HomeMy WebLinkAboutMINUTES - 03152005 - 2005 RES 171 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Resolution on March 15,2005, by the following vote:
AYES: SUPERVISORS GIOIA, DESAULNIER, GLOVER AND UILKEMA
NOES: NONE
ABSENT: SUPERVISOR MARY PIEPHO
ABSTAIN: none
RESOLUTION NO.2005/ 1.71
SUBJECT: Approving the Final Map and Subdivision Agreement for Subdivision 03-08747,
being developed by DHI-LCG, LLC, Martinez area. (District II)
The following documents were presented for Board approval this date:
I. Map
The final map of Subdivision 03-08747, property located in the Martinez area,
Supervisorial District Il, said map having been certified by the proper officials.
II. Subdivision Agreement
A subdivision agreement with DHI-LCG, LLC, principal, whereby said principal
agrees to complete all improvements as required in said subdivision agreement
within one year from the date of said agreement. Accompanying said subdivision
agreement is security guaranteeing completion of said improvements as follows:
I hereby certify that this is a true and correct copy of an action
taken and entered on the minutes of the Board of Supervisors
on the date shown.
originator:Public Works(ES)
Contact: Kevin Emigh(313-2233)
LS:rm
G:\GtpDatalEngSvc1B0\2005103-15\5D03.08747 B0-21.dac ATTESTED: 15, 2005cc: Public Works—T.Hell,Construction
Current Planning,Community Development JOHN SWEETEN, Clerk of the Board of Supervisors and
T—January 15,DHILCG, 2006 County Administrator
333 Civic Drive
Pleasant Hill,CA 94523
Ann:Phil Rowe
Fidelity and Deposit Cornpany of Maryland By ,Deputy
560Mission Sueet,Suite 2400 V�"
San Francisco,CA 94105
Attn:Chris Buckley
RESOLUTION NO.2005/ 171
SUBJECT: Approving the Final Map and Subdivision Agreement for Subdivision 03-08747,
being developed by DHI-LCG, LLC, Martinez area. (District II)
DATE: March 15, 2005
PAGE: 2
A. Cash Band
Performance amount: $2,511.00
Auditor's Deposit Permit No. 437203 Date: January 5, 2005
Submitted by: DHT-LCG, LLC
Tax ID Number: 41-2144835
B. Surety Band
Bond Company: Fidelity and Deposit Company of Maryland
Bond Number: 08719494 Date: December 21, 2004
Performance Amount: $248,589.00
Labor&Materials Amount: $125,550.00
Principal: DHI-LCG, LLC
III. Tax Letter
Letter from the County Tax Collector stating that there are no unpaid County taxes
heretofore levied on the property included in said map and that the 2004-2005 tax
lien has been paid in full and the 2005-2006 tax lien,which became a lien on the first
day of January 2005, is estimated to be $10,900.00, with security guaranteeing
payment of said tax lien as follows:
Tax Surety
Bond Company: Fidelity and Deposit Company of Maryland
Bond Number: 08719500 Date: January 11, 2005
Amount: $10,900.00
Principal: DHI-LCG, LLC
NOW, THEREFORE, THE FOLLOWING IS RESOLVED:
1. That said subdivision, together with the provisions for its design and
improvement,is DETERMINED to be consistent with the County's general and
specific plans.
2. That said final map is APPROVED and this Board does not accept or reject on
behalf of the public any of the streets, paths, or easements shown thereon as
dedicated to public use.
3. That said subdivision agreement is also APPROVED.
All deposit permits are on file with the Public Works Department.
RESOLUTION NO. 2005/171
SUBDIVISION AGREEMENT
(Gov.Code,§§66462 and 66463) ,t
Subdivision: 1&a7' LT Y,7 Effective Date:
Subdivider: —L G a, L LG Completion Period: 12,. 2 �^,Z.G71 J.—
THESE SIGNATURES ATTEST TO THE PARTIES`AGREEMENT HERETO:
CONTRA COSTA COUNTY SUBDIVIDER
Maurice M.Shfu,P till arks Director y r
By: Print Name ZI A 1I4- 5",4,+r.S'd,,✓
RECOMMENDED FOR APPROV Print Title ZiLff _
By: Print Name
ngineenng oesIvism' Print Title
FORM APPROVED: Slivano B.Marches!,County CounselN{ OTE:Ali signatures must be acknowledged,If Subdivider Is incorporated,the contract
must be signed by two officers.The first signature must be that of the chairman of the
board,president,or vice-president;the second signature must be that of Ina secretary,
assistant secretary,chief financial officer,or assistant treasurer.(Civ.Code,§1190 and
Corps.Code,§313.)
CERTIFICATE OF ACKNOWLEDGMENT
State of California )
ss.
County of )
On the date written below,before me,the undersigned Notary Public,personally appeared the person(s)signing above for personally
known to me(or proved to me on the basis of satisfactory evidence)to be the person(s)whose name(s)islare subscribed to the within Instrument and acknowledged to me that helshelthey
executed the same In hislhadtheir authorized capacity(ies),and that by hislhedtheir signature(s)on the instrument the person(s),or the entity upon behalf of which the person(s)acted,
executed the instrument
WITNESS my hand and official seal.
Dated:
Notary Public
(Notary Seal)
1. PARTIES&DATE.Effective on the above date,the County of Contra Costa,California,(heminafter'County")and the above-mentioned Subdivider mutually promise and agree
as follows concerning this Subdivision:
2. IMPROVEMENTS.Subdivider agrees to install certain road improvements(both public and private),drainage improvements,signs,street lights,fire hydrants,landscaping and
such other improvements{Including appurtenant equipment)as required in the improvement plans for this Subdivision as reviewed and on fife with the Contra Costa County Public Works
Department,as required by the Conditions of Approval for this Subdivision,and in conformance with the Contra Costa County Ordinance Code,including future amendments thereto
(hereinafter'Ordinance Code').
Subdivider shall complete said Improvements(hereinafter°Work")within the above completion period from date hereof,as required by the Callfomia Subdivision Map Act(Gov.
Code,§§66410 at.seq.)in a good workmenlike manner,in accordance with accepted construction practices and in a manner equal or superior to the requirements of the Ordinance Code
and rulings made thereunder,and where there is a conflict among the improvement plans,the Conditions of Approval and the Ordinance Code,the stricter requirements shall govern.
3. IMPROVEMENTS SECURITY. Upon executing this Agreement,the Subdividershali,pursuant kr Gov.Code§66499 and the County Ordinance Code,provide as security to
the County:
A. For Performance and Guarantee: $ l cash,plus additional security,in the amount of$ which together total one hundred
percent(100%)of the estimated cost of the Work. Such additional security is presented in the form of:
_Cash,certlfted check or cashier's check,
je— Acceptable corporate surety bond.
Acceptable irrevocable letter of credit.
With this security,Subdivkierguarantees performance underthis Agreement and maintenance of the Work foronsyearafter its completion and acceptance against any defective
workmanship or materials or any unsatisfactory performance.
B. For Payment Security in the amount:$ 1'Z�y 5,50, ,which is fifty percent(50%)of the estimated cost of the Work.Such security is presented in the
form of:
Cash,certified check,or cashier's check
Acceptable corporate surety bond. Form Approved by County Counsel
Acceptable irrevocable letter of credit. [Rev.51031
Page 1 of 2
With this security,Subdivider guarantees payment to the contractor,to its subcontractors and to persons renting equipment or furnishing labor or matedais to them or to the
Subdivider.
Upon acceptance of the Work as cdmplete by the Board of Supervisors and upon request of Subdivider,the amounts held as security may be reduced in accordance with
Sections 94.4.406 and 94.4.406 of the OrdinanA Code,
4. GUARANTEE AND WARRANTY OF WORK. Subdivider guarantees that the Work shall be free from defects in material orworkmanshlp and shall perform satisfactorily for a
period of one(1)year from and after the Board of Supervisors accepts the work as complete in accordance with Article 96.4.6,"Acceptance,"of the Ordinance Code,Subdivider agrees to
correct,repair,or replace,at Subdivider's expense,any defects in said Work.
The guarantee period does not apply to road improvements for private roads that are not to be accepted into the County road system.
5. PLANT ESTABLISHMENT WORK.Subdivider agrees to perform plant establishment work for tandsmong insWied under this Agreement Said plant establishment work shall
consist of adequately watering plants,replacing unsuitable plants;doing weed,rodent and other pest control and other work determined by the Public Works Department*.o be necessary
to an sure establishment of plants. Said plant establishment work shall be performed for a period of one(1)year from and after the Board of Supervisors accepts the Work as complete,
6. IMPROVEMENT PLAN WARRANTY.Subdivider warrants the improvement plans for the Work are adequate to accomplish the Work as promised in Section 2 and as required
by the Conditions of Approval for the Subdivision. If,at any time before the Board of Supervisors accepts the Work as complete or during the one year guarantee period,said improvement
plans prove to be inadequate in any respect,Subdivider shall make whatever changes are necessary to accomplish the Work as promised.
7. NO WAIVER BY COUNTY. inspection of the Work and/or materials,or approval of the Work and/or materials or statement by any officer,agent or employee of the Counly
indicating the Work or any part thereof complies with the requirements of this Agreement or acceptance of the whole or any part of said Work and/or materials,or payments therefor,or any
combination or all of these acts,shall not relieve the Subdivider of its obligation to fulfil this Agreement as prescribed;nor shall the County be thereby stopped from bringing any action for
damages arising from the failure to comply with any of the terms and conditions hereof.
8. INDEMNITY, Subdivider shall defend,hold harmless and indemnity the indemnitees from the liabilities as defined in this section:
A. The indemnitees benefitted and protected by this promise are the County and its special districts,elective and appointive boards,commissions,officers,agents and
employees.
B. The liabilities protected against are any liability or claim for damage of any kind allegedly suffered,incurred or threatened because of actions denried below,and
including personal injury,death,property damage,inverse condemnation,or any combination of these,and regardless of whether or not such liability,claim or damage was unforeseeable
at any time before County reviewed said Improvement pians or accepted the Work as complete,and including the defense of any sutt(s),action(s),or other proceeding(s)concerning said
liabilities and claims.
C, The actions causing liability are any act or omission(negligent or non-negligent)in connection with the matters covered by this Agreement and attributable to
Subdivider,contractor,subcontractor,or any officer,agent,or employee of one or more of them.
D. Non-Conditions.The promise and agreement in this section arencitconditioned ordeperidenton whether or not any inderninbe has prepared,suppfied,orapproved
any plan(s)or specifications)in connection with this Work or Subdivision,or has insurance or other indemnification covering any of these matters,orthat the alleged damage resulted partly
from any negligent or willful misconduct of any indemnitee.
9. COSTS. Subdivider shall pay,when due,all the costs of the Work,including but not limited to the costs of relocations of existing utilities required thereby;inspections;material
checks and tests;and othercosts incurred by County staff arising from or related to the Work,and prior to acceptance of the Work as complete of any applicable warranty periods,
whichever is later.
10. SURVEYS. Subdivider shall set and establish survey monuments in accordance with the filed map and to the satisfaction of the County Road Commissioner-Surveyor before
acceptance of the Work as complete by the Board of Supervisors.
11, NON-PERFORMANCE AND COSTS. If Subdivider faits to complete the Work within the time specified in this Agreement,and subsequent extensions,orfatis to maintain the
Work,County may proceed to complete and/or maintain the Work by contract or otherwise and Subdivider agrees to pay all costs and charges incurred by County(including,but notlimited
to,engineering,inspection,surveys,contract,overhead,etc.)immediately upon demand.
Once action is taken by County to complete or maintain the Work,Subdivider agrees to pay all costs incurred by County,even if Subdivider subsequently completes the Work.
Should County sue to compel performance underthis Agreamentorto recovercosts incurred in completing ormaintaining the Work,Subdivider agrees to pay all attom^ y's fees,
staff costs and all other expenses of litigation Incurred by County in connection therewith,even if Subdivider subsequently proceeds to complete the Work.
12. INCORPORATION/ANNEXATION. If,before the Board of Supervisors accepts the Work as complete,the Subdivision is included in territory incorporated as achy oris annexed
to an existing city,except as provided In this paragraph,County's tights under this Agreamentand/orany deposit bond,or letter of credit securing said rights shall be transferred to the new
or annexing city.Such city shall have all the rights of a third party beneficiary against Subdivider,who shall fulfill all the terms of this Agreement as though Subdivider had contracted with
the city originally.The provisions of paragraph 8(Indemnity)shall continue to apply in favor of the indemnbees listed in paragraph 8.A.upon any such incorporation or annexation.
13. RECORD MAP. in consideration hereof,County shall allow Subdivider to file and record the final map or parcel map for said Subdivision.
14, RIGHT OF ENTRY.Subdivider hereby consents to entry onto the Subdivision property,and onto any other property over which Subdivider has land rights and upon which any
portion of the Work is to be Installed pursuant to the improvement plans,by County and its forces,including contractors,for the purpose of inspection,and,In the event of non-performance
of this Agreement by Subdivider,completion and/or maintenance of the Work.
Form Approved by County Counsei
(Rev.9/03j
H:1FinaAPW1LW-SubA9mt9.03.wpd
Page 2 of 2
CALIFORNIA ALL-PURPOSE ACKNOWLEDOMENT
State of California
County of Contra Costa SS.
On " . ` "` ' before me, "z`��L1LC1 � L' ZL t" i tib 1
Elate
personally appearedc �
Name(s)of Signer(s)
V°personaliy known to me -OR- ❑ proved to me on the basis of satisfactory evidence
To be the person(srf whose name($) is/acre
subscribed to the within instrument and
acknowledged to me that he/sole/th6y executed
the same in his/hrbr/th6ir authorized capacity(As),
and that by his/h#r/th6ir signature(i) on the
=COSTACOUNTy
instrument the person(i), or the entity upon
" e co behalf of which the person(k) acted, executed the
C .,, instrument.
My G5
WITNESS my handand^ial seal.
Signature of No-ary Public
Though the information below is not required by law, it may prove valuable to persons relying on the document and
could prevent fraudulent removal and reattachment of this form to another document
Description of Attached Document
Title or Type of Document:
Document tate: Number of Wages:
Signer(s)Other Than Named Above:
Capacity(les)Claimed by Signer
Signer's Name:
j ]Individual
[ ]Corporate Office-Title(s):
E ]Partner-[ ]Limited[ ] General
[ ]Attorney in t=act
[ ]Trustee
[ ]Guardian or Conservator
[ ]Other
Signer is Representing:
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COUNTY Of CONTRA COSTA
DEPOSIT PERM
OFFICE OF COUNTY AUDITOR=CONTRt UR r
3 Tit`TREASURER: MARTINEZ,CALIFORNIA
:5CEIVEID FROM
-'
ORGANIZATION NLIMBER '
`A
(For Cash Collection Procedures we County Ae haWs Bulletin 305.)
DESCRIPTION FUNDJORG SUIL ACCT. TASK OPTIONACTMTY AMOUNT
1 9&
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k
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4N: TOTAL $
DEPOSIT
consists of the following items
Sand CURRENCY $ 1(� 21CH MDQ
rDEP OSITS $
FOR AUDITOR-CONTROLLER USE ONLY
DEPOSIT
PERMIT DP
-
NUMBER
DATE 437203 J� 5105
ASSIGNED -L
The amount Of"'Woo ey described above is for Treasurer's te:ceipt of above amount is approved. Receipt of above amount is hereby
t into the County Treasury ocknawiec g
{ i
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� � f,, - � j,i' EXT: -`•',,,,i W=-� � ty County Auditor Deaputy County reosurer
34 REY.(7'-93)-
0649µ9665 1 831000: G1159023, $65.090.00, Sub 7996, Major Sub Final
Map Check, Tall Bras, Inc., 100 Park Place #140, San Ramon, CA 94583
819800-0800: G1159016, $2,511.00 Sub 8747, Cash Bond, DHI- LCG, LLC,
333 Civic Dr., Pleasant- Hill, CA 94523
819800-0800: G1159022, $24.430.00, Sub 7996, Cash Bond, Toll Bras, Inc.,
100 Park Place #140, San Ramon, CA 94583
819800-0800: 01159024, $137,100.00, MS 010023, Cash Bond, Providence
Housing Partners II, 1700 N. Broadway, Suite 290, Walnut Creek, CA 94596
PREMIUM: $3,729.00
5ubdivisioA. #8747
Bond No.: 08719494
NPRdV'EMMNT SECIFRTTY BOND
FOR S MMSION AGREEMENT
ENx.`
(Performance, Guarantee and Payment)
(Califoritia Government Code §§ 66499 - 66499.10)
CrrA _oF SMIMSTOMAGRE str : The developer(principal)has executed a subdivision agreement
with the County of Contra.Costa to install and pay for street, drainage and other improvements in
Subdivisian 8747 _ .as specified in the subdivision agremnent and to conple'te said work within
the torte specified for completion.in the subdivision agreement, all in accordance with State and local latus
and ruYmgs thereunder in order to satisfy conditions for filing of a final map or parcel mar for said
subdivision.
2- DHI-LCC, LLC as principal and
FIDELITY AND DEPOSIT CO ANY OF MARYLAND a. corporation organized and
existing under the laws of the State of MARYLAND and authorized to transact surety
business in California, as surety, hereby jointly and severally bind ourselves, our heirs, executors,
administrators, successors and assigns to the County of Contm Costa, California to pay as follows:
A. Performance and Guarantee: TWO HUNDRED FORTY EIGHT THOUSAND, FIVE HUNDRED EIGHTY NII,
Dollars($ 248,589.00 ------Z=Z:::_,�-- 1 fot Contra Costa County or any city assignee under
the above County Subdivision Agreement
B, ]Payment: ONE HUNDRED TWENTY FIVE THOUSAND, FIVE HUNDRED FIFTY Dollars
(S_M,550.00 ----------------- to secure the claims to which rofemee,is made in Title XV
(commencing with Section 3082) of part 4 of Division M of the Civil Code of the State of
California.
3. Cuw.
A. The Condition of this obligation as to Section(2.A.)above is such that if the above bonded principal,
or principal's heirs, executors,administrators, successors or assigns,shall in all things stand to and
abide by and well and t my keep and perfo= the covenants, conditions and provisions in the said
agement and any alteration thereof made as therein provided, out it or its part, to be kept and
performed at the time and in the manner therein specified and in all respects according to their true
intent and meaning and shalt ind_%nnify and save harmless the County of Contra Costa(or city
assignee) its officers, agents and employees, as therein stipulated,then this obligation shall become
null and void; otherwise it shall be and remain in full force and effect.
As part of the obligation secured hereby and in addition to the face=oust specified therefore,there
skull be included reasonable costs, expenses and fees, including reasonable attomey`s fees, incurred
by the County of Centra.Costa(car city assignee)in successfully enforcing,such obligation, all to be
taxed as costs and included in any judg=mt rendered,
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........................._..
CALr FORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Contra Costa Ss.
On January 5, 2005 , before me, Christine J. Mazzara
Date
personally appeared Cava Sanson
Name(s)of Signer(s)
personally known to me -OR- ❑ proved to me on the basis of satisfactory evidence
To be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/shelthey executed
the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the
ClitM1111MIJ.�A instrument the parson{s}, or the entity upon
COMM1�lon#1481227 [
Notaty Dubuc-Colltornta beof w h the person(s) acted, executed the
C Costo County instrument
W Carom.teras Jul 18,2007
EWITNLEmy hand andFtcial se 1.
f
Signatu of ary tt lic
----------..-...---------------------------------- OPTIONAL -------------------—-------
Though the information below is not required by taw,it may prove valuable to persons relying on the document and
could prevent fraudulent removal and reattachment of this form to another document
Description of Attached Document
Title or Type of Document: Improvement Security Bond
Document Date: 12121/04 Number of Pages:
Signer(s)Other Than Named Above: John Galey=f=idelity and Deposit Company of Maryland
Capacity(les)Claimed by Signer
Signet's Name: Dave Sanson
[ ]Individual
[K]Corporate Office—Title(s): President
[ ]Partner—[ ]Limited[ ]General
[ ]Attorney in Fact
[ ]Trustee
[ ]Guardian or Conservator
[ ]Other:
Signer is Representing: DH{-LCG LLC
STATE OF Callfamia
SS.
COUNTY OF Contra Costa
On DECEMBER 21, 2004 before me, Tanya Chinchilla,Notary Public
PERSOXALLYAPPEARED John J.Daley
A
personaily known to me(wVm
xvd=6 to be the person(x)whose name(}isl=subscribed to the
within instrument and acluaowledged to me that helibrA1a executed
the same in lus WAJ*authorked capacity(kg and that by hiA&66hvht
signature( on the instrutnent the person(,d, or the entity upon behalf
of which the person( acted, executed the instrument. TANYA CHINCHILLA
Commission.# 1375153 z
WITNESS my hand and official seal. Notary Public - California
Contra Costa County
My Corhm.Expires Sep 16,2006
Ir VP Nap
7 J
Signature �
This area for Cricial Notarial Seat
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNED DESCRIPTION OF ATTACHED DOCUMENT
❑ INDIVIDUAL
❑ CORPORATE OFFICER BOND NUMBER: 08719494
7f7tE(S) TITLE OF TYPE OF DOCUMENT
❑ PARTNER(S) ❑ LIMITED
❑ GENERAL TWO (02)
;✓� ATTORNEY-IN-FACT NUMBER OF PAGES
TRUSTEE(S)
GUARDIAN/CONSERVATOR
® OTHER: DECEMBER 21., 2004
DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME OF PERSON(S)OR ENTM(IES)
FIDELITY AND DEPOSIT COMPANY OF MARYLAND
N/A
SIGNER(S)OTHER THAN NAMED ABOVE
ID•1232(REV.5/01) ALL-PURPOSE ACKNOWLEDGEMENT
Power of Attorney
FIDELITY AND DEPOSIT COMPANY OF MARYLAND
HOME OFFICE: P.O. BOAC 1227, BALTIMORE, MCI 21203-1227
Know ALL MEN BY THESE PRESENTS: That the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a
corporation of the State of Maryland, by M. J. ANDERSON, Vice President, and T. E. SMITH, Assistant Secretary, in
pursuance of authority granted by Article V1, Section 2, of the By-Laws of said Company,which are set forth on the reverse
side hereof and are hereby certified to be in full force and effect on the date hereof, does hereby nominate, constitute and
appoint John J. DALEY,of Walnut Creek, California, i true and law agent and Attorney-in-Fact, to make, execute,
seal and deliver, for, and on its behalf as surety, and as and de and all bonds and undertakings and the
execution of such bonds or undertakings in pursuance ofpresents a as binding upon said Company, as fully and
amply, to all intents and purposes, as if they had bee execute cknowledged by the regularly elected officers of
the Company at its office in Baltimore,Md.,in their oper pe
The said Assistant Secretary does hereby certify extract on the reverse side hereof is a true copy of Article VI,
Section 2,of the By-Laws of said Company,and` force.
IN WITNESS WHEREOF, the said Vic ent an tant Secretary have hereunto subscribed their names and
affixed the: Corporate Seal of the said ITY _ EPOSIT COMPANY OF MARYLAND, this 14th day of
September,A.D.2000.
ATTEST: FIDEL C CIBPt "COMPANY OF MARYLAND
T E Smith s t,Secretary M J. Anderson Vice President
State of Maryland)
County of Baltimore ss:
On this 14th day of September, A.D. 2000, before the subscriber, a Notary Public of the State of Maryland, duly
commissioned and qualified, carne M. J. ANDERSON, Vice President, and T. E. SMITH, Assistant Secretary of the
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, to me personally known to be the individuals and officers
described in and who executed the preceding instrument, and they each acknowledged the execution of the same, and being
by me duly sworn,severally and each for himself deposeth and saith,that they are the said officers of the Company aforesaid,
and that the seal affixed to the preceding instrument is the Corporate Seal of said Company, and that the said Corporate Seal
and their signatures as such officers were duly affixed and subscribed to the said instrument by the authority and direction of
the said Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above
written.
w:
Carol J. Fader Notary Public
My Commission Expires: August 1,2004
POA-F 016-29690
EXTRACT FROM BY-LAWS OF FIDELITY AND DEPOSIT COMPANY OF MARYLAND
"Article VI, Section 2. The Chairman of the Board, or the President,or any Executive Vice-President, or any of the Senior
Vice-Presidents or Vice-Presidents specially authorized so to do by the Board of Directors or by the Executive Committee,
shall have power, by and with the concurrence of the Secretary or any one of the Assistant Secretaries, to appoint Resident
Vice-Presidents, Assistant Vice-Presidents and Attorneys-in-Fact as the business of the Company may require, or to
authorize any person or persons to execute on behalf of the Company any bonds, undertaking, recogoizances, stipulations,
policies, contracts, agreements, deeds, and releases and assignments of judgements, decrees, mortgages and instruments in
the nature of mortgages,...and to affix the seal of the Company thereto."
CERTIFICATE
1,the undersigned,Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, do hereby certify
that the original Power of Attorney of which the foregoing is a full,true and correct copy, is in full force and effect on the
date of this certificate; and I do further certify that the Vice-President who executed the said Power of Attorney was one of
the additional Vice-Presidents specially authorized by the Board of Directors to appoint any Attomey-in-Fact as provided in
Article VI,Section 2,of the By-Laws of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND.
This Power of Attorney and Certificate may be signed by facsimile under and by authority of the following resolution of the
Board of Directors of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND at a meeting duly called and held on
the 10th day of May, 1990.
RESOLVED: "That the facsimile or mechanically reproduced seal of the company and facsimile or mechanically
reproduced signature of any Vice-President, Secretary, or Assistant Secretary of the Company, whether made heretofore or
hereafter, wherever appearing upon a certified copy of any power of attorney issued by the Company, shall be valid and
binding upon the Company with the same force and effect as though manually axed."
IN TESTIMONY WHEREOF,I have hereunto subscribed my name and affixed the corporate seal of the said Company,
this 21 st day of December 2004
ob(41c�
Assistant Secretary
#08719494
ZURICH
THIS IMPORTANT DISCLOSURE NOTICE IS PART OF YOUR. BLIND
Fidelity and Deposit Company of Maryland, Colonial American Casualty and Surety Company,Zurich American
Insurance Company, and American Guarantee and Liability Insurance Company are making the following
informational disclosures in compliance with The Terrorism Risk Insurance Act of 2002. No action is required on your
part.
Disclosure of Terrorism Premium
The premium charge for risk of loss resulting from acts of terrorism(as defined in the Act)under this bond is
$ waived . This amount is reflected in the total premium for this bond.
Disclosure of Availability of Coverase for Terrorism Losses
As required by the Terrorism Risk Insurance Act of 2002, we have made available to you coverage for losses resulting
from acts of terrorism(as defined in the Act)with terms, amounts, and limitations that do not differ materially as those
for losses arising from events other than acts of terrorism.
Disclosure of Federal Share of Insurance Com_panvs Terror ism Losses
The Terrorism Risk Insurance Act of 2002 establishes a mechanism by which the United States government will share
in insurance company losses resulting from acts of terrorism(as defined in the Act)after a insurance company has paid
losses in excess of an annual aggregate deductible. For 2002,the insurance company deductible is 1%of direct earned
premium in the prior year; for 2003, 7%of direct earned premium in the prior year; for 2004, 10%of direct earned
premium in the prior year;and for 2005, 15%of direct earned premium in the prior year. The federal share of an
insurance companys losses above its deduc tible is 90%. In the event the United States government participates in
losses,the United States government may direct insurance companies to collect a terrorism surcharge from
policyholders. The Act does not currently provide for insurance industry or United States government participation in
terrorism losses that exceed$100 billion in any one calendar year.
Definition of Act of Terrorism
The Terrorism Risk Insurance Act defines "act of terrorism" as any act that is certified by the Secretary of the Treasury,
in concurrence with the Secretary of State and the Attorney General of the United States:
1. to be an act of terrorism;
2. to be a violent act or an act that is dangerous to human life,property or infrastructure;
3. to have resulted in damage within the United States, or outside of the United States in the case of an air carrier
(as defined in section 40102 of title 49,United 17 States Code)or a United States flag vessel(or a vessel based
principally in the United States, on which United States income tax is paid and whose insurance coverage is
subject to regulation in the United States), or the premises of a United States mission; and
4. to have been committed by an individual or individuals acting on behalf of any foreign person or foreign
interest as part of an effort to coerce the civilian population of the United States or to influence the policy or
affect the conduct of the United States Government by coercion.
But, no act shall be certified by the Secretary as an act of terrorism if the act is committed as part of the course of a war
declared by Congress (except for workers co mpensation) or property and casualty insurance losses resulting from the
act, in the aggregate, do not exceed$5,000,000.
These disclosures are informational only and do not modify your bond or affect your rights under the bond.
Copyright Zurich American Insurance Company 2003
VOID AFTER 2/28/05 1114105 OLD REP. $42 8747
Tax Collector's Office William J.Pollacek
625 Court Street Contra County Treasurer-Tax Collector
Finance Building,Room 100
P. O. Box 631Russell V.Watts
Martinez, California 94553- Costa Chief Deputy Treasurer-Tax Collector
0 063
{925}646-4122 County Joslyn Mitchell
(925)646-4135 FAX Tax Operations Supervisor
•'� ;'-rte`-��,
Date. 1/14/2005
IF THIS TRACT IS NOT FILED PRIOR TO THE DATE TAXES ARE OPEN FOR
COLLECTION (R&T CODE 2608) THIS LETTER IS VOID.
This will certify that I have examined the map of the proposed subdivision entitled:
Tract! MS# City T.R.A.
8747 MARTINEZ 760108
Parcel#: 380-080-022-3
and have determined from the official tax records that there are no unpaid County taxes heretofore
levied on the property included in the map.
The 2004-2005 tax lien has been paid in full. Our estimate of the 2005-2006 tax lien, which
became a lien on the first day of January, 2005 is $10,900.00
This tract is not subject to a 1915 Act Bond. If subject to a 1015 Act Bond, the original principal
to calculate a segregation is
The amount calculated is void 45 days from the date of this letter, unless this letter
is accompanied with security approved by the Contra Costa County Tax Collector
Subdivision gond must be presented to the County Tax Collector for review and a2proval of
.adequacy of security rior to filing with the Clerk of the Board of Supervisors,
WILLIAM J. POLLACEK,
Treasurer-Tax Collector
By:
� `-
BOND NUMBER. 08719500
PREMIUM: $218,00
pR1NiPAL 7ITt,E COMPANY SUFETY
DBI-LCC, LLC QLd RepVbllp ale gomranv Fidelity and Deposit Company of
Marylon
333 Civic Drive 3=Cl rvton„Road 560 Mission Street, Suite #2400
Street Address Street Address Street Address
Pleasant Bill, CA Copmd ;CA 94515 San Francisco, CA 94105
City, State, Zip 94523 City, State,Zip City, Stag,Zip
QatArn Cabral Chris Buckley
Contact Peron Contact Person Contact Person
925-685-0560 @25)887-78813 415-538-7361
Phone Number Phone Number Phone Number
t 2N__Q A9A1JJ$J TAXES
KNOW ALL MEN BY THESE PRESENTS-
THAT DRI-LCG, LLC as Principal and
Fidelity and Deposit Compare of Marylon asi$u r ty, a corporation organized
and existing under the laws of the State of_Maryland and authortzed
to transact surety business in CalifoMia are held and firmly bound unto the County of
Contra Costa, State of Cal1_=.W.
n._the penal sum of TEN THOUSAND NINE
HUNDRED DOLLAI �f00), to be paid to the said County of Contra Costa, for
the payment of which will and truly be made,we and each of us bind ourselves, our
heirs, executors, administrators and successors,Jointly and severally, firmly by these:
presents.
Sealed with our seals and dated this W 11th day of January, 2005
The conditions of the above obligation is such that WHEREAS, the above bound
Principal is about to file map(s)entitled SUBDIVISION 1W covering a subdivision of a
bwg of land in said County of Contra Costa, and there are certain liens for taxes and
specialassessments collected as taxes, against said tract of land covered by said
map(s), which taxes and special assessments collected ars taxes, are not as yet clue or
payable.
NOW THEREFORE, 9 said Principal shall pay all of the taxes and special
assessments collected as taxes which are a lien against said tract of laird covered by
said map, at the time of the filing of said map,then this obligation sharp be void and of no
effect. Otherwise it shall remain in full force and elect.
PRWCIP C, LLC SURETY: Fidelity and Deposit Company of
Maryland
By: t
Sty: BY
(ALL SIGNATURESMUST BE NOTARIZED) .Joh�J.i Dal, Attorne, -In-Fact
DATE:
BOND RE'V'IEWED AND APPROVED
CONTRACOSTA COUNTY
1REAS R R 1Ax L LLE( TOR
STATE OF CALIFORNIA
SS.
COUNTY OF CONTRA COSTA
On January 11, 2005 before me, TANYA CHINCHILLA,NOTARY PUBLIC
PERSONALLY APPEARED JOHN J. DALEY
personally known to nee(� reute+ -eat�iiete�r3
epee?to be the person(,+)whose name{�)isl are subscribed to the
within instrument and acknowledged to me that heli iwA4tey executed
the scone in hislh6w4heir authorized capacity�ies),and that by his/�heir
signature(s)on the instrument the person{,&),or the entity upon behalf TANYA CHINCHIL!A
of which the person(&)acted, executed the instrument. Q. '`. Commission# 1375153
z : ' 'I Notary Public - California
WITNESS my hand and official seal. " Contra Costa County
My Comm.,E>pires Sep 16,2006
Signature
This area for Official Notarial Seal
OPTIONAL
Though the data below is not required by law, It may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
C-..I
INDIVIDUAL
C CORPORATE OFFICER BOND NUMBER: 0$ 19500
TITLE OF TYPE OF DOCUMENT
TiTIE(5)
L PARTNER(S) ® LIMITED
17 GENERAL ONE (01)
W1 ATTORNEY-IN-FACT NUMBER OF PAGES
(� TRUSTEE(S)
GUARDIAN/CONSERVATOR
C� OTHER: January 11, 2005
DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME OF PERSON(S)OR ENTITY(TES)
Fidelity and Deposit Company. of Maryland
NIA
SIGNER(S)OTHER THAN NAMED ABOVE
ID-1232(REV.5101) ALL-PURPOSE ACKNOWLEDGEMENT
Power of Attorney
FIDELITY AND DEPOSIT COMPANY OF MARYLAND
HOME OFFICE:P.O.BOX 1227, BALTIMORE, MD 21203-1227
Know ALL MEN BY THESE PRESENTS: That the FIDELITY AND DEPOSIT COMPANY OF MARYLAND, a
corporation of the State of Maryland, by M. J. ANDERSON, Vice President, and T. E. SMITH, Assistant Secretary, in
pursuance of authority granted by Article Vl, Section 2,of the By-Laws of said Company, which are set forth on the reverse
side hereof and are hereby certified to be in full force and effect on the date hereof, does hereby nominate, constitute and
appoint John J. DALEY, of Walnut Creek, California, i true and Iaw agent and Attomey-in-Fact, to make, execute,
seal and deliver, for, and on its behalf as surety, and as ` and de and all bands and undertakings and the
execution of such bonds or undertakings in pursuance of presents a as binding upon said Company, as fully and
amply, to all intents and purposes, as if they had bee execute cknowledged by the regularly elected officers of
the Company at its office in Baltimore,Md.,in their open pe
The said Assistant Secretary does hereby certify extract on the reverse side hereof is a true copy of Article VI,
Section 2,of the By-Laws of said Company,and i force.
IN WITNESS WHEREOF, the said Vic � ° ent an tant Secretary have hereunto subscribed their names and
affixed the Corporate Seal of the said ITY A1EPOSIT COMPANY OF MARYLAND, this 14th day of
September.A.D.2000. ` a
ATTEST: FIDEL D DER," COMPANY OF MARYLAND
0 �c .
By:
T E. Smith st Secretary M.J Anderson Vice President
State of Maryland)
County of Baltimore ss:
On this 14th day of September, A.D. 2000, before the subscriber, a Notary Public of the State of Maryland, duly
commissioned and qualified, came M. I. ANDERSON, Vice President, and T. E. SMITH, Assistant Secretary of the
FIDELITY AND DEPOSIT COMPANY OF MARYLAND, to me personally known to be the individuals and officers
described in and who executed the preceding instrument,and they each acknowledged the execution of the same, and being
by me duly sworn,severally and each for himself deposeth and saith,that they are the said officers of the Company aforesaid,
and that the seal affixed to the preceding instrument is the Corporate Seal of said Company, and that the said Corporate Seal
and their signatures as such officers were duly affixed and subscribed to the said instrument by the authority and direction of
the said Corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my Official Seal the day and year first above
written. ,
Carol J Fader Notary Public
My Commission Expires: August 1,2004
POA-F 016-2969C
EXTRACT FROM BY-LAWS OF FIDELITY AND DEPOSIT COMPANY OF MARYLAND
"Article VI, Section 2. The Chairman of the Board, or the President, or any Executive Vice-President, or any of the Senior
Vice-Presidents or Vice-Presidents specially authorized so to do by the Board of Directors or by the Executive Committee,
shall have power, by and with the concurrence of the Secretary or any one of the Assistant Secretaries, to appoint Resident
Vice-Presidents, Assistant Vice-Presidents and Attorneys-in-Fact as the business of the Company may require, or to
authorize any person or persons to execute on behalf of the Company any bonds, undertaking,recognizances, stipulations,
policies, contracts, agreements, deeds, and releases and assignments of judgements, decrees, mortgages and instruments in
the nature of mortgages....and to affix the seal of the Company thereto."
CERTIFICATE
I,the undersigned,Assistant Secretary of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND,do hereby certify
that the original Power of Attorney of which the foregoing is a fail, true and correct copy, is in full force and effect on the
date of this certificate; and I do further certify that the Vice-President who executed the said Power of Attorney was one of
the additional Vice-Presidents specially authorized by the Board of Directors to appoint any Attomey-in-Fact as provided in
Article VI,Section 2,of the By-Laws of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND.
This Power of Attorney and Certificate may be signed by facsimile under and by authority of the following resolution of the
Board of Directors of the FIDELITY AND DEPOSIT COMPANY OF MARYLAND at a meeting duly called and held on
the 10th day of May, 1990.
RESOLVED: "That the facsimile or mechanically reproduced seal of the company and facsimile or mechanically
reproduced signature of any Vice-President, Secretary, or Assistant Secretary of the Company, whether made heretofore or
hereafter, wherever appearing upon a certified copy of any power of attorney issued by the Company, shall be valid and
binding upon the Company with the same force and effect as though manually affixed."
IN TESTIMONY WHEREOF,I have hereunto subscribed my name and affixed the corporate seal of the said Company,
this 11th day of January 2005
Assisrani Secreaary
..................................
.............................................................................................................
BOND # 08719500
ZURICH
THIS IMPORTANT DISCLOSURE NOTICE IS PART OF YOUR BOND
Fidelity and Deposit Company of Maryland, Colonial American Casualty and Surety Company, Zurich American
Insurance Company, and American Guarantee and Liability Insurance Company are making the following
informational disclosures in compliance with The Terrorism Risk Insurance Act of 2002. No action is required on your
per.
Disclosure of Terrorism Premium
The premium charge for risk of loss resulting from acts of terrorism(as defined in the Act)under this bond is
$—waived . This amount is reflected in the total premium for this bond.
Disclosure of Availability of Coverage for Terrorism Losses
As required by the Terrorism Risk Insurance Act of 2002,we have made available to you coverage for losses resulting
from acts of terrorism(as defined in the Act)with terms, amounts, and limitations that do not differ materially as those
for losses arising from events other than acts of terrorism.
Disclosure of Federal Share of Insurance Comnanys Terror ism Losses
The Terrorism Risk Insurance Act of 2002 establishes a mechanism by which the United States government will share
in insurance company losses resulting from acts of terrorism.(as defined in the Act) after a insurance company has paid
losses in excess of an annual aggregate deductible. For 2002,the insurance company deductible is 1%of direct earned
premium in the prior year; for 2003, 7%of direct earned premium in the prior year; for 2004, 10%of direct earned
premium in the prior year; and for 2005, 15%of direct earned premium in the prior year. The federal share of an
insurance companys losses above its deduc tible is 90%. In the event the United States government participates in
losses,the United States government may direct insurance companies to collect a terrorism surcharge from
policyholders. The Act does not currently provide for insurance industry or United States government participation in
terrorism losses that exceed$100 billion in any one calendar year.
Definition of Act of Terrorism
The Terrorism Risk Insurance Act defines "act of terrorism" as any act that is certified by the Secretary of the Treasury,
in concurrence with the Secretary of State and the Attorney General of the United States:
1. to be an act of terrorism;
2. to be a violent act or an act that is dangerous to human life,property or infrastructure;
3. to have resulted in damage within the United States, or outside of the United States in the case of an air carrier
(as defined in section.40102 of title 49,United 17 States Code)or a United States flag vessel(or a vessel based
principally in the United States, on which United States income tax is paid and whose insurance coverage is
subject to regulation in the United States),or the premises of a United States mission; and
4. to have been committed by an individual or individuals acting on behalf of any foreign person or foreign
interest as part of an effort to coerce the civilian population of the United States or to influence the policy or
affect the conduct of the United States Government by coercion.
But,no act shall be certified by the Secretary as an act of terrorism if the act is committed as part of the course of a war
declared by Congress (except for workers co mpensation)or property and casualty insurance losses resulting from the
act, in the aggregate, do not exceed$5,000,000.
These disclosures are informational only and do not modify your bond or affect your rights under the bond.
Copyright Zurich American Insurance Company 2003
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Contra Costa SS.
On .January 12, 2005 before me, Christine J. Mazzera
Date
personally appeared David B. Sanson
Name(s)of Signer(s)
personally known to me - OR- ❑proved to me on the basis of satisfactory evidence
To be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/shelthey executed
- - _ the same in his/her/their authorized capacity(ies),
.0 1
Cotm►mM�k�r►#143127
d.Mrd and that by his/her/their signature(s) on the
y Public-Calffomio instrument the person(s), or the entity upon
Cam Coda County behalf of which a person(s)acted, executed the
L011MY
e
M. ft Jul 18,2007 instrument.
WITNESS y hand and offs ' I sea[.
r
Signature of 116tt Publi
----------_--__-_-_--_----------------------- OPTIONAL ------------------------------------__-----___---
Though the information below is not required by law,it may prove valuable to persons relying on the document and
could prevent fraudulent removal and reattachment of this form to another document
Description of Attached Document
Title or Type of Document: Bond Against Taxes
Document Date: January 11. 2005 Number of Pages: 1
Signer(s)Other Than Named Above: John Daley
Capacity(les)Claimed by Signer
Signer's Name: David B. Sanson
[ ]
Individual
[x]Corporate Office-Tftle(s): President
I ]Partner-[ ]Limited[ ]General
[ I Attorney in Fact
[ I Trustee
[ I Guardian or Conservator
[ ]Other:
Signer is Representing: DHI-LCC LLC.
OPERATING AGREEMENT
OF
DHI-LCG, LLC
THIS OPERATING AGREEMENT (this "Agreement") is among the Members
(collectively referred to as the "Members" and individually as a "Member") listed in §1.9
below and they agree:
ARTICLE 1
THE LIMITED LIABILITY COMPANY
§1.1. Formation. A limited liability company (the "Company") has been formed
under the subject to the provisions of the Beverly-Killea Limited Liability Company Act of
California (the "Act") as currently in effect.
§1.2. Filing. In connection with the execution of this Agreement, the Members have
caused Articles of Organization("Articles") that comply with the Act to be executed and
properly filed with the California Secretary of State. The Members will cause such further
action as is appropriate to comply with the requirements of law for the formation and operation
of a limited liability company in California and in all other places where the Company may
conduct its business.
§1.3. Name. The name of the Company is as set forth above.
§1.4. Registered Office; Agent. The Company shall maintain an office in California
as required by the Act at which it shall maintain the records required to be maintained there by
the Act, including those referred to in Section 4.8. The Company may have such other offices
as the Members may determine, within or without the State of California and any such office
may be the Company's principal place of business, as determined by the Members.
§1.5. Duration; Events of Dissolution. The Company's duration shall be perpetual,
unless sooner dissolved by:
(a) The happening of events causing dissolution, if any specified in the Articles or
this Agreement;
(b) The affirmative vote of a majority of the Members;
(c) Any event that mares it unlawful for the business of the Company to be carried
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on by the Members; or
(d) Subject to the provisions of §1.b, the death, insanity, bankruptcy, retirement,
resignation, or expulsion of any Member.
§1.6. Continuance of the Company. Notwithstanding the provisions of §1.5(d), if an
event described in it befalls a Member, the Company shall not be dissolved if:
(a) There is at least one remaining Member; and
(b) Within 90 days after that event occurs, all remaining Members vote to continue
the business of the Company.
If less than a majority in interest of the remaining Members fail to vote to continue the
business on or before the expiration of such 90-day period, the Company's affairs shall be
wound up as provided in Article 9.
§1.6.1 RIGHT OF FIRST REFUSAL
(a) No Transfers of Pledges.
Each Member hereby agrees that none of the Membership interests owned or
hereafter owned by him or her, or any right or interest therein, shall be
transferred, assigned, pledged, encumbered, or in any other way alienated,
whether voluntarily or by operation of law, or by gift or otherwise, except in a
transfer which meets the requirements of this Agreement. Any purported
transfer in violation of any provision of this Agreement shall be void and
ineffectual, shall not operate to transfer any title or interest to the purported
transferee, and shall give the Remaining Members (as herein defined) an option
to purchase the Membership interests involved in any such attempted transfer in
the manner and on the terms and conditions provided for in Sections 1.6.2 and
1.6.3 hereof.
(b) Obli ation of Transferee.
Except as otherwise expressly set forth herein, any transferee of any
Membership interests, or any interest therein, shall hold said Membership interests or interest
subject to all of the terms and conditions of this Agreement and shall make no further transfers
except as provided in this Agreement.
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(c) Options to Purchase.
No Member shall sell, transfer, or encumber any Membership interest or any
interest therein without first offering said Membership interest (the "Offered Membership
interest") to the other Members (the "Other Members") in the following manner:
(i) Offering Procedure. A Member (the "Offering Member") desiring to
make such a sale, transfer or encumbrance shall deliver a written notice to the Secretary (or if
none, to any officer of the Company) stating his or her intention to sell, transfer, or encumber,
the proposed transferee or security holder, Membership interest to be sold, transferred, or
encumbered, and in the case of a sale or transfer, the price, terms and conditions contained in
an acceptable bona fide offer. Promptly on receipt of said notice, the said officer shall forward
a copy thereof to each Member of the Company. The Other Members shall have the prior
right to purchase all or any number of the Offered Membership interest at the price (the
"Purchase Price") that is the lesser of: (i) the price, terms and conditions specified in the
written notice; or, (ii) the price set forth in Section 1.6.3,
The Other Members shall exercise their right to purchase all or any full number of the
Remaining Membership interests at the Purchase Price by delivering a written election to
purchase all or a portion of said Remaining Membership interests to the Secretary of the
Company (or if none, to any other officer) within fifteen (15) days of receipt of the notice of
the availability of the Offered Membership interest. If the total percentage of Membership
interests in the Company specified in the elections exceeds the percentage of the Offered
Membership interests, each electing Member shall have priority, up to the percentage interest
specified in his or her notice of election to purchase, to such proportion of the Offered
Membership interests as the percentage interest he or she owns in the Company bears to the
total percentage Membership interest owned by all Members electing to purchase. The Offered
Membership interests, if any, not purchased on such a priority basis shall be allocated in one
or more successive allocations to those Other Members electing to purchase more than the
percentage interest to which they have a priority right, up to the percentage interest specified in
their respective notices, in the proportion that the percentage interest owned by each of them
bears to the percentage interest owned by all of them.
(ii) No Purchase of Fewer Than All Offered Shares. Notwithstanding
anything to the contrary herein, if fewer than all of the Offered Membership interests are
subscribed to by the Other Members together within the total time periods set forth in
subsection (i) hereof, the Offering Member shall not be required to accept any of the offers
made under this Section 1.6.1, and may within thirty (30) days after the expiration of said time
periods dispose of all the Offered Membership to the person or persons specified in the notice
given to the Secretary pursuant to subsection (i) or encumber the Offered Membership interest
, provided that said Offered .Membership interest shall not be sold or transferred at a lower
price or on more favorable terms than those specified in the notice to the Secretary. The
transferee or security holder shall hold said Membership interests free and clear of the
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provisions of this Agreement. If the Offered Membership interests are not so sold, transferred
or encumbered, Membership interests may not be transferred without again complying with all
of the terms of this Section 1.6.1.
(iii) Payment of Purchase Price. The Purchase Price shall be paid by the
appropriate party or parties to the Offering Shareholder in the manner described in Section
1.6.3.
§1.6.2. BUY-SELL AGREEMENT
(a) Events Giving Rise to Options to Purchase Membership interests.
The following events (the "Option Events") shall give rise to the rights of the
Members not involved in such event (the "Remaining Members") to purchase the Membership
interests ("Available Membership interests") of a Member ("Selling Member") upon the terms
and conditions provided herein.
(i) The death of any Member;
(ii) The filing of any petition in bankruptcy (voluntary or involuntary) by or
for a Member, the making by any Member of an assignment for the benefit of creditors or the
appointment of a receiver over any of a Members' assets;
(iii) The making by any Member of a purported transfer of any of his
Membership interests in violation of the provisions of this Agreement;
(iv) The complete physical or mental incapacity of any Member which
condition continues for a period of nine (9) months;
(v) The commencement of involuntary dissolution proceedings against the
Company by any Member, pursuant to any provision of the California Corporations Code; or
(vi) In the event any Membership interests are to be distributed to a
Member's spouse, or the legal or personal representative of such spouse, as such spouse's joint
or community property interest pursuant to a decree or order of divorce or dissolution or a
property settlement agreement.
Upon the occurrence of any of the Option Events, the Selling Member, his
personal representative, or any other Member becoming aware of such occurrence shall
promptly give written notice to all of the Members.
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(b) Option to Purchase by the Remaining Members.
Upon the occurrence of an Option Event, each Remaining Member shall have
the right to elect to purchase all or any lesser portion of the Available Membership interests by
giving written notice to the Selling Member or his personal representative, of their election to
purchase and of the percentage Membership interests they intend to purchase, within thirty (30)
days after receiving notice of their option to purchase from the Selling Member.
If that portion of the Available Membership interest specified in the elections exceeds
the Available Membership interest that is being offered in the Company, each electing Member
shall have priority, up to Available Membership interest specified in his or her notice of
election to purchase, to such proportion of the Available Membership interest as the
percentage interest in the Company he or she owns bears to the total percentage interest in the
Company owned by all Members electing to purchase. The Available Membership interest, if
any, not purchased on such a priority basis shall he allocated in one or more successive
allocations to those Other Members electing to purchase more than the percentage interest in
the Company to which they have a priority right, up to the percentage interest in the Company
specified in their respective notices, in the proportion that the percentage interest in the
Company owned by each of them bears to the percentage interest in the Company owned by
all of there.
(c) Failure to Exercise Options.
ions.
In the event that the Remaining Members do not elect to purchase all of the
Available Membership interests pursuant to Sections 1.6.2(a) and (b) hereof within the time
periods in which they may do so, then the Selling Member or his or her personal representative
shall not be required to accept any of the offers made under this Section 1.6.2 and may hold all
of the Available Membership interests free and clear of all of the provisions of this Section
1.6.2. Notwithstanding the foregoing to the contrary, if the Option Event consists of a
purported transfer of a Member's Membership interests in -violation of the provisions of this
Agreement, the Selling Member shall be required to sell to the Remaining Members any and
all Membership interests elected to be purchased by the Remaining Members, whether or not
the Remaining Members elect to purchase all of the Available Membership interests, and any
Membership interests not so purchased shall remain subject to the provisions of this Agreement
and shall not be transferred without complying with the terms and conditions hereof.
(d) Extension of Purchase Periods.
In the event that any Membership interests are subject to a bona fide purchase
offer and notice of said offer has been delivered to the Remaining Members pursuant to Section
1.6.1(c) hereof, the various option and purchase periods provided in this Section 1.5.2 shall be
tolled until all of the option and transfer periods provided for in said Section 1.6.1(c) hereof
shall have expired.
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(e) Amendment of Annex 1.
Upon delivery of the clown payment and any rewired promissory notes by each
purchasing Member pursuant to this Section 1.6.2 or Section 1.6.1 above, Annex 1 of this
Agreement shall be amended immediately to reflect the transfer.
§1.6.3. PURCHASE PRICE AND PAYMENT
(a) Purchase Price.
(i) The purchase price of all Membership interests sold to the Company or to
the Members pursuant to this Agreement shall be the value ("Value"), determined, first, by
agreement as set forth herein, or, if there is no such agreement, then by appraisal as set forth
herein, with an appropriate premium or discount for control, lack of control (minority interest)
and/or lack of marketability. The stated intent of this Agreement that the value of the
Company as determined shall include goodwill, if any.
(ii) The Value of the Membership interests shall be determined as follows: the
parties hereto shall execute, upon signing of this Agreement and within sixty (60) days after
the closing of each fiscal year of the Company, a Certificate of Value, which shall be attached
hereto as Exhibit " A " and which shall set forth the Company's Value as of the end of the
preceding fiscal year. The Value shall be equal to that Value found in the last Certificate of
Value duly executed; provided however, that if no such Certificate of Value shall have been
executed within eighteen (I8) months of any event requiring a purchase (or granting an option
to purchase) to be made pursuant to this Agreement, then the Value shall be that value
unanimously agreed upon by the Other Members and the Offering Member, or his or her legal
representative, as the case may be. If they are unable to agree within thirty (30) days following
the Option Event, then within ten (10) days following the expiration of the thirty (30) day
period, the parties shall each, at its own cost, commence the appraisal and payment process
described in section 1.6.3 ( b, c, d, e, f, g and h) of this Agreement
(b) Selection of Appraiser.
The Members shall attempt to agree to the appointment of a single qualified
appraiser to determine the Value of the Company, the cost of such single qualified appraiser
being borne entirely by the Company. The Members shall have 10 days following the
expiration of the 30 day period following the Option Event in which to appoint a single
qualified appraiser. If the Members are not able to agree upon the appointment of a single
qualified appraiser, then each Member may appoint their own appraiser, the cost of each such
appraiser to be borne by the Member appointing that appraiser, within 10 days following
expiration of the deadline for the parties to appoint a single qualified appraiser. Failure to do
so shall result in that Member's loss of the right to appoint its own appraiser. If no qualified
appraiser is timely appointed, such shall be deemed authorization for any Member to apply to
the Superior Court of Contra Costa County for the appointment of two qualified appraisers,
6—
said application to occur no sooner than 15 days after the parties have failed to appoint any
qualified appraiser within the times set forth herein. Should the Superior Court refuse to act
upon said application, any Member may apply to the American Arbitration Association
("AAA") to make such appointment. Each duly appointed appraiser, whether appointed by
any of the Members, by a court or by AAA, shall then establish a Value and a written opinion
within 60 days from their appointment. For the purpose of this Section, a "qualified
appraiser" or "appraiser" is an M.A.I. certified professional appraiser with at least five years'
experience in appraising residential development properties, or a Certified Public Accountant
licensed by the State of California who is qualified by experience and ability to appraise the
values of companies and Membership interests of limited liability companies. The Company
shall pay all court costs, AAA casts if any, and the appraisers' fees and expenses should the
appraisers be appointed by either a court or by AAA.
(c) If appraisers are appointed to establish the Company's Value, the Value shall be
determined according to the applicable following circumstance:
(i) if the Members agree upon and appoint a single qualified appraiser, that
appraiser's determination shall be final and binding;
(ii) if two or more appraisers are used, and if their appraisals are the same
amount, or if the higher of the appraisals is no more than 110% of the lower
appraisal, then the average of the appraisals shall be final and binding. If the
higher of the appraisals is more than 110% of the lower appraisal, the
appointed appraisers shall appoint a final qualified appraiser ("the final
appraiser"). The appraisers' failure to appoint the final appraiser within 30 days
of the last appraisal shall grant any Member the right to apply to the Contra
Costa Superior Court, or to AAA if the Superior Court refuses to act upon said
application, to appoint the final appraiser. The final appraiser shall not have
acted in any capacity for any Member previously. No Member shall, nor shall
any Member's appraiser, inform the final appraiser of any prior appraisal
determination, and each Member shall instruct their appraiser to not
communicate with the final appraiser. The final appraiser shall disclose to all
Members any communications it received relating to the prior appraisals. The
final appraiser shall have the qualifications required of a qualified appraiser and
shall consider the factors described in this Agreement to determine the
Company's Value. The final appraiser shall advise the Members of his
determination simultaneously, either by mailing on the same date to all
Members his determination or by disclosing same at a joint meeting of all
Members and or the Members' legal representatives. If the final appraiser's
determination falls within the highest and lowest of the previous appraisers'
determination of Value, the final appraiser's determination shall be final and
binding. If the final appraiser's determination is above or below the highest and
lowest determination of the other appraisals, the Value shall be determined by
application of the following formula: the average of the two appraisals closest in
value to the final appraisal and the final appraisal.
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(d) Binding Nature of Determination.
The value of the Membership interests computed according to this Article shall
be final and binding on all parties hereto and no adjustment shall be made for operations of the
Company subsequent to the end of such preceding fiscal year.
(e) Consideration in Making-Appraisal.
The appraisers shall consider the following factors in making their appraisals:
(i} The value of comparable companies, if known;
(ii) The fair market value, replacement value, as appropriate, of any real
property, leasehold improvements, equipment, and furnishings and fixtures;
(iii) The face amount of any accounts payable, or other Company liabilities;
and
(iv) The face amount of any accounts receivable, with a reasonable reserve
for bad debts.
(e) Payment of Purchase Price.
The purchase price of all Membership interest purchased by any Member or the
Company pursuant to this Agreement shall be paid by each purchaser pursuant to a promissory
note made by such purchaser in favor of the selling Member. The promissory note(s) shall
provide for payment of principal and interest for no more than sixty (60) equal monthly
installments, with the actual number of months being determined at the sole option of the
purchaser, with interest on the unpaid balance at the applicable Federal Rate determined
pursuant to Internal Revenue Cade Section 1274(4). The interest rate for said promissory
note(s) shall be adjusted on a quarterly basis.
The promissory notes (the ":Notes") executed by the purchasers shall provide that
prepayment of the remaining principal balance may be made at any time without penalty or
bonus. Any prepaid sums shall be applied against the installments thereafter falling due, or
against all the remaining installments equally, at the option of the holders of the Notes. The
Notes shall further provide for acceleration upon default in the payment of principal or interest
when due and for the payment of all expenses, including reasonable attorney's fees, incurred
by the holder in connection with collection on the Notes. Payment on the Notes shall be
secured by the purchaser granting a security interest in all Membership interests being
purchased, and purchaser agrees to execute and deliver all documents necessary to perfect said
security interests. If purchaser fails to grant the security interest or fails to execute and deliver
documents for perfecting said security interest within five business days from the date in which
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........._. .
the purchase price has been established, purchaser hereby agrees to appoint seller as its
attorney in fact for the purpose of executing, delivering and taking all steps necessary to
perfect the security interest described herein. The purchased Membership interests shall be
registered in the names of the purchasing Member. As long as no default occurs in payments
on a Note, the purchasers shall be entitled to vote the transferred Member ship interests, to
receive distributions and have all other rights of Membership.
§1.6.4. ADDITIONAL SECURITIES
All Membership interests, including any such interests lawfully or unlawfully
transferred, to shall be subject to the terms and conditions of this Agreement.
§1.6.5. AIDMINISTRATIVE REQUIREMENTS
The Company and the Members agree to apply for, execute any and all appropriate
documents, and use their best efforts to obtain, all governmental and administrative approvals
which may be required in connection with the purchase and sale of the Membership interests
pursuant to this Agreement. All costs and filing fees incurred in connection with obtaining
such approvals shall be paid by the Company.
0.7. Character of Business. The business of the Company shall be:
(a) Real estate purchase, development, commercial management and sale, to engage in
all activities reasonably necessary or incidental thereto, and to engage in any or all other
businesses approved by the Members to which limited liability companies may be formed
under California law.
(b) To accomplish any of the foregoing purposes for its own account or as nominee,
agent, or trustee for others,
§1.8. Principal Place of Business. The location of the principal place of business of
the Company, which will be the office required by §17057 of the Act, will be at 1899 Clayton
Road, Suite 110, Concord, CA 94520, or at such other place in California as the Members
from time to time may select.
§1.9. The Members. The full name and business or residence street address of each
member are as set forth in Annex I to this Agreement. Each Member represents to the other
those representations set forth in Annex 1.
If a person becomes a Member by admission as such pursuant to action of the Members
or as a Member's assignee who becomes a Member of the Company as provided in Article 8,
9—
that person will become a party to this Agreement by executing and delivering to the Managers
a supplement to this Agreement in such a form as the Managers prescribe. The supplement
shall show; (a) the full name and business or residence street address of the new Member; (b)
the cash contribution, if any, to be made by the new Member; (c) the Sharing Ratio, if any, or
other method of calculating the new Member's participation in profits and losses ; and (d) any
adjustments in the Sharing Patios, or other methods of calculating profits and losses, of other
Members resulting from the admission of the new Member. By executing and delivering the
supplement, the new Member will become a party to this Agreement without further action.
§1.10. Definitions. As used in this Agreement, the following terms have the
fallowing meanings.
"Act" as defined in §1.1.
"Code" means the Internal Revenue Code of 1986, as it may be amended or superseded
from time to time.
"Economic Interest" has the meaning set forth in §17001(n) of the Act.
"Profit" and "Losses" mean respectively, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss for such year or period, determined in
accordance with Code Section 703(a).
ARTICLE 2
CAPITAL CONTRIBUTIONS
§2.1. Initial Contributions. The Members shall contribute capital to the Company in
the respective amounts and services set forth in Annex 1 to this Agreement.
§2.2. Additional Contributions. No Member shall be obligated to make any
additional contribution to the Company. No Member may make an additional contribution to
the Company without the prior written consent of all other Members. Notwithstanding
anything to the contrary herein, Member Denova Homes, Inc. is obligated to contribute that
amount of capital necessary to perform its obligations set forth in Annex I to this Agreement.
If Denova Homes, Inc. is unable to perform its capital contribution without outside financing,
all Memibers must approve in writing any such outside financing.
§2.3. Capital Accounts. A Capital Account shall be maintained for each Member.
The Capital Account of each Member must be credited initially with the amount of cash
contributed to the Company by that Member. Thereafter, each Member's Capital Account will
be credited with that Member's share of Profits and the amount of any additional cash
10_
contributed to the Company by that Member, and will be debited with that Member's share of
Losses and the amount of any cash distributed to that Member.
ARTICLE 3
PROFITS, LOSSES AND DISTRIBUTIONS
§3.1. Profits and Losses. The Profits and Lasses of the Company shall be allocated
among the Members in accordance with the provisions set Forth in Annex 1 to this Agreement.
§3.2. Distributions. The Members shall distribute available funds to the Members, in
accordance with the formula expressed in Annex 1 of this Agreement, at intervals to be agreed
by the Members. "Available funds" for this purpose means the Company's gross cash receipts
(other than cash funds obtained as contributions to the Company by its Members and cash
funds, if any, obtained from loans to the Company), less the Company's operating expenses
including provisions for payment of outstanding and unpaid current obligations of the
Company as of such time, and less the amount that, in the Members' reasonable judgment, the
Company should retain in order to fulfill its business purposes.
ARTICLE 4
MANAGEMENT
§4.1. Members. The liability of the Members shall be limited as provided in the Act,
which generally provides that no Member is personally liable for the debts, obligations, or
liabilities of the Company.
§4.2. Management Rights in Members. Except as otherwise provided in this
Agreement or as otherwise agreed, management of the Company is vested in the Members in
proportion to their initial capital contributions.
§4.3. Exercise of Company Powers. Except as provided otherwise provided in this
Agreement, all powers of the Company are exercised by or under the authority of the Members
and the business and affairs of the Company are managed under the direction of the Members.
§4.4. Member Denova Homes Inc. to Have Sole Authority to Make Certain
Decisions. No act may be taken, money expended, decision made, or obligation incurred by
the Company except by the unanimous consent of all Members with respect to a matter within
the scope of any of the major decisions enumerated below. Those decisions include.
11-
(a) The sale of all or substantially all assets of the Company;
(b) A mortgage or encumbrance on all or substantially all assets of the Company;
(c) Any matter that could result in a change in the amount or character of the
Company's contributions to capital;
(d) A change in the character of the business of the Company;
(e) Borrowing of money;
(1) Commission of an act that would make it impossible for the Company to carry
on its ordinary business; or
(g) Commission of an act that would contravene this Agreement,
§4.5. Alteration of Management Responsibilities. Management responsibilities may
not be altered except by the action of a majority in interest of all Members at a meeting called
on written notice expressly describing alteration of management responsibilities as one of the
purposes of the meeting.
§4.6. Powers of Members as Managers. Except as otherwise expressly provided,
each of the Members has all necessary powers to carry out the purposes, business, and
objectives of the Company, including the right to enter into and carry out contracts of all
kinds; to employ employees, agents, consultants, and advisors on behalf of the Company; to
lend or borrow money and to issue evidences of indebtedness; to bring and defend actions in
law or at equity; and to buy, own, manage, sell, lease, mortgage, pledge, or otherwise acquire
or dispose of Company property.
§4.7. Other Activities. Members will not be required to manage the Company as
their sole and exclusive function and each of them may have other business interests and may
engage in other activities in addition to those relating to the Company, including the making or
management of other investments.
§4.8. Company Books and Records. The Members may employ a competent person
to be responsible for authenticating the records of the Company, including keeping correct and
complete books of account that show accurately at all times the financial condition of the
Company; safeguarding all funds, notes, securities, and that may from time to time come into
possession of the Company; and depositing all funds of the Company with such depositories as
the Members designate, The employee may have other duties that the Members from time to
time jointly prescribe, but under no circumstances does the employee have any of the rights,
powers, responsibilities, or duties of a Member of the Company. Any person responsible for
the above-described duties may be terminated at any time by a Member, and any Member may
12 -
restrict the duties and/or authority of the person responsible for these duties at any time. The
Company shall keep at its principal place of business the following:
(a) A current list in alphabetical carder of the full name and last known business or
residence street address of each Member and each holder of an Economic Interest in the
Company, together with contribution and share in profits and losses of each Member and
holder of an Economic Interest;
(b) a current list of the full name and business or residence address of each
Manager, if any;
(c) A copy of the Articles and all amendments to them, together with executed
copies of any powers of attorney pursuant to which the Articles or any amendments to them
have been executed,
(d) Copies of the Company's federal, state, and local income tax returns and
reports, if any, for the six most recent years;
(e) A copy of this Agreement;
(f) Copies of financial statements of the Company, if any, for the six most recent
years;
(g) The books and records of the Company as they relate to its internal affairs for at
least the current and past four fiscal years.
(h) If the Company is to be operated by one or more Managers, a current list of the full
name and business or residence address of each Manager.
§4.9, Effect of Member's Execution of Document. Every contract, deed, mortgage,
lease, and other instrument executed by a Member is conclusive evidence in favor of every
person relying on, or claiming under, the fact that, at the time of the delivery, (1) the
Company was in existence, (2) neither this Agreement nor the Articles had been amended in
any manner to restrict the delegation of authority among the Members, and (3) the execution
and delivery of that instrument was duly authorized by the Members.
§4.113. Exculpation. No act or omission of the Members, the effect of which may
cause or result in loss or damage to the Company or the Members if done in good faith to
promote the best interests of the Company, shall subject the Members acting or failing to act to
any liability to the Members.
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ARTICLE 5
COMPENSATION
§5.1.. Compensation. Members may receive compensation as determined in writing
by all Members for services provided in the management of the Company. In the absence of
any such writing, the terms and provisions of Annex 1 of this Agreement shall be the sole
authorization and agreement for the payment of any such compensation.
§5.2. Reimbursement of Expenses. Each Member is entitled to reimbursement from
the Company of all expenses of the Company reasonably incurred and paid by the Member on
behalf of the Company.
ARTICLE 6
ACCOUNTS
§6.1. Books. The Members shall maintain complete and accurate records and books
on account of the Company's business and affairs at the Company's principal place of
business, These books shall be kept on an accounting method acceptable for tax or ether
applicable regulatory purposes as the Members may select. The Company's accounting period
is the calendar year.
§6.2. Reports. The Members shall close the books of account promptly after the close
of each calendar year, and Member Denova Homes, Inc. shall prepare and send to each
Member a statement of the Member's distributive share of income and expense for federal and
state income tax reporting purposes no later than February 28 of each year. Member Denova
Homes, Inc. shall also provide to all other Members on a monthly basis copies of all
construction loan draw requests.
§6.3. Tax Matters. Denova Homes, Inc. shall be the Tax Matters Member for all
purposes of the Cade.
ARTICLE 7
MEETINGS OF MEMBERS
P.I. Meetings and Consents of Members. Actions of Members may be taken at
meetings, by written consent of all Members, or otherwise as agreed among the members. If
action is taken at a meeting, an appropriate record of the action taken shall be made and
retainers in the Company's records. If the action is by written consent, executed copies shall be
maintainers in the Company's records. Regular periodic meetings of the Members are not
required, the Members retaining complete discretion as to the frequency of Member meetings.
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Meetings of Members may be called by any Member. Reasonable notice shall be given to each
Member of any meeting of Members. Notice is reasonable if it specifies briefly the nature of
the matters to be presented at the meeting, and is sent or delivered in a manner that in the
ordinary course of business would be received by each members not less than four business
days before the day of the meeting.
ARTICLE 8
TRANSFERS; NEW MEMBERS
§8.1. Assignment. A Member's interest in the Company may be assigned only with
the consent of a majority interest of the other Members.
§8.2. Substitution of Transferee as Member. Notwithstanding anything to the
contrary in this Agreement, no transferee, assignee, purchaser, designee, or legal
representative of a Member may become a Member without the consent of a majority interest
of the other Members. If consent is not granted, the transferee, assignee, purchaser, designee,
or legal representative of a Member shall have no right to participate in the management of the
business and affairs of the Company and shall be entitled only to receive the Economic Interest
to which. that Member would otherwise be entitled and which was assigned.
As further conditions to admission as a Member any transferee, assignee, purchaser,
designee, or legal representative of a Member shall (a) execute and deliver such instruments, in
form and substance satisfactory to the Members, as the Members deem necessary or desirable
to cause the transferee to become a Member, including the supplement to this Agreement
referred to in §1.9, and (b) pay all reasonable expenses in connection with admission as a
Member, including but not limited to, the cost of preparation and filing of any supplement to
this Agreement referred to above and any other amendment of this Agreement or the Articles
of the Company or of taking any other action necessary or desirable in connection therewith.
§8.3. Admission of New Members. Additional persons may be admitted as Members
of the Company on the affirmative vote of a majority of interest of the Members.
Concurrently with admission of a person as a Member, that new Member shall execute and
deliver the supplement described in §1.9.
ARTICLE 9
DISSOLUTION AND TERMINATION
§9.1. Final Accounting. In case of the Company's dissolution, a proper accounting
must be trade from the date of the last previous accounting to the date of dissolution.
§9.2. Liquidation. On the Company's dissolution and, if applicable, the failure of
15-
remaining Members to continue the Company as provided in §1.6, a Member selected by a
majority of the then Members, will act as liquidator to wind up the Company. The person
acting as liquidator must act pursuant to and in accordance with Chapter S of the Act. The
liquidator will have full power and authority to sell, assign, and encumber any or all of the
Company's assets and to wind up and liquidate the Company's affairs in an orderly and
prudent manner. The liquidator must distribute all proceeds from liquidation to the Members,
after payment or provision for all obligations of the Company, in accordance with the
distribution plan set forth>in Annex 1 of this Agreement.
§9.3. Distribution. of Kind. If the liquidator, with the consent of a majority of all
Members, determines that a portion of the Company's assets should be distributed in kind to
the Members, the liquidator must distribute the same to the Members in undivided interests as
tenants in common in proportion to the distribution agreement set forth on Annex 1 to this
Agreement.
§9.4. Certificates of.Dissolution and Cancellation. Upon dissolution of the
Company, if and as required by the Act, the Members shall cause a certificate of dissolution to
be filed pursuant to Corp. Code Section 17356. On completion of the Company's winding up
and distribution of its assets, the Company shall be terminated, and a majority of all Members
shall cause a certificate of cancellation of articles to be filed as required by Chapter S of the
Act and take such other actions as may be necessary to terminate the Company.
ARTICLE 10
NOTICES
§10.1. Method for Notices. Except as otherwise expressly provided in this
Agreement, all notices under this Agreement shall be sent by first class mail, postage prepaid,
and addressed to a Member at the current address of that person as set forth in the records of
the Company referred to in §4.7 (except that any Member may from time to time by notice to
the Company change the address for such purpose), and are effective on the date of receipt or
an the fifth day after mailing, whichever is earlier.
§113.2. Computation of Time. In computing any prior of time under this Operating
Agreement, the day of the act, event, or default from which the designated period of time
beings to run is not included. The last day of the period so computed is included, unless it is a
Saturday, Sunday, or legal holiday, in which event the period will run until the end of the next
day that is not a Saturday, Sunday, or legal holiday.
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ARTICLE 11
GENERAL PROVISIONS
§11.1. Entire Agreement. This Operating Agreement (a) contains the entire
agreement among the parties, (b) except as otherwise expressly provided in this Agreement,
may not be amended and no rights hereunder may be waived except by an instrument in
writing signed by the party sought to be charged with such amendment or waiver, (c) will be
construed in accordance with, and governed by, the laws of the California, and (d) is binding
on and inures to the benefit of the parties and their respective personal representatives,
successors, and assigns, except as above set forth, leo document that purports to amend,
supplement, or replace this Agreement will be effective to do so unless it specifically refers to
this Agreement, specifically states its effect on this Agreement, and is signed by all Members
of the Company.
§11.2. Construction Principles. Words in any gender are deemed to include the other
genders. The singular is deemed to include the plural and vice versa. The headings and
underlined paragraph titles are for guidance only and have no significance in the interpretation
of this Operating Agreement.
§11.3. Binding on Heirs, Successors and Assigns. This Agreement shall be binding
on and inure to the benefit of the heirs, executors, administrators, successors, and assigns of
each Member.
§11.4. Partial Invalidity. If any term of this Agreement is held by a court of
competent jurisdiction to be void or unenforceable, the remainder of the Agreement shall
remain in full force and effect and shall not be affected.
§11.5. Attorney's Fees. If any party to this Agreement resorts to legal action or
arbitration to enforce any provision of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney's fees in addition to any other relief to which he or she may be
entitled. This provision applies to the entire Agreement,
§11.6. Arbitration of:Disputes. If any dispute arises between the Members, between
any Member and the Administrator or Executor of a deceased Member, or between any
Member and the legal representative of a disabled Member, concerning any provision of this
Operating Agreement, the dispute shall be resolved by Arbitration in accordance with the
Rules of the American Arbitration Association in effect at the time a demand for arbitration is
filed with the Association. Any party to the dispute may file, in the manner provided by the
Rules of the Association, a demand for arbitration. The written decision of the arbitrator or
arbitrators appointed by the association will be final and conclusive as to all parties to the
dispute. If any party fails or refuses to appear or participate in the arbitration proceedings, the
arbitrator(s) may decide the dispute on the evidence presented in the proceedings by the other
1.7-
party or parties to the dispute. The arbitrator(s) will have the power and may award to any
party or parties to the dispute any suras for costs, expenses and attorneys fees that the
arbitrator(s) deem(s) proper. Judgment upon the award rendered by the arbitrator(s) may be
entered in any court of competent jurisdiction having jurisdiction thereof.
ARTICLE 12
NOTICES
14.1 Notice. All notices described here shall be sent to the original Members at the
addresses set forth below. Members may change the designated address by written notice to
each Member. Members who are not original Members of the Company shall forthwith
provide their address for notice purposes forthwith upon becoming Members.
Denova Homes, Inc.
ATTN: Dave Sanson
333 Civic Drive
Pleasant Hill, California 94523
with a copy to:
Craig F. Andersen
Andersen, Bonifield & Cottle
1.320 Willow Pass Road, Suite 504
Concord, California 94520-52.44
Lafayette Capital Group, Inc.
Lafayette, California 945
JJ
Date: July 22, 2004
/1
[Remainder of this page intentionally left blank]
IJ
/I
18-
IN WITNESS WHEREOF, the Members have signed this Operating Agreement as of
the date first above written.
DENOVA HOMES, INC.
By:
Dave Sanson, President
Lafayette Capital Croup, Inc.,
A California Corporation
By: t .
President
1:\work\denovs\dhHc9dd\0pn9c.wpd
19—
ANNEX 1
1. Name and address of each Member. The name and full business of each Member
are as follows:
Denova Homes, Inc. ("Denova")
333 Civic Drive
Pleasant Hill, California 94523
Lafayette Capital Groep, lnc.("LCG")
'Y
Lafayette, California 945'
2. Representations. Denova and LCC represents to the other that:
A. it is a duly organized corporation under California law and is in good standing
under the laws of the State of California;
B. The execution and delivery of this Agreement has been duly authorized and this
Agreement constitutes a valid and binding obligation, enforceable in accordance with each
parties obligations set forth herein.
3 Coital Contribution of LCG: LCG shall contribute that amount of capital necessary
for the Company to purchase marketable title, no later than , to the following described
real estate:
A) that real property consisting of eight lots known as Tract 8747, commonly
known as 664 Central Avenue, Martinez, California, the legal description of
which is attached hereto and labeled Exhibit "B" ("the Property.")
4. Coital Contribution of Denova.
A) Build and Sell.
i) Construction of the Property. Denova shall advance all capital and
or cash necessary for it to perform the construction and sale of approximately 8 residential
units on the Property, the precise number of units to be determined according to the Final Map
approved for the Property.
ii) Qonstruction Plans. Construction shall be in
accordance with the final approved plans for the Property.
5. Distributions. The proceeds from the sale of Property lots shall be distributed
according to the following formula ("the Distribution Formula"), which shall be calculated on
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a per lot basis:
A) Proceeds from sale of lot ("Step A"), reduced by
B) Obligation(s) to construction lender(s)for construction financing allocable to
that lot ("Step B), plus any additional reconveryance demand by any
construction lender(s), reduced by
C) All other debt incurred or costs advanced by the Company, by Denova and
by LCG, other than the Members' capital contributions, for the acquisition,
construction, development, financing and sale of the Property, allocable to that
lot ("Other Debt")', ("Step C),reduced by
D) Distribution to LCC for its capital contribution allocable to that lot, plus ten
percent (10.00%), or one hundred ten per cent (110%) of Par up to the total
proceeds available upon reconveyance ("Par" being LCG's capital contribution
divided by the number of lots), ("Step D"), reduced by
E) Distribution to Denova for its capital contribution allocable to that lot, plus
ten percent (10.00%) thereon, or one hundred ten per cent (110%) of Par until
paid off, ("Step E"), reduced by
F) a distribution to Denova of two percent (2.00%) of the Step A amount
allocable to that lot for a warranty and insurance reserve impound account
("Step F"). Denova agrees to be solely responsible for all warranty work which
the Company is obligated to perform.
G) The balance of any remaining proceeds shall be divided as follows: 35% to
LCG, and 65% to Denova ("Step G").
H) Example: For purposes of demonstrating the parties intended operation of the
Distribution Formula, the parties agree that the following example accurately
illustrates such intent, based upon the hypothetical facts provided:
*the Property is subdivided into S lots;
Lot X in sells for $450,000.
'Other Debt shall include but not be limited to all direct and indirect project-related costs
or debt such as fees, permits, insurance, materials, and marketing costs. Neither Member shall
be entitled to claim any type of developer/administrative overhead fee other than what is expressly
set forth herein.. Each party shall provide the other with an itemized list of Other Debt that was
paid or incurred.
21-
+ LCG capital contribution to acquire the Property is $686,000.
* Denova's capital contribution to Property is $100,000.00.
Construction financing for Property was $2 million.
• Other Debt for Property was $25,000
The distribution from the sale of Lot X would be correctly calculated and distributed as
follows:
$450,000 (Step A:proceeds from sale of Lot X)
(275,000) (Step B: construction lending allocable to this lot: $2 million divided by 8 lots
equals 250,000. Add 10% construction lender reconveyance reserve of
$25,(}00)}
(3,125) (Step C: Other Debt: 25,000 divided by 8 lots = 3,125)
(94,325) (Step D: to LCG for capital contribution: 686,000 divided by 8 lots equals
85,750, plus 10% ($8,575) thereon)
(1.3,750) (Step E: to Denova for capital contribution: 100,000 divided by 8 lots equals
12,500, plus 10% ($1,250) thereon)
($63,800)
(9,000) (Step F: Warranty reserve to Denova: 2% of Step A equals 12,000)
($54,800)
x 35% (Step G: 19,180 allocated to LCG)
x 65% (Step G: 35,620 allocated to Denova)
o.a0
6. Preferred Return to LCG. Notwithstanding anything to the contrary herein. LCG is
to receive, from the Step G distribution., a minimum return of eight percent (8.0%x) calculated
upon LCG's capital contribution ("the Preferred Return"). If the Step G distribution to LCG
does not at least equal eight percent of LCG's capital contribution, LCG shall receive all Step
G distributions (and Denova shall receive no Step G distributions) until LCG has received the
Preferred Return. All such distributions received by LCG shall be applied to LCD's respective
35% share described in Step G. Following LCG's receipt of the Preferred Return, the Step G
distributions shall resume in the manner described in Step G.
A. Example. For purposes of demonstrating the
parties intended operation of the Preferred Return as applied to the Distribution. Formula, the
parties agree that the following example accurately illustrates such intent, based upon the
hypothetical facts provided:
Assume that application of Steps A through F above yields a balance of 22,500, and assume
22--
there have been no prier Step G distributions. The following correctly illustrates the
application of.Step G's Preferred Return.
$22,500 (amount remaining following application of Step F)
Step G: LCG's 35% of 22,500 equals 7,875. But 8% on LCG's $686,000 capital
contribution divided by 8 lots for 1.5 years on the minimum capital contribution equals
10,290. LCG receives the full $10,290, which shall also be applied to LCG's 35%
share described in Step "G. Denova shall receive $12,210 in this Step "G" distribution.
LCG shall continue to receive that amount of Step G distributions on the sale of other
lots necessary to satisfy, at a minimum, the Preferred Return, all of which shall be
applied to LCD's 35% share described in.Step "G", Upon full satisfaction of the
Preferred Return, the Step "G" distributions shall be divided 35% to LCG and 64% to
Denova.
In all cases the final audit and equalization will occur upon the final units sold and after
all lender, LCG and ether accelerated debt is paid off and only project equity remains.
IN 'WITNESS WHEREOF, the Members have signed this Annex 1 to Operating Agreement on
the dates set forth below.
DATED:
DE LOVA DOMES, INC.
3
By:
Dave Sanson, President
DATED;
Lafayette Capital Group,
a California corporation.
117
. rs
t aR , President
23-
EXHIBIT A
CERTIFICATE OF VALUATION
We, the undersigned, being all the Members of DHI-LCG, LLC "the Company"} and
for the purpose of determining the value of the Company in the event of a purchase of a
Member's interest for any of the reasons set forth in Sections 1.6.1 and 1.6.2 OF THE
Co7mpany'S Operating Agreement do hereby agree and determine that the Company's value on
1 L2, 2003, was Dollars ($`I� ; }.
DATED:
DENOVA HOMES, INC.
By; r -�
Dave Sanson, President
DATED:
Lafayette Capital Group,
a California Corporation
By: U z
i ? President
24-
EXHIBIT B
Legal description of the Property
The land referred to in this Policy is situated in the unincorporated area of the County of Contra Costa, State of
California,and is described as follows:
PARCEL ONE:
Portion of the Rancho Las.juntas, described as follows:
Beginning at an iron pipe on the South line of a 50 feet in width private road at the most Easterly corner of the
4.45 acre parcel of land described as Parcel One in the deed from WM. Gottschalk, et ux,to WM. Olsen, et ux,
dated March 24, 1949 and recorded April 12, 1949, Book 1373 Official Records, Page 60; thence from said
point of beginning North 30 38' 10"East along the extension North 30 38' 10" East, of the East line of said
Olsen parcel 25.05 feet to the center line of said 50 feet in width private road; thence South 890 56' 20"East
along said center line 2003 feet; thence South 31 38' 10"West, 25.05 feet to an iron pipe on the South line of
said 50 feet in width road; thence South 12" 56' 30"West, 536.91 feet to the center line of a private road 50
Feet in width distant thereon South 87° 44' East, 125 feet from the most Southerly corner of said 4.45 acre
Olsen parcel;thence North 870 44' West along said center line 125 feet to said most Southerly corner, thence:
alone the East line of said Olsen parcel North 320 40' East, 25 feet and North 30 38' 10" East, 498.49 feet to
the point of beginning.
EXCEPTING THEREFROM that portion as described in the deed to Genera Martinez and Rosie M. Martinez,his
wife as joint tenants, recorded July 13, 1962, Book 4159, Page 446, Series No. 57436, Official Records,
PARCEL.TWO:
A right of way created in reference to the premises in the deed from Wm. Gottschalk, et ux, to Bess Shipstad,
et al, dated November 7, 1945 and recorded December 11, 1945, Book 854, 0}fficial Records, Page 338,as
follows:
"A non-exclusive right of way as an appurtenance to the remaining lands of Wm. Gottschalk and Sarah J.
Gottschalk for use as a roadway for vehicles of all kinds, pedestrians and animals, and as right of way for
water, gas, oil and sewer pipe lines and for telephone, electric light and power lines, together with the
necessary poles or underground conduits to carry said lines, over a strip of land 50.00 feet in width, lying
immediately Southerly of the first five coursed in the above described parcel. The Southerly line of said parcel
to be parallel to and distant 50.00 feet Southerly, measured at right angles from the first five courses of the
parcel hereinbefore described. The Westerly end of said right of way to be the Easterly terminus of Central
Avenue as shown on said map of Vine Hill Hornesites and the Easterly end of said right of way is to be the
exterior boundary of the Rancho Las.juntas as described in the parcel hereinfore described",
(Being APN 380-080-022)