Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 1 of 6
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
City of Patterson
P.O. Box 667
Patterson, CA 95363
Attention: City Clerk
Recording Fee Exempt (Gov. Code § 6103) SPACE ABOVE THIS LINE FOR RECORDER'S USE APN: 020-095-001
FOURTH AMENDMENT TO THE
DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF PATTERSON AND NUCLEUS HOMEOPATHICS, INC.
(Amendment to Recorded Document No. 2018-0031381-00)
Ordinance No. 815, Adopted on December 5, 2017 (Original Development Agreement) Ordinance No. 820, Adopted July 17, 2018 (First Amendment) Ordinance No. 835, Adopted December 4, 2018 (Second Amendment) Ordinance No. 842, Adopted April 21, 2020 (Third Amendment) Ordinance No. ___, Adopted __________________, 2023 (Fourth Amendment) Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 2 of 6
FOURTH AMENDMENT TO THE DEVELOPMENT AGREEMENT
THIS FOURTH AMENDMENT TO THE DEVELOPMENT AGREEMENT (“Fourth Amendment”) is made and entered into as of this _______________, 2023, by and between the CITY OF PATTERSON, a California municipal corporation (“City”), and NUCLEUS HOMEOPATHICS, 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. 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 the City and an individual 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.
B. On December 5, 2017, the City Council approved Ordinance No. 815, which authorized the Parties to enter into a development agreement for the operation of a cannabis manufacturing business (the “Development Agreement”) located at 100 West Las Palmas Avenue, Suite G, Patterson, CA 95363, identified as Stanislaus County Assessor’s Parcel Number 131-003-017.
C. City recorded the Development Agreement in the Office of the Stanislaus County Recorder as Document No. 2018-0031381-00.
D. City recorded the First Amendment to the Development Agreement in the Office of the Stanislaus County Recorder as Document No. 2018-0058583-00 (“First Amendment”). The First Amendment added a distribution license to Developer’s Authorized License in order to transport cannabis products between cannabis businesses pursuant to MAUCRSA.
E. City recorded the Second Amendment to the Development Agreement in the Office of the Stanislaus County Recorder as Document No. _________________ (“Second Amendment”). The Second Amendment added cannabis cultivation and a microbusiness to Developer’s Authorized License.
F. City recorded the Third Amendment to the Development Agreement in the Office of the Stanislaus County Recorder as Document No. _________________ (“Third Amendment”). The Third Amendment allows Developer to continue its cannabis business in an alternative location within the City.
G. The Development Agreement, at Section 4.2, requires Developer to pay to the City certain amounts to offset the impacts to City infrastructure, services, and Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 3 of 6
neighborhoods, commensurate with the private benefits conferred on Developer (the “Public Benefit Amount”).
H. On May 23, 2023, after Developer had failed to remit certain required Public Benefit Amount payments, resulting in an overdue Public Benefit Amount (the “Delinquent Public Benefit Amount”) and a default of the Development Agreement, Developer and the City reached a resolution to settle the Delinquent Public Benefit Amount, cure the default, and bring the Project current, subject to certain terms that would necessitate this Fourth Amendment to the Development Agreement (the “Fourth Amendment”).
I. On July 13, 2023, after a properly noticed public hearing, the Planning Commission reviewed this Fourth Amendment and provided its recommendations to the City Council.
J. Pursuant to Government Code sections 65867 and 65868, the City Council held duly noticed and properly conducted public hearings on August 15, 2023, and _________, 2023, regarding this Fourth Amendment. Pursuant to Government Code section 65867.5, the City Council found the provisions of this Fourth Amendment to be consistent with the City’s General Plan, and authorized execution of this Fourth Amendment.
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
1. Recitals. The above recitals are incorporated by this reference and made a part of this Fourth Amendment.
2. Effect of Amendment. Except as provided herein, the defined terms used in this Fourth Amendment shall have the same meaning as the terms in the Development Agreement. Unless expressly amended by this Fourth Amendment, all unaltered terms and provisions of the Development Agreement shall remain in effect as provided therein.
If any terms, provisions, or definitions in this Fourth Amendment conflict with terms, provisions, or definitions in the Development Agreement, the terms, provisions, and definitions in this Fourth Amendment shall control. All references in the Development Agreement to the “Agreement” shall be deemed to refer to the Development Agreement and this Fourth Amendment.
3. Effective Date. This Fourth Amendment shall be effective (the “Amendment Effective Date”) only after (a) thirty (30) days have passed from the City Council’s adoption of the ordinance approving this Fourth Amendment; and (b) all Parties have executed this Fourth Amendment. This Fourth Amendment shall be recorded by the City in the County of Stanislaus within ten (10) days following the Amendment Effective Date.
Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 4 of 6
4. Amendments to the Development Agreement.
A. Section 4.2., subparagraph (a) of the Development Agreement is hereby removed in its entirety and replaced with the following language, which shall read as follows:
Section 4.2. Public Benefit
(a) The Parties acknowledge and agree that this Agreement confers substantial private benefits upon Developer that will place burden 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 upon Developer (the “Public Benefit”). In consideration of the foregoing, Developer shall remit to City as follows:
(i) As of the Amendment Effective Date, Developer has paid to City in full all outstanding Public Benefit amounts due and owing for the full time period before the Amendment Effective Date.
(ii) Effective the first business day following the conclusion of the Project’s first quarter of operation, a Public Benefit amount of Seven Thousand Dollars ($7,000.00), or five percent (5%) of Developer’s gross receipts from operations, whichever is higher, shall be due and payable to the City on the first business day of each month going forward.
B. Section 4.7. of the Development Agreement is hereby removed in its entirety and replaced with the following language, which shall read as follows:
Section 4.7. City Tax. Developer will be subject to the City’s cannabis tax on an ongoing basis.
C. A new Section 2.13 shall be added to the Development Agreement, Article 2, Development of Property, and it shall read as follows:
Section 2.13. Schedule to Open Project. Developer shall ensure the Project is open and operational within twelve (12) months of the Amendment Effective Date. In the event the Project requires additional time in order to become operational, Developer and City may agree in writing to extend this period to eighteen (18) months upon Developer’s showing that progress is being made to the City’s satisfaction. Developer’s failure to comply with the terms of this Section shall constitute a default as defined in Section 8.1.
Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 5 of 6
5. Third Party Legal Challenge. In the event that legal action or special proceedings are commenced by any person or entity challenging this Fourth Amendment, 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 to this Fourth Amendment, with legal counsel satisfactory to 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. Unless prevented by law or court order, City shall continue to process any applications related to this Fourth Amendment and the Development Agreement, and any delay or failure to process such approvals or to take such other actions shall be considered a default by City of this Fourth Amendment and the Development Agreement.
6. Counterparts. This Fourth Amendment may be executed in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
7. Authority. The Parties and their signatories below warrant and represent that they have the power and authority to enter into this Fourth Amendment and the names, titles, and capacities herein stated on behalf of any entities, persons, states or firms represented or purposed 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 Fourth Amendment have been fully complied with. Further, by entering into this Fourth Amendment, each Party represents that this Fourth Amendment has not caused any breach of the terms or conditions of any other contract or agreement to which such Party is obligated.
[SIGNATURES ON FOLLOWING PAGE]
Fourth Amendment to the Development Agreement
City of Patterson &
Nucleus Homeopathics, Inc.
{CW129858.5} Page 6 of 6
IN WITNESS WHEREOF, this Fourth Amendment has been entered into by and between Developer and City as of the Amendment Effective Date, as defined above.
CITY
CITY OF PATTERSON, a California
municipal corporation
By:
Ken Irwin, City Manager
Date:
Attest:
By:
Aracely Alegre, City Clerk
Approved to as Form
By:
Nubia I. Goldstein
City Attorney
DEVELOPER
NUCLEUS HOMEOPATHICS, INC., a
California corporation
By:
Its:
Date:
Third Amendment to the Development Agreement
City of Patterson &
{CW129858.5} Nucleus Homeopathics, 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.
Third Amendment to the Development Agreement
City of Patterson &
{CW129858.5} Nucleus Homeopathics, 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.