HomeMy WebLinkAboutAuthentic 559 LLC Indemnification Agreement - 3-15-24DEV-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
AUTHENTIC 559 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:
AUTHENTIC 559 LLC
By:
Name: TAK SATO
Title: MANAGER
By:
Name:
Title:
(Parties authorized to sign on behalf of
applicant [staff: see AO 4-1])
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3/14/2024
3/14/2024
3/15/2024
3/15/2024
OPERATING AGREEMENT OF
AUTHENTIC 559 LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This Operating Agreement (the "Agreement") of AUTHENTIC 559 LLC, a California
limited liability company (the "Company"), effective as of November 5, 2021 (the "Effective
Date"), is entered into by and between the Company and Shryne Group Inc., as the single member
of the Company (the "Member").
WHEREAS, the Company was formed as a limited liability company on November 12,
2019 by the filing of the Company’s Articles of Organization with the California Secretary of State
pursuant to and in accordance with the California Revised Uniform Limited Liability
Company Act (Cal. Corp. Code §§ 17701.01 et seq.), as amended from time to time
("RULLCA"); and
WHEREAS, the Member agrees that the membership in and management of the Company
shall be governed by the terms set forth herein.
NOW, THEREFORE, the Member and the Company agree as follows:
1. Name. The name of the Company is AUTHENTIC 559 LLC.
2. Purpose. The purpose of the Company is to engage in any lawful act or activity for which
limited liability companies may be organized under RULLCA and to engage in any and all
activities necessary or incidental thereto.
3. Powers. The Company shall have all the powers necessary or convenient to carry out the
purposes for which it is organized, including the powers granted by RULLCA.
4. Principal Office; Office and Agent for Service of Process.
a. Principal Office. The location of the principal office of the Company shall be 728 E.
Commercial St., Los Angeles, CA 90012.
b. 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 Manager may designate in the manner provided by RULLCA.
5. Members.
c. Sole 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: Shryne
Group Inc.; Business address: 728 E. Commercial St., Los Angeles, CA 90012.
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a. Additional Members. One or more additional members may be admitted to the Company
with the 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.
b. No Membership Interests; Certificates. The Company will not issue any certificates to
evidence ownership of the membership interests.
6. Management of the Company. The Company shall be manager-managed by the Manager,
which shall initially be: Tak Sato, an individual. Subject to the provisions of Section 6(a) and
except as otherwise provided by RULLCA or this Agreement, the business, property, activities,
and affairs of the Company shall be managed by the Manager. The actions of the Manager
taken in accordance with the provisions of this Agreement shall bind the Company. The
Member shall not have any authority or right to act on behalf of or bind the Company, unless
otherwise provided herein or unless specifically authorized by the Manager pursuant to a duly
adopted resolution expressly authorizing such action.
a. Actions Requiring Approval of Members. Without the written approval of the Member, the
Manager shall not have the authority to do or take any of the following actions ("Major
Decisions"):
i. Amend, modify, or waive any provisions of the Articles of Organization or this
Agreement;
ii. Issue additional Membership Interests, or, except in connection with a Transfer of
Membership Interests that complies with the applicable provisions of this Agreement,
admit additional Members to the Company.
iii. The borrowing of any money by the Company or the granting of any lien, claim,
encumbrance, or security interest by the Company with respect to any asset of the
Company, as security for the debts and obligations of the Company or otherwise or the
modification, extension, renewal, or prepayment in whole or in part of any borrowing;
iv. The acquisition, by purchase, exchange, lease, or otherwise, of any real or personal
property by the Company (other than acquisition of the Project);
v. The sale or exchange of all or substantially all of the assets of the Company;
vi. Any change in nature of the business of the Company or the entrance by the Company
into any business other than the business described in Section 2;
vii. The entering into or amendment, modification or termination of any contracts,
agreements, or arrangements with any affiliates of the Manager;
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viii. The merger, consolidation, dissolution, or winding-up of the Company provided that
any merger or conversion requires the consent of the Member; or
ix. The filing by the Company of a voluntary petition for reorganization or liquidation
under any federal or state law for the relief of debtors or the consent or acquiescence to
the filing of any involuntary petition for liquidation or reorganization under any federal
or state law for the relief of debtors.
b. Officers. The Manager may appoint individuals as officers of the Company (the "Officers")
as the Manager deems necessary or desirable to carry on the business of the Company and
may delegate to such Officers such power and authority as the Manager deems advisable.
An Officer is not required to be a Member of the Company. Any individual may hold two
or more offices of the Company. Each Officer shall hold office until his or her successor is
designated by the Manager or until his or her earlier death, resignation, or removal. Any
Officer may resign at any time upon written notice to the Manager. Any Officer may be
removed by the Manager at any time, with or without cause. A vacancy in any office
occurring because of death, resignation, removal, or otherwise may, but need not, be filled
by the Manager.
c. Removal of Manager. The Member may remove the Manager in accordance with Section
6(d) upon the happening of any of the following events (each, a "Removal Event")
i. The Manager is in default of any payment obligation hereunder, or is in breach of any
other material obligation under this Agreement and such default or breach is not
corrected within fifteen (15) days after written notice thereof from the Member;
provided that if such default or breach is willful, flagrant, and material and not
susceptible of cure, then no notice or grace period shall be required;
ii. The Manager shall commit an act involving fraud, willful misconduct, or gross
negligence in connection with any of its obligations hereunder;
iii. Any transfer by the Manager in violation of the provisions of section 6(a);
iv. The misappropriation of funds or property of the Company by the Manager or any of
its respective affiliates;
v. The bankruptcy or dissolution of the Manager; or
vi. By the consent of the Member without cause.
d. If a Removal Event has occurred, the Member shall have the right, by written notice
delivered to the Manager within thirty (30) days after obtaining actual awareness of the
occurrence of the Removal Event (such notice, the "Removal Notice"), to remove the
Manager from managing the Company and to designate a new manager of the Company.
The Removal Notice shall specify with particularity the basis for removal and shall
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become effective the later of (i) ten (10) days after the date of the Removal Notice; or (ii)
the date set forth in the Removal Notice (the "Removal Date"). In such event, (x) the
powers and authorities granted to the Manager hereunder shall terminate and be of no force
or effect; and (y) until such time as a new manager is approved pursuant to Section 6(g),
the Member shall manage the LLC. If the Manager has been removed pursuant to this
Section, the Member shall have all rights, remedies, and recourses available to it hereunder
for any breach or default by any replacement manager of the Company, as if such
replacement manager were the Manager, as that term is used in this Section 6 and any
related defined terms, including, without limitation, Removal Event.
e. Upon removal of the Manager:
i. The Manager shall no longer transact any business on behalf of the Company and shall
no longer be the Manager of the Company;
ii. All contracts, agreements, or arrangements between the Company and the Manager
and/or any of its affiliates shall immediately terminate as of the Removal Date, without
penalty or termination fees;
iii. The Manager shall take such action as may be necessary, or as a replacement manager
may direct, for the transfer, protection, and/or preservation of company assets that is in
the possession or control of the Manager and in which the Company have or may
acquire an interest;
iv. The Manager shall cooperate fully with a replacement manager and the Company to
effect an orderly transition of management responsibilities to the new manager;
v. The Manager shall be released of all duties, obligations, rights and powers as manager
of the Company first arising or occurring after the Removal Date; provided, however,
that the Manager shall not be released from any duties or obligations arising prior to
the Removal Date; and
vi. The Manager shall have no right to subsequently cure or remedy the event or cause that
was the basis for removal in order to resume being the Manager.
f. Resignation of Manager. The Manager may resign by giving written notice of its
resignation to the Company at least thirty (30) days prior to the effective date of such
resignation.
g. Appointment of New Manager. If the Manager ceases to be a Manager as a result of any
event set forth in Section 6(c) or 6(f), a successor Manager shall be appointed by the
Member.
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7. Liability of Member and Manager; Indemnification.
a. Liability of Member and Manager. 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 neither the
Member nor Manager shall not be obligated personally for any such debt, obligation, or
liability of the Company solely by reason of acting as a member or manager or otherwise
participating in the management of the Company.
b. Indemnification. To the fullest extent permitted under RULLCA (after waiving all
RULLCA restrictions on indemnification other than those which cannot be eliminated), the
Member and Manager (irrespective of the capacity in which the Member or Manager 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 or Manager 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 or Manager on behalf of the Company; provided,
however, that any indemnity under this Section 7(b) 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 11.
9. Capital Contributions. The Member hereby agrees to contribute to the Company such cash,
property, or services as determined by the Manager; 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.
a. 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.
b. 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.
c. Distributions. Distributions shall be made to the Member at the times and in the amounts
determined by the Member.
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11. Dissolution; Liquidation.
a. 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.
b. Winding Up. Upon dissolution of the Company, the Company shall immediately
commence to wind up its affairs and the Manager 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 Manager 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.
c. 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.
d. Certificate of Cancellation. Upon the completion of the winding up of the Company, the
Manager shall file a certificate of cancellation with the California Secretary of State in
accordance with RULLCA.
12. Miscellaneous.
a. Amendments. Amendments to this Agreement may be made only with the written consent
of the Member.
b. 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.
c. 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.
d. 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.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of
the date first written above.
MEMBER:
Shryne Group Inc.
By: Tak Sato
Its: President
COMPANY:
Authentic 599, LLC
a California limited liability company
By: Tak Sato
Its: Manager
DocuSign Envelope ID: CDADF9D8-5E50-45E4-9744-2019B20EC7AC