Turlock City Council
June 9, 2026

Agenda Staff Report
6/9/2026

3. FISCAL IMPACT / BUDGET AMENDMENT:

Adoption of the amended Development Agreement will result in a reduction in the revenue collected from the public benefit amount.

4. ENVIRONMENTAL DETERMINATION:

The project consists of the annual review to determine if Fire House 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 Fire House 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 Firehouse

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 10, 2019 the City adopted Ordinance No. 1260-CS approving a Development Agreement by and between the City and Fire House Cooperative, Inc. (Fire House) 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 1601 W. Main Street, Turlock, California, County of Stanislaus Assessor’s Parcel Number 089-015-006 (the “Project”), consistent with the General Plan, as amended; and
WHEREAS, the City and Fire House Cooperative entered into a Development Agreement dated August 3, 2020, which permitted Fire House to operate a cannabis dispensary at 1601 W. Main Street, Turlock, California, County of Stanislaus Assessor’s Parcel Number 089-015-006; and
WHEREAS, the City and Fire House Cooperative, Inc. dba Fire House entered into that certain First Amendment to Development Agreement dated July 25, 2022 which amended the name of Developer to Fire House Turlock, Inc; and
WHEREAS, on August 30, 2024 the City and Fire House entered into that certain Second 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 Fire House entered into that certain Third Amendment to extend the term of the Development Agreement dated September 15, 2020 through June 30, 2025; and
}
}
}
}
}
}
}
}
}
ORDINANCE NO. 13XX-CS INTRODUCTION AND FIRST READING OF AN

ORDINANCE AMENDING TERMS AND EXTENDING

THE DEVELOPMENT AGREEMENT BETWEEN FIRE
HOUSE TURLOCK, INC. AND THE CITY OF
TURLOCK THROUGH JUNE 30, 2029 FOR THE

OPERATION OF A CANNABIS DISPENSARY AT
1601 W. MAIN STREET, TURLOCK, CALIFORNIA,
STANISLAUS COUNTY APN 089-015-006

Ordinance No. 13XX-CS

WHEREAS, on May 27, 2025, the City and Fire House entered into that certain Fourth Amendment to extend the term of the Development Agreement through June 30, 2026; 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 Fire House. This action will not result in direct or indirect physical changes in the environment.

Section 3. The City Council of the City of Turlock amends the Development Agreement and extends the terms of the Development Agreement between the City of Turlock and Fire House 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

Ordinance No. 13XX-CS

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

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )
SIGNED:
____________________________
Amy Bublak, Mayor
ATTEST: APPROVED AS TO FORM:
___________________________ _____________________________ Nichole Fiez, City Clerk, Katie Lucchesi, City Attorney City of Turlock, County of Stanislaus,
State of California

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 FIRE HOUSE TURLOCK, INC., A CALIFORNIA

CORPORATION

THIS F I R S T A M E N D E D A N D R E S T A T E D DEVELOPMENT AGREEMENT (“Agreement”) is made and entered into this ___________________ (____) day of _________________, 2026 (the “Effective Date”), by and between the CITY OF TURLOCK, a California municipal corporation (“City”), and Fire House Turlock, Inc., a California Corporation (“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 AdultUse 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 section 5.21 pursuant to AUMA and MAUCRSA; and
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. Fire House Cooperative, Inc. completed the RFQ requirements; and
I. Developer submitted an application to the City Planning Commission Department for consideration of a development agreement for a commercial cannabis business.

J. Developer leased property located at 1601 West Main Street, Turlock, California, County of Stanislaus Assessor’s Parcel Number 089-015-006 of which Developer improved approximately 4,517 (four thousand five hundred seventeen) 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.

K. Developer leased 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 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 public hearing, the City Council adopted Ordinance No. 1260-CS approving a Development Agreement for the Property and Cannabis Business Project; thereafter, on August 3, 2020, the City and Fire House Cooperative, Inc., dba Firehouse, entered into that certain Development Agreement (the “Development Agreement”), which authorizes the operation of a cannabis dispensary in the City of Turlock. The City and Fire House Cooperative, Inc. dba Firehouse entered into that certain First Amendment to Development Agreement dated July 25, 2022 which amended the name of Developer to Fire House Turlock, Inc. (“First Amendment”).

N. The City and Fire House Turlock, Inc. entered into that certain Second Amendment to Development Agreement dated August 30, 2024 (“Second Amendment”).

O. The City and Fire House Turlock, Inc. entered into that certain Third Amendment to Development Agreement dated on or about October 8, 2024 (“Third Amendment”)
P. The City and Fire House Turlock, Inc. entered into that certain Fourth Amendment to Development Agreement dated on or about May 27, 2025 (“Fourth Amendment”).

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

R. 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.

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.

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.

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 Lease
Exhibit D Notice of Non-Performance Penalty
Exhibit E Indemnification Agreement
Exhibit F Notice of Termination
Exhibit G Assignment and Assumption Agreement
Section 1.4. Definitions. In this Agreement, unless the context otherwise requires, the terms below have the following meaning:
(a) “Additional Insureds” has the meaning set forth in Section 6.1. (b) “Additional Licenses” has the meaning set forth in Section 2.4. (c) “Adult-use cannabis” means a product containing cannabis, including, but not limited to, concentrates and extractions, 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; 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.
(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 Fire House Turlock, Inc. Developer also has the meaning set forth in Section 6.1.
(bb) “Development Agreement Statute” has the meaning set forth in Recital E. (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.

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) “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. (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 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 issued 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 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”).
(a) 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. 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 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 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.

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 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.

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 2.9. 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.

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.

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, the relevant persons or entities shall be subject to additional background checks as required by the Turlock Police Department, and passage by the applicant as of such background checks. The City may repeat background checks on any individual or entity 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 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 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 Non-Performance Penalty of ten percent (10%) shall be applied to all past due payments. City shall deliver to Developer a “Notice of Non-Performance Penalty,” 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 Non-Performance 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 Non-Performance 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 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).

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) 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 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.

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”). 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 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.

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.

Section 8.3. Estoppel Certificates.
(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 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 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 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: Fire House Turlock, Inc.
1234 McHenry Ave. Suite C
Modesto, CA 95350
Attention: Anglibert Sarkis, Owner
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 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 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.
(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.
(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

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:

Christopher Fisher
Acting City Manager
Dated:

Attest:

By: ___________________________
Nichole Fiez
City Clerk
Approved to as Form
By___________________________
Katie O. Lucchesi
City Attorney
“DEVELOPER”
FIRE HOUSE TURLOCK, INC., a
California Corporation
By:
________________________________
Anglibert Sarkis
Its: _____________________________
Owner
Dated:

{CW080817.5}

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

California All-Purpose Acknowledgment
State of California )
)
County of )
On , before me , a Notary
Public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and 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.

{CW080817.5}

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

California All-Purpose Acknowledgment
State of California )
)
County of )
On , before me , a Notary
Public, personally appeared who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and 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.

{CW080817.5} CANNABIS SITE LEGAL DESCRIPTION
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit A
Exhibit A
Cannabis Site Legal Description

{CW080817.5} CANNABIS SITE LEGAL DESCRIPTION
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit A

{CW080817.5} CANNABIS BUSINESS PROJECT SITE MAP
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit B
Exhibit B
Cannabis Business Project Site Map

{CW080817.5} CANNABIS BUSINESS PROJECT SITE MAP
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit B

{CW080817.5} SITE DEED
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit C
Exhibit C
Site Deed

{CW080817.5} SITE DEED
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit C

{CW080817.5} NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit D
Exhibit D
Notice of Non-Performance Penalty

DATE: _________________, 20__
PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380
Attention: City Manager

DEVELOPER
Fire House Turlock, Inc.
1234 McHenry Ave Suite C
Modesto, CA 95350
Attention: Anglibert Sarkis, Owner

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 ________________, 2019, City recorded a development agreement between City and Fire House Turlock, Inc. (“Developer”), dated ______________, 2019 (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”).

{CW080817.5} NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit D
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”).

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

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, 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 ______ 2019, (“Effective Date”) by and between the City of Turlock, a California municipal corporation, and (“City”), Fire House 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.

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.

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.

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, 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 CannabisProgram.

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 1601 West Main Street in the City of Turlock, identified as Stanislaus County Assessor’s Parcel Number 089-015-006 (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.

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.

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”)

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit E
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.

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,

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit E
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.

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

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit E
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
156 S. Broadway
Turlock, CA 95380 Attention: City Attorney
If to Developer: Fire House Turlock, Inc.
1234 McHenry Ave Suite C
Modesto, CA 95350
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.

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

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit E
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.

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.

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

Exhibit E
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]

{CW080817.5} INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING | CITY OF TURLOCK AND FIRE HOUSETURLOCK, INC.

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

APPLICANT
FIRE HOUSE TURLOCK, INC.

By: _____________________________
Anglibert Sarkis

Its: _____________________________
Owner
Date: ___________________________
FIRE HOUSE TURLOCK, INC.

By: ___________________________
Its: ___________________________
Owner
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

NOTICE OF TERMINATION AND

RELEASE OF DEVELOPMENT

AGREEMENT CITY OF TURLOCK AND
FIRE HOUSETURLOCK, 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
Fire House Turlock, Inc.
1234 McHenry Ave Suite C
Modesto, CA 95350
Attention: Anglibert Sarkis, Owner

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 ________________, 2019, City recorded a development agreement between City and
______________, dated ______________, 2019 (the “Development Agreement”), relating to the development and operation of a cannabis business.

NOTICE OF TERMINATION AND

RELEASE OF DEVELOPMENT

AGREEMENT CITY OF TURLOCK AND
FIRE HOUSETURLOCK, INC.

Exhibit F
B. Pursuant to Sections 1.7 and 9.1 of the Development Agreement, the term of the Development Agreement expires five (5) years from _______, 2019, on __________, 20____.

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

NOTICE OF TERMINATION AND

RELEASE OF DEVELOPMENT

AGREEMENT CITY OF TURLOCK AND
FIRE HOUSETURLOCK, INC.

Exhibit F

{CW080817.5} ASSIGNMENT AND ASSUMPTION

AGREEMENT
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 ___________________Fire House Turlock, Inc., (“Assignors”), and ______________________ (“Assignee”).

RECITALS
A. On ___________, 2019, 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 __________________________ Fire House 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 089- 015-006 (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.

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

{CW080817.5} ASSIGNMENT AND ASSUMPTION

AGREEMENT
Exhibit G
Assignment and Assumption Agreement and is executed with the consent of the City Manager as contemplated in the Development Agreement.

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.

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]

{CW080817.5} ASSIGNMENT AND ASSUMPTION

AGREEMENT
Exhibit G

APPLICANT
FIRE HOUSE TURLOCK, INC.

By: _____________________________
Anglibert Sarkis
Its: _____________________________
Owner
Date:___________________________
FIRE HOUSE TURLOCK, INC.

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

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 Plan4Dream Investments LLC.

2. NARRATIVE:

BACKGROUND
JDI Farms now Plan4Dream is located at 600 D Street. The property is zoned industrial, which allows cannabis cultivation, manufacturing and distribution with a Conditional Use Permit and Development Agreement.

At their October 8, 2019, meeting, the City Council adopted the ordinance approving the Development Agreement (DA). On March 4, 2021, the Planning Commission granted Conditional Use Permit 2020-02 to allow JDI Farms to operate a cannabis cultivation, manufacturing and distribution business.

On August 30, 2024, the City and JDI Farms, Inc. entered into a First Amendment to extend the term of the Development Agreement through December 31, 2024. Then on October 8, 2024, the City and JDI Farms, Inc. entered into a Second Amendment to extend the term of the Development Agreement through June 30, 2025.

On June 2, 2025, Qingyu Huang, with Plan4Dream Investments, LLC and the City of Turlock executed an Assignment and Assumption Agreement, as allowed under Section 10.1 of the Development Agreement. The Assignment and Assumption Agreement allowed the sale, assignment, or transfer of JDI Farms, Inc. at 600 D Street, to Plan4Dream Investments, LLC.

All other conditions of the Conditional Use Permit and the Development Agreement remain unchanged.

JDI Farms submitted a building permit application for the necessary interior tenant improvements on March 30, 2021. The plan check process was completed, and the building permit was issued on September 24, 2024. Construction of the interior tenant improvements is underway and the applicant is working on final punch list items to move forward with occupancy of the building.

Once operational, the Development Agreement requires monthly payment of a public benefit amount. Section 4.2 of the Development Agreement details the public benefit amount that Plan4Dream must submit to the City on a monthly basis.

CULTIVATION

Agenda Staff Report
6/9/2026

YEAR PUBLIC BENEFIT AMOUNT

PAID MONTHLY, AMORTIZED

ANNUALLY
1 ST $10.00 sq/ft *
2 ND $10.00 sq/ft *
3 RD $10.00 sq/ft *
4 TH $10.00 sq/ft *
5 TH $10.00 sq/ft *
* Sq./ft. will be based on cultivation canopy. Cultivation canopy size will be the amount approved for use in the Conditional Use Permit.

MANUFACTURING

YEAR PUBLIC BENEFIT AMOUNT

PAID MONTHLY,

AMORTIZED ANNUALLY
1 ST $10.00 sq/ft *
2 ND $10.00 sq/ft *
3 RD $10.00 sq/ft *
4 TH $10.00 sq/ft *
5 TH $10.00 sq/ft *
* Sq./ft. will be based on area of building set aside for manufacturing and ballistics use.

DISTRIBUTION

YEAR PUBLIC BENEFIT AMOUNT, PAID

MONTHLY

AMORTIZED ANNUALLY
If distribution is from cultivation or
manufacturing uses not subject to a City of
Turlock Public Benefit Amount
If distribution is from
cultivation or manufacturing
uses subject to a City of
Turlock Public Benefit
Amount
1 ST 2.5% of gross receipts No Public Benefit Amount
owed
2 ND 2.5% of gross receipts No Public Benefit Amount
owed
3 RD 2.5% of gross receipts No Public Benefit Amount
owed
4 TH 2.5% of gross receipts No Public Benefit Amount
owed
5 TH 2.5% of gross receipts No Public Benefit Amount
owed
Police Department
On January 22, 2026, the Turlock Police Department was notified by the Sacramento County District Attorney’s Office regarding an ongoing investigation of illegal drug trafficking and money laundering. The criminal investigators served several financial search warrants on bank accounts and seized large sums of money under asset forfeiture. Some of these

Agenda Staff Report
6/9/2026
targeted bank accounts had made payments to Cold Storage Manufacturing, the contractor working on the tenant improvements at 600 D Street, for approximately $300,000. This money had been seized as part of the criminal investigation. Attorneys from Plan4Dream Investments contested the seizure of these funds in a letter sent to police investigators. They claimed the funds were personal loans secured by Mr. Huang from business partners for payment to Cold Storage Manufacturing for time and material related to the construction of the 600 D St. facility.

The letter further described that Mr. Huang was unable to obtain conventional financing for this project, and obtained these loans from his private lenders. The letter identified these lenders as other cannabis companies. As of the time of this staff report, Mr. Huang, Plan4 Dream Investments, and Cold Storage Manufacturing have not been identified as targets of the investigation. However, they are identified as affiliated organizations due to Plan4Dream securing loans from the targeted individuals, and payments from the targeted accounts sent to their contractor for 600 D St.

On February 27, 2026, the Turlock Police Department sent a letter to Mr. Huang notifying him that the background investigation for him had been reopened. The letter further advised him there would be delays in the final approval of the 600 D St. facility for operation until the matter is resolved. An additional letter was sent to Mr. Huang on March 19, 2026, notifying him that inspections of the facility would proceed while the background is being completed, but final approval for the certificate of occupancy would not occur until the investigation is resolved. Mr. Huang was requested to provide any information to assist in resolving the supplemental background investigation.

On April 3, 2026, Zach Drivon, the attorney representing Plan4Dream Investments and Mr.

Huang submitted a contingency proposal to the City in the event Mr. Huang is later determined to be an ineligible person for the Development Agreement. This proposal described the transfer of title of the business to another person with a controlling stake in the company.

Because of this ongoing investigation, the recommendation for the time extension is through April 1, 2027, to allow for additional time for the investigation to continue but to be able to bring the Development Agreement back for review if further concerns arise. Language is also proposed in the amended Development Agreement that stipulates the Development Agreement will have to be transferred to an approved party or will be revoked if a conviction occurs.

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 through April 1, 2027.

The improvements to the building are proposed to be completed and occupied in phases.

Language has been added into the agreement to clarify that only the portions of the building that have been improved can be occupied. During construction there were modifications

Agenda Staff Report
6/9/2026
made to the building that had not been anticipated that affected the exterior of the building.

Language has been added into the Development Agreement requiring the resurfacing of the building prior to phase two. There is adequate onsite parking for the phase one area to become operational. It has been included in the amended language that the parking lot will have to be resurfaced and brought up to City standards prior to phase two.

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:

None

4. ENVIRONMENTAL DETERMINATION:

The item consists of a time extension and various updates to the existing 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. The City Council can deny the proposed Development Agreement Amendment and Time Extension.

2. The City Council can propose other changes to the Agreement.

6. ATTACHMENTS:

1. Draft Ordinance and DA Plan4Dream

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 JDI Farms, Inc. entered into a Development Agreement dated October 8, 2019, which permitted JDI Farms, Inc. to operate an indoor cannabis cultivation, manufacturing, and distribution business at 600 D Street, Turlock, California, County of Stanislaus Assessor’s Parcel Number 043-018-016; and
WHEREAS, on October 8, 2019 the City adopted Ordinance No. 1264-CS approving a Development Agreement by and between the City and JDI Farms, Inc. 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 600 D Street, Turlock, California, County of Stanislaus Assessor’s Parcel Number 043-018-016 (the “Project”), consistent with the General Plan, as amended; and WHEREAS, on August 30, 2024 the City and JDI Farms, Inc. entered into that certain First Amendment to extend the term of the Development Agreement dated August 8, 2019 through December 31, 2024; and
WHEREAS, on October 22, 2024 the City and JDI Farms, Inc. entered into that certain Second Amendment to extend the term of the Development Agreement dated August 8, 2019 through June 30, 2025; and
}
}
}
}
}
}
}
}
}
}
}
ORDINANCE NO. 13XX-CS INTRODUCTION AND FIRST READING OF AN

ORDINANCE AMENDING TERMS AND EXTENDING

BY AMENDMENT, THE DEVELOPMENT
AGREEMENT BETWEEN PLAN4DREAM AND THE

CITY OF TURLOCK FOR THE OPERATION OF AN

INDOOR CANNABIS CULTIVATION,

MANUFACTURING, AND DISTRIBUTION BUSINESS
AT 600 D STREET, TURLOCK, CALIFORNIA,
STANISLAUS COUNTY APN 043-018-016 THROUGH
APRIL 1, 2027.

Ordinance No. 13XX-CS

WHEREAS, on May 27, 2025, the City and JDI Farms entered into an Amendment to extend the term of the Development Agreement through June 30, 2026; and WHEREAS, On June 2, 2025, Qingyu Huang, with Plan4Dream Investments, LLC and the City of Turlock executed an Assignment and Assumption Agreement, as allowed under Section 10.1 of the Development Agreement. The Assignment and Assumption Agreement allowed the sale, assignment, or transfer of JDI Farms, Inc. at 600 D Street, to Plan4Dream Investments, LLC.

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 April 1, 2027; 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

Ordinance No. 13XX-CS

the Development Agreement (DA) between the City of Turlock and Plan4Dream Investments LLC. This action will not result in direct or indirect physical changes in the environment.

Section 3. The City Council of the City of Turlock approves the amendments and extends the terms of the Development Agreement between the City of Turlock and Plan4Dreams Investments LLC. through April 1, 2027.

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.

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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
of 28
{CW082303.3)
( '·-!

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 PLAN4DREAM INVESTMENTS, LLC
THIS DEVELOPMENT AGREEMENT ("Agreement") is made and
entered into this________________2026, by and between the City of Turlock, a California municipal corporation ("City") and Plan4Dream Investments, 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 adultuse 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 PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3}
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.") Section 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.

I. The previous developer, JDI FARMS, INC. (“JDI Farms”) submitted an application to the City Planning Commission Department for consideration of a development agreement for a commercial cannabis business.

J. JDI Farms purchased property located at 600 D Street, Turlock, California, County of Stanislaus Assessor's Parcel Number 043-018-016 of which Developer intends to improve approximately 98,770 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.

K. JDI Farms 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.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

L. On August 22, 2019, the Turlock Planning Commission ("Planning Commission"), in a duly noticed and conducted public hearing, considered JDI Farms application for this Agreement. At that public hearing, the Planning Commission recommended the City Council adopt Ordinance No. 2019-19 which would allow JDI Farms 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.1264-CS.

N. The City and JDI Farms entered into that certain First Amendment to Development Agreement dated August 30, 2024 (“First Amendment”).

O. The City and JDI Farms entered into that certain Second Amendment to Development Agreement dated October 22, 2024 (“Second Amendment”).

P. The City and JDI Farms entered into that certain Third Amendment to Development Agreement dated May 27, 2025 (“Third Amendment”).

Q. On June 2, 2025, JDI Farms and Plan4Dream Investments, LLC (Developer) entered into an assignment and assumption agreement wherein Developer agreed to assume the Assumable Rights under the Development Agreement. The agreement was executed with the consent of the Interim City Manager, as contemplated in the Development Agreement.

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

P. City and Developer desire to enter into this Agreement to (i) facilitate the orderly development of the Site; (ii) create a physical environment that is consistent with and complements the City's goals and visions; (iii) protect natural resources from adverse impacts; (iv) improve, upgrade and create additional community facilities and infrastructure, enhance services and assist in implementing the goals of the General Plan; and (vi) reduce the economic risk of development of the Site to both City and Developer.

Q. The Parties intend, through this Agreement, to allow Developer to develop and operate the Cannabis Business Project in accordance with the terms of this Agreement.

R. 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.

S. The Parties wish to enter into this First Amended and Restated Development Agreement to

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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.

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 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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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.
(I) "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.
(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.
{CW082303.3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC

I

' ·'
(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 Plan4Dream Investments, 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;
{CW082303.3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC

'•'I

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.

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.
(he) “ 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. (II) "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)
(pp)
(qq)
(rr)
"Notice of Termination" has the meaning set forth in Section 9.1. "Processing Costs" has the meaning set forth in Section 1.11. "Project Litigation" has the meaning set forth in Section 10.7. "Public Benefit" has the meaning set forth in Section 4.2.

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

(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. (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 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 issued by the Department of Cannabis Control pursuant to the California Cannabis Laws authorizing the retail sales of cannabis and cannabis products. Retail sale includes sales at a storefront and by delivery,

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

pursuant to all state and local laws and regulations.
•• r •
(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").

Section 1.7. Term. The term of this Agreement (“Term”) shall be through April 1, 2027, unless earlier terminated in accordance with the provisions of this Agreement.

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

(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 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) Agreement, (c) Specific Plan, (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.
(a) 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 non-expended Processing Costs. 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

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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"):

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.

Occupancy and use of the building shall be limited to the Phase One area (indicated in approved construction drawings) only. All other portions of the building shall be secured, blocked off, and shall not be occupied or used for any purpose. No other portion of the building may be occupied or used unless and until all required permits have been issued and all required improvements have been completed and approved by the City, including, without limitation:

Cultivation
Manufacturer
Distribution
Type 1A, 2A, 3A
Type 6, 7

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

(a) Installation of fire sprinkler systems in such portions of the Building as required by applicable codes;
(b) Resurfacing of the exterior of the Building; and
(c) Regrading, where necessary, and resurfacing of the parking lot to meet current City standards.

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

Section 2.5. Conditional Use Permit. Developer shall obtain a Conditional Use Permit for the Commercial Cannabis Activity and Authorized License contemplated herein for the Project and at the Site. No Commercial 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.

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

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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 2.9. 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 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

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

with the provisions of this Agreement, Developer's proposed changes to the Cannabis Business Project that are necessary to comply with such federal or state law and that such proposed changes shall be conclusively deemed to be consistent with this Agreement without further need for any amendment to this Agreement.

Section 2.12. Health and Safety Emergencies. In the event that any future public health and safety emergencies arise with respect to the Cannabis Business Project contemplated by this Agreement, City agrees that it shall attempt, if reasonably possible as determined by City in its discretion, to address such emergency in a way that does not have a material adverse impact on the Cannabis 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.

Section 2.13. Other Regulations. The following provisions establish definitions and 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 granted 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, the relevant persons or entities shall be subject to additional background checks as required by the Turlock Police Department, and passage by the applicant as of such background checks. The City may repeat background checks on any individual or entity 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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303 .3}
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 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.

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 as follows (the "Cannabis Business Public Benefit"):

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303 .3}

CULTIVATION

YEAR PUBLIC BENEFIT AMOUNT PAID MONTHLY,

AMORTIZED ANNUALLY
1ST $10.00 sq/ft *
2ND $10.00 sq/ft *
3RD $10.00 sq/ft *
4TH $10.00 sq/ft *
5TH $10.00 sq/ft *
* Sq./ft. will be based on cultivation canopy. Cultivation canopy size will be the amount approved for use in the Conditional Use Permit.

MANUFACTURING

YEAR PUBLIC BENEFIT AMOUNT PAID MONTHLY,

AMORTIZED ANNUALLY
1ST $10.00 sq/ft *
2ND $10.00 sq/ft *
3RD $10.00 sq/ft *
4TH $10.00 sq/ft *
5TH $10.00 sq/ft *
* Sq./ft. will be based on area of building set aside for manufacturing and ballistics use.

DISTRIBUTION
YEAR

PUBLIC BENEFIT AMOUNT, PAID MONTHLY

AMORTIZED ANNUALLY
If distribution is from cultivation or manufacturing
uses not subject to a City of Turlock Public Benefit
Amount
If distribution is from cultivation
or manufacturing uses subject
to a City of Turlock Public
Benefit Amount
1ST 2.5% of gross receipts No Public Benefit Amount
owed
2ND 2.5% of gross receipts No Public Benefit Amount
owed
3RD 2.5% of gross receipts No Public Benefit Amount
owed
4TH 2.5% of gross receipts No Public Benefit Amount
owed
5TH 2.5% of gross receipts No Public Benefit Amount
owed
(a) Collectively, these amounts shall be known as the "Public Benefit Amount." The Public Benefit Amounts for each of the aforementioned uses shall be due monthly, beginning on the first business day following the first month in which Developer commences Commercial Cannabis Activity. Payment of the Public Benefit Amount shall continue for a period of five (5) years thereafter.
(b) 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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303 .3}
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.

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 Non-Performance Penalty of ten percent (10%) shall be applied to all past due payments. City shall deliver to Developer a "Notice of Non-Performance Penalty," 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 Non-Performance 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 Non-Performance 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 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).

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303 .3}
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 impacts 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

{CW082303 .3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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.

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

{CW082303 .3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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"). 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 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.

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 {CW082303.3) DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3}
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.

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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3}
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 investigation and meet

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3}
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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303 .3)
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 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:
and
City of Turlock
156 S. Broadway
Turlock, CA 95380
Attention: City Manager
Katie O. Lucchesi, City Attorney
156 S. Broadway
Turlock, CA 95380 '

{CW082303 .3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

If to Developer:

Plan4Dream Investments, LLC
Qingyu Huang
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 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 r!3asonable 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.

{CW082303 .3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

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 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.

{CW082303 .3} DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

(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.
(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.

G) 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.

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3)
'• l!
(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

DEVELOPMENT AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

{CW082303.3)
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:

Christopher Fisher
Acting City Manager
Dated:

Attest:

By: ___________________________
Nichole Fiez
City Clerk
Approved to as Form
By___________________________
Katie O. Lucchesi
City Attorney
“DEVELOPER”
Plan4Dream Investments, LLC, a California
limited liability company
By: ________________________________
Qingyu Huang
Its: _____________________________
Managing Member
Dated:

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.

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.

Exhibit A

LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of Stanislaus, City of Turlock and described as follows:

Parcel A as shown on the Parcel Map filed for record February 27, 2019 in Book 57 of Parcel Maps, at Page 91 Stanislaus County Records, more particularly described as follows:

Beginning at the southerly corner of D Street and Fifth Street at the North corner of said Parcel A; thence South 41°58'00" East a distance of 350.00 feet along the Southwesterly right-of-way line of Fifth Street; thence South 48°01'46" West a distance of 300.00 feet; thence North 41°58'00" West a distance of 70.00 feet; thence South 48°01'46" West a distance of 63.25 feet; thence North 41°58'00" West a distance of 280.00 feet to the Southeasterly right-of-way line of D Street; thence North 48°01'46 East a distance of 363.25 feet along said D Street right-of-way line to the Point of Beginning of this description.

Containing 2.82 Acres, more or less. Subject to all easements and rights-of-way of record.

APN: 043-018-016

Exhibit B
Cannabis Business Project Site Map

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
Exhibit C
Site Deed

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
Exhibit D
Notice of Non-Performance Penalty
DATE: _________________, 2026
PARTIES: CITY OF TURLOCK
156 S Broadway
Turlock, CA 95380
Attention: City Manager

DEVELOPER
Plan4Dream Investments, LLC
________________
________________
Attention: Qingyu Huang, Managing Member

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 ________________, 2019, City recorded a development agreement between City andPlan4Dream Investments, LLC. (“Developer”), dated ______________, 2019 (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”).

NOTICE OF NON-PERFORMANCE PENALTY
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
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
{CW082303 .3)

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, 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 ______, 2026, ("Effective Date") by and between the City of Turlock, a California municipal corporation ("City") and Plan4Dream Investments, 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.

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.

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.

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, 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 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 600 D Street in the City of Turlock, identified as Stanislaus County Assessor's Parcel Number 043- 018-016 (the "Project"). Applicant intends to improve approximately 98,770 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.

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

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, 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.

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, 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.

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

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC
Exhibit E
at their addresses set forth below:

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC
Exhibit E
If to City:
and
If to Developer:

City of Turlock 156 S.

Broadway
Turlock, CA 95380 Attention:

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

City Attorney
Plan4Dream Investments, LLC
Attention: Qingyu Huang
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.

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.

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC
Exhibit E
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.

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 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

{CW082303.3}

INDEMNITY AGREEMENT FOR LAND USE ENTITLEMENT PROCESSING CITY OF TURLOCK AND PLAN4DREAM INVESTMENTS, LLC
Exhibit E
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]

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

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

Exhibit F Notice of

APPLICANT
Plan4Dream Investments, LLC
By: _____________________________
Qingyu Huang

Its: _____________________________
Managing Member
Date: ___________________________
Plan4Dream Investments, LLC
By: ___________________________
Its: ___________________________
Managing Member
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

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
Termination

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
Plan4Dream Investments, LLC
_________________
________________
Attention: Qingyu Huang, Managing Member

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 ________________, 2019, City recorded a development agreement between City and ______________, dated ______________, 2019 (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 _______, 2019, on __________, 20____.

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

RECORDING REQUESTED BY AND WHEN
RECORDED RETURN TO:

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

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
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
Exhibit G

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
Assignment and Assumption Agreement

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 Plan4Dream Investments, LLC, a California limited liability company ("Assignor") and , a
("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 Plan4Dream Investments, 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 043-018-016 (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.

Attention: Ci!Y_Clerk

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
�, '.

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.

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]

{CW082303.3}

ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TURLOCK AND PLAN4DREAM

INVESTMENTS, LLC
>j.

ASSIGNOR ASSIGNEE
Plan4Dream Investments,
LLC, a California limited
liability company
City of Turlock, a California municipal
corporation
By: _
Qingyu Huang
Its: Managing Member
Date:

By: _
Gary Hampton, City Manager
Date:

APPROVED AS TO FORM:

By:

Katie O. Lucchesi,
City Attorney

City Council Staff Report
June 9, 2026
From: Jessie Dhami, Human Relations Director
Prepared by: Jessie Dhami, Human Relations Director
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Motion: Receive informational report regarding City of Turlock Vacancies and Recruitment and Retention Efforts pursuant to Assembly Bill 2561/Government Code Section 3502.03

2. NARRATIVE:

On September 22, 2024, Governor Newsom signed Assembly Bill 2561 (AB 2561) into law, amending the Meyers-Milias-Brown Act (MMBA). This new law requires all public agencies to provide an annual status report and employee vacancies in a public hearing before adopting their final budget each fiscal year. This requirement became effective on January 1, 2025.

The California Legislature found that high vacancy rates are a serious issue in the public sector. Unfilled positions increase workloads, contribute to employee burnout, lead to higher turnover, and reduce the quality of public services. The state emphasized that stable staffing levels are crucial for effective government services and positive employee relations.

Under AB 2561, agencies must also share any obstacles they face in hiring, including challenges related to policies, procedures, or recruitment practices.

If 20% or more full-time positions in a particular bargaining unit are vacant the agency must also report, upon request from the employee organization, the following:

1. The total number of job vacancies within the bargaining unit.

2. The total number of applicants for vacant positions within the bargaining unit.

3. The average number of days to complete the hiring process when a position is posted.

4. Opportunities to improve compensation and other working conditions.

Regardless of the vacancy rate, employee organizations have the right to present their own report during the same public hearing.

Current Status of Vacancies and Recruitment and Retention Efforts City of Turlock Workforce Snapshot:

The City of Turlock has six (6) bargaining groups (four represented, two unrepresented), with a total of 455 full-time authorized positions in Fiscal Year 2025/2026. As of December 31, 2025, the overall vacancy rate was approximately 7% which is below the 20% threshold.

Vacancy rates averaged between 7% and 10% throughout the 2025 calendar year.

Vacancies result from various situations, such as:

Agenda Staff Report
6/9/2026
• New positions added through the budget process.
• Internal transfers or promotions.
• Employee retirements, resignations or terminations.

AB 2561 Vacancy Report
Separation Summary:

Reason for Separation Count
Retirement 4
Voluntary Resignation 29
Involuntary Termination 2
Total 35
Recruitment and Retention Efforts:

The City has implemented several strategies to attract and retain qualified employees:
• Council Resolution 2022-071 authorized the City Manager to extend recruitment incentives, pre-accrual up to 80 hours of vacation and up to 40 hours of sick leave. • Council Resolution No. 2023-055 Offered Turlock Associated Police Officers (TAPO) a one-time forty (40) hour time bank to encourage referrals. • Council Resolution 2023-093 Authorized signing bonus for Police Department hires:
$6,000- $20,000 for lateral hires, trainees, and academy graduates. $3,000 referral bonuses or 40 hour time banks for successful hires.
• Council Resolution 2023-142 Authorized signing bonus for Water Treatment Plant Operator, Sr., Maintenance Technician, Sr., Instrument and Control Technician, Sr., Water Treatment Plant Supervisor and Water Treatment Plant Manager ranging from

Agenda Staff Report
6/9/2026
$7,500 to $12,000. Referral bonus of $3,000 were also made available for successful hires in these positions.

Key Challenges Identified:
• Competitive job market with comparable and/or neighboring agencies. • Limited applicant pools in specialized roles (e.g., water operations, law enforcement and specialty skilled positions).

Efforts to Address:

No specific changes have been identified or implemented to address hiring obstacles at this time. The City continues to take steps to support recruitment and retention and will continue monitoring vacancy rates.

3. FISCAL IMPACT / BUDGET AMENDMENT:

There is no direct fiscal impact from presenting this report or holding the required public hearing.

4. ENVIRONMENTAL DETERMINATION:

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

5. ALTERNATIVES:

6. ATTACHMENTS:

1. Attachment - Assembly Bill 2561

City Council Staff Report
June 9, 2026
From: Isaac Moreno, Finance Director
Prepared by: Isaac Moreno, Finance Director
Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Receive a presentation regarding a potential cannabis tax ballot measure and provide direction to staff

2. NARRATIVE:

In 2019, the City of Turlock established a 5-year Cannabis pilot program. This program developed a revenue stream through a development agreement that set a public benefit fee of 5.25% of gross receipts or up to $45,000 per month. To review this program, the City Council established a Cannabis Ad Hoc Committee that was chaired by Councilmember Abram and included Councilmember Bixel and Planning Commissioners Matthew Davis and Jim Reape.

On April 23, 2024, this Ad Hoc Committee submitted to the City Council a memorandum of its findings and recommendations. One of these recommendations was to pursue a cannabis business tax.

On June 25, 2024, a Cannabis tax ballot measure was discussed and proposed for the November 5, 2024 general municipal election but was not recommended to move forward.

With the upcoming November 3, 2026 General Municipal Election, staff is requesting discussion and direction to bring forward a ballot measure. Since the majority of the development agreements are coming up for renewal coupled with the upcoming election, staff engaged with the current cannabis operators on this topic in January 2026. Through these discussions, staff gathered feedback on their interest in supporting a cannabis tax ballot measure and their willingness to contribute financially. There was positive feedback from all operators during this discussion.

In May 2026, staff re-engaged the operators and received the following responses:
• Perfect Union – received written communication stating they do not support the measure nor are they willing to contribute financially
• Firehouse – received written communication stating they support the measure and are willing to contribute financially
• FF Farms – received a verbal communication stating they support the measure but are only willing to contribute financially if other operators contribute • NHC – received written communication stating they do not support the measure nor are they willing to contribute financially

Agenda Staff Report
6/9/2026
• Plan4Dreams – received verbal communication stating they support the ballot measure but not as written, as they stated the maximum square footage rate for cultivation is too high
Both Perfect Union and NHC expressed concerns with the proposed maximum rate but are willing to reopen discussions in 2028.

The discussion with Council at this time is only to bring the ballot measure forward and not approve the ballot placement. If approved to move forward, the measure will be brought to Council at the next meeting on June 23, 2026.

3. FISCAL IMPACT / BUDGET AMENDMENT:

No fiscal impact, discussion and direction only

4. ENVIRONMENTAL DETERMINATION:

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

5. ALTERNATIVES:

No alternatives, discussion and direction only

6. ATTACHMENTS:

None

City Council Staff Report
June 9, 2026
From: Isaac Moreno, Finance Director
Prepared by: Jennifer Figueroa, Housing Program Manager Agendized by: Christopher Fisher, Acting City Manager

1. ACTION RECOMMENDED:

Resolution: Approving the agreements between the City of Turlock and each of the public service agencies funded through the Community Development Block Grant (CDBG) for fiscal year 2026-2027 in a total amount not to exceed $115,000 from Fund 255 “CDBG-Housing”, and authorizing the Interim City Manager or designee to execute all related and necessary documents.

2. NARRATIVE:

For fiscal year 2026-2027, the City of Turlock will receive funding for the Community Development Block Grant (CDBG) program through an entitlement grant from the U.S.

Department of Housing and Urban Development (HUD). The City utilizes this funding to address affordable housing, homelessness, and non-housing priority needs through the implementation of City services and programs, as well as forming partnerships with other governmental agencies and non-profit organizations.

Under the CDBG program, the City can allocate up to 15% of its annual allocation plus an additional 15% of its program income generated from previous years, to programs that provide services to low and moderate-income households. For fiscal year 2026-2027, it is anticipated that the City will receive a CDBG allocation of approximately $636,784 plus an estimated $200,000 in program income for an estimated grand total of $836,784. This would allow for a maximum of $125,518 to be used for public service activities. The recommended funding set aside for fiscal year 2026-2027 is $115,000.

Applications for the City of Turlock’s public service grants are accepted once a year. Grants are provided to fund eligible activities that meet HUD’s guidelines and the goals of the City’s five-year Consolidated Plan. CDBG Public Service Grants are targeted at new services, expansion of existing services, implementation of new innovative approaches, and serving new clients.

A Notice of Funding Opportunity (NOFO) was issued to non-profit agencies serving low- and moderate-income households in Turlock. The NOFO announced that applications would become available beginning November 7, 2025, with a submission deadline of December 17, 2025. Staff held a technical assistance workshop on November 20, 2025, to support prospective applicants. The Turlock City Council appointed members to the CDBG Selection Committee on December 9, 2025, and six (6) applicants presented their proposals to the Committee on January 22, 2026. The submitted applications proposed a range of services including emergency shelter, food assistance, youth street outreach, recreational scholarships for youth, and tenant/landlord services. The Selection Committee evaluated and scored the applications and established a proposed funding recommendation list (Attachment B), pulling out the highest ranked homeless services proposal and highest

Agenda Staff Report
6/9/2026
ranked fair housing services proposal.

Staff is requesting authorization to execute the six (6) agreements (Attachment C) with each of the recommended public service agencies for the recommended dollar amounts. Total recommended budget amount for fiscal Year 2026-2027 is $115,000.

3. FISCAL IMPACT / BUDGET AMENDMENT:

Proposed fiscal year 2026-2027 activities will be funded with the fiscal year 2026-2027 CDBG entitlement funds and previous year’s program income. The funds will be allocated from various accounts within fund 255-41-485 for CDBG. The recommended amounts are as follows:
• United Samaritans Foundation for Emergency Food Box Program not to exceed $20,000;
• City of Turlock Public Works Recreation Division for Recreation for All Scholarship not to exceed $20,000;
• Healthy Alternatives to Violent Environments (HAVEN) for Housing Assistance not to exceed $20,000;
• Family Promise of Great Modesto for Transitional Living not to exceed $20,000; • Project Sentinel for Fair Housing services not to exceed $15,000; • We Care Program-Turlock for Emergency Shelter not to exceed $20,000.

Funding will be allocated during the Fiscal Year 2026-2027 budget process. No general funds will be needed in Fiscal Year 2026-2027.

4. ENVIRONMENTAL DETERMINATION:

This action approves agreements between the City of Turlock and service providers for funding public service grants. This action is not considered a project under CEQA.

5. ALTERNATIVES:

1. Council may choose not to approve the proposed funding recommendations.

However, this option is not recommended as the grants are proposed to be awarded to the agencies as selected by the appointed CDBG Selection Committee and are needed to assist the City of Turlock in meeting their Consolidated Plan goals.

2. Council may choose to change the proposed funding amounts to be awarded to each organization.

6. ATTACHMENTS:

1. Resolution for FY 2026-27 Public Service Grants

2. Public Service Grants Proposed funding table 2026-2027-2

3. Draft Public Service Agreement for FY 2026-2027- USF- 05-26-26-

4. Draft Public Service Agreement for FY 2026-2027- COT- 05-26-26-

5. Draft Public Service Agreement for FY 2026-2027- HAVEN- 05-26-26-

6. Draft Public Service Agreement for FY 2026-2027- Project Sentinel- 05-26-26-

Agenda Staff Report
6/9/2026

7. Draft Public Service Agreement for FY 2026-2027- We Care- 05-26-26-

8. Draft Public Service Agreement for FY 2026-2027- Family Promise- 05-26-26-

BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK
IN THE MATTER OF APPROVING THE }
AGREEMENTS BETWEEN THE CITY OF } RESOLUTION NO. 2026-
TURLOCK AND EACH OF THE PUBLIC SERVICE }
AGENCIES FUNDED THROUGH THE }
COMMUNITY DEVELOPMENT BLOCK GRANT }
(CDBG) FOR FISCAL YEAR 2026-2027 IN A }
TOTAL AMOUNT NOT TO EXCEED $115,000 }
FROM FUND 255 “CDBG-HOUSING”, AND }
AUTHORIZING THE INTERIM CITY MANAGER }
OR DESIGNEE TO EXECUTE ALL RELATED AND}
NECESSARY DOCUMENTS. }
}

WHEREAS, the City of Turlock receives federal grant funds from the U.S Department of Housing and Urban Development (HUD) for affordable housing and related activities; and
WHEREAS, the City of Turlock is an entitlement City under CDBG and will be the recipient of CDBG funds; and
WHEREAS, the City of Turlock can award a maximum of up to 15% of its annual allocation and prior years program income to public services; and WHEREAS, the City of Turlock addresses homelessness and non-housing priority needs through implementation of programs and partnerships with other governmental agencies and non-profit organizations; and WHEREAS, the recommended programs must meet an objective in the 2025- 2029 Consolidated Plan which are required to address community needs as identified in the Plan; and
WHEREAS, a total of six (6) programs were selected by the City Council appointed CDBG Selection Committee to be funded in the 2026-2027 fiscal year; and WHEREAS, funding is recommended as follows:
• not to exceed $20,000 to United Samaritans Foundation for Emergency Food Box Program from Account 255-41-485.47215_009 “Public Service United Samaritans/Food Assist”;
• not to exceed $20,000 to City of Turlock Public Works Recreation Division for Recreation for All Scholarship from Account 255-41-485.47215_003 “Public Service City of Turlock-Recreation”;
• not to exceed $20,000 to Healthy Alternatives to Violent Environments

Resolution No. 2026-

(HAVEN) for Housing Assistance from Account 255-41-485.47215_012 “Public Service Haven’s Women’s Center”;
• not to exceed $20,000 to Family Promise of Greater Modesto from Account 255-41-485.47215_023 “Public Service Family Promise Transitional Living”; • not to exceed $15,000 to Project Sentinel from Account 255-41-485.47216 “Fair Housing (Project Sentinel)”;
• not to exceed $20,000 to We Care Program-Turlock for Emergency Shelter from Account 255-41-485.47215_010 “Public Service We Care ProgramTurlock”; WHEREAS, a total of $115,000 will be allocated to assist the selected organizations; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby adopt a resolution approving the agreements between the City of Turlock and each of the public service agencies funded through the Community Development Block Grant (CDBG) for fiscal year 2026-2027 in a total amount not to exceed $115,000 from fund 255 “CDBG-Housing”, and authorizing the Interim City Manager or designee to execute all related and necessary documents PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 14th day of April, 2026, by the following vote:

AYES:

NOES:

NOT PARTICIPATING:

ABSENT:

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

City of Turlock
Community Development Block Grant (CDBG)
Proposed Funding for FY 2026-2027
# Organization and Project Name Funds
Requested
*Proposed
Funding
1 United Samaritans Foundation
Emergency Food Box $20,000 $20,000
2 City of Turlock Public Works, Recreation Division
Recreation for All Scholarship $20,000 $20,000
3 Healthy Alternatives to Violent Environments (HAVEN)
Housing Assistance $20,000 $20,000
Fair Housing Services Funds
Requested
*Proposed
Funding
1 Project Sentinel
Fair Housing $15,000 $15,000
Homeless Services Funds
Requested
*Proposed
Funding
1 We Care Program – Turlock
We Care Emergency Shelter $20,000 $20,000
2 Family Promise of Greater Modesto
Transitional Housing $20,000 $20,000
Total $115,000 $ 115,000
*This is the proposed funding estimate for fiscal year 2026-2027 based on the presentation scoring. The funding is subject to change and dependent on the finalization of the program budgeting process, HUD’s allocation to the city, and the City Council approval process.

Contract No. 2027-0004 United Samaritans Foundation

AGREEMENT
between

CITY OF TURLOCK
And
United Samaritans Foundation
for
Public Services through the Community Development Block Grant (CDBG) Program CONTRACT NO. 2027-0004
THIS AGREEMENT is made this 26th day of May, 2026, by and between the CITY OF TURLOCK, a municipal corporation of the State of California, as the implementer of the COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM, hereinafter referred to as "CITY" and United Samaritans Foundation hereinafter referred to as "ORGANIZATION." W I T N E S S E T H:

WHEREAS, CITY has received funds from the United States Government under Title I of the Housing and Community Development Act of 1974, as amended (HUD Act), Public Law 93- 383; and
WHEREAS, the CITY wishes to engage the ORGANIZATION to assist the CITY in utilizing such funds; and
NOW, THEREFORE, the parties hereto mutually agree as follows:

1. SCOPE OF SERVICE: The ORGANIZATION will be responsible for administering a CDBG 2026-2027 Emergency Food Box Distribution Public Service Program in a manner satisfactory to the CITY. The Public Service Program shall be provided in accordance with the standards required as a condition of providing these funds and in accordance with Exhibit A attached hereto and incorporated herein by reference. The ORGANIZATION shall provide such Services in accordance with 24 CFR § 570 et seq and all other applicable federal state or local laws, rules or regulations.
(a) National Objectives: All activities funded with CDBG funds must meet one of the CDBG program’s National Objectives: benefit low- and moderate-income persons; aid in the prevention or elimination of slums or blight; or meet community development needs having a particular urgency, as defined in 24 CFR 570.208. The ORGANIZATION certifies that the activity carried out under this Agreement will meet the National Objective specified in Exhibit A. (b) Levels of Accomplishment-Goals and Performance Measures: The ORGANIZATION agrees to provide levels of program services specified in Exhibit A.

Contract No. 2027-0004 United Samaritans Foundation

(c) Staffing: The ORGANIZATION agrees to provide levels of staffing for the program as specified in Exhibit A.
(d) Performance Monitoring: The CITY will monitor the performance of the ORGANIZATION against goals and performance standards as stated in Exhibit A. Substandard performance as determined by the CITY will constitute noncompliance with this Agreement. If action to correct such substandard performance is not taken by the ORGANIZATION within a reasonable period of time after being notified by the CITY, contract suspension or termination procedures will be initiated.

2. COMPENSATION: ORGANIZATION shall be paid a total consideration of not to exceed Twenty Thousand and no/100 ths Dollars ($20,000), for full performance of the Public Services specified under this Agreement, in conformity with the approved program proposal and budget document which is attached to this Agreement as Exhibit A. The amount set forth in this section is not a guarantee of the compensation that ORGANIZATION will receive, but rather is merely a limit of potential CITY expenditures under this Agreement. ORGANIZATION will be paid for services actually performed in accordance with the requirements of this Section. The CITY may require a more detailed budget breakdown than the one provided in Exhibit A and the ORGANIZATION shall provide such supplementary budget information in a timely fashion in the form and content prescribed by the CITY. Any amendments to the budget must be approved in writing by both the CITY and the ORGANIZATION. ORGANIZATION agrees that compensation shall be paid in the manner and at the times set forth below:
(a) Payment:

(1) Funds will be dispersed on a draw basis as costs are incurred and can be drawn monthly. Drawdowns for the payment of eligible expenses shall be made against the line item budgets specified in Exhibit A and in accordance with performance. Expenses for general administration shall also be paid against the line item budgets specified in Exhibit A and in accordance with performance.
(2) The request for a draw will be accompanied by documentation of the costs which would include such information as invoices and timecards. The request will also include data of the persons served through the program including, but not limited to, income, race/ethnicity, and statistics data required by HUD, and such other information as the CITY may request. First Draw can be requested after October 1, 2026. Final draw must be requested before June 15th, 2027
(3) Payments may be contingent upon certification of the ORGANIZATION’S financial management system in accordance with the standards specified in 2 CFR 200.
(4) ORGANIZATION shall notify CITY in writing of all authorized personnel who shall be empowered to file requests for payment pursuant to this Agreement. (5) Not more often than monthly, CITY shall make payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. CITY shall pay undisputed invoices that comply with the above requirements within 30 days from the receipt of the invoice.

Contract No. 2027-0004 United Samaritans Foundation

3. TERM OF AGREEMENT. The Services of ORGANIZATION are to commence on July 1, 2026, and end on June 30, 2027, unless the term of the agreement is otherwise terminated or extended, and shall be undertaken and completed in such sequence as to assure their expeditious completion in the light of the purposes of this Agreement. The point of contact for CITY shall be the City of Turlock, Housing Program Services Division, 156 South Broadway, Suite 140, Turlock, California, 95380.

4. GENERAL CONDITIONS. The ORGANIZATION agrees to comply with the requirements of Title 24 of the Code of Federal Regulations, Part 570 (the U.S. Housing and Urban development regulations concerning Community Development Block Grants (CDBG) including subpart K of these regulations, except that (1) the ORGANIZATION does not assume the recipient’s environmental responsibilities described in 24 CFR 570.604 and (2) the ORGANIZATION does not assume the recipient’s responsibility for initiating the review process under the provisions of 24 CFR Part 52. The ORGANIZATION also agrees to comply with all other applicable Federal, state and local laws, regulations, and policies governing the funds provided for under this contract. The ORGANIZATION further agrees to utilize funds available under this Agreement to supplement rather than supplant funds otherwise available. (a) ORGANIZATION agrees to submit quarterly program status reports to CITY, and other reports as may be required by CITY.
(b) ORGANIZATION agrees to maintain racial, ethnic, gender, head of household and family size data showing the extent to which these categories of persons have participated in, or benefited from, the project, and to provide such data in an activity report to CITY quarterly.
(c) ORGANIZATION agrees to keep all necessary books and records, including property, personnel and financial records, in connection with the operations and services performed under this Agreement, and shall document all transactions so that all expenditures may be properly audited.
(d) ORGANIZATION agrees that CITY or any authorized representative has access to and the right to examine all records, books, papers or documents related to the program/scope of services/project.
(e) ORGANIZATION agrees to provide to CITY at ORGANIZATION's cost, a certified audit performed by an accredited certified public accountant, of all funds received or utilized by ORGANIZATION, including the distribution of Community Development Block Grant Funds for fiscal year 2025-2026 to be delivered to CITY by October 1, 2025 or within 30 days of receipt of ORGANIZATION’s audited financials, whichever is later. (f) ORGANIZATION hereby warrants that it will establish and adopt safeguards to prohibit members, officers, and employees from using positions for a purpose that is or gives the appearance of being motivated by a desire for private gain for themselves or others, particularly those with whom they have family, business, or other ties. Further, no member, officer, or employee of ORGANIZATION who exercises any functions or responsibility with respect to the program during his or her tenure or for one year thereafter, shall have any interest, direct or indirect, in any Agreement or sub-agreement, or the proceeds thereof, either for themselves or those with whom they have family or business ties, for work to be performed in connection with the program assisted under this Agreement.

Contract No. 2027-0004 United Samaritans Foundation

(g) The undersigned persons signing as officers on behalf of ORGANIZATION, a party to this Agreement, hereby severally warrants and represents that said persons have authority to enter into this Agreement on behalf of said ORGANIZATION and to bind the same to this Agreement, and, further that said ORGANIZATION has authority to enter into this Agreement and that there are no restrictions or prohibitions contained in any article of incorporation or bylaws against entering into this Agreement.
(h) CITY shall not be responsible or liable for any debts, actions, obligations, negligence, or liabilities committed or incurred by ORGANIZATION, its staff or clientele, and ORGANIZATION hereby agrees to defend, hold harmless and indemnify CITY from and against any and all liabilities for debts, obligations, and negligence. No payment, however, final or otherwise, shall operate to release ORGANIZATION from any obligations under this Agreement.

Should either party be required to bring a legal action to enforce the provisions of this Agreement, the prevailing party shall be reimbursed for all court costs and all reasonable attorney's fees incurred in the prosecution or defense of said action.
(i) Both parties hereto in the performance of this Agreement will be acting in an independent capacity and not as agents, employees, partners or joint ventures with one another.

ORGANIZATION is not an employee of CITY and is not entitled to any of the rights, benefits, or privileges of CITY employees, including but not limited to medical, unemployment, or Workers' Compensation insurance.

5. OTHER PROVISIONS.
(a) During the performance of this Agreement, ORGANIZATION agrees as follows:
(1) ORGANIZATION shall not discriminate against any employee or applicant for employment because of race, color, religion, sex, age, handicap, sexual orientation, ancestry, national origin, familial status, veterans status, or any other basis prohibited by applicable law. ORGANIZATION shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, age, handicap, sexual orientation, familial status, veterans status, ancestry, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

ORGANIZATION agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.
(2) ORGANIZATION will, in all solicitations or advertisements for employees placed by or on behalf of ORGANIZATION, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, age, handicap, sexual orientation, ancestry, national origin, veterans status, familial status, or any other basis prohibited by applicable law.
(b) EQUAL OPPORTUNITY IN PARTICIPATION. Under the terms of Section 109 of the Housing and Community Development Act of 1974, and in conformance with CITY

Contract No. 2027-0004 United Samaritans Foundation

policy and all requirements imposed by or pursuant to the Regulations of the Department of Housing and Urban Development (24 CFR Part 570.602 issued pursuant to this section), ORGANIZATION shall not exclude any persons from participation in the program on the basis race, color, national origin, religion, or sex.

(c) Civil Rights
(1) Compliance. The ORGANIZATION agrees to comply with the civil rights laws of the State of California and with Title VI of the Civil Rights Act of 1964 as amended, Title VIII of the Civil Rights Act of 1968 as amended, Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended, Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive Order 11063, and Executive Order 11246 as amended by Executive Orders 11375, 11478, 12107 and 12086 as such laws and orders may be amended, modified or repealed from time to time and such other executive orders as may be applicable. (2) Nondiscrimination. The ORGANIZATION agrees to comply with the non-discrimination in employment and contracting opportunities laws, regulations, and executive orders referenced in 24 CFR 570.607, as revised by Executive Order 13279 as such laws and orders may be amended, modified or repealed from time to time. The applicable nondiscrimination provisions in Section 109 of the HCDA are still applicable. (d) BUSINESS AND EMPLOYMENT OPPORTUNITIES FOR
LOW/MODERATE INCOME RESIDENTS. ORGANIZATION will conform with the rules and regulations set forth under Section 3 of the Housing and Urban Development Act of 1968, (12 USC 1701u), as amended, and the HUD regulations issued pursuant thereto at 24 CFR Part 135, to the extent applicable. This act requires that, to the greatest extent feasible, opportunities for training and employment be given to lower income residents of the project area. (e) DRUG-FREE WORK PLACE. Organization will maintain a drug free work place and will comply with all applicable Federal, State and local laws pertaining to a drug-free work place.
(f) PROVISIONS REQUIRED BY LAW DEEMED INSERTED. Each and every provision of law and clause required by law to be inserted in this Agreement shall be deemed to be inserted herein, and the Agreement shall be read and enforced as though it were included herein, and if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon the application of either party, the Agreement shall forthwith be physically amended to make such insertion or correction. To the extent that any such laws are amended or repealed, ORGANIZATION shall comply with such laws as amended or repealed.

6. CITY RECOGNITION. The ORGANIZATION shall insure recognition of the role of the CITY in providing services through this Agreement. All activities, facilities and items utilized pursuant to this Agreement shall be prominently labeled as to funding source. In addition, the ORGANIZATION will include a reference to the support provided herein in all publications made possible with funds made available under this Agreement.

7. ADMINISTRATIVE REQUIREMENTS.
(a) Financial Management

Contract No. 2027-0004 United Samaritans Foundation

(1) Accounting Standards. The ORGANIZATION agrees to comply with 2 CFR Part 200 and agrees to adhere to the accounting principles and procedures required therein, utilized adequate internal controls, and maintain necessary source documentation for all costs incurred.
(2) Cost Principles. The ORGANIZATION shall administer its program in conformance with 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The Uniform Requirements superseded, consolidated, and streamlined requirements from eight OMB Circulars including OMB Circulars A-122, “Cost Principles for Non-Profit Organization,” or A-21, “Cost Principles for Educational Institutions,” or A-87, “Cost Principles for State, Local and Indian Tribal Governments,” as applicable. These principles shall be applied for all costs incurred whether charged on a direct or indirect basis. (b) Documentation and Record Keeping.
(1) Records to be maintained. The ORGANIZATION shall maintain all records required by the Federal regulations specified in 24 CFR 570.506 that are pertinent to the activities to be funded under this Agreement. Such records shall include but not be limited to:
a. Records providing a full description of each activity undertaken;
b. Records demonstrating that each activity undertaken meets one of the National Objectives of the CDBG program;
c. Records required to determine the eligibility of activities; d. Records required to document the acquisition,
improvement, use or disposition of real property acquired or improved with CDBG assistance; e. Records documenting compliance with the fair housing and equal opportunity component of the CDBG program;
f. Financial records as required by 24 CFR 570.502, and 2 CFR Part 200;
g. Other records necessary to document compliance with
Subpart K of 24 CFR Part 570.
(2) Retention. The ORGANIZATION shall retain all financial records, supporting documents, statistical records, and all other records pertinent to the agreement for a period of four (4) years. The retention period begins on the date of the submission of the CITY’S annual performance and evaluation report to HUD in which the activities assisted under the Agreement are reported on for the final time. Notwithstanding the above, if there is litigation, claims, audits, negotiations or other actions that involve any of the records cited and that have started before the expiration of the four-year period, then such records must be retained until completion of the actions and resolution of all issues, or the expiration of the four-year period, whichever occurs later.
(3) Client Data. The ORGANIZATION shall maintain client data demonstrating client eligibility for services provided. Such data shall include, but not be limited to, client name, address, income level or other basis for determining eligibility, and description of