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Collin J. Vierra (State Bar No. 322720)
2 EIMER STAHL LLP
99 S. Almaden Blvd., Ste. 600
3 San Jose, CA 95113-1605
Telephone: (408) 889-1668
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Email: cvierra@eimerstahl.com
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Attorney for Plaintiffs
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7
SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SAN MATEO
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10 Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148
Partnership, LP; and Brian Christopher Dunn
11 Custodianship; Dept. 21
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Plaintiffs, Hon. Robert D. Foiles
13 v.
14 David M. Bragg; Silicon Valley Real Ventures EXHIBITS TO DECLARATION OF
LLC; SVRV 385 Moore, LLC; SVRV 387 MARTHA DUNN
15 Moore, LLC; Gregory J. Davis; Kevin Wolfe;
Jason Justesen; Paramont Woodside, LLC;
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and Paramont Capital, LLC;
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Defendants.
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EXHIBITS TO DECLARATION OF MARTHA DUNN
Exhibit Page 1
1 INDEX
2 Exhibit A: December 20, 2017, Bank of America Account Activity Slip, Check from Martha Dunn
3 to SVRV, LLC, Amount: $150,000, Memo: Moore Rd……………………………………..……..4
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Exhibit B: February 27, 2018, Email Correspondence from Kurtis Kludt to Robert “Bob” Arntsen
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6 re: Effective Operating Agreements and Investment-Subscription Agreement………………...….6
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Exhibit C: February 8, 2018, Effective Operating Agreement for Woodside Parcel B, LLC……...8
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9 Exhibit D: February 8, 2018, Effective Operating Agreement for Woodside Parcel C, LLC…….31
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Exhibit E: August 2018, Investment-Subscription Agreement between Martha Dunn, Robert
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“Bob” Arntsen, and 389 Moore Road, Woodside ………………………………………………..54
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13 Exhibit F: June 8, 2018, Check Issued by Martha Dunn, Amount: $100,000, Memo: Moore Road
14 Real Estate …………………………………………………………….…………………………58
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Exhibit G: June 8, 2018, Bank of America Account Activity Slip, Check from Martha Dunn to
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SVRV, LLC, Amount: $130,000, Memo: Brian Dunn Trust Moore Rd Real Estate
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18 ……………………………………………………...………………………………………….....60
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Exhibit H: August 29, 2018, Email Correspondence between David Bragg, Robert “Bob” Arntsen,
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Martha Dunn, and Mary Lee re: Investor Agreements …………………………………………...63
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22 Exhibit I: March 20, 2019, Silicon Valley Real Ventures LLC, Bank of America Deposit
23 Summary, Wire from Arntsen Family Partnership, Amount: $100,000………...……………..…66
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Exhibit J: May 6, 2019, Email Correspondence between David Bragg, Martha Dunn, and Robert
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26 Arntsen re: Return of Short-Term Loans ……………………………………………………...…68
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EXHIBITS TO DECLARATION OF MARTHA DUNN
Exhibit Page 2
1 Exhibit K: August 9, 2019, Silicon Valley Real Ventures LLC Account QuickReport Spreadsheet
2 titled ‘Money Raised for Moore’…..………………………………………………………..……71
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Exhibit L: November 27, 2018, Unapproved Operating Agreement of SVRV 385 Moore, LLC
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……………………………………………………………………………….……………..…….75
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6 Exhibit M: November 27, 2018, Unapproved Operating Agreement of SVRV 387 Moore, LLC
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……………………………………………………………………………………………..……112
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9 Exhibit N: June 2019, Unapproved Investment-Subscription Agreement between Arntsen Family
10 Partnership and SVRV 385 Moore, LLC …………………………………………….…………148
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Exhibit O: June 2019, Unapproved Investment-Subscription Agreement between Arntsen Family
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Partnership and SVRV 387 Moore, LLC ………………………………………….……………171
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14 Exhibit P: March 23, 2020, Email Correspondence from David Bragg to Kurtis Kludt re: Need
15 for Additional Funds ……………………………………………………………………………194
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Exhibit Q: April 1, 2020, Wire Transaction Summary from the Arntsen Family Partnership to
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18 SVRV 385 Moore, LLC, Amount: $7,014 ………………………………………...……………197
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Exhibit R: Compilation of Eimer Stahl Invoice Summaries to Robert “Bob” Arntsen for Services
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Rendered re: Woodside Litigation …………………………………………...…………………199
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25 Dated: March 21, 2023 By: ______________________
26 Collin J. Vierra
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EXHIBITS TO DECLARATION OF MARTHA DUNN
Exhibit Page 3
Exhibit A
Exhibit Page 4
1/10/2018 Bank of America I Online Banking I Accounts I Account Details I Account Activity
BankofAmerica • Online Banking
SVRV: Account Activity Transaction Details
Post date: 12/ 20/ 2017
Amount: 307,000.00
Type: Deposit
Description: Cou nter Cred it
Merchant name: Cou nter Cred it
Transaction Income: Deposits
category:
ARNTSEN f'AMIL Y PARTNERSHIP I
320 l(INGS MOUNTAIN RO 1269
WOOOSAOE. CA Q-4062-l S:1 9
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Exhibit Page 5
https://secure.bankofamerica.com/myaccounts/brain/redirect.go?source=overview&target=acctDetails&adx=338625b94ef470f722272544a231 ae331b4.. . 1/1
Exhibit B
Exhibit Page 6
Date : 2/27/2018 2:02:34 PM
From : "Kurt Kludt"
To : "Arntsenr"
Subject : Investor Agreement and Woodside Parcel LLC docs
Bob,
Here is a draft of the framework from our investor presentation that we reviewed with you and Martha regarding the project. Let's discuss
tomorrow. The LLC docs for each Parcel are attached. You and Martha are the majority owners with SVRV, so let's keep the communication
open, discuss issues as they arise and make this a winning project for everyone.
Thank you, Kurt
389 Moore Woodside, LLC Investment Agreement Fe...
Woodside Parcel B LLC Operating Agreement Dunn...
Woodside Parcel C LLC Operating Agreement Dunn ...
KLUDT 001066
Exhibit Page 7
Exhibit C
Exhibit Page 8
OPERATING AGREEMENT
FOR
WOODSIDE PARCEL B, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This Operating Agreement (this “Agreement”), effective as of February 8, 2018, and
adopted by and among the parties listed on Exhibit A, attached hereto and incorporated herein by
reference, (such parties collectively referred to as the “Members” or individually as a “Member”),
as certified by the Company’s Secretary of even date herewith, with reference to the following facts:
A. On ___________, 2018, the Members caused to be filed an Articles of Organization (the
“Articles”) for WOODSIDE PARCEL B, LLC (the “Company”), a limited liability company under the
laws of the State of California, with the California Secretary of State, and numbered
_______________, a true and correct copy of which is attached hereto as Exhibit B; and
B. The Members have formed the Company for the purpose of acquiring, developing and
selling certain real property; and
C. The Members therefore desire to adopt and approve an Operating Agreement for the
Company under the California Revised Uniform Limited Liability Company Act (the “Act”), in order
to provide for the governance of the Company and the conduct of its business and to specify their
relative rights and obligations as Members of the Company.
NOW, THEREFORE, for good and valuable consideration, including the promises and
covenants herein, the Members agree as follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1. Name. The name of the Company shall be “WOODSIDE PARCEL B, LLC”. The Company may
conduct business under that name or any other name approved by the Members.
2. Term. The term of the Company commenced as of the date of the filing of the Articles and,
unless sooner terminated under Article IX.1, shall terminate on December 31, 2030.
3. Office and Agent. The Company shall continuously maintain an office and registered agent in
the State of California as required by the Act. The principal office of the Company shall be at
1 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 9
205 Constitution Drive, Menlo Park, CA 94025, or such location as the Members may
determine. The registered agent shall be as stated in the Articles or as otherwise determined
by the Members.
4. Business of the Company. The purpose of the Company is to engage in the business of
purchasing, developing, improving, investing in, holding and selling the real property located
at 389 Moore Rd, Woodside, CA, 94062-1149, and commonly referred to as Parcel One: Parcel
B, as shown on the map entitled, Parcel Map, filed for record in the office of the recorder of the
County of San Mateo, State of California on May 4, 2015 in Book 81 of Parcel Maps, pages 87,
88 and 89 APN: 073-133-390 JPN 073-013-133-15-02 (the “Property”), and more
specifically, entitling, permitting, and constructing for sale one (1) residential homes on the
Property (the “Project”), and such ancillary activities as are reasonably necessary to
accomplish that purpose. The Company shall not engage in any business other than the
following without the consent of all of the Members.
ARTICLE II
CAPITAL CONTRIBUTIONS
1. Capital Contributions. Each Member shall make an initial contribution to the capital of the
Company as set forth opposite the Member’s name on Exhibit A. Additional calls for
contributions to the capital of the Company shall be required only with the unanimous consent
of the Active Members. Except as provided in this Agreement, no Member may withdraw his
or her capital contribution.
2. Capital Accounts. The Company shall establish an individual capital account (“Capital
Account”) for each Member. The Company shall determine and maintain each Capital
Account in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). Upon a valid
transfer of a Member’s interest in the Company (“Membership Interest”) in accordance
with Article VII, such Member’s Capital Account shall carry over to the new owner.
3. No Interest. The Company shall not pay any interest on capital contributions.
4. Loans by Members. Notwithstanding the foregoing, and upon such terms as the Members may
agree upon by the vote of not less than seventy-five percent (75%) of the Active Members, as
described in Article III(2) (a “Special Majority”), Members may, from time to time, make
loans to the Company. It is agreed that such loans shall be on such terms as may be acceptable
to the Member(s) making the loan and the Company.
ARTICLE III
MEMBERS
2 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 10
1. Limited Liability. Except as expressly set forth in this agreement or required by law, no
Member shall be personally liable for any debt, obligation, or liability of the Company, whether
that liability or obligation arises in contract, tort, or otherwise.
2. Member Classes. There shall be two classes of Members; Active Members, whose ownership
interests are derived from project management, and Passive Members, whose ownership
interests are derived from capital investments. The Active Members will each appoint one
person to serve as one of the Managers for the Project. Active Members will have voting rights
as reflected on Exhibit A. Passive Members shall not be involved in any management decisions
affecting the Company or Property, and shall have no voting rights, but may provide input to
the Active Members from time to time about any issues relating to the Project.
3. Admission of Additional Members. Additional Members may be admitted with the unanimous
approval of all Active Members. Additional Members will participate in the, “Net Profits,”
“Net Losses” (as such terms are defined in Section VI.1), and distributions of the Company on
such terms as are determined by the Members. Exhibit A shall be amended upon the
admission of an additional Member to set forth such Member’s name and capital contribution.
4. Terminations, Withdrawals or Resignations. Any Member who is under an obligation to
render services to the Company may be terminated, with or without cause, by the vote of a
Special Majority, or may withdraw or resign as a Member at any time upon thirty (30) days
prior written notice to the Company, without prejudice to the rights, if any, of the Company or
the other Members under any contract to which the withdrawing Member is a party. In the
event of such withdrawal, such Member’s Membership Interest shall be terminated, such
Member shall thereafter only have the rights of a transferee as described in Section VII.3 and
such Membership Interest shall be subject to purchase and sale as provided in Section VII.4.
In the event of a Member’s withdrawal, no other Member(s) may withdraw, retire or resign
from the Company, without the written consent of Members holding a Special Majority in the
remaining interest of the Company not counting the withdrawn Member’s interest.
5. Payments to Members. Except as specified in this Agreement, no Member or person or entity
controlled by, controlling or under common control with the Member (each such person or
entity is defined as an “Affiliate”), is entitled to remuneration for services rendered or goods
provided to the Company. However, the Company shall reimburse the Members and their
Affiliates for organizational expenses (including, without limitation, legal and accounting fees
and costs) incurred to form the Company, prepare the Articles and this Agreement and, as
approved by the Members, for the actual cost of goods and materials used by the Company.
ARTICLE IV
MANAGEMENT AND CONTROL OF THE COMPANY
3 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 11
1. Management of the Company by Managers.
a. Exclusive Management by Manager. Subject to the provisions of this Agreement
relating to actions required to be approved by the Members, the business, property and
affairs of the Company shall be managed and all powers of the Company shall be
exercised by or under the direction of the Managers.
b. Agency Authority of Managers. Subject to Section IV.3.b:
The Managers are authorized to endorse checks, drafts, and other evidence of
indebtedness made payable to the order of the Company, and may sign all checks,
drafts, and other instruments obligating the Company to pay money, and may sign
contracts and obligations on behalf of the Company subject to the limitations on their
authority as set forth in this Agreement.
2. Election of the Manager(s).
a. Number, Term, and Qualifications. The Company shall initially have one (1) Managers:
David Bragg. The number of Managers of the Company shall be fixed from time to
time by the affirmative vote or written consent of a Special Majority of Active Members,
provided that in no instance shall there be less than one Manager, and provided further
that if upon a Special Majority vote the number of Managers is reduced from more than
one to one, a Statement of Information shall be filed with the California Secretary of
State evidencing such change. Unless he or she resigns or is removed, each Manager
shall hold office until a successor shall have been elected and qualified. Managers shall
be elected by a Special Majority vote or written consent of all the Members. A Manager
need not be a Member, an individual, a resident of the State of California, or a citizen of
the United States.
b. Resignation. Any Manager may resign at any time by giving thirty (30) days’ advance
written notice to the Members and remaining Managers, if any. The resignation of any
Manager shall take effect upon receipt of that notice or at such later time as shall be
specified in the notice. Unless otherwise specified in the notice, the acceptance of the
resignation shall not be necessary to make it effective. The resignation of a Manager
who is also a Member shall not affect the Manager’s rights as a Member and shall not
constitute a withdrawal of a Member.
c. Removal. Any Manager may be removed at any time, with or without cause, by the
affirmative Special Majority vote at a meeting called expressly for that purpose, or by
the written consent of the same per cent of unit holders. Any removal shall be without
prejudice to the rights, if any, of the Manager under any employment contract and, if
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OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 12
the Manager is also a Member, shall not affect the Manager’s rights as a Member or
constitute a withdrawal of a Member.
d. Vacancies. Any vacancy occurring for any reason in the number of Managers may be
filled by the affirmative vote or written consent of a Special Majority Interest.
3. Powers of Managers.
a. Powers of Managers. Without limiting the generality of Section IV.1, but subject to
Section IV.3.b and to the express limitations set forth elsewhere in this Agreement, the
Managers shall have all necessary powers to manage and carry out the purposes,
business, property, and affairs of the Company, including, without limitation, the
power to exercise on behalf and in the name of the Company, all of the powers
described in Corporations Code Section 17003, including, without limitation, the power
to:
i. Acquire, develop, sell, exchange, and lease any business or form of business
entity, and any other property or assets that the Managers determine is
necessary or appropriate or in the interest of the business of the Company;
ii. Acquire, purchase, renovate, improve, alter, rebuild, demolish, replace, and own
real property, and to acquire options for the purchase of any such property;
iii. Sell, exchange, lease, or otherwise dispose of the real property and other
property and assets owned by the Company, or any part thereof, or any interest
therein;
iv. Borrow money from any party including the Manager and his or her Affiliates,
issue evidences of indebtedness in connection therewith, refinance, increase the
amount of, modify, amend, or change the terms of, or extend the time for the
payment of any indebtedness or obligation of the Company, and secure such
indebtedness by mortgage, deed of trust, pledge, security interest, or other lien
on Company assets;
v. Guarantee the payment of money or the performance of any contract or
obligation of any Person (as used hereinafter, a “Person” shall mean any third
party individual, corporation, partnership, trust, agency, association or any
other legal entity);
vi. Sue on, defend, or compromise any and all claims or liabilities in favor of or
against the Company; submit any or all such claims or liabilities to arbitration;
and confess a judgment against the Company in connection with any litigation
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OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 13
in which the Company is involved; and
vii. Retain legal counsel, auditors, and other professionals in connection with the
Company business and to pay therefor such remuneration as the Managers may
determine.
b. Limitations on Power of Managers. The Managers shall not have authority hereunder
to cause the Company to engage in the following transactions without first obtaining
the affirmative vote or written consent of Members a Special Majority in the
outstanding ownership units:
i. The sale, exchange or other disposition of all, or substantially all, of the
Company’s assets occurring as part of a single transaction or plan, or in multiple
transactions over a twelve (12) month period, except in the orderly liquidation
and winding up of the business of the Company upon its duly authorized
dissolution;
ii. To agree to, commit, or incur on behalf of the Company any debt, or make any
payment in excess of ten thousand dollars ($10,000.00), without discussion with
Members;
iii. The merger of the Company with another limited liability company or limited
partnership;
iv. The merger of the Company with a corporation or a general partnership or other
Person;
v. The establishment of different classes of Members without discussion with
Members;
vi. Any act which would make it impossible to carry on the ordinary business of the
Company;
vii. The confession of a judgment against the Company;
viii. To file a bankruptcy petition on behalf of the Company; and
ix. Any other transaction described in this Agreement as requiring the vote,
consent, or approval of the Members.
4. Performance of Duties; Liability of Manager. A Manager shall not be liable to the Company or
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OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 14
to any Member for any loss or damage sustained by the Company or any Member, unless the
loss or damage shall have been the result of fraud, deceit, gross negligence, reckless or
intentional misconduct, or a knowing violation of law by the Manager. The Manager shall
perform his or her managerial duties in good faith, in a manner he or she reasonably believes
to be in the best interests of the Company and its Members, and with such care, including
reasonable inquiry, as an ordinarily prudent person in a like position would use under similar
circumstances. A Manager who so performs the duties of Manager shall not have any liability
by reason of being or having been a Manager of the Company. In performing his or her duties,
the Manager shall be entitled to rely on information, opinions, reports, or statements,
including financial statements and other financial data, of the following persons or groups
unless they have knowledge concerning the matter in question that would cause such reliance
to be unwarranted and provided that the Manager act in good faith and after reasonable
inquiry when the need therefore is indicated by the circumstances:
a. One or more officers, employees or other agents of the Company whom the Manager
reasonably believes to be reliable and competent in the matters presented;
b. Any attorney, independent accountant, or other Person as to matters which the
Manager reasonably believes to be within such Person’s professional or expert
competence; or
c. A committee upon which the Manager does not serve, duly designated in accordance
with a provision of the Articles or this Agreement, as to matters within its designated
authority, which committee the Manager reasonably believes to merit competence.
5. Devotion of Time. The Managers are not obligated to devote all of their time or business
efforts to the affairs of the Company. The Managers shall devote whatever time, effort, and
skill as he or she deems appropriate for the operation of the Company.
6. Competing Activities. The Members and Managers together with their officers, directors,
shareholders, partners, members, managers, agents, employees and Affiliates may engage or
invest in, independently or with others, any business activity of any type or description,
including without limitation those that might be the same as or similar to the Company’s
business and that might be in direct or indirect competition with the Company. Neither the
Company nor any Member shall have any right in or to such other ventures or activities or to
the income or proceeds derived therefrom.
The Managers shall not be obligated to present any investment opportunity or
prospective economic advantage to the Company, even if the opportunity is of the character
that, if presented to the Company, could be taken by the Company. The Managers shall have
the right to hold any investment opportunity or prospective economic advantage for their own
account or to recommend such opportunity to persons other than the Company. The Members
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OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 15
acknowledge that the Managers and their Affiliates own and/or manage other businesses,
including businesses that may compete with the Company and for the Manager’s time. The
Members hereby waive any and all rights and claims which they may otherwise have against
the Managers and their officers, directors, shareholders, partners, Members, managers, agents,
employees, and Affiliates as a result of any of such activities.
7. Transactions between the Company and the Managers. Notwithstanding that it may constitute
a conflict of interest, the Managers may, and may cause his or her Affiliates to, engage in any
transaction (including, without limitation, the purchase, sale, lease, or exchange of any
property or the rendering of any service, or the establishment of any salary, other
compensation, or other terms of employment) with the Company so long as such transaction is
not expressly prohibited by this Agreement and so long as the terms and conditions of such
transaction, on an overall basis, are fair and reasonable to the Company and are at least as
favorable to the Company as those that are generally available from persons capable of
similarly performing them and in similar transactions between parties operating at arm’s
length. It is specifically agreed that David Bragg will be the listing agent for the Property and
any sale thereof, pursuant to a standard listing agreement.
8. Liability of Manager Limited to Manager’s Assets. Under no circumstances will any director,
officer, shareholder, member, manager, partner, employee, agent or Affiliate of any Manager
have any personal responsibility for any liability or obligation of the Manager (whether on a
theory of alter ego, piercing the corporate veil, or otherwise), and any recourse permitted
under this Agreement or otherwise of the Members, any former Member or the Company
against a Manager will be limited to the assets of the Manager as they may exist from time to
time.
ARTICLE V
OFFICERS
1. Officers. The Members by a vote of a Majority Interest may elect officers of the Company,
including a President, Secretary and a Chief Financial Officer. Any number of offices may be
held by the same person.
2. Appointment of Officers. The officers of the Company shall be chosen by the Members and
serve at the pleasure of the Members, subject to the rights, if any, of an officer under any
contract of employment.
3. Subordinate Officers. The Members may appoint, or may empower the President to appoint,
such other officers as the business of the Company may require, each of whom shall hold office
for such period, have such authority, and perform such duties as are provided in this Operating
Agreement or as the Members may from time to time determine.
8 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 16
4. Removal and Resignation of Officers.
a. Subject to the rights, if any, of an officer under any contract of employment, all officers
serve at the pleasure of the Members and any officer may be removed, either with or
without cause, by a vote of a Majority Interest of the Members at any regular or special
meeting.
b. Any officer may resign at any time by giving written notice to the Company. Any
resignation shall take effect at the date of the receipt of that notice or at any later time
specified in that notice; and, unless otherwise specified in that notice, the acceptance of
the resignation shall not be necessary to make it effective. Any resignation is without
prejudice to the rights, if any, of the Company under any contract to which the officer is
a party.
5. Vacancies in Offices. A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled by the Members.
6. President. The President, shall be the chief executive officer of the Company and shall, subject
to the control of the Managers, have general supervision, direction, and control of the business
and the officers of the Company. The President shall have the general powers and duties of
management usually vested in the office, and shall have such other powers and duties as may
be prescribed by the Members.
7. Vice Presidents. The Vice Presidents shall have such other powers and perform such other
duties as from time to time may be prescribed for them respectively by the President or the
Managers.
8. Secretary. The Secretary shall keep or cause to be kept, at the principal executive office of the
Company or such other place as the Members may direct, a book of minutes of all meetings
and actions of Members and Managers. The minutes shall show the time and place of each
meeting, whether regular or special (and, if special, how authorized and the notice given), the
names of those present at the meetings or committee meetings, the respective interests of
Members or Managers at meetings, and the proceedings thereof.
The Secretary shall keep, or cause to be kept, at the principal executive office of the
Company or at the office of the Company’s transfer agent or registrar, as determined by the
Members, a share register, or a duplicate share register, showing the names of all Members
and their addresses, the percentage of interest held by each in the Company, the number and
date of certificates evidencing such ownership, and the number and date of cancellation of
every certificate surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all meetings of Members or
9 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 17
Managers required to be given by law. The Secretary shall keep the seal of the Company, if one
be adopted, in safe custody and shall have such other powers and perform such other duties as
may be prescribed by the Managers or by the President.
9. Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the properties
and business transactions of the Company, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall
at all reasonable times be open to inspection by any Manager or Member.
The Chief Financial Officer shall deposit all money and other valuables in the name and
to the credit of the Company with such depositaries as may be designated by the Managers.
The Chief Financial Officer shall disburse the funds of the Company as may be ordered by the
Managers, shall render to the President and Managers, whenever they request it, an account of
all of his or her transactions as Chief Financial Officer and of the financial condition of the
Company, and shall have such other powers and perform such other duties as may be
prescribed by the Managers or President.
10. Officers Compensation. The Members, by a Majority Interest vote, may authorize
compensation and/or benefits to the Officers, notwithstanding that the Officers may also be
Members, which compensation and/or benefits shall be considered as an expense of the
Company before determining the allocations of net profits and net losses and distributions as
set forth in Article VI.
ARTICLE VI
ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS
1. Definitions. When used in this Agreement, the following terms shall have the meanings set
forth below:
a. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time,
the provisions of succeeding law, and to the extent applicable, the Treasury
Regulations.
b. “Company Minimum Gain” shall have the meaning ascribed to the term
“Partnership Minimum Gain” in the Treasury Regulations Section 1.704-2(d).
c. “Member Nonrecourse Debt” shall have the meaning ascribed to the term “Partner
Nonrecourse Debt” in Treasury Regulations Section 1.704-2(b)(4).
d. “Member Nonrecourse Deductions” shall mean items of Company loss,
deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to
10 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 18
Member Nonrecourse Debt.
e. “Net Profits” and “Net Losses” shall mean the income, gain, loss, deductions, and
credits of the Company in the aggregate or separately stated, as appropriate,
determined in accordance with the method of accounting at the close of each fiscal year
employed on the Company’s information tax return filed for federal income tax
purposes.
f. ”Nonrecourse Liability” shall have the meaning set forth in Treasury Regulations
Section 1.752-1(a)(2).
g. “Treasury Regulations” shall mean the final or temporary regulations that have
been issued by the U.S. Department of Treasury pursuant to its authority under the
Code, and any successor regulations.
2. Allocations of Net Profit and Net Loss.
a. Net Loss. Net Loss shall be allocated to the Members in proportion to their
Membership Interest. Notwithstanding the previous sentence, loss allocations to a
Member shall be made only to the extent that such loss allocations will not create a
deficit Capital Account balance for that Member in excess of an amount, if any, equal to
such Member’s share of Company Minimum Gain that would be realized on a
foreclosure of the Company’s property. Any loss not allocated to a Member because of
the foregoing provision shall be allocated to the other Members (to the extent the other
Members are not limited in respect of the allocation of losses under this Section VI.2.a).
Any loss reallocated under this Section VI.2.a shall be taken into account in computing
subsequent allocations of income and losses pursuant to this Article VI, so that the net
amount of any item so allocated and the income and losses allocated to each Member
pursuant to this Article VI, to the extent possible, shall be equal to the net amount that
would have been allocated to each such Member pursuant to this Article VI if no
reallocation of losses had occurred under this Section VI.2.a.
3. Net Profit. Net Profit shall be distributed first to the Passive Members in proportion to their
unreturned capital contributions until each Member has recovered his or her capital
contributions, and then to all Members in proportion to their Membership Interests.
4. Special Allocations. Notwithstanding Section VI.2.a:
a. Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain
during any fiscal year, each Member shall be specially allocated items of Company
income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in an
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amount equal to the portion of such Member’s share of the net decrease in Company
Minimum Gain that is allocable to the disposition of Company property subject to a
Nonrecourse Liability, which share of such net decrease shall be determined in
accordance with Treasury Regulations Section 1.704-2(g)(2). Allocations pursuant to
this Section VI.3.a shall be made in proportion to the amounts required to be allocated
to each Member under this Section VI.3.a. The items to be so allocated shall be
determined in accordance with Treasury Regulations Section 1.704-2(f). This Section
VI.3.a is intended to comply with the minimum gain chargeback requirement contained
in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.
b. Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt. If there is a
net decrease in Company Minimum Gain attributable to a Member Nonrecourse Debt,
during any fiscal year, each Member who has a share of the Company Minimum Gain
attributable to such Member Nonrecourse Debt (which share shall be determined in
accordance with Treasury Regulations Section 1.704-2(i)(5)) shall be specially allocated
items of Company income and gain for such fiscal year (and, if necessary, in subsequent
fiscal years) in an amount equal to that portion of such Member’s share of the net
decrease in Company Minimum Gain attributable to such Member Nonrecourse Debt
that is allocable to the disposition of Company property subject to such Member
Nonrecourse Debt (which share of such net decrease shall be determined in accordance
with Treasury Regulations Section 1.704-2(i)(5)). Allocations pursuant to this Section
VI.3.b shall be made in proportion to the amounts required to be allocated to each
Member under this Section VI.3.b. The items to be so allocated shall be determined in
accordance with Treasury Regulations Section 1.704-2(i)(4). This Section VI.3.b is
intended to comply with the minimum gain chargeback requirement contained in
Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.
c. Nonrecourse Deductions. Any nonrecourse deductions (as defined in Treasury
Regulations Section 1.704-2(b)(1)) for any fiscal year or other period shall be specially
allocated to the Members in proportion to their Membership Interests.
d. Member Nonrecourse Deductions. Those items of Company loss, deduction, or Code
Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt
for any fiscal year or other period shall be specially allocated to the Member who bears
the economic risk of loss with respect to the Member Nonrecourse Debt to which such
items are attributable in accordance with Treasury Regulations Section 1.704-2(i).
e. Qualified Income Offset. If a Member unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), or any other event creates a deficit balance in such
12 WOODSIDE PARCEL B, LLC
OPERATING AGREEMENT (REV. 2/8/18)
Exhibit Page 20
Member’s Capital Account in excess of such Member’s share of Company Minimum
Gain, items of Company income and gain shall be specially allocated to such Member in
an amount and manner sufficient to eliminate such excess deficit balance as quickly as
possible. Any special allocations of items of income and gain pursuant to this Section
VI.3.e shall be taken into account in computing subsequent allocations of income and
gain pursuant to this Article VI so that the net amount of any item so allocated and the
income, gain, and losses allocated to each Member pursuant to this Section VI.3.e to
the extent possible, shall be equal to the net amount that would have been allocated to
each such Member pursuant to the provisions of this Article VI if such unexpected
adjustments, allocations, or distributions had not occurred.
5. Code Section 704(c) Allocations. Notwithstanding any other provision in this Article VI, in
accordance with Code Section 704(c) and the Treasury Regulations promulgated thereunder,
income, gain, loss, and deduction with respect to any property contributed to the capital of the
Company shall, solely for tax purposes, be allocated among the Members so as to take account
of any variation between the adjusted basis of such property to the Company for federal
income tax purposes and its fair market value on the date of contribution. Allocations
pursuant to this Section VI.4 are solely for purposes of federal, state and local taxes. As such,
they shall not affect or in any way be taken into account in computing a Member’s Capital
Account or share of profits, losses, or other items of distributions pursuant to any provision of
this Agreement.
6. Distribution of Assets by the Company. Subject to applicable law and any limitations
contained elsewhere in this Agreement, Members holding a majority of the Membership
Interests may elect from time to time to cause the Company to make distributions.
Distributions shall be first to the Passive Members in proportion to their unreturned capital
contributions until each Member has recovered his or her capital contributions, and then to all
Members in proportion to their Membership Interests.
ARTICLE VII
TRANSFER AND ASSIGNMENT OF INTERESTS
1. Transfer and Assignment of Interests. No Member shall be entitled to transfer, assign, convey,
sell, encumber or in any way alienate all or any part of his or her Membership Interest
(collectively, “transfer”) except with the prior approval of all Active Members, which approval
may be given or withheld in the sole discretion of each Active Members.
2. Substitution of Members. A transferee of a Membership Interest shall have the right to
become a substitute Member only if consent of the Members is given in accordance with
Section VII.1, such person executes an instrument satisfactory to the Members accepting and
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Exhibit Page 21
adopting the terms and provisions of this Agreement, and such person pays any reasonable
expenses in connection with his or her admission as a new Member. The admission of a
substitute Member shall not release the Member who assigned the Membership Interest from
any liability that such Member may have to the Company.
3. Transfers in Violation of this Agreement and Transfers of Partial Membership Interests. Upon
a transfer in violation of this Article VII, the transferee shall have no right to vote or participate
in the management of the Company or to exercise any rights of a Member. Such transferee
shall only be entitled to receive the share of the Company’s Net Profits, Net Losses and
distributions of the Company’s assets to which the transferor would otherwise be entitled.
Notwithstanding the immediately preceding sentences, if, in the determination of the
remaining Members, a transfer in violation of this Article VII would cause the termination of
the Company under the Code, in the sole discretion of the remaining Members, the transfer
shall be null and void.
4. Option to Purchase Units. As to any or all Membership units transferred in violation of this
Article VII, or units owned by a Member who has withdrawn, resigned, or been terminated
pursuant to Article III.4, the Company shall have an immediate and continuing option to
purchase those units. The purchase price shall be the fair market value of the units as
determined by an independent appraisal, taking into consideration an appropriate minority
discount. Payments shall be made through a cash payment when the option is exercised equal
to thirty percent (30%) of the units’ price and execution by the Company of an unsecured note
for the remaining seventy percent (70%) with amortizing equal annual payments for five years,
beginning one year after the initial down payment. Interest on the note shall be at eight
percent (8%). However, any such note shall have an acceleration clause making it due and
payable upon sale of the last of the residential units being developed. When each option
pursuant to this section is exercised, the secretary is authorized to void the units subject to
each respective exercised option, and reflect the purchase on the Company’s books and
records.
If a transferee who has obtained units in violation of this Article VII, which units have
been acquired by the Company pursuant to one or more of the options herein granted, disputes
the value determined by the Company, that transferee must, at his sole cost and expense,
provide the Company with an appraisal of the unit’s value, determined by a qualified business
appraiser, approved by the Company.
It is the intent to grant and establish multiple options pursuant to this section, such
that as to units transferred in violation of this Article VII, the Company may acquire any or a
Preview
1 Collin J. Vierra (State Bar No. 322720) 2 EIMER STAHL LLP 99 S. Almaden Blvd., Ste. 600 3 San Jose, CA 95113-1605 Telephone: (408) 889-1668 4 Email: cvierra@eimerstahl.com 5 Attorney for Plaintiffs 6 7 SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 COUNTY OF SAN MATEO 9 10 Robert Arntsen; Mary Lee; Arntsen Family Case No. 22-CIV-01148 Partnership, LP; and Brian Christopher Dunn 11 Custodianship; Dept. 21 12 Plaintiffs, Hon. Robert D. Foiles 13 v. 14 David M. Bragg; Silicon Valley Real Ventures EXHIBITS TO DECLARATION OF LLC; SVRV 385 Moore, LLC; SVRV 387 MARTHA DUNN 15 Moore, LLC; Gregory J. Davis; Kevin Wolfe; Jason Justesen; Paramont Woodside, LLC; 16 and Paramont Capital, LLC; 17 Defendants. 18 19 20 21 22 23 24 25 26 27 28 EXHIBITS TO DECLARATION OF MARTHA DUNN Exhibit Page 1 1 INDEX 2 Exhibit A: December 20, 2017, Bank of America Account Activity Slip, Check from Martha Dunn 3 to SVRV, LLC, Amount: $150,000, Memo: Moore Rd……………………………………..……..4 4 Exhibit B: February 27, 2018, Email Correspondence from Kurtis Kludt to Robert “Bob” Arntsen 5 6 re: Effective Operating Agreements and Investment-Subscription Agreement………………...….6 7 Exhibit C: February 8, 2018, Effective Operating Agreement for Woodside Parcel B, LLC……...8 8 9 Exhibit D: February 8, 2018, Effective Operating Agreement for Woodside Parcel C, LLC…….31 10 Exhibit E: August 2018, Investment-Subscription Agreement between Martha Dunn, Robert 11 “Bob” Arntsen, and 389 Moore Road, Woodside ………………………………………………..54 12 13 Exhibit F: June 8, 2018, Check Issued by Martha Dunn, Amount: $100,000, Memo: Moore Road 14 Real Estate …………………………………………………………….…………………………58 15 Exhibit G: June 8, 2018, Bank of America Account Activity Slip, Check from Martha Dunn to 16 SVRV, LLC, Amount: $130,000, Memo: Brian Dunn Trust Moore Rd Real Estate 17 18 ……………………………………………………...………………………………………….....60 19 Exhibit H: August 29, 2018, Email Correspondence between David Bragg, Robert “Bob” Arntsen, 20 Martha Dunn, and Mary Lee re: Investor Agreements …………………………………………...63 21 22 Exhibit I: March 20, 2019, Silicon Valley Real Ventures LLC, Bank of America Deposit 23 Summary, Wire from Arntsen Family Partnership, Amount: $100,000………...……………..…66 24 Exhibit J: May 6, 2019, Email Correspondence between David Bragg, Martha Dunn, and Robert 25 26 Arntsen re: Return of Short-Term Loans ……………………………………………………...…68 27 28 EXHIBITS TO DECLARATION OF MARTHA DUNN Exhibit Page 2 1 Exhibit K: August 9, 2019, Silicon Valley Real Ventures LLC Account QuickReport Spreadsheet 2 titled ‘Money Raised for Moore’…..………………………………………………………..……71 3 Exhibit L: November 27, 2018, Unapproved Operating Agreement of SVRV 385 Moore, LLC 4 ……………………………………………………………………………….……………..…….75 5 6 Exhibit M: November 27, 2018, Unapproved Operating Agreement of SVRV 387 Moore, LLC 7 ……………………………………………………………………………………………..……112 8 9 Exhibit N: June 2019, Unapproved Investment-Subscription Agreement between Arntsen Family 10 Partnership and SVRV 385 Moore, LLC …………………………………………….…………148 11 Exhibit O: June 2019, Unapproved Investment-Subscription Agreement between Arntsen Family 12 Partnership and SVRV 387 Moore, LLC ………………………………………….……………171 13 14 Exhibit P: March 23, 2020, Email Correspondence from David Bragg to Kurtis Kludt re: Need 15 for Additional Funds ……………………………………………………………………………194 16 Exhibit Q: April 1, 2020, Wire Transaction Summary from the Arntsen Family Partnership to 17 18 SVRV 385 Moore, LLC, Amount: $7,014 ………………………………………...……………197 19 Exhibit R: Compilation of Eimer Stahl Invoice Summaries to Robert “Bob” Arntsen for Services 20 Rendered re: Woodside Litigation …………………………………………...…………………199 21 22 23 24 25 Dated: March 21, 2023 By: ______________________ 26 Collin J. Vierra 27 28 EXHIBITS TO DECLARATION OF MARTHA DUNN Exhibit Page 3 Exhibit A Exhibit Page 4 1/10/2018 Bank of America I Online Banking I Accounts I Account Details I Account Activity BankofAmerica • Online Banking SVRV: Account Activity Transaction Details Post date: 12/ 20/ 2017 Amount: 307,000.00 Type: Deposit Description: Cou nter Cred it Merchant name: Cou nter Cred it Transaction Income: Deposits category: ARNTSEN f'AMIL Y PARTNERSHIP I 320 l(INGS MOUNTAIN RO 1269 WOOOSAOE. CA Q-4062-l S:1 9 !o !o '· - - --•·--•··- -·-·> Exhibit Page 5 https://secure.bankofamerica.com/myaccounts/brain/redirect.go?source=overview&target=acctDetails&adx=338625b94ef470f722272544a231 ae331b4.. . 1/1 Exhibit B Exhibit Page 6 Date : 2/27/2018 2:02:34 PM From : "Kurt Kludt" To : "Arntsenr" Subject : Investor Agreement and Woodside Parcel LLC docs Bob, Here is a draft of the framework from our investor presentation that we reviewed with you and Martha regarding the project. Let's discuss tomorrow. The LLC docs for each Parcel are attached. You and Martha are the majority owners with SVRV, so let's keep the communication open, discuss issues as they arise and make this a winning project for everyone. Thank you, Kurt 389 Moore Woodside, LLC Investment Agreement Fe... Woodside Parcel B LLC Operating Agreement Dunn... Woodside Parcel C LLC Operating Agreement Dunn ... KLUDT 001066 Exhibit Page 7 Exhibit C Exhibit Page 8 OPERATING AGREEMENT FOR WOODSIDE PARCEL B, LLC A CALIFORNIA LIMITED LIABILITY COMPANY This Operating Agreement (this “Agreement”), effective as of February 8, 2018, and adopted by and among the parties listed on Exhibit A, attached hereto and incorporated herein by reference, (such parties collectively referred to as the “Members” or individually as a “Member”), as certified by the Company’s Secretary of even date herewith, with reference to the following facts: A. On ___________, 2018, the Members caused to be filed an Articles of Organization (the “Articles”) for WOODSIDE PARCEL B, LLC (the “Company”), a limited liability company under the laws of the State of California, with the California Secretary of State, and numbered _______________, a true and correct copy of which is attached hereto as Exhibit B; and B. The Members have formed the Company for the purpose of acquiring, developing and selling certain real property; and C. The Members therefore desire to adopt and approve an Operating Agreement for the Company under the California Revised Uniform Limited Liability Company Act (the “Act”), in order to provide for the governance of the Company and the conduct of its business and to specify their relative rights and obligations as Members of the Company. NOW, THEREFORE, for good and valuable consideration, including the promises and covenants herein, the Members agree as follows: ARTICLE I ORGANIZATIONAL MATTERS 1. Name. The name of the Company shall be “WOODSIDE PARCEL B, LLC”. The Company may conduct business under that name or any other name approved by the Members. 2. Term. The term of the Company commenced as of the date of the filing of the Articles and, unless sooner terminated under Article IX.1, shall terminate on December 31, 2030. 3. Office and Agent. The Company shall continuously maintain an office and registered agent in the State of California as required by the Act. The principal office of the Company shall be at 1 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 9 205 Constitution Drive, Menlo Park, CA 94025, or such location as the Members may determine. The registered agent shall be as stated in the Articles or as otherwise determined by the Members. 4. Business of the Company. The purpose of the Company is to engage in the business of purchasing, developing, improving, investing in, holding and selling the real property located at 389 Moore Rd, Woodside, CA, 94062-1149, and commonly referred to as Parcel One: Parcel B, as shown on the map entitled, Parcel Map, filed for record in the office of the recorder of the County of San Mateo, State of California on May 4, 2015 in Book 81 of Parcel Maps, pages 87, 88 and 89 APN: 073-133-390 JPN 073-013-133-15-02 (the “Property”), and more specifically, entitling, permitting, and constructing for sale one (1) residential homes on the Property (the “Project”), and such ancillary activities as are reasonably necessary to accomplish that purpose. The Company shall not engage in any business other than the following without the consent of all of the Members. ARTICLE II CAPITAL CONTRIBUTIONS 1. Capital Contributions. Each Member shall make an initial contribution to the capital of the Company as set forth opposite the Member’s name on Exhibit A. Additional calls for contributions to the capital of the Company shall be required only with the unanimous consent of the Active Members. Except as provided in this Agreement, no Member may withdraw his or her capital contribution. 2. Capital Accounts. The Company shall establish an individual capital account (“Capital Account”) for each Member. The Company shall determine and maintain each Capital Account in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). Upon a valid transfer of a Member’s interest in the Company (“Membership Interest”) in accordance with Article VII, such Member’s Capital Account shall carry over to the new owner. 3. No Interest. The Company shall not pay any interest on capital contributions. 4. Loans by Members. Notwithstanding the foregoing, and upon such terms as the Members may agree upon by the vote of not less than seventy-five percent (75%) of the Active Members, as described in Article III(2) (a “Special Majority”), Members may, from time to time, make loans to the Company. It is agreed that such loans shall be on such terms as may be acceptable to the Member(s) making the loan and the Company. ARTICLE III MEMBERS 2 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 10 1. Limited Liability. Except as expressly set forth in this agreement or required by law, no Member shall be personally liable for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise. 2. Member Classes. There shall be two classes of Members; Active Members, whose ownership interests are derived from project management, and Passive Members, whose ownership interests are derived from capital investments. The Active Members will each appoint one person to serve as one of the Managers for the Project. Active Members will have voting rights as reflected on Exhibit A. Passive Members shall not be involved in any management decisions affecting the Company or Property, and shall have no voting rights, but may provide input to the Active Members from time to time about any issues relating to the Project. 3. Admission of Additional Members. Additional Members may be admitted with the unanimous approval of all Active Members. Additional Members will participate in the, “Net Profits,” “Net Losses” (as such terms are defined in Section VI.1), and distributions of the Company on such terms as are determined by the Members. Exhibit A shall be amended upon the admission of an additional Member to set forth such Member’s name and capital contribution. 4. Terminations, Withdrawals or Resignations. Any Member who is under an obligation to render services to the Company may be terminated, with or without cause, by the vote of a Special Majority, or may withdraw or resign as a Member at any time upon thirty (30) days prior written notice to the Company, without prejudice to the rights, if any, of the Company or the other Members under any contract to which the withdrawing Member is a party. In the event of such withdrawal, such Member’s Membership Interest shall be terminated, such Member shall thereafter only have the rights of a transferee as described in Section VII.3 and such Membership Interest shall be subject to purchase and sale as provided in Section VII.4. In the event of a Member’s withdrawal, no other Member(s) may withdraw, retire or resign from the Company, without the written consent of Members holding a Special Majority in the remaining interest of the Company not counting the withdrawn Member’s interest. 5. Payments to Members. Except as specified in this Agreement, no Member or person or entity controlled by, controlling or under common control with the Member (each such person or entity is defined as an “Affiliate”), is entitled to remuneration for services rendered or goods provided to the Company. However, the Company shall reimburse the Members and their Affiliates for organizational expenses (including, without limitation, legal and accounting fees and costs) incurred to form the Company, prepare the Articles and this Agreement and, as approved by the Members, for the actual cost of goods and materials used by the Company. ARTICLE IV MANAGEMENT AND CONTROL OF THE COMPANY 3 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 11 1. Management of the Company by Managers. a. Exclusive Management by Manager. Subject to the provisions of this Agreement relating to actions required to be approved by the Members, the business, property and affairs of the Company shall be managed and all powers of the Company shall be exercised by or under the direction of the Managers. b. Agency Authority of Managers. Subject to Section IV.3.b: The Managers are authorized to endorse checks, drafts, and other evidence of indebtedness made payable to the order of the Company, and may sign all checks, drafts, and other instruments obligating the Company to pay money, and may sign contracts and obligations on behalf of the Company subject to the limitations on their authority as set forth in this Agreement. 2. Election of the Manager(s). a. Number, Term, and Qualifications. The Company shall initially have one (1) Managers: David Bragg. The number of Managers of the Company shall be fixed from time to time by the affirmative vote or written consent of a Special Majority of Active Members, provided that in no instance shall there be less than one Manager, and provided further that if upon a Special Majority vote the number of Managers is reduced from more than one to one, a Statement of Information shall be filed with the California Secretary of State evidencing such change. Unless he or she resigns or is removed, each Manager shall hold office until a successor shall have been elected and qualified. Managers shall be elected by a Special Majority vote or written consent of all the Members. A Manager need not be a Member, an individual, a resident of the State of California, or a citizen of the United States. b. Resignation. Any Manager may resign at any time by giving thirty (30) days’ advance written notice to the Members and remaining Managers, if any. The resignation of any Manager shall take effect upon receipt of that notice or at such later time as shall be specified in the notice. Unless otherwise specified in the notice, the acceptance of the resignation shall not be necessary to make it effective. The resignation of a Manager who is also a Member shall not affect the Manager’s rights as a Member and shall not constitute a withdrawal of a Member. c. Removal. Any Manager may be removed at any time, with or without cause, by the affirmative Special Majority vote at a meeting called expressly for that purpose, or by the written consent of the same per cent of unit holders. Any removal shall be without prejudice to the rights, if any, of the Manager under any employment contract and, if 4 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 12 the Manager is also a Member, shall not affect the Manager’s rights as a Member or constitute a withdrawal of a Member. d. Vacancies. Any vacancy occurring for any reason in the number of Managers may be filled by the affirmative vote or written consent of a Special Majority Interest. 3. Powers of Managers. a. Powers of Managers. Without limiting the generality of Section IV.1, but subject to Section IV.3.b and to the express limitations set forth elsewhere in this Agreement, the Managers shall have all necessary powers to manage and carry out the purposes, business, property, and affairs of the Company, including, without limitation, the power to exercise on behalf and in the name of the Company, all of the powers described in Corporations Code Section 17003, including, without limitation, the power to: i. Acquire, develop, sell, exchange, and lease any business or form of business entity, and any other property or assets that the Managers determine is necessary or appropriate or in the interest of the business of the Company; ii. Acquire, purchase, renovate, improve, alter, rebuild, demolish, replace, and own real property, and to acquire options for the purchase of any such property; iii. Sell, exchange, lease, or otherwise dispose of the real property and other property and assets owned by the Company, or any part thereof, or any interest therein; iv. Borrow money from any party including the Manager and his or her Affiliates, issue evidences of indebtedness in connection therewith, refinance, increase the amount of, modify, amend, or change the terms of, or extend the time for the payment of any indebtedness or obligation of the Company, and secure such indebtedness by mortgage, deed of trust, pledge, security interest, or other lien on Company assets; v. Guarantee the payment of money or the performance of any contract or obligation of any Person (as used hereinafter, a “Person” shall mean any third party individual, corporation, partnership, trust, agency, association or any other legal entity); vi. Sue on, defend, or compromise any and all claims or liabilities in favor of or against the Company; submit any or all such claims or liabilities to arbitration; and confess a judgment against the Company in connection with any litigation 5 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 13 in which the Company is involved; and vii. Retain legal counsel, auditors, and other professionals in connection with the Company business and to pay therefor such remuneration as the Managers may determine. b. Limitations on Power of Managers. The Managers shall not have authority hereunder to cause the Company to engage in the following transactions without first obtaining the affirmative vote or written consent of Members a Special Majority in the outstanding ownership units: i. The sale, exchange or other disposition of all, or substantially all, of the Company’s assets occurring as part of a single transaction or plan, or in multiple transactions over a twelve (12) month period, except in the orderly liquidation and winding up of the business of the Company upon its duly authorized dissolution; ii. To agree to, commit, or incur on behalf of the Company any debt, or make any payment in excess of ten thousand dollars ($10,000.00), without discussion with Members; iii. The merger of the Company with another limited liability company or limited partnership; iv. The merger of the Company with a corporation or a general partnership or other Person; v. The establishment of different classes of Members without discussion with Members; vi. Any act which would make it impossible to carry on the ordinary business of the Company; vii. The confession of a judgment against the Company; viii. To file a bankruptcy petition on behalf of the Company; and ix. Any other transaction described in this Agreement as requiring the vote, consent, or approval of the Members. 4. Performance of Duties; Liability of Manager. A Manager shall not be liable to the Company or 6 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 14 to any Member for any loss or damage sustained by the Company or any Member, unless the loss or damage shall have been the result of fraud, deceit, gross negligence, reckless or intentional misconduct, or a knowing violation of law by the Manager. The Manager shall perform his or her managerial duties in good faith, in a manner he or she reasonably believes to be in the best interests of the Company and its Members, and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. A Manager who so performs the duties of Manager shall not have any liability by reason of being or having been a Manager of the Company. In performing his or her duties, the Manager shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, of the following persons or groups unless they have knowledge concerning the matter in question that would cause such reliance to be unwarranted and provided that the Manager act in good faith and after reasonable inquiry when the need therefore is indicated by the circumstances: a. One or more officers, employees or other agents of the Company whom the Manager reasonably believes to be reliable and competent in the matters presented; b. Any attorney, independent accountant, or other Person as to matters which the Manager reasonably believes to be within such Person’s professional or expert competence; or c. A committee upon which the Manager does not serve, duly designated in accordance with a provision of the Articles or this Agreement, as to matters within its designated authority, which committee the Manager reasonably believes to merit competence. 5. Devotion of Time. The Managers are not obligated to devote all of their time or business efforts to the affairs of the Company. The Managers shall devote whatever time, effort, and skill as he or she deems appropriate for the operation of the Company. 6. Competing Activities. The Members and Managers together with their officers, directors, shareholders, partners, members, managers, agents, employees and Affiliates may engage or invest in, independently or with others, any business activity of any type or description, including without limitation those that might be the same as or similar to the Company’s business and that might be in direct or indirect competition with the Company. Neither the Company nor any Member shall have any right in or to such other ventures or activities or to the income or proceeds derived therefrom. The Managers shall not be obligated to present any investment opportunity or prospective economic advantage to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by the Company. The Managers shall have the right to hold any investment opportunity or prospective economic advantage for their own account or to recommend such opportunity to persons other than the Company. The Members 7 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 15 acknowledge that the Managers and their Affiliates own and/or manage other businesses, including businesses that may compete with the Company and for the Manager’s time. The Members hereby waive any and all rights and claims which they may otherwise have against the Managers and their officers, directors, shareholders, partners, Members, managers, agents, employees, and Affiliates as a result of any of such activities. 7. Transactions between the Company and the Managers. Notwithstanding that it may constitute a conflict of interest, the Managers may, and may cause his or her Affiliates to, engage in any transaction (including, without limitation, the purchase, sale, lease, or exchange of any property or the rendering of any service, or the establishment of any salary, other compensation, or other terms of employment) with the Company so long as such transaction is not expressly prohibited by this Agreement and so long as the terms and conditions of such transaction, on an overall basis, are fair and reasonable to the Company and are at least as favorable to the Company as those that are generally available from persons capable of similarly performing them and in similar transactions between parties operating at arm’s length. It is specifically agreed that David Bragg will be the listing agent for the Property and any sale thereof, pursuant to a standard listing agreement. 8. Liability of Manager Limited to Manager’s Assets. Under no circumstances will any director, officer, shareholder, member, manager, partner, employee, agent or Affiliate of any Manager have any personal responsibility for any liability or obligation of the Manager (whether on a theory of alter ego, piercing the corporate veil, or otherwise), and any recourse permitted under this Agreement or otherwise of the Members, any former Member or the Company against a Manager will be limited to the assets of the Manager as they may exist from time to time. ARTICLE V OFFICERS 1. Officers. The Members by a vote of a Majority Interest may elect officers of the Company, including a President, Secretary and a Chief Financial Officer. Any number of offices may be held by the same person. 2. Appointment of Officers. The officers of the Company shall be chosen by the Members and serve at the pleasure of the Members, subject to the rights, if any, of an officer under any contract of employment. 3. Subordinate Officers. The Members may appoint, or may empower the President to appoint, such other officers as the business of the Company may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in this Operating Agreement or as the Members may from time to time determine. 8 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 16 4. Removal and Resignation of Officers. a. Subject to the rights, if any, of an officer under any contract of employment, all officers serve at the pleasure of the Members and any officer may be removed, either with or without cause, by a vote of a Majority Interest of the Members at any regular or special meeting. b. Any officer may resign at any time by giving written notice to the Company. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party. 5. Vacancies in Offices. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled by the Members. 6. President. The President, shall be the chief executive officer of the Company and shall, subject to the control of the Managers, have general supervision, direction, and control of the business and the officers of the Company. The President shall have the general powers and duties of management usually vested in the office, and shall have such other powers and duties as may be prescribed by the Members. 7. Vice Presidents. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the President or the Managers. 8. Secretary. The Secretary shall keep or cause to be kept, at the principal executive office of the Company or such other place as the Members may direct, a book of minutes of all meetings and actions of Members and Managers. The minutes shall show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at the meetings or committee meetings, the respective interests of Members or Managers at meetings, and the proceedings thereof. The Secretary shall keep, or cause to be kept, at the principal executive office of the Company or at the office of the Company’s transfer agent or registrar, as determined by the Members, a share register, or a duplicate share register, showing the names of all Members and their addresses, the percentage of interest held by each in the Company, the number and date of certificates evidencing such ownership, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all meetings of Members or 9 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 17 Managers required to be given by law. The Secretary shall keep the seal of the Company, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Managers or by the President. 9. Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any Manager or Member. The Chief Financial Officer shall deposit all money and other valuables in the name and to the credit of the Company with such depositaries as may be designated by the Managers. The Chief Financial Officer shall disburse the funds of the Company as may be ordered by the Managers, shall render to the President and Managers, whenever they request it, an account of all of his or her transactions as Chief Financial Officer and of the financial condition of the Company, and shall have such other powers and perform such other duties as may be prescribed by the Managers or President. 10. Officers Compensation. The Members, by a Majority Interest vote, may authorize compensation and/or benefits to the Officers, notwithstanding that the Officers may also be Members, which compensation and/or benefits shall be considered as an expense of the Company before determining the allocations of net profits and net losses and distributions as set forth in Article VI. ARTICLE VI ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS 1. Definitions. When used in this Agreement, the following terms shall have the meanings set forth below: a. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, the provisions of succeeding law, and to the extent applicable, the Treasury Regulations. b. “Company Minimum Gain” shall have the meaning ascribed to the term “Partnership Minimum Gain” in the Treasury Regulations Section 1.704-2(d). c. “Member Nonrecourse Debt” shall have the meaning ascribed to the term “Partner Nonrecourse Debt” in Treasury Regulations Section 1.704-2(b)(4). d. “Member Nonrecourse Deductions” shall mean items of Company loss, deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to 10 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 18 Member Nonrecourse Debt. e. “Net Profits” and “Net Losses” shall mean the income, gain, loss, deductions, and credits of the Company in the aggregate or separately stated, as appropriate, determined in accordance with the method of accounting at the close of each fiscal year employed on the Company’s information tax return filed for federal income tax purposes. f. ”Nonrecourse Liability” shall have the meaning set forth in Treasury Regulations Section 1.752-1(a)(2). g. “Treasury Regulations” shall mean the final or temporary regulations that have been issued by the U.S. Department of Treasury pursuant to its authority under the Code, and any successor regulations. 2. Allocations of Net Profit and Net Loss. a. Net Loss. Net Loss shall be allocated to the Members in proportion to their Membership Interest. Notwithstanding the previous sentence, loss allocations to a Member shall be made only to the extent that such loss allocations will not create a deficit Capital Account balance for that Member in excess of an amount, if any, equal to such Member’s share of Company Minimum Gain that would be realized on a foreclosure of the Company’s property. Any loss not allocated to a Member because of the foregoing provision shall be allocated to the other Members (to the extent the other Members are not limited in respect of the allocation of losses under this Section VI.2.a). Any loss reallocated under this Section VI.2.a shall be taken into account in computing subsequent allocations of income and losses pursuant to this Article VI, so that the net amount of any item so allocated and the income and losses allocated to each Member pursuant to this Article VI, to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to this Article VI if no reallocation of losses had occurred under this Section VI.2.a. 3. Net Profit. Net Profit shall be distributed first to the Passive Members in proportion to their unreturned capital contributions until each Member has recovered his or her capital contributions, and then to all Members in proportion to their Membership Interests. 4. Special Allocations. Notwithstanding Section VI.2.a: a. Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain during any fiscal year, each Member shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in an 11 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 19 amount equal to the portion of such Member’s share of the net decrease in Company Minimum Gain that is allocable to the disposition of Company property subject to a Nonrecourse Liability, which share of such net decrease shall be determined in accordance with Treasury Regulations Section 1.704-2(g)(2). Allocations pursuant to this Section VI.3.a shall be made in proportion to the amounts required to be allocated to each Member under this Section VI.3.a. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(f). This Section VI.3.a is intended to comply with the minimum gain chargeback requirement contained in Treasury Regulations Section 1.704-2(f) and shall be interpreted consistently therewith. b. Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt. If there is a net decrease in Company Minimum Gain attributable to a Member Nonrecourse Debt, during any fiscal year, each Member who has a share of the Company Minimum Gain attributable to such Member Nonrecourse Debt (which share shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(5)) shall be specially allocated items of Company income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in an amount equal to that portion of such Member’s share of the net decrease in Company Minimum Gain attributable to such Member Nonrecourse Debt that is allocable to the disposition of Company property subject to such Member Nonrecourse Debt (which share of such net decrease shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(5)). Allocations pursuant to this Section VI.3.b shall be made in proportion to the amounts required to be allocated to each Member under this Section VI.3.b. The items to be so allocated shall be determined in accordance with Treasury Regulations Section 1.704-2(i)(4). This Section VI.3.b is intended to comply with the minimum gain chargeback requirement contained in Treasury Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith. c. Nonrecourse Deductions. Any nonrecourse deductions (as defined in Treasury Regulations Section 1.704-2(b)(1)) for any fiscal year or other period shall be specially allocated to the Members in proportion to their Membership Interests. d. Member Nonrecourse Deductions. Those items of Company loss, deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt for any fiscal year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such items are attributable in accordance with Treasury Regulations Section 1.704-2(i). e. Qualified Income Offset. If a Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), or any other event creates a deficit balance in such 12 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 20 Member’s Capital Account in excess of such Member’s share of Company Minimum Gain, items of Company income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate such excess deficit balance as quickly as possible. Any special allocations of items of income and gain pursuant to this Section VI.3.e shall be taken into account in computing subsequent allocations of income and gain pursuant to this Article VI so that the net amount of any item so allocated and the income, gain, and losses allocated to each Member pursuant to this Section VI.3.e to the extent possible, shall be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of this Article VI if such unexpected adjustments, allocations, or distributions had not occurred. 5. Code Section 704(c) Allocations. Notwithstanding any other provision in this Article VI, in accordance with Code Section 704(c) and the Treasury Regulations promulgated thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value on the date of contribution. Allocations pursuant to this Section VI.4 are solely for purposes of federal, state and local taxes. As such, they shall not affect or in any way be taken into account in computing a Member’s Capital Account or share of profits, losses, or other items of distributions pursuant to any provision of this Agreement. 6. Distribution of Assets by the Company. Subject to applicable law and any limitations contained elsewhere in this Agreement, Members holding a majority of the Membership Interests may elect from time to time to cause the Company to make distributions. Distributions shall be first to the Passive Members in proportion to their unreturned capital contributions until each Member has recovered his or her capital contributions, and then to all Members in proportion to their Membership Interests. ARTICLE VII TRANSFER AND ASSIGNMENT OF INTERESTS 1. Transfer and Assignment of Interests. No Member shall be entitled to transfer, assign, convey, sell, encumber or in any way alienate all or any part of his or her Membership Interest (collectively, “transfer”) except with the prior approval of all Active Members, which approval may be given or withheld in the sole discretion of each Active Members. 2. Substitution of Members. A transferee of a Membership Interest shall have the right to become a substitute Member only if consent of the Members is given in accordance with Section VII.1, such person executes an instrument satisfactory to the Members accepting and 13 WOODSIDE PARCEL B, LLC OPERATING AGREEMENT (REV. 2/8/18) Exhibit Page 21 adopting the terms and provisions of this Agreement, and such person pays any reasonable expenses in connection with his or her admission as a new Member. The admission of a substitute Member shall not release the Member who assigned the Membership Interest from any liability that such Member may have to the Company. 3. Transfers in Violation of this Agreement and Transfers of Partial Membership Interests. Upon a transfer in violation of this Article VII, the transferee shall have no right to vote or participate in the management of the Company or to exercise any rights of a Member. Such transferee shall only be entitled to receive the share of the Company’s Net Profits, Net Losses and distributions of the Company’s assets to which the transferor would otherwise be entitled. Notwithstanding the immediately preceding sentences, if, in the determination of the remaining Members, a transfer in violation of this Article VII would cause the termination of the Company under the Code, in the sole discretion of the remaining Members, the transfer shall be null and void. 4. Option to Purchase Units. As to any or all Membership units transferred in violation of this Article VII, or units owned by a Member who has withdrawn, resigned, or been terminated pursuant to Article III.4, the Company shall have an immediate and continuing option to purchase those units. The purchase price shall be the fair market value of the units as determined by an independent appraisal, taking into consideration an appropriate minority discount. Payments shall be made through a cash payment when the option is exercised equal to thirty percent (30%) of the units’ price and execution by the Company of an unsecured note for the remaining seventy percent (70%) with amortizing equal annual payments for five years, beginning one year after the initial down payment. Interest on the note shall be at eight percent (8%). However, any such note shall have an acceleration clause making it due and payable upon sale of the last of the residential units being developed. When each option pursuant to this section is exercised, the secretary is authorized to void the units subject to each respective exercised option, and reflect the purchase on the Company’s books and records. If a transferee who has obtained units in violation of this Article VII, which units have been acquired by the Company pursuant to one or more of the options herein granted, disputes the value determined by the Company, that transferee must, at his sole cost and expense, provide the Company with an appraisal of the unit’s value, determined by a qualified business appraiser, approved by the Company. It is the intent to grant and establish multiple options pursuant to this section, such that as to units transferred in violation of this Article VII, the Company may acquire any or a