to receive 

a reasonable fee for services rendered on behalf of the Company or in his capacity as a Manager. 

The amount of such fee shall be determined by the Managers. The Company shall reimburse the 

Manager for reasonable out-of-pocket expenses that were or are incurred by the Manager on 

behalf of tiie Company with respect to the start-up or operation ofthe Company, the on-going 

conduct ofthe Company's business, or the dissolution and winding up ofthe Company and its 

business. 

6.05 Competition. During the existence of tiie Company, the Manager shall devote such time 

to the business ofthe Company as may reasonably be required to conduct its business in an 

efficient and profitable manner. The Manager, for his own account and for the account of others, 

may engage in business ventures which may compete with the business ofthe Company. The 

Member hereby expressly consents to the continued and future ownership and operation by the 

Manager of such businesses and waives any claim for damages or otherwise, or rights to 

participate therein or with respect to the operation and profits or losses thereof 

6.06 hidemnificatioa The Company shall indemnify ttie Manager, whether serving tiie 

Company or, at its request, any otiier Entity, to the full extent permitted by the Act. The 

foregoing rights of indemnification shall not be exclusive of any other rights to which the 

Manager may be entitled. The Manager may take such action as is necessary to cany out these 

indemnification provisions and may adopt, approve and amend from time to time such 

resolutions or contracts implementing such provisions or such further indemnification 

arrangements as may be permitted by law. 

6.07 Liability of Manager. Except as required by the Act, so long as the Manager acts in good 

faith with respect to the conduct ofthe business and affairs of tiie Company, the Manager shall 

not be liable or accountable to the Company or to the Member, in damages or otiierwise, for any 

^ error of judgment, for any mistake of fact or of law, or for any other act or thing that he may do 
or refrain from doing in connection with the business and affairs ofthe Company, except for 

willful misconduct or gross negligence or breach of fiduciary duty, and further except for 

breaches of conh-acttial obligations or agreements between the Manager and the Company. 

6.08 Resignation or Removal. A person or entity may terminate his or its position as Manager 

at any time by providing written notice to tfie Member of his or its resignation. Upon tfie 

removal or resignation ofthe Manager, the Manager shall be required to sign a "Statement of 

Withdrawal" in accordance with the terms ofthe Act. Such statement shall be filed with the 

Maine Secretary of State. The Member and Manager agree tiiat the Company shall have the right 

to enforce this provision by an injunction or other equitable remedy, if necessaiy. Any Manager 

refusing to execute said statement shall be liable to the Company for any applicable legal fees 

associated with enforcing this provision. 

ARTICLE v n 

BANKING 

All revenues ofthe Company shall be deposited regularly in the Company savings and checking 

accounts at such financial institutions as shall be selected by the Manager. 

ARTICLE vm 

ACCOUNTE^G AND RECORDS 

8.1 Records. The Company shall maintain at its principal place ofbusiness or such other 

place as the Manager may choose, the following: 

(a) a current list ofthe full name and last-known business, residence, or mailing address ofthe 

Member, both past and present; 

(b) a copy of tiie Articles of Organization and all amendments thereto, together witfi executed 

copies of any powers of attomey pursuant to which any amendment has been executed; 

(c) copies ofthe Company's federal, state, and local income tax returns and reports, if any, for 

tiie three most recent years; 

(d) copies of any currently effective written operating agreements, copies of any writings 

permitted or required under the Act, and copies of any financial statements ofthe Company for 

tiie three most recent years; and 

(e) minutes of any member meetings. 
ARTICLE DC 

MEMBERSHn> D>JTEREST AND MEMBERSHff RIGHTS OF A DECEASED, 

INCOMPETENT OR DISSOLVED MEMBER 

If a Member who is an individual dies or a court of competent jurisdiction adjudges him or her to 

be incompetent to manage his or her person or his or her property, tiie Member's executor, 

administiator, guardian, conservator or other legal representative shall be entitied to the benefits, 

and shall be subject to the burdens, ofthe Member's Membership Interest. 

ARTICLE X 

TRANSFER OF MEMBERSHff INTEREST 

10.1 Transfer. The Member may sell, hypothecate, pledge, assign or otherwise voluntarily, 

during the Member's lifetime or upon his death, transfer any part or all of his Membership 

Interest or Membership Rights in the Company to any other person only with the advance written 

approval ofthe Manager, which approval may be granted or withheld in the sole and absolute 

discretion ofthe Manager. In the event the Member transfers his entire Membership Interest, the 

transferee(s) shall become a member without any fiirther action, unless the Manager and the 

transferee agree otherwise. 

ARTICLE XI 

WITHDRAWAL OF MEMBER 

11.1 Withdrawal of Member. The Member has the power to withdraw from the Company only 

with the written approval ofthe Manager. The Member shall be deemed to have withdrawn from 

the Company if any ofthe events of Involuntary Withdrawal occur. 

ARTICLE x n 

DISSOLUTION AND TERMINATION 

12.1 Events of Dissolution. The Company shall dissolve upon the occmrence of any of the 

following events: 

(a) By the Member and Manager's unanimous written statement of dissolution; or 

(b) By the entry ofa decree of judicial dissolution pursuant to the Act. 

r 
r 

12.2 Effect of Filing of Dissolution Statement. As soon as possible following the occurrence 

of any of tiie events specified in this section which effect the dissolution ofthe Company, the 

Manager shall execute a statement of intent to dissolve. Upon executing a statement of intent to 

dissolve, the Company shall cease to carry on its business, except insofar as may be necessary for 

the winding up of its business, but its separate existence shall continue until a certificate of 

cancellation has been filed with the Secretary of State or until a decree dissolving the Company 

has been entered by a court of competent jurisdiction. 

12.3 Windmg UP. Liquidation and Distiibution of Assets. 

(a) Upon dissolution, an accounting shall be made by the Company's independent accountants of 

the accounts ofthe Company and ofthe Company's assets, liabilities and operations, from the 

date ofthe last previous accounting imtil the date of dissolution. The Manager shall immediately 

proceed to wind up the affairs ofthe Company. 

(b) If the Company is dissolved and its affairs are to be wound up. the Member shall (1) sell or 

otherwise liquidate all ofthe Company's assets as promptly as practicable (except to the extent 

they may determine to receive any assets in kind), (2) discharge all liabilities ofthe Company 

(other than liabilities to the Member), including all costs relating to the dissolution, winding up, 

and liquidation and distribution of assets, (3) establish such reserves as reasonably may be 

necessary to provide for contingent liabilities ofthe Company, (4) discharge any liabilities ofthe 

Company to the Member other than on account of his interest in Company capital or profits, and 

(6) distribute the remaining assets to the Member. 

(c) Upon completion ofthe winding up, liquidation and distribution ofthe assets, the Company 

shall be deemed terminated. 

(d) The Manager shall comply with any applicable requirements of applicable law pertaining to 

the winding up ofthe affairs ofthe Company and the final distribution of its assets. 

12.4 Certificate of Cancellation. When all debts, liabilities and obligations have been paid and 

discharged or adequate provision has been made therefor and all ofthe remaining property and 

assets have been distributed to the Member, a Certificate of Cancellation shall be executed by the 

Manager or his latest successor, which certificate shall set forth the information required by the 

Act. 

12.5 Filing of Certificate of Cancellation. 

(a) The original Certificate of Cancellation shall be delivered to the Maine Secretary of State. 

(b) Upon the filing the Certificate of Cancellation, the existence ofthe Company shall cease, 

except for the purpose of suits, other proceedings and appropriate action as provided in the Act. 

The Manager shall thereafter be a tmstee for creditors ofthe Company and as such shall have 

authority to distribute any Company property discovered after dissolution, convey real estate, and 

take such other action as may be necessary on behalf of and in the name ofthe Company. 

10 
^ 

12.6 Responsibility. Upondissolution, the Member shall look solely to tfie assets of tfie 

CompMiy for tiie retum of his Capital Contiibution. The winding up ofthe affairs of tiie 

Company and tfie distiibution of its assets shall be conducted by the Manager who is hereby 

authorized to take all actions necessary to accomplish such distribution, including, without 

limitation, selling any Company assets he deems necessary or appropriate to sell. 

ARTICLE xm 

GOVERNING LAW 

13.1 Governing Law. It is tiie intent of tiie parties hereto that all questions with respect to the 

constmction of this Agreement and the rights, duties, obligations and liabilities ofthe parties 

shall be determined in accordance with the applicable provisions ofthe laws ofthe State of 

Maine. 

ARTICLE XIV 

MISCELLANEOUS PROVISIONS 

14.1 Inurement. This Agreement shall be binding upon, and inure to the benefit of, all parties 

hereto, their personal and legal representatives, guardians, successors, and assigns to tiie extent, 

but only to the extent, that assignment is provided for in accordance with, and permitted by, the 

provisions of this Agreement. 

14.2 No Limit on Personal Activities. Nothing herein contained shall be constmed to limit in 

any manner the Member or Manager, or their respective agents, servants, and employees, in 

carrying out their separate businesses or activities. 

14.3 Gender and Headings. Throughout this Agreement, where such meanings would be 

appropriate: (a) the masculine gender shall be deemed to include the feminine and the neuter and 

vice versa, and (b) the singular shall be deemed to include the plural and vice versa. The 

headings herein are inserted only as a matter of convenience and reference, and in no way define 

or describe the scope ofthe Agreement or the intent of any provisions thereof 

14.4 Severability. Nothing contained in this Agreement shall be constmed as requiring the 

commission of any act contrary to law. In tfie event tfiere is any conflict between any provision 

of this Agreement and any statute, law, ordinance or regulation contrary to which the Member or 

the Company have no legal right to contract, the latter shall prevail, but in such event the 

provisions of this Agreement thus affected shall be curtailed and limited only to the extent 

necessary to conform with said requirement of law. In the event that any part, article, section, 

paragraph or clause of this Agreement shall be held to be indefinite, invalid, or otherwise 

11 
jpp. unenforceable, the entire Agreement shall not fail on account tiiereof, and the balance ofthe 

K Agreement shall continue in fiill force and effect. 

14.6 Membership Interest The Member hereby covenants, acknowledges and agrees that tiie 

Membership Interest in the Company shall for all purposes be deemed personalty and shall not be 

deemed realty or any interest in tiie assets or property owned by the Company. 

14.6 Not For Benefit of Creditor. The provisions of tiiis Agreement are intended only for tfie 

regulation of relations between the Member and tiie Company. This Agreement is not intended 

for the benefit of creditors and does not grant any rights to or confer any benefits on creditors or 

any other person who is not a Member or Manager ofthe Company. 

IN WITNESS WHEREOF, the sole Member and Manager have executed this Agreement 

effective as of nC-TbB'iK i . 2003. 

MEMBER: 

r 

(/UJA^.. L h^fdhfJC 

ANDREW BEDARD as custodian for GEORGE LIBERTY, under the Maine Unifomi Transfers 

to Minors Act 

MANAGER 

MICHAEL A. LIBERTY, Its M 

12 
Exhibit A 

Name, Address and Taxpayer 

Identification Number of Member 

Percentage Interest Consideration Paid 

ANDREW BEDARD as custodian 

for GEORGE LIBERTY, under the 

Maine Uniform Transfers to Minors 

Act 

100% 

The custodian shall transfer 

the Membership Interest to 

GEORGE LIBERTY when 

he reaches the age of 21. 

$100.00 

r 

r 

13 
OPER.ATING AGREEMENT 

THE MADNESS HOLDINGS, LLC 

THIS OPERATING AGREEMENT is made effective as of tiie lf[dzy of C>C7oag.1 ,2003 by 

ANDREW BEDARD as custodian for MAXWELL LIBERTY, under the Maine Unifomi 

Transfers to Minors Act, as sole member of THE MADNESS HOLDINGS, LLC, a Maine 

limited liabihty company (the "Company"). 

EXPLANATORY STATEMENT 

This Operating Agreement govems the relationship between the Company and its member, 

pursuant to tiie Maine Limited Liability Company .Act (the "Act"). 

DEFINITIONS 

For purposes of this Operating Agreement, and unless the context clearly otherwise indicates, the 

following terms shall have the following meanings: 

"Act" - Maine Lunited Liability Company Act, as amended fit»m time to time. 

"Agreement" - This Operating Agreement. 

"Code" - The Intemal Revenue Code of 1986, as amended. 

"Company" - THE MADNESS HOLDINGS, LLC, a Maine limited liability company. 

"Involuntary Withdrawal" - The occurrence of any ofthe following events, with respect to the 

Member: 

(a) the making of an assignment for tiie benefit of creditors; 

(b) the filing of a voluntary petition of bankmptcy; 

(c) the adjudication as a bankmpt or insolvent or the entry against the Member of an 

order for relief in any bankmptcy or insolvency proceeding; 

(d) any proceeding against the Member seeking arrangement, composition, 

readjustment, liquidation, or similar relief under any statute, law, or regulation, continues for one 

hundred twenty (120) days after commencement thereof, or the appointment ofa tmstee, 

receiver, or liquidator for the Member or all or any substantial part ofthe Member's properties 

without the Member's agreement or acquiescence, which appointment is not vacated or stayed 
for one hundred twenty (120) days or, if tiie appoindnent is stayed, for one hundred twenty (120) 

days after the expiration ofthe stay during which period the appointment is not vacated. 

"Manager" - a manager of tiie Company, whose rights, powers and duties are specified in Article 

VI, 

"Member" - ANDREW BEDARD as custodian for MAXWELL LIBERTY, under tiie Maine 

Uniform Transfers to Minors Act, as the sole initial Member ofthe Company, and any other 

person or persons who may subsequently be designated as a Member of this Company pursuant 

to the further terms of this Agreement. 

"Membership Interest" - The rights ofa Member m distributions and allocations of profits, 

losses, gains, deductions and credits. 

"Membership Rights" - The rights ofa Member, which are comprised of: (I) his or her 

Membership Interest, and (2) his or her right to vote and to otherwise participate in the 

management and govemance ofthe Company. 

"Persons" - Individuals, partnerships, corporations, limited liability companies, unincorporated 

associations, tmsts, estates and any other type of entity. 

"Profit" and "Loss" - The Company's taxable income or loss determined in accordance with the 

Code for each taxable year (or other period for which Profit or Loss must be computed). 

"Successor" - All Persons to whom all or any part ofa Membership Interest is transfened eitfier 

because of (a) the sale or gift by the Member of all or any part of his or her Membership Interest; 

(b) an assignment ofthe Member's Membership Interest; or (c) due to the Member's Involuntary 

Withdrawal. 

ARTICLE I 

FORMATION 

1.1 Organization. The Member acknowledges the formation ofthe Company as a Maine 

limited liability company pursuant to the provisions ofthe Act. 

1.2 Agreement. For and in consideration ofthe mutual covenants herein contained and for 

other good and valuable consideration, the receipt and sufficiency of which is hereby 

acknowledged, the Member agrees to the terms and conditions of this Agreement, as it may from 

time to time be amended according to its terms. Except to the extent a provision ofthe 

Agreement expressly incorporates federal income tax mles by reference to sections of tiie Code 

or Regulations or is prohibited or ineffective under the Act, the Agreement shall govem, even 

when inconsistent with, or different from, the pro\isions ofthe -Act or any other law or mle. To 

the extent any pro\ision of this Agreement is prohibited or ineffective under the -Act, the 
-Agreement shall be considered amended to the smallest degree possible in order to make the 

Agreement effective under the .Act. 

1.3 Name. ThenameoftiieCompany is THE MADNESS HOLDINGS, LLC. TheCompany 

may do business under that name and under any other name or names upon which the Manager 

may determine. If the Company does business under a name other than that set forth in its 

Articles of Organization, then the Company shall file a statement of intention to do business 

under an assumed name as required by law. 

1.4 Principal Place of Business. The Company may locate its principal place ofbusiness and 

registered office at any place or places as the Member may from time to time deem advisable. 

1.5 Registered Agent. The registered agent for the Company is Marcus Clegg & Mistretta, 

P.A. and the business address ofthe registered agent is 100 Middle Sfreet, Portland, Maine 

04101. The Manager may, from time to time, change the registered agent or the registered office 

tfirough appropriate filings with the Secretary of State. In the event the registered agent ceases to 

act as such for any reason or the registered office shall change, the Manager shall promptly 

designate a replacement registered agent or file a notice of change of address as the case may be. 

1.6 Term. The Company shall continue until it is dissolved in accordance with either the 

provisions of this Agreement or the Act. 

1.7 Permitted Business. The business of the Company shall be to make any investments and 

engage in any business activities permitted by law which the Manager may choose and to engage 

in all actixities necessary, customary, convenient, or incident to the foregoing. 

ARTICLE n 

CONTRIBUTIONS 

2.1 Initial Conttibutions. The initial capital conttibutions to the Company of the Member 

shall be made concurrently with the Member's execution and delivery of this Agreement. The 

Member's initial capital contribution is set forth in Exhibit A, attached hereto and hereby made a 

part of this Agreement. The Member shall not be required to make additional capital 

contributions. 

2.2 Loans. In tiie event tiie capital needs of tiie Company exceed the capital conttibutions 

pro\ided by section 2.1. the Member may, but shall not be required to, loan additional monies to 

the Company in amounts and on terms and conditions to be agreed upon by the Manager and the 

Member. The Company may also borrow money for its capital needs from any third parties in 

amounts and on terms and conditions determined by the Manager. 
2.3 hiterest on and Retum of Capital Contiibutions. The Member shall not be entitled to 

interest on any capital contribution, or to a retum of any capital contribution, except as 

specifically provided for herein. 

ARTICLE m 

PROFIF AND LOSS 

3.1 Percentages ofMembership Interest. The percentages ofMembership Interest of tiie 

Member shall be 100%. The custodian shall transfer the Membership Interest to MAXWELL 

LIBERTY' when he reaches the age of 21. 

3.2 Allocation of Profit and Loss. All Profit and Loss shall be allocated to tfie Member. 

3.3 Liquidation and Dissolution. IftheCompany is liquidated, the assets of tfie Company 

shall be disttibuted to the Member or to a Successor or Successors. 

ARTICLE IV 

DISTRIBUTIONS 

4.1 Distributions. Cash distributions shall be made in such amounts and at such times as may 

be determined by the Manager in its discretion. 

4.2 Limitations on Distributions. No distribution shall be declared or paid unless, after the 

distribution is made, tiie Company's assets exceed the Company's liabilities. Liabilities to the 

Member on account of his Membership Interest shall not be a Company liability for purposes of 

this section. 

ARTICLE V 

RIGHTS AND DUTIES OF MEMBERS 

5.1 Management Rights. The Member shall not be entitied to participate in the day-to-day 

affairs and management of tiie Company, but instead, the Member's right to participate witii 

respect to matters relating to the Company shall be limited to those matters as to which the 

express terms ofthe Act, the Articles of Organization, or this Operating Agreement vest in the 

Member the right to so participate. 

5.2 Action Requiring Approval of Member. Notwithstanding any other provision of this 

Operating Agreement, the approval of the Member shall be required in order to amend the 

Articles of Organization in any manner tfiat materially alters the preferences, privileges, or 

relative rights ofthe Member. 
5.3 Action bv Member. In exercising his rights as provided above, the Member shall act 

through written consents as provided in this Article. 

5.4 .Action by Written Consent. Any action required or permitted to be taken by the Member 

shall be taken by a written consent, signed by tiie Member. Such consent or consents shall be 

filed in the record book ofthe Company. Action taken under this Section shall be effective when 

signed by the Member, unless the consent or consents specify a different effective date. 

5.5 Liability of Member. The Member shall not be Uable as such for the Company's 

habilities, debts or obligations. The failure by the Company to observe any formalities or 

requirements relating to the exercise of its powers or the management of its business or affairs 

under this Agreement or the Act shall not be grounds for imposing personal liability on the 

Member. 

5.6 Indemnification. The Company shall indemnify the Member for all costs, losses, 

liabilities and damages paid by the Member in connection with the Company's business, to the 

fullest extent provided or allowed by Maine law. 

5.7 Fiduciary Duties and Obligations. The Member shall have no fiduciary duties of loyalty 

or otherwise with respect to the Company. 

ARTICLE VI 

MANAGERS 

6.01 Powers of Manager. Except as expressly provided otherwise in the Act, the Articles of 

Organization or this Operating .Agreement, the powers ofthe Company shall be exercised by or 

under tfie autiiority of, and the business and affairs ofthe Company shall be managed by, one or 

more Managers. The powers so exercised shall include but not be limited to the following: 

(a) Entering into, making and performing contracts, agreements and otiier undertakings 

binding the Company that may be necessary, appropriate or advisable m fiutherance ofthe 

purposes ofthe Company; 

(b) Opening and maintaining bank accounts, investment accounts and other arrangements, 

drawing checks and other orders for the payment of money, and designatmg individuals with 

authority to sign or give instmctions with respect to those accounts and airangements. Company 

funds shall not be commingled with fimds from other sources and shall be used solely for the 

business ofthe Company; 

(c) Collectmg funds due to the Company; 
(d) Acquiring, utilizing for the Company's purposes, maintaining and disposing of any assets 

ofthe Company; 

(e) To the extent that fimds ofthe Company are available therefor, paying debts and 

obligations ofthe Company; 

(f) Borrowing money or otherwise committing the credit ofthe Company for Company 

activities, and voluntarily prepaying or extending any such borrowings; 

(g) Employing from time to time persons, firms or corporations for the operation and 

management of various aspects ofthe Company's business, bicluding, without limitation, 

managing agents, contractors, subcontractors, architects, engineers, laborers, siqjpliers, 

accountants and attomeys on such terms and for such compensation as the Managers shall 

determine, notwithstanding the fact that the Managers or any Member may have a financial 

interest in such firms or corporations, provided that the Managers conform to any applicable 

disclosure and consent requirements ofthe Act; 

(h) Making elections available to the Company under the Code; 

(i) Obtaining general liability, property and other insurance for the Company, as the 

Managers deem proper; 

(j) Taking such actions as may be directed by the Member in fiirtherance of his approval of 

any matter set forth m Section 5.02 hereof; and 

(k) Doing and performing all such things and executing, acknowledging and delivering any 

and all such instruments as may be in fiirtherance ofthe Company's purposes and necessary and 

appropriate to the conduct of its business. 

6.02 Election. Etc. of Managers. 

(a) The Member hereby unanimously appoints MICHAEL A. LIBERTY as the Manager of the 

Company, to serve until the first annual meeting ofthe Members and until his successor shall be 

duly elected and qualified. 

(b) Unless and until MICHAEL A. LIBERTY otiierwise agrees in writing, MICHAEL A. 

LIBERTY, or such Person(s) whom he designates, shall be the only Manager ofthe Company. 

At such time as MICHAEL A. LIBERTY, or his successor, resigns in writing, and declines in 

writing to appoint a successor Manager, the Manager or Managers shall be elected by the 

Member according to the procedure set forth below. MICHAEL A. LIBERTY hereby appoints 

ANDREW BEDARD (the "Initial Successor Manager") to serve as Successor Manager unless 

and until designation is revoked in writing by MICHAEL A. LIBERTY. If the Initial Successor 

Manager is either unwilling or unable to serve, MICHAEL A. LIBERTY (or the personal 

representative of die estate of MICHAEL A. LIBERTY, if applicable) shall designate an 

altemative Initial Successor Manager. 
(c) If MICHAEL A, LIBERTY, or his successor, resigns in writing, and declines in writing to 

appoint a successor manager, the Member shall elect one Person as Manager each year to serve 

for an annual term and until the successor Manager is duly appointed and qualified. In addition, 

if any Person resigns or otherwise vacates the office of Manager, the Member shall appoint a 

replacement Manager to serve the remaining term of such office. Except as provided in subpart 

(b), a Person may be removed as a Manager by the Member with or witiiout cause at any time. 

Except as provided in subpart (b), the Member may, but shall not be required to, appoint himself 

Manager. A Manager may be a natural person or an Entity. 

6.03 Reliance bv Other Persons. Any Person dealing with the Company, other than the 

Member, may rely on the authority ofthe Manager in taking any action in the name ofthe 

Company, if the Manager provides to such Person a copy ofthe applicable provision of this 

Operating Agreement and/or the resolution or written consent ofthe Manager or Member 

granting such authority, certified in writing by the Manager to be genuine and correct and not to 

have been revoked, superseded or otiierwise amended. 

6.04 Manager's Expenses and Fees. The Manager shall be entitied, but not required, to receive 

a reasonable fee for services rendered on behalf of the Company or in his capacity as a Manager. 

The amount of such fee shall be determined by the Managers. The Company shall reimburse the 

Manager for reasonable out-of-pocket expenses that were or are incurred by the Manager on 

behalf of the Company with respect to the start-up or operation ofthe Company, the on-going 

conduct ofthe Company's business, or the dissolution and winding up ofthe Company and its 

business. 

6.05 Competition During the existence ofthe Company, the Manager shall devote such time 

to the business ofthe Company as may reasonably be required to conduct its business in an 

efficient and profitable manner. The Manager, for his own account and for the account of others, 

may engage in busmess ventures which may compete with the business ofthe Company. The 

Member hereby expressly consents to the continued and future ownership and operation by the 

Manager of such businesses and waives any claim for damages or otherwise, or rights to 

participate therein or with respect to the operation and profits or losses thereof 

6.06 Indemnification. The Company shall indemnify tiie Manager, whether serving the 

Company or, at its request, any other Entity, to the full extent permitted by the Act. The 

foregoing rights of indemnification shall not be exclusive of any other rights to which the 

Manager may be entitled. The Manager may take such action as is necessary to carry out these 

indemnification pro^isions and may adopt, approve and amend from tune to time such 

resolutions or contracts implementing such provisions or such further indemnification 

arrangements as may be permitted by law. 

6.07 Liability of Manager. Except as required by the Act, so long as the Manager acts in good 

faith with respect to tiie conduct ofthe business and affans ofthe Company, the Manager shall 

not be liable or accountable to the Company or to the Member, in damages or otherwise, for any 

error of judgment, for any mistake of fact or of law, or for any other act or thing that he may do 
-ARTICLE DC 

MEMBERSHff INTEREST AND MEMBERSHIP RIGHTS OF A DECEASED, 

INCOMPETENT OR DISSOLVED MEMBER 

If a Member who is an individual dies or a court of competent jurisdiction adjudges him or her to 

be incompetent to manage his or her person or his or her property, the Member's executor, 

administtator, guardian, conservator or other legal representative shall be entitled to the benefits, 

and shall be subject to the burdens, ofthe Member's Membership Interest. 

ARTICLE X 

TRANSFER OF MEMBERSfflP INTEREST 

10.1 Transfer. The Member may sell, hypothecate, pledge, assign or otherwise voluntarily, 

during the Member's lifetime or upon his death, ttansfer any part or all of his Membership 

Interest or Membership Rights in the Company to any other person only with the advance written 

approval ofthe Manager, which approval may be granted or withheld in the sole and absolute 

discretion ofthe Manager. In the event the Member transfers his entire Membership Interest, the 

ttansferee(s) shall become a member without any fiuther action, unless the Manager and the 

transferee agree otherwise. 

ARTICLE XI 

WITHDRAWAL OF MEMBER 

11.1 Withdrawal of Member. The Member has the power to withdraw from the Company only 

with the written approval ofthe Manager. The Member shall be deemed to have withdrawn from 

the Company if any ofthe events of Involimtary Witiidrawal occur. 

ARTICLE x n 

DISSOLUTION AND TERMINATION 

12.1 Events of Dissolution. The Company shall dissolve upon the occurrence of any ofthe 

following events: 

(a) By the Member and Manager's unanimous written statement of dissolution; or 

(b) By the enbry of a decree of judicial dissolution pursuant to the Act. 
12.2 Effect of Filing of Dissolution Statement. As soon as possible following the occurrence 

of any ofthe events specified in this section which effect the dissolution ofthe Company, the 

Manager shall execute a statement of intent to dissolve. Upon executing a statement of intent to 

dissolve, the Company shall cease to carry on its business, except insofar as may be necessaiy for 

the winding up of its business, but its separate existence shall continue until a certificate of 

cancellation has been filed with the Secretary of State or until a decree dissoMng tiie Company 

has been entered by a court of competent jurisdiction. 

12.3 Winding Up. Liquidation and Disttibution of Assets. 

(a) Upon dissolution, an accounting shall be made by the Company's independent accountants of 

the accounts ofthe Company and of tiie Company's assets, habilities and operations, from the 

date ofthe last previous accounting until the date of dissolution. The Manager shall immediately 

proceed to wind up the affairs ofthe Company. 

(b) If the Company is dissolved and its affairs are to be wound up, the Member shall (1) sell or 

otherwise liquidate all ofthe Company's assets as promptly as practicable (except to the extent 

they may determine to receive any assets m kind), (2) discharge all liabilities ofthe Company 

(other than liabilities to the Member), including all costs relating to the dissolution, winding up, 

and liquidation and distribution of assets, (3) establish such reserves as reasonably maybe 

necessary to provide for contingent liabihties ofthe Company, (4) discharge any liabilities ofthe 

Company to the Member other than on account of his interest in Company capital or profits, and 

(6) distribute the remaining assets to the Member. 

(c) Upon completion ofthe winding up, Hquidation and distribution ofthe assets, the Company 

shall be deemed terminated. 

(d) The Manager shall comply with any applicable requirements of applicable law pertaining to 

the winding up ofthe affairs ofthe Company and the final distribution of its assets. 

12.4 Certificate of Cancellation. When all debts, liabilities and obligations have been paid and 

discharged or adequate provision has been made therefor and all ofthe remaining property and 

assets have been distributed to the Member, a Certificate of Cancellation shall be executed by tiie 

Manager or his latest successor, which certificate shall set forth the information required by the 

Act. 

12.5 Filing of Certificate of Cancellation. 

(a) The original Certificate of Cancellation shall be delivered to the Maine Secretary of State. 

(b) Upon the filing the Certificate of Cancellation, the existence ofthe Company shall cease, 

except for the purpose of suits, other proceedings and appropriate action as provided in the Act. 

The Manager shall thereafter be a tmstee for creditors ofthe Company and as such shall have 

authority to distribute any Company property discovered after dissolution, convey real estate, and 

take such other action as may be necessary on behalf of and in the name ofthe Company. 

10 
12.6 ResponsibiUtv. Upon dissolution, the Member shall look solely to the assets ofthe 

Company for the retum of his Capital Contribution. The winding up ofthe affairs ofthe 

Company and die distribution of its assets shall be conducted by the Manager who is hereby 

authorized to take all actions necessary to accompHsh such distribution, includmg, witiiout 

limitation, selling any Company assets he deems necessary or appropriate to sell. 

ARTICLE x m 

GOVERNING LAW 

13.1 Governing Law. It is the intent of the parties hereto that all questions with respect to the 

constmction of this Agreement and the rights, duties, obUgations and liabilities ofthe parties 

shall be determmed in accordance with the appUcable provisions of the laws ofthe State of 

Maine. 

ARTICLE XIV 

MISCELLANEOUS PROVISIONS 

14.1 Inurement. This Agreement shall be binding upon, and inure to the benefit of, all parties 

hereto, their personal and legal representatives, guardians, successors, and assigns to the extent, 

but only to the extent, that assignment is provided for m accordance with, and permitted by, the 

provisions of tiiis Agreement. 

14.2 No Limit on Personal Activities. Nothing herein contained shall be constmed to hmit in 

any manner the Member or Manager, or their respective agents, servants, and employees, m 

carrying out their separate businesses or activities. 

14.3 Gender and Headings. Throughout this Agreement, where such meanings would be 

appropriate: (a) the masculine gender shall be deemed to include the feminine and the neuter and 

vice versa, and (b) the smgular shall be deemed to include the plural and vice versa. The 

headings herein are inserted only as a matter of convenience and reference, and in no way define 

or describe the scope ofthe Agreement or the intent of any provisions thereof 

14.4 Severability. Nothing contained m this -Agreement shall be constmed as requiring the 

commission of any act conttaiy to law. In the event there is any conflict between any provision 

of this Agreement and any statute, law, ordinance or regulation contrary to which the Member or 

the Company have no legal right to contract, the latter shall prevail, but in such event the 

provisions of this Agreement thus affected shall be curtailed and limited only to the extent 

necessary to conform with said requirement of law. In the event that any part, article, section, 

paragraph or clause of this Agreement shall be held to be indefinite, invalid, or otherwise 

11 
unenforceable, the entire Agreement shall not fail on account thereof and the balance ofthe 

Agreement shall continue in fiill force and effect. 

14.6 Membership Interest. The Member hereby covenants, acknowledges and agrees that the 

Membership Interest in the Company shall for all purposes be deemed personalty and shall not be 

deemed realty or any interest in the assets or property owned by the Company. 

14.6 Not For Benefit of Creditors. Theprovisionsofthis Agreement are intended only for the 

regulation of relations between the Member and the Company. This Agreement is not intended 

for the benefit of creditors and does not grant any rights to or confer any benefits on creditors or 

any other person who is not a Member or Manager ofthe Company. 

IN WITNESS WHEREOF, the sole Member and Manager have executed tiiis Agreement 

effective as of /^yCjro.'h'tJt I . 2003. 

MEMBER: 

a.L, ^ 

ANDREW BEDARD as custodian for MAXWELL LIBERTY, under the Maine Uniform 

Transfers to Minors Act 

MANAGER: 

MICHAEL A. LIBERTY, Its Manag ^ 

12 
Exhibit A 

Name, Address and Taxpayer 

Identification Number of Member 

Percentage Interest Consideration Paid 

ANDREW BEDARD as custodian 

for MAXWELL LIBERTY, under 

.the Maine Uniform Transfers to 

Minors Act 

100% 

The custodian shall ttansfer 

the Membership Interest to 

MAXWELL LIBERTY 

when he reaches the age of 

21. 

$100.00 

13 
Exhibit S-5 
P.O. Box 2 

Gray, ME 04039 

Phone 207-838-3084 

Fax 207-784-5326 

E-mail nate@flycharter.com 

Nathan Humphrey 

Summary of 

qualifications 

Professional 

experience 

Over 8000 hours flight time 

7700 PIC 

Jet time: Hawker HS-125 500 hrs, Citiation 100 hrs, Learjet400 hrs 

Turtiine time: Turtiine Beech 18 600 hrs, King Airs 900 hrs 

Piston: Cessna 402C 3500 hrs, single engine 1700 hrs 

Airline Transport Pilot with CE500, HS125 and Learjet type ratings 

Airplane CFI, CPU, MEI 

FAA Airline Transport Pilot certificate #3373149, issued October 2, 2008, 

Ratings: Airplane Multiengine Land, CE-500, HS-125, LR-Jet, Commercial 

privileges airplane single engine land. 

FAA Flight Instructor certificate number #3373149CFI, Airplane single and 

multiengine, instmment airplane 

1988-1989 Northeast Air 

Flight instructor 

1989 -1990 Caribou Flying Service 

Flight instructor, 135 Captain/Pilot 

1990-1992 Skyline Aviation 

Flight Instructor 

1992-1993 Oxford Aviation 

Flight Instructor, 135 Captain/Pilot 

1993-1995 East Coast Aviation 

Chief Pilot, general manager 

1995 - 1996 Calitta Flying Service 

135 SIC Pilot BE-18, LR-jet 

1996 Maine Aviation Corporation 

135 PIC Pilot and marketing director 

Portland, ME 

Caribou, ME 

Portland, ME 

Oxford, ME 

Portland, ME 

Morristown, TN 

Portland, ME 

1996 - 2000 Cape Air/Nantucket Airlines Hyannis, MA 

Director of Pilot Training 

Responsible for recruitment, hiring, training and recurrent pilot training 

2000 - 2001 

Pilot 

Charter Fleet of Sanford, ME Sanford, ME 

2001-2002 

Pilot 

Executive Jet Management Cincinnati, OH 

2002-Present Twin Cities Air Service, LLC Auburn, ME 
Owner, President 

Line pilot, check airman in C-402 and Kingair 200 

Work experience: 

For the two years previous to acquiring Twin Cities, I was acting as a flight crewmember in the 

international jet market. I was qualified as a Captain in both Hawker and Citation series jets. 

Prior to entering the jet market I was the Director of Pilot Training for Cape Air/Nantucket Airiines. 

Cape Air/Nantucket Airiines employs over 500 people, has a fleet of 50 Cessna 402s, and 

operates in three different geographical areas. Under my leadership, the pilot roster grew from 80 

to 120 pilots. I was responsible for the recruitment, hiring, training, and recurrent training for all 

pilots worldwide. I directly led a staff of about thirty training department members. During my 

tenure as the Director of Training, I was asked to join a committee of other Airiine Directors. The 

committee. Regional Airiine Associations Training Advisory Committee (RATAC), is Washington 

D.C. based, and focused on the pilot training needs of the airiine industry. This was a great 

learning experience for me. Being the youngest member, I learned much from my older and 

more experienced peers. I was also responsible to the FAA for all training and standardization 

matters. I successfully worked closely with our FAA principal operations inspector. While at 

Cape Air, I conducted over 100 FAA check rides acting as a qualified FAA check airman. I also 

supervised the training of all ground crews in the recognition of hazardous materials, and 

conducted all hazardous materials research. Cape Air/Nantucket Airiines enjoyed an accidentfree record during my tenure as the Director. Prior to Cape Air, my experience consisted of flight 

instruction and charter flying for Maine-based companies. I also served as the Chief Pilot and 

General Manager for one small Maine-based charter company. While serving in this position, I 

worked with the FAA in obtaining an FAR 135 certificate for the company. 

In summary, this February marked 23 years of professional experience for me. Twenty-three 

years of accident and incident free flying, with no violations, LOI's, or even so much as a 

speeding ticket. 
16 Goldeneye Drive 

Topsham, ME 04086 

Phone: 207-725-0885 

E-mail: stewartfour@gmail.com 

Dale Stewart 

Summary of 

qualifications 

ATP Multi-engine Land; Commercial Single-engine Land & Sea; LR-JET 

type rating 

Instrument, CPU, Advanced Ground Instmctor, Airframe & Powerplant 

License; Restricted Radio License; Technician Class Amateur License 

FAA Certificate number 2513519 issued 17 Feb 2009, rating- Airiine 

Transport Pilot airplane multiengine land LR-JET, commercial privileges 

airplane single engine land 

Flight Times 

Total 7100 

Instmment 674 

Multi 4006 

Night 716 

C-400 Series 3051.3 

TuriDine (Kingair 100/200) 

Lear Jet 482 

SE 3094 

Cessna 300 Series 438.9 

24 

Education 1989-1993 LeTourneau University 

Aviation Technology, B.S. 

Longview, Texas 

Professional experience 

1984-1989 

High School Diploma 

Yarmouth High School Yarmouth, ME 

1994-Present 

2011-Present 

2006-2010 

2004-2006 

2002-2004 

2000-2002 

1997-present 

1996- present 

1994- 1995 

1994-1996 

Twin Cities Air Service Auburn, ME 

Chief Pilot 

Chief Pilot / General Manager 

Maintenance Director / General Manager 

Chief Pilot / General Manager 

Chief Flight Instructor 

Charter Pilot 

Flight Instructor 

Line Service 

Aviation Maintenance Technician 

Interests and activities 

1999-2000 Assistant Director, Faith Bible Training Center, Philippines 

2006-2007 History Teacher, Maine Classical School 

2010- Present Sales representative, L.L. Bean, part-time 

Former Aviation Safety Counselor; Deacon at First Baptist Church, 

Portland, ME 2003-2009; Woodworking, Reading, History, Photography, 
Hiking, Canoeing 
Ben M. Mosher 

304 King Street 

Oxford, Maine 04270 

Certificate number: Mechanic, Airframe & Powerplant cert #305841057, issued 7-23-85 

Employment History: 

March 2005 to Director of Maintenance at Twin Cities Air Service 

Present Auburn, Maine 

Jan 2004 to 

March 2005 

Owner and Operator of Eaglewings Aviation 

Mechanic Falls, Maine 

Sept 1995 to 

Jan 2004 

Director of Maintenance at Twin Cities Air Service 

Auburn, Maine 

May 1994 to 

Sept 1995 

Aircraft Mechanic at Oxford Aviation 

Oxford, Maine 

March 1993 to 

Aug 1993 

Aircraft Mechanic at Master Aviation 

Danbury, CT 

March 1991 to 

Feb 1993 

Aircraft Mechanic at Bridgeport Air Service 

Bridgeport, CT 

June 1985 to 

March 1991 

Lead Aircraft Mechanic at South Central Airlines 

Kenai, AK 
Education: 

Associate of Science degree in Aviation Maintenance Technology LeTourneau College 1985 

Pratt & Whitney PT6A Turbine Engine Light Maintenance 1990 

Garrett TPE 331 Turbine Engine Light Maintenance 2000 

Lear Jet 35 Aircraft Maintenance Course 2007 

Ratings Held: 

Airframe and Powerplant Mechanic since 1985 

Inspection Authorization since 1992 

Commercial Pilot: Single Engine Land & Sea; Airplane Multiengine Land; Instrument Airplane. 

Total Flight Time: 815 HRS 

Work Experience: 

Have 26 years experience in maintenance ofthe following classes of aircraft: 

Light Single Engine Aircraft, Light Multiengine Aircraft, Turboprop Aircraft, Light Business Jets, and Light 

Helicopters. 

Perform all aspects of maintenance: Heavy structural maintenance and repairs. Electrical wiring 

installations. Avionics installations, Recip engine overhauls, and Turbine engine inspections and light 

maintenance. Adept at trouble shooting and repairing all types of aircraft systems. 

Experienced on the following aircraft: 

All Cessna 100, 200, 300 series aircraft. Cessna 401, 402, 414, 421, and 441 aircraft. 

Piper PA-23, PA-28, PA-30, PA-31, PA-32, PA-34, PA-39, and PA31T. 

Beechcraft Bonanza, Baron, Beech 18, King Air 90,100, and 200 series. 

Mitsubishi MU-2 

Commander 114 

Lear Jet35A 
Schweizer Helicopter 269 series. 
Exhibit S-6 
asspcjafesr A a. 

Certified Public Accountants 

May 4, 2011 

Twin Cities Air Service, LLC 

PO Box 2 

Grey, ME 04039 

Enclosed please find a draft ofthe financial statements of Twin Cities Air Service, LLC as of 

May 4,2011. 

Please review the draft financial statements. If everything appears correct, please sign and retum 

the enclosed representation letter and we will then issue the bound copies of your financial 

statements. 

Thank you for this opportunity to be of service. Should you have any questions, please do not 

hesitate to contact us. 

Very truly yours, 

/ ' 

AUSTIN ASSOCIATES, P.A. 

Certified Public Accountants 

Two Great Falls Plaza, PO Box 3400 • Auburn, Maine 04212-3400 • Telephone: 207-783-9111 • Fax:207-783-9130 • 800-605-9263 Maine Only 

E-mail: sba@austinpa.coni • Website: www.austinpa.com 
TWIN CITIES AI R SERVICE. LLC 

FINANCIAL STATEMENTS 

A N D SUPPLEMENTARY INFORMATION 

FOR THE YEARS ENDED 

DECEMBER 31. 2010 AN D 2009 

iiv r T 
Twin Cities Air Service, LLC 

Financial Statements 

And Supplementary Information 

For The Years Ended December 31.2010 and 2009 

Contents 

Exhibit 

Accountants' Report 

Financial Statements 

Balance Sheets 

Statements of Operations 

Statements of Changes in Members' Capital 

Statements of Cash Flows 

Notes to the Financial Statements 

Supplementary Information 

Schedules of Costs of Revenues 

Schedules of General and Administrative Expenses 

DRAFT 

A 

B 

C 

D 

E 

F 
INDEPENDENT ACCOUNTANTS' REVIEW REPORT 

DRAFT 

To the Members 

Twin Cities Air Service, LLC 

Gray, Maine 04039 

We have reviewed the accompanying balance sheets of Twin Cities Air Service, LLC, a limited liability 

company, as of December 31, 2010 and 2009 and the related statements of operations, changes in members' 

capital, and cash flows for the years then ended. A review includes primarily applying analytical procedures to 

management's financial data and making inquiries of Company management. A review is substantially less in 

scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a 

whole. Accordingly, we do not express such an opinion. 

Management is responsible for the preparation and fair presentation ofthe financial statements in accordance 

with accounting principles generally accepted in the United States of America and for designing, implementing, 

and maintaining intemal control relevant to the preparation and fair presentation ofthe financial statements. 

Our responsibility is to conduct the review in accordance with Statements on Standards for Accounting and 

Review Services issued by the American Institute of Certified Public Accountants. Those standards require us to 

perform procedures to obtain limited assurance diat there are no material modifications that should be made to 

the financial statements. We believe that the results of our procedures provide a reasonable basis for our report. 

Based on our review, with the exception ofthe matter disclosed in the following paragraph, we are not aware of 

any material modifications that should be made to the accompanying financial statements in order for them to be 

in conformity with generally accepted accounting principles. 

Management has informed us that the Company's financial statements are not consolidated with variable interest 

entities as required by FASB ASC 810-10. Twin Cities Turboprop, LLC was partially owned by Twin Cities Air 

Service, LLC. Long Lake Aviation, LLC has common ownership with Twin Cities Air Service, LLC. Twin 

Cities Air Service, LLC manages aircraft and provides fuel and maintenance services for the entities. 

Management believes it is impractical to develop the information and reports the related party transactions in die 

notes to the financial statements. 

Our review was made for the purpose of expressing limited assurance that there are no material modifications 

that should be made to the financial statements in order for tiiem to be in conformity with generally accepted 

accounting principles. The information included in the accompanying Exhibits E and F is presented only for 

supplementary analysis purposes. Such information has been subjected to the inquiry and analytical procedures 

applied in the review ofthe basic financial statements, and we are not aware of any material modifications that 

should be made thereto. rNr % A r* T 

AUSTIN ASSOCL\TES, P.A. 

Certified Public Accountants 
Exhibit A 

Twin Cities Air Service, LLC 

Balance Sheets 

December 31,2010 and 2009 

Assets 

2010 2009 

Current Assets: 

Cash 

Accounts receivable 

Other amounts receivable and prepaid 

Inventory 

$ 782 

172,680 

3,084 

357,050 

$ 27,112 

150,817 

12,640 

345,004 

DRAFT 

See indenpendent accountants' review report. 

The accompanying notes are an integral part of this statement. 

533,596 535.573 

Property and Equipment-Net 216,987 290,586 

Other Assets; 

Loans receivable-Related parties 794,432 794,432 

Security deposits 1,000 1,000 

Unamortized closing costs 12,552 4,930 

807,984 800,362 

Total assets $ 1,558,567 $ 1,626,521 
Exhibit A 

Twin Cities Air Service, LLC 

Balance Sheets 

December 31, 2010 and 2009 

Liabilities and Members' Capital 

2010 2009 

Current Liabilities; 

Lines of credit-Machias Savings Bank 

Bank overdraft 

Accounts payable 

Customer deposits 

Loan payable—Related party 

Other current liabilities 

Current portion of long-term debt 

DRAFT 

$ 207,088 

35,639 

106,453 

51,695 

32,258 

6,491 

35,400 

475,024 

$ 288,877 

52,522 

287,915 

45,323 

26,225 

4,191 

112,000 

817,053 

Long-Term Debt-Less current portion 537,160 377,193 

Members' Capital 

Total liabilities and members' capital 

546,383 432,275 

$ 1,558,567 $ 1,626,521 

See independent accountants' review report. 

The accompanying notes are an integral part of this statement. 
Twin Cities Air Service, LLC 

Statements of Operations 

For The Years Ended December 31, 2010 and 2009 

Exhibit B 

2010 2009 

Revenues $ 2,560,725 $ 2,480,165 

Cost of Revenues 1,657,603 1,856,685 

Gross Profit 903,122 623.480 

General and Administrative Expenses 729,002 ^788,968 

Operating Income (Loss) 

Other Income ("Expense); 

Gain on assets retired 

Interest income 

Lawsuit settlement 

Interest expense 

Net other expense 

174,120 (165,489) 

13 

(49,502) 

25,483 

37 

(60,000) 

(59,083) 

(49,489) (93.563) 

Net Income (Loss) $ 124,631 $ (259,052) 

See independent accountants' review report. 

The accompanying notes are an integral part of this statement. 
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Exhibit D 

Twin Cities Air Service, LLC 

Statements of Cash Flows 

For The Years Ended December 31.2010 and 2009 

2010 2009 

Cash Flows from Operating Activities: 

Net Income (Loss) $ 124,631 $ (259,052) 

Adjustments to reconcile net income (loss) to net cash 

(used in) operating activities: 

Depreciation 

Amortization 

Gain on assets retired 

(Increase) Decrease in assets: 

Accounts receivable 

Prepaid assets and other receivables 

Inventory 

Increase (Decrease) in liabilities: 

Accounts payable and accrued expenses 

Bank overdraft 

Total adjustments 

Net cash used in operating activities 

Cash Flows from Investing Activities: DRAFT 

Capital expenditures 

Proceeds for assets retired 

Net cash provided by (used in) investing activities 

Cash Flows from Financing Activities; 

Proceeds of long-term debt applied to line of credit 

Principal paid on loans 

Loans from members 

Net activity on lines of credit 

Distributions 

Net cash used in financing activities 

Net Increase (Decrease) in Cash and Cash Equivalents 

Cash and Cash Equivalents, at beginning 

Cash and Cash Equivalents, at end 

See independent accountants' review report. 

The accompanying notes are an integral part of this statement. 

77,230 

5,363 

-

(21,863) 

9,556 

(12,046) 

(172,790) 

(16,883) 

(131,433) 

(6,802) 

T 

1 

(3,630) 

-

(3,630) 

111,746 

(41,365) 

6,033 

(81,789) 

(10,523) 

(15,898) 

(26,330) 

27,112 

$ 782 

89,084 

1,096 

(25,483) 

45.763 

(10,556) 

58,351 

36,736 

52,522 

247,513 

(11,539) 

(3,406) 

147,000 

143,594 

_ 

(95,852) 

-

(5,621) 

(12.142) 

(113,615) 

18,440 

8,672 

$ 27,112 
Twin Cities Air Service, LLC 

Notes to the Financial Statements 

December 31, 2010 and 2009 

NOTE 1: Significant Accounting Policies 

Company's activities: 

Twin Cities Air Service, LLC is a limited liability company operating an aircraft maintenance 

service and charter air service out of the Lewiston-Aubum Municipal Airport in Auburn, Maine 

and in 2010 includes services out of Portland International Airport, Portland, Maine. It began 

operations July 1, 2003. The Company is an unconsolidated spin-off subsidiary of Nathanair, Inc., 

with a term of sixty years. 

Concentration of credit risk: 

Most ofthe Company's business activity is with customers located within the state of Maine or 

corporations having business in the state of Maine. Consequently, the Company's ability to collect 

amounts due is dependent on economic activities in Maine. 

Cash: 

For purposes ofthe statement of cash flows, the Company considers all highly liquid debt 

instruments purchased with a maturity of three months or less to be cash equivalents. 

Non-cash activity consisted of refinancing $445,269 and $-0- of long-term debt in 2010 and 2009, 

,«sp=c«vely DRAFT 

Trade accounts receivable: 

Trade accounts receivable are stated at the amount management expects to collect from balances 

outstanding at year-end. Based on management's assessment ofthe credit history with customers 

having outstanding balances and current relationships with them, it has been concluded that 

realization losses on balances outstanding at year-end will be immaterial. 

Inventories: 

Inventories are stated at the lower of cost or market value, with cost generally determined on the 

first-in, first-out method. They consist predominantly of fuel and aircraft parts. 

Property and equipment: 

Property and equipment are stated at cost. Depreciation is computed under the straight-line and 

certain accelerated methods. 

Closing costs: 

Costs associated with obtaining financing are amortized over the life ofthe loans of between ten 

and fifteen years. Accumulated amortization was $433 and $6,026 in 2010 and 2009, respectively. 

Sales tax: 

The Company collects sales tax. The amount received is credited to a liability account and as 

payments are made, this account is charged. At any point in time, this account represents the net 

amount owed to the taxing authority for amounts collected but not yet remitted. 
Twin Cities Air Service, LLC 

Notes to the Financial Statements 

December 31.2010 and 2009 

NOTE 1: Significant Accounting Policies (Continued) 

Use of estimates: 

Management uses estimates and assumptions in preparing financial statements. Those estimates 

and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent 

assets and liabilities, and the reported revenues and expenses. Actual results could differ from 

those estimates. 

Advertising: 

The Company expenses advertising as incurred. Advertising expense was $37,056 and $30,033, in 

2010 and 2009, respectively. 

Income taxes: 

No provision for income taxes has been made due to the election by the members to be treated as a 

limited liability company and taxed as a partnership for income tax purposes; and thereby, income 

is taxed to the members. 

The Company files income tax retums in the U.S. federal jurisdiction, and the state of Maine. The 

Company is no longer subject to U.S. federal, state and local income tax examinations by tax 

authorities for years before 2007. The Company has elected the provisions of FASB ASC 740-10, 

Accounting for Income Taxes. The Company records a liability for uncertain tax positions when it 

is probable that a loss has been incurred and the amount can be reasonably estimated. 

NOTE 2: Property and Equipment 

Property and equipment are summarized by major categories, as follows: 

DRAFT 

Cost 

Aircraft 

Equipment 

Leasehold improvements 

Vehicle 

Less: Accumulated depreciation 

Life 

7 years 

5-7 years 

40 years 

5 years 

2010 2009 

$ 1,033,362 $ 1.033,362 

71,729 

13,716 

80.402 

1,199,209 

( 982.222) 

68,098 

13,716 

80.402 

1,195,578 

( 904.992) 

$ 216.987 $ 290.586 
Twin Cities Air Service, LLC 

Notes to the Financial Statements 

December 31.2010 and 2009 

NOTE 3: Loans Receivable' 

Loans receivable for 2010 and 2009 consist ofthe following: 

Nathanair. Inc.-Non-interest bearing loan, unsecured, 

with no set terms of repayment 

Bel Air-Non-interest bearing loan with no set terms of 

repayment 

NOTE 4: Lines of Credit 

Machias Savings Bank-Interest rate of 1.0% over Wall Street Journal 

Prime Rate, secured by aircraft, maturity extended to Januaiy 2010, 

renewed in 2010. There are no pay down provisions. 

Machias Savings Bank-Interest rate of 2.0% over Wall Street Journal 

Prime Rate, currently the note bears interest at 5.25% per annum, 

secured by aircraft, annual maturities in February, renewed in 2010, 

due on demand 

2010 

24.000 

2010 

148.470 

NOTE 5: Lone-Tenn Debt 

Long-term debt consists ofthe following: 

Bangor Savings Bank-Installment loan, monthly payments of 

$905.57, including interest at 7.25% per annum, secured by a 

vehicle, matures January 2012 

Mechanics Savings Bank-Installment loan, interest at the rate 

of 7.0% per annum, to be adjusted to the Federal Home Loan 

Bank rate plus 4.0% in June 2009. current monthly payments 

of $10,798.09. secured by aircraft and members' guarantees 

Machias Savings Bank—Small Business Installment loan, 

monthly payments currently $4,837.35, including interest at 

6.00%, to increase to Wall Street Prime Rate plus 2.75% beginning 

May 2012, secured by substantially all assets, with the Company's 

member and manager guarantee, 90% guarantee ofthe Small Business 

Administration, matures July 2025 

2009 

$ 770.432 $ 770,432 

24.000 

$ 794.432 $ 794.432 

2009 

$ 58,618 $ 141,088 

147.789 

$ 207.088 $ 288.877 

DRAFT 

2010 2009 

$ 12,207 $ 21,817 

463,090 

560,353 
Twin Cities Air Service, LLC 

Notes to the Financial Statements 

December 31.2010 and 2009 

NOTE 5: Long-Tenn Debt (Continued) 

Long-term debt consists ofthe following: 

2010 2009 

American Honda Finance Corporation-Installment loan. 

monthly payments of $485.52. including interest at 6.99%, 

secured by a vehicle $ 0 $ 4.286 

572,560 489,193 

Less-Current portion 35.400 112.000 

$ 537.160 $ 377.193 

Maturities of long-term debt are as follows: 

Years Ending 

December 31. Amount 

2011 $ 35,400 

2012 28,506 

2013 28,300 

2014 30,100 

2015 32.000 

$154.306 

Interest paid for the years ended December 31, 2010 and 2009 was $49,502 and $59,083, respectively. 

NOTE 6: Related Partv DRAFT 

The Company provides repair services, charter services, and loans to related parties. In addition, the 

Company rents a hangar and aircraft, when needed, as well as receives loans from related parties. 

The following are account balances and summary of transactions with parties related through common 

ownership: 

Accounts receivable 

Loans receivable 

Loans payable, unsecured, non-interest bearing, 

due on demand 

Rent paid for use ofa hangar 

Income 

The Company is contingently liable for debts of Bel Air Services, Inc. As ofthe date of these statements, 

the amount was $136,320. 

$= 

$= 

2010 

Q 

794.432 

32.258 

$???? 

$= 

$= 

$= 

$= 

2009 

8.375 

JZ94,432 

_^6,225 

557,877 
Twin Cities Air Service, LLC 

Notes to the Financial Statements 

December 31.2010 and 2009 

NOTE 7: Pension Plan 

The Company has a SIMPLE IRA retirement plan. The Plan requires the Company to match the 

employees' deferred compensation up to 3.0% of their compensation. Only employees with one year of 

service and at least $5,000 of compensation may elect to participate. Employees are immediately vested 

in employer's contributions. The pension contribution expense was $13,236 and $18,899 in 2010 and 

2009, respectively, and is funded on a current basis. 

NOTE 8: Leases and Short-Term Rental Agreements 

The Company leases airport space and underground fuel tanks from the Auburn-Lewiston Municipal 

Airport under an operating lease that expires in March 2014. Minimum lease payments for the next five 

years and in the aggregate are as follows: 

Years Ending 

December 31. Amount 

2011 $ 33,204 

2012 33,204 

ll i S DRAFT 

$107.913 

The lease contains an escalation clause. Annual increases will occur on the aimiversary date ofthe lease 

and will be based on the Consumer Price Index for All Urban Consumers. 

The Company rents equipment and a hangar on an "as needed" basis and as a tenant-at-will. Total rental 

expense under all rental agreements was $70,053 and $71,744 in 2010 and 2009. respectively. 

NOTE 9: Lawsuit Settlement 

In 2009, the lawsuit stemming from an accident in 2006 was settled. The Company's portion ofthe 

settlement was $60,000. 

NOTE 10: Subsequent Events 

The Company has evaluated all subsequent events through DATEl. the date the financial statements 

were available to be issued. No material events have occurred. 
SUPPLEMENTARY INFORMATION 

DRAFT 
Twin Cities Air Service. LLC 

Schedules of Costs of Revenues 

For The Years Ended December 31, 2010 and 2009 

Exhibit E 

2010 2009 

Catering $ 28,174 $ 44,126 

Charter outsourcing 

Equipment rental 

Fuel and oil 

Landing fees 

Miscellaneous and other expenses 

Odier contracted services 

Parts for sale and use, freight, and repairs 

Payroll and payroll taxes 

Uniforms 

288,101 260,596 

DRAFT 

19,443 

776.211 

52.038 

-

42,650 

115.258 

335,419 

309 

$ 1,657,603 

18,045 

603,004 

60,467 

750 

147,739 

311,820 

409,048 

1,091 

$ 1,856,686 

See independent accountants' review report. 
Twin Cities Air Service, LLC 

Schedules of General and Administrative Expenses 

For The Years Ended December 31. 2010 and 2009 

Exhibit F 

2010 2009 

Advertising 

Amortization expense 

Auto and truck expenses 

Bank service charges 

Commissions 

Contributions 

Depreciation 

Dues and subscriptions 

Employee benefits 

Insurance 

Janitorial expenses 

Licenses and permits 

Merchant fees on credit cards 

Professional fees 

Miscellaneous 

Office expense and postage 

Professional development 

Rent 

Repairs and maintenance 

Supplies for shop 

Taxes-Other than income taxes 

Telephone 

Travel, tolls, and lodging 

Utilities and waste removal 

Wages and payroll taxes 

$ 37,056 

5,363 

3,152 

2,218 

1,000 

2.165 

77,230 

15.819 

13.236 

186,767 

^AFjo 

51,844 

38,122 

3.838 

9,791 

3.099 

50.610 

4,763 

5,647 

5,522 

16,255 

2,486 

23,311 

169,168 

$ 729,002 

$ 30,033 

1.096 

3.116 

4,071 

500 

627 

89,084 

20,059 

18,899 

256,728 

440 

528 

44,438 

9,961 

2.007 

15.818 

6,337 

53,699 

5,952 

4,686 

5,885 

18,421 

7,772 

31,575 

157,236 

$ 788,968 

See independent accountants' review report. 
Exhibit S-7 
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Exhibit S-12 
Print Page 1 of 

COMMERCIAL LOANS VAR - P&I (360) 

3130013176 

Printed by; Anna Blake 

MACHIAS SAVINGS BANK 4/26/2011 5:03:54 PM 

Reporting Institution: 0 

IVote 3130013176 - TWIN CITIES AIR SERVICE LLC 

Rel Birthfiate 

[0 i j TWIN cme s AIR SERVICE LLC * 

NATHAN HUMPHREY, MEMBER 

0 81 AIRPORT DRIVE 

AUBURN ME 04210 

Pht»ne 

[H] (207) 782-3882 

Tax 

Itlentifitation 

EIN 82-0551898 

Tax Name: [1] TWIN CITIES AIR SERVICE LLC 82-0551898 

61994 Responsibility Code: 

61994 Purpose Code: 

[575001] COMMERCIAL Collateral: 

LOANS VAR - P&I (360) 

[13] BANGOR 

Account Classification 

Portfolio: 

Line: 

Product: 

Accounting Branch: 

Warnings 

Teller Alert: [11] See Misc Add 

Priorit y Miscellaneous 

Description 

a 8/24/10 UBERTV AVIATION LLC IS A CO-SIGNER AND HAS A BAD ADDRESS. 

Loan To Date 

[202] Andrew C Dorr 

[510] Commercial General 

Purpose Ln 

Multiple 

Date 

Jul 01 , 2010 

Jul 01 , 2010 

Aug 11 , 2010 

Aug 16, 2010 

Sep 02, 2010 

Sep 30, 2010 

Nov 01 , 2010 

Dec 02, 2010 

Jan 11, 2011 

Feb 03, 2011 

Mar 01 , 2011 

Mar 31 , 2011 

Description 

Original Rate 

NEW LOAN 

Automatic Late Charge 

Payment - Extra To Principal 

Payment - Extra To Principal 

Payment - Extra To Principal 

Payment - Extra To Principaf 

Regular Payment 

MSB ECORP LOAN PAYMENT FROM 

BUSINESS FREE 8012471230 

MSB ECORP LOAN PAYMENT FROM 

BUSINESS FREE 8012471230 

Late Charge: 

MSB ECORP LOAN PAYMENT FROM 

BUSINESS FREE 8012471230 

MSB ECORP LOAN PAYMENT FROM 

Transaction 

Amount 

Interest Rate; 

Principal 

6.0000% 

$570,000.00 $570,000.00 

$241.86 

$4,837.35 

$4,837.35 

$4,837.35 

$4,837.35 

$4,837.35 

$4,837.35 

$5,079.21 

$241.86 

$4,837.35 

$4,837.35 

$467.35 

$3,223.68 

$2,194.58 

$1,828.74 

$1,932.21 

$1,101.67 

$2,693.56 

$2,425.60 

$2,066.69 

Interes t Principal 

Balance 

$570,000.00 

$570,000.00 

$4,370.00 $569,532.65 

$1,613.67 $566,308.97 

$2,642.77 $564,114.39 

$3,008.61 $562,285.65 

$2,905.14 $560,353.44 

$3,735.68 $559,251.77 

$2,143.79 $556,558.21 

$2,411.75 $554,132.61 

$2,770.66 $552,065.92 

BUSINESS FREE 8012471230 

http://10.l.l.55/LAS_LASl 151/LASl 151 .aspx?Action=PRINT&XMLGuid=0ED87FBD-... 4/26/2011 
Exhibit s-13 
TITLE 18 VERIFICATION 

The contents of this application and the attached exhibit(s) are true and correct to the best 

of my knowledge and belief. Pursuant to Title 18 United States Code Section 1001. I 

Nathan Humphrey, in my individual capacity and as the authorized representative ofthe 

applicant, have not in any manner knowingly and willfully falsified, concealed or failed 

to disclose any material fact or made any false, fictitious, or fraudulent statement or 

knowingly used any documents which contain such statements in connection with the 

preparation, filing or prosecution of the application. 1 understand that an individual who 

is found to have violated the provisions of 18 U.S.C. section 1001 shall be fined or 

imprisoned not more than five years, or both, 

^ 

Submitted by. 

Nathan Humphrey 

President of Twin Cities Air Service, LLC 

t e - d ss£s frsi ie s aoiAaas ai y saiii o NIM X wd i-tix e T I ez-se-Aw w