Agenda packet — Shafter City Council, March 3, 2026 (part 2 of 3)

11 85. Tie-ins to existing sewer mains, manholes, or other structures shall be constructed as directed by the City Engineer.

86. Sewer pipelines and manholes shall be installed within the proposed paving of the development.

87. Separate sewer services shall be installed for each property. At no time shall sewer be joint trenched with water.

ENGINEERING: STREET & TRAFFIC

88. Developer shall construct and provide rights-of-way for all streets, curb, gutter, cross gutter, drainage facilities, sidewalks, walls, landscaping, streetlights, drive approaches, intersections, and other related improvements consistent with Tentative Tract No. 7523.

Developer shall submit street improvement plans prepared by a registered civil engineer to the City Engineer for review and approval and shall include: Preliminary soils report, preliminary engineer’s estimate of construction costs; and plan check and inspection fees.

89. Additional rights of way easements or dedications necessary for street and/or public utility improvements located outside the tract boundary shall be granted to the City of Shafter prior to a final map recording.

90. The drawings shall include all proposed public street pavement, curb, gutter, driveways, streetlights, cross gutter, catch basins, striping, signage, traffic signals, and sidewalks along the perimeter of all streets adjacent to or within the project site. Said improvements shall be constructed as per the street improvement plans approved by the City Engineer in a manner consistent with the Subdivision and Engineering Design Manual.

91. Street signs shall be installed per City standards as required by the City Engineer.

92. During construction, the Developer shall maintain the project, including all adjacent streets in a dust free condition. This condition applies at all times including weekends, evenings, and nighttime hours. During construction operations, cleanup of soil from the public roadways shall be required, if deemed necessary, by the City Engineer.

93. All utilities proposed under paving shall be installed prior to paving. Cover over utilities shall be at a depth as approved by the City Engineer.

94. Driveway approaches shall be constructed in a manner consistent with the requirements for commercial approaches as set forth in the City’s Subdivision and Engineering Design Manual or as permitted by the City Engineer.

95. Sidewalk, including curb, shall be five (5) feet wide and shall be placed behind the curb, or as specified by the Engineering Design Manual. Transitions at intersections and wheelchair ramps shall be provided and installed per the City’s Subdivision and Engineering Design Manual.

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12 96. Monument and monument covers shall be set per City Standards.

97. Property line locations shall be marked with a chiseled line on the top of curb for all property lines. The location of all sewer laterals shall be indicated on the top or face of curb with a stamped “S”.

98. Street lighting shall be installed in accordance with the City Engineering and Subdivision Design Manual as directed by the City Engineer. Developer shall coordinate with Pacific Gas & Electric to ensure that the streetlights are established under the LS-2A rate schedule.

99. Secondary access easements shall be provided at the request of the City Engineer. Within any given phase of development, secondary access easements and improvements shall be provided in a manner approved by the City Engineer. Access roads shall be twenty (20) feet in width and shall consist of three (3) inches of Class II aggregate base over six (6) inches of native material compacted to 90% relative maximum density. 100. Developer shall dedicate to the City of Shafter an additional four (4) feet along the north side of E Ash Avenue, as shown on the approved Tract Map. Said dedication shall be shown on, and recorded with, the Final Map.
101. Prior to recordation of the Final Map, the Developer of Tract 7523 shall demonstrate to the satisfaction of the City that an Intersection Safety and Operational Assessment Process (ISOAP) has been initiated with the California Department of Transportation (Caltrans), District 6, to address operational and safety considerations at the Ash Avenue/State Route 43 intersection. The completed ISOAP shall be submitted to Caltrans District 6 for review and concurrence prior to issuance of any Caltrans encroachment permit affecting State Route 43.
102. The Developer shall complete the following street improvements, in accordance with all City standards:
a. Extend the existing paving, and install new curb, gutter, and 5-ft-wide sidewalk on the south-side of E Euclid Ave.
b. Extend the existing street paving, and install new curb, gutter, and 5-ft-wide sidewalk on the north side of E Ash Ave.
c. Extend the existing street paving, and install new curb, gutter, and 10-ft-wide sidewalk on the west side of Central Valley Highway (State-Route 43).

ENGINEERING: LANDSCAPING
103. Electrical Source for Landscaping:
a. Developer shall supply and install landscaping electrical services to power any and all required timers, solenoids, pumps, motorized equipment. Cabinets and meter pedestals shall be approved by the City of Shafter. Developer shall contract with Pacific, Gas & Electric the location of each pedestal and make all arrangements for them to deliver power at each location.

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13 104. Water Source for Landscaping:
a. Landscaping water service point of connection shall be approved by the City Engineer. The water source shall be from the non-potable water system installed with the tract.
105. Landscaping Enclosure:
a. Landscaping timers, electrical service fuses, breakers, etc., shall be installed within a commercial grade landscaping enclosure.
b. Commercial grade landscaping enclosure shall be installed within the dedicated landscaping area adjacent to the water source and/or electrical source. c. Commercial grade landscaping enclosure shall be installed on a concrete foundation poured onto a minimum of six (6) inches of native subgrade compacted to 90% (or in accordance with manufacturer’s recommendations, whichever is more stringent). d. The City of Shafter Subdivision and Design Manual requires a 110-volt duplex electrical service within the enclosure.
106. The Developer shall comply with all requirements for grading and erosion control, including the prevention of sedimentation or potential damage to off-site property. 107. Sleeves shall be placed under the proposed paving for landscape piping or low voltage electrical per the City Engineer.

ENGINEERING: SUBDIVISION IMPROVEMENT AGREEMENT
108. The Developer shall furnish the City of Shafter acceptable security to guarantee the construction of public improvements in accordance with all applicable provisions of the City of Shafter Municipal Code and the California Subdivision Map Act. The Developer shall enter into a subdivision improvement agreement with the City of Shafter for any public improvements that are not yet completed at the time of Final Map approval. The subdivision improvement agreement must be approved by the Shafter City Council and recorded with the Kern County Assessor-Recorder.

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PUBLIC HEARINGS

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Steve Esselman, Planning Director
SUBJECT: AMEND SHAFTER MUNICIPAL CODE TITLE 5 (BUSINESS

TAXES, LICENSES AND REGULATIONS) TO COMPLY WITH
SENATE BILL 635

RECOMMENDATION
Council find that the action is not defined as a “project” per Section 15378(b)(2) of the CEQA Guidelines; conduct hearing and introduce for first reading by title only and waive reading of Ordinance No. 778, an amendment Shafter Municipal Code Title 5 (Business Taxes, Licenses and Regulations) to comply with Senate Bill 635.

BACKGROUND
Senate Bill (SB) 635 was signed by the Governor on October 8, 2025, and went into effect on January 1, 2026. The new law adds privacy and enforcement protections for sidewalk vendors. The Shafter Municipal Code (SMC) defines “sidewalk vendor or vending” as “a person who sells food or merchandise from a pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other non-motorized conveyance, or from one's person, upon a public sidewalk or other pedestrian path.” The main goal of SB 635 is to protect the sensitive personal information of sidewalk vendors. The key provisions of the new law are that local governments, such as the City, are now:

1. Limited in the data that can be collected on a prospective sidewalk vendor,

2. Prohibited from sharing personal information about a sidewalk vendor with federal immigration enforcement unless a valid judicial warrant or subpoena is issued, and

3. Required to destroy now-prohibited data collected before the law’s effective date by March 1, 2026.

Regarding data collection, the new law now requires that local governments cannot collect or inquire about immigration or citizenship status, criminal history or background checks, fingerprints or biometric data (like LiveScan), and place of birth or similarly sensitive information as part of sidewalk vending permit or enforcement processes.

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AMEND SHAFTER MUNICIPAL CODE TITLE 5 (BUSINESS TAXES, LICENSES AND REGULATIONS) TO COMPLY WITH SENATE BILL 635
- 2 -
While not a part of State law established by SB 635, staff has also proposed revisions to food vending vehicle permits and enforcement in Title 5 that mirror the revisions to sidewalk vending permits and enforcement as part of this agenda item. The SMC defines “mobile vending vehicle” as “any motor vehicle, truck, car, trailer, cart, wagon, conveyance, or structure not permanently fixed to a permanent foundation and which may be moved under its own power, pushed or pulled by hand, towed by a motor vehicle, wheelchair, motorcycle, bicycle, or other mobile device or carried upon or in a motor vehicle or trailer.”
Staff’s reasoning for including food vending vehicle permit and enforcement revisions as part of this item is because of the similar nature of food vending vehicle permittees and sidewalk vending permittees, namely that sidewalk vending has a mobile food sales aspect and food vending vehicles also include mobile food sales. Due to this similarity, staff assert that it is in the spirit of the new law to include food vending vehicle revisions to Title 5. Staff also believe that such revisions reduce possible future City liability regarding mobile food sales and ensure compliance with State law established by SB 635.

FISCAL IMPACT
There is no fiscal impact because of the proposed action.

CEQA ANALYSIS
The action is not defined as a “project” per Section 15378(b)(2) of the CEQA Guidelines because the action is the approval of an ordinance in compliance with State law on how to regulate sidewalk vending and food vending vehicles and therefore, it is considered general policy and procedure making that will not result in direct or indirect physical changes to the environment and not subject to CEQA.

APPROVED BY THE CITY ATTORNEY
Yes

ATTACHMENTS

1. Exhibit 1 - Ordinance No. 778

2. Exhibit A of Exhibit 1

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EXHIBIT 1
ORDINANCE NO. 778

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SHAFTER AMENDING TITLE 5 (BUSINESS TAXES, LICENSES AND REGULATIONS) OF THE CITY OF SHAFTER MUNICIPAL CODE TO COMPLY WITH SENATE BILL 635
WHEREAS, the City of Shafter, California (“City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, Senate Bill (“SB”) 635 was signed by the Governor on October 8, 2025, and went into effect on January 1, 2026; and
WHEREAS, SB 635 amends Sections 51036, 51038, and 51039 of the Government Code, and amends Sections 114368.8 and 114381 of, and adds Section 114381.3 to, the Health and Safety Code, relating to local government such as the City; and WHEREAS, The key provisions of the new law are that local governments, such as the City, are now:

1. Limited in the data that can be collected on a prospective sidewalk vendor,

2. Prohibited from sharing personal information about a sidewalk vendor with federal immigration enforcement unless a valid judicial warrant or subpoena is issued, and

3. Required to destroy now-prohibited data collected before the law’s effective date by March 1, 2026; and
WHEREAS, the City desires to amend its local regulatory scheme in Title 5 of the Shafter Municipal Code to comply with SB 635.

NOW, THEREFORE, the City Council of the City of Shafter does hereby ordain as follows:

Section 1. The recitals above are each incorporated by reference by the City Council.

Section 2. Title 5 of the Shafter Municipal Code is hereby amended and restated as provided in Exhibit “A,” attached hereto and incorporated herein by reference.

Section 3. The City Clerk shall publish and certify as to adoption of this Ordinance as required by law.

Section 4. If any provision of this Ordinance or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this resolution are severable. The City Council declares that it would have adopted this Ordinance irrespective of the invalidity of any portion thereof.

Section 5. The Ordinance shall take effect and be enforced commencing thirty (30) days following its adoption.

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Shafter City Council Ordinance No. 778
March 17, 2026

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PASSED AND ADOPTED THIS 17th DAY OF MARCH, 2026.
________________________________
Chad Givens, Mayor
ATTEST:
________________________________
Yazmina Pallares, City Clerk
APPROVED AS TO FORM:
________________________________
Marco A. Martinez, City Attorney

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EXHIBIT A

5.04.210 - License tax—Special classifications.

A. Every person engaged in any of the businesses enumerated in this section in the city shall pay a license tax as follows:

1. Billboard advertising: two hundred dollars per year;

2. Christmas tree lot: forty dollars per quarter year;

3. Curb painting: thirty dollars per quarter year;

4. Junkyard or junk dealers: five hundred dollars per year;

5. Public dances: three hundred dollars per year or forty dollars per day;

6. Sign painting: thirty dollars per quarter year;

7. Telephone/telegraph: eighty dollars per year;

8. Barbers, beauticians and manicurists: twenty-five dollars per year;

9. Food vending vehicles, (except ice cream trucks and ice cream pushcarts) as defined in Chapter 5.56 shall pay an annual business license fee of one hundred twenty dollars plus fifty dollar administrative fee for a background check, plus twenty-five dollar finger printing fee, plus a twenty dollar vehicle safety inspection fee by the Shafter police department. In addition, the section should also include:
ice cream trucks, as defined in Chapter 5.56 shall pay an annual business license fee of sixty dollars plus fifty dollar administrative fee for a background check, plus twenty-five dollar finger printing fee, plus a twenty dollar vehicle safety inspection fee by the Shafter police department. Ice cream pushcart operators shall pay an annual business license fee of sixty dollars plus fifty dollar administrative fee for a background check, plus twenty-five dollar finger printing fee. Total annual city of Shafter fees will be two hundred fifteen dollars for food vending vehicles (except ice cream trucks); one hundred fifty-five dollars for ice cream trucks and one hundred thirty-five dollars for ice cream pushcarts.

B. The license tax hereinabove provided for the business of Christmas tree lot, curb painting and sign painting shall not apply to such businesses when the same are conducted in conjunction with or as an incident to, and on the same business premises as, a business licensed under the provisions of Section 5.04.170.

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(Ord. 594 § 2, 2007; Ord. 449 § 1, 1993; Ord. 406 § 1, 1988: prior code § 5-2-21) Chapter 5.50 - SIDEWALK VENDING[3]
Sections:

Footnotes:
--- (3) ---
Editor's note— Ord. No. 773, § 2(Exh. A), adopted April 5, 2022, amended and restated former Ch. 5.50, §§ 5.50.010—5.50.100, in its entirety which pertained to similar subject matter and derived Ord. No. 710, § 3, adopted Feb. 5, 2019.

5.50.010 - Purpose.

The city finds that the vending of prepared or pre-packaged foods, goods, and/or wares at semi-permanent locations on public sidewalks and rights-of-way may pose unsafe conditions and special dangers to the public health, safety, and welfare of residents and visitors. The purpose of this chapter is to implement regulations on sidewalk vending that protect the public health, safety, and welfare of the community while complying with the requirements of general state law, as amended from time to time, to promote safe vending practices, prevent safety, traffic, and health hazards, and preserve the public peace, safety, and welfare of the community.
(Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.020 - Definitions.

For purposes of this chapter, the following definitions apply:

A. "Certified Famers' Market" means a location operated in accordance with Chapter 10.5 (commencing with Section 47000) of Division 17 of the Food and Agricultural Code and any regulations adopted pursuant to that chapter.

B. "City" means the City of Shafter.

C. “Director of the planning department” means the planning department director of the city, or his or her designee.

C. "Chief law enforcement officer" means the chief of police of the city, or his or her designee.

DD. "Park" means a public park owned by the city.

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E. “Personally identifiable information” means an individual’s name, business name, home address, business address, birthdate, telephone number, business location, California’s driver’s license or identification number, individual taxpayer identification number, municipal identification number, government-issued identification number, consular identification, social media identifiers, employee identification number, business license number, seller’s permit number, social security number, vending registration certificate or license number, known place of work, income and tax information, and any other information that would identify the individual.

E. “Roaming sidewalk vendor or vending” means a sidewalk vendor who moves from place to place and stops only to complete a transaction.

FE. "Sidewalk vendor or vending" means a person who sells food or merchandise from a pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance, or from one's person, upon a public sidewalk or other pedestrian path.

G. “Stationary sidewalk vendor or vending” means a sidewalk vendor who vends from a fixed location.

HF. "Swap meet" means a location operated in accordance with Article 6 (commencing with Section 21660) of Chapter 9 of Division 8 of the Business and Professions Code, and any regulations adopted pursuant to that article.
(Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.030 - Permits Required.

A. All sidewalk vendors shall obtain a sidewalk vending permit from the director of the planning department planning department prior to engaging in any sidewalk vending activities, except if they fall into the exceptions activities described under 5.50.040(GF).

The planning department shall coordinate with the chief law enforcement officer to complete application processing. The following information shall be required.

1. Name, current mailing address, and phone number of the vendor; and

2. If the vendor is an agent of an individual, company, partnership, or corporation, the name and business address of the principal; and

3. A description of the merchandise/goods to be offered for sale or exchange, and the days/hours of sales; and

4. A copy of the California seller's permit with the sales tax number issued by the California Department of Tax and Fee Administration to the vendor; and

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5. A copy of the valid California Driver's license issued to the vendor; or A copy of the individual taxpayer identification number issued to the vendor; or A municipal identification number.
a. Any such identification number(s) or license(s) collected shall not be available to the public for inspection and shall remain confidential and not be disclosed except as required to administer the permit or licensure program or comply with a state law or state or federal court order.

6. If preparing or selling food, a copy of the county health department permit issued to the vendor. Kern County requires mobile food cart vehicles to be inspected and permitted by the Kern County Environmental Health Division; and

7. If the vendor proposes to be a sidewalk vendor, a description or site plan map of the proposed location(s) where vending will take place, showing that the sidewalk location maintains a minimum of thirty-six inches of accessible route area, in compliance with the Americans with Disabilities Act; and

8. If the vendor proposes to be a sidewalk vendor, an encroachment permit pursuant to Chapter 12.12 of the Shafter Municipal Code or other generally applicable authority that requires encroachment permits; and

9. A copy of general liability insurance policy naming the city as additional insured in the amount of one million dollars single occurrence and two million dollars aggregate limit.

10. A certification by the vendor that to his or her knowledge and belief, the information contained in the application is true.

11. A signed consent agreement for the chief law enforcement officer, through a LiveScan fingerprint process, that allows the chief law enforcement officer to obtain a state summary criminal history information as provided in Section 11105 of the Penal Code.

B. At the time the application or renewal application is filed, the applicant shall pay the permit processing fee established by separate resolution of the city council.

C. Any personally identifiable information collected pursuant to Section 5.50.030 shall be exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code. (Ord. No. 733, § 2(Exh. A), 4-5-22)

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5.50.040 - Review of Permit Application; Decision.

A. Upon acceptance of a properly completed and filed sidewalk vendor permit application, the city's director of the planning department planning department and chief law enforcement officer shall conduct a preliminary investigation to determine compliance with this chapter and shall make such determination within no more than thirty days of acceptance to approve or deny the application. The director of the planning department planning department shall provide the applicant with written notice of his or her decision to the address indicated in the application.

B. The director of the planning department planning department may deny an application for a permit if he or she makes any of the following findings:

1. The applicant has failed to pay the application permit fee.

2. The applicant has made one or more material misstatements in the application for a permit.

3. The applicant does not have a valid social security card or valid California Driver's license; or valid individual taxpayer identification number; or a municipal identification number.

4. The applicant's vending operation, as described in the application, is inconsistent with the standards, conditions, and requirements of this chapter.

5. It is determined that the applicant does not possess all federal, state, and local permits and licenses necessary to engage in the activity in which he or she seeks to engage.

C. The city's chief law enforcement officer may deny an application for a permit if he or she makes any of the following findings discovered through the LiveScan fingerprint results:

1. The applicant is required to register under the provisions of California Penal Code Section 290.

2. Within three years of the date of the application, the applicant has been convicted in a court of competent jurisdiction or pled nolo contendere to any felony offense involving the sale of a controlled substance specified in California Health and Safety Code Sections 11054, 11055, 11056, 11057 or 11058, or at the time of application is on probation or parole for any offenses set forth in this section for an offense that was committed within three years of the date of the application.

CD. If the application is denied, the reasons for disapproval shall be noted on the application, and the applicant shall be notified that his or her application is denied and

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that no permit will be issued. Notice shall be mailed to the applicant at the address shown on the application form.

FE. If the city's director of the planning department planning department and chief law enforcement officer approves the applicant's permit, he or she shall endorse his or her approval on the application and shall, upon payment of the prescribed fee, deliver the permit to the applicant.

GF. Exemptions. A sidewalk vending permit shall not be required for the following activities:

1. The sale of agriculture products on the site where the product is grown.

2. Catering for private parties held exclusively on private property and not open to the general public.

3. Events permitted pursuant to a lawfully issued temporary event permit including, but not limited to, a Certified Farmers' Market, Swap Meet, street fairs, outdoor concerts, sport league opening day, and business sidewalk sales.

G. Term of Permit. A sidewalk vending permit issued pursuant to this chapter shall automatically expire one year from the date issued, unless an earlier expiration date is noted on the permit.

H. Transferability. A sidewalk vending permit shall not be transferable to any other entity or person and is valid only as to the original applicant for the term stated. (Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.050 - Sidewalk Vending Locations and Standards.

A. Stationary Ssidewalk vendors shall be prohibited from operating or establishing in any residential areas zones of the city including parks within residential areas.

B. Roaming sidewalk vendors shall be allowed to operate in any residential zones of the city between the hours of 7:00 a.m. and 7:00 p.m. of everyday.

C. Sidewalk vendors shall be allowed to operate in any city owned or operated park, including in residential areas of the city, during the hours of operation for the park.

D. Sidewalk vendors shall be allowed to operate in non-residential zones of the city between the hours of 7:00 a.m. and 7:00 p.m. of every day unless the hours of operation imposed on other businesses or uses on the same street are less restrictive, then the less restrictive hours are imposed.

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EB. Sidewalk vendors shall adhere to may operate in non-residential zones of the city, provided they meet the following:

1. The sidewalk vendor is duly licensed and meets all requirements of section

5.50.030; and

2. The sidewalk vendor can set up their vending operation while still leaving a minimum of thirty-six inches of accessible path of travel, without obstruction, along the public sidewalk or public pathway, in compliance with the Americans with Disabilities Act; and

3. Sidewalk vending hours shall be conducted between the hours of 7:00 a.m. and 7:00 p.m. of every day; and

4. The sidewalk vendor maintains the vending area in a clean, orderly, and sanitary condition; and

5. The sidewalk vendor location does not block entrances to private buildings, private driveways, parking spaces or building windows; and

6. No vending shall occur within ten feet of a fire hydrant, fire escape, bus stop, loading zone, handicapped parking space or access ramp, fire station driveway, or police station driveway; and

7. No tables, chairs, fences, shade structures, other site furniture, or any freestanding signs shall be permitted in conjunction with the vendors vending activities; and

8. The vendor shall not attach or use any water lines, electrical lines, or gas lines during vending operations; and

9. Exterior storage or display of refuse, equipment, materials, goods, wares, or merchandise associated with the vendor is prohibited; and

10. No vending shall occur within the immediate vicinity of a certified farmers' market, a swap meet or an event held pursuant to a temporary event permit; and

11. Each pushcart shall have a current, valid county of Kern health inspection sticker affixed in a conspicuous location on the pushcart. (Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.060 - Suspension; Rescission.

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A. A sidewalk vendor permit issued under this chapter may be suspended or rescinded by the city's director of the planning department planning department and/or chief law enforcement officer after four or more violations of this chapter in accordance with Section

5.50.080100 of this chapter, at their discretion, for any of the following causes:

1. Fraud or misrepresentation in the course of vending;

2. Fraud or misrepresentation in the application for the permit;

3. Vending in a manner that creates a public nuisance or constitutes a danger to the public.

B. Notice of the suspension or rescission of a sidewalk vendor permit issued under this chapter shall be mailed, postage prepaid, to the holder of the sidewalk vendor permit at his or her last known address.

C. No person whose street vending permit has been revoked pursuant to this chapter shall be issued a street vending permit for a period of two years from the date revocation becomes final.
(Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.070 - Appeals to City Manager.

In the event that any applicant or permittee desires to appeal from any order, rescission, or other ruling of the city's director of the planning departmentplanning department and/or chief law enforcement officer made under the provisions of this chapter, such applicant or any other person aggrieved shall have the right to appeal such action or decision to the city manager within fifteen days after the notice of the action or decision has been mailed to the person's address as shown on the permit application. An appeal shall be taken by filing with the city clerk a written appeal statement setting forth the grounds for the appeal, along with the city's appeal fee, which shall be established by city council resolution. The filing of the appeal shall stay the enforcement of any decision suspending or rescinding the permit. The city's director of the planning department planning department and/or chief law enforcement officer shall transmit the written statement to the city manager within ten days of its filing and payment of the appeal fee, and the city manager shall set a time and place for a hearing on appeal. A hearing shall be set not later than sixty days from the date of filing of the applicant's written appeal statement with the police department. Notice of the time and place of the hearing shall be given to the appellant in the same manner as provided for the mailing of notice of suspension or rescission at least five days prior to the date set for the hearing. At the hearing, the permittee and the city shall be entitled to legal representation and may present relevant evidence, testify under oath, and call witnesses

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who shall testify under oath. The city manager shall not be bound by the traditional rules of evidence in a hearing, except that hearsay evidence may not be the sole basis for the decision of the city manager. The city manager may continue the hearing as deemed necessary. The decision of the city manager, or his or her designee, on the appeal shall be final and binding on all parties concerned.
(Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.080 - Penalties.

A. It is unlawful for any person to violate any provision or fail to comply with any requirements of this chapter. A violation of this chapter shall be punished by:

1. An administrative fine not exceeding one hundred dollars for a first violation.

2. An administrative fine not exceeding two hundred dollars for a second violation within one year of the first violation.

3. An administrative fine not exceeding five hundred dollars for each additional violation within one year of the first violation.

B. A violation of vending without a sidewalk vending permit may, in lieu of the penalties set forth in subsection (A) set forth above, be punished by:

1. An administrative fine not exceeding two hundred fifty dollars for a first violation.

2. An administrative fine not exceeding five hundred dollars for a second violation within one year of the first violation.

3. An administrative fine not exceeding one thousand dollars for each additional violation within one year of the first violation.

C. If an individual is subject to subsection (B), set forth above, for vending without a sidewalk vending permit, upon the individual providing proof of a valid permit issued by the city, the administrative fines set forth in this chapter shall be reduced to the administrative fines set forth in subsection (A), respectively.

D. The proceeds of any administrative fines assessed pursuant to this chapter shall be deposited in the treasury of the city.

E. Failure to pay an administrative fine assessed under this chapter shall not be punishable as an infraction or misdemeanor. Additional fines, fees, assessments, or any other financial conditions beyond those authorized in this chapter shall not be assessed.

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F. Any violation of this chapter shall not be punishable as an infraction or misdemeanor, and any person alleged to have violated any provisions of this chapter shall not be subject to arrest except when otherwise permitted under law.

G. When assessing an administrative fine pursuant to this chapter, the adjudicator shall take into consideration the person's ability to pay the fine. The city shall provide the person with notice of his or her right to request an ability-to-pay determination and shall make available instructions or other materials for requesting an ability-to-pay determination. The person may request an ability-to-pay determination at adjudication or while the judgment remains unpaid, including when a case is delinquent or has been referred to a comprehensive collection program.

1. If the person meets the criteria described in Government Code Section 68632(a) or (b), the city shall accept, in full satisfaction, twenty percent of the administrative fine imposed pursuant to this chapter.

2. The city may allow the person to complete community service in lieu of paying the total administrative fine, may waive the administrative fine, or may offer an alternative disposition.

H. A person who is currently serving, or who completed, a sentence, or who is subject to a fine, for a conviction of a misdemeanor or infraction for sidewalk vending, whether by trial or by open or negotiated plea, who would not have been guilty of that offense under SB 946 had SB 946the act that been in effect at the time of the offense, may petition for dismissal of the sentence, fine, or conviction before the trial court that entered the judgment of conviction in his or her case.
(Ord. No. 733, § 2(Exh. A), 4-5-22)

5.50.090 – Access, Review and Obtainment of Records.

A. The city, except as otherwise required by state or federal law, shall not provide voluntary consent to any individual to access, review or obtain any of the city’s records obtained pursuant to this chapter that include personally identifiable information of any sidewalk vendor without a subpoena or judicial warrant. This paragraph does not prohibit the city from challenging the validity of a subpoena or judicial warrant in a federal district court.

B. The city shall not disclose or provide in writing, verbally or in any other manner personally identifiable information of any sidewalk vendor obtained pursuant to this chapter that is requested, except pursuant to a subpoena or valid judicial warrant.

5.50.100 – Inquiry and Information Collection.

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A. The city shall not inquire into or collect information or documentation about an individual’s immigration or citizenship status or place of birth pursuant to this chapter.

B. The city shall not inquire into or collect information or documentation regarding and individual’s criminal history and shall not require an applicant to submit fingerprints, complete a LiveScan fingerprinting, or submit to a background check pursuant to this chapter.

C. Any information or documentation the city inquired into or collected regarding an individual’s place of birth or criminal history, required an applicant to submit fingerprints or complete a LiveScan fingerprinting or performed a background check before January 1, 2026, such information and documentation shall be destroyed on or before March 1, 2026, unless the information and documentation are expressly required by law to be preserved.

Chapter 5.56 - FOOD VENDING VEHICLES[4]
Footnotes:
--- (4) ---
Editor's note— Ord. No. 733, § 2(Exh. A, adopted April 5, 2022, repealed amended and restated former Ch. 5.56, §§ 5.56.010—5.56.210, 5.56.230—5.56.260, in its entirety which pertained to similar subject matter and derived from Ord. No. 594, § 1, 2007; Ord. No. 611, §§ 1—3, 2007; Ord. No. 668, § 1, 4-21-2015; Ord. No. 710, § 2, 2-5-2019.

5.56.010 - Purpose and intent.

The city council expressly finds that vehicles in which goods or merchandise are carried for purposes of retail sale on the public and private streets, and vehicles from which hot and/or cold food prepared in the vehicle and/or prepackaged are sold or offered for sale, pose traffic hazards and special dangers to the public health, safety and welfare of children and residents in the city. It is the purpose and intent of the city council, in enacting this chapter, to provide responsible companies and persons who engage in the operation of food vending from vehicles with clear and concise regulations to prevent safety, traffic and health hazards, as well as to preserve the peace, safety and welfare of the community. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.020 - Regulations for sales from vehicles.

It is unlawful for any person to sell or offer for sale, or operate any vehicle or conduct any business for the purpose of causing the sale of or offering for sale, any goods or merchandise from any vehicle parked, stopped or standing upon any public street, alley, parkway, sidewalk or other public property in the city except in accordance with all

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applicable requirements of this code and in compliance with all of the provisions of this chapter.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.030 - Definitions.

The following words and terms as used in this section shall be used to define "food vending vehicles" (and related activities) and shall have the following meanings:
"Chief law enforcement officer" means the chief of police of the city, or his or her designee. “Director of the planning department” means the planning department director of the city, or his or her designee."Director of administrative services" means the administrative services director of the city, or his or her designee.
"Goods or merchandise" means and includes items and products of every kind and description, including all food, produce and beverage items. "Ice cream truck" means a motor vehicle engaged in the vending or sale of frozen or refrigerated desserts, confections, or novelties commonly known as ice cream, or prepackaged candies, prepackaged snack foods, or soft drinks, primarily intended for the sale to children under sixteen years of age. For the purposes of this section and due to safety concerns, no trailer or platform attached to any sort of vehicle via hitch, chains or other similar method may be used as an ice cream or shaved ice vending truck. "Land use permit" shall include temporary land use permits, special event permits, and/or conditional use permits as provided for in Title 17 (Zoning Ordinance) of the municipal code.
"Mobile vending vehicle" shall include, but not be limited to, any motor vehicle, truck, car, trailer, cart, wagon, conveyance, or structure not permanently fixed to a permanent foundation and which may be moved under its own power, pushed or pulled by hand, towed by a motor vehicle, wheelchair, motorcycle, bicycle, or other mobile device or carried upon or in a motor vehicle or trailer.
"Operator" means any person or entity owning, operating or otherwise controlling any business involving the vending of goods or merchandise from a vehicle. "Person" means any natural person, firm, partnership, association, corporation or other entity of any kind or nature.
“Personally identifiable information” means an individual’s name, business name, home address, business address, birthdate, telephone number, business location, California’s

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driver’s license or identification number, individual taxpayer identification number, municipal identification number, government-issued identification number, consular identification, social media identifiers, employee identification number, business license number, seller’s permit number, social security number, vending registration certificate or license number, known place of work, income and tax information, and any other information that would identify the individual.
"Public property" means any real property, or interest therein, owned, leased, operated or otherwise controlled by the city other than a street, alley, parkway or sidewalk. "Vehicle" as defined in the Vehicle Code of the state of California, and shall not include any human-powered device.
"Vend" or "vending" means the sale or offering for sale of any goods or merchandise to the public from a food vending vehicle as defined herein.
"Vendor" means any person who engages in the act of vending from a vehicle or who drives or otherwise operates any such vehicle for the purpose of vending therefrom. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.040 - Permits required.

A. No person shall own, control, manage, lease, drive, operate, vend and/or prepare food from or on any vehicle defined as a food vending vehicle or contract with other persons for the operation of a food vending vehicle in the city without a valid business license/vendor's permit/operators permit issued pursuant to the provisions of this chapter in addition to any other license or permit required under any other chapter of this code for each and every food vending vehicle.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.050 - Permit term and renewal.

The term of vendor and operator permits, unless sooner suspended or revoked, shall be for a period of one year. Upon the expiration of such term, the permittee may renew the permit for additional one year terms by submitting new applications in conformance with this chapter, together with such permit renewal fees as may be established by resolution of the city council.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.060 - Application for vendor and/or operator permits—Contents—Required fees.

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A. Any person desiring to obtain a vendor and/or an operator's permit shall make application to the city's director of the planning departmentplanning department. The planning department shall coordinate with the chief law enforcement officer to complete application processing. Applications for either a vendor or an operator's permit shall be submitted in the form prescribed by the city. Prior to submitting such applications, a nonrefundable fee, as established by resolution of the city council shall be paid to the department of finance to defray, in part, the cost of the investigation and report required by this chapter. The department of finance shall issue a receipt showing that such application fee has been paid. The receipt, a copy thereof, shall be supplied to the director of the planning departmentplanning department at the time such application is filed. Permit issuance fees required under this chapter shall be in addition to any license, permit or fee required under any other chapter of this code. No permit application shall be processed unless and until the applicant has provided all the information requested on the application and has submitted the appropriate fee(s). If an applicant for a vendor permit also requires an operator's permit, then it is not necessary for said applicant to pay a separate fee for the operator's permit application.

B. Neither the filing of any application for a permit, nor the payment of an application fee, shall authorize the vending from or the operation or management of a food vending vehicle until such permit has been granted or renewed by the city of Shafter. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.070 - Investigation of applications.

The director of the planning departmentplanning department and chief law enforcement officer shall have a reasonable period of time in which to investigate the application and background of the applicant for a vendor's permit or an operator's permit including but not limited to the fingerprinting of any applicant. The director of the planning departmentplanning department shall, within thirty days after the date of the filing of the application, render a written recommendation to the director of administrative services, as to approval or denial ofapprove or deny the application for the permit or renewal thereof. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.080 - Issuance of permit.

The director of administrative servicesthe planning department, or his/her designated representative, within ten days after receiving the application and aforementioned recommendation from the planning department, shall grant the vendor's permit or operator's permit only if he/she finds that all of the following requirements have been met:

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A. The required fees have been paid;
B. The application conforms in all respects to the provisions of this chapter; C. The applicant has not knowingly made a material misrepresentation of fact in the application; and
D. The applicant has fully cooperated in the investigation of the applicant.; E. A signed consent agreement for the chief law enforcement officer, through a LiveScan fingerprint process, that allow the chief law enforcement officer to obtain a state summary criminal history information as provided in Section 11105 of the Penal Code; and F. The applicant, if an individual, or any of the directors, officers or stockholders holding more than five percent of the stock of the corporation, or any of the partners, including limited partners, or profit interest holders, managers or other persons principally in charge of the operation of the existing or proposed business of vending from a food vending vehicle, or a natural person employed or contracted with to be a driver, has not been convicted or pleaded "no contest" or "guilty" within five years prior to his/her application for a permit to a misdemeanor or felony crime or moral turpitude or drug-related misdemeanor or felony crime, including but not limited to: the sale of a controlled substance specified in California Health and Safety Code Sections 11054 through 11058; the sale, distribution or display of harmful or obscene matter; indecent exposure; selling or disposing of lottery tickets; permitting gambling, pool selling or bookmaking; or, in the case of applications for an operator's permit, alcohol or drug related traffic offenses. The investigating city employee is specifically authorized to obtain state summary criminal history record information as provided for in Section 11105 of the California Penal Code.

Any complaint for the above-listed charges pending before a court of law shall cause the application to be considered pending until adjudication of the complaint. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.090 - Denial of permit.

A. If the director of the planning departmentplanning department finds that any of the requirements set forth in Section 5.56.080 have not been met, he/she shall deny the application for a vendor or operator's permit. In the event the application for either permit is denied by the director of administrative servicesthe planning department, or his/her designated representative, written notice of such denial shall be given to the applicant specifying the ground or grounds of such denial. Notice of denial of the application for the permit shall be deemed to have been served if it is in fact is personally served on the

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applicant or when deposited in the United States mail with postage prepaid and addressed to the applicant at his/her residence as set forth in the application for either permit.

B. Any applicant whose application for a vendor or operator's permit has been denied by the director of the planning departmentplanning department may appeal such denial to the city council.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.100 - Revocation of permit.

A. Any vendor or operator's permit may be suspended or revoked by the director of the planning departmentplanning department for any of the following reasons:

1. Falsehood of any information supplied by the permittee upon which issuance of the permit was based;

2. Failure of the permittee to notify the chief law enforcement officerdirector of the planning department within two weeks of any change occurring subsequent to the issuance of the permit in the information supplied by the permittee upon which issuance of the permit was based;

3. Failure of the permittee, or of any employees or subcontractors of the permittee, to comply with the regulations set forth in Sections 5.56.110 through 5.56.210 of this chapter; and/or

4. Violation by the permittee, or any employee, subcontractor or independent contractor of the permittee, of any state law or municipal ordinance while in the course of conducting vending operations from a food vending vehicle pursuant to the permit.

B. No such suspension or revocation shall become effective until the permit holder has been notified in writing of the right of such permit holder to appeal the suspension or revocation. Notification to the permit holder shall be made either by personal delivery or by certified or registered mail, return receipt requested, addressed to the permit holder at such permit holder's residence address as set forth on the application for a permit. If a timely appeal is filed, the suspension or revocation shall be stayed and shall become effective only upon decision of the city council. Otherwise the suspension or revocation shall become effective after the timely appeal period has expired.

C. Permit holder has five working days from the date of receipt of the suspension or revocation notice to file his/her appeal.

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D. No person whose permit is revoked shall be eligible to apply for a new permit for a period of one year following such revocation.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.110 - Food vending vehicle regulations.

A. Each food vending vehicle shall have a current, valid county of Kern health inspection sticker affixed to the lower right side of the windshield in addition to the permit sticker issued by the city or in a conspicuous location on a pushcart.

B. Each operator shall retain the food vending vehicle permit issued by the city. The operator shall carry the permit at all times while engaged in the operation of and/or the actual vending from a food vending vehicle and shall produce the same for inspection upon request. Each permit holder shall immediately surrender to the director of the planning department chief law enforcement officer any permit issued by the city upon the suspension, revocation or expiration of such permit or upon leaving employment as an operator.

C. In addition to the operator's permit required in subsection A of this section, each person who drives a food vending vehicle shall have on his/her person a current, valid California driver's license, which he/she shall make available for inspection by law enforcement officials upon request.

D. Each food vending vehicle shall adhere to all Department of Motor Vehicle regulations and any relevant CAL OSHA requirements. Each food vending vehicle shall carry and maintain a fire extinguisher, first aid kit and an operating cell phone or other two-way communication for use in event of an emergency.

E. Each operator shall adhere to the requirements of California Vehicle Code regarding the operation and maintenance of a food vending vehicle.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.120 - Prohibited conduct.

A. No person shall vend from a food vending vehicle which is stopped, parked or standing on any public street, alley or highway:

1. Within two hundred and fifty feet of any school property, park, playground or recreational facility, except when granted a temporary land use permit or special events permit by the city;

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2. Within one hundred feet of any other food vending vehicle which is engaged in the operation of food vending;

13. Within two hundred feet of any intersection;

24. When the posted speed limit on the public street, alley or highway is greater than twenty-five miles per hour;

35. When the food vending vehicle is parked in violation of any other provision of this code or the California Vehicle Code;

46. When any part of the food vending vehicle is open to prospective customers other than on the side of the vehicle next to the right side of the street, alley or highway;

57. When the food vending vehicle is not stopped, parked or standing on the right side of the street, alley or highway;

68. When the prospective customer is standing or sitting in another vehicle;

79. When the prospective customer is located in that portion of the street, alley or highway which is open to vehicular traffic; and
810. Between one-half hour before sundown and seven a.m., except when granted a temporary land use permit or special event permit by the city, or, unless the hours of operation imposed on other businesses or uses on the same street are less restrictive, then the less restrictive hours are imposed.;

11. Within five hundred feet from any enclosed commercial restaurant unless the restaurant owner has provided written permission and the reason for the proximity of the food vending vehicle to the restaurant is for a permitted special event;

12. At any permitted location for a period of time exceeding ten minutes and regardless of the length of time that vending occurred at any permitted location, shall not vend again for a period of twenty-four hours within one thousand feet of such location, except when granted a temporary land use permit or special event permit by the city;

13. No vending activities, except for permitted farmers market, shall be permitted within the area bounded by and/or immediately adjacent to Lerdo Highway, Central Valley Highway, Tulare Avenue and Shafter Avenue.

B. No person shall back up a food vending vehicle to make or attempt to make a sale.

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C. No food vending vehicle shall be operated in any one location for longer than ten minutes, except as provided in Section 5.56.140(B), and shall be moved a minimum of five hundred feet before vending again, except when granted a temporary land use permit or special event permit by the city.

CD. No minor under the age of sixteen shall ride in or on a food vending vehicle while such food vending vehicle is engaged, or about to be engaged, in the operation of vending.

DE. All food vending vehicles shall be equipped with refuse containers large enough to contain all refuse generated by the operation of such vehicle, and the operator of the food vending vehicle shall pick up all refuse generated by such operation within a fifty-foot radius of the vehicle before such vehicle is moved.

F. No person vending from a food vending vehicle shall sell, trade, barter or otherwise deal any type or sort of toys, fireworks of any kind, or any sort of alcoholic beverage.

G. No person vending from a food vending vehicle shall set up or cause to be set up any table, chairs or any other seating for use by customers of the food vending vehicle.

H. Pushcart ice cream vendors (i.e., Las Rosas) may sell ice cream on the public sidewalk, outside of the downtown area as defined in subsection (A)(14) of this section. Such pushcart vendors shall not at any time impede vehicular traffic on public roadways.

HI. For the purposes of this section and due to safety concerns, no trailer or platform attached to any sort of vehicle via hitch, chains or other similar method may be used as an ice cream or shaved ice vending truck.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.130 - Vending of produce.

All produce regulated by the California Department of Food and Agriculture shall be handled, transported, displayed or disposed of in accordance with all California Department of Food and Agriculture regulations as they now exist or as amended from time to time, including, but not limited to, the following:

A. All produce or commodities under quarantine by the California Department of Food and Agriculture will be protected or safeguarded in an approved manner by being bagged, covered or screened to prevent infestation; any open display is prohibited; B. All produce, commodities or their husks, cores, rinds or pits shall be sealed in plastic bags before disposing of same;

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C. Every food vending vehicle shall have a receipt, invoice, or bill of lading or other acceptable proof of origin of all produce or commodities under quarantine; D. All produce or commodities under quarantine that are sold, offered for sale or transported within the quarantine area must be of commercial origin; E. Any violation of this section may result in the seizure of the produce or commodities in violation; all seized items will be destroyed;
F. The intent of this section is to address produce sales on food vending vehicles, not to permit vehicles that sell produce exclusively from vehicles. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.140 - Operations on private property.

All food vending vehicles are prohibited from operating on private property except:

A. If a land use permit has been obtained from the director of the planning departmentplanning department; or
B. To provide meals for employees located at an existing business on private property for a period of thirty minutes or less within a twelve-hour period. Additional time for a specified location may be permitted by the director of administrative servicesthe planning department pursuant to Section 5.56.080. No person vending from a food vending vehicle shall set up or cause to be set up any table, chairs or any other seating for use by customers of the food vending vehicle.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.150 - Insurance provisions.

A. It is unlawful for any person to own, lease, drive, operate or cause or permit to be driven or operated any food vending vehicle in the city of vending purposes unless such person has submitted with his/her application for permit a motor vehicle liability insurance policy, covering each food vending vehicle, issued by a solvent corporation holding a certificate of authority to do insurance business in the state of California, which policy shall conform in all respects to the requirements of this chapter.

B. The required motor vehicle liability policy shall insure the owner, driver and any other person using or responsible for the use of any food vending vehicle with the consent, expressed or implied, of such owner, driver or person, against loss from the liability imposed upon such owner, driver or person by law for injury to, or death of, any person, or

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damage to property due to the maintenance, operation or ownership of any food vending vehicle, in an amount of one million dollars, combined single limit, no aggregate.

C. Every insurance policy and every certificate of motor vehicle liability insurance filed with the city pursuant to the provisions of this chapter shall contain the following endorsements:

1. It is understood and agreed that, notwithstanding expressions consistent with or contrary thereto in this policy contained, the policy is expressly issued to cover a motor vehicle regulated by the provisions of this chapter. This policy shall insure to, and be for the benefit and protection of, anyone who shall sustain any damages or injury, or to the heirs, personal representatives, administrators, executors or assigns of any such person who may be so damaged or injured or suffer death, by reason of the operation of the motor vehicle or from the defective condition thereof.

Liability under this policy shall in no manner be abrogated or abated by the death or dissolution of the feasor or the insured.

2. There is continuing liability up to the full amount of the policy, notwithstanding any action or recovery thereon.

3. No cancellation or reduction in coverage of this policy for any reason whatsoever shall become effective until the expiration of thirty days after written notice of such cancellation or reduction in coverage shall have been given to the director of the planning departmentplanning department. Said period of thirty days to commence running from the date said notice is actually received byat the director of the planning department planning department.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.160 - Food vending vehicle equipment.

A. In addition to other equipment required by law, each food vending vehicle shall be equipped with the following:

1. A convex mirror mounted so that the occupant of the driver's seat can see the area in front of the truck which is obscured by the vehicle's hood;

2. A back-up alarm audible for a distance of at least one hundred feet. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.170 - Sanitation standards.

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A. Each food vending vehicle, including the interior of cabinet units or compartments, shall be equipped so as to have smooth, easily accessible, and easily cleanable surfaces.

Unfinished wooden surfaces are not permitted. Construction joints shall be tightly fitted and sealed so as to be readily cleanable. Equipment, including utensils, shall be constructed of nontoxic materials and shall be readily cleanable.

B. During the vending operation, no food shall be stored, displayed or served from any place other than the food vending vehicle.

C. Food condiments shall be protected from contamination and, where available for selfservice, shall be prepackaged or available only from approved dispensing devices.

D. During transportation and storage, food and food contact surfaces shall be protected from contamination.

E. All food vending vehicles shall operate out of a commissary or other facility approved by the county of Kern health department. Food vending vehicles shall report to the commissary at least once each operating day for cleaning and servicing operations. In addition, food vending vehicles whereon nonpackageds hot dogs are handled shall be properly stored at a commissary or other facility approved by the county of Kern health department so as to be protected from unclean or unsanitary conditions.

F. Food products remaining after each day's operation shall be stored only in a food facility approved by the county of Kern health department.

G. Utensils and equipment shall be handled and stored so as to be protected from contamination. Single-service utensils shall be contained only in sanitary containers or approved sanitary dispensers, stored in a clean, dry place until used, handled in a sanitary manner, and used once only.

H. All wastewater shall be drained to a water receptor approved by the county of Kern health department.

I. Readily perishable foods shall be maintained at or below seven degrees Celsius (fortyfive degrees Fahrenheit) or at or above sixty degrees Celsius (one hundred forty degrees Fahrenheit) at all times.

J. Vending from a food vending vehicle pursuant to a land use certificate shall be conducted within sixty meters (two hundred feet) of approved and readily available toilet and hand washing facilities or as otherwise approved by the county of Kern health department to ensure proper sanitary facilities are available to the mobile food vendors, operators, and their customers.

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(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.180 - Required signs and lettering.

A. There shall be displayed in a conspicuous place on both the right and left side of the food vending vehicle lettering permanently affixed showing the name of the company or operator of the food vending vehicle and the business address and telephone number thereof. The lettering for the name of the company or the operator of the food vending vehicle shall not be less than four inches in height, shall be in contrast to the color of the background upon which they are placed, and shall have strokes at least three-eighths of an inch wide. The lettering for the business address and telephone number shall not be less than one inch high.

B. No other lettering, numbering, price lists, signs or insignia shall be displayed on the right and left side of the food vending vehicle so as to interfere with the visibility of the lettering required in subsection A of this section.

C. Any ice cream truck shall be equipped at all times, while engaged in vending, with signs mounted on both the front and the rear and clearly legible from a distance of one hundred feet under daylight conditions, incorporating the words "WARNING" and "CHILDREN CROSSING." Each sign shall be at least twelve inches high by thirty-six inches wide, with letters of a dark color and at least four inches in height, a one inch wide solid border, and a sharply contrasting background.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.190 - Noise level.

A. Horns shall be permitted to be used only when reasonably necessary to insure the safe operation of the food vending vehicle while being operated on any public or private street, alley or highway or on public property.

B. No person on a food vending vehicle shall operate any horns, sound amplification systems or other sound producing devices when such vehicle is moving, stopped, standing, or parked for purposes of advertisement on any public or private street, alley or highway or on public property.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.200 - Applicability of regulations to existing business.

The provisions of this chapter shall be applicable to all persons and businesses described herein whether the herein described activities were established before or after the effective date of the ordinance enacting this chapter into law. All such persons and

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businesses shall have thirty days from said effective date to file a completed application for a vendor or operator's permit with the director of the planning department planning department.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.210 - Conducting business as a nuisance.

Any food vending vehicle operated contrary to the provisions of this chapter is unlawful and a public nuisance and the city attorney may, in addition to or in lieu of prosecuting a criminal action hereunder, commence an action or actions proceeding or proceedings, for the abatement, removal or enjoyment thereof, and may take such other steps and may apply to such court or courts as may have jurisdiction to grant such relief as will abate or remove such establishment and restrain and enjoin any person from operating a food vending vehicle contrary to the provisions of this chapter. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.220 - Reserved.

Editor's note— Sec. 2 of Ord. No. 710, adopted Feb. 5, 2019, repealed § 5.56.220, which pertained to the prohibition of sales from human-powered devices, and derived from Ord. 594, 2007.

5.56.230 - Exemptions.

The requirements of this chapter shall not apply to:

A. Any person delivering any goods or merchandise by vehicle where such goods or merchandise have been ordered in advance for such delivery from any business located at a permanent location and which goods or merchandise are being delivered from such location to the customer by vehicle, regardless of the point of sale thereof; B. Any person engaged in the vending of goods or merchandise on public property where such person has been authorized by the city to engage in such activity by a permit, lease, real property license, agreement or other entitlements issued by the city for such purpose. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.240 - Limited number of ice cream trucks.

Notwithstanding any other provision of this chapter, the number of permits to vend from ice cream trucks (not including ice cream pushcarts) shall be limited to one permit per four thousand in population of the city as provided by the State Department of Finance.

Fractional remainders shall always be rounded down to the next whole number.

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(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.250 - Penalty for violation.

Every violation of the provisions of this chapter shall be deemed to be a misdemeanor and, upon violation thereof, shall be punishable as provided for in Chapter 1.08 of this code.

Each day any violation of any provision of this chapter shall continue shall constitute a separate offense.
(Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.260 - "Grandfather" clause.

Any vendor legally operating within the city limits as of the date of adoption of the ordinance codified in this chapter shall be "grandfathered" in and may continue to operate within the city subject to all requirements contained herein until June 30, 2007.

Subsequently, on July 1, 2007, all food vending vehicles as defined herein shall be subject to limitations as provided in Section 5.56.240 of this chapter. (Ord. No. 773, § 2(Exh. A), 4-5-22)

5.56.270 – Access, Review and Obtainment of Records.

5.56.280 – Inquiry and Information Collection.

A. The city shall not inquire into or collect information or documentation about an individual’s immigration or citizenship status or place of birth pursuant to this chapter.

B. The city shall not inquire into or collect information or documentation regarding and individual’s criminal history and shall no require an applicant to submit fingerprints, complete a LiveScan fingerprinting, or submit to a background check pursuant to this chapter.

C. Any information or documentation the city inquired into or collected regarding an individual’s place of birth or criminal history, required an applicant to submit fingerprints

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or complete a LiveScan fingerprinting or performed a background check before January 1, 2026, such information and documentation shall be destroyed on or before March 1, 2026, unless the information and documentation are expressly required by law to be preserved.

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PUBLIC HEARINGS

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Steve Esselman, Planning Director
SUBJECT: AMEND SHAFTER MUNICIPAL CODE TITLE 15 (BUILDING AND

CONSTRUCTION) TO COMPLY WITH STATE LAW REGARDING

ELECTRIC VEHICLE CHARGING STATIONS

RECOMMENDATION
Council find that the action is not defined as a “project” per Section 15378(b)(2) of the CEQA Guidelines; conduct hearing and introduce for first reading by title only and waive reading of Ordinance No. 779, an amendment Shafter Municipal Code Title 15 (Building and Construction) to comply with State law regarding electric vehicle charging stations.

BACKGROUND
Over the past decade, California has significantly strengthened and expanded its legal framework to accelerate deployment of electric vehicle (EV) charging infrastructure.

Key legislative changes include state laws requiring streamlined, expedited permitting for EV charging stations, most notably Assembly Bill (AB) 1236 and its companion AB 970, which mandate “by-right” administrative approval and strict timelines for local review to reduce barriers to installation.

AB 1236 requires every city and county in the State to adopt an expedited and streamlined permitting process for electric vehicle charging stations to support broader EV deployment goals. Under AB 1236, local jurisdictions must ministerially approve EV charging station applications through a nondiscretionary permit if the installation meets applicable health and safety standards and may only deny permits by making written findings based on substantial evidence that a specific, adverse health or safety impact cannot be mitigated. The law also obligates jurisdictions to adopt an ordinance (see Exhibit 1) and publish a checklist of requirements that enables a streamlined review process (see Exhibit 2), limits local review to essential health and safety criteria, and standardizes procedures.

AB 970 builds on the State’s earlier EV charging permit streamlining law (AB 1236) by establishing specific deadlines for local jurisdictions to process electric vehicle charging station permit applications and tying automatic approval to jurisdiction inaction. Under AB 970, cities and counties must deem an application complete for projects with 1 to 25 chargers if they don’t make a completeness determination within 5 business days (10 days for 26+ chargers), and must approve or deny complete applications within 20

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AMEND SHAFTER MUNICIPAL CODE TITLE 15 (BUILDING AND CONSTRUCTION) TO COMPLY

WITH STATE LAW REGARDING ELECTRIC VEHICLE CHARGING STATIONS - 2 -
business days for smaller projects (40 days for larger ones); if these timelines lapse without action, the permit is automatically approved unless a finding is made that the project would cause a specific adverse health or safety impact. The law also clarifies applicability to all cities, including charter cities, and refines requirements around parking for EV charging stations as part of its broader goal to accelerate EV infrastructure deployment statewide.

FISCAL IMPACT
There is no fiscal impact because of the proposed action.

CEQA ANALYSIS
The action is not defined as a “project” per Section 15378(b)(2) of the CEQA Guidelines because the action is the approval of an ordinance in compliance with State law on how to regulate electric vehicle charging stations and therefore, it is considered general policy and procedure making that will not result in direct or indirect physical changes to the environment and not subject to CEQA.

APPROVED BY THE CITY ATTORNEY
Yes

ATTACHMENTS

1. Exhibit 1 - Ordinance No. 779

2. Exhibit A of Exhibit 1

3. Exhibit 2 - Draft Electric Vehicle Charging Station Permit Application

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EXHIBIT 1
ORDINANCE NO. 779

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SHAFTER ADDING CHAPTER 15.57 TO TITLE 15 (BUILDING AND CONSTRUCTION) OF THE CITY OF

SHAFTER MUNICIPAL CODE TO COMPLY WITH STATE LAWS REGARDING

ELECTRIC VEHICLE CHARGING STATIONS
WHEREAS, the City of Shafter, California (“City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, California has significantly strengthened and expanded its legal framework to accelerate deployment of electric vehicle (“EV”) charging infrastructure; and WHEREAS, key legislative changes include state laws requiring streamlined, expedited permitting for EV charging stations, most notably Assembly Bill (“AB”) 1236 and its companion AB 970, which mandate “by-right” administrative approval and strict timelines for local review to reduce barriers to installation.; and
WHEREAS, AB 1236 requires every city and county in California to adopt an expedited and streamlined permitting process for electric vehicle charging stations to support broader EV deployment goals; and
WHEREAS, AB 970 builds on California’s earlier EV charging permit streamlining law (AB 1236) by establishing specific deadlines for local jurisdictions to process electric vehicle charging station permit applications and tying automatic approval to jurisdiction inaction; and WHEREAS, the City desires to amend its local regulatory scheme in Title 15 of the Shafter Municipal Code to comply with California law regarding EV charging stations.

NOW, THEREFORE, the City Council of the City of Shafter does hereby ordain as follows:

Section 1. The recitals above are each incorporated by reference by the City Council.

Section 2. Chapter 15.57 – EXPEDITED AND STREAMLINED PERMITTING PROCESS FOR ELECTRIC VEHICLE CHARGING STATIONS is hereby added to as shown in Exhibit “A,” attached hereto and incorporated herein by reference.

Section 3. The City Clerk shall publish and certify as to adoption of this Ordinance as required by law.

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Shafter City Council Ordinance No. 779
March 17, 2026

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Section 5. The Ordinance shall take effect and be enforced commencing thirty (30) days following its adoption.

PASSED AND ADOPTED THIS 17th DAY OF MARCH, 2026.
__________________________________
Chad Givens, Mayor
ATTEST:
__________________________________
Yazmina Pallares, City Clerk
APPROVED AS TO FORM:
__________________________________
Marco A. Martinez, City Attorney

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EXHIBIT “A”

“Chapter 15.57 - EXPEDITED AND STREAMLINED PERMITTING PROCESS FOR ELECTRICAL

VEHICLE CHARGING STATIONS

15.57.010 - Purpose.

This chapter implements Government Code Section 65850.7 for the purpose of promoting and encouraging the use of electric vehicles by creating an expedited, streamlined permitting process for electric vehicle charging stations while promoting public health and safety and preventing specific adverse impacts in the installation and use of such charging stations.

15.57.020 - Definitions.

A. "Electric vehicle charging station" or "charging station" means any level of electric vehicle supply equipment station that is designed and built in compliance with Article 625 of the California Electrical Code, as it reads on the effective date of this Chapter, and delivers electricity from a source outside of an electric vehicle into a plug-in electric vehicle.

B. "Specific adverse impact" means a significant, quantifiable, direct, and unavoidable impact, based on objective, identified, and written public health or safety standards, policies, or conditions as they existed on the date the application was deemed complete.

C. "Electronic submittal" means the utilization of one or more of the following:

1. Electronic mail or email.

2. The internet.

D. All other terms, phrases and words in this Chapter shall be interpreted consistent with definitions set forth in California Government Code Section, 65850.7.

15.57.030 - Expedited permitting process.

Consistent with Government Code Section 65850.7, the Building Official shall implement an expedited, streamlined administrative permitting process for electric vehicle charging stations, and adopt a checklist of all requirements with which electric vehicle charging stations shall comply with to be eligible for expedited review. The expedited, administrative streamlined permitting process and checklist may refer to the recommendations contained in the most current version of the "Plug-In Electric Vehicle Infrastructure Permitting Checklist" of the Zero-Emission Vehicles in California: Community Readiness Guidebook as

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published by the Governor's Office of Governor's Office of Land Use and Climate Innovation.

The City's adopted checklist shall be posted on the City's website.

15.57.040 - Permit application processing.

A. Prior to submitting an application for processing, the applicant shall verify that the installation of an electric vehicle charging station will not have specific, adverse impact on public health and safety and building occupants. Verification by the applicant includes but is not limited to: information related to electrical system capacity and loads; electrical system wiring, bonding and overcurrent protection; building infrastructure affected by charging station equipment and associated conduits; areas of charging station equipment, and vehicle parking.

B. A permit application that satisfies the information requirements in the City's adopted checklist shall be deemed complete and be promptly processed. Upon confirmation by the Building Official that the permit application and supporting documents meet the requirements of the City's adopted checklist and is consistent with all applicable laws and health and safety standards, the Building Official shall, consistent with Government Code Section 65850.7, approve the application and issue all necessary permits. Such approval does not authorize an applicant to energize or utilize the electric vehicle charging station until approval is granted by the City. If the Building Official determines that the permit application is incomplete, he or she shall issue a written correction notice to the applicant, detailing all deficiencies in the application and any additional information required to be eligible for expedited permit issuance.

C. Consistent with Government Code Section 65850.7, the Building Official shall allow for electronic submittal of permit applications covered by this Chapter and associated supporting documentation. In accepting such permit applications, the Building Official shall also accept electronic signatures on all forms, applications, and other documentation in lieu of a wet signature by any applicant.

15.57.050 - Technical review.

A. It is the intent of this Chapter to encourage the installation of electric vehicle charging stations by removing obstacles to permit charging stations so long as the action does not supersede the Building Official's authority to address higher priority life-safety situations. If the Building Official makes a finding based on substantial evidence that the electric vehicle charging station could have a specific adverse impact upon the public health or safety, as defined in this Chapter, the City may require the applicant to apply for a use permit in accordance with Title 17.

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B. In the technical review of a charging station, consistent with Government Code Section 65850.7, the Building Official shall not condition the approval for any electric vehicle charging station permit on the approval of such a system by an association, as that term is defined by Civil Code Section 4080.

15.57.060 - Electric vehicle charging station installation requirements.

A. Electric vehicle charging station equipment shall meet the requirements of the California Electrical Code, the Society of Automotive Engineers, the National Electrical Manufacturers Association, and accredited testing laboratories such as Underwriters Laboratories, and rules of Pacific Gas & Electric.

B. Installation of electric vehicle charging stations and associated wiring, bonding, disconnecting means and overcurrent protective devices shall meet the requirements of Article 625 and all applicable provisions of the California Electrical Code.

C. Installation of electric vehicle charging stations shall be incorporated into the load calculations of all new or existing electrical services and shall meet the requirements of the California Electrical Code. Electric vehicle charging equipment shall be considered a continuous load.

D. Anchorage of either floor-mounted or wall-mounted electric vehicle charging stations shall meet the requirements of the California Building or Residential Code as applicable per occupancy, and the provisions of the manufacturer's installation instructions. Mounting of charging stations shall not adversely affect building elements.”

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1 RESIDENTIAL AND NON-RESIDENTIAL CHECKLIST

FOR PERMITTING ELECTRIC VEHICLE

CHARGING STATIONS
The purpose of Chapter 15.57 of the Municipal Code is to promote and encourage the use of electric vehicles by creating an expedited, streamlined permitting process for electric vehicle charging stations while promoting public health and safety and preventing specific adverse impacts in the installation and use of such charging stations.

Please complete the following information related to permitting and installation of Electric Vehicle Service Equipment (EVSE) and submit with a building permit application.

This checklist contains the technical aspects of EVSE installations and is intended to help expedite permitting and use for electric vehicle charging.

Upon this checklist being deemed complete, a permit shall be issued to the applicant. However, if it is determined that the installation might have a specific adverse impact on public health or safety, additional verification will be required before a permit can be issued.

This checklist substantially follows the “Plug-In Electric Vehicle Infrastructure Permitting Checklist” contained in the Governor’s Office of Planning and Research “Zero Emission Vehicles in California: Community Readiness Guidebook” and is purposed to augment the guidebook’s checklist.

Project Information:

Address: __________________________________________________________________________________________ APN: ____________________ Tract: ____________________ Lot: ____________________ Block: ________________ ❏ Single-Family ❏ Multi-Family (Apartment) ❏ Multi-Family (Condominium) ❏ Commercial (Single Business) ❏ Public Right-of-Way ❏ Commercial (Multi-Businesses) Location and Number of EVSE to be Installed:

Garage: _____________ Parking Level(s): _____________ Parking Lot: _____________ Street Curb: _______________ Valuation: _________________________________________________________________________________________ Scope of Work: _____________________________________________________________________________________ __________________________________________________________________________________________________ Property Owner Information:

Name: ____________________________________________________________________________________________ Address: __________________________________________________________________________________________ Phone: ___________________________________________ Email: ___________________________________________ Contractor Information:

Company Name: ____________________________________________________________________________________ Representative Name: ________________________________________________________________________________ Contractor’s License Number: _________________ Exp. Date: _________________ Class: ________________________ Address: __________________________________________________________________________________________ Phone No.: ________________________________________________________________________________________ Workman’s Comp. No.: ______________________ Exp. Date:__________________ Company: ____________________ City Business License No.: __________________________________ Exp. Date: _________________________________

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2 EVSE Information:

EVSE Charging Level: ❏ Level 1 (120V) ❏ Level 2 (240V) ❏ Level 3 (480V) Maximum Rating (Nameplate) of EV Service Equipment: ________________________________________________ kW Voltage EVSE: _______________ V Manufacturer / Model # of EVSE: ______________________________________ Mounting of EVSE: ❏ Wall Mount ❏ Pole Pedestal Mount ❏ Other System Voltage Information:
❏ 120/240V, 1, 3W ❏ 120/208V, 3, 4W ❏ 120/240V, 3, 4W Rating of Existing Main Electrical Service Equipment: ____________________ Amperes Rating of Panel Supplying EVSE (if not directly from Main Service): ____________________ Amperes Rating for Circuit for EVSE: __________ Amps / __________ Poles A/C Rating of EVSE Circuit Breaker (if not Single Family, 400A): __________ A.I.C. (or verify with Inspector in the field) Specify Either Connected, Calculated, or Documented Demand Load of Existing Panel:
• Connected Load of Existing Panel Supplying EVSE: __________ Amps • Calculated Load of Existing Panel Supplying EVSE: __________ Amps • Demand Load of Existing Panel or Service Supplying EVSE: __________ Amps Total Load (Existing Plus EVSE Load): __________ Amps
For Single Family Dwellings, if Existing Load is not known by any of the above methods, then the Calculated Load may be estimated using the “Single-Family Residential Permitting Application Example” in the Governor’s Office of Planning and Research “Zero Emission Vehicles in California: Community Readiness Guidebook.” (https://www.opr.ca.gov) EVSE Rating __________ Amps X 1.25 __________ Amps = Minimum Ampacity of EVSE Conductor = # __________ AWG
For Single-Family: Size of Existing Service Conductors = # __________ AWG or kcmil OR Size of Existing Feeder Conductor Supplying EVSE Panel = # __________ AWG or kcmil (or verify with Inspector in field) Please provide a link to the manufacturer’s installation instructions to be coordinated with the EVSE Manufacturer / Model number as specified in the EVSE Information above: ________________________________________________________ I hereby acknowledge that the information presented is true and correct representation of existing conditions at the job site and that any causes for concern as to life-safety verifications may require further substantiation of information.

Applicant’s Signature: _____ Date:

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3 Regulations:

15.57.010 - PURPOSE
This chapter implements Government Code Section 65850.7 for the purpose of promoting and encouraging the use of electric vehicles by creating an expedited, streamlined permitting process for electric vehicle charging stations while promoting public health and safety and preventing specific adverse impacts in the installation and use of such charging stations.

15.57.020 – DEFINITIONS
A. "Electric vehicle charging station" or "charging station" means any level of electric vehicle supply equipment station that is designed and built in compliance with Article 625 of the California Electrical Code, as it reads on the effective date of this Chapter, and delivers electricity from a source outside of an electric vehicle into a plug-in electric vehicle.

C. "Electronic submittal" means the utilization of one or more of the following:

1. Electronic mail or email.

2. The internet.

D. All other terms, phrases and words in this Chapter shall be interpreted consistent with definitions set forth in California Government Code Section, 65850.7.

15.57.030 – EXPEDITED PERMITTING PROCESS
Consistent with Government Code Section 65850.7, the Building Official shall implement an expedited, streamlined administrative permitting process for electric vehicle charging stations, and adopt a checklist of all requirements with which electric vehicle charging stations shall comply with to be eligible for expedited review. The expedited, administrative streamlined permitting process and checklist may refer to the recommendations contained in the most current version of the "Plug-In Electric Vehicle Infrastructure Permitting Checklist" of the Zero-Emission Vehicles in California: Community Readiness Guidebook as published by the Governor's Office of Governor's Office of Land Use and Climate Innovation. The City's adopted checklist shall be posted on the City's website.

15.57.040 – PERMIT APPLICATION PROCESSING
A. Prior to submitting an application for processing, the applicant shall verify that the installation of an electric vehicle charging station will not have specific, adverse impact on public health and safety and building occupants. Verification by the applicant includes but is not limited to: information related to electrical system capacity and loads; electrical system wiring, bonding and overcurrent protection; building infrastructure affected by charging station equipment and associated conduits; areas of charging station equipment, and vehicle parking.

15.57.050 – TECHNICAL REVIEW
A. It is the intent of this Chapter to encourage the installation of electric vehicle charging stations by removing obstacles to permit charging stations so long as the action does not supersede the Building Official's authority to address higher priority life-safety situations. If the Building Official makes a finding based on substantial evidence that the electric vehicle charging station could have a specific adverse impact upon the public health or safety, as defined in this Chapter, the City may require the applicant to apply for a use permit in accordance with Title 17.

15.57.060 - Electric vehicle charging station installation requirements.

B. Installation of electric vehicle charging stations and associated wiring, bonding, disconnecting means and overcurrent

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4 protective devices shall meet the requirements of Article 625 and all applicable provisions of the California Electrical Code.

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PUBLIC HEARINGS

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Michael James, Assistant City Manager
SUBJECT: COMMUNITY DEVELOPMENT BLOCK GRANT FAIR SHARE
FUNDING FOR FISCAL YEARS 2025-2026 AND 2026-2027

FILING OF A PROJECT APPLICATION PUBLIC HEARING

RECOMMENDATION
Council finds that the action is not defined as a “project” per Section 15378(b)(4) of the California Environmental Quality Act (CEQA) Guidelines; conduct a public hearing to receive community input regarding potential uses of CDBG funds for Fiscal Years 2025- 2026 and 2026-2027; adopt Resolution No. 3064, a Resolution of the City Council of the City of Shafter, authorizing the submission of an application to the County of Kern for up to the full estimated allocation amount for scalable improvements at Mannel Park, or an alternative eligible project approved by the City Council; and authorize staff to amend the application as necessary to reflect the final confirmed funding amount.

BACKGROUND
The City of Shafter participates with the County of Kern in a cooperative partnership to receive annual allocations of federal Community Development Block Grant (CDBG) funds administered by the U.S. Department of Housing and Urban Development (HUD).

The County distributes CDBG funds to participating agencies on a fair-share basis.

By correspondence dated January 16, 2026, the County of Kern notified the City that applications are being accepted for inclusion in the Fiscal Year 2026-2027 Annual Action Plan. The City did not previously apply for Fiscal Year 2025-2026 funding and is therefore seeking inclusion in the current Annual Action Plan cycle. The estimated allocation for Fiscal Years 2025-2026 and 2026-2027 is $246,972, although the final award amount remains subject to federal appropriations and County administrative adjustments.

Eligible CDBG activities include, but are not limited to, park and recreational facility improvements; street and sidewalk construction; water, sewer, and drainage infrastructure; and public facility improvements.

The City is required to conduct a public hearing to obtain community input regarding potential eligible uses of the available CDBG funds. Notice of the public hearing was published in bilingual format in accordance with County requirements.

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COMMUNITY DEVELOPMENT BLOCK GRANT FAIR SHARE FUNDING FOR FISCAL YEARS 2025- 2026 AND 2026-2027 FILING OF A PROJECT APPLICATION PUBLIC HEARING - 2 -
To further solicit public input, the City conducted a social media poll on February 11, 2026. Results indicate that respondents identified park upgrades (35%) and street lighting improvements (33%) as the highest priorities. When asked which park older than 20 years most needs improvements, Mannel Park received the highest number of responses (47%), followed by Rodriguez Park (41%). Written comments further emphasized lighting, pedestrian safety, drainage improvements, park amenities, and sidewalk connectivity.

Based on community input and staff evaluation of eligible activities, staff is recommending that the City Council authorize submission of an application for up to the full estimated allocation amount for scalable improvements at Mannel Park. Potential improvements may include irrigation system upgrades, installation or repair of sidewalks, tree planting, and additional recreational amenities. These improvements are structured to allow adjustment in scope depending on the final funding amount awarded. Mannel Park is a public facility that serves residents citywide and provides recreational opportunities benefiting all sectors of the community.

As part of the County’s application requirements, participating agencies must adopt a resolution authorizing submission of the funding application and the Public Works Director to execute required documents. Accordingly, Resolution No. 3064 has been prepared for Council consideration.

Upon Council approval and adoption of the resolution, staff will submit the CDBG application to the County of Kern. Any subsequent updates to the application, award amounts, or funding agreements will be brought back to the City Council for review and approval as necessary.

No CDBG-funded projects are currently underway. The City Council will conduct a separate public hearing during the March 3, 2026 meeting to consider potential reallocation of previously awarded CDBG funds that had been committed to the Learning Center Chess Garden project and are now available due to the Council’s authorization of alternative local funding for that project.

FISCAL IMPACT
There is no fiscal impact associated with conducting the public hearing or authorizing submission of the CDBG application.

If awarded, CDBG funds will provide up to the estimated allocation amount of approximately $246,972, subject to final confirmation by the County of Kern. The proposed improvements at Mannel Park are intended to be scalable and will be adjusted to align with the final award amount.

Any required local match or additional project costs will depend on the final scope of the project and funding award and will be presented to the City Council for consideration and approval at a later date. Upon award and execution of a funding agreement, the project will be brought back to the City Council for acceptance of funds and

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COMMUNITY DEVELOPMENT BLOCK GRANT FAIR SHARE FUNDING FOR FISCAL YEARS 2025- 2026 AND 2026-2027 FILING OF A PROJECT APPLICATION PUBLIC HEARING - 3 -
appropriation into the appropriate Fiscal Year Budget and Capital Improvement Program, as necessary.

CEQA ANALYSIS
The action is not defined as a “project” per Section 15378(b)(4) of the California Environmental Quality Act (CEQA) Guidelines because it involves the authorization to submit an application for funding and does not constitute a commitment to a specific project that may result in a potentially significant physical impact on the environment.

Therefore, the action is not subject to CEQA review.

APPROVED BY THE CITY ATTORNEY
Yes

ATTACHMENTS

1. Resolution No. 3064

2. Notice from County of Kern Regarding Available CDBG Funds (Dated January 16, 2026)

3. Social Media Poll Results (February 11, 2026)

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RESOLUTION NO. 3064

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHAFTER

AUTHORIZING THE FILING OF APPLICATIONS FOR COMMUNITY

DEVELOPMENT BLOCK GRANT (CDBG) FAIR SHARE FUNDS FOR
FISCAL YEARS 2025-2026 AND 2026-2027
WHEREAS, the U.S. Department of Housing and Urban Development (HUD) has identified the City of Shafter as authorized to be included in the County of Kern’s Community Development Block Grant program entitlement pursuant to Title I of the Housing and Community Development Act of 1974 (Act), as amended; and
WHEREAS, a Cooperation Agreement was executed between this City and the County of Kern to participate in the Community Development Block Grant (CDBG) and HOME Investment Partnerships (HOME) Programs; and
WHEREAS, HUD requires the County of Kern to prepare a Consolidated Plan to identify unmet needs, set goals and objectives, and provide a strategic plan for utilizing CDBG and HOME funds to address some of the identified needs contained in the Consolidated Plan; and WHEREAS, it is the intention of the City of Shafter to participate and cooperate with the County of Kern in undertaking, or assisting in undertaking, essential community development and housing assistance activities, specifically described in the Consolidated Plan.

WHEREAS, the City Council of the City of Shafter held a public hearing on March 3, 2026 to consider public testimony regarding the filing of Fiscal Years 2025-2026 and 2026-2027 CDBG Fair Share Project funds; and
WHEREAS, the City of Shafter expects to receive up to approximately $246,972 in CDBG Fair Share project funds for Fiscal Years 2025-2026 and 2026-2027; and WHEREAS, the City Council of the City of Shafter has received public testimony and reviewed the anticipated unmet community needs; and
WHEREAS, the City Council of the City of Shafter requests Community Development Block Grant Funding for Fiscal Years 2025-2026 and 2026-2027 to be allocated to additions and enhancements at Mannel Park.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Shafter approves and authorizes the Public Works Director of the City of Shafter to submit the application and to execute agreements and perform all other appropriate acts necessary to accomplish the purpose of this Resolution for the Fiscal Years 2025-2026 and 2026-2027 CDBG “Fair Share” estimated to be $246,972 to be allocated to additions and enhancements at Mannel Park. [SIGNATURES ON THE FOLLOWING PAGE]

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Shafter City Council Resolution No. 3064
March 3, 2026

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PASSED, APPROVED AND ADOPTED this 3rd day of March, 2026.

Chad Givens, Mayor
ATTEST:

Yazmina Pallares, City Clerk
APPROVED AS TO FORM:

Marco A. Martinez, City Attorney

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CDBG SOCIAL MEDIA
POLL
February 11, 2026

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PUBLIC HEARINGS

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Michael James, Assistant City Manager
SUBJECT: COMMUNITY DEVELOPMENT (CD) FUNDING ACTIVITY
NUMBERS 18.22.1 AND 18.23.1 FOR POTENTIAL PROJECTS

REALLOCATION PUBLIC HEARING

RECOMMENDATION
Council find that the action is not defined as a "project" per Section 15378(b)(4) of the CEQA Guidelines; conduct a public hearing regarding the proposed cancellation of CD Activities 18.22.1 and 18.23.1 and the reallocation of associated CDBG funds; adopt Resolution No. 3065, a Resolution of the City Council of the City of Shafter, authorizing the cancellation of CD Activities 18.22.1 and 18.23.1 and the reallocation and consolidation of associated CDBG funds for improvements at Rodriguez Park, or an alternative eligible CDBG project approved by the City Council; and authorize staff to take all actions necessary to effectuate the funding reallocation consistent with Council direction.

BACKGROUND
The City of Shafter participates with the County of Kern in a cooperative agreement to receive federal Community Development Block Grant (CDBG) funds administered by the U.S. Department of Housing and Urban Development (HUD). These funds are allocated on a fair-share basis and must be used for eligible activities that principally benefit low- and moderate-income residents.

The City Council previously authorized the use of CDBG funding for improvements at the Shafter Library and Learning Center associated with the Chess Garden project. At a subsequent meeting, the City Council authorized the use of local funds in lieu of the previously committed CDBG allocations in order to expedite completion of that project.

As a result, Community Development (CD) Activities 18.22.1 and 18.23.1 are no longer needed for their original purpose, and the associated CDBG funds are available for reallocation.

County staff have requested that the City advertise and conduct a public hearing regarding the proposed cancellation of CD Activities 18.22.1 and 18.23.1 and the reallocation of those funds, totaling to $248,805, to another eligible project.

The City Council will conduct two public hearings at its March 3, 2026 meeting related to CDBG funding. A separate agenda item addresses the submission of an application

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COMMUNITY DEVELOPMENT (CD) FUNDING ACTIVITY NUMBERS 18.22.1 AND 18.23.1 FOR

POTENTIAL PROJECTS REALLOCATION PUBLIC HEARING
- 2 -
for new CDBG funding for Fiscal Years 2025–2026 and 2026–2027 under the current agreement with the County of Kern. This item is limited to the reallocation of previously awarded CDBG funds.

To solicit community input regarding the use of CDBG funds, the City conducted a social media poll on February 11, 2026 . Results indicated that park upgrades (35%) and street lighting improvements (33%) were identified as the highest priorities. When asked which public park older than 20 years most needs improvements, Mannel Park received 47% of responses and Rodriguez Park received 41%. Written comments emphasized lighting, pedestrian safety, drainage improvements, shade, and expanded recreational amenities.

Rodriguez Park has previously been identified for recreational improvements funded through prior CDBG allocations. The Public Works Director has identified a funding gap associated with planned improvements at Rodriguez Park, including sports field lighting upgrades and drainage improvements in and around the park. Staff therefore recommends reallocating the funds from CD Activities 18.22.1 and 18.23.1 to Rodriguez Park to address the identified shortfall and advance completion of the project. The following is a breakdown of CDBG funding for Rodriguez Park with the potential addition of reallocated funds.

Source of Funds Amount of Funding Expected
Community Development Block Grant FY 18-19* $83,000
Community Development Block Grant FY 19-20* $120,000
Community Development Block Grant FY 20-21* $120,000
Community Development Block Grant FY 21-22* $120,000
Community Development Block Grant FY 24-25* $120,000
Sub-Total CDBG Funding $563,000
Reallocated Chess Garden Project Funds $248,805
Total Project Funding $811,805
(*) - All funds listed are based on preliminary estimates.

The City Council retains discretion to select an alternative eligible CDBG project for reallocation.

FISCAL IMPACT
The proposed action will not change the City’s overall CDBG funding commitment but will reassign previously awarded federal funds from CD Activities 18.22.1 and 18.23.1 to a different eligible project. The total amount proposed for reallocation, representing the remaining balance of funds originally committed to the Learning Center Chess Garden project, will be identified in the accompanying resolution.

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COMMUNITY DEVELOPMENT (CD) FUNDING ACTIVITY NUMBERS 18.22.1 AND 18.23.1 FOR

POTENTIAL PROJECTS REALLOCATION PUBLIC HEARING
- 3 -
If approved, the reallocated funds will be applied toward identified funding gaps associated with planned improvements at Rodriguez Park. No local match funds are required as part of this reallocation.

Following Council approval of the reallocation, the County of Kern is expected to prepare or amend the applicable funding agreement. The agreement will be brought back to the City Council for approval prior to implementation. Any necessary budget adjustments or Capital Improvement Program amendments will be presented to the Council at that time.

CEQA ANALYSIS
The proposed action consists of canceling previously approved CDBG activities and reallocating existing federal grant funds to another eligible project. This action constitutes a governmental fiscal activity involving the reassignment of funding and does not represent approval of construction or a commitment to a specific development project at this time.

Pursuant to Section 15378(b)(4) of the California Environmental Quality Act (CEQA) Guidelines, the creation of a governmental funding mechanism or other fiscal activity that does not involve a commitment to a specific project that may result in a potentially significant physical impact on the environment is not defined as a “project.” Accordingly, the proposed cancellation and reallocation of CDBG funds is not a project subject to CEQA.

Any future approval of a specific construction contract, site improvements, or other physical development at Rodriguez Park, or any alternative project selected by the City Council, will be subject to separate environmental review under CEQA, as appropriate.

Because the funding source includes federal Community Development Block Grant funds, the County of Kern will oversee compliance with the National Environmental Policy Act (NEPA) prior to project implementation.

APPROVED BY THE CITY ATTORNEY
Not Applicable

ATTACHMENTS

1. Resolution No. 3065

2. CDBG Social Media Poll (February 11, 2026)

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RESOLUTION NO. 3065

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHAFTER

AUTHORIZING THE CANCELLATION OF COMMUNITY DEVELOPMENT
(CD) ACTIVITIES 18.22.1 & 18.23.1 AND CONSOLIDATION OF CD ACTIVITIES

FUNDING
WHEREAS, the U.S. Department of Housing and Urban Development (“HUD”) has identified the City of Shafter (“City”) as authorized to be included in the County of Kern (“County”)’s Community Development Block Grant (“CDBG”) program entitlement pursuant to Title I of the Housing and Community Development Act of 1974, as amended; and WHEREAS, a Cooperation Agreement was executed between the City and the County to participate in the CDBG and HOME Investment Partnerships (“HOME”) Programs; and WHEREAS, HUD requires the County to prepare a Consolidated Plan to identify unmet needs, set goals and objectives, and provide a strategic plan for utilizing CDBG and HOME funds to address some of the identified needs contained in the Consolidated Plan; and WHEREAS, it is the intention of the City to participate and cooperate with the County in undertaking, or assisting in undertaking, essential community development and housing assistance activities, specifically described in the Consolidated Plan; and WHEREAS, at the City Council (“Council”) previously and separately adopted Resolution No. 2837 and Resolution No. 2897 authorizing the use of two of the City’s annual CDBG program funding allocations toward improvements at the Shafter Library and Learning Center, located at 236 James Street; and
WHEREAS, the Council later approved an activity agreement with the County to utilize said CDBG funding to complete improvements at the Shafter Library and Learning Center, said agreement specifically referred to Community Development (“CD”) Activities 18.22.1 and 18.23.1; and
WHEREAS, at its October 21, 2025 meeting, the Council authorized the use of solely local funds in lieu of funds previously authorized through CD Activities 18.22.1 and 18.23.1 to expedite completion of the project; and
WHEREAS, on July 19, 2022, the Council adopted Resolution No. 2882, which authorized:
(1) the cancellation of CD Activity 18.18.1; (2) the consolidation of CD Activity 18.18.1 funds with City CDBG allocations for Fiscal Years 2019-2020, 2020-2021, and 2021-2022 not yet assigned a funding agreement number; and (3) the use of the consolidated CDBG funding for a single funding agreement project dedicated to recreational improvements at Rodriguez Park; and WHEREAS, on January 10, 2023, the Council adopted Resolution No. 2902, which further authorized the cancellation of CD Activity 18.19.1 for the purpose of reallocating CDBG funds toward improvements at Rodriguez Park; and

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Shafter City Council Resolution 3065
March 3, 2026

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WHEREAS, the Public Works Director identified a funding shortage for the planned improvements at Rodriguez Park and has made a request of the Council to authorize the reallocation of CD Activities 18.22.1 and 18.23.1 for said improvements; and WHEREAS, County staff have requested that the City advertise and conduct a public hearing regarding the cancellation of CD Activities 18.22.1 and 18.23.1 and the reallocation of associated funding toward improvements at Rodriguez Park; and WHEREAS, the Council has received public testimony and reviewed the anticipated unmet community needs; and

NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE CITY COUNCIL OF THE CITY OF SHAFTER, CALIFORNIA, AS FOLLOWS:

Section 1. Recitals. The recitals set forth above are true and correct and are incorporated herein by this reference.

Section 2. Reallocation of CD Activities Funds. The City Council hereby authorizes all of the following: (1) the cancellation of CD Activities 18.22.1 and 18.23.1; (2) the consolidation of CD Activities 18.22.1 and 18.23.1 funds with City CDBG allocations for Fiscal Years 2018-2019, 2019-2020, 2020-2021, and 2021-2022 not yet assigned a funding agreement number; and (3) the use of all consolidated CDBG funding for one funding agreement project dedicated to recreational improvements at Rodriguez Park.

Section 3. Severability. If any provision of this Resolution or application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions, or application thereof, of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are hereby declared to be severable.

Section 4. Effective Date. This Resolution shall take effect and be in full force and effect upon its adoption.

PASSED, APPROVED AND ADOPTED this 3rd day of March, 2026.

Chad Givens, Mayor
ATTEST:

Yazmina Pallares, City Clerk
APPROVED AS TO FORM:

Marco A. Martinez, City Attorney

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CDBG SOCIAL MEDIA
POLL
February 11, 2026

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MANAGEMENT REPORT

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Kamal Siada, Economic Development Director, Giovanni Perez, Economic Development Coordinator
SUBJECT: RESOLUTION APPROVING LEASE AGREEMENT WITH

WONDERFUL REAL ESTATE LLC FOR USE OF EXISTING CITY
RAIL FACILITY LOCATED AT APNS 091-252-72, 091-253-09, 091- 261-13, portion of 091-261-16, and 090-180-29

RECOMMENDATION
Council find that the project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15301 and 15302; and adopt Resolution No. 3067, authorizing the City Manager to enter into a lease agreement with the Wonderful Industrial Park Logistics LLC (“Tenant”) for the use of the City’s existing rail facility located at APNs 091-252-72, 091-253-09, 091-261-13, portion of 091-261-16, and 090-180-29 (the “Lease”).

BACKGROUND
Background
In 2015, the City of Shafter completed construction of a rail facility located between the BNSF Mainline and Wonderful Logistics Center (“Rail Facility”). The Rail Facility is sited on approximately 34.5 acres of property owned by the City and consists of approximately 22,000 feet of track including connections to the BNSF and track that lead into the adjacent Industrial Park. The Rail Facility also contains improvements to facilitate switching operations, transloading, rail car storage, rail car cleaning, and other related uses for potential users. The primary beneficiaries of the service were oil & gas service companies who ceased their operations in Shafter as a result of the industry decline in Kern County. Although these facilities exist on the current Rail Facility, several of the improvements are in need of repair.

A successful reactivation of the Rail Facility as a rail transload and intermodal operation would require substantial private capital investment, and long-term operational commitment beyond the City’s ownership of the rail parcel alone.

Based on these findings, staff engaged in negotiations with Wonderful Industrial Park Logistics LLC, which controls adjacent land to support a full-scale intermodal operation and demonstrated the financial capacity and willingness to invest in reactivating the facility. Over the course of negotiations, staff focused on structuring a lease that would ensure market-based consideration, long-term revenue stability, and full transfer of

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RESOLUTION APPROVING LEASE AGREEMENT WITH WONDERFUL REAL ESTATE LLC FOR USE OF EXISTING CITY RAIL FACILITY LOCATED AT APNS 091-252-72, 091-253-09, 091- 261-13, portion of 091-261-16, and 090-180-29
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construction, financing, and operational risk to the tenant. The resulting Lease Agreement reflects these objectives while providing the City with a fixed, escalating revenue stream and avoiding any City capital investment or operational exposure.

Proposed Lease Agreement
The proposed Lease is between the City (Landlord) and Wonderful Industrial Park Logistics LLC (Tenant) for the City’s rail facility property (“Premises”) • The Lease has an initial term of 26 years, with two Tenant extension options of 12 years each (maximum 50 years). The “Commencement Date” is the earlier of (i) 12 months after execution, or (ii) when Tenant commences operations. • Tenant may access the Premises during an “Early Access Period” (from execution up to the earlier of the first anniversary or Commencement Date) to begin preparation and improvements, subject to insurance and the Security Deposit, but with no rent due until the Commencement Date. • The Lease provides the City with a fixed, escalating rent stream and shifts repair, maintenance, and operating responsibility to Tenant. Base rent is $918,330 per year ($76,527.50 per month) starting at the Commencement Date, escalating 3% annually for the first 10 years, then adjusting annually by CPI (no decreases; capped at 3% per year). Tenant provides a $153,055 security deposit to secure performance.
• Tenant is responsible for taxes/possessory interest taxes and all costs to maintain, repair, and operate the Premises and improvements, with the City’s role largely limited to contract administration/oversight. • The permitted use is operation of the rail facility and related ancillary uses. • Tenant may construct and modify “Tenant Improvements” at its sole cost, with City consent for “Fixed Vertical Improvements” (buildings/structures rising above ground level) which require the City’s prior written consent in its landowner capacity, separate of any permits or entitlements remain subject to separate City review and approval in its regulatory capacity.
• The Lease repeatedly confirms that nothing in the Lease is a regulatory approval: the City is acting as property owner under the Lease, the Lease does not commit the City to issue permits/entitlements, and the City expressly reserves its police powers and independent legal obligations for all required governmental reviews and findings.

Shafter Municipal Code, Section 2.74.010, authorizes the leasing of City property for terms greater than 55 years. Although its terms apply specifically to leases over 55 years and this Lease Agreement is for a max term of 50-year extensions, this Lease Agreement was negotiated and reviewed with the factors contained in Section 2.74.010 in mind. Specifically:

A. Because the term is not greater than 55 years, the lease has not been made subject to periodic review by the city council. Nonetheless, any City approvals required under the Lease are proprietary landlord consents given in the City’s capacity as property owner (including, without limitation, consent for any Fixed Vertical

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RESOLUTION APPROVING LEASE AGREEMENT WITH WONDERFUL REAL ESTATE LLC FOR USE OF EXISTING CITY RAIL FACILITY LOCATED AT APNS 091-252-72, 091-253-09, 091- 261-13, portion of 091-261-16, and 090-180-29
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Improvements). The Lease does not constitute and shall not be construed as any regulatory permit, entitlement, license, or other governmental approval, nor as a waiver of applicable laws. Tenant remains solely responsible for obtaining all permits and approvals required by law, and the City retains its full police powers and independent discretion in its governmental and regulatory capacity.

B. The lease has taken into consideration current market conditions. In 2023, the City commissioned a market study to gauge interest in the use of the Rail Facility by potential users and the terms such agreements could contain.

C. The public interest is served by the execution of the Lease. Approval of the Lease Agreement will result in the re-use of an existing Rail Facility, eliminating the need for the City to spend funds to maintain it and will provide the City with lease revenue beginning at $918,330 in Year 1, with annual escalations of 3% for the first 10 years and thereafter annual CPI-based increases (no decreases; capped at 3% per year) over the 26-year Initial Term for the City’s rail fund.

D. The consideration obtained in exchange for the Lease is reasonable, appropriate, and proportionate to the value of the property.

E. A lease for a shorter period is not feasible under the circumstances. In order to amortize the cost of required repairs of existing facilities and additional improvements needed for the Rail Facility, a shorter term is not feasible, and the proposed term is appropriate.

F. City property covered by this agreement encompasses 5 parcels: APNS 091- 252-72, 091-253-09, 091-261-13, portion of 091-261-16, and 090-180-29.

FISCAL IMPACT
Over the past several fiscal years, the Rail Facility has generated little to no revenue while continuing to incur operating expenses averaging approximately $100,000 to $150,000 annually, resulting in recurring losses. Approval of the Lease Agreement reverses this trend by converting a cost center into a revenue-generating asset and eliminating ongoing operating subsidies.

The proposed Lease Agreement will result in a significant positive fiscal impact to the Rail Fund while avoiding future capital and maintenance obligations.

The City will receive $918,330 in annual base rent in Year 1, with contractual annual escalations that provide a predictable and inflation-protected revenue stream over the 26-year Initial Term. Over the life of the Initial Term, the Lease is expected to generate tens of millions of dollars in cumulative lease revenue.

The City will also receive a $153,055 security deposit to secure Tenant performance under the Lease.

All costs associated with repair, rehabilitation, maintenance, and operation of the Rail Facility will be borne by the Tenant. Ongoing City costs are expected to be limited to

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CEQA ANALYSIS
Approval of the Lease Agreement for the operation of an existing Rail Facility is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15301 (Class 1 – Existing Facilities) and, alternately, Section 15302 (Replacement or Reconstruction) of the CEQA Guidelines.

Section 15301 applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing structures, facilities, mechanical equipment, or topographical features where the project involves negligible or no expansion of existing or former use. (State CEQA Guidelines, § 15301.) Here, consistent with Section 15301, the proposed Lease Agreement would authorize the operation of the existing Rail Facility in the manner contemplated when approved in 2002 and constructed between 2002 and 2015. Further, the proposed Lease Agreement would authorize the operator to repair/replace existing improvements, but does not authorize expansion of buildings, or rail lines on the site.

Section 15302 applies to the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced. Here, consistent with Section 15302, the proposed Lease Agreement would authorize the potential replacement of existing improvements on the same site with substantially the same purpose and capacity of the existing facility.

In addition, CEQA Guidelines Section 15300.2 lists the following exceptions to categorical exemptions:
a) Location. Classes 3, 4, 5, 6, and 11 are qualified by consideration of where the project is to be located – a project that is ordinarily insignificant in its impact on the environment may in a particularly sensitive environment be significant. Therefore, these classes are considered to apply all instances, except where the project may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.

The City is proposing a categorical exemption under Sections 15301 and 150302 (Class 1 and 2). Therefore, Exception (a) would not apply to the project b) Cumulative Impact. All exemptions for these classes are inapplicable when the cumulative impact of successive projects of the same type in the same place, over time is significant.

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RESOLUTION APPROVING LEASE AGREEMENT WITH WONDERFUL REAL ESTATE LLC FOR USE OF EXISTING CITY RAIL FACILITY LOCATED AT APNS 091-252-72, 091-253-09, 091- 261-13, portion of 091-261-16, and 090-180-29
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the same place” should be interpreted to refer to the area where the environmental impact will occur and that the affected area will depend on the nature of the environmental impact.

Here, proposed Lease Agreement authorizes the operation of the existing Rail Facility and the repair/replacement of existing improvements, but does not authorize expansion of buildings, or rail lines on the site. No other projects are currently proposed in this area of the City for the construction or operation of a new rail facility. As such, the impacts of the proposed Lease Agreement are not cumulatively considerable, and Exception (b) would not apply.
c) Significant Effect. A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.

This exception applies only when both unusual circumstances and a significant impact as a result of those unusual circumstances are shown (Berkeley Hillside Preservation v City of Berkeley “Berkeley Hillside” (2015) 60 Cal.4th 1086, 1104). As the Supreme Court explained in Berkeley Hillside, the City’s determination whether this exception applies involves two distinct questions: (1) whether the project presents unusual circumstances, and (2) if the project presents unusual circumstances, whether there is a reasonable possibility that a significant environmental impact will result from those unusual circumstances. (60 Cal.4th at 1098.) The City considers the second prong of this two-part test only if it first finds that some circumstance of the project is unusual. If the City finds that the project does not present unusual circumstances, the exception is inapplicable, and the agency need not reach the second prong of the two-part test.

Here, the City’s determination whether the proposed Lease Agreement presents unusual circumstances involves a factual inquiry under which the City weighs the relevant evidence to determine if those circumstances are unusual in comparison with other projects subject to CEQA Guidelines Section 15301 or 15302. The proposed Lease Agreement would allow the operation of the Rail Facility, an activity typical for other similar projects in the City that have been approved pursuant to the CEQA Guidelines section 15301 and 15302 exemption. An example of a similar project approved by the City pursuant to the CEQA Guidelines Section 15301 exemption is the improvements to the former Modified Community Correctional Facility Remodel Project and an example of a similar project approved by the City pursuant to CEQA Guidelines section 15302 is the Shafter Avenue Pedestrian Improvement Project As such, there is no reasonable possibility that the proposed Lease Agreement will have a significant effect on the environment due to unusual circumstances, and this exception (c) does not apply.
d) Scenic Highways. A categorical exemption shall not be used for a project which may result in damage to scenic resources, including but not limited to, trees, historic buildings, rock outcroppings, or similar resources, within a highway officially designated as a state scenic highway. This does not apply to improvements which are required as mitigation by an adopted negative declaration or certified EIR.

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RESOLUTION APPROVING LEASE AGREEMENT WITH WONDERFUL REAL ESTATE LLC FOR USE OF EXISTING CITY RAIL FACILITY LOCATED AT APNS 091-252-72, 091-253-09, 091- 261-13, portion of 091-261-16, and 090-180-29
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There are no scenic highways near the Rail Facility or in the City of Shafter. As such, the approval of the proposed Lease Agreement would have no impact on scenic resources within a State scenic highway and this exception (d) does not apply. e) Hazardous Waste Sites. A categorical exemption shall not be used for a project located on a site which is included on any list compiled pursuant to Section 65962.5 of the Government Code.

Government Code Section 65962.5 requires the Department of Toxic Substance Control and State Water Resources Control Board to compile and update a regulatory site listing (per the criteria of the Section). The California Department of Health Services is also required to compile and update, as appropriate, a list of all public drinking water wells that contain detectable levels of organic contaminants and that are subject to water analysis pursuant to Health and Safety Code Section 116395. Section 65962.5 requires the local enforcement agency, as designated pursuant to Section 18051 of Title 14 of the CCR, to compile, as appropriate, a list of all solid waste disposal facilities from which there is a known migration of hazardous waste. The Rail Facility site is not included on any list compiled pursuant to Section 65962.5 of the Government Code (Hazardous Waste). As such, this exception (e) does not apply. f) Historical Resources. A categorical exemption shall not be used for a project which may cause a substantial adverse change in the significance of a historical resource.

The Rail Facility, which was constructed between 2002 and 2015, is not a historic resource nor are there any historic resources in the area of the Rail Facility. As such, this exception (f) does not apply.

APPROVED BY THE CITY ATTORNEY
Yes

ATTACHMENTS

1. Resolution No. 3067

2. Shafter Rail Property - WIPL EXECUTED Ground Lease(3587139.1)

3. RailLease_CouncilPresentation_030326

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RESOLUTION NO. 3067

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHAFTER

APPROVING LEASE AGREEMENT WITH WONDERFUL INDUSTRIAL PARK

LOGISTICS LLC FOR USE OF EXISTING CITY RAIL FACILITY GENERALLY

LOCATED EAST OF SANTA FE WAY, NORTH OF SEVENTH STANDARD ROAD

AND SOUTH OF BURBANK STREET ADJACENT TO THE BNSF RAIL LINE AT APNS 091-252-72, 091-253-09, 091-261-13, PORTION OF 091-261-16, AND 090-180-29 WHEREAS, the City of Shafter (the "City") is a municipal corporation, duly organized as a Charter City under the constitution and laws of the State of California; and WHEREAS, the City of Shafter owns property located east of Sante Fe Way, North of Seventh Standard Road and South of Burbank Street Adjacent to the BNSF Rail line encompassed by APNs 091-252-72, 091-253-09, 091-261-13, portion of 091-261-16, and 090-180-29 that is currently developed with a rail facility located between the BNSF Mainline and Wonderful Industrial Park (“Rail Facility”); and
WHEREAS, the Rail Facility is sited on approximately 34.5 acres of property and consists of approximately 22,000 feet of track including connections to the BNSF and track that lead into adjacent properties and other existing improvements to facilitate switching operations, transloading, rail car storage, rail car cleaning and other related uses for potential users; and WHEREAS, on May 5, 2022 the City of Shafter complied with the requirements of the California Surplus Land Act by making the Subject Property available for housing development purposes to any interested developers (Notice Period); and WHEREAS, at the conclusion of the Notice Period, no interested parties requested to negotiate the use of the Subject Property for housing purposes; and WHEREAS, Shafter Municipal Code, Section 2.74.010, authorizes the leasing of City property, including leases for terms greater than 55 years; and WHEREAS, Lease of the Subject Property provides the City with substantial public benefits including a revenue stream to supplement the general fund, on-going maintenance of the facilities located on the Subject Property and significant reductions in truck emissions in the area.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SHAFTER HEREBY RESOLVES AS FOLLOWS:

Section 1. The above recitals are true and correct and are incorporated herein by this reference.

Section 2. The City Council of the City of Shafter (“City Council”) finds that approval of the Lease Agreement is in the public interest, provides the City with substantial public benefits and authorizes the use of the Subject Property in the manner in which it was intended when originally developed. The City Council further finds that approval of the Lease Agreement for the operation of an existing Rail Facility is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15301 (Class 1 – Existing Facilities) and, alternately, Section 15302 (Replacement or

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Shafter City Council Resolution No. 3067
March 3, 2026

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Reconstruction) of the CEQA Guidelines.

The City Council further finds that approval of this Lease Agreement is exempt pursuant to Section 15302. Section 15302 applies to the replacement or reconstruction of existing structures and facilities where the new structure will be located on the same site as the structure replaced and will have substantially the same purpose and capacity as the structure replaced. Here, consistent with Section 15302, the proposed Lease Agreement would authorize the potential replacement of existing improvements on the same site with substantially the same purpose and capacity of the existing facility.

In addition, CEQA Guidelines Section 15300.2 lists the following exceptions to the use of categorical exemptions:
a) Location. Classes 3, 4, 5, 6, and 11 are qualified by consideration of where the project is to be located – a project that is ordinarily insignificant in its impact on the environment may in a particularly sensitive environment be significant. Therefore, these classes are considered to apply all instances, except where the project may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law by federal, state, or local agencies.

The City is proposing a categorical exemption under Sections 15301 and 150302 (Class 1 and 2). Therefore, Exception (a) would not apply to the project. b) Cumulative Impact. All exemptions for these classes are inapplicable when the cumulative impact of successive projects of the same type in the same place, over time is significant.

This Exception disallows a categorical exemption to be used for a project when the cumulative impact of successive projects “of the same type in the same place over time” has a narrower definition than the broad definition of cumulative impacts as defined and applied elsewhere in CEQA practice. Further in Robinson v. City & County of San Francisco (2012) 208 Cal.App.4th 950, 958, the court held that the phrase “in the same place” should be interpreted to refer to the area where the environmental impact will occur and that the affected area will depend on the nature of the environmental impact.

Here, proposed Lease Agreement authorizes the operation of the existing Rail Facility and the repair/replacement of existing improvements, but does not authorize

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Shafter City Council Resolution No. 3067
March 3, 2026

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expansion of buildings, or rail lines on the site. No other projects are currently proposed in this area of the City for the construction or operation of a new rail facility.

As such, the impacts of the proposed Lease Agreement are not cumulatively considerable, and Exception (b) would not apply.
c) Significant Effect. A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.

This exception applies only when both unusual circumstances and a significant impact as a result of those unusual circumstances are shown. (Berkeley Hillside Preservation v City of Berkeley “Berkeley Hillside” (2015) 60 Cal.4th 1086, 1104) As the Supreme Court explained in Berkeley Hillside, the City’s determination whether this exception applies involves two distinct questions: (1) whether the project presents unusual circumstances, and (2) if the project presents unusual circumstances, whether there is a reasonable possibility that a significant environmental impact will result from those unusual circumstances. (60 Cal.4th at 1098.) The City considers the second prong of this two part test only if it first finds that some circumstance of the project is unusual. If the City finds that the project does not present unusual circumstances, the exception is inapplicable, and the agency need not reach the second prong of the two part test.

There are no scenic highways near the Rail Facility or in the City of Shafter. As such, the approval of the proposed Lease Agreement would have no impact on scenic resources within a State scenic highway and this exception (d) does not apply. e) Hazardous Waste Sites. A categorical exemption shall not be used for a project located on a site which is included on any list compiled pursuant to Section

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March 3, 2026

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65962.5 of the Government Code.

Section 65962.5 requires the local enforcement agency, as designated pursuant to Section 18051 of Title 14 of the CCR, to compile, as appropriate, a list of all solid waste disposal facilities from which there is a known migration of hazardous waste.

The Rail Facility site is not included on any list compiled pursuant to Section 65962.5 of the Government Code (Hazardous Waste). As such, this exception (e) does not apply.
f) Historical Resources. A categorical exemption shall not be used for a project which may cause a substantial adverse change in the significance of a historical resource. The Rail Facility, which was constructed between 2002 and 2015, is not a historic resource nor are there any historic resources in the area of the Rail Facility.

As such, this exception (f) does not apply.

Section 3. City Council hereby approves the Lease of the Subject Property to Wonderful Industrial Park Logistics LLC in accordance with the terms contained in the Lease Agreement attached hereto as Exhibit “A” to this resolution.

Section 4. City Council hereby authorizes City Manager to execute the Lease Agreement, including the approval of non-substantive changes, and any necessary supporting documentation to effectuate the Lease Agreement.

Section 5. This Resolution shall become effective immediately. [SIGNATURES ON THE FOLLOWING PAGE]

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Shafter City Council Resolution No. 3067
March 3, 2026

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PASSED, APPROVED, AND ADOPTED THIS 3
RD DAY OF MARCH, 2026.
_______________________________
Chad Givens, Mayor
ATTEST:
_______________________________
Yazmina Pallares, City Clerk
APPROVED AS TO FORM:
_______________________________
Marco A. Martinez, City Attorney

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Shafter City Council Resolution No. 3067
March 3, 2026

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EXHIBIT A

LEASE AGREEMENT

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17236.00133\43142402.10
1 {3496730.21}

GROUND LEASE
(RAIL OPERATION)
THIS GROUND LEASE (RAIL OPERATION) (the “Lease”) is dated as of March , 2026 (the “Execution Date”) by and between the CITY OF SHAFTER, a California municipal corporation (“Landlord”) and WONDERFUL INDUSTRIAL PARK LOGISTICS LLC, a Delaware limited liability company (“Tenant”).

W I T N E S S E T H:

A. Landlord is the owner of certain real property consisting of land identified as APNS 090-180-29, 091-252-72, 091-253-09, 091-261-13, and 091-261-16, located in the City of Shafter, State of California, as more particularly described and depicted on Exhibit A attached hereto and incorporated herein (the “Land”), including all improvements located thereon (the “Existing Improvements;” together with the Land, collectively, the “Property”).

B. Tenant desires to lease from Landlord a portion of the Property as more particularly described and depicted on Exhibit B attached hereto and incorporated herein (the “Premises”), and Landlord has agreed to lease the Premises to Tenant, on the terms and conditions set forth herein.

C. Landlord and Tenant acknowledge and agree that (i) Landlord’s regulatory authority concerning the issuance of any permits, clearances or approvals needed to construct the Tenant Improvements is not in any way abrogated or limited due to the entering into of this Lease by both parties; (ii) Landlord’s entering into this Lease does not commit Landlord to issue any permits, clearances or approvals which Tenant or Landlord may seek; and (iii) the entering into of this Lease by the parties has independent utility and is not dependent upon any other pending development projects which may be applied for or undertaken by either party.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:

ARTICLE I

LEASE OF PREMISES

1.1 Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, pursuant to the terms and conditions hereof, the Premises.

ARTICLE II
TERM

2.1 Initial Term. The initial term of this Lease shall be twenty-six (26) years (the “Initial Term”), commencing on the Commencement Date (as hereinafter defined) and expiring Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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17236.00133\43142402.10
2 {3496730.21}
twenty-six (26) years thereafter, unless extended or terminated as provided herein. The “Commencement Date” of this Lease shall be the earlier of: (a) twelve (12) months after the Execution Date, or (b) the date on which Tenant commences operations on the Premises. For purposes of this provision “commences operations” shall mean the date on which Tenant first substantially begins its intended use of the Premises for its Permitted Use (as defined in Section

5.1). Notwithstanding the foregoing, if Tenant’s ability to construct the Tenant Improvements (as defined in Section 7.1 below) or commence operations is delayed due to the occurrence of a Force Majeure Event (as defined in Section 15.14 below), then the Commencement Date shall be extended on a day-for-day basis for the duration of such Force Majeure Event. During any such period of delay caused by a Force Majeure Event, no Base Rent or additional rent (collectively, “Rent”) shall be due or payable. If any such Force Majeure Event continues for more than one hundred twenty (120) consecutive days, then Tenant shall have the right, in its sole discretion, either (i) to terminate this Lease upon written notice to Landlord, whereupon neither party shall have any further rights or obligations hereunder except as expressly stated to survive termination, or (ii) to allow this Lease to remain in effect, in which case Base Rent and additional rent shall commence as of the one hundred eighty-first (181st) day of such Force Majeure Event, notwithstanding that Tenant has not commenced operations. Landlord and Tenant shall execute a Commencement Date Memorandum in the form attached hereto as Exhibit C confirming the actual Commencement Date once determined.

2.2 Option To Extend. Provided Tenant is not in an Event of Default (as described in Section 14.1), Tenant shall have the option to extend the Lease (each, an “Extension Option”) for two (2) additional twelve (12) year terms (each, an “Extension Term”; and together with the Initial Term, collectively, the “Term”), commencing upon the expiration date of the then current Term, upon the same terms and conditions previously applicable, except for the grant of any exercised Extension Option. Tenant may exercise its Extension Option by providing written notice to Landlord no earlier than twelve (12) months and no later than nine (9) months prior to the expiration of the then-current Term. If Tenant does not exercise the Extension Option, the Extension Option shall terminate and be of no further force or effect. Each Extension Option may be transferred to any assignee of the Tenant subject to Article IX.

2.3 Early Access Period. Tenant may have early access to the Premises prior to the Commencement Date (the “Early Access Period”) to construct Tenant Improvements and prepare the Premises for the Permitted Use provided Tenant: (i) delivers payment of the Security Deposit (as defined in Section 3.2 below), (ii) complies with Section 12 (Insurance) and (iii) delivers an insurance certificate to Landlord prior to entry. The Early Access Period shall begin on the Execution Date and end on the sooner of the first anniversary of the Execution Date or the Commencement Date. During the Early Access Period, Tenant shall comply with all of the terms of this Lease, including, without limitation, insurance, indemnity, and maintenance obligations, except for Rent payments, which shall not be due until the Commencement Date. Tenant shall be solely responsible for all costs associated with its use of the Premises during the Early Access Period, including utilities, security, and any damages caused by Tenant, its employees, agents, and contractors. Tenant’s access shall be at its sole risk, and Landlord shall have no liability for any delays, damages, or losses incurred by Tenant during the Early Access Period. Tenant shall defend, indemnify, and hold Landlord harmless from any claims, liabilities, or damages arising from Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Tenant’s activities on the Premises during the Early Access Period. This indemnity shall survive the earlier termination or expiration of this Lease.

2.4 AS-IS, WHERE-IS. Except as otherwise expressly provided in this Lease, Tenant’s execution of this Lease constitutes Tenant’s acceptance of the Premises in its “AS-IS, WHEREIS” condition, with all faults, latent or patent, and without any representation or warranty by Landlord, express or implied, as to the condition, suitability, or fitness of the Premises for Tenant’s intended use. Notwithstanding the foregoing, Tenant may, in its sole discretion, terminate this Lease upon written notice to Landlord if, at any time during the Early Access Period, Tenant discovers a latent defect in the Property that materially impairs or materially interferes with Tenant’s ability to use the Property for the Permitted Use. Upon such termination, neither party shall have any further obligations to the other except for obligations accrued prior to the termination date. Tenant’s acceptance of the Premises in “AS-IS, WHERE-IS” condition shall not be deemed to constitute an assumption by Tenant of any liability or responsibility for any preexisting conditions at the Premises, including without limitation, any hazardous materials or environmental conditions existing prior to the Commencement Date. Landlord shall remain solely responsible for all claims, costs, and liabilities arising from or related to such pre-existing conditions, whether known or unknown, disclosed or undisclosed, and regardless of when discovered; provided, however, that Tenant shall be responsible for any claims, costs, or liabilities only to the extent arising out of Tenant’s exacerbation or disturbance of such pre-existing conditions.

2.5 Early Termination.
(a) Tenant’s Unilateral Right to Terminate. Tenant shall have the unilateral right to terminate this Lease at any time and for any reason by providing Landlord with at least twelve (12) months’ prior written notice (the “Termination Notice”). Upon expiration of the 12- month notice period, this Lease shall automatically terminate without further obligation, except for obligations that expressly survive termination, as expressly set forth in this Lease. (b) Mutual Termination. Tenant and Landlord may mutually agree in writing to terminate this Lease at any time, with such termination to be effective on a date specified in the mutual written agreement, which date shall be at least six (6) months’ after the date of such agreement. Upon such termination, this Lease shall terminate without further liability to either party, except for obligations that expressly survive termination as set forth herein. (c) Termination Pursuant to Other Provisions. In addition to the termination rights set forth in this Section 2.5, this Lease may also be terminated by Tenant (i) in the case of a Force Majeure Event in accordance with Section 2.1, (ii) in the event of a Casualty in accordance with Section 7.7, (iii) if there is a CEQA Challenge in accordance with Section 11.4(d), (iv) in the event of a Taking in accordance with Section 13.4(b), and (v) if the parties are unable to assign or enter into an Industry Track Agreement reasonably acceptable to Tenant in accordance with Section 15.20.

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(d) No Termination Penalty. Tenant shall not be required to pay any termination fee, penalty, or unamortized cost as a condition of exercising its termination rights. (e) Landlord’s Cooperation. Upon receipt of a Termination Notice, Landlord agrees to reasonably cooperate with Tenant to ensure an orderly transition of the Premises and execution of any necessary documentation to effectuate the termination.

2.6 Surrender. No later than ninety (90) days before the expiration or earlier termination of this Lease, Tenant shall provide Landlord with written notice identifying which Removable Improvements (as defined below) Tenant intends to remove from the Premises. Within ten (10) business days after receipt of such notice, the parties shall meet and confer in good faith regarding the proposed removal list, and Landlord may reasonably request modifications to the list. Tenant shall, at its sole cost and expense, remove those identified Removable Improvements in the final, mutually agreed-upon list, within ninety (90) days after the expiration or earlier termination of the Lease. Tenant shall have reasonable access to the Premises during such period to remove the Removable Improvements. Upon completion of such removal, Tenant shall surrender the Premises in good condition and repair, ordinary wear and tear excepted. Any Removable Improvements that remain on the Premises after such removal period shall automatically become the property of Landlord free and clear of all claims by Tenant or any third party, without the payment of compensation to Tenant. Landlord may, at its sole option, remove and dispose of any remaining Removable Improvements. Tenant shall reimburse Landlord for all reasonable costs and expenses incurred by Landlord in connection with such removal and disposal, payable promptly upon Tenant’s receipt of an invoice from Landlord. Tenant shall defend and indemnify Landlord against all liability and loss arising from such claims or from Landlord's exercise of the rights conferred by this Section. For purposes of this Section, “Removable Improvements” shall mean improvements that are not permanently affixed and are reasonably capable of removal without material damage (e.g., mobile equipment, modular structures). “Fixed Improvements” shall mean all improvements, fixtures, or alterations that are permanently affixed to the Premises and not reasonably capable of removal without material damage (i.e. rail tracks, foundations, utilities). Tenant shall not be required to remove any Fixed Improvements upon the expiration or earlier termination of this Lease.

ARTICLE III
RENT; SECURITY DEPOSIT

3.1 Base Rent.
(a) Tenant shall pay to Landlord an annual base rent of Nine Hundred Eighteen Thousand Three Hundred Thirty Dollars $918,330, payable in equal monthly installments of $76,527.50 (“Base Rent”), with the first payment of Base Rent being due on the Commencement Date. Commencing on the first anniversary of the Commencement Date and continuing on each subsequent anniversary thereafter for a total period of ten (10) years, the Base Rent shall increase annually by three percent (3%) of the then current Base Rent. Beginning on the eleventh (11th) anniversary of the Commencement Date and on each anniversary thereafter through the Term, the Base Rent shall be adjusted annually based on the percentage increase, if any, in the Consumer Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Price Index for All Urban Consumers (CPI-U), U.S. City Average, All Items (1982-84=100), as published by the Bureau of Labor Statistics of the United States Department of Labor (“CPI”), subject to the following limitations:
(b) Base Rent shall be adjusted by a percentage equal to the increase (but never decrease) in the CPI over the most recent twelve (12) month period for which CPI data is available, provided that the annual adjustment shall not exceed three percent (3%). (c) If the CPI is discontinued or materially altered, the parties shall use a comparable index published by the Bureau of Labor Statistics to measure cost of living increases.

The substitute shall then become the “CPI” hereunder.

3.2 Security Deposit. Concurrently with Tenant's execution of this Lease, Tenant shall either (a) deposit with Landlord a cash security deposit or (b) deliver to Landlord an unconditional, irrevocable standby letter of credit (“Letter of Credit”) issued by a national banking association reasonably acceptable to Landlord in the amount of $153,055.00 (the “Security Deposit”). The Security Deposit shall be held by Landlord as security for Tenant's performance of the terms of this Lease. Landlord may (but shall not be required to) use all or any part of the Security Deposit or draw upon the Letter of Credit to cure any default of Tenant under the Lease (after any required notice and expiration of any applicable cure period) or to compensate Landlord for any loss or damage which Landlord may incur as a result of Tenant's default. Tenant shall be entitled to interest on the Security Deposit and Landlord shall be required to keep the Security Deposit separate from its general funds. If Tenant elects to provide a Letter of Credit, it shall (i) be in a form reasonably acceptable to Landlord, (ii) be drawable upon presentation of a sight draft accompanied by Landlord’s certification of Tenant’s default under the Lease, and (iii) provide that it shall be automatically renewable annually for successive one-year periods unless the issuing bank provides at least sixty (60) days’ prior written notice of nonrenewal to Landlord. If the Letter of Credit is not renewed, Tenant shall replace it with a new Letter of Credit or cash deposit within thirty (30) days after such notice. Where there have been no defaults by Tenant or where all applicable deductions from Security Deposit or draws upon the Letter of Credit have been made as hereinabove provided, Landlord shall refund the then existing balance of the Security Deposit or return the undrawn Letter of Credit to Tenant within thirty (30) days of expiration or termination of this Lease.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF LANDLORD

4.1 Representations and Warranties of Landlord. Landlord hereby represents and warrants to Tenant that, as of the Execution Date:
(a) Landlord possesses full power and authority to lease the Premises pursuant to this Lease and consummate the transactions provided for herein, and no other party has any right or option thereto or in connection therewith.
(b) Landlord is the sole and valid vested title holder to the Premises.

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(c) There is no mortgage, deeds of trust, or lien encumbering the Premises. (d) To Landlord’s actual knowledge (without duty to investigate), the Premises are in compliance with all federal, state, regional or local statutes, laws, regulations, codes, orders, permits, and ordinances pertaining to the Premises.
(e) This Lease and the consummation of the transaction contemplated herein are the valid and binding obligations of Landlord and do not constitute a default (or an event which, with the giving of notice or the passage of time, or both, would constitute a default) under, nor are they inconsistent with, any contract to which Landlord is party or by which it is bound.

4.2 Covenants of Landlord.
(a) Quiet Enjoyment. Provided Tenant is paying Rent, and performing and observing all of its obligations, covenants, and conditions to be performed by Tenant under this Lease, Landlord hereby covenants to Tenant that, during the Term, Tenant shall peaceably and quietly hold and enjoy the use of the Premises.
(b) Grant of Encumbrances. Landlord shall not grant or permit any easements, licenses, covenants, conditions, restrictions, or other encumbrances affecting title to the Premises that would materially interfere with Tenant’s Permitted Use of the Premises.

ARTICLE V
USE

5.1 Permitted Use. The Premises may be developed, improved, and used by Tenant for use as a rail operation and all ancillary purposes related thereto. Tenant will not use the Premises for any purpose or use which in any manner causes, creates or results in a public or private nuisance.

5.2 No Additional Approvals Required. Tenant may construct, alter, or remove improvements on the Premises without prior Landlord approval, except as required by law.

5.3 No Competing Uses. During the Term, Landlord agrees not to lease adjacent or nearby properties for an rail operations or any purpose related thereto, during the Term, without Tenant’s prior written consent, which may be withheld in Tenant’s sole and absolute discretion.

5.4 Use Obligations. There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, age, handicaps, sex, marital status, sexual orientation, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Premises or the improvements thereon, or any part thereof, and Tenant itself, or any person claiming under or through it, shall not establish or permit any such practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subtenants or vendees of the Premises or the improvements thereon, or any part thereof.

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5.5 Use Prohibitions. Tenant agrees that in connection with the use and operation of the Premises it will not:
(a) Cause or permit substantial and obnoxious odors to emanate or be dispelled from the improvements; or
(b) Create, cause, maintain or permit any nuisance (as defined under applicable law) in, on or about the Premises; provided, however, that in no event shall any emissions, odors, noise, vibrations, truck or rail traffic, lighting, or other conditions that are customary, incidental, or reasonably necessary to the conduct of Tenant’s Permitted Use of the Premises as a rail operation be deemed to constitute a violation of this Section 5.5(a) or (b), so long as Tenant is in compliance with applicable laws

ARTICLE VI
MAINTENANCE OF PREMISES; HAZARDOUS MATERIALS

6.1 Tenant Responsibility. Tenant shall, during the Term, at its own cost and expense and without any cost or expense to Landlord be solely responsible for maintaining the Premises, including all improvements, utilities, and infrastructure located on the Premises as follows. (a) Tenant shall keep and maintain all buildings and improvements (including, but not limited to, all landscaping located on the Premises, Tenant Improvements and all appurtenances thereto in good and neat order and repair and shall allow no nuisances to exist or be maintained therein. Landlord shall not be obligated to make any repairs, replacements or renewals of any kind, nature or description whatsoever to the Premises, Tenant Improvements, or any buildings or improvements located thereon, and Tenant hereby expressly waives all right to make repairs at Landlord’s expense under sections 1941 and 1942 of the California Civil Code, or any amendments thereof.
(b) Tenant shall comply with and abide by all federal, state, county, municipal and other governmental statutes, ordinances, laws and regulations affecting the Premises, all buildings and improvements located thereon, or any activity or condition on or in the Premises. (c) Tenant agrees that it will not commit or permit waste upon the Premises. (d) Tenant will not cause any hazardous substance (as defined by applicable federal, state and local statutes, rules and regulations) to be released in, on, under or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Tenant’s expense, comply with all statutory requirements with respect to any contamination of the Premises that was caused or materially contributed to by Tenant or pertaining to or involving any hazardous substance brought onto the Premises during the Early Access Period and Term of this Lease by Tenant, or its agents, contractors, consultants, employees, or invitees (each a “Tenant Party” and collectively, the “Tenant Parties”) . Tenant will defend, indemnify and hold Landlord free and harmless from and against any and all claims, damages and liabilities with respect to any such contamination of the Premises caused by Tenant following the Commencement Date. Tenant will immediately notify Landlord if Tenant becomes aware that any release of hazardous Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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substances has come to be located in, on, under or about the Premises at any time during the Term.

In the event of any such release or contamination of the Premises caused by Tenant or a Tenant Party during the Early Access Period and the Term, Tenant shall, at Tenant’s sole expense, immediately remove such hazardous substance, remedy the contamination, and fully comply with all applicable statutory requirements for the safe and legal disposal of such substances.

6.2 No Mandatory Capital Improvements. Landlord shall not require Tenant to make capital improvements beyond those required for Tenant’s intended use.

ARTICLE VII

IMPROVEMENTS/CASUALTY

7.1 Tenant’s Right to Modify Existing Improvements and Construct New Improvements.
(a) Tenant shall have the sole and exclusive right, at its discretion and sole expense, to construct, install, expand, renovate, demolish, or modify any and all improvements on the Premises in connection with the Permitted Use (collectively, “Tenant Improvements”) without the need for Landlord’s consent, except as expressly provided in this Section 7.1. As of the Execution Date, the Tenant Improvements contemplated by Tenant are described on Exhibit E attached hereto and incorporated herein by reference. Tenant shall not construct any Fixed Vertical Improvements on the Premises without the prior written consent of Landlord, which may be withheld in Landlord’s reasonable discretion. For purposes of this Section, “Fixed Vertical Improvements” means any buildings, structures, or improvements that rise above ground level, including but not limited to enclosed or partially enclosed buildings, towers, canopies, awnings, or any similar constructed features that are permanently affixed to the Premises and occupy aboveground volume. Ordinary temporary or movable operational facilities or equipment (including, without limitation, container stacks, cranes, modular shelters, or similar movable improvements) shall not constitute Fixed Vertical Improvements and may be installed, used, and removed by Tenant without Landlord’s consent. For the avoidance of doubt, for purposes of this Agreement, the term “Fixed Vertical Improvements” does not include pavement of any kind (including concrete or asphalt), railroad tracks and ties, or railroad operational fixtures. (b) Notwithstanding anything to the contrary in this Lease, Tenant acknowledges that Landlord is a municipal entity and that Landlord’s obligations and approvals under this Lease are made solely in its capacity as the owner of the Premises and not in its capacity as a governmental entity, unless expressly provided otherwise. Following the Effective Date, if Tenant so elects, Tenant shall proceed with due diligence and dispatch to complete the construction on the Premises of the Tenant Improvements. Nothing in this Lease shall be construed as an approval, waiver, or commitment by Landlord in its capacity as a governmental entity with respect to any permits, entitlements, zoning, building codes, environmental regulations, or other municipal requirements applicable to the Premises or Tenant’s intended use.

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(c) All work done in connection with any improvement, change or alteration shall be done promptly and in a good and workmanlike manner and in compliance with all laws, ordinances, orders, rules, regulations and requirements of all Federal, state and municipal governments and the appropriate departments, commissions, boards and officers thereof. All such work shall be at the sole cost and expense of Tenant.
(d) During the term of improvements, Tenant shall maintain, at Tenant’s own cost and expense, insurance coverage referred to in Article XII below.

7.2 No Landlord Consent Required. Landlord’s approval shall not be required for any Tenant Improvements, except for:
(a) Tenant Improvements that reduce the value of the Premises or Property. (b) Tenant Improvements that adversely affect structural integrity of the existing improvements owned by Landlord (if any).
(c) Tenant Improvements that violate applicable laws or recorded covenants affecting the Premises.
(d) All Tenant Improvements, changes and alterations (other than changes or alterations of movable trade fixtures and equipment or improvements, changes or alterations involving costs less than Two Hundred Fifty Thousand Dollars ($250,000)). (e) For any Tenant Improvements requiring Landlord’s approval (in its ownership capacity, not governmental), such approval shall not be unreasonably withheld, conditioned, or delayed and shall be deemed granted if Landlord fails to respond within thirty (30) days of Tenant’s written request.
(f) No improvement, change or alteration shall be undertaken until: Tenant shall have procured, so far as the same may be required from time to time, all municipal and other governmental permits and authorizations of the various municipal departments and governmental subdivisions having jurisdiction, and Landlord agrees to join in the application for such permits or authorizations whenever such action is necessary. Tenant acknowledges and agrees that Landlord’s regulatory authority concerning the issuance of any permits needed to construct the Tenant Improvements is not in any way abrogated or limited due to the entering of this Lease by both parties.

7.3 Compliance with Laws. Tenant shall construct and maintain all Tenant Improvements in compliance with applicable laws, but shall have the right to seek variances, rezoning, or other modifications to applicable regulations without Landlord’s consent, provided Tenant does so at its own expense. Landlord agrees to reasonably cooperate with Tenant in obtaining any necessary permits or approvals.

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Landlord’s prior written consent for any financing arrangement, which consent shall not be unreasonably withheld, delayed, or conditioned. Landlord may require that any lenders agree to certain terms to protect Landlord’s interests. Landlord shall enter into commercially reasonable agreements with Tenant’s lenders to provide recognition and non-disturbance, provided that such agreements do not materially interfere with Landlord's rights under this Lease or the operation of the Property.

7.5 Right to Remove Trade Fixtures. Subject to Section 2.6, Tenant shall have the unrestricted right, at any time during the Term and up to the expiration or earlier termination of this Lease, to remove any of its Removable Improvements consisting of trade fixtures, machinery, equipment, and other personal property from the Premises, provided that Tenant repairs any damage to the Premises directly caused by such removal, ordinary wear and tear excepted, at its sole cost and expense. Any trade fixtures, machinery, equipment, or other personal property not removed by Tenant prior to the expiration or earlier termination of the Lease shall, at Landlord’s election, either (a) be deemed abandoned and become the property of Landlord without compensation to Tenant, or (b) be removed by Landlord and any costs incurred in connection with the removal, disposal, or remediation of such items which shall be payable promptly upon Tenant’s receipt of an invoice from Landlord.

7.6 Landlord’s Non-Interference. Landlord shall not take any action that materially interferes with Tenant’s construction, operation, modification, or removal of Tenant Improvements, including delays in permit approvals (in Landlord’s ownership capacity) or unreasonable conditions on development.

7.7 Casualty and Restoration.
(a) If the Premises or any material portion of the Tenant Improvements are damaged or destroyed by fire or other casualty (a “Casualty”), Tenant shall promptly notify Landlord.

Tenant shall, in its sole discretion, determine whether to restore the Premises and Tenant Improvements or terminate this Lease pursuant to subsection (b) below. (b) If, in Tenant’s reasonable judgment, (i) the Premises or a substantial portion thereof are rendered unusable for Tenant’s operations, or (ii) restoration cannot, with reasonable diligence, be completed within one hundred eighty (180) days after the date of the Casualty, or (iii) the cost of restoration exceeds the available insurance proceeds, Tenant may elect to terminate this Lease by written notice to Landlord within sixty (60) days after the date of the Casualty. Upon such termination, Rent shall be fully abated as of the date of the Casualty, and neither party shall have any further obligation to the other except for those that expressly survive termination. (c) If Tenant elects to restore, Tenant shall, at its sole cost and expense (subject to application of insurance proceeds), diligently repair or rebuild the Tenant Improvements in a good and workmanlike manner in compliance with applicable laws. Tenant shall have the full right to use and apply all insurance proceeds toward such restoration. Landlord shall have no obligation to restore any portion of the Premises or Tenant Improvements.

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(d) During any period in which Tenant is unable to use the Premises (or any portion thereof) due to the Casualty, Rent shall be equitably abated in proportion to the area or portion rendered unusable, commencing on the date of the Casualty and continuing until the earlier of (i) substantial completion of restoration or (ii) termination of this Lease. (e) All insurance proceeds payable with respect to damage or destruction of the Tenant Improvements or Tenant’s personal property shall belong solely to Tenant. Landlord shall have no right or claim to such proceeds, except to the extent any such proceeds relate exclusively to Landlord-owned property or to reimburse Landlord for rent actually paid in advance and unearned after termination.
(f) Landlord shall not be obligated to rebuild, repair, or contribute to any restoration following a Casualty, and shall have no liability to Tenant for any interruption of Tenant’s business or loss of profits resulting therefrom, except as expressly provided herein. (f) The provisions of this Section 7.7 shall govern the rights of the parties in the event of a full or partial destruction of the Tenant Improvements on the Premises. Tenant hereby waives the provisions of California Civil Code section 1932(2) and 1933(4) only to the extent such provisions are inconsistent with Tenant’s express rights under Section 7.7 to terminate this Lease or abate Rent following a Casualty.

ARTICLE VIII

UTILITIES
Tenant shall arrange for all water, storm sewer, sanitary sewer, gas, electric, telephone and other utility facilities and drainage facilities required in furtherance of Tenant’s use of the Premises, including the installation and maintenance of any necessary lines or connections. During the Term, Tenant shall be solely responsible for and shall promptly pay all charges and expenses for all utilities used or consumed on the Premises. It is understood that the use by Tenant of the Premises may require that the parties enter into contracts or agreements with local, county, state or other governmental agencies or bodies or with public utilities with reference to storm sewer, sanitary sewer, gas, water, electric, telephone or other utility lines or connections, storm water management or easement agreements. Landlord agrees to execute such written contracts, agreements, grants of easement and easement agreements and consents as are reasonably required for Tenant’s use of the Premises, provided that any such agreements do not impose additional obligations, costs, or liabilities on Landlord. Landlord’s obligation to execute such documents shall be contingent on Tenant’s assumption of all costs and liabilities associated with such agreements.

ARTICLE IX

ASSIGNMENT AND SUBLEASE

9.1 Subject to the provisions of Article IX hereof, Tenant may assign this Lease, or any interest therein, at any time provided that, (a) no Event of Default exists as of the date of such assignment, (b) the assignment shall be in writing, duly executed and acknowledged by Tenant and Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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the assignee, in form reasonably satisfactory to Landlord, and the assignee assumes and agrees to perform all obligations of Tenant under this Lease, and (c) an executed copy of such assignment is delivered to Landlord. Tenant may not otherwise assign, sublease, mortgage, pledge, or encumber this Lease, the Premises (or any portion thereof), or the leasehold estate created hereby, in whole or in part, without obtaining Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding the foregoing, Landlord’s prior consent shall not be required for the following (each, a “Permitted Transfer”):
(i) an assignment of this Lease to any entity that controls, is controlled by, or is under common control with Tenant, provided such parent or affiliate corporation controls or is controlled by Tenant or by persons or entities controlling or controlled by Tenant (an “Affiliate”);
(ii) an assignment resulting from a merger, consolidation, reorganization, or a sale of all or substantially all of Tenant’s assets, provided that the successor or acquiring entity or its parent entity (1) expressly assumes in writing all obligations of Tenant under this Lease, and (2) possesses adequate financial resources to comply with Tenant’s obligations hereunder. (iii) any assignment, transfer, or conveyance of this Lease or any direct or indirect ownership interest in Tenant to (A) the spouse, child, grandchild, or great-grandchild of any direct or indirect owner of Tenant, (B) a trust established for the benefit of one or more such family members, (C) an entity owned or controlled, directly or indirectly, by one or more such family members or such trusts, or (D) a bona fide charitable foundation, charitable trust, or other tax-exempt entity organized under Section 501(c)(3) of the Internal Revenue Code, whether during the lifetime of, or upon the death or legal incapacity of, any direct or indirect owner of Tenant, as part of estate planning or the administration of such person’s estate, will, trust, or similar instrument (each, an “Estate Planning Transfer”), provided such transferee assumes in writing all obligations of Tenant under this Lease.

In case of a Permitted Transfer, Tenant shall provide Landlord with written notice and reasonable documentation demonstrating that the assignee satisfies the foregoing requirements. If Tenant assigns this Lease in its entirety and the assignee executes an assumption agreement as required, then Tenant shall be automatically released from all obligations and liabilities under this Lease arising from and after the date of such assignment. Upon Tenant’s request, Landlord shall execute and deliver to Tenant a written release agreement in a form reasonably acceptable to Tenant, evidencing such release.

The term “common control” means ownership of at least one-third of the voting rights of the controlled entity. Notwithstanding the foregoing, the following transfers shall not be deemed to affect “control” or count toward the one-third voting interest threshold: (a) a transfer upon the death or legal incapacity of a natural person who is a direct or indirect owner of Tenant, or (b) a transfer by a trust to the beneficiary of such trust pursuant to its dispositive provisions, or transfers between or among the direct or indirect members, partners or shareholders of Tenant or the Stewart and Lynda Resnick Revocable Trust dated December 27, 1988, as amended.

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ARTICLE X

TAXES AND ASSESSMENTS

10.1 Tenant’s Tax Obligations. Tenant covenants and agrees to be responsible for the payment and discharge of all real and personal property taxes, possessory interest taxes, and water charges, sewer charges, utility rates and fees, levies or other charges, general, special, ordinary, extraordinary and otherwise, of every kind and character which are or may during the Term be levied, charged, assessed or imposed and any other assessments levied or imposed by any governmental authority in connection with Tenant’s leasehold interest in the Premises, any improvements constructed thereon, and Tenant’s use and occupancy of the Premises. Tenant recognizes and understands that this Lease may create a possessory interest subject to property taxation under California Revenue and Tax Code Section 107.6 and that Tenant is obligated to pay and discharge such taxes on the Premises or any taxable rights created herein. In addition, Tenant shall pay any tax assessed exclusively on rental income of Landlord to the extent such income is allocable to this Lease, if and only if such tax is assessed by State or local authorities upon the elimination and in lieu of taxation based on the ownership of real property. At the commencement and at the end of the Term, such taxes, assessments and other charges to be paid by Tenant shall be prorated on the basis of the fiscal year of the taxing authority in question so that, at the commencement and at the end of the Term, as to any such taxes, assessments and other charges levied or assessed for a fiscal year preceding the commencement or extending beyond the end of the Term, Tenant will pay only such proportion of such taxes, assessments and other charges as the portion of such fiscal year following the commencement and preceding the end of the Term bears to the entire fiscal year. Tenant waives any claim against Lessor for damages related to the assessment of such Taxes. Tenant shall pay any and all taxes not later than the taxing authority's delinquency date.

10.2 Exemptions and Landlord’s Tax Status. If Landlord, as a governmental entity, qualifies for any property tax exemption that would reduce or eliminate taxes on the Premises, Landlord may use commercially reasonable efforts to maintain such exemption and ensure that such benefit is applied to Tenant’s leasehold interest.

10.3 No Additional Assessments Without Tenant’s Consent. Landlord shall not impose or pass through to Tenant any new taxes, assessments, or fees not expressly set forth in this Lease, unless such charges are required by applicable law and uniformly applied to similarly situated properties.

10.4 Right to Contest. Tenant shall have the right, at its sole cost, expense and risk, to contest the full or partial amount or validity of any taxes by appropriate administrative and legal proceedings. Tenant may postpone payment of any contested taxes pending prompt and diligent prosecution of any such proceedings and appeals, but only if Tenant takes such action as may be required pending a final determination in Tenant’s contest (including the posting of a bond or other assurance of payment or performance with the court or administrative agency or other legal authority having jurisdiction over the contest) to suspend the collection of the contested taxes and the sale of the Premises or personal property to satisfy any lien(s) arising out of the nonpayment Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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of such taxes. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, damages, losses, liabilities, injuries, fines, penalties, and costs and expenses (including reasonable attorneys’ fees, costs and disbursements), arising directly or indirectly, in whole or in part, from or in connection with any such contest, noncompliance or postponed compliance. This indemnification shall survive the earlier termination/expiration of this Lease.

ARTICLE XI
LAWS

11.1 Compliance with Law. During the Early Access Period and Term, Tenant shall comply with all laws, rules, orders, ordinances, directions, regulations, and requirements (“Laws”) of all governmental agencies, offices, departments, bureaus and boards having jurisdiction over the Property (“Governmental Authority”) having jurisdiction over the Premises.

Without limiting the foregoing, Tenant shall comply with all police, fire, and sanitary regulations imposed by any Governmental Authority, and shall observe and obey all other requirements governing the conduct of any business conducted on the Premises.

11.2 Tenant Liens. Tenant shall not permit the Property to become subject to any mechanics’, laborers’ or materialmen’s lien on account of labor or material furnished to Tenant or claimed to have been furnished to Tenant in connection with work of any character performed or claimed to have been performed on the Property by or at the direction or sufferance of Tenant; provided, however, Tenant shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claimed lien and on final determination of the lien or claim for lien, Tenant will promptly pay any final judgment rendered with all proper costs and charges, and will, at its own expense, have the lien released and any judgment satisfied.

11.3 Landlord Liens. Landlord shall not permit the Property to become subject to any mechanics’, laborers’ or materialmen’s lien on account of labor or material furnished to Landlord or claimed to have been furnished to Landlord in connection with work of any character performed or claimed to have been performed on the Property by or at the direction or sufferance of Landlord; provided, however, Landlord shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claimed lien and on final determination of the lien or claim for lien, Landlord will promptly pay any final judgment rendered with all proper costs and charges, and will, at its own expense, have the lien released and any such judgment satisfied.

11.4 Rent Abatement Due to CEQA.
(a) Challenge or Other Legal Impediment. Notwithstanding anything to the contrary in this Lease, if construction of the Tenant Improvements or Tenant’s ability to use or operate from the Premises for its intended use is contested, delayed, hindered, suspended, or prevented due to: (a) any legal or administrative challenge or proceeding under the California Environmental Quality Act (“CEQA”), or (b) any action or challenge by an environmental group, agency, or third party that results in a governmental order, injunction, stay, or other restriction that prevents or materially impairs Tenant’s ability to proceed with or complete construction or to Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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commence or continue its operations (collectively, a “CEQA Challenge”), then the following shall apply:
(b) Abatement of Rent. If, as a result of a CEQA Challenge, Tenant elects to suspend or not commence operations from the Premises, then all obligations of Tenant to pay Base Rent and any additional rent shall be abated for the duration of such suspension, beginning on the date Tenant ceases or postpones operations, and continuing until such time as the CEQA Challenge is fully resolved and Tenant is reasonably able to resume or commence operations. However, if Tenant elects to continue operating from the Premises notwithstanding the CEQA Challenge, then Tenant shall remain obligated to pay all Base Rent and additional rent in accordance with this Lease.
(c) Commencement Date Extension. The Commencement Date shall be delayed on a day-for-day basis for the duration of the CEQA Challenge or such other applicable delay.
(d) Termination Right. If the CEQA Challenge continues for a period exceeding twelve (12) consecutive months (or such longer period as Tenant may elect in its sole discretion), Tenant shall have the right to terminate this Lease upon written notice to Landlord, in which case neither party shall have any further obligations hereunder (except those expressly surviving termination).
(e) No Force Majeure. A CEQA Challenge, the pendency of CEQA review, or any CEQA litigation does not constitute Force Majeure or excuse performance. (f) Indemnity.
(i) Tenant shall defend, indemnify, protect, and hold harmless the City of Shafter, and its elected and appointed officials, officers, directors, commissioners, councilmembers, representatives, agents, employees, volunteers, contractors, consultants, and attorneys (collectively, “City Parties”) from and against any and all actual or alleged claims, actions, or proceedings brought against the City Parties to attack, set aside, void, annul, or seek monetary damages arising out of or relating to any challenge to Tenant, the Tenant Improvements, Alterations, or any approvals of the Planning Commission and/or City Council concerning the Tenant’s Improvements or Alterations, including, but not limited to, actions challenging CEQA compliance, permits, agreements, licenses, and amendments. The City of Shafter shall promptly notify Tenant of any such claim, action, or proceeding and shall reasonably cooperate in the defense.
(ii) In the event of any such third-party action or proceeding, the City of Shafter shall have the right to retain its own separate legal counsel to defend its interests. Tenant shall reimburse the City of Shafter, upon demand, for all such legal fees and costs, including actual attorneys’ fees, incurred by the City of Shafter in defense of the action or proceeding. The City of Shafter’s separate counsel’s billing rates shall be identical to the rates the City of Shafter pays for its typical municipal litigation rates for legal challenges of the variety being defended. This Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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indemnification shall also include, without limitation, damages, fees, and/or costs awarded against the City of Shafter, if any, and cost of suit, attorneys’ fees, and other costs, liabilities, and expenses incurred in connection with such claim, action, or proceeding whether incurred by Tenant, the City of Shafter, and/or any parties bringing the same. Notwithstanding the foregoing, in no event shall Tenant be responsible for consequential, incidental, special, or punitive damages. This indemnity shall survive the earlier termination or expiration of the Lease. (iii) The City of Shafter and Tenant acknowledge that the City of Shafter would not have approved the Tenant Improvements, Alterations, or project if the City of Shafter were to be liable to Tenant or to other parties in damages under or with respect to all or any part of such approvals or this Lease. Accordingly, Tenant shall not assert, and hereby waives, any claim for damages or monetary relief against the City of Shafter or City Parties arising from or related to this indemnification provision. Tenant’s sole and exclusive remedies shall be limited to declaratory relief, injunctive relief, mandate, and/or specific performance.

11.5 Prevailing Wage.
(a) During the Early Access Period and Term, Tenant shall investigate the applicability of and, if and to the extent applicable, pay prevailing wages meeting the requirements of such governmental requirements, under California Labor Code § 1720 et seq. for the Tenant Improvements, Alterations or public work projects contemplated by its use of the Premises; provided that Tenant reserves the right to reasonably contest such laws and regulations. (b) Tenant hereby agrees that, with respect to the Premises, Tenant shall be fully responsible for determining whether the foregoing wage requirements are applicable. Tenant shall obtain, at its sole cost, a written determination, opinion letter, or other applicable ruling from the California Department of Industrial Relations (“DIR”) regarding whether the Tenant Improvements (or any Alterations) to be constructed under this Lease are subject to prevailing wage requirements. If, based on such ruling or determination, Tenant reasonably concludes that the Tenant Improvements are subject to prevailing wage requirements and that such requirements materially and adversely affect the feasibility of Tenant’s planned development of the Premises, then Tenant shall have the right to terminate this Lease by delivering written notice to Landlord.

Any such termination must be exercised by written notice delivered to Landlord prior to the start of construction of Tenant Improvements, provided such right to terminate this Lease shall not extend past the Early Access Period. Upon such termination, this Lease shall be of no further force or effect, and neither party shall have any further rights or obligations hereunder, except for those that expressly survive termination. After the Early Access Period, Tenant shall have no right to terminate this Lease based on the applicability or impact of prevailing wage requirements, regardless of whether such requirements are later deemed to apply during the Term. (c) Tenant agrees on behalf of itself, and its successors and assigns under this Lease, each successor Tenant and each and every person claiming by, through or under Tenant or any successor Tenant, to indemnify, defend and hold the Landlord free and harmless from and against any and all claims arising from or related to compliance by Tenant or Tenant’s officers, directors, employees, agents, representatives, consultants and/or contractors (at every tier) in Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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construction of the Tenant Improvements with the prevailing wage requirements imposed by any applicable federal and State labor laws. The indemnity set forth in this Section 11.6 shall survive the earlier termination or expiration of this Lease.

11.6 Environmental Indemnity. Landlord shall indemnify, defend (with counsel selected by Landlord), and hold harmless Tenant, its directors, officers, partners, shareholders, employees, agents, successors and assigns (collectively, “Tenant’s Representatives”) against any and all claims, demands, liabilities, costs and expenses incurred by Tenant or to which Tenant may be exposed (excluding consequential, special or punitive damages) by reasons of any of the following (an “Environmental Default”): (a) a violation of any environmental law existing as of the Commencement Date prior to Tenant taking possession of the Premises; or (b) any preexisting environmental condition that is required to be remediated under applicable Environmental Laws as of the Commencement Date, or (c) the gross negligence or willful misconduct of Landlord.

Notwithstanding the foregoing, Landlord shall have no obligation to hold Tenant harmless to the extent any Environmental Default is exacerbated, worsened, or made more costly to address by the negligence, willful misconduct, or failure to act of Tenant, or a Tenant Party. This indemnity shall survive the Commencement Date of this Lease.

ARTICLE XII

INSURANCE

12.1 General. Tenant shall, at its sole expense, maintain during the Lease Term and any improvements the following insurance. All insurance shall be placed with insurers admitted in the State of California and shall be provided by insurers reasonably acceptable to Landlord. Evidence of such insurance shall be delivered to Landlord prior to the Commencement Date. (a) Commercial General Liability. Tenant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office (ISO) Form CG 00 01, covering liabilities arising from Tenant’s activities under this Lease. Minimum limits shall be $5,000,000 per occurrence, $5,000,000 general aggregate, and $5,000,000 products and completed operations aggregate, covering bodily injury, property damage, and death. Coverage may be provided through a combination of primary and umbrella/excess policies and may be included under a blanket policy.
(i) Landlord and its officials, officers, employees, agents, and volunteers shall be included as additional insureds for both ongoing and completed operations using ISO forms CG 20 10 and CG 20 37 (or equivalent).
(ii) Coverage shall allow and be endorsed primary and non-contributory with any insurance or self-insurance maintained by Landlord or its affiliates. (iii) Coverage shall provide and be endorsed to include a waiver of subrogation in favor of Landlord and its officials, officers, employees, and agents.

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(iv) Any unintentional failure to comply with policy reporting provisions shall not affect coverage for Landlord and its representatives. (v) Coverage shall apply separately to each insured, subject to policy limits.
(b) Business Automobile Liability. Tenant shall maintain automobile liability insurance covering owned, non-owned, and hired vehicles using ISO Form CA 00 01 (or equivalent), with a limit of at least $1,000,000 each accident. Landlord and its officials, officers, employees, agents, and volunteers shall be included and endorsed as additional insureds. Coverage shall allow and be endorsed primary and non-contributory and include a waiver of subrogation in favor of Landlord and its affiliates.
(c) Workers’ Compensation and Employer’s Liability. Tenant shall maintain statutory workers’ compensation insurance and employer’s liability coverage with minimum limits of $1,000,000 per accident, $1,000,000 per employee for disease, and $1,000,000 policy limit for disease. No executive officer, partner, or member may be excluded. Coverage shall provide and be endorsed to include a waiver of subrogation in favor of the Landlord and its officials, officers, employees, agents, and volunteers. Landlord may waive this requirement upon written confirmation that Tenant has no employees. Tenant shall require any sublessee to maintain equivalent coverage.
(d) Property and Casualty. Tenant shall maintain insurance covering the full replacement value of its personal property, equipment, appurtenances, and tenant improvements. (e) Policy Changes and Cancellation. All required policies shall be endorsed to provide that coverage shall not be suspended, canceled, reduced, or materially modified without at least thirty (30) days’ prior written notice to Landlord. If the insurer does not provide notice, Tenant shall notify Landlord in writing no later than ten (10) business days before cancellation or policy modification.
(f) Insurer Rating. Insurance shall be placed with insurers rated at least A:VII by A.M. Best.
(g) Verification. Tenant shall provide Landlord with certificates of insurance and applicable policy endorsements evidencing the required coverage.

12.2 Blanket Policies. Tenant may satisfy its insurance obligations under a blanket policy covering multiple properties, provided such policy includes Landlord as an additional insured and meets the coverage requirements stated herein.

ARTICLE XIII

CONDEMNATION

13.1 Definition. For purposes of this Lease, “Taking” shall mean (i) any taking of all or any part of the Premises or Tenant’s leasehold interest therein through the exercise of eminent Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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domain or similar Governmental Authority, whether by judicial proceeding, negotiated sale under threat of condemnation, or otherwise; or (ii) any temporary or permanent interference with Tenant’s use, occupancy, or operation of the Premises that substantially impairs Tenant’s ability to conduct its Use.

13.2 Award Allocation. In the event of a Taking, any condemnation award or compensation paid in connection therewith shall be allocated as follows:
(a) Tenant’s Right to Compensation for Improvements. Tenant shall be entitled to the value of all improvements constructed, installed, or paid for by Tenant, including any fixtures, trade fixtures, and equipment located on the Premises. Tenant shall have the exclusive right to claim, receive, and retain that portion of the condemnation award attributable to the value of its improvements, relocation expenses, and any loss of business goodwill. (b) Landlord’s Interest. Landlord shall be entitled only to that portion of any condemnation award attributable to the fair market value of the Land, excluding the value of any improvements made by Tenant.

13.3 Temporary Takings. If all or any part of the Premises is temporarily taken for a period that does not extend beyond the Term, Tenant shall continue to perform its obligations under this Lease, except for any obligations that are rendered impracticable by such temporary Taking. Tenant shall be entitled to receive any award or compensation payable for the use or occupancy of the Premises during the temporary Taking, to the extent that such award compensates Tenant for lost business, disruption, or use of its improvements.

13.4 Lease Termination Rights.
(a) Total Taking. If the entire Premises is taken, this Lease shall automatically terminate as of the effective date of the Taking (the “Termination Date”), and Tenant shall have no further obligation under this Lease other than obligations that accrued prior to the Termination Date.
(b) Partial Taking – Tenant’s Termination Right. If a partial Taking materially impairs Tenant’s ability to use the Premises for its intended purposes, Tenant shall have the option, exercisable upon written notice to Landlord within ninety (90) days after the Taking, to terminate this Lease as of the effective date of the Taking. In such event, Tenant shall be entitled to compensation for all improvements and other damages incurred by Tenant in connection with the Taking.
(c) Partial Taking – Lease Continuation. If this Lease is not terminated following a partial Taking, Base Rent shall be equitably reduced based on the portion of the Premises taken, and Tenant shall be entitled to use any portion of the condemnation award necessary to restore or modify the remaining Premises to a functional condition.

13.5 No Landlord Offset. Landlord shall have no right to offset, deduct, claim, or otherwise reduce any amount owed to Tenant under this Lease as a result of any Taking.

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ARTICLE XIV

DEFAULT BY TENANT

14.1 Events of Default. Any of the following occurrences shall constitute a default under this Lease (each, an “Event of Default”):
(a) Tenant fails to pay any Rent or other sum due under this Lease within five (5) business days after written notice from Landlord that such amount is past due; provided, however, that Landlord shall not be obligated to provide more than two (2) such notices in any 12- month period, and thereafter, any failure to pay shall constitute an Event of Default without further notice;
(b) Tenant fails to perform any other non-monetary obligation under this Lease and such failure continues for more than thirty (30) days after written notice from Landlord specifying the nature of the default; provided, that if such non-monetary default cannot reasonably be cured within thirty (30) days, Tenant shall not be in default if Tenant commences the cure within such period and diligently prosecutes the same to completion within a reasonable time not exceeding ninety (90) days in total;
(c) Tenant makes a general assignment for the benefit of its creditors or file a petition for bankruptcy or other reorganization, liquidation, dissolution or similar relief; (ii) has a proceeding filed against it seeking any relief mentioned in (i) above which is not discharged within sixty (60) days thereafter; or (iii) has a trustee, receiver or liquidator appointed for Tenant or a substantial part of its property.
(d) Tenant abandons or vacates the Premises for a continuous period of thirty (30) days without payment of Rent or notice to Landlord, unless due to casualty, Force Majeure, or other lawful excuse.

14.2 Landlord’s Remedies Upon Default. Upon the occurrence of an Event of Default, and after the expiration of any applicable notice and cure period set forth above, Landlord may exercise any rights and remedies available to it under this Lease or at law or in equity:
(a) Landlord shall have the right to terminate this Lease by written notice to Tenant, and to recover from Tenant:
(i) The worth at the time of award of any unpaid Rent that had been earned as of the date of such termination;
(ii) The worth at the time of award of the amount by which the unpaid Rent that would have been earned after the date of termination until the time of award exceeds the amount of such loss of Rent that Tenant proves could have been reasonably avoided; (iii) The worth at the time of award of the amount by which the unpaid Rent would have been payable, for no more than five (5) years, following the time of award exceeds the amount of such loss that Tenant proves could have been reasonably avoided. In no Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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event shall Tenant be liable for more than five (5) years of future Rent following termination.

Landlord shall be obligated to use commercially reasonable efforts to mitigate its damages following Lease termination, including actively marketing the Premises for reletting. (b) Any other amounts reasonably and actually incurred by Landlord as a direct result of Tenant’s material uncured Event of Default, to the extent such amounts are not otherwise recovered under this Section 14.2 and are not speculative, consequential, or punitive. (c) Landlord hereby expressly, knowingly, and irrevocably waives any and all rights and remedies available under California Civil Code §1951.4. Landlord shall not have the right to elect to keep this Lease in effect after an Event of Default while collecting Rent as it becomes due.
(d) Entry Without Termination. Any entry onto the Premises by Landlord pursuant to this Section shall be made in a commercially reasonable manner and in compliance with all applicable laws and shall not constitute a termination of this Lease unless Landlord affirmatively elects to terminate this Lease in writing. (e) No Acceleration of Rent. Notwithstanding anything herein to the contrary, Landlord shall not be entitled to accelerate Rent due for the balance of the Lease Term unless expressly permitted by law and such right is determined by a court of competent jurisdiction to be enforceable under the circumstances.
(f) No Double Recovery. Landlord shall not be entitled to recover duplicative damages.
(g) Tenant’s Cure Rights. Before exercising any remedy under this Article 14, Landlord shall give Tenant written notice of the default and a reasonable opportunity to cure, as provided in Section 14.1.
(h) Tenant’s Investment Protections. In recognition of the long-term nature of this Lease and the significant capital investment made or to be made by Tenant, Landlord shall not terminate this Lease due to a monetary default unless: (i) such default continues uncured for more than ten (10) business days after written notice to Tenant; and (ii) Landlord has provided a further ten (10) business day notice of intent to terminate, and Tenant fails to cure within that period.

14.3 Landlord's Right to Cure Tenant's Default. Landlord, at any time after Tenant commits an Event of Default which Tenant has failed to cure within the time established therefor, may cure the default at Tenant's cost. If Landlord at any time, by reason of Tenant's default, pays any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date, shall bear interest at the maximum rate permitted by law from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional Rent. For clarity, any right of Landlord to cure under this Section shall not expand Landlord’s remedies beyond those expressly permitted under Section

14.2 and California Civil Code Section 1951.2, and Landlord hereby waives any right to proceed under Civil Code Section 1951.4.

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14.4 Notices. Notices given under this Article 14 shall specify the alleged default and the applicable Lease provisions and shall demand that Tenant perform the provisions of this Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time for cure.

No such notice shall be deemed a forfeiture or termination of this Lease.

ARTICLE XV

MISCELLANEOUS

15.1 Address for Notice and Rental Payments. Any notice, demand, request, or other communication required or permitted under this Lease (“Notice”) shall be in writing and shall be deemed properly given only if delivered (a) by personal delivery, (b) by nationally recognized overnight courier (e.g., FedEx, UPS), (c) by certified mail, return receipt requested, postage prepaid, or (d) by email, provided that a hard copy of such emailed Notice is sent by one of the foregoing methods within one (1) business day. Notice shall be deemed given and effective: (i) on the date of delivery, if delivered personally; (ii) one (1) business day after being deposited with an overnight courier, with proof of delivery; (iii) three (3) business days after mailing by certified mail, return receipt requested; or (iv) on the date of email transmission, but only if a hard copy is sent within one (1) business day as required above. Notices may not be given by facsimile transmission and any such attempted Notice shall be deemed ineffective. Notices shall be sent to the parties at the addresses set forth below (or at such other address as a party may designate in writing):

Landlord Address: City of Shafter
Attn.: City Manager
336 Pacific Ave,
Shafter, CA 93263
Telephone: (209) 324 – 6051
Email:

With a copy to: Best Best & Krieger
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Attention: Marco Martinez
Telephone: (949) 263-6582
Email: [email protected]
Tenant Address: Wonderful Industrial Park Logistics LLC 11444 W. Olympic Boulevard, 10th Floor
Los Angeles, California 90064
Attention: President
Telephone: (310) 966-5700
Email: [email protected]
with a copy to: The Wonderful Company LLC
11444 W. Olympic Boulevard, 10th Floor
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Los Angeles, California 90064
Attention: General Counsel
Telephone: (310) 966-5700
Email: [email protected]

15.2 Commissions. Each party hereto represents and warrants to the other that there are no fees, commissions or other payments due for bringing about the execution and delivery of this Lease. If such representation and warranty is breached, each party hereby indemnifies, defends and holds harmless the other of and from each and every claim for fees, commissions or other payments made against such other party, which claim is based on the agreement or undertaking of the indemnifying party.

15.3 Cumulative Remedies. No remedy herein or otherwise conferred upon or reserved hereunder shall be considered exclusive of any other remedy, but the same shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute, and every power and remedy given by this Lease may be exercised, from time to time, as often as occasion therefor may arise or as may be deemed expedient.

15.4 Governing Law. The terms of this Lease shall be governed by and construed in accordance with the laws of the State of California.

15.5 Waiver of Trial By Jury. To the maximum extent permitted by law, Tenant and Landlord both waive a trial by jury of any or all issues arising in any action or proceeding between the parties hereto or their successors, under or connected with this Lease or any of its provisions.

15.6 Arbitration; Allocation of Arbitration Fees and Costs. Any dispute, claim or controversy arising out of or relating to this Lease or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Lease to arbitrate, shall first be subject to a meet and confer process between the parties. The parties shall meet and confer in good faith within thirty (30) days of the written request by either party to attempt to resolve the dispute informally. If the dispute is not resolved during this period, either party may initiate binding arbitration, which shall be conducted in Bakersfield, California, before one (1) arbitrator selected in accordance with the procedures set forth below. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules. The arbitrator shall be chosen from a list of seven (7) names submitted by JAMS to the parties in accordance with the applicable JAMS rule for selecting arbitrators, and the proposed arbitrators shall, to the extent possible, have relevant arbitration experience in the subject matter of the arbitration under this Lease. Judgment on the arbitrator’s award may be entered in any court having appropriate jurisdiction. The prevailing party shall be entitled to its reasonable attorneys’ fees and costs (based on market rates) from the non-prevailing party. The parties will share equally the administrative costs of the arbitration and the arbitrator’s fees. This Section 15.6 shall not preclude the parties from seeking provisional remedies, including injunctive relief, in aid or arbitration or otherwise from a court of appropriate jurisdiction.

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15.7 Entire Agreement. All negotiations, considerations, representations and understandings between the parties relating to this Lease are merged herein and may be modified or altered only by an agreement in writing between the parties hereto.

15.8 Captions. The headings of the several articles and sections contained herein are for convenience of reference only and do not define, limit or construe the contents of such articles and sections.

15.9 Partial Invalidity. If any term or provision of this Lease shall to any extent be held invalid or unenforceable, the remaining terms and provisions of this Lease shall not be affected thereby, but each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

15.10 Covenants Running with the Land; Survival. This Lease and each and every covenant, agreement, condition and undertaking shall be deemed to be running with the Property during the Term of this Lease and shall be binding upon and inure to the benefit of the respective parties hereto, their legal representatives, heirs, executors, administrators, successors and assigns.

All claims arising hereunder which could survive the expiration or earlier termination of this Lease must be made, if at all, by written notice delivered to the other party on or before the expiration of one (1) year from the expiration or earlier termination of this Lease, and any action to enforce any such claim must be filed on or before the expiration of fifteen (15) months from the expiration or earlier termination of this Lease.

15.11 Memorandum of Lease. The parties shall execute, acknowledge and record in the Official Records of Kern County, California a memorandum of ground lease and right to acquire fee title (the “Memorandum”) in the form of Exhibit D attached hereto. The parties agree that upon the expiration or termination of this Lease, the parties will mutually record a termination of ground lease in the Official Records of Kern County, California.

15.12 Not a Partnership. Nothing herein contained shall be construed as creating a partnership, joint venture or any other relationship between Landlord and Tenant, other than that of landlord and tenant. In addition, this Lease is made an entered into for the sole protection and benefit of Landlord and Tenant. No other person shall have any right of action based upon any provision in this Lease.

15.13 Merger. If both Landlord’s and Tenant’s estates in and to the Premises become vested in the same owner, this Lease shall not be destroyed by application of the doctrine of merger except by the Tenant’s express election and consent.

15.14 Force Majeure. The time for performance by either Landlord or Tenant of any term, covenant, or condition of this Lease (other than Tenant’s obligation to pay Rent or other monetary sums due hereunder) shall be extended for the period of any delay resulting from causes beyond the reasonable control of the affected party (a “Force Majeure Event”). As used herein, a “Force Majeure Event” shall include, but is not limited to: acts of God, strikes, lockouts, labor Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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disputes, civil commotion, war, terrorism, pandemics, epidemics, governmental restrictions or regulations, floods, fire, unusual weather events, inability to obtain materials or labor.

15.15 Facilitation. Each party agrees to perform such further acts and to execute and deliver such further documents as may be reasonably necessary to carry out the provisions of this Lease and are consistent therewith.

15.16 Waiver. No waiver of any of the terms or conditions of this Lease shall be binding or effective unless expressed in writing and signed by the party giving such waiver.

15.17 No Subordination. Tenant’s interest in the Premises under this Lease is not, and shall not be hereafter, subordinate to any deed of trust, mortgage deed, mortgage, deed to secure debt or to any other lien, encumbrance, condition, restriction, covenant or agreement affecting the Premises. Landlord shall not execute, or consent to the execution of, any instrument which could adversely affect the priority of this Lease.

15.18 Interest. Wherever in this Lease a party is entitled to interest on sums it has expended, such amount shall bear interest from the date of expenditure until the date of repayment at an annual rate (“Default Rate”) equal to seven percent (7%) above the prime rate of interest from time to time announced by Bank of America, but not greater than the highest non-usurious rate then permitted by law.

15.19 No Landlord Liens; Waiver of Landlord’s Lien Rights. Landlord shall not impose, suffer, or permit any liens, assessments, or encumbrances upon Tenant’s Improvements, trade fixtures, equipment, inventory, or personal property located on the Premises (collectively, “Tenant Property”), and such Tenant Property shall not be subject to or included in any financing or security interest secured by the Premises without Tenant’s prior written consent. Landlord hereby expressly and unconditionally waives any statutory, contractual, or common law lien rights (including, without limitation, any landlord’s lien or right of distraint) against Tenant Property, whether arising for nonpayment of rent or otherwise. This waiver is intended to be, and shall be, automatic and self-operating. Notwithstanding the foregoing, upon Tenant’s request, Landlord shall, within ten (10) business days after such request, execute and deliver any instrument reasonably required by Tenant or its lenders to evidence or confirm such waiver.

15.20 BNSF Track Services Agreement. Landlord and Burlington Northern and Santa Fe Railway Company (“Railroad”) are parties to that certain Industry Track Agreement dated July 27, 2005, as amended by that certain First Amendment to Industry Track Agreement dated April 15, 2009 and that certain Second Amendment to Industry Track Agreement dated March 19, 2012, 2012 (as amended, the “Industry Track Agreement”). Landlord agrees to either (a) assign its interest in the Industry Track Agreement to the Tenant, subject to Railroad’s consent, or (b) cooperate with Railroad and Tenant to negotiate a new Industry Track Agreement for the benefit of Tenant on terms reasonably acceptable to Tenant. If (i) the parties are unable, after using good faith efforts, to obtain Railroad’s consent to an assignment of the Industry Track Agreement to Tenant, or (ii) Tenant and Railroad are unable to agree upon the terms of a new Industry Track Agreement reasonably acceptable to Tenant within a reasonable period of time following the Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Commencement Date, then Tenant shall have the right to terminate this Lease upon written notice to Landlord, without penalty or further liability, except for obligations that expressly survive termination as set forth in this Lease.

15.21 Holding Over. If Tenant shall hold over the Premises after the expiration of the term hereof with the consent of Landlord, either express or implied, such holding over shall be construed to be only a tenancy from month to month, subject to all the covenants, conditions and obligations contained in this Lease. Tenant hereby agrees to pay to Landlord as monthly rental 125% of the Base Rent in effect at the expiration of the term, together with any other monetary sums which are Tenant's obligations to pay under this Lease.

15.22 Exhibits. Notwithstanding anything in this Agreement to the contrary, the dimensions depicted on the Exhibits attached hereto are approximations only and shall in no way deemed to be binding.

15.23 Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within 30 days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the real property subject to this Lease.

15.24 Estoppel Certificate. Tenant agrees to deliver, within fifteen (15) business days after written request therefor by Landlord an estoppel certificate in a form reasonably requested by Landlord certifying that this Lease is unmodified and is in full force and effect (if such be the case), certifying the commencement and termination dates of the Lease Term, certifying that there has been no assignment or sublease of this Lease and that there are no defenses or offsets hereto (or stating those claimed by Tenant) and containing such other information as may reasonably be requested by the party to whom such certificate is addressed.

15.25 Qualified Commercial Tenant Status/SB 1103 Compliance. Tenant hereby represents that, as of the date of Lease execution, it is not deemed a “qualified commercial tenant” defined in California Civil Code section 827(b)(7)(D) as follows:
(a) A sole proprietorship, partnership, limited liability company, or corporation that (i) has 5 or fewer employees, including the owner, and (ii) generally lacks sufficient access to loans, equity, or other financial capital (a “microenterprise,” as defined in California Business and Professions Code section 18000), (b) A restaurant with fewer than 10 employees, or
(c) A nonprofit organization with fewer than 20 employees.

15.26 Lease Negotiated in English. The parties acknowledge and agree that this Lease was negotiated and executed in the English language. If a translation of this Lease is provided to any party, it is for convenience only, and the English version shall control in the event of any conflict or discrepancy between the English version and the translated version.

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15.27 CASP. Pursuant to California Civil Code § 1938, Landlord hereby states that the Premises have not undergone inspection by a Certified Access Specialist (CASp) (defined in California Civil Code § 55.52(a)(3)). Pursuant to Section 1938 of the California Civil Code, Landlord hereby provides the following notification to Tenant: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or Landlord may not prohibit the Tenant or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the Tenant or tenant, if requested by the Tenant or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction related accessibility standards within the premises.” If Tenant requests to perform a CASp inspection of the Premises, Tenant shall, at its cost, retain a CASp approved by Landlord (provided that Landlord may designate the CASp, at Landlord’s option) to perform the inspection of the Premises at a time agreed upon by the Parties.

Tenant shall provide Landlord with a copy of any report or certificate issued by the CASp (the “CASp Report“) and Tenant shall, at its cost, promptly complete any modifications necessary to correct violations of construction related accessibility standards identified in the CASp Report.

Tenant agrees to keep the information in the CASp Report confidential except as necessary for the Tenant to complete such modifications.

15.28 Landlord's Right to Sell. Landlord shall have the right to sell its fee estate in the Property and assign its interest in this Lease without limitation; provided, however, that any such sale shall be subject to this Lease. Upon any such conveyance, Landlord shall automatically be relieved of any obligations under this Lease the occur after such assignment. Landlord shall also have the right to mortgage, hypothecate or otherwise pledge its interest in the Property and this Lease, at no additional cost or expense to Tenant.

15.29 Right of First Refusal to Purchase. If, at any time during the Term (as may be extended) Landlord receives a bona fide offer from a third party to purchase the Premises, or if Landlord intends to sell or otherwise transfer the Premises to any third party (collectively, a “Proposed Sale”), Tenant shall have the right of first refusal to purchase the Premises on the same terms and conditions as the Proposed Sale, but in any event, subject to the following provisions. (a) Notice of Offer. Before accepting or entering into any agreement for a Proposed Sale, Landlord shall provide Tenant with written notice (the “Notice of Offer”), which shall include (i) the name and contact information of the third-party buyer, and (ii) a full and complete copy of the proposed purchase agreement, or if not available, a detailed written summary of all material terms, including purchase price, payment terms, financing conditions, due diligence periods, and closing timelines.
(b) Tenant’s Right to Exercise. Tenant shall have thirty (30) days from receipt of the Notice of Offer to elect, by written notice to Landlord, to purchase the Premises on the same terms and conditions set forth in the Notice of Offer. If the Offer includes non-cash consideration, Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Tenant shall have the option to substitute equivalent fair market value cash consideration, to be determined by an independent appraiser if necessary.
(c) Landlord’s Obligation to Sell to Tenant. If Tenant exercises its right of first refusal within the specified period, Landlord shall be obligated to sell the Premises to Tenant on the terms set forth in the Notice of Offer. The parties shall negotiate in good faith and execute a formal purchase agreement within ninety (90) days following Tenant’s exercise of the right.

Closing shall occur in accordance with the timeline set forth in the Notice of Offer, unless otherwise agreed in writing by the parties.
(d) Failure to Exercise and Third-Party Sale. If Tenant fails to exercise its right of first refusal within the specified period, Landlord may proceed with the sale to the third party on the same terms and conditions set forth in the Notice of Offer. However, if Landlord proposes to materially modify the terms of the sale (including a lower price or more favorable terms to the buyer), Landlord must provide Tenant with a new Notice of Offer, and Tenant shall again have the right of first refusal for forty-five (45) days to match the revised terms. (e) Exclusions & Exempt Transfers. The right of first refusal shall be personal to the original Tenant or a Permitted Transfer and shall not apply to: (i) a transfer of the Premises to an affiliate or entity controlled by Landlord, provided the transferee assumes all obligations of Landlord under this Lease, (ii) a transfer as part of a merger, corporate reorganization, or sale of substantially all of Landlord’s assets, and (iii) a mortgage, deed of trust, or other security interest granted in favor of a lender (but shall apply if the lender later forecloses and sells the Premises). (f) Survival & Assignability. Tenant’s right of first refusal shall remain in effect throughout the Term of the Lease, including any renewal or extension periods. Tenant may assign this right to an affiliate or an entity approved by Landlord, which approval shall not be unreasonably withheld, conditioned, or delayed.

15.30 Reservation of Powers. Nothing in this Lease shall be construed to limit, waive, or impair City’s police powers or its independent governmental obligations under applicable law.

This Lease shall not predetermine, obligate, or commit City to approve any permits, entitlements, or projects contemplated by Tenant without first conducting and completing all legally required reviews, determinations, and findings.
[SIGNATURES ON FOLLOWING PAGE]
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S-1
{3496730}
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written.

LANDLORD:

CITY OF SHAFTER,
a California municipal corporation
By:

TENANT:

WONDERFUL INDUSTRIAL PARK

LOGISTICS LLC,
a Delaware limited liability company
By:

Name:

Title:

City Clerk
Marco Martinez, Attorney for City
APPROVED TO FORM:

ATTEST:

Lance Lippincott
City Manager
Craig B. Cooper
Executive Vice President
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17236.00133\43142402.10
Exhibit A
{3496730}

EXHIBIT A
Legal Description and Depiction of Land
[SEE ATTACHED]
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EXHIBIT “A”

CITY OF SHAFTER OWNED PROPERTY

LEGAL DESCRIPTION
PARCEL 1: (APN: 090-180-29, 091-252-72 & 091-253-09)
BEING ALL THOSE PORTIONS OF SECTION 25 OF TOWNSHIP 28 SOUTH, RANGE 25 EAST, AND SECTIONS 30 AND 31, TOWNSHIP 28 SOUTH, RANGE 26 EAST, M.D.M., CITY OF SHAFTER, COUNTY OF KERN, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE EAST QUARTER CORNER OF SAID SECTION 31 MARKED BY A CONCRETE

MONUMENT WITH A TWO INCH BRASS CAP SCRIBED AND STAMPED FOR THE APPROPRIATE CORNER; THENCE ALONG THE FOLLOWING THIRTEEN (13) COURSES:
1) SOUTH 02°08'33" WEST, ALONG THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 31, A DISTANCE OF 9.24 FEET TO A POINT ON THE NORTHEASTERLY RIGHT-OFWAY LINE OF THAT CERTAIN EASEMENT GRANTED TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY IN BOOK 15, PAGE 301, AND BOOK 73 PAGES 113, 121, 124 AND 126, ALL OF DEEDS (SAID STRIP BEING 100 FEET WIDE LYING. EQUALLY ON EACH SIDE OF THE EXISTING MAIN LINE); THENCE
2) NORTH 44°16'28" WEST, ALONG SAID NORTHEASTERLY RIGHT-OF-W A Y LINE, A DISTANCE OF 3,748.25 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID SECTION 30; THENCE 3) CONTINUING NORTH 44°16'28" WEST, ALONG SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 3,891.65 FEET TO A POINT ON THE WEST LINE OF SAID SECTION 30, SAID POINT ALSO BEING A POINT ON THE EASTERLY LINE OF SAID SECTION 25; THENCE 4) CONTINUING NORTH 44°16'28" WEST, ALONG SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 3,586.85 FEET TO A POINT ON THE NORTH LINE OF SAID SECTION 25; THENCE 5) DEPARTING FROM SAID NORTHEASTERLY RIGHT-OF-WAY LINE, SOUTH 89°03'54" EAST, ALONG THE NORTH LINE OF SAID SECTION 25, A DISTANCE OF 70.97 FEET TO A POINT 50.00

FEET NORTHEASTERLY, AS MEASURED AT RIGHT ANGLES, TO SAID NORTHEASTERLY RIGHT-OF-W A Y LINE; THENCE
6) SOUTH 44°16'28" EAST, PARALLEL WITH SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 3,296.22 FEET; THENCE
7) SOUTH 89°48'47" EAST, A DISTANCE OF 106.48 FEET TO A POINT 126.00 FEET NORTHEASTERLY, AS MEASURED AT RIGHT ANGLES TO SAID NORTHEASTERLY RIGHT-OFWAY LINE; THENCE 8) SOUTH 44°16'28" EAST, PARALLEL WITH SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 41.88 FEET TO A POINT ON THE WEST LINE OF SAID SECTION 30; THENCE 9) CONTINUING SOUTH 44°16'28" EAST, PARALLEL WITH SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 4,141.48 FEET TO A POINT ON THE NORTH LINE OF SAID SECTION 31; THENCE
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10) CONTINUING SOUTH 44°16'28" EAST, PARALLEL WITH SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 734.51 FEET; THENCE
11) NORTH 45°43'32" EAST, AT RIGHT ANGLES TO SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 181.00 FEET TO A POINT 307 .00 FEET NORTHEASTERLY, AS MEASURED AT RIGHT ANGLES, TO SAID NORTHEASTERLY RIGHT-OF-WAY LINE; THENCE 12) SOUTH 44°16'28" EAST, PARALLEL WITH SAID NORTHEASTERLY RIGHT-OF-WAY LINE, A DISTANCE OF 2,595.57 FEET TO A POINT ON THE EAST LINE OF SAID SECTION 31; THENCE 13) SOUTH 02°08'50" WEST, ALONG SAID EAST LINE, A DISTANCE OF 414.54 FEET TO THE POINT OF BEGINNING.

RESERVING THEREFROM TO GRANTOR AND ITS SUCCESSORS AND ASSIGNS FOREVER A

PERMANENT RIGHT AND EASEMENT TO CONSTRUCT, INSTALL, MAINTAIN, OPERATE, ENLARGE,

IMPROVE, RELOCATE, REMOVE, REPAIR AND RENEW AND TO PERMIT ANY IRRIGATION OR

WATER COMPANY TO CONSTRUCT, INSTALL, MAINTAIN, OPERATE, ENLARGE, IMPROVE,

RELOCATE, REMOVE, REPAIR AND RENEW, AT ANY TIME AND FROM TIME TO TIME, AT THE SOLE

COST AND EXPENSE OF GRANTEE, ITS SUCCESSORS AND ASSIGNS, WITHOUT ANY CHARGE

WHATSOEVER TO GRANTOR, ITS SUCCESSORS AND ASSIGNS, OR TO SUCH IRRIGATION OR

WATER COMPANY, ANY AND ALL PIPELINES, PIPES, CULVERTS, DITCHES, CANALS AND

RELATED FIXTURES, DEVICES, MACHINERY AND APPURTENANCES IN CONNECTION

THEREWITH IN, UNDER, ALONG AND ACROSS THE PROPERTY BEING GRANTED TO GRANTEE HEREBY.

CONTAINING 37.51 ACRES (GROSS), MORE OR LESS.

PARCEL 2: (APN: 091-261-13 & 091-261-16)

REAL PROPERTY IN THE CITY OF SHAFTER, COUNTY OF KERN, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

PARCEL 3 OF PARCEL MAP 11028 IN THE CITY OF SHAFTER, COUNTY OF KERN, STATE OF CALIFORNIA, AS PER MAP RECORDED OCTOBER 20, 2004 IN BOOK 53, PAGES 156 THROUGH 159 INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM THAT PORTION OF LAND GRANTED TO THE BNSF RAILWAY COMPANY, A DELAWARE CORPORATION IN GRANT DEED RECORDED AS INSTRUMENT NO. 0206307301 OF OFFICIAL RECORDS.

CONTAINING 31.14 ACRES (GROSS), MORE OR LESS.

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EXHIBIT "A"

THE PROPERTY

CITY OWNED

CITY OF SHAFTER

OWNED PROPERTY
(34.54 ACRES)
SHEET 1 OF 1

CITY OF SHAFTER

OWNED PROPERTY
(11.86 ACRES)
SCALE: 1" =1000'
C 7TH STANDARD ROAD L
C
SANTA
FE
HWY
L
LC

BSNF RAILROAD
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Exhibit B
{3496730}

EXHIBIT B
Legal Description and Depiction of the Premises
[SEE ATTACHED]
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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EXHIBIT "B"

CITY OF SHAFTER RAIL PROPERTY LEASE

LEGAL DESCRIPTION

LEASE AREA
BEING A PORTION OF PARCEL 3 OF PARCEL MAP NO. 11028, FILED OCTOBER 20, 2004 AT BOOK 53, PAGE 158 OF PARCEL MAPS IN THE OFFICE OF THE KERN COUNTY RECORDER AND ALL THOSE PORTIONS OF SECTION 25, TOWNSHIP 28 SOUTH, RANGE 25 EAST, AND SECTIONS 30, 31, AND 32, TOWNSHIP 28 SOUTH, RANGE 26 EAST, M.D.M., CITY OF SHAFTER, COUNTY OF KERN, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE EAST QUARTER CORNER OF SAID SECTION 31 MARKED BY A CONCRETE

MONUMENT WITH BRASS CAP SCRIBED AND STAMPED FOR THE APPROPRIATE CORNER, THENCE SOUTH 02°08'33" WEST, ALONG THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 31, A DISTANCE OF 9.24 FEET TO A POINT ON THE NORTHEASTERLY RIGHT OF

WAY OF THAT CERTAIN EASEMENT GRANTED TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY IN BOOK 15, PAGE 301, AND BOOK 73, PAGES 113, 121, 124 AND 126 OF DEEDS, AND THE TRUE POINT OF BEGINNING.
1) THENCE NORTH 44°16'28" WEST, ALONG SAID NORTHEASTERLY RIGHT OF WAY OF SAID

EASEMENT TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY, A DISTANCE OF 3,748.25 FEET TO THE SOUTHERLY LINE OF SAID SECTION 30; 2) THENCE CONTINUING ALONG THE NORTHEASTERLY RIGHT OF WAY OF SAID EASEMENT TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY, NORTH 44°16'28" WEST, A DISTANCE OF 3,891.65 FEET TO THE WEST LINE OF SAID SECTION 30 AND THE EASTERLY LINE OF SAID SECTION 25;
3) THENCE CONTINUING ALONG THE NORTHEASTERLY RIGHT OF WAY OF SAID EASEMENT TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY, NORTH 44°16'28" WEST, A DISTANCE OF 3,586.85 FEET TO THE NORTH LINE OF SAID SECTION 25; 4) THENCE LEAVING THE NORTHEASTERLY RIGHT OF WAY OF SAID EASEMENT TO THE SAN

FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY AND ALONG THE NORTH LINE OF SAID SECTION 25, SOUTH 89°03'54" EAST, A DISTANCE OF 70.97 FEET; 5) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 3,296.22 FEET; 6) THENCE SOUTH 89°48'47" EAST, A DISTANCE OF 106.48 FEET; 7) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 41.88 FEET TO THE WEST LINE OF SAID SECTION 30;
8) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 4,141.48 TO THE NORTH LINE OF SAID SECTION 31;
9) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 734.51 FEET; 10) THENCE NORTH 45°43'32" EAST, A DISTANCE OF 181.00 FEET; Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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11) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 2,595.57 TO THE EAST LINE OF SAID SECTION 31;
12) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 586.85 FEET TO THE EAST-WEST MID SECTION LINE OF SAID SECTION 32;
13) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 57.55 FEET; 14) THENCE SOUTH 45°43'32" WEST, A DISTANCE OF 105.00 FEET; 15) THENCE SOUTH 44°16'28" EAST, A DISTANCE OF 1288.03 FEET; 16) THENCE SOUTH 87°44'22" EAST, A DISTANCE OF 248.53 FEET TO THE WESTERLY RIGHT OF WAY OF FANUCCHI WAY;
17) THENCE ALONG THE WESTERLY RIGHT OF WAY OF SAID FANUCCHI WAY, SOUTH 02°11'23" WEST, A DISTANCE OF 212.42 FEET TO THE BEGINNING OF A NON-TANGENT CURVE WITH A 543.00 FOOT RADIUS TO WHICH THE BEGINNING OF CURVE BEARS A RADIAL OF SOUTH 87°48'37" EAST;
18) THENCE CONTINUING ALONG THE WESTERLY RIGHT OF WAY OF SAID FANUCCHI WAY AND ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 44°27'51", AN ARC DISTANCE OF 440.35 FEET;
19) THENCE LEAVING THE WESTERLY RIGHT OF WAY OF SAID FANUCCHI WAY, SOUTH 45°43'32" WEST, A DISTANCE OF 50.00 FEET TO THE NORTHEASTERLY RIGHT OF WAY OF

SAID EASEMENT TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY;
20) THENCE ALONG THE NORTHEASTERLY RIGHT OF WAY OF SAID EASEMENT TO THE SAN FRANCISCO AND SAN JOAQUIN VALLEY RAILROAD COMPANY, NORTH 44°16'28" WEST, A DISTANCE OF 2360.61 FEET TO THE TRUE POINT OF BEGINNING.

EXCEPTING THEREFROM THE SOUTHWESTERLY 50.00 FEET OF SAID LAND.

SAID PARCEL CONTAINS 34.54 ACRES (1,504,412) MORE OR LESS.

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EXHIBIT "B"

THE PREMISES
LEASED

CITY OF SHAFTER
LEASE (34.54 ACRES)
SHEET 1 OF 1
C
SANTA
FE
HWY
L
LC

BSNF RAILROAD
C 7TH STANDARD ROAD L
SECTION 32
T.28S./R.26E.

SECTION 31
T.28S./R.26E.

SECTION 30
T.28S./R.26E.

SECTION 29
T.28S./R.26E.
50' WIDE ADDITIONAL

RIGHT OF WAY (BNSF)
SCALE: 1" =1000'
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Exhibit C
{3496730}

EXHIBIT C
Commencement Date Notice
[SEE ATTACHED]
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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17236.00133\44621513.2
Shafter Rail Property - Exhibit C - Commencement Date Memorandum {3580297.2}

COMMENCEMENT DATE MEMORANDUM
This COMMENCEMENT DATE MEMORANDUM (this “Memorandum”) is made this day of , 2026, between the CITY OF SHAFTER, a
California municipal corporation (“Landlord”) and WONDERFUL INDUSTRIAL PARK LOGISTICS LLC, a Delaware limited liability company (“Tenant”).

WHEREAS, Landlord and Tenant entered into a Ground Lease dated as of ________, 2026 (the "Lease") with respect to the Premises (as defined in the Lease). Capitalized terms not defined herein shall have the meanings set forth in the Lease.

NOW, THEREFORE, pursuant to the provisions of the Lease, Landlord and Tenant mutually agree to as follows:

1. The Commencement Date of the Initial Term is ___________________. The Initial Term shall expire at 11:59 p.m. on [26 years after the Commencement Date], unless otherwise extended or terminated in accordance with the terms and provisions of the Lease.

2. If exercised by Tenant pursuant to the terms of the Lease, the first Extension Term will commence on __________________ and end at 11:59 p.m. on __________________; and the second Extension Term will commence on ____________________ and end at 11:59 p.m. on ________________________.

3. Tenant’s monthly Base Rent for the Initial Term is set forth in the below payment schedule:

Lease Year Period Monthly Rent
1 $76,527.50
2 $78,823.33
3 $81,188.02
4 $83,623.67
5 $86,132.38
6 $88,716.35
7 $91,377.84
8 $94,119.17
9 $96,942.75
10 $99,851.03
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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17236.00133\44621513.2
Shafter Rail Property - Exhibit C - Commencement Date Memorandum {3580297.2}
Commencing on the eleventh (11) anniversary of the Commencement Date, and each anniversary thereafter through the Term (including during any Extension Term), Tenant’s monthly Base Rent shall be adjusted annually based on the percentage increase of the CPI.

4. The Parties hereby agree that the Lease is in full force and effect.

5. This Memorandum may be executed simultaneously 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, which may be delivered by facsimile or electronically transmitted portable document format (PDF) of signature pages (including any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com). [SIGNATURES APPEAR ON NEXT PAGE]
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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17236.00133\44621513.2
Shafter Rail Property - Exhibit C - Commencement Date Memorandum {3580297.2}
IN WITNESS WHEREOF, the parties hereto have caused Memorandum to be executed as of the day and year first set forth above.

LANDLORD:

CITY OF SHAFTER,
a California municipal corporation
By:

Name:

Title:

TENANT:

WONDERFUL INDUSTRIAL PARK

LOGISTICS LLC,
a Delaware limited liability company
By:

Name:

Title:

Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Exhibit D
{3496730}

EXHIBIT D
Memorandum

RECORDING REQUESTED BY AND )
AFTER RECORDATION MAIL TO: )
)
Wonderful Industrial Park Logistics LLC )
11444 W. Olympic Boulevard, 10th Floor )
Los Angeles, California 90064 )
Attn: General Counsel )
Space above this line for recorder's use

MEMORANDUM OF GROUND LEASE
This is a Memorandum of Ground Lease dated as of ______________, 2026, by and between THE CITY OF SHAFTER, a California municipal corporation (“Landlord”) whose address is P.O. Box 434, Lost Hills, CA 93249, and WONDERFUL INDUSTRIAL PARK LOGISTICS LLC, a Delaware limited liability company (“Tenant”) whose address is 11444 W.

Olympic Boulevard, 10th Floor, Los Angeles, California 90064. On the terms and subject to the conditions contained in that certain ground lease between Landlord and Tenant dated , 2026 (the “Lease”), the terms and conditions of which are incorporated into this memorandum by reference, Landlord has leased to Tenant the real property located in the City of Shafter, County of Kern, State of California, as more particularly described in Exhibit A attached hereto and incorporated herein by reference (the “Premises”).

The Lease shall commence on the Commencement Date (as defined in the Lease) and shall terminate twenty-six (26) years thereafter subject to the terms and conditions of the Lease, including Tenant’s two (2) options to extend the term of the Lease an additional twelve (12) years each.

The Lease contains a right of first refusal granted in favor of Tenant under Section 15.29, where Tenant can exercise at any point during the Term (as defined in the Lease.) Nothing contained herein is intended to or does change or modify any of the terms or provisions of the Lease, or the rights, duties, obligations, conditions and agreements created thereby, all of which remain in full force and effect. In the event of any conflict or inconsistency between the terms of this Memorandum of Lease and the terms of the Lease, the terms of the Lease shall govern and control for all purposes.
[SIGNATURES APPEAR ON NEXT PAGE]
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Exhibit D
{3496730}
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum on the day and year written above.

LANDLORD:

CITY OF SHAFTER, a California
municipal corporation
By:

Name:

Title:

TENANT:

WONDERFUL INDUSTRIAL PARK

LOGISTICS LLC,
a Delaware limited liability company
By:

Name:

Title:

Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Exhibit D
{3496730}

STATE OF CALIFORNIA )
) ss.

COUNTY OF LOS ANGELES )
On ______________________________, 2026, before me, _____________________________, Notary Public, personally appeared
__________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_________________________________
Notary Public (Seal)

STATE OF CALIFORNIA )
) ss.

COUNTY OF ________________ )
On ______________________________, 2026, before me, _____________________________, Notary Public, personally appeared _________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_________________________________
Notary Public (Seal)
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Exhibit D
{3496730}
Exhibit A
Legal Description
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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1 EXHIBIT E
Tenant Improvements
[SEE ATTACHED]
Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Docusign Envelope ID: 9302D815-956E-4D61-B6BC-F1067F46BB6E

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Rail Facility Ground Lease
Strategic Asset Reactivation & Fiscal Enhancement
City of Shafter
March 3. 2026

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Action Before Council
Core Question
Continue to carrying structural cost deficit – or convert it into a longterm revenue stream as well as economic enabler for long term growth? Scope of Action Requested
• Approve Ground Lease Agreement
• Authorize execution
• Convert recurring cost exposure into significant recurring revenue

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Historical Context
2002-2005 1
Original site master plan – Southerly connection
Industrial Track Agreement with BNSF
Rail service to MiSwaco & Weatherfor
2 2011-2012
Track & Service extension to Baker Hughs
2013-2015 3
Completed northerly track extension
4 2018-2026
Operational Shift
Operations declined; infrastructure remains
Recurring deficit Now – Unlocking value 5

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Proposed Lease Overview
• The lease establishes predictable, escalating revenue • Strong annual return on land value
Lease Structure Key Protections for the City
• Term – 26-year initial term
• $918,330 Year 1 base rent
• 3% annual escalation (Year 1-10)
• CPI-adjusted thereafter (Cap 3%)
• Tenant responsible for operations and
maintenance
• Tenant funds all capital reinvestment
• Indemnification of the City
• Insurance coverage required
• No City operating obligation
• NNN

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Pre-Lease & Post Lease Operating Profile
Rail Spur Fund Profile
• Average annual expenditures ~ $400,000
• ~ $175,000 cash operating cost
• ~ $225,000 Non-Cash depreciation
• No revenue generation
• Recurring structural imbalance

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2019
($522,699)
2027
$918,330
2036
$1,198,212
($800,000)
($600,000)
($400,000)
($200,000)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
Annual Asset Performance
Pre-Lease to Post-Lease
(FY 2019-2036)
Fiscal Impact

EXPECTED TIME FOR THE ELIMINATION
OF THE $1.8M BUDGET DEFICIT IN THE

RAIL SPUR FUND

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Risk Profile
Category City Tenant
Capital Investment ❌ ✅
Construction Risk ❌ ✅
Market Risk ❌ ✅
Operating Risk ❌ ✅
Revenue Performance Risk ❌ ✅

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Strategic Benefits
Direct Benefits Indirect & Multiplier Effects
• Unlocking value from an idle key City asset
• ~ $60M private capital reinvestment
• Direct operation job creation
• Long term activation of existing infrastructure
• Strengthens rail-serve industrial capacity
• Increased supply chain and logistics activity
• Economic development enabler – industrial
clustering and increased competitiveness
• Regional freight throughput growth
• Potential long-term expansion of tax base
•

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Conclusion
Fiscal Stewardship & Strategic Asset Management
Status Quo
• Recurring operating imbalance
• Accumulated negative fund balance
Lease Structure
• $918,330 Year 1 revenue
• Escalating annually
• ~$60M private capital investment
• Operational & market risk transferred
Outcome
• Eliminates ongoing operating losses
• Stabilizes Rail Spur Fund
• Unlock financial and long-term economic value

RECOMMENDATION
• APPROVE THE GOURND LEASE

AGREEMENT
• APPROVE RESOLUTION

AUTHORIZING EXECUTION

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MANAGEMENT REPORT

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Giovanni Perez, Economic Development Coordinator SUBJECT: PURCHASE OF 1351 E ASH AVENUE SHAFTER, CA 93263 (APN 089-140-13)

RECOMMENDATION
Council find the action is not defined as a “project” per Section 15378(b)(4) of the CEQA Guidelines; approve the Purchase and Sale Agreement (“Purchase Agreement”) for the purchase of the property located at 1351 E Ash Avenue; approve a fiscal year 2025-26 budget adjustment from the General Fund for $860,000; approve the use of Transit grant funding in the amount of $1,100,000 for this acquisition; and adopt Resolution 3066, a Resolution of the City Council of the City of Shafter, authorizing City Manager or his designee, Kamal Siada, Economic Development Director, to execute all documents necessary to complete the transaction.

BACKGROUND
Property Information
1351 E Ash Ave, Shafter, CA 93263 (APN: 089-140-13)
Zoning Classification: Industrial
Gross Acreage: ~4.74 Acres
Office: ~3,000 SqFt
Warehouse: ~15,950 SqFt
Power: 1,600 Amps, 277/480V, 3Ph
Background
On May 6, 2026, the City Council held a closed session to discuss the potential acquisition of the Property. During that session, the Council directed Staff to obtain a formal appraisal and initiate negotiations with the Property owner.

Shortly after, City Staff received the Property appraisal and began negotiations with the owner and their broker. The property owner agreed to sell the Property to the City “AS-IS” for $1,900,000.

The Property was previously identified by Staff as a location for expansion efforts, such as Transit, Fiber, and other city functions.

Funds for Acquisition
Due to the intent of the site housing the transit division, Staff has determined that $1.1

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PURCHASE OF 1351 E ASH AVENUE SHAFTER, CA 93263 (APN 089-140-13) - 2 -
million in grant funding available to the Transit Department is applicable and can be fully used for this acquisition. The remaining balance of $800,000 is proposed to be covered by a budget adjustment from General Fund Reserves. An additional $100,000 is to be added for estimated closing and transactional costs coverage.

Next Steps
If the Council approves, Staff will obtain signatures and open escrow. Staff anticipate the title transfer to be completed in 60 days.

FISCAL IMPACT
The total estimated acquisition cost, inclusive of purchase price, appraisal, escrow, closing costs, and related transactional expenses, is not expected to exceed $2,000,000.

The City of Shafter has received a total SB 125 Transit Program allocation of $2,371,093 through the California State Transportation Agency (CalSTA). Of this amount, approximately $1,100,000 is currently available through Kern COG for immediate obligation. The remaining balance is anticipated to be programmed and reimbursed in a subsequent funding cycle.

Because the property is intended to house the Transit Division, the acquisition qualifies as an eligible capital expense under SB 125 program guidelines. Staff proposes utilizing SB 125 funds for the full acquisition amount.

Due to the timing of available funds, the City will temporarily advance up to $900,000 from General Fund reserves to complete escrow. It is anticipated that these General Fund advances will be reimbursed once the remaining SB 125 allocation is released.

In addition to acquisition costs, the facility requires substantial repairs and improvements to make it operational for Transit and related City uses. Public WorksStaff estimate repair costs between $250,000 and $400,000, though formal bids have not yet been obtained. These improvements are expected to qualify as eligible capital expenditures under SB 125 guidelines.

Accordingly:
▪ Total estimated acquisition cost: $2,000,000
▪ Estimated repair and improvement costs: Up to $400,000 ▪ Total estimated project cost exposure: Up to $2,400,000 ▪ Total SB 125 allocation: $2,371,093
▪ Temporary General Fund bridge funding: Up to $900,000 ▪ Anticipated long-term General Fund impact: None, assuming full SB 125 reimbursement and eligibility confirmation
If any portion of the improvements is later determined to be ineligible under SB 125

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PURCHASE OF 1351 E ASH AVENUE SHAFTER, CA 93263 (APN 089-140-13) - 3 -
guidelines, the City Council may need to consider alternative funding sources.

This funding strategy maximizes available state transit funds to acquire and improve a long-term strategic asset while limiting permanent General Fund exposure and preserving reserve stability.

CEQA ANALYSIS
The action is not defined as a “project” per Section 15378(b)(4) of the CEQA Guidelines because the action is the approval of purchase and sale instructions for the purchase of privately-owned property and acceptance of a declaration of restrictive covenants for said property and therefore, it is the creation of a governmental funding mechanism or other fiscal activity that does not involve any commitment to a specific project that can result in a potentially significant physical impact on the environment and not subject to CEQA.

APPROVED BY THE CITY ATTORNEY
Yes

ATTACHMENTS

1. 1351EAshAve_FloorPlan_From_CushmanAndWakefieldBrochure

2. Resolution No. 3066

3. PSA - Shafter City - Quantum - 1351 E Ash Ave - 02-23-26 - signed

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RESOLUTION NO. 3066

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SHAFTER

AUTHORIZING THE CITY MANAGER OR DESIGNEE TO ENTER INTO A

PURCHASE AND SALE AGREEMENT TO ACQUIRE THE PROPERTY
LOCATED AT 1351 E ASH AVENUE, APN 089-140-13
WHEREAS, the City of Shafter (the "City") desires to acquire the 4.74-acre real property located at 1351 E Ash Avenue, Shafter, CA 93263 zoned Industrial, identified as Kern County Assessor’s Parcel Number 089-140-13, which is more fully described in Exhibit A and depicted in Exhibit B, attached hereto and incorporated herein by reference (the “Property”); WHEREAS, the Property will be acquired from QUANTUM LAND, LLC, a California limited liability company (“Seller”) in its “as-is” condition for the purchase price of $1,900,000; WHEREAS, the acquisition of the Property supports the City’s efforts to address identified needs for downtown revitalization; and
WHEREAS, the terms and conditions of the proposed Purchase and Sale Agreement (“Purchase Agreement”) are being presented to City Council for approval.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SHAFTER HEREBY RESOLVES AS FOLLOWS:

Section 1. The above recitals are true and correct and are incorporated herein by this reference.

Section 2. City Council finds and approves the acquisition of the Property pursuant to the terms and conditions of the proposed Purchase Agreement.

Section 3. City Council hereby authorizes City Manager or City Manager’s designee, Kamal Siada, Economic Development Director, to execute the Purchase and Sale Agreement, escrow instructions, Certificate of Acceptance, and any other related documents necessary to complete the acquisition.

Section 4. The action authorized by this Resolution does not authorize or approve a particular project, or grant any specific approval that would have a direct or reasonably foreseeable indirect environmental impact pursuant to the California Environmental Quality Act (“CEQA”). (See California Code of Regulations Title 14, Sections 15060(c); 15378(b).) As such, the mere approval of property acquisition and authorization to proceed does not constitute the approval of a “project” under CEQA, and no further action under CEQA is required.

Section 5. If any provision of this Resolution or the application thereof to any person, place, or circumstance, shall be held to be invalid, unenforceable or void, the remainder of this Resolution and such provisions as applied to other persons, places and circumstances shall remain in full force and effect. In the event of such severance, the remaining provisions shall be interpreted and enforced as if the Resolution did not contain the severed provision, with all other provisions remaining in full force and effect.

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Shafter City Council Resolution No. 3066
March 3, 2026

Page 2 ends

Section 6. This Resolution shall become effective immediately.

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Shafter City Council Resolution No. 3066
March 3, 2026

Page 3 ends

EXHIBIT A

LEGAL DESCRIPTION
THAT PORTION OF THE EAST 1/2 OF LOT 11, IN SECTION 14, TOWNSHIP 28 SOUTH, RANGE 25 EAST, MOUNT DIABLO MERIDIAN, IN THE CITY OF SHAFTER, COUNTY OF

KERN, STATE OF CALIFORNIA, AS DESIGNATED AND DELINEATED UPON THE MAP ENTITLED “SALES MAP OF THE LANDS OF KERN COUNTY LAND COMPANY, IN SECTION 14, TOWNSHIP 28 SOUTH, RANGE 25 EAST, MOUNT DIABLO MERIDIAN,” FILED FEBRUARY 11, 1913, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE WEST LINE OF THE EAST 1/2 OF LOT 11, DISTANT 670

FEET NORTH OF THE CENTER LINE OF THE COUNTY ROAD BOUNDING SAID LOT ON THE SOUTH; THENCE NORTH ALONG SAID WEST LINE, 650 FEET, MORE OR LESS, TO THE NORTH LINE OF SAID LOT; THENCE EAST ALONG SAID NORTH LINE TO THE NORTHEAST CORNER OF SAID LOT; THENCE SOUTH ALONG THE EAST LINE OF SAID LOT, 650 FEET, MORE OR LESS TO A POINT WHICH IS DISTANT NORTH 670 FEET FROM

THE CENTER LINE OF THE COUNTY ROAD BOUNDING SAID LOT ON THE SOUTH,

THENCE WEST AND PARALLEL TO THE NORTH LINE THEREOF, TO A POINT OF BEGINNING.

EXCEPTING AND RESERVING UNTO THE GRANTOR AND HEIRS HEREIN ALL OIL, GAS

PETROLEUM, OTHER HYDROCARBON SUBSTANCES AND MINERALS WITHIN OR

UNDERLYING SAID LAND OR THAT MAY BE PRODUCED AND SAVED THEREFROM,

PROVIDING THAT THE GRANTOR, HIS SUCCESSORS AND ASSIGNS, SHALL NOT

CONDUCT DRILLING OR OTHER OPERATIONS UPON THE SURFACE OF SAID LAND, BUT

NOTHING HEREIN CONTAINED SHALL BE DEEMED TO PREVENT THE GRANTOR, HIS

SUCCESSORS AND ASSIGNS, FROM EXTRACTING TO CAPTURING SAID MINERALS BY DRILLING ON ADJACENT OR NEIGHBORING LANDS AND/OR FROM CONDUCTING SUBSURFACE DRILLING OPERATIONS UNDER SAID LANDS AT A DEPTH OF 500 FEET

BELOW THE SURFACE OF SAID LAND, SO AS NOT TO DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON.

EXHIBIT B

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Shafter City Council Resolution No. 3066
March 3, 2026

Page 4 ends

SITE MAP – PROPERTY
The Property comprises the entirety of APN 089-140-13, which is approximately 4.74 acres in size, and which is depicted below.

Page 300 of 328 ends

________ ________
________ ________

1. Buyer.

1.1 City of Shafter or assignee , ("Buyer") hereby offersto purchase the real property, hereinaŌer described, from the owner thereof ("Seller") (collecƟvely, the "ParƟes" or individually, a "Party"), through an escrow ("Escrow") to close 30 or 15 days aŌer the waiver or saƟsfacƟon of the Buyer's ConƟngencies, ("Expected Closing Date") to be held by Chicago Title Company ("Escrow Holder") whose address is 4015 Coffee Rd #100, Bakersfield, CA 93308 , Phone No. (661)536-6122 , Facsimile No. upon the terms and condiƟons set forth in this agreement ("Agreement"). Buyer shall have the right to assign Buyer's rights hereunder, but any such assignmentshall not relieve Buyer of Buyer's obligaƟons herein unless Seller expressly releases Buyer.

1.2 The term "Date of Agreement" as used herein shall be the date when by execuƟon and delivery (as defined in paragraph 20.2) of this document or a subsequent counteroffer thereto, Buyer and Seller have reached agreement in wriƟng whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both ParƟes.

2. Property.

2.1 The real property ("Property") that is the subject of this offer consists of (insert a brief physical descripƟon) approximately 18,950sf of building space on an approximately 4.73 acre parcel islocated in the County of Kern , is commonly known as (street address, city, state, zip) 1351 E. Ash Avenue, Shafter, CA 93263 and is legally described as: to be provided by Chicago Title Company (APN: 089-140-13-00-6 ).

2.2 If the legal descripƟon of the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal descripƟon shall be completed or corrected to meet the requirements of Chicago Title Company ("Title Company"), which shall issue the Ɵtle policy hereinaŌer described.

2.3 The Property includes, at no addiƟonal cost to Buyer, the permanent improvementsthereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribuƟon systems(power panel, bus ducƟng, conduits, disconnects, lighƟng fixtures); telephone distribuƟon systems(lines, jacks and connecƟons only);space heaters; heaƟng, venƟlaƟng, air condiƟoning equipment ("HVAC"); air lines; fire sprinkler systems;security and fire detecƟon systems; carpets; window coverings; wall coverings; and See Paragraph 26.1 (collecƟvely, the "Improvements").

2.4 The fire sprinkler monitor: is owned by Seller and included in the Purchase Price, is leased by Seller, and Buyer will need to negoƟate a new lease with the fire monitoring company, ownership will be determined during Escrow, or there is no fire sprinkler monitor.

2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include Seller's personal property, furniture and furnishings, and all of which shall be removed by Seller prior to Closing.

3. Purchase Price.

3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be $1,900,000 , payable as follows:
$1,900,000
Total Purchase Price: $1,900,000

3.2 If Buyer is taking Ɵtle to the Property subject to, or assuming, an ExisƟng Deed of Trust and such deed of trust permits the beneficiary to demand payment

STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS

FOR PURCHASE OF REAL ESTATE
(Non-ResidenƟal)
(Strike any not applicable)
(a) Cash down payment, including the Deposit as defined in paragraph 4.3 (or if an all cash transacƟon, the Purchase Price):
(b) Amount of "New Loan" as defined in paragraph 5.1, if any:
(c) Buyer shall take Ɵtle to the Property subject to and/or assume the following exisƟng deed(s) of trust ("ExisƟng Deed(s) of Trust")securing the exisƟng promissory note(s) ("ExisƟng Note(s)"):
(i) An ExisƟng Note ("First Note") with an unpaid principal balance as of the Closing of approximately:

Said First Note is payable at per month, including interest at the rate of % per annum unƟl paid (and/or the enƟre unpaid balance is due on ). (ii) An ExisƟng Note ("Second Note") with an unpaid principal balance as of the Closing of approximately:

Said Second Note is payable at per month, including interest at the rate of % per annum unƟl paid (and/or the enƟre unpaid balance is due on ). (d) Buyer shall give Seller a deed of trust ("Purchase Money Deed of Trust") on the property, to secure the promissory note of Buyer to Seller described in paragraph 6 ("Purchase Money Note") in the amount of:

WA
WA
MDK
MDK kk WAA
WAA Page 301 of 328
________ ________
________ ________

INITIALS INITIALS
© 2019 AIR CRE. All Rights Reserved. Last Edited: 2/23/2026 2:00 PM OFA-20.30, Revised 10-13-2022 Page 2 of 11
of fees including, but not limited to, points, processing fees, and appraisal fees as a condiƟon to the transfer of the Property, Buyer agrees to pay such fees up to a maximum of 1.5% of the unpaid principal balance of the applicable ExisƟng Note.

4. Deposits.

4.1 Buyer has delivered to Broker a check in the sum of , payable to Escrow Holder, to be delivered by Broker to Escrow Holder within 2 or business days aŌer both ParƟes have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, or within 2 or 3 business days aŌer both ParƟes have executed this Agreement and the executed Agreement has been delivered to Escrow Holder Buyer shall deliver to Escrow Holder a check in the sum of $50,000.00 . If said check is not received by Escrow Holder within said Ɵme period then Seller may elect to unilaterally terminate thistransacƟon by giving wriƩen noƟce of such elecƟon to Escrow Holder whereupon neither Party shall have any further liability to the other under this Agreement. Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check orfunds shall, upon request by Buyer, be promptly returned to Buyer. Subject to a 3 business daynotice to cure if Buyer fails to pay deposit before Seller can terminate.

4.2 AddiƟonal deposits:
(a) Within 5 business days aŌer the Date of Agreement, Buyer shall deposit with Escrow Holder the addiƟonal sum of to be applied to the Purchase Price at the Closing.
(b) Within 5 business days aŌer the conƟngencies discussed in paragraph 9.1 (a) through (m) are approved or waived, Buyer shall deposit with Escrow Holder the addiƟonal sum of to be applied to the Purchase Price at the Closing. (c) If an AddiƟonal Deposit is not received by Escrow Holder within the Ɵme period provided then Seller may noƟfy Buyer, Escrow Holder, and Brokers, in wriƟng that, unlessthe AddiƟonal Deposit is received by Escrow Holder within 2 business days following said noƟce, the Escrow shall be deemed terminated without further noƟce or instrucƟons.

4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collecƟvely the "Deposit"), in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the Ɵming requirements of this transacƟon. The interest therefrom shall accrue to the benefit of Buyer, who hereby acknowledges that there may be penalƟes or interest forfeitures if the applicable instrument isredeemed prior to its specified maturity. Buyer's Federal Tax IdenƟficaƟon Number is . NOTE: Such interest bearing account cannot be opened unƟl Buyer's Federal Tax IdenƟficaƟon Number is provided.

4.4 Notwithstanding the foregoing, within 5 days aŌer Escrow Holder receives the monies described in paragraph 4.1 above, Escrow Holder shall release $100 of said moniesto Seller as and for independent consideraƟon for Seller's' execuƟon of this Agreement and the granƟng of the conƟngency period to Buyer as herein provided. Such independent consideraƟon is non-refundable to Buyer butshall be credited to the Purchase Price in the event that the purchase of the Property is completed.

4.5 Upon waiver of all of Buyer's conƟngenciesthe Depositshall become non-refundable but applicable to the Purchase Price except in the event of a Seller breach, or in the event that the Escrow is terminated pursuant to the provisions of Paragraph 9.1(n) (DestrucƟon, Damage or Loss) or 9.1(o) (Material Change).

5. Financing ConƟngency. (Strike if not applicable)

5.1 This offeris conƟngent upon Buyer obtaining from an insurance company, financial insƟtuƟon or other lender, a commitment to lend to Buyer a sum equal to at least % of the Purchase Price, on terms acceptable to Buyer. Such loan ("New Loan") shall be secured by a first deed of trust or mortgage on the Property. If this Agreement provides for Seller to carry back junior financing, then Seller shall have the right to approve the terms of the New Loan. Seller shall have 7 daysfollowing receipt of the commitmentseƫng forth the proposed terms of the New Loan to approve or disapprove ofsuch proposed terms. If Seller failsto noƟfy Escrow Holder, in wriƟng, of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan.

5.2 If Buyer shall fail to noƟfy its Broker, Escrow Holder and Seller, in wriƟng within days following the Date of Agreement, that the New Loan has not been obtained, itshall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan conƟngency.

5.3 If Buyer shall noƟfy its Broker, Escrow Holder and Seller, in wriƟng, within the Ɵme specified in paragraph 5.2 hereof, that Buyer has not obtained said New Loan, this Agreementshall be terminated, and Buyer shall be enƟtled to the prompt return of the Deposit, plus any interest earned thereon, less only Escrow Holder and Title Company cancellaƟon fees and costs, which Buyer shall pay.

6. Seller Financing. (Purchase Money Note). (Strike if not applicable)

6.1 If Seller approves Buyer's financials(see paragraph 6.5) the Purchase Money Note shall provide for interest on unpaid principal at the rate of % per annum, with principal and interest paid as follows: . The Purchase Money Note and Purchase Money Deed of Trustshall be on the current forms commonly used by Escrow Holder, and be junior and subordinate only to the ExisƟng Note(s) and/or the New Loan expressly called for by this Agreement.

6.2 The Purchase Money Note and/or the Purchase Money Deed of Trust shall contain provisions regarding the following (see also paragraph 10.3 (b)):
(a) Prepayment. Principal may be prepaid in whole or in part at any Ɵme without penalty, at the opƟon of the Buyer. (b) Late Charge. A late charge of 6% shall be payable with respect to any payment of principal, interest, or other charges, not made within 10 days aŌer it is due.
(c) Due On Sale. In the event the Buyer sells or transfers Ɵtle to the Property or any porƟon thereof, then the Seller may, at Seller's opƟon, require the enƟre unpaid balance of said Note to be paid in full.

6.3 If the Purchase Money Deed of Trust is to be subordinate to other financing, Escrow Holder shall, at Buyer's expense prepare and record on Seller's behalf a request for noƟce of default and/or sale with regard to each mortgage or deed of trust to which it will be subordinate.

6.4 WARNING: CALIFORNIA LAW DOES NOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER FINANCING. IF BUYER ULTIMATELY DEFAULTS ON THE LOAN, SELLER'S SOLE REMEDY IS TO FORECLOSE ON THE PROPERTY.

6.5 Seller's obligaƟon to provide financing is conƟngent upon Seller's reasonable approval of Buyer's financial condiƟon. Buyer to provide a current financial statement and copies of its Federal tax returns for the last 3 yearsto Seller within 10 daysfollowing the Date of Agreement. Seller has 10 days following receipt of such documentaƟon to saƟsfy itself with regard to Buyer's financial condiƟon and to noƟfy Escrow Holder asto whether or not Buyer's financial condiƟon is acceptable. If Seller failsto noƟfy Escrow Holder, in wriƟng, of the disapproval of this conƟngency within said Ɵme period, itshall be conclusively presumed that Seller has approved Buyer's financial condiƟon. If Seller is notsaƟsfied with Buyer's financial condiƟon or if Buyer fails to deliver the required documentaƟon then Seller may noƟfy Escrow Holder in wriƟng that Seller Financing will not be available, and Buyer shall have the opƟon, within 10 days of the receipt of such noƟce, to either terminate this transacƟon or to purchase the Property without Seller financing. If Buyer failsto noƟfy Escrow Holder within said Ɵme period of its elecƟon to terminate this transacƟon then Buyer shall be conclusively presumed to have elected to purchase the Property without Seller financing. If Buyer electsto terminate, Buyer's Deposit shall be refunded less Title Company and Escrow Holder cancellaƟon fees and costs, all of which shall be Buyer's obligaƟon.

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7. Real Estate Brokers.

7.1 Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency RelaƟonship, confirms and consentsto the following agency relaƟonships in thistransacƟon with the following real estate broker(s) ("Brokers") and/or their agents(“Agent(s)”):

Seller's Brokerage Firm Cushman & Wakefield U.S., Inc. License No. 01880493 is the broker of (check one): the Seller; or both the Buyer and Seller (dual agent).

Seller's Agent Coby Vance License No. 01449929 is(check one): the Seller's Agent (salesperson or broker associate); or both the Seller's Agent and the Buyer's Agent (dual agent).

Buyer's Brokerage Firm License No. isthe broker of (check one): the Buyer; or both the Buyer and Seller(dual agent).

Buyer's Agent License No. is (check one): the Buyer's Agent (salesperson or broker associate); or both the Buyer's Agent and the Seller's Agent (dual agent).

The ParƟes acknowledge that other than the Brokers and Agents listed above, there are no other brokers or agents represenƟng the ParƟes or due any fees and/or commissions under this Agreement. Buyer shall use the services of Buyer's Broker exclusively in connecƟon with any and all negoƟaƟons and offers with respect to the Property for a period of 1 year from the date inserted for reference purposes at the top of page 1.

7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, firm, broker, agent or finder in connecƟon with the negoƟaƟon of this Agreement and/or the consummaƟon of the purchase and sale contemplated herein, other than the Brokers and Agents named in paragraph 7.1, and no broker, agent or other person, firm or enƟty, other than said Brokers and Agents is/are enƟtled to any commission or finder's fee in connecƟon with this transacƟon as the result of any dealings or acts ofsuch Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensaƟon, commission or charges which may be claimed by any broker, agent, finder or othersimilar party, other than said named Brokers and Agents by reason of any dealings or act of the indemnifying Party.

8. Escrow and Closing.

8.1 Upon acceptance hereof by Seller, this Agreement, including any counteroffers incorporated herein by the ParƟes, shall consƟtute not only the agreement of purchase and sale between Buyer and Seller, but also instrucƟons to Escrow Holder for the consummaƟon of the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instrucƟons restaƟng or amending the Agreement unlessspecifically so instructed by the ParƟes or a Broker herein. Subject to the reasonable approval of the ParƟes, Escrow Holder may, however, include itsstandard general escrow provisions. In the event that there is any conflict between the provisions of the Agreement and the provisions of any addiƟonal escrow instrucƟons the provisions of the Agreement shall prevail as to the ParƟes and the Escrow Holder.

8.2 As soon as pracƟcal aŌer the receipt of this Agreement and any relevant counteroffers, Escrow Holder shall ascertain the Date of Agreement as defined in paragraphs 1.2 and 20.2 and advise the ParƟes and Brokers, in wriƟng, of the date ascertained.

8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and pracƟce of the community in which Escrow Holder is located, including any reporƟng requirements of the Internal Revenue Code. In the event of a conflict between the law of the state where the Property islocated and the law of the state where the Escrow Holder islocated, the law of the state where the Property is located shall prevail.

8.4 Subject to saƟsfacƟon of the conƟngencies herein described, Escrow Holder shall close this escrow (the "Closing") by recording a general warranty deed (a grant deed in California) and the other documentsrequired to be recorded, and by disbursing the funds and documents in accordance with this Agreement.

8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protecƟon policy of Ɵtle insurance. (See also paragraph 11.)

8.6 Escrow Holder shall verify that all of Buyer's conƟngencies have been saƟsfied or waived prior to Closing. The maƩers contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, maƩers of agreement between the ParƟes only and are not instrucƟons to Escrow Holder.

8.7 If this transacƟon isterminated for non-saƟsfacƟon and non-waiver of a Buyer's ConƟngency, as defined in paragraph 9.2 or disapproval of any other maƩer subject to Buyer's approval, then neither of the ParƟes shall thereaŌer have any liability to the other under this Agreement, except to the extent of a breach of any affirmaƟve covenant or warranty in this Agreement. In the event of such terminaƟon, Buyer shall,subject to the provisions of paragraph 8.10, be promptly refunded all funds deposited by Buyer with Escrow Holder, less only the $100 provided for in paragraph 4.4 and the Title Company and Escrow Holder cancellaƟon fees and costs, all of which shall be Buyer's obligaƟon. If thistransacƟon is terminated as a result of Seller's breach of this Agreement then Sellershall pay the Title Company and Escrow Holder cancellaƟon fees and costs.

8.8 The Closing shall occur on the Expected Closing Date, or assoon thereaŌer asthe Escrow isin condiƟon for Closing; provided, however, that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instrucƟons of the ParƟes, a Party not then in default under this Agreement may noƟfy the other Party, Escrow Holder, and Brokers, in wriƟng that, unlessthe Closing occurs within 5 business days following said noƟce, the Escrow shall be deemed terminated without further noƟce or instrucƟons.

8.9 Except as otherwise provided herein, the terminaƟon of Escrow shall not relieve or release either Party from any obligaƟon to pay Escrow Holder'sfees and costs or consƟtute a waiver, release or discharge of any breach or default that has occurred in the performance of the obligaƟons, agreements, covenants or warranƟes contained therein.

8.10 If this Escrow is terminated for any reason other than Seller's breach or default, then as a condiƟon to the return of Buyer's deposit, Buyer shall within 5 days aŌer wriƩen request deliver to Seller, at no charge, copies of allsurveys, engineering studies, soil reports, maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.

9. ConƟngenciesto Closing.

9.1 IF, BEFORE EXPIRATION OF THE APPLICABLE TIME, BUYER FAILS TO PROVIDE ESCROW HOLDER WRITTEN NOTICE OF BUYER'S DISAPPROVAL OF ANY OF

BUYER'S CONTINGENCIES OR ANY OTHER MATTER THAT IS SUBJECT TO BUYER'S APPROVAL IN THIS AGREEMENT, THEN BUYER SHALL BE CONCLUSIVELY DEEMED TO HAVE DISSATISFIED SATISFIED SUCH BUYER'S CONTINGENCIES AND/ORDISAPPROVED APPROVED OF SUCH OTHER MATTERS. If a number of days is completed in any of the opƟonalspaces in subparagraphs 9.1 (a) through (m), then such number shall apply and override the pre-printed number, even if the pre-printed number is not stricken. The Closing of thistransacƟon is conƟngent upon the saƟsfacƟon or waiver of the following conƟngencies:
(a) Disclosure. Seller shall make to Buyer, through Escrow, all of the applicable disclosures required by law (See AIR CRE ("AIR")standard form enƟtled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property InformaƟon Sheet ("Property InformaƟon Sheet") concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or 5 days following the Date of Agreement.

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Buyer has 10 days from the receipt of said disclosures to approve or disapprove the maƩers disclosed. (b) Physical InspecƟon. Buyer has 10 or 45 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement, whichever islater, to saƟsfy itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance CondiƟons Report. Buyer has 30 or 45 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement, whichever islater, to saƟsfy itself with regard to the environmental aspects of the Property. Seller recommendsthat Buyer obtain a Hazardous Substance CondiƟons Report concerning the Property and relevant adjoining properƟes. Any such report shall be paid for by Buyer. A "Hazardous Substance" for purposes of this Agreement is defined as any substance whose nature and/or quanƟty of existence, use, manufacture, disposal or effect, render it subject to Federal, state orlocal regulaƟon, invesƟgaƟon, remediaƟon or removal as potenƟally injurious to public health or welfare. A "Hazardous Substance CondiƟon" for purposes of this Agreement is defined as the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediaƟon and/or removal under applicable Federal, state or local law. Seller agrees to complete an environmental questionnaire to the best of its knowledge and return an executed copy to Buyer within 10 days upon request. Such request by Buyer shall be made within the Escrow Period. (d) Soil InspecƟon. Buyer has 30 or 45 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement, whichever is later, to saƟsfy itself with regard to the condiƟon of the soils on the Property. Sellerrecommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days following the Date of Agreement. (e) Governmental Approvals. Buyer has 30 or 45 days following the Date of Agreement to saƟsfy itself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdicƟon over the Property and which Buyer deems necessary or desirable in connecƟon with its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, fire, police, handicapped and Americans with DisabiliƟes Act requirements, transportaƟon and environmental maƩers. (f) CondiƟons of Title. Escrow Holder shall cause a current commitment for Ɵtle insurance ("Title Commitment") concerning the Property issued by the Title Company, as well aslegible copies of all documentsreferred to in the Title Commitment ("Underlying Documents"), and a scaled and dimensioned plot showing the locaƟon of any easements, at Seller's cost, to be delivered to Buyer within 10 or daysfollowing the Date of Agreement. Buyer has 10 45 days from the Date of Agreement receipt of the Title Commitment, the Underlying Documents and the plot plan to saƟsfy itself with regard to the condiƟon of Ɵtle.

The disapproval by Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property aŌer the Closing, shall not be considered a failure of this conƟngency, as Seller shall have the obligaƟon, at Seller's expense, to saƟsfy and remove such disapproved monetary encumbrance at or before the Closing.
(g) Survey. Buyer has 30 or 45 days following the Date of Agreement receipt of the Title Commitment and Underlying Documents to saƟsfy itself with regard to any ALTA Ɵtle supplement based upon a survey prepared to American Land Title AssociaƟon ("ALTA")standards for an owner's policy by a licensed surveyor, showing the legal descripƟon and boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of eitherside of the Property boundary lines. Any such survey shall be prepared at Buyer's direcƟon and expense. If Buyer has obtained a survey and approved the ALTA Ɵtle supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner'sform of Ɵtle policy, in which event Buyer shall pay any addiƟonal premium aƩributable thereto. (h) ExisƟng Leases and Tenancy Statements. Seller shall within 10 or daysfollowing the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collecƟvely, "ExisƟng Leases") affecƟng the Property, and with a tenancy statement ("Estoppel CerƟficate") in the latest form or equivalent to that published by the AIR, executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best efforts to have each tenant complete and execute an Estoppel CerƟficate. If any tenant fails or refuses to provide an Estoppel CerƟficate then Seller shall complete and execute an Estoppel CerƟficate for that tenancy. Buyer has 10 days from the receipt of said ExisƟng Leases and Estoppel CerƟficates to saƟsfy itself with regard to the ExisƟng Leases and any other tenancy issues. (i) Owner's AssociaƟon. Seller shall within 10 or days following the Date of Agreement provide Buyer with a statement and transfer package from any owner's associaƟon servicing the Property. Such transfer package shall at a minimum include: copies of the associaƟon's bylaws, arƟcles of incorporaƟon, current budget and financial statement. Buyer has 10 days from the receipt of such documents to saƟsfy itself with regard to the associaƟon. (j) Other Agreements. Seller shall within 10 or daysfollowing the Date of Agreement provide Buyer with legible copies of all other agreements("Other Agreements") known to Seller that will affect the Property aŌer Closing. Buyer has 10 daysfrom the receipt of said Other Agreements to saƟsfy itself with regard to such Agreements.
(k) Financing. If paragraph 5 hereof dealing with a financing conƟngency has not been stricken, the saƟsfacƟon or waiver of such New Loan conƟngency. (l) ExisƟng Notes. If paragraph 3.1(c) has not been stricken, Seller shall within 10 or daysfollowing the Date of Agreement provide Buyer with legible copies of the ExisƟng Notes, ExisƟng Deeds of Trust and related agreements (collecƟvely, "Loan Documents") to which the Property will remain subject aŌer the Closing. Escrow Holder shall promptly request from the holders of the ExisƟng Notes a beneficiary statement ("Beneficiary Statement") confirming: (1) the amount of the unpaid principal balance, the current interest rate, and the date to which interest is paid, and (2) the nature and amount of any impounds held by the beneficiary in connecƟon with such loan. Buyer has 10 or days following the receipt of the Loan Documents and Beneficiary Statements to saƟsfy itself with regard to such financing. Buyer's obligaƟon to close is condiƟoned upon Buyer being able to purchase the Property without acceleraƟon or change in the terms of any ExisƟng Notes or chargesto Buyer except as otherwise provided in this Agreement or approved by Buyer, provided, however, Buyer shall pay the transfer fee referred to in paragraph 3.2 hereof. Likewise if Seller is to carry back a Purchase Money Note then Seller shall within 10 or daysfollowing the Date of Agreement provide Buyer with a copy of the proposed Purchase Money Note and Purchase Money Deed of Trust. Buyer has 10 or days following the receipt of such documents to saƟsfy itself with regard to the form and content thereof. (m) Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has 10 or daysfollowing the Date of Agreement to saƟsfy itself with regard to the Ɵtle condiƟon of such personal property. Seller recommendsthat Buyer obtain a UCC-1 report. Any such reportshall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances affecƟng such personal property that it is aware of within 10 or days following the Date of Agreement.
(n) DestrucƟon, Damage or Loss. Subsequent to the Date of Agreement and prior to Closing there shall not have occurred a destrucƟon of, or damage or lossto, the Property or any porƟon thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the opƟon, within 10 days aŌer receipt of wriƩen noƟce of a loss cosƟng more than $10,000.00 to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but without deducƟon or offset against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this Agreement, Buyer shall be enƟtled to any insurance proceeds applicable to such loss. Unless otherwise noƟfied in wriƟng, Escrow Holder shall assume no such destrucƟon, damage or loss has occurred prior WA
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to Closing.
(o) Material Change. Buyer shall have 10 days following receipt of wriƩen noƟce of a Material Change within which to saƟsfy itself with regard to such change. "Material Change" shall mean a substanƟal adverse change in the use, occupancy, tenants, Ɵtle, or condiƟon of the Property that occurs aŌer the date of this offer and prior to the Closing. Unless otherwise noƟfied in wriƟng, Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (p) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement.
(q) Brokerage Fee. Payment at the Closing of such brokerage fee as isspecified in this Agreement or later wriƩen instrucƟons to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the ParƟes and Escrow Holder that Brokers are a third party beneficiary of this Agreement insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee specified in this Agreement, without the wriƩen consent of Brokers.

9.2 The conƟngenciesspecified in subparagraphs 9.1(a) through (m) are for the benefit of, and may be waived by, Buyer, and are referred to collecƟvely as "Buyer's ConƟngencies" and individually as a "Buyer's ConƟngency."

9.3 Buyer's Ɵmely and wriƩen disapproval or condiƟonal approval of a Buyer's ConƟngency or any other maƩer that is subject to Buyer's approval in this Agreement shall consƟtute disapproval thereof ("Disapproved Item(s)"). Concurrent with noƟce of a Disapproved Item, Buyer may make a request to Seller regarding such Disapproved Item ("Buyer's Request"). If Buyer fails to make a Ɵmely and wriƩen Buyer's Request, then this Agreement shall terminate due to the non-saƟsfacƟon and non-waiver of a conƟngency. Seller may respond to a Buyer's Request within 10 days following Seller's receipt thereof ("Seller's Response").

Seller's acceptance of a Buyer's Request shall amend this Agreement accordingly. If Seller failsto provide a Ɵmely and wriƩen Seller's Response, then Seller's Response shall be deemed to be a rejecƟon of Buyer's Request. Buyer may, within 10 days following the earlier of Buyer'sreceipt of a Seller's Response (which is not an acceptance of Buyer's Request) or the date of Seller's deemed rejecƟon of a Buyer's Request ("Buyer's Reply Period"), reply to a Seller's Response ("Buyer's Reply") and elect to (i) terminate this Agreement due to the non-saƟsfacƟon and non-waiver of the applicable conƟngency, (ii) accept the Seller's Response in which event this Agreement shall be amended accordingly, or (iii) withdraw Buyer's Request and waive the Disapproved Item in which event Buyer shall accept the Property subject to the Disapproved Item. If Buyer fails to provide a Ɵmely and wriƩen Buyer's Reply, then Buyer shall be deemed to have elected to terminate this Agreement as of the end of the Buyer's Reply Period. The date Buyer accepts a Seller's Response or withdraws a Buyer's Request and waives a Disapproved Item shall be the date of Buyer's approval of the Disapproved Item. A Party shall provide to Escrow Holder copy of all noƟces of a Disapproved Item, Buyer's Request, Seller's Response and Buyer's Reply and Escrow Holder shall promptly provide copies thereof to the other Party. Unless the ParƟes in wriƟng agree otherwise, if the Expected Closing Date is a specific calendar date and a Buyer's Reply Period expires aŌersuch specific calendar date, then notwithstanding paragraph 1.1, the Expected Closing Date shall be extended to be 3 business days aŌer the earlier of the date Buyer withdraws a Buyer's Request and waives the applicable Disapproved Item or Buyer accepts the applicable Seller's Response.

9.4 The ParƟes acknowledge that extensive local, state and Federal legislaƟon establish broad liability upon owners and/or users of real property for the invesƟgaƟon and remediaƟon of Hazardous Substances. The determinaƟon of the existence of a Hazardous Substance CondiƟon and the evaluaƟon of the impact of such a condiƟon are highly technical and beyond the experƟse of Brokers. The ParƟes acknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properƟes, and Buyer and Seller are not relying upon any invesƟgaƟon by or statement of Brokers with respect thereto. The ParƟes hereby assume all responsibility for the impact of such Hazardous Substances upon their respecƟve interests herein.

10. Documents and Other Items Required at or Before Closing.

10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the ParƟes.

10.2 Seller shall deliver to Escrow Holder in Ɵme for delivery to Buyer at the Closing:
(a) Grant or general warranty deed, duly executed and in recordable form, conveying fee Ɵtle to the Property to Buyer. (b) If applicable, the Beneficiary Statements concerning ExisƟng Note(s). (c) If applicable, the ExisƟng Leases and Other Agreements together with duly executed assignmentsthereof by Seller and Buyer. The assignment of ExisƟng Leases shall be on the most recent Assignment and AssumpƟon of Lessor'sInterest in Lease form published by the AIR or its equivalent. (d) An affidavit executed by Seller to the effect that Seller is not a "foreign person" within the meaning of Internal Revenue Code SecƟon 1445 or successor statutes. If Seller does not provide such affidavit in form reasonably saƟsfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Internal Revenue Service such sum as isrequired by applicable Federal law with respect to purchases from foreign sellers.
(e) If the Property is located in California, an affidavit executed by Seller to the effect that Seller is not a ''nonresident" within the meaning of California Revenue and Tax Code SecƟon 18662 or successor statutes. If Seller does not provide such affidavit in form reasonably saƟsfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (f) If applicable, a bill ofsale, duly executed, conveying Ɵtle to any included personal property to Buyer. (g) If the Seller is a corporaƟon, a duly executed corporate resoluƟon authorizing the execuƟon of this Agreement and the sale of the Property.

10.3 Buyer shall deliver to Seller through Escrow:
(a) The cash porƟon of the Purchase Price and such addiƟonal sums as are required of Buyer under this Agreementshall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder in immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date provided, however, that Buyer shall not be required to deposit such monies into Escrow if at the Ɵme set for the deposit of such monies Seller isin default or hasindicated that it will not perform any of its obligaƟons hereunder. Instead, in such circumstances in order to reserve its rights to proceed Buyer need only provide Escrow with evidence establishing that the required monies were available. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of fire insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract (at Buyer's expense), assuring Seller of noƟce of the status of payment of real property taxes during the life of the Purchase Money Note.
(c) The Assignment and AssumpƟon of Lessor'sInterest in Lease form specified in paragraph 10.2(c) above, duly executed by Buyer. (d) AssumpƟons duly executed by Buyer of the obligaƟons of Seller that accrue aŌer Closing under any Other Agreements. (e) If applicable, a wriƩen assumpƟon duly executed by Buyer of the loan documents with respect to ExisƟng Notes. (f) If the Buyer is a corporaƟon, a duly executed corporate resoluƟon authorizing the execuƟon of this Agreement and the purchase of the Property.

10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 9.1(g)) owner's form policy of Ɵtle insurance effecƟve as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring Ɵtle to the Property vested in Buyer, subject only to WA
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the excepƟons approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transacƟon, the policy of Ɵtle insurance shall be a joint protecƟon policy insuring both Buyer and Seller.

IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING.

11. ProraƟons and Adjustments.

11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The ParƟes agree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill.

11.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property.

11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on ExisƟng Notes, uƟliƟes, and operaƟng expenses shall be prorated as of the date of Closing.

The ParƟes agree to promptly adjust between themselves outside of Escrow any rents received aŌer the Closing.

11.4 Security Deposit. Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing.

11.5 Post Closing MaƩers. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the ParƟes by appropriate cash payment outside of the Escrow when the amount due is determined.

11.6 VariaƟons in ExisƟng Note Balances. In the event that Buyer is purchasing the Property subject to an ExisƟng Deed of Trust(s), and in the event that a Beneficiary Statement asto the applicable ExisƟng Note(s) discloses that the unpaid principal balance ofsuch ExisƟng Note(s) at the closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("ExisƟng Note VariaƟon"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such ExisƟng Note VariaƟon. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a)shall be reduced orincreased by the amount of such ExisƟng Note VariaƟon.

11.7 VariaƟons in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ulƟmately obtained exceeds the amount set forth in paragraph 5.1, then the amount of the Purchase Money Note, if any,shall be reduced by the amount of such excess.

11.8 Owner's AssociaƟon Fees. Escrow Holder shall: (i) bring Seller's account with the associaƟon current and pay any delinquencies or transfer fees from Seller's proceeds, and (ii) pay any up front fees required by the associaƟon from Buyer's funds.

12. RepresentaƟons and WarranƟes of Seller and Disclaimers.

12.1 Seller's warranƟes and representaƟons shall survive the Closing and delivery of the deed for a period of 3 years, and any lawsuit or acƟon based upon them must be commenced within such Ɵme period. Seller's warranƟes and representaƟons are true, material and relied upon by Buyer and Brokers in all respects. Seller hereby makes the following warranƟes and representaƟons to Buyer and Brokers:
(a) Authority of Seller. Selleris the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligaƟons hereunder. (b) Maintenance During Escrow and Equipment CondiƟon At Closing. Except as otherwise provided in paragraph 9.1(n) hereof, Sellershall maintain the Property unƟl the Closing in its present condiƟon, ordinary wear and tear excepted. (c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in wriƟng, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank. (d) Compliance. Except as otherwise disclosed in wriƟng, Seller has no knowledge of any aspect or condiƟon of the Property which violates applicable laws, rules, regulaƟons, codes or covenants, condiƟons or restricƟons, or of improvements or alteraƟons made to the Property without a permit where one was required, or of any unfulfilled order or direcƟve of any applicable governmental agency or casualty insurance company requiring any invesƟgaƟon, remediaƟon, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any ExisƟng Lease or Other Agreement, or create any new leases or other agreements affecƟng the Property, without Buyer's wriƩen approval, which approval will not be unreasonably withheld. (f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in wriƟng to Buyer.
(g) Mechanics' Liens. There are no unsaƟsfied mechanics' or materialmens' lien rights concerning the Property. (h) AcƟons, Suits or Proceedings. Seller has no knowledge of any acƟons, suits or proceedings pending orthreatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or uƟlize same. (i) NoƟce of Changes. Seller will promptly noƟfy Buyer and Brokers in wriƟng of any Material Change (see paragraph 9.1(o)) affecƟng the Property that becomes known to Seller prior to the Closing.
(j) No Tenant Bankruptcy Proceedings. Seller has no noƟce or knowledge that any tenant of the Property isthe subject of a bankruptcy or insolvency proceeding.
(k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding. (l) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances affecƟng such personal property, except as disclosed by this Agreement or otherwise in wriƟng to Buyer.

12.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its exisƟng condiƟon and will, by the Ɵme called for herein, make or have waived all inspecƟons of the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The ParƟes acknowledge that, except as otherwise stated in this Agreement, no representaƟons, inducements, promises, agreements, assurances, oral or wriƩen, concerning the Property, or any aspect of the occupaƟonal safety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party or Brokers, or relied upon by either Party hereto.

12.3 In the event that Buyer learns that a Seller representaƟon or warranty might be untrue prior to the Closing, and Buyer electsto purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an acƟon or proceeding against Seller or Brokers regarding said representaƟon or warranty. Buyer does not waive fraud, intentional misrepresentation, or seller's express covenants.

12.4 Any environmental reports, soils reports, surveys, and othersimilar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representaƟves, have been delivered as an accommodaƟon to Buyer and without any representaƟon or warranty as to the sufficiency, accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and invesƟgate the Property.

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13. Possession.

Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under ExisƟng Leases. Seller must convey fee title free and clear of any occupants/tenants and free and clearof all monetary liens/encumbrances other than Buyer-approved permitted exceptions.

14. Buyer's Entry.

At any Ɵme during the Escrow period, Buyer, and its agents and representaƟves, shall have the right at reasonable Ɵmes and subject to rights of tenants, to enter upon the Property for the purpose of making inspecƟons and tests specified in this Agreement. No destrucƟve tesƟng shall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in wriƟng by Seller, Buyer shall return the Property to the condiƟon it was in prior to such entry or work, including the re-compacƟon or removal of any disrupted soil or material as Seller may reasonably direct. Allsuch inspecƟons and tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabiliƟes, losses, expenses (including reasonable aƩorneys' fees), damages, including those for injury to person or property, arising out of or relaƟng to any such work or materials or the acts or omissions of Buyer, its agents or employees in connecƟon therewith.

15. Further Documents and Assurances.

The ParƟes shall each, diligently and in good faith, undertake all acƟons and procedures reasonably required to place the Escrow in condiƟon for Closing as and when required by this Agreement. The ParƟes agree to provide all further informaƟon, and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company.

16. AƩorneys' Fees.

If any Party or Broker brings an acƟon or proceeding (including arbitraƟon) involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereaŌer defined) in any such proceeding, acƟon, or appeal thereon, shall be enƟtled to reasonable aƩorneys' fees and costs. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such acƟon or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall include, without limitaƟon, a Party or Broker who substanƟally obtains or defeatsthe reliefsought, as the case may be, whether by compromise, seƩlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The aƩorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all aƩorneys' feesreasonably incurred.

17. Prior Agreements/Amendments.

17.1 This Agreementsupersedes any and all prior agreements between Seller and Buyer regarding the Property.

17.2 Amendments to this Agreement are effecƟve only if made in wriƟng and executed by Buyer and Seller.

18. Broker's Rights.

18.1 If this sale is not consummated due to the default of either the Buyer or Seller, the defaulƟng Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer isthe defaulƟng party, payment of said Brokerage Fee is in addiƟon to any obligaƟon with respect to liquidated or other damages.

18.2 Upon the Closing, Brokers are authorized to publicize the facts of this transacƟon.

19. NoƟces.

19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any noƟce, demand, request, approval, disapproval or other communicaƟon, each such communicaƟon shall be in wriƟng and shall be delivered personally, by messenger, or by mail, postage prepaid, to the address set forth in this agreement or by facsimile transmission, electronic signature, digital signature, or email.

19.2 Service of any such communicaƟon shall be deemed made on the date of actual receipt if personally delivered, or transmiƩed by facsimile transmission, electronic signature, digital signature, or email. Any such communicaƟon sent by regular mail shall be deemed given 48 hours aŌer the same is mailed.

CommunicaƟons sent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours aŌer delivery of the same to the Postal Service or courier. If such communicaƟon isreceived on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

19.3 Any Party or Broker hereto may from Ɵme to Ɵme, by noƟce in wriƟng, designate a different address to which, or a different person or addiƟonal persons to whom, all communicaƟons are thereaŌer to be made.

20. DuraƟon of Offer.

20.1 If this offeris not accepted by Seller on or before 5:00 P.M. according to the Ɵme standard applicable to the city of Bakersfield, CA on the date of February 6, 2026 , it shall be deemed automaƟcally revoked.

20.2 The acceptance of this offer, or of any subsequent counteroffer hereto, that creates an agreement between the ParƟes as described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed wriƟng uncondiƟonally accepƟng the last outstanding offer or counteroffer.

21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if iniƟaled by both ParƟes).

THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER

OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $50,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER.

Buyer's IniƟals Seller's IniƟals

22. ARBITRATION OF DISPUTES. (This ArbitraƟon of Disputes paragraph is applicable only if iniƟaled by both ParƟes.)

22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF THE DEPOSIT WA
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SHALL BE DETERMINED BY BINDING ARBITRATION ADMINISTERED BY THE JUDICIAL ARBITRATION & MEDIATION SERVICES, INC. ("JAMS") IN ACCORDANCE WITH ITS COMMERCIAL ARBITRATION RULES ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED.

SUCH CONTROVERSY SHALL BE ARBITRATED BY A SINGLE ARBITRATOR, APPOINTED UNDER THE COMMERCIAL RULES WHO HAS HAD AT LEAST 5 YEARS OF EXPERIENCE IN THE TYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THE ARBITRATOR SHALL HEAR AND DETERMINE SAID CONTROVERSY IN

ACCORDANCE WITH APPLICABLE LAW OF THE JURISDICTION WHERE THE PROPERTY IS LOCATED, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE ARBITRATOR SHALL RENDER AN AWARD WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING, WHICH MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF AND SHALL BE ACCOMPANIED BY A REASONED OPINION. THE FAILURE OR REFUSAL OF A PARTY TO PAY SUCH PARTY'S REQUIRED SHARE

OF THE DEPOSITS FOR ARBITRATOR COMPENSATION OR ADMINISTRATIVE CHARGES SHALL CONSTITUTE A WAIVER BY SUCH PARTY TO PRESENT EVIDENCE OR

CROSS-EXAMINE WITNESSES, BUT SUCH WAIVER SHALL NOT ALLOW FOR A DEFAULT JUDGMENT AGAINST THE NON-PAYING PARTY IN THE ABSENCE OF EVIDENCE AND LEGAL ARGUMENT AS THE ARBITRATOR MAY REQUIRE FOR MAKING AN AWARD. JUDGMENT MAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT.

Judicial Reference.
(a) The parties agree that any action or proceeding ϐiled ina court of the State of California in connection with any controversy, claim, or dispute arising out of or relating to this Agreement, or the breach, enforcement, interpretation, or validity thereof (collectively, a “Dispute”), shall be resolved through a general reference pursuant to California Code of Civil Procedure section 638. Upon the ϐiling of any such action or proceeding, the parties shall promptly request that the court order a general reference under section 638 to a single referee who is an active or retired judge, selected by mutual agreement of the parties or, if the parties cannot agree, appointedpursuant to California Code of Civil Procedure section 640. The referee shall hear and determine all issues of fact andlaw in the Dispute and shall issue a written statement of decision. The referee shall have authority to hear and determine all pretrial and post-trial matters, including discovery disputes and dispositive motions, and to award all legal and equitable relief available to the court with respect to the Dispute. The referee’s decision shall stand as the decision of the court and shall be entered as a ϐinal judgment, subject to appeal as provided by law.

Notwithstanding the foregoing, the court shall retain jurisdiction to hear and determine requests for temporary, emergency, or provisional relief, including temporary restraining orders,preliminary injunctions, protective orders, writs of possession, appointment of a receiver, and any other interim relief necessary to preserve the status quo or prevent irreparable harm, pending determination of the Dispute by the referee. (b) The parties shall use good faith efforts to agree upon a referee within ten (10) business days after service of a written notice invoking this section. If the parties do not agree within that time, either party may apply to the court for appointment pursuant to Code of Civil Procedure section 640. Unless otherwise ordered by the referee or the court, the parties shall share the referee’s fees and costs equally, subject to reallocation in the ϐinal decision or judgment as permitted by this Agreement or applicable law. Each party shall bear its own attorneys’ fees and costs except as otherwise provided in this Agreement or by applicable law.

If any portion of this section is determined to be unenforceable as to any Dispute, the remaining provisions shall remain in effect to the fullest extent permitted by law, and any Dispute not subject to reference shall be resolved by the court; to the extent a jury trial would otherwise be available for such Dispute, the parties waive jury trial to the fullest extent permitted by law

22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE

BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

Buyer'sIniƟals Seller'sIniƟals

23. Miscellaneous.

23.1 Binding Effect. This Agreementshall be binding on the ParƟes without regard to whether or not paragraphs 21 and 22 are iniƟaled by both of the ParƟes.

Paragraphs 21 and 22 are each incorporated into this Agreement only if iniƟaled by both ParƟes at the Ɵme that the Agreement is executed. Signatures to this Agreement accomplished by means of electronic signature orsimilar technology shall be legal and binding.

23.2 Applicable Law. This Agreementshall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property islocated.

Any liƟgaƟon or arbitraƟon between the ParƟes hereto concerning this Agreement shall be iniƟated in the county in which the Property islocated.

23.3 Time of Essence. Time is of the essence of this Agreement.

23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together WA
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shall consƟtute one and the same instrument. Escrow Holder, aŌer verifying that the counterparts are idenƟcal except for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then consƟtute the Agreement.

23.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

23.6 Conflict. Any conflict between the printed provisions of this Agreement and the typewriƩen or handwriƩen provisionsshall be controlled by the typewriƩen or handwriƩen provisions. Seller and Buyer must iniƟal any and all handwriƩen provisions.

23.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to parƟcipate in a 1031 exchange. Any party iniƟaƟng an exchange shall bear all costs of such exchange. The cooperaƟng Party shall not have any liability (special or otherwise) for damages to the exchanging Party in the event that the sale is delayed and/or that the sale otherwise fails to qualify as a 1031 exchange.

23.8 Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days.

24. Disclosures Regarding the Nature of a Real Estate Agency RelaƟonship.

24.1 The ParƟes and Brokers agree that their relaƟonship(s) shall be governed by the principles set forth in the applicable secƟons of the California Civil Code, as summarized in paragraph 24.2.

24.2 When entering into a discussion with a real estate agent regarding a real estate transacƟon, a Buyer or Seller should from the outset understand what type of agency relaƟonship or representaƟon it has with the agent or agentsin the transacƟon. Buyer and Seller acknowledge being advised by the Brokersin this transacƟon, as follows:
(a) Seller's Agent. A Seller's agent under a lisƟng agreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent hasthe following affirmaƟve obligaƟons: (1) To the Seller: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duƟes. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the ParƟes. An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes set forth above.
(b) Buyer's Agent. A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situaƟons, the agent is not the Seller's agent, even if by agreement the agent may receive compensaƟon for services rendered, either in full orin part from the Seller. An agent acƟng only for a Buyer has the following affirmaƟve obligaƟons. (1) To the Buyer: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duƟes. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the ParƟes. An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes set forth above.
(c) Agent RepresenƟng Both Seller and Buyer. A real estate agent, either acƟng directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transacƟon, but only with the knowledge and consent of both the Seller and the Buyer. (1) In a dual agency situaƟon, the agent has the following affirmaƟve obligaƟons to both the Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Seller or the Buyer. b. Other duƟes to the Seller and the Buyer as stated above in their respecƟve secƟons (a) or (b) of this paragraph 24.2. (2) In represenƟng both Seller and Buyer, the agent may not, without the express permission of the respecƟve Party, disclose to the other Party confidenƟal informaƟon, including, but not limited to, facts relaƟng to either Buyer's or Seller's financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, including Seller's willingness to accept a price less than the lisƟng price or Buyer's willingnessto pay a price greater than the price offered. (3) The above duƟes of the agent in a real estate transacƟon do not relieve a Seller or Buyer from the responsibility to protect their own interests. Buyer and Seller should carefully read all agreementsto assure that they adequately express their understanding of the transacƟon. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Buyer hasthe duty to exercise reasonable care to protect Buyer, including asto those facts about the Property which are known to Buyer or within Buyer's diligent aƩenƟon and observaƟon. Both Seller and Buyer should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transacƟon can be complex and subject to change. (d) Further Disclosures. Throughout this transacƟon Buyer and Seller may receive more than one disclosure, depending upon the number of agents assisƟng in the transacƟon. Buyer and Seller should each read its contents each Ɵme it is presented, considering the relaƟonship between them and the real estate agent in thistransacƟon and that disclosure. Buyer and Seller each acknowledge receipt of a disclosure of the possibility of mulƟple representaƟon by the Broker represenƟng that principal. This disclosure may be part of a lisƟng agreement, buyer representaƟon agreement or separate document. Buyer understands that Broker represenƟng Buyer may also represent other potenƟal buyers, who may consider, make offers on or ulƟmately acquire the Property. Seller understands that Broker represenƟng Seller may also represent other sellers with compeƟng properƟes that may be of interest to this Buyer. Brokers have no responsibility with respect to any default or breach hereof by either Party. The ParƟes agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relaƟng to thistransacƟon may be brought against Broker more than one year aŌer the Date of Agreement and that the liability (including court costs and aƩorneys' fees), of any Broker with respect to any breach of duty, error or omission relaƟng to this Agreementshall not exceed the fee received by such Broker pursuant to this Agreement; provided, however, that the foregoing limitaƟon on each Broker'sliability shall not be applicable to any gross negligence or willful misconduct of such Broker.

24.3 ConfidenƟal InformaƟon. Buyer and Seller agree to idenƟfy to Brokers as "ConfidenƟal" any communicaƟon or informaƟon given Brokers that is considered by such Party to be confidenƟal.

25. ConstrucƟon of Agreement. In construing this Agreement, all headings and Ɵtles are for the convenience of the ParƟes only and shall not be considered a part of this Agreement. Whenever required by the context, the singular shall include the plural and vice versa. This Agreement shall not be construed as if prepared by one of the ParƟes, but rather according to its fair meaning as a whole, asif both ParƟes had prepared it.

26. AddiƟonal Provisions.

AddiƟonal provisions of this offer, if any, are as follows or are aƩached hereto by an addendum or addenda consisƟng of paragraphs 28 through 34 . (If there are no addiƟonal provisions write "NONE".) See Addendum attached hereto.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX WA
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CONSEQUENCES OF THIS AGREEMENT OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT.

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PROPERTY FOR BUYER'S INTENDED USE.

WARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.

NOTE:

1. THIS FORM IS NOT FOR USE IN CONNECTION WITH THE SALE OF RESIDENTIAL PROPERTY.

2. IF EITHER PARTY IS A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE OFFICERS.

The undersigned Buyer offers and agreesto buy the Property on the terms and condiƟons stated and acknowledges receipt of a copy hereof.

BROKER
AƩn:

Title:

Address:

Phone:

Fax:

Email:

Federal ID No.:

Broker DRE License #:

Agent DRE License #:

Date:

BUYER
City of Shafter or assignee
By:

Name Printed:

Title:

Phone:

Fax:

Email:

By:

Name Printed:

Title:

Phone:

Fax:

Email:

Address:

Federal ID No.:

27. Acceptance.

27.1 Seller accepts the foregoing offer to purchase the Property and hereby agreesto sell the Property to Buyer on the terms and condiƟons therein specified.

27.2 In consideraƟon of real estate brokerage service rendered by Brokers, Seller agreesto pay Brokers a real estate Brokerage Fee in a sum equal to

5.0 % of the Purchase Price. to be divided between the Brokers as follows: Seller's Broker % and Buyer's Broker %. This Agreement shall serve as an irrevocable instrucƟon to Escrow Holder to pay such Brokerage Fee to Brokers out of the proceeds accruing to the account of Seller at the Closing.

27.3 Seller acknowledges receipt of a copy hereof and authorizes Brokers to deliver a signed copy to Buyer.

NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT.

BROKER
Cushman & Wakefield U.S., Inc.

AƩn: Coby Vance
Title: Senior Director
Address: 5060 California Ave., Suite 1000,
Bakersfield, CA 93309
Phone: (661)203-4400
Fax:

Email: [email protected]
Date:

SELLER
Quantum Land, LLC, a California limited
liability company
By:

Name Printed: Kathy Keyes
Title: Managing Member
Phone:

Fax:

Email:

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Broker DRE License #: 01880493
Agent's DRE License #: 01449929
By:

Name Printed: William P. Altmiller
Title: Managing Member
Phone:

Fax:

Email:

By: _________________________________________________________________ Name Printed: William A. Altmiller
By: _________________________________________________________________ Name Printed: Michael Keyes
Address:

Federal ID No.:

AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.

WA
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William Altmiller
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17236.01000\44669631.1

ADDENDUM TO STANDARD OFFER, AGREEMENT AND ESCROW

INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
THIS ADDENDUM (“Addendum”) supplements and, to the extent of any inconsistency, supersedes the provisions of that certain, Standard Offer, Agreement and Escrow Instructions For Purchase of Real Estate (“Agreement”) between the undersigned Buyer and Seller dated as of , 2026, as follows:

The AIR Commercial Real Estate Association Standard Offer and this Addendum shall be effective as of the date, following all legally required notices and hearings, this Agreement has been approved by Buyer’s governing body or its delegated representative and signed by all Parties.

28. Delivery Condition. Buyer purchases the Property AS IS, WHERE IS, subject to Seller’s representations, warranties, covenants, and required deliveries under the Agreement (including title and vacant possession at Closing), and no claim for fraud is waived. Seller shall leave all items on the Property as of the Effective Date at no cost. This Section controls over Section 2.5 to the extent of conflict.

29. City Approval. Buyer shall have 45 days from the full execution of the Agreement to (i) receive approval for Buyer’s intended use of the Property, (ii) obtain all necessary approvals from relevant governmental agencies, including making findings consistent with the City’s General Plan and (iii) obtain formal approval of the purchase, including authorization to proceed, by the Shafter City Council. The Agreement shall be contingent upon such City Council approval.

Buyer shall have no obligation to perform or close escrow unless and until the City Council of the City of Shafter has duly approved this Agreement and authorized the acquisition at a public meeting.

30. Closing Costs. Buyer, as a public agency, is exempt from payment of documentary transfer taxes and recording fees pursuant to California Revenue & Taxation Code § 11922. Seller shall pay the premium for the owner’s standard coverage title insurance policy. Each Party shall pay its customary share of escrow fees. Any provision requiring “net to Seller” or shifting all costs to Buyer is deleted.

31. Escrow Instructions. Escrow Holder shall not prepare, amend or modify any escrow instructions relating to this transaction without the prior written approval of the City Attorney or other authorized representative of the City of Shafter.

32. Brokerage. Buyer has not engaged any broker or agent in connection with this transaction. No broker’s commission shall be payable by Buyer. Any brokerage fees shall be the sole responsibility of Seller unless expressly approved by the City Council of the City of Shafter.

33. Non-Appropriation. Buyer’s obligations under the Agreement are subject to the lawful appropriation of funds by the City Council of the City of Shafter.

34. Property Taxes and Assessments. Buyer is a public agency and is exempt from payment of real property taxes. Prior to Close of Escrow, Escrow Holder and the Title Company shall confirm with Kern County that no escaped assessments or other property tax liabilities affect the Property. In the event any such liabilities exist, Seller authorizes the satisfaction of such Feb 23, 2026 Page 312 of 328
17236.01000\44669631.1
2 liabilities from funds otherwise payable to Seller at Close of Escrow. If any pre-Closing tax liabilities are later assessed, Seller shall promptly satisfy them or reimburse Buyer within thirty (30) days of demand, together with interest at the maximum legal rate from the date of Buyer’s payment.

IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date above.

BUYER:

City of Shafter, a California municipal corporation
By: _____________________________
Lance Lippincott, City Manager
SELLER:

Quantum Land, LLC, a California Limited Liability Company By: _____________________________
Name: Kathy Keyes
Its: __________Managing Member_______
By: ________________________________
Name: William P. Altmiller ______
Its: __________Managing Member_______
By: ________________________________
Name: William A. Altmiller
Its: __________ Member________________
By: ________________________________
Name: Michael Keyes
Its: __________ Member________________
William Altmiller (Feb 23, 2026 14:37:45 PST)
William Altmiller
Michael
Michael Keyes (Feb 24, 2026Keyes 12:57:34 CST)
Kathy (Feb 24, 2026 11:14:21 PST)
William A Altmiller (Feb 25, 2026 11:43:33 PST)
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INITIALS INITIALS
© 2019 AIR CRE. All Rights Reserved. Last Edited: 2/23/2026 2:03 PM AD-3.11, Revised 12-31-2024 Page 1 of 4
When you enter into a discussion with a real estate agent regarding a real estate transacƟon, you should from the outset understand what type of agency relaƟonship or representaƟon you wish to have with the agent in the transacƟon.

A Seller's agent under a lisƟng agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmaƟve obligaƟons:

To the Seller: A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Seller.

To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance of the agent's duƟes. (b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the parƟes.

An agent is not obligated to reveal to either party any confidenƟal informaƟon obtained from the other party that does not involve the affirmaƟve duƟesset forth above.

A Buyer's agent can, with a Buyer's consent, agree to act as agent for the Buyer only. This includes a Buyer's agent under a buyer-broker representaƟon agreement with the Buyer. In these situaƟons, the agent is not the Seller's agent, even if by agreement the agent may receive compensaƟon for servicesrendered, either in full or in part from the Seller. An agent acƟng only for a Buyer hasthe following affirmaƟve obligaƟons:

To the Buyer: A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer.

An agent is not obligated to reveal to either party any confidenƟal informaƟon obtained from the other party that does not involve the affirmaƟve duƟesset forth above.

A real estate agent, either acƟng directly or through one or more salesperson and broker associates, can legally be the agent of both the Seller and the Buyer in a transacƟon, but only with the knowledge and consent of both the Seller and the Buyer.

In a dual agency situaƟon, the agent hasthe following affirmaƟve obligaƟonsto both the Seller and the Buyer:
(a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duƟes to the Seller and the Buyer as stated above in their respecƟve secƟons.

In represenƟng both Seller and Buyer, a dual agent may not, without the express permission of the respecƟve party, disclose to the other party confidenƟal informaƟon, including, but not limited to, facts relaƟng to either the Buyer's or Seller's financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, including the Seller's willingness to accept a price less than the lisƟng price or the Buyer's willingness to pay a price greater than the price offered.

Either the purchase agreement or a separate document will contain a confirmaƟon of which agent is represenƟng you and whether that agent isrepresenƟng you exclusively in the transacƟon or acƟng as a dual agent. Please pay aƩenƟon to that confirmaƟon to make sure it accurately reflects your understanding of your agent's role. The above duƟes of the agent in a real estate transacƟon do not relieve a Seller or Buyer from the responsibility to protect their own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transacƟon. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. If you are a Buyer, you have the duty to exercise reasonable care to protect yourself, including as to those facts about the property which are known to you or within your diligent aƩenƟon and observaƟon. Both Sellers and Buyers should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transacƟon can be complex and subject to change.

Throughout your real property transacƟon you may receive more than one disclosure form, depending upon the number of agents assisƟng in the transacƟon. The law requires each agent with whom you have more than a casual relaƟonship to present you with this disclosure form. You should read its contents each Ɵme it is presented to you, considering the relaƟonship between you and the real estate agent in your specific transacƟon. This disclosure form includesthe provisions of SecƟons 2079.13 to 2079.24, inclusive, of the Civil Code set forth on page 2. Read it carefully. I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTED ON THE BACK (OR A SEPARATE PAGE).

Buyer
Buyer
Agent: Cushman & Wakefield U.S., Inc. DRE Lic. #: 01880493 Real Estate Broker (Firm)
By:
(Salesperson or Broker-Associate)

DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP
(Asrequired by the Civil Code)

SELLER'S AGENT

BUYER'S AGENT

AGENT REPRESENTING BOTH SELLER AND BUYER

SELLER AND BUYER RESPONSIBILITIES
Seller Lessor Lessee Date:

Seller Lessor Lessee Date:

DRE Lic. #: 01449929 Date: 2/23/2026
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William Altmiller Feb 23, 2026
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© 2019 AIR CRE. All Rights Reserved. Last Edited: 2/23/2026 2:03 PM AD-3.11, Revised 12-31-2024 Page 2 of 4
THIS FORM HAS BEEN PREPARED BY AIR CRE. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF THIS FORM FOR ANY SPECIFIC TRANSACTION. PLEASE SEEK LEGAL COUNSEL AS TO THE APPROPRIATENESS OF THIS FORM.

AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.

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DISCLOSURE REGARDINGREAL ESTATE AGENCY RELATIONSHIP
CIVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ONTHE FRONT) 2079.13. As used in thissecƟon and SecƟons 2079.7 and 2079.14 to 2079.24, inclusive, the following terms have the following meanings:
(a) “Agent” means a person acƟng under provisions of Title 9 (commencing with SecƟon 2295) in a real property transacƟon, and includes a person who is licensed as a real estate broker under Chapter 3 (commencing with SecƟon 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a lisƟng is executed or an offer to purchase is obtained. The agent in the real property transacƟon bears responsibility for that agent's salespersons or broker associates who perform as agents of the agent. When a salesperson or broker associate owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transacƟon, that duty is equivalent to the duty owed to that party by the broker for whom the salesperson or broker associate funcƟons. (b) “Buyer” means a transferee in a real property transacƟon, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the services of an agent in more than a casual, transitory, or preliminary manner, with the object of entering into a real property transacƟon. “Buyer” includes vendee or lessee of real property. (c) “Commercial real property” means all real property in the state, except (1) single-family residenƟal real property, (2) dwelling units made subject to Chapter 2 (commencing with SecƟon 1940) of Title 5, (3) a mobile home, as defined in SecƟon 798.3, (4) vacant land, or (5) a recreaƟonal vehicle, as defined in SecƟon 799.29. (d) “Dual agent” means an agent acƟng, either directly or through a salesperson or broker associate, as agent for both the seller and the buyer in a real property transacƟon. (e) “LisƟng agreement” means a wriƩen contract between a seller of real property and an agent, by which the agent has been authorized to sell the real property or to find or obtain a buyer, including rendering other servicesfor which a real estate license isrequired to the seller pursuant to the terms of the agreement. (f) “Seller's agent” means a person who has obtained a lisƟng of real property to act as an agent for compensaƟon. (g) “LisƟng price” is the amount expressed in dollars specified in the lisƟng for which the seller is willing to sell the real property through the seller's agent. (h) “Offering price” is the amount expressed in dollars specified in an offer to purchase for which the buyer is willing to buy the real property. (i) “Offer to purchase” means a wriƩen contract executed by a buyer acƟng through a buyer's agent that becomes the contract for the sale of the real property upon acceptance by the seller. (j) “Real property” means any estate specified by subdivision (1) or (2) of SecƟon 761 in property, and includes (1) single-family residenƟal property, (2) mulƟ-unit residenƟal property with more than four dwelling units, (3) commercial real property, (4) vacant land, (5) a ground lease coupled with improvements, or (6) a manufactured home as defined in SecƟon 18007 of the Health and Safety Code, or a mobile home as defined in SecƟon 18008 of the Health and Safety Code, when offered for sale or sold through an agent pursuant to the authority contained in SecƟon 10131.6 of the Business and Professions Code. (k) “Real property transacƟon” means a transacƟon for the sale of real property in which an agent is retained by a buyer, seller, or both a buyer and seller to act in that transacƟon, and includes a lisƟng or an offer to purchase. (l) “Single-family residenƟal property” or “single-family residenƟal real property” means any of the following: (1) Real property improved with one to four dwelling units, including a leasehold exceeding one year's duraƟon. (2) A unit in a residenƟal stock cooperaƟve, condominium, or planned unit development. (3) A mobilehome or manufactured home when offered forsale or sold through a real estate broker pursuant to SecƟon 10131.6 of the Business and Professions Code. (m) “Sell,” “sale,” or “sold” refersto a transacƟon for the transfer of real property from the seller to the buyer and includes exchanges of real property between the seller and buyer, transacƟons for the creaƟon of a real property sales contract within the meaning of SecƟon 2985, and transacƟons for the creaƟon of a leasehold exceeding one year's duraƟon. (n) “Seller” means the transferor in a real property transacƟon and includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which they are the owner from an agent on behalf of another. “Seller” includes both a vendor and a lessor of real property. (o) “Buyer's agent” means an agent who represents a buyer in a real property transacƟon. (p) “buyer-broker representaƟon agreement” means a wriƩen contract between a buyer of real property and a buyer's agent by which the buyer's agent has been authorized by the buyer to provide services set forth in subdivision (a) of SecƟon 10131 of the Business and Professions Code for or on behalf of the buyer for which a real estate license is required pursuant to the terms of the contract.
2079.14. (a) A copy of the disclosure form specified in SecƟon 2079.16 shall be provided in a real property transacƟon as follows: (1) The seller's agent, if any, shall provide the disclosure form to the seller before entering into the lisƟng agreement. (2) The buyer's agent shall provide the disclosure form to the buyer as soon as pracƟcable before execuƟon of a buyer-broker representaƟon agreement and execuƟon of the buyer's offer to purchase. If the offer to purchase is not prepared by the buyer's agent, the buyer's agent shall present the disclosure form to the buyer not later than the next business day aŌer receiving the offer to purchase from the buyer. (b) The agent providing the disclosure form specified in SecƟon 2079.16 shall obtain a signed acknowledgment of receipt from the buyer or seller except as provided in SecƟon 2079.15.
2079.15. In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to SecƟon 2079.14, the agent shall set forth, sign, and date a wriƩen declaraƟon of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form.
2079.17(a) As soon as pracƟcable, the buyer's agent shall disclose to the buyer and seller whether the agent is acƟng in the real property transacƟon as the buyer's agent, or as a dual agent represenƟng both the buyer and the seller. This relaƟonship shall be confirmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller, the buyer, and the buyer's agent prior to or coincident with execuƟon of that contract by the buyer and the seller, respecƟvely. (b) As soon as pracƟcable, the seller's agent shall disclose to the seller whether the seller's agent is acƟng in the real property transacƟon as the seller's agent, or as a dual agent represenƟng both the buyer and seller. This relaƟonship shall be confirmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller and the seller's agent prior to or coincident with the execuƟon of that contract by the seller. (C) CONFIRMATION: The following agency relaƟonships are confirmed for thistransacƟon.

Seller's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):  the seller; or  both the buyer and seller. (dual agent) Seller's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):  the Seller's Agent. (salesperson or broker associate); or  both the Buyer's Agent and the Seller's Agent. (dual agent) Buyer's Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one):  the buyer; or  both the buyer and seller. (dual agent) Buyer's Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one):  the Buyer's Agent. (salesperson or broker associate); or  both the Buyer's Agent and the Seller's Agent. (dual agent) (d) The disclosures and confirmaƟon required by thissecƟon shall be in addiƟon to the disclosure required by SecƟon 2079.14. An agent's duty to provide disclosure and confirmaƟon of representaƟon in thissecƟon may be performed by a real estate salesperson or broker associate affiliated with that broker. 2079.18 (Repealed pursuant to AB-1289, 2017-18 California LegislaƟve session) 2079.19 The payment of compensaƟon or the obligaƟon to pay compensaƟon to an agent by the seller or buyer is not necessarily determinaƟve of a parƟcular agency relaƟonship between an agent and the seller or buyer. A lisƟng agent and a selling agent may agree to share any compensaƟon or commission paid, or any right to any WA
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compensaƟon or commission for which an obligaƟon arises as the result of a real estate transacƟon, and the terms of any such agreement shall not necessarily be determinaƟve of a parƟcular relaƟonship.
2079.20 Nothing in this arƟcle prevents an agent from selecƟng, as a condiƟon of the agent's employment, a specific form of agency relaƟonship not specifically prohibited by this arƟcle if the requirements of SecƟon 2079.14 and SecƟon 2079.17 are complied with. 2079.21 (a) A dual agent may not, without the express permission of the seller, disclose to the buyer any confidenƟal informaƟon obtained from the seller. (b) A dual agent may not, without the express permission of the buyer, disclose to the seller any confidenƟal informaƟon obtained from the buyer. (c) “ConfidenƟal informaƟon” meansfacts relaƟng to the client's financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, such as the selleris willing to accept a price lessthan the lisƟng price or the buyer is willing to pay a price greater than the price offered. (d) ThissecƟon does not alter in any way the duty or responsibility of a dual agent to any principal with respect to confidenƟal informaƟon other than price. 2079.22 Nothing in this arƟcle precludes a seller's agent from also being a buyer's agent. If a seller or buyer in a transacƟon chooses to not be represented by an agent, that does not, of itself, make that agent a dual agent. 2079.23 (a) A contract between the principal and agent may be modified or altered to change the agency relaƟonship at any Ɵme before the performance of the act which is the object of the agency with the wriƩen consent of the parƟes to the agency relaƟonship. (b) A lender or an aucƟon company retained by a lender to control aspects of a transacƟon of real property subject to this part, including validaƟng the sales price, shall not require, as a condiƟon of receiving the lender's approval of the transacƟon, the homeowner or lisƟng agent to defend or indemnify the lender or aucƟon company from any liability alleged to result from the acƟons of the lender or aucƟon company. Any clause, provision, covenant, or agreement purporƟng to impose an obligaƟon to defend or indemnify a lender or an aucƟon company in violaƟon of thissubdivision is against public policy, void, and unenforceable. 2079.24 Nothing in this arƟcle shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees,subagents, and employees or to relieve agents and their associate licensees, subagents, and employeesfrom liability for their conduct in connecƟon with acts governed by this arƟcle or for any breach of a fiduciary duty or a duty of disclosure.

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SELLER'S MANDATORY DISCLOSURE STATEMENT
(DO NOTUSE IN SALE OF RESIDENTIAL PROPERTIES WITH 1-4 UNITS) This Seller's Mandatory Disclosure Statement ("Disclosure") is made pursuant to the requirements of and shall be a part of the STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (See paragraph 9.1(a) thereof) or (the "Purchase Agreement") dated for reference purposes as of , regarding that certain real property commonly known as (street address, city, state, zip): 1351 E. Ash Avenue, Shafter, CA 93263 ("Property") wherein Quantum Land, LLC, a California limited liability company isthe Seller and City of Shafter or assignee isthe Buyer. Note: This Disclosure does not replace the Property InformaƟon Sheet published by AIR CRE ("AIR") and, unless not required by the Purchase Agreement, Seller should also provide Buyer the Property InformaƟon Sheet.

1. NATURAL HAZARDS DISCLOSURES. To make the disclosures required by California Government Code SecƟon 8589.3 (a special flood hazard area), California Government Code SecƟon 8589.4 (dam failure inundaƟon area), California Government Code SecƟons 51178 or 51179, and 51182 (very high fire hazard severity zone), California Public Resources Code SecƟons 4125, 4142 and 4291 (wildlands fire area), California Public Resources Code SecƟon 2622 (earthquake fault zone), and California Public Resources Code SecƟon 2696 (seismic hazard zone) ("Natural Hazards Disclosures"), Seller provides Buyer a natural hazards report ("Natural Hazards Report") prepared by:
myNHD Inc., 800-814-2922, , or , , and the Natural Hazards Report is aƩached.

2. EARTHQUAKE SAFETY. If the improvements on the Property were constructed prior to 1975 and include structures with either (i) pre-cast (e.g., Ɵlt-up) concrete or reinforced masonry walls together with wood frame floors or roofs, or (ii) unreinforced masonry walls, then California Business & Professions Code §10147; Government Code §§8875.6, 8875.9, 8893.2, and 8893.3; and California Civil Code §2079.9 require Seller to provide Buyer a copy of The Commercial Property Owner's Guide to Earthquake Safety (the "Booklet") published by the California Seismic Safety Commission, available through the following link:
. Seller is not required to provide the Booklet to Buyer. Seller isrequired to provide the Booklet to Buyer, which Booklet Seller is hereby providing to Buyer.

3. FLOOD DISASTER INSURANCE. If Seller or Seller's predecessor-in-interest has previously received Federal flood disaster assistance and such assistance was condiƟoned upon obtaining and maintaining flood insurance on the Property, Federal law, i.e., 42 U.S.C. §5154a, mandatesthat prospecƟve purchasers be advised that they will be required to obtain and maintain such insurance on the Property and that if such insurance is not maintained and the Property is thereaŌer damaged by a flood disaster, the purchaser may be required to reimburse the Federal Government for the disaster relief provided. Buyer is hereby informed that to the best of Seller's knowledge, Federal flood disaster assistance has or has not been previously received with regard to the Property. Note: if such disaster assistance has been received, the law specifies that the required noƟce be "contained in documents evidencing the transfer of ownership".

4. WATER HEATER BRACING. The Property does or does not contain one or more water heaters of 120 gallons or less. If the Property does contain one or more water heaters of 120 gallons or less, then as required by California Health and Safety Code §19211, Seller hereby cerƟfies to Buyer that all such water heaters have or have not been braced, strapped and/or anchored in accordance with law.

5. TITLE INSURANCE. If the Purchase Agreement does not provide that Buyer will be provided with Ɵtle insurance, Buyer isstrongly urged to consider purchasing Ɵtle insurance. In accordance with California Civil Code §1057.6, Buyer is advised as follows:

6. METHAMPHETAMINE LABORATORY ACTIVITY. As required by California Health and Safety Code §25400.28, Seller noƟfies Buyer that a government order idenƟfying the Property as contaminated by methamphetamine laboratory acƟvity has been received by Seller (copy of such order is aƩached), or has not been received by Seller.

7. HAZARDOUS SUBSTANCES. If the Property is non-residenƟal property, then asrequired by California Health and Safety Code §78700 Seller noƟfies Buyer that:

Seller neither knows nor has reasonable cause to believe that any release of hazardous substance (as such terms are defined by California Health and Safety Code §§25320 and 25316) has come to be located on or beneath the Property, or Seller knows or has reasonable cause to believe that a release of hazardous substance has come to be located on or beneath the Property.

8. WATER CONSERVING PLUMBING FIXTURES. For mulƟ-family residenƟal (containing more than one unit) and commercial properƟes built before January 1, 1994:

California Civil Code §1101.5 requires all noncompliant plumbing fixtures to be replaced before January 1, 2019 with water-conserving plumbing fixtures. As required by California Civil Code §1101.5(e), Seller discloses that the Property was built aŌer January 1, 1994 and is exempt from this statute; does include noncompliant plumbing fixtures; or does not include any noncompliant plumbing fixtures.

9. DEATH ON THE PROPERTY. Asrequired by California Civil Code §1710.2, Seller does or does not know of the death on the Property of an occupant of the Property in the three years before the date of Buyer's offer to purchase the Property per the Purchase Agreement. hƩps://www.myNHD.com
hƩps://ssc.ca.gov/forms_pubs/cog
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10. OTHER. Sellers make no representations or warranties for the Property.

Seller believes the informaƟon provided in this Disclosure by Selleris true and correct to the best knowledge of Seller as of the date of this Disclosure, but Seller states that Seller has exercised good faith in the selecƟon of a Natural Hazards Expert, Seller has not independently verified, and Seller is not obligated to verify, the informaƟon contained in the Natural Hazards Report, and makes no representaƟon or warranty as to the truth or accuracy of any informaƟon contained in the Natural Hazards Report. Buyer agreesthe Natural Hazards Report saƟsfies Seller's legal duty to make the Natural Hazards Disclosures, the provider of the Natural Hazards Report shall be deemed to be an expert dealing with maƩers within the scope of its experƟse with respect to the examinaƟon and wriƩen report regarding the Natural Hazards Disclosures, and California Civil Code §1103.4 which deals with a seller's non-liability for errors and/or omissions not within such seller's personal knowledge shall be deemed to apply to Seller.

The hazards referenced in this Disclosure may limit the ability of the owner of the Property to develop the Property, to obtain insurance, or to receive assistance aŌer a disaster. The maps on which the Natural Hazards Report are based esƟmate where natural hazards exist and are not definiƟve indicators of whether or not a property will be affected by a natural disaster. Buyer is advised to obtain professional advice regarding those hazards and other hazards that may affect the Property.

Applicable laws and the areas covered by the various natural hazard zones, etc. may change. Sellershall not be required to noƟfy Buyer if the informaƟon provided in the Natural Hazards Report becomesinaccurate as a result of any governmental acƟon, map revision, changed informaƟon, or other act or occurrence, unless Seller has actual knowledge that the informaƟon has become inaccurate. Prior to the close of escrow, Buyer may wish to again check the status of the Property. Also, Buyer is advised to verify with appropriate local governmental agencies, such as the city and/or county in which the Property islocated, to determine if they have established natural hazard zones in addiƟon to those listed above. Signaturesto this Disclosure accomplished by means of electronic signature or similar technology shall be legal and binding. This Disclosure may be executed in counterparts.

The statements herein are not intended to be full or complete disclosure of all possible impacts on Buyer and/or the Property. If a maƩer is disclosed regarding the Property, Buyer is advised to:

1. Review the enƟrety of all laws applicable to such disclosed maƩer.

2. Seek advice of counsel asto the legal consequence of any disclosed maƩers.

3. Retain appropriate consultants to review and invesƟgate the impact of allsuch disclosed maƩers.

Neither AIR CRE nor any of the brokers make any representaƟon, warranty or recommendaƟon regarding the legalsufficiency, legal effect or any other consequences of this Disclosure.

Date:

SELLER
Quantum Land, LLC, a California limited
liability company
By:

Name Printed: Kathy Keyes
Title: Managing Member
By: ___________________________________________________________________ Name Printed: William P. Altmiller
Title: Managing Member
By: ___________________________________________________________________ Name Printed: William A. Altmiller
By: ___________________________________________________________________ Name Printed: Michael Keyes
Buyer acknowledges receipt of this Disclosure together with the Natural Hazards Report, the Booklet and any other documents referenced herein (as applicable) as being provided to Buyer, and agrees to the above terms and condiƟons.

Date:

BUYER
City of Shafter or assignee
By:

Name Printed:

Title:

AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.

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PROPERTY INFORMATION SHEET
(For the sale or leasing of non-residenƟal properƟes)
PREFACE:

Purpose: This Statement is NOT a warranty as to the actual condiƟon of the Property/Premises. The purpose is, instead, to provide the brokers and the potenƟal buyer/lessee with important informaƟon about the Property/Premises which is currently in the actual knowledge of the Owner and which the Owner is required by law to disclose.

Actual Knowledge: For purposes of this Statement the phrase 'actual knowledge' means: the awareness of a fact, or the awareness ofsufficient informaƟon and circumstancesso as to cause one to believe that a certain situaƟon or condiƟon probably exists.

TO WHOM IT MAY CONCERN:

Quantum Land, LLC, a California limited liability company ("Owner"), owns the Property/Premises commonly known as (street address, city, state, zip) 1351 E. Ash Avenue, Shafter, CA 93263 located in the County of Kern , and generally described as(describe briefly the nature of the Premises or Property) approximately 18,950sf of building space on an approximately 4.73 acre parcel (hereinaŌer "Property"), and cerƟfies that:

1. Material Physical Defects. Owner has no actual knowledge of any material physical defects in the Property or any improvements and structures thereon, including, but not limited to the roof, except (if there are no excepƟons write "NONE"): .

2. Equipment.

A. Owner has no actual knowledge that the heaƟng, venƟlaƟng, air condiƟoning, plumbing, loading doors, electrical and lighƟng systems, life safety systems, security systems and mechanical equipment exisƟng on the Property as of the date hereof, if any, are not in good operaƟng order and condiƟon, except (if there are no excepƟons write "NONE"): .

B. Owner has no actual knowledge of any leases, financing agreements, liens or other agreements affecƟng any equipment which is being included with the Property, except (if there are no excepƟons write "NONE"): .

3. Soil CondiƟons. Owner has no actual knowledge that the Property has any slipping, sliding, seƩling, flooding, ponding or any other grading, drainage or soil problems, except (if there are no excepƟons write "NONE"): .

4. UƟliƟes. Owner represents and warrantsthat the Property isserved by the following uƟliƟes (check the appropriate boxes) public sewer system and the cost of installaƟon thereof has been fully paid, private sepƟc system, electricity, natural gas, domesƟc water, telephone, and other:
.

5. Insurance. Owner has no actual knowledge of any insurance claims filed regarding the Property during the preceding 3 years, except (if there are no excepƟons write "NONE"): .

6. Compliance With Laws. Owner has no actual knowledge of any aspect or condiƟon of the Property which violates applicable laws, rules, regulaƟons, codes, or covenants, condiƟons or restricƟons, or of improvements or alteraƟons made to the Property without a permit where one was required, or of any unfulfilled order or direcƟve of any applicable government agency or of any casualty insurance company that any work of invesƟgaƟon, remediaƟon, repair, maintenance or improvement isto be performed on the Property, except (if there are no excepƟons write "NONE"): .

7. Hazardous Substances and Mold.

A. Owner has no actual knowledge of the Property ever having been used as a waste dump, of the past or present existence of any above or below ground storage tanks on the Property, or of the current existence on the Property of asbestos, transformers containing PCB's or any hazardous, toxic or infecƟous substance whose nature and/or quanƟty of existence, use, manufacture or effect, render itsubject to Federal, state or local regulaƟon, invesƟgaƟon, remediaƟon or removal as potenƟally injurious to public health or welfare, except (if there are no excepƟons write "NONE"): .

B. Owner represents and warrantsthat it is not currently, and never has been engaged in the business of hauling waste, and never stored hazardous substances on the Property, except (if there are no excepƟons write "NONE"): .

C. Owner has no actual knowledge of the existence on the Property of hazardous levels of any mold or fungi defined astoxic under applicable state or Federal law, except (if there are no excepƟons write "NONE"): .

8. Fire Damage. Owner has no actual knowledge of any structure on the Property having suffered material fire damage, except (if there are no excepƟons write "NONE"): .

9. AcƟons, Suits or Proceedings. Owner has no actual knowledge that any acƟons, suits or proceedings are pending or threatened before any court, arbitraƟon tribunal, governmental department, commission, board, bureau, agency or instrumentality that would affect the Property or the right or ability of an owner or tenant to convey, occupy or uƟlize the Property, except (if there are no excepƟons write "NONE"): .

Owner has not served any NoƟces of Default on any of the tenants of the Property which have not been resolved except (if there are no excepƟons write "NONE"):
.

10. Governmental Proceedings. Owner has no actual knowledge of any exisƟng or contemplated condemnaƟon, environmental, zoning, redevelopment agency WA
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plan or other land use regulaƟon proceedings which could detrimentally affect the value, use and operaƟon of the Property, except (if there are no excepƟons write "NONE"): .

11. Unrecorded Title MaƩers. Owner has no actual knowledge of any encumbrances, covenants, condiƟons, restricƟons, easements, licenses, liens, charges or other maƩers which affect the Ɵtle of the Property that are not recorded in the official records of the county recorder where the Property is located, except (if there are no excepƟons write "NONE"): NONE .

12. Leases. Owner has no actual knowledge of any leases, subleases or other tenancy agreements affecƟng the Property, except (if there are no excepƟons write "NONE"): .

13. OpƟons. Owner has no actual knowledge of any opƟons to purchase, rights of first refusal, rights of first offer or other similar agreements affecƟng the Property, except (if there are no excepƟons write "NONE"): .

14. Short Sale/Foreclosure. The ability of the Owner to complete a sale of the Property is conƟngent is not conƟngent upon obtaining the consent of one or more lendersto conduct a 'short sale', i.e. a sale for less that the amount owing on the Property. (This paragraph only needs to be completed if this Property InformaƟon Sheet is being completed in connecƟon with the proposed sale of the Property) One or more of any loans secured by the Property is is not in foreclosure.

15. Energy Efficiency. The Property has has not been granted an energy efficiency raƟng or cerƟficaƟon such as one from the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) or Seller/Lessor does not know if the Property has been granted such a raƟng or cerƟficate. If such a raƟng or cerƟficaƟon has been obtained please describe the raƟng or cerƟficaƟon and provide the name of the organizaƟon that granted it: .

16. Other. (It will be presumed that there are no addiƟonal items which warrant disclosure unless they are set forth herein): Sellers make no representations or warranties for the Property .

The statements herein will be relied upon by brokers, buyers, lessees, lenders and others. Therefore, Owner and/or the Owner's Property Manager has reviewed and modified this printed statement as necessary to accurately and completely state all the known material facts concerning the Property. To the extent such modificaƟons are not made, this statement may be relied upon as printed. This statement, however, shall not relieve a buyer or lessee of responsibility for independent invesƟgaƟon of the Property. Owner agrees to promptly noƟfy, in wriƟng, all appropriate parƟes of any material changes which may occur in the statements contained herein from the date this statement is signed unƟl Ɵtle to the Property is transferred, or the lease is executed. Signatures to this Statement accomplished by means of electronic signature or similar technology shall be legal and binding.

Date:
(fill in date of execuƟon)
OWNER
Quantum Land, LLC, a California limited
liability company
By:

Name Printed: Kathy Keyes
Title: Managing Member
By: _________________________________________________________________ Name Printed: William P. Altmiller
Title: Managing Member
By: _________________________________________________________________ Name Printed: William A. Altmiller
By: _________________________________________________________________ Name Printed: Michael Keyes
Buyer/lessee hereby acknowledges receipt of a copy of this Property InformaƟon Sheet on . (Fill in date received)

BUYER/LESSEE
City of Shafter or assignee
By:

Name Printed:

Title:

AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.

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MANAGEMENT REPORT

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 3, 2026
DEPARTMENT: Steve Esselman, Planning Director
SUBJECT: DISCUSSION AND DIRECTION REGARDING CONTRACTING

WITH LEGAL COUNSEL TO REVIEW THE SHAFTER MUNICIPAL

CODE FOR COMPLIANCE WITH STATE LAW

RECOMMENDATION
Council receive and file. This item is for informational purposes only.

BACKGROUND
The Shafter Municipal Code (SMC) establishes the legal framework for local governance, regulatory authority, and enforcement in the City of Shafter. State laws affecting local governments are frequently amended through legislation, regulations, and court decisions. Over time, portions of the SMC may become outdated, inconsistent, or preempted by State law. This staff report requests City Council discussion and direction on whether to retain legal counsel, either with 1) the contracted City Attorney’s Office (Best Best & Krieger LLP or BBK) or 2) outside counsel, to conduct a comprehensive review of the SMC to identify provisions that may be inconsistent with or preempted by State law and to recommend updates to maintain legal compliance and reduce potential risk to the City.

The SMC is a compilation of ordinances adopted by the City Council over many years.

While individual code amendments are typically reviewed by the City Attorney at the time of adoption, a comprehensive, code-wide legal compliance review has not been conducted recently.

State law governing land use, housing, public safety, business regulation, labor standards, and environmental requirements has evolved significantly in recent years. In some cases, State law expressly preempts local regulation. In others, it establishes minimum standards or procedural requirements that must be reflected in local ordinances. Failure to align local code provisions with State law may expose the City to legal challenges, enforcement limitations, or unintended barriers to implementing City policies.

A municipal code compliance review would typically:

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Shafter City CouncilMarch 3, 2026

Shafter City Council
March 3, 2026