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2018/08/23 Menifee-La Piedra Rd 29, LLC Model Home Complex TR30812 Boulder Estates d.L:G�TY kjk ENIFE _�1 4 CITY OF MENIFEE Planning Division Community Development Department Model Home Complex Agreement for Tract Map No. 30812 — Boulder Estates This Model Home Complex Agreement("Agreement") is made this day of �S�2018, by and between the City of Menifee ("City") and Menifee-La Piedra Road 29, LLC, a Delaware Limited Liability Company, ("Developer') (collectively the "Parties") in exchange for good and valuable consideration receipt of which is hereby acknowledged. City agrees to issue Building Permits for a model home complex and associated facilities (the "Model Home Complex") as set forth on Exhibit A to this Agreement on property located as Lot 27 and Lot 28 of Tract No. 30812 (APNs 360-681-006, 360-681-007),within Tract No. 30812 (the "Tract" or"Tract Map") upon completion of the terms and conditions set forth in this Agreement. The Tract is presently zoned R-1 20000 (One-family Dwellings) and has a General Plan land use of Rural Residential %2 acre minimum (RR1/2). Such zoning and General Plan designations allow the construction and sale of individual single-family dwellings, one per recorded lot, with City approval and recordation of a Tract Map as provided under the State of California Subdivision Map Act. Because the Model Home Complex will contain dwellings that possess atypical features from those of a standard home and the one (1) additional model home will also possess atypical features, such as office accommodations and trap fencing, etc., the City agrees to allow construction and operation of such atypical features under this Model Home Complex Agreement, for a period not to exceed three (3) years unless extended in writing as provided herein and subject to the requirements and stipulations set forth in this Agreement. It is understood and agreed that all physical public infrastructure improvements required for the safe ingress and egress to the Model Home Complex from existing, improved and accepted public rights-of-way shall be in place to the satisfaction of the City's Engineering Department, regardless of whether such improvements have been finally approved and accepted by the City prior to opening the Model Home Complex to the public. Developer shall ensure the physical safety of customers/clients that may visit the Model Home Complex approved under this Agreement. While phasing of development shall be allowed, each phase must be approved by the City and constructed in such a manner as to ensure the safety of customers/clients, as well as new home owners and all construction shall be in compliance with all state and federal regulations, including without limitation, compliance with the Americans with Disabilities Act. Developer agrees to remove, amend, modify or reconstruct, or cause the removal, amendment, modification or reconstruction of the individual dwellings within the Model Home Complex to the Model Home Complex Agreement for Tract No. 2018-063 (TR30812) level and degree necessary to ensure that such structures are clearly identifiable as a typical home within the surrounding neighborhood of the dwelling units upon full occupancy (less the model homes), but in no case more than sixty (60) days from the close of escrow of the final (production) dwelling sold by Developer within Tract No. 30812, unless otherwise agreed to in writing by the City. At a minimum, Developer shall complete all of the following: remove any trap fencing, all signage or other displays, attraction or directional devices used to direct individuals to the Model Home Complex, infill any access ways within or through block walls or fences to the Model Home Complex, remove any landscaping/associated irrigation, install City required driveway surfaces where needed, and remove all other ancillary items atypical of a single-family residential dwelling. The above-noted removal, amendment, modification or reconstruction of the individual dwellings within the Model Home Complex shall be completed within sixty (60) days from the close of escrow of the final dwelling (less the model homes) within the approved Tract, or by the close of escrow of any dwelling within the Model Home Complex, whichever comes first, unless otherwise mutually agreed in writing by and between the City and Developer. In no case, however, shall the modifications agreed to under this Agreement remain in place beyond three (3) years from the date of this Agreement, unless otherwise extended by mutual agreement of the Parties in writing. The location of the dwellings subject to this Model Home Complex Agreement is lot specific and the approvals granted herein shall not be transferable between lots. This limitation, however, does not preclude the City and Developer from amending this Agreement, in writing, to establish alternative location(s) for the Model Home Complex, or individual dwellings within a Model Home Complex. A surety, in a form acceptable to the City Manager of the City of Menifee, is herewith provided in a sum as detailed below for the express purpose of the removal/modifications/reconstruction of the Model Home Complex as detailed below, shall be provided prior to and as an integral part of entering into this Agreement. Developer shall notify City of completion of any removal/modification/reconstruction undertaken pursuant to the terms of this Agreement and City shall inspect and review the Model Home Complex within thirty (30) days of receipt of such notification. If the City determines and is satisfied that Developer has removed, amended, modified or reconstructed, or caused the removal, amendment, modification or reconstruction of the individual dwellings within the Model Home Complex to the level and degree necessary to ensure that such structures are clearly identifiable as typical homes within the surrounding neighborhood of the dwelling units, any surety, cash deposit or release of bonds in the possession of the City directly associated with the individual dwellings within the Model Home Complex following such removal, amendment, modification or reconstruction shall be returned to the undersigned within thirty (30) days of the written notification by the Developer or his/her representative of the completion of such work. If the Developer, or a representative, or agent thereof, fails to remove, amend, modify or reconstruct, or cause the removal, amendment, modification or reconstruction of the individual dwellings within the Model Home Complex to the satisfaction of the City, the undersigned authorizes the City, its employees, representatives or agents, to enter the property, physically remove, amend, modify or reconstruct, the dwellings within the Model Home Complex to a level and degree necessary to ensure compliance with the terms of this Agreement. Any and all costs incurred by the City, including any fees from agencies other than the City, including attorney fees, for said removal, amendment, modification or reconstruction shall be deducted from the surety Page 2 of 4 Model Home Complex Agreement for Tract No. 2018-063 (TR30812) noted above and written notice thereof provided to the Developer. Any costs incurred by the City in excess of the surety established herein and on file with the City shall be reimbursed to the City within thirty (30) days of the written notification to the Developer of the completion of such work. Neither a Certificate of Occupancy nor Final Inspection shall be issued or conducted upon the dwellings subject to this Model Home Complex Agreement until such reimbursement has been provided to the City. Any excess surety, cash deposit or release of bonds still in the position of the City following any removal, amendment, modification or reconstruction of the above noted dwellings shall be returned to the undersigned within thirty (30) days of the completion of such work. No Certificate of Occupancy or Final Inspection shall be requested or granted for any individual dwelling subject to this Model Home Complex Agreement prior to the conversion of the dwellings within the Model Home Complex until such time as the dwellings are removed, amended, modified or reconstructed, as identified herein. A temporary Certificate of Occupancy may be issued to allow the furnishing, preparation of work for display, display and use as office space of the Model Homes to potential buyers. The Developer shall indemnify, protect, defend and hold harmless, the City and any agency or instrumentality thereof, and/or any of its officers, employees and agents from any and all claims, actions, demands and liabilities arising or alleged to arise as the result of the Developer's performance or failure to perform under this Agreement, or from any proceedings against or brought against the City, or any agency or instrumentality thereof, or any of their officers, employees and agents, to attack, set aside, void, annul, or seek monetary damages resulting from an action by the City, or any agency or instrumentality thereof, advisory agency, appeal board or legislative body including actions approved by the voters of the City, concerning this agreement. In compliance with the above, the Developer shall reimburse the City, its agents, officers or employees for any judgment, court costs and attorney's fees which the City, its agents, officers or employees may be required to pay as a result of such action. The City may, in its sole discretion, participate at its own expense in the defense of any such action, but such participation shall not relieve the undersigned of its obligations under this requirement. This Agreement is in reference to the lots and dwellings constructed thereon, listed below within Tract No. 30812: Lot No. 27— Plan 1 BR Lot No. 28— Plan 2A Itemized list of removal, amendment, modification or reconstruction required by this Agreement and associated anticipated costs for surety purposes: 1. Removal of parking lot; N/A 2. Clean up of any painted curbs; N/A 3. Removal of sales office; N/A 4. Removal of all other ancillary items not incidental of a typical single-family resident unit. $1,000 Total: $1,000 Page 3 of 4 Model Home Complex Agreement for Tract No. 2018-063 (TR30812) The rights and benefits of this Agreement are personal to Developer. Developer shall not assign, hypothecate, encumber, or otherwise transfer, voluntarily, involuntarily, or by operation of law, any of its rights and/or obligations set forth in this Agreement to any other person or entity without City's prior written consent, which consent City may grant or withhold in its sole and absolute discretion. This Agreement represents the full and entire agreement of the parties and shall be effective as of the date first set forth above. Menifee-La Piedra Road 29, LLC by: Griffin Residential III, LLC a Delaware Limited Liability Company a California Limited Liability Company ("Developer") Dated: / By OSs (Signature fVVdKaiger or other Category 1 Officer) ZA�l (Print Name) (Title) Dated: By (Signature for Secretary or other Category 2 Officer) (Print Name) (Title) CITY OF MENIFEE ("City") Dated: By Cheryl Kitze w CommunityLVevelop ent Director Appr s to Form: rityey . elching Attorney Page 4 of 4 LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF Menifee-La Piedra Road 29, LLC A Delaware Limited Liability Company 1.4 Intentionally Deleted 1.5 "Assignee" "Assignee" means a person who has acquired a Member's Economic Interest in the Company, by way of a Transfer in accordance with the terms of this Agreement, but who has not become a Member. 1.6 "Assigning Member" "Assigning Member" means a Member who by means of a Transfer has transferred an Economic Interest in the Company to an Assignee. 1.7 "Available Cash" "Available Cash" means all net revenues from the Company's operations, including net proceeds from all sales, refinancings, and other dispositions of Company property that the Manager, in the Manager's sole discretion, deems in excess of the amount reasonably necessary for the operating requirements of the Company, including debt reduction and Reserves. 1.8 "Capital Account" "Capital Account" means, with respect to any Member, the account reflecting the capital interest of the Member in the Company, consisting of the Member's initial Capital Contribution maintained and adjusted in accordance with Section 3.3. 1.9 "Capital Contribution" "Capital Contribution" means, with respect to any Member, the amount of the money and the Fair Market Value of any property (other than money) contributed to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take "subject to" under IRC §752) in consideration of a Percentage Interest held by such Member. A Capital Contribution shall not be deemed a loan. 1.10 "Capital Event" "Capital Event" means a sale or disposition of any of the Company's capital assets, the receipt of insurance and other proceeds derived from the involuntary conversion of Company property,the receipt of proceeds from a refinancing of Company property, or a similar event with respect to Company property or assets. 1.11 "Code" or"IRC" "Code" or "IRC"means the Internal Revenue Code of 1986, as amended, and any successor provision. - 2 - 1.20 "Manager" or"Managers" "Manager" or"Managers" means the Person(s) named as such in ARTICLE II or the Persons who from time to time succeed any Person as a Manager and who, in either case, are serving at the relevant time as a N tanager. 1.21 "Member" "Member" means an Initial Member or a Person who otherwise acquires a Membership Interest, as permitted under this Agreement,and who remains a Member. 1.22 "Membership Interest" "Membership Interest" means a Member's rights in the Company, collectively, including the Member's Economic Interest, any right to Vote or participate in management, and any right to information concerning the business and affairs of the Company. 1.23 "Notice" "Notice" means a written notice required or permitted under this Agreement. A notice shall be deemed given or sent when deposited, as certified mail or for overnight delivery, postage and fees prepaid, in the United States mails; when delivered to Federal Express, United Parcel Service, DHL WorldWide Express, or Airborne Express, for overnight delivery, charges prepaid or charged to the sender's account; when personally delivered to the recipient; when transmitted by electronic means, and such transmission is electronically confirmed as having been successfully transmitted; or when delivered to the home or office of a recipient in the care of a person whom the sender has reason to believe will promptly communicate the notice to the recipient. 1.24 "Percent of the Members" "Percent of the Members" is the specified total of Percentage Interests of all the Members. 1.25 "Percentage Interest" "Percentage hiterest" means a fraction, expressed as a percentage, the numerator of which is the total of a Member's Capital Account and the denominator of which is the total of all Capital Accounts of all Members. 1.26 "Person" "Person" means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign. 1.27 "Profits and Losses" "Profits and Losses" means for each fiscal year or other period specified in this Agreement, an amount equal to the Company's taxable income or Isos for such year or period, determined in accordance with IRC §703(a). - 4- 1.37 "Voting Interest" "Voting Interest" means, with respect to a Member, the right to Vote or participate in management and any right to information concerning the business and affairs of the Company provided under the Act, except as limited by the provisions of this Agreement. A Member's Voting Interest shall be directly proportional to that Member's Percentage Interest. ARTICLE II. ORGANIZATION OF COMPANY 2.1 Articles of Organization. The Certificate of Formation was filed with the State of Delaware on November 2, 2017 and the LLC-5 was filed with the California Secretary of State on November 3, 2017. A copy of the both filings are attached to this Agreement as Exhibit A. 2.2 Name. The name of the Company is Menifee-La Piedra Road 29, LLC. The registered office of the Company in the State of Delaware shall be at 251 Little Falls Drive, Wilmington, Delaware 19808-1674. The name of its Resigtered Agent at such address is Coporation Service Company. 2.3 Principal Office. The principal executive office of the Company shall be at 110 N. Lincoln Avenue, Suite 100, Corona, CA 92882, or such other place or places as may be determined by the Manager from time to time. 2.4 Agent. The initial agent for service of process on the Company shall be IAN R. GRIFFIN, whose address is 110 N. Lincoln Avenue, Suite 100, Corona, CA 92882. The Manager(s) may fi•om time to time change the Company's agent for service of process. 2.5 Purpose. The Company will be formed for the purposes of engaging in any lawful act or activity for which a limited liability company may be organized under the Act. 2.6 Intention of Parties. The Members intend the Company to be a limited liability company under the Act. Neither the Manager nor any Member shall take any action inconsistent with the express intent of the parties to this Agreement. 2.7 Term. The term of the Company shall commence on the date the Certificate of Formation for the Company is filed with the Office of the Delaware Secretary of State, and shall only terminate pursuant to the provisions of this Agreement or as provided by law. - 6 - (d) A Member's Capital Account shall be reduced by the Member's share of any expenditures of the Company described in IRC §705(a)(2)(B) or which are treated as IRC §705(a)(2)(B) expenditures pursuant to Reg. §1.704-1(b)(2)(iv)(i) (including syndication expenses and losses nondeductible under IRC §§267(a)(1) or 707(b)). (e) If any Economic Interest (or portion thereof) is transferred, the transferee of such Economic Interest or portion shall succeed to the transferor's Capital Account attributable to such interest or portion. (f) The principal amount of/a promissory note that is not readily traded on an established securities market and that is contributed to the Company by the maker of the note shall not be included in the Capital Account of any Person until the Company makes a taxable disposition of the note or until (and to the extent) principal payments are made on the note, all in accordance with Reg. §1.704-1(b)(2)(iv)(d)(2). (g) Each Member's Capital Account shall be increased or decreased as necessary to reflect a revaluation of the Company's property assets in accordance with the requirements of Reg. §§1.704-1(b)(2)(iv)(f) and 1.704-1(b)(2)(iv)(g), including the special rules under Reg. §1.701-1(b)(4), as applicable. The provisions of this Agreement respecting the maintenance of Capital Accounts are intended to comply with Reg. §1.704-1(b) and shall be interpreted and applied in a manner consistent with those Regulations. 3.4 Withdrawal of Capital. A Member shall not be entitled to withdraw any part of the Member's Capital Contribution or to receive any distributions, whether of money or property, from the Company except as provided in this Agreement. 3.5 Interest on Capital. No interest shall be paid on Capital ContrlbUtions or on the balance of a Member's Capital Account. 3.6 Limited Liabilih, of Members. A Member shall not be bound by, or be personally liable for, the expenses, Iiabilities, or obligations of the Company except as otherwise provided in the Act or in this Agreement. 3.7 No Prioritv Return of Capital. Except as otherwise expressly provided in this Agreement, no Member shall have priority over any other Member with respect to the return of a Capital Contribution or distributions or allocations of income, gain, losses, deductions, credits, or items thereof. - 8 - 4.6 Proceeds from Sale. If the proceeds from a sale or other disposition of a Company asset consist of property other than cash, the value of such property shall be as determined by the Members. Such non-cash proceeds shall then be allocated among all the Members in proportion to their Percentage Interests. If such non-cash proceeds are subsequently reduced to cash, such cash shall be distributed to each Member in accordance with Section 4.5. 4.7 Distribution in Liquidation. Notwithstanding any other provisions of this Agreement to the contrary, when there is a distribution in liquidation of the Company, or when any Member's interest is liquidated,all items of income and loss first shall be allocated to the Members' Capital Accounts under this ARTICLE IV, and other credits and deductions to the Members' Capital Accounts shall be made before the final distribution is made. The final distribution to the Members shall be made to the Members to the extent of and in proportion to their positive Capital Account balances. 4.8 Compliance with Law and Reimlations. It is the intent of the Members that each Member's allocated share of Company Tax Items be determined in accordance with this Agreement to the fullest extent permitted by IRC §§704(b) and 704(c).Notwithstanding anything to the contrary contained in this Agreement, if the Company is advised that, as a result of the adoption of new or amended regulations pursuant to IRC §§704(b) and 704(c), or the issuance of authorized interpretations, the allocations provided in this Agreement are unlikely to be respected for federal income tax purposes, the Manager is hereby granted the power to amend the allocation provisions of this Agreement, on advice of accountants and legal counsel, to the minimum extent necessary to cause such allocation provisions to be respected for federal income tax purposes. ARTICLE V. MANAGEMENT OF THE COMPANY; RIGHTS, POWERS,AND OBLIGATIONS OF THE MANAGERS 5.1 Manager. The business of the Company shall be managed by the Manager named in Section 2.9, or a successor Manager selected in the manner provided in Section 6.5. Except as otherwise set forth in this Agreement, all decisions concerning the management of the Company's business shall be made by the Manager. 5.2 Term of ManalZer. The Manager shall serve until the earlier of (1) the Manager's resignation, retirement, death, or disability; (2) the Manager's removal by the Members; and (3) the expiration of the Manager's term as Manager, if a term has been designated by a Majority of Members. A new Manager shall be appointed by a Majority of Members on the occurrence of any of the foregoing events. - 10 - (k) To invest as a limited partner, shareholder of a corporation, or Member of another limited liability company, in any property and make supplemental investments in and/or loans to other entities and to take any other action to protect the Company's investments, in their sole discretion, including,without limitation, the right to vote on all matters requiring the votes of the Company under any investment; (1) To lend money or extend credit on behalf of the Company; (m) To invest and reinvest Company fiends; (n) To incur obligations (contractual or otherwise), and to perform, compromise, or discharge such obligations; (o) To retain other Persons to render services to them or to the Company and to compensate such Persons therefor; (p) Subject to their continuing general supervision, to delegate to other Persons the performance of any duties they are required to perform or the exercise of any rights they possess; (q) To prosecute, defend, or compromise actions on behalf of the Company or its Members; (r) To contract with, and compensate themselves or Affiliates for, the performance of set-vice or the furnishing of goods to or on behalf of the Company; provided, however, that such services or goods are competitive in price and other material terms with nonaffiliated Persons rendering comparable services or furnishing comparable goods; (s) To become a Manager or Member in another limited liability company or to become a general partner or limited partner in a partnership; (t) To exercise all voting and other rights incident to the Company's ownership of an interest in another Person; (u) To pay or reimburse any Person for costs, expenses, or losses incurred in connection with any aspect of the Company or its business; (v) To do and perform all such other acts as may be necessary or appropriate to the conduct of the Company's business; (w) To negotiate for and conclude agreements for the sale, exchange, or other disposition of all or substantially all of the property of the Company as provided for herein; and (x) To establish and maintain appropriate reserves for expenses, losses, and liabilities, contingent or otherwise. - 12 - I', 5.9 Other Rights and Duties of the Managers. The Manager shall promptly take any and all action that may be necessary or appropriate to perfect and maintain the Company as a limited liability company under the Act and that will be treated as a partnership for income tax purposes, and to acquire, own, and maintain its assets in accordance with the provisions of this Agreement and applicable federal, state, and local Iaws and regulations. The Manager agrees that the Manager shall do all acts, make all elections, and take whatever steps are required to maximize the federal; state, and local income tax advantage available to the Company, provided that such acts, elections, and steps are not inconsistent with the provisions of this Agreement. 5.10 Managers' Right to Deal with the Company. Any Manager, or any entity controlling, controlled by, under common control with, or otherwise affiliated with any Manager, shall have the right to contract and otherwise deal with the Company. The Manager hereby agrees that if the Manager or the Massager's Affiliates do provide such services, the same will be provided at rates no higher than and upon terms at least as favorable to the Company as could be obtainable in an arin's-length transaction. 5.11 Fiduciary Capacity. The Manager shall at all times exercise his responsibilities in a fiduciary capacity and in a manner consistent with the objectives of the Company. The Manager shall have a fiduciary responsibility for the safekeeping and use of all funds and assets of the Company, regardless of whether in their immediate possession or control, and shall not employ such funds or assets in any manner except for the exclusive benefit of the Company. Nothing in this section shall be deemed to grant any assignee of an Interest(s)any cause of action or to expand the rights of such assignee(s) under applicable law. 5.12 Time Devoted to Company by Manager. It is acknowledged that the Manager has other business interests to which the Manager devotes part of the Manager's time. The Manager shall devote such time to the conduct of the business of the Company as the Manager, in the Manager's own good faith and discretion, deems necessary. 5.13 Compensation of Manager. The Manager shall be entitled to compensation for the Manager's services as determined by the Members, and to reimbursement for all expenses reasonably incurred by the Manager in the performance of the Manager's duties. 5.14 Title to Assets. The Manager shall cause all assets of the Company, whether real or personal, to be held in the name of the Company. 5.15 Bank Accounts. All finds of the Company shall be deposited in one or more accounts with one or more recognized financial institutions in the name of the Company, at such locations as shall be - 14 - have the right to receive profits and losses attributable to the Manager's Interest in the Company, and shall not be admitted as a Member or Manager of the Company. In this event, and if said Manager shall resign as Manager; the Members shall within ten days of the assignment of said Interests, elect, by Majority of the Members Vote, a new Manager if there are no remaining Managers whose Interests have not been taken in a manner described above, or elect to dissolve the Company. 6.3 Substitute and Additional Managers. A Manager may admit any Person as a substitute Manager if that Person shall have been approved by any other Managers and a Majority. Additional Persons may become Managers upon designation by the Managers (or successor Managers) and with the consent of a Majority. 6.4 Admission of a Successor Manager. Any successor Person shall be admitted as a Manager of the Company if the following terms are satisfied:* (a) The successor Person shall have accepted and assumed all the terms and provisions of this Agreement; (b) If the successor is a corporation, it shall have provided counsel for the Company with a certified copy of a resolution of its Board of Directors authorizing it to become a Manager under the terms and conditions of this Agreement; (c) The successor Person shall have executed the Agreement, the Articles of Organization and such other documents or instruments as may be required or appropriate in order to effect the admission of such Person or entity as a Manager; (d) Counsel for the Company shall have rendered an opinion that none of the actions taken in connection with such Transfer nor the admission of the successor entity shall cause the termination or dissolution of the Company or cause it to be taxed as an association taxable as a corporation and not as a partnership. 6.5 Appointment and Removal of Manager. The Manager shall be appointed by a Majority of Members for(a) a term expiring with the appointment of a successor, or (b) a term expiring at a definite time specified by a Majority of Members in connection with such an appointment. A Manager who is not also a Member may be removed with or without cause at any time by action of a Majority of Members. A Manager who is a Member may be removed only on the Vote of all other Members and the execution and filing of a Certificate of Amendment of the Articles of Organization of the Company in conformity with Corporations Code §17054, if necessary, to provide that the Company is to be managed by Members. i - 16 - If the Manager deems that any of the foregoing items shall be kept beyond the term of existence of the Company, the repository of said items shall be as designated by the Manager. 7.4 Financial Statements. At the end of each fiscal year the books of the Company shall be closed and examined and statements reflecting the financial condition of the Company and its Profits or Losses shall be prepared, and a report thereon shall be issued by the Company's certified public accountants. Copies of the financial statements shall be given to all Members. In addition, all Members shall receive not less frequently than at the end of each calendar quarter, copies of such financial statements regarding the previous calendar quarter, as may be prepared in the ordinary course of business, by the Manager or accountants selected by the Manager. The Manager shall deliver to each Member, within one hundred twenty (120) days after the end of the fiscal year of the Company, a financial statement that shall include: (a) A balance sheet and income statement, and a statement of changes in the financial position of the Company as of the close of the fiscal year; (b) A statement showing the Capital Account of each Member as of the close of the fiscal year and the distributions, if any, made to each Member during the fiscal year. Members representing at least thirty percent (30%) of the Members, by number, may request interim balance sheets and income statements, and may, at their own discretion and expense, obtain an audit of the Company books by certified public accountants selected by them; provided, however, that not more than one such audit shall be made during any fiscal year of the Company. 7.5 Income Tax-Returns. Within ninety (90) days after the end of each taxable year of the Company the Manager shall send to each of the Members all information necessary for the Members to complete their federal and state income tax or information returns and a copy of the Company's federal, state, and local income tax or information returns for such year. 7.6 Tax Matters Partner. The Manager shall be designated to act as Tax Matters Partner within the meaning of IRC §6231(a)(7). 7.7 Tax Characterization. The parties hereto intend that Company be treated as a partnership for income tax purposes,and all provisions of this Agreement, the Company's Articles of Organization, shall be construed so as to preserve that tax status. C - 18 - I I . 8.5 Meetings; Call, Notice and Quorum. Meetings of the Members may be called at any time by the Manager, or by Members representing more than ten percent (10%) of the h terests of the Members for the purpose of addressing any matters on which the Members may Vote. If a meeting of the Members is called by the Members, Notice of the call shall be delivered to the Manager. Meetings may be held at the principal executive office of the Company or at such other location as may be designated by the Manager. Following the call of a meeting, the Manager shall give Notice of the meeting not less than ten, or more than 60 calendar days prior to the date of the meeting to all Members entitled to Vote at the meeting. The Notice shall state the place, date, and hour of the meeting and the general nature of business to be transacted. No other business may be transacted at the meeting. A quorum at any meeting of Members shall consist of a Majority of Members, represented in person or by Proxy. The Members present at a duly called or held meeting at which a quorum is present may continue to transact business until adjourmnent, notwithstanding the withdrawal of a sufficient number of Members to leave less than a quorum, if the action taken, other than adjournment, is approved by the requisite Percentage of Members as specified in this Agreement or the Act. 8.6 Ad'ournment of Meetings. A meeting of Members at which a quorum is present may be adjourned to another time or place and any business which might have been transacted at the original meeting may be transacted at the adjourned meeting. If a quorum is not present at an original meeting, that meeting may be adjourned by the Vote of a majority of Voting Interests represented either in person or by Proxy. Notice of the adjourned meeting need not be given to Members entitled to Notice if the time and place of the adjourned meeting are announced at the meeting at which the adjournment is taken, unless (a) the adjournment is for more than 45 days, or (b) after the adjournment, a new record date is fixed for the adjourned meeting. In the situations described in clauses (a) and (b), Notice of the adjourned meeting shall be given to each Member of record entitled to Vote at the adjourned meeting. 8.7 Waiver of Notice. The transactions of any meeting of Members, however called and noticed, and wherever held, shall be as valid as though consummated at a meeting duly held after regular call and notice, if(a) a quorum is present at that meeting, either in person or by Proxy, and (b) either before or after the meeting, each of the persons entitled to Vote, not present in person or by Proxy, signs either a written waiver of notice, a consent to the holding of the meeting, or an approval of the minutes of the meeting. Attendance of a Member at a meeting shall constitute waiver of notice, unless that Member objects, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be described in the notice of the meeting and not so included, if the objection is expressly made at the meeting. - 20 - benefit of the Member, or any combination between or among the Member, the Member's Spouse, and the Member's issue; provided that the Member retains a beneficial interest in the trust and all of the Voting Interest included in such Membership Interest. A Transfer of a Member's beneficial interest in such trust, or failure to retain such Voting Interest, shall be deemed a Transfer of a Membership Interest. 9.3 Right of First Refusal. If a Member wishes to transfer any or all of the Member's Membership Interest in the Company pursuant to a Bona Fide Offer(as defined below), the Member shall give Notice to the Manager at least thirty (30) days in advance of the proposed sale or Transfer, indicating the terms of the Bona Fide Offer and the identity of the offeror. The Company and the other Members shall have the option to purchase the Membership Interest proposed to be transferred at the price and on the terms provided in this Agreement. If the price for the Membership Interest is other than cash, the fair value in dollars of the price shall be as established in good faith by the Company. For purposes of this Agreement, "Bonn Fide Offer" means an offer in writing setting forth all relevant terms and conditions of purchase from an offeror who is ready, willing, and able to consummate the purchase and who is not an Affiliate of the selling Member. For thirrty (30) days after the Notice is given, the Company shall have the right to purchase the Membership Interest offered, on the terms stated in the Notice, for the lesser of (a) the price stated in the Notice (or the price plus the dollar value of noncash consideration, as the case may be) and (b) the price determined under the appraisal procedures set forth in Section 9.7. If the Company does not exercise the right to purchase all of the Membership Interest, then, with respect to the portion of the Membership Interest that the Company does not elect to purchase, that right shall be given to the other Members for an additional 30-day period, beginning on the day that the Company's right to purchase expires. Each of the other Members shall have the right to purchase, on the same terms, a part of the interest of the offering Member in the proportion that the Member's Percentage Interest bears to the total Percentage Interests of all of the Members who choose to participate in the purchase; provided, however, that the Company and the participating Members may not, in the aggregate, purchase less than the entire interest to be sold by the offering Member. If the Company and the other Members do not exercise their rights to purchase all of the Membership Interest, the offering Member may, within ninety (90) days from the date the Notice is given and on the terms and conditions stated in the Notice, sell or exchange that Membership Interest to the offeror named in the Notice. Unless the requirements of Section 9.2 are met, the offeror under this section shall become an Assignee, and shall be entitled to receive only the share of Profits or other compensation by way of income and the return of Capital Contribution to which the assigning Member would have been entitled. 9.4 Triggering Events. On the happening of any of the following events (Triggering Events) with respect to a Member, the Company and the other Members shall have the option to purchase the Membership Interest in the Company of such Member (Selling Member) at the price and on the terms provided in Section 9.7 of this Agreement: -22 - 9.8 Payment of Purchase Pricc. The Purchase Price shall be paid as follows: (i) payment of twenty-five percent (25%) of the Purchase Price (or such greater percent of the Purchase Price as the Company or purchasing Member shall agree to) shall be paid in cash within thirty (30) days of the determination of the Purchase Price by the parties; and (ii) payment of the balance of the Purchase Price by a promissory note containing the terms described below (the "Note"). The Note, which shall be unsecured, shall be executed by the purchasing party, and dated as of the date of the closing. The Note shall provide for the following: (a) Accrual of interest at the lowest interest rate per annum by which no interest shall be imputed to the recipient of such interest by reason of IRC §7872 and the Treasury Regulations thereunder as amended from time to time. This determination of the interest rate shall be made as of the date the payor of the interest first becomes obligated to pay interest on any obligation created pursuant to this Agreement; (b) Payment of principal and interest in sixty (60) equal consecutive monthly installments beginning on the first day of the month following the date of the closing and continuing on the first day of each month thereafter, until the Note is paid in frill; (c) The option of the holder of the Note to accelerate the sums owing under the Note in the event of a default in payment or other performance under the Note; (d) Partial or total prepayment of the Note by its maker without penalty; and (e) Payment of reasonable attorneys' fees to the prevailing party in the event an action is instituted on the Note. 9.9 Substituted Member. Except as expressly permitted under Section 9.2, a prospective transferee (other than an existing Member) of a Membership Interest may be admitted as a Member with respect to such Membership Interest (Substituted Member) only (a) on the unanimous Vote of the other Members in favor of the prospective transferee's admission as a Member, and (b) on such prospective transferee executing a counterpart of this Agreement as a party hereto. Any prospective transferee of a Membership Interest shall be deemed an Assignee, and, therefore,the owner of only an Economic Interest until such prospective transferee has been admitted as a Substituted Member. Except as otherwise permitted in the Act, any such Assignee shall be entitled only to receive allocations and distributions under this Agreement with respect to such Membership Interest and shall have no right to Vote or exercise any rights of a Member until such Assignee has been admitted as a Substituted Member. Until the Assignee becomes a Substituted Member,the Assigning Member will continue to be a Member and to have the power to exercise any rights and powers of a Member under this Agreement, including the right to Vote in proportion to the Percentage Interest that the Assigning Member would have had in the event that the assignment had not been made. -24 - (b) To the establishment of reasonable reserves for contingent liabilities or obligations of the Company. Upon the determination that such reserves are no longer necessary, said reserves shall be distributed as provided in this Section 10.2. (c) To repay outstanding loans to Members. If there are insufficient funds to pay such loans in full, each Member shall be repaid in the ratio that the Member's loan, together with interest accrued and unpaid thereon, bears to the total of all such loans from Members, including all interest accrued and unpaid thereon. Such repayment shall first be credited to unpaid principal and the remainder shall be credited to accrued and unpaid interest. 10.3 Deficit on Liquidation. Each Member shall look solely to the assets of the Company for the return of the Member-s investment, and if the Company property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the investment of each Member, such Member shall have no recourse against any other Members for indemnification, contribution, or reimbursement, except as specifically provided in this Agreement. ARTICLE XI. INDEMNIFICATION The Company shall have the power to indemnify any Person who was or is a party, or who is threatened to be made a party, to any Proceeding by reason of the fact that such Person was or is a Member, Manager,officer, employee, or other agent of the Company, or was or is serving at the request of the Company as a director, officer,-employee, or other Agent of another limited liability company, corporation, partnership,joint venture, trust, or other enterprise, against expenses,judgments, fines,settlements,and other amounts actually and reasonably incurred by such Person in connection with such proceeding, if such Person acted in good faith and in a manner that such Person reasonably believed to be in the best interests of the Company, and,in the case of a criminal proceeding, such Person had no reasonable cause to believe that the Person's conduct was unlawful. The termination of any proceeding by judgment,order, settlement, conviction, or upon a plea of nolo contendre or its equivalent, shall not, of itself, create a presumption that the Person did not act in good faith and in a manner that such Person reasonably believed to be in the best interests of the Company, or that the Person had reasonable cause to believe that the Person's conduct was unlawful. To the extent that an agent of the Company has been successful on the merits in defense of any Proceeding, or in defense of any claim, issue, or matter in any such Proceeding,the agent shall be indemnified against expenses actually and reasonably incurred in connection with the Proceeding. In all other cases, indemnification shall be provided by the Company only if authorized in the specific case by a Majority of Members. "Agent, " as used in this ARTICLE XI, shall include a trustee or other fiduciary of a plan,trust, or other entity or arrangement described in Corp Code §207(f). "Proceeding. " as used in this ARTICLE XI, means any threatened,pending, or completed action or proceeding, whether civil, criminal, administrative, or investigative. - 26 - �' 13.2 Complete Agreement. This Agreement and the Articles of Organization constitute the complete and exclusive statement of agreement among the Members and Manager with respect to the subject matter herein and therein and replace and supersede all prior written and oral agreements or statements by and among the Members and Manager or any of them. No representation, statement, condition or warranty not contained in this Agreement or the Articles of Organization will be binding on the Members or Manager or have any force or effect whatsoever. To the extent that any provision of the Articles of Organization conflict with any provision of this Agreement, the Articles of Organization shall control. 13.3 Binding Effect. Subject to the provisions of this Agreement relating to transferability, this Agreement will be binding upon and inure to the benefit of the Members, and their respective successors and assigns. 13.4 Parties in Interest. Except as expressly provided in the Act, nothing in this Agreement shall confer any rights or remedies under or by reason of this Agreement on any Persons other than the Members and Managers and their respective successors and assigns. Moreover, no provision of this Agreement shall relieve or discharge the obligation or liability of any third person to any party to this Agreement, nor shall any provision of this Agreement grant any third person or creditor any rights or benefits, including any right of subrogation or action, over or against any party to this Agreement. 13.5 Arbitration. Any action to enforce or interpret this Agreement, or to resolve disputes with respect to this Agreement as between the Company and a Member, or between or among the Members, shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association. Any party may commence arbitration by sending a written demand for arbitration to the other parties. Such demand shall set forth the nature of the matter to be resolved by arbitration. The Manager shall select the place of arbitration. The substantive law of the State of California shall be applied by the arbitrator to the resolution of the dispute. The parties shall share equally all initial costs of arbitration. The prevailing party shall be entitled to reimbursement of attorney fees, costs, and expenses incurred in connection with the arbitration. All decisions of the arbitrator shall be final,binding, and conclusive on all parties. Judgment may be entered upon any such decision in accordance with applicable law in any court having jurisdiction thereof. The arbitrator (if permitted under applicable law) or such court may issue a writ of execution to enforce the arbitrator's decision. 13.6 Pronouns; Statutory References. All pronouns and all variations thereof shall be deemed to refer to the masculine, feminine, or neuter, singular or plural, as the context in which they are used may require. Any reference to the Code, the Regulations, the Act, Corporations Code or other statutes or laws will include all amendments, modifications, or replacements of the specific sections and provisions concerned. -28 - 13.15 Time is of the Essence. All dates and times in this Agreement are of the essence. 13.16 Remedies Cumulative. The remedies under this Agreement are cumulative and shall not exclude any other remedies to which any person may be lawfully entitled. 13.17 Multiple Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument, binding upon all of the Members and Managers; notwithstanding that not all of the Members and Managers are signatories to the original of the same counterpart. The Manager is authorized to remove the signature pages of this instrument from any counterpart copy and attach such signature pages to a single instrument so that the original signatures of all Members and Managers will be physically attached to the same document. IN WITNESS WHEREOF, the parties have executed or caused to be executed this Agreement on the day and year first above written. "MEMBER" GRIPfIN RESIllENTIAL III, LLC "MEMBER" IRG D ;VELOPMENT, INC. - 30 - MENIFE New. Better. BE City of Menifee Front Counter ��os��- • 29714 Haon Road Menifee, CA 92586 951-672-6777 �Q 001876-003i Crystal S 08/14/2018 03:52. PERMIT RECEIPTS Payment Tran Code: Deposits (dep) Description; 2018-063 Deposits (dep) 2019 Item: dep Deposits (dep) 1,000,00 -------------- Subtotal 1,000.00 Total 1,000.00 CHECK 11000.00 Check Number000i083 1,000,00 Change due Paid b O.OU y menifee la piedra �glw1 1099 '•�wy�,�, MICy11 1WI Y 4lMWngl .. I Thank you for Your ur payment CUSTOMER COPY WGRIFFIN TransmiUaI To: From: Patti Nahill Christina Bustamente City of Menifee Community Development Department Date: August 3, 2018 Re: Model Home Complex Agreement for Boulder Estates TR 30812 The following: ■ Originals ■ Correspondence ❑ Copies ❑ Other Are being transmitted to you via: ❑ US Mail ■ Hand Delivery ❑ Other Are being transmitted to you: ❑ For your use ❑ For Approval ❑ As requested IN For Review &Comment Please find the following item attached: Model Home Complex Agreement for Boulder Estates TR 30812 Operating Agreement for Menifee-La Piedra Road 29 LLC The cash deposit will follow. city of AUG 0 1), 2019 Received Accepted By: 110 N LINCOLN AVENUE, SUITE 100 CORONA, CA 92882 951.547.3500 phone 951.547.3547 fax