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shall adequately document that it has met the Plan's obligations and commitments as a <br />condition of renewal/extension of this AGREEMENT upon expiration of the initial term and <br />any extensions. <br />2. Records Inspection Examination god Audit <br />OPERATOR acknowledges and agrees that CITY is empowered under this Agreement <br />to inspect, examine and audit OPERATOR's books and records (including tax filings and <br />returns), to ascertain the amount of operating fees due and owing. CITY or its authorized <br />agents shall have the power and authority to conduct a full inspection, examination and audit <br />of such books and records (including tax filings and returns) at any reasonable time, including <br />but not limited to, during normal business hours. In the event any such books, records, tax <br />filings and returns cannot be made fully available within the City of Santa Ana, OPERATOR <br />acknowledges and agrees that it shall reimburse CITY for the cost of all transportation, <br />lodging, meals, portal-to-portal travel time, and other incidental costs reasonably incurred by <br />CITY or its authorized agents in obtaining said full inspection, examination and audit. In the <br />event that said records inspection, examination and audit determines that a net operating <br />agreement fee payment deficiency of greater than Five Percent (5%) exists; OPERATOR <br />acknowledges and agrees that it shall reimburse CITY for the full cost of said records <br />inspection, examination and audit reasonably incurred by CITY or its authorized agents. <br />3. Term. <br />This AGREEMENT shall start on the date indicated above and shall terminate on <br />December 31, 2020 regardless of starting date unless terminated earlier in accordance with <br />Section 9 or 10 of this AGREEMENT. The AGREEMENT will have one (1) two-year extension <br />period until December 31, 2022 exercisable by a writing executed by the City Manager and <br />City Attorney's Office with the approval of OPERATOR. <br />4. Business License Required. <br />A valid City of Santa Ana Business License is required for all persons engaged in <br />transacting and carrying on any commercial cannabis business activity in the City of Santa <br />Ana. It is unlawful for any person or legal entity to commence, transact or carry -on cannabis <br />business activity in the City of Santa Ana without first having procured a City of Santa Ana <br />cannabis business license. <br />5. Operating Commercial Cannabis Business <br />OPERATOR shall not operate a commercial cannabis business authorized under the <br />Santa Ana Municipal Code unless: <br />A. it is the holder of a valid Regulatory Safety Permit issued by CITY in accordance with <br />the procedures and requirements of Article 1 of Chapter40, of the Santa Ana Municipal <br />Code; and <br />B. At such time as the State of California requires cannabis business facilities and <br />businesses to hold a valid license or permit issued by the State of California, it also <br />holds such license or permit; unless, however, such permit or license is subsequently <br />2 <br />