Turlock City Council
May 26, 2026

28 Commercial Drive Approach SF 475 $38.00 $18,050.00 $39.00 $18,525.00 $22.53 $10,701.75 $26.00 $12,350.00 29 Detectable Warning Surface SF 213 $45.00 $9,585.00 $44.00 $9,372.00 $40.24 $8,571.12 $50.00 $10,650.00 30 Install Sanitary Sewer Manhole EA 1 $10,000.00 $10,000.00 $15,000.00 $15,000.00 $23,727.72 $23,727.72 $15,000.00 $15,000.00 31 Install 24” PVC Sanitary Sewer Pipe LF 66 $600.00 $39,600.00 $340.00 $22,440.00 $502.92 $33,192.72 $500.00 $33,000.00 32 Adjust Manhole Frame & Cover to Finished Grade EA 34 $2,900.00 $98,600.00 $1,900.00 $64,600.00 $1,367.58 $46,497.72 $3,000.00 $102,000.00 33 Adjust Valve Frame & Cover to Finished Grade EA 70 $1,400.00 $98,000.00 $1,200.00 $84,000.00 $861.74 $60,321.80 $1,750.00 $122,500.00 34 Remove Tree/Hedge EA 1 $15,000.00 $15,000.00 $2,000.00 $2,000.00 $2,613.91 $2,613.91 $3,000.00 $3,000.00 35 Relocate Wrought Iron Fence LF 29 $150.00 $4,350.00 $362.22 $10,504.38 $204.88 $5,941.52 $410.00 $11,890.00 36 Relocate Chain Link Fence LF 37 $150.00 $5,550.00 $276.86 $10,243.82 $65.80 $2,434.60 $313.00 $11,581.00 37 Relocate Existing Bollard EA 1 $1,500.00 $1,500.00 $1,100.00 $1,100.00 $587.93 $587.93 $1,700.00 $1,700.00 38 Install Pedestrian Barricade EA 1 $3,000.00 $3,000.00 $1,050.00 $1,050.00 $1,380.00 $1,380.00 $1,195.00 $1,195.00 39 Install Roadside Sign EA 8 $3,500.00 $28,000.00 $625.00 $5,000.00 $546.25 $4,370.00 $710.00 $5,680.00 40 Thermoplastic Traffic Stripe LF 19,780 $5.00 $98,900.00 $1.00 $19,780.00 $1.97 $38,966.60 $1.80 $35,604.00 41 Thermoplastic Pavement Marking SF 3,745 $12.00 $44,940.00 $9.00 $33,705.00 $13.43 $50,295.35 $11.00 $41,195.00 42 Decomposed Granite SF 180 $8.00 $1,440.00 $10.00 $1,800.00 $11.87 $2,136.60 $56.00 $10,080.00 43 Relocate Mailbox EA 2 $600.00 $1,200.00 $1,450.00 $2,900.00 $929.76 $1,859.52 $850.00 $1,700.00 44 Green Traffic Paint for Conflict Zones (MMA) SF 4,870 $17.00 $82,790.00 $9.00 $43,830.00 $10.35 $50,404.50 $14.50 $70,615.00 $3,879,885.00
Lowest Responsible and Responsive
Bidder
Total $3,998,043.00 $3,462,283.50 $3,781,974.95

1 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

AGREEMENT

FOR ROADS PROGRAM PUBLIC IMPROVEMENT PROJECT

Project No. 25-025 Package 1

Roads Program Capital Improvement Project

THIS PUBLIC IMPROVEMENT AGREEMENT (the “Agreement”) is entered into by and between the CITY OF TURLOCK, a California municipal corporation (“ City”), and Granite Construction Company, a California corporation (“Contractor”), on this ____ day of _________ 20__ (the “Effective Date”). City and Contractor m ay be collectively referred to herein as the “ Parties” or individually as “Party.” There are no other parties to this Agreement.

RECITALS

A. City seeks a duly qualified and licensed firm experienced in the construction of Project No. 25-025 Package 1 (the “Project”).

B. The Project involves the expenditure of funds in excess of $5,000 and constitutes a “public project” pursuant to Public Contract Code section 20161.

C. Contractor has made a proposal to City to provide construction services, a copy of which is attached and incorporated hereto as Exhibit A (the “Services”).

D. City has determined it is necessary and desirable to employ the services of Contractor to perform construction work on the Project.

E. City has taken appropriate proceedings to authorize co nstruction of the Project and execution of this contract pursuant to Public Contract Code section 20160 et seq.; specifically, on May 26, 2026, at a duly noticed meeting of the City Council of the City of Turlock, this contract for the construction of the improvements hereinafter described was awarded to Contractor as the lowest responsive and responsible bidder for said improvements.

2 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

NOW, THEREFORE, in consideration of the promises and covenants set forth below, the Parties agree as follows:

AGREEMENT

1. Contract Documents: This Agreement, together with the following documents, are collectively referred to herein as the “Contract Documents”:

i. Notice to Bidders;
ii. Contractor’s Bid or Proposal accepted by City;
iii. Special Provisions of the City of Turlock for Project No. 25-025 Package 1; iv. Plans and detailed drawings prepared for this Project and approved by City (“Project Plans”);
v. All bonds and insurance required by the Contract Documents; vi. Any and all supplemental agreements amending, decreasing, or extending the work contemplated or which may be required to complete the work in a substantial and acceptable manner; and
vii. The current edition of the City of Turlock Standard Specifications and Drawings.

All of the Contract Documents are intended to incorporate the terms of the others so that any work called for in one and not mentioned in the other, or vice versa, is to be executed the same as if mentioned in all said documents. The documents comprising the complete contract will hereinafter be re ferred to as the “Contract.” In case of any dispute regarding the terms of the Contract, the decision of the City Engineer shall be final.

2. Term. The Contract shall be effective as of the Effective Date first stated above. Contractor shall not commence work on the Project until it has been given notice by City (“ Notice to Proceed”).

The Contract shall terminate one (1) year after City accepts Contractor’s performance of the Services by recording a Notice of Completion with the County of Stanislaus Clerk Recorder (the “Term”), unless the Parties mutually agree in writing to terminate the Contract earlier or extend the Term in an agreed writing executed by both Parties.

3. Scope of Work.

(a) Services. Contractor shall perform the Services described in Exhibit A, subject to all terms and conditions in the Contract. Contractor shall not receive additional compensation for the performance of any Services not described therein.

(b) Modification. City, at any time, by written order, may make changes within the genera l scope of the work under this Agreement or issue additional instructions, require additional work or direct deletion of work. Contractor shall not proceed with any change involving an increase

3 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

or decrease in the Contract Price, as defined in Section 4 of this Agreement, without prior written authorization from City. Contractor shall not be entitled to compensation for the performance of any such unauthorized work. Contractor further waives any and all right or remedy by way of restitution or quantum meruit for any and all extra or changed work performed without express and prior written authorization of City. Notwithstanding the foregoing, Contractor shall promptly commence and diligently complete any change to the work subject to City's written author ization issued pursuant to this Section ; Contractor shall not be relieved or excused from its prompt commencement of diligent completion of any change subject to City's written authorization by virtue of the absence or inability of Contractor and City to agree upon the extent of any adjustment to the completion schedule or Contract Price on account of such change. The issuance of a change order pursuant to this Section 3 in connection with any change authorized by City shall not be deemed a condition precedent to Contractor's obligation to promptly commence and diligently complete any such change authorized by City hereunder. City's right to make changes shall not invalidate the Contract nor relieve Contractor of any liability or other obligations under th e Contract. Any requirement of notice of changes in the scope of work to Contractor’s surety shall be the responsibility of Contractor.

(c) Specific Materials & Performance of Work. Contractor shall furnish all tools, equipment, facilities, labor, and materi als necessary to perform and complete, in good workmanlike manner, the work of general construction as called for and in the manner designated in, and in strict conformity with, the plans and specifications for said work entitled, “Special Provisions for Project No. 25-025 Package 1.” The equipment, apparatus, facilities, labor, and material shall be furnished, and said work performed and completed as required by the Contract under the direction and supervision, and subject to the approval, of the City Engineer or City Engineer’s designated agent.

(d) Exhibits. All “Exhibits” referred to below or attached hereto are, by this reference, incorporated into the Contract.

Exhibit Designation Exhibit Title

1. Exhibit A Scope of Services

2. Exhibit B Payment by Force Account

3. Exhibit C Workers’ Compensation Insurance Certification

4. Exhibit D Performance Bond

5. Exhibit E Payment Bond

4. Contract Price. City shall pay, and Contractor shall accept in full payment for the work set forth above in Section 3, Scope of Work, an amount not to exceed Three Million Four Hundred Sixty-Two Thousand Two Hundred Eighty -Three and 50/100ths Dollars ($3,462,283.50) (the “Contract Price”). Said amount shall be paid pursuant to Section 8 of this Agreement. The Contract Price may only be changed by a contract change order. The value of any work covered by a contract change order for an adjustment in the Contract Price will be determined in the sole discretion of City as follows:

(a) If the work performed is on the basis of unit prices contained in the Contract Documents, the change order will be determined in accordance with the provisions in Section 4-1.05, “Changes and Extra Work”, of the Caltrans Standard Specifications, as applicable; or

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City Project No. 25-025 Package 1
Rev.01.2026

(b) If the work performed is not included on the engineer’s estimate associated with a unit price, the change order will be by a mutually agreed lump sum; or

(c) If the change order is not determined as described above in either subdivision (a) or (b), the change order will be determined on the basis of force account in accordance with the provisions set forth in Exhibit B, “Payment by Force Account,” attached hereto and incorporated herein by reference.

5. Time for Performance. The time fixed for the commencement of work under the Contract is within ten (10) working days after the Notice to Proceed has been issued. The work on this project, including all punch list items, shall be completed on or before the expiration of ninety (90) working days (the “Completion Date”) beginning on the first day of work or no later than the tenth day after the Notice to Proceed has been issued.

(a) Right of City to Increase Working Days: If Contractor fails to complete the Services by the Completion Date, the City Engineer shall have the right to increase the number of working days in the amount the City Engineer may determine will best serve the interests of City, and if the City Engineer desires to increase said number of working days, the City Engineer shall have the further right to charge Contractor and deduct from the final payment for the work the actual cost of engineering, inspection, superintendence, and other overhead expenses which are directly chargeable to Contractor, and which accrue during the period of such extension, except that the cost of the final service and preparation of the final estimates shall not be included in such charges. No extension of time for completion of Services under the Contract shall be considered unless requested by Contractor at least twenty (20) calendar days prior to the Completion Date, in writing, to the City Engineer.

The Completion Date may only be changed by a contract change order. The value of any work covered by a contract change order for an adjustment in the Completion Date will be determined as follows:

i. Additional working days will be awarded where the amount of time is mutually agreed upon by Contractor and the City Engineer; or

ii. Additional working days will be awarded where Contractor is prevented from completing any part of the work identified on the critical path and:

1. where the delay is caused by acts of public enemy, fire, floods, tsunamis, earthquakes, epidemics, quarantine restrictions, strikes, labor disputes, shortage of materials and freight embargos, provided that Contractor shall notify Engineer in writing of the causes of delay within fifteen (15) days from the beginning of that delay; or

2. where the delay is caused by actions beyond the control of Contractor; or

3. where the delay is caused by actions or failure to act by the City Engineer.

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Contractor shall not be entitled to an adjustment in the Completion Date for delays within the control of Contractor. Delays resulting from and within the control of a subcontractor or supplier of Contractor shall be deemed to be delays within the control of Contractor.

(b) Excusable Delays. Contractor shall not be in breach of the Contract in the event that performance of Services is temporarily interrupted or discontinued due to a “Force Majeure” event which is defined as: riots, wars, sabotage, civil disturbances, insurrections, or explosions; natural disasters, such as floods, earthquakes, landslides, and fires; strikes, lockouts, a nd other labor disturbances; or other catastrophic events, which are beyond the reasonable control of Contractor. Force Majeure does not include Contractor’s financial inability to perform, Contractor’s failure to obtain any necessary permits or licenses from other governmental agencies, or Contractor’s failure to obtain the right to use the facilities of any public utility where such failure is due solely to the acts or omissions of Contractor. If Contractor’s performance of the Services is delayed by an excusable delay, the Completion Date shall be extended for such reasonable time as determined by the City Engineer. Extensions in time must be requested by Contractor within fifteen (15) calendar days of the excusable delay in order to receive consideration.

(c) Emergency - Additional Time for Performance - Procurement of Materials. If, because of war or other declared national emergency, the federal or s tate government restricts, regulates, or controls the procurement and allocation of labor or materials, or both, and if solely because of said restrictions, regulations or controls, Contractor is, through no fault of Contractor, unable to perform the Services, or the work is thereby suspended or delayed, any of the following steps may be taken:

i. City may, pursuant to resolution of the City Council, grant Contractor additional time for the performance of the Contract, sufficient to compensate in time, for delay or suspension.

To qualify for such extension in time, Contractor within ten (10) days of Contractor's discovering such inability to perform, shall notify the City Engineer in writing thereof, and give specific reasons therefore; the City Engineer shall thereupon have sixty (60) days within which to procure such needed materials or labor as is specified in this agreement, or permit substitution, or provide for changes in the work in accordance with subdivision (b) of this Section.

Substituted materials, or changes in the work, or both, shall be ordered in writing by the City Engineer, and the concurrence of the City Council shall not be necessary.

All reasonable expenses of such procurement incurred by the City Engineer shall be defrayed by the Contractor; or

ii. If such materials or labor cannot be procured through legitimate channels within sixty (60) days after the filing of the aforesaid notice, either Party may, upon thirty (30) days' written notice to the other, terminate this agreement. In such event, Contractor shall be compensated for all work executed upon a unit basis in proportion to the amount of the work completed, or upon a cost-plus-ten-percent

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(10%) basis, whichever is the lesser. Materials on the ground, in process of fabrication or in route upon the date of notice of termination specially ordered for the Project and which cannot be ut ilized by Contractor, shall be compensated for by City at cost, including freight, provided Contractor shall take all steps possible to minimize this obligation; or

iii. The City Council, by resolution, may suspend the Contract until the cause of inability to perform is removed for a period of not to exceed sixty (60) days.

If the Contract is not canceled, and the inability of Contractor to perform continues without fault on Contractor's part, beyond the time during which the Contract may have been suspended, as herein above provided, the City Council may further suspend the Contract, or e ither Party hereto may, without incurring any liability, elect to declare the Contract terminated upon the ground of impossibility of performance. In the event City declares this agreement terminated, such declaration shall be authorized by the City Council by resolution, and Contractor shall be notified in writing thereof within five (5) days after the adoption of such resolution.

Upon such termination, Contractor shall be entitled to proportionate compensation at the Contract Price for such portion of the Contract as may have been performed; or

iv. City may terminate the Contract, in which case Contractor shall be entitled to proportionate compensation at the agreed rate for such portion of the Contract as may have been performed. Such termination shall be authorized by resolution of the City Council. Notice thereof shall be forthwith given in writing to Contractor, and the Contract shall be terminated upon receipt by Contractor of such notice.

In the event of the termination provided in this sub -paragraph (iv ), none of the covenants, conditions or provisions hereof shall apply to the Services not performed, and City shall be liable to Contractor for the proportionate compensation last herein mentioned.

(d) Delay Damages. In the event Contractor, for any reason, fails to perform the Services to the satisfaction of the City Engineer by the Completion Date, City may, in accordance with Section 7203 of the Public Contract Code, in lieu of any other of its rights authorized by Section 6 of this agreement, deduct from payments or credits due Contractor after such breach a sum equal to six thousand seven hundred and no/100ths Dollars ($6,700.00) for each calendar day beyond the Completion Date. This deduction shall not be considered a penalty but shall be considered as delay damages. The aforementioned rate of deduction is an amount agreed to by the Parties as reasonably representing additional construction engineering costs incurred by City if Contractor fails to complete the Services by the Completion Date. However, any deduction assessed as delay damages shall not relieve Contractor from liability for any damages or costs resulting from delays to other contractors on the project or other projects caused by a failure of the assessed Contractor to complete the Services by the Completion Date. Due account shall be taken of any time extensions granted to Contractor by City.

Permitting Contractor to continue work beyond the Completion Date shall not operate as a waiver on the part of City of any of its rights under the Contract nor shall it relieve Contractor from liability for

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City Project No. 25-025 Package 1
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any damages or costs resulting from delays to other contractors on the project or other projects caused by a failure of the assessed Contractor to complete the Services by the Completion Date.

6. Termination.

(a) Option of City to Terminate Contract for Failure to Complete Services. If a Party should fail to perform any of its obligations hereunder within the time and in the manner herein provided, or otherwise violates any of the terms of the Contract (the “ Defaulting Party”), the other Party shall give notice to the Defaulting Party and allow the Defaulting Party ten (10) days to correct such deficiency.

If the Defaulting Party does not correct such deficiency, the other Party may immediately terminate the Contract by giving written notice of such termination, stating the reason for such termination. In such event, Contractor shall be entitled to receive payment for all Services satisfactorily rendered until such termination, provided, however, there shall be deducted from such amount the amount of damage, if any, sustained by virtue of any breach of the Contract by Contractor, including Delay Damages. If payment under the Contract is based upon a lump sum in total or by individual task, payment for Services satisfactorily rendered shall be an amount which bears the same ratio to the total fees specified in this Agreement as the Services satisfactorily rendered hereunder by Contractor to the total services otherwise required to be performed for such total fee, provided, however, that there shall be deducted from such amount the amount of damage, if any sustained by City by virtu e of any breach of the Contract by Contractor. Upon termination, Contractor shall deliver copies of all Work Product, as defined in Section 19 of this Agreement, to City. If District terminates the Contract before Contractor commences any Services hereunder, City shall not be obligated to make any payment to Contractor.

(b) If Contractor should be adjudged bankrupt or if it should make a general assignment for the benefit of its creditors, or if a receiver should be appointed on account of its insolvency, or if it or any of its subcontractors should violate any of the provisions of the Contract, City may serve written notice upon it and its surety of its intention to terminate the Contract. Such notice shall contain the reasons for City’s intention to terminate the Contract, and unless such violations shall cease within five (5) calendar days after serving of such notice, the Contract shall cease and terminate upon the expiration of said five (5) calendar days. In the event of any such termination, City shall immediately serve written notice thereof upon the surety and Contractor, and the surety shall have the right to take over and perform the Contract; provided however, that, if the surety does not give City written notice of its intention to take over and perform the Contract or does not commence performance thereof within thirty (30) calendar days from the date of the service of such notice, City may take over the work and prosecute the same to completion by contract or any other method it may deem advisab le, for the account and at the expense of Contractor, and Contractor and its surety shall be jointly liable to City for any excess cost occasioned City thereby, and in such event City may, without liability for so doing, take possession of and utilize in c ompleting the work, such materials, appliances, and other property belonging to Contractor as may be on the Project site and necessary thereof.

7. Liability for Breach: Neither Party waives the right to recover direct damages against the other for breach of the Contract, including any amount necessary to compensate City for all detriment proximately caused by Contractor's failure to perform its obligations hereunder or which in the ordinary course of things would be likely to result therefrom. City reserves the right to offset such damages against any payments owed to Contractor. City shall not, in any manner, be liable for special or consequential damages, including but not limited to Contractor's actual or projected lost profits had Contractor completed the Services required by the Contract. In the event of termination by either Party,

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copies of all finished or unfinished Work Product, as defined in Section 19 of this Agreement, shall become the property of City. Notwithstanding the foregoing, in no event shall City be liable, regardless of whether any claim is based on contract or tort, for any special, consequential, indirect or incidental damages, including, but not limited to, lost profits or revenue, arising out of or in connection with the Contract or the Services performed in connection with the Contract.

8. Compensation:

City shall make payments to Contractor in accordance with the provisions of Section 9 of the City Standard Specifications in legally executed and regularly issued warrants of City, drawn on the appropriate fund or funds as required by law and order of the City Council thereof. Contractor shall be administered a progress payment approximately every thirty (30) calendar days from the time work begins according to the payment schedule furnished by the City Engineer at the time work begins.

Contractor shall provide access at all reasonable times to all reports, contract records, contract documents, contract files, and personnel necessary to audit and verify Contractor’s charges to City under this Contract.

Monthly progress payments in the amount of 95 percent (95%) of the value of the work will be made to Contractor based on the Contractor’s estimate and the schedule of prices contained in the accepted bid. The remaining 5 percent (5%) will be retained by City as partial security for the fulfillment of the Contract except that at any time after 50 percent (50%) of the work has been completed, if the City Engineer finds that satisfactory progress is being made and the Project’s critical path of work are on schedule, City may discontinue any further retention. Such discontinuance will only be made upon the written request of Contractor. City may, at any time the City Engineer finds that satisfactory progress is not being made, again institute retention of 5 percent (5%) as specified above. Payment will be made as soon as possible after the preparation of the Contractor’s estimate. City shall pay the remaining 5 percent (5%) of the value of the Services completed under this Contract, if unencumbered by retentions for claims, not sooner than the expiration of thirty-five (35) calendar days from the date of recordation of the Notice of Completion, pursuant to Section 2 of this agreement, and not later than sixty (60) days from the “completion” of the Services as said term is defined in Public Contract Code section 7107(c).

No estimate or payment shall be made if, in the judgment of the City Engineer, the work is not proceeding in accordance with the provisions of the Contract, or when, in his judgment, the total value of the work done since the last estimate amounts to less than $1,000. No progress payments will be made if the time allotted for the job is thirty (30) working days or less. Payment of any progress payment, or the acceptance thereof by Contractor, shall not constitute acceptance of the work performed under this Contractor, or any portion thereof, and shall in no way reduce the liability of Contractor to replace unsatisfactory work or materials, though the unsatisfactory character of such work or materials may not have been apparent or detected at the time such payment was made.

Additionally, as a precondition to City’s progress payments hereunder, Contractor shall provide to City, prior to payment, unconditional waivers and r eleases of stop notices pursuant to Civil Code section 8128 et seq. from each subcontractor and materials supplier. The form of said waivers and releases shall be as set forth in Civil Code section 3262(d)(2).

Pursuant to Public Contract Code section 22300 et seq., Contractor may request the right to substitute securities for any moneys withheld by City to ensure the performance required of Contractor under the

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Contract, or that City make payment of retentions earned directly into an escrow account established at the expense of Contractor.

9. Disputes Pertaining to Payment for Work:

Should any dispute arise respecting the true value of any work performed, of any work omitted, or of any extra work which Contractor may be required to do, or respecting the size of any payment to Contractor during the performance of the Contract, such dispute shall be decided by the City Engineer, and the decision of the latter shall be final and conclusive. The Parties agree to comply with the claims resolution procedures set forth in Public Contract Code section 9204 when applicable.

(a) Claims Processing. Any submission of a claim by Contractor must comply with the requirements of Public Contract Code section 9204. Upon receipt of a claim pursuant to this section, City shall conduct a reasonable review of the claim and, within a period not to exceed forty -five (45) days, shall provide Contractor a written statement identifying what portion of the claim is disputed and what portion is undisputed. Upon receipt of a claim, the Parties may, by mutual agreement, extend the time period provided in this subdivision. Contractor shall furnish reasonable documentation to support the claim. Any payment due on an undisputed portion of the claim shall be processed and made within sixty (60) days after City issues its written statement. If Contractor disputes City’s wr itten response, or if City fails to respond to a claim issued pursuant to this section within the time prescribed, Contractor may demand in writing an informal conference to meet and confer for settlement of the issues in dispute.

(b) Meet-and-Confer Conference. Upon receipt of a demand in writing sent by registered mail or certified mail, return receipt requested, City shall schedule a meet-and-confer conference within thirty (30) days for settlement of the dispute. Within ten (10) business days following the conclusion of the meet -and-confer conference, if the claim or any portion of the claim remains in dispute, City shall provide the claimant a written statement identifying the portion of the claim that remains in dispute and the portion that is undispu ted. Any payment due on an undisputed portion of the claim shall be processed and made within sixty (60) days after the City issues its written statement.

(c) Nonbinding Mediation. Any disputed portion of the claim, as identified by Contractor in writing, shall be submitted to nonbinding mediation, with the Parties sharing the associated costs equally. The Parties shall mutually agree to a mediator within ten (10) business days after the disputed portion of the claim has been identified in writing. If th e Parties cannot agree upon a mediator, each party shall select a mediator and those mediators shall select a qualified neutral third party to mediate with regard to the disputed portion of the claim. Each Party shall bear the fees and costs charged by its respective mediator in connection with the selection of the neutral mediator. If mediation is unsuccessful, the parts of the claim remaining in dispute shall be subject judicial review pursuant to Section 23 of this Agreement.

Notwithstanding any claim, dispute, or other disagreement between the Parties regarding performance under the Contract, the scope of work hereunder, or any other matter arising out of or related to, in any manner, the Contract, Contractor shall proceed diligently with performance of the Services in accordance with City's written direction, pending any final determination or decision regarding any such claim, dispute, or disagreement.

10. Permits and Care of Work:

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Contractor shall, at Contractor's expense, obtain all necessary permits and licenses for the construction of each improvement, give all necessary notices and pay all fees and taxes required by law, except those City fees set forth in Section 1 of the Special Provisions. Contractor has examined the Project site and is familiar with its topography and condition, location of property lines, easements, building lines, and other physical factors and limitations affecting the performance of the Contract. Contractor, at Contractor's expense, shall obtain any permission necessary fo r any operations conducted off the property owned or controlled by City. Contractor shall be responsible for the proper care and protection of all materials delivered and work performed until completion and final acceptance.

11. Public Works and Payment of Prevailing Wage:

(a) Monitoring and Enforcement. In accordance with the provisions of Sections 1725.5, 1771.1, 1771.3, and 1771.4 of the Labor Code, all work performed under the Contract is subject to compliance monitoring and enforcement by the Department of Industrial Relations (“ DIR”). All work performed by Contractor or its subcontractors under the Contract is subject to the requirements of Labor Code section 1720 et seq. It is not a violation of this section for an unregistered contractor to submit a bid that is authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5 of the Public Contract Code , provided the contractor is registered to perform public work pursuant to Section 1725.5 of the Labor Code at the time the contract is awarded. Contractor and its subcontractors shall furnish the records specified in Section 1776 of the Labor Code directly to the Labor Commissioner, at least monthly, in the format prescribed by the Labor Commissioner.

In accordance with the provisions of Section 1773.3 of the Labor Code, City shall provide notice to DIR of the award of this Contract within thirty (30) working days of the award. The notice shall be transmitted electronically in a format spec ified by DIR and shall include the name of Contractor, any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, Project location, and any additional information DIR spe cifies that aids in the administration and enforcement of Section 1720 et seq. of the Labor Code.

(b) Wages & Hours of Employment: In the performance of the Services under the Contract, eight (8) hours shall be the maximum hours of labor on any calendar day, and the minimum wages of compensation of persons performing labor in the execution of this agreement shall be the current prevailing scale of wages determined by DIR for the community. Contractor shall forfeit as penalty Twenty-five and no/100ths Dollars ($25.00) to be paid to City for each workman employed in the execution of the Contract by Contractor or its subcontractor(s), for each calendar day during which any workman is required or permitted to labor more than eight (8) hours, in violation of provisions of Labor Code section 1810 et seq. Contractor shall post prevailing wage rates at the Project no later than the first day Contractor commences performance of the Services under the Contract.

12. Superintendence by Contractor: Contractor shall give personal superintendence to the work on the Project or have a competent foreman or superintendent satisfactory to the City Engineer on the Project at all times during construction and performance of work under the Contract, with authority to act for Contractor.

13. Inspection and Testing by City: Contractor shall at all times maintain proper facilities and provide safe access for inspection by City to all parts of the work performed on the Project and to the shops wherein the work is in preparation. Contractor shall notify City with sufficient tim e in advance

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of the manufacture of production materials to be supplied by Contractor under the Contract in order for City to arrange for mill or factory inspection and testing of same. Any materials shipped by Contractor from factory prior to having satis factorily passed such testing and inspection by City's representative or prior to the receipt of notice from such representative that such testing and inspection will not be required shall not be incorporated on the Project. Contractor shall also furnish to City, in triplicate, certified copies of all factory and mill test reports upon request.

14. Conformity with Law and Safety: Contractor shall observe and comply with all applicable laws, ordinances, codes, and regulations of governmental agencies, including federal, state, municipal, and local governing bodies having jurisdiction over any or all of the scope of Services, including all provisions of the Occupational Safety and Health Act of 1979 as amended, all California Occupational Safety and Health Regulations, the California Building Code, the American with Disabilities Act, any copyright, patent, or trademark law, and all other applicable federal, state, municipal, and local safety regulations, appropriate trade association safety standards, and appropr iate equipment manufacturer instructions. All Services performed by Contractor or its subcontractors must be in accordance with these laws, ordinances, codes, and regulations. Contractor’s failure to comply with any laws, ordinances, codes, or regulation s applicable to the performance of the Services hereunder shall constitute a breach of contract. In cases where standards conflict, the standard providing the highest degree of protection shall prevail.

If a death, serious personal injury or substantial property damage occurs in connection with the performance of the Contract, Contractor shall immediately notify City's risk manager by telephone. If any accident occurs in connection with the Contract, Contractor shall promptly submit a written report to City, in such form as City may require. This report shall include the following information: (a) name and address of the injured or deceased person(s); (b) name and address of Contractor’s subcontractor, if any; (c) name and address of Contractor’s liability insurance carrier; and (d) a detailed description of the accident, including whether any of City's equipment, tools, or materials were involved.

If a release of a hazardous material, substance, or waste occurs in connection with the performance of the Contract, Contractor shall immediately notify City. Contractor shall not store hazardous materials or hazardous waste within City limits without a proper permit from City.

15. Other Contracts: City may award other contracts for additional work on the Proje ct, and Contractor shall fully cooperate with such other contractors and carefully fit Contractor's own work to that provided under other contracts as may be directed by the City Engineer. Contractor shall not commit or permit any act which will interfere with the performance of work by any other contractor.

16. Bonds: Concurrently with the execution hereof, Contractor shall furnish, on the forms provided herein as Exhibits D and E , respectively, corporate surety bonds to the benefit of City, issued by a surety company acceptable to City and authorized and admitted to do business in the state of California, as follows:

(a) Faithful Performance Bond. In an amount equal to at least one hundred percent (100%) of the Contract Price as security for the faithful performance of the Contract. The bond shall contain a provision that the surety thereon waives the provisions of Sections 2819 and 2845 of the Civil Code.

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(b) Payment Bond. In an amount equal to at least one hundred percent (100%) of the Contract Price as security for the payment of all persons performing labor and furnishing materials in connection with the Contract. The bond shall be in accordance with the provisions of Sections 3225, 3226, and 3247 through 3252, inclusive, of the Civil Code and Section 13020 of the Unemployment Insurance Code of California. Said bond shall also contain a provision that the surety thereon waives the provisions of Sections 2819 and 2845 of the Civil Code.

The surety companies shall familiarize themselves with all provisions and conditions of the Contract.

It is understood and agreed that the surety or sureties waive the right of special notification of any modification or alterations, om issions or reductions, extra or additional work, extensions of time, or any other act or acts by City or its authorized agents under the terms of this Contract and failure to so notify the surety or sureties of such changes shall in no way relieve the sure ty or sureties of their obligations under the Contract.

17. Indemnification:

(a) Indemnity for Professional Liability. When the law establishes a professional standard of care for Contractor’s Services, to the fullest extent permitted by law, Contractor shall indemnify, protect, defend, and hold harmless City and any and all of its elective and appointive boards, officers, officials, agents, employees or volunteers (“ City’s Agents ”) from and against any and all losses, liabilities, damages, costs, and expenses, including legal counsel’s fees and costs but only to the extent Contractor or its subcontractors are responsible for such damages, liabilities and costs on a comparative basis of fault between Contractor or its subcontractors and City in the performance o f professional services under the Contract. Contractor shall not be obligated to defend or indemnify City for City’s own negligence or for the negligence of others.

(b) Indemnity for other than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, Contractor shall indemnify, defend, and hold harmless City and any and City’s Agents from and against any liability, including liability for claims, suits, actions, arbitration proceedings, administr ative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including legal counsel’s fees and costs, court costs, interest, defense costs, and expert witness fees, where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of the Contract by Contractor or by any individual or agency for which Contractor is legally liable, including, but not limited to, officers, agents, employees, or subcontractors of Contractor.

18. Contractor's Insurance: Concurrently with the execution hereof, Contractor shall furnish City with satisfactory proof of carriage of the insurance required under this section, and that Contractor shall give City at least thirty (30) days prior notice of the cancellation of any policy during the Term of this contract. Contractor shall not commence work under this Agreement until Contractor has obtained City’s approval regarding all insurance requirements, forms, endorsemen ts, amounts, and carrier ratings, nor shall Contractor allow any subcontractor to commence work on a subcontract until all similar insurance required of the subcontractor shall have been so obtained and approved. Contractor shall procure and maintain for the duration of the Contract insurance against claims for injuries to

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persons or damages to property which may arise from or in connection with the performance of the Services hereunder by Contractor, its agents, representatives, employees or subcontractor s. Failure to maintain or renew coverage or to provide evidence of renewal may constitute a material breach of the Contract. Any available insurance proceeds in excess of the specified minimum limits and coverage shall be available to City. The City of Turlock shall be named as a certificate holder.

(a) General Liability Insurance . Contractor shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than Two Million Dollars ($2,000,000.00) per occurrence, Four Million Dollars ($4,000,000.00) general aggregate, and Two Million Dollars ($2,000,000.00) products and completed operations aggregate for bodily injury, personal injury, and property damage, including, without limitation, blanket contractual liability and coverage for explosion, collapse, and underground property damage hazards. The general aggregate limit shall apply separately to this Project or the general aggregate shall be doubled. Contractor’s general liability policies shall be primary and not seek contribution from City’s coverages and be endorsed using Insurance Services Office form CG 20 10 to provide that City and its officers, officials, employees, and agents shall be additional insureds under such policies. For construction contracts, an endorsement providing completed operations to the additional insured, ISO form CG 20 37, is also required. The policy shall contain, or be endorsed to contain, the following provisions:

(1) City, its elective and appointive boards, officers, agents, employees, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations performed by or on behalf of Contractor, including materials, parts or equipment furnished in connection with such work or operations, which coverage shall be maintained in effect for at least three (3) years following the completion of the work specified in the Contract. General liability coverage can be provided in the form of an endorsement to Contractor’s insurance (at least as broad as CG 20 10 for ongoing operat ions and CG 20 37 for products/completed operations for construction services), or as a separate Owners and Contractors Protective Liability policy providing both ongoing operations and completed operations coverage.

(2) For any claims related to the Proj ect, Contractor’s insurance coverage shall be primary insurance as respects City and any insurance or self-insurance maintained by City shall be excess of Contractor’s insurance and shall not contribute with it.

(3) In the event of cancellation, non -renewal, or material change that reduces or restricts the insurance coverage afforded to City under the Contract, the insurer, broker/producer, or Contractor shall provide City with thirty (30) days’ prior written notice of such cancellation, non-renewal, or material change.

(4) Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code.

(b) Workers’ Compensation Insurance. Contractor shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance with limits of at least One Million

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Dollars ($1,000,000.00) each accident or disease. Contractor sha ll submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees, and volunteers.

(c) Commercial Automobile Liability Insurance. Contractor shall maintain automobile liability using ISO Business Auto Coverage form CA 00 01, or the exact equivalent, with a limit of no less than Two Million Dollars ($2,000,000.00) each accident—for owned, leased, hired, non -owned, and borrowed automobiles. The policy shall provide and be endorsed that the City, its officials, officers, agents, employees, and volunteers are included or named as additional insureds. If Contractor owns no vehicles, this requirement may be met through a non -owned auto coverage or an endorsement to the CGL policy.

(d) Builder’s Risk Insurance. {Intentionally Omitted}

(e) Installation Floater Insurance. {Intentionally Omitted}

(f) Contractors Pollution Insurance . Pollution Coverage shall be maintained on a Contractors Pollution Liability form, or other form acceptable to City, providing coverage for liability arising out of sudden, accidental, and gradual pollution and remediation. The policy limit shall be no less than Two Million Dollars ($2,000,000.00) per claim. All activities contemplated in the Contract shall be specifically scheduled on the policy as “covered operations.” The policy shall provide coverage for the hauling of waste from the Project site to the final disposal location, including non -owned disposal sites.

(g) Professional Liability Insurance . Contractor shall maintain professional liability insurance that insures against professional errors and omissions that may be made in performing the Services to be rendered in connection with the Contract, in the minimum amount of Two Million Dollars ($2,000,000.00) per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this Agreement, and Contractor agrees to maintain continuous coverage through a period no less than three (3) ye ars after completion of the services required by the Contract.

(h) Umbrella or Excess Policy. Contractor may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying policies of insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Contractor’s primary and excess liability policies are exhausted.

(i) Deductibles and Self-Insured Retentions. Upon request of City, any deductibles or self- insured retentions must be declared to and approved by City. At the option of City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City and City’s Agents; or (2) Contractor shall provide a financial guarantee satisfactory to City guaranteeing payment of losses and related investigations, claim administration, and defense expenses.

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(j) Acceptability of Insurers. Insurance is to be placed with insurers admitted in California with a current A.M. Best’s rating of no less than A-:VII or with an insurer to which City has provided prior approval.

(k) Verification of Cov erage. Contractor shall furnish City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this Section 18. All certificates and endorsements are to be received and approved by City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive Contractor’s obligation to provide them. City reserves the right, at any time, to require complete, certified copies of all required insurance policies and endorsements.

(l) Waiver of Subrogation. With the exception of professional liability, Contractor hereby agrees to waive subrogation which any insurer of Contractor may acquire from Contractor by virtue of the payment of any loss. The commercial general liability policy , automobile liability policy, and workers’ compensation policy shall be endorsed to contain a waiver of subrogation in favor of City for all work performed by Contractor, its agents, employees, independent contractors a nd subcontractors.

Contractor shall provide written proof of waiver of subrogation in the Certificate of Insurance.

Additionally, Contractor agrees to obtain any available endorsements that may be necessary to effectuate this waiver of subrogation.

(m) Subcontractors. Contractor shall ensure all subcontractors furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

19. Ownership of Work Product: Any and all work, artwork, copy, posters, billboards, photographs, videotapes, audiotapes, systems designs, software, reports, designs, specifications, drawings, diagrams, surveys, source codes, professional or technical information or data, photographs, notes, letters, emails, or any original works of authorship created by contractor or its subcontractors or subcontractors in connection with Services performed under the Contract (“ Work Product”) shall be works for hire as defined under Title 17 of the United States Code, and all copyrights in such works are the property of City. In the event that it is ever determined that any Work Product created by Contractor or its subcontractors or subcontractors under the Contract are not works for hire under U.S. l aw, Contractor hereby assigns all copyrights to such Work Product to City. With the prior written approval of the City Engineer, Contractor may retain and use copies of such Work Product for reference and as documentation of its experience and capabilities.

All Work Product shall become the property of City irrespective of where located or stored and Contractor agrees to deliver all such documents and information to City, without charge and in whatever form it exists, upon the Completion Date, as may be e xtended. Contractor shall have no ownership interest in such Work Product.

All Work Product of Contractor under the Contract, including written information which City will cause to be distributed for either internal or public circulation, including both preliminary and final drafts, shall be delivered to City in both printed and electronic form, or as may be specific in Exhibit A.

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When the Contract is terminated, Contractor agrees to return to City all documents, drawings, photographs, and other written or graphic material, however produced, that it received from City or City’s Agents, in connection with the performance of its Services under the Contract. All materials shall be returned in the same condition as received.

20. Taxes: Payment of any taxes, in cluding California sales and use taxes, levied upon the Contract, the transaction, or the Services or goods delivered pursuant hereto, shall be the obligation of Contractor. Contractor shall cooperate with City to the full extent possible to maximize the local allocation of California sales and use tax to City. Such cooperation shall include, but not be limited to:
(a) Use Tax Direct Payment Permits. Contractor shall apply for, obtain, and utilize, to the maximum extent reasonable, a California Use Tax Direct Payment Permit.

(b) Purchases of $500,000 or More. Contractor shall require vendors and suppliers located outside California from whom Contractor makes purchases of $500,000 or more to allocate the use tax to City.

21. Independent Contractor: At all times during the Term of the Contract, Contractor shall be deemed to be an independent contractor and shall be wholly responsible for the manner in which Contractor performs the Services required under the Contract. Contractor shall be liable for its acts and omissions, and those of its employees, contractors, subcontractors, representatives, volunteers, and its agents. Nothing contained herein shall be construed as creating an employment, agency, or partnership relationship between City and Contractor. City shall have the right to control Contractor only insofar as the result of Contractor’s Services rendered pursuant to the Contract; however, City shal l not have the right to control the means by which Contractor accomplishes Services rendered pursuant to the Contract.

22. Contractor Not Agent: Except as City may specify in writing, Contractor shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent.

Contractor shall have no authority, express or implied, pursuant to the Contract to bind City to any obligation whatsoever.

23. Arbitration of Disputes: All claims, disputes, and other matters in question between City and Contractor arising out of, or relating to, this Contract or the breach thereof, including claims of Contractor for extra compensation of Services related to the project, shall be decided by arbitration before a single arbitrator in accordance wi th the provisions of Sections 1281 through 1284.2 of the Code of Civil Procedure (the “ Arbitration Laws”) unless the Parties mutually agree otherwise. The provisions of Section 1283.05 of the Arbitration Laws apply to any arbitration proceeding except as otherwise provided in the Contract. The arbitrator shall have authority to decide all issues between

the Parties including, but not limited to, claims for extras, delay, and liquidated damages, if any, provided for the Contract, matters involving defects in the Services performed by Contractor or its subcontractors, rights to payment, and whether the necessary procedures for arbitration have been followed. The award rendered by the arbitrator shall be final and judgment may be entered upon it in accordance with applicable law in any court having competent jurisdiction thereof.

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Notice of the demand for arbitration shall be filed in writing with the other Party. The demand for arbitration shall be made within a reasonable time after the claim, dispute, or other matter in question has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such claim, dispute, or other matter in question would be barred by the applicable statute of limitations.

The parties shall jointly appoint an arbitrator within fifteen (15) calendar days of the date of giving the notice of the demand for arbitration. If the Parties are unable to jointly agree upon the appointment of an arbitrator within said fifteen (15) calen dar day period, and do not agree in writing to extend said period for a fixed period, then either Party may seek to have the arbitrator appointed by the Superior Court of Stanislaus County in accordance with the Arbitration Laws.

If any proceeding is brought to contest the right to arbitrate and it is determined that such right exists, the losing Party shall pay all costs and attorney’s fees incurred by the prevailing Party.

In addition to the other rules of law which may be applicable to any arbitration hereunder, the following shall apply:

(a) Promptly upon the filing of the arbitration, each Party shall be required to set forth in writing and to serve upon each other Party a detailed statement of its contentions of fact and law.

(b) All Parties to the arbitration shall be entitled to the discovery procedures provided under Section 1283.05 of the California Code of Civil Procedure.

(c) The arbitration shall be commenced and conducted as expeditiously as possible consistent with affording reasonable discovery as provided herein.

(d) These additional rules shall be implemented and applied by the arbitrator.

The costs of arbitration shall be borne by the Parties as determined by the arbitrator, but each Party shall bear its own attorney’s fees associated with the dispute with the other Party and to the arbitration.

All administrative remedies required under Section 9 of this Agreement or pursuant to Public Contract Code section 9204, or required by any other law, shall be exhausted prior to commencement of any arbitration under this Section 23.

24. Provisions Cumulative:

The provisions of the Contract are cumulative, and in addition to and not in limitation of, any other rights or remedies available to City.

25. Notices: All notices shall be in writing and delivered in person or transmitted by certified mail, postage prepaid. Any Party hereto may at any time, by giving ten (10) days’ written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below.

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If to City: City of Turlock
Attn: Christopher Fisher, Municipal Services Director
156 S. Broadway, Suite 150
Turlock, CA 95380-5461

With courtesy copies to: City of Turlock, City Attorney’s Office Attn: Katie O. Lucchesi, City Attorney
156 S. Broadway, Suite 230
Turlock, CA 95380-5456

If to Contractor: Granite Construction Company
2716 Granite Court
Fresno, CA 93706

If to Contractor’s Sureties: _______________________________ _______________________________
_______________________________
_______________________________

26. City Contract Administrator: The City’s contract administrator and contact person for this Agreement is:

Fred Pezeshk, PE
City of Turlock, Roads Program Manager
156 S. Broadway, Suite 150
Turlock, California 95380-5461
Telephone: (209) 668-5520
E-mail: [email protected]

27. Interpretation: As used herein, any gender includes each other gender, the singular includes the plural and vice versa.

28. Antitrust Claims: Contractor or its subcontractors offer and agree to assign to City all rights, title, and interest to any causes of action under Section Four of the Clayton Act and the Cartwright Act concerning antitrust claims.

29. Use of City Project Number: Contractor or its subcontractors agree to use the aforementioned City project number on all maps, drawings, submittals, billing, and written correspondence that involve City staff or contracted consultants. Nothing in this section shall preclude Contracto r or its subcontractors from using their own project numbers for their own internal use.

30. No Conflict of Interest: Contractor represents that no conflict of interest will be created under state or federal law by entering into or in carrying out the Contract.

31. Confidentiality: Contractor understands and agrees that, in the performance of Services under the Contract, or in the contemplation thereof, Contractor may have access to private or confidential

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information that may be owned or controlled by City and that such information may contain proprietary or confidential details, the disclosure of which to third parties may be damaging to City (“Confidential Information”). Contractor shall not, either during or after the Term, disclose to any third party any Confidential Information without the prior written consent of City. If City gives Contractor written authorization to make any such disclosure, Contractor shall do so only within the limits and to the extent of that authorization. Contractor may be direct ed or advised by the City Attorney on various matters relating to the performance of Services on the Project or on other matters pertaining to the Project, and in such event, Contractor agrees that it will treat all communications between itself, its employees, and its subcontracts as being communications which are within the attorney-client privilege.

32. Modification. No alteration, amendment, modification, or termination of the Contract shall be valid unless made in writing and executed by all Parties to the Contract.

33. Waiver: No covenant, term, or condition or the breach thereof shall be deemed waived, except by written consent of the Party against whom the waiver is claimed, and any waiver of the breach of any covenant, term, or condition shall not be de emed to be a waiver of any preceding or succeeding breach of the same or any other covenant, term, or condition.

34. Assignment: No Party to the Contract shall assign, transfer, or otherwise dispose of this Agreement in whole or in party to any individual, firm, or corporation without the prior written consent of the other Party. Subject to the foregoing provisions, the Contract shall be binding upon, and inure to the benefit of, the respective successors and assigns of the Parties hereto.

35. Authority: All Parties to this Agreement warrant and represent that they have the power and authority to enter into this Agreement and the names, titles, and capacities herein stated on behalf of any entities, persons, states, or firms represented or purported to be represented by such entities, person, states, or firms and that all former requirements necessary or required by state or federal law in order to enter into the Contract have been fully complied with. Further, by entering into this Agreement, neither Party hereto shall have breached the terms or conditions of any other contract or agreement to which such Party is obligated, which such breach would have a material effect hereon.

36. Governing Law: The Contract shall be governed and construed in accordance with the laws of the state of California.

37. Severability: If the Contract in its entirety is determined by an arbitrator or a court of competent jurisdiction to be invalid or unenforceable, the Contract shall automatically terminate as of the date of final entry of judgment. If any provision of the Contract shall be determined to be invalid and unenforceable, or if any provision of the Contract is rendered invalid or unenforceable according the terms of any federal or state statute, which becomes effective after t he Effective Date of this Agreement, the remaining provisions shall continue in full force and effect and shall be construed to give effect to the intent of this Agreement.

38. Execution and Counterparts: This Agreement may be executed simultaneously and, in several counterparts, each of which shall be deemed an original but together shall constitute one and the same instrument. The parties agree that this Agreement and any other documents to be delivered in connection herewith may be electronically signed utilizing services such as DocuSign and Nitro Sign, or by transmitting signatures in pdf or similar format, and that any electronic signatures appearing on

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this Agreement or such other documents are the sa me as handwritten signature for the purposes of validity, enforceability, and admissibility.

39. Mandatory and Permissive: “Shall” and “will” and “agrees” are mandatory. “May” and “can” are permissive.

40. Headings: Headings used in this Agreement are for re ference purposes only and shall not be considered in construing this Agreement.

41. Attorney’s Fees and Costs: Except as expressly provided for in Section 23 of this Agreement, if any action at law or in equity, including action for declaratory relief, is brought to enforce or interpret the provisions of the Contract, the prevailing Party shall be entitled to reasonable attorney’s fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled.

42. Necessary Acts and Further Assurances: The Parties shall, at their own cost and expense, execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of the Contract.

43. Recitals: The recitals set forth above (“ Recitals”) are true and correct and are hereby incorporated into and made part of this Agreement by this reference. In the event of any inconsistency between the Recitals and Section 1 through 43 of this Agreement, Sections 1 through 43 shall prevail.

[Signatures on Following Page]

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CONTRACTOR CITY OF TURLOCK, a municipal corporation

By: ____________________________ By: _________________________________ Gary R. Hampton, Interim City Manager
_______________________________
Print Name Date: ____________________________

Address:_________________________
_______________________________ APPROVED AS TO SUFFICIENCY:
_______________________________
Phone: __________________________ By: _____________________________________ Christopher Fisher, Municipal Services
Director
Date: ___________________________

Federal Tax ID or Social Security No:

APPROVED AS TO FORM:
_______________________________
By: _____________________________
Katie O. Lucchesi, City Attorney
DIR Registration Number:

_______________________________ ATTEST:

Affix Contractor’s Seal Here By: _____________________________ Nichole Fiez, City Clerk

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EXHIBIT A

SCOPE OF SERVICES

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EXHIBIT B

PAYMENT BY FORCE ACCOUNT

For work paid by force account, the City Engineer compares City’s records to Contractor’s daily force account work report. When the City Engineer and Contractor agree on the contents of the daily force account work reports, the City Engineer accepts the r eport and City pays for the work. If the records differ, City pays for the work based only on the information shown on City’s records. If a subcontractor performs work at force account, work paid at force account will be accepted at an additional 2 percen t (2%) markup to the total cost of that work , including markups , as reimbursement for additional administrative costs. The markups specified in labor, materials, and equipment includes compensation for all delay costs, overhead costs, and profit. If an i tem's unit price is adjusted for work -character changes, City excludes Contractor’s cost of determining the adjustment. Payment for owner -operated labor and equipment is made at the market-priced invoice submitted.

A. Labor. Labor payment is full compensation for the cost of labor used in the direct performance of the work plus a fifteen percent (15%) markup, as set forth below, and consistent with California Labor Code section 1770 et seq. Force account labor payment consists of:

1. Employer payment to the worker for:

1.1 Basic hourly wage

1.2 Health and welfare

1.3 Pension

1.4 Vacation

1.5 Training

1.6 Other State and federal recognized fringe benefit payments

2. Labor surcharge percentage in Labor Surcharge and Equipment Rental Rates current during the work paid at force account for:

2.1 Workers' compensation insurance

2.2 Social security

2.3 Medicare

2.4 Federal unemployment insurance

2.5 State unemployment insurance

2.6 State training taxes

3. Subsistence and travel allowances paid to the workers

4. Employer payment to supervisors, if authorized

The fifteen percent (15%) markup consists of payment for all overhead costs related to labor but not designated as costs of labor used in the direct performance of the work including:

(a) Home office overhead

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(b) Field office overhead
(c) Bond costs
(d) Profit
(e) Labor liability insurance
(f) Other fixed or administrative costs that are not costs of labor used in the direct performance of the work

B. Materials. Material payment is full compensation for materials the Contractor furnishes and uses in the work. The City Engineer determines the cost based on the material purchase price, including delivery charges, except:

1. A fifteen percent (15%) markup is added;

2. Supplier discounts are subtracted whether the Contractor takes them or not;

3. If the City Engineer believes the material purchase prices are excessive, City pays the lowest current wholesale price for a similar material quantity;

4. If Contractor procured the materials from a source Contractor wholly or partially own, the determined cost is based on the lower of the:

4.1 Price paid by the purchaser for similar materials from that source on Contract items; and

4.2 Current wholesale price for those materials;

5 If Contractor does not submit a material cost record within thirty (30) days of billing, the determined cost is based on the lowest wholesale price:

5.1 During that period

5.2 In the quantities used

C. Equipment Rental. Equipment rental payment is full compensation for:

1. Rental equipment costs, including moving rental equipment to and from the change order work site using its own power.

2. Transport equipment costs for rental equipment that cannot be transported economically using its own power. No payment is made during transport for the transported equipment.

3. Fifteen percent (15%) percent markup.

If Contractor wants to return the equipment to a location other than its original location, the payment to move the equipment must not exceed the cost of returning the equipment to its original location.

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If Contractor uses the equipment for work other than work paid by force account, the transportation cost is included in the other work.

Before moving or loading the equipment, Contractor must obtain authorization for the equipment rental's original location.

The City Engineer determines rental costs:

1. Using rates in Labor Surcharge and Equipment Rental Rates:

1.1. By classifying equipment using manufacturer's ratings and manufacturer - approved changes.

1.2. Current during the work paid by force account.

1.3. Regardless of equipment ownership but City uses t he rental document rates or minimum rental cost terms if:

1.3.1. Rented from equipment business Contractor does not own.

1.3.2. The Labor Surcharge and Equipment Rental Rates hourly rate is $10.00 per hour or less.

2. Using rates established by the City Engineer for equipment not listed in Labor Surcharge and Equipment Rental Rates . Contractor may submit cost information that helps the City Engineer establish the rental rate but City uses the rental document rates or minimum rental cost terms if:

2.1. Rented from equipment business Contractor does not own.

2.2. The City Engineer establishes a rate of $10.00 per hour or less.

3. Using rates for transport equipment not exceeding the hourly rates charged by established haulers.

Equipment rental rates include the cost of:

1. Fuel 7. Repairs and maintenance

2. Oil 8. Depreciation

3. Lubrication 9. Storage

4. Supplies 10. Insurance

5. Small tools that are not consumed by use 11. Incidentals

6. Necessary attachments

City pays for small tools consumed by use. The City Engineer determines payment for small tools consumed by use based on Contractor-submitted invoices.

The City Engineer may authorize rates in excess of those in the Labor Surcharge and Equipment Rental Rates if:

1. Contractor submits a request to use rented equipment

31 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

2. Equipment is not available from Contractor’s no rmal sources or from one of Contractor’s subcontractors

3. Rented equipment is from an independent rental company

4. Proposed equipment rental rate is reasonable

5. The City Engineer authorizes the equipment source and the rental rate before Contractor uses the equipment

D. Equipment on the Job Site. For equipment on the job site at the time required to perform work paid by force account, the time paid is the time:

44. 1. To move the equipment to the location of work paid by force account plus an equal amount of time to move the equipment to another location on the job site when the work paid by force account is completed

2. To load and unload equipment

3. Equipment is operated to perform work paid by force account and:

3.1. Hourly rates are paid in 1/2-hour increments

3.2. Daily rates are paid in 1/2-day increments

E. Equipment Not on the Job Site Required for Original-Contract Work. For equipment not on the job site at the time required to perform work paid by force account and required for original-Contract work, the time paid is the time the equipment is operated to perform work paid by force account and the time to move the equipment to a location on the job site when the work paid by force account is completed.

The minimum total time paid is:

1. 1 day if daily rates are paid

2. 8 hours if hourly rates are paid

If daily rates are recorded, equipment:

1. Idled is paid as 1/2 day

2. Operated four (4) hours or less is paid as 1/2 day

3. Operated four (4) hours or more is paid as one (1) day

If the minimum total time exceeds eight (8) hours and if hourly rates are listed , City rounds up hours operated to the nearest 1/2-hour increment and pays based on the hours shown in the following table.

The table does not apply when equipment is not operated due to breakdowns, in which case rental hours are the hours the equipment was operated.

Equipment Rental Hours
Hours
operated
Hours
paid

0.0 4.00

32 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

0.5 4.25

1.0 4.50

1.5 4.75

2.0 5.00

2.5 5.25

3.0 5.50

3.5 5.75

4.0 6.00

4.5 6.25

5.0 6.50

5.5 6.75

6.0 7.00

6.5 7.25

7.0 7.5

7.5 7.75
≥8.0 hours
used

F. Equipment Not on the Job Site Not Required for Original-Contract Work. For equipment not on the job site at the time required to perform work paid by force account and not required for original-Contract work, the time paid is the time:

1. To move the equipment to the location of work paid by force account plus an equal amount of time to return the equipment to its source when the work paid by force account is completed

2. To load and unload equipment

3. Equipment is operated to perform work paid by force account

G. Non-Owner-Operated Dump Truck Rental. Contractor shall submit the rental rate for non- owner-operated dump truck rental to City. The City Engineer shall determine the payment rate. Payment for non-owner-operated dump truck rental is for the cost of renting a dump truck, including its driver. For the purpose of markup payment only, the non-owner- operated dump truck is rental equipment and the owner is a subcontractor.

The above markups shall constitute full compensation for all home office overhead, field office overhead, bond costs, profit, labor liability insurance, and other fixed or administrative costs that are not costs specifically designated as cost or equipment rental as stated above. The total payment made as provided above shall be deemed to be the actual cost of the work and shall constitute full compensation therefor.

When extra work to be paid for on a force account basis is performed by a subcontractor, an additional markup of 2 percent (2%) will be added to the total cost of that extra work including all markups specified in this Section. The additional 2 percent (2%) ma rkup shall reimburse Contractor for

33 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026
additional administrative costs, and no other additional payment will be made by reason of performance of the extra work by a subcontractor.

34 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

EXHIBIT C
WORKERS’ COMPENSATION INSURANCE CERTIFICATION

Pursuant to Section 18(b) of the Agreement, Contractor certifies as follows:

I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for worker’s compensation or to undertake self -insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.

Signed: Date:

(Typed or Printed Name)

Business Address (Street Address, City, State & Zip Code):

Business Phone: ( )

35 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

EXHIBIT D

PERFORMANCE BOND

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the City of Turlock, State of California, has awarded to Granite Construction Company, hereinafter designated as the “ Principal,” a contract for Project No. 25-025 Package 1 ; and,

WHEREAS, said Principal is required under the terms of said contract to furnish a bond for the faithful performance of said contract.

NOW, THEREFORE, we the Principal, and as Surety, are held and firmly bound unto the City of Turlock in the penal sum of _____________________________________ ($_____________), lawful money of the United States for the payment of which sum well and truly to be made, we bind ou rselves, our heirs, executors, administrators, successors, or assigns jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH, that if the above bounden Principal, or Principal’s heirs, executors, administrators, successors, or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions, and agreements in said contract and any alteration thereof made as therein provided, on the Principal’s part, to be kept and performed at the time and in the manner therein specified and in all respects according to their true intent and meaning; and shall defend, indemnify and save harmless the City of Turlock, its officers and agents as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and virtue.

And the Surety, for value received hereby stipulates and agrees that, in accordance with the Plans, Standard Specifications, Special Provisions, and other contract documents, no change, extension of time, alteration, or addition to the terms of the contract, or to the work to be performed hereunder, or to the specifications accompanying the same shall in anywise affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration of additions to the terms of the Contract to the work, or to the specifications.

The City of Turlock reserves the right to refuse use of any Contractor assigned by any surety to complete the work.

[Signatures on Following Page]

36 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

37 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026
IN WITNESS WHEREOF, the above-bound parties have executed this instrument under their seals this __________ day of _______________, 20__, the name and corporate seals of each corporate party being hereto affixed and these presents duly signed by its undersigned representative, pursuant to authority of its governing body.

(Corporate Seal) Principal

By

Title

(Attach Notarial Acknowledgment)

(Corporate Seal) Surety

Address

Phone No.: ( ) Fax No.: ( )

By
Attorneys-in-Fact

Title

(Attach Notarial Acknowledgment)

NOTE TO SURETY COMPANY : There must be submitted a certified copy of unrevoked resolution of authority for the attorneys-in-fact.

(Seal) Witness

Approved as to form:

Risk Manager

38 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

EXHIBIT E

PAYMENT BOND

KNOW ALL MEN BY THESE PRESENTS:

WHEREAS, the City of Turlock , a municipal corporation, has awarded to Granite Construction Company, hereinafter designated as the “Principal”, a contract for Project No. 25-025 Package 1”; and

WHEREAS, said Principal is required to furnish a bond in connection with said contract, to secure payment of claims of laborers, mechanics, or materialmen employed on work under said contract, as provided by law.

NOW, THEREFORE, we the undersigned Principal and Surety are held and firmly bound unto the City of Turlock in the sum of ____________________________________________ ($_________), said sum being equal to the estimated amount payable by said City of Turlock under the terms of the contract, for which payment well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors, or assigns jointly and severally, firmly by these presents.

THE CONDITIONS OF THIS OBLIGATION ARE SUCH that if said Principal, or Principal’s heirs, executors, administrators, successors, or assigns, or subcontractors shall fail to pay f or any material, provisions, provender, or other supplies, implements, or machinery used in, upon, for or about the performance of the work contracted to be done, or for any work or labor thereon of any kind, or for amounts due under the Unemployment Insur ance Code with respect to such work or labor, or for any amounts required to be deducted, withheld, and paid over to the Franchise Tax Board from these wages of employees of the Contractor and Contractor’s subcontractors pursuant to the Revenue and Taxation Code, with respect to such work and labor, the Surety or Sureties hereon will pay for the same in an amount not exceeding the sum specified in this bond, otherwise the above obligation shall be void. In case suit is brought upon this bond, said Surety w ill pay a reasonable attorney’s fee to be fixed by the court.

This bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Section 3138 of the Civil Code of the State of California so as to give a right of action to them or their assigns in any suit brought upon this bond.

Said Surety, for value received, hereby stipulates and agrees that, in accordance with the Plans, Standard Specifications, Special Provisions, and other Contract Documents, no change, extension of time, alteration or addition to the terms of the contract, or to the work to be performed there under, or to the specifications accompanying the same, shall in anywise affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the contract, or to the work, or to the specifications.

[Signatures on Following Page]

39 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

40 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026
IN WITNESS WHEREOF, the above-bound parties have executed this instrument under their seals this ___________ day of ________________, 20__ , the name and corporate seals of each corporate party being hereto affixed and these presents duly signed by its undersigned representative, pursuant to authority of its governing body.

(Corporate Seal) Principal

By

Title

(Attach Notarial Acknowledgment)

(Corporate Seal) Surety

Address

Phone No.: ( ) Fax No.: ( )

By
Attorneys-in-Fact

Title

(Attach Notarial Acknowledgment)

NOTE TO SURETY COMPANY : There must be submitted a certified copy of unrevoked resolution of authority for the attorneys-in-fact.

(Seal) Witness

Approved as to form:

Risk Manager

41 City Contract No. 2026-171
City Project No. 25-025 Package 1
Rev.01.2026

City Council Staff Report
May 26, 2026

From: Jessie Dhami, Human Relations Director
Prepared by: Darlene Ingersoll, Principal HR Analyst
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Motion: Approving an Agreement with Romeo Medical Corporation d/b/a Work Wellness to provide Pre-Employment Examinations, Annual Physicals, and Occupational Medical Services for the City of Turlock in an Annual Amount not to Exceed $70,000 for the period covering June 1, 2026, through June 30, 2027, to be paid from various department funds XXX-XX-XXX.43155 “Physicals, Shots & Psychological”.

2. NARRATIVE:

The City of Turlock is requesting to continue services with Romeo Medical Corporation, d/b/a Work Wellness for Pre-employment, Annual Physicals, and Occupational Medical Services.

Romeo Medical Corporation offers services through the Work Wellness Clinic which are critical to support required pre-employment and ongoing employment occupational medical services. These services include new hire evaluations, annual medical evaluations, Hazmat, respiratory tests, vaccination and titers, Department of Transportation (DOT) physicals, drug screening, fit for duty evaluations, and occupational medical services for the City’s Workers’ Compensation program.

All of these services are essential to ensuring the City is hiring healthy candidates and maintaining protection against preventable diseases with the annual medical evaluation and occupational medical services.

The City has contracted these services with Romeo Medical since 2005, and desires to continue services with them as the working relationship is efficient, seamless and effective.

These services are essential and critical to supporting a healthy workforce. Therefore, continuing such services will ensure we meet our pre-employment and ongoing occupational medical service requirements.

Section 2-7-08(b)(3) of the Turlock Municipal Code provides that bidding procedures are not required under the circumstances for contracts involving the obtaining of professional or specialized skill. Work Wellness is the only Occupational Medical Clinic in Turlock, CA that provides specialized Occupational Medical Services to a municipality of our size. Utilizing a vendor outside city limits would not be recommended by staff due to the inconvenience of traveling outside city limits and the potential loss of premier services provided to the City of Turlock by Romeo Medical over the last twenty-one (21) years.

Therefore, the recommendation is to approve the contract to continue services with Romeo Medical Corporation d/b/a Work Wellness.

Agenda Staff Report
5/26/2026

3. FISCAL IMPACT / BUDGET AMENDMENT:

Appropriate funds have been allocated for Fiscal Year 2025/2026 and will be appropriated during the Fiscal Year 2026/2027 budget process to all impacted Funds and accounts.

4. ENVIRONMENTAL DETERMINATION:

This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.

5. ALTERNATIVES:

Council may reject the contract with Romeo Medical Corporation and direct City staff to identify other medical providers that may offer such services.

6. ATTACHMENTS:

1. Professional Services Agreement

City Council Staff Report
May 26, 2026

From: Christopher Fisher, Municipal Services Director
Prepared by: James Governale, Management Analyst
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Ordinance: Second and final reading of an ordinance amending Turlock Municipal Code Title 7 (Public Works), Chapter 7-7 (Street Trees)

2. NARRATIVE:

Introduction & Background
The City of Turlock is well-known in the valley for its trees; not just at City facilities and parks, but also those in residential areas, at California State University, Stanislaus, and more.

Between towering sycamores, charming floral growth, vibrant fall colors, and almond blossoms, trees are an integral part of our community. To memorialize its commitment to trees, the City has maintained an active membership as a "Tree City USA" for 35 years.

Street trees are some of the most common trees in Turlock: many of Turlock’s iconic streets are lined with street trees that provide shade to pedestrians, reduce air pollution and topsoil erosion, enhance the visual appeal of the community, and much more.

Just like any plant, trees need regular care, especially when they are young and still establishing their root system. Rather than the responsibility for taking care of street trees falling to the City and the cost to taxpayers at large, the maintenance of street trees is performed by the adjacent property owner (Turlock Municipal Code 7-7-206). In addition to practical considerations, this long-standing approach fosters a sense of pride and ownership in each tree.

However, when trees are not properly selected, planted, watered, or maintained, they can negatively impact nearby infrastructure, including curbs, gutters, sidewalks, and utility lines.

In May 2016, following findings by an ad hoc subcommittee tasked with evaluating tree maintenance and sidewalk repair programs, the City Council adopted Resolution No. 2016- 094, which updated the street tree list, themed planting areas, and provided some limited planting standards.

In conjunction with updates to the sidewalk maintenance policy discussed at the December 9, 2025, and January 13, 2026 City Council meetings, the Interim City Manager authorized a contract with a local professional landscape architect, Linda Fish. Her scope of work included evaluating the current street tree list; proposing updates to the street tree list; developing Planting, Watering, and Maintenance Guidelines; reviewing the Turlock Municipal Code; and reviewing the landscape section of the City Engineer’s Standard Specifications and Drawings (last revised in 2016). An updated Street Tree List and Planting, Watering, and Maintenance Guidelines were adopted by the City Council under Resolution Nos. 2026-046 and 2026-047, respectively.

Municipal Code Revisions

Agenda Staff Report
5/26/2026

As part of her scope of work, Ms. Fish also reviewed the Turlock Municipal Code and provided recommended revisions. Drawing on her experience with municipal landscape standards, she identified opportunities to retain effective provisions while improving clarity and consistency.

The proposed changes align the municipal code with the updated tree list, maintenance guidelines, and the City Engineer’s Standard Specifications and Drawings, which she has also evaluated and provided to the City Engineer, creating a more cohesive and consistent regulatory framework.

Proposed changes to the municipal code include:
• Aligning it properly with the proposed resolutions
o Removing language about themed areas
o Modifying planting areas to match what is referenced in the Planting, Watering, and Maintenance Guidelines
• Performing cleanup work
Conclusion
Staff have worked with Ms. Fish to take a comprehensive approach on the consideration of trees in Turlock. If implemented, these updates are expected to improve public understanding of proper tree care and ownership responsibilities, particularly in relation to local and state requirements for maintaining sidewalks, curbs, gutters, and utility connections.

Staff recommend adoption of this ordinance, as the updates are expected to address ongoing concerns related to tree impacts on public infrastructure while supporting public health, safety, and the overall experience of residents and visitors.

3. FISCAL IMPACT / BUDGET AMENDMENT:

There is no fiscal impact as a result of the adoption of this ordinance. The cost to the public, if all the actions are adopted, is unchanged, and the contract with Ms. Fish is being expensed in Fiscal Year 2025 - 2026 with existing appropriations. No budget amendment is required.

4. ENVIRONMENTAL DETERMINATION:

The amendments to the Turlock Municipal Code involve administrative activities regarding general policy and procedure-making and does not itself result in direct or indirect physical changes in the environment. Therefore, the action is not a project under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15378.

5. ALTERNATIVES:

1. The Council could choose not to adopt the proposed amendments to the Turlock Municipal Code. This alternative is not recommended because the proposed changes are part of a comprehensive approach to tree management in Turlock and primarily consist of clarifying and updating existing code provisions.

2. The Council can provide alternative direction to staff.

Agenda Staff Report
5/26/2026

6. ATTACHMENTS:

1. Draft Ordinance

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

ORDINANCE NO. -CS

WHEREAS , the City of Turlock has long recognized the publi c health, safety, environmental, and aesthetic benefits of street trees; and

WHEREAS , street trees contribute to the character of the City, provide shade, reduce air pollution and erosion, and support the overall quality of life for residents and visitors; and

WHEREAS , the proper planting, placement, and maintenance of street trees is necessary to prevent damage to public infrastructure, includi ng sidewalks, curbs, gutters, and utilities, and to minimize risks to public safety; and

WHEREAS , the Turlock Municipal Code currently establishes requirements related to street trees and landscaping, including responsibil ities for adjacent property owners and standards applicable to development; and

WHEREAS , the City has identified the need to update and cl arify these provisions to improve consistency, usability, and alignment with current practices related to tree planting, maintenance, and infrastructure protection; and

WHEREAS , the proposed amendments are intended to reorganiz e and refine existing regulations, remove outdated or ineffective provisions, and improve coordination between street tree requirements and other development standards within the Municipal Code; and

WHEREAS , the City Council finds that these amendments will promote clearer administration and enforcement of the Municipal Cod e while continuing to protect public improvements and support the long-term health and sustainability of the City’s urban forest; and

WHEREAS, the City further finds that restructuring and clari fying these provisions will improve transparency and ease of use for residents, property owners, and staff responsible for implementation and compliance.

BE IT ORDAINED by the City Council of the City of Turlock as follows:

SECTION 1. ENVIRONMENTAL DETERMINATION: The Ordinance has been reviewed with respect to applicability of CEQA and the CEQA Guidelines. This action involves administrative activities regarding general policy and procedure making and does not itself result in direct or indirect physical changes in the envir onment. Therefore, the action is not a project under the California Environmental Quality Act (CEQ A) pursuant to CEQA Guidelines Section 15378.

SECTION 2. AMENDMENT: Title 7, Chapter 7-7 shall hereby be amended to re ad as follows:

CHAPTER 7-7
}
}
}

IN THE MATTER OF AMENDING TURLOCK
MUNICIPAL CODE TITLE 7 (PUBLIC WORKS),
CHAPTER 7-7 (STREET TREES)
}
}
}
}

STREET TREES
Article 1
Miscellaneous
§ 7-7-101. Purpose.

The Council finds that:
(a) Street trees are of economic, environmental, and aesthetic importance to the City; and
(b) The City requires the planting of street trees as a part of subdivision developments and along
major streets to enhance the character of the City; and (c) Street trees directly benefit the City residents by:
(1) Reducing erosion of the topsoil by breaking the summer winds; (2) Reducing air pollution by producing oxygen from carbon dioxide; (3) Increasing property values;
(4) Maintaining the ecological balance of the area;
(5) Providing shade and buffering noise and glare; and
(6) Providing energy conservation by the reduction of summer temperatures; and
(d) The health, safety, and general welfare of the citizens will best be served by regulating the removal, severe pruning, topping, an d planting of street trees and encouraging the reforestation of areas in which street trees have been removed. § 7-7-102. Definitions.

For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
(a) "Department" shall mean the Parks, Recreation and Public Facilities Department. (a) "Director" shall mean the Parks, Recreation and Public Facilities Municipal Services Director or his or her designated representative. (b) "Street Tree Plan" shall mean the officially adopted plan for the planting of certain varieties of trees in public rights-of-way , or planting easements , or along certain specified theme streets .
(c) "Planting easement" shall mean an easement on p rivate property of five (5') feet in width along the frontage of the parcel for the p urposes of planting and maintaining street trees.
(d) "Parkway" shall mean that portion of land withi n the public right-of-way between the curb or curb line and sidewalk.

(e) "Street Tree List" shall mean the list of stree t trees specified by resolution and approved for planting and maintenance as street trees.
(f) "Theme street" shall mean a specifically named street, or streets within an area, specified by resolution, for which uniformity of species is desired for special effects or purposes.
(g) (f) "Maintenance" or "maintain" shall mean and include pruning, spraying, watering, mulching, fertilizing, cultivating, supporting, treating for disease or injury, or any other similar act which promotes the life, growth, health, or beauty of street trees.
(h) (g) "Pruning" shall mean the usual pruning, cutting, or thinning or otherwise the removal of branches, stems, and other parts of a tree.
(i) (h) "Person" shall be defined as set forth in TMC 1-3-1 3 and shall include a public utility company or similar entity.
(i) "Property owner" shall mean the owner of the real p roperty, or the owner of the property adjacent to the right-of-way, on which the street tree is located or his authorized agent or representative.
(j) “Trimming” shall mean the minor cutting or removal of small branches or foliage for routine clearance or maintenance that does not materially alter the tree’s natural form, structure, health, or stability.

Article 2
Responsibilities, Authority, Duties, And Costs
§ 7-7-201. Director to enforce chapter provisions.

The Director, under the general direction of the Ci ty Manager, shall have the authority and responsibility to carry out the provisions of this chapter. § 7-7-202. Authority to enter premises.

The Director or his or her designee shall have the authority to enter in or upon any part of the parkway or planting easement or adjacent property as is reasonably necessary for the purpose of planting, maintaining, pruning, spraying, or removing a street tree. § 7-7-203. Control of disease and the like.

The Director or his or her designee shall have the authority to order a property owner to
take such action as is necessary to control insects , scales, parasites, fungus, or other injurious pests or plant materials which could cause serious injuries to the City street trees or other plant materials within the City. The Director or his or her designee shall notify the property owner in writing of the condition which ex ists and the controls necessary to correct the conditions and establish a reasonable time in which the corrective action shall be taken.

§ 7-7-204. Responsibility for condition of trees.

The Director or his or her designee shall be respon sible for inspecting, supervising, or ordering the maintenance, removal, and replaceme nt of street trees planted within parkways or planting easements by the property owner or by the City. The Director or his or her designee may cause or permit street trees or other plant materials planted in the parkways or planting easements to be removed by the City or the property owner if the trees are deemed by the Director or his or her designee to be unhealthy, hazardous, undesirable, or causing, or will cause, excessive d amages to the existing public improvements or street trees.
§ 7-7-205. Authority to seek advice.

The Director or his or her designee shall have the authority to consult and seek the advice and recommendations of nurserymen, arborists, and o ther persons qualified in horticulture.
§ 7-7-206. Duty to maintain.

It shall be the duty of every property owner and ev ery person occupying property within the City to maintain street trees in the parkway or planting easement on or adjacent to his or her property.
(a) In conjunction with any sale or transfer of real property and using the Local Option Real Estate Transfer Disclosure Statement form set forth in Civil Code Section 1102.6a, the seller/transferor shall provide notice of the maintenance obligations set forth in this article to the buyer/transferee. The notice shall, at a minimum, include the following language:

Every property owner and every person occupying pro perty within the City shall maintain street trees in the parkway or plant ing easement on or adjacent to his/her property.
(b) To provide all property owners and occupants wi th notice of his/her obligation to maintain street trees as set forth in this article, the ordinance codified in this chapter shall be recorded with the County Clerk of the County of Stanislaus. § 7-7-207.

Trimming Pruning .

Street trees shall be pruned trimmed as needed to enhance the natural growth, characteristics, and traits of the trees. A street tree permit is required for all pruning o f street trees pursuant to TMC 7-7-301, except for th e trimming of small branches necessary to maintain clearance for pedestrian or v ehicle travel from ground level that does not materially alter the tree’s structure or r emove more than 10% of live foliage.

Street trees shall not be pruned to create a form unnatural to the street tree. § 7-7-208. Duty to protect.

It shall be the responsibility of every property owner and every person occupying land to

protect street trees planted in the parkways or pla nting easements on or adjacent to his property from physical damages and other plant mate rials which can be detrimental to the street tree's growth or health.
§ 7-7-209. (Not used).
§ 7-7-210. Owners to perform work: Costs.

All work, and the costs thereof, required in the re moval, pruning, or maintenance of a street tree shall be provided by the property owner or his agent, including the removal of the stump to a depth as specified by the Director or his or her designee. § 7-7-211. Refusal to perform work.

If the property owner refuses to perform the work a fter notice from the Director or his or her designee, the Director or his or her designee m ay order the work done by the City, and the costs shall be assessed to the property own er and tenant consistent with the provisions of TMC 7-7-210 as a personal debt and, i f unpaid within thirty (30) days after billing by the City, shall become a lien on the property. § 7-7-212. Appeals.

Any person aggrieved by any action taken
by any City Official pursuant to the provisions of
this chapter or any guideline or procedure issued p ursuant to the chapter, may appeal such action the decision first to the City Manager or their des ignee, then to the City Council pursuant to TMC 1-4-01(b) as provided by Chapter 1-4 TMC .

Article 3
Permits: Costs: Removal And Limb Reduction
§ 7-7-301. Permits required.

It shall be unlawful for any person to remove, prune,
or severely prune , or alter any street
tree within the City, without a permit from the Cit y. This prohibition does not extend to trimming as outlined the regular maintenance required under TMC 7-7-207 206 . § 7-7-302. Applications for permits.

Any person desiring to remove, prune, severely prun e, or otherwise alter a street tree shall file an application for a permit with the Dir ector or his or her designee. Such application shall be provided by the Director or his or her designee and may contain such information deemed necessary by the Director or his or her designee to insure ensure compliance with the spirit and intent of this chapter.

Applications for permits shall be signed by the property owner. § 7-7-303. Time for performance under permits.

The Director or his or her designee shall stipulate a time by which all work shall be

performed, not to exceed sixty (60) days after the date of the issuance of the permit, and may require the posting of cash or other surety in an amount equal to the cost of the work to insure ensure the faithful completion of the work specified and t he cleanup of debris within the time stipulated for performance.
§ 7-7-304. Removal permits.
(a) Upon the receipt of an application to remove a street tree, the Director or his or her designee shall determine whether or not such tree should be removed. (b) The Director or his or her designee may issue a permit to remove or conditionally remove a street tree when one (1) or more of the following conditions apply to the tree:

The tree is:
(1) Dying or dead;
(2) Decayed, rotted, or otherwise hazardous to the public; (3) Diseased beyond reclamation;
(4) Damaging public improvements, such as curbs, gu tters, sidewalks, or other utilities;
(5) Required to be removed due to building moving f rom the lot or parcel
provided it is not practical or reasonable to save the tree; all work and costs will be provided by the owner;
(6) Required to be removed for new construction and the Director or his or her designee believes better and more suitable planting will result provided there is no practical or reasonable means to save t he tree; all work and costs will be provided by the owner; or
(7) Located so that thinning is desired to improve spacing or conformity. (c) The Director or his or her designee, as a condi tion of the removal of a tree, whenever possible shall require the planting of either a theme tree or a tree from the Street Tree List in a location along the proper ty frontage in keeping with the Street Tree Plan.
§ 7-7-305. Pruning permits.
(a) Upon the receipt of an application to prune or severely cut a street tree, the Director or his or her designee shall determine whether or not the tree should be pruned or otherwise severely cut.
(b) The Director or his or her designee may issue a permit to prune or severely cut a street tree when limb reduction or severe cutting is required either to:
(1) Maintain pedestrian or traffic clearance and visibility;

(2) Maintain tree health;
(3) Maintain continuity with prior pruning practices; or (4) Remove a building from the parcel.
§ 7-7-306. Permits not required.

A permit shall not be required when an immediate th reat to the public health and safety exists due to an accidental occurrence or act of God and, in the opinion of the Director or his or her designee, the removal, pruning, or cutting is required.

Article 4
Cooperation With Other Agencies And Departments
§ 7-7-401. Public utilities.
(a) Any public utility maintaining any overhead wir e or underground pipe, wire, or conduit shall obtain permission from the Director o r his or her designee before performing any maintenance to wires or pipes or con duits which would cause injuries to street trees. Such public utility shall in no way injure, deface, prune, scar, or top any tree until its plans and procedures have been approved by the Director or his or her designee.
(b) The Director or his or her designee shall be pe rmitted to inspect all maintenance or operational work performed by public utilities which might affect the street trees.

If, in the opinion of the Director or his or her de signee, the performance of work would cause excessive or unnecessary injuries to an y street tree, the Director or his or her designee shall have the authority to sto p such maintenance and operational work and arrange with such utility anot her method of maintenance or operational work satisfactory to the City.
(c) This section shall not apply to emergency public utility maintenance work which is performed during nonworking hours for City personnel.
§ 7-7-402. Notification of street improvements.

The Engineering Department and Planning Department shall notify the Director or his or her designee of any known applications for a new cu rb, gutter, sidewalk, driveway approach, or other installation which might require the removal of, or cause injury to, any street tree or otherwise be contrary to the intent of this chapter.

Article 5
Street Tree Plan
§ 7-7-501. Street trees required.

Street trees shall be planted and maintained as par t of all new construction and all remodeling which exceeds twenty-five (25%) percent of the value of the structure as

shown on the latest equalized assessment roll of th e County. All required street trees shall be planted as required by this chapter prior to the issuance of a certificate of occupancy or approval of final inspection by the Building Inspector. § 7-7-502. Subdivision Street Tree List and Theme Street List.

Street trees shall be planted of the type, size, an d at the locations specified in the Subdivision Street Tree List and Theme Street List which shall be adopted by resolution of the Council.
§ 7-7-503. Street tree types.

REPEALED
§ 7-7-504. Location of street trees.

Street trees shall be planted in the following locations:
(a) In areas of the City
, where parkways exist, and not more than fifty (50%) percent of the block frontage has been converted to current sidewalk standards, street trees may shall be planted in the parkway.
(b) In areas where parkways do not exist and tree wells are not required, blocks where more than fifty (50%) percent of the parkway has be en eliminated and replaced consistent with current sidewalk standards street trees shall be planted three (3’) two and one-half (2-1/2') feet behind the sidewalk.
(c) In commercial areas or in those areas in which sidewalks are required or authorized to extend from the curb to the property line, stree t trees shall be planted in the sidewalk area in a four (4') foot by six (6’) foot rectangular square area adjacent to the curb, unless otherwise authorized by the Director or his or her designee. (See City Standard No. of Turlock Standard s, Specifications and Drawings No. ST-22. ) (d) In all subdivisions for which the final map is filed prior to June 1, 1978, street trees shall be planted two and one-half (2-1/2') feet behind the sidewalk. (e) (d) In all subdivisions and parcel map areas, street trees shall be planted three (3’) two and one half (2 ½’) within an area two and one-half (2-1/2') feet to four (4') feet behind the sidewalk in a planting easement , except in areas with parkways. (f) (e) In industrial areas and other commercial areas, str eet trees shall be planted as provided in the Street Tree List or as determined b y the Director or his or her designee.

SECTION 3. VALIDITY: If any section, subsection, sentence, clause, word, or phrase of this ordinance is held to be unconstitutional or ot herwise invalid for any reason, such decision shall not affect the validity of the remainder of t his ordinance. The Turlock City Council hereby declares that they would have passed this ordinance , and each section, subsection, sentence, clause, word, or phrase thereof, irrespective of th e fact that one or more section, subsection, sentence, clause, word, or phrase be declared invalid or unconstitutional.

PASSED AND ADOPTED at a regular meeting of the City Council of the Ci ty of Turlock this 26
th day of May, 2026, by the following vote:

AYES:

NOES:

NOT PARTICIPATING:

ABSENT:

Signed and approved this 26
th day of May, 2026.

SIGNED:

____________________________
Amy Bublak, Mayor
ATTEST:

___________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California APPROVED AS TO FORM:

____________________________
Katie O. Lucchesi, City Attorney

City Council Staff Report
May 26, 2026

From: Katie Quintero, Planning Manager
Prepared by: Katie Quintero, Planning Manager
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Resolution: Finding that The Evergreen Market dba FF Farms has complied in good faith with the terms and conditions of the Development Agreement between The Evergreen Market dba FF Farms and the City of Turlock for the operation of a cannabis retail dispensary at 101 E. Glenwood Avenue, Stanislaus Assessor's Parcel Number 044-022-013

Ordinance: Introduction and First Reading of an Ordinance amending terms and extending the Development Agreement between the City of Turlock and Evergreen Market dba FF Farms

2. NARRATIVE:

The Evergreen Market is located at 101 E. Glenwood Avenue. The property is zoned Community Commercial, which allows cannabis dispensaries with a Conditional Use Permit and Development Agreement.

At their February 28, 2023, meeting, the City Council adopted the ordinance approving the Development Agreement (DA). As required in the DA, The Evergreen Market applied for a Conditional Use Permit. The Planning Commission granted Conditional Use Permit 2022-07 at the April 6, 2023, public hearing, allowing The Evergreen Market to operate a cannabis dispensary in the existing 2,785 square foot building.

On March 31, 2024, Jose Rodrigues and the City of Turlock executed an Assignment and Assumption Agreement, as allowed under Section 10.1 of the Development Agreement. The Assignment and Assumption Agreement allowed the sale, assignment, or transfer of The Evergreen Market at 101 E. Glenwood Avenue to Jose Rodrigues. All other conditions of the Conditional Use Permit and the Development Agreement remain unchanged.

Planning Department
A sign permit was issued for the signs on the building.

Evergreen Market dba FF Farms has complied with the requirements of the Planning Division.

Building Department
The Evergreen Market is in compliance with the requirements of the Building and Safety Division.

Finance Department
Business License
The Evergreen Market was issued a business license on August 1, 2024. Their business

Agenda Staff Report
5/26/2026

license is current and active. There are no outstanding issues.

Public Benefit Amount
The Development Agreement requires the monthly payment of a public benefit amount.

Section 4.2 of the Development Agreement details the public benefit amount that Evergreen Market must submit to the City on a monthly basis.

The above public benefit amounts include a one-quarter percent (.25%) dollar amount dedicated to supporting the City of Turlock juvenile drug and alcohol treatment and rehabilitation programs.

The audits and compliance checks have been completed. Evergreen Market is in compliance with the Finance Department requirements. The public benefit amount that Evergreen Market has paid is detailed in the table below:

Fiscal Year Public Benefit
Payment
2020-21 N/A
2021-22 N/A
2022-23 N/A
2023-24 N/A
2024-25 $275,000.00
2025-26* $262,360.00
Total through 4/29/26 $537,360.00

*Through March 2026

Police Department
Calls for Service
In 2024, there were two calls for service (CFS). The landscaping crew set off an alarm when leaf blowing near the front doors. The other call for service was a false alarm set off by the business owner. Both calls were closed by the responding officer and did not result in a report or arrests.

Calls for service from January 1, 2025, through October 22, 2025, totaled two. Both calls were accidental alarms by the employees. Both calls were closed by the responding officer with no arrests made.

There were five calls for service from October 2025 through April 2026. Four calls for service were false or accidental alarms and closed by the responding officer. One call was to assist another agency to check security guard credentials.

It is important to remember, when responding to calls for service, the location is indexed by where the incident occurred or where the officer should respond to contact the victim. If the

Agenda Staff Report
5/26/2026

officer responds to the Evergreen Market parking lot or in close proximity to Evergreen Market, the business name will be indexed in the report. It does not mean a crime occurred at Evergreen Market. If no report was made, the responding officer did not find probable cause to show a crime occurred.

Annual Inspection
On April 23, 2026, the Police Department conducted their annual inspection. The following items were found at the inspection:

The point of sale cash drawer had the key sitting in the lock and viewable to the public. This is a security concern. The key needs to be secured by an employee or manager during business hours.

The dumpster to the business was not locked. The dumpster needs to be locked at all times when not in use to prevent people from accessing the dumpster.

Immature clone cannabis plants were left stacked outside the back door against the fence line in preparation for disposal. These plants need to be properly secured until they are disposed of per DDC regulations.

The security door to the lobby was propped open during business hours. This door needs to be secure at all times and requires key card access to open. *This occurred during the last inspection in 2025.*

The manager was not able to provide permits for all employees. The Police Department discussed the necessity of displaying all employee permits in the manager’s office for inspections.

The business has been mailed a letter noting these deficiencies and a second inspection will be conducted to ensure these items have been corrected. These items are minor in nature and can be corrected easily and, therefore, Evergreen Market dba FF Farms is in substantial compliance with the Police Department’s conditions.

Annual Review
TMC §9-5-912 directs the Planning Commission to recommend to the City Council whether the business has complied in good faith with the terms and conditions of the Development Agreement.

Proposed Amendments
Various amendments are proposed to the Development Agreement. To capture all previous amendments to the Development Agreement into one document, the City has prepared a First Amended and Restated Development Agreement. This captures the previous amendments and newly proposed amendments into this one complete Agreement.

In response to concerns from many of the dispensary operators, the City is proposing to amend the language for the public benefit amount to remove the monthly minimum payment and move to a percentage only. The percentage is set as a range up to 9% of gross receipts but proposes to set the amount required to be paid at 5.25% through May 31, 2027, at which time Council may set a new Public Benefit amount within the range. This change will cause

Agenda Staff Report
5/26/2026

a reduction in the overall amount the City will receive in the public benefit, but it will provide more stability and will reduce the financial strain on the cannabis operators.

This Development Agreement does not expire until July 13, 2028, but staff is proposing to amend the term of the agreement through June 30, 2029, so it is on the same schedule as the other dispensary Development Agreements.

Other regulations proposed to be added to the agreement include requiring remote real-time live access to the video footage of cameras installed at the businesses and requiring background checks prior to any changes in ownership or on any individual or entity every two years or at any other time upon reasonable cause. A section has been added detailing that if anyone with direct or indirect ownership or controlling interest in the project is convicted of a felony or any crime substantially related to the ownership or operation of a cannabis business, the City may terminate the Development Agreement. If given such notice, the Developer would have 180 days to complete a transfer of their interest to a transferee approved by the City.

Other proposed changes include various language cleanups and updates to current laws and regulations.

3. FISCAL IMPACT / BUDGET AMENDMENT:

Approving the amendment to remove the monthly minimum payment will result in a reduction in the public benefit amount collected annually but will provide more stability for the cannabis operators.

4. ENVIRONMENTAL DETERMINATION:

The project consists of the annual review to determine if Evergreen Market dba FF Farms has complied in good faith with the terms and conditions of the Conditional Use Permit and Development Agreement as well as a three-year time extension and miscellaneous amendments to the Development Agreement.

No changes or modifications to the site are anticipated as a result of this review; therefore, this action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) [Project] of the CEQA guidelines. This is an organizational or administrative activity involving the annual review, request for a time extension and various miscellaneous changes to the Development Agreement. This action will not result in direct or indirect physical changes in the environment.

5. ALTERNATIVES:

1. City Council could find The Evergreen Market dba FF Farms has not complied in good faith with the terms of the Development Agreement for the annual review.

2. City Council could propose other changes to the terms of the Development Agreement.

6. ATTACHMENTS:

1. Draft Resolution

2. Draft Ordinance and 1st Amended and Restated DA Evergreen

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

WHEREAS, on February 28, 2023 the City adopted Ordinance No. 1300-CS approving a Development Agreement by and between the City and The Evergreen Market dba FF Farms to operate a storefront retail dispensary as defined in Turlock Municipal Code Section 5.21 in strict accordance with applicable state and local law, at 101 E. Glenwood Avenue, Turlock, California, County of Stanislaus Assessor’s Parcel Number 044-022-013 (the “Project”), consistent with the General Plan, as amended; and

WHEREAS, on May 7, 2026, the Planning Commission of the City of Turlock met in accordance with Turlock Municipal Code Section 9-5-912(c); and

WHEREAS, pursuant to Section 9-5-912(c), the City Council, upon recommendation of the Planning Commission, shall determine whether the property owner has complied in good faith with the terms and conditions of the agreement during the period under review;

WHEREAS, the City Council determined the recommended action does not constitute a project and will not create a physical impact on the environment or authorize any action that has the potential to impact the physical environment and would not make any changes in current policy or regulations; therefore, the proposed action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3)(General Rule, No Environmental Impact) of the CEQA Guidelines.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby determine that The Evergreen Market dba FF Farms has complied in good faith with the terms and conditions of the Development Agreement between The Evergreen Market dba FF Farms and the City of Turlock for the operation of a cannabis retail dispensary at 101 E. Glenwood Avenue, Turlock, CA, County of Stanislaus, Assessor’s Parcel Number 044-022-013.

}
}
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}
RESOLUTION NO. 2026-IN THE MATTER OF THE CITY COUNCIL FINDING

THAT THE EVERGREEN MARKET DBA FF FARMS

HAS COMPLIED IN GOOD FAITH WITH THE TERMS

AND CONDITIONS OF THE DEVELOPMENT

AGREEMENT BETWEEN THE EVERGREEN

MARKET DBA FF FARMS AND THE CITY OF

TURLOCK FOR THE OPERATION OF A CANNABIS
RETAIL DISPENSARY AT 101 E. GLENWOOD

AVENUE, TURLOCK, CALIFORNIA, COUNTY OF
STANISLAUS, ASSESSOR’S PARCEL NUMBER
044-022-013

Resolution No. 2026-

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 26th day of May, 2026, by the following vote:

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )

ATTEST:

__________________________
_
Nichole Fiez, City Clerk,
City of Turlock, County of
Stanislaus,
State of California

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

WHEREAS, on June 11, 2019, the City Council of the City of T urlock (the “City Council”) adopted Ordinance No. 1255-CS to enact ca nnabis regulations for cannabis businesses pursuant to AUMA and MAUCRSA, by amendin g the City’s cannabis business regulations and establishing a Cannabis Business Pilot Program (the “Pilot Program”); and

WHEREAS, on June 11, 2019, the City adopted Ordinance No. 12 55-CS amending the City’s cannabis business regulations and establishing a Cannabis Business Pilot Program (the “Pilot Program”) to regulate the operation of commercial cannabis businesses within the City; and

WHEREAS, on February 28, 2023 the City adopted Ordinance No. 1300-CS approving a Development Agreement by and between the City and The Evergreen Market to operate a storefront retail dispensary as defined in Turlock Municipal Code Section 5.21 in strict accordance with applicable state and local law, at 101 E. Glenwood Avenue, Turlock, California, County of Stanislaus Assessor’s Parcel Number 044-022-013 (the “Project”), consistent with the General Plan, as amended; and

WHEREAS, on March 31, 2024, the City of Turlock and The Evergreen Market entered into an Assignment and Assumption Agreement; and

WHEREAS, pursuant to Section 1.9 of the Development Agreeme nt a “Major Amendment” to the Development Agreement shall be approved by the City Council; and

WHEREAS, after the public hearing held on May 7, 2026, the Planning Commission recommended the City Council make the proposed amen dments to the Development Agreement and extend the term of the Development Agreement through June 30, 2029; and

WHEREAS, the City Council, based on its independent review a nd analysis of the Planning Commission’s recommendation, oral and writ ten testimony, and the record as a whole, finds, after due study, deliberation, and ho lding a public hearing, and based on its independent judgement, find that the following circumstances exist:
}
}
}
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}
ORDINANCE NO. 13XX-CS INTRODUCTION AND FIRST READING OF AN

ORDINANCE AMENDING TERMS AND EXTENDING

BY AMENDMENT, THE DEVELOPMENT

AGREEMENT BETWEEN EVERGREEN MARKET

DBA FF FARMS AND THE CITY OF TURLOCK FOR

THE OPERATION OF A CANNABIS DISPENSARY
AT 101 E. GLENWOOD AVENUE, TURLOCK,
CALIFORNIA, STANISLAUS COUNTY APN 044-022-
013 THROUGH JUNE 30, 2029

Ordinance No. 13XX-CS

1. The Project is consistent with the goals, polici es, and standards of the City’s General Plan and all other applicable standards and ordinances of the City.

2. In accordance with the Development Agreement Sta tute, the City Council finds that the amendment to the Development Agreement:
a. Will not be detrimental to the health, safety, a nd general welfare of persons residing in the immediate area nor detrimental to t he general welfare of the residents of the City as a whole; and
b. Will not adversely affect the orderly developmen t of property or the preservation of property values; and
c. Is consistent with the relevant provisions of Go vernment Code Sections 65864 through 65869.5; and
d. Contains a legal description of the property.

NOW THEREFORE, BE IT RESOLVED , that the City Council of the City of Turlock does hereby determine:

Section 1. The recitals stated above are true and correct, and hereby incorporated herein.

Section 2. This request is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) [Project] of the CEQA guidelines. This is an organizational or administrative activity involving the request for a time extension for the Development Agreement (DA) between the City of Turlock and Evergreen Market dba FF Farms This action will not result in direct or indirect physical changes in the environment.

Section 3. The City Council of the City of Turlock approved t he proposed amendments and extends the terms of the Development Agreement between the City of Turlock and Evergreen Market dba FF Farms through June 30, 2029.

Section 4. If any section, subsection, sentence, clause, phra se, or word of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid for any reason, such decision shall not aff ect the validity of the remaining portions of the Ordinance. The City Council hereby declares tha t it would have passed this Ordinance and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more sections(s), subsection(s ), sentence(s), clause(s), phrase(s), or word(s) be declared invalid.

Section 5. Upon passage of this Ordinance, the City Manager i s authorized to execute the amendment to the First Amended and Rest ated Development Agreement as shown in Exhibit A on behalf of the City. Within te n (10) days of the execution, but no earlier than 30 days after passage of this Ordinance, the C ity Clerk shall cause the amendment to the Development Agreement to be recorded in the Office of the County Recorder as provided for by Government Code section 65868.5. The amendme nt to the Development Agreement shall not take effect for thirty (30) days following passage and adoption of this Ordinance.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock

Ordinance No. 13XX-CS

this 26
th day of May, 2026, by the following vote:

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )

SIGNED:

____________________________
Amy Bublak, Mayor

ATTEST: APPROVED AS TO FORM:

___________________________ ____________________ _________ Nichole Fiez, City Clerk, Katie Lucchesi, City Attorney City of Turlock, County of Stanislaus,
State of California

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

City of Turlock
156 S Broadway
Turlock, CA 95380
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER'S USE
Recording Fee Exempt per Government Code §6103

FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT BETWEEN THE CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

THIS FIRST AMENDED AND RESTATED DEVELOPMENT AGREEME NT
(“Agreement”) is made and entered into this _______ ____________ (____) day of _________________, 2026, by and between the City o f Turlock , a California municipal corporation (“City”), and The Evergreen Market (Turlock), Inc. , a California corporation (“Developer”). City and Developer may b e referred to herein individually as a “Party” or collectively as the “Parties.” Ther e are no other parties to this Agreement.

RECITALS
A. On October 9, 2015, Governor Jerry Brown signed thr ee bills into law (Assembly Bill 266, Assembly Bill 243, and Senate Bill 643) w hich are collectively referred to as the Medical Cannabis Regulation and Safety Act ( “MCRSA”). MCRSA establishes a statewide regulatory system for the c ultivation, processing, transportation, testing, manufacturing and distribu tion of medical marijuana to qualified patients and their primary caregivers.

B. On November 8, 2016, California voters enacted Prop osition 64, the Control, Regulate and Tax Adult Use of Marijuana Act, also k nown as the Adult Use of Marijuana Act (“AUMA”), which establishes a compreh ensive system to legalize, control, and regulate the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical cannabis, including cannabis products, for use by adults 21 years and older and to tax the growth and retail sale of cannabis for nonmedical use.

C. On June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult- Use Cannabis Regulation and Safety Act (“MAUCRSA”), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses.

MAUCRSA retains the provisions in MCRSA and AUMA th at granted local jurisdictions control over whether businesses engag ed in Commercial Cannabis Activity, as defined in Section 1.4 of this Agreeme nt, may operate in a particular jurisdiction.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

D. On June 11, 2019, the Turlock City Council (the “City Council”) adopted Ordinance No. 1255-CS to enact cannabis regulations as define d under Turlock Municipal Code (“T.M.C.”) Section 5.21 pursuant to AUMA and MAUCRSA; and E. On June 11, 2019, the City adopted Ordinance No. 12 55-CS amending the City’s cannabis business regulations and establishing a Ca nnabis Business Pilot Program (the “Pilot Program”) to regulate the opera tion of commercial cannabis businesses within the City.

F. Developer proposed to improve, develop and use real property to operate a Cannabis Business Project, as defined below, in str ict accordance with California Cannabis Laws, as defined in Section 1.4 of this Ag reement and the T.M.C., as each may be amended from time to time.

G. To strengthen the public planning process, encourag e private participation in comprehensive planning and reduce the economic risk of development, the California Legislature adopted Government Code sect ion 65864 et seq . (the “Development Agreement Statute”), which authorizes City and an individual or business entity with an interest in real property t o enter into a development agreement that establishes certain development righ ts in real property that is subject to a development agreement application.

H. On June 11, 2019, following the adoption of the Pilot Program, the City issued and circulated a request for qualifications (“RFQ”). The purpose of the RFQ was to form the basis for a selection process of qualified cannabis operators for participation in the Pilot Program. The Evergreen Market (Turlock), Inc. has completed the RFQ requirements; and

I. Developer submitted an application to the City Plan ning Commission Department for consideration of a development agreement for a commercial cannabis business.

J. Developer has leased property located at 101 E Glen wood Avenue, Turlock, California, County of Stanislaus Assessor’s Parcel Number 044-022-013 of which Developer improved approximately 2,677 (two thousand six hundred and seventy- seven) square feet of space (the “Site”) to operate the Cannabis Business Project, more particularly described in the legal descriptio n attached hereto as Exhibit A (“Legal Description“) and the Cannabis Business Project Site Map attached hereto as Exhibit B .

K. Developer leased the Site for the purpose of carryi ng out the Cannabis Business Project. A copy of the lease to the Site is attache d hereto as Exhibit C, within satisfaction of the requirement of T.M.C. Chapter 5.21.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

L. On January 5, 2023 the Turlock Planning Commission (“Planning Commission”), in a duly noticed and conducted public hearing, considered Developer’s application for this Agreement. At that public hearing, the Planning Commission recommended the City Council adopt Ordinance No.1300-CS, which would allow Developer to operate the Cannabis Business Project at the Site.

M. On February 28, 2023, pursuant to Government Code s ection 65867.5, and following a duly noticed and conducted public heari ng, the City Council reviewed, considered, adopted, and entered into this Agreemen t pursuant to Ordinance No. 1300-CS.

N. This Agreement is entered into pursuant to the Development Agreement Statute.

O. On March 31, 2024, the City of Turlock and The Evergreen Market entered into an Assignment and Assumption Agreement.

P. The City Council has determined that this Agreement is consistent with the City’s General Plan and has conducted all necessary procee dings in accordance with the T.M.C. for the approval of this Agreement.

Q. Under Section 5-21-103 of the Turlock Municipal Cod e, any cannabis dispensary business allowed in the City shall obtain a develop ment agreement, a City business license, and a conditional use permit.

R. The Parties wish to enter into this First Amended a nd Restated Development Agreement to replace previous agreement between the Parties and to fulfill the requirement that a cannabis business requires a development agreement pursuant to TMC Section 5-21-103.

NOW, THEREFORE , in consideration of the mutual covenants and agre ements contained herein, and other good and valuable consi deration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:

AGREEMENT

ARTICLE 1

GENERAL PROVISIONS

Section 1.1. Findings . City hereby finds and determines that entering i nto this Agreement furthers the public health, safety and ge neral welfare and is consistent with the City’s General Plan, including all text and maps in the General Plan.

Section 1.2. Recitals . The Recitals above are true and correct and are hereby incorporated into and made a part of this Agreement . In the event of any inconsistency between the Recitals and the provisions of Articles 1 through 10 of this Agreement, the provisions of Articles 1 through 10 shall prevail.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Section 1.3. Exhibits . The following “Exhibits” are attached hereto and incorporated into this Agreement:

Designation

Description
Exhibit A Cannabis Site Legal Description
Exhibit B Cannabis Business Project Site Map
Exhibit C Lease
Exhibit D Notice of Non -Performance Penalty
Exhibit E Indemnification Agreement
Exhibit F Notice of Termination
Exhibit G Assignment and Assumption Agreement

Section 1.4. Definitions . In this Agreement, unless the context otherwise requires, the terms below have the following meaning:
(a) “Additional Insureds” has the meaning set forth in Section 6.1. (b) “Additional Licenses” has the meaning set forth in Section 2.4. (c) “Adult-use cannabis” means a product containing cannabis, including, but not limited to, concentrates and extractions, inten ded for use by adults 21 years of age and older in California pursuant to the California Cannabis Laws. (d) “Agreement” means this Development Agreement, i nclusive of all Exhibits attached hereto.
(e) “Application” has the meaning set forth in Reci tal G. (f) “Assignment and Assumption Agreement” has the m eaning set forth in Section 10.1.
(g) “AUMA” means the Adult Use of Marijuana Act (Pr oposition 64) approved by California voters on November 8, 2016.
(h) “Authorized License” has the meaning set forth in Section 2.3. (i) “Department” means the Department of Cannabis C ontrol or any successor state agency.
(j) “California Building Standards Codes” means the California Building Code, as amended from time to time, in Part 2, Volu mes 1 and 2, as part of Title 24 of the California Code of Regulations, as may be adopted by the T.M.C. (k) “California Cannabis Laws” includes AUMA, MAUCR SA, CUA (as defined below), the Medical Marijuana Program Act of 2004 c odified as Health and Safety Code

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

sections 11362.7 through 11.62.83 and any other applicable laws that may be enacted or approved.
(l) “Cannabis” means all parts of the plant Cannabi s sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether gro wing or not; the seeds thereof; the resin, whether crude or purified, extracted from an y part of the plant, and every compound, manufacture, salt, derivative, mixture, o r preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the s terilized seed of the plant which is incapable of germination. For the purpose of this d ivision, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code. Cannabis and the term “marijuana” may be used interchangeably.
(m) “Cannabis Business Pilot Program” means the can nabis business program established and authorized by T.M.C. Chapter 5.21. (n) “Cannabis Business Project” means the cannabis retail business operated by Developer on the Site pursuant to the Authorized License. (o) “Cannabis Manufacturing Business” means a busin ess engaged in commercial cannabis activity pursuant to a state ap proved Type 6 or 7 license, Type A and M licenses designated as a Cannabis business.
(p) “Cannabis product” means cannabis that has unde rgone a process whereby the plant material has been transformed int o a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.
(q) “CEQA” means the California Environmental Quali ty Act, as set forth in Division 13 (Commencing with Section 21000) of the California Public Resources Code, and the CEQA Guidelines, as set forth in Title 14 ( Commencing with Section 15000) of the California Code of Regulations.
(r) “City” means the City of Turlock, a California municipal corporation having general police powers.
(s) “City Council” means the City of Turlock City C ouncil, as defined in T.M.C.

Section 2.1.
(t) “City Manager” means the City Manager of the Ci ty of Turlock or his or her designee, as described in T.M.C. Section 2.4.
(u) “Charged Party” has the meaning set forth in Se ction 8.1. (v) “Charging Party” has the meaning set forth in S ection 8.1

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

(w) “Commercial Cannabis Activity” includes cultiva tion, possession, manufacture, processing, storing, laboratory testin g, labeling, transporting, distribution, delivery, or sale of cannabis or a cannabis product that requires a state license pursuant to MAUCRSA.
(x) “Planning Commission” means the City of Turlock Planning Commission, as established by T.M.C. Section 9.5.
(y) “Conditional Use Permit” means a conditional us e permit issued by City pursuant to T.M.C. Section 9.3.
(z) “CUA” means the Compassionate Use Act (Proposit ion 215) approved by California voters on November 5, 1996.
(aa) “Developer” means Evergreen Market, (Turlock), Inc. Developer also has the meaning set forth in Section 6.1.
(bb) “Development Agreement Statute” has the meanin g set forth in Recital H. (cc) “Exhibits” has the meaning set forth in Sectio n 1.3. (dd) "Gross Receipts from Operations" means total r evenue actually received or receivable from operation of the Cannabis Busine ss Project, including: all sales; the total amount of compensation actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed whether or not such act or service is done as part of or in connection with the sale of materials, goods, wares, or merchandise; and gains realized from trading in stocks or bonds, interest discounts, rents, royalties, fees, commissions, dividends, or other remunerations, however designated. Included in "gro ss receipts" shall be all receipts, cash, credits, and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expens es whatsoever, except that the following shall be excluded therefrom:

1. Cash discounts allowed and taken on sales;

2. Credit allowed on property accepted as part of t he purchase price and which property may later be sold, at which time the sales price shall be included as "gross receipts";

3. Any tax required by law to be included in or add ed to the purchase price and collected from the consumer or purchaser;

4. Such part of the sale price of property returned by purchasers upon rescission of a contract of sale as is refunded eit her in cash or by credit; and

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

5. Receipts of refundable deposits, except that suc h deposits when forfeited and taken into income of the business shall not be excluded.

The intent of this definition is to ensure that in calculating the payment required under Section 4.2, all sales of cannabis products through the Cannabis Business Project are captured. This definition shall therefore be given the broadest possible interpretation consistent with this intent.
(ee) “Indemnification Agreement” has the meaning se t forth in Section 6.3. (ff) “Major Amendment” means an amendment that shal l have a material effect on the terms of this Agreement. A Major Amendment also has the meaning set forth in Section 2.4. Major Amendments shall require approval by the City Council. (gg) “Marijuana” has the same meaning as cannabis a nd those terms may be used interchangeably.
(hh) “MAUCRSA” means the Medicinal and Adult-Use Ca nnabis Regulation and Safety Act, codified as Business and Profession s Code section 26000 et seq., as may be amended from time to time.
(ii) “MCRSA” has the meaning set forth in Recital A .
(jj) “Ministerial Fee” or “Ministerial Fees” has th e meanings set forth in Section

4.1. (kk) “Minor Amendment” means a clerical amendment t o this Agreement that shall not materially affect the terms of this Agreement and any amendment described as minor herein. A Minor Amendment also has the meaning set forth in Section 1.7. (ll) “Mortgage” has the meaning set forth in Articl e 7. (mm) “Non-Performance Penalty” has the meaning set forth in Section 4.5. (nn) “Notice of Non-Performance Penalty” has the me aning set forth in Section

4.5. (oo) “Notice of Termination” has the meaning set fo rth in Section 9.1. (pp) “Processing Costs” has the meaning set forth i n Section 1.11. (qq) “Project Litigation” has the meaning set forth in Section 10.7. (rr) “Public Benefit” has the meaning set forth in Section 4.2. (ss) “Public Benefit Amount” has the meaning set fo rth in Section 4.2. (tt) “State Licensing Authority” means the state ag ency responsible for the issuance, renewal or reinstatement of a state canna bis license or the state agency

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

authorized to take disciplinary action against a bu siness licensed under the California Cannabis Laws.
(uu) “State Cannabis Regulations” means the regulat ions promulgated by the State Licensing Authority pursuant to the California Cannabis Laws (4 CCR 15000 et seq., or their respective successors).
(vv) “State Taxing Authority” has the meaning set f orth in Section 4.2. (ww) “Subsequent City Approvals” has the meaning se t forth in Section 3.1. (xx) “Term” has the meaning set forth in Section 1. 7.
(yy) “TMC” means Turlock Municipal Code.
(zz) “Type 1A license” or “Specialty Indoor” means a state license issued by the Department of Cannabis Control pursuant to the California Cannabis Laws for indoor cultivation using exclusively artificial lighting of between 501 and 5,000 square feet of total canopy size on one premises.

(aaa) “Type 2A license” or “Small Indoor” means a s tate license issued by the Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws for indoor cultivation using exclusively artificial lighting b etween 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises.

(bbb) “Type 3A license” or “Indoor” means a state l icense issued by the Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws for indoor cultivation using exclusively artificial lighting b etween 10,001 and 22,000 square feet, inclusive, of total canopy size on one premises.

(ccc) “Type 4 license” or “Nursery” means a state license issued by the Department of Cannabis Control pursuant to the California Cannabis Laws for cultivation.

(ddd) “Type 6 license” or “Manufacturer 1” means a state license issued by the Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws for manufacturing sites that produce cannabis products using nonvolatile solvents.

(eee) “Type 7 license” or “Manufacturer 2” means a state license issued by the Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws for manufacturing sites that produce cannabis products using volatile solvents.

(fff) “Type 10 license” or “Retailer” means a state license issued by the Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws authorizing the retail sale of cannabis and cannabis products. Retail sale includes sales at a storefront and by delivery, pursuant to all state and local laws and regulations. (ggg) “Type 11 license” or “Distributor” means a s tate license issued by the

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Department of Cannabis Control pursuant to the Cali fornia Cannabis Laws for the distribution of cannabis and cannabis products from manufacturer to dispensary.

(hhh) “Type 12 license” or “Microbusiness” means a state license issued by a State Licensing Authority pursuant to the Californi a Cannabis Laws relating to cannabis manufacturing, retail and distribution.
(iii) “Type 13 license” or “Distribution Transport- Only” means a state license issued by the Department of Cannabis Control pursuant to the California Cannabis Laws for distribution cannabis and cannabis products.

Conforming Interpretation of State Cannabis License References. Any reference in this Agreement to a State cannabis license, State C annabis Regulations, licensing authority, or specific state cannabis license type or designation shall be deemed to include any successor license, permit, approval, ag ency, or regulation that replaces, renames, consolidates, or reclassifies such license or regulatory framework under California law, including those administered by the California Department of Cannabis Control or any successor agency.

No change in the name, number, classification, or s tructure of any State cannabis business license shall be construed to expand, limi t, or otherwise modify the cannabis activities authorized under this Agreement, except as required by applicable state law or as expressly approved in writing by the City.

The scope of permitted commercial cannabis activities shall be determined solely by this Agreement and applicable City approvals, and not by the type, title, or designation of any state license held by Developer, unless expressly mandated by state law.

Section 1.5. Project is a Private Undertaking . The Parties agree that the Cannabis Business Project is a private development and that City has no interest therein, except as authorized in the exercise of its governmental functions. City shall not for any purpose be considered an agent of Developer or of the Cannabis Business Project.

Section 1.6. Effective Date of Agreement . This Agreement shall become effective upon the date that the ordinance approving this Agr eement becomes effective (the “Effective Date”).

Section 1.7. Term . The term of this Agreement (“Term”) shall be thr ough June 30, 2029, unless earlier terminated in accordance with the provisions of this Agreement. (a) Government Tolling or Termination. City may pr ovide written notice to Developer to cease all Commercial Cannabis Activity , upon which Developer shall immediately comply if City is required, directed or believes, in its sole and absolute discretion, it must temporarily halt or terminate C ommercial Cannabis Activity within the City to comply with federal or state law. If City temporarily halts this Agreement to comply with federal or state law, this Agreement shall be tolled for no longer than one (1) calendar year (the “Tolling Period”). Developer shall not ac crue or be liable to City for any Ministerial Fees or Public Benefit Amount during th e Tolling Period. Developer shall

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

resume paying any applicable fees after the Tolling Period ends. City and Developer shall discuss in good faith the termination of this Agreement if the Tolling Period exceeds one (1) calendar year to comply with federal or state law.
(b) Developer Tolling or Termination. Developer ma y not temporarily halt or terminate this Agreement for any purpose without ca using a default of this Agreement, except as otherwise allowed by this Agreement or by mutual agreement of the Parties.

Section 1.8. Priority of Enactment . In the event of a conflict between the various land use documents referenced in this Agreement, the Par ties agree that the following sequence of approvals establishes the relative prio rity of the approvals, each approval superior to the approvals listed thereafter: (a) Ge neral Plan, (b) Specific Plan, (c) Agreement, (d) Conditional Use Permit, (e) Indemnif ication Agreement, and (f) Subsequent City Approvals.

Section 1.9. Amendment of Agreement . This Agreement shall be amended only by mutual consent of the Parties. All amendments shall be in writing. The City Council hereby expressly authorizes the City Manager to approve a Minor Amendment to this Agreement, upon notification of the City Council. A Major Amen dment to this Agreement shall be approved by the City Council. The City Manager shal l, on behalf of City, have sole discretion for City to determine if an amendment is a Minor Amendment or a Major Amendment. Nothing in this Agreement shall be const rued as requiring a noticed public hearing, unless required by law.

Section 1.10. Recordation of Development Agreement . The City Clerk shall cause a copy of this Agreement to be recorded against the title of the Site within ten (10) business days of the Effective Date.

Section 1.11. Funding Agreement for Processing Cost s . If Developer proposes an amendment to this agreement, Developer shall pay fo r all actual fees and expenses incurred by City that are related to the preparation and processing of amendments to this Agreement, including recording fees, publishing fee s, staff time, and consultant and attorneys’ fees and costs (collectively, “Processin g Costs”). Developer shall deposit monies for such processing as estimated by the Development Services Department. The Processing Costs are refundable solely to the extent of non-expended Processing Costs. (a) Accounting. Developer may request, and City shall issue within a reasonable time not to exceed thirty (30) days, an accounting and written acknowledgement of Processing Costs paid to City.

ARTICLE 2

DEVELOPMENT OF PROPERTY
Section 2.1. Vested Right of Developer . During the Term, in developing the Site consistent with the Cannabis Business Project descr ibed herein, Developer is assured that the development rights, obligation terms, and conditions specified in this Agreement, including, without limitation, the terms, conditions, and limitations set forth in the Exhibits,

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

are fully vested in Developer and may not be modified or terminated by City except as set forth in this Agreement or with Developer’s written consent.

Section 2.2. Vested Right to Develop . In accordance with Section 2.1, Developer shall have the vested right to develop and use the Cannabis Business Project consistent with this Agreement, the Conditional Use Permit, and Subsequent City Approvals.

Section 2.3. Permitted Uses and Development Standar ds . Developer shall be authorized to develop, construct, and use the Site for Commercial Cannabis Activity consistent with the following license type (the “Authorized License”):

Type 10 Storefront Dispensary

Pursuant to this Agreement, Developer shall be permitted to use the Site consistent with the Authorized License for the Term of this Agreeme nt and during the time Developer is applying for the Authorized License with the applic able State Licensing Authority.

Developer shall begin operations of the Cannabis Business Project under the Authorized License within twelve (12) months of the issuance of a Conditional Use Permit or adoption of the operative ordinance approving this Agreement , whichever is later, unless Developer is prevented from doing so due to any eve nt or circumstance set forth in Section 8.6 of this Agreement. Notwithstanding the foregoing, Developer is required to apply for and obtain the Authorized License from th e State of California. If the State Licensing Authority does not grant the Authorized License to Developer, Developer shall immediately cease Commercial Cannabis Activity and any other operations on the respective site. Developer shall also, within thirt y (30) days of receiving notice from the State Licensing Authority, notify City of the State Licensing Authority’s denial or rejection of the Authorized License. In this situation, this Agreement shall terminate immediately.

The Parties intend for this Agreement and the Condi tional Use Permit to serve as the definitive and controlling documents for all subseq uent actions, discretionary or ministerial, relating to development of the Site and the Cannabis Business Project.

Section 2.4. Major Amendment to Permitted Uses . Developer may request to add to the Authorized License additional license types once that license is applied for or obtained from the appropriate State Licensing Authority (the “Additional Licenses”). Such request shall be a Major Amendment to this Agreement.

Section 2.5. Conditional Use Permit . Developer shall obtain a Conditional Use Permit for the Commercial Cannabis Activity and Authorized License contemplated herein for the Project and at the Site. No Commercial Cann abis Activity may occur at the Site until Developer has obtained a Conditional Use Permit to use and operate the Authorized License at the Site. This Conditional Use Permit mu st be maintained in good standing throughout the Term. This Agreement shall immediately terminate if the Conditional Use Permit for the Authorized License is revoked by City for any reason.

Section 2.6. Subsequent Entitlements, Approvals, an d Permits . Successful implementation of the Cannabis Business Project sha ll require Developer to obtain additional approvals and permits from City and othe r local and state agencies. City shall

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

comply with CEQA in the administration of all Subsequent City Approvals. In acting upon any Subsequent City Approvals, City’s exercise of d iscretion and permit authority shall conform to this Agreement. Notwithstanding the fore going, in the course of taking action on the Subsequent City Approvals, City will exercis e discretion in adopting mitigation measures as part of the Conditional Use Permit. The exercise of this discretion is not prohibited or limited in any way by this Agreement. Nothing in this Agreement shall preclude the evaluation of impacts or consideration of mitigation measures or alternatives, as required by CEQA.
(a) Contemplated City Rules and Guidelines. City a nticipates issuing additional rules, administrative guidelines, and amendments to the T.M.C. associated with operation of the Cannabis Business Program. City ma y establish requirements that are identical to or place a higher standard of care as existing provisions of the California Cannabis Laws, State Cannabis Regulations, or any amendments thereto. City reserves the right to adopt additional categories of rules o r guidelines that are not listed in this Section as part of the Cannabis Business Program. Developer shall comply with any and all additional rules, administrative guidelines, and amendments to the T.M.C. adopted by City that govern or pertain to the Cannabis Busines s Project. Nothing in this Agreement shall be construed as limiting the City to amend th e T.M.C or issue rules or guidelines following the Effective Date of this Agreement that Developer will be required to adhere to.

Section 2.7. Initiatives and Referenda . If any City ordinance, rule or regulation, or addition to the T.M.C. is enacted or imposed by a c itizen-sponsored initiative or referendum after the Effective Date that would conflict with this Agreement, an associated Conditional Use Permit, Subsequent City Approvals, or reduce the development rights or assurances provided to Developer in this Agreement, such T.M.C. changes shall not be applied to the Site or the Cannabis Business Projec t; provided, however, the Parties acknowledge that City’s approval of this Agreement is a legislative action subject to referendum. City shall cooperate with Developer and shall undertake such reasonable actions as may be appropriate to ensure this Agreem ent remains in full force and effect and is implemented in accordance with its terms to the fullest extent permitted by state or federal law.

Section 2.8. Regulation by Other Government Entitie s . Developer acknowledges that City does not have authority or jurisdiction over any other government entities’ ability to grant governmental approvals or permits or to impose a moratorium or other limitations that may negatively affect the Cannabis Business Pr oject or the ability of City to issue a permit to Developer or comply with the terms of this Agreement. Any moratorium imposed by another government entity, including the State L icensing Authority, on City shall not cause City to be in breach of this Agreement.

Section 2.9. Developer’s Right to Rebuild . Developer may renovate portions of the Site any time within the Term of this Agreement con sistent with the T.M.C. Any such renovation or rebuild shall be subject to all design, building code, and other requirements imposed on the Cannabis Business Project by this Agreement.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Section 2.10. Changes in California Building Standa rds Codes . Notwithstanding any provision of this Agreement to the contrary, de velopment of the Cannabis Business Project shall be subject to changes occurring from time to time to the California Building Standards Codes.

Section 2.11. Changes Mandated by Federal or State Law . The Site and the Cannabis Business Project shall be subject to subsequently enacted state or federal laws or regulations that may preempt the T.M.C. or manda te the adoption or amendment of local regulations or are in conflict with this Agre ement or local rules or guidelines associated with the Cannabis Business Program. As p rovided in Section 65869.5 of the Development Agreement Statute, in the event state or federal laws or regulations enacted after the Effective Date prevent or preclude compli ance with one or more provisions of this Agreement, such provisions shall be modified or suspended as may be necessary to comply with such state or federal laws or regulatio ns. Upon discovery of a subsequently enacted federal or state law meeting the requiremen ts of this Section, City or Developer shall provide the other Party with written notice o f the state or federal law or regulation, and a written statement of the conflicts thereby raised with the provisions of the T.M.C. or this Agreement. Promptly thereafter, City and Developer shall meet and confer in good faith in a reasonable attempt to modify this Agreement, as necessary, to comply with such federal or state law or regulation provided City sh all not be obligated to agree to any modification materially increasing its obligations or materially adversely affecting its rights and benefits hereunder. In such discussions, City and Developer will attempt to preserve the terms of this Agreement and the rights of Devel oper derived from this Agreement to the maximum feasible extent while resolving the con flict. If City, in its judgment, determines it necessary to modify this Agreement to address such conflict, City shall have the right and responsibility to do so, and shall not have any liability to Developer for doing so or be considered in breach or default of this Ag reement. City also agrees to process, in accordance with the provisions of this Agreement , Developer’s proposed changes to the Cannabis Business Project that are necessary to comply with such federal or state law and that such proposed changes shall be conclusively deemed to be consistent with this Agreement without further need for any amendment to this Agreement.

Section 2.12. Health and Safety Emergencies . In the event that any future public health and safety emergencies arise with respect to the Cannabis Business Project contemplated by this Agreement, City agrees that it shall attempt, if reasonably possible as determined by City in its discretion, to address such emergency in a way that does not have a material adverse impact on the Cannabis Busi ness Project. If City determines, in its discretion, that it is not reasonably possible to so address such health and safety emergency in a way that does not have a material ad verse impact on the Cannabis Business Project, City may select an option which, in its discretion, minimizes, so far as reasonably possible, the impact on development and use of the Cannabis Business Project in accordance with this Agreement, while st ill addressing such health and safety emergency in a manner acceptable to City.

Section 2.13. Other Regulations. The following provisions establish operational requirements applicable to this Agreement in furthe rance of public safety and to ensure

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

compliance with applicable regulations governing the Project and Developer’s obligations hereunder.
(a)In addition to other requirements, remote and re al-time, live access to the video footage of cameras installed by the cannabis busine ss shall be provided to the Chief of Police or his/her designee(s) using such software a s designated by the Chief of Police.

Developer shall be responsible for ensuring that th e security surveillance camera's footage is remotely accessible by the Chief of Police or his/her designee(s), and that it is compatible with the City's software and hardware. Such access shall be required within 120 days of approval of this agreement.

(b)Prior to changes in ownership, ownership structure, and management, or any sale or other transfer of the cannabis business, shall be subject to additional background checks as required by the Turlock Police Department, and passage by the applicant of such background checks. The City may repeat background checks on any individual every two (2) years, and at any other time upon reasonable cause.

ARTICLE 3

ENTITLEMENT AND PERMIT PROCESSING, INSPECTIONS
Section 3.1. Subsequent City Approvals . City shall permit the development, construction, and conditionally permitted use contemplated in this Agreement. City agrees to timely grant, pursuant to the terms of this Agreement, the T.M.C., and any Subsequent City Approvals reasonably necessary to complete the goals, objectives, policies, standards, and plans described in this Agreement. The Subsequent City Approvals shall include any applications, permits, and approvals required to complete the improvements necessary to develop the Site, in general accordanc e with this Agreement (“Subsequent City Approvals”). Nothing herein shall require City to provide Developer with Subsequent City Approvals prior to, or without complying with, all of the requirements in this Agreement, the T.M.C., and any applicable state law.

Section 3.2. Timely Processing . City shall use its reasonable best efforts to process and approve, within a reasonable time, any Subsequent City Approvals or environmental review requested by Developer during the Term of this Agreement.

Section 3.3. Cooperation Between City and Developer . Consistent with the terms set forth herein, City agrees to cooperate with Dev eloper, on a timely basis, in securing all permits or licenses that may be required by Cit y or any other government entity with permitting or licensing jurisdiction over the Cannabis Business Project.

Section 3.4. Further Consistent Discretionary Actions . The exercise of City's authority and independent judgment is recognized un der this Agreement and nothing in this Agreement shall be interpreted as limiting City’s discretion or obligation to hold legally required public hearings. Except as otherwise set forth herein, such discretion and action taken by City shall, however, be consistent with th e terms of this Agreement and not prevent, hinder, or compromise development or use o f the Site as contemplated by the Parties in this Agreement.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Section 3.5 Existing Pole Sign. Developer agrees that it shall not utilize the existing pole sign along the East Glenwood frontage of the Site.

ARTICLE 4

PUBLIC BENEFIT, PROCESSING, AND OVERSIGHT
Section 4.1. Processing Fees and Charges . Developer shall pay to City those processing, inspection, plan checking and monitorin g fees and charges required by City which are in force and effect at the time those fee s and charges are incurred (including any post-Effective Date increases in such fees and charges) for processing applications and requests for building permits, inspections, other permits, approvals and actions, and monitoring compliance with any permits issued or ap provals granted or the performance of any conditions (each a “Ministerial Fee” and collectively, the “Ministerial Fees”).

Section 4.2. Public Benefit .
(a) The Parties acknowledge and agree that this Agr eement, and the Cannabis Business Project, confers substantial priv ate benefits upon Developer that will place burdens upon City infrastructure, services, and neighborhoods. Accordingly, the Parties intend to provide consideration to City to offset these impacts that commensurate with the private benefits conferred on Developer (the “Public Benefit”).

In consideration of the foregoing, Developer shall remit to City an amount determined and set by the City Council up to a maximum of nine percent (9%) of Gross Receipts from Operations. (the “Cannabis Business Public Benefit” or “Public Benefit Amount”).

Notwithstanding the foregoing, the City Council determines and sets the Public Benefit Amount at five and one-quarter percent (5.25%) of g ross receipts from operations through May 31, 2027. The City Council may take any actions required to change the Public Benefit Amount that will be in effect from J une 1, 2027 and thereafter. Such actions may include, without limitation, setting a new Public Benefit Amount by adopted resolution of the Council. Any such Public Benefit Amount shall be due on the 5th day of each month before 5:00 p.m..
(b) The above public benefit amounts include a one- quarter percent (.25%) dollar amount dedicated to supporting the City of T urlock juvenile drug and alcohol treatment and rehabilitation programs.
(c) Developer shall file an applicable statement th at complies with the California State Board of Equalization, California Department of Tax and Fee Administration, or either’s successor agency (the “State Taxing Authority”) for sales tax purposes showing the true and correct amount of Gro ss Receipts from Operations of the Cannabis Business Project during the applicable time period. Developer shall provide a copy of such statement to City upon request by City.

Section 4.3. Reporting . Developer shall provide City with copies of any rep orts provided to a State Licensing Authority within fort y-five (45) days of that submission.

Any failure or refusal of Developer to provide any statement or report to City, the State Taxing Authority, or any other State Licensing Auth ority, as required within the time required, or to pay such sums due hereunder when th e same are due and payable in

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

accordance with the provisions of this Agreement, m ay constitute full and sufficient grounds for the revocation or suspension of the Conditional Use Permit.

Section 4.4. Records . Developer shall keep records of all Commercial C annabis Activity in accordance with Chapter 16 (commencing with Section 26160) of Division 10 of the Business and Professions Code and the applic able State Cannabis Regulations.

All records required by this Section shall be maint ained and made available for City’s examination and duplication (physical or electronic) at the Site or at an alternate facility as approved in writing by the City Manager, or his or her designee.

Section 4.5. Penalty . Developer acknowledges that to ensure proper compliance with the terms of this Agreement and any applicable laws , City must engage in costly compliance review, inspections, and, if necessary, enforcement actions to protect the health, safety, and welfare of its residents. Penalty and interest provisions are necessary to assist City in compliance review and enforcement actions. If Developer fails to make any payment when due, as required by this Agreement , including the Public Benefit Amount, City may impose a “Non-Performance Penalty. ” A Non-Performance Penalty of ten percent (10%) shall be applied to all past due payments. City shall deliver to Developer a “Notice of Non-Performance Penalty,” at tached hereto as Exhibit D .

Payment of the Non-Performance Penalty shall be in a single installment due on or before a date fifteen (15) days following delivery of the Notice of Non-Performance Penalty.

Section 4.6. Interest on Unpaid Non-Performance Pen alty . If Developer fails to pay the Non-Performance Penalty after City has delivere d the Notice of Non-Performance Penalty, then, in addition to the principal amount of the Non-performance Penalty, Developer shall pay City interest at the rate of ei ghteen percent (18%) per annum, computed on the principal amount of the Non-Perform ance Penalty, from a date fifteen (15) days following delivery of the Notice of Non-performance Penalty.

Section 4.7. Protections from Duplicative Payments . Notwithstanding Section 4.2, Developer shall be exempt from paying the Public Be nefit Amount if the City imposes a tax specific to commercial cannabis businesses and instead shall pay such specific tax.

Notwithstanding the foregoing, Developer and the Ca nnabis Business Project shall be subject to any and all taxes, assessments, or simil ar charges or fees of general applicability enacted by the federal government, state government, County of Stanislaus, including any tax applicable to an area greater than the City limits to which City may be a party (i.e., county tax sharing agreement with City).

ARTICLE 5

PUBLIC FACILITIES, SERVICES, AND UTILITIES
City shall use the Public Benefit Amount in any way the City Council deems appropriate to offset the impact of the Project or to benefit the City.

ARTICLE 6

INSURANCE AND INDEMNITY

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Section 6.1. Insurance . Developer shall require all persons doing constr uction or related work on the Cannabis Business Project and, including its contractors and subcontractors (collectively, “Developer” for purposes of this Article 6 only), to obtain and maintain insurance of the types and in the amounts described in this Article with carriers reasonably satisfactory to City.
(a) General Liability Insurance. Developer shall maintain commercial general liability insurance or equivalent form with a limit of not less than Two Million Dollars ($2,000,000) (or as otherwise approved, in writing, by City) per claim and Two Million Dollars ($2,000,000) each occurrence. Such insurance shall also:
(i) Name City, its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives as “Additional Insureds” by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the above-listed additional insured.
(ii) Be primary with respect to any insurance or se lf-insurance programs covering City, its officials, employees, agents, and representatives. (iii) Contain standard separation of insured provis ions. (b) Automotive Liability Insurance. Developer shall maintain business automobile liability insurance or equivalent form w ith a limit of not less than One Million Dollars ($1,000,000) for each accident. Such insurance shall include coverage for owned, hired and non-owned automobiles. Such insurance shall also:
(i) Name City, its elected and appointed councils, boards, commissions, officers, agents, employees, and representatives as Additional Insureds by endorsement with respect to performance of this Agreement. The coverage shall contain no special limitations on the scope of its protection afforded to the above-listed Additional Insureds. (ii) Be primary with respect to any insurance or se lf-insurance programs covering City, its officials, employees, agents, and representatives. (iii) Contain standard separation of insured provis ions. (c) Workers’ Compensation Insurance. Developer sha ll take out and maintain during the Term of this Agreement, workers ’ compensation insurance for all of Developer’s employees employed at or on the Cannabi s Business Project and, should any of the work be subcontracted, Developer shall r equire any general contractor or subcontractor similarly to provide workers’ compensation insurance for such contractor’s or subcontractor’s employees, unless such employees are covered by the protection afforded by Developer. In case any class of employee engaged in work on the Cannabis Business Project and is not protected under any wor kers’ compensation law, Developer shall provide and shall cause each contractor and s ubcontractor to provide adequate insurance for the protection of employees not other wise protected. Developer hereby indemnifies City for any damage resulting from fail ure of Developer, its agents,

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

employees, contractors or subcontractors to take ou t or maintain such insurance.

Workers’ compensation insurance with statutory limi ts and employer’s liability insurance with limits of not less than One Million Dollars ($ 1,000,000) for each accident shall be maintained by Developer.

Section 6.2. Other Insurance Requirements . Developer shall do all of the following:
(a) Prior to taking any actions under this Agreemen t, furnish City with properly executed certificates of insurance that clearly evi dence all insurance required in this Article, including evidence that such insurance wil l not be canceled, allowed to expire or materially reduced in coverage without thirty (30) days prior written notice to City. (b) Provide to City, upon request, and within seven (7) days of said request, certified copies of endorsements and policies and p roperly executed certificates of insurance evidencing the insurance required herein.
(c) Replace or require the replacement of certifica tes, policies, and endorsements for any insurance required herein expi ring prior to the termination of this Agreement.
(d) Maintain all insurance required herein from the Effective Date of this Agreement to the earlier of the expiration of the Term or the mutual written termination of this Agreement.
(e) Place all insurance required herein with insure rs licensed to do business in California with a current Best’s Key Rating Guide reasonably acceptable to City.

Section 6.3. Indemnity . To the fullest extent permitted by law, Developer shall defend, indemnify, and hold harmless City, and its agents, elected and appointed officials, officers, employees, consultants, and volunteers (c ollectively, “City’s Agents”) from any and all liability arising out of a claim, action, o r proceeding against City or City’s Agents, to attack, set aside, void, or annul an approval concerning the Cannabis Business Project and this Agreement, any applicable Conditional Use Permit or Subsequent City Approvals. Developer shall execute the indemnificat ion agreement (“Indemnification Agreement”) attached hereto as Exhibit E.

Section 6.4. Failure to Indemnify; Waiver . Failure by Developer to indemnify City, when required by this Agreement and the Indemnifica tion Agreement, shall constitute a material breach of this Agreement and of any applic able Conditional Use Permit and Subsequent City Approvals, which shall entitle City to all remedies available under law, including, but not limited to, specific performance and damages. Failure to indemnify shall constitute grounds upon which City may rescind its approval of any applicable Conditional Use Permit. Developer’s failure to indemnify City s hall be a waiver by Developer of any right to proceed with the Cannabis Business Project or any portion thereof, and a waiver of Developer’s right to file a claim, action, or pr oceeding against City or City’s Agents, based on City’s rescission or revocation of any Conditional Use Permit, Subsequent City Approvals, or City’s failure to defend any claim, a ction, or proceeding based on Developer’s failure to indemnify City.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Section 6.5. Waiver of Damages . Notwithstanding anything in this Agreement to th e contrary, the Parties acknowledge that City would n ot have entered into this Agreement had it been exposed to liability for damages from D eveloper and, therefore, Developer hereby waives all claims for damages against City f or breach of this Agreement.

Developer further acknowledges that under the Devel opment Agreement Statute, land use approvals (including development agreements) must be approved by the City Council and that, under law, the City Council's discretion to vote in any particular way may not be constrained by contract. Developer therefore waives all claims for damages against City in the event that this Agreement or any Project app roval is: (1) not approved by the City Council; or (2) is approved by the City Council but with new changes, amendments, conditions, or deletions to which Developer is opposed. Developer further acknowledges that, as an instrument which must be approved by ordinance, a development agreement is subject to referendum; and that, under law, the City Council's discretion to avoid a referendum by rescinding its approval of the underlying ordinance may not be constrained by contract, and Developer waives all claims for damages against City in this regard.

ARTICLE 7

MORTGAGEE PROTECTION
This Agreement, once executed and recorded, shall be superior and senior to any lien placed upon the Site or any portion thereof fo llowing recording of this Agreement, including the lien of any deed of trust or mortgage (“Mortgage”). Notwithstanding the foregoing, no breach hereof shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value. This Agreement shall immediately be deemed in default and immediately terminate upon the foreclosure or transfer of any interest in the Site or Project, whether by operation of law or any other method of interest change or transfer, unless the City Manager has authorized su ch change or transfer in advance, in writing. City agrees to not unreasonably withhold its authorization.

ARTICLE 8

DEFAULT
Section 8.1. General Provisions .
(a) Subject only to any extensions of time by mutua l consent in writing, or as otherwise provided herein, the failure or delay by any Party to perform in accordance with the terms and provisions of this Agreement shall co nstitute a default. Any Party alleging a default or breach of this Agreement (“Charging Pa rty”) shall give the other Party (“Charged Party”) not less than ten (10) days written notice, which shall specify the nature of the alleged default and the manner in which the default may be cured. During any such ten (10) calendar day period, the Charged Party sha ll not be considered in default for purposes of termination of this Agreement or instit ution of legal proceedings for the breach of this Agreement.
(b) After expiration of the ten (10) calendar day p eriod, if such default has not been cured or is not in the process of being diligently cured in the manner set forth in the notice or if the breach cannot reasonably be cured within ten (10) days, the Charging

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Party may, at its option, institute legal proceedings pursuant to this Agreement, and give notice of its intent to terminate this Agreement pu rsuant to Government Code section 65868. In the event City is the Charging Party, City may, in its sole discretion, give notice, as required by law, to the Charged Party of its int ent to revoke or rescind any operable Conditional Use Permit related to or concerning the Cannabis Business Project. (c) Prior to the Charging Party giving notice to th e Charged Party of its intent to terminate, or prior to instituting legal proceed ings, the matter shall be scheduled for consideration and review by City in the manner set forth in Government Code sections 65865, 65867 and 65868 within thirty (30) days from the expiration of the ten (10) day notice period.
(d) Following consideration of the evidence present ed and said review before City, and after providing the Charged Party an addi tional five (5) calendar day period to cure, the Charging Party may institute legal procee dings against the Charged Party or may give written notice of termination of this Agreement to the Charged Party. (e) Evidence of default may arise in the course of a regularly scheduled periodic review of this Agreement pursuant to Government Cod e section 65865.1, as set forth in Section 8.2. If any Party determines that another P arty is in default following the completion of the normally scheduled periodic review, without reference to the procedures specified in Section 8.1(c), said Party may give wr itten notice of termination of this Agreement, specifying in the notice the alleged nature of the default and potential actions to cure said default where appropriate. If the alleged default is not cured in ten (10) days or within such longer period specified in the notice or the defaulting Party is not diligently pursuing a cure, or if the breach cannot reasonably be cured within the period or the defaulting Party waives its right to cure such alle ged default, this Agreement may be terminated by the non-defaulting Party by giving wr itten notice. An extension of the ten (10) day cure period may be given by mutual consent of the Parties. (f) In the event Developer is in default under the terms and conditions of this Agreement, no permit application shall be accepted by City, nor will any permit be issued to Developer until the default is cured or the Agreement is terminated.

Section 8.2. Annual Review . City shall, at least every twelve (12) months durin g the Term of this Agreement, review the extent of good f aith, substantial compliance of Developer and City with the terms of this Agreement . Such periodic review by City shall be limited in scope to compliance with the terms of this Agreement pursuant to California Government Code section 65865.1. City shall deposit in the mail or fax to Developer a copy of all staff reports and, to the extent practi cal, related exhibits concerning this Agreement or the Cannabis Business Project’s performance, at least seven (7) days prior to such periodic review. Developer shall be entitle d to appeal a determination of City or the City Manager to the City Council. Any appeal must be filed within ten (10) days of the decision of City or the City Manager, respectively. Developer shall be permitted an opportunity to be heard orally or in writing regarding its performance under this Agreement before City, the City Manager, or the City Council, as applicable. The reasonable cost for

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

City's annual review of this Agreement shall be pai d by Developer, not to exceed the actual costs incurred by City in connection with the review.

Section 8.3. Estoppel Certificate .
(a) City shall, with at least twenty (20) days prio r written notice, execute, acknowledge, and deliver to Developer, Developer’s lender, potential investors, or assignees, an Estoppel Certificate in writing which certifies that this Agreement is in full force and effect, that there are no breaches or def aults under the Agreement, and that the Agreement has not been modified or terminated a nd is enforceable in accordance with its terms and conditions.
(b) At Developer’s option, City’s failure to delive r such Estoppel Certificate within the stated time period shall be conclusive e vidence that the Agreement is in full force and effect, that there are no uncured breache s or defaults in Developer’s performance of the Agreement or violation of any Ci ty ordinances, regulations, and policies regulating the use and development of the Site, the Cannabis Business Project, or the subject to this Agreement.

Section 8.4. Default by City . In the event City does not accept, review, appro ve, or issue any permits or approvals in a timely fashion, as defined by this Agreement, or if City otherwise defaults under the terms of this Agreemen t, City agrees that Developer shall not be obligated to proceed with or complete the Ca nnabis Business Project and shall constitute grounds for termination or cancellation of this Agreement by Developer.

Section 8.5. Cumulative Remedies of Parties . In addition to any other rights or remedies, City or Developer may institute legal or equitable proceedings to cure, correct, or remedy any default, enforce any covenant, or enj oin any threatened or attempted violation of the provisions of this Agreement, so l ong as any such action conforms to Section 9.1(c) of this Agreement.

Section 8.6. Forced Delay, Extension of Times of Pe rformance . Delays in performance, by either Party, shall not be deemed a default if such delays or defaults are due to war, terrorism, insurrection, strikes, walko uts, riots, floods, earthquakes, fires, casualties, acts of God, governmental restrictions imposed where mandated by governmental entities other than City, enactment of conflicting state or federal laws or regulations, new or supplementary environmental reg ulations enacted by the state or federal government, litigation, or other force maje ure events. An extension of time for such cause shall be in effect for the period of forced delay or longer, as may be mutually agreed upon.

Section 8.7. Appeals . Developer may appeal any adverse decision or act ion of City pursuant to the T.M.C, as may be amended from time to time.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

ARTICLE 9

TERMINATION
Section 9.1. Termination . This Agreement shall terminate upon the expirati on of the Term, unless it is terminated earlier pursuant to t he terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination in substantial conformance with the “Notice of Termination” attach ed hereto as Exhibit F , and this Agreement shall be of no further force or effect ex cept as otherwise set forth in this Agreement.

Section 9.2. Effect of Termination on Developer’s O bligations . Termination of this Agreement shall eliminate any further obligation of Developer to comply with this Agreement, or some portion thereof, if such termination relates to only part of the Site or Project. Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights of Developer to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.

Section 9.3. Effect of Termination on City’s Obliga tions . Termination of this Agreement shall eliminate any further obligation of City to comply with this Agreement, or some portion thereof. Termination of this Agreement shall not, however, eliminate the rights of City to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.

Section 9.4. Survival After Termination . The rights and obligations of the Parties set forth in this Section 9.4, Section 2.8, Section 6.3 , Section 10.3, Section 10.4, Section

10.5, Section 10.7, and Section 10.10, and any righ t or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination.

Section 9.5. Criminal Conviction; Termination; Transfer Rights. If Developer, or any owner, officer, director, manager, or person wi th a direct or indirect ownership or controlling interest in Developer, is convicted of a felony or any crime substantially related to the ownership or operation of a cannabis busines s, the City may, in its sole and absolute discretion, terminate this Agreement upon written notice. A “conviction” includes a guilty or nolo contendere plea and is deemed fina l upon entry of judgment, regardless of appeal.

Following such notice, Developer shall have a one h undred and eighty (180) day period to complete a transfer of its interest in this Agre ement and the Project to a transferee approved in advance and in writing by the City. Approval is in the City’s sole and absolute discretion. Any proposed transferee shall undergo a background investigation and meet all applicable eligibility requirements, including approval by the Chief of Police or designee.

If an approved transfer is not completed within the one hundred and eighty (180) day period, this Agreement shall automatically terminate. Any unapproved transfer is void.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

ARTICLE 10

OTHER GENERAL PROVISIONS
Section 10.1. Assignment and Assumption . Developer shall not have the right to sell, assign or transfer all or any part of its rights, t itle, and interests in all or a portion of the Site or Project, subject to or a part of this Agree ment, to any person, firm, corporation or entity during the Term of this Agreement without th e advance written consent of the City Manager. This assignment prohibition applies to the corporate and business entities of Developer that are a Party to this Agreement. Any a ssignment or transfer prohibited by this Agreement will be considered an immediate brea ch of this Agreement and City may elect to immediately terminate this Agreement. If t he City Manager approves an assignment or transfer of any interest detailed in this Section 10.1, City and Developer shall execute an “Assignment and Assumption Agreeme nt” in the form attached hereto as Exhibit G.

Section 10.2. Covenants Running with the Land . All of the provisions contained in this Agreement shall be binding upon the Parties an d their respective heirs, successors and assigns, representatives, lessees, and all othe r persons acquiring all or a portion of interest in the Site or Project, whether by operati on of law or in any manner whatsoever.

All of the provisions contained in this Agreement s hall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to California law, including California Civil Code section 1468. Each covenant herein to act or refrain from acting is for the benefit of or a burden upon the C annabis Business Project and, as appropriate, runs with the Site and is binding upon Developer.

Section 10.3. Notices . Any notice or communication required hereunder b etween City and Developer must be in writing and may be given e ither personally, by facsimile (with original forwarded by regular U.S. Mail), by regist ered or certified mail (return receipt requested), or by Federal Express, UPS, or other si milar couriers providing overnight delivery. If personally delivered, a notice shall b e deemed to have been given when delivered to the Party to whom it is addressed. If given by facsimile transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving Par ty’s facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a norma l business day, or on a Saturday, Sunday, or holiday, shall be deemed to have been given and received on the next normal business day. If given by registered or certified m ail, such notice or communication shall be deemed to have been given and received on the fi rst to occur of (i) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent; or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in th e United States mail. If given by Federal Express or similar courier, a notice or com munication shall be deemed to have been given and received on the date delivered, as s hown on a receipt issued by the courier. Any Party hereto may at any time, by givin g ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such n otices or communications shall be given to the Parties at their addresses set forth below:

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

If to City: City of Turlock
156 S. Broadway
Turlock, CA 95380
Attention: City Manager

and Katie Lucchesi, City Attorney
156 S. Broadway
Turlock, CA 95380

If to Developer: Jose Rodrigues

4242 East Valley Road
Renton, WA 98057

Section 10.4. Governing Law and Binding Arbitration . The validity, interpretation, and performance of this Agreement shall be controlled by and construed pursuant to the laws of the state of California. Any dispute, claim, or controversy arising out of or relating to this Agreement or the breach, termination, enfor cement, interpretation, or validity thereof, including the determination of the scope o r applicability of this Agreement to arbitrate, shall be determined by binding arbitration in Sacramento, California, before one arbitrator. The arbitration shall proceed pursuant to the Comprehensive Arbitration Rules and Procedures of the Judicial Arbitration and Medi ation Services (“JAMS”). Judgment on the award may be entered in any court having jurisdiction thereof.

Section 10.5. Invalidity of Agreement/Severability . If this Agreement, in its entirety, is determined by an arbitrator or court of competen t jurisdiction to be invalid or unenforceable, this Agreement shall automatically t erminate as of the date of final entry of judgment. If any term or provision of this Agree ment shall be determined by an arbitrator or court of competent jurisdiction to be invalid and unenforceable, or if any term or provision of this Agreement is rendered invalid or unenforceable according to the terms of any federal or state statute, any provisions tha t are not invalid or unenforceable shall continue in full force and effect and shall be cons trued to give effect to the intent of this Agreement. The Parties expressly agree that each Pa rty is strictly prohibited from failing to perform any and all obligations under this Agreement on the basis that this Agreement is invalid, unenforceable, or illegal. By entering into this Agreement, each Party disclaims any right to tender an affirmative defense in any a rbitration or court of competent jurisdiction, that performance under this Agreement is not required because the Agreement is invalid, unenforceable, or illegal.

Section 10.6. Cumulative Remedies . In addition to any other rights or remedies, Cit y and Developer may institute legal or equitable proc eedings to cure, correct, or remedy any default, to specifically enforce any covenant o r agreement herein, or to enjoin any threatened or attempted violation of the provisions of this Agreement. The prevailing Party in any such action shall be entitled to reasonable attorneys’ fees and costs.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Notwithstanding the foregoing or any other provisio n of this Agreement, in the event of City default under this Agreement, Developer agrees that it may not seek, and shall forever waive any right to, monetary damages against City, but excluding, therefrom, the right to recover any fees or charges paid by Develo per in excess of those permitted hereunder.

Section 10.7. Third Party Legal Challenge . In the event any legal action or special proceeding is commenced by any person or entity cha llenging this Agreement or any associated entitlement, permit, or approval granted by City to Developer for the Cannabis Business Project (collectively, “Project Litigation ”), the Parties agree to cooperate with each other as set forth herein. City may elect to t ender the defense of any lawsuit filed and related, in whole or in part, to Project Litiga tion with legal counsel selected by City.

Developer will indemnify, hold City harmless from, and defend City from all costs and expenses incurred in the defense of such lawsuit, including, but not limited to, damages, attorneys’ fees, and expenses of litigation awarded to the prevailing Party or Parties in such litigation. Developer shall pay all litigation fees to City within thirty (30) days of receiving a written request and accounting of such fees and expenses from City.

Notwithstanding the aforementioned, City may request, and Developer will provide to City within seven (7) days of any such request, a deposit to cover City’s reasonably anticipated Project Litigation fees and costs.

Section 10.8. Constructive Notice and Acceptance . Every person who, after the Effective Date and recording of this Agreement, owns or acquires any right, title or interest to any portion of the Site is and shall be conclusi vely deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which s uch person acquired an interest in the Site and all rights and interests of such person in the Site shall be subject to the terms, requirements, and provisions of this Agreement.

Section 10.9. Statute of Limitations and Laches . City and Developer agree that each Party will undergo a change in position in detrimental reliance upon this Agreement from the time of its execution and subsequently. The Parties agree that Section 65009(c)(1)(D) of the California Government Code, which provides f or a ninety (90) day statute of limitations to challenge the adoption of this Agree ment, is applicable to this Agreement.

In addition, any person who may challenge the validity of this Agreement is hereby put on notice that, should the legality or validity of thi s Agreement be challenged by any third party in litigation, which is filed and served more than ninety (90) days after the execution of this Agreement, City and Developer shall each assert the affirmative defense of laches with respect to such challenge, in addition to all other available defenses. This Section in no way limits the right of a Party, claiming that the other Party breached the terms of this Agreement, to bring a claim against the other Party within the four (4) year statute of limitations set forth in Section 337 of the California Civil Code.

Section 10.10. Joint and Several Liability . Developer shall be jointly and severally liable for any amount due under this Agreement, and any breach of this Agreement or failure to pay by one Party shall also constitute a breach of this Agreement by the other

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Party. Developer agrees that City may impose a lien and seek foreclosure on any parcel of the Site due to any default by Developer.

Section 10.11. Change in State Regulations . In no event shall Developer operate the Cannabis Business Project in violation of the Agreement, or State Cannabis Regulations, as may be amended from time to time.

Section 10.12. Standard Terms and Conditions .
(a) Venue. Venue for all legal proceedings shall be th e JAMS Resolution Center in Sacramento, California.
(b) Waiver. A waiver by any Party of any breach of any term, covenant, or condition herein contained or a waiver of any right or remedy of such Party available hereunder, at law or in equity, shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition herein contained or of any continued or subsequent right to the same right or remedy. No Party shall be deemed to have made any such waiver unless it is in writing and signed by the Party so waiving. (c) Completeness of Instrument. This Agreement, to gether with its specific references, attachments, and Exhibits, constitutes all of the agreements, understandings, representations, conditions, warranties, and covenants made by and between the Parties hereto. Unless set forth herein, no Party to this A greement shall be liable for any representations made, express or implied.
(d) Supersedes Prior Agreement. It is the intention of the Parties hereto that this Agreement shall supersede any prior agreements , discussions, commitments, or representations, written, electronic, or oral, between the Parties hereto with respect to the Site or Cannabis Business Project.
(e) Captions. The captions of this Agreement are f or convenience and reference only and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction , or meaning of the provisions of this Agreement.
(f) Number and Gender. In this Agreement, the neut er gender includes the feminine and masculine, and the singular includes t he plural, and the word “person” includes corporations, partnerships, firms, or associations, wherever the context requires. (g) Mandatory and Permissive. “Shall” and “will” a nd “agrees” are mandatory. “May” or “can” are permissive.
(h) Term Includes Extensions. All references to th e Term of this Agreement shall include any extensions of such Term.
(i) Counterparts. This Agreement may be executed s imultaneously, and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

(j) Other Documents. The Parties agree that they s hall cooperate in good faith to accomplish the objectives of this Agreemen t and, to that end, agree to execute and deliver such other instruments or documents as may be necessary and convenient to fulfill the purposes and intentions of this Agreement. (k) Time is of the Essence. Time is of the essence in this Agreement in each covenant, term, and condition herein.
(l) Authority. All Parties to this Agreement warra nt and represent that they have the power and authority to enter into this Agr eement and the names, titles, and capacities herein stated on behalf of any entities, persons, states, or firms represented or purported to be represented by such entities, persons, states, or firms and that all former requirements necessary or required by state or fede ral law in order to enter into this Agreement had been fully complied with. Further, by entering into this Agreement, no Party hereto shall have breached the terms or condi tions of any other contract or agreement to which such Party is obligated, which s uch breach would have a material effect hereon.
(m) Document Preparation. This Agreement will not be construed against the Party preparing it but will be construed as if prepared by all Parties. (n) Advice of Legal Counsel. Each Party acknowledg es that it has reviewed this Agreement with its own legal counsel and, base d upon the advice of that counsel, freely entered into this Agreement.
(o) Attorneys’ Fees and Costs. If any action at la w or in equity, including action for declaratory relief, is brought to enforce or interpret provisions of this Agreement, the prevailing Party shall be entitled to reasonabl e attorneys’ fees and costs, which may be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled. (p) Calculation of Time Periods. All time referenc ed in this Agreement shall be calendar days, unless the last day falls on a le gal holiday, Saturday, or Sunday, in which case the last day shall be the next business day.

SIGNATURES ON FOLLOWING PAGE

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

IN WITNESS WHEREOF , this Agreement has been entered into by and betwe en Developer and City as of the Effective Date of the Agreement, as defined above.

“CITY”

CITY OF TURLOCK, a
California municipal corporation

By:

Christopher Fisher
Acting City Manager

Dated:

Attest:

By:

Nichole Fiez
City Clerk

Approved as to Form

By
Katie Lucchesi
City Attorney
“DEVELOPER”

THE EVERGREEN MARKET (TURLOCK),
INC., a California corporation

By:

Jose Rodrigues
Its: Owner

Dated:

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND EVERGREEN MARKET (TURLOCK), INC.

California All-Purpose Acknowledgment

State of California )
)
County of )

On , before me , a 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 ackn owledged to me that he/she/they executed the same in his/her/their authorized capac ity(ies), and that by his/her/their signature(s) on the instrument the person(s), or th e entity upon behalf of which the person(s) acted, executed the instrument.

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

Witness my hand and official seal.

(Signature)

(Seal)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND EVERGREEN MARKET (TURLOCK), INC.

California All-Purpose Acknowledgment

State of California )
)
County of )

On , before me , a 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 ackn owledged to me that he/she/they executed the same in his/her/their authorized capac ity(ies), and that by his/her/their signature(s) on the instrument the person(s), or th e entity upon behalf of which the person(s) acted, executed the instrument.

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

Witness my hand and official seal.

(Signature)

(Seal)

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

CANNABIS SITE LEGAL DESCRIPTION
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit A
Exhibit A

Cannabis Site Legal Description

CANNABIS SITE LEGAL DESCRIPTION
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit A

CANNABIS BUSINESS PROJECT SITE MAP
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit B
Exhibit B

Cannabis Business Project Site Map

CANNABIS BUSINESS PROJECT SITE MAP
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit B

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C
Exhibit C

Site Lease

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

SITE LEASE
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit C

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit D
Exhibit D

Notice of Non-Performance Penalty

DATE: _________________, 20__

PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380
Attention: City Manager

DEVELOPER
Evergreen Market (Turlock), Inc.
4242 East Valley Road
Renton, WA 98057
Attention: Jose Rodrigues

THIS NOTICE OF NON-PERFORMANCE PENALTY (“Penalty Notice”) is being executed by the City of Turlock, a California municipal corporation (“City”), with reference to the following.

A. By Instrument No. _____________, which was recor ded in the Official Records of Stanislaus County, California, on ______ __________, 20__, City recorded a development agreement between City and Evergreen Market (Turlock), Inc., a California corporation (“ Developer”), dated ______________, 20__ (the “Development Agreement”), relating to the development and operation of a cannabis business.

B. Pursuant to Section 4.2 of the Development Agree ment, Developer agrees to pay to City a Public Benefit on the first business day of each month during the Term of the Development Agreement.

C. On ________, 20__, the Public Benefit was due to City by Developer. City did not receive payment.

D. Pursuant to Section 4.5 of the Development Agree ment, if Developer fails to make payment when it is due, City may impose a p enalty of ten percent (10%) of the total of the past due amounts (“Penalty”). As of ____________, 20__, the past due amount equals $_________. The Pe nalty owed by Developer equals $____________ (“Penalty Amount”).

E. Pursuant to Section 4.5 of the Development Agree ment, Developer shall make payment of the Penalty Amount in a single inst allment due within fifteen (15) days of delivery of this Penalty Notice (“Penalty Due Date”).

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit D

F. Pursuant to Section 4.6 of the Development Agree ment, if Developer fails to pay the Penalty Amount before the Penalty Due Date, then, in addition to the Penalty Amount specified in subdivision (D), De veloper shall pay City interest on the Penalty Amount, at the rate of eigh teen percent (18%) per annum (“Penalty Interest Payment”), computed from t he Penalty Due Date specified in subdivision (E). The Penalty Interest Payment is due fifteen (15) days following delivery of the Penalty Due Date. As of ____________, 20__, the Penalty Interest Payment amount equals $_________.

G. Nothing contained herein shall constitute a waiv er of City’s future claims for the Public Benefit, Penalty, or interest on the Penalty.

NOW, THEREFORE, City hereby provides Developer the Penalty Notice required by Section 4.5 of the Development Agreement. This Penalty Notice shall be effective upon notice pursuant to Section 10.3 of the Development Agreement.

CITY OF TURLOCK,
a California municipal corporation

By:

City Manager

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
Exhibit E

INDEMNITY AGREEMENT FOR

LAND USE ENTITLEMENT PROCESSING

THIS INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT
PROCESSING (“Agreement”) is made and entered into on this ___ day of ____, 20__, (“Effective Date”) by and between the City of Turlo ck, a California municipal corporation (“City”) and Evergreen Market (Turlock), Inc., a Ca lifornia corporation (“Applicant”). City and Applicant may be referred to herein individuall y as a “Party” or collectively as the “Parties”. There are no other parties to this Agreement.

RECITALS

A. In 1996, the people of the state of California a pproved Proposition 215, the Compassionate Use Act of 1996 (“CUA”). The CUA enables seriously ill Californians to legally possess, use, and cultivate marijuana for medical use under state law. In 2003, the California Legislature adopted Senate Bill 420, entitled the Medical Marijuana Program (“MMP”), which authorizes qualified patient s and their primary caregivers to cultivate marijuana for medical purposes without be ing subject to criminal prosecution under the California Penal Code.

B. On October 9, 2015, Governor Jerry Brown signed three bills into law (Assembly Bill 266, Assembly Bill 243, and Senate Bill 643) which are collectively referred to as the Medical Cannabis Regulation and Safety Ac t (“MCRSA”). MCRSA establishes a statewide regulatory system for the cultivation, processing, transportation, testing, manufacturing, and distribution of medical marijuan a to qualified patients and their primary caregivers.

C. On November 8, 2016, California voters passed Pr oposition 64, the Adult Use of Marijuana Act (“AUMA”). AUMA legalizes the c ultivation, commercial sale, and possession of recreational cannabis for adults age 21 and older.

D. On June 27, 2017, Governor Jerry Brown signed in to law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”), which created a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in the MCRSA and AUMA that g ranted local jurisdictions control over whether businesses engaged in commercial canna bis activity may operate in a particular jurisdiction.

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
E. On December 7, 2017, California state cannabis l icensing authorities issued emergency regulations that apply to AUMA and MAUCRA and further regulate businesses engaged in commercial cannabis activity.

F. Turlock Municipal Code (“T.M.C.”) Chapter 5.21 a uthorizes cannabis businesses to operate within the City under specified restrictions pursuant to a Cannabis Pilot Program.

G. Applicant intends to improve, develop, and use r eal property to operate a cannabis business (the “Project”) within the City in strict compliance with MAUCRSA and T.M.C. chapter 5.60.

H. Applicant has an agreement to lease that certain real property located at 101 East Glenwood Avenue in the City of Turlock, id entified as Stanislaus County Assessor’s Parcel Number 044-022-013 (the “Project” ) Applicant intends to improve approximately 2,677 (two thousand six hundred and seventy-seven) square feet of space and operate the Project on the Property.

I. As a condition of approval of the Land Use Entit lements, City has required Applicant to enter into this Agreement.

J. It is in the public interest for City and Applic ant to enter into this Agreement, as Applicant will benefit from City’s processing of the Project.

K. Applicant desires to enter into this Agreement t o fulfill a condition of approval of the Project, which is a prerequisite for construction of the Project.

AGREEMENT

NOW, THEREFORE , in consideration of the promises, covenants and agreements set forth below, the Parties agree as follows:

Section 1. Recitals . The recitals set forth above (“Recitals”) are true and correct and are hereby incorporated into and made part of this Agreement by this reference. In the event of any inconsistency between the Recitals and Sections 1 through 19 of this Agreement, Sections 1 through 19 shall prevail.

Section 2. Applicant’s Indemnification Obligations .

2.1. Indemnification for Land Use Entitlements . To the fullest extent permitted by law, Applicant shall indemnify, and hold harmless City and its agents, elected and appointed officials, officers, employees, and volunteers (collectively, “City’s Agents”) from any and all liability arising out of a claim, action, or proceeding against City, or City’s

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
Agents, to attack, set aside, void, or annul, an ap proval concerning the Land Use Entitlements by reason of the action or inaction of City, or City’s Agents. Applicant’s duty to indemnify and hold harmless shall not extend to any claim, action or proceeding arising from the gross negligence or willful misconduct of City, or City’s Agents.

Applicant’s obligations under this Agreement to ind emnify City shall apply to any claim, lawsuit or challenge against City brought against t he Project, specifically including, but not limited to, any legal challenge based on the C alifornia Environmental Quality Act, codified in California Public Resources Code sectio n 21000 et seq .; actions or proceedings brought to challenge the validity of en vironmental documents prepared in conjunction with the approval of the Project or Land Use Entitlements, or the requirements of any other federal, state, or local laws, including, but not limited to, general plan, specific plan, and zoning requirements.

2.2. Tender of Defense . Upon receiving notice of a claim and pursuant to Article 6 of the Land Use Entitlements, Applicant s hall assume the defense of the claim, action, or proceeding through the prompt payment of all attorneys’ fees and costs, incurred in good faith and in the exercise of reaso nable discretion, of City’s counsel in defending such an action. Regardless of whether Ap plicant chooses to defend City pursuant to Section 6.4 of the Land Use Entitlement s, City shall have the absolute and sole authority to control the litigation and make l itigation decisions, including, but not limited to, selecting counsel to defend City and se ttlement or other disposition of the matter.

2.3. Deposit for Costs . Applicant shall make a refundable deposit to City within thirty (30) days of written notification fro m City (“Cost Deposit”), to cover the estimated fees and costs associated with City’s def ense of any claim, action or proceeding. Applicant shall make any and all additional payments to City to replenish the Cost Deposit within thirty (30) days of written notice from City.

2.4. Failure to Indemnify; Waiver . Failure to indemnify City, when required by this Agreement, shall constitute a material brea ch of this Agreement and of the Land Use Entitlements, which shall entitle City to all r emedies available under law including, but not limited to, specific performance and damage s. Failure to indemnify shall constitute grounds upon which City may rescind its approval of the Land Use Entitlements. Applicant’s failure to indemnify Cit y shall be a waiver by Applicant of any right to proceed with the Project, or any portion t hereof, and a waiver of Applicant’s right to file a claim, action or proceeding against City or City’s Agents based on City’s rescission or revocation of the Land Use Entitlemen ts, or City’s failure to defend any claim, action or proceeding based on Applicant’s failure to indemnify City.

2.5. Satisfaction of Judgment . With respect to any claims, demands, acts, causes of action, damages, costs, expenses, settlem ents, losses or liabilities which Applicant has indemnified City against, Applicant s hall pay and satisfy any judgment, award, settlement or decree that may be rendered or agreed against City and City’s Agents arising out of any final, non-appealable judicial or administrative action.

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E

2.6. Payment of Costs and Fees . Applicant’s obligations under this Agreement to defend and indemnify City shall includ e, but not be limited to, payment of all court costs and attorneys' fees, all litigation -related costs, all costs of any judgments or awards against City, or all settlement costs whi ch arise out of City’s processing or approval of the Project.

2.7. Continuing Obligation . Applicant shall be and remain personally obligated to all of the terms of this Agreement, no twithstanding any attempt to assign, delegate or otherwise transfer all or any of the rights or obligations of this Agreement, and notwithstanding a change in or transfer of ownership of the real property upon which the Project is located (or any interest therein). Howe ver, Applicant may be released from such obligations if Applicant obtains City’s prior written consent to such transfer, which consent shall not be unreasonably withheld.

Section 3. City’s Obligations . City shall notify Applicant of any claim, action or proceeding within ten (10) business days of receivi ng service of any claim, action or proceeding. If City fails to notify Applicant of a ny claim, action, or proceeding, Applicant shall not, thereafter, be responsible to defend, indemnify, or hold City harmless. City shall have and retain, in its sole discretion, the right to not participate in the defense of any claim, action, or proceeding. At its sole discretion, City may participate at its own expense in the defense, but such participation shall not relieve Applicant of any obligation imposed by this Agreement.

Section 4. Notice . Any notice or communication required hereunder bet ween City and Applicant must be in writing and may be given e ither personally, by facsimile (with original forwarded by regular U.S. Mail), by regist ered or certified mail (return receipt requested), or by Federal Express, UPS or other sim ilar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by facsimile transmission, a notice or communication shall be deemed to have been given and received upon actual physical receipt of the entire document by the receiving Par ty’s facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a norma l business day, or on a Saturday, Sunday or holiday, shall be deemed to have been given and received on the next normal business day. If given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the fi rst to occur of (a) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent, or (b) five (5) days after a registered or certified l etter containing such notice, properly addressed, with postage prepaid, is deposited in th e United States mail. If given by Federal Express or similar courier, a notice or com munication shall be deemed to have been given and received on the date delivered as sh own on a receipt issued by the courier. Any Party hereto may at any time, by givi ng ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

If to City: City of Turlock
156 S. Broadway
Turlock, CA 95380
Attention: City Manager

and Katie O. Lucchesi, City Attorney
156 S. Broadway
Turlock, CA 95380

If to Developer: Jose Rodrigues

4242 East Valley Road
Renton WA 98057

Section 5. Modification of Agreement . This Agreement may be supplemented, amended, or modified only by a writing signed by City and Applicant.

Section 6. Entire Agreement . This Agreement constitutes the final, complete, and exclusive statement of the terms of the agreement b etween the Parties pertaining to the action and supersedes all other prior or contemporaneous oral or written understandings and agreements of the Parties. No Party has been i nduced to enter into this Agreement by, nor is any Party relying on, any representation or warranty except those expressly set forth in this Agreement.

Section 7. Agreement is Voluntary . The Parties acknowledge that they have entered into this Agreement voluntarily, on the bas is of their own judgment and without coercion, and not in reliance on any promises, repr esentations, or statements made by the other Party other than those contained in this Agreement. This Agreement incorporates the entire understanding of the Parties and recites the sole consideration of the promises and agreements contained within it. The Parties have read this Agreement and are fully aware of its contents and legal effect.

Section 8. Time of Essence . Time is of the essence for this Agreement, and each section contained within this Agreement is made and declared to be a material, necessary, and essential part of this Agreement.

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
Section 9. Severability of Agreement . If a court or an arbitrator of competent jurisdiction holds any section of this Agreement to be illegal, unenforceable, or invalid for any reason, the validity and enforceability of the remaining sections of this Agreement shall not be affected.

Section 10. Authority . All Parties to this Agreement warrant and represent that they have the power and authority to enter into this Agr eement, and the names, titles, and capacities herein stated on behalf of any entities, persons, states, or firms represented or purported to be represented by such entities, persons, states, or firms and that all former requirements necessary or required by state or fede ral law in order to enter into this Agreement had been fully complied with. Further, by entering into this Agreement, neither Party hereto shall have breached the terms or condi tions of any other contract or agreement to which such Party is obligated, which s uch breach would have a material effect hereon.

Section 11. Noninterference . No Party will do anything to interfere with or inhibit the ability of the other to comply with their respectiv e obligations under the terms of this Agreement.

Section 12. Ambiguities . Each Party has participated fully in the review and revision of this Agreement. Any rule of construction that a mbiguities are to be resolved against the drafting Party does not apply in interpreting this Agreement.

Section 13. Headings . The headings in this Agreement are included for convenience only, and neither affect the construction or interpretation of any section in this Agreement nor affect any of the rights or obligations of the Parties to this Agreement.

Section 14. Necessary Acts and Further Assurances . The Parties shall, at their own cost and expense, execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement. The Parties will act in good faith to carry out the intent of this Agreement.

Section 15. Governing Law . This Agreement shall be governed and construed in accordance with the laws of the State of California.

Section 16. Venue . Venue for all legal proceedings shall be in the Sup erior Court of the State of California in and for the County of Stanislaus.

Section 17. Attorney’s Fees and Costs . If any action at law or in equity, including action for declaratory relief, is brought to enforce or interpret sections of this Agreement, the prevailing Party shall be entitled to reasonabl e attorney's fees and costs, which may

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
be set by the court in the same action or in a separate action brought for that purpose, in addition to any other relief to which such Party may be entitled.

Section 18. Waiver . No covenant, term, or condition, or the breach ther eof, shall be deemed waived, except by written consent of the Par ty against whom the waiver is claimed, and any waiver of the breach of any covena nt, term, or condition shall not be deemed to be a waiver of any preceding or succeedin g breach of the same or any other covenant, term, or condition.

Section 19. Counterparts . This Agreement may be executed in counterparts and all so executed shall constitute an agreement which shall be binding upon the Parties hereto, notwithstanding that the signatures of all Parties and Parties’ designated representatives do not appear on the same page.

[SIGNATURE PAGE TO FOLLOW]

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit E
IN WITNESS THEREOF, the Parties have executed this Agreement on the day, month and year first above written.

APPLICANT

The Evergreen Market (Turlock),
Inc., a California corporation

By: _____________________________
Jose Rodrigues
Its: _____________________________
Owner

Date: ___________________________

The Evergreen Market (Turlock),
Inc., a California corporation

By: ___________________________

Its: ___________________________

Date: _________________________

CITY

City of Turlock, a California municipal
corporation

By: ____
Gary Hampton, City Manager

Date:

APPROVED AS TO FORM:

By: _____
Katie Lucchesi, City Attorney

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit F
Exhibit F

Notice of Termination

RECORDING REQUESTED BY AND WHEN
RECORDED RETURN TO:

City of Turlock
156 S Broadway
Turlock, CA 95380
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER ’S USE
Recording Fee Exempt per Government Code § 6103

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT

DATE: _________________, 20___

PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380

THE EVERGREEN MARKET (TURLOCK), INC.
4242 East Valley Road
Renton, WA 98057
Attn: Jose Rodrigues

THIS NOTICE OF TERMINATION AND RELEASE (the “Release”) is being executed by the City of Turlock, a California municipal corporation (“City”), with reference to the following.

A. By Instrument No. _____________, which was recor ded in the Official Records of Stanislaus County, California, on ______ __________, 20__, City recorded a development agreement between City and
______________, dated ______________, 20__ (the “De velopment Agreement”), relating to the development and operat ion of a cannabis business.

B. Pursuant to Sections 1.7 and 9.1 of the Developm ent Agreement, the term of the Development Agreement expires five (5) years from _______, 20__, on __________, 20____.

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT CITY OF TURLOCK AND THE EVERGREEN MARKET (TURLOCK), INC.

Exhibit F
C. Pursuant to Section 9.1 of the Development Agree ment, once terminated, the Development Agreement has no further force or effect, unless otherwise set forth in the Development Agreement.

NOW, THEREFORE, City hereby terminates, cancels, and otherwise rel eases Developer and Developer’s heirs, executives, admini strators, successors, and assigns from their obligations in the Development Agreement on this ____ of _____ , 20___, and relinquishes any right it may hereafter have to enf orce any of the terms and provisions set forth in the Development Agreement, unless othe rwise set forth in the Development Agreement. This termination, cancellation, and rele ase shall be effective upon the recordation of this Release in the office of the Co unty Recorder for the County of Stanislaus, State of California.

CITY OF TURLOCK,
a California municipal corporation

By:

City Manager

ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT CITY OF TURLOCK AND EVERGREEN MARKET (TURLOCK), INC.

Exhibit G
Exhibit G

Assignment and Assumption Agreement

RECORDING REQUESTED BY AND WHEN
RECORDED RETURN TO:

City of Turlock
156 S Broadway
Turlock, CA 95380
Attention: City Clerk

S PACE ABOVE THIS LINE FOR RECORDER ’S USE
Recording Fee Exempt per Government Code § 6103

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Agreement”) is entered into this _____ day of __________, 20___, b y and between ___________________The Evergreen Market (Turlock), Inc. (“Assignors”), and ______________________ (“Assignee”).

RECITALS

A. On ___________, 20__, Assignor and the City of T urlock (the “City”) entered into that certain agreement entitled “Devel opment Agreement by and between the City of Turlock, a California municipal corpora tion and The Evergreen Market (Turlock), Inc. relating to the improvement, develo pment, and use of real property to operate a cannabis business (the “Development Agree ment”), originally recorded upon Stanislaus County Assessor’s Parcel Number 044-022-013 (the “Property”).

B. Section 10.1 of the Development Agreement prohib its the sale, assignment, or transfer by Assignor of any portion of Assignor’s interests, rights, or titles described in that section of the Development Agreem ent (“Assignable Rights”) to a third party without prior written approval by the City Ma nager of the City of Turlock (the “City Manager”).

C. Assignor intends to assign, and Assignee intends to assume, the Assignable Rights under the Development Agreement.

D. In accordance with the terms of the Development Agreement, Assignor has provided to the City Manager a written request for consent to assignment. The City Manager has received the information he or she deem s appropriate and consulted with the City Attorney for the purpose of determining that Assignee is a qualified applicant for purposes of the foregoing terms of the Development Agreement. This Agreement is intended to meet the requirements of Section 10.1 of the Development Agreement for an Assignment and Assumption Agreement and is executed with the consent of the City Manager as contemplated in the Development Agreement.

ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT CITY OF TURLOCK AND EVERGREEN MARKET (TURLOCK), INC.

Exhibit G
NOW, THEREFORE, Assignor and Assignee hereby agree as follows:

1. The foregoing Recitals are true and incorporated herein by this reference as though set forth in full.

2. Assignor hereby assigns to Assignee all of the A ssignable Rights of Assignor under the Development Agreement.

3. Assignee hereby assumes all of the burdens and o bligations of Assignor under the Development Agreement and agrees to obser ve and fully perform all of the duties and obligations of Assignor under the Development Agreement, and to be subject to all the terms and conditions thereof, with respect to the Property and Assignable Rights.

It is the express intention of Assignor and Assigne e that, upon the execution of this Agreement, Assignee shall become substituted for Assignor as the “Developer” under the Development Agreement.

4. This Agreement shall take effect and be binding only upon the City Manager’s consent to and approval of the Agreement.

5. Assignee represents and warrants that it has rev iewed and is familiar with the terms and conditions of the Development Agreeme nt. Assignee acknowledges that the Assignable Rights are as set forth in Section 1 0.1 of the Development Agreement, and the duties of Assignor thereunder and the duties of Assignee hereunder, as between Assignee and City, shall be without reference to an y underlying agreements or understandings that may exist between Assignee, Ass ignor, or any other party with respect to the subject matter hereof, and that City is not party to such other agreements.

6. All of the covenants, terms, and conditions set forth herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors, and assigns.

IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

[Signatures on the Following Page]

ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT CITY OF TURLOCK AND EVERGREEN MARKET (TURLOCK), INC.

Exhibit G

ASSIGNOR

The Evergreen Market (Turlock), Inc., a
California corporation

By: _____________________________
Jose Rodrigues
Its: Owner

Date: ___________________________

ASSIGNEE

__________________________
__________________________

By: _____________________________
Its: _____________________________

Date: ___________________________

City of Turlock, a California municipal
corporation

By:

Gary Hampton
City Manager

Date:

APPROVED AS TO FORM:

By:

Katie Lucchesi, City Attorney

Date:

City Council Staff Report
May 26, 2026

From: Adrienne Werner, Development Services Director
Prepared by: Katie Quintero, Planning Manager
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Resolution: Finding that NHC Turlock LLC has complied in good faith with the terms and conditions of the Development Agreement between NHC Turlock LLC and the City of Turlock for the operation of a cannabis retail dispensary at 3401 West Monte Vista Avenue, Stanislaus Assessor's Parcel Number 087-003-039.

Ordinance: Introduction and First Reading of an Ordinance amending terms and extending the Development Agreement between the City of Turlock and NHC Turlock LLC.

2. NARRATIVE:

BACKGROUND

NHC is located at 3401 W. Monte Vista Avenue. The property is zoned PD 233 with an underlying General Plan Designation of Highway Commercial (HWC). The commercial zoning and general plan designations allow cannabis dispensaries with a Conditional Use Permit and Development Agreement.

On September 22, 2020, the City Council granted Conditional Use Permit 2020-01 and approved the Development Agreement to allow NHC to operate a cannabis dispensary.

NHC opened for business on May 19, 2023.

On September 11, 2025, the City of Turlock and NHC entered into a second amendment to the Development Agreement to extend the term of the Development Agreement through June 30, 2026.

Annual Review

The Turlock Municipal Code §9-5-912 requires the City Council to review annually whether the property owner has complied in good faith with the terms and conditions of the Development Agreement.

Planning Department

Signage
NHC was issued a sign permit for the signs on the building and is in compliance with all sign requirements.

NHC is in compliance with all other Planning conditions established in City Council Resolution 2020-145.

Agenda Staff Report
5/26/2026

Building Department

There are no active building code violations and NHC is in compliance with the requirements of the Building and Safety Division.

Finance Department

Business License
NHC was issued a business license on January 27, 2023. Their business license is current and active. There are no outstanding issues.

Public Benefit Amount
The Development Agreement requires monthly payment of a public benefit amount. Section

4.2 of the Development Agreement details the public benefit amount that NHC must submit to the City on a monthly basis.

The audits and compliance checks have been completed. NHC is in compliance with the Finance Department requirements. The public benefit amount that NHC has paid is detailed in the table below:

Fiscal Year Public Benefit Payment

2020-21 N/A
2021-22 N/A
2022-23 $50,000.00
2023-24 $310,000.00
2024-25 $375,000.00
2025-26* $280,000.00
Total through 4/29/26 $1,015,000.00

*Payment made through March 2026

Police Department

Calls for Service

There were 13 calls for service (CFS) in 2023, including four extra patrols and three trespassing calls prior to NHC opening for business. Two panic alarms were accidental. The responding officer found the building secure. The alarm company called back and canceled the 2 commercial alarms. A suspicious vehicle call found an unoccupied car with no one in the vicinity. A self-initiated trespass call was placed by the security guard when two males in an RV refused to leave the property. The officer responded and advised the subjects to leave the area. The subjects stated they were waiting for a friend to drive them to Modesto.

The Fire Department responded to a fire in the microwave in the employee break room. One fraudulent phone call made to the business was closed by the responding officer.

Agenda Staff Report
5/26/2026

There were a total of 9 CFS in 2024, including one commercial fire alarm and a medical emergency call, both cleared by the Fire Department. A suspicious vehicle call found a boat and trailer parked on the property with no one in the surrounding area. Three panic alarm calls were attributed to employees accidentally pressing the panic button, two commercial alarms found a roof hatch unsecured, and a main entry unsecured. Employees were educated on securing the respective entries. One CFS was for larceny with two suspects concealing a product and leaving the business without paying for the product. This call for service resulted in an arrest. All other calls did not result in a report filed by the responding officer or arrests.

Calls for Service from January 1, 2025, through October 22, 2025, totaled five. All five calls for service were false alarm calls closed by dispatch and the alarm company and/or the responding officer.

There were eight calls for service from October 2025 through April 2026. Five false alarm or accidental alarm calls included three closed by the responding officer, one closed by dispatch and one closed by the alarm company. One emergency medical call was closed by AMR. Two ordinance checks were closed by dispatch and the responding officer. The ordinance checks were for suspicious objects left in the bushes.

It is important to remember, when responding to calls, the location is indexed by where the incident occurred or where the officer should respond to, to contact the victim. If the officer responds to the parking lot for NHC, the address and business name will be indexed in the report. If no report was made, the officer did not find probable cause to show a crime occurred.

Annual Inspection

On April 23, 2026, the Police Department conducted their annual inspection. The following items were found at the inspection:
• The public lobby of the business did not have a monitor viewable to the public to show customers they were being recorded.

The business has been mailed a letter noting these deficiencies and a second inspection will be conducted to ensure these items have been corrected. These items are minor in nature and can be corrected easily and, therefore, NHC is in substantial compliance with the Police Department’s conditions.

PROPOSED AMENDMENTS

Various amendments are proposed to the Development Agreement. To capture all previous amendments to the Development Agreement into one document, the City has prepared a First Amended and Restated Development Agreement. This captures the two previous amendments and newly proposed amendments into this one complete Agreement.

In response to concerns from many of the dispensary operators, the City is proposing to amend the language for the public benefit amount to remove the monthly minimum payment and move to a percentage only. The percentage is set as a range up to 9% of gross receipts

Agenda Staff Report
5/26/2026

but proposes to set the amount required to be paid at 5.25% through May 31, 2027, at which time Council may set a new Public Benefit amount within the range. This change will cause a reduction in the overall amount the City will receive in the public benefit amount, but it will provide more stability and will reduce the financial strain on the cannabis operators.

The term of the agreement is proposed to be extended for three years through June 30, 2029.

Other regulations proposed to be added to the agreement include requiring remote real-time live access to the video footage of cameras installed at the businesses and requiring background checks prior to any changes in ownership or on any individual or entity every two years or at any other time upon reasonable cause. A section has been added detailing if anyone with direct or indirect ownership or controlling interest in the project is convicted of a felony or any crime substantially related to the ownership or operation of a cannabis business, the City may terminate the Development Agreement. If given such notice, the Developer would have 180 days to complete a transfer of their interest to a transferee approved by the City.

Other proposed changes include various language cleanups and updates to current laws and regulations.

3. FISCAL IMPACT / BUDGET AMENDMENT:

Adopton of the proposed amendments will lead to a reduction in cannabis revenue collected from the public benefit amount but it will create more stability for the cannabis operators.

4. ENVIRONMENTAL DETERMINATION:

The project consists of the annual review to determine if NHC has complied in good faith with the terms and conditions of the Development Agreement as well as a three-year time extension and miscellaneous amendments to the Development Agreement.

No changes or modifications to the site are anticipated as a result of this review; therefore, this action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) [Project] of the CEQA guidelines. This is an organizational or administrative activity involving the annual review, request for a time extension and various miscellaneous changes to the Development Agreement. This action will not result in direct or indirect physical changes in the environment.

5. ALTERNATIVES:

1. City Council could find NHC Turlock LLC has not complied in good faith with the terms of the Development Agreement for the annual review.

2. City Council could propose other changes to the terms of the Development Agreement.

6. ATTACHMENTS:

1. Draft Resolution

2. Draft Ordinance and DA for NHC

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

WHEREAS, on September 22, 2020 the City adopted Ordinance No. 1284-CS approving a Development Agreement by and between the City and NHC Turlock LLC (“NHC”) to operate a storefront retail dispensary as defined in Turlock Municipal Code Section 5.21 in strict accordance with applicable state and local law, at 3401 W. Monte Vista Avenue, Turlock, California, County of Stanislaus Assessor’s Parcel Number 087- 003-039 (the “Project”), consistent with the General Plan, as amended; and

WHEREAS, on May 7, 2026, the Planning Commission of the City of Turlock met in accordance with Turlock Municipal Code Section 9-5-912(c); and

WHEREAS, pursuant to Section 9-5-912(c), the City Council, upon recommendation of the Planning Commission, shall determine whether the property owner has complied in good faith with the terms and conditions of the agreement during the period under review;

WHEREAS, the City Council determined the recommended action does not constitute a project and will not create a physical impact on the environment or authorize any action that has the potential to impact the physical environment and would not make any changes in current policy or regulations; therefore, the proposed action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3)(General Rule, No Environmental Impact) of the CEQA Guidelines.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby determine that NHC Turlock LLC has complied in good faith with the terms and conditions of the Development Agreement between NHC Turlock LLC and the City of Turlock for the operation of a cannabis retail dispensary at 3401 W.

Monte Vista Avenue, Turlock, CA, County of Stanislaus, Assessor’s Parcel Number 087-003-039.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 26th day of May, 2026, by the following vote:
}
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RESOLUTION NO. 2026-IN THE MATTER OF THE CITY COUNCIL FINDING

THAT NHC HAS COMPLIED IN GOOD FAITH WITH

THE TERMS AND CONDITIONS OF THE

DEVELOPMENT AGREEMENT BETWEEN NHC

TURLOCK LLC AND THE CITY OF TURLOCK FOR

THE OPERATION OF A CANNABIS RETAIL
DISPENSARY AT 3401 W. MONTE VISTA AVENUE,

TURLOCK, CA, COUNTY OF STANISLAUS,
ASSESSOR’S PARCEL NUMBER 087-003-039

Resolution No. 2026-

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )

ATTEST:

__________________________
_
Nichole Fiez, City Clerk,
City of Turlock, County of
Stanislaus,
State of California

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

WHEREAS, on June 11, 2019, the City Council of the City of T urlock (the “City Council”) adopted Ordinance No. 1255-CS to enact ca nnabis regulations for cannabis businesses pursuant to AUMA and MAUCRSA, by amendin g the City’s cannabis business regulations and establishing a Cannabis Business Pilot Program (the “Pilot Program”); and

WHEREAS, on June 11, 2019, the City adopted Ordinance No. 12 55-CS amending the City’s cannabis business regulations and establishing a Cannabis Business Pilot Program (the “Pilot Program”) to regulate the operation of commercial cannabis businesses within the City; and

WHEREAS, the City and NHC entered into a Development Agreeme nt dated September 22, 2020, which permitted NHC Turlock LLC (“NHC”) to operate an indoor cannabis cultivation, manufacturing, and distributi on business at 3401 W. Monte Vista Avenue, Turlock, California, County of Stanislaus A ssessor’s Parcel Number 087-003-039; and

WHEREAS, on September 22, 2020 the City adopted Ordinance No . 1284-CS approving a Development Agreement by and between the City and Evergreen Market dba FF Farms to operate an indoor cannabis cultivation, manufacturing, and distribution business as defined in Turlock Municipal Code Section 5.21 in strict accordance with applicable state and local law, at 101 E. Glenwood Avenue, Turlock, Cali fornia, County of Stanislaus Assessor’s Parcel Number 087-003-039 (the “Project”), consiste nt with the General Plan, as amended; and

WHEREAS, the City and NHC Turlock LLC entered into that certain First Amendment to Development Agreement dated December 19, 2022 au thorizing a change in ownership; and

WHEREAS, on September 11, 2025, the City and NHC Turlock LLC entered into that certain Second Amendment to extend the term of the Development Agreement through June 30, 2026; and

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ORDINANCE NO. 13XX-CS INTRODUCTION AND FIRST READING OF AN

ORDINANCE AMENDING TERMS AND EXTENDING

BY AMENDMENT, THE DEVELOPMENT

AGREEMENT BETWEEN NHC TURLOCK, LLC AND

THE CITY OF TURLOCK FOR THE OPERATION OF

AN INDOOR CANNABIS CULTIVATION,

MANUFACTURING, AND DISTRIBUTION BUSINESS
AT 3401 W. MONTE VISTA AVENUE, TURLOCK,
CALIFORNIA, STANISLAUS COUNTY APN 087-003-
039 THROUGH JUNE 30, 2029

Ordinance No. 13XX-CS

WHEREAS, under Section 5-21-103 of the Turlock Municipal Co de, any cannabis cultivation, manufacturing, and distribution busine ss allowed in the City shall obtain a development agreement, a City business license, and conditional use permit; and

WHEREAS, pursuant to Section 1.9 of the Development Agreeme nt a “Major Amendment” to the Development Agreement shall be approved by the City Council; and

WHEREAS, after the public hearing held on May 7, 2026, the Planning Commission recommended the City Council make the proposed amen dments to the Development Agreement and extend the term of the Development Agreement through June 30, 2029; and

WHEREAS, the City Council, based on its independent review a nd analysis of the Planning Commission’s recommendation, oral and writ ten testimony, and the record as a whole, finds, after due study, deliberation, and ho lding a public hearing, and based on its independent judgement, find that the following circumstances exist:

1. The Project is consistent with the goals, polici es, and standards of the City’s General Plan and all other applicable standards and ordinances of the City.

2. In accordance with the Development Agreement Sta tute, the City Council finds that the amendment to the Development Agreement:
a. Will not be detrimental to the health, safety, a nd general welfare of persons residing in the immediate area nor detrimental to t he general welfare of the residents of the City as a whole; and
b. Will not adversely affect the orderly developmen t of property or the preservation of property values; and
c. Is consistent with the relevant provisions of Go vernment Code Sections 65864 through 65869.5; and
d. Contains a legal description of the property.

NOW THEREFORE, BE IT RESOLVED , that the City Council of the City of Turlock does hereby determine:

Section 1. The recitals stated above are true and correct, and hereby incorporated herein.

Section 2. This request is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) [Project] of the CEQA guidelines. This is an organizational or administrative activity involving the request for a time extension for the Development Agreement (DA) between the City of Turlock and Evergreen Market dba FF Farms This action will not result in direct or indirect physical changes in the environment.

Section 3. The City Council of the City of Turlock extends th e terms of the Development Agreement between the City of Turlock and NHC through June 30, 2029.

Section 4. If any section, subsection, sentence, clause, phra se, or word of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or

Ordinance No. 13XX-CS

invalid for any reason, such decision shall not aff ect the validity of the remaining portions of the Ordinance. The City Council hereby declares tha t it would have passed this Ordinance and each section, subsection, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more sections(s), subsection(s ), sentence(s), clause(s), phrase(s), or word(s) be declared invalid.

Section 5. Upon passage of this Ordinance, the City Manager i s authorized to execute the amendment to the Amended and Restated Development Agreement as shown in Exhibit A on behalf of the City. Within ten (10) da ys of the execution, but no earlier than 30 days after passage of this Ordinance, the City Cler k shall cause the amendment to the Development Agreement to be recorded in the Office of the County Recorder as provided for by Government Code section 65868.5. The amendment to the Development Agreement shall not take effect for thirty (30) days following passage and adoption of this Ordinance.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 9th day of June, 2026, by the following vote:

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )

SIGNED:

____________________________
Amy Bublak, Mayor

ATTEST: APPROVED AS TO FORM:

___________________________ ____________________ _________ Nichole Fiez, City Clerk, Katie Lucchesi, City Attorney City of Turlock, County of Stanislaus,
State of California

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Turlock
156 S Broadway
Turlock, CA 95380
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER'S USE
Recording Fee Exempt per Government Code §6103

FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT BETWEEN

THE CITY OF TURLOCK AND NHC TURLOCK LLC

THIS FIRST AMENDED AND RESTATED DEVELOPMENT AGREEME NT
("Agreement") is made and entered into this_____ day of _ _ _ _ _ 2026, by and
between the City of Turlock, a California municipal corporation ("City"), and NHC Turlock LLC, a California limited liability company ("Developer"). City and Developer may be referred to herein individually as a "Party" or collectively as the "Parties." There are no other parties to this Agreement.

RECITALS
A. On October 9, 2015, Governor Jerry Brown signed three bills into law (Assembly Bill 266, Assembly Bill 243, and Senate Bill 643) which are collectively referred to as the Medical Cannabis Regulation and Safety Act ("MCRSA" ). MCRSA establishes a statewide regulatory system for the cultivation, pr ocessing, transportation, testing, manufacturing and distribution of medical marijuana to qualified patients and their primary caregivers.

B. On November 8, 2016, California voters enacted P roposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act, also known as t he Adult Use of Marijuana Act ("AUMA"), which establishes a comprehensive system to legalize, control, and regulate the cultivation, processing, manufacture, distribution, testing, and sale of nonmedical cannabis, including cannabis products, f or use by adults 21 years and older and to tax the growth and retail sale of cannabis for nonmedical use.

C. On June 27, 2017, Governor Jerry Brown signed in to law the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"), which creates a single regulatory scheme for both medicinal and adult-use cannabis businesses. MAUCRSA retains the provisions in MCRSA and AUMA that granted local jur isdictions control over whether businesses engaged in Commercial Cannabis Activity, as defined in Section 1.4 of this Agreement, may operate in a particular jurisdiction.

DEVELOPMENT AGREEMENT CITY OF TURLOCK AND NHC TURLOCK, LLC

,/".

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

l

D. On June 11, 2019, the Turlock City Council (the "City Council") adopted Ordinance No. 1255-CS to enact cannabis regulations as defined un der Turlock Municipal Code ("T.M.C.") Chapter 5.21 pursuant to AUMA and MAUCRSA.

E. On June 11, 2019, the City adopted Ordinance No. 1255-CS amending the City's cannabis business regulations and establishing a Ca nnabis Business Pilot Program (the "Pilot Program") to regulate the operation of commercial cannabis businesses within the City.

F. Developer proposed to improve, develop and use r eal property to operate a Cannabis Business Project, as defined below, in strict accor dance with California Cannabis Laws, as defined in Section 1.4 of this Agreement a nd the T.M.C., as each may be amended from time to time.

G. To strengthen the public planning process, encou rage private participation in comprehensive planning and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 e t seq. (the "Development Agreement Statute"), which authorizes City and an i ndividual or business entity with an interest in real property to enter into a develo pment agreement that establishes certain development rights in real property that is subject to a development agreement application.

H. On June 11, 2019, following the adoption of the Pilot Program, the City issued and circulated a request for qualifications ("RFQ"). The purpose of the RFQ was to form the basis for a selection process of qualified cannabis operators for participation in the Pilot Program. Developer completed the RFQ requirements.

I. Developer submitted an application to the City P lanning Department for consideration of a development agreement for a commercial cannabis business.

J. Developer purchased property located at 3401 Wes t Monte Vista Avenue Turlock, California, County of Stanislaus Assessor's Parcel Number 087-003-039 of which Developer improved approximately 1.326 acres of spa ce (the "Site") to operate the Cannabis Business Project, more particularly descri bed in the legal description attached hereto as Exhibit A ("Legal Description") and the Cannabis Business Project Site Map attached hereto as Exhibit B.

K. Developer purchased the Site for the purpose of carrying out the Cannabis Business Project. A copy of the deed to the Site is attached hereto as Exhibit C, within satisfaction of the requirement of T.M.C. Chapter 5.21.

L. On August 6, 2020, the Turlock Planning Commissi on ("Planning Commission"), in a duly noticed and conducted public hearing, considered Developer's application

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

for this Agreement. At that public hearing, the Planning Commission adopted Planning Commission Resolution No. 2020-16 recommending the City Council adopt an Ordinance, which would allow Developer to operate the Cannabis Business Project at the Site.

M. On September 22, 2020, pursuant to Government Co de section 65867.5, and following a duly noticed and conducted public heari ng, the City Council reviewed, considered, adopted, and entered into this Agreemen t pursuant to Ordinance No. 1284-CS.

N. This Agreement is entered into pursuant to the D evelopment Agreement Statute.

O. The City Council has determined that this Agreem ent is consistent with the City's General Plan and has conducted all necessary procee dings in accordance with the T.M.C. for the approval of this Agreement.

P. The City and NHC Turlock LLC entered into that certain First Amendment to Development Agreement dated December 19, 2022 (“First Amendment”).

Q. The City and NHC Turlock LLC entered into that cert ain Second Amendment to Development Agreement dated September 11, 2025 (“Second Amendment”).

R. Under Section 5-21-103 of the Turlock Municipal Code, any cannabis dispensary business allowed in the City shall obtain a development agreement, a City business license, and a conditional use permit.

S. The Parties wish to enter into this First Amended and Restated Development Agreement to replace previous agreements between the Parties and to fulfill the requirement that a cannabis business requires a development agreement pursuant to TMC Section 5-21-103.

NOW, THEREFORE, in consideration of the mutual covenants and agreem ents contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:

AGREEMENT

ARTICLE 1

GENERAL PROVISIONS

Section 1.1. Findings. City hereby finds and determines that entering into this Agreement furthers the public health, safety and general welfare and is consistent with the City's General Plan, including all text and maps in the General Plan.

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

Section 1.2. Recitals. The Recitals above are true and correct and are hereby incorporated into and made a part of this Agreement. In the even t of any inconsistency between the Recitals and the provisions of Articles 1 through 1 0 of this Agreement, the provisions of Articles 1 through 10 shall prevail.

Section 1.3. Exhibits. The following "Exhibits" are attached hereto and incorporated into this Agreement:

Designation Description
Exhibit A Cannabis Site Legal
Description
Exhibit B Cannabis Business
Project Site Map
Exhibit C Site Deed
Exhibit D Notice of Non -
Performance Penalty
Exhibit E Indemnification
Agreement
Exhibit F Notice of Termination
Exhibit G Assignment and
Assumption
Agreement

Section 1.4. Definitions. In this Agreement, unless the context otherwise requires, the terms below have the following meaning:
(a) "Additional Insureds" has the meaning set forth in Section 6.1. (b) "Additional Licenses" has the meaning set forth in Section 2.4. (c) "Adult-use cannabis" means a product containing cannabis, including, but not limited to, concentrates and extractions, intended for use by adults 21 years of age and older in California pursuant to the California Cannabis Laws.
(d) "Agreement" means this Development Agreement, i nclusive of all Exhibits attached hereto.
(e) "Application" has the meaning set forth in Reci tal G. (f) "Assignment and Assumption Agreement" has the m eaning set forth in Section 10.1. (g) "AUMA" means the Adult Use of Marijuana Act (Pr oposition 64) approved by California voters on November 8, 2016.
(h) "Authorized License" has the meaning set forth in Section 2.3.

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

(i) “Department” means the Department of Cannabis C ontrol or any successor state agency.
(j) "California Building Standards Codes" means the California Building Code, as amended from time to time, in Part 2, Volumes 1 and 2, as part of Title 24 of the California Code of Regulations, as may be adopted by the T.M.C .
(k) "California Cannabis Laws" includes AUMA, MAUCR SA, CUA (as defined below), the Medical Marijuana Program Act of 2004 codified as Health and Safety Code sections 11362.7 through 11.62.83 and any other applicable laws that may be enacted or approved. (l) "Cannabis" means all parts of the plant Cannabi s sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant, and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtaine d from cannabis. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufac ture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this division, "cannabis" does not mean "industrial hemp " as defined by Section 11018.5 of the Health and Safety Code. Cannabis and the term "marijuana" may be used interchangeably. (m) "Cannabis Business Pilot Program" means the can nabis business program established and authorized by T.M.C. Chapter 5.21.
(n) "Cannabis Business Project" means the cannabis retail business operated by Developer on the Site pursuant to the Authorized License. (o) "Cannabis Manufacturing Business" means a busin ess engaged in commercial cannabis activity pursuant to a state approved Type 6 or 7 license, Type A and M licenses designated as a Cannabis business.
(p) "Cannabis product" means cannabis that has unde rgone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containin g cannabis or concentrated cannabis and other ingredients.
(q) "CEQA" means the California Environmental Quali ty Act, as set forth in Division 13 (Commencing with Section 21000) of the California P ublic Resources Code, and the CEQA Guidelines, as set forth in Title 14 (Commencing wi th Section 15000) of the California Code of Regulations.
(r) "City" means the City of Turlock, a California municipal corporation having general police powers.
(s) "City Council" means the City of Turlock City C ouncil, as defined in T.M.C. Section

2.1.

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

(t) "City Manager" means the City Manager of the Ci ty of Turlock or his or her designee, as described in T.M.C. Section 2.4.
(u) "Charged Party" has the meaning set forth in Se ction 8.1. (v) "Charging Party" has the meaning set forth in S ection 8.1 (w) "Commercial Cannabis Activity" includes cultiva tion, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, delivery, or sale of cannabis or a cannabis product that requires a state license pursuant to MAUCRSA. (x) "Planning Commission" means the City of Turlock Planning Commission, as established by T.M.C. Section 9.5.
(y) "Conditional Use Permit" means a conditional us e permit issued by City pursuant to T.M.C. Section 9.3.
(z) "CUA" means the Compassionate Use Act (Proposit ion 215) approved by California voters on November 5, 1996.
(aa) "Developer'' means NHC Turlock, LLC Developer also has the meaning set forth in Section 6.1.
(bb) "Development Agreement Statute" has the meanin g set forth in Recital (cc) "Exhibits" has the meaning set forth in Sectio n 1.3. (dd) "Gross Receipts from Operations" means total revenue actually received or receivable from operation of the Cannabis Business Project, including: all sales; the total amount of compensation actually re ceived or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allowed whether or not such act or s ervice is done as part of or in connection with the sale of materials, goods, wares , or merchandise; and gains realized from trading in stocks or bonds, interest discounts, rents, royalties, fees, commissions, dividends, or other remunerations, how ever designated. Included in "gross receipts" shall be all receipts, cash, credits, and property of any kind or nature, without any deduction therefrom on account of the c ost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever, except that the following shall be excluded therefrom:

1. Cash discounts allowed and taken on sales;

2. Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as "gross receipts";

3. Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

4. Such part of the sale price of property returned by purchasers upon rescission of a