HomeMy WebLinkAboutInfinity Assets Fresno, LLC - Indemnification Agreement - 2-9-2023UUUU,DlylI CIIVCIUpu IU. JV 10IO U-rVMO-'FV VL-.'7V OL-V CIJU��L� 1'40r
INDEMNIFICATION AGREEMENT
THIS AGREEMENT (Agreement) is entered into on
2/9/2023
by and between the CITY OF FRESNO, a municipal corporation (City), and Infinity
Assets Fresno, LLC (Applicant).
RECITALS
WHEREAS, Applicant has applied to City for a Cannabis Conditional Use
Permit (Permit) for a retail or commercial cannabis business; and
WHEREAS, litigation challenging the granting or issuance of Permit approvals
by governmental bodies is proliferating, and such litigation exposes City to potential
liability for damages, costs, and attorney's fees; and,
WHEREAS, City incurs great expense in the active defense of such litigation and,
if unsuccessful, may also be required to pay the prevailing party's attorney's fees and
costs; and,
WHEREAS, fairness and sound fiscal policy require that the person or entity
receiving the benefits of Permit should also bear the burden of the liability for potential
injuries and the expense of such litigation and claims: and,
WHEREAS, Applicant and City mutually desire to enter into this Indemnification
Agreement, by which Applicant shall indemnify, (at City's request) defend, save and hold
City harmless, in order that City shall bear no fiscal or financial burden whatsoever
resulting from any litigation challenging the City's grant or issuance of land use approvals
to Applicant, subject to the provisions of Section 2, below.
HOLD HARMLESS AND INDEMNIFICATION
To the furthest extent allowed by law, Applicant shall indemnify, hold harmless and
defend City and each of its officers, officials, employees, agents and volunteers from
any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in
contract, tort or strict liability, including but not limited to personal injury, death at any
time and property damage) incurred by City, Applicant or any other person, and from
any and all claims, demands and actions in law or equity (including reasonable attorney's
fees, litigation expenses and cost to enforce this agreement), arising or alleged to have
arisen directly or indirectly out of performance of this Agreement. Applicant's obligations
under the preceding sentence shall apply regardless of whether City or any of its officers,
officials, employees, agents or volunteers are negligent, but shall not apply to any loss,
liability, fines, penalties, forfeitures, costs or damages caused solely by the gross
negligence, or caused by the willful misconduct, of City or any of its officers, officials,
employees, agents or volunteers.
This section shall survive termination or expiration of this Agreement.
2. INSURANCE REQUIREMENTS
(a) Throughout the life of this Agreement, Applicant shall pay for and maintain
in full force and effect all insurance as required herein with an insurance company(ies)
either (i) admitted by the California Insurance Commissioner to do business in the State
of California and rated no less than "A-VII" in the Best's Insurance Rating Guide, or (ii) as
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may be authorized in writing by City's Risk Manager or designee at any time and in its
discretion. The required policies of insurance as stated herein shall maintain limits of
liability of not less than those amounts stated therein. However, the insurance limits
available to City, its officers, officials, employees, agents, and volunteers as additional
insureds, shall be the greater of the minimum limits specified therein or the full limit of any
insurance proceeds to the named insured.
(b) If at any time during the life of the Agreement or any extension, Applicant
fail to maintain any required insurance in full force and effect, all terms under this
Agreement shall be discontinued immediately until notice is received by City that the
required insurance has been restored to full force and effect and that the premiums
therefore have been paid for a period satisfactory to City. Any failure to maintain the
required insurance shall be sufficient cause for City to terminate this Agreement. No
action taken by City pursuant to this section shall in any way relieve Applicant of its
responsibilities under this Agreement. The phrase "fail to maintain any required
insurance" shall include, without limitation, notification received by City that an insurer
has commenced proceedings, or has had proceedings commenced against it, indicating
that the insurer is insolvent.
(c) The fact that insurance is obtained by Applicant shall not be deemed to
release or diminish the liability of Applicant, including, without limitation, liability under the
indemnity provisions of this Agreement. The duty to indemnify City shall apply to all claims
and liability regardless of whether any insurance policies are applicable. The policy limits
do not act as a limitation upon the amount of indemnification to be provided by Applicant.
Approval or purchase of any insurance contracts or policies shall in no way relieve from
liability nor limit the liability of Applicant, vendors, suppliers, invitees, contractors, sub-
contractors, consultants, or anyone employed directly or indirectly by any of them.
Coverage shall be at least as broad as:
1. The most current version of Insurance Services Office (ISO) Commercial
General Liability Coverage Form CG 00 01, providing liability coverage
arising out of your business operations. The Commercial General Liability
policy shall be written on an occurrence form and shall provide coverage for
"bodily injury," "property damage" and "personal and advertising injury" with
coverage for premises and operations (including the use of owned and non -
owned equipment), products and completed operations, and contractual
liability (including, without limitation, indemnity obligations under the
Agreement) with limits of liability not less than those set forth under
"Minimum Limits of Insurance."
2. The most current version of ISO Commercial Auto Coverage Form CA 00
01, providing liability coverage arising out of the ownership, maintenance or
use of automobiles in the course of your business operations. The
Automobile Policy shall be written on an occurrence form and shall provide
coverage for all owned, hired, and non -owned automobiles or other licensed
vehicles (Code 1- Any Auto).
3. Workers' Compensation insurance as required by the State of California
and Employer's Liability Insurance.
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MINIMUM LIMITS OF INSURANCE
Applicant shall procure and maintain for the duration of the agreement, insurance with
limits of liability not less than those set forth below. However, insurance limits available to
City, its officers, officials, employees, agents, and volunteers as additional insureds, shall
be the greater of the minimum limits specified herein or the full limit of any insurance
proceeds available to the named insured:
COMMERCIAL GENERAL LIABILI
(i) $1,000,000 per occurrence for bodily injury and property damage;
(ii) $1,000,000 per occurrence for personal and advertising injury;
(iii) $2,000,000 aggregate for products and completed operations; and,
(iv) $2,000,000 general aggregate applying separately to the work
performed under the Agreement.
2. COMMERCIAL AUTOMOBILE LIABILITY
$1,000,000 per accident for bodily injury and property damage.
3. Workers' Compensation Insurance as required by the State of
California with statutory limits and EMPLOYER'S LIABILITY with limits
of liability not less than:
(i) $1,000,000 each accident for bodily injury;
(ii) $1,000,000 disease each employee; and,
(iii) $1,000,000 disease policy limit.
UMBRELLA OR EXCESS INSURANCE
In the event Applicant purchases an Umbrella or Excess insurance policy(ies) to meet the
"Minimum Limits of Insurance," this insurance policy(ies) shall "follow form" and afford no
less coverage than the primary insurance policy(ies). In addition, such Umbrella or
Excess insurance policy(ies) shall also apply on a primary and non-contributory basis for
the benefit of the City, its officers, officials, employees, agents, and volunteers.
DEDUCTIBLES AND SELF -INSURED RETENTIONS
Applicant shall be responsible for payment of any deductibles contained in any insurance
policy(ies) required herein and Applicant shall also be responsible for payment of any
self -insured retentions. Any self -insured retentions must be declared on the Certificate
of Insurance, and approved by, the City's Risk Manager or designee. At the option of the
City's Risk Manager or designee, either:
(i) The insurer shall reduce or eliminate such self -insured retentions as
respects City, its officers, officials, employees, agents, and volunteers; or
(ii) Applicant shall provide a financial guarantee, satisfactory to City's Risk
Manager or designee, guaranteeing payment of losses and related
investigations, claim administration and defense expenses. At no time shall
City be responsible for the payment of any deductibles or self -insured
retentions.
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OTHER INSURANCE PROVISIONS/ENDORSEMENTS
(i) All policies of insurance required herein shall be endorsed to provide that
the coverage shall not be cancelled, non -renewed, reduced in coverage or
in limits except after 30 calendar days' written notice has been given to City,
except ten days for nonpayment of premium. Applicant is also responsible
for providing written notice to the City under the same terms and conditions.
Upon issuance by the insurer, broker, or agent of a notice of cancellation,
non -renewal, or reduction in coverage or in limits, Applicant shall furnish
City with a new certificate and applicable endorsements for such policy(ies).
In the event any policy is due to expire during the work to be performed for
City, Applicant shall provide a new certificate, and applicable
endorsements, evidencing renewal of such policy not less than 15 calendar
days prior to the expiration date of the expiring policy.
(ii) The Commercial General and Automobile Liability insurance policies shall
be written on an occurrence form.
(iii) The Commercial General and Automobile Liability insurance policies shall
be endorsed to name City, its officers, officials, agents, employees, and
volunteers as an additional insured. Applicant shall establish additional
insured status for the City and for all ongoing and completed operations
under the Commercial General Liability policy by use of ISO Forms or an
executed manuscript insurance company endorsement providing additional
insured status. The Commercial General endorsements must be as broad
as that contained in ISO Forms: GC 20 10 11 85 or both CG 20 26 or CG
2012.
(iv) The Commercial General and Automobile Liability insurance shall contain,
or be endorsed to contain, that the Applicants' insurance shall be primary
to and require no contribution from the City. The Commercial General policy
is required to include primary and non-contributory coverage in favor of the
City for both the ongoing and completed operations coverage. These
coverages shall contain no special limitations on the scope of protection
afforded to City, its officers, officials, employees, agents, and volunteers. If
Applicant maintains higher limits of liability than the minimums shown
above, City requires and shall be entitled to coverage for the higher limits
of liability maintained by Applicant.
(v) Should any of these policies provide that the defense costs are paid within
the Limits of Liability, thereby reducing the available limits by defense costs,
then the requirement for the Limits of Liability of these polices will be twice
the above stated limits.
(vi) For any claims related to this Agreement, Applicant's insurance coverage
shall be primary insurance with respect to the City, its officers, officials,
agents, employees, and volunteers. Any insurance or self-insurance
maintained by the City, its officers, officials, agents, employees, and
volunteers shall be excess of the Applicant's insurance and shall not
contribute with it.
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(vii) The Workers' Compensation insurance policy shall contain, or be endorsed
to contain, a waiver of subrogation as to City, its officers, officials, agents,
employees, and volunteers.
(viii) The Commercial General and Automobile Liability insurance policies shall
contain, or be endorsed to contain, a waiver of subrogation as to City, its
officers, officials, agents, employees, and volunteers.
PROVIDING OF DOCUMENTS - Applicant shall furnish City with all certificate(s)
and applicable endorsements effecting coverage required herein. All certificates
and applicable endorsements are to be received and approved by the City's
Risk Manager or designee prior to City's execution of the Agreement and
before work commences. All non -ISO endorsements amending policy coverage
shall be executed by a licensed and authorized agent or broker. Upon request of
City, Applicant shall immediately furnish City with a complete copy of any
insurance policy required under this Agreement, including all endorsements, with
said copy certified by the underwriter to be a true and correct copy of the original
policy. This requirement shall survive expiration or termination of this Agreement.
All sub -applicants working under the direction of Applicant shall also be required
to provide all documents noted herein.
CLAIMS -MADE POLICIES - If any coverage required is written on a claims -made
coverage form:
(i) The retroactive date must be shown, and must be before the effective date
of the Agreement or the commencement of work by Applicant.
Insurance must be maintained and evidence of insurance must be provided
for at least five years after completion of the work or termination of the
Agreement, whichever first occurs.
(iii) If coverage is canceled or non -renewed, and not replaced with another
claims -made policy form with a retroactive date prior to the effective date of
the Agreement, or work commencement date, Applicant must purchase
"extended reporting" period coverage for a minimum of five years after
completion of the work or termination of the Agreement, whichever first
occurs.
(iv) A copy of the claims reporting requirements must be submitted to City for
review.
(v) These requirements shall survive expiration or termination of the
Agreement.
3. NOTIFICATIONS AND COOPERATION BY CITY.
City shall notify Applicant within a reasonable period of time of its receipt of any
demand, claim, action, proceeding, or litigation in which City is to be indemnified and held
harmless by Applicant. If City requests that Applicant defend City, it shall notify Applicant
in writing within a reasonable period of time of its receipt of any such demand, claim,
action, proceeding, or litigation and City shall cooperate fully in such defense.
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City shall have the right to select the attorney or attorneys who will defend the
City. In selecting defense counsel, City should consider the prevailing local rates for
attorneys with the requisite skills. City should further consider whether a joint defense
arrangement utilizing counsel for Applicant will suffice in lieu of separate counsel. City
reserves its rights at all times to retain separate defense counsel subject to the
provisions of this paragraph, and Applicant agrees to accept such selection. City and
Applicant shall at all times cooperate with respect to the retention of counsel. Applicant
further agrees to be fully responsible for any and all costs and attorney's fees generated
by said attorney(s) in the defense of City in any claim, demand, action, proceeding, or
litigation arising out of the Project.
4. CITY'S PARTICIPATING INDEFENSE.
Nothing contained herein shall prohibit City, in its sole discretion, from participating
in the defense of any demand, claim, action, proceeding, or litigation over and above
representation by outside counsel, or from participating in the defense of any demand,
claim, action, proceeding, or litigation. If City elects to also defend, it shall do so in good
faith. In no event shall City's participation in the defense of any demand claim, action,
proceeding, or litigation affect the obligations imposed upon Applicant in section 2 of this
Agreement.
5. REIMBURSEMENT OF CITY'S COSTS RE: ADMINISTRATIVE RECORD.
Without limiting the City's right to recover its costs from Applicant under paragraph
2 herein above, Applicant agrees to reimburse the City for its actual cost incurred,
including, but not limited to, City staff and attorney time expended for certifying and/or
preparing the administrative record in connection with any proceedings related to the
subject matter of this Indemnification Agreement. Applicant and City agree to work
cooperatively with respect to preparation of the administrative record, and Applicant shall
ensure that City is fully reimbursed for the costs of preparation before receiving such
administrative record. To the extent administrative record reimbursement and related
costs are recovered in any litigation by the City, Applicant shall be reimbursed to the
extent any such recovery is made as cost recovery items.
6. COVENANT NOT TO SUE.
(a) Applicant on behalf of itself, and its successors, and assigns, hereby fully
releases City, its successors, and all other persons and associations, known or
unknown, from all claims and causes of action by reason of any damage which has
been sustained, or may be sustained, as a result of the above -described Permit and
covenants not to sue relating to such claims, excluding gross negligence or willful
misconduct of City, as set forth in Section 1, above.
(b) Applicant acknowledges and agrees that this release applies to all claims
that Applicant may have against City arising out of the above -described Land Use
Approval for injuries, damages, or losses to Applicant's person and property, real or
personal, whether those injuries, damages, or losses are known or unknown, foreseen or
unforeseen, or patent or latent.
(c) Applicant certifies that Applicant has read section 1542 of the Civil Code,
set out below:
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A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing
the release, which if known by him or her must have materially
affected his or her settlement with the debtor.
(d) Applicant hereby waives application of section 1542 of the Civil Code.
(e) Applicant understands and acknowledges that the significance and
consequence of this waiver of section 1542 of the Civil Code is that even if Applicant
should eventually suffer additional damages arising out of the above described Land Use
Approval, Applicant will not be permitted to make any claim for those damages.
Furthermore, Applicant acknowledges that Applicant intends these consequences even
as to claims for damages that may exist as of the date of this release but which Applicant
does not know exist, and which, if known, would materially affect Applicant's decision to
execute this release, regardless of whether Applicant's lack of knowledge is the result of
ignorance, oversight, error, negligence or any other cause.
(f) Applicant warrants and represents that in executing this release, Applicant
has relied on legal advice from the attorney of Applicant's choice that the terms of this
release and its consequences have been completely read and explained to Applicant by
that attorney, and that Applicant fully understands the terms of this release.
(g) Applicant acknowledges and warrants that Applicant's execution of this
release is free and voluntary.
(h) This release pertains to a disputed claim and does not constitute an
admission of liability by City for the above -described Permit.
(i) The provisions of section 8 herein below shall not apply to this covenant not
to sue.
7. TERMINATION OF AGREEMENT.
(a) This Indemnification Agreement may be terminated only upon the
following conditions:
(i) The parties agree to terminate this Indemnification Agreement by
their express, mutual written consent; or
(ii) The Applicant petitions the City Manager to terminate this
Agreement by providing to the Council a written opinion of Applicant's legal counsel
and the City Manager, in its sole discretion, determines that termination of this
Agreement is in the best interest of the public and the City. It is understood and
agreed that the City, in making such determination of whether to terminate this
Agreement, may reasonably rely upon said opinion of Applicant's legal counsel.
(b) If this Agreement is terminated as provided above, the City shall execute
a written release of Applicant's obligations under this Agreement. It shall be Applicant's
responsibility to record such document with the office of the Recorder of the County of
Fresno.
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8. ATTORNEY'S FEES.
If either party is required to commence any proceeding or legal action to enforce
or interpret any term, covenant or condition of this Agreement, the prevailing party in such
proceeding or action shall be entitled to recover from the other party its reasonable
attorney's fees and legal expenses. For the purposes of this agreement, "attorneys' fees"
and "legal expenses" include, without limitation, paralegals' fees and expenses, attorneys,
consultants fees and expenses, expert witness fees and expenses, and all other
expenses incurred by the prevailing party's attorneys in the course of the representation
of the prevailing party in anticipation of and/or during the course of litigation, whether or
not otherwise recoverable as "attorneys' fees" or as "costs" under California law, and the
same may be sought and awarded in accordance with California procedure as pertaining
to an award of contractual attorneys' fees.
9. SEVERABILITY.
If any provision of this Agreement is determined to be invalid in a final judgment
by a court of competent jurisdiction, each and every other provision hereof shall remain
infull force and effect.
10.
CONSTRUCTION OF CONTRACT.
The parties hereby acknowledge that they and their respective counsel have
cooperated in the drafting and preparation of this Agreement, for which reason this
Agreement shall not be construed against any party as the drafter thereof.
[Signatures follow on the next page.]
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IN WITNESS WHEREOF, the parties have executed this Agreement at Fresno,
California, on the day and year first above written.
CITY:
CITY OF FRESNO,
A Capicipal corporation
By: 2/9/2023
Georgeanne hite
City Manager
APPROVED AS TO FORM:
ANDREW JANS
City Attorngyusigned by:
By:-F
Cyy►r,�n,�'3
Mary Ratermac-Doidge Date
Senior Deputy City Attorney II
ATTEST:
Todd Stermer
City Clerk �t'
By: gbUr 2/9/2023
Deputy
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APPLICANT:
INFINIT /r� 1_1,�� f,T§ FRESNO, LLC
By: Sl��ff2/2023
Name: Scott Morse
Title: Manager
vockas ned by -
(�
By: 2/7/2023
Name: Miguel Rodriquez
Title: Manager
(Parties authorized to sign on behalf of
applicant [staff: see AO 4-1 ])
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OPERATING AGREEMENT
OF
Infinity Assets Fresno, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This OPERATING AGREEMENT ("Agreement") has been made and entered into by
and among the persons whose names appear on Exhibit A annexed hereto (individually a
"Member" and collectively the "Members"), for the purposes of setting forth the rights and
obligations of the Members in Infinity Assets Fresno, LLC, a California limited liability
company (the "Company"), formed pursuant to the provisions of the California Revised Uniform
Limited Liability Company Act (the "Act"). This Agreement shall become effective upon the
date last signed by the Members and shall supersede any prior operating agreement, whether oral
or written, entered into by and/or between the Company and/or the Members.
ARTICLE 1
INTERPRETATION
1.1 Definitions. Unless otherwise expressly provided herein or unless the context clearly
requires otherwise, the following terms as used in this Agreement shall have the following
meanings:
l .1.1 "Additional Capital Contributions" means the aggregate amount of additional
Capital Contributions made to the Company by the Members, beyond the initial Capital
Contributions made by the Members.
1.1.2 "Affiliate" means a Person (defined hereafter) that, directly, indirectly, or through
one or more intermediaries, controls, is controlled by, or is under common control with the
Person specified. For this purpose, control of a Person means the power (whether or not
exercised) to direct the policies, operations, or activities of such Person by or through ownership
of, or right to vote or to direct the manner of voting of, such Person, or pursuant to law,
agreement, or otherwise. No Member shall be deemed to be an Affiliate of another Member by
virtue of this Agreement or such Member's respective ownership of Interests in the Company.
1.1.3 "Attorney -in -Fact" means any Manager that has been granted certain powers of,
for, and by the Members pursuant to Section 11.13.
1.1.4 "Available Cash" means as of any date, all cash receipts received by the Company
(other than Capital Contributions), less the sum of the following to the extent made from cash
receipts received by the Company:
1.1.4.1 All principal, interest, and other payments due and owing with respect to
loans, mortgages, leases in which the Company is the lessee, and other indebtedness of the
Company;
1.1.4.2 All cash expenditures then necessary, in the opinion of the Managers, to
be made in connection with the operation of the Business of the Company; and
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1.1.4.3 Such cash reserves as the Managers deem reasonably necessary for the
proper operation of the Business of the Company and all costs and expenses of the Business of
the Company.
1.1.5 "Business" means the business of the Company, which maybe changed from time
to time, but which, as of the date of this Agreement is the ownership of and operation of a retail
cannabis facility at 618 E Shaw Ave in Fresno, California.
1.1.6 "Capital Account" means the Capital Account maintained and adjusted for each
Member pursuant to Section 4.1.
1.1.7 "Capital Contribution" means the aggregate amount of cash and the initial Gross
Asset Value of any property (other than cash) contributed to the Company by a Member as of
such time.
1.1.8 "Code" means the Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time.
1.1.9 "Fiscal Year" means the fiscal year of the Company, which shall be the calendar
year or, in the case of the last fiscal year of the Company, the portion of the calendar year ending
on the date on which the winding -up of the Company is completed. The taxable year of the
Company for U.S. federal income tax purposes shall be determined under Section 706 of the
Code. The Managers shall have the authority to change the ending date of the fiscal year if they
determine in good faith that such change is necessary or appropriate; provided that the Managers
shall promptly give written notice of any such change to the Members.
1.1.10 "Gross Asset Value" means, with respect to any asset, the asset's adjusted basis
for federal income tax purposes, except as follows:
1.1.10.1 The initial Gross Asset Value of any asset contributed by a
Member to the Company shall be the gross fair market value of such asset;
1.1.10.2 The Gross Asset Value of each Company asset shall be adjusted to
equal its respective gross fair market value, as determined by the Managers as of the following
times: (i) the acquisition or issuance of an Interest in the Company by any new or existing
Member in exchange for more than a de minimis Capital Contribution or in connection with the
grant of an Interest as consideration for the provision of services to, or for the benefit of, the
Company; (ii) the distribution by the Company to a Member of more than a de minimis amount
of property or money as consideration for an Interest in the Company; and (iii) the liquidation of
the Company; provided, however, that adjustments pursuant to clauses (i) and (ii) above shall be
made only if the Managers determine that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Members;
1.1.10.3 The Gross Asset Value of any Company asset distributed to a
Member shall be the gross fair market value of such asset on the date of distribution;
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1.1.10.4 The Gross Asset Value of Company assets shall be increased or
decreased to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section
734(b) or 743(b) but only to the extent that such adjustments are taken into account in
determining capital accounts pursuant to Regulation Section 1.704-1(b)(2)(iv)(m); and
1.1.10.5 If the Gross Asset Value of an asset has been determined or
adjusted pursuant to Sections 1.1.14.1-1.1.14.4, such Gross Asset Value shall thereafter be
adjusted by the depreciation taken into account with respect to such asset for purposes of
computing Net Profits and Net Losses.
1.1.11 "Interest" means the percentage ownership interest of a Member in the Company
as reflected on Exhibit A attached hereto, as the same may be amended from time to time.
Holders of Interests shall not be entitled to vote or grant or withhold consents on any Company
matter unless required by the Act or expressly provided for in this Agreement. All Interests shall
be considered personal property. Any percentage Interest not specified as belonging to a Member
in Exhibit A belongs to the Company and is subject to transfer according to this Agreement.
1.1.12 "Majority Vote" means the affirmative vote of the Members eligible to vote on a
matter that hold greater than 50% of the total of all issued and outstanding Interests held by the
Members eligible to vote. When any decision under this Agreement is to be made by the
Members, such decision shall be made by Majority Vote unless otherwise specified in this
Agreement.
1.1.13 "Manager" and "Managers" mean the Person or Persons designated in Exhibit B
or elected as set forth in Article 5 herein. When any decision under this Agreement is to be made
or action is to be taken by the "Managers," such decision shall be made or action taken by the
Members when no Manager has been designated or elected. In such case, and except as
otherwise required by this Agreement, no actual written notice to the Members is required, but
all time periods for a Member to exercise applicable rights and fulfill applicable duties after a
decision is made or an action is taken under this Agreement shall continue to apply, and in such
case, a Member shall send any notices normally required to be sent to the Managers to the other
Members instead.
1.1.14 "Member" means the holder of any Interest in the Company.
1.1.15 "Membership Interest" means a Member's entire ownership of and rights in the
Company, collectively, including the Member's right to receive distributions from the Company
in accordance with the terms of this Agreement, any right to Vote or participate in management,
and any right to information concerning the business and affairs of the Company.
1.1.16 "Net Profits and Net Losses" refers to, for each Fiscal Year, the Company's
taxable income or loss for such year determined in accordance with the Code.
1.1.17 "Person" means an individual, corporation, partnership, limited liability
company, trust, unincorporated organization, association, or any other entity.
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1.1.18 "Regulations" means the Treasury Regulations promulgated under the Code, as
such regulations may be amended from time to time, including the corresponding provisions of
succeeding regulations.
1.1.19 "Transfer" means the mortgage, pledge, hypothecation, transfer, sale,
assignment, gift, or other disposition, in whole or in part, of an Interest, whether voluntarily, by
operation of law, or otherwise.
1.1.20 "Vote" means a written consent or approval or a ballot cast or voice vote at a
meeting.
1.2 General Rules of Construction. As used in this Agreement, pronouns shall refer to both
male and female persons, and corporate entities, where such construction is required to give
meaning to a provision contained herein. Whenever a singular or plural number is used herein,
the same shall refer to both the plural and singular, as applicable. Unless the context clearly
requires otherwise, the words "hereof," "herein," and "hereunder," and words of similar import
shall refer to this Agreement as a whole and not to any particular provision hereof. Unless the
context clearly requires otherwise, the terms "include" and "included," however used, are not
limiting and mean "including without limitation." In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if negotiated and drafted jointly by
the Members, and no presumption or burden of proof shall arise favoring or disfavoring any
Member by virtue of the authorship of any of the provisions of this Agreement.
ARTICLE 2
THE COMPANY
2.1 Formation of Company. The Company was formed pursuant to the provisions of the Act.
The rights and liabilities of the Members, the management of the affairs of the Company, and the
conduct of its Business shall be as provided in the Act, except as otherwise expressly provided
herein.
2.2 Name. The name of the Company shall be Infinity Assets Fresno, LLC; provided,
however, that the Managers, subject to the terms of this Agreement, may change the name of the
Company at any time and from time to time upon written notice to the Members.
2.3 Term of Company• The term of the Company commenced upon the filing of the
appropriate formation documents in the Office of the Secretary of State of the State of California
in accordance with the Act and shall continue until terminated in accordance with this
Agreement or as provided by law.
2.4 P ose of Com an . The purpose of the Company is to (i) engage in any lawful act or
activity for which limited liability companies may be organized under the Act; and (ii) do all
things necessary, suitable, or proper for the accomplishment of, or in the furtherance of, the
Company's Business.
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2.5 Offices. The Company shall maintain its primary office and principal place of business at
such places of business as the Managers deem advisable for the conduct of the Company's
Business, and may from time to time change the Company's primary office after notifying the
Members in writing of any such change.
2.6 Filings.
2.6.1 The Managers are authorized to execute, file, and publish, or cause to be filed and
published, with the proper authorities in each jurisdiction where the Company conducts business
and where the failure to file or publish would have a material adverse effect on the Company or
such other places as the Managers deem necessary or advisable, such certificates or documents in
connection with the conduct of the Company's business as are necessary or desirable pursuant to
applicable law.
2.6.2 The Members from time to time shall execute, acknowledge, verify, file, and
publish all such applications, certificates, and other documents, or cause to be done all such other
acts, as the Managers may deem necessary or appropriate to comply with the requirements of law
for the formation, qualification, and operation of the Company as a limited liability company in
all jurisdictions in which the Company shall desire to conduct business, unless the same may be
accomplished through the Managers in which case the Managers shall complete such tasks.
ARTICLE 3
MEMBERS; COMPANY INTERESTS; CAPITALIZATION
3.1 Interests and Capital Contributions of the Members.
3.1.1 Initial Ca ital Contribution (ICC) and Interest. As of the date of this Agreement,
each Person named on Exhibit A is a Member and shall be shown as such on the books and
records of the Company. Each Member shall be required to contribute (or to have already
contributed) the full amount of the specified Capital Contribution in Exhibit A of this Agreement
on the date hereof, unless otherwise unanimously determined by the Members, or provided in
this Agreement. Each Member has been allocated the Interest set forth opposite such Member's
name on Exhibit A annexed hereto. Each Member's initial Capital Contribution shall be provided
on Exhibit A, including subsequent Members reflected in amendments to Exhibit A.
3.1.1.1 Additional Coital Contribution (ACQ by Startup Members. Startup
Members ("SM"), the persons identified in Exhibit A, will contribute $700,000 (seven hundred
thousand dollars) and make all expenditures necessary to cover the costs associated with carrying
the property through the licensing process, the tenant improvements to the facilities used for the
operation of the Business at 618 E Shaw Ave in Fresno, California, as well as acquisition of
initial inventory for the Business, hiring and initial wages for the initial labor force necessary for
the Business to begin operations, premises rent, and fees for all local and state permits, licenses,
and entitlements necessary for the Business to begin operations. All such funds shall be deemed
the required Capital Contribution from SM in Exhibit A to this Agreement, and is reflected in
SM Membership Interest in Exhibit A.
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3.1.1.2 No Member shall be entitled to interest on their Initial Contribution except
as expressly rovided by this Agreement. or as re aired by law.
3.1.2 Failure to Make Capital Contributions. The Company shall be entitled to enforce
the obligations of each Member to make Capital Contributions pursuant to Section 3.1.1, and the
Company shall have all remedies available at law or in equity in the event any such Capital
Contribution is not so made.
3.1.3 Additional Contributions. The Managers, upon receiving the consent of all the
Members, may call upon and require the Members to make additional Capital Contributions (an
"Additional Capital Contribution Notice"), if the Managers determine, in good faith, that
additional capital is required for the Company's Business, including providing working capital,
establishing reserves, or paying expenses, costs, losses, or liabilities of the Company at any time
and from time to time. If there are no Managers, the Members may also make such a decision by
unanimous consent. Within thirty (30) days after the Additional Capital Contribution Notice is
sent to the Members, each Member shall contribute to the Company an amount equal to such
Member's pro rata share of the aggregate amount identified on the Additional Capital
Contribution Notice, based upon each Member's Interest. Each Additional Capital Contribution
Notice shall specify the proposed use of proceeds, the aggregate amount of additional Capital
Contributions requested, and the additional Capital Contribution amount each Member is
required to contribute to the Company.
3.1.3.1 If any Member shall fail to make the Member's Additional Capital
Contribution as required pursuant to this Section 3.1.4 (each such Member being hereinafter
referred to as a "Non -Contributing Additional Capital Member"), then the Managers shall give
notice of such failure to the Non -Contributing Additional Capital Member and the amount of the
Additional Capital Contribution not funded by the Non -Contributing Additional Capital Member
(a "Failed Additional Capital Contribution") and, within ten (10) business days after receiving
notice of such failure, any Member who is not a Non -Contributing Additional Capital Member
may elect to fund all or a portion of a Non -Contributing Additional Capital Member's Failed
Additional Capital Contribution (each such funding Member is referred to as a "Contributing
Additional Capital Member"). Each such Contributing Additional Capital Member shall have the
right to fund all or a portion of any such Non -Contributing Additional Capital Member's Failed
Additional Capital Contribution in proportion to the Interest of such Contributing Additional
Capital Members relative to the total of all Members' Interests or in such other proportions as all
Contributing Additional Capital Members may agree unanimously.
3.1.3.2 If one or more Contributing Additional Capital Members elect to pay a
Failed Additional Capital Contribution for a Non -Contributing Additional Capital Member, the
Interest of such Contributing Additional Capital Member shall be increased to a percentage equal
to the quotient (rounded up to the nearest one hundredth of one percent) obtained when the
aggregate amount of the Failed Additional Capital Contribution funded by such Contributing
Additional Capital Member is added to the total Capital Contributions and Additional Capital
Contributions made by such Contributing Additional Capital Member and is divided by the sum
of all Members' Capital Contributions and Additional Capital Contributions as of such date
(including the aggregate Failed Additional Capital Contribution amounts funded by all
UUUUJIIJ.II CIIvtjlupC IL). 3L)f U IODU-r U.-%O-'FUUL-000L-UCI.L/DDLU IVOr
Contributing Additional Capital Members). The Interest of a Non -Contributing Additional
Capital Member shall be decreased by the aggregate Interest increase of all Contributing
Additional Capital Members as a result of funding such Non -Contributing Additional Capital
Member's Failed Additional Capital Contribution.
3.2 No Withdrawal of Ca ital Contributions. Except upon dissolution and liquidation of the
Company, no Member shall have the right to withdraw, reduce, or demand the return of any part
of a Member's Capital Contribution.
3.3 Return of Cgpital Contributions. Except upon dissolution and liquidation of the Company
or as otherwise provided herein, there is no agreement, nor time set, for the return of any Capital
Contribution of any Member. A Member shall look solely to the assets of the Company for the
return of the Member's Capital Contributions, and if the assets remaining after the payment or
discharge of the debts and liabilities of the Company are insufficient to return the Member's
Capital Contributions, the Member shall have no recourse against the Company or its Managers
for any such insufficiency.
3.4 No Obligation to Restore Negative Balances in Capital Account. No Member shall have
an obligation, at any time during the term of the Company or upon its liquidation or dissolution,
to pay to the Company or any other Member or third party an amount equal to any or all of any
negative balance in such Member's Capital Account.
3.5 No Liability of Members Managers, and Their Affiliates for Coital and Debts. The
debts, obligations, and liabilities of the Company, whether arising in contract, tort, or otherwise,
shall be solely the debts, obligations, and liabilities of the Company. Neither the Members, the
Managers, nor any Person that is an Affiliate of a Member or Manager shall be obligated
personally for any debt, obligation, or liability of the Company solely by reason of being a
Member, Manager, or Affiliate.
3.6 Securities Laws Representations. Each Member, by executing this Agreement, hereby
represents and warrants to the Company and to the Members that (a) such Member is aware that
the acquisition of its Interest in the Company has not been registered under the Securities Act of
1933, as amended, or qualified under the securities laws of any state, including California; (b)
such Member is acquiring its Interest in the Company solely for its own account and not for the
account of any other Person; for investment only; and not with a view to or for sale in connection
with any distribution of such Interest; (c) such Member understands that the sale, pledge,
hypothecation, assignment, or other transfer of its Interest in the Company is limited by this
Agreement and in any event may not be effected unless (i) the Transfer is not considered a
security offering subject to federal or state securities laws; or (ii) the Transfer is registered and
qualified under applicable securities laws, or is exempt from the registration and qualification
requirements of applicable securities laws; and the Person acquiring such Interest represents and
warrants to the Company and to the Members that such Person is acquiring its Interest in the
Company solely for its own account and not for the account of any other Person; for investment
only; and not with a view to or for sale in connection with any distribution of such Interest; (d)
such Member has sufficient knowledge and experience in financial and business matters that the
Member is capable of evaluating the merits and risks of acquiring an Interest in the Company; (e)
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such Member acknowledges that there is no guarantee that the Company will be a financial
success, and such Member is able to bear the economic risk of the loss of such Member's Interest
in the Company; and (f) such Member acknowledges that the Company and the Members are
relying on the foregoing representations in execution of this Agreement and conducting the
affairs of the Company.
ARTICLE 4
CAPITAL ACCOUNTS; ALLOCATION OF NET PROFITS/LOSSES; DISTRIBUTIONS
4.1.1 Capital Accounts. The Managers, or if there are no Managers, a Member who
agrees to the appointment of such duty by the other Members, shall maintain separate Capital
Accounts and distribution accounts for each Member. Each Member's Capital Account shall
consist of such Member's initial capital contribution increased by (a) any additional capital
contributions, including pursuant to Section 3.1.4 (but not including interest) and (b) any credit
balances transferred from the Member's distribution account to such Member's Capital Account;
and decreased by (y) any distributions made to the Member in reduction of Company capital,
including repayment of loans incurred pursuant to Section 3.1.4 (but not including interest) and
(z) the Member's share of Company losses, if charged to the Member's Capital Account.
4.2 Distributions of Available Cash.
4.2.1 Distributions. Except as otherwise provided in this Agreement, Available Cash
shall be distributed (i) promptly after the sale, exchange, or transfer of all or substantially all of
the Company's assets; and (ii) at such times and in such amounts as are determined in the sole
discretion of the Managers to and among the Members in accordance with their respective
Interests in the Company.
4.2.2 Incorrect Distributions. To the extent any distributions pursuant to this Agreement
were made incorrectly, the recipients shall promptly repay all incorrect payments and the
Company shall have the right to set-off any such incorrectly paid amount against any current or
future sums owing to such recipients.
4.2.3 Limitations on Distributions. In determining the timing and amount of
distributions, if any, the Managers shall consider the best interests of the Company; provided,
however, that no distributions will be made if the making of such distributions would impair the
Business of the Company or violate the Act, the Code, or any restriction imposed by this
Agreement.
4.2.4 Distributions In -Kind. If the Company makes a distribution in -kind of Company
property, the Capital Accounts of the Members shall be debited or credited as though the
property had been sold for an amount equal to its fair market value and the amount received on
such sale had been distributed.
4.2.5 Tax Distributions. The Managers may, in the Managers' sole discretion, to the
extent of the Company's Available Cash and as permitted by applicable law and any financing
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documents, cause the Company to distribute to the Members amounts sufficient to enable each
Member to discharge its income tax liability for each taxable year arising as a result of the
Member's ownership of an Interest, determined by assuming the applicability to each Member of
the highest combined effective marginal federal, state, and local income tax rates, to the extent
distributions otherwise cumulatively made or payable to the Members pursuant to Section 4.2.1
are insufficient to cover such tax liability (the "Tax Distributions"). The amount of such tax
liability shall be calculated taking into account (i) the deductibility (to the extent allowed) of
state and local income taxes for United States federal income tax purposes; (ii) the amount of
cumulative Net Losses previously allocated to such Member in prior Fiscal Years and not used in
prior Fiscal Years to reduce taxable income for the purpose of making distributions under this
Section (based on the assumption that taxable income or taxable loss from the Company is each
Member's only taxable income or tax loss); (iii) the amount and character of the taxable income
or loss allocated to such Member or arising with respect to the Member's Interest; and (iv) such
other reasonable assumptions as the Managers determine in good faith to be appropriate. Tax
Distributions shall be debited against such Member's Capital Account. Distributions pursuant to
this Section shall be treated as distributions to the Members pursuant to Section 4.2.1. The
amount otherwise distributable to any Member pursuant to Section 4.2.1 shall be reduced by any
Tax Distributions made to such Member and not previously taken into account. To the extent this
Section results in distributions other than as required by Section 4.2.1, the first distributions that
are not made pursuant to this Section shall be made so as to cause the aggregate distributions
pursuant to Section 4.2.1, including those made pursuant to this Section, to be, as nearly as
possible, in the ratio required by Section 4.2.1.
4.3 Net Profits and Net Losses. Net Profits and Net Losses shall be allocated to the Members
in the manner set forth below, as adjusted from time to time, at the end of the month that
includes the date on which there occurs the admission of a new member in the Company or a
valid transfer of all or part of a Member's Interest. Net Profits and Net Losses during each of the
Company's Fiscal Years shall be allocated as set forth below.
4.3.1 Allocation of Net Profits.
4.3.1.1 First, to the Members in an amount sufficient to reverse the cumulative
amount of any Net Losses previously allocated to the Members in the current and all prior Fiscal
Years ("Prior Net Losses") that have not been offset previously, beginning with the oldest
allocation of such Prior Net Losses and ending with the newest allocation of such Prior Net
Losses; and
4.3.1.2 The balance, to the Members pro-rata in accordance with their respective
Interests.
4.3.2 Allocation of Net Losses.
4.3.2.1 First, to the Members in the amount of the Net Profits, if any, allocated to
the Members pursuant to Section 4.3.2 until the cumulative amount of Net Losses allocated
pursuant to this Section equals the cumulative amount of Net Profits allocated to each Member
pursuant to Section 4.3.2, beginning with the newest allocation of such Prior Net Losses and
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ending with the oldest allocation of such Prior Net Losses;
4.3.2.2 Second, to the Members, in proportion to the positive balance in their
respective Capital Accounts, until the Capital Accounts of all Members have reached a zero
balance; and
4.3.2.3 The balance, to the Members pro-rata in accordance with their respective
Interests.
4.3.3 Allocation on Liquidation. Notwithstanding anything to the contrary contained in
this Section 4.3, in connection with the liquidation of the Company, Net Profits and items
thereof, and Net Losses and items thereof, attributable to the year in which such liquidation takes
place, shall be allocated among the Members in such a manner that the Capital Account balance
of each Member shall, to the extent possible, be the same amount as the liquidation proceeds to
be distributed to such Members pursuant to Section 10.2. To the extent that such allocations fail
to produce such final Capital Account balances, such allocations of items of income (including
gross income) and deductions for the year shall be made among the Members to the extent
necessary to produce Capital Account balances in the same amount as the liquidation proceeds to
be distributed to such Members pursuant to Section 10.2.
4.3.4 Section 704(c) Allocation.
4.3.4.1 Except as set forth in this Section 4.3.4, allocations for tax purposes of
items of income, gain, loss, and deduction, and credits and basis therefor, shall be made in the
same manner as allocations as set forth in Sections 4.3.2 and 4.3.3. Allocations pursuant to this
Section 4.3.4 are solely for purposes of federal, state, local, and foreign income taxes and shall
not affect or in any way be taken into account in computing any Member's Capital Account or
share of Net Profits, Net Losses, or other items or distributions pursuant to any provision of this
Agreement.
4.3.4.2 Any item of Company income, gain, loss, deduction, or credit attributable
to property contributed to the Company, shall, solely for tax purposes, be allocated among the
Members in accordance with the principles set forth in Section 704(c) of the Code 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 at the time such property was contributed to the
Company.
4.3.4.3 In the event the Gross Asset Value of any Company asset is adjusted
pursuant to the definition of Gross Asset Value, subsequent allocations of income, gain, loss,
deduction, and credit with respect to such asset shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Regulations promulgated thereunder as in
effect at the time such Gross Asset Value is adjusted.
4.3.4.4 Any elections or other decisions relating to allocations, including without
limitation, the choice of permissible methods under Regulations Section 1.704-3 (Code Section
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704(c) allocations) shall be made by the Managers in any manner that reasonably reflects the
purpose and intention of this Agreement.
4.3.5 Withholding. The Company may withhold and pay any taxes with respect to any
Member that it is required to withhold and pay pursuant to applicable law. Each Member hereby
authorizes the Company to withhold from, or pay on behalf of or with respect to, such Member
any amount of federal, state, local, or foreign taxes that the Managers determine the Company is
required to withhold or pay with respect to any amount distributable to such Member pursuant to
this Agreement. The Managers, on behalf of the Company, shall be entitled to take any other
action they determine to be necessary or appropriate in connection with any obligation or
possible obligation to impose withholding pursuant to any law or to pay any tax with respect to a
Member. Any such taxes may be withheld from any distribution otherwise payable to such
Member or, if no sufficiently large distribution is imminent, the Company may require the
relevant Member to promptly reimburse the Company for the amount of such tax withheld and
paid over by the Company on behalf of such Member. No such reimbursement payment will be
considered a Capital Contribution for purposes of this Agreement and shall not increase the
Capital Account of the Member making such reimbursement payment. Taxes withheld on
amounts directly or indirectly payable to the Company or taxes otherwise paid by the Company
on behalf of any Member shall be treated for purposes of this Agreement as distributed to the
appropriate Member and paid by the appropriate Member to the relevant taxing jurisdiction.
ARTICLE 5
MANAGEMENT; MEMBERS
5.1 Management. If the Members decide to appoint one or more Managers, the name and
place of residence of each Manager shall be specified Exhibit B to this Agreement. By a
Majority Vote, the Members shall elect as many Managers as the Members determine. An
elected Manager may also be a Member, but membership is not required to be a Manager.
5.1.1 Compensation. The Managers may be compensated. The compensation of the
Managers shall be determined by a Unanimous Vote from time to time.
5.1.2 Removals. Vacancies. Any Manager may be removed at any time by a Majority
Vote.
5.1.3 Expenses. The Company shall pay all of its own operating, overhead, and
administrative expenses of every kind. The Managers will also be entitled to reimbursement from
the Company for reasonable expenses incurred in connection with the performance of the
Managers' duties hereunder so long as the Managers submit appropriate documentation for such
expenses.
5.2 Management Authorit . Except as otherwise provided in this Agreement, the Managers
shall have all rights and powers that may be possessed by a manager under the Act on behalf and
in the name of the Company to carry out the purposes of the Company and to perform all acts
and conduct all affairs of the Business that the Managers may deem necessary or desirable and
are not otherwise prohibited under this Agreement or applicable law. All decisions made at the
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management level must be agreed upon by a majority of the Managers, and no Manager may act
unilaterally to bind the Company to any contract, agreement, or otherwise unless such Manager
is the sole Manager. If the Members have not appointed any Managers, the rights and powers of
the Managers under the Act shall lie in the Members.
5.2.1 Require Consent. Except with the consent of all Members, the Managers shall not:
5.2.1.1 Enter into a merger, consolidation, recapitalization, or other reorganization
of the Company or a sale of all or substantially all of the Company's assets;
5.2.1.2 Enter into any equity financing or issue additional Interests;
5.2.1.3 Borrow money for the Company and pledge, mortgage, or grant security
interests in any assets of the Company to secure such borrowings;
5.2.1.4 Admit additional Members, other than pursuant to the provisions of
Article 9 hereof,
Persons;
5.2.1.5 Approve or adopt any equity incentive plans for employees or other
5.2.1.6 Materially change the nature of the Company's Business;
5.2.1.7 Amend, alter, or otherwise modify any Interest or other interest, equity, or
debt security issued by the Company;
5.2.1.8 Consent to any tax audit adjustment with respect to taxes;
5.2.1.9 Create or allow the creation of any material lien with aspect to the
property of the Company;
5.2.1.10 Make any loans to, or provide any guarantees of liabilities of, any
Person;
5.2.1.11 Execute, modify, or amend any agreement to purchase real
property or obtain a loan to purchase real property; or
5.2.1.12 Execute, modify, or amend any agreement to lease or sublease real
property to or from a Person.
5.2.2 Time and Other Activities. Except as otherwise provided, the Managers shall
devote such time and attention to the Business of the Company as the Managers shall determine,
from time to time, in the exercise of their reasonable judgment, is necessary for the carrying on
of the Company's Business. The Managers shall have the right to their own investments and to
make investments in any other business not competitive with the Business of the Company, and
neither the Company nor any of its Members shall have any rights or claims as a result of any
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such activity. In furtherance of the foregoing, the Members (in their capacity as such other than
the Managers) hereby waive any and all rights and claims that they might otherwise have as a
result of such activities.
5.2.3 FiducigU Duty. The Managers shall have a fiduciary responsibility for the
safekeeping and use of any Company funds, property, and assets, whether or not in the
Managers' immediate possession. No Manager shall employ or permit any Person to use any of
the Company's funds, property, or assets in any manner except for the exclusive benefit of the
Company. In fulfilling their fiduciary duties, the Managers shall exercise their business judgment
in a manner that is reasonably consistent with that to be applied by a reasonable person under
similar circumstances.
5.3 Officers. The Managers, may, from time to time, but shall not be required to, designate or
appoint one or more officers of the Company, including without limitation, a chairman of the
board, a chief executive officer, president, one or more vice presidents, a secretary, an assistant
secretary, a treasurer, and/or an assistant treasurer. Such officers may, but need not be,
employees of the Company or an Affiliate of the Company. Each appointed officer shall hold
such office until (i) his or her successor is appointed; (ii) such officer submits his or her
resignation; or (iii) such officer is removed, with or without cause by the Managers. All officers
shall perform their duties in good faith and with the degree of care that an ordinarily prudent
person in a like position would use under similar circumstances.
5.4 Members Have No Management Powers. Except as otherwise expressly provided herein
or when no Managers have been appointed or are currently serving, the Members as such shall
take no part in or interfere in any manner with the management, conduct, or control of the
Company's Business and no Member shall have any right or authority to act for or bind the
Company in any manner whatsoever. Members shall have only the right to vote on specified
matters as set forth in this Agreement or as required by the Act.
5.5 Member Meetings. Meetings of the Members shall be held at such places, on such dates,
and at such times as may be determined by Majority Vote. Special meetings of Members may be
called by the Managers if a Company matter requires the vote of the Members. The Members
may, in their sole discretion, determine that a meeting shall not be held at any geographical
place, but shall instead be held solely by means of remote communications in a manner
determined by the Members. There shall be no requirement that formal meetings of the Members
be held.
5.5.1 Quorum. The presence in person, by participation via telephone or other
communications equipment, or by proxy, of the Members holding a majority of the Interests
entitled to vote, shall constitute a quorum at all meetings; provided, however, that if there be no
such quorum, Members (or their proxies) shall have the power to adjourn the meeting from time
to time without notice other than an announcement at the meeting until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted that might have been transacted at the meeting originally called.
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5.5.2 Voting by Proxy. Each Member entitled to vote pursuant to this Agreement may
authorize any Person to act for such Member by proxy in all matters in which the Member is
entitled to participate. Every proxy must be signed by the Member or the Member's Attorney -in -
Fact. No proxy shall be recognized after the expiration of six months from the date thereof.
Every proxy shall be revocable at any time by the Member executing it.
5.5.3 Action at Meeting. When a quorum is present at any Member meeting, any matter
to be voted upon by the Members at such meeting shall be decided by the Members holding the
required percentage of Interests as required by any express provision of this Agreement, or in the
absence of an applicable provision herein then of the Act.
5.6 Conf"identiaii!y. The Members agree that they shall not disclose or use, except in
furtherance of the Company's business and affairs, any Proprietary and Confidential Information
during the existence of the Company or for five years after the termination of the Company. For
purposes of this Section 5.7, "Proprietary and Confidential Information" means all information
that is known or intended to be known only to the Members and/or the managers, officers,
directors, agents, representatives, and/or employees of the Company, or any Affiliate of the
Company, including any document or record, or financial or other information of the Company,
or any Affiliate of the Company, or others in a confidential relationship with the Company or
any Affiliate of the Company, and further relates to specific business matters including, but not
limited to, financial information, identity of and information concerning customers, policies and
procedures, fee structures, trade secrets, proprietary know-how, account information, and other
information of the Company or any Affiliate of the Company.
ARTICLE 6
INDEMNIFICATION
6.1 General. The Company shall indemnify any Person who was or is a party or is threatened
to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative by reason of the fact that the Person is or was a
Manager (or if there are no Managers, a Member), officer, employee, or agent of the Company or
is or was serving at the request of the Company as a director, officer, employee, or agent of
another entity (any such Person being an "Indemnified Person"), against expenses, judgments,
fines, and amounts paid in settlement actually and reasonably incurred by the Indemnified Person
in connection with such action, suit, or proceeding if such Indemnified Person acted in good faith
in any manner the Indemnified Person reasonably believed to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal action or proceeding, if the
Indemnified Person had no reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the
Indemnified Person is not qualified for indemnification pursuant to this Section.
6.2 Expenses. The Company shall indemnify any Indemnified Person qualified for
indemnification pursuant to Section 6.1 against expenses, including attorney's fees, actually and
reasonably incurred by such Person in connection with the defense or settlement of any action,
suit, or proceeding, except that no indemnification shall be made with respect to any claim, issue,
14
UUI:U01yI I CI IVt IlUpU IU. JU! J 11'#Or
or matter as to which such Indemnified Person has been adjudged to be liable to the Company,
unless and only to the extent that the court in which such action or suit was brought shall
determine upon application by the Indemnified Person that, despite the adjudication of liability,
in view of all of the circumstances of the case such Person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper. Expenses, including attorney's fees,
incurred by a Person in defending any civil, criminal, administrative, or investigative action, suit,
or proceeding may be paid by the Company in advance of the final disposition of such action,
suit, or proceeding upon receipt of a written undertaking by or on behalf of such Person to repay
such amount if it shall ultimately be determined that such Person is not entitled to be indemnified
by the Company as authorized hereby. Such expenses, including attorney's fees, incurred by
Indemnified Persons may be so paid upon such terms and conditions, if any, as the Managers,
deem appropriate.
6.3 Determination of Indemnification. A determination that indemnification is available
under any circumstances shall be made by independent legal counsel paid for by the Company.
Such determination is final.
6.4 Exclusivity of Rights. The indemnification and advancement of expenses provided by or
granted pursuant to this Article 6 shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled to under any
agreement or otherwise. The Company shall have the power to purchase and maintain insurance
on behalf of any Person for purposes of this Article 6.
ARTICLE 7
BOOKS AND RECORDS; TAXES
7.1 Books of Account. Complete books of account shall be kept by the Managers at the
principal office of the Company (or at such other office as the Managers may designate). The
method of accounting to be used in keeping the books of the Company for financial accounting
purposes shall be determined by the Managers in accordance with applicable law.
7.2 Tax Elections. The Managers shall have the authority to cause the Company to make any
election required or permitted to be made for income tax purposes if the Managers determine that
such election is in the best interests of the Company. The Managers, in their sole discretion, may
cause the Company to make, in accordance with Section 754 of the Code, a timely election to
adjust the basis of Company property as described in Sections 734 and 743 of the Code.
7.3 Bank Accounts. The Managers may maintain one or more bank accounts for such funds
of the Company as they shall choose to deposit therein, and withdrawals thereof shall be made
upon such signature or signatures as the Managers shall determine.
7.4 Tax Returns. The Company shall prepare income tax returns for the Company and shall
further cause such returns to be timely filed with all appropriate taxing agencies. The Company
may outsource this task to one or more professional accountants.
15
LJUUUJIl t CIIVCIUFIC mi. JU/J 10.7U-r UF10---FUUL-UFJOL-UCIJUOD4V 1-+OF
7.5 Tax Matters Partner.
7.5.1 The Managers shall act as the "tax matters partner" ("TMP"') of the Company, as
such term is defined in Section 6231(a)(7) of the Code, and shall have all the powers and duties
assigned to the TMP under Sections 6221-6231 of the Code and under the Regulations. The
Members agree to perform all acts necessary under Section 6231 of the Code and related
Regulations to designate such persons as the TMP. In the event there are no Managers, the
Members shall select a Member to act as the TMP upon such Member's written consent.
7.5.2 The Company shall indemnify and reimburse the TMP for all expenses, including
legal and accounting fees, incurred as TMP pursuant to this Section in connection with any
administrative or judicial proceeding with respect to the tax liability of the Members as long as
the TMP has determined in good faith that its course of conduct was in, or not opposed to, the
best interests of the Company.
7.5.3 Tax Status. Each Member acknowledges that, if possible and advisable, the
Company may elect to be treated as a partnership for federal income tax purposes (as a "flow -
through" entity) and will therefore be subject to all applicable partnership -related provisions of
the Code. Each Member must independently handle such Member's tax obligations that flow
through the Company to the Member, and neither the Managers nor the Company shall be liable
for any Member's failure to properly handle such tax matters. However, in the event the
Company has only one Member, the Member acknowledges that the Company's nature as a
limited liability company will be disregarded for federal tax purposes.
ARTICLE 8
REPORTING; INSPECTION; TITLE TO ASSETS
8.1 Tax Reporting. The Company shall use all reasonable efforts within 60 days after the
close of the Company's Fiscal Year to furnish to the Members the information reasonably
required for the Members to prepare their federal, state, and local income tax returns.
8.2 Access and Inspection. The Company's books and records shall be available for
inspection and copying at reasonable times during business hours by any Member or any
Member's duly authorized agent or representative for a purpose reasonably related to such
Member's Interest in the Company, at the Member's cost. Each Member further agrees to treat
any information received from the Company as confidential.
8.3 Title to Company Assets. Title to, and all rights and interests in, the Company's assets
shall be acquired in the name of and held by the Company, or, if required to be held in any other
name, shall be held for the benefit of the Company.
ARTICLE 9
TRANSFERS OF INTERESTS
16
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9.1 General Provisions. Except as otherwise set forth in this Agreement or as otherwise
provided in the Act, a Member may not Transfer the Member's Interest in the Company without
the prior written consent of the Members holding a 60% majority of the Interests, or in the case
where there are only two Members, with the prior written consent of the other Member, and in
either case such consent may be withheld without any liability or accountability to any Person.
Notwithstanding anything to the contrary in this Agreement, any Transfer of an Interest in
violation of this Agreement shall be void and shall not bind the Company.
9.2 Permitted Transfers. Notwithstanding anything in this Agreement to the contrary:
9.2.1 A Member may Transfer such Member's Interest as provided in Section 9.6.
9.2.2 A Member who is a natural person may Transfer such Member's Interest to such
Member's spouse, children, or grandchildren, or to a trust or entity under his or her control upon
not less than 10 days prior written notice to the Managers, accompanied, in each case, by
evidence reasonably satisfactory to the Managers, or if there are no Managers, the other
Members, that such Member has control over the transferee(s) and has the power to vote, direct,
or control the vote of the Interest transferred to such transferee(s).
9.2.3 A Member that is a legal entity may Transfer all of its Interest to any Affiliate.
9.2.4 A Member that is a trust may Transfer its Interest to the beneficiaries of such trust
in accordance with the terms thereof; provided, however, that with respect to any trusts
established by the Managers, in accordance with the terms hereof, voting with respect to such
Interests shall be controlled by the Managers, by irrevocable proxy or otherwise.
9.3 Notice of Certain Transfers. Any Member making or permitting a Transfer allowed
pursuant to Sections 9.2.2 through 9.2.4 must send immediate written notice thereof to the
Managers, together with reasonable evidence that the conditions or restrictions applicable thereto
as set forth herein have been satisfied. Any Member making or permitting a Transfer allowed
pursuant hereto shall also comply with such other conditions and requests for information about
the transferee as the Managers, or if there are no Managers, the other Members, may reasonably
request.
9.4 General Conditions to Permitted Transfers. No Transfer of an Interest permitted by the
terms of this Agreement shall be effective unless:
9.4.1 Such Transfer shall have satisfied the provisions of Section 9.1, and if applicable,
Section 9.6;
9.4.2 The transferee shall accept and adopt in writing, by an instrument in form and
substance satisfactory to the Managers all of the terms and provisions of this Agreement, as the
same may be amended from time to time, and shall have expressly assumed all of the obligations
of the transferring Member relating to the transferred Interest;
17
UUL;UJ I Iy.I I CI IVCIUpU IU. 3UI U IOyU-r UMO-'+UUL-SUOG-UCI+L/000J 1'+Or
9.4.3 The transferee shall pay any and all applicable filing, publication, and recording
fees, transfer and stamp taxes, if any, and all reasonable expenses, including, without limitation,
reasonable attorney's fees and expenses incurred by the Company in connection with such
transaction;
9.4.4 The transferee shall execute such other documents or instruments as counsel to
the Company may require, or as may be required by law, in order to effect the admission of the
transferee as a Member;
9.4.5 The transferee shall execute a statement that the transferee is acquiring the
Interest for the transferee's own account for investment and not with a view toward resale or
distribution thereof, and that the transferee will only transfer the acquired Interest to a Person
who so similarly represents and warrants;
9.4.6 If required by the Managers, or if there are no Managers, the other Members, the
Company receives an opinion of legal counsel, who may be counsel for the Company, in form
and substance satisfactory to the Managers, that such transfer does not violate federal or state
securities laws or any representation or warranty of such transferring Member given in
connection with the Transfer of the Member's Interest; and
9.4.7 If required by the Managers, or if there are no Managers, the other Members,
legal counsel to the Company delivers to the Company an opinion that such transfer (i) will not
result in a termination of the Company under the Code and (ii) will not cause the Company to
lose its desired tax status under the Code and Regulations.
9.5 Substitute Member. Upon the admission of a substitute Member, the Managers shall
promptly cause any necessary documents or instruments to be filed, recorded, or published, if
any, wherever required, showing the substitution of the transferee as a substitute Member in
place of the transferring Member. The effective date of a permitted Transfer of an Interest shall
be no earlier than the last day of the calendar month that includes the date on which the
Managers had received such documentation as they shall determine in their discretion is required
pursuant to this Article 9 (the "Effective Transfer Date"). The transferring Member shall cease to
be a Member, and the transferee shall become a substitute Member as to the Interest so
transferred, at the time of the Effective Transfer Date. Thereafter, the transferring Member shall
have no rights or obligations with respect to the Company insofar as the Interest transferred is
concerned.
9.6 Members' Right of First Refusal.
9.6.1 Notice of Bona Fide Offer. If a Member (a "Selling Member") receives from a
Person (the "Proposed Purchaser"), including another Member, a bona fide offer acceptable to
the Selling Member to purchase any Interest or portion thereof held by the Selling Member, then
the Selling Member shall first give written notice (a "Sale Notice") thereof to the Managers and
each other Member (each a "Non -selling Member"). The notice shall name the proposed
transferee and state the Interest or portion of Interest that is to be transferred, the proposed price
Un
L.I000JIIyII CIIVtlIUpC IU. JUIU II40r
of the Interest or portion of Interest, and all other terms and conditions of the offer.
9.6.2 Election Period. For 15 days following delivery of the Sale Notice to a Non -
selling Member by the Selling Member, such Non -selling Member shall have the option to
purchase all or a smaller amount of the portion of the Selling Member's Interest that is
proportionate to such Non -selling Member's Interest relative to the Interests of all Non -selling
Members. In the event a Non -selling Member elects to purchase all or a smaller amount of the
Selling Member's Interest, such Non -selling Member shall give written notice to the Selling
Member and the Managers of the election within the 15-day period.
9.6.3 Remainder Option. Within 10 days after the expiration and/or exercise of all
options granted above to the Non -selling Members, the Managers shall determine how much of
the Selling Member's Interest remains unclaimed (the "Remainder Interest"), if any. Within such
10-day timeframe, if there is a Remainder Interest, the Managers shall give written notice to each
Non -selling Member (a "Remainder Notice") that fully exercised the option granted by Section
9.6.2 to purchase all of such Non -selling Member's proportionate share of the Selling Member's
Interest (each a "Fully Exercising Member") that such Fully Exercising Member has an
additional option to purchase all or a smaller amount of the portion of the Remainder Interest that
is proportionate to such Fully Exercising Member's Interest relative to the Interests of all Fully
Exercising Members. In the event a Fully Exercising Member elects to exercise such option,
such Fully Exercising Member shall give written notice to the Selling Member and the Managers
of the election within 10 days of delivery of the Remainder Notice to such Fully Exercising
Member by the Managers.
9.6.4 Matching. In order to exercise the options provided by this Section 9.6, a
Non -selling or Fully Exercising Member must offer at least the amount offered by the Proposed
Purchaser reduced proportionately to the percentage of the Selling Member's Interest being
claimed by the Non -selling Member or Fully Exercising Member (in other words, per unit). In
the event the Proposed Purchaser has offered property other than currency in exchange for the
Selling Member's Interest or portion thereof, whether in part consideration or in full
consideration, the value of such property shall be considered its fair market value for purposes of
establishing the price offered by the Proposed Purchaser.
9.6.5 Withdrawal of Offer. Except as otherwise provided by this Agreement and as
otherwise required by the law of contracts or any other law, a Selling Member shall have the
right to withdraw an offer from consideration pursuant to this Section 9.6 at any time. Such
withdrawal shall not relieve the Selling Member from continued compliance with this Article 9
as to any future proposed Transfer.
9.7 Drag Along Rights. Notwithstanding anything in this Agreement to the contrary, if one or
more Members owning seventy-five percent (75%) or more of the Interests in the Company (the
"Selling Members") determine to sell all of their Interests in the Company to one or more
Persons that are not Affiliates of the Selling Members and are not other Members (the "Proposed
Purchasers"), and the Proposed Purchasers seek to purchase all of the Interests of the Company
pursuant to a bona fide offer, the Selling Members may, in writing, request all other Members
(the "Non -selling Members") to sell, and if so requested, the Non -selling Members shall be
19
L/UUU,D1y1I CIIVCIUpl, ILJ. OU I'U IOSU-rUMO-4000-UUOG-UCI.L/DOG:91'+Or
obligated to sell their Interests on the same terms and conditions, including representations and
warranties, to the purchaser as of the same date that the sale of Interests to the purchaser occurs,
except as provided below. In connection therewith, the Selling Members must send written
notice to the Non -selling Members and the Managers (a "Drag Along Notice"), which notice
must describe in reasonable detail the proposed purchase price, the Proposed Purchasers'
identities, the payment terms, and the projected closing date, and the notice must include a copy
of the letters of intent and/or proposed contracts, as applicable and if any.
9.7.1 Election Period. For 15 days following delivery of the Drag Along Notice by the
Selling Members, the Non -selling Members shall have the option to collectively purchase all of
the Selling Members' Interests, to be divided up among the Non -selling Members in such
proportions as they may agree amongst themselves. In the event the Non -selling Members elect
to purchase all of the Selling Members' Interests, the Non -selling Members shall give written
notice to the Selling Members and the Managers of their election within the 15-day period.
9.7.2 Matching Price. In order to exercise the option provided by this Section 9.7, the
Non -selling Members must offer at least the amount offered by the Proposed Purchasers. In the
event the Proposed Purchasers has offered property other than currency in exchange for the
Selling Members' Interests, whether in part consideration or in full consideration, the value of
such property shall be considered its fair market value for purposes of establishing the price
offered by the Proposed Purchasers.
9.7.3 Withdrawal of Offer. Except as otherwise provided by this Agreement and as
otherwise required by the law of contracts or any other law, the Selling Members shall have the
right to withdraw an offer from consideration pursuant to this Section 9.7 at any time. Such
withdrawal shall not relieve the Selling Members from continued compliance with this Article 9
as to any future proposed Transfer.
ARTICLE 10
DISSOLUTION; TERMINATION
10.1 Dissolution. The Company shall be dissolved and terminated upon the earliest to occur of
the following:
10.1.1 All of the Members elect to dissolve the Company;
10.1.2 The entry of a decree of judicial dissolution of the Company that is final and
appealable; or
10.1.3 When the provisions of Section 10.3 have been met.
10.2 Liquidation.
10.2.1 Upon the dissolution of the Company, the Managers shall proceed, within a
reasonable time, to sell or otherwise liquidate the assets of the Company. The assets of the
Company (whether consisting of cash, other assets, or a combination thereof) shall be distributed
20
L/UVUJ1yi CIIvt 1iupC IL1. out IOJU-r UF10-'FVVL-.7UOL-VCVL/DDL.'71•+Or
by the Managers as follows:
10.2.1.1 First, all of the Company's debts and liabilities to Persons other
than Members shall be paid and discharged (excluding secured creditors whose obligations will
be assumed or otherwise transferred on the liquidation of Company assets), and any reserve
deemed necessary by the Managers for the payment of such debts shall be set aside;
10.2.1.2 Second, all of the Company's debts and liabilities to Members
shall be paid and discharged; and
10.2.1.3 The balance to the Members in accordance with Section 4.2.1.
10.2.2 Upon dissolution, the Members shall look solely to the assets of the Company for
the return of their Capital Contributions. The winding up of the affairs of the Company and the
distribution of its assets shall be conducted exclusively by the Managers.
10.3 Termination. The Company shall terminate when all property owned by the Company
shall have been disposed of and the assets, after payment of or due provision has been taken for
liabilities to Company creditors, shall have been distributed as provided in Section 10.2. Upon
such termination, the Managers shall execute and cause to be filed a certificate of cancellation of
the Company and any and all other documents necessary in connection with the termination of
the Company.
10.4 Effect of Certain Events on the Company's Existence. The death of any individual
Member or the bankruptcy, dissolution, or similar event of any Member shall not dissolve or
terminate the Company.
ARTICLE 11
MISCELLANEOUS
11.1 Governing Law. This Agreement and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto shall be governed by the laws of the State of
California, without giving effect to principles of conflicts of law.
11.2 Entire Agreement. This Agreement sets forth the entire agreement between the parties
with respect the subject hereof and merges all prior discussions between them.
11.3 Notice. Any notice, demand, or request required or permitted to be given by the
Company, the Mangers, or the Members pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the parties at the addresses of
the parties set forth at the end of this Agreement or such other address as a party may request by
notifying the other in writing.
11.4 Successors and Assi . The rights and benefits of the Company under this Agreement
shall be transferable to any one or more persons or entities, and all covenants and agreements
21
UUUUo1 11 CI IVCIUpt= IU. OU I U I O�U-rUMO-V000-. UOG-UCI. V DDGU I'+Or
hereunder shall inure to the benefit of, and be enforceable by the Company's successors and
assigns. The rights and obligations of each Member under this Agreement may only be assigned
with the prior written consent of the Company and otherwise in accordance with this Agreement;
any purported transfer otherwise shall be null and void.
11.5 Amendment,• Enforcement of Right . No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be effective unless such
modification, amendment, or waiver it receives a Majority Vote if required by this Agreement, a
higher percentage vote if required by this Agreement, or the consent of a Member if it treats such
Member differently from other Members. The failure of any party hereto to enforce any
provision of this Agreement shall not in any way be construed as a waiver of any such provision,
nor prevent that party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and shall not constitute a waiver
of the parties' right to assert all other legal remedies available to them_
11.6 Cooperation. The Members agree that, upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this Agreement, such
Members will take reasonable steps to comply.
11.7 Arbitration. The parties to this Agreement agree that any dispute that arises out of or
relates to the validity, enforceability, or breach of this Agreement (including this Section) shall
be submitted to binding arbitration in accordance with the Federal Arbitration Act, not the
California Arbitration Act, using the procedural rules for the resolution of commercial disputes
of the American Arbitration Association then in effect. For the purposes of this Section, each
party includes its affiliates, successors, subsidiaries, or parent companies and any present or
former officer, director, employee, agent, attorney, or insurer thereof.
The arbitration shall take place within 45 miles of the Company's principal place of
business. The parties shall agree on a single arbitrator.
The parties each expressly waive the right to a jury trial and agree that the arbitrator's
award shall be final and binding on the parties, provided that any award shall be reviewable by a
court of law to the fullest extent allowed by law, including for any error of law by the arbitrator.
The arbitrator shall have discretion to award monetary and other damages, or to award no
damages, and to fashion any other relief he or she considers appropriate, but only to the extent
consistent with law. The arbitrator shall have discretion to award the prevailing party reasonable
costs and attorney's fees incurred in bringing or defending an action under this Section, to the
fullest extent allowed by law at the time the arbitration commences. Judgment may be entered on
the arbitrator's decision in any court having jurisdiction.
11.8 Electronic SigLiatures. Any signature page delivered electronically shall be binding to the
same extent as an original signature page, with regard to this Agreement, to any agreement
subject to the terms hereof, and any amendment thereto.
11.9 Severability. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, the parties agree to renegotiate such provision in good faith. In the event
22
L/UUUJIy I I CIIVCIUyC IL). JU/ U I ODU-FUMO-'iUUG-UUOG-UCIJL/DDGU 1'40r
that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this Agreement; (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded; and (iii) the balance of this
Agreement shall be enforceable in accordance with its terms.
11.10 Attorney's Fees. If any action at law or inequity is necessary or advisable to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs, and disbursements in addition to any other relief to which such party may
be entitled.
11.11 Employment at Will. EACH MEMBER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREUNDER DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED
EMPLOYMENT AS AN EMPLOYEE FOR ANY PERIOD, AND SHALL NOT INTERFERE
WITH THE MEMBER'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE THE
MEMBER' S RELATIONSHIP WITH THE COMPANY AT ANY TIME, WITH OR
WITHOUT CAUSE OR NOTICE IN ACCORDANCE WITH APPLICABLE LAW.
11.12 Acknowledgement. Each Member has reviewed this Agreement in its entirety, has had an
opportunity to obtain the advice of legal counsel prior to executing this Agreement, and fully
understands all provisions of this Agreement.
11.13 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this Agreement.
11.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned Members have caused this signature page to
this Operating Agreement of Infinity Assets Fresno, LLC to be duly executed as of the last date
set forth below.
23
LIUUUJlylI CIIVCIUFIC IU. JUf U II -tor
NICK RENDINO
L140" Signed by:
� PAI djVh
Nick Rending
SCOTT MORSE
DoocccuuS�ignneed
Mem er ame
MIGUEL RODRIGUEZ
�DaMslg.ee ay:
Member Name
JUSTIN JARIN
I
L
d 6y: _
4
Member Name
DAVE KANG
FVDocuSigned bAv-G
Mere o er ame
ALICIA COTTA
oocu5rq.od by:
EG 10 R16
em er ame
MEMBERS:
12/20/2022
Date
12/17/2022
Date
12/20/2022
Date
12/22/2022
Date
12/20/2022
Date
12/22/2022
Date
24
UUUUol II CI IVCIUpC IU. JUf U I OVU-rUM0-4UVG-UU04-Ur-%,UDDGy INOr
CHRISTOPHER RYAN HESTER
DocuSigned by:
Chr�st0p er Ryan Hester
JARED KATZ
DacuSfgned by:
em er ame
JOSHUA ROGINA
DacuSlgnv�-
Member Name
PAUL SUCHOMEL
FP
DacuBiynrd by:
WA $+, tt
Mem er Name
JAMES ROLLINS II
Dsiad by:
J.
��acrrA:xgcx
Member Name
12/16/2022
Date
12/16/2022
Date
12/16/2022
Date
12/19/2022
Date
12/22/2022
Date
25
L/UUU01yjI CI IVCIUpu ILi. JU/"J IOyU-rUMO-'FUUL-�UOL-UCIrUDDGy I'FOr
EXHIBIT A
TO OPERATING AGREEMENT OF
Infinity Assets Fresno, LLC
INITIAL CAPITAL CONTRIBUTIONS ("ICC"), ADDITIONAL CAPITAL
CONTRIBUTIONS ("ACC") AND PERCENTAGE OWNERSHIP INTEREST ("POI")
OF MEMBERS
Member: ICC: ACC: POI: Mailing Address
REAL ESTATE 50% 100% 51%
PARTNERS See Section 3.1.1.1
Scott Morse
49%
2793 E Vermont Ave,
Fresno, CA 93720
Nick Rendino
2%
2159 E Hillview Ave
Fresno, CA 93720
OPERATING 50% $0
49%
PARTNERS
Miguel Rodriguez
7%
3130 Balfour Rd D267
Brentwood, CA 94513
Christopher Hester
7%
1255 Jacob Lane
Carmichael, CA 95608
Alicia Cotta
7%
1455 Galindo St
APT 2326
Concord, CA 94506
Justin Jarin
7%
58 Wild Oak Place
Danville, CA 94506
David Kang
7%
3750 Las Vegas Blvd
Unit 2707
Las Vegas, NV, 89158
Joshua Rogina
7%
1833 Pebble Beach Place
Merced, CA 95340
James Rollins II
3%
4111 Valley Meadow Rd
Encino, CA 91436
Jared Katz
2%
617 23`d St
Sacramento, CA 95816
Paul Suchomel
2%
4839 Roberts Ct
Castro Valley, CA 94552
26
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Manager•
Scott Morse
EXHIBIT B
TO OPERATING AGREEMENT OF
Infinity Assets Fresno, LLC
NAME(S) AND PLACE(S) OF RESIDENCE OF MANAGER(S)
Place of Residence/Business:
2793 E Vermont Ave, Fresno, CA 93720
Miguel Rodriguez 3130 Balfour Rd D267, Brentwood, CA 94513
27