Healdsburg City Council
November 13, 2023

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Packet Pg. 1265 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

TO BALANCE YOUR ACCOUNT

1. Go through your register and mark each check, withdrawal, ATM card transaction, payment, deposit, or other credit listed on this statement. Be sure your register shows any interest paid into your account and any service charges, automatic payments or transfers withdrawn from your account during this statement period.

2. Using the chart below, list any outstanding checks, ATM withdrawals, purchases made with your ATM card, or any other withdrawals (including any from previous months) which are listed on your register but are not shown on this statement.

3. Balance your account by filling in the spaces below.

ITEMS OUTSTANDING
Check or
Transaction
Number
Amount
Total
ENTER:

The Ending Balance as shown on this
Statement $
ADD
Any deposits listed $
in your register or $
transfers into your $
account which are not $
shown on this statement $
TOTAL + $

CALCULATE THE SUBTOTAL
$
SUBTRACT:

The total outstanding checks and
withdrawals from the chart at left $

CALCULATE THE CURRENT BALANCE
This amount should be the same as the
current balance shown in your check
register. $

IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR ELECTRONIC FUND TRANSFERS Please call us at (888) 408-0288 or write us at First Republic Bank, 111 Pine Street, San Francisco, CA 94111 immediately if you believe there is an error on your statement or transaction receipt, or if you need more information about an electronic transaction listed on the statement or receipt. When you call or write us:

1. Tell us your name and account number or ATM/Debit Card number

2. As clearly as you can, describe the error or the transaction you are unsure about, and explain why you believe there is an error or why you need more information.

3. Tell us the dollar amount of the suspected error.

For personal accounts only: You must report the suspected error to us no later than 60 days after we sent you the FIRST statement on which the problem or error appeared. We well investigate your question(s) and will correct any error promptly. If our investigation takes longer than 10 business days (or 20 business days for new accounts), we will temporarily credit your account for the amount you believe is in error, so that you will have use of the money until our investigation is completed.

Packet Pg. 1266 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Statement Period: June 11, 2023-
July 10, 2023
Account Number: NORMAN YOUSIF
Account Statement

ATM REBATE CHECKING

111 Pine Street, San Francisco, California 94111, TEL (415) 392-1400 or (800) 392-1400 firstrepublic.com | Member FDIC

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Packet Pg. 1267 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Statement Period: June 11, 2023-
July 10, 2023
Account Number: NORMAN YOUSIF
Account Statement

ATM REBATE CHECKING

111 Pine Street, San Francisco, California 94111, TEL (415) 392-1400 or (800) 392-1400 firstrepublic.com | Member FDIC

3.1.ak
Packet Pg. 1268 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Statement Period: June 11, 2023-
July 10, 2023
Account Number: NORMAN YOUSIF
Account Statement

ATM REBATE CHECKING

111 Pine Street, San Francisco, California 94111, TEL (415) 392-1400 or (800) 392-1400 firstrepublic.com | Member FDIC

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Packet Pg. 1269 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Statement Period: June 11, 2023-
July 10, 2023
Account Number: NORMAN YOUSIF
Account Statement

ATM REBATE CHECKING

111 Pine Street, San Francisco, California 94111, TEL (415) 392-1400 or (800) 392-1400 firstrepublic.com | Member FDIC

3.1.ak
Packet Pg. 1270 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail P.

O. Box269040 San Diego, CA92196-9040
(877) 732-2848 sdccu.com
Account NumberStatement Period Page
04/01/23 - 06/30/23 1 of 3
What’s New
Norman Najib Yousif
W Hollywood CA 90046-6681

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Packet Pg. 1271 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Account Number Statement Period Page
04/01/23 - 06/30/23 2 of 3

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Packet Pg. 1272 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Account Number Statement Period Page
04/01/23 - 06/30/23 3 of 3

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Packet Pg. 1273 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

Wells Fargo® High Yield Savings
June 30, 2023 Page 1 of 4
(114)
Questions?
Available by phone 24 hours a day, 7 days a week:

We accept all relay calls, including 711
1-800-742-4932
En español: 1-877-727-2932
Online: wellsfargo.com
Write: Wells Fargo Bank, N.A. (114)
P.O. Box 6995
Portland, OR 97228-6995

NORMAN YOUSIF

POD ASHTON I YOUSIF

AND ACE A YOUSIF
WEST HOLLYWOOD CA 90046-6681
You and Wells Fargo
Thank you for being a loyal Wells Fargo customer. We value your trust in our company and look forward to continuing to serve you with your financial needs.

Sheet Seq = 0301334
Sheet 00001 of 00002

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Packet Pg. 1274 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

June 30, 2023 Page 2 of 4
Transaction history

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Packet Pg. 1275 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

June 30, 2023 Page 3 of 4
When you don't have a sufficient available balance in your account (or in accounts linked for Overdraft Protection as described below), the decision to authorize or pay a transaction into overdraft is made at our sole discretion, and we reserve the right to decline or return a transaction that would result in an overdraft. We reserve this discretion regardless of whether we've previously honored or dishonored overdrafts.

We base our decision to authorize or pay a transaction into overdraft on criteria that includes, but is not limited to, your account history, deposits you make, and transaction characteristics.

When you make or schedule payments to a merchant (including payments made through another service provider, such as a digital wallet or other payment platform), it is important for you to understand your rights and responsibilities under any applicable agreement you may have with the merchant or service provider - including the methods in which they process transactions and what occurs if the Bank declines your transaction or returns it unpaid. The Bank does not assess fees for declined or returned transactions, but the merchant or service provider may assess fees or other penalties. Even if a merchant or service provider has approved or processed your transaction, you should not assume that the transaction will be authorized or paid by us when we become aware of the transaction and you do not have sufficient available funds in your bank account.

NEW YORK CITY CUSTOMERS ONLY -- Pursuant to New York City regulations, we request that you contact us at 1-800-TO WELLS (1-800-869-3557) to share your language preference.

Other Wells Fargo Benefits
Help take control of your finances with a Wells Fargo personal loan.

Whether it's managing debt, making a large purchase, improving your home, or paying for unexpected expenses, a personal loan may be able to help. See personalized rates and payments in minutes with no impact to your credit score.

Get started at wellsfargo.com/personalloan.

Other Wells Fargo Benefits
June 15th is World Elder Abuse Awareness Day, and now is a great time to learn about ways to help protect yourself and your loved ones from the rising risks of scams. Download a guide at www.wellsfargo.com/protectelders.

Sheet Seq = 0301335
Sheet 00002 of 00002

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Packet Pg. 1276 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

June 30, 2023 Page 4 of 4
©2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. NMLSR ID 399801 Enter the ending balance on this statement.

List outstanding deposits and other
credits to your account that do not appear on
this statement. Enter the total in the column
to the right.

Add and to calculate the subtotal.

List outstanding checks, withdrawals, and
other debits to your account that do not appear
on this statement. Enter the total in the column
to the right.

Subtract from to calculate the
adjusted ending balance. This amount should be
the same as the current balance shown in your
register.
$
+ $
= $
- $
= $
Worksheet to balance your account
Follow the steps below to reconcile your statement balance with your account register balance. Be sure that your register shows any interest paid into your account and any service charges, automatic payments or ATM transactions withdrawn from your account during this statement period.

Important Information You Should Know
To dispute or report inaccuracies in information we have furnished to a Consumer Reporting Agency about your accounts:

Wells Fargo Bank, N.A. may furnish information about deposit accounts to Early Warning Services. You have the right to dispute the accuracy of information that we have furnished to a consumer reporting agency by writing to us at Overdraft Collection and Recovery, P.O. Box 5058, Portland, OR 97208-5058. Include with the dispute the following information as available: Full name (First, Middle, Last), Complete address, The account number or other information to identify the account being disputed, Last four digits of your social security number, Date of Birth. Please describe the specific information that is inaccurate or in dispute and the basis for the dispute along with supporting documentation. If you believe the information furnished is the result of identity theft, please provide us with an identity theft report.

If your account has a negative balance:

Please note that an account overdraft that is not resolved 60 days from the date the account first became overdrawn will result in closure and charge off of your account. In this event, it is important that you make arrangements to redirect recurring deposits and payments to another account. The closure will be reported to Early Warning Services. We reserve the right to close and/or charge-off your account at an earlier date, as permitted by law. The laws of some states require us to inform you that this communication is an attempt to collect a debt and that any information obtained will be used for that purpose.

In case of errors or questions about your electronic transfers:

Telephone us at the number printed on the front of this statement or write us at Wells Fargo Bank, P.O. Box 6995, Portland, OR 97228-6995 as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer on the statement or receipt. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared.

1. Tell us your name and account number (if any).

2. Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information.

3. Tell us the dollar amount of the suspected error.

We will investigate your complaint and will correct any error promptly. If we take more than 10 business days to do this, we will credit your account for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation.

In case of errors or questions about other transactions (that are not electronic transfers):

Promptly review your account statement within 30 days after we made it available to you, and notify us of any errors.

To download and print an Account Balance Calculation Worksheet (PDF) to help you balance your checking or savings account, enter www.wellsfargo.com/balancemyaccount in your browser on either your computer or mobile device.

A
B
E D C
C A B
D
Description Amount
Total $
Number/Description Amount
Total $

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Packet Pg. 1277 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Initiate Business Checking SM
June 30, 2023 Page 1 of 5
Questions?
Available by phone Mon-Sat 7:00am-11:00pm Eastern
Time, Sun 9:00am-10:00pm Eastern Time:

We accept all relay calls, including 711
1-800-CALL-WELLS (1-800-225-5935)
En español: 1-877-337-7454
Online: wellsfargo.com/biz
Write: Wells Fargo Bank, N.A. (114)
P.O. Box 6995
Portland, OR 97228-6995

GREEN CONSULTING PARTNERS, LLC
23 CORPORATE PLAZA DR STE 150
NEWPORT BEACH CA 92660-7908
Your Business and Wells Fargo
Visit wellsfargo.com/digitalbusinessresourcesto explore tours, articles, infographics, and other resources on the topics of money movement, account management and monitoring, security and fraud prevention, and more.

Account options
A check mark in the box indicates you have these
convenient services with your account(s). Go to
wellsfargo.com/biz or call the number above if you have questions or if you would like to add new services.

Business Online Banking ÷
Online Statements ÷
Business Bill Pay
Business Spending Report ÷

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Packet Pg. 1278 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail June 30, 2023 Page 2 of 5
Transaction history

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Packet Pg. 1279 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail June 30, 2023 Page 3 of 5
Transaction history (continued)
Check Deposits/ Withdrawals/ Ending daily

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Packet Pg. 1280 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail June 30, 2023 Page 4 of 5

IMPORTANT ACCOUNT INFORMATION
This notice re-establishes that Wells Fargo has the right to conduct setoff for overdrawn deposit account balances, where applicable, and in accordance with your governing Deposit Account Agreement. When we exercise this right, we may reduce funds in any account you hold with us for purposes of paying the amount of the debt, either due or past due, that is owed to us as allowed by the laws governing your account. Our right of setoff won't apply if it would invalidate the tax-deferred status of any tax-deferred retirement account (e.g., a SEP or an IRA) you keep with us. To review a copy of your Deposit Account Agreement, including the provisions related to the right of setoff, please visit wellsfargo.com/online-banking/consumer-account-fees/.

Effective July 25, 2023, the paragraph in the "Standard Overdraft Coverage" subsection of the "Available Balance, Posting Transactions, and Overdraft" section of the Deposit Account Agreement that reads:
"The decision to pay a transaction into overdraft is made at our sole discretion. Generally, we base this decision on criteria such as your account history, deposits you make, and the transaction amount. We reserve the right to not pay a transaction into overdraft." is deleted and replaced with the following:

When you don't have a sufficient available balance in your account (or in accounts linked for Overdraft Protection as described below), the decision to authorize or pay a transaction into overdraft is made at our sole discretion, and we reserve the right to decline or return a transaction that would result in an overdraft. We reserve this discretion regardless of whether we've previously honored or dishonored overdrafts.

We base our decision to authorize or pay a transaction into overdraft on criteria that includes, but is not limited to, your account history, deposits you make, and transaction characteristics.

When you make or schedule payments to a merchant (including payments made through another service provider, such as a digital wallet or other payment platform), it is important for you to understand your rights and responsibilities under any applicable agreement you may have with the merchant or service provider - including the methods in which they process transactions and what occurs if the Bank declines your transaction or returns it unpaid. The Bank does not assess fees for declined or returned transactions, but the merchant or service provider may assess fees or other penalties. Even if a merchant or service provider has approved or processed your transaction, you should not assume that the transaction will be authorized or paid by us when we become aware of the transaction and you do not have sufficient available funds in your bank account.

NEW YORK CITY CUSTOMERS ONLY -- Pursuant to New York City regulations, we request that you contact us at 1-800-TO WELLS (1-800-869-3557) to share your language preference.

Effective April 9, 2023, the Classic and Premium Check Image Fee was eliminated for non-analyzed business checking and savings accounts. Refer to definition of analyzed accounts in the Business Account Fee and Information Schedule available at wellsfargo.com/biz/fee-information. Thank you for banking with Wells Fargo. We appreciate your business.

Other Wells Fargo Benefits
June 15th is World Elder Abuse Awareness Day, and now is a great time to learn about ways to help protect yourself and your loved ones from the rising risks of scams. Download a guide at www.wellsfargo.com/protectelders.

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Packet Pg. 1281 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail June 30, 2023 Page 5 of 5
ImportantInformation You Should Know
• To dispute orreport inaccuracies in information we have furnished to a Consumer Reporting Agency about your accounts: Wells Fargo Bank, N.A. may furnish information about deposit accountsto Early Warning Services. You have the right to dispute the accuracy of information that we have furnished to a consumer reporting agency by writing to us at Overdraft Collection and Recovery, P.O. Box 5058, Portland,OR 97208-5058. Include with the dispute the following information as available: Full name (First, Middle, Last), Complete address, The account number or other information to identify the account being disputed, Last four digits of your social security number, Date of Birth. Please describe the specific information that isinaccurate or in dispute and the basisfor the dispute along with supporting documentation. If you believe the information furnished isthe result of identity theft, please provide us with an identity theft report.
• In case of errors or questions about othertransactions (that are not electronic transfers): Promptly review your account statement within 30 days after we made it available to you, and notify us of any errors. • If your account has a negative balance: Please note that an account overdraft that is not resolved 60 daysfrom the date the account first became overdrawn will result in closure and charge off of your account. In this event, it isimportant that you make arrangementsto redirect recurring deposits and paymentsto another account. The closure will be reported to Early Warning Services. We reserve the right to close and/or charge-off your account at an earlier date, as permitted by law. The laws ofsome statesrequire usto inform you that this communication is an attempt to collect a debt and that any information obtained will be used for that purpose.
• To download and print an Account Balance Calculation
Worksheet(PDF) to help you balance your checking or savings account, enter www.wellsfargo.com/balancemyaccount in your browser on either your computer or mobile device.

Account Balance Calculation Worksheet

1. Use the following worksheet to calculate your overall account balance.

2. Go through your register and mark each check, withdrawal, ATM transaction, payment, deposit or other credit listed on your statement.

Be sure that your register shows any interest paid into your account and any service charges, automatic payments or ATM transactions withdrawn from your account during thisstatement period.

3. Use the chart to the right to list any deposits, transfersto your account, outstanding checks, ATM withdrawals, ATM payments or any other withdrawals(including any from previous months) which are listed in your register but not shown on your statement.

Number ItemsOutstanding Amount
Total amount $
©2021 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. NMLSR ID 399801 ENTER
A. The ending balance
shown on your statement . . . . . . . . . . . . . . . . . . . . . . . $ ADD
B. Any deposits listed in your
register or transfersinto
your account which are not
shown on your statement.
$
$
$
+ $
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL $

CALCULATE THE SUBTOTAL
(Add Parts A and B)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TOTAL $

SUBTRACT
C. The total outstanding checks and
withdrawalsfrom the chart above . . . . . . . . . . . . . - $

CALCULATE THE ENDINGBALANCE
(Part A + Part B - Part C)
This amount should be the same
as the current balance shown in
your check register. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

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Packet Pg. 1282 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Customer service information

1.888.888.RWDS (1.888.888.7937)
En Español: 1.800.688.6086
bankofamerica.com
Bank of America, N.A.

P.O. Box 25118
Tampa, FL 33622-5118

SEAN D MADDOCKS
LAGUNA BEACH, CA 92651-1703
P.O. Box 15284
Wilmington, DE 19850
PULL: B CYCLE: 20 SPEC: E DELIVERY: E TYPE: IMAGE: I BC: CA1 Page 1 of 8

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Packet Pg. 1283 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

IMPORTANT INFORMATION:

BANK DEPOSIT ACCOUNTS
How to Contact Us - You may call us at the telephone number listed on the front of this statement.

Updating your contact information - We encourage you to keep your contact information up-to-date. This includes address, email and phone number. If your information has changed, the easiest way to update it is by visiting the Help & Support tab of Online Banking.

Deposit agreement - When you opened your account, you received a deposit agreement and fee schedule and agreed that your account would be governed by the terms of these documents, as we may amend them from time to time. These documents are part of the contract for your deposit account and govern all transactions relating to your account, including all deposits and withdrawals. Copies of both the deposit agreement and fee schedule which contain the current version of the terms and conditions of your account relationship may be obtained at our financial centers.

Electronic transfers: In case of errors or questions about your electronic transfers - If you think your statement or receipt is wrong or you need more information about an electronic transfer (e.g., ATM transactions, direct deposits or withdrawals, point-of-sale transactions) on the statement or receipt, telephone or write us at the address and number listed on the front of this statement as soon as you can. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared. - Tell us your name and account number. - Describe the error or transfer you are unsure about, and explain as clearly as you can why you believe there is an error or why you need more information. - Tell us the dollar amount of the suspected error.

For consumer accounts used primarily for personal, family or household purposes, we will investigate your complaint and will correct any error promptly. If we take more than 10 business days (10 calendar days if you are a Massachusetts customer) (20 business days if you are a new customer, for electronic transfers occurring during the first 30 days after the first deposit is made to your account) to do this, we will provisionally credit your account for the amount you think is in error, so that you will have use of the money during the time it will take to complete our investigation.

For other accounts, we investigate, and if we find we have made an error, we credit your account at the conclusion of our investigation.

Reporting other problems - You must examine your statement carefully and promptly. You are in the best position to discover errors and unauthorized transactions on your account. If you fail to notify us in writing of suspected problems or an unauthorized transaction within the time period specified in the deposit agreement (which periods are no more than 60 days after we make the statement available to you and in some cases are 30 days or less), we are not liable to you and you agree to not make a claim against us, for the problems or unauthorized transactions.

Direct deposits - If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company, you may call us to find out if the deposit was made as scheduled. You may also review your activity online or visit a financial center for information.
© 2023 Bank of America Corporation

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Packet Pg. 1284 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Deposits and other additions
Withdrawals and other subtractions
ATM and debit card subtractions

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Packet Pg. 1285 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Withdrawals and other subtractions - continued
ATM and debit card subtractions - continued

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Packet Pg. 1286 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Withdrawals and other subtractions - continued
ATM and debit card subtractions - continued

3.1.ak
Packet Pg. 1287 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Withdrawals and other subtractions - continued
ATM and debit card subtractions - continued

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Packet Pg. 1288 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Withdrawals and other subtractions - continued

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Packet Pg. 1289 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail SEAN D MADDOCKS ! Account # ! June 1, 2023 to June 30, 2023

Withdrawals and other subtractions - continued

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Packet Pg. 1290 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

BUSINESS ENTITY

FORMATION DOCUMENTS
JULY 2023

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Packet Pg. 1291 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail 202358310798
Limited Liability Company Name
Limited Liability Company Name OTC Healdsburg LLC
Initial Street Address of Principal Office of LLC
Principal Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Initial Mailing Address of LLC
Mailing Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Attention
Agent for Service of Process
Agent Name Sean Maddocks
Agent Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Purpose Statement
The purpose of the limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under the California Revised Uniform Limited Liability Company Act.

Management Structure
The LLC will be managed by One Manager
Additional information and signatures set forth on attached pages, if any, are incorporated herein by reference and made part of this filing.

Electronic Signature
By signing, I affirm under penalty of perjury that the information herein is true and correct and that I am authorized by California law to sign.

Sean Maddocks
Organizer Signature
07/21/2023
Date

STATE OF CALIFORNIA
Office of the Secretary of State

ARTICLES OF ORGANIZATION

CA LIMITED LIABILITY COMPANY
California Secretary of State
1500 11th Street
Sacramento, California 95814
(916) 653-3516
B1973-5731 07/21/2023 4:03 PM Received by California Secretary of State

For Office Use Only
-FILEDFile No.: 202358310798
Date Filed: 7/21/2023

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Packet Pg. 1292 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Secretary of State
Certificate of Status
I, SHIRLEY N. WEBER, PH.D., California Secretary of State, hereby certify:

Entity Name: OTC Healdsburg LLC
Entity No.: 202358310798
Registration Date: 07/21/2023
Entity Type: Limited Liability Company - CA
Formed In: CALIFORNIA
Status: Active
The above referenced entity is active on the Secretary of State's records and is authorized to exercise all its powers, rights and privileges in California.

This certificate relates to the status of the entity on the Secretary of State’s records as of the date of this certificate and does not reflect documents that are pending review or other events that may impact status.

No information is available from this office regarding the financial condition, status of licenses, if any, business activities or practices of the entity.

IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of July 21, 2023.

SHIRLEY N. WEBER, PH.D.

Secretary of State
Certificate No.:

To verify the issuance of this Certificate, use the Certificate No. above with the Secretary of State Certification Verification Search available at bizfileOnline.sos.ca.gov. 131757831

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Packet Pg. 1293 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail BA20231153925
Entity Details
Limited Liability Company Name OTC Healdsburg LLC
Entity No. 202358310798
Formed In CALIFORNIA
Street Address of Principal Office of LLC
Principal Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Mailing Address of LLC
Mailing Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Attention
Street Address of California Office of LLC
Street Address of California Office None
Manager(s) or Member(s)
Manager or Member Name Manager or Member Address
+ Norman Yousif 771 JAMACHA RD
358
EL CAJON, CA 92019
Agent for Service of Process
Agent Name Sean Maddocks
Agent Address 23 CORPORATE PLAZA DR
150
NEWPORT BEACH, CA 92660
Type of Business
Type of Business Retail
Email Notifications
Opt-in Email Notifications Yes, I opt-in to receive entity notifications via email.

Chief Executive Officer (CEO)
CEO Name CEO Address
None Entered
Labor Judgment
No Manager or Member, as further defined by California Corporations Code section 17702.09(a)(8), has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal is pending, for the violation of any wage order or provision of the Labor Code.

STATE OF CALIFORNIA
Office of the Secretary of State

STATEMENT OF INFORMATION

LIMITED LIABILITY COMPANY
California Secretary of State
1500 11th Street
Sacramento, California 95814
(916) 653-3516
B1973-6047 07/21/2023 4:15 PM Received by California Secretary of State

For Office Use Only
-FILEDFile No.: BA20231153925
Date Filed: 7/21/2023

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Packet Pg. 1294 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Electronic Signature
By signing, I affirm under penalty of perjury that the information herein is true and correct and that I am authorized by California law to sign.

Sean Maddocks
Signature
07/21/2023
Date
B1973-6048 07/21/2023 4:15 PM Received by California Secretary of State

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Packet Pg. 1295 Attachment: OTC Healdsburg - Off the Charts Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail

ZONING CLEARANCE LETTER
JULY 2023

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Packet Pg. 1296 Attachment: OTC Healdsburg - Off the Charts Zoning Clearance Letter (4237 : Public Hearing to Consider Retail Cannabis Business July 25, 2023
OTC Healdsburg, LLC
Attn: Norman Yousif
771 Jamacha Road
El Cajon, CA 92109

Sent via email to [email protected]; [email protected] Subject: Zoning Clearance Letter – 129 - 133 Healdsburg Avenue Dear Mr. Yousif:

The purpose of this letter is to inform you that the above-referenced location at 129 - 133 Healdsburg Avenue meets all of the location criteria outlined in the Commercial Cannabis Ordinance for a retail dispensary.

Location Requirements (HMC Section 20.20.095(B)(6)):
a. A retail dispensary which is open to the public may only be located within the allowed zoning district(s) under Table 10 of Section 20.08.145, Table 12 of Section 20.08.155, and Table 15 of Section 20.08.195.
129 - 133 Healdsburg Avenue is zoned Mixed Use (MU) which allows for a retail dispensary or microbusiness.
b. A retail dispensary shall not be established on any parcel containing a dwelling unit, or immediately abutting (sharing a common property line with) a residential zoning district. Residentially zoned does not include mixed-use zoning for purposes of this section.
129 - 133 Healdsburg Avenue does not contain a dwelling unit. The abutting parcels are designated Mixed Use (MU) and Industrial (I).
c. A retail dispensary shall not be established within five hundred feet from any youthoriented property.

CITY OF HEALDSBURG

COMMUNITY DEVELOPMENT DEPARTMENT
401 Grove Street
Healdsburg, CA 95448-4723
Phone: (707) 431-3346
Fax: (707) 431-2710
Visit us at www.healdsburg.gov

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Packet Pg. 1297 Attachment: OTC Healdsburg - Off the Charts Zoning Clearance Letter (4237 : Public Hearing to Consider Retail Cannabis Business There are no youth-oriented properties located within 500 feet of 129 - 133 Healdsburg Avenue.
d. A retail dispensary shall not be established within two hundred and fifty feet of any public park (with the exception of West Plaza Park and 3 North Street), public playground, or public library.

There are no public parks, public playgrounds, or public libraries within 250 feet of 129 - 133 Healdsburg Avenue.
e. The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the retail dispensary and the nearest property line of the parcel(s) on which the youth-oriented property, public park, public playground, or public library is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

The distances noted in criteria c and d above were calculated based on the above measurement criteria.

Other Requirements:
a. Parking (HMC Section 20.20.095(B)(7)(k))
The proposed site at 129 - 133 Healdsburg Avenue can provide the required parking onsite.

Please feel free to contact me at 707-431-3346 or [email protected] if you have any questions regarding this determination.

Sincerely,
Ellen McDowell
Senior Planner

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Packet Pg. 1298 Attachment: OTC Healdsburg - Off the Charts Zoning Clearance Letter (4237 : Public Hearing to Consider Retail Cannabis Business

COMMERCIAL CANNABIS

BUSINESS PERMIT

APPLICATION
(Cannabis Storefront Retailer)
City of Healdsburg
City Manager’s Office
401 Grove Street
Healdsburg, CA 95448
Email: [email protected]
HEALDSBURG COMMERCIAL CANNABIS BUSINESS APPLICATION Page 1 of 5

APPLICANT (ENTITY) INFORMATION
Applicant (Entity) Name: DBA:

Physical Address:

Street City State Zip
Primary Contact: Title:

Mailing Address:

Street City State Zip
Phone Number: Email:

HAS ANY INDIVIDUAL IN THIS APPLICATION APPLIED FOR ANY OTHER CANNABIS PERMIT IN THE CITY OF HEALDSBURG? ☐ Yes ☐ No Indicate whether you are applying for Retail (Storefront) or Retail (Storefront with Delivery). ☐ Retail (Storefront) ☐ Retail (Storefront with Delivery) Indicate whether you intend to operate a Microbusiness with Retail. ☐ Yes ☐ No Business Formation: Describe how the business is organized. ☐ Sole Partnership ☐ Corporation ☐ S-Corporation ☐ Limited Partnership ☐ Limited Liability Company ☐ Other (please describe):

PROPOSED LOCATION
Property Owner Name:

Proposed Location
Address:

Street City State Zip
Phone Number: Email:

Zoning Clearance Letter (Please attach): ☐ Yes ☐ No
Assessor’s Parcel Number (APN): Proposed Location Square Footage:

APPLICATION SUBMITTAL CHECKLIST
Applications failing to submit any of the following will be deemed incomplete and will not move forward in the application process:
 One (1) printed hard copy of a complete and signed Cannabis Business Permit Application form (Pages 1-5).  A signed Financial Responsibility, Indemnity and Consent to Inspect Terms Agreement form (Pages F1-F3).  A signed Limitations of City Liability and Indemnification to City form (Pages F4-F6).  Application Fee Payment.
 Criminal background check confirmation for each owner and manager.  A signed and notarized Property Owner Letter of Intent form.  Proof of capitalization.
 Business entity formation and organizing documents.
 Application Zoning Clearance Letter (ZVL).
 A USB flash drive containing all of the materials identified in the Application Procedure Guidelines and Review Criteria for a Commercial Cannabis Business Permit (Storefront Retail Applications).

Sonoma CHO Flora Terra
1825 Empire Industrial Court Santa Rosa CA 95403
Alicia Wingard COO
1825 Empire Industrial Court Santa Rosa CA 95403
707.569.4366 [email protected]
X
X
Susan Selby
498 Moore Lane Healdsburg CA 95448
707.975.0998 [email protected]
X
088.230.001 3,000SQFT

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Packet Pg. 1299 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1300 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) HEALDSBURG COMMERCIAL CANNABIS BUSINESS APPLICATION Page 3 of 5

OTHER CONTACT INFORMATION
If the proposed commercial cannabis applicant is incorporated, provide the names, titles, addresses, and contact information of each corporate officer. If the proposed commercial cannabis applicant is a partnership, provide the names, addresses of each partner.

In addition, provide the name, address, and contact information of the agent for service of process, and any person(s) designated as a manager of the proposed business.

CORPORATE OFFICERS OR PARTNERS
Name: Title:

Address:

Street City State Zip
Name: Title:

Address:

Street City State Zip
Name: Title:

Address:

Street City State Zip
Name: Title:

Address:

Street City State Zip
Name: Title:

Address:

Street City State Zip

AGENT FOR SERVICE OF PROCESS
Name:

Address:

Street City State Zip

MANAGER(S)
Any person(s) designated by the commercial cannabis applicant to act as the representative or agent of the commercial cannabis applicant in managing day-to-day operations. If such information is not available at the time the commercial cannabis permit application is submitted, the commercial cannabis permit applicant shall submit such information as soon as it becomes available to the City Manager’s Office at [email protected].

Name: Title:

Address:

Street City State Zip
Background information included as required? ☐ Yes ☐ No Phone:

Add more pages as necessary to accommodate all Corporate Officers, Partners, and Managers.

David and Alicia Wingard CEO & COO
Santa Rosa CA 95403
Sally and David Wingard Investor
Sebastopol CA 95472
James G Brown, Trustee of James G. and Teresa A. Brown Living Trust Investor / Lender Sebastopol CA 95472
Michael and Susan Barrett Investor
Santa Rosa CA 95404

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Packet Pg. 1301 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) HEALDSBURG COMMERCIAL CANNABIS BUSINESS APPLICATION Page 4 of 5

SUPPORTING INFORMATION
List all fictitious business names the applicant is operating under including the address where each business is located:

Has the Applicant or any of its owners been the subject of any administrative action, including but not limited to suspension, denial, or revocation of a cannabis business license at any time in the previous seven (7) years? If so, please list and explain:

Is the Applicant or any of its owners currently involved in an application process in any other jurisdiction(s)? If so, which jurisdiction(s)?
Does the applicant intend to store or use any hazardous chemicals on-site? If so, please list and explain:

Does the applicant intend to discharge any effluent into the City’s wastewater or storm water system? If so, please list and explain:

If applicable, provide a brief description of the proposed cannabis delivery service, including number of delivery vehicles, location of vehicle storage, and estimated size of delivery area.

Sonoma CHO dba Flora Terra. Addresses actively doing business as Flora Terra are as follows:
• 1825 Empire Industrial Court Suite A Santa Rosa, CA 95403 • 1226 4th Street Santa Rosa CA, 95403
• 4575 Sonoma Highway Santa Rosa, CA 95407
N/A
N/A
N/A
N/A
Flora Terra will offer cannabis deliveries within city limits, employing an electric vehicle for retail delivery purposes. The vehicle will be safely stored in the receiving area outside operational hours. Delivery services will commence at 10 am, and the cut-off time for placing delivery orders will be 7 pm. The ordering process will be similar to that of online grocery shopping, where customers place their orders through the company website, and the orders will be verified and packed on the retail floor by a staff member.

To streamline deliveries and ensure adherence to state regulations, the company will employ advanced API connections to Metrc through various point-of-sale integrations. This approach guarantees full compliance with all necessary regulatory requirements.

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Packet Pg. 1302 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1303 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Agreement of Limitations of City’s Liability, and Certifications, Assurances, Warranties, and Indemnification to City 1 F-1

CITY OF HEALDSBURG

COMMERCIAL CANNABIS BUSINESS LICENSE APPLICATION

FINANCIAL RESPONSIBILITY, INDEMNITY AND

CONSENT TO INSPECTION TERMS
(Must be completed by at least one owner)
Dated: _____________________, 2023
I hereby agree to the following terms:

1. I herewith pay the sum of $9,647.31 for the application fee for the review and processing of an application for commercial cannabis business permit.

2. The entire fee amount paid to the City of Healdsburg (“City”) is non-refundable for any reason. There is no guarantee - expressed or implied - that by submitting the application or paying the application fee that I will obtain any land use entitlements or a permit to operate a commercial cannabis business.

3. All costs incurred by the City in processing said application, including staff time, attorney’s fees, Consultant’s fees and overhead, shall be funded by me from the fees paid. This is my personal obligation and shall not be affected by sale or transfer of the property subject to the application, changes in business organization, or any other reason.

4. I acknowledge and agree to the defense, waiver, and indemnification obligations stated in the attached “Agreement on Limitations of City’s Liability, and Certifications, Assurances Warranties and Indemnification to City”, incorporated herein by reference.

5. The City will promptly notify the Applicant(s) and Owner(s) of any claim, action, or proceeding that is or may be subject to this Agreement on Limitations of City’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. The City may, within its unlimited and sole discretion, participate in the defense of any such claim, action, orproceeding.

6. I will fund a deposit account (“Fund”) to reimburse the City’s cost, including attorney’s fees, to defend any claim, action, or proceeding that is or may be subject to the Agreement on Limitations of City’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. In the event that any such claim, action, or proceeding is filed against the City, I shall within 30 days of the filing, deposit an initial sum of $10,000 to the Fund to reimburse my portion of the City defense costs, as determined by the City in its sole discretion. The Fund shall contain an amount necessary to cover three months’ worth of budgeted expenditures by the City relating to the City’s defense of the claim, action, or proceeding, including all time to appeal, or as long as expenditures made by the City relating to its defense remain unreimbursed, whichever is later. Once all remaining and outstanding reimbursements have been paid to the City by me, City shall return to me any remaining unused July 8

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Packet Pg. 1304 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Agreement of Limitations of City’s Liability, and Certifications, Assurances, Warranties, and Indemnification to City 2 F-2
portion of my deposit.

7. The City shall have the sole and absolute right to approve any and all counsel employed to defend the City. To the extent the City uses any of its resources to respond to such claim, action or proceeding, or to assist the defense, I will reimburse the City for those costs. Such resources include, but are not limited to, staff time, court costs, City Attorney’s time, or any other direct or indirect cost associated with responding to, or assisting in defense of, the claim, action, or proceedings.

8. I consent and expressly allow, authorize, and permit the City, all its departments, agents, and employees, to enter upon and inspect the subject property identified in my application, with or without prior notice, for the purposes of processing this application or inspection or photographing for compliance with all laws, regulations, and conditions placed on land use approvals or the cannabis business permit. No additional permission or consent to enter upon the property is necessary or shall be required. By signing this agreement, I further certify and warrant I am authorized to, and hereby do, consent, and allow such inspections on my behalf and on the behalf of each and all Owners of the property and Applicants.

9. I understand that all materials submitted in connection with my application are public records subject to inspection and copying by members of the public. By filing an application, I agree that the public may inspect and copy these materials and the information contained therein, and that some or all of the materials may be posted on the City’s website. For any materials that may be subject to copyright protection, or which may be subject to Sections 5500.1 and 5536.4 of the California Business and Professions Code, by submitting such materials to the City I represent that I have the authority to grant, and hereby grant, the City permission to make the materials available to the public for inspection and copying, whether in hardcopy or electronic format.

In the event a request for information under the California Public Records Act seeks disclosure of application materials marked by me as “Confidential information,” the City may make reasonable efforts to provide notice to me prior to such disclosure to allow me to seek a protective order, injunctive relief, or other appropriate remedy. If I contend any designated application materials are exempt from the CPRA and wish to prevent disclosure, I agree that I am required, at my own, cost, liability, and expense to obtain a protective order, injunctive relief or other appropriate remedy from a court having jurisdiction over the matter at least two (2) days before City’s deadline to respond to the California Public Records Act request. I understand and acknowledge that if I fail to obtain such a remedy before the deadline for the City’s response to the request, the City will disclose the requested information and shall not be liable or responsible for such disclosure.

10. This Agreement shall constitute a separate agreement from any cannabis business permit approval, and that if the cannabis business permit, in part or in whole, is revoked, invalidated, rendered null or set aside by a court of competent jurisdiction, I agree to be bound by the terms of this Agreement, which shall survive such invalidation, nullification or setting aside.

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Packet Pg. 1305 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1306 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Agreement of Limitations of City’s Liability, and Certifications, Assurances, Warranties, and Indemnification to City 4 F-4
Agreement on Limitations of City’s Liability, and
Certifications, Assurances, Warranties, and
Indemnification to City
(Must be completed by all owners)
A. WAIVER, RELEASE AND HOLD HARMLESS
I hereby waive, release, and hold harmless the City of Healdsburg (“City”) and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to my application for a cannabis business permit, the issuance of the cannabis business permit, the process used by the City in making its decision, the enforcement of the conditions of the cannabis business permit, or the cannabis business’ operations.

I hereby waive, release and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to: (1) any repeal or amendment of any provision of the Healdsburg Municipal Code or Zoning Ordinance relating to commercial cannabis activity; or (2) any investigation, arrest or prosecution of me, or the cannabis business’ owners, operators, employees, clients or customers, for a violation of state or federal laws, rules or regulations relating to cannabis activities.

B. AGREEMENT TO INDEMNIFY
I shall defend, indemnify, and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from and against any and all actual and alleged liabilities, demands, claims, losses, damages, injuries, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and attorney’s fees), which arise out of, or which are in any way related to i) the requested cannabis business permit and any land use entitlement related thereto, ii) the proceedings undertaken in connection with the approval, denial, or appeal of the requested cannabis business permit and any land use entitlement related thereto, iii) any subsequent approvals or licensing/permits relating to the requested cannabis business permit and any land use entitlement related thereto, iv) the processing of the requested cannabis business permit and any land use entitlement related thereto, v) any amendments to the approvals for the requested cannabis business permit and any land use entitlement related thereto, vi) the City’s approval, consideration, analysis, review, issuance, denial or appeal of the cannabis business permit; vii) the City’s approval, consideration, analysis, review, issuance, denial or appeal of any land use entitlement related thereto, viii) the City’s drafting, adoption and passage of an ordinance, and related resolutions, policies, rules and regulations, allowing for cannabis businesses, ix) the City’s drafting, adoption and passage of an ordinance, and related resolutions if necessary in the future regarding any zoning law amendment(s) related to my cannabis business, x) the operation of my cannabis business or activity, xi) the process used by the City in making its decision to approve, consider, analyze, review, issue, or deny, my cannabis business permit or any related land use entitlement, or the appeal of either, xii) City’s compliance or failure to comply with applicable laws and regulations or xiii) the alleged violation of any federal, state or local

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Packet Pg. 1307 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Agreement of Limitations of City’s Liability, and Certifications, Assurances, Warranties, and Indemnification to City 5 F-5
laws by my cannabis business or any of its officers, employees or agents, except where such liability is caused by the sole negligence or willful misconduct of the City.

City may (but is not obligated to) defend such challenge as City, in its sole discretion, determines appropriate, all at applicant’s sole cost and expense. I shall bear any and all losses, damages, injuries, liabilities, costs, and expenses (including, without limitation, staff time and in-house attorney's fees on a fully-loaded basis, attorney’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any challenge (“Costs”), whether incurred by me, City, or awarded to any third party, and shall pay to the City upon demand any Costs incurred by the City.

C. OBLIGATIONS INDEPENDENT OF AWARD OF PERMIT, LICENSE, OR ENTITLEMENTS My obligations under this Agreement shall apply regardless of whether a cannabis business permit or any related permits or entitlements are issued.

D. OBLIGATIONS SURVIVE EXPIRATION OF PERMIT, LICENSE, OR ENTITLEMENTS My obligations under this Agreement shall survive the expiration of any cannabis business permit or related permit or entitlement issued by the City. No modification of the permit, other approval, change in applicable laws and regulations, or change in processing methods shall alter the applicant’s indemnity obligation.

E. PROSECUTION UNDER FEDERAL LAW
I understand that I, other applicants, owners, operators, employees, and members of the cannabis business may be subject to prosecution under Federal Laws.

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Packet Pg. 1308 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1309 Attachment: Sonoma CHO - Flora Terra Application (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

TABLE OF CONTENTS
Introduction…………………………………………………………………......1
Section A: Business Plan………………………………………….................2 Section B: Labor and Employment Plan ...………....................................27 Section C: Security Plan …………………...............................…………...34 Section D: Qualification of Owners ……….........…………………………..47 Section E: Neighborhood Compatibility Plan ….…………………………..51 Section F: Community Benefits and Equity Plan ……........………………58 Section G: Proposed Site Plan …………………................................…...63

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Packet Pg. 1310 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) David and Alicia Wingard
Flora Terra
1825 Empire Inustrial Court
Santa Rosa, CA 95403
July 28, 2023
Dear City of Healdsburg,
We are thrilled to introduce Flora Terra Dispensary and our ambitious plan to build a community-centric cannabis destination in Healdsburg.

At Flora Terra, we are passionate about cultivating an environment that goes beyond providing cannabis products; we strive to create a unique and enriching experience for our customers. We believe that the community we serve deserves more than just a traditional dispensary. Our vision is to establish a boutique-like cannabis dispensary that focuses on education, well-being, and engagement within the Healdsburg community.

As you may know, Flora Terra already operates successfully in Sonoma County, and we are eager to expand our presence to Healdsburg. Walkable from the Healdsburg Square, just a 3 minute drive from local authorities, we believe that the proposed site at 498 Moore Lane offers a prime location, nestled within an industrial park that houses a diverse range of businesses.

We have carefully planned the site layout to ensure strict compliance, security, and a welcoming atmosphere for all visitors.

One of our primary objectives is to promote education not only amongst our staff but also within the community.

We host community education events at our Santa Rosa location, and we are excited to offer similar opportunities in Healdsburg. These engaging events, led by experts in the field, cover a wide range of cannabisrelated topics, from consumption types and minor cannabinoids to even hands-on workshops on growing cannabis. By fostering an informed community, we hope to destigmatize cannabis, promote responsible use, and empower individuals with knowledge.

Our commitment to cost-effectiveness is exemplified through the expertise of our Owner, David Wingard, who serves as the project manager. With over 20 years of experience as a licensed contractor, David's leadership enables us to complete projects at a fraction of the typical cost. This financial efficiency allows us to focus our resources on our staff's betterment, enriching our company, and delivering savings to our customers through competitive sales programs and meaningful community engagement events.

Flora Terra is more than just a dispensary; it is a dedicated partner in Healdsburg's growth and well-being. We envision building lasting relationships within the community and are eager to collaborate with local businesses, organizations, and authorities to ensure a positive impact on the region.

As we progress through this application process, we look forward to receive valuable insights and support from the City of Healdsburg. We would be honored to discuss our project further in the next phase and explore potential partnerships for the benefit of the community.

Thank you for taking the time to read this introduction letter. We look forward to the opportunity to connect and share our vision for Flora Terra with you in more detail.

Warm regards,
David and Alicia Wingard

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Packet Pg. 1311 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section A
Business Plan

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Packet Pg. 1312 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section A: Business Plan

1. Flora Terra Finances
A. Proof of Capitalization: Flora Terra plans to utilize resources from its existing bank account and has secured a loan from one of its business investors to finance the construction and startup of the proposed location. As evidence of our capitalization, we have submitted a separate document for your reference titled File #4: Proof of Capitalization.

B. Pro Forma: Enclosed is a Pro Forma containing a comprehensive breakdown of 5 years' worth of operating expenses. The document details various aspects, including construction expenses, operational costs, maintenance, wages for employees and contractors, equipment purchases, security installations, anticipated start-up expenses, and a contingency provision.

As highlighted in the Pro Forma, Flora Terra aims to achieve cost-effectiveness by leveraging the expertise of Owner David Wingard, who also serves as the project manager.

With over 20 years of experience in the trades, 14 years as a licensed contractor, David's project management skills and industry connections allow the company to complete projects at a fraction of the typical cost compared to other firms. By minimizing build-out expenses, we can allocate our financial resources towards enhancing our staff, improving our company, and passing along the savings to our customers through compelling sales programs and engaging community events.

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Packet Pg. 1313 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Commercial Construction Project Budget
Project Name Flora Terra Healdsburg
Date Prepared 7.1.2023
Expenses
Budget Item Cost Notes
Architect Fees($ 10,000.00 )
Building Permits($ 15,000.00 )
Health Permit ($ 5,528.00 )
Landscaping/irrigation($ 5,000.00 )
Demolition $5,000.00
Rough Plumbing $2,500.00
Framing $6,000.00
Electrical $20,000.00
HVAC $15,000.00
Drywall $12,350.00
Doors $5,000.00
Lighting Fixtures $1,500.00
Cabinets $42,000.00
Floor Polish $14,000.00
Interior Paint $7,500.00
Signage $4,500.00
CCTV $15,000.00
Alarm Install $6,000.00
Access Readers $3,000.00
Security Shutters $7,000.00
Professional Fees & Permitting ($ 30,528.00)
Consruction Subtotal($ 171,350.00)
Construction Contingency ($ 17,135.00 )
Total($ 219,013.00)

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Packet Pg. 1314 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) General Assumptions Investors
Company Name Flora Terra Name Value
Projection Start Month 11/1/23 Flora Terra 150,000 $ 0
Loan 500,000 $ 0
Accounts Receivable Terms
% of sales paid upon delivery 100%
% of sales on net 30 payment 0%
Accounts Payable Terms Inventory
% of operating expenses paid in month incurred 60% Beginning Inventory Balance 28,000 $ % of operating expenses paid on 1 month delay 40% Average inventory carried as a % of sales 25% Fixed Assets
Name Category
Leasehold Improvements Building & Improvements 220,000 $ 15 30,000 $ 1 Furniture and Fixtures Furniture and Fixtures 20,000 $ 20 5,000 $ 3 Safe Equipment 10,000 $ 10 8,000 $ 3
Signage Other Fixed Assets 2,500 $ 10 - $ 3
Computers and tech Equipment 5,000 $ 2 1,000 $
Loans
Name Interest Rate
Number of Monthly Payments
(Remaining)
JB Loan 500,000 $ 13 8.00% 60
How Much Cash Is Required
Working Capital Needed 137,000 Funds to cover operating losses & loan payments until positive cash flow is achieved Months until Positive Cash Flow 5 Number of months the working capital will cover Cash needed for Fixed Assets 252,500 $
Reccomended Buffer 40,000 $ 10% buffer to account for unforseen circumstances and overages Total Cash Needed 429,500 $ Cash needed to start business and reach positive cash flow - can come from investments, loans, or both Cash from Investments (Above) 650,000 $
Cash from Loans (Above) - $
Total Starting Cash in Model 650,000 $ Check: Starting Cash is Sufficient Month of Operation
Invested
Original Amount
(Or Outstanding Amount as of Month
1)
First Payment Month
(use 1 for Existing
Loans)
Life Expectancy in Years Salvage Cost Value
Purchased during which
month of operation?

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Packet Pg. 1315
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) 2024 2025 2026 2027 2028
Revenue $ 3,332,694 100% $ 8,297,869 100% $ 9,552,886 100% $ 11,964,223 100% $ 16,086,489 100% Cost of Goods Sold $ 1,410,653 42% $ 3,455,728 42% $ 3,901,609 41% $ 4,789,278 40% $ 6,314,645 39% Gross Profit $ 1,922,041 58% $ 4,842,141 58% $ 5,651,277 59% $ 7,174,945 60% $ 9,771,844 61% Operating Expenses $ 550,611 17% $ 914,043 11% $ 1,077,017 11% $ 1,151,638 10% $ 1,193,842 7% Net Income $ 987,021 30% $ 2,959,669 36% $ 3,444,005 36% $ 4,588,318 38% $ 6,623,633 41% EBITDA $ 1,387,096 42% $ 3,980,902 48% $ 4,618,034 48% $ 6,059,465 51% $ 8,605,913 53% EBITDA is earnings before interest, tax, depreciation, and amortization. 1 2 3 4 5 12 24 36 48 60 2024 2025 2026 2027 2028
New Customers 14,724 17,439 18,605 19,970 21,581
Total Marketing Spend $ 15,000 $ 26,474 $ 31,652 $ 37,844 $ 45,247 Customer Acquisition Cost $ 1.02 $ 1.52 $ 1.70 $ 1.90 $ 2.10 Annual Customer Visits 50,402 120,500 132,120 157,355 201,460 Average Spend per Customer Visit $ 66.12 $ 68.86 $ 72.30 $ 76.03 $ 79.85 Average COGS per Customer Visit $ 27.99 $ 28.68 $ 29.53 $ 30.44 $ 31.34 Gross Margin % 58% 58% 59% 60% 61%
Total 0s Sold - - - - -
Total Other Products Sold - Units 131,046 313,300 343,512 409,124 523,795 Average Regular Customers 1,016 3,962 6,364 8,567 10,707 Customer Visits per Day 138 330 362 431 552
Total Employees 10.00 14.00 19.00 19.00 19.00
Annual Revenue per Employee $ 333,269 $ 592,705 $ 502,783 $ 629,696 $ 846,657 Total Funds Required: $ 429,500
Total Funds Raised: $ 650,000
Total Months Until
Positive Cash Flow: 5
Use of Initial Funds:

Cost of Goods Sold $ 135,000
Marketing $ 600
General and Administrative $ 106,934
Building Expenses $ 10,855
Salaries $ 13,432
Interest & Taxes $ -
Loan Principal $ -
Building & Improvements $ 220,000
Equipment $ 15,000
Furniture and Fixtures $ 20,000
Other Fixed Assets $ 2,500
Total $ 524,321
Profit and Loss at a Glance
Summary Data
Cost of Goods Sold
26%
Marketing
0%
General and Administrative
20%
Building
Expenses
2%
Salaries
3%
Interest & Taxes
0%
Loan Principal
0%
Building & Improvements
42%
Equipment
3%
Furniture
and
Fixtures
4% Other Fixed Assets
0%
Use of Start-Up Funds

3.1.an
Packet Pg. 1316 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) 2024 2025 2026 2027 2028
Sales Growth N/A 149% 15% 25% 34%
Gross Profit Margin 58% 58% 59% 60% 61% (Revenue - Cost of Goods Sold - Direct Labor) / Revenue. Shows what % of revenue remains after direct costs are paid.

Return on Capital 45% 58% 41% 35% 34% Net income / (Debt + Equity). Shows how efficiently your company is using it's capital.

Profit Margin 30% 36% 36% 38% 41% Net Income / Revenue. Shows what % of revenue remains after all expenses are paid.

Key Ratios
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
2024 2025 2026 2027 2028
$
Annual Sales, Gross Margin, Net Profit
Total Sales Gross Margin Pre-Tax Income
$-
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 Month
Monthly Sales Forecast
Sales Revenue
$(5,000,000)
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 Cash Generated from Operating Activities (Breakeven)
Month Initial Loan Initial Investment Cumulative Cash From Operations

3.1.an
Packet Pg. 1317 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the
Month 1 2 3 4 5 6 7 8 9 10 11 12 Year Ended
For the Month Ended 11/30/23 12/31/23 1/31/24 2/29/24 3/31/24 4/30/24 5/31/24 6/30/24 7/31/24 8/31/24 9/30/24 10/31/24 10/31/24 Sales
Sales Revenue - - - - 168,841 195,628 405,983 463,566 274,169 563,576 639,162 621,768 3,332,694 Total Sales - $ - $ - $ - $ 168,841 $ 195,628 $ 405,983 $ 463,566 $ 274,169 $ 563,576 $ 639,162 $ 621,768 $ 3,332,694 $ Cost of Goods Sold
Cost of Goods Sold - - - - 71,985 83,267 172,515 196,656 116,116 238,290 269,801 262,023 1,410,653 Operating Expenses
Advertising - - - - 1,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 15,000 - - - - - - - - - - - - - -
POS Services Monthly Fee - - - 3,000 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 15,000 Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent - - - - 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 56,000 Supplies - - - 500 500 500 500 500 500 500 500 500 4,500 Misc - - - 100 100 100 100 100 100 100 100 100 900
Utilities - - - 500 500 500 500 500 500 500 500 500 4,500 Internet and Phone 250 250 250 250 250 250 250 250 250 250 250 250 3,000 Dues and Subscriptions - - - 200 200 200 200 200 200 200 200 200 1,800 Repairs and Maintenance - - - - 175 175 175 175 175 175 175 175 1,400 Legal & Professional Fees 5,000 - - - - - - - - - - - 5,000 Salaries - - - 6,373 11,765 31,289 31,289 31,289 31,289 31,289 34,647 34,647 243,877 - - - - - - - - - - - - - -
Depreciation and Amortization 1,222 1,222 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 15,667 Total Operating Expenses 67,636 $ 12,636 $ 12,736 $ 23,409 $ 35,476 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 59,359 $ 59,359 $ 550,611 $ Pre-Tax Income (67,636) $ (12,636) $ (12,736) $ (23,409) $ 61,380 $ 56,362 $ 177,469 $ 210,909 $ 102,052 $ 269,286 $ 310,002 $ 300,386 $ 1,371,430 $ Income Tax Expense - - - - 48,051 48,051 48,051 48,051 48,051 48,051 48,051 48,051 274,286 Net Income (67,636) $ (12,636) $ (12,736) $ (23,409) $ 13,329 $ 8,311 $ 129,418 $ 162,858 $ 54,001 $ 221,235 $ 261,951 $ 252,335 $ 987,021 $ Flora Terra
Pro Forma Income Statement
Year 1

3.1.an
Packet Pg. 1318
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the
Month 13 14 15 16 17 18 19 20 21 22 23 24 Year Ended
For the Month Ended 11/30/24 12/31/24 1/31/25 2/28/25 3/31/25 4/30/25 5/31/25 6/30/25 7/31/25 8/31/25 9/30/25 10/31/25 10/31/25 Sales
Sales Revenue 604,218 606,736 473,872 489,442 559,743 658,039 688,313 760,299 832,873 871,191 909,814 843,328 8,297,869 Total Sales 604,218 $ 606,736 $ 473,872 $ 489,442 $ 559,743 $ 658,039 $ 688,313 $ 760,299 $ 832,873 $ 871,191 $ 909,814 $ 843,328 $ 8,297,869 $ Cost of Goods Sold
Cost of Goods Sold 254,205 254,840 198,705 204,893 233,933 274,558 286,713 316,173 345,778 361,086 376,468 348,378 3,455,728 Total Cost of Goods Sold 254,205 $ 254,840 $ 198,705 $ 204,893 $ 233,933 $ 274,558 $ 286,713 $ 316,173 $ 345,778 $ 361,086 $ 376,468 $ 348,378 $ 3,455,728 $ Gross Margin 350,014 351,896 275,167 284,549 325,809 383,481 401,600 444,127 487,096 510,106 533,346 494,950 4,842,141 Percent 57.93% 58.00% 58.07% 58.14% 58.21% 58.28% 58.35% 58.41% 58.48% 58.55% 58.62% 58.69% 58.35% Operating Expenses
Advertising 2,030 2,060 2,091 2,123 2,155 2,187 2,220 2,253 2,287 2,321 2,356 2,391 26,474 0 - - - - - - - - - - - - -
POS Services Monthly Fee 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,000 Supplies 515 515 515 515 515 515 515 515 515 515 515 515 6,180 Misc 103 103 103 103 103 103 103 103 103 103 103 103 1,236 Utilities 515 515 515 515 515 515 515 515 515 515 515 515 6,180 Internet and Phone 258 258 258 258 258 258 258 258 258 258 258 258 3,090 Dues and Subscriptions 206 206 206 206 206 206 206 206 206 206 206 206 2,472 Repairs and Maintenance 180 180 180 180 180 180 180 180 180 180 180 180 2,163 0 - - - - - - - - - - - - -
Salaries 46,830 46,830 46,830 47,149 47,418 48,394 48,394 48,394 48,394 48,394 48,394 48,394 573,817 Loan Interest Expense 3,333 3,288 3,242 3,196 3,150 3,103 3,057 3,009 2,962 2,914 2,866 2,817 36,938 Depreciation and Amortization 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 1,322 15,867 Total Operating Expenses 75,261 $ 75,246 $ 75,231 $ 75,535 $ 75,791 $ 76,753 $ 76,738 $ 76,725 $ 76,711 $ 76,697 $ 76,684 $ 76,671 $ 914,043 $ Pre-Tax Income 274,753 $ 276,650 $ 199,936 $ 209,014 $ 250,019 $ 306,728 $ 324,862 $ 367,402 $ 410,385 $ 433,408 $ 456,662 $ 418,279 $ 3,928,097 $ Income Tax 80,702 80,702 80,702 80,702 80,702 80,702 80,702 80,702 80,702 80,702 80,702 80,702 785,619 Net Income 194,050 $ 195,947 $ 119,234 $ 128,311 $ 169,316 $ 226,026 $ 244,160 $ 286,700 $ 329,682 $ 352,706 $ 375,960 $ 337,577 $ 2,959,669 $ Year 2
Flora Terra
Pro Forma Income Statement

3.1.an
Packet Pg. 1319
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the
Month 25 26 27 28 29 30 31 32 33 34 35 36 Year Ended
For the Month Ended 11/30/25 12/31/25 1/31/26 2/28/26 3/31/26 4/30/26 5/31/26 6/30/26 7/31/26 8/31/26 9/30/26 10/31/26 10/31/26 Sales
Sales Revenue 776,271 694,469 640,435 657,395 660,134 744,551 868,234 908,179 919,259 937,741 859,743 886,474 9,552,886 Total Sales 776,271 $ 694,469 $ 640,435 $ 657,395 $ 660,134 $ 744,551 $ 868,234 $ 908,179 $ 919,259 $ 937,741 $ 859,743 $ 886,474 $ 9,552,886 $ Cost of Goods Sold
Cost of Goods Sold 320,145 285,933 263,248 269,771 270,445 304,523 354,520 370,215 374,110 380,998 348,728 358,974 3,901,609 Total Cost of Goods Sold 320,145 $ 285,933 $ 263,248 $ 269,771 $ 270,445 $ 304,523 $ 354,520 $ 370,215 $ 374,110 $ 380,998 $ 348,728 $ 358,974 $ 3,901,609 $ Gross Margin 456,127 408,536 377,187 387,624 389,689 440,028 513,714 537,964 545,149 556,743 511,015 527,500 5,651,277 Percent 58.76% 58.83% 58.90% 58.96% 59.03% 59.10% 59.17% 59.24% 59.30% 59.37% 59.44% 59.51% 59.16% Operating Expenses
Advertising 2,427 2,464 2,500 2,538 2,576 2,615 2,654 2,694 2,734 2,775 2,817 2,859 31,652 0 - - - - - - - - - - - - -
POS Services Monthly Fee 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,000 Supplies 530 530 530 530 530 530 530 530 530 530 530 530 6,365 Misc 106 106 106 106 106 106 106 106 106 106 106 106 1,273 Utilities 530 530 530 530 530 530 530 530 530 530 530 530 6,365 Internet and Phone 265 265 265 265 265 265 265 265 265 265 265 265 3,183 Dues and Subscriptions 212 212 212 212 212 212 212 212 212 212 212 212 2,546 Repairs and Maintenance 186 186 186 186 186 186 186 186 186 186 186 186 2,228 0 - - - - - - - - - - - - -
Salaries 59,704 59,704 59,704 60,038 60,321 61,346 61,346 61,346 61,346 61,346 65,017 65,017 736,234 Loan Interest Expense 2,769 2,719 2,670 2,620 2,570 2,520 2,469 2,418 2,366 2,314 2,262 2,210 29,907 Depreciation and Amortization 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 13,867 Total Operating Expenses 88,168 $ 88,155 $ 88,143 $ 88,465 $ 88,736 $ 89,749 $ 89,737 $ 89,726 $ 89,715 $ 89,704 $ 93,365 $ 93,354 $ 1,077,017 $ Pre-Tax Income 367,959 $ 320,381 $ 289,045 $ 299,159 $ 300,953 $ 350,279 $ 423,977 $ 448,238 $ 455,434 $ 467,039 $ 417,651 $ 434,146 $ 4,574,261 $ Income Tax 94,188 94,188 94,188 94,188 94,188 94,188 94,188 94,188 94,188 94,188 94,188 94,188 914,852 Net Income 273,771 $ 226,193 $ 194,857 $ 204,971 $ 206,765 $ 256,091 $ 329,789 $ 354,050 $ 361,246 $ 372,851 $ 323,463 $ 339,958 $ 3,444,005 $ Flora Terra
Pro Forma Income Statement
Year 3

3.1.an
Packet Pg. 1320
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the
Month 37 38 39 40 41 42 43 44 45 46 47 48 Year Ended
For the Month Ended 11/30/26 12/31/26 1/31/27 2/28/27 3/31/27 4/30/27 5/31/27 6/30/27 7/31/27 8/31/27 9/30/27 10/31/27 10/31/27 Sales
Sales Revenue 815,987 811,938 673,201 977,064 1,000,873 1,024,817 1,048,905 1,073,143 1,097,542 1,122,110 1,146,855 1,171,787 11,964,223 Total Sales 815,987 $ 811,938 $ 673,201 $ 977,064 $ 1,000,873 $ 1,024,817 $ 1,048,905 $ 1,073,143 $ 1,097,542 $ 1,122,110 $ 1,146,855 $ 1,171,787 $ 11,964,223 $ Cost of Goods Sold
Cost of Goods Sold 329,882 327,700 271,255 393,038 401,947 410,880 419,839 428,828 437,850 446,908 456,005 465,145 4,789,278 Total Cost of Goods Sold 329,882 $ 327,700 $ 271,255 $ 393,038 $ 401,947 $ 410,880 $ 419,839 $ 428,828 $ 437,850 $ 446,908 $ 456,005 $ 465,145 $ 4,789,278 $ Gross Margin 486,105 484,238 401,946 584,026 598,926 613,937 629,065 644,315 659,692 675,202 690,850 706,642 7,174,945 Percent 59.57% 59.64% 59.71% 59.77% 59.84% 59.91% 59.97% 60.04% 60.11% 60.17% 60.24% 60.30% 59.97% Operating Expenses
Advertising 2,902 2,945 2,990 3,034 3,080 3,126 3,173 3,221 3,269 3,318 3,368 3,418 37,844 0 - - - - - - - - - - - - -
POS Services Monthly Fee 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,000 Supplies 546 546 546 546 546 546 546 546 546 546 546 546 6,556 Misc 109 109 109 109 109 109 109 109 109 109 109 109 1,311 Utilities 546 546 546 546 546 546 546 546 546 546 546 546 6,556 Internet and Phone 273 273 273 273 273 273 273 273 273 273 273 273 3,278 Dues and Subscriptions 219 219 219 219 219 219 219 219 219 219 219 219 2,623 Repairs and Maintenance 191 191 191 191 191 191 191 191 191 191 191 191 2,295 0 - - - - - - - - - - - - -
Salaries 66,192 66,192 66,192 66,543 66,840 67,916 67,916 67,916 67,916 67,916 68,100 68,100 807,739 Loan Interest Expense 2,157 2,104 2,050 1,996 1,942 1,887 1,832 1,777 1,721 1,665 1,609 1,552 22,291 Depreciation and Amortization 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 13,867 Total Operating Expenses 94,897 $ 94,888 $ 94,878 $ 95,220 $ 95,509 $ 96,577 $ 96,569 $ 96,561 $ 96,553 $ 96,546 $ 96,723 $ 96,717 $ 1,151,638 $ Pre-Tax Income 391,208 $ 389,350 $ 307,068 $ 488,806 $ 503,417 $ 517,361 $ 532,497 $ 547,754 $ 563,139 $ 578,656 $ 594,127 $ 609,925 $ 6,023,307 $ Income Tax 119,582 119,582 119,582 119,582 119,582 119,582 119,582 119,582 119,582 119,582 119,582 119,582 1,204,661 Net Income 271,625 $ 269,768 $ 187,486 $ 369,223 $ 383,835 $ 397,778 $ 412,914 $ 428,172 $ 443,556 $ 459,073 $ 474,545 $ 490,343 $ 4,588,318 $ Flora Terra
Pro Forma Income Statement
Year 4

3.1.an
Packet Pg. 1321
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the
Month 49 50 51 52 53 54 55 56 57 58 59 60 Year Ended
For the Month Ended 11/30/27 12/31/27 1/31/28 2/29/28 3/31/28 4/30/28 5/31/28 6/30/28 7/31/28 8/31/28 9/30/28 10/31/28 10/31/28 Sales
Sales Revenue 1,196,914 1,222,246 1,247,791 1,273,559 1,299,559 1,325,800 1,352,293 1,379,046 1,406,070 1,433,375 1,460,970 1,488,867 16,086,489 Total Sales 1,196,914 $ 1,222,246 $ 1,247,791 $ 1,273,559 $ 1,299,559 $ 1,325,800 $ 1,352,293 $ 1,379,046 $ 1,406,070 $ 1,433,375 $ 1,460,970 $ 1,488,867 $ 16,086,489 $ Cost of Goods Sold
Cost of Goods Sold 474,331 483,566 492,853 502,196 511,598 521,062 530,592 540,191 549,862 559,610 569,437 579,347 6,314,645 Total Cost of Goods Sold 474,331 $ 483,566 $ 492,853 $ 502,196 $ 511,598 $ 521,062 $ 530,592 $ 540,191 $ 549,862 $ 559,610 $ 569,437 $ 579,347 $ 6,314,645 $ Gross Margin 722,583 738,680 754,938 771,363 787,961 804,738 821,701 838,855 856,208 873,765 891,533 909,520 9,771,844 Percent 60.37% 60.44% 60.50% 60.57% 60.63% 60.70% 60.76% 60.83% 60.89% 60.96% 61.02% 61.09% 60.75% Operating Expenses
Advertising 3,470 3,522 3,574 3,628 3,682 3,738 3,794 3,851 3,908 3,967 4,027 4,087 45,247 0 - - - - - - - - - - - - -
POS Services Monthly Fee 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 18,000 Insurance 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 84,000 Supplies 563 563 563 563 563 563 563 563 563 563 563 563 6,753 Misc 113 113 113 113 113 113 113 113 113 113 113 113 1,351 Utilities 563 563 563 563 563 563 563 563 563 563 563 563 6,753 Internet and Phone 281 281 281 281 281 281 281 281 281 281 281 281 3,377 Dues and Subscriptions 225 225 225 225 225 225 225 225 225 225 225 225 2,701 Repairs and Maintenance 197 197 197 197 197 197 197 197 197 197 197 197 2,364 0 - - - - - - - - - - - - -
Salaries 69,333 69,333 69,333 69,702 70,014 71,144 71,144 71,144 71,144 71,144 71,337 71,337 846,110 Loan Interest Expense 1,494 1,437 1,379 1,320 1,262 1,202 1,143 1,083 1,023 962 901 839 14,044 Depreciation and Amortization 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 1,156 13,867 Total Operating Expenses 98,334 $ 98,328 $ 98,323 $ 98,687 $ 98,995 $ 100,121 $ 100,118 $ 100,114 $ 100,112 $ 100,110 $ 100,301 $ 100,300 $ 1,193,842 $ Pre-Tax Income 624,249 $ 640,352 $ 656,615 $ 672,676 $ 688,966 $ 704,617 $ 721,583 $ 738,741 $ 756,096 $ 773,655 $ 791,233 $ 809,220 $ 8,578,002 $ Income Tax 162,864 162,864 162,864 162,864 162,864 162,864 162,864 162,864 162,864 162,864 162,864 162,864 1,715,600 Net Income 461,385 $ 477,488 $ 493,751 $ 509,812 $ 526,102 $ 541,753 $ 558,719 $ 575,877 $ 593,232 $ 610,791 $ 628,368 $ 646,356 $ 6,623,633 $ Flora Terra
Pro Forma Income Statement
Year 5

3.1.an
Packet Pg. 1322
Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the Year Ended October 31, 2024 2025 2026 2027 2028 Cash at Beginning of Period $ - $ 1,903,438 $ 4,833,830 $ 8,220,176 $ 12,749,733 Cash Receipts from Operating Activities
Cash From Sales 3,332,694 8,297,869 9,552,886 11,964,223 16,086,489 Cash Payments for Operating Activities
Cash paid for Inventory (1,473,669) (3,455,728) (3,901,609) (4,789,278) (6,314,645) Cash paid for Advertising (14,200) (26,317) (31,465) (37,620) (44,980) 0 - - - - -
Cash paid for POS Services Monthly Fee (14,400) (18,000) (18,000) (18,000) (18,000) Cash paid for Insurance (11,600) (12,000) (12,000) (12,000) (12,000) Cash paid for Rent (53,200) (84,000) (84,000) (84,000) (84,000) Cash paid for Supplies (4,300) (6,174) (6,359) (6,550) (6,746) Cash paid for Misc (860) (1,235) (1,272) (1,310) (1,349) Cash paid for Utilities (4,300) (6,174) (6,359) (6,550) (6,746) Cash paid for Internet and Phone (2,900) (3,087) (3,180) (3,275) (3,373) Cash paid for Dues and Subscriptions (1,720) (2,470) (2,544) (2,620) (2,699) Cash paid for Repairs and Maintenance (1,330) (2,161) (2,226) (2,292) (2,361) Cash paid for Legal & Professional Fees (5,000) - - - - Cash paid for Salaries (230,018) (568,318) (729,585) (806,506) (844,816) Cash paid for Loan Interest Expense - (35,811) (30,150) (22,554) (14,329) Cash paid for Income Tax (336,357) (935,777) (1,116,770) (1,409,595) (1,911,087) Net Cash from Operating Activities $ 1,010,938 $ 3,015,112 $ 3,478,098 $ 4,628,924 $ 6,682,215 Cash from Financing and Investing
Cash from New Loans 500,000 - - - -
Cash from New Investments 650,000 - - - -
Cash paid on Loan Principal - (84,720) (91,752) (99,367) (107,615) Cash paid for Fixed Assets (257,500) - - - -
Net Cash from Financing and Investing $ 892,500 $ (84,720) $ (91,752) $ (99,367) $ (107,615) Cash Before Owner Draw 1,903,438 4,833,830 8,220,176 12,749,733 19,324,333 Cash paid for Owner Draw - - - - -
Net Cash Inflow (Outflow) $ 1,903,438 $ 2,930,392 $ 3,386,346 $ 4,529,557 $ 6,574,600 Cash at End of Period $ 1,903,438 $ 4,833,830 $ 8,220,176 $ 12,749,733 $ 19,324,333 Flora Terra Statement of Cash Flows

3.1.an
Packet Pg. 1323 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) For the Year Ended October 31, 2024 2025 2026 2027 2028 Sales
Sales Revenue 3,332,694 8,297,869 9,552,886 11,964,223 16,086,489 Total Sales $ 3,332,694 $ 8,297,869 $ 9,552,886 $ 11,964,223 $ 16,086,489 Cost of Goods Sold
Cost of Goods Sold 1,410,653 3,455,728 3,901,609 4,789,278 6,314,645 Total Cost of Goods Sold $ 1,410,653 $ 3,455,728 $ 3,901,609 $ 4,789,278 $ 6,314,645 Gross Margin $ 1,922,041 $ 4,842,141 $ 5,651,277 $ 7,174,945 $ 9,771,844 Percent 58% 58% 59% 60% 61%
Operating Expenses
Advertising 15,000 26,474 31,652 37,844 45,247
0 - - - - -
POS Services Monthly Fee 15,000 18,000 18,000 18,000 18,000 Insurance 12,000 12,000 12,000 12,000 12,000
Rent 56,000 84,000 84,000 84,000 84,000
Supplies 4,500 6,180 6,365 6,556 6,753
Misc 900 1,236 1,273 1,311 1,351
Utilities 4,500 6,180 6,365 6,556 6,753
Internet and Phone 3,000 3,090 3,183 3,278 3,377
Dues and Subscriptions 1,800 2,472 2,546 2,623 2,701
Repairs and Maintenance 1,400 2,163 2,228 2,295 2,364
Legal & Professional Fees 5,000 - - - -
Salaries 243,877 573,817 736,234 807,739 846,110
Loan Interest Expense - 36,938 29,907 22,291 14,044
Depreciation and Amortization 15,667 15,867 13,867 13,867 13,867 Total Operating Expenses $ 550,611 $ 914,043 $ 1,077,017 $ 1,151,638 $ 1,193,842 Pre-Tax Income $ 1,371,430 $ 3,928,097 $ 4,574,261 $ 6,023,307 $ 8,578,002 Income Tax 384,408 968,428 1,130,255 1,434,989 1,954,369 Net Income $ 987,021 $ 2,959,669 $ 3,444,005 $ 4,588,318 $ 6,623,633 EBITDA $ 1,387,096 $ 3,980,902 $ 4,618,034 $ 6,059,465 $ 8,605,913 (Earnings Before Interest, Taxes, Depreciation, and Amortization) Flora Terra Income Statement

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Packet Pg. 1324 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) C. A schedule for beginning operation, including a narrative outlining any proposed construction and improvements and a timeline for completion.

The proposed location at 498 Moore Lane presents an attractive commercial building with a charming stone facade, complemented by lush green trees and a landscape area with much potential. The envisioned project involves exterior modifications that are primarily focused on updated signage, security enhancements, landscape updates, and the installation of 2 DC Level 3 EV Chargers.

Inside the building, the plan is to undertake a comprehensive transformation through the demolition of existing infrastructure, followed by the implementation of the proposed floor plan.

This interior overhaul will encompass framing, electrical work, HVAC installation, drywall, painting, plumbing, lighting, and the setup of cabinetry and retail fixtures, and polishing the existing concrete floors.

Flora Terra is no stranger to opening new locations, as they have successfully launched their 2nd location in January 2023 and their 3rd location in Apri 2023. Owner David Wingard takes on the role of project manager during the construction phase, leveraging his expertise and in-depth knowledge of the trades to ensure timely and budget-conscious completion of the projects. With the recent completion of two locations, David is well aware of the associated expenses with the build-out and has assembled a reliable team of licensed contractors for the proposed location.

The experience and track record of Flora Terra, coupled with the competent project management of David Wingard, instill confidence in the success of this endeavor. We are eager to see this project come to fruition and contribute positively to the community.

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Packet Pg. 1325 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Days 1-8 Days 9-30 Days 31-38 Days 39-52 Days 53-59 Day 50 Construction Timeline
Receive
Permits
Drywall
Framing Drywall
Inspection
Trim
Plumbing,
Electrical & Paint HVAC
Polish
Floor
Cabinet
Install
Finishing Touches
Final
Inspection Rough In Plumbing & Electrical
Underground
Installation
Rough In Plumbing &
Electrical
HVAC
Plumbing, Electrical
HVAC Rough Inspection
Rough In
Plumbing &
Electrical
Underground Demo Inspection
Project Completion Timeline
Submit Building Permits
Building Permit
Issued
Building Permit
Review
Period Construction
Build-Out
Final
Inspection &
Occupancy
Health Permit
Inspections &
Permit Issuance
Finalize
State
Licensing
Staff
Onboarding & Training
Receive All
Inventory
Soft
Opening
Merchandising Store
Submit Health
Permit
Application &
State
Licensing
Days
1-30
Day
31 Days
32-93
Days
94-96
Days
97-111
Days
112-126
Day
127
Phase
1 Phase
2 Phase
3 Phase
4 Phase
5 Phase
6

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Packet Pg. 1326 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) D. Access to Banking
Flora Terra has an active membership in good standing at Salal Credit Union since 2019 with access banking, bill pay, and cash logistics.

2. Daily Operations
Flora Terra obtained its licensing from the Department of Cannabis Control (DCC) as a Microbusiness with Retail, Distribution, and Cultivation activities in July 2019. As of 2022, the company has also expanded their footprint adding two C10 Retail Licenses. Flora Terra ensures that its retail daily operations strictly adhere to DCC regulations and comply with all relevant local and state laws. The proposed site at 498 Moore Lane in Healdsburg will operate in alignment with the existing practices of the C10 licenses in Santa Rosa operating between the hours of 9am and 9pm as permitted by the City of Helaldsburg. The following are key aspects of daily operations:

A. Customer check-in procedures
Flora Terra strictly adheres to age and identification requirements for Adult Use and Medical Cannabis Businesses. Only individuals who are 21 years of age or older, possessing a valid government-issued photo identification card, or individuals who are 18 years of age or older, possessing both a valid government-issued photo identification card and a valid medical recommendation are permitted to make purchases. Age verification takes place prior to being invited onto the sales floor.

To ensure compliance, Flora Terra employs various methods to verify the authenticity of identification cards. Trained personnel visually inspect all government-issued identification cards. Additionally, the company utilizes tools such as scanning into Meadow POS, UV lights, or referring to the 2023 ID Verification Guide to validate identification. Meadow POS can also be used to verify the validity of a medical recommendation, the CDPH website can be used to verify MMIC patients.

Upon successful verification by a trained employee, patrons are granted entry to the retail space for shopping. However, if a patron's identification or medical recommendation cannot be verified, they will be respectfully escorted from the premises to maintain compliance with regulations.

B. Location(s) and procedures for receiving deliveries during business hours.

Flora Terra will utilize their distribution license to deliver all cannabis products to the proposed site at 498 Moore Lane. Deliveries will take place inside the receiving room as outlined on the premise diagram. Through a roll up door adjacent to the front door, the driver will pull in to unload their shipment then vacate the receiving area. Delivery procedures, regardless of if they are internal or external, folllow the same standard operating procedure outlined below:

Delivery Schedule and Notification
• Establish a delivery schedule and communicate it to suppliers. • Incoming deliveries will be scheduled on a shared Google Calendar called “Flora Terra Retail Deliveries”

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Packet Pg. 1328 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Receiving Area Preparation
• Ensure the receiving area is clean, organized, and free of any potential contaminants at the start of each day.
• Verify that all necessary tools and equipment are available, such as box cutters, barcode scanners, inventory tracking software/laptop, and appropriate writing tools including a ballpoint pen and sharpie.

Driver Verification
• Meet the driver at the designated receiving area.
• Request the driver's identification and compare it with the delivery manifest. • Ensure the driver's identification matches the authorized personnel listed on the manifest.

Visually inspect the driver's employee identification badge for identity confirmation. • Have driver sign in on the visitor log including legible name, company, date and time. They must also sign out upon exiting the building.

Packaging Inspection
• Examine the packaging for any signs of tampering, damage, or leaks. • Note any discrepancies or irregularities on the delivery manifest and report them to the appropriate personnel.
• Deny shipment of any tampered, damaged, or leaking products.

Quantity and Item Verification
• Cross-check the delivered items with the information on the delivery manifest. • Verify the quantity, strain, product type, and any additional details specified in the manifest.

Compliance Check
• Verify that all cannabis products meet regulatory requirements, including labeling, packaging, and safety standards. See CDPH packaging and labeling guidelines. • Check for appropriate labeling of THC and CBD content, batch numbers, expiration dates, and warnings.
• Ensure childproof packaging is intact and functional for applicable products. • Deny shipment of any products that do not meet regulatory requirements or do not meet the labeling requirements.

Metrc Manifest Verification
• Compare the items received with the corresponding Metrc manifest. • Confirm that each package tag UID matches the manifest. • Note any discrepancies or missing items and report them to the appropriate personnel. • Upon completion of product verification sign the manifest accepting or rejecting the the shipment on the final page of the manifest.
• Ensure the driver signs the fist page of the manifest including date and time.

Metrc Tagging and Documentation
• Secure the blue Metrc tags to each corresponding package, ensuring proper attachment and visibility.
• If multiple packages are associated with one Metrc tag:
o Tear the bottom half of the tag off and attach it to the secondary packaging. o Label each corresponding box with the complete Metrc UID if more than two boxes are associated with the tag.

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Packet Pg. 1329 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Storage
• Place the entire cannabis inventory order in the designated storage area for incoming shipments.
• Ensure that the storage area is secure, climate-controlled, and compliant with state and local regulations.

Documentation
• Place entire delivery packet including invoice, metrc maifest, and any other documents provided in the hanging file labeled “incoming orders”. • Once the order is entered into the POS system, file the delivery manifest, invoices, and any related documents in a designated folder in the wall mounted document holder inside the vault.
• Maintain accurate and up-to-date records of all inventory transactions, including receiving dates, quantities, and supplier information.

C. The Point-of-Sale system to be used and how it will interact with the state’s mandated track and trace system. Identify the number of Point-of-Sales terminals to be used when the business is at full capacity.

The company plans to utilize Meadow, an integrated set of tools that offers a comprehensive solution for cannabis dispensary sales, inventory management, and compliance. Meadow has been in operation since 2014 and was among the pioneering systems to establish a complete API connection with Metrc. To ensure uninterrupted access to Metrc and timely reporting of daily sales, Meadow employs a dedicated team of engineers who work around the clock. Over the years, the company has experimented with various point of sale systems, noting operational inefficiencies that may lead to non-compliance. However, with Meadow's vigilant account monitoring and a team of personnel, operators can be confident that the system will function smoothly and maintain its expected interface with Metrc.

Four point of sale terminals will be used when the business is functioning at full capacity.

D. The number of customers to be served per hour/day.

Flora Terra can expect to serve over 200 customers per day with an average of 18-25 customers per hour during off peak tourism months, and over 300 customers today during peak tourism months averaging a minimum of 25 customers per hour.

E How cannabis and cannabis products will be tracked and monitored to prevent Diversion.

Flora Terra has identified that inventory diversion can happen in a variety of ways that may include, internal theft, external theft, and clerical errors.

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Packet Pg. 1330 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Standard operating procedures are followed to ensure the company has received the right amount of product that is indicated on a shipping manifest, if the incoming units are not correct this must be adjusted prior to receiving the shipment. The procedures followed during the intake process eliminates any clerical or packing errors. After a trained staff member intakes a product delivery, products are then securely stored while the management team enters the products into the POS system from the state track and trace system.

Flora Terra uses a variety of methods to track and monitor inventory to prevent diversion which include but are not limited to:

Movement of inventory throughout the facility is tracked from room to room to ensure visibility into where all products are at all times.

F. The proposed waste management plan, including waste disposal locations, security measures, methods of rendering all waste unusable and unrecognizable, and the vendor in charge of disposal.

Cannabis waste comprises expired, damaged, spoiled, or customer-returned cannabis items. To ensure proper disposal in accordance with The Department of Cannabis Control regulation Chapter 9 Section §17223, a waste management program is carried out by management following the waste management standard operating procedure. A designated, clearly labeled cannabis waste bin will be located within the secure vault area. All items that are considered to be cannabis waste will be removed from its packaging and destroyed using 90% inorganic materials to render the product unrecognizable. If applicable, the exterior packaging will be recycled.

Below is an example of a waste management SOP for cannabis flower. This SOP was written for our Microbusiess license in Santa Rosa. Due to the complexity of waste destruction, cannabis waste will be transfered to the company's distribution hub in Santa Rosa where the destruction will occur on a monthly basis. In our experience, cannabis waste in a retail setting is very minimal.

The destruction process for cannabis or cannabis products will be recorded under video surveillance. Additionally, details of the disposal, including the reason for disposal and batch number, will be documented in the Metrc track and trace system. This documentation will include the time, date, employee name, and identification number.

Flora Terra will utilize Recology for all waste management services as they do at all facilities in Sonoma County.

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Packet Pg. 1331 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

STANDARD OPERATING PROCEDURE
TITLE: Inventory Destruction EFFECTIVE DATE: 8.1.2021
DEPARTMENT(S): Cultivation, Post Harvest, Retail SOP #:

AUTHOR(S): Sondra Gilbert, Willie Melia REVISION #: 2
PURPOSE: To establish the process of the destruction of cannabis inventory rendering it unrecognizable and unusable in accordance with all regulations. This process must take place in a secured, designated location such as the Vault and must be worked through methodically to ensure the accuracy and efficacy of the destruction of the cannabis inventory.

Cannabis goods intended for disposal shall remain on the licensed premises until rendered into cannabis waste. Access to the cannabis goods is restricted to authorized management and executives. Storage of the cannabis goods allocated for disposal is separate and distinct from other cannabis goods.

RESPONSIBILITY: Compliance personnel
FREQUENCY: As needed/required.

MATERIALS &
EQUIPMENT:
● Certified scale
● Pen
● Calculator
● Biomass to be destroyed
● Inorganic material (kitty litter, soil)
● Water
● Container(s), appropriately sized for the biomass and additives (soil, water, etc) ● Spray bottle containing Isopropyl Alcohol (70% or 99%) SAFETY
CONSIDERATIONS:
●
PPE REQUIRED:

PROCEDURE: 1. Obtain a blank Inventory Destruction Record

2. SETUP: On a clean, uncluttered work station, set up the following:
a. Certified scale (if applicable)
b. Additive(s) (i.e. soil)
c. Futurola shredder
d. Container(s), appropriately sized for the biomass and additives (soil, water, etc)

3. BLENDING COMBINATION RATIO by weight shall be 30:50:20 ratio a. FLOWER: Thirty percent (30%) of total weight
b. SOIL: Fifty percent (50%) of total weight
c. WATER: Twenty percent (20%) of total weight
PAGE 1 of 4

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Packet Pg. 1332 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

STANDARD OPERATING PROCEDURE

4. Obtain biomass to be destroyed and place to one side of the scale (right or left)

5. Estimate quantity of biomass by weight
a. PACKAGED FLOWER
i. Determine unit of measure (i.e. 3.5g, 7g, etc.)
ii. Count the units to be destroyed
iii. Calculate total number of units to be destroyed and multiply by unit of measure
● EXAMPLE: 30 jars of 3.5g (30 x 3.5 = 105g)

6. Calculate the amount of Soil and Water required based upon the weight of the biomass to be destroyed, rounded to the nearest 10.
a. EXAMPLE: Biomass (flower) weight to be destroyed is 105 grams. i. TOTAL WEIGHT CALCULATION
● Multiply biomass to be destroyed by 3.33 for total weight a. EXAMPLE: 105g x 3.33 = 349.65g
ii. SOIL REQUIRED: 50% of total weight. Multiply total weight by 0.5. a. EXAMPLE: 349.65g x 0.5 = 174.825g
● Round up to the nearest ten (10) is 180g
iii. WATER REQUIRED: 20% of total weight. Multiply total weight by 0.2. ● NOTE: One (1) mL is the same as one (1) gram.
a. EXAMPLE: 349.65g x 0.2 = 69.93g/mL
● Round up to the nearest ten (10) is 70g/mL

7. Obtain clean soil purchased from a store
a. If the soil is in a bag larger than what is required, remove enough soil from the bag to accomplish the destruction of the flower by weight

8. Using a certified scale, place an appropriately sized container for all materials to fit when combining and TARE the scale.
a. Using the previous example, the total weight of all materials when combined is approximately 350g, therefore a 1,000mL pitcher would suffice for weighing soil

9. Label container with TARE weight for transparency when video recording is performed.

10. Weigh the soil in the designated container that was just previously tared on the scale.

11. Set container with measured soil aside

12. Obtain water in a measuring pitcher appropriately sized for the quantity required. a. Water weighs 1g to 1mL; measure water in the pitcher to the required amount calculated
PAGE 2 of 4

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Packet Pg. 1333 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

STANDARD OPERATING PROCEDURE
b. Using the previous example in Step 5, the required amount of Water is 70g therefore a 100 mL beaker would suffice for the required amount.

13. Obtain a container appropriately sized for biomass to be destroyed

14. Place the container on a certified scale and TARE.

15. Label container with TARE weight for transparency when video recording is performed.

Place behind biomass to be destroyed

16. RECORDING:
a. Designate one (1) person for recording the process
b. Designate one (1) or two (2) people to perform the destruction of inventory c. The recorder must clearly state
i. The current date
ii. The current time
iii. The location
iv. “This is the documentation of the inventory destruction process for [Strain, Batch ID, METRC #] (if applicable)”
d. Each person must:
i. Show their badge close to the camera so it may be clearly visible. ii. Show their face to the camera and state their name clearly

17. Obtain biomass to be destroyed and place into previously tared container. a. For PACKAGED material such as jars or tubes,
i. Empty each unit into tared container and set the original packaging aside. ii. Spray with Isopropyl Alcohol
iii. Place in a container (i.e. a bucket) to be disposed of separately

18. Once all biomass is placed in the previously tared container, weigh the biomass.

19. Place the previously weighed Soil onto the scale for the recording

20. Place the previously measured Water in clear view of the camera for the recording

21. Process the biomass in the Futurola Mini Shredder
a. Refer to the Futurola Mini Shredder Use WIP

22. Place properly shredded biomass into the previously weighed soil.

23. Thoroughly mix the biomass and inorganic material together until the mixture is evenly blended.

24. Slowly add water while mixing the soil/biomass blend until all material is evenly blended.

25. BEFORE ENDING VIDEO RECORDING clearly state:
a. The current date
PAGE 3 of 4

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Packet Pg. 1334 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

STANDARD OPERATING PROCEDURE
b. The current time
c. “This concludes the inventory destruction process for [Strain, Batch ID, METRC #]” d. Stop recording

26. Place all materials in their designated location(s)

27. Clean all equipment with Isopropyl Alcohol and a clean towel

28. Wipe down work surface area with Isopropyl Alcohol and clean towel REPORTING:

REFERENCE
DOCUMENTS:
● Inventory Destruction Record
● Futurola Mini Shredder Use WIP
PAGE 4 of 4

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Packet Pg. 1335 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) G. Opening and Closing Procedures
Flora Terra's employees possess a comprehensive understanding of their daily duties and faithfully follow a well-organized checklist. This checklist serves to uphold rigorous compliance, security measures, and a high level of cleanliness during each shift.

Employees diligently complete the checklists, and their respective shift supervisor or manager provides sign-offs to ensure task completion. Through meticulous adherence to these checklists, the facility maintains its security, compliance, cleanliness, and readiness to serve the community. Furthermore, the checklists play a vital role in maintaining quality control by monitoring HVAC, refrigeration, and expiration date checks.

Having established and thoroughly tested systems in operation for the past four years, Flora Terra is well-prepared to expand its footprint in Sonoma County. Their goal is to introduce a boutique-like dispensary to the community of Healdsburg, prioritizing education and the overall well-being of the community they aim to proudly serve.

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Packet Pg. 1336 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section B
Labor & Employment Plan

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Packet Pg. 1337 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section B: Labor & Employment Plan

1.Collective Bargaining – Application describes to what extent the cannabis business will recognize the collective bargaining rights of employees.

According to the Department of Cannabis Control (DCC) California Code of Regulations (CCR) Title 4, Division 19, §15002 section 19, any commercial cannabis operator is mandated to establish a labor peace agreement with a legitimate labor organization within 60 days of reaching 20 employees. Effective July 1, 2024, this requirement will change, applying to businesses with 10 employees instead. Flora Terra recognizes and respects employees' right to be represented by a union should they choose to do so. The company is committed to remaining neutral, engaging in good faith bargaining, providing union access during paid company time, and furnishing updated employee rosters to ensure continued access to information.

Flora Terra has already entered into a labor peace agreement and is well-versed in the process, making us well-prepared to comply with this regulation and the upcoming change in July 2024.

Our commitment extends to adhering to all local and state regulations set forth by regulatory agencies. Moreover, we are dedicated to fostering a work environment where employees' working conditions are fair, equitable, and meet their needs effectively.

2. Number of Employees – Application identifies the number of employees at initial opening, and the maximum number of employees when the business is at full capacity.

To avoid overstaffing issues, the company will initially maintain a lean workforce. Initially, the staffing will range from 5 to 8 people, this will include 2-3 dispensary employees and one security guard per shift. As the company reaches its peak capacity, it anticipates employing between 16 to 20 employees, with 3-6 employees per shift, alongside one security guard.

Drawing from our experience operating three dispensaries in Sonoma County over the past four years, we have effectively utilized point-of-sale data to forecast sales trends, ensuring appropriate staffing levels. As we venture into the new territory of Healdsburg, we will rely on historical trends from our busiest Santa Rosa location and make necessary adjustments accordingly.

3. Employee Responsibilities – Application identifies all positions to be employed at the proposed business, and their responsibilities.

Having operated for nearly four years and now 3 retail locations in Sonoma County, Flora Terra has identified the essential roles and responsibilities required for seamless business operations.

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Packet Pg. 1338 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Retail Manager: The Retail Manager will oversee the entire dispensary team, ensuring smooth operations, compliance with local and state regulations, and outstanding customer service. Their responsibilities will include managing staffing, inventory levels, and ensuring a clean and welcoming atmosphere for customers. They will collaborate with upper management on employee-related matters and maintain seamless communication to report operational information. Their key responsibilities include but are not limited to the following:
• Lead and supervise the dispensary team, including hiring, firing, onboarding, training, and scheduling.
• Offer recommendations to upper management on employee-related issues, fostering a positive and productive work environment.
• Work closely with upper management to ensure compliance with local and state regulations, adhering to all company policies and procedures. • Maintain the dispensary's cleanliness and ambience at all times, providing customers with a pleasant and inviting experience.
• Participate in local area business organizations and networking groups, contributing to the dispensary's growth and community engagement.
• Manage inventory levels efficiently, ensuring proper stock levels and organizing cash in drop safe and vault securely.
• Oversee opening and closing duties for each shift, ensuring smooth transitions and adherence to established procedures.
• Address and resolve customer service issues and concerns promptly, maintaining a high level of customer satisfaction.
• Monitor and enforce company policies and procedures, ensuring all staff members are on task and adhering to guidelines.
• Collaborate with upper management, providing regular updates and reports on operational performance and challenges.

Assistant Store Manager: The Assistant Retail Manager will support the Retail Manager in overseeing the dispensary team and ensuring efficient operations. They will assist in managing staffing, inventory levels, and maintaining compliance with local and state regulations. Their role will involve providing exceptional customer service, resolving issues, and fostering a positive work environment. Collaboration with the Retail Manager and team members is vital to achieve overall dispensary success. Their key responsibilities include but are not limited to the following:
• Support the Dispensary Retail Manager in supervising and coordinating the dispensary team, ensuring a cohesive and productive workforce.
• Assist in hiring, onboarding, and training new staff members, promoting a positive and welcoming work culture.
• Collaborate with the Retail Manager to schedule employees effectively, optimizing staffing levels to meet business needs.
• Help maintain compliance with local and state regulations, following all company policies and procedures diligently.
• Ensure the dispensary's premises remain clean, organized, and welcoming to create an excellent customer experience.

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Packet Pg. 1339 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) • Provide exceptional customer service and promptly address any customer concerns or inquiries.
• Assist in managing inventory levels, ensuring accurate stock counts, and supporting efficient inventory management practices.
• Help oversee the opening and closing duties for each shift, ensuring proper procedures are followed consistently.
• Support the Retail Manager in addressing personnel issues and fostering a positive work environment for the team.
• Work collaboratively with team members to achieve sales targets and uphold the dispensary's reputation for excellence.
• Contribute to the growth and success of the dispensary by actively participating in local area business organizations and networking groups.
• Assist in monitoring and enforcing adherence to company policies and procedures, promoting a culture of compliance.

Shift Lead/Supervisor: Shift Leads will support the Retail Manager and Assistant Retail Manager in overseeing daily operations in their absence, ensuring a seamless customer experience. They will be responsible for supervising the dispensary team during their shift, ensuring tasks are completed efficiently, and maintaining compliance with all company policies and procedures. Their strong leadership and problem-solving skills will be essential in delivering exceptional customer service and fostering a positive work environment. Key Responsibilities include but are not limited to:
• Supervise the dispensary team during their shift, providing guidance and support to ensure smooth operations.
• Assist in training and onboarding new team members, ensuring they are equipped to deliver excellent customer service and compliance.
• Foster a positive and cohesive work environment, encouraging teamwork and employee engagement.
• Maintain compliance with local and state regulations, adhering to all company policies and procedures.
• Ensure the dispensary's premises is clean, organized, and well-maintained to create a welcoming atmosphere for customers.
• Provide exceptional customer service, addressing inquiries, and resolving any issues or concerns promptly and escalating issues to the manager as needed. • Oversee inventory management during their shift, ensuring accurate stock counts and proper product placement.
• Assist in opening and closing duties, following established procedures for a smooth start and end to each day.
• Monitor employee performance and provide constructive feedback to support their growth and development.
• Assist in addressing any personnel issues that may arise, escalating matters to the Manager or Assistant Manager as needed.
• Collaborate with team members to achieve sales targets and uphold the dispensary's reputation for excellence.
• Continuously seek opportunities for process improvement and efficiency enhancements.

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Packet Pg. 1340 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Retail Associate: The Retail Associate is an essential part of the dispensary team, responsible for providing excellent customer service and ensuring a positive shopping experience for the customers. They assist customers in selecting cannabis products, answer their questions, and maintain the dispensary's cleanliness and organization. Their knowledge of cannabis products and dedication to customer satisfaction will contribute to the dispensary's success and growth. Their key responsibilities include but are not limited to the following:
• Greet and welcome customers warmly as they enter the dispensary, creating a friendly and inviting atmosphere.
• Provide exceptional customer service by assisting customers in product selection, offering recommendations, and answering questions about cannabis products. • Educate customers on the different strains, product types, and consumption methods, ensuring they have the information needed to make informed decisions. • Accurately process transactions through the point-of-sale (POS) system, handling cash and electronic payments efficiently.
• Maintain the dispensary's appearance by organizing product displays, restocking shelves, and ensuring the premises are clean and well-organized at all times. • Stay up-to-date with product knowledge, industry trends, and regulations related to cannabis to provide accurate and helpful information to customers. • Comply with all company policies and procedures, as well as local and state regulations, to ensure a compliant and safe operation.
• Collaborate with team members to achieve sales targets and contribute to a positive and cohesive work environment.
• Handle customer inquiries, concerns, and feedback with professionalism and a commitment to resolution.
• Assist with opening and closing duties, ensuring a smooth start and end to each business day.
• Continuously seek opportunities to improve the customer experience and provide feedback to management for process enhancements.
• Adhere to all security measures and protocols to ensure the safety and integrity of the dispensary and its products.

Security Guard: Security guards will be contracted through a 3rd party company but play a vital role in day to day operations. The Dispensary Security Guard and Asset Protection Specialist will play a vital role in ensuring the safety and security of the dispensary, its employees, customers, and valuable assets. In addition to safeguarding the premises and maintaining a secure environment, they will focus on protecting valuable inventory and assets from theft, loss, and unauthorized access. Their strong attention to detail, vigilance, and commitment to asset protection will contribute to the overall success and reputation of the dispensary. Their key responsibilities include but are not limited to the following:
• Monitor and control access to the dispensary, verifying the identity of employees and customers, with a specific focus on protecting valuable assets and inventory. • Conduct regular patrols inside and outside the premises to deter potential security threats and unauthorized access to restricted areas.
• Operate surveillance systems, including CCTV cameras, to monitor all areas of the dispensary.
• Promptly respond to alarms or security alerts, focusing on asset protection measures to prevent theft or loss of valuable inventory.

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Packet Pg. 1341 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) • Collaborate with the Retail Manager and other staff members to implement asset protection protocols and emergency response plans.
• Report any suspicious activities or individuals, with an emphasis on potential asset threats, to the Retail Manager and/or appropriate authorities as required. • Assist in the enforcement of company policies and procedures, particularly those related to asset protection, security, and safety.
• Conduct bag checks and security screenings with a focus on safeguarding valuable products and assets.
• Provide a visible security presence in the dispensary, specifically in areas where valuable assets are stored or displayed, to deter potential criminal activity. • Ensure compliance with all security-related regulations imposed by local and state authorities.
• Maintain accurate records of security-related incidents, especially those related to asset protection, including incident reports and asset logs.
• Communicate effectively with the Retail Manager and other staff members to relay important asset protection-related information.
• Collaborate with law enforcement or emergency services when required to address serious security incidents.

4. Employee Benefits – Application identifies the benefits provided to employees, including health care, vacation, and medical leave, to the degree they are offered as part of Employment.

At Flora Terra, we prioritize the well-being and satisfaction of our full-time employees by offering an extensive benefits package. This package includes 5 paid holidays, 40 hours of paid time off, 24 hours of sick leave, 50-90% company sponsored medical, dental, and vision, and 401k benefits, ensuring our team's overall welfare. Full-time and Part-time employees receive 5 paid holidays, 24 hours of sick leave and participate in a company wide incentive program we have designed to further motivate and recognize all of our employees' hard work.

Through our incentive programs, our staff can enjoy regular product samples, enabling them to stay informed about our products and better assist our valued customers. Employees have the opportunity to earn extra compensation for generating positive Google reviews through a third party company, recognizing and rewarding their dedication to exceptional customer service.

Furthermore, we take pride in our exclusive employee discount program, allowing our team to benefit from discounted prices on our premium products. This incentive encourages employees to explore our inventory and become more knowledgeable about our offerings.

Flexibility is a cornerstone of our workplace culture, and we prioritize providing our employees with flexible scheduling options to enhance work-life balance. To foster a positive and appreciative atmosphere, we celebrate Employee Appreciation Days and organize teambuilding activities that strengthen our team dynamics and boost employee morale.

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Packet Pg. 1342 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) In recognition of outstanding performance, we offer performance-based rewards, setting targets and milestones for our team to achieve. Meeting and exceeding these goals earns our employees well-deserved recognition and incentives.

At Flora Terra, we also value the importance of nourishment and camaraderie in the workplace. Collaborating with our vendors, we provide our employees with onsite snacks and meals on a regular basis, creating a rewarding and enjoyable work environment.

Overall, our approach to incentivizing our staff focuses on empowering, acknowledging, and valuing their contributions, making Flora Terra an exceptional and fulfilling place to work.

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Packet Pg. 1343 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section C
Security Plan

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Packet Pg. 1344 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section C: Security Plan

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Packet Pg. 1345 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1346 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1347 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1348 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1349 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1350 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1351 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Revised: 1/6/2023 PAGE 1 of 2

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Packet Pg. 1352 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Revised: 1/6/2023 PAGE 2 of 2

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Packet Pg. 1353 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1354 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1355 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1356 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section D
Qualifications of Owners

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Packet Pg. 1357 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section D: Qualification of Owners
Since 2018, Flora Terra has been successfully operated by the husband and wife team, David and Alicia Wingard, who co-founded the company. The dispensary officially opened its doors to the public in the fall of 2019 at the Empire Industrial Court location. Holding two cannabis licenses at the original location, Flora Terra operates as a Microbusiness and a nursery. The Microbusiness license covers cultivation, distribution, and retail operations, additionally, they possess an additional two C10 Retail Licenses in the City of Santa Rosa.

David Wingard honed his project management skills on a tour bus. Spending a decade on the road, doing stage and concert lighting for a major production company, he learned to juggle the many moving parts of large scale projects; planning, scheduling, supervising, and communicating. Settling in Sonoma County in 2006, he entered the solar field; working his way up from journeyman electrician to a contractor with dual licenses in electric and solar.

From managing sizable solar projects for West County Unified School District to spearheading a San Francisco solar initiative that installed hundreds of systems on low income residential homes, the ability to coordinate and be a team leader comes naturally to David. An experienced cultivator under Proposition 215, it was clear that he should apply his skillset and transition into the regulated market. Alongside his wife and Cofounder, Alicia, David has led every aspect of the creation of Flora Terra; from conception, through buildout, to completion and expansion.

For Flora Terra Co-Founder & COO, Alicia Wingard, advancing the cannabis movement is nothing new. Born in Humboldt County and raised in Mendocino, Alicia is a longtime advocate for the powerful plant and its progressive community. Having worked at a headshop in 2001, she has always aspired to connect people to the healing properties of cannabis -- but state laws lagged far behind her. Migrating to Sonoma County in 2002, Alicia spent several years climbing the corporate ladder before going back to school and becoming a Registered Nurse. Once California laws finally caught up with its culture, Alicia and her husband jumped on the opportunity to open a legal cannabis business. For Alicia, the pivot from RN to COO of Flora Terra was an easy one. Marrying her passions of legitimizing the industry while positively impacting the community’s health, she is making great strides in bringing the holistic qualities of cannabis to light. Through Flora Terra, Alicia aspires to shift the perception towards cannabis, elevate the dialogue and provide education. She is leading the way in destigmatizing the budding industry by creating an inviting and open space for the community to gather and learn .Alicia has been actively pursuing her goal of educating others, evident in her role as a keynote speaker alongside Annie Doe at the 2021 California Physical Therapy Conference. The topic of their presentation was the medical benefits of topical cannabis. Additionally, she is directly involved with California Community Colleges (CCC), using their Santa Rosa facility to educate college professors and board members about different aspects of the cannabis industry and how to integrate cannabis education into the standard curriculum. Through that program she was connected with Diablo Valley College where she serves as an annual speaker for Diablo Valley College's cannabis education program.

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Packet Pg. 1358 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Her vast experience has allowed her to connect with and impact thousands of business professionals, students, and professors since 2019. Her commitment to education and her passion for the cannabis industry shine through in her various roles as a speaker and educator.

Since 2019, the Wingards have led Flora Terra's expansion in Santa Rosa, now boasting three locations. Taking a hands-on approach, they oversee all aspects of the retail operations, working closely with management and staff to prioritize safety, compliance, education, and an exceptional customer experience.

David's primary focus lies in business development, strategic planning, financial management, risk management, industry trends, and innovation. His active involvement is instrumental in steering the dispensary's success, fostering compliance, and nurturing a positive work culture.

With outstanding leadership and decision-making skills, he drives the dispensary's growth and overall performance within the ever-changing cannabis industry.

In contrast, Alicia meticulously handles day-to-day operations, encompassing staff management, facilities, vendor and supplier coordination, and implementing standard operating procedures to uphold compliance with local and state regulations. Her role is indispensable in maintaining the dispensary's success and reputation in the cannabis industry.

Her proficiency in efficiently managing staff, inventory, compliance, and overall operations ensures the dispensary's consistent performance and customer satisfaction.

Together, David and Alicia possess the background and skills necessary to lead a thriving dispensary in the Healdsburg community.

Describe your overall knowledge of the cannabis industry, including identification of how industry best practices and State regulations have been incorporated in existing/ prior legal businesses outside the City of Healdsburg.

David and Alicia, as seasoned experts in the cannabis industry, possess an extensive reservoir of knowledge and experience. With nursery and microbusiness licenses in their possession, they engage in various facets of the cannabis market, encompassing cultivation, distribution, and managing three retail locations. Their diverse involvement in different areas of the industry showcases a profound understanding of its dynamics and challenges.

A pivotal factor in their success has been the incorporation of industry best practices and strict adherence to State regulations. Through close collaboration with the Sonoma County Agriculture Department, Sonoma County Health Department, Sonoma County Weights and Measures, and Department of Cannabis Control, they have assimilated regulations seamlessly into their Standard Operating Procedures, creating a fully compliant facility. They prioritize educating their managers and staff on compliance measures, acknowledging the constant changes within the industry. To remain up-to-date, they actively participate in industry events, continuously expanding their knowledge base.

Their operations stand as a testament to strict adherence to state guidelines, setting high standards for quality, safety, and customer satisfaction. Their unwavering dedication has contributed significantly to their positive reputation and exceptional success in the competitive cannabis market.

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Packet Pg. 1359 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Describe the involvement of the ownership team in the day-to-day operation and management of the proposed business.

CEO David and COO Alicia Wingard are actively involved in overseeing all aspects of the business day to day. While their main office is located at the headquarters in Santa Rosa, they will also have an office and conference room meeting area at the proposed location for easy accessibility. Ensuring the success of the company necessitates conducting regular site visits to all locations. Additionally, they hold weekly meetings with the management team to address any matters, feedback, or inquiries. The Wingards are available round the clock to provide unwavering support to the management team and assist in resolving any challenges that may arise.

For the first month of operations, Alicia will work on-site daily to ensure continuity of training and to assist in working out any operational hiccups. Although they may not be working on the retail floor daily after that month, Alicia regularly works shifts to assess the effectiveness of policies, procedures, and training implemented by the management team. During these shifts, she observes staff interactions, both among themselves and with customers.

Furthermore, Alicia is responsible for carefully selecting the menu offerings at every establishment, collaborating directly with various brands, with many of them being local to Sonoma County. By personally overseeing the brand selection process, Alicia ensures that we have a clear understanding of the businesses we partner with and the ones we endorse.

Prioritizing community and staff education, Flora Terra's featured brands offer in-store demonstrations and promotions, empowering us to become well-informed about their products and enabling us to assist customers in making informed choices. This continuous commitment to staff education and involvement plays a pivotal role in driving the overall success of the business.

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Packet Pg. 1360 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section E
Neighborhood Compatibility Plan

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Packet Pg. 1361 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section E: Neighborhood Compatability Plan

1. Describe how the business will take proactive steps to avoid becoming a nuisance or having negative impacts on its neighbors or surrounding community. Additionally, describe how the business will react and respond to complaints specifically related to noise, light, odor, public consumption, loitering, littering, and vehicle and pedestrian Traffic.

At Flora Terra, our commitment to being a responsible and considerate member of our community is paramount. We hold all individuals associated with our business, be it employees, vendors, or customers, to the highest standard of compliance with local and state regulations.

To maintain a positive relationship with our neighbors and the surrounding community, we proactively implement several measures and develop a comprehensive plan to address any potential complaints. At all our retail locations, we prominently display contact information of the founders, David and Alicia Wingard. Their phone numbers and email address is displayed giving everyone the opportunity to reach out and address concerns or issues directly.

By taking the following proactive steps, Flora Terra remains dedicated to fostering a positive relationship with our community and fulfilling our responsibility as a respectful and responsible business within it.

Noise: Our project does not involve equipment that exceeds 75 decibels, thus no additional measures are required to comply with the City's noise ordinance (Healdsburg City Code, 9.32.080) If noise complaints are received, the company will investigate the issue promptly, identify the source, and take appropriate corrective actions.

Lighting: Both interior and exterior lighting will be designed and implemented with best practices to minimize glare, light pollution, and any light spillover onto neighboring properties.

Odor: Following the regulations outlined in the Department of Cannabis Control regulations Chapter 11, Article 4, Section §17411, all cannabis products must be pre-packaged before delivery to retail locations, adhering to specific guidelines based on the product type. To maintain minimal odor emissions, we will implement a professional carbon filtration system, a widely adopted industry-standard solution. This system employs activated carbon to effectively absorb and eliminate contaminants, ensuring robust odor control.

Public Consumption: Per city and state regulations, cannabis consumption on our premises is strictly prohibited, and this policy is strictly enforced by security with anyone present on the premises.

Loitering: For safety reasons, we request customers to complete their purchases and promptly leave the premises. Our on-site security personnel actively monitor and manage any instances of loitering, as we do not permit customers to linger at any of our three locations.

Littering: Littering is not aligned with our company values and environmental stewardship. We have zero tolerance for littering from employees, customers, or vendors. If a someone is found littering on our premises or in the vicinity, a warning will be issued and documented in their profile.

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Packet Pg. 1362 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Traffic: Similar to any new business, we expect an influx of pedestrians and vehicles. Our proposed location provides abundant parking choices in a designated lot and on the street. Based on our experience at our other locations, traffic concerns have been minimal. However, if any issues arise, we will actively engage with neighboring businesses and local authorities to find the most suitable resolution. The implementation of traffic management plans, such as designated parking areas or shuttle services, will be considered if necessary.

Within our point of sale system, we maintain records of all individuals entering and exiting our facility with timestamps. In case of any issues, we take appropriate actions, such as issuing warnings depending on the severity. Our security personnel and management team document these warnings within the customer's profile, continued policy violations or misconduct may result in a ban from entering our facility, although we hope such situations do not arise. We treat these matters seriously to ensure a safe and respectful environment for all.

Flora Terra is dedicated to handling complaints promptly, professionally, and empathetically. Each complaint is treated with utmost seriousness and documented using an incident report form. Upon receiving a complaint, the company initiates a comprehensive investigation to verify its details and assess its validity. This may involve consulting relevant employees or witnesses and reviewing security footage.

After completing the investigation, Flora Terra takes appropriate actions to resolve the complaint.

Depending on the seriousness and impact on the complainant, the business may offer a refund, a discounted rate, compensation, or extend a sincere apology as part of the resolution process. In cases where the complaint is found to be valid, the company diligently implements corrective measures to address the root cause and prevent recurrence.

Furthermore, Flora Terra regards complaints as invaluable feedback to identify areas of improvement. By following a step-by-step approach to managing complaints, the company aims to establish trust with its customers and the community, demonstrating its commitment to responsible, respectful, and customer-centric practices.

2. Describe the policies that you would implement, and how you would enforce these policies, to ensure your cannabis products do not end up in the hands of underage youth.

To prevent cannabis products from reaching underage youth, Flora Terra will deploy the same rigorous policies and enforcement measures as its other locations which include the following:

A. Strict Age Verification:
• In compliance with Department of Cannabis Control Chapter 3. Section §15400. • All customers attempting to purchase cannabis products will be required to present valid government identification prior to shopping.
• Staff will be trained to properly verify identification and detect fraudulent documents. • Customer who fail to provide valid government identification will be escorted off the premises.

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Packet Pg. 1363 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) B. Clear Signage and Communication:
• Prominent signage will be displayed on the door, clearly indicating the legal age requirement for purchasing cannabis products.
• Staff will be trained to communicate these policies and guidelines to customers, emphasizing the commitment to preventing underage access.

C. Training and Education:
• All employees will undergo comprehensive training on the importance of preventing underage sales.
• Training will cover identification verification techniques, recognizing signs of potential underage customers, and handling challenging situations. • Regular refresher training sessions will be conducted to ensure ongoing compliance and awareness.

D. Point of Sale Controls:
● Flora Terra will utilize Meadow, a robust point of sale system that includes age verification features.
● The system will prompt employees to verify the age of customers during the regular check in process, ensuring consistent adherence to the age requirement.

People under the age of 21 without a valid medical recommendation will not be permitted to enter the premises.
● Daily purchase limits are tracked to ensure compliance with allowable limits per Department of Cannabis Control Chapter 3 section §15409.

E. Strict Enforcement Measures:
• Any employee found to be in violation of the policies regarding underage sales will be terminated immediately.
• Any customer found to violate this policy will be banned from the store and reported to local authorities.

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Packet Pg. 1364 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

3. Describe the steps you have taken to get to know the Healdsburg community. Provide a detailed description of the neighborhood in which you are seeking to open a cannabis retail business, and how your business will contribute positively to the surrounding area.

Flora Terra is owned and operated by David and Alicia Wingard, a married couple deeply rooted in Sonoma County. Being long-term residents for over 20 years, they are very familiar with the Healdsburg community. The Wingards appreciate the abundance of unique mom-and-pop businesses in the area, much like their own, and believe that their business will enhance the community. While familiarizing themselves with the City of Helaldsburg 2030 General Plan, they are confident that Flora Terra is perfectly suited to “preserve, protect and enhance Healdsburg’s small-town character and unique quality of life” as stated in the guiding principles of of the general plan.

The Wingards embrace the community's charm and actively support local establishments.

Whether it's grabbing lunch and groceries from Big John's Market, a bottle of bubbly at the proposed locations neighboring winery, Breathless, or savoring meals at the fantastic restaurants in the vicinity, they relish the vibrant local scene.

The prospective Flora Terra location at 498 Moore Lane boasts a convenient location, in close proximity to Healdsburg Square and only one block away from Grove Street. Close proximity to Grove Street provides alternative access for easy vehicle entry without navigating the potentially congested Healdsburg Avenue. We appreciate the close proximity to the City of Healdsburg Police Department, being just a 3 minute drive from the site, should any issues arise we will receive a very prompt response. The walkable distance from the lively Healdsburg Square means increased foot traffic for neighboring businesses. By providing a nearby option for both locals and tourists to purchase legal cannabis, Flora Terra will enrich the Moore Lane Neighborhood and contribute to its vibrancy.

At Flora Terra, David and Alicia have reimagined the traditional dispensary model to create an environment that fosters education, connection, and style. They have steered away from the secretive and stigmatized past, transforming Flora Terra into an inviting, open, and educational space. It's a place where community can gather, and their curated selection showcases premium edibles, topicals, extracts, and flowers from California's finest craft cannabis brands.

Contrary to misconceptions, Flora Terra is not adorned with tie-dye and peace signs. The premises will be meticulously maintained, reflecting an aesthetically pleasing environment that adds to the overall visual appeal of the area. With its green boutique concept, Flora Terra exudes an aesthetic similar to that of clothing or wine boutiques. Their simplistic yet spohisitcaed design aligns with The City of Healdsburg 2030 General Plan section 9 under community design.

Providing knowledgeable customer service is a top priority at Flora Terra. The retail team will be dedicated to educating customers about the wide range of products available, ensuring they feel confident and well-informed in their purchases. Hiring like minded individuals who aspire to carry out these objectives will be detrimental to the success of the company. The creation of

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Packet Pg. 1365 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) jobs in the proposed location situated in an industrial zone also aligns 2030 General Plan under Section 4, Economic Deveopment.

Environmental responsibility is another core value for Flora Terra. The business will implement energy-efficient technologies and responsible waste management practices. By reducing their carbon footprint and actively contributing to local environmental initiatives, Flora Terra strives to create a cleaner and healthier community. Through reading the initiatives of the City of Healdsburg in their 2030 General Plan, we have discovered that our values align with that of the City.

Through their personal ties to the community, dedication to education, commitment to the environment, and tasteful presentation, Flora Terra aims to contribute positively to the Healdsburg area. The Wingards' vision for Flora Terra aligns with the unique charm and values of the community they aspire to serve.

4. Describe steps that the business will take to minimize any negative environmental impacts of the retail operation, including greenhouse gas emissions, vehicle miles travelled, excessive product packaging, energy and water utilization, and other impacts.

As part of our dedication to social responsibility and sustainability in all retail operations, Flora Terra is firmly committed to minimizing its environmental impact. To achieve this objective, the company has implemented a range of strategies:

Greenhouse gas emissions: Flora Terra places a strong emphasis on energy efficiency initiatives, which include the adoption of LED lighting, energy-efficient appliances, the optimization of HVAC systems and an existing photovoltaic solar system to lower greenhouse gas emissions. Furthermore, our proposal entails the installation of two DC Level 3 EV Chargers to facilitate the charging needs of customers, employees, and vendors with electric vehicles. It is our goal to transition all company vehicles to electric models by the year 2027.

Vehicle Miles Traveled: To minimize transportation-related emissions, Flora Terra will leverage its distribution license for cannabis retail deliveries. By consolidating deliveries from various brands and distributors into 2-4 trips per month from their warehouse in Santa Rosa, the company aims to reduce the number of miles traveled. Additionally, the installation of bike racks on the premises encourages customers and employees to choose biking to work as opposed to driving. The company will encourage walking, use public transportation, or carpooling as alternative transportation options.

Excessive product packaging: With a requirement to comply with Business Professions Code section 26120 a, Flora Terra actively seeks suppliers that utilize minimalistic and recyclable or biodegradable packaging. The company also promotes recycling practices among employees and customers, emphasizing the recycling of packaging, paper, and plastic to reducce waste.

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Packet Pg. 1366 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) In addition, Flora Terra reduces waste through the utilization digital communication platforms for employees and customers, cloud storage for document management, and minimizing unnecessary printing within the facility. The company has a commitment to limit the amount of single use plastics within the facility utilizing paper shopping bags that we encourage customers to reuse.

Flora Terra places a high priority on energy and water efficiency during the construction phase, adhering strictly to the California Building Energy Efficiency Standards Energy Code Title 24.

The building will feature energy-efficient equipment, such as HVAC systems, refrigeration units, and lighting. Smart technology and sensors will be integrated to optimize lighting and temperature based on occupancy and natural light availability. To minimize water waste, low-flow toilets and water-efficient fixtures will be installed. Additionally, the exterior will be adorned with drought-tolerant plants, enhancing visual aesthetics while conserving water.

Education lies at the heart of our organization, encompassing not just product knowledge but also social responsibility. Our primary goal is to heighten awareness among employees about environmental issues and provide training on sustainable practices. Similarly, we are dedicated to educating our customers about our company's initiatives and encouraging them to adopt eco-friendly choices.

Flora Terra is committed to monitoring and measuring the effectiveness of these sustainability measures. The company will continuously seek new technologies and practices to improve its environmental performance and embrace sustainable advancements. By implementing these strategies and continuously striving for improvement, Flora Terra aims to minimize its negative environmental impact and contribute to a more sustainable future.

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Packet Pg. 1367 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section F
Community Benefits & Equity Plan

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Packet Pg. 1368 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) F. Community Benefits & Equity Plan
1 Describe the benefits that the business will provide to the local community.

Since its establishment in the fall of 2019, Flora Terra has been committed to supporting the local community. Twice a year, the company organizes fundraising initiatives and collects donations for a specific organization based in Sonoma County. This organization plays a crucial role in assisting an average of 117,273 residents from the county on a monthly basis, including 33,441 at-risk children and 13,606 low-income seniors. Both customers and employees actively participate in these efforts, demonstrating their enthusiasm and support.

As part of our dedication to community engagement, Flora Terra will initiate team-building activities through in-person volunteering. This will provide our employees with the opportunity to make a direct impact and strengthen their bond as a team. Additionally, we actively participate in programs aimed at offering cannabis products at discounted rates or as gifts to veterans and medical patients in need within Sonoma County.

Furthermore, the company is dedicated to educating not only its staff but also the community.

The proposed site features a spacious office suitable for hosting community education events, similar to the ones organized at our Santa Rosa East location. These engagement events are offered free of charge and serve as valuable opportunities for the community to learn about a wide range of cannabis-related topics. Topics covered in these events have included: a mom’s guide to cannabis consumption, minor cannabinoids and their effects, and even workshops on how to grow cannabis. Recently, Flora Terra's Director of Cultivation led a workshop on this very subject.

Fostering a sense of community, Flora Terra has a robust program for local residents offering weekly special pricing and incentives to the local community.

2. Identify the minimum wage that will be offered to employees of the proposed business, excluding tips and gratuities.

Upon conducting research on entry-level retail and grocery jobs available in the Healdsburg community through different job boards, we observed that compensation for such positions ranges between $15.50 and $19.00 per hour, depending on experience. To ensure that our employees receive fair and competitive compensation, Flora Terra will provide entry-level positions with a starting wage of $18 per hour, significantly surpassing the minimum wage requirements. This wage rate surpasses the Sonoma County livable wage of $17.65, enabling our employees to fulfill their basic needs and maintain a reasonable standard of living.

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Packet Pg. 1369 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Employee Benefits

3. Identify the benefits that will be provided to employees, including but not limited to health care, vacation, and medical leave, to the degree they are offered as part of Employment.

At Flora Terra, we prioritize the well-being and satisfaction of our full-time employees by offering an extensive benefits package. This package includes 5 paid holidays, 40 hours of paid time off for years 1-2 of employment, 80 hours for years 3+, 24 hours of sick leave, 50-90% company sponsored medical, dental, and vision, and 401k benefits, ensuring our team's overall welfare. Part-time employees receive 5 paid holidays, 24 hours of sick leave and participate in a company wide incentive program we have designed to further motivate and recognize all of our employees' hard work.

Through our incentive programs, our staff can enjoy regular product samples, enabling them to stay informed about our products and better assist our valued customers. Employees have the opportunity to earn extra compensation for generating positive Google reviews through a third party company, recognizing and rewarding their dedication to exceptional customer service.

Furthermore, we take pride in our exclusive employee discount program, allowing our team to benefit from discounted prices on our premium products. This incentive encourages employees to explore our inventory and become more knowledgeable about our offerings.

Flexibility is a cornerstone of our workplace culture, and we prioritize providing our employees with flexible scheduling options to enhance work-life balance. To foster a positive and appreciative atmosphere, we celebrate Employee Appreciation Days and organize teambuilding activities that strengthen our team dynamics and boost employee morale.

In recognition of outstanding performance, we offer performance-based rewards, setting targets and milestones for our team to achieve. Meeting and exceeding these goals earns our employees well-deserved recognition and incentives.

At Flora Terra, we also value the importance of nourishment and camaraderie in the workplace. Collaborating with our vendors, we provide our employees with onsite snacks and meals on a regular basis, creating a rewarding and enjoyable work environment.

Overall, our approach to incentivizing our staff focuses on empowering, acknowledging, and valuing their contributions, making Flora Terra an exceptional and fulfilling place to work.

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Packet Pg. 1370 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

4. Describe the Applicant’s plans for local outreach to City of Healdsburg residents for open positions, and any other actions proposed by the Applicant that are intended to benefit the local workforce and/or Applicant’s local employees.

At Flora Terra, we place a strong emphasis on sourcing job applicants from the local community.

To achieve this, we utilize various platforms such as LinkedIn, Indeed, Zip Recruiter, Craigslist, and the Healdsburg Chamber of Commerce job board to recruit and hire individuals, with a particular focus on residents of Healdsburg.

In addition, whenever there are local job fairs, our company will actively participate to engage with potential candidates. We believe in fostering a sense of community by offering employment opportunities to local residents.

Hiring locally offers several benefits to both the community and the business. Local employees are more likely to be invested in the community's well-being, actively participating in local events, supporting initiatives, and contributing to the area's social climate.

Additionally, hiring a local candidate means that the salary and benefits paid by the business stay within the community, positively contributing to the local economy and supporting other small businesses in the area.

Above that, local employees enjoy shorter commute times, which result in less traffic congestion, reduced carbon emissions, and improved air quality—a priority for both Flora Terra and the City of Healdsburg, as outlined in the General Plan.

Furthermore, local employees can build stronger connections with customers, thanks to their shared experiences and local knowledge, leading to enhanced customer service. Their stronger ties to the community also contribute to increased employee retention and a more stable workforce.

Overall, hiring a local applicant has a positive impact on the community, fostering a stronger connection between the business and its customers, and contributing to the economic and social well-being of the area

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Packet Pg. 1371 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

5. Identify the total number of paid community service volunteer hours that will be provided, if any, to each employee per year.

As part of our commitment to community engagement, Flora Terra will organize team-building activities through in-person volunteering. To further support our employees' involvement in the community, we will offer each employee up to 10 hours of paid community service time annually.

This community benefit is extended to all full and part-time staff and is overseen by the management team. In total, Flora Terra Healdsburg aims to contribute 180 hours of community service through this initiative.

Moreover, this benefit is not limited to Healdsburg but extends to all employees across all Flora Terra locations. During the first year of operation, our volunteer efforts will be focused on the Healdsburg community, adding an additional 400 hours of service. Together, these efforts showcase our dedication to making a positive impact in the communities we serve.

6. Describe how the business will secure supplies and equipment from local sources.

Since its establishment in 2019, Flora Terra has been actively dedicated to sourcing not only local cannabis products but also essential business supplies from nearby sources. The selection process for suitable suppliers involves a multi-step evaluation process conducted by the leadership team.

Potential suppliers are carefully assessed based on their capabilities, product quality, pricing, reliability, and their proximity to our other locations. Opting for local suppliers enables us to reduce the distance traveled to obtain supplies, thereby minimizing our carbon footprint.

Prior to engaging with any supplier, a comprehensive evaluation is conducted, which includes a thorough assessment of their service record, customer reviews, references, financial stability, and their ability to consistently meet our company's high standards for quality.

By giving priority to these crucial considerations, Flora Terra ensures that its suppliers are not only reliable and capable but also aligned with the company's steadfast commitment to supporting local businesses.

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Packet Pg. 1372 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section G
Proposed Site Plan
City of Healdsburg

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Packet Pg. 1373 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) Section G. Proposed Site Plan

1. Current Site Information:

Flora Terra intends to establish their fourth retail location in Sonoma County at 498 Moore Lane in Healdsburg. The site is part of an industrial park and is located at the end of Moore Lane within a building comprising four suites. Currently, this property serves as administrative offices, and wine and barrel storage for Selby Winery. The other three suites in the building serve as the production facility for Selby Winery. Notably, there are a total of 24 parking spaces available on the property, which exceeds the parking requirements of 1 per 300 square feet setforth by the City of Healdsburg code 20.16.150. Sidewalks along Moore Lane provide a safe pathway for pedestrians traveling to and from the facility.

The surrounding area boasts a diverse array of businesses on adjacent parcels, including a crossfit gym, a distillery, a theater company, an art studio, and several other professional services businesses. The walkable distance from downtown Healdsburg will bring additional pedestrian traffic to the area.

The photos below depict the property as it is now.

Suite and building exterior:

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Packet Pg. 1374 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

2. Proposed Site: The site plan below accurately depicts the proposed perimeter, including perimeter fencing, driveways, streets, property lines, buildings, parking areas, and outdoor spaces. The building itself is constructed using a cement tilt-up, its facade boasts an attractive brick appearance. Thankfully, only minor exterior modifications are needed for the purpose of security and environmental enhancements.

Aiming
to support the use of electric vehicles, Flora Terra will provide access to electrical vehicle charging. The company proposes to install two DC Level 3 EV Chargers in the parking lot, plans will be submitted with construction permits. Installation of the Flora Terra sign will enhance the building's exterior, serving as a clear indicator of our presence in the community.

It's important to note that our sign and logo intentionally do not depict any cannabis symbolism.

As part of our plans, we will also address the landscaping. Overgrown vegetation will be expertly manicured, and we will introduce native drought-tolerant plants and grasses to update and enhance the landscaping.

The photo below is a proposed image to show our proposed signage, landscaping will be updated.

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Packet Pg. 1375 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

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Packet Pg. 1376 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications)

3. Modifications and Utilization Impacts
The proposed site's improvements will benefit the surrounding community in several ways. Access to legal cannabis ensures that purchases are made from licensed sources that undergo rigorous compliance testing. This guarantees availability of regulated, quality-assured cannabis, enhancing overall safety. Moreover, the sales and tax revenue generated from cannabis sales will remain in the community, contributing to the local economy rather than being spent in neighboring cities.

As outlined in Section E: Neighborhood Compatibility Plan, Flora Terra is committed to minimizing its carbon footprint through various measures. These include reducing travel distances, optimizing HVAC systems to lower greenhouse gas emissions, implementing energy-efficient practices, and promoting recycling programs, other businesses may not be as well versed in contributing to the enviromental quality of the city.

Flora Terra prioritizes safety and security and maintains a demonstrated track record of adhering to a rigorous and compliant safety program, as outlined in their security plan. Their property's surveillance cameras have also proven beneficial in assisting local authorities with enforcement efforts related to property crimes at neighboring facilities.

Legal dispensaries, like Flora Terra, bring a host of positive attributes to the community, significantly improving community members' quality of life. Access to legal cannabis is just the beginning; the dispensary serves as a place where people can learn about cannabis, discuss its benefits, and receive support from our knowledgeable staff.

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Packet Pg. 1377 Attachment: Sonoma CHO - Flora Terra Evaluation Criteria (4237 : Public Hearing to Consider Retail Cannabis Business Applications) 7/28/23, 12:47 PM Flora Terra Mail - Fwd: bc-Healdsburg https://mail.google.com/mail/u/0/?ik=af9bd4b0f4&view=pt&search=all&permmsgid=msg-f:1772637660223466072&dsqt=1&simpl=msg-f:17726376602… 1/1 Alicia Wingard <[email protected]>
Fwd: bc-Healdsburg
David Wingard <[email protected]> Thu, Jul 27, 2023 at 9:36 PM To: Alicia Wingard <[email protected]>
Here is the background check.

Kind Regards,
David J. Wingard II
(707) 280-6173
Begin forwarded message:

From: cannabis backgroundcheck <[email protected]> Date: June 29, 2023 at 12:44:10 PM PDT
To: [email protected]
Subject: bc-Healdsburg
Reply-To: [email protected]
Thank you for submitting your background check application:

Name: David Jordan Wingard II
Business Name: Sonoma CHO LLC
DBA: Flora Terra

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Packet Pg. 1378 Attachment: Sonoma CHO - Flora Terra Background Check Information (4237 : Public Hearing to Consider Retail Cannabis Business 7/27/23, 9:18 PM Flora Terra Mail - bc-Healdsburg
https://mail.google.com/mail/u/0/?ik=af9bd4b0f4&view=pt&search=all&permthid=thread-f:1770157739575071976&simpl=msg-f:1770157739575071976 1/1 Alicia Wingard <[email protected]>
bc-Healdsburg
1 message
cannabis backgroundcheck <[email protected]> Fri, Jun 30, 2023 at 12:39 PM Reply-To: [email protected]
To: [email protected]
Thank you for submitting your background check application:

Name: Alicia Marie Wingard
Business Name: Sonoma CHO
DBA: Flora Terra

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Packet Pg. 1379 Attachment: Sonoma CHO - Flora Terra Background Check Information (4237 : Public Hearing to Consider Retail Cannabis Business

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Packet Pg. 1380 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis BA20230811949
Entity Details
Limited Liability Company Name SONOMA CHO LLC
Entity No. 201803010223
Formed In CALIFORNIA
Street Address of Principal Office of LLC
Principal Address 1825 EMPIRE INDUSTRIAL CT.

SANTA ROSA, CA 95403
Mailing Address of LLC
Mailing Address 1825 EMPIRE INDUSTRIAL CT.

SANTA ROSA, CA 95403
Attention
Street Address of California Office of LLC
Street Address of California Office 1825 EMPIRE INDUSTRIAL CT.

SANTA ROSA, CA 95403
Manager(s) or Member(s)
Manager or Member Name Manager or Member Address
David Wingard II 1825 Empire Industrial Ct.

Santa Rosa, CA 95403
Agent for Service of Process
Agent Name David WINGARD II
Agent Address 1825 EMPIRE INDUSTRIAL COURT
1825 EMPIRE INDUSTRIAL COURT
SANTA ROSA, CA 95403
Type of Business
Type of Business AGRICULTURE AND RETAIL
Email Notifications
Opt-in Email Notifications Yes, I opt-in to receive entity notifications via email.

Chief Executive Officer (CEO)
CEO Name CEO Address
David Wingard II 1825 Empire Industrial Ct.

Santa Rosa, CA 95403
Labor Judgment
No Manager or Member, as further defined by California Corporations Code section 17702.09(a)(8), has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal is pending, for the violation of any wage order or provision of the Labor Code.

STATE OF CALIFORNIA
Office of the Secretary of State

STATEMENT OF INFORMATION

LIMITED LIABILITY COMPANY
California Secretary of State
1500 11th Street
Sacramento, California 95814
(916) 653-3516
B1763-0049 05/18/2023 12:07 PM Received by California Secretary of State

For Office Use Only
-FILEDFile No.: BA20230811949
Date Filed: 5/18/2023
Certificate Verification No.: 109887030 Date: 05/18/2023

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Packet Pg. 1381 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis Electronic Signature
By signing, I affirm under penalty of perjury that the information herein is true and correct and that I am authorized by California law to sign.

Alicia Wingard
Signature
05/18/2023
Date
B1763-0050 05/18/2023 12:07 PM Received by California Secretary of State

Certificate Verification No.: 109887030 Date: 05/18/2023

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Packet Pg. 1382 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis

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Packet Pg. 1383 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 1 OPERATING AGREEMENT
OF

SONOMA CHO, LLC,

A CALIFORNIA LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT OF SONOMA CHO, LLC (this “Agreement”) is entered into by and among the parties named on the signature page of this Agreement (collectively, the “Parties”) effective as of January 16, 2018 (the “Effective Date”).

A. Sonoma CHO, LLC, a California limited liability company (the “Company”) was formed on January 16, 2018, by filing the Company’s Articles with the California Secretary of State in accordance with the Act.

B. The Parties enter into this Agreement to set forth certain operating standards and procedures applicable to the Company, the conduct of its business and the Parties’ relative rights and obligations in relation to the Company.

NOW, THEREFORE, the Parties agree as follows:

ARTICLE ONE: DEFINITIONS
Capitalized terms used in this Agreement (including all Exhibits), have the meanings specified below in this Article One and when not so defined have the meanings set forth elsewhere in this Agreement or otherwise in Corporations Code §17701.02.

1.1. “Act” means the California Revised Uniform Limited Liability Company Act (Corporations Code §§17701.01-17713.13), including amendments from time to time.

1.2. “Actuarially Held” refers to the actuarial value of interests in a trust which has Permitted Transferees as beneficiaries. A trust will be deemed to be “more than 75% Actuarially Held” for Permitted Transferees if, at the applicable time, more than 75% of the actuarial value of the beneficial interests of the trust is held for the benefit of one or more Permitted Transferees.

Such interest will be valued under Code §2512(a) as if such interests were being assigned at the time. For purposes of such calculation, a possibility that an interest in a trust may be appointed under a power of appointment will be ignored, although the actual exercise of such a power of appointment may constitute a Transfer under the terms of this Agreement.

1.3. “Agreement” means the Operating Agreement of the Company, as it may be amended or restated from time to time.

1.4. “Articles” and “Articles of Organization” means the organizational document signed and delivered by the organizers of the Company to the California Secretary of State, as required by Corporations Code §17701.02 and as more particularly described in Corporations Code §17702.01(b). The term “Articles” or “Articles of Organization” includes all amendments thereto.

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Packet Pg. 1384 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 2 1.5. “Bankruptcy” means, with respect to a Member: (a) the filing of an application by a Member for, or such Member’s consent to, the appointment of a trustee, receiver, or custodian of such Member’s assets; (b) the entry of an order for relief with respect to a Member in proceedings under the United States Bankruptcy Code, as amended; (c) the making by a Member of a general assignment of such Member’s assets for the benefit of creditors; (d) the entry of an order, judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian of the assets of a Member unless the proceedings and the person appointed are dismissed within 60 days; or (e) the failure by a Member generally to pay such Member’s debts as the debts become due within the meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined by the Bankruptcy Court, or the admission in writing of a Member’s inability to pay such Member’s debts as they become due.

1.6. “Capital Account” means, as to any Interest Holder, a separate account maintained and adjusted in accordance with Section 3.4.

1.7. “Capital Contribution” means, with respect to any Interest Holder, the amount of money or services rendered, or to be rendered, and the Fair Market Value of any property (other than money) contributed to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take “subject to” under Code §752) in consideration of a Percentage Interest held by such Interest Holder. A Capital Contribution will not be deemed a loan and a loan will not be deemed a Capital Contribution.

1.8. “Capital Event” means a sale or disposition of all or substantially all of the Company’s capital assets, the receipt of insurance and other proceeds derived from the involuntary conversion of Company property, the receipt of proceeds from a refinancing of Company property, or a similar event with respect to Company property or assets.

1.9. “Code” means the Internal Revenue Code of 1986, as amended, and any successor provision.

1.10. “Company” means the company named in Section 2.2 of this Agreement.

1.11. “Company Minimum Gain” has the meaning ascribed to the term “Partnership Minimum Gain” in the Regulations §1.704-2(d).

1.12. “Corporations Code” means the California Corporations Code.

1.13. “Descendants” (a) refers to lineal issue of all degrees of the designated ancestor, (b) excludes step-children and foster children and (c) includes (i) a person adopted into the class during minority; (ii) a person adopted into the class as an adult if the adopted person lived for a significant period during minority as a member of the household of the adopting parent or if the adopting parent is the spouse of a natural parent of the adopted person and (iii) a person naturally born into the class out of wedlock if the person lived for a significant period during minority as a member of the household of the relevant natural parent. The reference to “descendants” in the plural includes a single descendant where the context so requires. Whether a person has “lived for a significant period during minority as a member of the household” of an adoptive or natural parent will be determined in the reasonable discretion of the Members.

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Packet Pg. 1385 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 3 1.14. “Distributable Cash” means the amount of cash which the Manager deems, in his, her, or its sole discretion, available from (i) net revenue from Company operations (including sales and dispositions of Property in the ordinary course of business); or (ii) net cash proceeds from a Capital Event for distribution to the Interest Holders pursuant to Section 4.5. In determining the amount of cash available, the Manager will take into account all Company debts, liabilities, and obligations then due, amounts which the Manager deems necessary to hold in reserve for customary and usual expenses with respect to the Company’s business, and the Company’s operating performance.

1.15. “Electronic transmission by the Company” and “electronic transmission to the Company” have the meanings set out in Corporations Code §17701.02(i).

1.16. “Encumber” means the act of creating or purporting to create an Encumbrance, whether or not perfected under applicable law.

1.17. “Encumbrance” means, with respect to any Interest, or any element thereof, a mortgage, pledge, security interest, lien, proxy coupled with an interest (other than as contemplated in this Agreement), option, or preferential right to purchase.

1.18. “Fair Market Value” means the price at which an asset would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having knowledge of all relevant facts.

1.19. “Gross Asset Value” means, with respect to any item of property of the Company, the item’s adjusted basis for federal income tax purposes, except as follows:

1.19.1. The initial Gross Asset Value of any item of property contributed by a Member to the Company will be the Fair Market Value of such property on the date of the contribution, as mutually agreed by the contributing Member and the Company; and

1.19.2. The Gross Asset Value of any item of Company property will be adjusted as of the following times: (i) the acquisition of an interest or additional interest in the Company by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution of money or other property (other than a de minimis amount) by the Company to a Member as consideration for an Transferable Interest in the Company; and (iii) the liquidation of the Company within the meaning of Regulations §1.704-1(b)(2)(ii)(g); provided, however, that adjustments under clauses (i) and (ii) above will be made only if the Members have determined that the Company must revalue its assets in accordance with Regulations §1.704-1(b)(2)(iv)(f);

1.19.3. The Gross Asset Value of any item of Company property distributed to any Member will be the fair market value of such item of property on the date of distribution, as mutually agreed by the distributee Member and the Company.

1.19.4. The Gross Asset Value of Company assets will be increased (or decreased) to reflect any adjustments to the adjusted tax basis of the assets under Code §734(b) or 743(b), subject to the limitation imposed by Code §755 and only to the extent that the adjustments are taken into account in determining Capital Accounts under Regulations §1.704-1(b)(2)(iv)(m);

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Packet Pg. 1386 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 4 and if the Gross Asset Value of an asset has been determined or adjusted under Subsections

1.19.1, 1.19.2 or 1.19.4 of this Section, the Gross Asset Value will thereafter be adjusted by the Book Adjustments, if any, taken into account with respect to the asset for purposes of computing Net Profit and Net Loss.

1.20. “Interest” means a Membership Interest and/or a Transferable Interest.

1.21. “Interest Holder” means a Member and/or a Transferable Interest Owner.

1.22. “Involuntary Transfer” means, with respect to any Interest, or any element thereof, any Transfer (defined below) or Encumbrance, whether by operation of law, pursuant to court order, foreclosure of a security interest, execution of a judgment or other legal process, or otherwise, including a purported Transfer to or from a trustee in bankruptcy, receiver, or assignee for the benefit of creditors.

1.23. “Manager” means the Person named as such in Section 5.2.2, or the Person who from time to time succeeds any Person as the Manager and who, in either case, are serving at the relevant time as Manager.

1.24. “Majority of Members” means a Member or Members whose Percentage Interests represent more than 50% of the Percentage Interests of all the Members.

1.25. “Member” means an owner of a Membership Interest who is identified on Exhibit A or who otherwise acquires a Membership Interest as permitted under this Agreement, and who has not dissociated with the Company under Corporations Code §17706.02, or otherwise ceased to be a Member; provided, however, the term Member will not include a Member’s Spouse whose only interest in a Membership Interest is a community property interest.

1.26. “Membership Interest” means a Member’s rights in the Company, collectively, including the Member’s Transferable Interest, any right to Vote or participate in management and any right to information concerning the business and affairs of the Company as set forth in this Agreement.

1.27. “Member Nonrecourse Debt” has the meaning ascribed to the term “Partner Nonrecourse Debt” in Regulations §1.704-2(b)(4) or any succeeding regulation.

1.28. “Member Nonrecourse Deductions” means items of Company loss, deduction, or Code §705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt.

1.29. “Net Profit” and “Net Loss” means the aggregate income, gain, loss, deductions and credits of the Company, determined in accordance with generally accepted accounting principles employed under the method of accounting on the Company’s information tax return filed for federal income tax purposes.

1.30. “Nonrecourse Liability” has the meaning set forth in Regulations §1.752-1(a)(2) or any succeeding regulation.

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Packet Pg. 1387 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 5 1.31. “Other Member” means a Member who (a) is not a Selling Interest Holder (defined below) and (b) is a Permitted Transferee (defined below) for purposes of the restrictions on Transfer set forth in this Agreement.

1.32. “Percentage Interest” means, for each Interest Holder, that percentage set forth next to his, her or its name on Exhibit A, as adjusted from time to time as set forth in this Agreement.

1.33. “Permitted Transfer” means a Transfer that is permitted under the restrictions on Transfer which are set forth in this Agreement.

1.34. “Permitted Transferee” means a Person who is eligible to receive a Permitted Transfer.

1.35. “Person” means an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign.

1.36. “Personal Representative” means any of the following:

1.36.1 An executor of a will of a deceased Interest Holder, if such will is admitted to probate;

1.36.2 An administrator of an estate of a deceased Interest Holder, in the absence of a will;

1.36.3 A trustee of a trust holding an Interest for the benefit of a settlor of such trust during the settlor’s lifetime and for a period of administration following the death of the settlor;

1.36.4 An attorney-in-fact acting on behalf of an Interest Holder serving under a currently effective power of attorney (durable or otherwise) which authorizes the attorney-in-fact to represent the Interest Holder in matters which relate to the Company or to the Interest Holder’s Interest;

1.36.5 A guardian or conservator appointed by a court of competent jurisdiction to represent an Interest Holder; or

1.36.6 A parent or person with whom a Descendant of an Interest Holder lives if such Descendant is a minor and is not already represented by a Personal Representative with authority to act on behalf of such Descendant under this Agreement.

All references in this Agreement to an Interest Holder or an Interest Holder’s Descendant will include his or her Personal Representative. If an Interest Holder is deceased, incapacitated, a minor, or for some other reason has his, her or its interests in property being currently represented by a Personal Representative, then all communications required by the terms of this Agreement made to or by such Interest Holder may be made to or by such individual’s Personal Representative.

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Packet Pg. 1388 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 6 1.37. “Proxy” means a written authorization signed or an electronic transmission authorized by a Member giving another person the power to exercise the voting rights of that Member. “Signed,” for the purpose of this definition, means the placing of the Member’s name on the proxy (whether by manual signature, typewriting, telegraphic or electronic transmission, or otherwise) by the Member. A Proxy may not be transmitted orally.

1.38. “Purchase Interest” means a Membership Interest that becomes available for purchase by the Company and/or Other Members pursuant to the terms of this Agreement.

1.39. “Regulations” means the income tax regulations promulgated by the United States Department of the Treasury and published in the Federal Register for the purpose of interpreting and applying the provisions of the Code, as such Regulations may be amended from time to time, including corresponding provisions of applicable successor regulations.

1.40. “Selling Interest Holder” means an Interest Holder who proposes to Transfer his, her or its Interest or any rights or interests therein in a manner that is not a Permitted Transfer or an Interest Holder whose Interest otherwise becomes available for purchase by the Company and/or Other Members pursuant to the terms of this Agreement.

1.41. “Spouse” means the person who is legally married to the individual in question under the laws of such person’s state or foreign country of domicile. The term “Spouse” will also include persons who have entered into a legally recognized civil union under the laws of their state or foreign country of domicile, or persons who are registered domestic partners under the laws of the State of California (the term “marriage” as used in this Agreement will include each of these types of unions, as applicable). A person’s status as a “Spouse” of another person will terminate with the first of the following to occur: (a) the persons are legally separated, or (b) their marriage has ended. Provisions under this document for a person’s “surviving Spouse” will not be affected by such person’s entry into a new marriage.

1.42. “Spouse Interest” means the community property interest (if any) in an Interest owned by an Interest Holder’s Spouse.

1.43. “Transfer” means, with respect to an Interest, or any element or portion thereof, any direct or indirect sale, exchange, assignment, gift, transfer at death (including but not limited to any bequest by will or the laws of intestacy, transfer to or from a trust, or a joint tenancy or community property transfer), Involuntary Transfer, Encumbrance or other disposition of such Interest, or any element or portion thereof.

1.44. “Transferable Interest” means an interest in the Company, which will entitle the holder thereof to the same allocations and distributions from the Company as if it were a Membership Interest for allocation and distribution purposes only, but which will not entitle the holder to: (i) require any accounting of the Company's transactions; (ii) inspect the Company's books and records; (iii) require any information from the Company; (iv) vote on or consent to any Company matter; or (v) exercise any privilege or right of a Member except as otherwise expressly required by any non-waivable provision of the Act, but the holder of such Transferable Interest will be subject to all duties, obligations and restrictions placed on the Members by this Agreement and the Act, including, without limitation, transferability and withdrawal restrictions.

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Packet Pg. 1389 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 7 1.45. “Transferable Interest Owner” means a Person who has acquired a Transferable Interest in the Company by way of a Transfer from a Member or from another Transferable Interest Owner in accordance with the terms of this Agreement, but who has not become a Member. A Transferable Interest Owner will be deemed to hold the Percentage Interest held by the Member or Interest Owner from which it acquired a Transferable Interest immediately prior to the Transfer. A Transferable Interest Owner will participate in allocations and distributions as set forth in this Agreement.

1.46. “Transferee” means the recipient of a Transfer of any Interest in the Company, including but not limited to a Membership Interest or a Transferable Interest.

1.47. “Vote” means a written consent or approval, including that given by electronic transmission to the Company, a ballot cast at a meeting, or a voice vote.

1.48. “Writing” includes any record as that term is defined in Corporations Code §17701.02(x), and when used to describe communications between the Company and its Member, “writing” will include electronic transmission by and to the Company as defined in Corporations Code §17701.02(i).

1.49. “Written” or “in writing” includes facsimile and other electronic communication authorized by the Corporations Code.

ARTICLE TWO: FORMATION AND ACTIVITIES

2.1. Formation. The Members formed the Company by filing Articles with the California Secretary of State on January 16, 2018, File Number 201803010223. The Members intend the Company to be a limited liability company under the Act, classified as a partnership for federal and, to the maximum extent possible, state income taxes. To the extent permitted by the Act, if the Members’ rights or obligations under this Agreement are different than those stated in the Act, this Agreement will control. Neither the Manager nor any Member will take any action inconsistent with the express intent of the parties to this Agreement.

2.2. Name. The Company’s name is Sonoma CHO, LLC. The Company’s business may be conducted under that name or, in compliance with applicable laws, any other name the Manager deems appropriate.

2.3. Purpose and Activities of the Company. The purpose of the Company is to engage in any lawful activity which a limited liability Company may carry on under the Act on the terms and conditions and subject to the limitations set forth in this Agreement. Without limiting the foregoing, the specific purpose of the Company is to engage in the business agricultural production and retail operations, and such other related activities as may be necessary, advisable, or appropriate, in the reasonable opinion of the Manager. The Company may also invest and participate in any joint venture, general partnership, limited partnership, or other business activity approved by the Members and not prohibited by law or this Agreement.

2.4. Term. The Company commenced on the date the Articles were filed with the California Secretary of State, and will continue until dissolved as provided under this Agreement or the Act.

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Packet Pg. 1390 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 8 2.5. Office and Agent. So long as it is required by the Act, the Company will maintain an office and have a registered agent in the State of California. The Company may have such other offices, within and outside of the State of California, as the Manager may determine. The registered agent will be as stated in the Articles or as otherwise determined by the Vote of a Majority of Members. The Members appoint David Wingard II as the initial agent for service of process and the address of such agent is 1430 Madrone Ave., Cotati, California 94931.

2.6. Addresses of the Members and the Manager. The respective addresses of the Members and the Managers are set forth on Exhibit A, which is attached to and made a part of this Agreement.

2.7. Company Tax Representative. David Wingard II shall act as Partnership Representative under Code §6223(a) for tax years beginning on or after January 1, 2018 in which the Company is not eligible to or does not timely elect out of application of Chapter 63, Subchapter C of the Code, pursuant to Code §6221(b) (or any successor provision); for all other tax years, David Wingard II shall act as Tax Matters Partner under 26 U.S.C. §6231(a)(7) (2014) (collectively, the Company’s “Tax Representative”).

2.7.1. Code §6221(b) Election. If the Company is qualified to elect under Code §6221(b) to have Chapter 63, Subchapter C of the Code not apply to any federal income tax audits and other proceedings, a Manager shall cause the Company to make such election (a “6221(b) Election”).

2.7.2. Tax Matters Partner. For tax years ending on or before December 31, 2017, or later tax years where the Company makes a 6221(b) Election, the Tax Matters Partner is authorized to take the actions as set forth in subsections (a) – (e) of this Section 2.7.2. For purposes of this Section 2.7.2 only, references to sections of the Internal Revenue Code are to those provisions prior to their amendment and/or repeal by the Bipartisan Budget Act of 2015 (Pub. L. No. 114–74, 129 Stat. 584 (2015)).

2.7.2.a. Keep the Members informed of administrative and judicial proceedings for the adjustment of Company items (as defined in Code §6231(a)(3)) at the Company level, as required under Code §6223(g) and the implementing Regulations;

2.7.2.b. Enter into settlement agreements under Code §6224(c)(3) and applicable Regulations with the Internal Revenue Service or the Secretary of the Treasury (the “Secretary”) with respect to any tax audit or judicial review, in which agreement the Tax Matters Partner may expressly state that the agreement will bind the other Members, except that the settlement agreement will not bind any Member who (within the time prescribed under the Code and Regulations) files a statement with the Secretary providing that the Tax Matters Partner will not have the authority to enter into a settlement agreement on behalf of that Member;

2.7.2.c. On receipt of a notice of a final Company administrative adjustment, to file a petition for readjustment of the Company items with the Tax Court, the District Court of the United States for the district in which the Company’s principal place of business is located, or the United States Court of Federal Claims, all as contemplated under Code §6226(a) and applicable Regulations;

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Packet Pg. 1391 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 9 2.7.2.d. File requests for administrative adjustment of Company items on Company tax returns under Code §6227(b) and applicable Regulations; and, to the extent those requests are not allowed in full, file a petition for adjustment with the Tax Court, the District Court of the United States for the district in which the Company’s principal place of business is located, or the United States Court of Federal Claims, all as contemplated under Code §6228(a); and

2.7.2.e. Take any other action on behalf of the Members or the Company in connection with any administrative or judicial tax proceeding to the extent permitted by law or regulations, including retaining tax advisers (at the expense of the Company) to whom the Tax Matters Partner may delegate such rights and duties as deemed necessary and appropriate.

2.7.3. Partnership Representative. For tax years beginning on or after January 1, 2018 in which no 6221(b) Election is made, the Partnership Representative shall have the authority, and the Members shall have the obligations, described in the subsections (a) – (e) of this Section 2.7.3. For purposes of this Section 2.7.3, all references to sections of the Code are to the Internal Revenue Code provisions enacted by the Bipartisan Budget Act of 2015 (Pub. L. No. 114–74, 129 Stat. 584 (2015)), as such provisions may subsequently be amended.

2.7.3.a. No later than 10 business days after the Partnership Representative has knowledge of any audit or proceeding concerning the Company, the Partnership Representative shall notify the Members of the existence of such audit or proceeding.

Each Member shall have the right to have a tax advisor of its own choosing participate in, but not direct, the prosecution or defense of such audit or proceeding at such Member’s sole expense.

The Partnership Representative shall make commercially reasonable efforts to facilitate such tax advisor’s participation.

2.7.3.b. If any adjustment in the amount of any item of income, gain, loss, deduction, or credit of a partnership, or any partner’s distributive share thereof, is determined with respect to the Company, the Partnership Representative shall promptly notify the Members on receipt of the notice of final adjustment and shall take all actions directed by a Majority of Voting Members in writing within 10 business days after receipt of such notice, including without limitation, filing a petition in Tax Court or, if applicable, causing the Company either to pay the amount of such adjustment under Code §6225 or to make the election under Code §6226(a).

2.7.3.c. To the extent that the Partnership Representative does not make the election under Code §6226(a) with respect to a material imputed underpayment amount, the Partnership Representative shall use commercially reasonable efforts to (i) make any modifications available under Code §6225(c)(3), (4), and (5), and (ii) if requested by a Member, provide to such Member information allowing such Member to file an amended federal income tax return, as described in Code §6225(c)(2), to the extent such amended return and payment of any related federal income taxes would reduce any taxes payable by the Company with respect to the imputed underpayment amount (after taking into account any modifications described in clause (i)).

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Packet Pg. 1392 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 10 2.7.3.d. To the extent that a portion of the tax liabilities imposed under Code §6225 relates to a former Member, the Manager may require that former Member to indemnify the Company for its allocable portion of such tax. Each Member acknowledges and agrees that, notwithstanding the transfer or redemption of all or any portion of its interest in the Company, it will remain liable for all tax liabilities with respect to its allocable share of income and gain of the Company for the Company’s taxable years (or portions thereof) prior to such transfer or redemption.

2.7.3.e. Unless negotiated as part of the transfer or redemption, the obligations of each Member or former Member under this Section 2.7.3 shall survive the transfer or redemption by a Member of its Membership Interest and the termination of this Agreement or the dissolution of the Company.

2.8. Title to Property; No Right to Partition. All property owned by the Company, whether tangible, intangible, real, personal or mixed, will be owned by the Company as an entity, and no Interest Holder will have any ownership interest in the property or the right to bring an action for partition against the Company. The Interest Holders irrevocably waive any and all rights to maintain an action to partition Company property or to compel any sale or Transfer of such property.

2.9. Competing Activities. The Members may engage or invest in, independently or with others, business activities of any type or description, including those that are the same as or similar to the Company’s business and that might be in competition with the Company.

However, Members will present any such investment opportunity or prospective economic advantage which relates to an activity competitive to the activities of the Company to all of the Members and will not pursue such opportunity or advantage without first offering participation or investment in such competitive activity to all of the Members.

ARTICLE THREE: CAPITALIZATION

3.1. Initial Capital Contributions. Each of the Members contributed an amount of money, property, or services to the Company to establish the Members’ respective Percentage Interests as set forth on Exhibit A. The initial Fair Market Value of each item of contributed property (net of liabilities secured by that property) that the Company is considered to take “subject to” under Code §752, is also set forth on Exhibit A together with the description and amount of the liabilities. Exhibit A will be revised to reflect any additional Capital Contributions in accordance with Section 3.2.

3.1.1. In the case of a Member contributing only services in exchange for a Membership Interest, each such Member agrees that his, her, or its Membership Interest represents a Transferable Interest in the Company and possibly other rights such as the right to vote; however, a Member contributing only services in exchange for a Membership Interest pursuant to this Section 3.1.1 will not receive any credit to his or her Capital Account in connection with such services.

3.2. Additional Capital Contributions. No Interest Holder is required to make any additional Capital Contributions. If, however, the Manager determines that the Company

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Packet Pg. 1393 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 11 requires additional capital, the Interest Holders may make additional Capital Contributions in amounts and at the times determined by the Manager. Each Interest Holder’s Capital Account will be credited in the amount of any additional Capital Contribution that such Interest Holders makes to the Company.

An Interest Holder who has voluntarily agreed in writing to make an additional Capital Contribution will do so within 30 days of the determination by the Manager that such additional Capital Contribution is required. In the event that an Interest Holder fails to make the additional Capital Contribution within that time, one or more of the non-defaulting Interest Holders may advance funds to the Company on behalf of the defaulting Interest Holder to cover the amount the defaulting Interest Holder fails to contribute. Amounts which non-defaulting Interest Holder(s) advance on behalf of the defaulting Interest Holder will become a loan due and owing from the defaulting Interest Holder to such non-defaulting Interest Holder(s) which loan will bear interest at the rate of 10% per annum, compounding and payable monthly. Any Distributable Cash otherwise distributable to the defaulting Interest Holder under this Agreement will be paid to the non-defaulting Interest Holder(s) making such advances until such advances and any interest accrued are paid in full.

3.3. Failure to Make Contributions. If an Interest Holder does not timely contribute the entire amount of his or her capital when required (including, without limitation, an Initial Capital Contribution or an Additional Capital Contribution) within 30 days from the date such notice is given, the Percentage Interests of each Interest Holder will be adjusted, in which event each Interest Holder’s Percentage Interest will be a fraction, the numerator of which represents the aggregate amount of such Interest Holder’s Capital Contributions and the denominator of which represents the sum of all Interest Holders’ Capital Contributions.

3.4. Capital Accounts. The Company will establish and maintain an individual Capital Account for each Interest Holder, in accordance with the requirements of Regulation §1.704- 1(b)(2)(iv) consisting of that Interest Holder’s Capital Contribution, increased by that Interest Holder’s share of Net Profit and decreased by his, her or its share of Net Loss, and otherwise adjusted as required in accordance with applicable provisions of the Code and Regulations. If an Interest Holder transfers all or a part of his, her or its Interest in accordance with this Agreement, such Interest Holder’s Capital Account attributable to the Interest or portion thereof transferred will carry over to the new owner of such Interest pursuant to Regulations Section 1.704- 1(b)(2)(iv)(1).

3.5. Interest Holder Loans. No Interest Holder will lend or advance money to or for the Company’s benefit without the approval of the Manager. The loan will not be treated as a Capital Contribution by that Interest Holder or entitle that Interest Holder to an increase in that Interest Holder’s Percentage Interest. The loan amount will be a debt due from the Company, repayable out of the Company’s cash, and will be on such terms as the Company (acting through its Manager) and that Interest Holder agree. Notwithstanding the foregoing, no Interest Holder will be required to make any loans to the Company or guarantee the payment or performance of any Company obligation.

3.6. No Interest. No Interest Holder is entitled to receive any interest on such Interest Holder’s Capital Contributions or on the balance of such Interest Holder’s Capital Account.

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Packet Pg. 1394 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 12 3.7. Withdrawal of Capital Contribution. An Interest Holder will not be entitled to withdraw any part of his, her or its Capital Contribution or to receive any distributions, whether of money or property from the Company except as provided in this Agreement.

3.8. Liability of Members. A Member will not be bound by, or be personally liable for, the expenses, liabilities, or obligations of the Company except as otherwise provided in the Act or in this Agreement. In accordance with Corporations Code §11704.08, the Company will reimburse the Member for any payment made and will indemnify the Members for any debt, obligation, or other liability incurred by a Member in the course of the Member’s activities on behalf of the Company, so long as the action or omission of such Member was taken in compliance with the terms of this Agreement and the Member’s fiduciary duties of good faith and fair dealing under Corporations Code §17704.09(d).

3.9. No Priority. Except as otherwise expressly provided in this Agreement, no Interest Holder will have priority over any other Interest Holder with respect to the return of Capital Contributions or distributions or allocations of income, gain, losses, deductions, credits, or items thereof.

ARTICLE FOUR: ALLOCATIONS AND DISTRIBUTIONS

4.1. Allocations of Net Profit and Net Loss.

4.1.1. Net Loss. Net Loss will be allocated to the Interest Holders in proportion to their Percentage Interest. Notwithstanding the previous sentence, loss allocations to an Interest Holder will be made only to the extent that such loss allocations will not create a deficit Capital Account balance for that Interest Holder in excess of an amount, if any, equal to such Interest Holder’s share of Company Minimum Gain that would be realized if the Company disposed of all Company property subject to Nonrecourse Liability for no consideration other than full satisfaction of the total Nonrecourse Liability. Any loss not allocated to an Interest Holder because of the foregoing provisions will be allocated to the other Interest Holders (to the extent that the other Interest Holders are not limited by this Section 4.1). Any loss reallocated under this Section 4.1 will be taken into account in computing subsequent allocations of income and losses, so that the net amount of any item so allocated and the income and losses allocated to each Interest Holder, to the extent possible, will be equal to the net amount that would have been allocated to each such Interest Holder if no reallocation of losses had occurred under this Section

4.1. 4.1.2. Net Profit. The Company’s Net Profit will be allocated to the Interest Holders in proportion to their Percentage Interest.

4.2. Special Allocations.

4.2.1. Minimum Gain Chargeback. Notwithstanding Section 4.1, if there is a net decrease in Company Minimum Gain during any fiscal year, each Interest Holder will be specially allocated items of Company income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in an amount equal to the portion of such Interest Holder’s share of the net decrease in Company Minimum Gain that is allocable to the disposition of Company

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Packet Pg. 1395 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 13 property subject to a Nonrecourse Liability. The share of such net decrease will be determined in accordance with Regulations §1.704-2(g)(2) or any succeeding regulation. The items to be so allocated will be determined in accordance with Regulations §1.704-2(f) or any succeeding regulation. This Section 4.2.1 is intended to comply with the minimum gain chargeback requirement contained in Regulations §1.704-2(f) or any succeeding regulation governing the chargeback and will be interpreted consistently therewith.

4.2.2. Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt.

Notwithstanding Section 4.1, if there is a net decrease in Company Minimum Gain attributable to a Member Nonrecourse Debt during any fiscal year, each Interest Holder who has a share of the Company Minimum Gain attributable to such Member Nonrecourse Debt (which share will be determined in accordance with Regulations §1.704-2(i)(5) or any succeeding regulation) will be specially allocated items of Company income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in an amount equal to that portion of such Interest Holder’s share of the net decrease in Company Minimum Gain attributable to such Member Nonrecourse Debt that is allocable to the disposition of Company property subject to such Member Nonrecourse Debt (which share of such net decrease will be determined in accordance with Regulations §1.704- 2(i)(5) or any succeeding regulation). The items to be so allocated will be determined in accordance with Regulations §1.704-2(i)(4). This Section 4.2.2 is intended to comply with the minimum gain chargeback requirement contained in Regulations §1.704-2(i)(4) or any succeeding regulation governing the chargeback and will be interpreted consistently therewith.

4.2.3. Nonrecourse Deductions. Notwithstanding Section 4.1, any nonrecourse deductions (as defined in Regulations §1.704-2(b)(1) or in any succeeding regulation) for any fiscal year or other period will be specially allocated to the Interest Holders in proportion to their Percentage Interest.

4.2.4. Member Nonrecourse Deductions. Notwithstanding Section 4.1, those items of Company loss, deduction, or Code §705(a)(2)(B) expenditures which are attributable to Member Nonrecourse Debt for any Fiscal Year or other period will be specially allocated to the Interest Holder who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such items are attributable in accordance with Regulations §1.704-2(i) or any succeeding regulation.

4.2.5. Qualified Income Offset. Notwithstanding Section 4.1, if an Interest Holder unexpectedly receives any adjustments, allocations, or distributions described in Regulations §1.704-1(b)(2)(ii)(d)(4), (5) or (6) or in any succeeding regulation, or any other event creates a deficit balance in such Interest Holder’s Capital Account in excess of such Interest Holder’s share of Company Minimum Gain, items of Company income and gain will be specially allocated to such Interest Holder in an amount and manner sufficient to eliminate such excess deficit balance as quickly as possible. Any special allocations of items of income and gain pursuant to this Section 4.2.5 will be taken into account in computing subsequent allocations of income and gain so that the net amount of any item so allocated and the income, gain, and losses allocated to each Interest Holder, to the extent possible, will be equal to the net amount that would have been allocated to each such Interest Holder pursuant to the provisions of this Section 4.2.5 if such unexpected adjustments, allocations, or distributions had not occurred.

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Packet Pg. 1396 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 14 4.3. Code §704(c) Allocations. Notwithstanding any other provision in this Agreement, in accordance with Code §704(c) and the Regulations promulgated thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company will, solely for tax purposes, be allocated among the Interest Holders so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value on the date of contribution. Allocations pursuant to this Section 4.3 are solely for purposes of federal, state and local taxes. As such, they will not affect or in any way be taken into account in computing an Interest Holder’s Capital Account or share of profits, losses, or other items of distributions pursuant to any provision of this Agreement.

4.4. Allocations and Distributions in Respect of a Transferred Interest. Upon the Transfer of an Interest, or increase or decrease of an Interest by reason of the admission or dissociation of an Interest Holder or otherwise during any fiscal year of the Company, each item of income, gain, loss deduction, or credit of the Company for such fiscal year will be assigned pro rata to each day in the particular period of such fiscal year to which such item is attributable (i.e., the day on or during which it is accrued or otherwise incurred) and the amount of each such item assigned to any such day will be allocated to each Interest Holder based upon such Interest Holder’s respective Membership Interest at the close of such day.

However, for the purpose of accounting convenience and simplicity, the Company will treat a Transfer of, or an increase or decrease in, an Interest which occurs at any time during a semi-monthly period (commencing with the semi-monthly period including the date hereof) as having been consummated on the last day of such semi-monthly period, regardless of when such Transfer, increase, of decrease actually occurs during such semi-monthly period (i.e., sales and dispositions made during the first 15 days of any month will be deemed to have been made on the 15th day of the month).

Notwithstanding any provision to the contrary, gain or loss of the Company realized in connection with a sale or other disposition of any of the assets of the Company will be allocated solely to Persons owning an Interest as of the date such sale or other disposition occurs.

4.5. Distributions of Distributable Cash. Subject to applicable law and any limitations contained in this Agreement, any note, bond, indenture or loan agreement binding upon the Company, the Manager will distribute Distributable Cash to the Interest Holders in proportion to their respective Percentage Interests, except that Distributable Cash attributable to a Capital Event will be distributed to the Interest Holders first in proportion to their Capital Accounts and thereafter in proportion to their Percentage Interests. The Manager will use his, her, or its best efforts to distribute annually to the Interest Holders, an amount of Distributable Cash sufficient to permit each Interest Holder to satisfy its federal, state, local and foreign tax liabilities attributable to items of income, gain, loss and deduction allocated to such Interest Holder by the Company. Distributions will be made only to Interest Holders of record, according to the books and records of the Company, in respect of which such distributions are made on the actual date of distribution. Neither the Company nor the Manager will incur any liability for making distributions in accordance with this Section 4.5.

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Packet Pg. 1397 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 15 4.6. Form of Distribution. An Interest Holder, regardless of the nature of his, her, or its Capital Contribution, has no right to demand and receive any distribution from the Company in any form other than money. No Interest Holder may be compelled to accept from the Company a distribution of any asset in kind in lieu of a proportionate distribution of money being made to other Interest Holders. Except upon the dissolution and winding up of the Company, no Interest Holder may be compelled to accept a distribution of any asset in kind.

4.7. Restriction on Distributions.

4.7.1. Prohibited Distributions. No distribution will be made if, after giving effect to the distribution:

4.7.1.a. The Company would not be able to pay its debts as they become due in the usual course of business; or

4.7.1.b. The Company’s total assets would be less than the sum of its total liabilities plus, unless this Agreement provides otherwise, the amount that would be needed, if the Company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other Interest Holders, if any, upon dissolution that are superior to the rights of the Interest Holder receiving the distribution.

4.7.2. Determination of Prohibited Distributions. The Manager may base a determination that a distribution is not prohibited on any of the following:

4.7.2.a. Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances;

4.7.2.b. A fair valuation; or

4.7.2.c. Any other method that is reasonable in the circumstances.

4.7.3. Except as provided in Corporations Code §17704.05(f), the effect of a distribution is measured: (i) in the case of a distribution by purchase, redemption, or other acquisition of an Interest, as of the date money or other property is transferred or debt incurred by the Company; or (ii) in all other cases, as of the date of authorization, or the date payment is made if it occurs more than 120 days of the date of authorization. For purposes of determining a prohibited distribution under this Section 4.7 a “distribution” does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business under a bona fide retirement plan or other benefits program.

4.7.4. Liability for Prohibited Distributions. A Manager who knowingly Votes for a distribution in violation of this Agreement or the Act is personally liable to the Company for the amount of that distribution that exceeds what could have been distributed without violating this Agreement or the Act. Any Manager who is so liable will be entitled to compel contribution from each Interest Holder for the amount the Interest Holder received with knowledge of facts indicating that the distribution was made in violation of this Agreement or the Act.

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Packet Pg. 1398 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 16 4.8. Return of Distributions. Except for distributions made in violation of the Act or this Agreement, no Interest Holder will be obligated to return any distribution to the Company or pay the amount of any distribution for the account of the Company or to any creditor of the Company. The amount of any distribution returned to the Company by an Interest Holder or paid by an Interest Holder for the account of the Company or to a creditor of the Company will be added to the account or accounts from which it was subtracted when it was distributed to the Interest Holder.

4.9. Obligations of Interest Holders to Report Allocations. The Interest Holders are aware of the income tax consequences of the allocations made under this Agreement and agree to be bound by the provisions of this Agreement in reporting their shares of Company income and loss for income tax purposes.

ARTICLE FIVE: MANAGEMENT

5.1. Management of the Company. The Company’s business will be managed by the Person named as Manager in Section 5.2.2, or any successor selected as provided in subsection

5.2.5. Subject to the limitations and restrictions set forth in this Agreement (including without limitation, those set forth in this Article Five), the Manager will have the sole and exclusive right to manage the business, property, and affairs of the Company and will have all of the rights and powers which may be possessed by the Manager under the Act. The Manager’s authority under this Agreement is limited by the terms of this Agreement, including Section 5.6.

5.2. Term; Election of Manager.

5.2.1. Term. The Manager will serve until the earlier of the Manager’s resignation in accordance with subsection 5.2.3, retirement, death, disability, or removal by the Members in accordance with subsection 5.2.4, or the expiration of the Manager’s term as Manager if a term has been designated by an affirmative Vote of the Majority of Members. In the event that a vacancy is created, a new Manager will be appointed in accordance with subsection 5.2.5.

5.2.2. Election; Number; Qualifications. The Manager will be elected by the affirmative Vote of the Majority of Members. The Company will have one (1) Manager. David Wingard II is appointed the initial Manager of the Company. If, at any time, the Manager is removed, resigns, or is no longer able to serve as Manager for any other reason, then a replacement Manager will be appointed pursuant to section 5.2.5.

5.2.3. Resignation. The Manager may resign at any time by giving written notice to the Members, without prejudice to the rights of the Company under any contract to which the Manager is a party. The resignation of a Manager will take effect upon receipt of that notice by the Members or as otherwise provided in the notice. The resignation of a Manager who is also an Interest Holder will not affect the Manager’s rights as an Interest Holder.

5.2.4. Removal. The Manager may be removed at any time, with or without cause, upon the Vote of not less than a Majority of Members. Any removal will be without prejudice to the rights, if any, of the Manager under any written employment contract and, if the Manager is also an Interest Holder, will not affect the Manager’s rights as an Interest Holder.

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Packet Pg. 1399 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 17 5.2.5. Vacancies. A vacancy in the position of a Manager or the Tax Representative (addressed in Section 2.7) will be filled by a Vote of the Majority of Members.

5.3. Manager’s Other Business Activities. The Manager acknowledges and agrees that he or she owes a duty of loyalty to the Company and each Member, as a trustee, to hold and account for any property, profit, or benefit derived from Company activities, the use of Company property, or opportunities presented to the Company. The Manager also acknowledges and agrees that he or she owes a duty of care to the Company and the Members to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law, in the conduct or winding up of the Company’s activities. Notwithstanding the foregoing, the Members acknowledge that the Manager does not violate his or her duties to the Company merely by engaging in conduct that furthers his or her own interest.

5.3.1. The Manager may devote such time to the conduct of the business of the Company as the Manager, in the Manager’s own good faith and discretion, deems necessary, but will not be obligated to devote any specific portion of his or her time to the business of the Company and may devote part of their time to other business interests and activities.

5.3.2. The Manager may engage in, independently or with others, any business activity which does not compete, directly or indirectly, with the Company’s business. Neither the Company nor any Member will have any right in or to such other business ventures or activities of the Manager or to the income or proceeds derived from such ventures or activities.

5.3.3. The Manager will not be obligated to present any investment opportunity or prospective economic advantage to the Company, unless the opportunity is of the character that, if presented to the Company, could be taken by the Company. The Manager will have the right to hold any investment opportunity or prospective economic advantage for his or her own account or to recommend such opportunity to Persons other than the Company. Neither the Company nor any Member will have any right in or to such other investments of the Manager or to the income or proceeds derived from such investments.

5.3.4. The Manager may engage in activities that would otherwise violate his or her duty of loyalty if such activity is approved by Vote of not less than Members holding at least 80% of the Percentage Interests, after full disclosure of all material facts related to the activities.

The Manager will disclose all material facts related to the proposed activities by describing them in Exhibit C and providing such Exhibit C describing the competitive activities to each Member at the same time as delivering notice of a meeting of the Members to Vote on the approval of the proposed activities by the Manager. Upon approval by Vote of not less than Members holding at least 80% of the Percentage Interests, the Members acknowledge and agree such Vote of the Members will constitute the Members informed consent pursuant to Corporations Code §17701.10(e) and will modify the Manager’s fiduciary duties to the Company and the Members under the Act to permit a Manager to engage in the activities described in Exhibit C. Each Member will evidence their consent by executing Exhibit C.

5.4. Action by Manager. All Manager authority is subject to the restrictions in Section

5.6 and any other requirements for Member consent set forth in this Agreement.

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Packet Pg. 1400 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 18 5.5. Manager Compensation. The Manager may receive reasonable compensation for the Manager’s services upon approval by a Majority of Members, and will be entitled to reimbursement for all expenses reasonably incurred by the Manager in the performance of the Manager’s duties. Any fee paid to the Manager will be treated as payment under Code §707(a) or (c) as appropriate (and any comparable provision of state or local law).

5.6. Restrictions on Manager Authority. The Manager will not take any of the following actions on behalf of the Company unless a Majority of Members have consented to the taking of such action:

5.6.1. Amend the Articles of Organization or this Agreement (subject to the requirements of Section 11.1);

5.6.2. Enter into, on behalf of the Company, any transaction constituting a “merger” or “conversion” within the meaning of Article 10 of the Act (Corporation Code §17710.11 et seq.);

5.6.3. Cause the Company to enter Bankruptcy or confess a judgment;

5.6.4. Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the Company’s property, with or without the goodwill, outside the ordinary course of the company’s activities;

5.6.5. Undertake any other act outside the ordinary course of the Company’s activities, including, without limitation, those set forth in Section 2.3 of this Agreement; or

5.6.6. Knowingly do any act which would make it impossible to carry on the ordinary business of the Company, except as otherwise provided in this Agreement.

5.7. Officers.

5.7.1. Appointment of Officers. The Manager may appoint officers of the Company at any time. The officers will exercise such powers and perform such duties as will be determined from time to time by the Manager.

5.7.2. Removal, Resignation, and Filling of Vacancy of Officers. Subject to the rights, if any, of an expressed, written employment contract, any officer may be removed, either with or without cause, by the Manager at any time. Any officer may resign at any time by giving written notice to the Manager, who will then inform all the Members. Any resignation will take effect at the date of the receipt of that notice or at any later time specified in that notice. Any resignation is without prejudice to the rights, if any, of the Company under any contract to which the officer is a party. A vacancy in any office will be filled by an appointment made by the Manager.

5.7.3. Acts of Officers as Conclusive Evidence of Authority. Any note, mortgage, evidence of indebtedness, contract, certificate, statement, conveyance, or other instrument in writing, and any assignment or endorsement thereof, executed or entered into between the Company and any other Person, when signed by (i) the president or any vice

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Packet Pg. 1401 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 19 president and (ii) any secretary, any assistant secretary, the chief financial officer, or any assistant financial officer of the Company, is not invalidated as to the Company by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other Person that the signing officers had no authority to execute the same.

5.8. Company Assets. The Manager will cause all assets of the Company, whether real or personal, to be held in the name of the Company.

5.9. Company Accounts. All funds of the Company will be deposited in one or more accounts with one or more recognized financial institutions in the name of the Company, at such locations as will be determined by the Manager. Subject to the terms of Sections 5.1 and 5.6, withdrawal from such accounts will require only the signature of the Manager or such other person or persons as the Manager may designate.

5.10. Indemnification of Manager. The Manager will be fully indemnified by the Company against any claims, expenses or assertions which may arise (whether by a Person not a Member of the Company, by a Person who is a Member in the Company, by a Person not a Member but who claims an interest directly or indirectly in the Company, or by anyone else) which in any way relates to the Manager serving as such so long as the action or omission of such Manager was taken in compliance with the fiduciary duties of the Manager stated in Corporations Code §17704.09, as modified by this Agreement. Notwithstanding the foregoing, or any other provision of this Agreement, the Manager will not be indemnified by the Company for:

5.10.1. A breach of the Manager’s duty of loyalty (as defined in the Act and modified by the terms of this Agreement) to the Company;

5.10.2. A financial benefit received by the Manager to which the Manager is not entitled;

5.10.3. The Manager’s intentional infliction of harm on the Company or a Member; or

5.10.4. The Manager’s intentional violation of criminal a law or statute.

ARTICLE SIX: ACCOUNTS AND ACCOUNTING

6.1. Entry and Storage of Books and Records. Complete books of account of the Company’s business, in which each Company transaction will be fully and accurately entered, will be kept at the Company’s principal executive office and at other locations that the Manager may determine from time to time, and will be open to inspection and copying by each Member or the Member’s authorized representatives on reasonable Notice during normal business hours.

The costs of such inspection and copying will be borne by the Member.

6.2. Accounting Method. The Company’s financial books and records will be kept on the cash method of accounting, which will be the method of accounting followed by the Company for federal income tax purposes. The Company’s financial statements will include a balance sheet and income statement, which will each be prepared promptly following the close

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Packet Pg. 1402 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 20 of each fiscal year in a manner appropriate to and adequate for the Company’s business and for carrying out the provisions of this Agreement. The fiscal year of the Company will be January 1st through December 31st.

6.3. Accounts and Records. At all times during the term of existence of the Company, and beyond that term if a Majority of Members deem it necessary, the Manager will keep or cause to be kept the books of account referred to in Section 6.1, and the following:

6.3.1. A current list of the full name and last known business or residence address of each Member, together with the Capital Contribution and the share in Net Profits and Net Losses of each Member;

6.3.2. A copy of the Articles of Organization of the Company, as amended;

6.3.3. Copies of the Company’s federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years;

6.3.4. Executed counterparts of this Agreement, as amended;

6.3.5. Any powers of attorney under which the Articles or any amendments thereto were executed;

6.3.6. Financial statements of the Company for the six most recent fiscal years; and

6.3.7. The books and records of the Company as they relate to the Company’s internal affairs for the current and past four fiscal years.

If the Manager deems that any of the foregoing items will be kept beyond the term of existence of the Company, the repository of said items will be as designated by the Manager.

6.4. Information Regarding Interest Holders’ Tax Returns. Within 90 days after the end of each taxable year of the Company, the Company will send to each of the Interest Holders all information necessary for the Interest Holders to complete their federal and state income tax or information returns, and a copy of the Company’s federal, state, and local income tax or information returns for such year.

ARTICLE SEVEN: MEMBERS AND VOTING

7.1. Rights of Members. The Company has only one class of Membership and no Member will have any rights or preferences in addition to or different from those possessed by any other Member. Each Member will Vote in proportion to the Member’s Percentage Interest as of the governing record date, determined in accordance with Section 7.3. If a Member has assigned all or part of the Member’s Transferable Interest to a Person who has not been admitted as a Member, the assigning Member will Vote in proportion to the Percentage Interest that the assigning Member would have had if the assignment had not been made. Any action that may or that must be taken by the Members will be taken by the unanimous Vote of the Members, except as otherwise provided in this Agreement.

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Packet Pg. 1403 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 21 7.2. Admission of New Members. A Person will be admitted as a Member of the Company by Vote of not less than Members holding at least 75% of the Percentage Interests, and such Person who is a married individual will execute a counterpart of this Agreement as a party to it and his or her Spouse will execute a Spousal Consent in the form provided in Exhibit B to this Agreement.

7.3. Record Date. The record date for determining the Members entitled to notice of any meeting, to Vote, to receive any distribution, or to exercise any right in respect of any other lawful action, will be the date set by the Manager, provided that such record date will not be more than 60, nor less than ten days prior to the date of the meeting, Vote or other action. In the absence of any action setting a record date the record date will be determined in accordance with Corporations Code §17704.07(p).

7.4. Meetings of the Members. Meetings of the Members may be called at any time by the Manager, or by Members representing 10% or more of the outstanding Membership Interests of the Company, for the purpose of addressing any matters on which the Members may Vote. If a meeting of the Members is called by the Members, Notice of the call will be delivered to the Manager. Meetings may be held at the principal executive office of the Company or at any other location designated by the Manager. Following the call of a meeting, the Manager will give Notice of the meeting not less than ten, nor more than 60, calendar days before the meeting date to all Members entitled to Vote at the meeting. The Notice will state the place, date, and hour of the meeting, the means of electronic transmission by and to the Company or electronic video communication, if any, and the general nature of business to be transacted. No other business may be transacted at the meeting, unless approved by a Majority of the Members at the meeting. A quorum at any meeting of Members will consist of a Majority of Members, represented in person or by Proxy. The Members present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the withdrawal of a sufficient number of Members to leave less than a quorum, if the action taken, other than adjournment, is approved by the requisite Percentage Interest as specified in this Agreement or the Act. Each meeting of the Members will be conducted by the Manager or such other Person as the Manager may appoint.

7.5. Adjournment. A meeting of Members at which a quorum is present may be adjourned to another time or place and any business that might have been transacted at the original meeting may be transacted at the adjourned meeting. Notice of the adjourned meeting need not be given to Members entitled to Notice if the time and place of the adjourned meeting are announced at the meeting at which the adjournment is taken, unless (a) the adjournment is for more than 45 days, or (b) after the adjournment, a new record date is fixed for the adjourned meeting. In the situations described in clauses (a) and (b), Notice of the adjourned meeting will be given to each Member of record entitled to Vote at the adjourned meeting.

7.6. Waiver of Notice. The transactions of any meeting of Members, however called and noticed, and wherever held, will be as valid as though consummated at a meeting duly held after regular call and notice if (a) a quorum is present at that meeting, either in person or by Proxy, and (b) either before or after the meeting, each of the persons entitled to Vote, not present in person or by Proxy, signs either a written waiver of notice, a consent to the holding of the meeting, or an approval of the minutes of the meeting. Attendance of a Member at a meeting will

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Packet Pg. 1404 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 22 constitute waiver of notice, unless that Member objects, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened.

Attendance at a meeting is not a waiver of any right to object to the consideration of matters required to be described in the notice of the meeting and not so included, if the objection is expressly made at the meeting.

7.7. Methods of Voting by Members. At any meetings of the Members, a Member may Vote in person or by Proxy. Such Proxy will be submitted to the Manager before or at the time of the meeting, and may be submitted to the Manager by facsimile transmission or by electronic transmission to the Company at the principal executive office of the Company or such other address as may be given by the Manager to the Members for such purposes.

7.8. Participation in Meetings by Electronic Means. A meeting of the Members may be conducted, in whole or in part, by electronic transmission by and to the Company or by electronic video communication if (i) the Company implements reasonable measures to provide Members (in person or by Proxy) a reasonable opportunity to participate in the meeting and to Vote on matters submitted to the Members, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with those proceedings, and if (ii) any Member Votes or takes other action at the meeting by means of electronic transmission to the Company or electronic video communication, a record of that Vote or action is maintained by the Company.

7.9. Action by Members Without a Meeting. Any action that may be taken at any meeting of the Members may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by Members having not less than the minimum number of Votes that would be necessary to authorize or take that action at a meeting at which all Members entitled to Vote were present and voted. If the Members are requested to consent to a matter without a meeting, each Member will be given notice of the matter to be voted on in the manner described in Section 7.4. Any action taken without a meeting will be effective when the required minimum number of Votes have been received. Prompt Notice of the action taken will be given to all Members who have not consented to the action.

7.10. Meetings Not Required. The provisions of this Article Seven govern meetings of the Members if the Manager or the Members elect, in their discretion, to hold meetings of Members. However, nothing in this Article or in this Agreement is intended to require that meetings of Members be held, it being the intent of the Manager and Members that meetings of Members are not required.

7.11. Personal Representatives. The Personal Representative of an Interest Holder will be entitled to exercise all of the rights of such Interest Holder under the terms of this Agreement and under the Act.

7.12. Spousal Consent. Each Interest Holder who is a married individual will provide a copy of this Agreement to his or her Spouse, unless his or her Spouse is also an Interest Holder, and obtain a written consent to the terms of this Agreement from his or her Spouse in the form provided in Exhibit B to this Agreement.

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Packet Pg. 1405 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 23 7.13. No Agency. No Interest Holder acting solely in the capacity of an Interest Holder is an agent of the Company, nor can any Interest Holder acting solely in the capacity of an Interest Holder bind the Company or execute any instrument on behalf of the Company. No Interest Holder will have any right or power to take part in the management or control of the Company or its business and affairs except for a Member’s right to Vote on those matters provided for in this Agreement.

ARTICLE EIGHT: TRANSFERS OF INTERESTS

8.1. Restrictions on Transfers. No Interest Holder may Transfer or Encumber all or any portion of his, her, or its Interest, whether now owned or hereafter acquired, except in accordance with the terms and conditions described in this Article Eight. Any attempted Transfer or Encumbrance of an Interest which fails to comply with all of the provisions of this Agreement will be null and void and will not be effective to Transfer any Interest whatsoever to any purported Transferee. Any Transfer which would cause the dissolution and termination of the Company in violation of this Agreement or the Act will also be null and void and the purported Transferee of such Transfer will not become an Interest Holder.

8.2. Permitted Transfers and Permitted Transferees.

8.2.1. Permitted Transfers. Notwithstanding Section 8.1, an Interest Holder may Transfer any of his, her or its Interest (a “Permitted Transfer”) and any rights and interest therein to the following Persons (each a “Permitted Transferee”):

8.2.1.a. Any other Member; or

8.2.1.b. Except as specifically provided hereafter, to or for the benefit of the Member’s Spouse or Descendants; or

8.2.1.c. A trustee, individual or corporate, of a trust that is exclusively for a Member’s lifetime benefit, over which such Member holds an unqualified power of revocation, and which qualifies under subsections 8.2.1.d. or 8.2.1.e. below whenever the trust becomes irrevocable; or

8.2.1.d. A trustee, individual or corporate, of an irrevocable trust for the benefit of a Spouse or Descendants of a Member which does not vest ownership of any Interest in such Spouse or Descendants and which provides for the disposition of such Interest upon termination of the trust to one or more individuals or trusts who are Permitted Transferees under the terms of this Section 8.2; or

8.2.1.e. A trustee, individual or corporate, of an irrevocable trust which is more than 75% Actuarially Held for one or more of the Permitted Transferees described in this subsection 8.2.1.

For purposes of this Section 8.2, if the Member is a trust, the Member will be deemed to be settlor of such trust.

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Packet Pg. 1406 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 24 8.3. Fiduciary Transfers. Any Personal Representative, or any other person who is an Interest Holder due to a fiduciary relationship, may Transfer an Interest to a successor fiduciary if such Transfer does not otherwise violate the terms of this Agreement, and such Transfer will be deemed a Permitted Transfer under Section 8.2.1.

8.4. Informational Notices. A Person who makes a Permitted Transfer under Section

8.2.1 will promptly inform the Manager of the Transfer, and the Manager will promptly inform the other Members of such Transfer.

8.5. Transferees. A Permitted Transfer to a Permitted Transferee who is already a Member, will effectively Transfer the subject Interest to the Member. A Transfer to a Permitted Transferee or any other Person who is not a Member will effectively Transfer only a Transferable Interest and such Transferee will be only a Transferable Interest Owner unless and until such Transferee is admitted as a Member in accordance with the provisions of Section 7.2 and Section 8.6. The Permitted Transfer of an Interest does not release the Interest Holder who Transferred the Interest from any liability that such Interest Holder may have to the Company or to any of the other Interest Holders.

8.6. Obligations of Transferees. Each Transferee will, unless this Agreement expressly provides otherwise: (a) execute this Agreement and hold his, her, or its interest in the Company subject to all the provisions of this Agreement; (b) if such Transferee is married, have such Transferee’s Spouse execute a Spousal Consent in the form attached hereto as Exhibit B and (c) make no further Transfer of such Interest except as provided in this Agreement. If any such Transferee refuses to execute this Agreement, or if such Transferee’s Spouse refuses to execute a Spousal Consent, then such Transferee will be deemed a Selling Interest Holder, the Manager will give a Manager’s Notice with respect to the Interest held by the Transferee, and the provisions of Section 8.7, et seq. will then apply to such Interest.

8.7. Right of First Refusal.

8.7.1. Notice of Sale. If any Interest Holder receives a bona fide offer to purchase any of the Interest Holder’s Interest or any right therein (the “Purchase Interest”), from a third party offeror (a “Proposed Transferee”), and such Interest Holder desires to become a Selling Interest Holder, such Interest Holder will first give written notice to the Company, in the manner specified in Section 11.12, of his or her intention to accept such offer (the “Notice of Sale”).

8.7.1.a. Contents of the Notice of Sale. The Notice of Sale will (i) be signed by the Selling Interest Holder and the Proposed Transferee, (ii) set forth all of the terms and conditions of the Proposed Transfer (to include the price, date of the proposed Transfer and the terms of payment, if any), (iii) a current financial statement of the Proposed Transferee, which will be signed by the Proposed Transferee and verified to be true and correct, and (iv) include a written agreement by the Proposed Transferee to become a Member subject to the terms and conditions of this Agreement. The Selling Interest Holder will attach to the Notice of Sale a true and correct copy of any sale or other document pursuant to which the Purchase Interest is proposed to be purchased by the Proposed Transferee and a certification from the Proposed Transferee that his, her or its offer to acquire the Purchase Interest is bona fide.

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Packet Pg. 1407 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 25 8.7.2. Distribution of the Notice of Sale. Promptly upon (a) receipt of a Notice of Sale or (b) notice of the occurrence of an event that causes any Interest Holder to be deemed a Selling Interest Holder under this Agreement, the notified Manager will cause a copy of such notice to be sent to all Interest Holders of record as of the date (the “Manager’s Notice”). The Manager’s Notice will be given in the manner specified in Section 11.12.

8.7.3. Company’s Option to Purchase.

8.7.3.a. Within 30 days after the issuance of the Manager’s Notice, the Company will have the option to purchase the Purchase Interest at the price and on the terms and conditions set forth in the Notice of Sale, or if the terms and conditions are not set forth in the Notice of Sale, on the terms provided in Section 8.9

8.7.3.b. If the Company elects to purchase the Purchase Interest, the Manager will notify the Selling Interest Holder, and if the terms and conditions are not set forth in the Notice of Sale, the Company will pay the purchase price at the time and in the manner provided in Section 8.9. If the Company elects not to purchase the Purchase Interest, or if the Company acquires some, but not all, of the Purchase Interest, the Company will notify the Other Members (the “Company’s Non-Exercise Notice”).

8.7.4. Other Members’ Option to Purchase.

8.7.4.a. If the Company does not exercise its option to purchase the Purchase Interest, or to the extent that the Company purchases some but not all of the Purchase Interest, within 30 days after the issuance of the Company Non-Exercise Notice (the “Member Option Period”), the Other Members will have the option to purchase a pro rata share of the Purchase Interest, or portion thereof which has not been purchased by the Company at the price and on the terms and conditions set forth in the Notice of Sale, or if the terms and conditions are not set forth in the Notice of Sale, on the terms provided in Section 8.9.

8.7.4.b. All Other Members desiring to acquire a share of the Purchase Interest will deliver to the Manager a written election specifying their intent to purchase. Each electing Other Member may purchase a share of the Purchase Interest in the same proportion that each Other Member’s Percentage Interest bears to the total Percentage Interests owned by all of the electing Other Members. As soon as the percentage of each electing Other Member has been determined, the Manager will notify each electing Other Member of the percentage.

8.7.5. Selling Interest Holder’s Right to Dispose of Interest. If all of a Purchase Interest that is subject to a bona fide purchase offer from a third party offeror has not been purchased by the Company or Other Members, the Selling Interest Holder may, for a oneyear period commencing after expiration of the Member Option Period, Transfer the remaining portion of the Purchase Interest upon the terms and conditions described in the Notice of Sale.

At the end of such one-year period, the transfer restrictions and right of first refusal set forth in this Article Eight will once again become effective as to the Interest owned by the Selling Interest Holder. If all of the Purchase Interest is not purchased by the Company or Other Members where that Purchase Interest is deemed such because of an event under Section 8.8 or

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Packet Pg. 1408 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 26 otherwise, the remaining portion of the Purchase Interest will cease to be a Purchase Interest, but will otherwise continue to be subject to the terms and restrictions of this Article 8.

8.7.6. Assignment of Options. No option to purchase a Purchase Interest under the terms of this Article Eight may be assigned or transferred to any Person, including the Company or Permitted Transferees.

8.8. Buy-Sell Provisions

8.8.1. Death of an Interest Holder. Within 30 days of the death of an Interest Holder, the deceased Interest Holder’s Personal Representative will notify the Manager of such Interest Holder’s death. If, as a result of the death of the deceased Interest Holder, the Transfer of any Interest is to be made to a Person who is not a Permitted Transferee, then (a) the deceased Interest Holder’s Personal Representative will so notify the Manager, and (b) effective upon the Manager’s receipt of such notice, the deceased Interest Holder’s Interest will be deemed a Purchase Interest and the Interest Holder a Selling Interest Holder, and (c) the Manager will issue a Manager’s Notice and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest. For purposes of this Section 8.8.1, if an Interest Holder is a trust, the Interest Holder will be deemed to be settlor of such trust.

8.8.2. Bankruptcy; Attachment by Creditors. In the event a creditor of an Interest Holder successfully attaches an Interest, or any interest therein, or if any Interest Holder is adjudicated bankrupt (voluntarily or involuntarily) or makes an assignment for the benefit of his, her or its creditors, effective upon the occurrence of such event (i.e., the date of the attachment or the date of the assignment), such Interest will deemed a Purchase Interest and such Interest Holder a Selling Interest Holder, the Manager will issue a Manager’s Notice, and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest.

8.8.3. Interest as Collateral. An Interest Holder may only assign, pledge, hypothecate, or otherwise Encumber his, her, or its Interest as security for any debt or other obligation upon the written consent of the Manager. Any attempted foreclosure on the security for which an Interest is serving as collateral will result in such Interest being deemed a Purchase Interest and the Interest Holder a Selling Interest Holder, and as soon as the Manager receives notice of the attempt to foreclose on such Interest, the Manager will issue a Manager’s Notice and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest.

8.8.4. Dissolution of Marriage. If an Interest Holder’s marriage dissolves, then such Interest Holder will notify the Manager of the dissolution in the manner specified in Section

11.12 and will have the right to purchase any Spouse Interest, if any, from his or her Spouse. To the extent such Interest Holder has not purchased the Spouse Interest, if any, within 30 days of the effective date of the dissolution of marriage, such Spouse Interest will be deemed a Purchase Interest and the Spouse a Selling Interest Holder, the Manager will issue a Manager’s Notice, and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest.

8.8.5. Actions by Interest Holder Against the Company. Within 30 days of an Interest Holder’s election to dissolve the Company, filing of a lawsuit to dissolve the Company, filing a legal action against the Company or the Manager, or the Interest Holder’s wrongful

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Packet Pg. 1409 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 27 dissociation under Section 9.3 below, then the Interest Holder who has instituted such action will be deemed a Selling Interest Holder and its Interest a Purchase Interest and the Manager will issue a Manager’s Notice, and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest.

8.8.6. Actions Impacting Permitting or Licensing. The Company has been organized for the purpose of operating a business which requires particular state, county, and local permits and/or licenses. If any Interest Holder commits an act or takes any action that jeopardizes the permitting or licensing of the Company, as determined by the Manager in his or her sole discretion, and including, for example, repeated violations of certain federal or state laws, committing a felony, being married to a felon, acquiring an interest in a business that would violate statutory prohibitions, or attempting to transfer an Interest to a person under the age of 21, such Interest Holder will be deemed a Selling Interest Holder and its Interest a Purchase Interest, the Manager will issue a Manager’s Notice, and the provisions of Section 8.7, et seq. will then apply to such Purchase Interest.

8.9. Valuation. For Transfers that are not Permitted Transfers, or for transfers proposed under Section 8.7.1 which do not contain a purchase price in the Notice of Sale, or transfers arising from the occurrence of an event set forth in Section 8.8, the purchase price for the sale of a Purchase Interest will be the Fair Market Value that the Selling Interest Holder(s) and the purchaser(s) of the Purchase Interest (i.e., those who are exercising the right to purchase the Interest under this Agreement) will agree upon. If the Selling Interest Holder(s) and the purchaser(s) (the “parties” to the proposed purchase and sale transaction) cannot agree on a Fair Market Value within 30 days after the date of the event requiring the determination of a value, then the value of the Purchase Interest will be determined by appraisal as follows:

8.9.1. The parties will appoint one or more appraisers who have the qualifications described in subsection 8.9.7 below, and the parties will be bound by the appraiser’s(s’) determination of the value of the Purchase Interest.

8.9.2. If the parties cannot agree upon one or more appraisers within 30 days of the event requiring the determination of a value, then each party will immediately name an appraiser, and the value of the Purchase Interest will be the average of the two values determined by each appraiser. However, if the lower of the two values determined by the appraisers is less than 85% of the higher value, then the original appraisers will jointly appoint a third appraiser within five days of their determination of values. If the two original appraisers cannot agree upon a third appraiser within the five day period, each original appraiser will submit names of no more than two candidates to be chosen as the third appraiser, and the third appraiser will be chosen at random by some agreed upon method (such as by drawing names from a hat) from such list of candidates. After the third appraiser has determined the value of the Purchase Interest, the value of the Purchase Interest will be the average of the two closest values determined by the three appraisers.

8.9.3. The assignment given to each appraiser appointed under this Section will be to determine the Fair Market Value of the Purchase Interest that is to be transferred under this Agreement, as of the date of the Manager’s Notice. Such an appraisal will consider such factors as control premiums, discounts for minority interests, and discounts for lack of marketability.

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Packet Pg. 1410 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 28 8.9.4. The parties will share equally the fees and expenses of any appraiser the parties or their appraisers appoint jointly, but each party will be responsible for the fees and expenses of any appraiser appointed solely by such party.

8.9.5. Before an appraiser is engaged to appraise a Purchase Interest for purposes of this Agreement, the appraiser must agree that the written appraisal, including the analysis and the factors upon which the appraisal is based, will be delivered to each party within 90 days of the engagement.

8.9.6. All parties will make available to any appraiser engaged pursuant to this Section any information requested by such appraiser for the purpose of preparing the appraisal.

8.9.7. Each appraiser engaged under this Section will be a business valuation specialist certified by the American Society of Appraisers who has experience in appraising businesses similar to the Company.

8.10. Payment and Transfer of a Purchase Interest. If a Purchase Interest is being purchased from a Selling Interest Holder who is proposing to Transfer the Interest to a Proposed Transferee described in the Selling Interest Holder’s Notice of Sale, then the consideration to be paid to the Selling Interest Holder by the purchaser(s) who are exercising the right to purchase an Interest under this Agreement will be:

8.10.1. At the same price and on the same terms as those described in the Notice of Sale provided by the Selling Interest Holder if the Proposed Transferee has proposed to purchase the Purchase Interest with cash or cash equivalents; or

8.10.2. If the offer made by the Proposed Transferee is to purchase a Purchase Interest with any non-cash assets, then cash, notes, or a combination thereof, as determined by the purchaser(s), can be used in lieu of such non-cash assets when determining the consideration to be paid to the Selling Interest Holder, so long as such consideration is of equivalent value to the non-cash assets and any note used in such purchase meets the requirements of Section 8.11.

If the parties to the transaction are unable to agree as to the value of any such non-cash assets, then they will have such assets appraised in the manner described in Section 8.9.

If a Purchase Interest is being sold as a result of an event described in Section 8.8 or if a Purchase Interest is being sold because an Interest Holder has been deemed a Selling Interest Holder under this Agreement, then the consideration for the Purchase Interest will be paid in cash, or with one or more notes, or a combination thereof, as the purchaser(s) will determine so long as any note used in such purchase meets the requirements of Section 8.11.

The consideration to be paid for the Purchase Interest determined under this Section 8.10 will be paid to the Selling Interest Holder within 60 days of the date that the purchase price for such Purchase Interest has been determined.

8.10.3. Administrative Requirements. The Company agrees to apply for, and use its best efforts to obtain, all governmental and administrative approvals, if any, required in connection with the Transfer of an Interest under this Agreement. The Interest Holders agree to cooperate and obtain the approvals and to execute any and all documents which may be required

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Packet Pg. 1411 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 29 to be executed by them in connection with the approvals. The Company will pay all costs and filing fees in connection with obtaining these approvals.

8.10.4. Indemnity. If a Purchase Interest is being purchased as a result of a Notice of Sale given by a Selling Interest Holder which describes the terms of an offer made to purchase such Membership Interest by a Proposed Transferee, then the purchasers of such Purchase Interest will assume the liabilities of the Selling Interest Holder and indemnify the Selling Interest Holder in the same manner as that proposed by the Proposed Transferee as described in the Notice of Sale. If a Membership Interest is being purchased as a result of the Notice of Sale given by a Selling Interest Holder for whom there is no Proposed Transferee, then each purchaser will indemnify the Selling Interest Holder from any cost, expense or liability arising from any guaranties or liabilities of the Selling Interest Holder entered into for the benefit of the Company or the Other Members, including but not limited to, all debts, obligations, duties, agreements, expenses and losses, whether arising from, in connection with, or occasioned by negligence, gross negligence, willful misconduct, contractual agreements, insured or uninsured casualties or torts, or otherwise, and punitive damages, as well as attorney’s fees, expenses, and other costs of defense.

8.11. Promissory Notes.

8.11.1. Note Provisions. Any deferred portion of the purchase price for a Purchase Interest will be represented by a promissory note executed by each Transferee that elects to defer all or a portion of the purchase price by use of a promissory note. Each debtor under such a promissory note will pay each installment of principal and interest as it falls due.

Any such promissory note will:

8.11.1.a. provide for payment of principal and interest in equal monthly installments for a term selected by the purchaser(s) but not to exceed 120 months, bearing fixed interest at the lowest rate permissible under federal law without the imputation of interest;

8.11.1.b. provide for full privilege of prepayment of all or any part of the principal at any time without penalty or bonus;

8.11.1.c. provide that any prepaid sums will be applied against installments thereafter falling due in inverse order of their maturity, or against all the remaining installments equally, at the option of the holder; and

8.11.1.d. provide that, in the case of default, at the election of the holder, the entire sum of principal and interest will immediately be due and payable, and that the debtor will pay reasonable attorney’s fees to the holder if suit is commenced because of default.

8.11.2. If a Purchase Interest is being purchased from the Personal Representative of a deceased Interest Holder, then the purchase price must be paid in a manner that will provide the Personal Representative with cash equal to the greater of 20% of the purchase price or an amount that is sufficient to pay any federal and state estate tax that is incurred as a result of the inclusion of the Purchase Interest in the gross estate of the deceased Interest Holder (i.e., at the top marginal estate tax brackets applicable to the estate as a result of

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Packet Pg. 1412 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 30 the inclusion of the Purchase Interest), and which is payable at the time of the filing of the estate tax returns. Notwithstanding the foregoing, if the payment of any federal and state estate tax incurred by the inclusion of the Purchase Interest in the gross estate of the deceased Interest Holder is deferred under the provisions of §6166 of the Code (or its successor sections) and any state statute that operates similarly to §6166 of the Code, then the amount of such tax which is payable at the time of filing of the estate tax returns must be paid in cash and any promissory note executed for the balance the purchase price will provide for regular payments which will coincide with the time and amount of such deferred tax payments.

8.12. Securities Laws; Legends on Certificates. The issuance of an Interest to Members or subsequent Transfer to an Interest Holder has not been qualified or registered under the securities laws of any state, including California, or registered under the Securities Act of 1933, in reliance on exemptions from the registration provisions of those laws. Notwithstanding any other provision of this Agreement, an Interest may not be Transferred unless registered or qualified under applicable state and federal securities laws unless, in the opinion of legal counsel satisfactory to the Company, qualification or registration is not required. An Interest Holder who desires to Transfer an Interest will be responsible for all legal fees incurred in connection with that opinion.

In addition to any legend required by the laws of the State of California, any other applicable state, and the laws of the United States, each certificate representing an Interest, if any, will bear, when issued or as soon as this Agreement has been executed, the following legend:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933

OR REGISTERED OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS. SALE, TRANSFER, AND HYPOTHECATION

OF THE INTEREST REPRESENTED BY THIS CERTIFICATE ARE

RESTRICTED BY THE PROVISIONS OF THE OPERATING

AGREEMENT OF SONOMA CHO, LLC, A COPY OF WHICH MAY

BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY,

AND ALL OF THE PROVISIONS OF WHICH ARE INCORPORATED
BY REFERENCE IN THIS CERTIFICATE.”
ARTICLE NINE: MEMBER’S DISSOCIATION

9.1. Right to Dissociate. A Member may not dissociate from the Company without the affirmative Vote of all other Members. If a Member dissociates from the Company by desire pursuant to Corporations Code §17706.01(a), the Member will be deemed to have dissociated wrongfully for purposes of this Agreement and the Act.

9.2. Dissociation of Member. A Member is deemed to have dissociated from the Company upon the occurrence of any of the following events:

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Packet Pg. 1413 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 31 9.2.1. The Company's receipt of written notice of the Member’s express will to dissociate, but, if the Member specified a dissociation date later than the date the Company had notice, on that later date.

9.2.2. Any event stated in this Agreement as causing the Member’s dissociation to occur.

9.2.3. In the case of a Member who is an individual, the Member dies.

9.2.4. In the case of a Member that is a Personal Representative, the Personal Representative’s entire Transferable Interest in the Company is distributed but not solely by reason of a substitution of a successor Personal Representative.

9.2.5. In the case of a Member that is not an individual, partnership, limited liability company, corporation, trust, or estate, the termination of the Member.

9.2.6. The Company participates in a merger under Article 10 (Corporations Code §17710.01 et seq.), and either (i) the Company is not the surviving entity or (ii) otherwise as a result of the merger, the Member ceases to be a Member.

9.2.7. The Company is wound up, dissolved, and terminated.

9.3. Wrongful Dissociation. A Member is deemed to have wrongfully disassociated from the Company upon the occurrence of any of the following events:

9.3.1. The dissociation is in breach of Section 9.1 or any other express provision of this Agreement.

9.3.2. Upon the unanimous Vote of the other Members to expel the Member because it is unlawful to carry on the Company’s activities with the Member because any of the following has occurred:

9.3.2.a. There has been a Transfer of all of the Member’s Transferable Interest in the Company, other than either of the following: (i) a Transfer for security purposes; or (ii) a charging order in effect under Corporations Code §17705.03 that has not been foreclosed.

9.3.2.b. The Member is an entity (i) which has filed a certificate of dissolution or is otherwise being wound up and dissolved, (ii) whose charter has been revoked, or (iii) whose right to conduct business has been suspended, and after 90 days written notice from the Company, has not ceased dissolution, or its charter or right to conduct business has not been reinstated.

9.3.3. On application by the Company, the Member’s Membership Interest is terminated by judicial order because the Member has done any of the following:

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Packet Pg. 1414 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 32 9.3.3.a. Engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the Company’s activities.

9.3.3.b. Willfully or persistently committed, or is willfully and persistently committing, a material breach of this Agreement or the Member’s duties or obligations under Corporations Code §17704.09.

9.3.3.c. Engaged, or is engaging, in conduct relating to the Company’s activities that makes it not reasonably practicable to carry on the activities of the Company with the Member as a Member.

9.3.4. The Member becomes a debtor in a bankruptcy proceeding.

9.4. Effect of Dissociation. As of the effective date of dissociation, the dissociated Member’s Membership Interest is terminated and the dissociated Member will have only the rights of a Transferable Interest Owner. In the event the dissociated Member is also a Manager, the dissociated Member’s status as a Manager and right to participate in the management and conduct of the Company’s activities will terminate as of the effective date of dissociation.

Dissociation will not release a Member from any obligations and liabilities under this Agreement accrued or incurred before the effective date of dissociation. Unless all remaining Members consent to the dissociation, the dissociating Member will not be entitled to a distribution of or in connection with its Transferable Interest until the dissolution and liquidation of the Company.

9.5. Liability for Wrongful Dissociation. A Member that wrongfully dissociates as a Member under this Agreement or the Act is liable to the Company and to the other Members for any damages caused by the dissociation. The liability is in addition to any other debt, obligation, or other liability of the Member to the Company or the other Members.

ARTICLE TEN: DISSOLUTION AND WINDING UP

10.1. Dissolution. The Company will be dissolved, its assets will be disposed of, and its affairs wound up on the first to occur of the following:

10.1.1. Upon the entry of a decree of judicial dissolution pursuant to Corporations Code §17707.03;

10.1.2. Upon the Vote of not less than Members holding at least 75% of the Percentage Interests; or

10.1.3. The sale or other disposition of all or substantially all of the assets of the Company.

10.2. Certificate of Dissolution. As soon as possible following the occurrence of any of the events specified in Section 10.1, the Manager, or if none, a designated Member, will execute a Certificate of Dissolution in such form as is prescribed by the California Secretary of State and file the Certificate(s) as required by the Act.

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Packet Pg. 1415 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 33 10.3. Winding Up. Upon the occurrence of any event specified in Section 10.1, the Company will continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The Manager will be responsible for overseeing the winding up and liquidation of Company, will take full account of the liabilities of Company and assets, will either cause its assets to be sold or distributed, and if sold as promptly as is consistent with obtaining the fair market value thereof, will cause the proceeds therefrom, to the extent sufficient, to be applied and distributed as provided in Section 10.5. The Manager will give written notice of the commencement of winding up by mail to all known creditors and claimants whose addresses appear on the records of the Company. The Manager will be entitled to reasonable compensation for such services.

10.4. Distributions in Kind. Any non-cash asset distributed to one or more Interest Holders upon dissolution of the Company will first be valued at its Fair Market Value to determine the Net Profit or Net Loss that would have resulted if such asset were sold for such value. Such Net Profit or Net Loss will then be allocated pursuant to this Agreement, and the Interest Holders’ Capital Accounts will be adjusted to reflect such allocations. The amount distributed and charged to the Capital Account of each Interest Holder receiving an interest in such distributed asset will be the Fair Market Value of such interest (net of any liability secured by such asset that such Interest Holder assumes or takes subject to). The Fair Market Value of such asset will be determined by the Manager, or by an independent appraiser if any Interest Holder objects, so long as any such appraiser is recognized as an expert in valuing the type of asset involved. Such appraiser will be selected by mutual agreement of the Manager and the objecting Interest Holder(s).

10.5. Order of Payment Upon Dissolution.

10.5.1. After determining that all known debts and liabilities of the Company in the process of winding-up, including, without limitation, debts and liabilities to Interest Holders who are creditors of the Company, have been paid or adequately provided for, the remaining assets will be distributed to the Interest Holders first in proportion to their respective Capital Accounts and thereafter in proportion to their Percentage Interest, after taking into account income and loss allocations for the Company’s taxable year during which liquidation occurs.

Such liquidating distributions will be made by the later of (i) end of the Company’s taxable year in which the Company is liquidated or (ii) ninety (90) days after the date of such liquidation.

10.5.2. For purposes of this Agreement, the payment of a debt or liability has been adequately provided for if the payment has been provided for by either of the following means:

10.5.2.a. Payment thereof has been assumed or guaranteed in good faith by one or more financially responsible Persons or by the United States government or any agency thereof, and the provision, including the financial responsibility of the Person, was determined in good faith and with reasonable care by the Manager to be adequate at the time of any distribution of the assets pursuant to this Section; or

10.5.2.b. The amount of the debt or liability has been deposited as provided in Corporations Code §2008.

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Packet Pg. 1416 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 34 This Section 10.5.2 will not prescribe the exclusive means of making adequate provision for debts and liabilities.

10.6. Compliance with Regulations. All payments to an Interest Holder upon the winding up and dissolution of Company will be strictly in accordance with the positive Capital Account balance limitation and other requirements set forth in this Agreement.

10.7. Deficit Capital Account Balance on Dissolution. Upon dissolution and liquidation of the Company, no Interest Holder will be obligated to contribute to the capital of the Company an amount equal to the negative balance, if any, standing in its Capital Account (after taking into account all Capital Account adjustments for all taxable years, including the year such dissolution and liquidation occurs).

10.8. Limitations on Payments Made in Dissolution. Except as otherwise provided in this Agreement, each Interest Holder will only be entitled to look solely to a distribution of the assets of the Company for the return of such Interest Holder’s positive Capital Account balance and will have no other recourse against any other Interest Holders for indemnification, contribution, or reimbursement for such Interest Holder’s Capital Contribution and/or share of Net Profits upon dissolution, except as specifically provided in this Agreement.

10.9. Certificate of Cancellation. The Manager or a designated Member who files the Certificate of Dissolution will also cause to be filed in the office of, and on a form prescribed by, the California Secretary of State, a Certificate of Cancellation of the Articles upon the completion of the winding up of the affairs of the Company.

10.10. No Action for Dissolution. Each Interest Holder acknowledges that irreparable damage would be done to the goodwill and reputation of the Company if an Interest Holder should bring an action in court to dissolve the Company under circumstances where dissolution is not required by Section 10.1. Accordingly, except where the Company has not been liquidated as required by Section 10.1, each Interest Holder waives and renounces his, her or its right to initiate legal action to seek the appointment of a receiver or trustee to liquidate the Company or to seek a decree of judicial dissolution of the Company on the ground that (a) it is not reasonably practicable to carry on the business of the Company in conformity with the Articles or this Agreement, or (b) dissolution is reasonably necessary for the protection of the rights or interests of the complaining Member.

ARTICLE ELEVEN: DISCLOSURES AND RISK FACTORS

11.1. Due Diligence Investigation. All Members should conduct a due diligence investigation of the Company and the other Members prior to executing this Agreement in order to fully understand the nature and risk of an investment in the Company. Each Member is advised to obtain the services of an attorney, accountant or other advisor to assist in analyzing the merits and risks of the acquisition of a Membership Interest and each Member, by executing this Agreement, acknowledges that he has done so or has consciously waived his right to do so.

11.2. Equity Investment. Each Member understands that an investment in the Company and purchase of a Membership Interest is an equity investment and that there is no

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Packet Pg. 1417 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 35 promise or assurance that such investment will be returned or that such Member will receive any appreciation or other return on such investment.

11.3. Long-Term Illiquid Investment. Each Member acknowledges: (i) that the acquisition of a Membership Interest is for long term investment, without any intention or expectation to resell the same; (ii) Membership Interest are restricted securities and may not be sold except in compliance with federal and state securities laws and in all events are subject to the restrictions on transfer and encumbrance as set forth in this Agreement; (iii) investment in a Membership Interest is an illiquid investment; and (iv) there is no ready mechanism available to convert the Membership Interest to cash or to otherwise sell a Membership Interest or to cause the Company to sell its assets or to liquidate.

11.4. Price for Membership Interest is Negotiated. A Membership Interest may never be worth more than, or even as much as, the contributions made by a Member in exchange for a Membership Interest. The contribution obligation amount is established by the Company based on anticipated needs of the Company, but does not reflect the amount any Member would receive if the Member were able to sell a Membership Interest or if the Company assets are sold and the net proceeds distributed to the Interest Holders. No promises or assurances have been made to any Member regarding the profitability, cash flow or projections for business operations of Company. If the Company were liquidated and dissolved the day following the date of acquisition of a Membership Interest, the Members would most likely not receive in full the amount paid for a Membership Interest.

11.5. Availability of Operating Capital. To the extent that Company requires operating capital in the future in addition to the monies available from the contributions of the Members, or from Company's normal business activities, there is no assurance that any such operating capital can be raised by Company or will be sufficient to pay all obligations of Company when due.

Failure of any Member to make future capital contributions when due may result in the Company unable to continue with its business plans.

11.6. Failure of Projections. Many events may occur beyond the control of Company or even if in the control of Company, may not be now anticipated, any of which could result in delay, damage or destruction to the business or assets of Company, and the occurrence of any of which could result in the Company being undercapitalized.

11.7. Partnership For Income Tax Purposes. Company is a partnership for federal income tax purposes. As a result, a portion of the profit or loss of Company, equal to the allocation to be made to the Members pursuant to this Agreement, will be required to be reported by the Members on the Member's income tax return and each Member will be required to pay tax on any such reported profit. The Company has no obligation to make any distribution to any Member to enable any Member to pay the taxes on such profit, except as otherwise expressly set forth in this Agreement. There is no promise or assurance that there will ever be any distributions of cash or property from Company except as otherwise set forth in this Agreement, and even if Company has an obligation to make a distribution, the Company may not be economically able to do so. Losses may or may not be deductible by the Members, depending upon their respective basis in a Membership Interest and their personal tax situation.

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Packet Pg. 1418 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 36 11.8. No Guarantee of Return of Investment. Company has made no promise or warranty that in the event of liquidation or termination of Company there will be adequate funds to return any Member's investment in a Membership Interest.

11.9. Lack of Diversification. There is no diversification of the business of the Company. The business of the Company is limited to its defined purpose. The viability of the business of the Company may be affected by economic factors not within the control of the Company.

11.10. Projections and Forward Looking Statements. Any projections presented to Members are not promises of future performance, but only depict possible future performance if all the assumptions upon which the projections were made in fact occur. To the extent that the Company from time-to-time prepares or has prepared a budget, or a projection of future activity, there can be no assurance, and there is no promise, that the performance of Company will be in accordance with such budget or projection. Such budget and projections are only the best estimate of the Company, based entirely on the assumptions on which the budget or projection was based. Any projections that may be delivered, and as well as references to potential future events, possible outcomes and projected growth are called herein "forward-looking statements" or "forward looking projections." Members are cautioned not to place undue reliance on forwardlooking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: inability to obtain financing in addition to the Member contributions to the extent necessary or desired; market competition; lack of public acceptance of the business being undertaken, risks inherent in business operations; inability to generate sufficient cash flow from operations to meet current and future obligations; inability to access external sources of debt and equity capital; political and economic conditions affecting business; and the risk of international war, hostilities, civil insurrection and instability and terrorist threats.

The foregoing list of important factors is not exhaustive. Furthermore, the forward-looking statements are made as of the date such statements are made, and there is no obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements, budgets and/or projections are not promises.

11.11. Insurance. The Company may or may not be adequately insured for catastrophic losses. A variety of events can occur, which if not insured against, could result in substantial adverse loss to the Company.

ARTICLE TWELVE: GENERAL PROVISIONS

12.1. Entire Agreement; Amendments. This Agreement constitutes the whole and entire agreement of the undersigned with respect to the subject matter of this Agreement, and it will not be amended in any respect except with the consent of a Majority of Members.

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Packet Pg. 1419 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 37 12.2. Governing Law. This Agreement will be construed and enforced in accordance with the laws of the State of California. If any provision of this Agreement is determined by any court of competent jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision will, if possible, be construed in a way to avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision will, to the extent of such invalidity, illegality, or unenforceability, be severed from the Agreement, and the remaining provisions of this Agreement will remain in effect.

12.3. Dispute Resolution. With respect to any dispute arising out of or related to this Agreement, the parties will first make a good-faith effort to resolve the dispute without resort to litigation. In the event of a dispute, the Parties agree to meet informally within 15 days after notice from one party requesting such a meeting. Should the dispute not be resolved by said informal discussions, the parties agree to attempt in good faith to resolve their differences in confidential, non-binding mediation, using an experienced mediator with at least five years of experience in the a regulated industry who is an attorney or retired judge and who is mutually agreed upon by the Parties. If the Parties are unable to agree upon a mediator, Judicial Arbitration and Mediation Services (“JAMS”) will suggest three mediators meeting the above qualifications and each party will strike one. A mediation session will be scheduled within 30 days after the failure of informal discussions to resolve the dispute. Costs of the mediation will be borne equally by the Parties. The mediation will be held under the rules of JAMS and will be conducted in Sonoma County, California. The Parties will participate in the mediation process in good faith, and will have a representative in attendance throughout the mediation with authority to settle the dispute. The Parties may be represented by counsel at both the informal discussions and the mediation session. Statements made during the mediation process will be considered to be made in the context of settlement discussions, and will not be admissible in any subsequent judicial proceeding. If mediation fails to resolve the dispute, the Parties may resort to any form of dispute resolution, including litigation within the California courts.

12.4. Prevailing Party’s Fees. In any dispute among the Members or between any Member and the Manager or the Company, whether or not resulting in litigation or arbitration, the party substantially prevailing will be entitled to recover from the other party all reasonable fees, costs and expenses including, without limitation, reasonable attorneys’ fees and expenses, incurred by the prevailing Party or Parties in connection therewith, all of which will be deemed to have accrued on the commencement of such action and will be paid whether or not such action is prosecuted to judgment. Any award, judgment or order entered in such action will specifically provide for the recovery of attorneys’ fees and costs incurred in enforcing such award or judgment and an award of prejudgment interest from the date of the breach at the maximum rate allowed by law. For purposes of this Agreement, the term “attorney fees” or “attorney fees and costs” will include, without limitation, fees incurred in post-award or post-judgment motions, contempt proceedings, garnishment, levy, and debtor and third party examinations, discovery, appeals, arbitrations and bankruptcy litigation and may include, without limitation, printing, Photostatting, copying, duplicating and other expenses, air freight charges and fees billed for law clerks, paralegals, librarians and others not admitted to the bar but performing services under an attorney’s supervision. The term “prevailing party” will mean the party that is determined in the proceeding to have prevailed or who prevails by dismissal, demurrer, default or otherwise. The term “attorney” will have the same meaning as the term “counsel.”

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Packet Pg. 1420 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 38 12.5. Legal Counsel.

12.5.1. Counsel to the Manager and the Company. Each Member acknowledges and understands that Dickenson, Peatman & Fogarty PC (“DP&F”) has acted as counsel for the Manager in preparing this Agreement and ancillary documents, each Member represents that he, she or it understands that DP&F also represents the Company. Each Member consents to such representations.

12.5.2. Representations and Warranties by Members. Each Member: (1) represents and warrants that it has considered the foregoing carefully and approves such counsel’s representation of the Manager and the Company; (2) acknowledges the possibility that, under the laws and ethical rules governing the conduct of attorneys, such counsel may be precluded from representing any one or more specific Parties in connection with any dispute involving Members or the Company; (3) agrees that such counsel may decline to represent, or withdraw from representing, the Manager or the Company at any time; (4) acknowledges that actual or potential conflicts of interest may exist among the Members, that no Member will be represented by legal counsel unless such Member specifically engages counsel on its own behalf, and that such Member has been afforded the opportunity to engage and seek the advice of its own legal counsel before entering into this Agreement; (5) agrees that in the event of a dispute between one or more Members, on the one hand, and the Manager or the Company, on the other hand, DP&F may represent one or more of the Company, Manager or the officers thereof; (6) acknowledges that the approvals, acknowledgements and waivers in this Section

11.5.2 do not reflect or create a right under this Agreement on the part of such Member to approve the Manager’s selection of legal counsel for the Company; (7) agrees that neither this Agreement nor the transactions and Company operations contemplated hereby are intended to create an attorney/client relationship between DP&F and such Member or any other relationship pursuant to which such Member (acting other than in the name of the Company) would have a right to object to such counsel’s representation of any person under any circumstances; (8) acknowledges and understands that DP&F may at times agree to represent the Company, and each Member consents to such representation and agrees that such representation will not be deemed or result in representation of any Member by DP&F, notwithstanding that the services of DP&F rendered for the benefit of the Company may also benefit the Members by virtue of their interests in the Company; (9) agrees that, if there is ever a dispute between any Member and the Manager or the Company, no Member will be entitled to discovery of any communication between DP&F and the Manager or the Company relating to services provided by DP&F to the Manager or the Company; and (10) understands that DP&F owes a duty of confidentiality only to its client the Manager and the Company and not to the Members and accordingly, DP&F may obtain confidential information from or about the Manager or the Company that it may not share with the Members, and further, DP&F may obtain confidential information from or about the Members that it is under no duty to keep confidential and that it may share with the Manager and the Company.

12.5.3. Related Issues. The Parties intend that DP&F will be entitled to enforce this Section 11.5 and each Member consents in advance to such enforcement. Nothing in this Section 11.5 will preclude the Manager or the Company from selecting different legal counsel at any time in the future and, except as specifically provided in this Section 11.5, no Member will be deemed by virtue of this Agreement to have waived its right to object to any

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Packet Pg. 1421 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 39 conflict of interest relating to matters other than this Agreement or the transactions and Company operations contemplated hereby.

12.6. Binding Agreement. This Agreement will be binding on and inure to the benefit of the Parties and their heirs, personal representatives, and permitted successors-in-interest and assigns, and no other person or entity will have or acquire any right by virtue of this Agreement.

12.7. Interpretation; Headings. Whenever used in this Agreement, the singular will include the plural, the plural will include the singular, and the neuter gender will include the male and female as well as a trust, firm, company or corporation, all as the context and meaning of this Agreement may require. The article and section headings contained in this Agreement are inserted as a matter of convenience and for ease of reference only, and will be disregarded for all other purposes, including the construction or enforcement of this Agreement or any of its provisions.

12.8. Confidentiality. No Interest Holder may disclose any confidential and/or proprietary information related to the business activities of the Company including, but not limited to, business plans, financial statements, revenue, pricing, formulas, data (including customer information and potential customer opportunities), inventions, techniques, product designs, strategies, and other trade secrets (collectively, “Confidential Information”) without the prior written approval of the Manager. All Confidential Information will remain the sole property of the Company and all materials containing such information will be returned to the Company by the Interest Holder upon (i) the Interest Holder’s disassociation from the Company; or (ii) the Manager’s request.

12.9. No Agency Relationship. No provision in this Agreement is intended to make a Member the agent of any other Member.

12.10. Implementation of Agreement Each of the Members agrees to include in his or her will or other testamentary document a direction and authorization to his or her Personal Representative to comply with the provisions of this Agreement and to Transfer his or her Membership Interest only in accordance with the terms of this Agreement. Notwithstanding the foregoing, the failure of a Member to do so will not affect the validity or enforceability of this Agreement.

12.11. Severability. It is intended that each paragraph of this Agreement will be viewed as separate and devisable, and in the event that any paragraph will be held to be invalid, the remaining paragraphs will continue to be in full force and effect.

12.12. Notices. All notices and any other communications permitted or required under this Agreement must be in writing and will be effective (i) immediately upon delivery in person or by electronic mail, or (ii) 24 hours after deposit with a commercial courier or delivery service for overnight delivery. All notices must be properly addressed and delivered to the Parties at the address set forth on the signature page of this Agreement or at any other address that any party may designate by written notice to the Manager.

12.13. Specific Enforcement. The Parties to this Agreement agree that there is no adequate remedy at law for breach of the terms and conditions contained in Article Eight, and

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Packet Pg. 1422 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 40 therefore, all of those terms and conditions will be specifically enforceable by a court of competent jurisdiction.

12.14. Waiver of Rights. The failure of any party to this Agreement at any time or times to require performance of any provision of this Agreement will in no manner affect the right to enforce that provision at a later time. No waiver by any party to this Agreement of any breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, will be deemed to be or construed as a further or continuing waiver of any such breach or a waiver of any other term contained in this Agreement.

12.15. Counterparts This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

12.16. Time of Essence. Time is of the essence of every provision of this Agreement that specifies a time for performance.

12.17. Intent of Members that Company be Limited Liability Company. The undersigned intend the Company to be a limited liability company under the Act. No Member will take any action inconsistent with the express intent of the Parties to this Agreement. [SIGNATURE PAGES TO FOLLOW]

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Packet Pg. 1424 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis 2 MANAGER:

Dated: June 22, 2018
David Wingard II

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Packet Pg. 1425 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis Exhibit A

EXHIBIT A

INFORMATION OF MEMBERS AND MANAGER
OF

SONOMA CHO, LLC
Member Names and Addresses Percentage Interest Capital Contribution David Wingard II & Alicia Wingard
Cotati, CA 94931

60% $75,000.00 +
Services
David & Sally Wingard
Sebastopol, CA 95472
20% $400,000.00
Michael & Susan Barrett
Santa Rosa, CA 95404

10% $200,000.00
James G. Brown, Trustee of James G.
and Teresa A. Brown Living Trust,
dated December 3, 2003 (held therein
for the benefit of James G. Brown, as
his sole and separate property).

Sebastopol, CA 96572
10% Services
Manager’s Name and Address
David Wingard II
Cotati, CA 94931

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Packet Pg. 1426 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis Exhibit B – page 1

EXHIBIT B

SPOUSAL CONSENT
I, the Spouse of _______________, a Member of Sonoma CHO, LLC, a California limited liability company (the “Company”), acknowledge that I have read the Operating Agreement of Sonoma CHO, LLC (the “Agreement”) and that I know its contents. Capitalized terms used in this Spousal Consent will have the meaning specified in the Agreement. I am aware that by the provisions of the Agreement:
(1) my Spouse agrees to sell all of his/her Membership Interest, including any community property interest in his/her Membership Interest that I may own, on the occurrence of certain events; and
(2) I will sell to my Spouse, the Company, or the Other Members, on the terms set forth in the Agreement, my Spouse Interest in the event of the dissolution of our marriage.

I consent to and approve the provisions of the Agreement, and agree that (a) any Membership Interest registered in my name or in my Spouse’s name, and any interest that I may own in such Membership Interest, is subject to the provisions of the Agreement, (b) that I will take no action at any time to hinder operation of the Agreement on that Membership Interest or any interest that I may own in it, and (c) that I will cooperate in implementing all of the terms of the Agreement, including the execution of all documents that are necessary to implement the terms of the Agreement.

Dated: _________________________
Name:

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Packet Pg. 1427 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis Exhibit C

EXHIBIT C

COMPETITIVE ACTIVITIES OF THE MANAGER
The undersigned Member of Sonoma CHO, LLC, a California limited liability company (the “Company”), acknowledges that ______________________ who is a Manager of the Company is engaging or intends to engage in activities competitive to the Company’s business and/or is rendering or intends to render services to other businesses which are substantially similar to those the Manager engages in on behalf of or renders to the Company. These activities and/or services are as follows:
______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ The undersigned Member gives his/her/its informed consent pursuant to Section 17701.10(e) of the California Revised Uniform Limited Liability Company Act (the “Act”) so as to modify the above identified Manager’s fiduciary duties to the Company and the Members under the Act to permit the Manager to engage in the activities and/or render the service described above while they serve as a Manager of the Company. Each Member further agrees that the above described activities are not manifestly unreasonable and do not violate the Manager’s fiduciary duties to the Company or to the Members under the Act.

The undersigned Member waives any and all rights and claims they may otherwise have against the Manager or the other Members under the Act as a result of the above identified Manager’s participation in the activities described above.

Dated: _________________________
Name:

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Packet Pg. 1428 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis

OPERATING AGREEMENT
OF

SONOMA CHO, LLC

A CALIFORNIA LIMITED LIABILITY COMPANY

THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY

NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED, OR

HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE

STATE AND FEDERAL SECURITIES LAWS OR IN THE OPINION OF COUNSEL

SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION OR REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF SECURITIES REPRESENTED BY THIS

AGREEMENT IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

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Packet Pg. 1429 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis i

TABLE OF CONTENTS
ARTICLE ONE: DEFINITIONS..............................................................................................................................1 ARTICLE TWO: FORMATION AND ACTIVITIES............................................................................................7

2.1 FORMATION .....................................................................................................................................................7

2.2 NAME...............................................................................................................................................................7

2.3 PURPOSE AND ACTIVITIES OF THE COMPANY...................................................................................................7

2.4 TERM ...............................................................................................................................................................7

2.5 OFFICE AND AGENT .........................................................................................................................................8

2.6 ADDRESSES OF THE MEMBERS AND THE MANAGER.........................................................................................8

2.7 COMPANY TAX REPRESENTATIVE....................................................................................................................8

2.8 TITLE TO PROPERTY; NO RIGHT TO PARTITION..............................................................................................10

2.9 COMPETING ACTIVITIES.................................................................................................................................10 ARTICLE THREE: CAPITALIZATION..............................................................................................................10

3.1 INITIAL CAPITAL CONTRIBUTIONS .................................................................................................................10

3.2 ADDITIONAL CAPITAL CONTRIBUTIONS.........................................................................................................10

3.3 FAILURE TO MAKE CONTRIBUTIONS ..............................................................................................................11

3.4 CAPITAL ACCOUNTS ......................................................................................................................................11

3.5 INTEREST HOLDER LOANS .............................................................................................................................11

3.6 NO INTEREST .................................................................................................................................................11

3.7 WITHDRAWAL OF CAPITAL CONTRIBUTION ...................................................................................................12

3.8 LIABILITY OF MEMBERS.................................................................................................................................12

3.9 NO PRIORITY..................................................................................................................................................12 ARTICLE FOUR: ALLOCATIONS AND DISTRIBUTIONS............................................................................12

4.1 ALLOCATIONS OF NET PROFIT AND NET LOSS ...............................................................................................12

4.2 SPECIAL ALLOCATIONS..................................................................................................................................12

4.3 CODE §704(C) ALLOCATIONS ........................................................................................................................14

4.4 ALLOCATIONS AND DISTRIBUTIONS IN RESPECT OF A TRANSFERRED INTEREST............................................14

4.5 DISTRIBUTIONS OF DISTRIBUTABLE CASH .....................................................................................................14

4.6 FORM OF DISTRIBUTION.................................................................................................................................15

4.7 RESTRICTION ON DISTRIBUTIONS...................................................................................................................15

4.8 RETURN OF DISTRIBUTIONS ...........................................................................................................................16

4.9 OBLIGATIONS OF INTEREST HOLDERS TO REPORT ALLOCATIONS..................................................................16 ARTICLE FIVE: MANAGEMENT.......................................................................................................................16

5.1 MANAGEMENT OF THE COMPANY ..................................................................................................................16

5.2 TERM; ELECTION OF MANAGER .....................................................................................................................16

5.3 MANAGER’S OTHER BUSINESS ACTIVITIES....................................................................................................17

5.4 ACTION BY MANAGER ...................................................................................................................................17

5.5 MANAGER COMPENSATION............................................................................................................................18

5.6 RESTRICTIONS ON MANAGER AUTHORITY.....................................................................................................18

5.7 OFFICERS .......................................................................................................................................................18

5.8 COMPANY ASSETS .........................................................................................................................................19

5.9 COMPANY ACCOUNTS....................................................................................................................................19

5.10 INDEMNIFICATION OF MANAGER...............................................................................................................19 ARTICLE SIX: ACCOUNTS AND ACCOUNTING............................................................................................19

6.1 ENTRY AND STORAGE OF BOOKS AND RECORDS ...........................................................................................19

6.2 ACCOUNTING METHOD ..................................................................................................................................19

6.3 ACCOUNTS AND RECORDS .............................................................................................................................20

6.4 INFORMATION REGARDING INTEREST HOLDERS’ TAX RETURNS ...................................................................20 ARTICLE SEVEN: MEMBERS AND VOTING ..................................................................................................20

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Packet Pg. 1430 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis ii

7.1 RIGHTS OF MEMBERS.....................................................................................................................................20

7.2 ADMISSION OF NEW MEMBERS......................................................................................................................21

7.3 RECORD DATE ...............................................................................................................................................21

7.4 MEETINGS OF THE MEMBERS. ........................................................................................................................21

7.5 ADJOURNMENT ..............................................................................................................................................21

7.6 WAIVER OF NOTICE .......................................................................................................................................21

7.7 METHODS OF VOTING BY MEMBERS..............................................................................................................22

7.8 PARTICIPATION IN MEETINGS BY ELECTRONIC MEANS..................................................................................22

7.9 ACTION BY MEMBERS WITHOUT A MEETING.................................................................................................22

7.10 MEETINGS NOT REQUIRED........................................................................................................................22

7.11 PERSONAL REPRESENTATIVES...................................................................................................................22

7.12 SPOUSAL CONSENT ...................................................................................................................................22

7.13 NO AGENCY ..............................................................................................................................................23 ARTICLE EIGHT: TRANSFERS OF INTERESTS ............................................................................................23

8.1 RESTRICTIONS ON TRANSFERS .......................................................................................................................23

8.2 PERMITTED TRANSFERS AND PERMITTED TRANSFEREES ...............................................................................23

8.3 FIDUCIARY TRANSFERS..................................................................................................................................24

8.4 INFORMATIONAL NOTICES .............................................................................................................................24

8.5 TRANSFEREES ................................................................................................................................................24

8.6 OBLIGATIONS OF TRANSFEREES.....................................................................................................................24

8.7 RIGHT OF FIRST REFUSAL ..............................................................................................................................24

8.8 BUY-SELL PROVISIONS ..................................................................................................................................26

8.9 VALUATION ...................................................................................................................................................27

8.10 PAYMENT AND TRANSFER OF A PURCHASE INTEREST ...............................................................................28

8.11 PROMISSORY NOTE ...................................................................................................................................29

8.12 SECURITIES LAWS; LEGENDS ON CERTIFICATES........................................................................................30 ARTICLE NINE: MEMBER’S DISSOCIATION.................................................................................................30

9.1 RIGHT TO DISSOCIATE....................................................................................................................................30

9.2 DISSOCIATION OF MEMBER............................................................................................................................30

9.3 WRONGFUL DISSOCIATION ............................................................................................................................31

9.4 EFFECT OF DISSOCIATION ..............................................................................................................................32

9.5 LIABILITY FOR WRONGFUL DISSOCIATION ....................................................................................................32 ARTICLE TEN: DISSOLUTION AND WINDING UP .......................................................................................32

10.1 DISSOLUTION ............................................................................................................................................32

10.2 CERTIFICATE OF DISSOLUTION..................................................................................................................32

10.3 WINDING UP .............................................................................................................................................33

10.4 DISTRIBUTIONS IN KIND............................................................................................................................33

10.5 ORDER OF PAYMENT UPON DISSOLUTION.................................................................................................33

10.6 COMPLIANCE WITH REGULATIONS ............................................................................................................34

10.7 DEFICIT CAPITAL ACCOUNT BALANCE ON DISSOLUTION..........................................................................34

10.8 LIMITATIONS ON PAYMENTS MADE IN DISSOLUTION................................................................................34

10.9 CERTIFICATE OF CANCELLATION ..............................................................................................................34

10.10 NO ACTION FOR DISSOLUTION ..................................................................................................................34 ARTICLE ELEVEN: DISCLOSURES AND RISK FACTORS..........................................................................34

11.1 DUE DILIGENCE INVESTIGATION...............................................................................................................34

11.2 EQUITY INVESTMENT ................................................................................................................................34

11.3 LONG-TERM ILLIQUID INVESTMENT..........................................................................................................35

11.4 PRICE FOR MEMBERSHIP INTEREST IS NEGOTIATED ..................................................................................35

11.5 AVAILABILITY OF OPERATING CAPITAL....................................................................................................35

11.6 FAILURE OF PROJECTIONS .........................................................................................................................35

11.7 PARTNERSHIP FOR INCOME TAX PURPOSES ..............................................................................................35

11.8 NO GUARANTEE OF RETURN OF INVESTMENT...........................................................................................36

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Packet Pg. 1431 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis iii

11.9 LACK OF DIVERSIFICATION .......................................................................................................................36

11.10 PROJECTIONS AND FORWARD LOOKING STATEMENTS ..............................................................................36

11.11 INSURANCE ...............................................................................................................................................36 ARTICLE TWELVE: GENERAL PROVISIONS................................................................................................36

12.1 ENTIRE AGREEMENT; AMENDMENTS ........................................................................................................36

12.2 GOVERNING LAW......................................................................................................................................37

12.3 DISPUTE RESOLUTION ...............................................................................................................................37

12.4 PREVAILING PARTY’S FEES .......................................................................................................................37

12.5 LEGAL COUNSEL .......................................................................................................................................38

12.6 BINDING AGREEMENT ...............................................................................................................................39

12.7 INTERPRETATION; HEADINGS ....................................................................................................................39

12.8 CONFIDENTIALITY.....................................................................................................................................39

12.9 NO AGENCY RELATIONSHIP ......................................................................................................................39

12.10 IMPLEMENTATION OF AGREEMENT ...........................................................................................................39

12.11 SEVERABILITY...........................................................................................................................................39

12.12 NOTICES....................................................................................................................................................39

12.13 SPECIFIC ENFORCEMENT ...........................................................................................................................39

11.14 WAIVER OF RIGHT.....................................................................................................................................40

12.15 COUNTERPARTS.........................................................................................................................................40

12.16 TIME OF ESSENCE......................................................................................................................................40

12.17 INTENT OF MEMBERS THAT COMPANY BE LIMITED LIABILITY COMPANY ................................................40 EXHIBIT A INFORMATION OF MEMBERS AND MANAGER .......................................................................1 EXHIBIT B SPOUSAL CONSENT..........................................................................................................................1 EXHIBIT C COMPETITIVE ACTIVITIES OF THE MANAGER .....................................................................1

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Packet Pg. 1432 Attachment: Sonoma CHO - Flora Terra Business Information & Proof of Capitalization (4237 : Public Hearing to Consider Retail Cannabis June 30, 2023
David Wingard
1825 Empire Industrial Ct.

Santa Rosa, CA 95403

Sent via email to [email protected]; [email protected] Subject: Zoning Clearance Letter – 498 Moore Lane
Dear Mr. Wingard:

The purpose of this letter is to inform you that the above-referenced location at 498 Moore Lane meets all of the location criteria outlined in the Commercial Cannabis Ordinance for a retail dispensary.

Location Requirements (HMC Section 20.20.095(B)(6)):
a. A retail dispensary which is open to the public may only be located within the allowed zoning district(s) under Table 10 of Section 20.08.145, Table 12 of Section 20.08.155, and Table 15 of Section 20.08.195.
498 Moore Lane is zoned Industrial (I) which allows for a retail dispensary or microbusiness.
b. A retail dispensary shall not be established on any parcel containing a dwelling unit, or immediately abutting (sharing a common property line with) a residential zoning district. Residentially zoned does not include mixed-use zoning for purposes of this section.
498 Moore Lane does not contain a dwelling unit. The abutting parcels are designated Industrial (I).
c. A retail dispensary shall not be established within five hundred feet from any youthoriented property.

There are no youth-oriented properties located within 500 feet of 498 Moore Lane.

CITY OF HEALDSBURG

COMMUNITY DEVELOPMENT DEPARTMENT
401 Grove Street
Healdsburg, CA 95448-4723
Phone: (707) 431-3346
Fax: (707) 431-2710
Visit us at www.healdsburg.gov

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Packet Pg. 1433 Attachment: Sonoma CHO - Flora Terra Zoning Clearance Letter (4237 : Public Hearing to Consider Retail Cannabis Business Applications) d. A retail dispensary shall not be established within two hundred and fifty feet of any public park (with the exception of West Plaza Park and 3 North Street), public playground, or public library.

There are no public parks, public playgrounds, or public libraries within 250 feet of 498 Moore Lane.
e. The distances listed above shall be measured between the nearest entrance (ingress/egress to commercial cannabis establishment, e.g., front door/public entry or service door) of the retail dispensary and the nearest property line of the parcel(s) on which the youth-oriented property, public park, public playground, or public library is located, along the shortest route intended and available for public passage (any public road, street, or highway, including footpaths and bicycle paths, or other route provided for the passage of people).

The distances noted in criteria c and d above were calculated based on the above measurement criteria.

Other Requirements:
a. Parking (HMC Section 20.20.095(B)(7)(k))
The proposed site at 498 Moore Lane can provide the required parking on-site.

Please feel free to contact me at 707-431-3346 or [email protected] if you have any questions regarding this determination.

Sincerely,
Scott Duiven
Community Development Director

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Packet Pg. 1434 Attachment: Sonoma CHO - Flora Terra Zoning Clearance Letter (4237 : Public Hearing to Consider Retail Cannabis Business Applications)