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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. 11 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 iP 16 L -sr zc 15 G r 2B0.28• /i5.//s' IJt fes' us: TRACT o .. V.A. ID Ai• QSBE 303-30-17-4 4s' at o O di40o r, 1.930 AC.(CI 0 10#3 `VV 4.706 AC. 0 1 41 LOT 1 LOT 2 LOT 3 LOT 4 4 It. MM 1 it zea.=3 ; a Q a M M 091 ��py FWY 2.346 AGd7 2/59 AC(CI 1. FWY e •6 w 0 < vi W 1.358 AC. d 5 N J tt 255.23' c so' 150 l N0. 156 �'c i)' L 0 19 - - z O7 pM • < ��Q 113' FWY �` n STREEtw• 0 �- �� V� /esus' eo' i.,m; 0 ) I =5 aa.Ns' % /ail' ��Q V, 4 ,3 W/LSON �NI. " STREET . " A / 1 �----.1 ( I N 1 O s6r 7.<........P.e,qt. 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