Purchase and Sale Agreement - Dream Big Investment, LLC - 2017-08-22 PURCHASE AND SALE AGREEMENT
This Agreement is made and entered into on 4V 11272017 between
Dream Big Investments LLC, a limited liability company ("Seller") and the Costa
Mesa Sanitary District ("Buyer"), with reference to the following facts:
Recitals
WHEREAS, Seller has offered its property for sale, located at 2252 Fairview
Avenue, Costa Mesa California; and
WHEREAS, Buyer desires to purchase said property and its Board of
Directors has determined that said purchase is necessary and proper to the
exercise of its powers and in compliance with all laws.
NOW, THEREFORE the parties agree as follows:
1. Seller warrants that it is a limited liability company, organized and
existing under the laws of the State of California (#200631510042); and
Michael F. Johnson is an officer thereof with the authority to sell the property.
The attached copy of the articles of incorporation was filed in the State of
California with the Secretary of State. (Exhibit A)This sale has been approved
by a resolution of the board of directors, attached hereto, which remains in
effect.
2. Michael F. Johnson warrants that he has the authority to sign on
behalf of the corporation in the capacity indicated and that the attached
Operating Agreement for Member-Managed Limited Liability Company,
remains in effect. (Exhibit B)
3. Seller agrees to sell and buyer agrees to purchase the property
located at 2252 Fairview Avenue, Costa Mesa, California and described
herein in Exhibit C.
4. TheP urchase prices shall be One Million Six Hundred Ninety
Thousand Dollars ($1,690,000) payable in accordance with the escrow
instructions entered into contemporaneously herewith.
5. (a) This sale shall be consummated through an escrow
established with First American Title, Santa Ana, California. The closing date
is to be September 30, 2017. The escrow shall be opened when Buyer has
deposited $100,000 and both parties have executed identical escrow
instructions with First American Title and close of escrow shall be when the
deed is recorded.
(b) If Buyer fails to complete this purchase because of Buyer's
default, Seller shall retain as damages, the deposit paid. Buyer and Seller
agree that this amount is a reasonable sum given that it is impractical or
extremely difficult to establish the amount of damages that would actually be
suffered by Seller in the event Buyer were to breach this Agreement..
Seller Buyer
6. On the close of escrow title shall vest in the Costa Mesa Sanitary
District, a California sanitary district.
7. Seller shall by grant deed convey to Buyer a fee simple interest free
and clear of all title defects, liens, encumbrances, deeds of trust and
mortgages except real property taxes and assessments.
8. Seller shall procure a California Land Title Association standard
policy of title insurance in the amount of$1,690,000 to be paid by Seller and
to be issued by First American Title with only those exceptions to title as may
be agreed to.
9. All real property taxes, interest on assessments assumed, and
insurance premiums shall be prorated as of the closing date on the basis of
a 30-day month. All security deposits shall be credited to Buyer. Seller shall
pay any additional or supplemental taxes outside of escrow that accrued
before the close of escrow.
10. Seller shall pay all costs of clearing title, preparing and executing the
grant deed and shall pay any transfer taxes. Buyer shall pay any recording
fees. Each party shall pay half of the escrow fees.
11. Buyer offers and agrees to buy the property on the terms and
conditions stated in this agreement. Seller agrees to accept the offer and
to Buyer on the terms and conditions specified.
agrees to sell the property y
Buyer and Seller acknowledge that no real estate broker or agent services
have been rendered and that no commissions or fees are owed for those
services.
12. The parties acknowledge that a Phase 1 report has been prepared
for the property and that Buyer has had a property inspection and no
unacceptable defects have been discovered. Nevertheless should Buyer
discover a defect in title or property condition within 10 days of escrow
opening, it shall notify Seller, who shall then have 20 days to correct said
defect. If those defects are not remedied within that time frame, it shall be
Buyer's option to terminate the agreement or complete the purchase and
seek a reduction in price.
13. First American Title is to be able to issue an owner's policy
acceptable to Buyer as of the closing date, with liability not less than the
purchase price, covering the property, showing title vested in Buyer, and
showing as exceptions only those Buyer has approved.
14. Seller shall furnish Buyer within 10 days after this agreement is
signed by both parties, a preliminary title report and legible copies of
documents reported as exceptions. Buyer shall report to Seller within 10 days
any disapproval of an exception.
15. If Buyer so elects, Buyer may order at Buyer's expense an American
Land Title Association title report (ATLA report).
16. First American Title is to be able to issue its standard owners policy
of title insurance for not less than the purchase price showing title vested in
Dream Big Investments LLC.
17. Seller shall deliver possession of the property to Buyer free of all
leases or claims from tenants claiming a right to possession.
18. Seller warrants that there .are no pending government actions
against it and that there are no violations on the property of federal, state or
local laws. Seller also warrants that to its knowledge there is no litigation
pending on the use or operations or regarding any condition on the property.
19. Seller shall diligently continue its normal operations on the property
and the business conducted on it and shall maintain the property until the
close of escrow in good condition. Seller shall additionally be allowed to wind
down its operation and remain on the property without charge until December
31, 2017, on which date it will fully vacate the property and remove all
personal possessions. Buyer shall have the right to make improvements on
the property after the close of escrow and before December 31, 2017. Buyer
and Seller shall each reasonably cooperate in accommodating these
operations and occupancies during this time period.
20. Buyer warrants that there are no contracts pertaining to the property,
other than
no mechanics liens or other
no licenses granted, andobligations
,III
what has been disclosed.
21. If either party brings suit against the other party arising from this
agreement or the sale of the property, each side shall bear their own
attorney's fees.
22. Notices may be given under this Agreement as follows:
Costa Mesa Sanitary District Dream Big Investments LLC
290 Paularino Avenue 26456 San Torini Rd
Costa Mesa, California 92626 Mission Viejo, California 92692
Attn: Scott Carroll
23. This Agreement is the entire agreement and supersedes other
agreements, oral or written. This Agreement will be supplemented by escrow
instructions.
24. This agreement may be signed in counterparts and all counterparts
together shall be construed as one document.
25. This Agreement shall inure to the benefit of the successors and
assigns of the parties hereto.
In Witness Whereof the parties have executed this Agreement the date and
year above-written.
SELLER
Dream Big Investments LLC
BYi��,
TitleP.i1----
BUYER APPROVED AS TO FORM
Costa Mesa Sanitary District HARPS BURNS LLP
II �
By By
Presi•i'nt ( District Counsel
By. (1-6"10
Secretary
Exhibit A
=,' '• State of California File# 200631510042,
Kevin Shelley
Secretary of State .
Fiat:E d 41 sf�tF
�
LIMITED LIABILITY COMPANY • NOV 0 82006
ARTICLES OF ORGANIZATION
A$70.00 filing fee must accompany this form.
IMPORTANT—Read instructions before completing this form. This Space For Filing Use Only
1. NAME OF THE LIMITED LIABILITY COMPANY (END THE NAME WTH THE WORDS-LIMITED LIABILITY COMPANY.LTD.LIABILITY CO.'OR THE
ABBREVIATIONS'LLC OR'L L C.')
Dream Big Investments LIC
2. THE PURPOSE OF THE LIMITED LIABILITY COMPANY.IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR WHICH A UMITED
UABILrTY COMPANY MAY BE ORGANIZED UNDER THE BEVERLY-KILLEA LIMITED LIABILITY COMPANY ACT.
3. CHECK THE APPROPRIATE PROVISION BELOW AND NAME THE AGENT FOR SERVICE OF PROCESS.
® AN INDIVIDUAL RESIDING IN CALIFORNIA. PROCEED TO ITEM 4.
C:3 A CORPORATION WHICH HAS FILED A CERTIFICATE PURSUANT TO SECTION 1505. PROCEED TO ITEM 5.
AGENTS NAME: Mike Johnson
4. ADDRESS OF THE AGENT FOR SERVICE OF PROCESS IN CALIFORNIA,IF AN INDIVIDUAL:
ADDRESS 22452 Bayberry St.
CITY Mission Viejo STATE CA ZIP CODE 92692
S. THE LIMITED LIABILITY COMPANY WILL BE MANAGED BY: (CHECK ONE)
EiONE MANAGER
MORE THAN ONE MANAGER
ALL LIMITED LIABILITY COMPANY MEMBER(S)
6. OTHER MATTERS TO BE INCLUDED IN THIS CERTIFICATE MAY BE SET FORTH ON SEPARATE ATTACHED PAGES AND ARE MADE A
PART OF THIS CERTIFICATE. OTHER MATTERS MAY INCLUDE THE LATEST DATE ON WHICH THE LIMITED UABILITY COMPANY IS TO
DISSOLVE.
7. NUMBER OF PAGES ATTACHED,IF ANY:
S. TYPE OF BUSINESS OF THE LIMITED UABILITY COMPANY. (FOR INFORMATIONAL PURPOSES ONLY)
Real Estate Investment
9. IT IS HERE Y C 0 THAT I AM THE PERSON WHO EXECUTED THIS INSTRUMENT,WHICH EXECUTION IS MY ACT AND DEED.
11/7/2006
SIGNATUR F ORGANIZER DATE
KERRY WALSH,ORGANIZER
TYPE OR PRINT NAME OF ORGANIZER
10. RETURN TO:
1
NAME KERRY WALSH
FIRM
ADDRESS 173 N Main St#400
CITY/STATE Sayville NY
ZIP CODE 11782
L j
SEC/STATE FORM LLC-1(Rev.0612003)—FILING FEE 370 00 APPROVED BY SECRETARY OF STATE
RESOLUTION NO. 2017-901
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE COSTA MESA
SANITARY DISTRICT MAKING FINDINGS REGARDING THE PURCHASE OF
PROPERTY AT 2252 FAIRVIEW AS NECESSARY AND PROPER, AND
PERTAINING TO CEQA AND GENERAL PLAN CONFORMANCE, AND
PROVIDING AUTHORITY TO EXECUTE FURTHER DOCUMENTS
WHEREAS, the Board of Directors has authorized negotiations for the acquisition
of the property for sale at 2252 Fairview Avenue in the City of Costa Mesa and has
reached a tentative agreement with the Owner; and
WHEREAS, the Board does hereby determine to make the findings required by
Health and Safety Code Section 6514 that the acquisition of the property is
necessary and proper for the exercise of its powers in that the property is adjacent
to the District's yard facility and necessary for storage purposes; and
WHEREAS, the Board does hereby determine that the purchase of the property
has been submitted for general plan conformance to the City of Costa Mesa's
Planning Agency in accordance with Government Code Section 65402(c); and
WHEREAS, the Board does hereby determine that the purchase of the property at
Fairview Avenue, which has a garage type building on it presently used as a trailer
hitch assembly facility, is similar to what District desires the property for, namely
to store vehicles and other equipment, and therefore is exempt from CEQA as a
reconstruction of an existing facility or structure with the same purpose as the
original structure (15 CCR 15302), as a conversion of an existing structure from
one use to another with only minor exterior modifications (15 CCR 15303), or as
an infill project (15 CCR 15332); and
WHEREAS, the Board of Directors also desires to give further authority to enter
into final agreements and to sign other documents as may the necessary to
consummate the purchase.
Now, therefore, the Board of Directors does hereby Resolve and Determine as
follows:
1. That the above recitals are true and correct and constitute findings of the
Board of Directors.
2. That the Board has authorized the purchase of the property for the sum of
$1, 690,000.
3. That the President, Secretary and General Manager are authorized to sign
Purchase and Sale Agreements, Escrow Instructions, and any other
necessary documents to consummate the sale as may be approved by
District Counsel without further Board action.
22 June 2017.
PASSED and ADOPTED this day of ,
1 / / /
112...h. tA., / A
Secretary, Costa Mesa San' -ry District Pre/fent, Costa :sa Sanitary District
Board of Directors Bo-rd of Director
STATE OF CALIFORNIA)
COUNTY OF ORANGE ) SS
CITY OF COSTA MESA )
I, Noelani Middenway, Clerk of the Costa Mesa Sanitary District, hereby
certify that the above and foregoing Resolution No. 2017-901 was duly and
regularly passed and adopted by said Board of Directors at a regular meeting
e9 Y
thereof held on the 27 day of June, 2017 by the following vote:
AYES: Scheafer, Ferryman, Schafer, Ooten, Perry
NAYES: None
ABSTAIN: None
ABSENT: None '
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
of the Costa Mesa Sanitary District, this 29 day of June 2017.
/i//7 41, Of' ' ,
No: -ni,Mi•:,; way
Clerk of the Costa Mesa Sani =ry District
Exhibit B
OPERATING AGREEMENT FOR MEMBER-MANAGED LIMITED
LIABILITY COMPANY
I. PRELIMINARY PROVISIONS
(1) Effective Date: This operating agreement of
Dream Big Investments LLC , effective
11/17/2006 , is adopted by the members
whose signatures appear at the end of this
agreement.
(2) Formation: This limited liability company
(LLC) was formed by filing Articles of
Organization, a Certificate of Formation or a
similar organizational document with the LLC
filing office of the state of
Califomia on 11/17/2006 . A
copy of this organizational document has been
placed in the LLC's records book.
(3) Name: The formal name of this LLC is as
stated above. However, this LLC may do business
under a different name by complying with the
state' s fictitious or assumed business name
statutes and procedures.
(4) Registered Office and Agent: The registered
g g 9
office of this LLC and the registered agent at
this address are as follows:
22452 Bayoertv St_Mission Viejo,ca.92692 . The registered office and
agent may be changed from time to time as the
members may see fit, by filing a change of
registered agent or office form with the state LLC
filing office. It will not be necessary to amend
this provision of the operating agreement if and
when such a change is made.
(5) Business Purposes: The specific business
purposes and activities contemplated by the
founders of this LLC at the time of initial
signing of this agreement consist of the
following: Real Estate Investment
1
It is understood that the foregoing statement
of purposes shall not serve as a limitation on the
powers or abilities of this LLC, which shall be
permitted to engage in any and all lawful business
activities. If this LLC intends to engage in
business activities outside the state of its
formation that require the qualification of the
LLC in other states, it shall obtain such
qualification before engaging in such out-of-state
activities.
(6) Duration of LLC: The duration of this LLC
shall be Perpetual
Further, this LLC shall terminate when a
proposal to dissolve the LLC is adopted by the
membership of this LLC or when this LLC is
otherwise terminated in accordance with law.
II. MEMBERSHIP PROVISIONS
(1) Nonliability of Members: No member of this
LLC shall be personally liable for the expenses,
debts, obligations or liabilities of the LLC, or
for claims made against it.
(2) Reimbursement for Organizational Costs:
Members shall be reimbursed by the LLC for
organizational expenses paid by the members. The
LLC shall be authorized to elect to deduct
organizational expenses and start-up expenditures
ratably over a period of time as permitted by the
Internal Revenue Code and as may be advised by the
LLC's tax advisor.
(3) Management: This LLC shall be managed
exclusively by all of its members.
(4) Members' Percentage Interests: A member's
percentage interest in this LLC shall be computed
as a fraction, the numerator of which is the total
of a member's capital account and the denominator
2
of which is the total of all capital accounts of
all members. This fraction shall be expressed in
this agreement as a percentage, which shall be
called each member' s "percentage interest" in this
LLC.
(5) Membership Voting: Except as otherwise may
be required by the Articles of Organization,
Certificate of Formation or a similar
organizational document, other provisions of this
operating agreement, or under the laws of this
state, each member shall vote on any matter
submitted to the membership for approval in
proportion to the member's percentage interest in
this LLC. Further, unless defined otherwise for a
particular provision of this operating agreement,
the phrase "majority of members" means the vote of
members whose combined votes equal more than 50%
of the votes of all members in this LLC.
(6) Compensation: Members shall not be paid as
members of the LLC for performing any duties
associated with such membership, including
management of the LLC. Members may be paid,
however, for any services rendered in any other
capacity for the LLC, whether as officers,
employees, independent contractors or otherwise.
(7) Members' Meetings: The LLC shall not
provide for regular members' meetings. However,
any member may call a meeting by communicating his
or her wish to schedule a meeting to all other
members. Such notification may be in person or in
writing, or by telephone, facsimile machine, or
other form of electronic communication reasonably
expected to be received by a member, and the other
members shall then agree, either personally, in
writing, or by telephone, facsimile machine or
other form of electronic communication to the
member calling the meeting, to meet at a mutually
acceptable time and place. Notice of the business
3
to be transacted at the meeting need not be given
to members by the member calling the meeting, and
any business may be discussed and conducted at the
meeting.
If all members cannot attend a meeting, it
shall be postponed to a date and time when all
members can attend, unless all members who do not
attend have agreed in writing to the holding of
the meeting without them. If a meeting is
postponed, and the postponed meeting cannot be
held either because all members do not attend the
postponed meeting or the nonattending members have
not signed a written consent to allow the
postponed meeting to be held without them, a
second postponed meeting may be held at a date and
time announced at the first postponed meeting. The
date and time of the second postponed meeting
shall also be communicated to any members not
attending the first postponed meeting. The second
postponed meeting may be held without the
attendance of all members as long as a majority of
the percentage interests of the membership of this
LLC is in attendance at the second postponed
meeting. Written notice of the decisions or
approvals made at this second postponed meeting
shall be mailed or delivered to each nonattending
member promptly after the holding of the second
postponed meeting.
Written minutes of the discussions and
proposals presented at a members' meeting, and the
votes taken and matters approved at such meeting,
shall be taken by one of the members or a person
designated at the meeting. A copy of the minutes
of the meeting shall be placed in the LLC's
records book after the meeting.
(8) Membership Certificates: This LLC shall be
authorized to obtain and issue certificates
representing or certifying membership interests in
4
this LLC. Each certificate shall show the name of
the LLC, the name of the member, and state that
the person named is a member of the LLC and is
entitled to all the rights granted members of the
LLC under the Articles of Organization,
Certificate of Formation or a similar
organizational document, this operating agreement
and provisions of law. Each membership certificate
shall be consecutively numbered and signed by one
or more officers of this LLC. The certificates
shall include any additional information
considered appropriate for inclusion by the
members on membership certificates.
In addition to the above information, all
membership certificates shall bear a prominent
legend on their face or reverse side stating,
summarizing or referring to any transfer
restrictions that apply to memberships in this LLC
under the Articles of Organization, Certificate of
Formation or a similar organizational document
and/or this operating agreement, and the address
where a member may obtain a copy of these
restrictions upon request from this LLC.
The records book of this LLC shall contain a
list of the names and addresses of all persons to
whom certificates have been issued, show the date
of issuance of each certificate, and record the
date of all cancellations or transfers of
membership certificates.
(9) Other Business by Members: Each member
shall agree not to own an interest in, manage or
work for another business, enterprise or endeavor,
if such ownership or activities would compete with
this LLC' s business goals, mission, profitability
or productivity, or would diminish or impair the
member's ability to provide maximum effort and
performance in managing the business of this LLC.
5
III. TAX AND FINANCIAL PROVISIONS
(1) Tax Classification of LLC: The members of
this LLC intend that this LLC be initially
classified as a Corporation for federal
and, if applicable, state income tax purposes. It
is understood that all members may agree to change
the tax treatment of this LLC by signing, or
authorizing the signature of, IRS Form 8832,
Entity Classification Election, and filing it with
the IRS and, if applicable, the state tax
department within the prescribed time limits.
(2) Tax Year and Accounting Method: The tax
year of this LLC shall be CalendarYear,The LLC shall
use the Cash Method
method of accounting. Both the tax year and the
accounting period of the LLC may be changed with
the consent of all members if the LLC qualifies
for such change, and may be effected by the filing
of appropriate forms with the IRS and state tax
authorities.
(3) Tax Matters Partner: If this LLC is
required under Internal Revenue Code provisions or
regulations, it shall designate from among its
members a "tax matters partner" in accordance with
Internal Revenue Code Section 6231 (a) (7) and
corresponding regulations, who will fulfill this
role by being the spokesperson for the LLC in
dealings with the IRS as required under the
Internal Revenue Code and Regulations, and who
will report to the members on the progress and
outcome of these dealings.
(4) Annual Income Tax Returns and Reports:
Within 60 days after the end of each tax year of
the LLC, a copy of the LLC's state and federal
income tax returns for the preceding tax year
shall be mailed or otherwise provided to each
member of the LLC, together with any additional
6
information and forms necessary for each member to
complete his or her individual state and federal
income tax returns. If this LLC is classified as a
partnership for income tax purposes, this
additional information shall include a federal
(and, if applicable, state) Form K-i (Form 1065-
Partner's Share of Income, Credits, Deductions) or
equivalent income tax reporting form. This
additional information shall also include a
financial report, which shall include a balance
sheet and profit and loss statement for the prior
tax year of the LLC.
(5) Bank Accounts: The LLC shall designate one
or more banks or other institutions for the
deposit of the funds of the LLC, and shall
establish savings, checking, investment and other
such accounts as are reasonable and necessary for
its business and investments. One or more members
of the LLC shall be designated with the consent of
all members to deposit and withdraw funds of the
LLC, and to direct the investment of funds from,
into and among such accounts. The funds of the
LLC, however and wherever deposited or invested,
shall not be commingled with the personal funds of
any members of the LLC.
(6) Title to Assets: All personal and real
property of this LLC shall be held in the name of
the LLC, not in the names of individual members.
IV. CAPITAL PROVISIONS
(1) Capital Contributions by Members: Members
shall make the following contributions of cash,
property or services as shown next to each
member's name below. Unless otherwise noted, cash
and property described below shall be paid or
delivered to the LLC on or by
12/01/2006 . The fair market values of
7
items of property or services as agreed between
the LLC and the contributing member are also shown
below. The percentage interest in the LLC that
each member shall receive in return for his or her
capital contribution is also indicated for each
member.
Name of Member Contribution Fair Market Percentage
Value Interest in
Michael F.Johnson 250.00 250.00 50 g
LeAnne Johnson 250.00 250.00 50
$
(2) Additional Contributions by Members: The
members may agree, from time to time by unanimous
vote, to require the payment of additional capital
contributions by the members, on or by a mutually
agreeable date.
(3) Failure to Make Contributions: If a member
fails to make a required capital contribution
within the time agreed for ,a member's
contribution, the remaining members may, by
unanimous vote, agree to reschedule the time for
payment of the capital contribution by the late-
paying member, setting any additional repayment
terms, such as a late payment penalty, rate of
interest to be applied to the unpaid balance, or
other monetary amount to be paid by the delinquent
member, as the remaining members decide.
Alternatively, the remaining members may, by
unanimous vote, agree to cancel the membership of
the delinquent member, provided any prior partial
payments of capital made by the delinquent member
8
are refunded promptly by the LLC to the member
after the decision is made to terminate the
membership of the delinquent member.
(4) No Interest on Capital Contributions: No
interest shall be paid on funds or property
contributed as capital to this LLC, or on funds
reflected in the capital accounts of the members.
(5) Capital Account Bookkeeping: A capital
account shall be set up and maintained on the
books of the LLC for each member. It shall reflect
each member's capital contribution to the LLC,
increased by each member's share of profits in the
LLC, decreased by each member's share of losses
and expenses of the LLC, and adjusted as required
in accordance with applicable provisions of the
Internal Revenue Code and corresponding income tax
regulations.
(6) Consent to Capital Contribution Withdrawals
and Distributions: Members shall not be allowed to
withdraw any part of their capital contributions
or to receive distributions, whether in property
or cash, except as otherwise allowed by this
agreement and, in any case, only if such
withdrawal is made with the written consent of all
members.
(7) Allocations of Profits and Losses: No
member shall be given priority or preference with
respect to other members in obtaining a return of
capital contributions, distributions or
allocations of the income, gains, losses,
deductions, credits or other items of the LLC. The
profits and losses of the LLC, and all items of
its income, gain, loss, deduction and credit shall
be allocated to members according to each member's
percentage interest in this LLC.
(8) Allocation and Distribution of Cash to
Members: Cash from LLC business operations, as
9
well as cash from a sale or other disposition of
LLC capital assets, may be distributed from time
to time to members in accordance with each
member's percentage interest in the LLC, as may be
decided by Majority of the members.
(9) Allocation of Noncash Distributions: If
proceeds consist of property other than cash, the
members shall decide the value of the property and
allocate such value among the members in
accordance with each member's percentage interest
in the LLC. If such noncash proceeds are later
reduced to cash, such cash may be distributed
among the members as otherwise provided in this
agreement.
(10) Allocation and Distribution of Liquidation
Proceeds: Regardless of any other provision in
this agreement, if there is a distribution in
liquidation of this LLC, or when any member's
interest is liquidated, all items of income and
loss shall be allocated to the members' capital
accounts, and all appropriate credits and
deductions shall then be made to these capital
accounts before any final distribution is made. A
final distribution shall be made to members only
to the extent of, and in proportion to, any
positive balance in each member's capital account.
V.V. MEMBERSHIP WITHDRAWAL AND TRANSFER PROVISIONS
(1) Withdrawal of Members: A member may
withdraw from this LLC by giving written notice to
all other members at least Thirty
days before the date the withdrawal is to be
effective.
(2) Restrictions on the Transfer of Membership:
A member shall not transfer his or her membership
in the LLC unless all nontransferring members in
the LLC first agree to approve the admission of
10
the transferee into this LLC. Further, no member
may encumber a part or all of his or her
membership in the LLC by mortgage, pledge,
granting of a security interest, lien or
otherwise, unless the encumbrance has first been
approved in writing by all other members of the
LLC.
Notwithstanding the above provision, any member
shall be allowed to assign an economic interest in
his or her membership to another person without
the approval of the other members. Such an
assignment shall not include a transfer of the
member's voting or management rights in this LLC,
and the assignee shall not become a member of the
LLC.
VI. DISSOLUTION PROVISIONS
(1) Events That Trigger Dissolution of the LLC:
The following events shall trigger a dissolution
of the LLC, except as provided:
(a) the death, permanent incapacity,
bankruptcy, retirement, resignation or expulsion
of a member, except that within Thirty days of the
happening of any of these events, all remaining
members of the LLC may vote to continue the legal
existence of the LLC, in which case the LLC shall
not dissolve;
(b) the expiration of the term of existence
of the LLC if such term is specified in the
Articles of Organization, Certificate of Formation
or a similar organizational document, or this
operating agreement;
(c) the written agreement of all members to
dissolve the LLC;
(d) entry of a decree of dissolution of the
LLC under state law.
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VII. GENERAL PROVISIONS
(1) Officers: The LLC may designate one or more
officers, such as a President, Vice President,
Secretary and Treasurer. Persons who fill these
positions need not be members of the LLC. Such
positions may be compensated or noncompensated
according to the nature and extent of the services
rendered for the LLC as a part of the duties of
each office. Ministerial services only as a part
of any officer position will normally not be
compensated, such as the performance of officer
duties specified in this agreement, but any
officer may be reimbursed by the LLC for out-of-
pocket expenses paid by the officer in carrying
out the duties of his or her office.
(2) Records: The LLC shall keep at its
principal business address a copy of all
proceedings of membership meetings, as well as
books of account of the LLC's financial
transactions. A list of the names and addresses of
the current membership of the LLC also shall be
maintained at this address, with notations on any
transfers of members' interests to nonmembers or
persons being admitted into membership in the LLC.
Copies of the LLC' s Articles of Organization,
Certificate of Formation or a similar
organizational document, a signed copy of this
operating agreement, and the LLC's tax returns for
the preceding three tax years shall be kept at the
principal business address of the LLC. A statement
also shall be kept at this address containing any
of the following information that is applicable to
this LLC:
• the amount of cash or a description and value
of property contributed or agreed to be
contributed as capital to the LLC by each
member;
12
• a schedule showing when any additional capital
contributions are to be made by members to this
LLC;
• a statement or schedule, if appropriate,
showing the rights of members to receive
distributions representing a return of part or
all of members' capital contributions; and
• a description of, or date when, the legal
existence of the LLC will terminate under
provisions in the LLC' s Articles of
Organization, Certificate of Formation or a
similar organizational document, or this
operating agreement.
If one or more of the above items is included
or listed in this operating agreement, it will be
sufficient to keep a copy of this agreement at the
principal business address of the LLC without
having to prepare and keep a separate record of
such item or items at this address.
Any member may inspect any and all records
maintained by the LLC upon reasonable notice to
the LLC. Copying of the LLC's records by members
is allowed, but copying costs shall be paid for by
the requesting member.
(3) All Necessary Acts: The members and
officers of this LLC are authorized to perform all
acts necessary to perfect the organization of this
LLC and to carry out its business operations
expeditiously and efficiently. The Secretary of
the LLC, or other officers, or all members of the
LLC, may certify to other businesses, financial
institutions and individuals as to the authority
of one or more members or officers of this LLC to
transact specific items of business on behalf of
the LLC.
(4) Mediation and Arbitration of Disputes Among
Members: In any dispute over the provisions of
13
r
this operating agreement and in other disputes
among the members, if the members cannot resolve
the dispute to their mutual satisfaction, the
matter shall be submitted to mediation. The terms
and procedure for mediation shall be arranged by
i
the parties to the dispute.
If good-faith mediation of a dispute proves
impossible or if an agreed-upon mediation outcome
cannot be obtained by the members who are parties
to the dispute, the dispute may be submitted to
arbitration in accordance with the rules of the
American Arbitration Association. Any party may
commence arbitration of the dispute by sending a
written request for arbitration to all other
parties to the dispute. The request shall state
the nature of the dispute to be resolved by
arbitration, and, if all parties to the dispute
agree to arbitration, arbitration shall be
commenced as soon as practical after such parties
receive a copy of the written request.
All parties shall initially share the cost of
arbitration, but the prevailing party or parties
may be awarded attorney fees, costs and other
expenses of arbitration. All arbitration decisions
shall be final, binding and conclusive on all the
parties to arbitration, and legal judgment may be
entered based upon such decision in accordance
with applicable law in any court having
jurisdiction to do so.
(5) Entire Agreement: This operating agreement
represents the entire agreement among the members
of this LLC, and it shall not be amended, modified
or replaced except by a written instrument
executed by all the parties to this agreement who
are current members of this LLC as well as any and
all additional parties who became members of this
LLC after the adoption of this agreement. This
agreement replaces and supersedes all prior
14
written and oral agreements among any and all
members of this LLC.
(6) Severability: If any provision of this
agreement is determined by a court or arbitrator
to be invalid, unenforceable or otherwise
ineffective, that provision shall be severed from
the rest of this agreement, and the remaining
provisions shall remain in effect and enforceable.
VIII. SIGNATURES OF MEMBERS AND SPOUSES
(1) Execution of Agreement: In witness whereof,
the members of this LLC sign and adopt this
agreement as the operating agreement of this LLC.
Date: 7/ /7
signature: G11 .4,Ce
Printed Name: Michael F. Johnson , Member
Date: KJIN J,`2r�t
Signature: Q_��hn
Printed Name: LeAnne J nson , Member
Date:
Signature:
Printed Name: , Member
Date:
Signature:
Printed Name: , Member
Date:
Signature:
Printed Name: , Member
Date:
15
Exhibit C
2252 Fairview Road, Costa Mesa California 92627
TR 156 Lot 1 W 165.23 FTS 160 FT— EX STS
A commercial building of approximately 1,176 square feet situated on approximately
14,810 square feet know as APN 419-091-03
THIS MAP WAS PREPARED FOR ORANGE
COUNTY ASSESSOR DEPT. PURPOSES ONL Y. 4
THE ASSESSOR MAKES NO GUARANTEE AS TO
ITS ACCURACY NOR ASSUMES ANY LIABILITY
FOR OTHER USES. NOT TO BE REPRODUCED.
ALL RIGHTS RESERVED.
11 COPYRIGHT ORANGE COUNTY ASSESSOR 2009
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MARCH 1978 TRACT NO. 156 M.M. 11-47 NOTE - ASSESSOR'S BLOCK & ASSESSOR'S MAP
PARCEL NUMBERS BOOK 419 PAGE 09
SHOWN IN CIRCLES COUNTY OF ORANGE