Amended and Restated Development Agreement (Green Catalyst Enterprises)

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RECORDING REQUESTED BY

AND WHEN RECORDED MAIL
TO:

City of Patterson
P.O. Box 667
1 Plaza
Patterson, CA 95363
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER'S USE
Recording Fee Exempt per Government Code §6103
APN: 021-088-016

AMENDED AND RESTATED DEVELOPMENT AGREEMENT

THIS AMENDED AND RESTATED DEVELOPMENT AGREEMENT
(“Agreement”) is made and entered into this ______________________, _____, by and between the CITY OF PATTERSON, a municipal corporation of the State of California (“City”), DARRON SILVA, an individual (“Owner”), and GREEN CATALYST ENTERPRISES, INC., a California corporation (“Tenant”). Owner and Tenant may be referred to herein individually as “Developer” or collectively as “Developers.” City, Owner, or Tenant 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 {CW140641.12}
Activity, as defined in Section 1.4 of this Agreement, may operate in a particular jurisdiction.

D. On November 7, 2017, the City Council adopted Ordinance No. 806 to revise Patterson Municipal Code 6.56 to establish a Cannabis Business Program to regulate all cannabis businesses within the City, as may be updated from time to time.

E. Pursuant to Chapter 6.56 of the Patterson Municipal Code, all cannabis businesses operating within City must enter into a Development Agreement with City.

F. Developers propose to improve, develop, and use real property located in the City of Patterson to operate a Cannabis Dispensary, in strict accordance with California Cannabis Laws, and the Municipal Code of the City of Patterson, as each may be amended from time to time (the “Project”).

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 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. Consistent with the requirements of the Development Agreement Statute, City adopted Patterson Municipal Code Chapter 18.20 et seq. (“City Development Agreement Ordinance”), authorizing the use of and establishing the procedures and requirements for the consideration of development agreements within the City.

I. Government Code section 65865 requires that an applicant for a development agreement hold a legal or equitable interest in the real property that is the subject of the development agreement.

J. Owner is the fee title owner to the property located at 520 Park Center Drive, Patterson, CA 95363 (APN 021-088-016) (the “Property”), as more particularly described in the legal description attached hereto as Exhibit A. In 2017, Owner acquired the Property from City, subject to a promissory note executed between Owner and City.

K. Tenant has leased the Property from Owner for the purpose of operating a Cannabis Dispensary. Owner is aware of, and agrees to, Tenant operating the Project at the Property.

L. On December 5, 2017, Developers and City first entered into a Development Agreement prior to the Project commencing operation, as later amended by that First Amendment to the Development Agreement (dated December 4, 2018). This Agreement shall supersede and take the place of the original Development {CW140641.12}
Agreement and all subsequent amendments, which shall no longer have any force or effect.

M. On May 10, 2018, the Planning Commission approved Conditional Use Permit #17-20 and Architectural & Site Plan Review #17-05 for the Project (Planning Commission Resolution No. 2018-06); and
N. On August 22, 2024, the Planning Commission recommended the City Council adopt an ordinance to approve this Agreement.

O. On ____________, _____, the City Council reviewed, considered, adopted, and entered into this Agreement pursuant to Ordinance No. _____.

P. City and Developers desire to enter into this Agreement to (i) facilitate the orderly development of the Property; (ii) create a physical environment that is consistent with and complements 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; (v) reduce the economic risk of development of the Property to both City and Developer; and (vi) establish public benefits that will be provided to City through operation of the Project.

Q. This Agreement is entered into pursuant to the Development Agreement Statute and the City Development Agreement Ordinance. The Parties intend through this Agreement to allow Developers to develop and operate the Project in accordance with the terms of this Agreement.

R. The City Council has determined that this Agreement is consistent with City’s General Plan and have conducted all necessary proceedings in accordance with the Patterson Municipal Code for the approval of this Agreement.

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:
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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 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 this Agreement, the provisions shall prevail.

Section 1.3. Exhibits. The following “Exhibits” are attached hereto and incorporated into this Agreement:

Designation Description
Exhibit A Legal Description of the Property
Exhibit B Notice of Non-Performance Penalty
Exhibit C Indemnification Agreement
Exhibit D Development Agreement Ordinance
Section 1.4. Definitions. In this Agreement, unless the context otherwise requires, the terms below have the following meaning:
(a) “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 or older in California pursuant to the California Cannabis Laws. (b) “Agreement” means this Development Agreement, inclusive of all Exhibits attached hereto and all amendments hereto.
(c) “AUMA” means the Adult Use of Marijuana Act (Proposition 64) approved by California voters on November 8, 2016.
(d) “Authorized Licenses” has the meaning set forth in Section 2.3. (e) “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.
(f) “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, {CW140641.12}
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. (g) “Cannabis Business Program” means the cannabis business program established and authorized by Patterson Municipal Code Chapter 6.56. (h) “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.
(i) “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.
(j) “City” means the City of Patterson, a municipal corporation having general police powers.
(k) “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.
(l) “Conditional Use Permit” means a conditional use permit issued by City pursuant to Patterson Municipal Code section 18.18.020. (m) “Conditionally Extended Term” or “Conditionally Extended Terms” have the meaning set forth in Section 1.7.
(n) “CUA” means the Compassionate Use Act (Proposition 215) approved by California voters on November 5, 1996.
(o) “Distribution” means the procurement, sale, and transport of cannabis and cannabis products between licensees.
(p) "Gross Receipts from Operations" means total revenue actually received or receivable from operation of the 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, {CW140641.12}
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 Project are captured. This definition shall therefore be given the broadest possible interpretation consistent with this intent.
(q) “Marijuana” has the same meaning as cannabis and those terms may be used interchangeably.
(r) “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.
(s) “Ministerial Fee” or “Ministerial Fees” has the meanings set forth in Section 4.1.
(t) “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.
(u) “State Cannabis Distribution Regulations” means the regulations related to cannabis distribution issued by a State Licensing Authority in accordance with Business and Professions Code section 26013.
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(v) “State Cannabis Regulations” means the regulations promulgated by the State Licensing Authority pursuant to the California Cannabis Laws. (w) “Type 3A” or “Indoor” means a state license issued by a State License Authority 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.
(x) “Type 6” or “Manufacturer 1” means a state license issued by a State License Authority pursuant to the California Cannabis Laws for the manufacturing, packaging, and labeling of manufactured products using nonvolatile solvents, or no solvents.
(y) “Type 7” or “Manufacturer 2” means a state license issued by a State Licensing Authority pursuant to California Cannabis Laws for the manufacturing, packaging, and labeling of manufactured products using volatile solvents. (z) “Type 11” or “Distributor” means a state license issued by a State Licensing Authority pursuant to the California Cannabis Laws for the procurement, sale, and transport of cannabis and cannabis products between cannabis business licensees. (aa) “Vertically Integrated Cannabis Business” means a business that engages in Commercial Cannabis Activity related to the cultivation, distribution, and manufacturing of cannabis and cannabis products pursuant to the Authorized Licenses.

Section 1.5. Project is a Private Undertaking. The Parties agree that the 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 Developers or the 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 initial term of this Agreement shall be five (5) years from the Effective Date, unless terminated or extended earlier, as set forth in this Agreement (the “Initial Term”). After the Initial Term, the City Manager shall perform a review of Developer’s performance under this Agreement to verify that Developer is complying with this Agreement, the California Cannabis Laws, the Conditional Use Permit, and all applicable Subsequent City Approvals. If the City Manager determines Developer is in compliance with the Agreement, the California Cannabis Laws, the Conditional Use Permit, and applicable Subsequent City Approvals, the City Manager in his or her sole discretion may extend the term of this Agreement in increments of nine (9) months (individually, a “Conditionally Extended Term”, or collectively, the “Conditionally Extended Terms”), for a maximum of four (4) Conditionally Extended Terms.

Collectively, the Conditionally Extended Terms, if granted, shall not exceed Thirty-Six (36) Months, unless otherwise extended pursuant to the terms of this Agreement. The Initial Term and any Conditionally Extended Terms shall collectively be referred to as {CW140641.12}
the “Term”. Any extension of this Agreement beyond the Term shall be subject to approval by the City Council. The City Manager’s review of the Agreement for purposes of this Section 1.7 shall be a Minor Amendment of this Agreement. The City Manager in his or her sole discretion may decide that any extension beyond the Initial Term shall be subject to the approval of City Council.
(a) Government Tolling or Termination. City may provide written notice to Developers to cease all Commercial Cannabis Activity, upon which Tenant 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”). Developers shall not accrue or be liable to City for any Ministerial Fees or Public Benefit Amount during the Tolling Period. Tenant shall resume paying any applicable fees after the Tolling Period ends. City and Developers 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) Developers Tolling or Termination. Developers 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) this Agreement, (c) Conditional Use Permit, (d) Indemnification Agreement, and (e) 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 Property promptly after the Ordinance approving this Agreement becomes effective.

Section 1.11. Funding Agreement for Processing Costs. On November 3, 2017, Developer deposited Twenty-Five Thousand Dollars ($25,000) with City to pay for all actual fees and expenses incurred by City that are related to the preparation, processing, and administration of this Agreement, including recording fees, publishing {CW140641.12}
fees, staff time, and consultant and attorney fees and costs (collectively, “Processing Costs”). Developer shall maintain a funding agreement for Processing Costs at all times during the time that the Project is operational. Developer shall be entitled to a refund of available Processing Costs only after City determines all financial obligations associated with the Project have been received and paid by City.
(a) Apportionment of Processing Costs. If the amount deposited for purposes of Processing Costs is insufficient to cover all Processing Costs, Developers shall deposit with City such additional funds necessary to pay for all Processing Costs within thirty (30) days. The failure to timely pay any such additional amounts requested by City shall be considered a material default of this Agreement and City may terminate this Agreement.
(b) Accounting. Developers 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 Developers. During the Term, in developing the Project described herein, Developers are 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 Developers and may not be modified or terminated by City except as set forth in this Agreement or with Developers’ written consent.

Section 2.2. Vested Right to Develop. In accordance with Section 2.1, Developers shall have the vested right to develop and use the 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 Property for Commercial Cannabis Activity consistent with the following license types (the “Authorized Licenses”):

Type 3A Indoor
Type 6 Manufacturer 1
Type 7 Manufacturer 2
Type 10 Retailer
Type 11 Distributor

(a) License Required. Developer shall be permitted to use the Property consistent with the Type 3A, Type 6, Type 7, or Type 10 license for the Term of this Agreement and during the time Developer is applying for the Authorized Licenses with the applicable State Licensing Authority. Notwithstanding the foregoing, Developer is required to apply for and obtain the Type 3A, Type 6, Type 7, or Type 10 license from the State Licensing Authority. If the State Licensing Authority does not grant the Type {CW140641.12}
3A, Type 6, Type 7, or Type 10 license to Developer, Developer shall immediately cease Commercial Cannabis Activity on the Property and this Agreement shall terminate immediately. Developer shall also, within thirty (30) days of receiving notice from the State Licensing Authority, notify City of the State Licensing Authority’s denial, revocation, suspension or rejection of any Authorized License. (b) Type 11 License Not Required. So long as Developer maintains the Type 3A, Type 6, Type 7, or Type 10 license, Developer shall also be permitted to use the Property consistent with the Type 11 license for the Term of this Agreement and during the time Developer is applying for any Authorized Licenses with the applicable State Licensing Authority. If Developer’s Type 3A, Type 6, Type 7, or Type 10 license is not granted, or is revoked, denied, suspended, or otherwise ineffective, Developer shall immediately cease operations pursuant to the Type 11 license as well. In this situation, the provisions of subdivision (a) shall apply. If Developer’s Type 11 license is not granted, or is revoked, denied, suspended, or otherwise ineffective, Developer may continue to use the Property consistent with the Type 3A, Type 6, Type 7, or Type 10 license.
(c) 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 the development and ongoing use of the Property.

Section 2.4. Major Amendment to Permitted Uses. Developers 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”).

Section 2.5. Conditional Use Permit. Prior to commencing operation of any Commercial Cannabis Activity on the Property, Developers shall obtain a Conditional Use Permit and any applicable Subsequent City Approvals. Developers shall be required to comply with all provisions of the Patterson Municipal Code and any City rules and administrative guidelines associated with implementation of the Cannabis Business Program. Nothing in this Agreement shall be construed as limiting the ability of City to amend the Patterson Municipal Code or issue rules or administrative guidelines associated with implementation of the Cannabis Business Program or Developers’ obligation to strictly comply with the same.

Section 2.6. Subsequent Entitlements, Approvals, and Permits. Successful implementation of the Project shall require Developers 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 {CW140641.12}
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 and administrative guidelines associated with implementation 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. Developers will be required to comply with any and all administrative guidelines adopted by City that govern or pertain to the Project.

Section 2.7. Initiatives and Referenda. If any City ordinance, rule or regulation, or addition to the Patterson Municipal Code 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 Developers in this Agreement, such Patterson Municipal Code changes shall not be applied to the Property or Project; provided, however, the Parties acknowledge that City’s approval of this Agreement is a legislative action subject to referendum. City shall cooperate with Developers 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. Developers acknowledge 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 Project or the ability of City to issue a permit to Developers 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. Developers’ Right to Rebuild. Developers may renovate portions of the Project any time within the Term of this Agreement consistent with the Patterson Municipal Code. Any such renovation or rebuild shall be subject to all design, building code, and other requirements imposed on the Project by this Agreement.

Section 2.10. Changes Mandated by Federal or State Law. The Project shall be subject to subsequently enacted state or federal laws or regulations that may preempt the Patterson Municipal Code, 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 Pilot 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, {CW140641.12}
City or Developers 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 Patterson Municipal Code or this Agreement. Promptly thereafter, City and Developers 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 Developers will attempt to preserve the terms of this Agreement and the rights of Developers 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 Developers 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, Developers’ proposed changes to the 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 development 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 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 Project, City may select an option which, in its discretion, minimizes, so far as reasonably possible, the impact on development and use of the Project in accordance with this Agreement, while still addressing such health and safety emergency in a manner acceptable to City.

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 Patterson Municipal Code, 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 Project, in general accordance with this Agreement (“Subsequent City Approvals”). Nothing herein shall require City to provide Developers with Subsequent City Approvals prior to, or without complying with, all of the requirements in this Agreement, the Patterson Municipal Code, 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 Developers during the Term of this Agreement. {CW140641.12}
Section 3.3. Cooperation Between City and Developers. Consistent with the terms set forth herein, City agrees to cooperate with Developers, 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 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 Project as contemplated by the Parties in this Agreement.

ARTICLE 4

PUBLIC BENEFIT, PROCESSING, AND OVERSIGHT
Section 4.1. Processing Fees and Charges. Developers 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) Public Benefit Requirement. 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”). (b) Outstanding Public Benefit Payment. Developer hereby agrees to pay to City a fixed sum of Twenty-Two Thousand Five Hundred Eighty-Six and 24/100 Dollars ($22,586.24) to offset the entire outstanding Public Benefit amount due and owed to City arising before the Effective Date (“Adjusted Public Benefit”). Payment shall be due to City promptly after the Effective Date, but no later than ninety (90) days after the Effective Date. Upon receipt of the Adjusted Public Benefit, Developer will have paid to City in full all outstanding Public Benefit amounts due and owing for the full time period before the Effective Date.
(c) Project Subject to Citywide Cannabis Business Tax. The Project shall be subject to the following “Cannabis Business Tax,” as applicable to the Gross Receipts generated by the Project (pursuant to City Council Resolution No. 2021-44):
7% of Gross Receipts from retail operations each month; and 5% of Gross Receipts from manufacturing operations each month; and {CW140641.12}

2.5% of Gross Receipts from cultivation operations each month. (d) Public Benefit Amount. As of the Effective Date, the following payment shall be due and payable to City on the first business day of each month going forward (referred to as the “Public Benefit Amount”):

WHICHEVER IS GREATER OF THE FOLLOWING AMOUNTS:

The flat sum of Seven Thousand Dollars ($7,000.00), OR
Sums due and owed to City pursuant to the Cannabis
Business Tax, as described in Section 4.2(c) above.
(e) Filing of Tax Statement. Developers 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 Project during the applicable time period. Developers shall provide a copy of such statement to City upon request by City.

Section 4.3. Reporting. Developers 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 Property or at an alternate facility as approved in writing by the City Manager or his or her designee. Developers further agree to provide a copy of the lease between Owner and Tenant, at City’s request.

Section 4.5. Penalty. Developers acknowledge 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 Developers fail 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 one percent (1%) shall be applied to all past due payments. City shall deliver to Developers a “Notice of Non-Performance Penalty,” attached hereto as Exhibit B. {CW140641.12}
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 Developers fail 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, Developers 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. Taxes by Other Public Agencies. Developer and the 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, or 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).

ARTICLE 5

PUBLIC FACILITIES, SERVICES, AND UTILITIES
City shall use the Public Benefit Amount to pay for the impact on and maintenance or improvement of City neighborhoods and the existing level of service of City infrastructure, facilities, and services to accommodate for the Project.

ARTICLE 6

INSURANCE AND INDEMNITY
Section 6.1. Insurance. Developer shall require all persons doing work on the Project, 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. {CW140641.12}
(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 Developer’s employees employed at or on the 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 Project 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.
{CW140641.12}
(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 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 Project, this Agreement, any applicable Conditional Use Permit, or Subsequent City Approvals. Developers shall acknowledge its indemnification obligations by execution of the form included as Exhibit C attached hereto (“Indemnification Agreement”). Pursuant to Section 6.4, Developers shall also defend City and 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 Project, this Agreement, any applicable Conditional Use Permit, or Subsequent City Approvals.

Section 6.4. Failure to Indemnify and Defend.
(a) Failure to Indemnify; Waiver. Failure by Developers 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. Developers’ failure to indemnify City shall be a waiver by Developers of any right to proceed with the Project, or any portion thereof, and a waiver of Developers’ 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 Developers’ failure to indemnify City.
(b) Failure to Defend; Waiver. Developers shall have the option to defend City and 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 Project, this Agreement, any applicable Conditional Use Permit, or Subsequent City Approvals. Developers’ failure to defend City or City’s Agents shall be a waiver by Developers of any right to proceed with the Project, or any portion thereof, and a waiver of Developers’ 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, {CW140641.12}
Subsequent City Approvals, or City’s failure to defend any claim, action, or proceeding based on Developers’ failure to defend 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 Developers and, therefore, Developers hereby waive all claims for damages against City for breach of this Agreement.

Developers further acknowledge 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. Developers therefore waive 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 Developers are opposed.

Developers further acknowledge 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 Developers waive 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 Property 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 Property 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. Default. Failure or unreasonable delay by either Party to perform any term or condition of this Agreement shall constitute a default. In the event of default, the Party alleging such default or breach shall give the other Party not less than thirty (30) days’ notice in writing specifying the nature of the alleged default and the manner in which said default may be satisfactorily cured. During any such 30-day period, the Party charged shall not be considered in default for purposes of termination of this Agreement or institution of legal proceedings. After notice and expiration of the 30-day period, if such default has not been cured or cure is not being diligently pursued in the manner set forth in the notice, the charging Party may at its option: (i) terminate this Agreement, in which event neither Party shall have any further rights against or liability {CW140641.12}
to the other with respect to this Agreement, or (ii) institute legal or equitable action to cure or remedy any default.

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 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’ performance of the Agreement or violation of any City ordinances, regulations, and policies regulating the use and development of the Property or the Project subject to this Agreement.

Section 8.4. 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.

Section 8.5. 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, 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 {CW140641.12}
such cause shall be in effect for the period of forced delay or longer, as may be mutually agreed upon.

Section 8.6. Appeals. Developer may appeal any adverse decision or action of City pursuant to Patterson Municipal Code Chapter 1.36.

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 agrees provide Developer with a release or such other document as may be required to remove this Agreement as an encumbrance on the title of the Property.

Section 9.2. Effect of Termination. Termination of this Agreement shall eliminate any further obligation of any Party to comply with this Agreement, or some portion thereof (if such termination relates to only part of the Property or Project). Termination of this Agreement, in whole or in part, shall not, however, eliminate the rights of either Party to seek any applicable and available remedies or damages based upon acts or omissions occurring before termination.

Section 9.3. Survival After Termination. 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.

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 Property, 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. The City Manager's approval of Developer's request for assignment of this Agreement shall not be unreasonably withheld, and the City Manager's determination shall take into account the proposed assignee's experience, financial resources, background information, competency, and compliance with Department of Cannabis Control regulations. 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” to be recorded on the title to the Property. With respect to the prohibition as it relates to Developers’ business entity, City agrees to not unreasonably withhold its authorization to transfer any of Developers’ business interests. {CW140641.12}
Section 10.2. Covenants Running with the Land. This Agreement is an instrument affecting title to the real property described in Exhibit A attached hereto. All terms, covenants, and conditions contained herein shall run with the land and be binding on all parties having or acquiring any legal title or interest in the lands described in Exhibit A or any part thereof. Developer shall provide any successors to any part of the Property with a copy of this Agreement. The failure of Developer to provide a copy of this Agreement to any successor to any part of the Property shall in no way affect the rights of City to require performance of the obligations under this Agreement.

Section 10.3. Notices. Any and all notices or other communications related to this Agreement shall be in writing and shall be deemed received when: (a) personally delivered to the Party to whom they are directed; or (b) the earlier of actual receipt or five (5) days following delivery by registered or certified U.S. mail (return receipt requested); or (c) if given by Federal Express or similar courier, on the date delivered, as shown on a receipt issued by the courier; or (d) delivered by email, based on the date shown on the sent email (provided that in the event of default or a NonPerformance Penalty, such notice shall also be provided by one of the other methods specified herein). Either Party may change its address information by giving ten (10) days advance written notice of such change to the other Party. Notices and communications will be addressed to the Parties as follows:

If to City: City of Patterson
1 Plaza
Patterson, California 95363
Attention: City Manager
Email: [email protected]
and White Brenner LLP
1608 T Street
Sacramento, California 95811
Attention: Nubia Goldstein, Esq.

Email: [email protected]
If to Owner: Darron Silva
1631 Fig Avenue
Patterson, CA 95363
Email: [email protected]
If to Tenant: Green Catalyst Enterprises
1631 Fig Avenue
Patterson, CA 95363
Attn: Darron Silva
Email: [email protected]
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 {CW140641.12}
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 Developer 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. 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 Property 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 Property, and all rights and interests of such person in the Property shall be subject to the terms, requirements, and provisions of this Agreement.

Section 10.8. 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 {CW140641.12}
(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 10.9. Joint and Several Liability. Developers 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. Developers agree that City may impose a lien and seek foreclosure on any parcel of the Property due to any default by Developers.

Section 10.10. Change in State Regulations. In no event shall Developer operate the Project in violation of this Agreement, or State Cannabis Regulations, as many be amended from time to time.

Section 10.11. 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 Property and the 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.
{CW140641.12}
(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.
(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) Attorney’s 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 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. (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 ]
{CW140641.12}
{CW140641.12}
IN WITNESS WHEREOF, this Agreement has been entered into by and between Developers and City as of the Effective Date of the Agreement, as defined above. “CITY”
Date: , 2024

CITY OF PATTERSON, CA
a California Municipal Corporation
By: __________________________
Fernando Ulloa
City Manager
Attest:

By: ___________________________
Aracely Alegre
City Clerk
Approved to as Form:

By: _________________________
Nubia Goldstein
City Attorney
“OWNER”
Date: , 2024

DARRON SILVA,
an individual
By:
“TENANT”
Date: , 2024

GREEN CATALYST

ENTERPRISES,
a California corporation
By:

Its:________________________
{CW140641.12}
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.
{CW140641.12}

EXHIBIT A
Legal Description of Property
A portion of the 27.16 acre Remainder parcel as shown on the Parcel Map for Keystone Pacific Business Park Phase 7 recorded in Book 54 of Parcel Maps, at Page 21, Stanislaus County Records, lying in the north half of Section 26, Township 5 South, Range 7 East, Mount Diablo Meridian, situate in the City of Patterson, County of Stanislaus, State of California, described as follows:

Beginning at the southwest corner of Parcel F-5A as shown on the Parcel Map for Keystone Pacific Business Park Phase 4 recorded in Book 53 of Parcel Maps, at Page 85, Stanislaus County Records; thence along the westerly prolongation of the south line of said Parcel F-5A, North 89°40’32” West, 358.55 feet to the easterly line of 70-foot wide Park Center Drive and the beginning of a non-tangent curve concave southwesterly, having a radius of 685.00 feet, to which a radial line bears North 76°46’33” East, thence northerly along the arc of said curve through a central angle of 08°32’41”, a distance of 102.16 feet; thence continuing along the easterly line of said Park Center Drive, North 21°46’08” West, 194.15 feet to the beginning of a curve concave northeasterly, having a radius of 615.00 feet; thence continuing along the easterly line of said Park Center Drive and northerly along the arc of said curve through a central angle of 02°47’49”, a distance of 30.02 feet to the southwest corner of Parcel F-6 as shown on the Parcel Map for Keystone Pacific Business Park Phase 6 recorded in Book 54 of Parcel Maps, at Page 17, Stanislaus County Records; thence along the southerly line of said Parcel F-6, North 79°25’40” East, 304.26 feet to the southwest corner of Parcel F-5 as shown on the Parcel Map for Keystone Pacific Business Park Phase 3 recorded in Book 53 of Parcel Maps, at Page 60, Stanislaus County Records; thence along the south line of said Parcel F-5, South 89°40’00” East, 175.65 feet to the northwest corner of said Parcel F-5A; thence along the west line of said Parcel F-5A, South 00°29’03” West, 362.63 feet to the point of beginning, consisting of 3.326 acres, more or less.

EXHIBIT “A”
Legal Description
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{CW140641.12}

EXHIBIT B
Notice of Non-Performance Penalty
DATE: _________________, 20___
PARTIES: CITY OF PATTERSON, a California municipal corporation P.O. Box 667
1 Plaza
Patterson, California 95363
______________________________
______________________________
______________________________
______________________________
THIS NOTICE OF NON-PERFORMANCE PENALTY (“Penalty Notice”) is being executed by the City of Patterson, 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 ________________, 20___, City recorded a development agreement between City and _____________________ dated ______________, 20__ (the “Development Agreement”), relating to the development and operation of a cannabis dispensary.

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 Amount 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 one percent (1%) 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”).
{CW140641.12}
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 PATTERSON,
a California municipal corporation
By:
____________________, City Manager
{CW140641.12}

EXHIBIT C
Indemnification Obligations of Developers

1. Indemnification for Project Approvals. To the fullest extent permitted by law, Developer 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 the City, or City’s Agents, to attack, set aside, void, or annul, any approval concerning the Project by reason of the action or inaction of City or City’s Agents. Developer’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.

Developer’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; the Development Agreement; or the requirements of any other federal, state, or local laws, including, but not limited to, general plan, specific plan, and zoning requirements.

2. Tender of Defense. Upon receiving notice of a claim, Developer 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. 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.

3. Deposit for Costs. Developer shall make a refundable deposit to the City within thirty (30) days of written notification from the City (“Cost Deposit”), to cover the estimated fees and costs associated with the City’s defense of any claim, action or proceeding. Developer shall make any and all additional payments to City to replenish the Cost Deposit within thirty (30) days of written notice from City.

4. Failure to Indemnify; Waiver. Failure to indemnify City, when required by this Agreement, shall constitute a material breach of this Agreement, 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 any approval concerning the Project. Developer’s failure to indemnify City shall be a waiver by Developer of any right to proceed with the 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 the Project, or City’s failure to defend any claim, action or proceeding based on Developer’s failure to indemnify City.
{CW140641.12}

5. Satisfaction of Judgment. With respect to any claims, demands, acts, causes of action, damages, costs, expenses, settlements, losses or liabilities which Developer has indemnified City against, Developer 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.

6. Payment of Costs and Fees. Developer’s obligations under this Agreement to defend and indemnify City shall include, but are 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.

7. Continuing Obligation. Developer 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, Developer may be released from such indemnification obligations if Developer obtains City’s written consent to such release, which consent shall not be unreasonably withheld.

EXECUTED AND ACKNOWLEDGED BY:

DARRON SILVA, an individual
Signed: ______________________________
Date: ________________
GREEN CATALYST ENTERPRISES, a California corporation
By:

Print:

Its: _____________________________
Date: _______________
{CW140641.12}

EXHIBIT D
Development Agreement Ordinance

Patterson City CouncilOctober 1, 2024

Patterson City Council
October 1, 2024