The platform for the Tofino Shared Ownership Program (the “Program”) is contained in the Tofino form of Operating Agreement (the “Operating Agreement”), supplemented by the Tofino form of General Management Agreement (“GMA”). The initial platform involves a limited liability company (the “LLC”) with up to fifty (50) members in which Tofino Homes’ affiliate, Member Management, Inc., a Delaware corporation, will be appointed to act as the non-member manager (“Owner Representative”). The Operating Agreement provides that the Owner Representative will oversee all LLC activities and will engage General Management Inc. (dba “Tofino Homes”), a Delaware corporation (“Tofino Homes”), as property manager (the “General Manager”) under the GMA. Tofino Homes will provide access to the Tofino Homes Website and Tofino Homes Owner Dashboard to the Members of the LLC in conformity with the Operating Agreement. The General Manager will subcontract with a local property Management company for the physical property management aspects of the Program.

Key Features of the Operating Agreement and the Program

1. Name of the LLC:

2. Address of the Tofino Home:

3. Number of LLC Members:

4. Description of Tofino Home:

5. Price of Membership Interests:

6. Powers and Authority of LLC: General power and authority is typical of all limited liability companies, but includes the additional features required for Program and Property management.

7. Description of the Program: The program is a modern, frictionless way to own income generating vacation rental homes entirely online. Each Member will have the right to full transparency of the Tofino Home’s progress of construction, expenses and revenue by accessing the owner dashboard and other services/portals. Dividend checks are issued to all members of the LLC in proportion to members’ interest percentage once construction is completed and on a monthly basis. The General Manager is responsible for providing secured property management services to the Tofino Home by providing oversight of:

Property Management
Revenue Management (ie Competitive nightly rate strategy)
Revenue Collection and Monthly Dividend distribution.

8. Capital Calls: Capital calls can be issued to members for any “assessments” levied by the Owner Representative for such things as required property improvements, uninsured losses related to major damage, and the like.

9. Investment Sponsor: Tofino acts as the sponsor that raised capital in order to carry out the business plan. Tofino is responsible to execute and oversee the project, which includes purchasing the asset, organizing contractors and other parties necessary to execute the Tofino Home, arranging financing, managing the project, and ultimately overseeing the sale of the asset. Tofino contributes further services to engage and oversee the architect, consultants, permitting and general contractor for 20% interest of the Tofino Home.

10. LLC Governance. The LLC is non-member managed by Owner Representative, and the Program is to be managed by General Manager under the terms of the GMA. Members are to have no day-to-day involvement with the management of the LLC and the Program, and there will be no regularly scheduled meetings of Members. Member meetings will only be held to allow the Members to make certain major decisions on “Matters of Concern” and only those that are deemed “Important Matters”, “Major Matters” or “Unanimous Matters”. Important Matters require the Consent of 66% Members interest. Major matters require the Consent of 75% Members interest and only the sale of the Tofino Home requires Unanimous Consent. For details on what these Matters of Concern are, see Section 2.1(c) and (d).

11. Restrictions Upon Resale or Transfer. As noted above, no resale or transfer of a Membership Interest is permitted for three (3) years. Thereafter, transfers are subject to the limitations contained in the Operating Agreement. Among these limitations a Member who desires to transfer a Membership Interest must offer that Membership Interest to the other Members first on terms the transferring Member determines, and if no other Member desires to buy the membership Interest on those terms, then the member may offer the Membership Interest through the General Manager’s resale program, but not otherwise. The property will be appraised upon completion of construction by a third-party by choice of General Manager.

1. 1. General Management Service: Includes all of the financial and accounting services required to run the Program and maintain the Tofino Home such as property taxes, LLC management, municipal requirements and the likes. It also covers any Tofino Homes Fees associated with the Website and the Owner Dashboard.
   
   
2. 2. Property Management Service: Includes management of the property (such as repairs and utilities), revenue management (such as booking management, listings and managing optimal nightly rates) and 24/7 guest communication services.
   
   
3. 3. General Management Agreement. The GMA covers both General Management Services and Property Management Services. General Manager is responsible for both but may subcontract the Property Management Services out to a local Property Manager.
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5. 4. Fees. General Manager is entitled to receive a Property Management Fee for performing the Property Management Services and an additional fee for General Management. If the General manager engages a local Property Manager, the fee charged by the local Property Manager constitutes the Property Management Fee.
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7. 5. General Manager Subsidies. In consideration of the payment to the General Manager of the General Management Fee, the General Manager agrees to cover any “shortfalls” in Assessment payments due from the Members. If such shortfalls are not cured by a Delinquent Member, General Manager may exercise its rights as the holder of the LLC Security Interest against that Delinquent Member’s Assessment obligations and cause the Membership Interest of that Delinquent Member to be sold to generate proceeds to cover the Delinquencies.

6. Termination. Without General Manager’s consent, the LLC may not terminate the GMA, unless such termination is based upon General Manager’s gross negligence or willful misconduct amounting to a default under the GMA and is approved by the Consent of 75% Members interest.

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