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273128.v17
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL
TO:
COMMERCIAL CANNABIS BUSINESS DEVELOPMENT
AGREEMENT BETWEEN THE CITY OF BARSTOW AND
BARSTOW OUTLET LLC AND DESERT BLOOM HOLDINGS LLC
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this day of December 19, 2022, (the “Execution Date”), by and between the CITY OF BARSTOW, a California municipal corporation (“City”), Barstow Outlet, LLC, a Delaware limited liability company (“Owner”), and Desert Bloom Holdings, LLC, a California limited liability company (“Operator”). City, Owner, and Operator are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, each may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement:
RECITALS
WHEREAS, the State of California enacted California Government Code Sections 65864 et seq. (“Development Agreement Statutes”) to authorize municipalities to enter into development agreements with those having an interest in real property to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within their jurisdiction; and WHEREAS, the purpose of the Development Agreement Statutes is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations, to vest certain rights in the Owner, and to meet certain public purposes of the local government; and WHEREAS, as authorized by the Development Agreement Statutes, City has adopted Ordinance No. 934-201 to add Barstow Municipal Code Chapter 19.46, establishing the procedures and requirements for the consideration of development agreements with City; and WHEREAS, on November 8, 2016, California voters enacted Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act, also known as the Adult Use of Marijuana Act (“AUMA”), which establishes a comprehensive system to legalize, control, and regulate the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical cannabis, including cannabis products, for use by adults 21 years and older, and to tax the growth and retail sale of cannabis for nonmedical use; and
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WHEREAS, on June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in Commercial Cannabis Activity may operate in a particular jurisdiction; and WHEREAS, on June 7, 2021, the City Council of the City of Barstow adopted Ordinance No. 974-2021 to permit commercial cannabis activities in the City; and WHEREAS, on October 4, 2021, the City Council of the City of Barstow adopted Ordinance No. 977-2021 amending the zoning code to allow for commercial cannabis as a permitted use in certain zones; and
WHEREAS, Operator currently holds a legal or equitable interest in real property considered in this Agreement which has a development area approximately 12,423 rentable square feet located 2865 Lenwood Road, Building # 1, City of Barstow, State of California (the “Premises”), pursuant to a Master Lease Agreement by and between Operator and Barstow Outlet LLC (“Owner”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-000, and is more fully described in Exhibit A and shown on the map in Exhibit B. Both exhibits being attached hereto and incorporated herein by this reference;
WHEREAS, presently, Operator leases the property for the purpose of state and locally licensed commercial cannabis related activities which shall include, but not be limited to cannabis cultivation, manufacturing (type 6 and type 7), distribution, (together, the “Permitted Uses” and individually, a “Permitted Use”). Such Permitted Uses shall operate in accordance with all applicable provisions of Business and Professions Code §§26000-26231.2; California Health and Safety Code Safety Code §§ 11357-11362.9 and 11362.7- 11362.85; Revenue and Taxation Code §§ 34010-34021.5; Vehicle Code §§ 2429.7 and 23222; Water Code §§ 1831, 1847, and 13276; Title 4 of the California Code of Regulations, §§ 15000, et seq.; and the City of Barstow Municipal Code as it applies to such facilities (collectively the “Applicable Cannabis Laws”). Prior to Operator operating one or more Permitted Use, Operator shall be required to obtain approval of this Agreement, a conditional use permit, and a Commercial Cannabis Permit from City, and all related state and other permits and licenses prior to the operation of same, pursuant to Barstow Municipal Code Chapter 19.27, et seq.;
WHEREAS, Operator will obtain a California State License issued, pursuant to Applicable Cannabis Laws, to operate one or more Permitted Use at the Site.
WHEREAS, on March 30 August 31, 2022, Operator applied to City for a Conditional Use Permit (“CUP”) for the Premises to permit Commercial Cannabis Activities. No such activities are allowed or authorized without a Development Agreement, the CUP, a Commercial Cannabis Permit (“CCP”), and all requirements pursuant to City Ordinance No. 977-2021, including all applicable requirements pursuant to the Barstow Municipal Code. - 3 -
WHEREAS, Operator intends to develop a commercial cannabis facilities, each in compliance with one or more of the Permitted Uses on the Premises, consistent with the Applicable Cannabis Laws and Project Approvals (known as the “Project”).
WHEREAS, the Project will consist of: 1 building building, located on a single parcel, with a combined 12,423 rentable square feet, as further described in Exhibit B.
The proposed layout of the site is as shown in the attached Site Plan.
Hours of Operation: 6:00 AM to 10:00 PM for retail business hours and 24-hours for internal operations, unless limited further by Barstow Municipal Code. [X] Co-location, check if applicable:
Note MAUCRSA now authorizes a person to apply for and be issued more than one State license at one location provided the licensed premises are separate and distinct.
Operator has applied for a CCP for the following license types:
1) Cultivation - Types – Nursery, Specialty Indoor
WHEREAS, all procedures of the California Environmental Quality Act (“CEQA”), California Public Resources Code §21000 et seq., and the CEQA guidelines, title 14 of the California Code of Regulations, chapter 3, §15000 et seq. have been satisfied; WHEREAS, City has given public notice of its intention to adopt this Agreement and has conducted public hearings thereon pursuant to California Government Code §65867. The City has found that the provisions of this Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances;
WHEREAS, City, in entering into this Agreement, acknowledges that certain City obligations hereby assumed shall survive beyond the terms of the present Council members, that this Agreement will serve to bind City and future Councils to the obligations hereby undertaken, and that this Agreement shall limit the future exercise of certain governmental and proprietary powers of City. By approving this Agreement, the Council has elected to exercise certain governmental powers at the time of entering into this Agreement rather than defer its actions to some undetermined future date. The terms and conditions of this Agreement have undergone extensive review by City and the Council and have been found to be fair, just and reasonable. City has concluded that the pursuit of the Project will serve the best interests of its citizens and that the public health, safety and welfare are best served by entering into this obligation. Owner has represented to City that it would not consider or engage in the Project absent City approving this Agreement;
WHEREAS, City agrees that Owner’s land use entitlements for the Project shall vest for the term of this Agreement as described below;
Commented [AS1]: Medicinal Adult Use Cannabis
Regulation and Security Act
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WHEREAS, After conducting a duly noticed hearing on October 10, 2022, in conjunction with City’s applicable ordinances and resolutions, the Planning Commission of the City reviewed, considered and approved environmental clearance and recommended approval of the execution of this Agreement to City Council. The Planning Commission found the Project: consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on City; WHEREAS, after conducting a duly noticed hearing on December 19, 2022, in conjunction with City’s applicable ordinances and resolutions, and after independent review and consideration, City Council approved the execution of this Agreement by adopting the ordinance that approves this development agreement (the “Enabling Ordinance”). The City Council found the Project:
consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in City’s zoning laws; in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of City; and is in the best interest of City and its residents.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:
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AGREEMENT
1. General Provisions.
a. Findings. The City hereby finds and determines that entering into this Agreement furthers the public health, safety, and general welfare and is consistent with City’s General Plan, including all text and maps in the General Plan. b. Recitals. The Recitals above are true and correct and are hereby incorporated into and made a part of this Agreement. In the event of any inconsistency between the Recitals and the provisions of Sections 1 through 24 of this Agreement, the provisions of Sections 1 through 24 shall prevail.
c. Exhibits. The following “Exhibits” are attached to and incorporated into this Agreement:
Designation Description
Exhibit A Legal Description
Exhibit B Parcel Map
Exhibit C Site and Floor Plans
Exhibit D Reservation for Dedication of Land for Public Purposes (If Applicable)
Exhibit E Operational and Additional Business
Standards (If Applicable)
Exhibit F Indemnification Agreement
Exhibit G Standards and Conditions for Construction (If Applicable)
2. Government Code and Municipal Code Required Elements. a. Owner and Operator each agree to be bound by the terms of this Agreement and shall not operate a cannabis-related business within City without being bound by the terms of this Agreement, including all payment obligations owed to City, of this Agreement. The City reserves the right to reject Operator’s CCP if City finds, at a lawfully noticed public hearing before the Planning Commission, that the proposed Operator is not eligible to operate the proposed commercial cannabis facility due to noncompliance with any applicable law. Each CCP issued by the City shall run with the Premises, to the extent each Operator retain rights thereto, and all Parties covenant that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of Owner, as landlord, and Operator, as tenant and operator, each as applicable and each as approved by the City via the assignment approval provisions of Section 21. - 6 -
b. Description of Property. Land situated in the City of Barstow, County of San Bernardino, State of California; whose street address is 2865 Lenwood Road, Building #1, City of Barstow, State of California (the “Premises”). The Premises is located on Assessor’s Parcel Number: 0428-211-26-0000 (the “Property”), the legal description of which is located on Exhibit A.
c. Owner and Other Person with Legal or Equitable Interest.
Owner: Barstow Outlet, LLC
Operator and Lessee: Desert Bloom Holdings, LLC
Nature of Interest held by Master Lessee: Master Lease for 10 years with Option to Renew for an additional 10 years
d. Owner Representations and Warranties. Owner represents and warrants that the Owner has consented in writing to the Permitted Uses (as defined below) and the execution and recordation of this Agreement against the Property. e. Permitted Uses. The Premises may be used for one or more, in any combination, of the permitted uses listed below (together, the “Permitted Uses” and individually, a “Permitted Use”) , as presently authorized under Barstow Municipal Code Chapter 19.27, and for any other use as may be authorized under applicable provisions of the Barstow Municipal Code, if all required City permits and state licenses are approved and maintained in full force and effect under applicable law.
License Description State License Type(s)
Cultivation Indoor Types 1A/2A/3A/5A
Cultivation Nursery Type 4
Cultivation Processor Processor
e. Zoning. Operator represents and warrants such activities outlined in its Commercial Cannabis Permit Application (“Application”) conducted pursuant to this Agreement and under the Commercial Cannabis Permit shall comply with City’s municipal code, including the zoning ordinance and any and all development and construction requirements contained therein. Owner shall not conduct any business under this Agreement or under the Commercial Cannabis Permit without having obtained all necessary permits, licenses, and approvals from City and State of California. f. Reservation or Dedication of Land for Public Purposes. Sufficient roadway, sidewalk, and utility easements shall be reserved or dedicated to City for such purposes, as depicted in Exhibit D.
3. Term, Extensions.
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a. Term. This Agreement, along with the issued the Cannabis Business Permit and Conditional Use Permit shall commence on the Effective Date and it shall end five (5) years from the starting date.
b. Extension by Operator. Operator, at its sole and absolute discretion may extend this Agreement for one (1) additional five (5) year period following the expiration of the initial five (5) year term; provided that:
(i) Operator shall give written notice to City no later than one hundred twenty (120) days before the expiration of the initial five (5) year term that the Owner desires to extend this Agreement for an additional five (5) year period; (ii) Operator shows adequate evidence to City that it has a legal and/or equitable interest in the Premises and/or will have such interests for the duration of the extended term of the Agreement;
(iii) Operator shall deposit all fees per the Council-adopted fee schedule necessary for processing the extension request and drafting necessary documentation;
(iv) Operator shall comply with all provisions of Ordinance No. 977- 2021, the additional Ordinance adopting this Agreement, Barstow Municipal Code Chapter 19.27 et seq., all terms imposed by City-issued Commercial Cannabis Permit, and City-Issued Conditional Use Permit, and all other requirements of applicable City law and permits; and
(v) Operator and any approved Operators have completed and built the commercial cannabis facility contemplated by the Agreement and has commenced and continues to operate it in compliance with and shall not be in default of any provision of any applicable law, including Barstow Municipal Code Chapter 19.27, or any agreement between City and Operator relative to the development of the Premises or of any condition of approval imposed upon any entitlement granted by City relative to the development of the Premises or cannabis operations for which Owner has been given a written notice to cure by City and for which Owner has not cured or commenced to cure such default within thirty (30) days, if and as provided by such agreement or condition of approval.
c. Extension by Agreement of the Parties. The Parties may agree to extend this Agreement for additional five (5) year periods, provided that the same conditions in Section 2(a) continue to be met and that City has expressly approved a further five (5) year renewed term. The City reserves the right to conditionally approve and/or shorten the length of additional renewal periods. The City shall give at least 180 days’ notice of any proposed nonrenewal of this Agreement.
4. Development Plans. The following shall comprise the Project’s “Development - 8 -
Plans”:
a. Site Plan and Floor Plan. Operator’s site plan and floor plan for the facility are attached hereto as Exhibit C and incorporated into the Application. b. Landscape Plan. A preliminary landscape plan shall be prepared by the Operator and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees. A final landscape plan shall be prepared and submitted in conjunction with building and site improvement plans prior to issuance of building permits for construction activities. All final landscape plans must comply with the Building Code.
c. Signage Plan. An exterior signage plan shall be prepared and reviewed and approved by City Manager and/or the Director of Public Works & Development Services, or their respective designees, in accordance with the procedures and requirements of the Barstow Municipal Code.
5. Facility Operations. Operator shall comply with the below operating requirements:
a. Compliance with California Cannabis Laws. Operator will operate at all times in compliance with California Cannabis Laws and all other applicable laws. Prior to Operator conducting any Permitted Use, Operator shall be required to obtain a Commercial Cannabis Permit (a “CCP”) and comply with all requirements pursuant to such entitlements, from City pursuant to the Enabling Ordinance and Chapter 19.27 of the Barstow Municipal Code. Further, Operator shall conduct any Permitted Use in accordance with (i) California Cannabis Laws, as may be amended, (ii) the Enabling Ordinance, (iii) this Development Agreement and the Conditional Use Permit issued per its terms, (iv) a CCP, (v) the Operational and Business Standards (Exhibit E), and the Barstow Municipal Code.
b. Security Plan. Operator shall secure approval of its proposed security plan by the Barstow Police Department prior to opening. The security plan shall include, at a minimum and as appropriate, provisions for video surveillance, perimeter fencing and security, protection of the building(s) from vehicle intrusion, cash handling procedures, internal accounting controls, product handling and storage procedures, and a professionally monitored alarm system. Equipment and systems used for video surveillance and building alarms shall be approved by City.
The Project will secure the facility against unauthorized entry by installing security lights on the exterior of the building to illuminate the side yards and parking area, installing commercial-grade locks, installing an alarm and video surveillance system, establishing procedures for identifying authorized persons, establish inventory controls, and install a secure surveillance vault to maintain the integrity of records. In addition, Operator will engage a licensed security company to provide and implement an operational security plan. - 9 -
Video surveillance shall include, at a minimum, all site and facility entrances and access points, all spaces accessible by the public, all secured areas of the facility with restricted access, all interior spaces and rooms where cannabis products are handled and processed, shipping and receiving areas, cash storage areas, and other areas necessary to protect the safety of employees and the public and to ensure cannabis products are received, handled, stored, packaged, shipped, and distributed in compliance with applicable state and local laws and regulations. The video surveillance system shall be web-based with direct access provided to the Barstow Police Department upon request.
The security system shall also include sensors to detect entry and exit from all secure areas, panic buttons in appropriate locations, and a professionally monitored alarm system with glass breakage sensors and motion detectors.
Operator shall employ properly trained and licensed third-party security personnel to protect the welfare and safety of Operator and their respective employees, and to ensure public safety to the neighboring community. Operator shall use security personnel twentyfour (24) hours, seven (7) days a week. Security personnel may be armed so long as proper licensing and insurance requirements are followed and met by the third-party operator providing such security services.
c. Fire Department Approval. Operator shall not operate any facility, and no permit, license, or other approval issued by City shall be valid unless and until the Barstow Fire Protection District has approved Operator’s site plan, floor plan, safety plan, and any other applicable plans that require its approval.
d. Possession of Firearms. Except for licensed and bonded security personnel, no person employed by Operator shall be in possession of any firearm while on the premises or location without having first obtained a license from the appropriate state or local agency authorizing the person to be in possession of such firearm. Every such person in possession of a firearm while on the premises or location must provide City Manager and the Barstow Police Department written notice no less than ten (10) days before bringing such firearm onto the premises, with the following:
1) A copy of the license issued to the person by the appropriate state or local agency authorizing him or her to possess such firearm; 2) A copy of his or her law enforcement identification (if he or she is employed by a law enforcement agency).
3) A copy of his or her California driver’s license or California identification card; and
4) Any other information reasonably required by the Barstow Police Department to show that the individual is in compliance with the provisions of all laws regarding the possession and use of a firearm.
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e. Identification Display. Each Operator, their respective manager, employee, and individual member engaged in any Permitted shall at all times while engaged in the duties of his or her position wear in plain sight, on his or her person and at chest level, a valid identification badge, issued by Operator.
f. Employee Background Checks/Procedures for Inventory Control to Prevent Diversion of Cannabis. Only employees who receive clearance from Operator shall be permitted to enter the Premises. Each employee will have to meet a criminal background investigation conducted by the Barstow Police Department, which at minimum shall include a LiveScan criminal history check, which City shall make a good faith effort to facilitate within a reasonable time following the application of a CCP by Operator.
Operator shall take all necessary and reasonable steps to prevent the distribution of any of its cannabis products to minors; prevent revenue from the sale or distribution of its cannabis and/or infused products from going to criminal enterprises, gangs and cartels; prevent the diversion of cannabis from California to any other state; prevent stateauthorized cannabis activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity; prevent violence and the use of firearms in the course of conducting any Permitted Use; discourage and educate against drugged driving and the exacerbation of other adverse public health consequences associated with cannabis use; disavow growing cannabis on public lands that creates attendant public safety and environmental dangers posed by such illegal uses; and discourage and educate against cannabis possession or use on federal property.
g. Quality Control and Testing. Operator shall utilize quality control measures and testing to ensure only the highest quality of commercial cannabis and infused products will be produced. Operator shall inspect the product to ensure its identity and quantity and shall have a testing lab perform testing of random samples prior to distribution. Inspection and testing will be conducted by a testing lab off-site. Testing standards and procedures shall be in accordance with applicable state law and regulations.
All commercial cannabis products will undergo a quality assurance review in accordance with state law prior to distribution. Inventory procedures will be utilized for tracking and taxing purposes by the state. Operator shall employ an efficient recordkeeping system to make transparent its financing, testing, and adverse effect recording, as well as recall procedures. Operator shall employ an efficient record-keeping system that will reflect its financing, testing, and adverse effect recording and product recall procedures.
h. Packaging of Commercial Cannabis and Manufactured Cannabis Products.
All commercial cannabis and manufactured cannabis products shall be packaged and labeled as required by California Cannabis Laws.
i. Manufactured Cannabis Products. Operator intends to produce manufactured products and shall secure any approval from the County of San Bernardino Health Department, if required, for manufacturing and handling such manufactured - 11 -
products. Infused products shall not be produced, manufactured, stored, or packaged in private homes.
j. Point of Sale Tracking System. Operator shall maintain an inventory control and reporting system that accurately documents the location of cannabis products from inception through distribution, including descriptions, weight, and quantity. The inventory control and reporting system shall comply with the California Cannabis Track and Trace (CCTT) program required by California Cannabis Laws. Operator will make such CCTT records available to City upon request.
Operator shall utilize an electronic point of sale or inventory management system approved by the State of California for all point of sales and inventory tracking from seed or inception to product distribution to other licensed commercial cannabis facilities. Such approved system shall track all commercial cannabis products, each edible, harvested flower, and/or manufactured concentrate, as well as gross sales (by weight and sale).
Operator’s point of sale or inventory management system shall have the capacity to produce historical transactional data in accordance with City's requirements. k. Record Keeping. Operator shall maintain records for all commercial cannabis and/or infused products required by California Cannabis Laws. Operator shall comply with all record-keeping responsibilities that are set forth in Barstow Municipal Code Chapter 19.27, including complete and up-to-date records regarding the amount of commercial cannabis cultivated, produced, manufactured, harvested, stored, tested, distributed, delivered or packaged at Operator’s facility]. l. Processing, Handling, Storing, and Distribution of Commercial Cannabis and Related Products. Commercial cannabis cultivation, handling, storing, and processing shall be concealed from public view at all stages of growth and processing, and there shall be no exterior evidence of cultivation or processing occurring at the premises from a public right-of-way or from an adjacent parcel. Commercial cannabis cultivation, handling, storing, processing, or distribution shall not create offensive odors; create excessive dust, heat, noise, smoke, traffic, or other impacts that are disturbing to people of normal sensitivity residing or present on adjacent or nearby property or areas open to the public; or be hazardous due to use or storage of materials, processes, products, or wastes.
Operator shall store its commercial cannabis and/or commercial cannabis products in a locked safe room with T-card identification access for management only. The safe room shall be constructed of fire-rated walls with numerous cameras installed to view all entries and exits from the safe room, as well as all other activities performed within Operator’s facility. Operator will not conduct outdoor operations except as related to lawful delivery and transportation of medicinal commercial cannabis and infused products.
Operator will not store commercial cannabis or related products in its delivery vehicle outside normal operating hours of the facility.
Commercial cannabis products shall be sold or distributed only to licensed facilities in California. Excess or contaminated product will be securely stored on-site until properly - 12 -
disposed. Disposal may include composting, incineration, land-fill disposal through the local waste management hauler, or other disposal methodology in accordance with California Cannabis Laws.
m. Odor Control. All structures shall have ventilation and filtration systems installed that prevent commercial cannabis plant odors from exiting the interior of the structure. The ventilation and filtration system shall be approved by the Building Department and installed prior to commencing cultivation or manufacturing within the allowable structure. Facility air intake, exhaust, and recirculating system shall be of industrial grade. Activated charcoal, recirculating, and closed loop aeration systems will be utilized as necessary for effective odor control and management. See minimum requirements, pursuant to Municipal Code Section 5.61.280(12). n. Description of Banking Plan. Operator shall seek to open a bank account under the name of Operator or its associated management company to provide transparency for funds received, operational costs, including payroll, tax payments to the state and federal governments. Should a bank account not be forthcoming, Operator shall implement other industry standard banking and/or other industry standard transactional mechanisms. o. Transportation Plan. Operator shall comply with California Cannabis Laws regarding transportation and delivery of cannabis and cannabis products. Operator shall retain a list of names and cellular contact numbers for all employees engaged in transportation of commercial cannabis products and provide it to the applicable oversight authority, keeping the list current and up to date.
Operator will keep complete and up-to-date records documenting each transfer of commercial cannabis to other lawful cooperative corporations, including the amount provided, the form or product category in which the commercial cannabis was provided, the date and time provided, the name of the employee making the transfer, the name and address of the other lawful cooperative corporation to whom delivery is made, and the amount of any related donation or other monetary transaction.
6. Community Relations, Employment, and Wages.
a. Public Outreach and Education Program. Operator shall coordinate and cooperate with City and other operators of commercial cannabis facilities located within City of Barstow in the establishment and implementation of appropriate public outreach and education programs, including but not limited to joining the local chamber of commerce, meeting neighbors and community partners, donating to local charities, and complying with Local hiring requirements in Section 6(e) below. The public outreach and education programs shall be approved by City.
b. Community Benefits Program. Operator shall coordinate and cooperate with City, Operator, and/or any other Operators of commercial cannabis facilities located within City in the establishment, implementation, and funding of a community benefits program which could include such items as senior citizen programs, City beautification - 13 -
efforts, funding for enforcement against illegal cannabis operations, public safety, housing programs, economic development, infrastructure, capital improvements, including expansion and/or improvement to existing facilities or other physical improvements that provide a benefit to the community, support of holiday and special community events, and support of local public service, public safety, litigation defense, and special social and community organizations. This community benefits program may be implemented by City.
The City may invite public participation in the decision-making process for identifying and prioritizing community needs and benefits and identifying appropriate projects to be funded by the entity implementing this community benefits program. All projects under the community benefits program must be approved by City.
Operator agrees, as a business expense, to pay City annual payment at a rate of two dollars ($2.00) per square foot of the Premises (the “Public Benefit Fee”) payable upon issuance of each Operator’s CCP and City-issued business license, then annually thereafter upon each anniversary date. Unless initialed below by the City Manager, the Public Benefit Fee shall be deposited in full into a dedicated account set up by City in order to create, fund and implement a City-approved community benefits program. The community benefits program funds shall be spent only as directed by the City Council and shall be separately accounted for within City’s General Fund.
c. Designation of Community Relations Liaison. Pursuant to Ordinance No. 977-2021 at the time of this Agreement, Operator’s day-to-day operations manager, who is to be determined upon commencement of business operations, will be responsible for community inquiries and complaints and on-site management during normal business hours.
d. Interface with Barstow Police Department / Inspections. Operator’s dayto- day operations manager, and/or the Operator’s Community Relations Liaison who is to be determined upon commencement of business operations, will interface with the Barstow Police Department's assigned designee to ensure its operation complies with California Cannabis Laws. The City Manager, or designee, or the Barstow Police Department's assigned designee acting at City Manager’s request and per his specific and limiting instructions, shall have the right to enter all Premises from time to time unannounced during hours of operation for the purpose of making reasonable inspections to observe and enforce compliance with this Agreement, without the requirement of a search warrant, subpoena, or court order, and subject to appropriate cost recovery fees set forth in this Agreement, or adopted by City.
e. Local Recruitment, Hiring, and Training Programs. Operator is committed to making a good-faith effort to recruit, hire, and train Local residents for employment by Operator. A good-faith effort means Operator shall take the following or similar actions to recruit and employ City residents: 1) Contact local recruitment sources to identify qualified individuals who are City residents, 2) Advertise for qualified City residents in trade papers and newspapers of general circulation in the area, and 3) Develop a written plan to recruit and employ City residents as a part of its workforce. At a minimum, Operator commits to a good faith local annual hiring goal of 40% of total work hours for permanent and - 14 -
apprentice employees. This goal shall apply horizontally, across all departments and managerial positions. The Operator shall not be penalized or deemed in default under this Agreement if it is unable to achieve such a goal. “Local” is defined as within a three-mile radius of City’s boundaries. The purpose of the hiring policy is to facilitate the training and employment of Local and disadvantaged job applicants for jobs within City’s jurisdiction, and three-mile radius of City boundaries. The Operator shall report on compliance with the local hiring goals as part of its annual audit report.
f. Full-time Work. Operator shall make its best efforts to fill every position with a full-time employee. However, at no time shall Operator have a labor force that is composed of less than 50% full-time employees within its labor force, and Operator shall make a good faith effort to maintain a full-time employee level of 75%. Operator agrees to provide to its eligible employees leave benefits, health insurance benefits, and other employee benefits to the extent such benefits are required to be paid for by an employer under applicable state and federal employment laws.
7. Indemnification Agreement by each Cannabis Permittee.
Pursuant to Ordinance No 977-2021, and to the fullest extent permitted by local, state and/or federal law, City shall not assume any liability whatsoever with respect to having issued a CCP or executed this Agreement, or the Enabling Ordinance, or otherwise approving the operation of any commercial cannabis business. As a condition to the approval of any CCP and to the execution and approval of this Agreement, Operator (if operating a Permitted Use) and any Operator shall be required to meet all the conditions enumerated in the Barstow Municipal Code before each can receives a CCP and before this Agreement may be executed. The City Manager shall require Operator and each Operator execute the form Indemnification Agreement (Exhibit F) that fully indemnifies the City for all liabilities associated with the CCP, the Commercial Cannabis Permittee’s Commercial Cannabis Activities, and any action taken by the Cannabis Permittee. The Indemnification Agreement shall include the defense of the City and reimbursement of all fees, costs and expenses incurred by the City related to any action arising from this Agreement. Attached as Exhibit F, and incorporated herein by this reference, is true and correct copy of a fully executed Indemnification Agreement.
8. Fees, Costs, and Future Taxes.
a. Fees. Operator agrees to pay all permit fees and charges adopted by City Council by Fee Resolution pursuant to Chapter 19.27 of the Barstow Municipal Code, as well as, any fees set forth in this Agreement. Permit application, processing, and renewal fees shall be due and payable at the time such application is made. The following fee payment obligations shall be imposed on the Operator.
b. Costs. Operator agrees to reimburse City for all additional reasonable costs of City resulting from the operation of a commercial cannabis facility authorized under applicable provisions of the Barstow Municipal Code, Council resolutions and administrative policies and regulations. City shall invoice such costs monthly, and - 15 -
reimbursement to City for such costs shall be due and payable within thirty (30) days of receipt. Late Fees shall be assessed pursuant to the Barstow Municipal Code provisions applicable to disputes and shall be resolved pursuant to the Municipal Code. c. Operating Fees. As used herein, “Premises” means the designated structure or structures and land specified in the application that is owned, leased, or otherwise held under the control of the Commercial Cannabis Permittee where one or more Permitted Uses will be or is conducted. The parties stipulate and agree that the square footage for the Premises upon the Effective Date of this Agreement is and shall be during the term of this Agreement:
As used herein, “Commercial Cannabis Activities” means one or more Permitted Use (e.g., cultivation, possession, manufacture, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or distribution of Cannabis and/or Cannabis Products).
As used herein, “Gross receipts” shall mean the total amount actually received or receivable in the course of business in a calendar year or calendar month from sales or the performance of acts or services for which charge is made or credit allowed. “Gross receipts” include, without limitation, all receipts, cash, credit, property received in lieu of cash, and any other valuable consideration taken in exchange for goods, services, or other valuable consideration.
As used herein, “Production Space” means the area on or within the Premises intended for Commercial Cannabis Activities excluding non-operational common areas such as restrooms, cafeterias, break rooms, hallways, corridors, vestibules, parking structures or surface street lots. The parties stipulate and agree that the square footage for the Production Space shall be determined by the City Manager in his sole and complete discretion as the Project is completed.
The City Manager is specifically authorized to set and adjust the square footage for the Production Space and to determine the corresponding operating fee as the Project is completed.
1) Each Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, the following fees, if holding a Cannabis Cultivation Permit or Cannabis Manufacturing Permit: a yearly operating fee of Five Dollars ($5) per square foot of the Premises. Fees shall be paid no later than December 31st of every year beginning in the year each Operator receives its CCP and shall be prorated commensurate with the number of months such Operator had its CCP. Failure to pay the fee within thirty (30) days after the due date shall result Address Building No. Size (SF)
2865 Lenwood Rd Building 1 12,423
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in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.
Operator agrees to pay to City, in order to enable City to promote, protect, and enhance the healthy, safety, and welfare of the community and its residents and its quality of life, and shall pay the following fees, if holding a Cannabis NonStorefront Retail Delivery Permit or Cannabis Storefront Retail Permits shall pay:
2) a monthly operating fee(s) of three percent (3%) of Gross Receipts for operations from the Cannabis Non-Storefront Retail Delivery Permits and Cannabis Storefront Retail Permits, to be paid monthly. Fees shall be due to the City on first (1st) of the month. Failure to pay the fee within thirty (30) days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five percent (25%) of the total amount due.
Facilities with multiple licenses must not commingle respective sales proceeds, and blend percentage rate of Gross Receipts.
d. Operator understands and agrees that the fees set forth above shall be paid in a manner and in accordance with a payment schedule set or modified by City. The cultivation, manufacturing, testing, distribution, and delivery space to which the fee applies is as identified on the attached floor plan.
e. If Operator makes any changes to the interior layout of the facility that increases the amount of space allocated to those uses to which the per-square- foot fee applies, Operator shall notify City of such changes at least fourteen (14) calendar days prior to making such changes, and the per-square-foot fee shall be modified accordingly. If Operator fails to give City notice as required herein, Operator shall be responsible for paying to City a per-square-foot fee based on any increase in the amount of space allocated to those uses to which the per-square- foot fee applies retroactive to the date the CCP became effective.
9. Cost Recovery Fee. In addition to the applicable application fees, community benefits payment, and City operating fees, Operator agrees to pay, and City shall assess to each Operator respective fees to recover City’s reasonable processing and monitoring costs (“CRF”) relating to Operator’s business upon issuance of Operator’s Manufacturing, Cultivation, Testing, Distribution, Non-Storefront Retailer Delivery, and Microbusiness Permits or any Additional Permits. CRF is separate and apart from any operating fees set forth in Article 8. Operator shall pay all such fees per the cannabis fee scheduled as adopted by the City Council by Resolution. a. Processing Fees. Processing fees for the Application are based upon the direct and indirect costs that City incurs in reviewing the Application. The processing fees for the Application shall be based only on costs that are reasonably necessary for processing the Application and implementing the Ordinance, including staff time, legal fees, and consultant fees.
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b. Annual Regulatory and Monitoring Fees. Annual Regulatory and Monitoring fees for the Manufacturing, Cultivation and Distribution Permits are based upon the direct and indirect costs City incurs in confirming the use of the Premises in accordance with the municipal code, the Ordinance, this Agreement, and the Application.
The monitoring fees shall be based only on costs that are reasonably necessary for conducting these reviews.
c. Billing and Payment. The City may elect to bill the Operator the Initial CRF on the first day of the month following the Effective Date of this Agreement. Thereafter, City shall bill Operator, or Owner if Owner and Operator are the same entity, the CRF on the first day of each Quarter with an invoice providing the time spent by City and its representatives. Operator shall pay the CRF invoice within thirty (30) days of the invoice date.
d. Disputes. If Operator disagrees with the dollar amount provided by City on the CRF invoice, Operator may submit a written request before the disputed fee is due for a substitution of alternative CRF invoice to the City Manager. The written request must include supporting documentation. After review of the written request, Operator and City shall work, in good faith to resolve the dispute.
10. Additional Operator Obligations.
a. Reporting of Gross Receipts from Operations.
1) Quarterly Receipts. No later than three (3) months after execution of this Agreement, , and every three months thereafter, Operator shall deliver to City a report (the “Quarterly Report”) showing the following information for the cannabis business authorized under this Agreement: (i) Gross Receipts from operations for the immediate prior three months received by Operator, and a cumulative total of all amounts of Gross Receipts from Operations received by Operator for the calendar year, (ii) a calculation of the quarterly payment due to City for the prior three months, and (iii) a calculation of the cumulative total of all quarterly payments for the calendar year.
2) Statement of Receipts/Annual Audit. Each Operator shall keep complete, accurate and appropriate books and records of all receipts from all cannabis business operations in accordance with generally accepted accounting principles. For purposes herein, “books and records” shall mean all bookkeeping or accounting documents each Operator typically utilizes in managing its business operations relating to the Project. Such books and records, as well as all other relevant documents as the City Manager may reasonably require, shall, upon reasonable written notice, be open for inspection by City, its auditors, or other authorized representatives. If at any time during the term such books and records prove inadequate in the reasonable judgment of City to record the Gross Receipts from Operations as herein required, each Operator shall, upon the written request of the City, procure and maintain such books and records as shall be of a character - 18 -
and from adequate for such purpose. City shall have the right to audit and examine such books, records and documents and other relevant items in the possession of such Operator, on no less than an annual basis, or at any time upon reasonable request by the City, to the extent necessary for a proper determination of Gross Receipts from Operations, and all such books, records, documents and other items shall be held available for such audit and examination. The City’s audit shall be performed by a non-contingency fee independent auditor approved in advance by the City. Upon request by City, each Operator shall make all such books, records, and documents available to the City Manager, his designee, or to the City approved auditor, and provide removable copies thereof, within thirty (30) of the date of City’s request. Each Operator shall pay all costs of such audits. Each Operator shall preserve such books, records, documents, and other items in Barstow for a period of not less than one (1) years for the purpose of auditing or re-auditing these accounts upon reasonable notice; except that, if an audit is made within the sevenyear period and each Operator claims that errors or omissions have occurred, the books and records shall be retained and made available until those matters are resolved. City shall keep strictly confidential all statements of revenue furnished by each Operator and all other information concerning such Operator’s operation of the Premises obtained by City as a result of the inspection audit and examination privileges of City hereunder, except as otherwise required by law. If City receives a request for such information pursuant to the Public Records Act (California Government Code Section 6250, et seq.), City shall provide each Operator notice of any such request prior to disclosing any such information and afford such Operator the opportunity to obtain a protective order. Within seven (7) years after the receipt of any statement of receipts under this Agreement, City at any time shall be entitled to carry out an audit of such revenue either by City or agent to be designated by City. If it shall be determined as a result of such audit that there has been a deficiency in any payment due under this Agreement made on the basis of such statement, then such deficiency shall become immediately due and payable within thirty (30) days of such determination.
3) Copies of Tax Filings. Each Operator shall provide the City with courtesy copies of each and every CDTFA Quarterly report such Operator is required to provide to the California Department of Tax and Fee Administration for sales and use tax, Cannabis Excise Tax, and/or Cannabis Cultivation Tax, at the time such filings are made. This reporting obligation is imposed on the cannabis business Operator, or Owner if Owner and Operator are the same entity, and not on the Owner if the Owner is solely a landlord and not also a listed permittee or operator of the cannabis business.
b. Future Revenue Mechanisms. During the term of this Agreement, if the City imposes (by Citizen Initiative or otherwise) an alternative revenue mechanism specifically related to cannabis operations (e.g., a cannabis tax), Operator and City agree to renegotiate in good faith the terms of this Agreement so as to conform the aggregate Public Benefit Fees and Operating Fees payable by an Operator with any alternative revenue mechanism approved by voters. As used in this section, “alternative revenue mechanism” does not - 19 -
include taxes, fees, or assessments levied on or collected from both cannabis and noncannabis operations.
11. Insurance and Indemnity.
a. Insurance. Each Operator shall require all persons doing work on the Project, including its contractors and subcontractors (“Contractors”)to obtain and maintain insurance of the types and in the amounts described in this section and its subsections with carriers reasonably satisfactory to City.
b. General Liability Insurance. Each Operator shall maintain commercial general liability insurance or equivalent form with a limit of not less than One Million Dollars ($1,000,000) per claim and Two Million Dollars ($2,000,000) each occurrence.
Such insurance shall also:
1) Name City, its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives as “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insured. 2) Be primary with respect to any insurance of self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
c. Automotive Liability Insurance. Each Operator shall maintain business automobile liability insurance or equivalent form with a limit of not less than One Million Dollars ($1,000,000) for personal injury for each accident for the vehicles Operator operates in connection with its cannabis business. Such insurance shall include coverage for owned, hired, and non-owned automobiles. Such insurance shall also:
1) Name City, and work in good faith with the City and the insurers to name additional insureds as deemed reasonably necessary. “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the abovelisted additional insureds. 2) Be primary with respect to any insurance or self-insurance programs covering City, its officials, employees, agents, and representatives. 3) Contain standard separation of insured provisions.
d. Workers’ Compensation Insurance. Each Operator shall take out and maintain during the term of this Agreement, workers’ compensation insurance for all of such Operator’s employees employed at or on the Project, and in the event any of the work - 20 -
is subcontracted, Operator shall require any general contractor or subcontractor similarly to provide workers’ compensation insurance for such contractor’s or subcontractor’s employees, unless such employees are covered by the protection afforded by such Operator.
In case any class of employee engaged in work on the Project is not protected under any workers’ compensation law, such Operator shall provide and shall cause each contractor and subcontractor to provide adequate insurance for the protection of employees not otherwise protected. Each Operator hereby indemnifies City for any damage resulting from failure of such Operator, its agents, employees, contractors, or subcontractors to take out or maintain such insurance. Workers’ compensation insurance with statutory limits and employer’s liability insurance with limits of not less than One Million Dollars ($1,000,000) each accident shall be maintained.
e. Other Insurance Requirements. Operator shall do all of the following:
1) Prior to taking any actions under this Agreement, furnish City with properly executed certificates of insurance that clearly evidenced all insurance required in this Article, including evidenced that such insurance will not be canceled, allowed to expire, or be materially reduced in coverage without thirty (30) days prior written notice to City.
2) Provide to City, upon request, and within seven (7) calendar days of said request, certified copies of endorsements and policies, and properly executed certificates of insurance evidencing the insurance required herein. 3) Replace or require the replacement of certificates, policies and endorsements for any insurance required herein expiring prior the termination of this Agreement.
4) Maintain all insurance required herein from the Effective Date of this Agreement to the earlier of the expiration of the term or the mutual written termination of this Agreement.
5) Place all insurance required herein with insurers licensed to do business in California with a current Best’s Key Rating Guide reasonably acceptable to City.
f. Indemnification. Operator shall execute the form Indemnification Agreement attached as Exhibit F, thereby agreeing to indemnify, defend, and hold City, and its elected and appointed council, boards, commissions, officers, agents, employees, contractors, consultants and representatives, harmless from any and all claims costs and liability for any personal injury or property damage which may arise as a result of any actions or negligent omissions by Operator or Master Lessee’s contractors, subcontractors, agents, or employees in connection with the construction, improvement, or operation of the Project.
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12. Termination.
a. Termination Upon End of Term. This Agreement shall terminate upon the expiration of the Term unless it is terminated earlier pursuant to the terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination and this Agreement shall be of no further force or effect except as otherwise set forth in this Agreement.
b. Effect of Termination on Operator’s Obligations. Termination of this Agreement shall eliminate any further obligation of Operator to comply with this Agreement, or some portion thereof, if such termination relates to only part of the Premises or Project. Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights of Operator to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
c. Effect of Termination on City’s Obligations. Termination of this Agreement shall eliminate any further obligation of City to comply with this Agreement, or any portion thereof. Termination of this Agreement shall not, however, eliminate the rights of City to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.
d. Survival After Termination. The rights and obligations of the Parties set forth in Section 10, Section 16, Section 22, and Section 24 and any right or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination. e. Termination Upon Failure to Perform. Operator shall have two (2) years after the Effective Date to commence operation of the commercial cannabis facility contemplated by this Agreement. Failure Operator to commence commercial cannabis operations within that two-year time period may constitute a default and City shall have the right, but not the obligation, to exercise its default remedies under Section 15. The Parties agree to negotiate in good faith regarding any reasonably necessary extensions of this deadline for good cause, such as may be shown as a result of circumstances delaying commencement of operations beyond the control of Operator.
13. Resources Efficiency. Each Operator shall endeavor to reduce its environmental impact when possible. The design of the facility shall include reasonable water and energy conservation measures in accordance with applicable State regulations.
14. Standard Conditions for Construction. During any on-site construction activities related to development of the project site and any buildings thereon, or renovation or remodeling of existing buildings, Operator shall comply with all applicable terms and conditions attached hereto and incorporated herein by reference as Exhibit G. The Project shall comply with the applicable parking standards established by the City for cannabis activities. - 22 -
15. Defaults and Remedies.
a. Remedies in General. It is acknowledged by the parties that City would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof, except as hereinafter expressly provided. Subject to extensions of time by mutual consent in writing, failure to delay by either party to perform any term or provision of this Agreement beyond a reasonable notice and cure period shall constitute a default. In the event of alleged default or breach of any terms or conditions of this Agreement, the party alleging such default or breach shall give the other party not less than thirty (30) day notice in writing specifying the nature of the alleged default and the manner in which said default may be satisfactorily cured during any such thirty (30) day period, the party charged shall not be considered in default for purposes of termination or institution of legal proceedings. Notwithstanding the foregoing to the contrary, if the alleged default is of such a nature that it cannot be cured within thirty (30) days, the alleged defaulting party shall not be deemed in default as long as such party commences to cure such default within such thirty (30) day period and thereafter diligently prosecutes such cure to completion.
After notice and expiration of the thirty (30) day period without a cure of such default, the other party to this Agreement, at its option, may terminate the Agreement or institute legal proceedings pursuant to this Agreement.
In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that City shall not be liable in monetary damages, to Operator, to any mortgagee or lender, or to any successors in interest of Operator or mortgagee or lender, or to any other person, and Operator covenants on behalf of itself and all successors in interest to the Premises or any portion thereof, not to sue for damages or claim any damages.
1) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
2) For the impairment or restriction of any right or interest conveyed or provided under, with, or pursuant to this Agreement, including, without limitation, any impairment or restriction which Operator characterizes as a regulatory taking or inverse condemnation; or
3) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.
b. Specific Performance. The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non- monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:
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1) Money damages are unavailable against City as provided in Section 15(a) above.
2) Due to the size, nature, and scope of the Project, it may not be practical or possible to restore the Premises to its natural condition once implementation of this Agreement has begun. After such implementation, Operator may be foreclosed from other choices it may have had to use the Premises or portions thereof. Operator has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate Operator for its efforts. By the same token, in the event that City issues any permit or other approval for a structure, and the public facilities, improvements, and infrastructure reasonably necessary to provide an adequate level of public services to that structure are not timely completed or Operator otherwise fails to carry out its obligations under this Agreement, then it would not be possible to determine a sum of money that would adequately compensate City for the resulting hardship.
For the above reasons, City and Operator and agree that, notwithstanding any other language in this Agreement, damages would not be an adequate or appropriate remedy if City fails to carry out its obligations under this Agreement. Therefore, specific performance of this Agreement is the only remedy which would compensate Operator if City fails to carry out its obligations under this Agreement, and City hereby agrees that Operator shall be entitled to specific performance in the event of a default by City hereunder. Further, specific performance of this Agreement is the only remedy which would compensate City if Operator fails to carry out their obligations under this Agreement, and Operator hereby agree that City shall be entitled to specific performance in such event. c. Release. Except for those remedies set forth in Sections 15(a), 15(b), and this 15(c), Operator, for itself, its successors and assignees, hereby releases City, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, based or asserted, pursuant to Article 1, Section 19 of the California Constitution, the Fifth Amendment of the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon City because it entered into this Agreement or because of the terms of this Agreement.
Operator acknowledges that it may have suffered, or may suffer, damages and other injuries that are unknown to it, or unknowable to it, at the time of its execution of this Agreement. Such fact notwithstanding, Operator agrees that the release provided in this Section 14(c) shall apply to such unknown or unknowable claims and damages. Without limiting the generality of the foregoing, Operator acknowledges the provisions of California Civil Code Section 1542, which provide:
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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.”
Operator hereby waives, to the maximum legal extent, the provisions of California Civil Code Section 1542 and all other statutes and judicial decisions of similar effect. d. Attorneys’ Fees and Costs. In any action or proceeding between City and Operator brought to interpret or enforce this Agreement, or which in any way arises out of the existence of this Agreement or is based upon any term or provision contained herein, the “prevailing party” in such action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this Agreement, the prevailing party’s reasonable attorneys’ fees and litigation costs, in an amount to be determined by the court. The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 14(e) include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding.
e. Default. No building permit shall be issued or building permit application accepted for Operator for any structure on the Premises after Operator is determined by City to be in default of the terms and conditions of this Agreement until such default thereafter is cured such defaulting party or is waived by City. If City terminates this Agreement as to any Operator because of such Operator’s default, then City shall retain any and all benefits, including money or land received by City hereunder.
16. Third Party Litigation.
a. General Plan Litigation. City has determined that this Agreement is consistent with its General Plan and all applicable special plans. Operator has reviewed the General Plan and concurs with City’s determination.
City shall have no liability under this Agreement or otherwise for any failure of City to perform under this Agreement, or for the inability of Operator to develop the Premises as contemplated by the Agreement, including, but not limited to, if such failure to perform or inability to develop is the result of a judicial determination that the General Plan, or portions thereof, are invalid or inadequate or not in compliance with law, or that this Agreement.
b. Hold Harmless Agreement. Operator hereby agrees to, and shall hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees harmless from any liability for damage or claims for damage for personal injury, including death, as well as from claims for property damage which may arise from Operator or their respective contractors, subcontractors, agents, or employees’ operations under this Agreement, whether such operations be by Operator, or by any of - 25 -
Operator’s contractors, subcontractors, agents, or employees operations under this Agreement. Operator agrees to and shall defend City and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid operations.
c. Indemnification. Operator shall defend, indemnify, and hold harmless City and its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants, and employees against and from any and all liabilities, demands, claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys’ fees), which any or all of them may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (i) this Agreement and the concurrent and subsequent permits, licenses and entitlements approved for the Project or Premises, and all activities conducted under such entitlements; (ii) the environmental impact report, mitigated negative declaration or negative declaration, as the case may be, prepared in connection with the development of the Premises; (iii) any claims based on or alleging inverse condemnation by any person or entity with an interest in the Premises; and (iv) the proceedings undertaken in connection with the adoption or approval of any of the above.
In the event of any legal or equitable action or other proceeding instituted by any third party (including a governmental entity or official) challenging the validity of any provision of this Agreement or any portion thereof as set forth herein, the parties shall mutually cooperate with each other in defense of said action or proceeding. Notwithstanding the above, City, at is sole option, may tender the complete defense of any third-party challenge as described herein. In the event City elects to contract with special counsel to provide for such a defense, City shall meet and confer with Operator regarding the selection of counsel, and Operator shall pay all costs related to retention of such counsel. d. Environmental Contamination. Operator shall indemnify and hold City, its elective and appointive boards, commissions, officers, agents, attorney's, contractors, consultants and employees free and harmless from any liability, based or asserted, upon any act or omission of Operator, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors, excepting and acts or omissions of City as successor to any portions of the Premises dedicated or transferred to City by Operator, for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Premises, including, but not limited to, soil and groundwater conditions, and Operator shall defend, at its expense, including attorneys’ fees, City, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. City may in its discretion participate in the defense of any such claim, action or proceeding. e. City to Approve Counsel. With respect to Sections 16(a) through 16(d), City shall approve any counsel which Operator selects, hires, or otherwise engages to defend City hereunder, which approval shall not be unreasonably withheld.
17. California Environmental Quality Act. Operator shall reimburse City for any - 26 -
and all costs incurred by City related to project review under the California Environmental Quality Act (CEQA), Public Resources Code, §§21000-21189.3, and the Guidelines for California Environmental Quality Act, California Code of Regulations, Title 14, §§15000-15387. If reasonably requested by City, Operator shall conduct and pay for any required CEQA reviews and analyses.
18. Rules, Regulations, and Official Policies. Except as otherwise provided in this Agreement, the rules, regulations, and official policies of City governing permitted uses of the land, governing density, and governing the design, improvements, and construction standards and specifications applicable to the development of the Project subject of this Agreement, shall be those rules, regulations, and official policies of City in force at the time of the execution of this Agreement. This Agreement does not prevent City, in subsequent actions applicable to the property, from applying new rules, regulations, and policies which do not conflict with those rules, regulations, and policies applicable to the property as set forth herein, nor does this Agreement prevent City from denying or conditionally approving any subsequent development project application based on such existing or new rules, regulations, or policies.
19. Commercial Cannabis Permit Conditions of Approval. Operator shall comply with all conditions of approval of the City-issued Commercial Cannabis Permit and Conditional Use Permit.
20. Periodic Reviews. This Agreement shall be subject to annual review by the City Manager. Operator and Landlord executing this Agreement, or successor in interest thereto, shall demonstrate good faith compliance with the terms of this Agreement. If, as a result of such periodic review, City finds and determines, based on substantial evidence, that Operator executing this Agreement, or successor in interest thereto, has not complied in good faith with the terms or conditions of this Agreement, City may terminate or modify this Agreement as to such noncompliant Operator (except no modification shall increase Operator’s liability nor reduce Operator’s rights), provided that City shall first provide Operator notice of its intent to terminate, with a detailed explanation as to why, and provide Operator the reasonable right to cure the same. a. Periodic Review. City Manager shall review this Agreement annually, on or before each anniversary of the Effective Date, in order to ascertain Operator’s good faith compliance with this Agreement. During the periodic review Operator shall be required to demonstrate good faith compliance with the terms of the Agreement, through submitting an annual monitoring report, records, or equivalent written materials to the Planning Department. Operator shall document any request for an extension of the term due to delays beyond the control of Operator under Section 12(e) or Section 24(j). Operator shall submit an annual review and administration fee deposit not to exceed City’s estimated internal and third-party costs associated with the review and administration of this Agreement during the succeeding year, consistent with Section 23(k) (“Deposit with City”) below. City shall provide Operator said estimate a reasonable time in advance of the annual review and administration fee deposit being due.
b. Conditional Use Permit. In addition to the CCP, Operator shall apply for and obtain a CUP for the establishment and operation of the Project. Operator’s operation - 27 -
of any business at all times shall be required to comply with the terms of this Agreement and Operator’s CUP and CCP. Operator acknowledges and covenants that the CUP obtained by Operator via this Agreement shall run with the Premises and that this Agreement is binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Owner, as landlord, as applicable and approved by the City via the assignment approval provisions of Section 21.
c. Special Review. City Council may order a special review of compliance with this Agreement at any time. The City Manager or his or her designee shall conduct such special review. During a special review, Operator shall be required to demonstrate good faith compliance with the terms of this Agreement. The burden of proof on this issue shall be on Operator.
d. Special Review Hearing. At the time and place set for the review hearing, Operator shall be given an opportunity to be heard. If City Council finds, based upon clear and convincing evidence, that Operator has not complied in good faith with the terms or conditions of this Agreement, City Council may terminate this Agreement as to such party notwithstanding any other provision of this Agreement to the contrary, or modify this Agreement as to such party and impose such conditions as are reasonably necessary to protect the interests of City. The decision of City Council shall be final, subject only to judicial review pursuant to Code of Civil Procedure Section 1094.5. e. Certificate of Agreement Compliance. If, after a periodic or special review, Operator is found to be in compliance with this Agreement, and if Master Lessee and/or any Operator requests it, City shall issue a Certificate of Agreement Compliance (“Certificate”) to such requesting party stating that after the most recent periodic or special review, and based upon the information known or made known to the City Manager and City Council, that (i) this Agreement remains in effect and (ii) Operator is not in default.
City shall not be bound by a Certificate if a default existed at the time of the periodic or special review but was concealed from or otherwise not known to the City Manager and City Council, regardless of whether the Certificate is relied upon by assignees or other transferees or Operator.
f. Failure to Conduct Review. City’s failure to conduct a periodic review of this Agreement shall not constitute a breach of this Agreement. g. Cost of Review. The costs incurred by City in connection with the periodic reviews shall be borne by Operator subject to such review.
21. Assignment by Owner, Master Lessee or Operator. Owner or Operator shall not transfer, delegate, sublet or assign its interest, rights, duties, and obligations under this Agreement without the prior written consent of City Council, which consent shall not be unreasonably withheld. Owner or Operator shall submit a transfer application to the City Manager or City Manager’s designee and pay any applicable transfer fee. The proposed transferee must show proof of lawful transfer of possession of the applicable location as may be acceptable to the City. Owner or Operator acknowledges it may take the City approximately three (3) months to process a transfer - 28 -
application.
Any assignment, delegation, subletting or assignment without the prior written consent of City Council shall be null and void. Any transfer, delegation, subletting or assignment by Owner or Operator as authorized herein shall be effective only if and upon the party to whom such transfer, delegation, subletting, or assignment is made is issued a CCP as required under the Barstow Municipal Code.
22. Operating Commercial Cannabis Facility. Any party to this Agreement, or successor in interest thereto, including Operator, shall not operate a commercial cannabis facility authorized under the municipal code unless:
a. It is the holder of a valid CCP issued by City in accordance with the procedures and requirements or the Enabling Ordinance, and Chapter 19.27 of the Barstow Municipal Code; and,
b. It is the holder of a valid license issued by the State of California to operate a commercial cannabis business.
23. Notice. Any notice or communication required hereunder between City and Operator must be in writing, and may be given either personally, by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered, as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:
If to City: City of Barstow
220 E. Mountain View Street, CA 92311
Attention: City Manager
With courtesy copy to: City Attorney
790 E. Colorado Boulevard, Suite 850
Pasadena, California 91101
If to Owner: Barstow Outlet LLC
910 Broadway Ave, Suite 110
Santa Monica, CA 90401
Attn: Farhad Abolfathi
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[email protected]
With courtesy copy to: Baker, Burton & Lundy, P.C.
515 Pier Ave.
Hermosa Beach, CA 90254
Attn: Mary G. Korkodian
[email protected]
If to Operator: Desert Bloom Holdings, LLC
1007 S. Central Ave Ste. 206
Glendale, CA 91204
With courtesy copy to: Weinberg Gonser Frost LLP
10866 Wilshire Bvld., Sutie 1650
Los Angeles, CA 90024
Attn: Michael Jensen
[email protected]
24. Miscellaneous Provisions.
a. Amendment or Cancellation. This Agreement may be amended, or canceled in whole or in part, only by the written mutual consent of the parties to this Agreement or their successors in interest, except those minor amendments that do not affect a substantive provision of this Agreement may be approved by the City Manager on behalf of the City.
The decision whether a proposed amendment is “minor” shall be in the exclusive discretion of the City Manager.
b. Waiver. Waiver by City of any one or more of the terms or conditions of this Agreement shall not be construed as waiver of any other term or condition under this Agreement.
c. Enforcement/Reserved Powers. Unless amended or canceled pursuant hereto, this Agreement shall be enforceable by any party hereto, or successor in interest thereto, notwithstanding any subsequent change in any applicable general or specific plan, zoning, subdivision or building regulation, or municipal code amendment adopted by City that conflicts with the terms of this Agreement. However, this Agreement is subject to the City's “Reserved Powers.” For purposes of this Agreement, “Reserved Powers” means the rights and authority excepted from this Agreement's restrictions on the City's police powers and which are instead reserved to the City. The Reserved Powers include the powers to enact regulations or take future discretionary actions after the Effective Date of this Agreement that: (1) are necessary to protect the public health and safety, and are generally applicable on a City-wide basis (except in the event of natural disasters as found by the City Council such as floods, earthquakes and similar acts of God); (2) are amendments to California Cannabis Laws or California Uniform Codes, as adopted by the City of Barstow, and/or the Barstow Municipal Code, as applicable, regarding the construction, engineering and design standards for private and public improvements to be constructed on the - 30 -
Premises; (3) are necessary to comply with state or federal laws and regulations; or (4) involve sign and parking ordinances and guidelines, changes to the City’s zoning laws, Specific Plan or the City's General Plan, whether adopted previous or subsequent to the Effective Date of this Agreement).
If any City ordinance, rule or regulation or addition to the Barstow Municipal Code is enacted or imposed by a citizen-sponsored initiative or referendum after the Effective Date that would conflict with this Agreement or an associated Commercial Cannabis Permit, business license or other authorizations and City approvals, or reduce development rights or assurances provided to the Operator in this Agreement, then such changes, additions or deletions to the Barstow Municipal Code shall not be applied to the Premises or Project; provided, however, the parties acknowledge that the City's approval of this Agreement is a legislative action subject to referendum. The parties shall cooperate with each other and undertake such reasonable actions as may be appropriate to ensure this Agreement remains in full force and effect and is implemented in accordance with its terms and to the fullest extent permitted by state or federal law.
Notwithstanding anything to the contrary in this Agreement, site improvements contemplated by this Agreement shall be completed pursuant to the development standards and design guidelines applicable at the time of development. e. Joint and Several Liability. Operator shall be jointly and severally liable for any amount due under this Agreement, and any breach of this Agreement or failure to pay by one Party shall also constitute a breach of this Agreement by the other Party. f. Severability. If any part of this Agreement is found to conflict with applicable state laws or regulations, such part shall be inoperative, null, and void insofar as it conflicts with said laws or regulations or modified or suspended as may be necessary to comply with such state laws or regulations, but the remainder of this Agreement shall continue to be in full force and effect.
g. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual, facsimile, or electronic signature.
h. Jurisdiction. The law governing this Agreement shall be that of the State of California. Any suit brought by any party against any other party arising out of the performance of this Agreement or the breach, termination, enforcement, interpretation, or validity thereof, shall be filed and maintained in the County of San Bernardino Superior Court.
i. Disclaimer. Despite California Cannabis Laws and the terms and conditions of this Agreement, any CUP, or any CCP issued pertaining to Operator, or the Premises, California commercial cannabis cultivators, transporters, distributors, or possessors may still be subject to arrest by state or federal officers and prosecuted under state or federal - 31 -
law. The Federal Controlled Substances Act, 21 USC § 801, et seq., prohibits the manufacture, distribution, and possession of cannabis without any exemptions for medical use.
j. Force Majeure. If delays are caused by unforeseen events beyond the control of Operator, such delays will entitle Operator to an extension of time as provided in this section. Such unforeseen events (“Force Majeure”) shall mean war, insurrection, acts of God, local, state or national emergencies, strikes and other labor difficulties beyond the party’s control, or any default by City hereunder, which Force Majeure event substantially interferes with the development, construction or operation of the Project. k. Constructive Notice and Acceptance. Every person who after the Effective Date and recording of this Agreement owns or acquires any right, title, or interest to any portion of the Premises, is and shall be conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Premises, and all rights and interests of such person in the Premises shall be subject to the terms, requirements, and provisions of this Agreement.
l. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same. Except as otherwise provided, the burdens of this Agreement are binding upon, and the benefits of this Agreement inure to, all authorized successors-in-interest of the Parties and constitute covenants which run with the Premises. In order to provide constructive notice thereof, the City Clerk will record this Agreement with the San Bernardino County Recorder within the period required by Government Code Section 65868.5.
m. Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between the City and Operator is that of a government entity regulating the development of private property and developer of such property.
n. Changes to Project. The Parties acknowledge that changes to the Project or Development Plans and related approvals may be appropriate and mutually desirable to carry out the intent and purpose of this Agreement. This Agreement shall not prevent the City from applying, with the consent or at the request of Operator, Subsequent Land Use Regulations or Subsequent Development Approvals that do not directly conflict with the Project, Premises or Development Plan authorized under this Agreement. The granting of one such change, or request shall not obligate the City to grant other similar changes or requests. As used herein, “Subsequent Development Approvals” include, without limitation, all excavation, grading, building, construction, demolition, encroachment or street improvement permits, occupancy certificates, utility connection authorizations, or - 32 -
other non-discretionary permits or approvals necessary, convenient or appropriate for the Project. As used herein, “Subsequent Land Use Regulations” means ordinances, resolutions and codes adopted or approved by the City after the Effective Date of this Agreement governing the development and use of the land, including general plan amendments, zone changes, variances or conditional use permits affecting the permitted use of the land including density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings, the provisions of reservation or Dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Premises.
o. Conflicting Federal or State Rules. In the event that any conflicting federal or state laws or regulations, enacted after the Effective Date, prevent, or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps or permits approved by the City, this Agreement shall remain in full force and effect as to those provisions not affected; and
(i) Notice of Conflict. Either party, upon learning of any such matter, will provide the other party with written notice thereof and provide a copy of any such law, regulation, or policy together with a statement of how any such matter conflicts with the provisions of this Agreement; and
(ii) Modification Conferences. The parties shall, within thirty (30) days of the notice referenced to in the preceding subsection, meet and confer in good faith and attempt to modify this Agreement to bring it into compliance with any such federal or state law or regulation.
(iii) City Council Hearings. In the event the City believes that an amendment to this Agreement is necessary due to the effect of any federal or state law or regulation, the proposed amendment shall be scheduled for hearing before the City Council. The City Council shall determine the exact nature of the amendment necessitated by such federal or state law or regulation. Operator shall have the right to offer oral and written testimony at the hearing. Any modification ordered by the City Council pursuant to such hearing is subject to judicial review in accordance with California law. (iv) Minor Amendments. A minor modification is a modification that does not modify the material terms of this Agreement including (1) the Term; (2) Facility Operations; (3) Indemnification; and (4) Fees. Minor Modifications shall not require a public hearing prior to execution of the modification to this Agreement. Either Party may propose a minor modification, consent to which shall not be unreasonably withheld, conditioned or delayed by the other Party.
Upon the written request of Developer for a modification to this Agreement, the City Manager or his/her designee shall determine: (1) whether, in his/her reasonable judgment, the requested modification constitutes a minor modification as defined herein; (2) whether the requested modification is consistent with applicable law (other than that portion of this Agreement sought to be modified); and (3) whether, in his/her reasonable judgment, the requested modification tends to promote the goals of this Agreement. If the City Manager or his/her designee determines that the - 33 -
requested modification is minor modification that is consistent with applicable law and tends to promote the goals of this Agreement, the proposed modification will be approved by the City as a minor modification, and a written modification will be executed by the Parties and attached to this Agreement. Any such minor modification shall not be deemed an “amendment” to this Agreement under Government Code Section 65858.
(v) City Cooperation. The City shall cooperate with Operator in securing any City permits, licenses or other authorizations that may be required as a result of any amendment resulting from actions initiated by the City. As required by this Agreement, Operator shall be responsible to pay all applicable fees in connection with securing of such permits, licenses, or other authorizations.
q. Effective Date. “Effective Date” means the date on which all of the following are true: (i) thirty (30) days have elapsed since the second reading of the Ordinance adopting and approving this Development Agreement and (ii) all Exhibits to this Agreement are finalized, executed and notarized by all affected parties (if applicable) and attached hereto; provided, however, that if these conditions have not been fully satisfied by Operator the Effective Date may not thereafter occur and this Agreement may not thereafter become effective.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.
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“CITY”
Date: _______________, 2022
CITY OF BARSTOW,
a California Municipal Corporation
By:
Its: Mayor
Attest:
______________________________
City Clerk
Approved to as Form:
______________________________
City Attorney
“OPERATOR”
Date: , 2022
Desert Bloom Holdings, LLC
a California limited liability company
By:
Its:
- 35 -
OWNER
BARSTOW OUTLET, LLC
a Delaware limited liability company
By:
Its:
273128.v17
EXHIBIT A
LEGAL DESCRIPTION
[INSERT LEGAL DESCRIPTION]
273128.v17
EXHIBIT B
PARCEL MAP
[INSERT PARCEL MAP]
273128.v17
EXHIBIT C
SITE AND FLOOR PLANS
273128.v17
EXHIBIT D
RESERVATION OR DEDICATION OF LAND FOR PUBLIC PURPOSES (IF APPLICABLE) 273128.v17
EXHIBIT E
OPERATIONAL AND ADDITIONAL BUSINESS STANDARDS (IF APPLICABLE) 273128.v17
EXHIBIT F.
INDEMNIFICATION AGREEMENT
273128.v17
EXHIBIT G
STANDARDS AND CONDITIONS FOR CONSTRUCTION (IF APPLICABLE) 273128.v17
EXHIBIT H
[reserved]
273128.v17
EXHIBIT I
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into this ___ day of _______ , _______, by and between the CITY OF BARSTOW, a municipal corporation of the State of California (“City”), and Desert Bloom Holdings, LLC, a California limited liability company (“Developer” or “Assignor”), _________________ , a California corporation/limited liability company (“Assignee”). City, Assignors, or Assignee may be referred to herein individually as a “Party” or collectively as the “Parties.” There are no other parties to this Agreement.
RECITALS
A. City and Assignor entered into a development agreement, dated March [*], 2022, for the development of property located in the City of Barstow, County of San Bernardino, State of California, Assessor’s Parcel Number: 0428-211-26-0000, commonly known as 2552 Mercantile Way, Barstow, CA 92311 (“Development Agreement”); B. Pursuant to the Development Agreement, Assignor may transfer all or part of its rights, title, and/or interests in all or a portion of Premises, or Project, as those terms are defined in the Development Agreement, to any person, firm, corporation, or entity during the Term of the Development Agreement only with the advance written consent of the City Council, who shall not unreasonably withhold or condition such consent;
C. Assignor desires to transfer to Assignee some or all of Assignors’ rights and obligations under the Development Agreement, in accordance with Article 9, Section 9.1 of the Development Agreement;
D. Assignee desires to assume some or all of Assignor’s rights and obligations under the Development Agreement;
E. The City Council has agreed to permit Assignors’ transfer of some or all of Assignor’s rights and obligations under the Development Agreement to Assignee, and to Assignee’s assumption of same, subject to the terms and conditions specified in this Agreement; F. The Parties intend through this Agreement to allow Assignors to transfer, and Assignee to assume, some or all of Assignors’ rights and obligations under the Development Agreement.
G. The City Council has conducted all necessary proceedings in accordance with City’s Municipal Code for the approval of this Agreement and this Assignment, including finding that the Development Agreement continues to be in full force and effect and that Assignor and Assignee are not currently in default under the Development Agreement nor the subject of a Notice of Violation regarding violations of any applicable law issued by the City of Barstow or any other government entity with jurisdiction.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:
273128.v17
AGREEMENT
Section 1. Assignment. Assignors hereby assign to Assignee (all/some) of Assignors’ rights and obligations under the Development Agreement. If Assignor is transferring only some of Assignor’s rights and obligations under the Development Agreement, then the specific rights and obligations subject to transfer shall be specified in Exhibit l, attached hereto and incorporated herein by this reference.
Section 2. Assumption. Assignee hereby accepts and assumes the foregoing transfer or assignment of (all/some) of Assignors’ rights and obligations under the Development Agreement.
Section 3. Consent. In accordance with Section 21 of the Development Agreement, the City Council hereby consents to Assignors’ transfer of, and Assignee’s assumption of, Assignor’s rights and obligations under the Development Agreement, as specified herein, subject to any reasonable terms and conditions the City Council may require, as set forth in Exhibit 2, attached hereto and incorporated herein.
Section 4. Conditions of Assignment. The Parties hereby agree to abide by the terms or conditions of assignment, if any, set forth in Exhibit 2, and acknowledge that City’s consent would not have been provided but for the Parties’ agreement to abide by the terms or conditions of assignment.
Section 4. Effective Date. The assignment and assumption of rights and obligations as specified herein shall be effective on ___________, _____.
Section 5. Terms of the Development Agreement. The terms of the Development Agreement are incorporated herein by this reference. Assignors acknowledge and agrees that the representations, warranties, covenants, agreements and indemnities contained in the Development Agreement shall not be superseded hereby but shall remain in full force and effect to the full extent provided therein.
Section 6. Inconsistency. In the event of any conflict or inconsistency between the terms of the Development Agreement and the terms of this Agreement, the terms of the Development Agreement shall govern.
Section 7. Further Actions. Each of the Parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request of the other Parties hereto, such further instruments of transfer and assignment and to take such other action as such the other Parties may reasonably request to more effectively consummate the assignments and assumptions contemplated by this Agreement.
[Signature appear on following page.]
273128.v17
“CITY”
Date: _______________, _____
CITY OF BARSTOW,
a California Municipal Corporation
_____________________________
By:
Its: City Manager
“ASSIGNOR”
Date: _______________, _____
Desert Bloom Holdings, LLC,
a California limited liability company
_____________________________
By:
Its: Managing Member
“ASSIGNEE”
Date: _______________, 2022
_____________________________
By:
Its: