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3 DOCSOPEN\MU210\317\1012155.v2-2/26/25DOCSOPEN\MU210\317\1012155.v1-2/26/25 DOCSOPEN\MU210\317\1012155.v2-2/26/25 3 DOCSOPEN\MU210\317\1012155.v1-2/26/25 All funds related to the cannabis business will be deposited into an account in the name of the City. GWC’s management fee will be paid from that account based on a percentage of either gross revenue or net revenue, depending on the physical location of the cannabis business. In either scenario described in Section 5 (c), expenses related to the operation of the license will be paid from gross revenue deposited into the City account and shall be considered to be revenues of a licensed cannabis business that are reinvested in the business pursuant to Minn. Stat. 342.185. The amount paid from the City to GWC under the management fee will be less than 10% of revenue. 4. TRUE PARTY OF INTEREST. The City and GWC shall comply with all reporting, disclosure, and other requirements related to true party of interest regulations pursuant to Minn. Stat. 342.185 as they apply to this Parties’ relationship. GWC may be disclosed as a true party of interest if the Parties alone or after receiving direction from the OCM determine that the management fee structure meets the requirements of Minn. Stat. 342.185. If the OCM determines that GWC is a true party of interest with an ownership interest that prohibits the City from applying for or obtaining a municipal cannabis license, the Parties agree to negotiate in good faith to amend this MOU or the Definitive Documents to meet the requirements of the OCM and resubmit or clarify any portions of the license application. 5. DEFINITIVE DOCUMENTS. Upon licensure by the OCM of the City, the Parties shall work expeditiously and in good faith to negotiate and enter into the Definitive Documents. The Parties agree that the Definitive Documents shall include agreements for consultant services, branding services, staffing services, and related services as discussed above, and any other documents necessary to complete the transactions contemplated therein. The Parties shall work together with regard to any third parties to ensure performance of the covenants contained with the Definitive Documents. 6. AMENDMENT. The City Manager of the City of Mounds View may approve amendments to this MOU as necessary to timely respond to inquiries from the OCM related to the application for a municipal cannabis retailer license. 7. MISCELLANEOUS. The Parties shall not be deemed to be in a relationship as partners by virtue of this MOU nor shall either of them be deemed to be an agent, representative, trustee, or fiduciary of the other. Neither Party shall be any authority to bind the other to any agreement, except as set forth herein. Each party shall be responsible for its own fees and expenses incurred in connection with this MOU. This MOU may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile signatures and electronic typed signatures shall constitute original signatures. Formatted: No underline Formatted: No underline Formatted: No underline Commented [JS6]: I am assuming that the scenario that would sink our ship is if the OCM determines that the relationship violates the 10% threshold in 342.185. Commented [KL7R6]: The statute refers to 10% ownership i.e. corporate shareholder situation - I don’t think you could get there with a municipal entity. Commented [JS8]: This is intended to acknowledge that GWC may be a true-party of interest, but it is the parties intent to ensure that GWC’s “interest” is not determined to be an ownership interest that would violate 342.185. I assume the OCM will be on the lookout for folks trying to sneak something by them, so I think that erring on the side of disclosure could be a benefit. Commented [KL9R8]: See comment above - GWC cannot be a TPI in this contractual relationship. They have no desire to be, they have no interest in, nor would they ever gain any ownership interest. If the OCM determines a contract is a TPI there is no muni contract scenario that will work under the principles we have agreed to in this transaction where the city owns the license and it is up to the contractor to do everything else.