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A-2018-308 INSURANCE NOT REQUIRED WORK MAY PROCEED CLERK OF COUNCIL OPERATING AGREEMENT FOR JAN 2 2 2015 CANNABIS TESTING FACILITY/LABORATORY 3<y51D� This Operating Agreement ("AGREEMENT") is dated December 12, 2018 between the City of Santa Ana, a charter city and municipal corporation ("CITY") and CB Labs, Santa Ana, LLC, a Limited Liability Company ("OPERATOR"), collectively referred to as "the Parties". This AGREEMENT shall become effective on the date that OPERATOR is issued a Regulatory Safety Permit by CITY for the operation of a cannabis testing facility/laboratory business conducting cannabis testing and/or laboratory services in whole or in part of its operations transacted and carried -on by OPERATOR at the following subject property location, 1910 E. Warner Ave, #A, Santa Ana, California 92705. 1. Public Benefit. A. Intent. The purpose of this Operating AGREEMENT is to collect fees for the operation of a cannabis testing facility/laboratory and to provide fees for mitigation options to be used by CITY to compensate for impacts to CITY services, residents, and/or businesses as set forth in Santa Ana Municipal Code Chapter 40. The Parties agree that this AGREEMENT confers substantial private benefits on OPERATOR which should be balanced by commensurate public benefits. As part of the cannabis Regulatory Safety Permit process, OPERATOR agrees to enter into this AGREEMENT. OPERATOR acknowledges that CITY and OPERATOR have had extensive negotiations and proceedings prior to entering into this AGREEMENT. OPERATOR has elected to execute this AGREEMENT as it provides OPERATOR with important economic benefits. Accordingly, the Parties intend to provide consideration to the public to balance the private benefits conferred on OPERATOR by providing mitigation measures to the public and to pay for CITY services as a result of the operating agreement fees collected. B. Local Hiring and Sourcing. OPERATOR agrees to use its reasonable efforts to hire qualified City of Santa Ana residents living in Santa Ana to work at its cannabis testing facilityllaboratory business. OPERATOR shall also use reasonable efforts to retain the services of qualified contractors and suppliers who are located in the City of Santa Ana or who employ a significant number of City of Santa Ana residents. OPERATOR shall make a good faith effort to advertise on various social media sites, at local job fairs, and through public agencies and organizations. C. Community Benefit and Sustainable Business Practices Plan. OPERATOR agrees to submit a Community Benefit and Sustainable Business Practices Plan ("Plan") to CITY that is hereby attached and incorporated into this AGREEMENT as ("EXHIBIT A"). Said Plan shall detail OPERATOR's experience working with community-based groups such as school districts, college districts, city or county agencies, non-profit organizations, artist or downtown groups. The Pian shall also include a description of OPERATOR's efforts for recruiting and hiring local persons and businesses. Said Plan must also outline commitments by OPERATOR to engage its staff in community service events or programs in the City of Santa Ana. Plan must also outline and address sustainable business practices. OPERATOR shall adequately document that it has met the Plan's obligations 1