Agenda packet — Turlock City Council, June 9, 2026 (part 3 of 9)

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 Agreement, if Developer fails to pay the Penalty Amount before the Penalty Due Date, then, in addition to the Penalty Amount specified in subdivision (D), Developer shall pay City interest on the Penalty Amount, at the rate of eighteen percent (18%) per annum (“Penalty Interest Payment”), computed from the 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 waiver 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

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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 Turlock, a California municipal corporation (“City”) and Evergreen Market (Turlock), Inc., a California corporation (“Applicant”). City and Applicant may be referred to herein individually 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 approved 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 patients and their primary caregivers to cultivate marijuana for medical purposes without being subject to criminal prosecution under the California Penal Code.

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

D. On June 27, 2017, Governor Jerry Brown signed into 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 granted local jurisdictions control over whether businesses engaged in commercial cannabis activity may operate in a particular jurisdiction.

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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 licensing 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 authorizes cannabis businesses to operate within the City under specified restrictions pursuant to a Cannabis Pilot Program.

G. Applicant intends to improve, develop, and use real 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, identified 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 Entitlements, City has required Applicant to enter into this Agreement.

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

K. Applicant desires to enter into this Agreement to 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.

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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 approval 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 indemnify City shall apply to any claim, lawsuit or challenge against City brought against the Project, specifically including, but not limited to, any legal challenge based on the California Environmental Quality Act, codified in California Public Resources Code section 21000 et seq.; actions or proceedings brought to challenge the validity of environmental 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 shall 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 reasonable discretion, of City’s counsel in defending such an action. Regardless of whether Applicant chooses to defend City pursuant to Section 6.4 of the Land Use Entitlements, City shall have the absolute and sole authority to control the litigation and make litigation decisions, including, but not limited to, selecting counsel to defend City and settlement 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 from City (“Cost Deposit”), to cover the estimated fees and costs associated with City’s defense 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 breach of this Agreement and of the Land Use Entitlements, 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 the Land Use Entitlements. Applicant’s failure to indemnify City shall be a waiver by Applicant of any right to proceed with the Project, or any portion thereof, 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 Entitlements, 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, settlements, losses or liabilities which Applicant has indemnified City against, Applicant shall 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.

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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 include, 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 which 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, notwithstanding 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). However, 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 receiving service of any claim, action or proceeding. If City fails to notify Applicant of any 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 between City and Applicant must be in writing and may be given either personally, by facsimile (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by 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 Party’s facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a normal 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 first 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 letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which

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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 between 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 induced 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 basis of their own judgment and without coercion, and not in reliance on any promises, representations, 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.

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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 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, persons, states, or firms and that all former requirements necessary or required by state or federal 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 conditions of any other contract or agreement to which such Party is obligated, which such 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 respective 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 ambiguities 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 Superior Court of the State of California in and for the County of Stanislaus.

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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 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 deemed to be a waiver of any preceding or succeeding 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]

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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

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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 recorded in the Official Records of Stanislaus County, California, on ________________, 20__, City recorded a development agreement between City and
______________, dated ______________, 20__ (the “Development Agreement”), relating to the development and operation of a cannabis business.

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

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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 Agreement, 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 releases Developer and Developer’s heirs, executives, administrators, successors, and assigns from their obligations in the Development Agreement on this ____ of _____ , 20___, and relinquishes any right it may hereafter have to enforce any of the terms and provisions set forth in the Development Agreement, unless otherwise set forth in the Development Agreement. This termination, cancellation, and release shall be effective upon the recordation of this Release in the office of the County Recorder for the County of Stanislaus, State of California.

CITY OF TURLOCK,
a California municipal corporation
By:

City Manager

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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
SPACE 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___, by and between ___________________The Evergreen Market (Turlock), Inc. (“Assignors”), and ______________________ (“Assignee”).

RECITALS
A. On ___________, 20__, Assignor and the City of Turlock (the “City”) entered into that certain agreement entitled “Development Agreement by and between the City of Turlock, a California municipal corporation and The Evergreen Market (Turlock), Inc. relating to the improvement, development, and use of real property to operate a cannabis business (the “Development Agreement”), originally recorded upon Stanislaus County Assessor’s Parcel Number 044-022-013 (the “Property”).

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

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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 Assignable Rights of Assignor under the Development Agreement.

It is the express intention of Assignor and Assignee 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 reviewed and is familiar with the terms and conditions of the Development Agreement. Assignee acknowledges that the Assignable Rights are as set forth in Section 10.1 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 any underlying agreements or understandings that may exist between Assignee, Assignor, 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]

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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:

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City Council Staff Report
June 9, 2026
From: Adrienne Werner, Development Services Director
Prepared by: Katie Quintero, Planning Manager
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Ordinance: Second and Final 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.

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

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Agenda Staff Report
6/9/2026
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.

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

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Agenda Staff Report
6/9/2026
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 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.

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Agenda Staff Report
6/9/2026
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 Ordinance and DA for NHC

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BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK

WHEREAS, on June 11, 2019, the City Council of the City of Turlock (the “City Council”) adopted Ordinance No. 1255-CS to enact cannabis regulations for cannabis businesses pursuant to AUMA and MAUCRSA, by amending 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. 1255-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 Agreement dated September 22, 2020, which permitted NHC Turlock LLC (“NHC”) to operate an indoor cannabis cultivation, manufacturing, and distribution business at 3401 W. Monte Vista Avenue, Turlock, California, County of Stanislaus Assessor’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, California, County of Stanislaus Assessor’s Parcel Number 087-003-039 (the “Project”), consistent 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 authorizing 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
}
}
}
}
}
}
}
}
}
}
}
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

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Ordinance No. 13XX-CS

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WHEREAS, under Section 5-21-103 of the Turlock Municipal Code, any cannabis cultivation, manufacturing, and distribution business 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 Agreement 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 amendments 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 and analysis of the Planning Commission’s recommendation, oral and written testimony, and the record as a whole, finds, after due study, deliberation, and holding a public hearing, and based on its independent judgement, find that the following circumstances exist:

1. The Project is consistent with the goals, policies, 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 Statute, the City Council finds that the amendment to the Development Agreement:
a. Will not be detrimental to the health, safety, and general welfare of persons residing in the immediate area nor detrimental to the general welfare of the residents of the City as a whole; and
b. Will not adversely affect the orderly development of property or the preservation of property values; and
c. Is consistent with the relevant provisions of Government 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 the terms of the Development Agreement between the City of Turlock and NHC through June 30, 2029.

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

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invalid for any reason, such decision shall not affect the validity of the remaining portions of the Ordinance. The City Council hereby declares that 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 is 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) days of the execution, but no earlier than 30 days after passage of this Ordinance, the City 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 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

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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 AGREEMENT
("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, processing, transportation, testing, manufacturing and distribution of medical marijuana to qualified patients and their primary caregivers.

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

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 that granted local jurisdictions 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

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,/".

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l
D. On June 11, 2019, the Turlock City Council (the "City Council") adopted Ordinance No. 1255-CS to enact cannabis regulations as defined under 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 Cannabis 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 real property to operate a Cannabis Business Project, as defined below, in strict accordance with California Cannabis Laws, as defined in Section 1.4 of this Agreement and the T.M.C., as each may be amended from time to time.

G. To strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the California Legislature adopted Government Code section 65864 et seq. (the "Development Agreement Statute"), which authorizes City and an individual or business entity with an interest in real property to enter into a development 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 Planning Department for consideration of a development agreement for a commercial cannabis business.

J. Developer purchased property located at 3401 West Monte Vista Avenue Turlock, California, County of Stanislaus Assessor's Parcel Number 087-003-039 of which Developer improved approximately 1.326 acres of space (the "Site") to operate the Cannabis Business Project, more particularly described 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 Commission ("Planning Commission"), in a duly noticed and conducted public hearing, considered Developer's application

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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 Code section 65867.5, and following a duly noticed and conducted public hearing, the City Council reviewed, considered, adopted, and entered into this Agreement pursuant to Ordinance No. 1284-CS.

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

O. The City Council has determined that this Agreement is consistent with the City's General Plan and has conducted all necessary proceedings 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 certain 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 agreements contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:

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.

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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.

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 NonPerformance 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, inclusive of all Exhibits attached hereto.
(e) "Application" has the meaning set forth in Recital G. (f) "Assignment and Assumption Agreement" has the meaning set forth in Section 10.1. (g) "AUMA" means the Adult Use of Marijuana Act (Proposition 64) approved by California voters on November 8, 2016.
(h) "Authorized License" has the meaning set forth in Section 2.3.

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(i) “Department” means the Department of Cannabis Control 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, MAUCRSA, 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 Cannabis 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, 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 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 cannabis 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 business 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 undergone 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 containing cannabis or concentrated cannabis and other ingredients.
(q) "CEQA" means the California Environmental Quality 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 Council, as defined in T.M.C. Section

2.1.

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(t) "City Manager" means the City Manager of the City 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 Section 8.1. (v) "Charging Party" has the meaning set forth in Section 8.1 (w) "Commercial Cannabis Activity" includes cultivation, 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 use permit issued by City pursuant to T.M.C. Section 9.3.
(z) "CUA" means the Compassionate Use Act (Proposition 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 meaning set forth in Recital (cc) "Exhibits" has the meaning set forth in Section 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 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 "gross 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 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

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contract of sale as is refunded either in cash or by credit; and

5. Receipts of refundable deposits, except that such 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 set forth in Section 6.3. (ff) "Major Amendment" means an amendment that shall 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 and those terms may be used interchangeably.
(hh) "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, codified as Business and Professions 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 the meanings set forth in Section 4.1.
(kk) "Minor Amendment" means a clerical amendment to 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 Article 7. (mm) "Non-Performance Penalty" has the meaning set forth in Section 4.5. (nn) "Notice of Non-Performance Penalty” has the meaning set forth in Section

4.5. (oo) Termination" has the meaning set forth in Section 9.1. (pp) "Processing Costs" has the meaning set forth in 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 forth in Section 4.2.

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(tt) "State Licensing Authority" means the state agency responsible for the issuance, renewal or reinstatement of a state cannabis license or the state agency authorized to take disciplinary action against a business licensed under the California Cannabis Laws.
(uu) “State Cannabis Regulations” means the regulations promulgated by the State Licensing Authority pursuant to the California Cannabis Laws (4 CCR 4 15000 et seq., or their respective successors)
(vv) "State Taxing Authority" has the meaning set forth in Section 4.2. (ww) "Subsequent City Approvals" has the meaning set forth in Section 3.1. (xx) ''Term" has the meaning set forth in Section 1.7.
(yy) “T.M.C.” means the 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 state license issued by the Department of Cannabis Control pursuant to the California Cannabis Laws for indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises. (bbb) "Type 3A license" or "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 between 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 Public Health pursuant to the California Cannabis Laws for manufacturing sites that produce cannabis products using nonvolatile solvents. (eee) ''Type? license" or "Manufacturer 2" means a state license issued by the Department of Public Health pursuant to the California 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 California Cannabis Laws authorizing the retail sale of cannabis and cannabis products. Retail sale

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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 state license issued by the Department of Cannabis Control pursuant to the California 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 California 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 Cannabis Regulations, licensing authority, or specific state cannabis license type or designation shall be deemed to include any successor license, permit, approval, agency, 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 structure of any State cannabis business license shall be construed to expand, limit, 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 Agreement becomes effective (the "Effective Date").

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immediately comply if City is required, directed or believes, in its sole and absolute discretion, it must temporarily halt or terminate Commercial 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 accrue or be liable to City for any Ministerial Fees or Public Benefit Amount during the Tolling Period. Developer shall 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 may not temporarily halt or terminate this Agreement for any purpose without causing 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 Parties agree that the following sequence of approvals establishes the relative priority of the approvals, each approval superior to the approvals listed thereafter: (a) General Plan, (b) Specific Plan, (c) Agreement, (d) Conditional Use Permit, (e) Indemnification 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 Amendment to this Agreement shall be approved by the City Council. The City Manager shall, 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 construed 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 Costs. If Developer proposes an amendment to this agreement, Developer shall pay for 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 fees, staff time, and consultant and attorneys’ fees and costs (collectively, “Processing 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 nonexpended 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.

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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 described 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, 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 Standards. 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 Agreement and during the time Developer is applying for the Authorized License with the applicable State Licensing Authority. Developer shall begin operations of the Cannabis Business Project under the Authorized License within six (6) 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 event 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 the 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 thirty (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 Conditional Use Permit to serve as the definitive and controlling documents for all subsequent 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

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herein for the Project and at the Site. No Commercial Cannabis 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 must 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, and Permits. Successful implementation of the Cannabis Business Project shall require Developer to obtain additional approvals and permits from City and other local and state agencies. City shall comply with CEQA in the administration of all Subsequent City Approvals. In acting upon any Subsequent City Approvals, City's exercise of discretion and permit authority shall conform to this Agreement. Notwithstanding the foregoing, in the course of taking action on the Subsequent City Approvals, City will exercise 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 anticipates issuing additional rules, administrative guidelines, and amendments to the T.M.C. associated with operation of the Cannabis Business Program. City may 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 or 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 Business Project.

Nothing in this Agreement shall be construed as limiting the City to amend the 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 citizen-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 Project; 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 Agreement remains in full force and effect and is implemented in accordance with its terms to the fullest extent permitted by state or federal law.

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this Agreement. Any moratorium imposed by another government entity, including the State Licensing 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 consistent 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.

Section 2.10. Changes in California Building Standards Codes.

Notwithstanding any provision of this Agreement to the contrary, development 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 mandate the adoption or amendment of local regulations or are in conflict with this Agreement or local rules or guidelines associated with the Cannabis Business Program. As provided 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 compliance 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 regulations. Upon discovery of a subsequently enacted federal or state law meeting the requirements of this Section, City or Developer shall provide the other Party with written notice of 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 shall 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 Developer derived from this Agreement to the maximum feasible extent while resolving the conflict. 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 Agreement. 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.

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health and safety emergency in a way that does not have a material adverse 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 still 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 furtherance of public safety and to ensure compliance with applicable regulations governing the Project and Developer’s obligations hereunder.
(a) In addition to other requirements, remote and real-time, live access to the video footage of cameras installed by the cannabis business shall be provided to the Chief of Police or his/her designee(s) using such software as designated by the Chief of Police. Developer shall be responsible for ensuring that the 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.
(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 accordance 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 Developer, on a timely basis, in

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securing all permits or licenses that may be required by City 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 under 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 the terms of this Agreement and not prevent, hinder, or compromise development or use of the Site as contemplated by the Parties in this Agreement.

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 monitoring fees and charges required by City which are in force and effect at the time those fees 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 approvals 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 Agreement, and the Cannabis Business Project, confers substantial private 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 gross 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 June 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 Turlock juvenile drug and alcohol treatment and rehabilitation programs.
(c) Developer shall file an applicable statement that 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 Gross Receipts from Operations of the

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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 reports provided to a State Licensing Authority within forty-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 Authority, as required within the time required, or to pay such sums due hereunder when the same are due and payable in accordance with the provisions of this Agreement, may 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 Cannabis Activity in accordance with Chapter 16 (commencing with Section 26160) of Division 10 of the Business and Professions Code and the applicable State Cannabis Regulations. All records required by this Section shall be maintained 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 NonPerformance Penalty of ten percent (10%) shall be applied to all past due payments.

City shall deliver to Developer a "Notice of Non-Performance Penalty," attached 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 NonPerformance Penalty.

Section 4.6. Interest on Unpaid Non-Performance Penalty. If Developer fails to pay the Non-Performance Penalty after City has delivered the Notice of NonPerformance Penalty, then, in addition to the principal amount of the Non-performance Penalty, Developer shall pay City interest at the rate of eighteen percent (18%) per annum, computed on the principal amount of the Non-Performance 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 Benefit Amount City imposes a tax specific to commercial cannabis businesses and instead shall pay such specific tax. Notwithstanding the foregoing, Developer and the Cannabis Business Project shall be subject to any and all taxes, assessments, or similar 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

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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
Section 6.1. Insurance. Developer shall require all persons doing construction 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 self-insurance programs covering City, its officials, employees, agents, and representatives. (iii) Contain standard separation of insured provisions. (b) Automotive Liability Insurance. Developer shall maintain business automobile liability insurance or equivalent form with 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 self-insurance programs covering City, its officials, employees, agents, and representatives. (iii) Contain standard separation of insured provisions. (c) Workers' Compensation Insurance. Developer shall take out and maintain during the Term of this Agreement, workers' compensation insurance for all of

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Developer's employees employed at or on the Cannabis Business Project and, should any of the work be subcontracted, Developer shall require any general contractor or subcontractor similarly to provide workers' compensation insurance for such contractor's or subcontractor's employees, unless such employees are covered by the protection afforded by Developer. In case any class of employee engaged in work on the Cannabis Business Project and is not protected under any workers' compensation law, Developer shall provide and shall cause each contractor and subcontractor to provide adequate insurance for the protection of employees not otherwise protected.

Developer hereby indemnifies City for any damage resulting from failure of Developer, its agents, employees, contractors or subcontractors to take out or maintain such insurance. Workers' compensation insurance with statutory limits and employer's liability insurance with limits of not less than One Million Dollars ($1,000,000) 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 Agreement, furnish City with properly executed certificates of insurance that clearly evidence all insurance required in this Article, including evidence that such insurance will 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 properly executed certificates of insurance evidencing the insurance required herein.
(c) Replace or require the replacement of certificates, policies, and endorsements for any insurance required herein expiring 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 insurers 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 (collectively, "City's Agents") from any and all liability arising out of a claim, action, or 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 indemnification agreement ("Indemnification Agreement") attached hereto as Exhibit E.

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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 shall 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 proceeding 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, action, or proceeding based on Developer's failure to indemnify City Section 6.5. Waiver of Damages. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge that City would not have entered into this Agreement had it been exposed to liability for damages from Developer and, therefore, Developer hereby waives all claims for damages against City for breach of this Agreement. Developer further acknowledges that under the Development 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 approval 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 following 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 such 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 mutual 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 constitute a default. Any Party

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alleging a default or breach of this Agreement ("Charging Party") 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 shall not be considered in default for purposes of termination of this Agreement or institution of legal proceedings for the breach of this Agreement.
(b) After expiration of the ten (10) calendar day period, 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 Party may, at its option, institute legal proceedings pursuant to this Agreement, and give notice of its intent to terminate this Agreement pursuant 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 intent 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 the Charged Party of its intent to terminate, or prior to instituting legal proceedings, 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 presented and said review before City, and after providing the Charged Party an additional five (5) calendar day period to cure, the Charging Party may institute legal proceedings 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 Code section 65865.1, as set forth in Section 8.2. If any Party determines that another Party 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 written 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 alleged default, this Agreement may be terminated by the non-defaulting Party by giving written 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.

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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 practical, 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 entitled 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 City's annual review of this Agreement shall be paid 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 prior 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 defaults under the Agreement, and that the Agreement has not been modified or terminated and is enforceable in accordance with its terms and conditions.
(b) At Developer's option, City's failure to deliver such Estoppel Certificate within the stated time period shall be conclusive evidence that the Agreement is in full force and effect, that there are no uncured breaches or defaults in Developer's performance of the Agreement or violation of any City 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, approve, 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 Agreement, City agrees that Developer shall not be obligated to proceed with or complete the Cannabis 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 enjoin any threatened or attempted violation of the provisions of this Agreement, so long as any such action conforms to Section 9.1(c) of this Agreement.

Section 8.6. Forced Delay, Extension of Times of Performance. Delays in performance, by either Party, shall not be deemed a default if such delays or defaults are due to war, terrorism, insurrection, strikes, walkouts, 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 regulations enacted by the state or

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federal government, litigation, or other force majeure 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 action of City pursuant to the T.M.C, as may be amended from time to time.

ARTICLE 9 TERMINATION
Section 9.1. Termination. This Agreement shall terminate upon the expiration of the Term, unless it is terminated earlier pursuant to the terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination in substantial conformance with the "Notice of Termination" attached hereto as Exhibit F, and this Agreement shall be of no further force or effect except as otherwise set forth in this Agreement.

Section 9.2. Effect of Termination on Developer's Obligations. 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 Obligations. 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 right or obligation of the Parties in this Agreement which, by its express terms or nature and context is intended to survive termination of this Agreement, will survive any such termination.

Section 9.5. Criminal Conviction; Termination; Transfer Rights. If Developer, or any owner, officer, director, manager, or person with 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 business, 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 final upon entry of judgment, regardless of appeal.

Following such notice, Developer shall have a one hundred and eighty (180) day period to complete a transfer of its interest in this Agreement 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

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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.

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, title, and interests in all or a portion of the Site or Project, subject to or a part of this Agreement, to any person, firm, corporation or entity during the Term of this Agreement without the 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 assignment or transfer prohibited by this Agreement will be considered an immediate breach of this Agreement and City may elect to immediately terminate this Agreement. If the 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 Agreement" 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 and their respective heirs, successors and assigns, representatives, lessees, and all other persons acquiring all or a portion of interest in the Site or Project, whether by operation of law or in any manner whatsoever. All of the provisions contained in this Agreement shall 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 Cannabis Business Project and, as appropriate, runs with the Site and is binding upon Developer.

Section 10.3. Notices. Any notice or communication required hereunder between City and Developer must be in writing and may be given either personally, by facsimile (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express, UPS, or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by 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 Party's facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a normal 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 first to occur of (i) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent; or
(ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by

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Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered, as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

If to City:

City of 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:

Kyle Kazan
3645 Long Beach Blvd
Long Beach, CA 90807
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, enforcement, interpretation, or validity thereof, including the determination of the scope or 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 Mediation 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 competent jurisdiction to be invalid or unenforceable, this Agreement shall automatically terminate as of the date of final entry of judgment. If any term or provision of this Agreement 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 that are not invalid or unenforceable shall continue in full force and effect and shall be construed to give effect to the intent of this Agreement. The Parties expressly agree that each Party 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 arbitration or court of competent jurisdiction, that performance under this Agreement

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is not required because the Agreement is invalid, unenforceable, or illegal.

Section 10.6. Cumulative Remedies. In addition to any other rights or remedies, City and Developer may institute legal or equitable proceedings to cure, correct, or remedy any default, to specifically enforce any covenant or 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. Notwithstanding the foregoing or any other provision 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 Developer 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 challenging 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 tender the defense of any lawsuit filed and related, in whole or in part, to Project Litigation 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 conclusively deemed to have consented and agreed to every provision contained herein, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the 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 for a ninety (90) day statute of limitations to challenge the adoption of this Agreement, 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 this 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

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DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

Page 27 of 28 ends

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 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 the 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, together 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 Agreement 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 for 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 neuter gender includes the feminine and masculine, and the singular includes the plural, and the word "person" includes corporations, partnerships, firms, or associations, wherever the context requires.
(g) Mandatory and Permissive. "Shall" and "will" and "agrees" are mandatory. "May" or "can" are permissive.

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DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC

Page 28 of 28 ends

(h) Term Includes Extensions. All references to the Term of this Agreement shall include any extensions of such Term.
(i) Counterparts. This Agreement may be executed simultaneously, and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
(j) Other Documents. The Parties agree that they shall cooperate in good faith to accomplish the objectives of this Agreement 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.
(I) 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, persons, states, or firms and that all former requirements necessary or required by state or federal 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 conditions of any other contract or agreement to which such Party is obligated, which such 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 acknowledges that it has reviewed this Agreement with its own legal counsel and, based upon the advice of that counsel, freely entered into this Agreement.
(o) Attorneys' Fees and Costs. If any action at law 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 reasonable 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 referenced in this Agreement shall be calendar days, unless the last day falls on a legal holiday, Saturday, or Sunday, in which case the last day shall be the next business day.

SIGNATURES ON FOLLOWING PAGE

Page 615 of 1436 ends

IN WITNESS WHEREOF, this Agreement has been entered into by and between Developer and City as of the Effective Date of the Agreement, as defined above. “CITY” “DEVELOPER”

CITY OF TURLOCK,
a California municipal corporation
NHC Turlock LLC,
a California limited liability company
By: ________________________________ By: ________________________________ Christopher Fisher Kyle Kazan
Acting City Manager Its: Owner
Dated: _____________________________ Dated: _____________________________ Attest:

By: ________________________________
Nichole Fiez
City Clerk
Approved as to Form:

By: ________________________________
Katie O. Lucchesi
City Attorney

Page 616 of 1436 ends

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 acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

Witness my hand and official seal.

(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.

Page 617 of 1436 ends

Order Number: P-409187
EXHIBIT "A" LEGAL DESCRIPTION
The land described herein is situated in the State of California, County of Stanislaus, unincorporated area, described as follows:

Parcel 4, as shown on a Parcel Map Filed April 14, 2004 in Book 52 Page 79 of Parcel Maps in the Office of the County Recorder of Stanislaus County, Being a portion of the Southeast 1/4 of Section 5 Township 5 South, Range 10 East, Mount Diablo Base and Meridian.

APN: 087-003-039-000

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CANNABIS BUSINESS PROJECT SITE MAP

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit B
Exhibit B
Cannabis Business Project Site Map

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CANNABIS BUSINESS PROJECT SITE MAP

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit B

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CANNABIS BUSINESS PROJECT SITE MAP

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit B

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SITE DEED

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit C
Exhibit C Site Deed

Page 622 of 1436 ends

SITE DEED

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit C

Page 623 of 1436 ends

SITE DEED

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit C

Page 624 of 1436 ends

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND NHC Turlock, LLC
Exhibit D
Exhibit D
Notice of Non-Performance Penalty
DATE: ,2026
PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380 Attention: City Manager

DEVELOPER
Kyle Kazan, Owner,
Natural Healing Center
3645 Long Beach Blvd.

Long Beach, CA 90807
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 recorded in the Official Records of Stanislaus County, California, on , 2020,
City recorded a development agreement between City and NHC Turlock LLC, a California limited liability company ("Developer"), dated , 2020 (the "Development Agreement"), relating to the
development and operation of a cannabis business.

B. Pursuant to Section 4.2 of the Development Agreement, 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 Agreement, if Developer fails to make payment when it is due, City may impose a penalty of ten percent (10%) of the total of the past due amounts ("Penalty"). As of ,
20_, the past due amount equals $ . The Penalty owed by Developer equals $ ("Penalty Amount").

E. Pursuant to Section 4.5 of the Development Agreement, Developer shall make payment of the Penalty Amount in a single installment due within fifteen (15) days of delivery of this Penalty Notice ("Penalty Due Date").

Page 625 of 1436 ends

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND NHC Turlock, LLC
Exhibit D
F. Pursuant to Section 4.6 of the Development Agreement, if Developer fails to pay the Penalty Amount before the Penalty Due Date, then, in addition to the Penalty Amount specified in subdivision (D), Developer shall pay City interest on the Penalty Amount, at the rate of eighteen percent (18%) per annum ("Penalty Interest Payment"), computed from the 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 waiver of City's future claims for the Public Benefit, Penalty, or interest on the Penalty.

CITY OF TURLOCK,
a California municipal corporation
By: _
City Manager

Page 626 of 1436 ends

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
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 2020, ("Effective Date") by and between the City of Turlock, a California municipal corporation ("City") and NHC Turlock LLC, a California limited liability company ("Applicant"). City and Applicant may be referred to herein individually 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 approved 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 patients and their primary caregivers to cultivate marijuana for medical purposes without being subject to criminal prosecution under the California Penal Code.

C. On November 8, 2016, California voters passed Proposition 64, the Adult Use of Marijuana Act ("AUMA"). AUMA legalizes the cultivation, commercial sale, and possession of recreational cannabis for adults age 21 and older.

D. On June 27, 2017, Governor Jerry Brown signed into 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 granted local jurisdictions control over whether businesses engaged in commercial cannabis activity may operate in a particular jurisdiction.

Page 627 of 1436 ends

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
E. On December 7, 2017, California state cannabis licensing 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 authorizes cannabis businesses to operate within the City under specified restrictions pursuant to a Cannabis Pilot Program.

G. Applicant intends to improve, develop, and use real 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 purchase that certain real property located at 3401 W Monte Vista Ave in the City of Turlock, identified as Stanislaus County Assessor's Parcel Number 087-003-039 (the "Project") Applicant intends to improve approximately 5,400 (fifty four hundred) of space and operate the Project on the Property.

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

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

K. Applicant desires to enter into this Agreement to 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.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
concerning the Land Use

Page 629 of 1436 ends

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
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 indemnify City shall apply to any claim, lawsuit or challenge against City brought against the Project, specifically including, but not limited to, any legal challenge based on the California Environmental Quality Act, codified in California Public Resources Code section 21000 et seq.; actions or proceedings brought to challenge the validity of environmental 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 shall 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 reasonable discretion, of City's counsel in defending such an action. Regardless of whether Applicant chooses to defend City pursuant to Section 6.4 of the Land Use Entitlements, City shall have the absolute and sole authority to control the litigation and make litigation decisions, including, but not limited to, selecting counsel to defend City and settlement 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 from City ("Cost Deposit"), to cover the estimated fees and costs associated with City's defense 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 breach of this Agreement and of the Land Use Entitlements, 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 the Land Use Entitlements. Applicant's failure to indemnify City shall be a waiver by Applicant of any right to proceed with the Project, or any portion thereof, 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 Entitlements, 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, settlements, losses or liabilities which Applicant has indemnified City against, Applicant shall 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.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E

2.6. Payment of Costs and Fees. Applicant's obligations under this Agreement to defend and indemnify City shall include, 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 which 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, notwithstanding 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). However, 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 receiving service of any claim, action or proceeding. If City fails to notify Applicant of any 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.

Notices transmitted by facsimile after 5:00 p.m. on a normal 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 first 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 letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

Page 631 of 1436 ends

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
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: Kyle Kazan, Owner
NHC Turlock LLC
3645 Long Beach Blvd.

Long Beach, CA 90807
With copies to:

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

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 Agreement, and the names, titles, and

Page 632 of 1436 ends

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
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 federal 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 conditions of any other contract or agreement to which such Party is obligated, which such 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 respective obligations under the terms 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 Superior 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 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.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
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]

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit E
IN WITNESS THEREOF, the Parties have executed this Agreement on the day, month and year first above written.

APPLICANT CITY
Natural Healing Center, LLC
a California limited liability
company
By: _
Kyle Kazan
Its: Owner
Date:

City of Turlock, a California
municipal corporation
By:

Gary Hampton., City Manager
Date:

Natural Healing Center, LLC
A California limited liability
company
By:

Its:

Owner
Date: ______
APPROVED AS TO FORM:

By: ----------------------------------------
Katie O. Lucchesi, City Attorney

Page 635 of 1436 ends

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
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 Attention: City Manager

NHC TURLOCK LLC
Kyle KazanOwner, NHC Turlock LLC
3645 Long Beach Blvd.

Long Beach, CA 90807
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 recorded in the Official Records of Stanislaus County, California, on ., 2020,
City recorded a development agreement between City and
, dated , 2020 (the "Development
Agreement"), relating to the development and operation of a cannabis business.

B. Pursuant to Sections 1.7 and 9.1 of the Development Agreement, the term of the Development Agreement expires five (5) years from , 2020, on ,20 .

Page 636 of 1436 ends

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit F
C. Pursuant to Section 9.1 of the Development Agreement, 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 releases Developer and Developer's heirs, executives, administrators, successors, and assigns from their obligations in the Development Agreement on this of , 20_, and relinquishes any right it may hereafter have to enforce any of the terms and provisions set forth in the Development Agreement, unless otherwise set forth in the Development Agreement. This termination, cancellation, and release shall be effective upon the recordation of this Release in the office of the County Recorder for the County of Stanislaus, State of California.

CITY OF TURLOCK,
a California municipal corporation
By: _________________________________
City Manager

Page 637 of 1436 ends

ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
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
SPACE 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_, by and between NHC Turlock LLC, a California
limited liability company ("Assignors"), and
("Assignee").

RECITALS
A. On , 2020, Assignor and the City of Turlock (the "City") entered into that certain agreement entitled "Development Agreement by and between the City of Turlock, a California municipal corporation and NHC Turlock LLC, a California limited liability company, relating to the improvement, development, and use of real property to operate a cannabis business (the "Development Agreement"), originally recorded upon Stanislaus County Assessor's Parcel Number 061-041-006 (the "Property").

B. Section 10.1 of the Development Agreement prohibits the sale, assignment, or transfer by Assignor of any portion of Assignor's interests, rights, or titles described in that section of the Development Agreement ("Assignable Rights") to a third party without prior written approval by the City Manager 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.

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ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit G
Agreement for an Assignment and Assumption Agreement and is executed with the consent of the City Manager as contemplated in the Development Agreement.

Page 639 of 1436 ends

ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
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 Assignable Rights of Assignor under the Development Agreement.

3. Assignee hereby assumes all of the burdens and obligations of Assignor under the Development Agreement and agrees to observe 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 Assignee 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.

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]

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ASSIGNMENT AND ASSUMPTION AGREEMENT OF DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND NHC TURLOCK, LLC
Exhibit G

ASSIGNOR
NHC Turlock LLC, a
California limited liability
company
By:

Kyle Kazan
Its: Owner
Date: _
City of Turlock, a California municipal
corporation
By: _
City Manager
Date: _
APPROVED AS TO FORM:

ASSIGNEE
By: _
Its:

Date: _
By: _
Katie O. Lucchesi, City Attorney
Date:

Page 641 of 1436 ends

City Council Staff Report
June 9, 2026
From: Adrienne Werner, Development Services Director
Prepared by: Katie Quintero, Planning Manager
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Ordinance: Amending terms and extending the Development Agreement between the City of Turlock and Perfect Union

2. NARRATIVE:

Perfect Union is located at 2500 N. Golden State Boulevard. The property is zoned Community Commercial which allows cannabis dispensaries with a Conditional Use Permit and Development Agreement.

The City Council adopted ordinance 1263-CS approving the Development Agreement on September 24, 2019, and the Planning Commission approved Conditional Use Permit 2019- 07 on March 5, 2020, to allow Perfect Union to operate a cannabis retail dispensary. Perfect Union opened for business in September 2020.

The initial Development Agreement was set to expire in October 2024. As a result, under the City Manager’s authority of the Development Agreement, the City and Perfect Union entered into an Amendment to the Development Agreement extending the Development Agreement through December 31, 2024.

In May 2025, Council approved another extension to the Development Agreement through June 30, 2026. The intention of the shorter-term time extensions was to allow time for the cannabis operators and the City to discuss potential changes to the cannabis program.

ANNUAL REVIEW
TMC §9-5-912 requires the City Council to review annually whether the business has complied in good faith with the terms and conditions of the Development Agreement.

Planning Department
Signage
The signs at Perfect Union have been permitted and comply with all requirements.

A complaint was received that a special event was held in the parking lot with a food vendor on site. Outside vendors such as food vendors are not allowed per the Conditional Use

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Permit. Perfect Union has been made aware such events are not allowed, and all staff are being made aware of this and Perfect Union has confirmed this will not occur again.

Perfect Union is in substantial compliance with the Planning Department.

Building Department
Perfect Union opened for business on September 18, 2020. There are no active building code violations and Perfect Union is in compliance with the requirements of the Building and Safety Division.

Finance Department
Business License
Perfect Union was issued a business license on August 25, 2020. Their business license is current and active. There are no outstanding issues.

Public Benefit Amount
The Development Agreement requires a monthly public benefit payment to the City of Turlock. Section 4.2 of the Development Agreement details the public benefit amount that Perfect Union must submit to the City on a monthly basis.

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

Fiscal Year Public Benefit Payment
2020-21 $237,500.00
2021-22 $350,000.00
2022-23 $410,000.00
2023-24 $430,000.00
2024-25 $525,000.00
2025-26 * $365,500.00
Total through 4/29/26 $2,318,000.00
*Payment made through March 2026
Police Department
There were nine calls for service (CFS) in 2023. Three calls were for City Ordinance reinspections, four commercial alarm checks, a security check and a suspicious incident call.

All CFS were closed by the officer and did not result in a report being filed or an arrest.

In 2024, there were four calls for service (CFS). Two calls were closed by the responding officer. A fireworks violation where a nearby business was setting off fireworks, and damage to a nearby property. A medical emergency was attended by the Fire Department and an accidental panic alarm was closed by dispatch. None of the calls resulted in a report being filed by the officer and no arrests were made.

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Calls for Service from January 1, 2025, through October 22, 2025, totaled 7. Four calls were emergency medical calls which were cleared by the Fire Department, one suspicious vehicle, two individuals fighting each other, and a public intoxication call. Only the public intoxication call resulted in an arrest. The other 6 calls were closed by the responding officer.

There was one call for service from October 2025 through April 2026. The call was a security check on an individual asking for help getting home. The call was closed by the responding officer.

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 officer responds to the Perfect Union parking lot or in close proximity to Perfect Union the business name will be indexed in the report. It does not mean a crime occurred at Perfect Union. If no report was made, the responding officer did not find probable cause to show a crime occurred. In reviewing the calls for service these are typical for what is anticipated for this use and does not create a concern at this time.

Annual Inspection
On April 23, 2026, the Police Department conducted their annual inspection. There were no items found during the inspection.

Perfect Union is in 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 all previous amendments and newly proposed amendments into this one complete Agreement.

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

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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 Perfect Union 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 in 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 Perfect Union 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 Ordinance and First Amended and Restated DA Perfect Union

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BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK
WHEREAS, on June 11, 2019, the City Council of the City of Turlock (the “City Council”) adopted Ordinance No. 1255-CS to enact cannabis regulations for cannabis businesses pursuant to AUMA and MAUCRSA, by amending 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. 1255-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 September 24, 2019 the City adopted Ordinance No. 1263-CS approving a Development Agreement by and between the City and Perfect Union 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 2500 N. Golden State Boulevard, Turlock, California, County of Stanislaus Assessor’s Parcel Number 088-007-025 (the “Project”), consistent with the General Plan, as amended; and
WHEREAS, the City and Perfect Union entered into a Development Agreement dated September 15, 2020, which permitted Perfect Union to operate a cannabis dispensary at 2500 N. Golden State Boulevard, Turlock, California, County of Stanislaus Assessor’s Parcel Number 088-007-025; and
WHEREAS, on August 30, 2024 the City and Perfect Union entered into that certain First Amendment to extend the term of the Development Agreement dated September 15, 2020 through December 31, 2024; and
WHEREAS, on October 8, 2024 the City and Perfect Union entered into that certain Second Amendment to extend the term of the Development Agreement dated September 15, 2020 through June 30, 2025; and
WHEREAS, on May 27, 2025, the City and Perfect Union entered into that certain Third 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 PERFECT UNION AND

THE CITY OF TURLOCK FOR THE OPERATION OF
A CANNABIS RETAIL DISPENSARY AT 2500 N.

GOLDEN STATE BOULEVARD, TURLOCK,
CALIFORNIA, STANISLAUS COUNTY APN 088-007-
025 THROUGH JUNE 30, 2029.

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Ordinance No. 13XX-CS

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WHEREAS, pursuant to Section 1.9 of the Development Agreement 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 adopt the proposed amendments and extend the term of the Development Agreement through June 30, 2029; and
WHEREAS, the City Council, based on its independent review and analysis of the Planning Commission’s recommendation, oral and written testimony, and the record as a whole, finds, after due study, deliberation, and holding a public hearing, and based on its independent judgement, find that the following circumstances exist:

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

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 Perfect Union. 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 the terms of the Development Agreement between the City of Turlock and Perfect Union through June 30, 2029.

Section 4. If any section, subsection, sentence, clause, phrase, 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 affect the validity of the remaining portions of the Ordinance. The City Council hereby declares that 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.

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Ordinance No. 13XX-CS

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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:

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Exhibit A

DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC

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FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT

BETWEEN THE CITY OF TURLOCK AND PERFECT UNION TURLOCK,
LLC

THIS FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT
("Agreement") is made and entered into this ___________________ (____) day of _________________, 2026, by and between the City of Turlock, a California municipal corporation ("City") and Perfect Union 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.

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

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DEVELOPMENT AGREEMENT

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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 that granted local jurisdictions control over whether businesses engaged in Commercial Cannabis Activity, as defined in Section 1.4 of this Agreement, may operate in a particular jurisdiction.

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

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

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DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC

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J. Developer purchased property located at 2500 N. Golden State Blvd., California, County of Stanislaus Assessor's Parcel Number 088-007-025 of which Developer improved approximately 4,200 (four thousand two hundred) square feet of space (the "Site") to operate the Cannabis Business Project, more particularly described in the legal description attached hereto as Exhibit A ("Legal Description") and the Cannabis Business Project Site Map attached hereto as Exhibit B.

L. On August 22, 2019, 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. 2019-18, which would allow Developer to operate the Cannabis Business Project at the Site.

M. On August 27, 2019, pursuant to Government Code section 65867.5, and following a duly noticed and conducted public hearing, the City Council reviewed, considered, adopted, and entered into this Agreement pursuant to Ordinance No. 1263-CS; thereafter, on September 15, 2020, the City and Perfect Union Turlock, LLC entered into that certain Development Agreement (the “Development Agreement”), which authorizes the operation of a cannabis dispensary in the City of Turlock.

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

P. The City and Perfect Union Turlock, LLC entered into that certain First Amendment to Development Agreement dated September 23, 2024 (“First Amendment”).

Q. The City and Perfect Union Turlock, LLC entered into that certain Second Amendment to Development Agreement dated October 8, 2024 (“Second Amendment”).

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DEVELOPMENT AGREEMENT

CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC

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R. The City and Perfect Union Turlock, LLC entered into that certain Third Amendment to Development Agreement dated May 27, 2025 (“Third Amendment”).

S. 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.

T. 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.

AGREEMENT
ARTICLE 1

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

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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, inclusive of all Exhibits attached hereto.
(e) "Application" has the meaning set forth in Recital G. (f) "Assignment and Assumption Agreement" has the meaning set forth in Section 10.1 .
(g) "AUMA" means the Adult Use of Marijuana Act (Proposition 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 Control 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, MAUCRSA, 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 Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof;

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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, 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 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 cannabis 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 business 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 undergone 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 containing cannabis or concentrated cannabis and other ingredients. (q) "CEQA" means the California Environmental Quality 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 Council, as defined in T.M.C. Section 2.1.
(t) "City Manager" means the City Manager of the City 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 Section 8.1. (v) "Charging Party" has the meaning set forth in Section 8.1 (w) "Commercial Cannabis Activity" includes cultivation, 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.

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(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 use permit issued by City pursuant to T.M.C. Section 9.3.
(z) "CUA" means the Compassionate Use Act (Proposition 215) approved by California voters on November 5, 1996.
(aa) "Developer" means Perfect Union Turlock, LLC. Developer also has the meaning set forth in Section 6.1.
(bb) "Development Agreement Statute" has the meaning set forth in Recital H.
(cc) "Exhibits" has the meaning set forth in Section 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 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 "gross 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 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 contract of sale as is refunded either in cash or by credit; and

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

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(ff) "Major Amendment" means an amendment that shall 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 and those terms may be used interchangeably.
(hh) "MAUCRSA" means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, codified as Business and Professions 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 the meanings set forth in Section 4.1. (kk) "Minor Amendment" means a clerical amendment to 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 Article 7. (mm) "Non-Performance Penalty" has the meaning set forth in Section 4.5. (nn) "Notice of Non-Performance Penalty" has the meaning set forth in Section 4.5
(oo) "Notice of Termination" has the meaning set forth in Section 9.1. (pp) "Processing Costs" has the meaning set forth in 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 forth in Section 4.2. (tt) "State Licensing Authority" means the state agency responsible for the issuance, renewal or reinstatement of a state cannabis license or the state agency authorized to take disciplinary action against a business licensed under the California Cannabis Laws.
(uu) "State Cannabis Regulations" means the regulations 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 forth in Section 4.2. (ww) "Subsequent City Approvals" has the meaning set forth in Section 3.1. (ww) “Subsequent City Approvals” has the meaning set forth in Section 4.2.

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(xx) "Term" has the meaning set forth in Section 1.7.
(yy) “T.M.C.” means the Turlock Municipal Code.
(zz) "Type IA 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 state license issued by the Department of Cannabis Control pursuant to the California Cannabis Laws for indoor cultivation using exclusively artificial lighting between 5,001 and 10,000 square feet, inclusive, of total canopy size on one premises. (bbb) "Type 3A license" or "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 between 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 California 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 California Cannabis Laws for manufacturing sites that produce cannabis products using volatile solvents. (fff) "Type 10 license" or "Retailer" means a state license issues by the Department of Cannabis Control pursuant to the California 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 1 1 license" or "Distributor" means a state license issued by the Department of Cannabis Control pursuant to the California 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 California 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.

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

Section 1.7. Term. The term of this Agreement (“Term”) shall be through June 30, 2029, unless earlier terminated in accordance with the provisions of this Agreement. (a) Government Tolling or Termination. City may provide 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 Commercial 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 accrue or be liable to City for any Ministerial Fees or Public Benefit Amount during the Tolling Period.

Developer shall 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 may not temporarily halt or terminate this Agreement for any purpose without causing a default of this

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Agreement, except as otherwise allowed by this Agreement or by mutual agreement of the Parties.

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 described 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, 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.

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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 Cannabis 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 must 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.

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authority shall conform to this Agreement. Notwithstanding the foregoing, in the course of taking action on the Subsequent City Approvals, City will exercise 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 anticipates issuing additional rules administrative guidelines, and amendments to the T.M.C. associated with operation of the Cannabis Business Program. City may 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.

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 citizen-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 Project; 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 Agreement 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 Entities. 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 Project 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 Licensing Authority, on City shall not cause City to be in breach of this Agreement.

Section 2.10. Changes in California Building Standards Codes. Notwithstanding any provision of this Agreement to the contrary, development of the Cannabis

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Business Project shall be subject to changes occurring from time to time to the California Building Standards Codes.

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 Business 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 adverse 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 still addressing such health and safety emergency in a manner acceptable to City.

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(a) In addition to other requirements, remote and real-time, live access to the video footage of cameras installed by the cannabis business shall be provided to the Chief of Police or his/her designee(s) using such software as designated by the Chief of Police. Developer shall be responsible for ensuring that the 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. (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 accordance 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 3.3. Cooperation Between City and Developer. Consistent with the terms set forth herein, City agrees to cooperate with Developer, on a timely basis, in securing all permits or licenses that may be required by City or any other government entity with permitting or licensing jurisdiction over the Cannabis Business Project.

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ARTICLE 4

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 gross 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 June 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 Turlock juvenile drug and alcohol treatment and rehabilitation programs.
(c) Developer shall file an applicable statement that 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 Gross 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 reports provided to a State Licensing Authority within forty-five (45) days of that submission.

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

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

Section 4.7. Protections from Duplicative Payment. Notwithstanding Section 4.2, Developer shall be exempt from paying the Public Benefit 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 Cannabis Business Project shall be subject to any and all taxes, assessments, or similar 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).

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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
Section 6.1. Insurance. Developer shall require all persons doing construction 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 self-insurance programs covering City, its officials, employees, agents, and representatives.
(iii) Contain standard separation of insured provisions. (b) Automotive Liability Insurance. Developer shall maintain business automobile liability insurance or equivalent form with 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:

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 self-insurance programs covering City, its officials, employees, agents, and representatives. (iii) Contain standard separation of insured provisions.

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(c) Workers' Compensation Insurance. Developer shall take out and maintain during the Term of this Agreement, workers' compensation insurance for all of Developer's employees employed at or on the Cannabis Business Project and, should any of the work be subcontracted, Developer shall require any general contractor or subcontractor similarly to provide workers' compensation insurance for such contractor's or subcontractor's employees, unless such employees are covered by the protection afforded by Developer. In case any class of employee engaged in work on the Cannabis Business Project and is not protected under any workers' compensation law, Developer shall provide and shall cause each contractor and subcontractor to provide adequate insurance for the protection of employees not otherwise protected. Developer hereby indemnifies City for any damage resulting from failure of Developer, its agents, employees, contractors or subcontractors to take out or maintain such insurance. Workers' compensation insurance with statutory limits and employer's liability insurance with limits of not less than One Million Dollars ($1,000,000) 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 Agreement, furnish City with properly executed certificates of insurance that clearly evidence all insurance required in this Article, including evidence that such insurance will 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 properly executed certificates of insurance evidencing the insurance required herein.
(c) Replace or require the replacement of certificates, policies, and endorsements for any insurance required herein expiring 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 insurers 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 (collectively, "City’s Agents") from any and all liability arising out of a claim, action, or 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

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Subsequent City Approvals. Developer shall execute the indemnification 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 Indemnification Agreement, shall constitute a material breach of this Agreement and of any applicable 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 shall 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 proceeding 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, action, or proceeding based on Developer's failure to indemnify City.

Section 6.5. Waiver of Damages. Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge that City would not have entered into this Agreement had it been exposed to liability for damages from Developer and, therefore, Developer hereby waives all claims for damages against City for breach of this Agreement. Developer further acknowledges that under the Development 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 approval 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 following recording of this Agreement, including the lien of any deed of trust or mortgage ("Mortgage").

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ARTICLE 8

DEFAULT
Section 8.1. General Provisions.
(a) Subject only to any extensions of time by mutual 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 constitute a default.

Any Party alleging a default or breach of this Agreement ("Charging Party") 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 shall not be considered in default for purposes of termination of this Agreement or institution of legal proceedings for the breach of this Agreement.
(b) After expiration of the ten (10) calendar day period, 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 Party may, at its option, institute legal proceedings pursuant to this Agreement, and give notice of its intent to terminate this Agreement pursuant 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 intent 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 the Charged Party of its intent to terminate, or prior to instituting legal proceedings, 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 presented and said review before City, and after providing the Charged Party an additional five (5) calendar day period to cure, the Charging Party may institute legal proceedings 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 Code section 65865.1, as set forth in Section 8.2. If any Party determines that another Party 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 written 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 alleged

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default, this Agreement may be terminated by the non-defaulting Party by giving written notice. An extension of the ten (10) day cure period may be given by mutual consent of the Parties.

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 during the Term of this Agreement, review the extent of good faith, 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 practical, 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 entitled 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 City's annual review of this Agreement shall be paid by Developer, not to exceed the actual costs incurred by City in connection with the review.

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

ARTICLE 9

TERMINATION
Section 9.1. Termination. This Agreement shall terminate upon the expiration of the Term, unless it is terminated earlier pursuant to the terms of this Agreement. Upon termination of this Agreement, City shall record a notice of such termination in substantial conformance with the "Notice of Termination" attached hereto as Exhibit F, and this Agreement shall be of no further force or effect except as otherwise set forth in this Agreement.

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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.

ARTICLE 10

10.1, City and Developer shall execute an "Assignment and Assumption Agreement" in the form attached hereto as Exhibit G.

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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 Party's facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a normal 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 first to occur of (i) actual receipt by any of the addressees designated below as the Party to whom notices are to be sent; or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered, as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

If to City: City of Turlock
156 S. Broadway
Turlock, CA 95380
Attention: City Manager
and Katie Lucchesi, City Attorney
156 S. Broadway
Turlock, CA 95380
If to Developer: Thomas Sheridan
1025 Joellis Way, Suite 150
Sacramento, CA 95815
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, enforcement, interpretation, or validity

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Exhibit A

DEVELOPMENT AGREEMENT

OF TURLOCK AND PERFECT UNION TURLOCK, LLC

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thereof, including the determination of the scope or 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 Mediation Services ("JAMS"). Judgment on the award may be entered in any court having jurisdiction thereof.

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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 10.9. 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 for a ninety (90) day statute of limitations to challenge the adoption of this Agreement, 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 this 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.

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(c)Completeness of Instrument. This Agreement, together 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 Agreement 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 for 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 neuter gender includes the feminine and masculine, and the singular includes the plural, and the word "person" includes corporations, partnerships, firms, or associations, wherever the context requires.
(g)Mandatory and Permissive. "Shall" and "will" and "agrees" are mandatory. "May" or "can" are permissive.
(h)Term Includes Extensions. All references to the Term of this Agreement shall include any extensions of such Term.
(i)Counterparts. This Agreement may be executed simultaneously, and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
(j)Other Documents. The Parties agree that they shall cooperate in good faith to accomplish the objectives of this Agreement 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 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, persons, states, or firms and that all former requirements necessary or required by state or federal 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 conditions of any other contract or agreement to which such Party is obligated, which such breach would have a material effect hereon.

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(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 acknowledges that it has reviewed this Agreement with its own legal counsel and, based upon the advice of that counsel, freely entered into this Agreement.
(o)Attorneys' Fees and Costs. If any action at law 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 reasonable 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 referenced in this Agreement shall be calendar days, unless the last day falls on a legal holiday, Saturday, or Sunday, in which case the last day shall be the next business day.

SIGNATURES ON FOLLOWING PAGE

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Exhibit A

CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC
IN WITNESS WHEREOF, this Agreement has
been entered into by and between Developer and City
as of the Effective Date of the Agreement, as defined
above.
“CITY”
CITY OF TURLOCK, a
California municipal corporation
By:

Gary Hampton
City Manager
Dated:

Attest:

By: ___________________________
Nichole Fiez
City Clerk
Approved to as Form
By___________________________
Katie O. Lucchesi
City Attorney
“DEVELOPER”

PERFECT UNION TURLOCK, LLC
a California limited liability company
By:
________________________________
Thomas Sheridan, CEO
Its:
_____________________________

Dated:

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC
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 acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

Witness my hand and official seal.

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC
Exhibit D
Notice of Non-Performance Penalty
DATE: , 20
PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380
Attention: City Manager

DEVELOPER
Thomas Sheridan1025 Joellis Way, Suite 150
Sacramento, CA 95815
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 recorded in the
Official Records of Stanislaus County, California, on , 20 City recorded a development agreement between City and Perfect Union Turlock, LLC ('Developer"), dated20 (the
"Development Agreement"), relating to the development and operation of a cannabis business.

B. Pursuant to Section 4.2 of the Development Agreement, 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 Agreement, if Developer fails to make payment when it is due, City may impose a penalty of ten percent (10%) of the total of the past due amounts ("Penalty"). As of 20 the past due amount equals $The Penalty owed
by Developer equals $("Penalty Amount").

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

Pursuant to Section 4.6 of the Development Agreement, if Developer fails to pay the Penalty Amount before the Penalty Due Date, then, in addition to the Penalty Amount specified in subdivision (D), Developer shall pay City interest on the Penalty Amount, at the rate of eighteen percent (18%) per annum ("Penalty Interest
Payment"), computed from the 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 waiver of City's future claims for the Public Benefit, Penalty, or interest on the Penalty.

CITY OF TURLOCK, a
California municipal corporation
By:

City Manager

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CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC
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 2020, ("Effective Date") by and between the City of Turlock, a California municipal corporation ("City") and Perfect Union Turlock, LLC, a California limited liability company ("Applicant"). City and Applicant may be referred to herein individually as a "Party" or collectively as the "Parties". There are no other parties to this Agreement.

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 Act ("MCRSA"). MCRSA establishes a statewide regulatory system for the cultivation, processing, transportation, testing, manufacturing, and distribution of medical marijuana to qualified patients and their primary caregivers.
c. On November 8, 2016, California voters passed Proposition 64, the Adult Use of Marijuana Act ("AUMA"). AUMA legalizes the cultivation, commercial sale, and possession of recreational cannabis for adults age 21 and older.

MAUCRSA retains the provisions in the MCRSA and AUMA that granted local jurisdictions control over whether businesses engaged in commercial cannabis activity may operate in a particular jurisdiction.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

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

G. Applicant intends to improve, develop, and use real 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 purchase that certain real property located at 2500 N. Golden State Blvd. in the City of Turlock, identified as Stanislaus County Assessor's Parcel Number 088-007-025 (the "Project") Applicant intends to improve approximately 4,517 (four thousand five hundred seventeen) square feet of space and operate the Project on the Property.

1. As a condition of approval of the Land Use Entitlements, City has required Applicant to enter into this Agreement.

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

K. Applicant desires to enter into this Agreement to 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 Agents, to attack, set aside, void, or annul, an approval 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.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

Exhibit E
Applicant's obligations under this Agreement to indemnify City shall apply to any claim, lawsuit or challenge against City brought against the Project, specifically including, but not limited to, any legal challenge based on the California Environmental Quality Act, codified in California Public Resources Code section 21000 et seq.; actions or proceedings brought to challenge the validity of environmental 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.

Tender of Defense. Upon receiving notice of a claim and pursuant to Article 6 of the Land Use Entitlements, Applicant shall 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 reasonable discretion, of City's counsel in defending such an action. Regardless of whether Applicant chooses to defend City pursuant to Section 6.4 of the Land Use Entitlements, City shall have the absolute and sole authority to control the litigation and make litigation decisions, including, but not limited to, selecting counsel to defend City and settlement or other disposition of the matter.

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 breach of this Agreement and of the Land Use Entitlements, 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 the Land Use Entitlements. Applicant's failure to indemnify City shall be a waiver by Applicant of any right to proceed with the Project, or any portion thereof, 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 Entitlements, 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, settlements, losses or liabilities which Applicant has indemnified City against, Applicant shall 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.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

Exhibit E

2.7. Continuing Obligation. Applicant shall be and remain personally obligated to all of the terms of this Agreement, notwithstanding 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). However, 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 4. Notice. Any notice or communication required hereunder between City and Applicant must be in writing and may be given either personally, by facsimile (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express, UPS or other similar couriers providing overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the Party to whom it is addressed. If given by 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 Party's facsimile machine. Notices transmitted by facsimile after 5:00 p.m. on a normal 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 first 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 letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any Party hereto may at any time, by giving ten (10) days written notice to the other Party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the Parties at their addresses set forth below:

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

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

Exhibit E
and
Katie O. Lucchesi, City
Attorney 156 S. Broadway
Turlock, CA 95380
If to
Developer:

Thomas Sheridan
1025 Joellis Way,
Suite 150
Sacramento, CA 95815
Section 5. Modification of agreement. This Agreement may be supplemented, amended, or modified only by a writing signed by City and Applicant.

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

Exhibit E
Section 11. Noninterference. No Party will do anything to interfere with or inhibit the ability of the other to comply with their respective obligations under the tens 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 Superior 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 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.

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]

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INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PERFECT UNION TURLOCK, LLC.

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

APPLICANT
Perfect Union Turlock, LLC, a
California limited liability
company
By:

Thomas Sheridan
Its: I
Date:

CITY
City of Turlock, a California
municipal corporation
By:

Gary Hampton, City Manager
Date:

APPROVED AS TO FORM:

By:

Katie O. Lucchesi, City
Attorney

Page 692 of 1436 ends

Exhibit A

PERFECT UNION TURLOCK, LLC
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 S 6103

NOTICE OF TERMINATION AND RELEASE OF DEVELOPMENT AGREEMENT DATE:20
PARTIES:

City of Turlock
156 S Broadway
Turlock, CA
95380
Thomas Sheridan
1025 Joellis Way, Suite 150
Sacramento, CA 95815
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.

By Instrument No. which was recorded in the Official
Records of Stanislaus County, California, on ____________ 20__, City recorded a development agreement between City and
_____________ dated ___________________20__ (the "Development Agreement"), relating to the development and operation of a cannabis business.

B. Pursuant to Sections 1.7 and 9.1 of the Development Agreement, the term of the Development Agreement expires ____ ( ) years from from ______, 20__, on _____________ , 20.

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PERFECT UNION TURLOCK, LLC
Exhibit
c. Pursuant to Section 9.1 of the Development Agreement, 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 releases Developer and Developer's heirs, executives, administrators, successors, and assigns from their obligations in the Development Agreement on this _______of _____, 20__ , and relinquishes any right it may hereafter have to enforce any of the terms and provisions set forth in the Development Agreement, unless otherwise set forth in the Development Agreement. This termination, cancellation, and release shall be effective upon the recordation of this Release in the office of the County Recorder for the County of Stanislaus, State of California.

CITY OF TURLOCK,
a California municipal corporation
By:

City Manager

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{CW093563.1)

ASSIGNMENT AND ASSUMPTION
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

SPACE ABOVE THIS LINE FOR

RECORDER'S USE
Recording Fee Exempt per Government Code S 6103
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is entered into this ________ day of 20__by and between Perfect Union Turlock, LLC, a California limited liability company ("Assignor") and ____________________________________ ("Assignee").

RECITALS
On 20__ , Assignor and the City of Turlock (the "City") entered into that certain agreement entitled "Development Agreement by and between the City of Turlock, a California municipal corporation and Perfect Union Turlock, LLC relating to the improvement, development, and use of real property to operate a cannabis business (the "Development Agreement"), originally recorded upon Stanislaus County Assessor's Parcel Number 088-007-025 (the "Property").

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 deems 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.

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{CW093563.1)

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

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 Assignable Rights of Assignor 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.

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]

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{CW093563.1)

ASSIGNMENT AND ASSUMPTION
Exhibit G

ASSIGNOR
Perfect Union Turlock, LLC, a
California limited liability
company
By:

Its: CEO
Date:

ASSIGNEE
By:

Its:

Date:

CITY
City of Turlock, a California
municipal corporation
By:

Gary Hampton, City
Manager
Date:

APPROVED AS TO FORM.

By:

Katie O. Lucchesi, City Attorney

Page 697 of 1436 ends

City Council Staff Report
June 9, 2026
From: Adrienne Werner, Development Services Director
Prepared by: Katie Quintero, Planning Manager
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Ordinance: Amending terms and extending the Development Agreement between the City of Turlock and Fire House Turlock, Inc.

2. NARRATIVE:

BACKGROUND
Fire House Turlock, Inc. (Fire House) is located at 1601 W. Main Street. The property is zoned Community Commercial which allows cannabis dispensaries with a Conditional Use Permit and Development Agreement.

At their September 10, 2019, meeting, the City Council adopted the ordinance approving the Development Agreement (DA) and granted a Conditional Use Permit (CUP) on March 10, 2020, for Fire House to operate a cannabis dispensary. Fire House opened for business in August 2020.

The initial Development Agreement was set to expire in October 2024. As a result, under the City Manager’s authority of the Development Agreement, the City and Fire House entered into an Amendment to the Development Agreement extending the Development Agreement through December 31, 2024.

On September 19, 2024, the Planning Commission recommended the City Council extend the Development Agreement to June 30, 2025. The City Council approved the extension of the Development Agreement at their October 8, 2024 meeting. In May of 2025, Council approved another extension to the Development Agreement through June 30, 2026. The intention of the shorter-term time extensions was to allow time for the cannabis operators and the City to discuss potential changes to the cannabis program.

ANNUAL REVIEW
Turlock Municipal Code §9-5-912 requires the Council to conduct an annual review to verify the business has complied in good faith with the terms and conditions of the Development Agreement.

Planning Department
Signage
Fire House has not applied for any exterior wall signs and no signs are installed on the exterior of the building. Any proposed exterior wall signs would have to comply with TMC §9-2-518(6)(ac)(iv) for commercial cannabis uses.

The existing 50’ tall pole sign is considered a legal nonconforming sign. Staff continues to work with the City Attorney’s office to address the sign.

Fire House is in compliance with the Planning Division.

Building Department

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Agenda Staff Report
6/9/2026
Fire House opened for business on August 7, 2020. There are no active building code violations and Fire House is in compliance with the requirements of the Building and Safety Division.

Finance Department
Business License
Fire House was issued a business license on August 5, 2020. Their business license is current and active.

Public Benefit Amount
The Development Agreement requires a monthly public benefit payment to the City of Turlock. Section

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

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

Fiscal Year Public Benefit Deposit
2020-21 $943,815.11
2021-22 $891,144.88
2022-23 $750,862.13
2023-24 $602,846.38
2024-25 $534,486.69
2025-26* $360,000.00
Total through 4/29/26 $4,083,155.19
*Payment made through March
2026
Police Department
Calls for Service
There were 10 calls for service (CFS) in 2023. Two calls were for medical emergencies which AMR and the Fire Department responded to, two security checks initiated by onsite security requesting an officer to check on two persons sleeping/loitering on the property, two suspicious person calls, and four disturbance calls. All CFS were closed by the officer and did not result in a report being filed or an arrest.

In 2024, there were seven calls for service (CFS). Two medical emergency calls and a grass fire were attended by the Fire Department and closed. Two disturbance/suspicious person calls, one security check of a toddler not buckled in, and one commercial alarm call. None of the calls resulted in a report being filed by the officer and no arrests were made.

There have been five calls for service from January 2025 through October 2025. Two of the calls started as traffic stops, with one resulting in the arrest of the individual for an outstanding warrant. One vehicle accident and one medical emergency were both cleared by the Fire Department, and a security check that was a false alarm.

There were eleven calls for service from October 2025 through April 2026. These calls consisted of the following: one false alarm, one security check, one suspicious vehicle, a warrant arrest, assist other agency (checking security guard credentials), larceny (ATM card left in machine), disturbance (individual approached security aggressively), and a missing person (man reported the last place he saw his girlfriend was at The Fire House). The girlfriend was later found at home safe.

An emergency medical call was responded to and cleared by the Fire Department. There was a suspicious

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Agenda Staff Report
6/9/2026
phone call, no answer on call back. A traffic stop turned into a weapons violation and resulted in the arrest of the driver.

Of these eleven calls for service, nine were closed by the responding officer without a report being filed or an arrest being made. The medical emergency call was closed by the Fire Department. One call resulted in an arrest.

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 officer responds to the Fire House's parking lot or in proximity to Fire House the business name will be indexed in the report. It does not mean a crime occurred at Fire House . If no report was made, the responding officer did not find probable cause to show a crime occurred. In reviewing the calls for service, these are typical of what is anticipated for this use and do not create a concern at this time.

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, Fire House 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 all four previous amendments and newly proposed into this one complete Agreement.

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.

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Turlock City CouncilJune 9, 2026

Turlock City Council
June 9, 2026