HomeMy WebLinkAbout1784 Shaw Retail LLC Indemnification Agreement 3-18-24DEV-B Indemnity Agt (08-19-21)
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INDEMNIFICATION AGREEMENT
THIS AGREEMENT (Agreement) is entered into on ___________________,
by and between the CITY OF FRESNO, a municipal corporation (City), and 1784
SHAW RETAIL 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.
1. 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:
1. COMMERCIAL GENERAL LIABILITY
(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
20 12.
(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.
(ii) 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 IN DEFENSE.
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
in full 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 California municipal corporation
By:
Georgeanne A. White
City Manager
APPROVED AS TO FORM:
ANDREW JANZ
City Attorney
By:
Heather Thomas Date
Deputy City Attorney
ATTEST:
Todd Stermer
City Clerk
By:
Deputy
APPLICANT:
1784 SHAW RETAIL LLC
By:
Name: LAUREN CARPENTER
Title: MANAGER
By:
Name:
Title:
(Parties authorized to sign on behalf of
applicant [staff: see AO 4-1])
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3/18/2024
3/18/2024
3/18/2024
CERTIFICATION
I, Lauren Carpenter, certify that I am the Sole Member of the limited liability company named herein,
1784 Shaw Retail LLC (the “Company”), and that enclosed are true and correct copies of the Company’s:
(1)Articles of Organization; (2) Statement of Information; and (3) Operating Agreement; each of which
documents have not been modified and are in full force and effect. I have full signing authority for the
Company and am authorized to enter into whatever agreements are necessary to finalize the Company’s
Commercial Cannabis Business Permit.
1784 Shaw Retail LLC
By:_______________________________
Name: Lauren Carpenter
Title: Sole Member
Date: 2/27/2024
Doc ID: 3434e77a9287b783b387f104023148ae73ddee23
/encl
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California Secretary of State
Electronic Filing
LLC Registration – Articles of Organization
Entity Name:
Entity (File) Number:
File Date:
Entity Type: Domestic LLC
Jurisdiction: California
Detailed Filing Information
1.Entity Name:
2.Business Addresses:
a.Initial Street Address of
Designated Office in California:
b.Initial Mailing Address:
3.Agent for Service of Process:
4.Management Structure:
5.Purpose Statement:The purpose of the limited liability
company is to engage in any lawful act
or activity for which a limited liability
company may be organized under the
California Revised Uniform Limited
Liability Company Act.
Electronic Signature:
The organizer affirms the information contained herein is true and correct.
Organizer:
Use bizfile.sos.ca.gov for online filings, searches, business records, and resources.
1784 Shaw Retail LLC
202033710215
11/30/2020
1201 K Street, Suite 920
Sacramento, California 95814
United States
1201 K Street, Suite 920
Sacramento, California 95814
United States
CALIFORNIA REGISTERED AGENT INC
(C3730769)
One Manager
Phyllis Newton
1784 Shaw Retail LLC
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Entity Details
Limited Liability Company Name 1784 SHAW RETAIL LLC
Entity No.202033710215
Formed In CALIFORNIA
Street Addres s of Pr inc ipal O ffic e of LLC
Principal Address 1616 1/2 WEBSTER STREET
ALAMEDA, CA 94501
Mailing Addr es s of LLC
Mailing Address 1616 1/2 WEBSTER STREET
ALAMEDA, CA 94501
Attention
Street Addres s of California O ffic e of LLC
Street Address of California Office 1616 1/2 WEBSTER STREET
ALAMEDA, CA 94501
Manager (s ) or Member (s )
Manager or Member Name Manager or Member Addres s
Lauren Carpenter 1616 1/2 Webster Street
Alameda, CA 94501
Agent for Serv ic e of Proc es s
California Registered Corporate Agent (1505)REGISTERED AGENTS INC
Registered Corporate 1505 Agent
Ty pe of Bus ines s
Type of Business Any lawful purpose
Email Notific ations
Opt-in Email Notifications Yes, I opt-in to receive entity notifications via email.
Chief Ex ec utiv e O ffic er (CEO )
CEO Name CEO Addres s
None Entered
Labor J udgment
No Manager or Member of this Limited Liability Company has an outstanding final judgment issued by the Division
of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any
wage order or provision of the Labor Code.
Elec tronic Signatur e
By signing, I affirm under penalty of perjury that the information herein is true and correct and that I am authorized by
California law to sign.
Riley Park
Signature
09/27/2022
Date
STATE OF CA LIFOR NIA
Office of the Secretary of State
STATEMENT OF INFOR MATION
LIMITED LIAB ILITY COMPANY
California Secretary of State
1500 11th Street
Sacramento, California 95814
(916) 653-3516 B1131-8384 09/27/2022 8:44 PM Received by California Secretary of StatePage 1 of 1
For Office Use Only
-FILED-
File No.: BA20220905172
Date Filed: 9/27/2022
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4.1 Principal Office. The location of the principal office of the Company shall be
1616 ½ Webster Street, Alameda, CA 94501, or such other location as the Member may
from time to time designate.
4.2 Office and Agent for Service of Process. The office and agent for service of
process on the Company in the State of California shall be the office of and the initial agent
named in the Articles of Organization or such other office (which need not be a place of
business of the Company) or person as the Member may designate in the manner provided
by RULLCA.
5.Members.
5.1 Initial Member. The Member owns 100% of the membership interests of the
Company. The name and the business, residence, or mailing address of the Member are as
follows:
Lauren Carpenter
1616 ½ Webster Street
Alameda, CA 94501
5.2 Additional Members. One or more additional members may be admitted to the
Company with the written consent of the Member. Prior to the admission of any such
additional members to the Company, the Member shall amend this Agreement or adopt a
new operating agreement to make such changes as the Member shall determine to reflect the
fact that the Company shall have such additional members. Each additional member shall
execute and deliver a supplement or counterpart to this Agreement, as necessary.
5.3 No Membership Interests; Certificates. The Company will not issue any
certificates to evidence ownership of the membership interests.
6.Management.
6.1 Authority; Powers and Duties of the Member. The Company shall be member-
managed. The Member shall have exclusive and complete authority and discretion t o
manage the operations and affairs of the Company and to make all decisions regarding the
business of the Company. Any action taken by the Member shall constitute the act of and
serve to bind the Company. Persons dealing with the Company are entitled to r ely
conclusively on the power and authority of the Member as set forth in this Agreement. The
Member shall have all rights and powers of a manager under RULLCA, and shall have such
authority, rights, and powers in the management of the Company to do any and all other acts
and things necessary, proper, convenient, or advisable to effectuate the purposes of this
Agreement.
6.2 Election of Officers; Delegation of Authority. The Member may, from time to
time, designate one or more officers with such titles as may be designated by the Member to
act in the name of the Company with such authority as may be delegated to such officers by
the Member (each such designated person, an “Officer”). Any such Officer shall act
pursuant to such delegated authority until such Officer is removed by the Member. Any
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action taken by an Officer designated by the Member pursuant to authority delegated to such
Officer shall constitute the act of and serve to bind the Company. Persons dealing with the
Company are entitled to rely conclusively on the power and authority of any Officer set
forth in this Agreement and any instrument designating such Officer and the authority
delegated to him or her.
7.Liability of Member; Indemnification.
7.1 Liability of Member. Except as otherwise required by RULLCA, 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, and the Member shall
not be obligated personally for any such debt, obligation, or liability of the Company solely
by reason of acting as a member or participating in the management of the Company.
7.2 Indemnification. To the fullest extent permitted under RULLCA (after waiving
all RULLCA restrictions on indemnification other than those which cannot be eliminated),
the Member (irrespective of the capacity in which the Member acts) shall be entitled to
indemnification and advancement of expenses from the Company for and against any loss,
damage, claim, or expense (including attorneys’ fees) whatsoever incurred by the Member
relating to or arising out of any act or omission or alleged acts or omissions (whether or not
constituting negligence or gross negligence) performed or omitted by the Member on behalf
of the Company; provided, however, that any indemnity under this Section 7.2 shall be
provided out of and to the extent of Company assets only, and neither the Member nor any
other person shall have any personal liability account thereof.
8.Term. The term of the Company shall be perpetual unless the Company is dissolved
and terminated in accordance with Section 12.
9.Capital Contributions. The Member hereby agrees to contribute to the Company
such cash, property, or services as determined by the Member in its sole discretion; provided
that, absent such determination, the Member is under no obligation, express or implied, to make
any such contribution.
10.Tax Status; Income and Deductions.
10.1 Tax Status. As long as the Company has only one member, it is the intention of
the Company and the Member that the Company be treated as a disregarded entity for
federal and all relevant state tax purposes and neither the Company nor the Member shall
take any action or make any election which is inconsistent with such tax treatment. All
provisions of this Agreement are to be construed so as to preserve the Company’s tax status
as a disregarded entity.
10.2 Income and Deductions. All items of income, gain, loss, deduction, and credit
of the Company (including, without limitation, items not subject to federal or state income
tax) shall be treated for federal and all relevant state income tax purposes as items of
income, gain, loss, deduction, and credit of the Member.
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11.Distributions. Distributions shall be made to the Member at the times and in the
amounts determined by the Member.
12.Dissolution; Liquidation.
12.1 Dissolution Events. The Company shall dissolve, and its affairs shall be wound
up, upon the first to occur of the following: (i) the written consent of the Member or (ii) any
other event or circumstance giving rise to the dissolution of the Company under Article 7 of
RULLCA, unless the Company’s existence is continued pursuant to RULLCA.
12.2 Winding Up. Upon dissolution of the Company, the Company shall
immediately commence to wind up its affairs and the Member shall (i) if required by
RULLCA, file a certificate of dissolution with the California Secretary of State in
accordance with RULLCA and (ii) promptly liquidate the business of the Company. During
the period of the winding up of the affairs of the Company, the rights and obligations of the
Member under this Agreement shall continue. The Member or other person winding up the
affairs of the Company shall give written notice of the commencement of winding up to all
known creditors and claimants of the Company in accordance with RULLCA.
12.3 Distribution of Proceeds. In the event of dissolution, the Company shall
conduct only such activities as are necessary to wind up its affairs (including the sale of the
assets of the Company in an orderly manner), and the assets of the Company shall be applied
as follows: (i) first, to creditors, to the extent otherwise permitted by law, in satisfaction of
liabilities of the Company (whether by payment or the making of reasonable provision for
payment thereof); and (ii) second, to the Member.
12.4 Certificate of Cancellation. Upon the completion of the winding up of the
Company, the Member shall file a certificate of cancellation with the California Secretary of
State in accordance with RULLCA.
13.Miscellaneous.
13.1 Amendments. Amendments to this Agreement may be made only with the
written consent of the Member.
13.2 Governing Law. This Agreement and the rights and obligations of the parties
hereunder shall be governed by and interpreted, construed, and enforced in accordance with
the laws of the State of California, without giving effect to principles of conflicts of law.
The parties agree and acknowledge that no party makes, will make, or shall be deemed to
make or have made any representation or warranty of any kind regarding the compliance of
this Agreement with any Federal Cannabis Laws. No party shall have any right of rescission
or amendment arising out of or relating to any non-compliance with Federal Cannabis Laws
unless such non-compliance also constitutes a violation of applicable state law as
determined in accordance with the Act or by the Regulator, and no party shall seek to
enforce the provisions hereof in federal court unless and until the parties have reasonably
determined that the Act is fully compliant with Federal Cannabis Laws. As used herein,
“Federal Cannabis Laws” means any U.S. federal laws, civil, criminal or otherwise, as such
relate, either directly or indirectly, to the cultivation, harvesting, production, distribution,
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sale and possession of cannabis, marijuana or related substances or products containing or
relating to the same, including, without limitation, the prohibition on drug trafficking under
21 U.S.C. § 841(a), et seq., the conspiracy statute under 18 U.S.C. § 846, the bar against
aiding and abetting the conduct of an offense under 18 U.S.C. § 2, the bar against misprision
of a felony (concealing another’s felonious conduct) under 18 U.S.C. § 4, the bar against
being an accessory after the fact to criminal conduct under 18 U.S.C. § 3, and federal money
laundering statutes under 18 U.S.C. §§ 1956, 1957, and 1960 and the regulations and rules
promulgated under any of the foregoing.
13.3 Severability. If any provision of this Agreement shall be declared to be invalid,
illegal, or unenforceable in any jurisdiction, such provision shall survive to the extent it is
not so declared, and the validity, legality, and enforceability of the other provisions hereof
shall not in any way be affected or impaired thereby, unless such action would substantially
impair the benefits to any party of the remaining provisions of this Agreement.
13.4 No Third Party Beneficiaries. Nothing in this Agreement, either express or
implied, is intended to or shall confer upon any person other than the parties hereto, and
their respective successors and permitted assigns, any rights, benefits, or remedies of any
nature whatsoever under or by reason of this Agreement.
13.5 Regulatory Compliance. This Agreement is subject to strict requirements
for ongoing regulatory compliance by the parties hereto, including, without limitation,
requirements that the parties take no action in violation of either any state cannabis
laws (together with all related rules and regulations thereunder, and any amendment
or replacement act, rules, or regulations, the “Act”) or the guidance or instruction of
any applicable state regulatory body (together with any successor or regulator with
overlapping jurisdiction, the “Regulator”). The parties acknowledge and understand
that the Act and/or the requirements of the Regulator are subject to change and are
evolving as the marketplace for state-compliant cannabis businesses continues to
evolve. If necessary or desirable to comply with the requirements of the Act and/or the
Regulator, the parties hereby agree to (and to cause their respective affiliates and
related parties and representatives to) use their respective commercially reasonable
efforts to take all actions reasonably requested to ensure compliance with the Act
and/or the Regulator, including, without limitation, negotiating in good faith to amend,
restate, amend and restate, supplement, or otherwise modify this Agreement to reflect
terms that most closely approximate the parties’ original intentions but are responsive
to and compliant with the requirements of the Act and/or the Regulator. In
furtherance, not limitation of the foregoing, the parties further agree to cooperate with
the Regulator to promptly respond to any informational requests, supplemental
disclosure requirements, or other correspondence from the Regulator and, to the
extent permitted by the Regulator, keep all other parties hereto fully and promptly
informed as to any such requests, requirements, or correspondence.
[Signature page follows]
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DocuSign Envelope ID: 4C5768CE-8C5E-489D-8416-325B04BC91A9